m irn Q^Drtttll Earn Srlinnl Eibrarjj Cornell University Library KF 398.P31 1893 Illustrative cases in equity / 3 1924 018 814 800 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018814800 PATTEE'S ' ILLUSTRATIVE CASES INEQUITY (SECOND EDITION.) Cornell University Law Library. THE QIFT OF LILLIAN HUFFCUT BINGHAMTDN, N. Y. November 27, 1915 ILLUSTRATIVE CASES IN EQUITY SELECTED BY WILLIAM S. PATTEE, LL. D. Dean of the College of Law of the University of Minnesota. SECOND EDITION St. Paul, Minn. WEST PUBLISHING CO. 1893 Copyright, 1892, BY WILLIAM S. PATTEE, LL, D. Copyright, 1893, BY WILLIAM S. PATTEE, LL. D. PREFACE. These cases have been collected for use in the class room. They are not selected as "leading," but rather as "illustrative," cases in that part of Equity Jurispru- dence which deals with the "first principles" and the "doctrines" of Equity. They are not designed to be used alone, but in connection with my lectures upon those topics, as aids to the student in his work; and their chief value is to be found in the emphasis which they give to those principles and doctrines by fur- nishing a particular case illustrative of ^ach, and by directing the student to numerous authors and Eeports where each particular topic is elaborately dis- cussed or specifically applied. I have not been anxious to select those cases only wherein the decision has turned upon the principle under consideration, but I have to some extent selected those which illustrate the use that courts make of equitable principles in their arguments regarding equitable interests and estates, even though the ultimate decision may have turned upon some other point. Wm. S. Pattee, LL.D. Cou^oE OF Law of the Uniteesitt of Minnesota, Minneapolis, December 1, 1893. (iii)* TABLE OF CONTENTS. EQUITY JURISPRUDENCE. INTKODUCTION". EQUITY — ITS ORIGIN, JURISDICTION", AND FIRST PRINCIPLES. Part I. THE CHARACTER AND EXTENT OP EQUITY JURISDICTION. a. "Jurisdiction" Defined. c. Concurrent. b. Exclusive. d. Auxiliary. Part II. THE FIRST PRINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS," 5. Only he who comes with clean hands can procure the aid of an equity court. 7. An equity court extends its aid only to the vigilant. 8. Whoever seeks the aid of an equity 9. court must himself do equity. An equity court looks to the intent 10. of the parties, rather than to the form of their transactions. 11. An equity court imputes to parties an intention to perform their obli- 12. gations. Where the equities of parties are (V) equal, the first in order of time must prevail. Where the equities of parties are equal, the law must prevail. Equality is equity. An equity court will not sufifer a wrong without a remedy. An equity court, in certain cases, fol- lows the law. An equity court acts in personam, and not in rem. Whatever ought in good faith to have been done, a court of equity will con- sider as having been done already. VI TABLE OF CONTENTS. Part II — (Continued.) EQUITABLE PROPERTY. 1. Originating from a Contract to Sell 4. Sale of Property not yet in Existence^ Land. or afterwards to be Acquired. 2. Trust Property. 5. Sale of Possibility. 3. Assignment of Chose in Action. Part III. THE DOCTRINES OP EQUITY. a. Conversion. /. Priorities. b. Election. g. Bona fide FmchaseTs. c. Satisfaction and Performance. h. Equitable Estoppel. d. Penalties and Forfeitures. i. Merger. e. Notice. Part IV. GROUNDS FOR EQUITABLE RELIEF. a. Accident. c. Fraud. b. Mistake. 1. Actual. 2. Constructive. CASES REPORTED. Page Ames V. Richardson (29 Minn. 330, 13 N. W. Rep. 137) 27 Attorney General v. Tudor Ice Co. (104 Mass. 239) 1 , '^f~\ — Bailey v. Galpin (40 Minn. 319, 41 N. W. k • Rep. 1054) ft Bayler v. Commonwealth (40 Pa. St. 37) . . "* Berry v. Mutual Ins. Co. (2 Johns. Ch. 603) Blandy v. Widmore (1 P. Wms. 3231 Bleakley's Appeal (66 Pa. St. 187) I d. Bostwick V. Stiles (35 Conn. 195.) Cobb V. Cole (44 Minn. 278, 46 N. W. Rep. 364) I , ■Collins V. Cooley (14 Atl. Rep. 574) -♦-"^'Commissioners of Douglas County v. Union ' Pac. Ry. Co., B. D. (5 Kan. 615) . . Comstock V. Johnson (46 N. Y. 015) f- "T—Cope V. District Pair Ass'n of Flora f99 111. 489) ,] _. Cowper V. Cowper (2 P. Wms. 720) ~: ^Craft V. McConoughy (79 111. 346) • Craig T. Leslie (3 Wheat. 563-576) Davis V. Pierce (10 Minn. 376, Gil. 302) . . ■Dix v. Cobb (4 Mass. 508) Dobbin v. Cordiner (41 Minn. 165, 42 N. W. Rep. 870) Ellison V. Moffatt (1 Johns. Ch. 46) Erkens v. Nicolin (39 Minn. 461, 40 N. W. Rep. 567) "/-^Fisher v. Sievres (65 111. 99) C--*- Force v. City of Elizabeth (27 N. J. Eq. , 408) -? — I Fox V. Palmer (25 N. J. Eq. 416) ■Grymes v. Sanders (93 U. S. 55) 4--<*«ardeman v. Battersby (53 Ga. 36) I Haughwout V. Murphy (22 N. J. Eq. 531) Herbert v. Wren (7 Cranch, 370) CAS. EQ. 92 104 29 5 1 18 105 23 70 36 68 4 88 74 73 63 89 72 32 47 Pose . 104 Holmes' Appeal (77 Pa. St. 50) Jacobs T. Morange (47 N. Y. 57) 79 Johnson v. Dougherty (18 N. J. Eq. 406) . . 8 Hf- Kief er v. Rogers (19 Minn. 32, Gil. 14) . . . 98 Leach v. Fobes (11 Gray, 506) 87 -^ McDonongh v. O'Niel ril3 Mass. 02) 35 Mamldek v. Fairbanks (46 Wis. 415, 1 N. W. Rep. 167) Mason v. Callender (2 Minn. 350, Gil. 302) Moreland v. Atchison (19 Tex. 303) Muir V. Schenck (3 Hill, 228) Muller V. Dows (94 U. S. 444) MulTey V. King (39 Ohio St. 491) National Land Co. t. Perry (23 Kan. 140) Newton v. McLean (41 Barb. 285) 101 52 80 62 ^ 19 -JL. 103 r^ 58 109 Patton V. Campbell (70 111. 72) Perkins v. Partridge (30 N. J. Eq. 82) Peter v. Beverly (10 Pet. 532) Philadelphia, W. & B. R. Co. v. Woelpper (04 Pa. St. 366) Pitcher v. Hennessey (48 N. Y. 415) Rees V. City of Watertown (19 Wall. 107) Ruple V. Bindley (91 Pa. St. 290) Russell V. Failor (1 Ohio St. 327) r- 11 -r ' 94- 38^ 84^ 15 ' 37 13 School Dist. No. 1 v. Dauchy (25 Conn. .530) ..; 77 Shirras v. Caig (7 Cranch, 34) ^. . . 11 -f Stimson v. Hel Rep. 290). lelps (9 Colo. 33, 10 Pac. Stinchfield v. Milliken (71 Me. 567) 6 Strong v. Williams (12 Mass. 391) 50 Weaver v. Barden (49 N. Y. 286) 65 ^ Wheaton v. Wheaton (9 Conn. 96) 82 -jC— Wilcocks V. Wilcocks (2 Vern. 558) (vii)t ILLUSTRATIVE CASES IN EQUITY Part I. JURISDICTION. An eqiiity court has no criminal jurisdiction, but is limited to the protection of civil rights. (99 111. 489.) Cope v. Distkict Fair Ass'n of Flora. (Supreme Court of Illinois. June 21, 1881.) Equity does not enforce the criminal law of the state. . «.^ Mr. Justice Mulkey delivered the opinion of the Court: The question presented for our determina- tion by the record in this case is, will an injunction lie at the suit of a stockholder in an incorporated fair association, restraining the company and its officers from permitting, for a pecuniary reward, gamblers to congre- gate and ply tlieir vocation upon the grounds of the company, during its annual exhibi- tions, where it does not appear, from the bill or otherwise, thiit the complainant or the company has thereby sustained some pecuniary injury or loss. The circuit court of Clay county and the Appellate Court for the Fourth District have both answered tliis question in the nega- tive, and, we think, properly. It is no part of the mission of equity to administer the criminal law of the State or to enforce the principles of religion and mo- rality, except so far as it may be incidental to the enforcement of property rights, and per- haps other matters of equitable cognizance. High on Inj. sec. 23. Tlie licensing of gambling tables by the oflScers of the company can not, in any sense, be regarded the act of the company. It is foreign to the objects and purposes of the association, and is clearly ultra vires, and the officers alone are responsible unless authorized by the stockholders, in which case it would doubtless be such an abuse of the company's franchises as would warrant the State in reclaiming them. Gambling — such as that complained of — is a violation of the criminal code, which affords ample means for its suppression. If the bill in this case showed any pecun- iary loss or injury, it would present an en- CAS EQ. — 1 tirely different question ; but nothing of that kind is claimed or pretended, and we are aware of no principle upon which such a biU can be maintained, and counsel has failed tO' suggest any or furnish us with any prece- dent where such a bill has been sustained. The judgment of the Appellate Court i» affirmed. Judgment affirmed. (104 Mass. 239.) (^ Attorney General v. Tudor Ioe Co, '-' {Supreme Judicial Court of Massachusetts. 1870.) Equity does not administer punishment for trans- gression of law, but its jurisdiction is limited to the protection of civil rights. Gray, J. This court, sitting in equity, does not administer punishment or enforce forfeitures for transgressions of law; but its jurisdiction is limited to the protectioi* of civil rights, and to cases in which full and adequate relief cannot be had on the com- mon law side of this court or of the other courts of the Commonwealth. The Tudor Ice Company is a private trad- ing corporation. It is not in any sense » trustee for public purposes. This is not » suit by a stockliolder or a creditor. The acts- complained of are not shown to have injured or endangered any rights of the public, or of any individual or other corporation ; and can- not, upon any legal construction, be held to- constitute a nuisance. It is expressly stated, in the report of the chief justice, that "it does not appear that any of the creditors of the company are in danger of losing by it, and there is no objection to its proceeding* except tiiat tliey are not authorized by its act of incorporation and are alleged to be against public policy for that reason." No case is- therefore made, upon which, according to th& principles of equity jurisprudence and the- practice of this court, an injunction should be issued upon an information in chancery. In Attorney General v. Utica Insurance CASES IN EQUITY. Co. 2 Johns. Ch. 371 Chancellor Kent, in a very able and elaborate judgment, after a thorough discussion of the question on prin- ciple, and an extensive examination of the earlier authorities, held that such an infor- mation could not be maintaiped to restrain an insurance company from exercising banlsing powers in violation of a statute of New York; but that the proper remedy was at law, by in- formation in the nature of a quo warranto; and no appeal appears to have been talsen from his decree. An information in the na- ture of a quo warranto was thereupon filed, and sustained by the supreme court of New York, and judgment rendered thereon that the corporation be ousted from the franchise which it had usurped. People v. Vti<:a In- surance Co. 15 Johns. 358. Similar proceed- ings may be had at law in this Common- wealth in a proper case. Goddardv. Smith- ett, 3 Gray, 116, 122, 123. Attorney General V. Salem, 103 Mass. 138. Boston & Provi- dence Railroad Co. v. Midland Railroad Co. 1 Gray, 340. Gen. Sts. c. 145, §§ 16-24. One early English case of high authority, not cited by Chancellor Kent, nor at the argu- ment of the present case, is so much in point as to be worth quoting in full. Upon a bill in equity, filed by the attorney general, at the relation of several freemen of the Weavers' Company, against the officers of that com- puny, setting forth "that the defendants had been guilty of many breaches and violations of their charters, and had oppressed the free- men, &c., and mentioned some particulars; and for a discovery of the rest, and that they might be decreed for the future to observe tlie charters, and to have an account of the revenue of the corporation which the defend- ants had misspent, &c., was the end of the bill. To which the defendants demurred, be- cause as to part of the bill, it was to subject them to prosecutions at law, and to a (juo warranto; and as to the other parts, the plaintiff^ had remedy by mandarmis, infor- mation, or otherwise, and not here. And of the same opinion," the report proceeds, was Lord Cowper, "who said it would usurp too much on the king's bench; and that he never heard of any precedent for such a case as this; and so allowed tlie demurrer." Attorney General v. Reynolds, 1 Eq. Cas. Ab. (3d ed.) 131. The modern English cases, cited in sup- port of this information, were of suits against public bodies or oflicers exceeding the pow- ers conferred upon them by law, or against corporations vested with the power of emi- nent aomain and doing acts which were deemed inconsistent with rights of the public. Some of them were cases of misapplication of funds raised by taxation and held by muni- cipal corporations or officers upon specific public trusts. Such were Attorney General v. Norwich, 16 Sim. 225, Attorney General v. Guardians of Poor of Southampton, 17 Sim. 6, and Attorney General v. Andrews, 2 Macn. & Gord. 225. The hypothetical case, in which Lord West- bury, in Stockport District WatenoorJts v. Manchester, 9 Jur. (N. S.) 266, said that he should "probably not hesitate" to act upon the information of the attorney general, was of a suit to restrain the making of a contract between an aqueduct corporation and a city to carry water bej'ond the limits which the city was authorized by law to supply. The passages cited from Liverpool v. Chor- ley Water Works Co. 2 De Gex, Macn. & Gord. 852, 860, and Ware v. Regent's Canal Co. 3 De Gex & Jones, 212, 228, were but dicta that an unauthorized diversion of water or llowing of land by an aqueduct or canal corporation, without proof of actual or im- minent injury to property, gave no right of suit to an individual, and could only be checked on an application to the court by the attorney general. The case of Attorney General v. Great Northern Railway Co. 4 De Gex & Smale, 75, was a clear case of nuisance, the unlaw- ful obstruction of a public highway by a rail- road. That of Attorney Goieral v. Oxford, Worcester & Wolverhampton Railway Co. 2 Weekly liep. 330, was the case of the open- ing of a railway line in violation of an order which an authorized public board had made upon the ground that it would be unsafe to the public. The single case, in which an information has been sustained in an English court of chancery against a corporation for carrying on a business beyond its corporate powers, is Attorney General v. Great Northern Railway Co. 1 Drewry & Smale, 154, in which Vice Chancellor Kindersley in 1860 restrained a railway company from trading in coal in large quantities, upon the ground that there was danger that, if allowed to go on, it might get into its hands the coal trade of the whole dis- trict from or through which its railway ran, and thus acquire a monopoly injurious to the public. That case is evidently the founda- tion of the dictum of Vice Chancellor Wood, two years later, in Hare v. London & North- western Railway Co. 2 Johns. & Hem. 80, 111. In Attorney General v. iLid Kent Railway Co. L. R. 3 Cli. App. 100, a mandatory injunc- tion was granted upon the information of the attorney general to compel a railway com- pany to construct a bridge over a public road, and with as gradual a slope as was required by a special clause in its charter; and the ob- jection that the attorney general might have had an equal and complete remedy at law was stated by each of the lords justices as if itre- quired no answer and afforded no ground for refusing to entertain jurisdiction in equity. It is often said, in the English books, that the king or his attorney general, suing in be- lialf of the public, has the election to sue in either of his courts, and may therefore enforce a legal right in the court of chancery. 1 Dan. Ch. PracL. (3d Am. ed. ) 6, 7. .-1 ttorney Gen- eral V. Galway, 1 Molloy, 95, 103. However that may bs by our statutes the general equity jurisdiction of this court is limited ta FIRST PRINCirLES OF EQUITY. GENERALLY CALLED "MAXIMS." 3 cases where there is no plain, adequate and -complete remedy at law, as well in suits by the Commonwealth as in those brought by vprivate persons. Gen. Sts. c. 113, § 2. Com- monwealth V. Smith, 10 Allen, 448. Clous- ton V. Shearer, 99 Mass. 209, 211, and other cases there cited. The 38th of tlie former rules in chiincery of this court (14 Gray, 360) by which the court adopted, as the outlines -of its practice, the practice of the high court of chancery in England, so far as the same was not repugnant to the Constitution and laws of the Commonwealth, nor to those or such other rules as the court might from time to time make, cannot enlarge the jurisdiction -of this court as defined by statute, and has been repealed by the new rules recently estab- lislied. Rules of 1870, post, 555. The only cases in which informations in -equity in the name of the attorney general have been sustained by this court are of two classes. The one is of public nuisances, which affect or endanger the public safety or •convenience, and require immediate judicial interposition, like obstructions of highways or navigable waters. District Attorney v. Lynn & Boston Railroad Co. 16 Gray, 242. Attorney General v. Cambridge, lb. 247. Attorney General v. Boston Wharf Co. 12 Gray, 553. Rowe v. Granite Bridge Co. 21 Pick. 344, 347. The other is of trusts for charitable purposes, where the beneficiaries are so numerous and indefinite that the breach of trust cannot be effectively re- dressed except by suit in behalf of the pub- lic. Parker v. May, 5 Cush. 336. Jack- son V. Phillips, 14 Allen, 539, 579. Attor- ney General v. Garrison, 101 Mass. 223. Gen. Sts. c. 14, § 20. If there are any other cases to which this form of remedy is appro- priate, that of a private trading corporation, whose proceedings are not shown to have in- jured or endangered any public or private rights, and are objected to solely upon the ground that they are not authorized by its act of incorporation and are therefore against public policy, is not one of them. Information dismissed. (See, also, 1 Story, Eq. Jur. §25, note; Pom. Eq. Jur. §§ 36, 197, 303, 402, 936, 940, note 2, 1347, note, 13M, note; Phillips v. Stone Mountain, 61 Ga. 386; Association v. Boogher, 3 Mo. App. 173: Davis T. Society, 75 N. Y. 362.) Part II. THE FIRST PRINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." Maxim 1. He who comes into equity must come -with clean hands. (66 Pa. St. 187.) Bleakley's Appeal. {Swpreme Court of Pennsylvania. 1870.) Where one attempts to perpetrate a fraud upon another in a particular transaction, equity will not assist him to maintain any rights wtiich he may claim in the premises, on the ground that he who comes into equity must come with clean hands. The opinion of the court was delivered, October 27th 1870, by Agnew, J. — The facts of this case are few. Robert Lamberton was the owner of a judg- ment for $31,000, entered against Samuel P. Iryin on the 8th day of June 1865. Irvin had purchased of F. D. Kinnear, Esq., lot No. 449 in Franklin at $2600, of which $820 •only remained unpaid, and would fall due on the 6th of August 1865, with a provision for forfeiture of the contract in case of non-pay- ment for thirty days after it fell due. On the 19th of July 1865, Irvin assigned his contract to James Bleakley, binding him to pay the $820 to save the forfeiture, and with the admitted understanding that Irvin should refund the $820 to Bleakley, settle his in- debtedness to the bank, of which Bleakley was cashier, and that then Bleakley should reconvey to Irvin's wife. But the assign- ment was antedated to the 1st of May 1865, thus overreaching Lamberton's judgment. The master finds that this was done to de- fraud the plaintiff. The finding is ably vin- dicated in the opinion of Judge Trunkey. The absolute character of the paper, though but a security, the agreement to reconvey to Irvin's wife instead of himself, and the at- tempt of Bleakley to use the paper to defeat the sheriff's sale of the property by Lamber- ton on his judgment, evince the true motive for antedating the paper. Bleakley paid the $820 to Kinnear, and now chiims a decree for this sum, before specific performance shall be decreed to Lam- berton, who purchased Irvin's title at the sheriff's sale. Kinnear does not resist spe- cific performance, but stands ready to convey to Lamberton, whenever the covinous assign- ment to Bleakley is put out of his way. It is Bleakley who resists the decree until he is refunded the $820, paid upon the footing of the fraudulent agreement with Lrvin, to do- CASES IN EQUITY. feat Lamberton's judgment. Bleakley is made a party to the bill only for the purpose of putting aside the covinous assignment to enable Kinnear to convey to Lamberton. The question then is whether a chancellor would require Lamberton to refund the $820 to Bleakley, as a condition to setting aside the assignment and entitling Lamberton to spe- cific performance of Kinnear. But clearly Bleakley cannot demand repay- ment of Lamberton either at law or equity. And first he is not entitled to subrogation to Kinnear's rights. Subrogation is not a mat- ter of contract but of pure equity and benev- olence: Kyner v. Kyner, 6 Watts 221; Wal- lace's Appeal, 5 Barr, 103. On what pretence, in f'oro uonscientice, can a party attempting to carry out a scheme of fraud against an- other, by a payment, claim compensation of the parly he has attempted to defraud? Con- science and benevolence revolt at such an iniquity. Again Bleakley did not recognise Kinnear's title by the payment. He did not profess to bargain for it, and Kinnear did not profess to sell it to him. His act was simply a payment and no more, made by him because of Irvin's duty to pay, and accepted by Kinnear because of his right to receive from Irvin. Besides the payment was ac- cepted by Kinnear in ignorance of the at- tempted fraud. There can be no legal in- tendment therefore of a bargain on Kinnear's part to vest his right to receive the money in Bleakley. As to Lamberton the payment by Bleakley was not only fraudulent and in- tended to displace his judgment, but it was also voluntary. It was not paid at Lamber- ton's request nor for his use and benefit; but on the contrary was intended to defeat his right, as a creditor by overlapping his judg- ment, by means of the covinous transfer, Bleakley is therefore neither a purchaser, nor a creditor of Lamberton, nor an object of benevolence, but is forced upon the record to compel him to put out of the way th& fraudulent barrier to Kinnear's specific per- formance to Lamberton, He cannot, thus standing before a chancellor, ask him t» make repayment to him a condition to a de- cree to remove the fraudulent obstruction he threw in the way. The payment is one of the very steps he took to consummate the fraud upon Lamberton. If he have a legal right of recovery he must resort to his action at law, and if he can have none, it is a test of his want of equity. And in addition to all this, it is a rule that a chancellor will not assist a party to obtain any benefit arising from a fraud. He must come into a court of equity with clean hands. It would be a singular exercise of equity, which would as- sist a party, who had paid money to enable him to perpetrate a fraud, to recover hi» money, just when the chancellor was engaged in thrusting out of the way of his doing equity to the injured party, the very instru- ment of the fraud. Who does iniquity shall not have equity: Hershey v. Welting, 14 Wright 244-5. We are therefore of opinion the court com- mitted no error in refusing compensation, and the decree of the court below is confirmed. (See, also, 1 Pom. Eq. Jur. § 897; Wheeler v. Sage, 1 Wall. 518; Creath v. Sims, 5 How. 193; Bolt V. Rogers, 8 Paige, 156; Johns v. Norris, 23 N. J. Eq. 103; Society v. Ordway, 38 Cal. 679; Lewis' Ap- peal, 67 Pa. St. 166; Wilson v. Bird, 28 N. J. Bq. 852; Atwood v. Fisk, 101 Mass. 863; Overton v. Ban- ister, 3 Hare, 503; Savage v. foster, 9 Mod. 35.) Maxim 2. Equity aids the vigilant, and not those who sleep upon their rights. (1 Johns. Ch. 46.) Ellison v. Moffatt, (Court of Chancery of New York. 1814.) Where a person allows an account to stand 36 years before filing his bill for an adjustment, the bill will be dismissed on the ground of the state- ness of the demand. The Chancelloe. The parties lived in the same county, and, without accounting for the delay, the plaintiff suflered a period of 26 years to elapse, from the termination of the American war, to the time of filing hia bill. The offer made by the executors being for peace, and without any recognition of (See also 1 Pom. Eq. Jur. §§418, 419; Story, Eq. Jur. § 64a; Snell, Bq. 43; Philips v. Prevost, 4 Johns. Ch. ^05; Laoon V. Bi-iggs, 3 Atk. lOo; Germantown, etc., Co. v. Filler, 60 Pa. St. 134-133; Pres- *° w--,F''^^i2°J,?5„Fj S- 200; Neely's Appeal, 85 Pa. St. 387; Barnes v. Taylor, 37 N. J. Eq. 359; Kine- y, Wilder, (o 111. 3'5; Johnson v. Diversey, 83 ni. 446; Borland v. Thornton, 13 Cal. 440; Tash v a£ ams, 10 Gush. 253; Peabody v. Flint, 6 Allen, 52 ; Great Western Ry. Co. v. Oxford, etc., Ily.. 3 De Gm m- ^ '^■•,^*Uv,^''Pf«?^"i/- McGregor, 21 Minn. Ill; Hughes v. Edwards, 9 Wheat. 489; Elmendorf v* Taylor, 10 Wheat. 168; Murray v. Coster, 20 Johns. 576-582; Prevost v. Gratz, 6 Wheat. 481 ; Storv Eo Jur. & 1519, note.) ' " ^* the justness of the demand, and being re- jected by the plaiptiff , cannot affect the ques- tion. It would not be sound discretion to over- haul accounts, in favor of a party who has slept on his rights for such a length of time; especially, against the representatives of the other party, who have no knowledge of the original transactions. It is against the prin- ciples of public policy, to require an account, after the plaintiff has been guilty of so great laches. The bill must be dismissed on the ground of the ataleness of the demand; but without costs. FIRST PRINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." Mazim 3. He w^ho seeks tlie aid of equity must do equity. (46 N. Y. 615.) CoMSTOOK V. Johnson. (Court of Appeals of New York. 1871.) 1. Where one grants a privilege to another to •draw off water from a dam in sufficient quantity to run a certain mill, and the party enjoying the privilege draws oil water to run machinery in front ■of the mill, on land where he had no right to put it, a court of equity will not restrain the party from thus shutting off the water, unless the complain- ant ceases to use the land in front of the mill for such an unwarranted purpose. 2. He who seeks equity must do equity. Church, Ch. J. The principal question in this case, involving the construction of the grant of water, was correctly decided in the court below. It is well settled in this State that the terras used in this grant are to be taken as a measure of the quantity of water granted, and not a limitation of the use to the particular machinery specified. ( Wakely V. Davidson, 26 N. Y"., 387; Cromwell v. Selden, 3 id., 253.) It was found by the court that, at the time the defendant shut the water off, he asserted that the plaintiff had forfeited his right to the water, and claimed a right to shut it off. In this he was mistaken. In de- priving the plaintiff of the use of the water under an assertion of forfeiture, he rendered himself amenable to the process of the court for the protection of the plaintiff's rights. The judgment enjoining the defendants from depriving the plaintiff of the quantity of wa- ter to which he was entitled under his deed, cannot be disturbed. The only serious ques- tion in the case relates to the use of the buzz saw in front of the mill. The plaintiff did not, by his deed, acquire the title to the land in front of the mill, because the description is limited to the land upon which the mill stands; but he did acquire an easement in such land for the purpose of ingress and «gress, and also for the purpose of piling and sawing wood for the use of the mill, as it had been used and enjoyed for forty years. Ev- erything necessary for the full and free enjoy- ment of the mill passed as an incident, ?p- purtenant to the land conveyed. (2 Kent's Com., 467; Blaine's Lessee v. Chambers, 1 Serg. & Hawle, 174.) But this would not au- thorize the plaintiff to erect and use ma- •chinery upon this land not necessaxv to tlie use of the mill, as it had been used, and would not authorize the use of the buzz saw upon that land. The objection is not that tlie plaintiff propelled the buzz saw with the wa- ter from the dam, as he had the right to use the water for any machinery and in any place which he was entitled to occupy; but he could not occupy the space in front of the mill for that purpose. At the time the water was (See, also, 1 Pom. Eq. Jur. § 385; Story, Eq. Jur. § 64e; Snell, Eq. % 41; Powell v. Thomas, 6 Hare, 800; Fanning v. Dunham, 5 Johns. Ch. 122, 142-144; Williams v. Pitzhugh, 37 N. Y. 444; Bank v. Bell, 14 Ohio St. 200; Kuhner v. Butler, 11 Iowa, 419; Hart v. Goldsmith, 1 Allen, 145; Mumford v. lusur- ance, etc., Co., 4 N. Y. 463-483; Willard v. Tayloe, 8 Wall. 557; McGoou v. Shirk, 54 III. 403; Reed v. Tyler, 56 111. 288 ; McLaughlin v. McLaughlin, 20 N. J.' Eq. 190 ; Campbell v. Campbell, 21 Mich. 438-45a) (See post, "Election" and "Estoppel. ") shut off by the defendants, it was being used only to propel this saw ; and it is claimed that the defendants were justified in shutting off the water from that machinery; and for that reason the judgment should be reversed, or, at least, that it should be modified so as to restrain the plaintiff from using his buzz saw on the defendants" premises. As we have seen, tlie judgment against the defendants is fully warranted by the findings; and the ques- tion is, whether any modification should bo made against the plaintiff. It is a rule of equity that he who asks equity must do eq- uity. The plaintiff was in fault in using the buzz saw on the defendants' premises. It is said that this was an independent transac- tion, for which the defendants might have an action; and this was the view of the court below. The rule referred to will be applied when the adverse equity grows out of the very controversy before the court, or of such circumstances as the record shows to be a part of its history, or is so connected with the cause in litigation as to be presented in the pleadings and proofs, with full opportunity afforded to the party thus recriminated to ex- plain or refute the charges. (Tripp v. Cook, 26 Wend., 148; McDonald v. Neilson, 2 Cow., 190; easier v. Shipman, 35 N. Y., 533.) All the facts connected with the right of the plaintiff to use the buzz saw were not only spread out upon the record, but were in fact litigated upon the trial, and, as to his strict legal rights, are undisputed; and we cannot say that, but for his use of the saw on the defendants' premises, the water would not have been shut off. Whether this was so or not, the controversy in relation to his right to use the saw was involved in the liti- gation, and was intimately connected with the wrongful act of the defendants; and, be- ing so, it is proper to apply the equitable rule. It is not indispensable to the applica- tion of this rule that the fault of the plaintiff should be of such a character as to authorize an independent action for an injunction against him. The plaintiff, in strictness, was in the wrong in placing his buzz saw in front of the mill. The defendants were in the wrong in shutting off the water, and es- pecially in asserting a forfeiture; and. as both parties are in court to insist upon their strict legal rights, we think substantial justice will be done by modifying the judgment so as to enjoin the plaintiff from using the buzz saw on the land in front of his mill, and, as mod- ified, judgment afllrmed, without costs to either party against the other in this court. All concur. Judgment accordingly. 6 CASES m EQUITY. Maxim 4. Equity looks to the intent of tlie parties rather than to the^ form of their transactions. (71 Me. 567.) Stinohfield v. Milliken. (Suweme Jiuiieial Court of Maine. December, 1880.) Peters, J. The following facts are de- ducible frora the evidence in this case: The complainant purchased of the defendants, certain steam-mill machinery, for removal from Hallowell to Danforth, in this State. There was at the time a verbal agreement, that the complainant should build a mill, and put the machinery into it, on a lot of land in Danforth, bought by him of one Russell, who was to deed the lot directly to the defendants. The complainant was also to procure a deed of his hump (another) lot to the defendants from the heirs of H. E. Prentiss, who held an absolute title thereof as security for tlie complainant's indebtedness to tliem, there being a small balance only unpaid, which the defendants were to pay for him. The de- fendants were to give an agreement, to con- vey to the complainant if he paid his indebt- edness to them according to the tenor of cer- tain notes to be given. On June 15, 1875, the compltiinant gave to the defendants a mortgage on the machinery as personal property to secure the notes here- after named, in order to protect a lien there- on until the machinery should be put into the mill to be built, and become a part of the real estate. And there was embodied in this mortgage, an agreement of the complainant to build the mill and put the machinery into it. On June 16, 1875, Kussell conveyed the mill lot to the defendants. On August 2, 1875, Prentiss conveyed the home lot to them, they paying the balance of the Prentiss claim. On August 4, 1875, the defendants gave a writing to the complainant, agreeing to con- vey the property to him upon the condition that he would pay to them his notes on one, two, three, and five years, respectively, with interest. The notes were given for the amount payable for the machinery, the sum paid to Prentiss, and for other loans and ad- vances. The complainant went on and erected and completed a mill on the Russell lot, and the steam-mill machinery became a part of it. Tlie complainant seeks to redeem the prop- erty, claiming the transaction to be a mort- gage. The defendants contend that the transaction was not a mortgage, that it was a conditional sale. It was not a legal mortgage: Because the defeasance has no seal. Warren v. Lovis, 53 Maine, 463. And because the papers were not between the same parties. At law, the conveyance must be made by the mort- gager and the defeasance by the mortgagee. Shaw V. Erskine, 43 Maine, 371. But the transaction was in equity a mort- gage — an equitable mortgage. The criterion is the intention of the parties. In equity,, this intention may be ascertained from all pertinent facts either within or without the- written parts of thetransaction. Where the- intention is clear that an absolute convey- ance is taken as a security for a debt, it is in equity a mortgage. No matter how much the real transaction may be covered up and disguised. The real intention governs. "If a transaction resolve itself into a securi- ty, whatever may be its form, and whatever name the parties may choose to give it, it is in equitv a mortgage." Plagg v. Mann, Z Sum. 533. The existence of a debt is well nigh an in- fallible evidence of the intention. The in- tention here is transparent. The defendants have a debt and held the property as a se- curity for its collection. A legal mortgage was avoided; an equitable mortgage was made. Although different at law, in equity a mortgage is not pj-evented because the con- veyance does not come from the equitable mortgager. It is suflScient that the debtor has an interest in the property conveyed, either legal or equitable. Having such an interest, if he procures a conveyance to one who advances money upon it for him, taking the property as security for the money ad- vanced, he has a right to redeem. Tho- grantee in such case, acquiring the title by his act, holds it as his mortgagee. .Jones oa Mort. 2d ed. § 331. Stoddard v. Whiting, 46 N. Y. 627; Carr v. Carr, 52 N. Y. 251. It is denied that this court has the power to declare that an absolute deed shall be- deemed to be a mortgage, allowing an equi- table mortgager the right to redeem. At law, it has no such power. Nor, when the court had a limited jurisdiction in equity, was the- doctrine admitted. It was always under- stood, however, that, in a case like the pres- ent, if, instead of a demurrer, an answer was filed admitting the facts alleged, the court had the power to apply the remedy. Thomnston Bank v. Stimpson, 21 Maine, 195; Whitney v. Bachelder, 32 Maine, 313; Howe V. Russell, 36 Maine, 115; Richardson V. Woodbury, 43 Maine, 206. But since thfr act of 1874 conferred general chancery pow- ers upon the court, it has full and complete jurisdiction in such cases. Rowell v. Jewett, 69 Maine, 293-303; Jones, Mort. (2d ed.V § 282. Courts of equity generally exercise such power. While the grounds upon which the doctrine is admitted vary with different courts, there is a great concurrence of opin- ion as far as the result is concerned. In our judgment, it is a sound policy as well as- principle to declare that, to take an absolute conveyance as a mortgage without any de- feasance, is in equity a fraud. Experience shows tliat endless frauds and oppressions. FIRST PRmciPLES OF EQUITY, GENERALLY CALLED "MAXIMS." would be perpetrated under such modes, if equity could not grant relief. It is taking an agreement, in one sense, exceeding and differing from the true agreement. Instead of setting it wholly aside, equity is worked out by adapting it to the purpose originally intended. Equity allows reparation to be made by admitting a verbal defeasance to be proved. The cases which support this view are too numerous to cite. The Amerixjan cases are collected in Jones, Mort. 2d ed. § 241, et seq. See Campbell v. Dearborn, 109 Mass. 130; and Hassam v. Barrett, 115 Mass. 256. The complainant seeks to separate the arti- cles originally mortgaged as personal prop- erty, and, being allowed the value of them, redeem the balance of the estate only. That would not be equitable. The personal be- came a part of tlie real as originally designed to be. It was affixed and solidly bolted there- to. The mortgage was evidently only to serve a temporary purpose. It was not just to either party that there should be two mort- gages instead of one. It is urged that the defendants foreclosed the personal mortgage. It could not be done. The personal mort- gage was extinguished when attempted to be done. That was but a ruse to get the pos- session which the defendants were entitled to. No severance was ever made or attempt- ed to be made. It is intimated that the mill has burned down, pendente lite, under an insurance ob- tained by the defendants, and a question may arise, before the master, whether the complainant should have a credit of the net proceeds. If the insurance was obtained on the mortgagees' own account only, they should not be allowed. Cushing v. Thomp- son, 34 Maine, 496; Pierce, v. Faunae, 53 Maine, 351. The head note in Larrahee v. Lumbert, 32 Maine, 97, is erroneous in that respect. It was allowed in that ease by con- sent. Insurance Co. \. Woodbury, 45 Mnine, 447. But where a mortgagee insures the prop- erty by the authority of the mortgager, and charges him witli the expense, then any in- surance recovered should be accounted for. And if a mortgager covenants to insure, and fails to do so, the mortgagee can himself in- sure at the mortgager's expense. Oneof tlie defendants testifies that "Stinch- fleld agreed to pay all taxes and insurance." He also says, "We have had the house, stable and mill insured, and have paid the insurance, $108." We think this is evi- dence of an insurance obtained by the mort- gagees at the expense of the mortgager on account of his failure to keep his verbal cov- enant to insure, and renders it proper that the net proceeds of any insurance obtained should be allowed in the settlement between them. But this cannot be, if the insurance was collected under a policy in which it is agreed between the insured and insurer that the company in case of loss should be subrogated to the right of the mortgagee. For in such case the insurance is not in fact on the mort- gager's account, nor is it such an insurance as could be made available to him. Jones, Mort. (2d ed.) § 420, and cases in note. The complainant may redeem the whole property upon payment of whatever may be due upon the whole debt. Inasmuch as the complainant sets up a claim exceeding the equitable right, neither party to recover costs up to the entry of this order; and whether future costs shall be recovered by either side, to be reserved for decision when the proceed- ings are to be finally terminated. Another reason why complainant should not recover costs is, that when his bill was commenced the mortgage debt was not due. The mort- gage could not be redeemed until 1880. The bill was commenced long before that time. But as the mortgage is now due, and no point is taken that tlie proceeding was pre- mature, it will probably be lor the interest of all the parties that their matters may be adjusted under this bill. For which purpose a master must be appointed, unless the par- ties can best determine the accounts between themselves. Decree accordingly. Appleton, C. J., Walton, Danfoeth, Virgin and Libbey, JJ., concurred. (See, also, 1 Pom. Eq. Jur. §§ 162, IfiS, 378; 3 Pom. Eq. Jur. § 1196, note; Snell, Eq. § 45; Adam, Eq. Ill, note; Holton v. MeigHen, 1.5 Minn. 63, Gil. 50; Belote v. Morrison, 8 Minn. 87, Gil. 62- Russell V. Southard, 12 How. 139. Strong and clear proof required, Sloan v. Becker, 34 Minn. 491, 26 N W. Kep. 730; 68 N. Y. 449; b3 N. J. Eq. 143; 55 Cal. 143; 102 111. 441. Once a mortgage, always a mortgage. Wing v. Cooper, 37 Vt. 169; French v. Burns, 35 Conn. 359; 109 Mass. 130.) (See, further, under subjects, "Mortgages," "Penalties," and "Forfeitures.") Maxim 5. Equity imputes an intention to parties to fulfill their ob ligations. (2 Vern. 558.) WiLCOCKS v. WiLOOOKS. (Hig/i Court of Chancery. 1706.) Where a party covenants, on his marriage, to purchase lands and settle them upon cer- (See, also, Deacon v. Smith, 3 Atk. 333; Lechmere v. Earl of Carlisle, 3 P. Wms. 211, 228, note.) tain persons, and, after purchasing lands, dies without making the settlement, but the lands descend by law to the said persons, the descent of the lands will be regarded in equity as a satisfaction of the covenant. s CASES IN EQUITY. (18 N. J. Bq. 406.) Johnson v. Dougherty. i,Coui-t of Chancery of New Jersey. May, 1867.) Where a guardian purchases land with his "ward's money, but takes the title to himself, the •court of equity will treat the guardian as a trus- tee holding the land for his ward, — i. e., the court •will impute to the guardian an intent to fulfill his obligation to his ward. The Chancelloe. This suit is to foreclose a mortgage, given by Jacob E. Terhiine and wife, to Martiia Speer, for $700, dated on the ninth day of April, 1853. It includes a lot of land in Bergen county, and two lots in Passaic coun- ty; $400 of tlie principal has been paid, and ■complainant seeks payment of the remain- ing $300, with interest. The mortgage was assigned by Martha Speer to Daniel Depew, on the tenth day of May, 1854, and was by liim assigned to the complainants, in Septem- tier, 1860. It is admitted that the mortgage, while held by Depew, was a valid and sub- sisting encumbrance on the property. Jacob R. Terhune and his wife, on the tenth day of May, 1854, conveyed the mortgaged prem- ises and one other lot, to Letitia Johnson, the wife of the complainant, who died on the fourth day of February, 1859, leaving the defendant, Catharine Jane Dougherty, her daughter, her only issue and her heir-at-law. She was then seventeen years old, and after- wards married the defendant, James Dough- erty. After the purchase from Terhune, John- son and his wife purchased two other lots, adjoining the first lot in the deed, from Ter- hune, being together the half acre excepted in that deed; one of these two lots was con- veyed to him and his wife, and the other to his wife. On the thirteenth of September, 1860, Johnson, by a written contract, agreed to convey to Abraham Coe, the first tract in the deed from Terhune, and the half acre ex- cepted out of it in that deed and conveyed by the two subsequent deeds. The price was to be $1300, of which $300 was paid in cash; the residue was to be paid on the delivery of the deed, which was to be on or before De- cember, 1864; Coe, in the meantime, to occu- py the property and pay $70 yearly rent for it. With the $800 paid by Coe, Johnson pur- chased the mortgage held by Depew, and had the same assigned to him so as to have it fore- closed, and by a sale of the property, to give title to Coe; which could not otherwise be done, as the defendant, Catharine Jane, was a minor. The defendants allege that the property conveyed by Terhune was purchased and paid for by money of the defendant, Catha- rine Jane, held by her mother, and was ex- pressly bought and intended for her, and that it was, in consequence thereof, held in trust for her, free trom any curtesy or interest of Johnson; and that when Johnson sold, or un- dertook to sell the same to Coe, the purchase money belonged to her, and when he paid De- pew for this mortgage $300 received from Coe, the mortgage was satisfied or held in trust for her. The consideration of the conveyance from Terhune was $1000 or $1025. Of this, $300 was left in the mortgage, which was by pay- ments, on the day of the conveyance, reduced to $300. and transferred to Depew; $700 or $725 was paid in money. It appears satis- factorily, by the weight of the evidence, that Letitia Johnson had in her bands about $700 of money belonging to her daughter, wliich she desired and intended to invest in this property, for the benefit of her daughter. It is proved, and not disputed, that she recov- ered and received upwards of $700 in a suit brought by her as next friend, in her daugh- ter's name, in New York, for damages to her real estate in that state; and that she had several hundred dollars of the personal es- tate of Stephen Christopher, her first hus- band, and the father of Catharine Jane, to which Catharine Jane was entitled; and it is fair to presume that the money advanced for the expenses of that suit was intended to be advanced out of this money. The amount recovered is clearly proved by the attorney, who prosecuted the suit, and collected the greater part of it. The only evidence on the other side is that of the complainant, who is so clearly shown to be mistaken in the most material parts of his account of what became of this money, as to deprive his tes- timony of all its weight. The repeated declarations of his wife, at or about the time of the purchase, that this was bought with the $700 of her daughter, and was intended for her, are already proved, and are in harmony with the attending facts and circumstances. It is a settled principle, that when one per- son purcliases property for a stranger, and the purchase money is paid by the stranger, or out of his funds, although the title is taken in the name of the person making the pur- chase, a trust results, and the land is held in trust for the party whose money paid for it. So, if a guardian or other trustee pur- chase with the money of his ward or other cestui que trust, a trust results by operation of law. This trust arises without any dec- laration in writing, for it is expressly except- ed by the statute of frauds, from the opera- tion of that statute; and the facts necessary to constitute such trust can be proved by parol, even if denied by the answer. Hill on Trustees, 91-2, and notes, and 95; Depey- ster v. Qould, 2 Green's C. R. 480. In this case, the lands conveyed to Letitia Johnson by Jacob li. Terhune and wife, by their deed of May tenth, 1853, must be taken to have been held by her in trust for her daughter, Catharine Jane, with whose mon- ey, and for whose benefit, the same was pur- chased. But this does not dispose of the main question in this cause. The mortgage was in Depew's hands, a valid security. It was bought by Johnson that he might fore- FIRST PRINCIPLES OF EQUITY, GEXERALLY CALLED "MAXIMS. ■cloae it; not to pay it off. He bought it with money that was his own, and to which the ■defeiidanta had no claim. The money was paid to him by Coe, as the consideration of his agreement to convey the property. Coe got no title, but only Johnson's personal ob- ligation* to give title. Jolinson, if he does not convey title, will be personally liable to pay this money back; it is no lien on the property of the defendants. The lot con- veyed to Johnson and his wife by Mrs. Ter- hune and her heirs, for which he paid S324, is included in the sale to Coe; and of this, the fee was vested in Johnson solely, by the death of his wife. Such is the effect of o were the trustees of the mortgage. It was at the instance of tlie latter the master was ordered to make the sale. The court might have ordered the trustees to make it. The mortgagors who were foreclosed were enjoined against claiming property after the master's sale, and directed to make a deed to the purchaser in further assurance. And the ccurt can direct the trustees to make a deed to the purchaser in confirmation of the sale. We cannot, therefore, declare void the decree which was made. The next objection urged by the appel- lants is, tliat the bill for a foreclosure and all the proceedings therein were collusive. It is said the suit was instituted by col- Jusio;i between the trustees and the Rock Island and South-western Railroad Com- panies, for the purpose of destroying the lien of the Atchinson branch bondholders •on the main line of the South-western Rail- way, and to enable the Rock Island com- pany to obtain the title to the main line, dis- «harged from any lien or claim on the part of such bondholders. After careful exam- ination of the evidence, we have failed to find anything that, justifies this objection. And certainly, if there was collusion in bringing and conducting the suit, the ap- pellants have not been injured by it. They were permitted to come in as parties defend- ant, and they had full opportunity to assert their equities. The fourth objection is general. It is, that, at the time of filing the bill, no right of foreclosure existed in favor of the com- phiinant trustees for the benefit of the Chi- cago and Rock Island Railway Company, or, if such a right did exist, that it had been waived. In respect to tliis objection we have to remark, that unless the right to a foreclosure had been waived by the Rock Is- land company, we discover no foundation for the assertion that there was no right of foreclosure when the suit was brought. That company had indorsed $5,000,000 of the bonds of the South-western company se- cured by the mortgage; and, in consequence of the indorsement, had paid coupons for interest of the bonds to a large amount. The mortgage stipulated that it might be foreclosed, in case of failure by the mort- gagor to pay the interest; and it stipulated further, that in case the Rock Island com- pany should, in consequence of its guaranty, pay any of the bonds or coupons, the mort- gMge might be foreclosed at their instance. The right to foreclose at tlie instance of the Rock Island company was expressly given. Was there any waiver of this right? We tliink not. It is said that the contract of July 27, 1871, coupled with the contract of Oct. 1, 1869, constituted a waiver. The contract first made preceded and contem- plated the execution of the mortgage. It gave to the Rock Island company the option of furnishing the equipment for the South- western road, or to lease and operate it on such terms as might be agreed upon. Man- ifestly, this was for an additional security to the guarantors of the bonds, and not for a substituted security. And the contract of July 27, 1871, made between the Rock Is- land company and the South-western, mere- ly provided that, with regard to the lease of the branch railroad proposed to>be construct- ed by the latter to the Missouri river, op- posite Atchinson, it should be used and operated by the Rock Island road in the same manner and on the same terms as the main line of the South-western. The meaning of this is, not that a lease existed, or should be taken, though one may have been contem- plated, but that the branch road should be operated in the same manner and on the same terms as the main line m'ght be. How this contract alone, or connected with the contract of Oct. 1, 1869, can be con strued as a waiver of a right to sue for fore- closure of the mortgage on the main line, we are unable to comprehend. Nor can we see that the contract of Dec. 4, 1871, called a "lease contract," even if it be regarded as an executed and subsisting contract, can have such an effect. We have heretofore said that the agreement to give and take a lease, dependent on the option of the Rock Island company, was intended as an addi- tional security to that company for its in- dorsement of the bonds. If we are correct, a lease executed in pursuiinco of the agree- ment could be only cumulative security. 22 CASES IN EQUITY. Henre, it could be no waiver of the right to foreclose. But, in fact, there was no lease, nor any agreement for a lease, that could be enforced specifically. The language of the agreement of Oct. 1, 18t)9, and that of the agreement of July 27, 1871, warrant no interpretation that makes them a lease In law, or in equity. The first, it is true, contemplated the possi- bility of a lease of the main line, if the terms could be agreed upon; and the latter pro- vided that when such lease should be agreed upon, if ever, it should also embrace the branch line. But the terms never were agreed upon. On the thirtieth day of Octo- ber, 187i, at a meeting of tlie executive committee of the Rocl<; Island company, Messrs. Scott and Riddle were appointed a sub-committeo "to agree upon the basis of a contract for a running arrangement be- tween the company and the South-western, with directions to report to the general com- mittee when an arrangement should be agreed upon." On the 4th of December, 1871, a proposition was submitted by that sub-committee to the officers of the South- western, and accepted by them. It was a proposition for a lease. But the sub-com- mittee had no authority to agree for the Rock Island company to take a lease, and when, afterwards, they reported their action to the general committee, that committee re- fused to confirm it. It is vain, therefore, to contend tliat there was a lease, or any agree- ment for a lease, that can be enforced. And, even it there was, there is no evidence that one of its terms was that the rent should be sufficient for the payment, and should be applied to the payment of the Atchinson branch bonds. It is next insisted on behalf of the appel- lants that the Bock Island company could not ask for a foreclosure of the mortgages until it had accounted for and applied the stock of the South-western company to its indemnification for its guaranty, for which purpose it held such stock as security. The company did hold a large amount of that stock. Whether it held it as an indemnity for the liabilities it had assumed, we do not care to inquire. Assuming that it did, the fact is quite immaterial. It surely cannot be maintained that a surety who held several securities for his indemnity cannot use one of them because he has another to which he might resort. The fifth particular in which the decree is alleged to have been erroneous is, that it de- nied the relief for which the appellants prayed in their cross-bill. That relief was the enforcement of what is called the lease contract of Dec. 4, 1871, or the enforcement of the contract of July 27, 1871, by a lease of the branch line, on terms and conditions to be derived from the contract of Oct. 1, 1869; that is to say, the rental to be paid by the Rock Island company to be an amount sufficient to guarantee the principal, or at least the interest, of the Atchinson brancb bonds. The answer to this is what we hava heretofore said. There was no lease, nor any contract which bound the Rock Island company to take a lease, much less to pay a rental sufficient to guarantee the principal or interest of the Atchinson branch bonds, or to apply the rent to the payment of that principal or interest. The appellants also, in their cross-bill, prayed in the alternative that the bonds of the branch road, held by them, might be- deemed to have been obtained under false and fraudulent pretences, and that the pro- ceeds thereof were paid out by the Rock Is- land company knowingly, fraudulently, and in violation of a trust assumed by them, and that tho said company might be decreed to- pay to tl.em the par value of the same and interest. We have sought in vain for any evidence that would justify a decree that the Rock Is- land company obtained the bonds of the- branch road by fraudulent pretences, or that it knowingly, fraudulently, and in violation of any trust assumed by it, paid out the pro- ceeds of sale of the bonds. By the provi- sions of the branch mortgage the Rock Island company was made the custodian of the bonds, with power and direction to pay them and their proceeds to the president or other duly authorized agent of the South-western company, in three contingencies: First, upon the delivery of an invoice of aiticlea purchased, approved by the president; sec- ond, upon the presentation of monthly esti- mates by the engineer of the South-western of work done and materials furnished in the construction of the branch railway, ap- proved in the same manner; and, third, on the certificate of the same engineer, ap- proved in like manner, that the road had been completed and was in running order. If this constituted a trust, it was only that of a custodian. The Rock Island company had no riglit to control the location of the branch road, or the cost of its construction. It was not its duty to supervise the con- tracts or direct tlie alignment. Such action would have been outside of its corporate- power. If some persons who were its offi- cers undertook to control the expenditure in such a manner as to secure a proper location and construction of the road (of which we discover no sufficient evidence), those per- sons may be responsible for their breach of duty, if there was any. But no such trust was assumed by the Rock Island company. Certiiinly, then, there was no undertaking that the branch road should be fifty miles long; and, if it was imperfeclly constructed, it appears that the Rock Island company has expended upon its construction a very large sum of its own money, and has made it a first-class Western road. If, then, there was such a trust, as is charged by the ap- pellants, and a breach of it, full compensa- tion has been made, and the appellants have FIRST PRINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." 23 all the security the trust was intended to give them; i. e., a first mortg:ige upon a fin- ished first-class road. The last objection to the decree is, that the relief prayed for by the cross-biils of the two defendant railroad companies should not have been granted, for the following rea- sons: 1st, If the original suit fails for want of jurisdiction, so must the cross-bills. 2d, The cross-bills were nullities, because filed without leave of the court, and because not making the intervening bondholders parties. 3d, Because collusive. We have seen the court liad jurisdiction of the original suit. Tlie permission of the court to file the cross- bills must be presumed from its action upon them, and the intervening bondholders were not parties or necessary parties when the bills were filed. They became parties to the original bill, but they did not ask to be made parties to the cross-bills of tlie defend- ant corporations. That the cross-bills were collusive in their origin, purpose, and con- duct, if such was the fact, which we do not perceive, is of no importance, since the ap- pellants had an unobstructed opportunity to vindicate their rights. They might, if they had chosen, have become parties defendant to the cross-bills, and, if they liad, they could not have resisted the relief giveu by the court. The appellants are, no doubt, unfortunate. It may be that tliey purchased their bonds expecting that the Hock Island company would protect them, either by taking a lease of the branch road, or by holding the pur- chase-money of the bonds and expending it for their security. But the expectation of a guaranty cannot be treated as a guaranty it- self. Decree affirmed. (See, also, 1 Pom. Eq. Jur. §§ 428-431; Snell, Eq. 47.) Maxim 12. Equity regards that as to be done. (3 Wheat. 563-576.) Ceaig V. Leslie. (Supreme Court of the United States. 1818.) "Where, in a will, the executor is ordered to sell certain lands, and to pay over the proceeds toa des- ignated person, within a certain time, at the ex- piration of that time, even If the lands have not been sold, equity will regard that as done which ought tohave been done, and will hold the executor responsible lor the money. Robert Craig's will contained the following clause: "I give and bequeath to my brother, Tlionias Craig, of Baith parish, Ayrshire, Scotland, all the proceeds of my estate, both real and personal, which I have herein di- rected to be sold, to be remitted to him, ac- cording as the payments are made." Thom- as Craig being an alien, the question was, could he take the proceeds of this land, which had been devised to one Leslie, in trust, the proceeds from the sale of which were to be paid to him ? Mr. Justice Washington delivered the opinion of the court. The incapacity of an alien to take, and to hold beneficially, a legal or equitable estate in real property, is not disputed by the counsel for the plaintiff; and it is admitted by the counsel for the state of Virginia, that this incapacity does not extend to jiersonal estate. The only inquiry, then, which this court has to make is, whether tlie above clause in the will of Robert Craig is to be construed, under all the circumstances of this case, as a bequest to Thomas Craig of persoijal property, or as a devise of the land itself. Were this a new que.stion, it would seem extremely difficult to raise a doubt respecting it. The common sense of mankind would determine, that a devjse of money, the pro- done •which, in good faith, ought ceeds of land directed to be sold, is a devise of money, notwithstanding it is to arise out of land; and that a devise of land, which a testator by his will directs to be purcliased, will pass an interest in the land itself, with- out regard to the character of the fund out of which the purchase is to be made. *The settled doctrine of the courts of equi- ty corresponds with this obvious construction of wills, as well as of otlier instruments, wliereby land is directed to be turned into money, or money into land, for the benefit of those for whose use the conversion is in- tended to be made. In the c^se of Fletcher v. Ashburner, (1 Bro. Ch. Cas. 497,) the master of the rolls says, that "nothing is better established than this principle, that money directed to be employed in the pur- chase of land, and land directed to be sold and turned into money, are to be considered as tliat species of property into wliich they are directed to be converted, and this, in whatever manner the direction is given." He adds, "the owner of the fund, or tlie con- tracting parties, may make land money or money land. The cases establish this rule universally." This declaration is well war- ranted by the cases to which the master of the rolls refers, as well as by many others. See Doughty v. Bull, 2 P. Wms. 320. Yates V. Compton, Id. 308. Trelawney v. Booth, 2 Atk. 307. The principle upon which the whole of this doctrine is founded is, that a tourt of equity, regarding the substance, and not the mere forms and circumstances of agreements and •Equity considers land, directed to be sold and converted into money, as money; and money di- rected to be employed in the purchase of land, a> land. $.<^ Uli 24 CASES IN EQUITY. other instruments, considers things directed or agreed to be done, as having been actual- ly performed, where nothing has intervened which ought to prevent a performance. This qualification of the more concise and general cule, that equity considers th;it to be done which is agreed to be done, will corapreliend the cases which coma under this head of «quity. *Thus, where the whole beneficial interest in the money in the one case, or in the land in tlie other, belongs to the person for whose •use it is given, a court of equity will not com- pel the trustee to execute the trust against the wishes of the cestui que trust, but will per- unit him to talie the money or the land, if he elect to do so before the conversion has ac- tually been made; and this election he may make, as well by acts or declarations, clearly indicating a determination to that effect, as toy application to a court of equity. It is this election, and not the mere right to make it, which changes the character of the estate so as to make it real or personal, at the will of the party entitled to the beneficial interest. If this election be not made in time to stamp the property with a character different from that which the will or other instrument gives it, the latter accompanies it, with all its legal consequences, into the hands of thoseentitled toit in that character. fSothat in case of the death of the cestui que trust, without having determined his election, the property will pass to his heirs or personal i-epresentatives, in the same manner as it would have done had the trust been executed, and the conversion actually made in his life- time. In the case of Kirkman v. Milles, (13 Ves. 338) which was a devise of real estate to trus- tees upon trust to sell, and the moneys arising as well as the rents and profits till the sale, to be equally divided between the testator's three daughters, A. B. and C. The estate was, upon the death of A. B. and C, con- sidered and treated as personal property, not- withstanding the cestui que trust's, after the ■death of the testator, had entered upon, and occupied the land for about two years prior to their deaths; but no steps had been taken by them, or by the trustees, to sell, nor had any requisition to that effect been made by the former to the latter. The master of the rolls was of opinion, that the occupation of the land for two years was too short to pre- «ume an election. He adds, "the opinion of Lord llosslyn, that property was to be taken as it happened to be at the death of the party *Where the whole beneficial interest in the land in one case, or in the money in the other, be- longs to the person for whose use it is given, a court of equity will permit the cestui que trust to take the money or land at his election, if he elect 'before the conversion is made. tBut if the cestui que trust die, without having determined his election, the property will pass to his heirs or personal representatives, in the same manner as it would have done if the conversion had been made, and the trust executed in his life- time. from whom the representative claims, had been much doubted by Lord Eldon, who held that without some act, it must be considered as being in the state in which it ought to be; and that Lord Rosslyn's rule was new, ' and not according to the prior cases." > The same doctrine is laid down and main- tained in the case of Edwards v. The Count- ess of Warwick, (2 P. Wms. 171,) which was a covenant on marriage to invest 10,000/., part of the lady's fortune, in the purchase of land in fee, to be settled on the husband for life, remainder to his first and every other son in tail male, remainder to the husband in fee. The only son of this marriage hav- ing died without issue, and intestate, and the investment of the money not having been made during his life, the chancellor decided that the money passed to the heir at law; that it was in the election of the son to have made this money, or to have disposed of it as such, and that, therefore, even his parol dis- position of it would have been regarded; but that something to determine the election must be done. *This doctrine, so well established" by the cases which have been referred to, and by many others which it is unnecessary to men- tion, seems to be conclusive upon the ques- tion which this court is called upon to decide, and would render any farther investigatioa of it useless, were it not for the case of Roper v. Kadclilfe, which was cited, and mainly re- lied upon, by the counsel for the stateof Vir- ginia. The short statement of that case is as fol- lows: John Roper conveyed all his Ian Is to trustees and their heirs, in trust, to sell the same, and out of the proceeds, and of the rents and protits till sale, to pay certain debts, and the overplus or the money to be paid as he, the said John Roper, by his will or other- wise, should appoint, and for want of such appointment, for the benefit of the said John Roper, and his Iieirs. By his will reciting the said deed, and the power reserved to him in the surplus of the said real estate, he be- queathed several pecuniary legacies, and then gave the residue of his real and personal es- tate to William Constable and Thomas Rad- cliffe, and two others, and to their heirs. By a codicil to this will, he bequeathed other pe- cuniary legacies; and the remainder, whether in lands or personal estate, he gave to the said W. C. and T. R. Upon a bill filed by W. C. and T.R. against the heir at law of John Roper, and the other trustees, praying to have the trust executed, and the residue of the money arising from the sale of the lands to be paid" over to them; tlie heir at law opposed the execution of the trust, and claimed the land as a resulting trust, upon the ground of the incapacity of Constable and Radcliife to take, theyjaeing papists. The decree of the court of chancery, which was in favour of the papists, was, up- ♦The case of Roper v. Radcliffe, 9 Mod. 167. ex- amined. FIRST PRINCIP] ES OF EQUITY, GENERALLY CALLED "MAXIMS. 25 on appeal to the house of lords, reversed, and the title of the heir at law sustained; six judges against live, being in his favour. Without stating at large the opinion upon which the reversal took place, this court vrill proceed, 1st. To examine the general prin- ciples laid down in that opinion; and then, 2d. The case itself, so far as it has been pressed npon us as an authority to rule the question before the court. In performing the first part of this under- taking, it will not be necessary to question any one of the premises laid down in that opinion. They are, 1. That land devised to trustees, to sell for payment of debts and legacies, is to be deemed as money. This is the general doctrine established by all the cases referred to in the preceding part of this opinion. *2. That the heir at law has a re- sulting trust in such land, so far as it is of value, after the debts and legacies are paid, iipd that he may come into equity and re- strain the trustee from selling more than is necessary to pay the debt and legacies; or he may offer to pay them himself, and pray to have a conveyance of the part of the land not sold in the first case, and the whole in the latter, which property will, in either case, be land, and not money. This right to call for a conveyance is very correctly styled a priv- ilege, and it is one which a court of equity will never refuse, unless there are strong reasons for refusing it. The whole of this doctrine proceeds upon a principle which is incontrovertible, that where the testator merely directs the real estate to be converted into money, for the purposes directed in his will, so much of the estate, or the money arising from it, as Is not effectually disposed of by the will, (whether it arise from some omission or defect in the will itself, or from any subsequent accident, which prevents the ■devise from taking effect,) results to the heir at law, as the old use not disposed of. Such was the case of Cruse v. Barley, (3 P. Wms. 20.) where the testator having two sons, A. and B., and three daughters, devised his lands to be sold to pay his debts, &c., and as to the moneys arising by the sale, after debts paid, gave £200 to A. the eldest son, at the age of 21, and the residue to his four younger children. A. died before the age of 21, in consequence of which the bequest to him failed to take effect. The court decided that the £200 should be considered as land to de- scend to the heir at law of the testator, be- cause it was in effect the same as if so much land as was of the value of £200 was not di- rected to be sold, but was suffered to descend. The case of Ackroyd v. Smithson, (1 Bro. *Lnnd, devi=ed to trustees, to sell for payment cl debts and legacies, is to be deemed as money. The heir at law has a resulting trust in such lands, after the debts and legacies are paid, and may come into equity and restrain the trustee from selling more than sufficient to pay them, or may offer to pay them himself, and pray a convey- ance of the part of the land not sold in the first case, and the whole in the latter, which property in either case will be land, and not money. Ch. Cas. 503,) is one of the same kind, and establishes the same principle. So, like- wise, a money provision under a marriage contract, to arise out of land, which did not take effect, on account of the death of the party for whose benefit it was intended, be- fore the time prescribed, resulted as money to the grantor, so as to pass under a residu- ary clause in his will. (Hewitt v. Wright, 1 Bro. Ch. Cas. 86.) *But even in cases of resulting trusts, for the benefit of the heir at law, it is settled that if the intent of the testator appears to have been to scamp upon the proceeds of the land described to be sold, the quality of personal- ty, not only to subserve the particular pur- poses of the will, but to all intents, the claim of the heir at law to a resulting trust is de- feated, and the estate is considered to be per- sonal. This was decided in the case of Yates V. Compton, (2 P. Wms. 308,) in which the chancellor says, that the intention of the will was to give away all from the heir, and to turn the land into personal es- tate, and that that was to be taken as it was at the testator's death, and ought not to be altered by any subsequent accident, and de- creed the heir to join in the sale of the land, and the money arising therefrom to be paid over as personal estate to the representatives of the annuitant, and to those of the residu- ary legatee. In the case of Fletcher v. Ash- burner, before referred to, the suit was brought by the heir at law of the testator, against the personal representatives and the trustees claiming the estate upon the ground of a resulting trust. But the court decreed the property, as money, to the personal rep- resentatives of him to whom the beneficial interest in the money was bequeathed, and the master of the rolls observes, that the case of Erablyn v. Freeman, and Cruse v. Barley, are those where real estate being directed to be sold, some part of the disposition has failed, and the thing devised has not accrued to the representative, or devisee, by which something has resulted to the heir at law. It is evident, therefore, from a view of the above c:ises, that the title of the heir to a re- sultiug trust can never arise, except when something is left undisposed of, either by some defect in the will, or by some subse- quent lapse, which prevents the devise from taking effect; and not even then, if it appears that the intention of the testator was to change the nature of the estate from land to money, absolutely and entirely, and not merely to serve the purposes of the will. But the ground upon which the title of the heir rests is, that svhatever is not disposed remains to him, and partakes of the old use, as if it had not been directed to be sold. *But if the intent of the testator appears to have been to stamp upon the proceeds of the land di- rected to be sold, the quality of personalty, not only for the particular purposes of the will, but to all intents, the claim of the heir at law to a result- ing trust is defeated, and the estate is considered to be personal. 26 CASES IN EQUITY. The third proposition laid down in the case of Eoper v. Kadcliffe, is, that equity will ex- tend the same privilege to the residuary legatee which is allowed to the heir, to pay the debts and legacies, and call for a convey- ance of the real estate, or to restrai n the trns- tees from selling more than is necessary to pay the debts and legacies. *This has, in effect, been admitted in the preceding part of this opinion; because, if the cestui que trust of the whole beneficial interest in tlie money to arise from the sale of the land, may claim this privilege, it fol- lows, necessarily, that the residuary legatee may, because he is, in effect, the beneficial owner of the whole, charged with the debts and legacies, from whicli he will be permitted to discharge it, by paying the debts and lega- cies, or may cliiira so much of the real estate as may not be necessary for that purpose. fBut the court cannot accede to the con- clusion, which, in Roper v. Radcliffe, is de- duced from the establishment of the above principles. That conclusion is, that in re- •spect to the residuary legatee, such a devise shall be deemed as land inequity, though in respect to the creditors and specific legatees it is deemed as money. It is admitted, with this qualification, tliat if the residuary legatee thinks proper to avail himself of the priv- ilege of taking it as land, by making an elec- tion in his life time, the property will then assume the eliaracter of land. But if he does not make this election, the property retains the character of personalty to every intent and purpose. The cases before cited seem to the court to be conclusive upon this point; and none were referred to, or have come un- der the view of the court, which sanction the conclusion made in the unqualified terms used in the case of Roper v. Radcliffe. As to the idea that the character of the es- tate is affected by this right of election, whether the right be claimed or not, it ap- pears to be as repugnant to reason, as we think it has been stiown to be, to principle and authorities. Before any thing can be made of the proposition, it sliould be shown that this right of privilege of election is so indissolubly united with tlie devise, as to constitute a part of it, and that it may be ex- ercised in all cases, and under all circum- stances. This was, indeed, contended for with great ingenuity and abilities by the counsel for the state of Virginia, but it was not proved to the satisfaction of the court. It certainly is not true, that equity will *Equity will extend the same privilege to the re- siduary legatee which is allowed to the heir, to pay the debts and legacies, and call for a convey- ance of the real estate, or to restrain the trustees from selling more than is necessary to pay the debts and legrG^cies. tThe conclusion— which, in Roper v. RadolifCe, is deduced from the above principles, that in re- spect to the residuary legatee such a devise shall be considered as land in equity, though in respect to the creditors and specific legatees, it is deemed as money— denied. extend this privilege in all cases to the cestui que trust. It will he refused if he be an in- fant. In thecaseof Seeley V. Jago, (IP.Wms. 389,) where money was devised to be laid out in land in fee, to be settled on A. B. and C, and their heirs, equally to be divided: On the death A., his infant heir, together with B. and C, filed their bill, claiming to have the money, which was decreed accordingly as to B. and C. ; but the share of the infant was ordered to be put out for his benefit, and the reason assigned was, that he was inca- pable of making an election, and that such election, if permitted, would, in case of his death, be prejudicial to his heir. In the case of Poone v. Blount, (Cowp, 467,) Lord Mansfield, who is compelled to ac- knowledge the authority of Roper v. Rad- cliffe in parallel cases, combats the reason- ing of Cliief Justice Parker upon this doc- trine of election, with irresistible force. He suggests, as the true answer to it, that though in a variety of cases this right exists, yet it was inapplicable to the case of a person who was disabled by law from taking land, and that therefore a court of equity would, in such a case, decree that he should take the property as money. This case of Walker v. Denne, (2 Ves. Jun. 170,) seems to apply with great force to this part of our subject. The testator directed money to be laid out in lands, tenements, and hereditaments, or on long terms, with limita- tions applicable to real estate. The money not having been laid out, the crown on fail- ure of heirs, claimed the money as land. It was decided that the crown had no equity against the next of kin to have the money laid out in real estate in order to claim it by escheat. It was added that the devisees, on becoming absolutely entitled, have the option given by the will; andadeed of appointment by one of the cestui que trusts, though a feme covert, was held a sutflcient indication of her intention that it should continue per- sonal against her heir claiming it as ineffectu- ally disposed of for want of her examination. This case is peculiarly strong, from the cir- cumstance, that the election is embodied in the devise itself; but tliis was not enough, because the crown had no equity to force an election to be made for the purpose of pro- ducing an escheat. Equity would surely proceed contrary to its regular course, and' the principles which universally govern it, to allow the right of election where it is desired, and can be law- fully made, and yet refuse to decree the money upon the application of the alien, up- on no other reason, but because, by law, he is incapable to hold the land: In short, to con- sider him in the same situation as if he had made an election, which would have been re- fused hail he asked for a conveyance. The more just and correct rule would seem to be, that where the cestui que trust is incapable to take or to hold the land beneficially, the right of election does not exist, and conss- FIRST PBINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." 27 quently, that the property is to be considered as being of that species into which it is di- rected to be converted. , Having made these observations upon the principles laid down in the case of Roper v. Radcliffe, and upon the arguments urged at the bar in support of them, very few words will suffice to show that, as an authority, it is inapplicable to this case. *The incapacities of a papist under the English statute of 11 and 12 Wm. HI. c. 4, and of an alien at common law, are extreme- ly dissimilar. The former is incapable to take by purchase, any lands, or profits out of lands; and all estates, terras, and any other interests or profits whatsoever out of lands, to be made, suffered, or done, to, or for the use of such person, or upon any trust for him, or to, or for the benefit, or relief of any such person, are declared by the statute to be ut- terly void. Thus, it appears that he cannot even take. His incapacity is not confined to land, but to any profit, interest, benefit, or relief, in or out of it. He is not only disabled from tak- ing or having the benefit of any such inter- est, but the will or deed itself, which at- tempts to pass it, is void. In Roper v. Rad- cliffe, it was strongly insisted, that the money given to the papist, which was to be the pro- ceeds of the land, was a profit or interest out of the land. If this be so, (and it is not material in this case to affirm or deny that position,) then the will of John Roper in re- lation to the bequest to the two papists, was void under the statute; and if so, the right of the heir at law of the testator, to the residue, as a resulting trust, was incontestable. The cases above cited have fully established that principle. In that case, too, tlie rents and profits, till the sale, would have belonged to the papists, if they were capable of taking, which brought the case still more strongly witliin the statute; and this was much relied on, nut only in reasoning upon the words, but the policy of the statute. fNow, what is the situation of an alien? He cannot only take an interest in land, but a freehold interest in the land itself, and may hold it against all the world but tlie king, and even against him until office found, and he is not accountable for the rents and profits previously received. («) In this case the will being valid, and the alien capable of taking under it, there can be no resulting trust to the heir, and the claim of the state is founded solely upon a supposed equity, to have the land by escheat as if the alien had, or could upon the principles of a court of equity, have elected to take the land instead •The case of Roper v. RadclifEe distinguished from the present case. tAn alien may take, by purchase, a freehold, or other interest in land, and may Iwld it against all the world except the king ; and even against him until office found; and is not accountable for the rents and profits previously received. (a) Vide 3 Wheat. 13. Jackson ex dcm. State of Uew York v. Clarke, note c. of the money. The points of difference be- tween the two cases are so striking tliat it would be a waste of time to notice them ia detail. It may be further observed, that the case of Roper v. Radcliffe has never, in England, been applied to the case of aliens; that its authority has been submitted to with reluc- tance, and is strictly conQned in its applica- tion to cases precisely parallel to it. Lord Mansfielil in the case of Foone v. Blount, speaks of it with marked disapprobation; and we know, that had Lord Trevor been pres- ent, and declared the opinion he had before entertained, the judges would have been equally divided. The case of the Attorney General and Lord "Weymouth, {Ambler, 20,) was also pressed upon the court, as strongly supporting that of Roper v. Radcliffe, and as bearing upon the present case. The first of these propositions might be- admitted; although it is certain that the mortmain act, upon which that case was de- cided, is even stronger in its expression than the statute against papists, and the chancel- lor so considers it; for he says, whether the surplus be considered as money or land, it is just the same thing, the statute making void all charges and encumbrances on land, for the benefit of a charity. But if this case were, in all respects, the same as Roper v. Radcliffe, the observations which have been made upon the latter would all apply to it. It may be remarked, how- ever, that in this case, the chancellor avoid* expressing any opinion upon the question, whether the money to arise from the Siile of the land, was to be taken as personalty or land; and, although he mentions the case of Roper V. Radcliffe, he adds, that he does not depend upon it, as it was immaterial whether the surplus was to be considered as land or money under the mortmain act. Upon the whole we are unanimously of opinion, that the legacy given to Thomas Craig, in the will of Robert Craig, is to be- consiilered as a bequest of personal estate, which he is capable of taking for his own benefit. Certificate accordingly. (29 Minn. 330, 13 N. W. Rep. 137.) Ames v. Richardson. {Supreme Court of Minnesota. July 35, 1883.) On December 16, 1879, C, owning a piece of land, insured a mill, machinery and fixtures there- in against damage by fire, in the Western Manu- facturers' Mutual Insurance Company, for $3,000. December IS, 1879, C. borrowed of defendant R. $5,200, for which he gave his note on five years, so- cured by a mortgage of the land mentioned, duly recorded December 32d. By the terms of the mortgage, C. covenanted witti R. that, at all times during its continuance, he would keep the build- ings on the mortgaged premises uucsasingly in- sured for at least $5,200, payable in case of loss to- R., to the amount then secured by the mortgage. December 28, 18;9, C. insured the mill, machinery, and fixtures for $1,500 in one company, and for -28 CASES IN EQUITY. 42,000 in another; the losses being made payable by indorsements upon the policies to R., as her in- terest might appear. On July 9, 1880, the insured propertv was totally destroyed by fire. Before this tim'e R. had no knowledge of the first insur- xince. The losses on the three insurances were ad- justed by C. and the insurance companies at $4,298.03, as the true value of the property de- stroyed, so that the losses payable to R. were scaled from $3,.500 {the face of the last two poli- cies) to $3,442.20, which sum was paid to R. and ■applied on C.'s note. The loss under the first in- surance was scaled and adjusted at $1,317.70, and that sum agreed to be paid C. accordingly. This was done July 19, 1880, and on the same day the •certificate issued to C. on the first insurance, in lieu of a policy, was for value assigned to the plaintiffs. Held, that R. has an equitable lien on the proceeds of the first insurance, and is entitled to recover the same, to be applied on her note and tmortgage. Plaintiffs brought this action, in the district couit for Hennepin county, against the West- ern Manufacturers' Mutual Insurance Com- pany, to recover the amount due on a policy of insurance for $2,000, issued to one Robert Cochran, on a mill and macliinery in tliis .state. The mill was destroyed by tire, and the loss under this policv was adjusted at $1,317.70 on July 19, 1880. On the same •day Cochran assigned all his rights under the policy to plaintiffs, Ruth C. Richardson, who had a mortgage upon the mill property, claiming to be entitled to this sum, was ,sub- -stituted as defendant in place of the insur- .ance company; The action was submitted to the court, Young, J., presiding, upon the complaint and .answer, the allegations of which were ad- milted to be true, and the material portions of which are stated in the opinion. The court found for the plaintiffs, and ordered judgment accordingly. Defendant appeals from an order refusing a new trial. Beery, J. On December 16, 1879, Coch- Tan, being owner of a piece of land in this state, insured a mill, machinery and fixtures therein against damage by fire, in the West- ■ern Manufacturers' Mutual Insurance Com- pany, for $2,000. December 18, 1879, he borrowed of defendant $5,200, for which he gave his promissory note orf five years, se- -cured by a mortgage of the land mentioned, which was duly recorded December 22d. By the terms of the mortgage Cochran cove- nanted with Richardson that at all times dur- ing its continuance he would keep the build- ings on the premises "unceasingly insured" for at least $5,200, payable in case of loss to Richardson, to the amount Ihen secured by the mortgage. December 28, 1879, Coch- ran insured the mill, machinery, and fixtures for .$1,500 in one company, and for $2,000 in another, and, by indorsement upon each of the two policies issued to him, the loss was made payable to Richardson, as her in- terest might appear. On July 9, 1880, while the three insurances were in force, the in- sured property was totally destroyed by fire- Before this RicharJ.son had no knowledge of the first insurance. The loss was adjusted hy Cochran and the three insurance com- panies at $4,298.03, as the true value of the property destroyed. The result was that the losses payable to Richardson were scaled from $3,500 (the face of the last two policies) to $2,442.20, and this sum was paid to her and applied on tlie note. The loss under the first insurance was scaled and adjusted at $1,317.- 70, and that sum agreed to be paid Cochran accordingly. This was done July 19, 1880, and on the same day the certificate which had been issued to Cochran by the Western Manufacturers' Mutual Insurance Company, in lieu of a policy, was for a valuable con- sideration duly assigned to the plaintiffs. They brought this action against the insur- ance company to recover the amount of the loss as adjusted at $1,317.70. Nothing hav- ing been paid upon Richardson's note and mortgage other than the sum of $2,442.20 before mentioned, and the whole debt hav- ing been declared due under a provision in the mortgage, there remains due and un- paid thereon something over $3,000. Rich- ardson laying claim to the money ($1,317.70) realized from the first insurance, the com- pany paid it into court, and Richardson was substituted as defendant in the company's place. The question is, who is entitled to this money — plaintiffs or Richardson? It is well settled that, in the absence of an agreement by a mortgagor to insure for the benefit of his mortgagee, the latter has no right to any advantage whatever from an insurance upon the mortgaged property ef- fected by the former for his own benefit. 1 Jones, Mortg. § 401; Nichols v. Baxter, 5 R. I. 491; Plimpton v. Ins. Co., 43 Vt. 497; May, Ins. §§ 449, 456; Carter v. Rockett, etc, Ins. Co., 8 Paige, 437. It is equally well settled that an agreement by the mortgagor to insure for the benefit of his mortgagee gives the latter an equitable lien upon the proceeds of a policy taken out by the former and embraced in the agree- ment. And when the agreement is that the mortgagor shall procure insurance upon the mortgaged property, payable in case of loss to the mortgagee, and the mortgagor, or some one for him, procures insurance in the mort- gagor's or a third person's name, without making it payable to the mortgagee, though this be done without the mortgagee's knowl- eJge, or without any intent to perform the agreement, equity will treat the insurance as effected under the agreement, (unless this has been fulfilled in some other way,) and will give the mortgagee his equitable lien ac- cordingly. This is upon the principle by which equity treats that as done which ought to have been done. That is to say, inasmuch as the insurance effected ought to have been made payable to the mortgagee, equity will give the mortgagee the same benefit from it as if it had been. In support of these gen- eral propositions we refer to Thomas v. Vonkapff, 6 Gill & J. 372; Carter v. Rock- ett, etc., Ins. Co., and Nichols v. Baxter, svr- pra; Wheeler v. Ins. Co., 101 U. S. 439; Cromwell v. Brooklyn Fire Ins. Co., 44 N FIRST PKINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." 2^ Y. 42; Miller v. Aldrich, 31 Mich. 408; 1 Story, Eq, Jur. § 64fl>,- 2 Am. Leatl. Gas. (5th Ed.) 832-4; In re Sands Ale Brewing Co., Z Bis3„ 175. Ip the cases cited (with the exception of Nichols V. Baxter) the insurance was effect- ed after the agreement to insure. In Nichols V. Baxter it would seem that tlie court tbouglit this made no difference, though tlie opinion alludes (somewhat as a makeweight, as it occurs to us) to the fact, which appeared by inference only, that the insurance in that case, though effected before the agreement to insure, wa? understood by the parties to be embraced in it. We, however, can see no reason why the same rule should not be ap- plicable to insurance already subsisting when the agreement to insure is made, as to that subsequently obtained, unless this result is aftirmatively excluded by the facts of the case. Such subsisting insurance can be made payable to the mortgagee, or assigned to him, so as to satisfy the agreement. Where the agreement is, as in the case at bar, "to keep" the premises insured, it is en- tirely consistent with its letter as well as its spirit to hold that it embraces prior as well as subsequent insurance. And where, as in the present instance, the value of the insured property is such that subsequent insurance, sulficient to satisfy the agreement, cannot be obtained so long as the prior insurance stands, this is an equitable circumstance en- titled to great weight upon the question whetlier the prior insurance ought to be held to be covered by the agreement. This equi- table circumstance is much enhanced when the effect of the prior insurance is, as in this case, to scale and reduce the subsequent insurance procured and made payable to the mortgagee under the agreement. In such a state of facts, to permit the mortgagor to withhold the prior insurance from the mortgagee is to permit him to prolit by his own wrong, at the expense of him whom he has wronged, and a violation of one of the first principles of law as well as of equity. The question is not what the mortgagor's intention was with reference to the prior insurance, but whether it was equi- table that, in carrying out any intention, he should be permitted to withhold the benetits from the mortgagee, especially in view of the maxim that equity regards that as done which ought to have been done. Cromwell V. Brooklyn Fire Ins. Co., Wheeler v. Ins. Co., Miller v. Aldrich, and In re Sands Ale Brewing Co.. supra. Applying these considerations to this case, we are of opinion that Richardson is clearly entitled to an equitable lien upon the pro- ceeds of the first insurance, to be applied up- on her note and mortgage. Cochran ought to have kept his covenant. He could have done this by procuring a third new policy, or by assigning the first insurance, or hav- ing it made payable to Ricliardson. As he did not do the former, he should have done the latter, and therefore Richardson is in equity entitled to stand in the same position as if he had done what he ought to hav& done. Stearns v. Quincy Ins. Co., 124 Mass. 61, relied upon by the plaintiffs, is not a case presenting the precise question whether an insurance effected before an agreement to- insure is to be regarded as embraced in such agreement, so as to give a mortgagee an equitable lien on the proceeds. But the- principle there enunciated, and which ap- pears to be supported by other decisions of that state, is that the mortgagee cannot have- the lien unless the insurance was obtained by the mortgagor as his agent, or with intent to perform an agreement to insure. If this- was to be regarded as the correct rule, it would seem to be decisive in the plain- tiffs' favor. But it is against the weight and current of authority, and, as it seems to us, inequitable, and therefore we do not fol- low it. Another question was discussed upon the- argument, viz., whether the covenant to in- sure ran with the land, so that the record of the mortgage was constructive notice to the plaintiff and to all others of Richardson's (the mortgagee's) equities. We do not deem, it at all necessary to consider this question. The mortgagor's assignment of his claim under the certificate after the loss was an as- signment of a debt, — a mere chose in action, — which the plaintiffs took suljject to all de- fenses and equities against him. Archer v.. Merchants' & M. Ins. Co., 43 Mo. 434; Wil- son V. Hill, 3 Met. 66; Brichta v. N. T. La- fayette Ins. Co., 2 Hall, (N. Y.) 372; Mel- len V. Hamilton Fire Ins. Co., 17 N. Y. 609; Greene v. Warnick, 64 N. Y. 220; May, Ins. § 386. From all this it follows that, in our opinion, the defendant is entitled to the pro- ceeds of the first insurance paid into the- court, instead of the plaintiffs, as found by the court below. There being no dispute as to the correct- ness of the findings of fact, tlie case is re- manded, with directions to the district court to render judgment for the defendant accord- ingly. Though there is no formal reversal of the order denying a new trial, the defend- ant is entitled to costs, as of course. (5 Kan. 615.) Com'ks Douglas Co. v. Union Pao. Et» Co., E. D. (Supreme Court of Kansas. April, 1870.) 1. As long as the title to land lying within an Indian reserve remains in the United States, or in. the Indians, or in both, the land is not taxable by the state. 2. A mere contingent, conditional, and inchoate equity, obtained by a railway company in such lands, but whiob does not amount to a title, either legal or equitable, does not so divest the United States of their title to the land as to subject the same to taxation. 8. Under a conditional purchase of said land by a railway company when by the terms of the con- tract of purchase no patent is to be issued for the 30 CASES IN EQUITY. land until all the conditions of the purchase are fulfilled, and if any one of the conditions of the purchase is not fulfilled, the railway company are to forfeit all their right, title, and interest in and to said land, and the same is to bo sold again to •other parties, and when it appears from the nature of the contract and the character of the parties that time is an essential ingredient of the contract, no title, legal or equitable, passes to the railway company, until they fulfill every condition of their -contract. 4. The laws and treaties of the United States, and not the laws of the state, must govern in the primary disposal of the soil by the United States. Error from Douglas district court. This action was brouglit by the railroad company to restrain the collection of taxes, levied for the years 1866 and 1867, on a quar- ter section of the 100,000 acres of land speci- fied in the treaties with the Delaware tribe of Indians of May 30, 1860, and of July 2, 1861. 12 St. at Large, 1177. The patent granted, pursuant to tlie provisions of these treaties and tlie amendments, was not issued by the government until 1868. Inthedefense it was sought tube shown that although the legal title to the land did not pass until that time, yet that the railroad company held such an equitable title thereto as to make it liable for the taxes mimed; and this claim was ibased upon the contract found in the treaty, the Pacific railroad bills and the acts of the parties thereunder. The record shows that it was a fart agreed upon that the purchase money for the land had not been paid in 1867; that $250,000, the balance in full of the bonds issued, was not paid until February 11, 1868, but that the interest had been fully paid when due, and that it was further agreed that more than 25 miles of the road from Leavenworth westward had been completed and equipped in A. D. 1866. Valentine, J. The only question in this case which counsel desire to raise, or to have decided, is whether the N. W. J of sec- tion No. 29, township No. 12, range No. 20, in Douglas county, was subject to taxation for the years 1866 and 1867. This depends upon the question whether, at the time the land was assessed, the title to the same had passed from the Indians and the government of the United States to the Union Pacific Railway Company. If the title had passed, so th^t the land belonged to the railway company, it was taxalile; but if the title had not so passed — if the land still belonged to the In- dians or to the United States, or to both — it was not taxable. As the patent from the United States to the railway company had not been issued until the year 1868, it will hardly be contended that the legal title had passed. It is contended, however, that the equitable title had passed; that in equity the railway company were the real owners of the land, and therefore that the land was taxable. We suppose it will be conceded, even by the defendants in error, that if the equitable title had passed to the railway company, if their title was perfect, except that thecouiiiany hud received no patent, which is only the legal evidence of title, the land was taxable. We are of the opinion that no title, legal or equitable, had passed. It is true that the railway company had some equities in the land, but they were mere contingent, condi- tional, and inchoate equities that did not amount to a title. It is true that the com- pany had made a conditional purchase of this land, but they were not to receive the patent therefor until all the conditions of the pur- chase were fulfilled; and if any one of the conditions were violated; if the company failed to complete and equip twenty-five miles of their railroad from Leavenworth westwardly within five years ; if they failed to complete and equip the whole of their rail- road through the Delaware reserve within eight years; if they failed to pay the interest annually or the purchase money, secured by bonds, within thirty days after the same be- came due, or if tliey failed to pay the princi- pal of said bonds at the time it should become due, they were to forfeit all their right, title, and interest in and to said land, and Jt was then to be sold to other pai'ties. It will be perceived from the very nature of this con- tract, and from the character of the parties to the same, that time was an essential in- gredient of the contract. The contract was purely executory, and it was not intended that the government should be bound to ex- ecute its part of the contract by parting with any portion of its land, unless the railroad company should fulfill every portion of its part of the contract first, and strictly within the time stipulated. It was not intended to have any lawsuits over the matter. The rail- road company could not sue the government or the Indians, and it was not intended that the government or the Indians should, under any circumstances, be under the necessity of suing the railroad company. The govern- ment and the Indians chose rather to retain every portion of their title to said lands and thereby keep their remedy within their own hands. In equity there is a maxim that equity will consider as done that which ought to be done, and that it will look upon things agreed to be done as actually performed. As an applica- tion of this maxim equity generally consid- ers that when land is sold on credit, and the deed is to be made when the purchase money is paid, that the land at the time the sale is made becomes the vendee's, and the purchase money the vendor's; that the vendor becomes at once the trustee of the vendee with re- spect to the land, and the vendee the trustee of the vendor with respect to the purchase money. But this maxim never applies where time is of the essence of the con- tract, and where the land is subject to absolute forfeiture on failure of some con- ' dition of the sale being performed; "for there is no necessity in such a case for courts of equity to resort to any such fiction, and equity never looks upon a thing as done which ought not to be done, nor in favor of any party, except one that lias a FIRST PRINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." 31 right to pray that it may be done. In such a case no title, legal or equitable, passes un- til every condition of the sale is performed; and if such condition is not performed at the exact time that it should be performed, no title ever passes. Benedict v. Lynch, 1 Johns. Ch. 370; Wells v. Smith, 7 Paige, Oh. 22. The legal title to land never passes un- til the legal evidence of such title is exe- cuted, and the equitable title probably never passes until everything has been done so that the land cannot be forfeited; so that the per- son claiming to hold the equitable title could, «ven after failure on his part, still tender performance within a reasonable time, if he should so choose, and compel the conveyance of the legal title by a suit in equity if the ad- verse party be an individual, or by a writ of mandamus against the officers of the gov- ernment if the government be the adverse party. In this case the conditions upon which the land was sold had not all been per- formed when the land was assessed. In 1866 and 1867 the purchase money had not been paid, and therefore the patent had not been Issued. Hence, in 1866 and 1867, we think the railroad company had no title to the land, legal or equitable. It is undoubtedly true, wlien the parties so agree, that title, both legal and equitable, may pass before the purchase money or any part of it is paid ; but it can hardly be supposed that such title will pass against the consent of the parties in violation of their contract, and in violation of equity and good conscience. On the second day of July, 1861, Thomas Ewing, -Jr., agent for the Leavenworth, Paw- nee & Western Railroad Company, (since •changed to Union Pacific — now Kansas Pa- cific Railway Company,) executed an instru- ment in writing called a mortgage. Now, whatever this instrument may be called, it is absolutely ridiculous to suppose it has the at- tributes of a Kansas statutory mortgage. If it is such a mortgage, the railroad company, as mortgagor, possessed the entire title to the land, and the United States, as mortga- gee, had nothing but a lien on the same — a mere security for the debt. After condition broken, the United States could not repossess themselves of the land, as provided in the treaty, and sell it as though no contract had ever been made with the railroad company, but they must commence an action in the district court of the state as provided in our statutes, obtain a judgment against the rail- way company, and have the land appraised and sold at sheriff's sale to satisfy said debt; and if the United States should not commence such action within three years after the cause of action accrued, they would be forever barred by our statute of limitations from com- mencing any action, or from ever setting up any claim or title to the land by virtue of the mortgage or otherwise. This doctrine seems to be too preposterous to be seriously consid- ered. Under it the state law becomes the paramount law, — the supreme law of the land, — and the laws and treaties of the Unit- ed States must yield thereto. But see sub. 2, § 1, art. 6, U. S. Const. The state of Kan- sas has the paramount right to control the au- thority of the United States with regard to making "regulations respecting the Indians, their lands, property, or other rights, by treaty, law, or otherwise," (but see Act of Admission, latter part of section 1 ;) and the state also has the right to "interfere with the primary disposal of the soil by the United States," and to give the land of the United States to a railroad company against the will of the United States, against their laws, and against the treaty made with the Indians. But see Act of Admission, sub. 5, § 3, and joint resolution of the legislature of Kansas, Oomp. Laws 1862, p. 84. This case in some respects is similar to the case of State ex rel. Parker v. Winsor, 5 Kan. 362, decided at this term, and for additional arguments and additional authorities we would refer to that case. The judgment of the court below is af- firmed. Saffoed, J., concurring. (See, also, 1 Pom. Eq. Jur. p. 393; Story, Eq. Jur. § 640; Suell, Eq. p. 37; 2 Spence, Eq. Jur. p. 253; Adams, Eq. p. 135; Frederick v. Frederick, 1 P. Wms. 710; Lechmere v. Earl of Carlisle, 3 P. Wms. 211; Gardiner v. Gerrish, 23 Me. 46; Peter v. Beverly, 10 Pet. 534-563; Daggett v. Rankip, 31 CaU 321- 826; Atwood v. Vincent, 17 Conn. 575; Felch v. Hooper, 119 Mass. 52.) 32 CASES IN EQUITY. EQUITABLE PEOPERTY, GROWING OUT OP THE APPLICA- TION OP THIS MAXIM. 1. Originating from a contract to sell land. A (33 N. J. Eg. 531.) HATJ&HWOUT V. MUEPHT. (Court of Errors and Appeals of New Jersey. 1871.) Where a contract for the sale of land has been executed and delivered, the vendee becomes the eguitable ovpner of the land, and the vendor the equitable owner of the purchase price. The opinion of the court was delivered by Depue, J. The bill of complaint filed in this cause, after setting out tlie proceedings in the suit in chancery between Haughwout and Boi- saubin, charges that the deed of conveyance from Boisaubin to Murphy, though bearing date on the 7th of August, 1865, was not actually delivered until the 5th day of Octo- ber of that year, and after the filing of the bill of complaint by Haughwout against Boisaubin, and after the filing of notice of the pendency of that suit in theclerlt's office of the county of Morris. It further charges that the said Murphy had actual knowledge of the contract of purchase made by Haugh- wout with Boisaubin, and of the intention of Haughwout to commence suit for speciflc performance, long before the delivery of his deed and the payment of any part of the con- sideration money therefor; and that the de- fendant accepted the said conveyance, and paid the purcliase money therefor, with actual knowledge of the existence of the complain- ants' contract, and of the pendency of the suit for the speciflc performance thereof. The prayer of the bill is that the title of the complainants to the said three lots may be ratified and established, and declared to be good and valid as against the claim of title made to the same by said Murphy, and be de- clared paramount thereto; and that the claim of title to the said lots by the said Murphy, under his deed of conveyance from Boisau- bin, be declared invalid and of no effect against the title of the complainants, and that the defendant may be directed to release and convey to the complainants; and that the complainants may have such other and fur- ther relief, &c. Asuit in cliancery, duly prosecuted in good faith, and followed by a decree, is construc- tive notice to every person who acquires from a defendant, pendente lite, an interest in the subject matter of the litigation, of the legal and equitable rights of the complainant as charged in the bill and established by the de- cree. This effect of a successful litigation in sub- ordinating the title of a purchaser pending a litigation, to the riglits of the complainant as established in the suit, is not derived from legislation. It is a doctrine of courts of equity, of ancient origin, and rests not upon the principles of the court witli regard to notice, but on the ground that it is necessary to the administration of justice that the de- cision of the court in a suit should be bind- ing not only on the litigant parties, but also upon those who acquire title from them dur- ing the pendency of the suit. Bellamy v. Sabine, 1 DeQ. & J. 566; Metcalfe v, Fulver- toft, 2 V. <& B. 205; Walden v. Bodleys' Heirs, 9 How. {U.S.) 49; Murray v. Lylburn, 2 Johns. Oh. 441. Such a purchaser need not be made a party, and will be bound by the decree which shall be made. 1 Story's Eq. Jur. § 406; Story's Eq. PI. §§ 106, 351; Bishop of Winchester v. Paine, 11 Ves. 196. Before any statutory provision was made requiring notice of the pendency of the suit to be filed in order to charge a subsequent purchaser from the defendant with notice of the litigation, it became the established practice that subpoena served and bill filed were necessary before the suit was consid- ered as commenced, so as to make its pend- ency constructive notice to persons deriv- ing title from the parties, and to give the decree a conclusive effect against such per- sons. 1 Vern. 318; 2 Maddock's Ch. Prac. 325; 2 Sug. V. & P. 280; Hill on Trustees *511; Hayden v. Bucklin, 9 Paige, 512; Dunn's Lesiee v. Games, 1 McLean, 321; S. C, 14 Peters, 322, 333. An assignee who takes an assignment from the defendant after bill filed, but before subpoena served, is a necessary party. Powell v. Wright, 7 Beav. 444. By the fifty-seventh section of the Chancery Practice Act, (the provisions of which are similar to the New York act of 1834, and to the English Statute of 2 Vic, ch. 11, sec. 7,) another requisite is super- added in order that the proceedings in the suit shall affect a bona fide purchaser or mort- gagee; a written notice of the pendency of the suit must be filed in the clerk's office of the county in which the lands to be affected lie. Nix. Dig. p. 102.* This section is ex- pressed in negative terms, and has not changed the former practice except in pre- scribing that notice of the lis pendens shall be filed before a bona fide purchaser or mort- *Rev., p. 114, sec. 5T. FIRST PRINCIPLES OF EQUITY, GENERALLY CALLED "MAXIMS." 33 gagee shall be chargeable with notice of the pendency of the suit, notwithstanding the bill has been filed and tlie subpoena served. But the defendant was not a purchaser pendente lite. He acquired title by a deed ■which bears date on the 7th day of August, 1865, and was acknowledged on the next day. The defendant testifies that it was delivered on the 7th of August. Boisaubin's testi- mony is that it was delivered on the 7th or tjth. From tlie date of the acknowledgment of the mortgage, it is probable that it was not Anally delivered before the 19th. The proof, however, is full and clear that it was exe- cuted and delivered to Murphy before the bill was filed in the case of Hougtnoout v Boisaubin,* The commencement of a suit in cliancery is constructive notice of the pend- ancy of such suit only as against persons who have acquired some title to or interest in the property involved in the litigation, under the defendant, after the suit is com- menced. Stuyvesant v. Hall, 2 Barb. Ch. 151; Hopkins v. McLaren, 4 Cow. 667; Parks v. Jackson, II Wend. 442. A person whose interest existed at the commencement of the suit is a necessary party, and will not be bound by the proceedings unless he be made a party to the suit. Ensworth v. Lambert, 4 Johns. Ch. 605. The complainants' right to relief on the ground tliat the defendant was a purchaser from Boisaubin pendente lite having failed, it must be considered whether, in the other iispect of the case, he will be entitled to re- lief. In this aspect the bill is to be taken to have been filed for the execution of the trust arising from the prior contract between Haughwout and Boisaubin for the purchase of the lands, by the conveyance to the com- plainant, by Murphy, of the legal title which he acquired by his deed. In this aspect of the case, the bill is a bill for specific per- formance. In equity, upon an agreement for the sale of lands, the contract is regarded, for most purposes, as if specifically executed. The purchaser becomes the equitable owner of the lands, and the vendor of tlie purcliase money. After the contract, the vendor is the trustee of the legal estate for the vendee. Crawford v. Bertholf, Saxton, 460; Hoag- land V. Latourette, 1 Green's Ch. 254; Huff- man V. Hummer, 2 C. E. Qreen, 264: King V. Ruckman, 6 C. E. Green, 599. Before the contract is executed by conveyance, the lands are devisable by the vendee, and de- scendible to his heirs as real estate; and the personal representatives of the vendor are entitled to tlie purchase money. 1 Story's Eq. '^ur. § 789; 2 Ibid., § 1213. If the vendor should again sell the estate of which, by rea- son of the first contract, he is only seized in trust, he will be considered as selling it for the benefit of the person for whom, by the first contract, he became trustee, and there- fore liable to account. 2 Spence's Eq. Jur. *3C. E. Green, 315. CAS.EQ.— 3 310. Or the second purchaser, if he have notice at the time of the purchase of the previous contract, will be compelled to con- vey the property to the first purchaser. Hoag- land V. Latourette, 1 Green's Ch. 254; Dovm- ing V. Risley, 2 McCarter, 94. A purcliaser from a trustee, with notice of the trust, stands in the place of his vendor, and is as much a trustee as he was. 1 Eq. Cos. Abr. 384; Story v. Lord Windsor, 2 Atk. 631. The cestui que trust may follow the trust property in the hands of the purchaser, or may resort to tlie purchase money as a sub- stituted fund. Murray v. Ballou, 1 Johns. Ch. 566, 581. It is upon the principle of the transmission by the contract of an actual equitable estate, and the impressing of a trust upon the legal estate for the benefit of the vendee, that the doctrine of the specific performance of contracts for the sale and conveyance of lands mainly depends. The defendant insists that he holds the lands discharged of any trust in favor of Haughwout or the complainants, by reason of his being a bona fide purchaser for a valua- ble consideration, witliout notice. The proof is, that at the time of the deliv- ery of the deed, $400 of the consideration money was paid, and the balance secured by mortgage. Conceding that the $400 was actually paid before Murphy had notice of Haughwout's claim, the defence of a bona fide purchase is not supported. Before the mortgage became due. Murphy had actual notice of the existence and nature of Haugh- wout's claim. The defence of a bona fide purchase may be made by plea, in bar of discovery and re- lief, or by answer, in bar of relief only. If made by plea, tlie payment of the whole of the consideration money must be averred. An averment that part was paid and the balance secured by mortgage, will not be sufiScient. Wood v. Mann, 1 Sumner, 506. Proof of the payment of the whole purchase money is essential to the defence, whether it be made by plea or answer. Jewett v. Palm- er, 7 Johns. Ch. 65; Molony v. Kernan, 2 Drury <& Warren, 31; Losey v. Simpson, 3 Stockt. 246. Notice before actual payment of all the purchase money, although it be se- cured and the conveyance executed, or before the execution of the conveyance, notwith- standing the money is paid, is equivalent to notice before the contract. 2 Sug. V. & P. 533 (1037); Hill on Trustees 165. If the defendant has paid part only, he will be pro- tected pro tanto only. 1 Story's Eq. Jur., § 64 c; Story's Eq. Pl.,% 604 a. What the measure of relief shall be in cases where the deed has been executed and deliv- ered and part of the purchase money paid before notice of the previous contract to sell to another, was elaborately discussed by the counsel of the appellants. Tlie Chancellor held, upon the authority of Flagg v. Mann, 2 Sumner 487, that a contract of purchase, executed by delivery of tlie deed and payment of part of the purchase money without notice 34 CASES IN EQUITY. of the previous contract, gave the purchaser a right to hold the land, and that the equity of the person with whom the previous con- tract was made, was merely to have the un- paid purchase money. The law of the English courts is, that until the defence of a bona fide purchase is per- fected by the delivery of the deed of convey- ance, and the payment of the entire consid- eration money, such purcliaser is without any protection as against the estate of the equitable owner under a prior contract, even though he contracted to purchase, and ac- cepted his deed and paid part of the purchase money in good faith; his only remedy being against his vendor to recover back what he has paid on a consideration which has failed. In some of the American courts this doctrine has been qualified to the extent of enforcing specific performance of the prior contract, on condition that the purchaser shall be indem- nified for the purchase money paid, and also for permanent improvements put upon the property before notice, on the principle that he who asks equity must do equitj'. The cases are collected in 2 Lead. Cas. in Eq. 1 ; notes to Basset v. Nosworthy. The doctrine of the English courts is nec- essary to give effect to the principle that in equity, immediately on the contract to pur- chase, an equitable estate arises in the ven- dee, the legal estate remaining in the vendor for his benefit. Qualified by the obligation to make compensation to any subsequent bona flde purchaser, who has paid part only of the consideration money, for all disbursements made before notice, the rule is every way consonant with correct principles. Such in- demnity is protection pro tanto. But whatever the nature of the relief may be in cases where the naked question of the acceptance of a deed and payment of part of the consideration before notice is presented, the relief indicated by the Chancellor is the only relief the complainants are entitled to under the circumstances of this case. The rule of law which deprives a subsequent pur- chaser who has contracted for and accepted a conveyance, and paid part of the purcliase money in good faith, of the fruits of his pur- chase without indemnity, is exceedingly harsh, and often oppressive in its applica- tion. Mitigated by the obligation to make indemnity for payments and expenditures before actual notice, its operation is never- theless frequently inequ itable. A party who asks the enforcement of a rule of this nature against another who is innocent of actual fraud, must seek his remedy promptly. He may lose his right to specific relief against the lands by laches, and be remitted to the unpaid purchase money as the only relief which will be equitable. In cases where the prayer is for the specific performance of a contract between the immediate parties to the suit, delay in filing the bill is often of it- self a bar to relief. Merritt v. Brown, 6 C. E. Qreen. 401. The agreement between Haughwout an*' Boisaubin was made on the 24th of Septem- ber, 1863. In February, 1864, Haughwout gave Boisaubin notice of his election to take- the property under the agreement. After this notice was given, Boisaubin laid th» property out in lots and publicly offered then* for sale. Murphy's deed for the three lots of which he became the purchaser, was exe- cuted and delivered in August, 1865. The bill in the suit of Haughwout v. Boisaubin,. was filed the last day in the same months The solicitor who appeared for Haughwout in that suit, had notice of the existence of Murphy's deed within a few days after bis bill was filed. Boisaubin, in his answer,- which was filed on the 3d of November, 1865, specifically sets out the fact of the convey- ance to Murphy and the circumstances con- nected therewith. Murphy was himself ex- amined as a witness on the 5th of Aprjl,. 1866, and testified in relation to the convey- ance to him. Haughwout must be charged with notice as early as April, 1866, that Murphy intended to assert his right to the land. The bill in this case was not filed un- til the 4th of April, 1868. After this long' delay it would be inequitable to enforce spe- cific performance against the defendant. The fact that there were delays in the prosecution^^ of that suit to final decree, which were un- avoidable, ought not to prejudice Murphy.- He should have been made a party to that suit. Besides that, the bond and mortgage which were given by Murphy to Boisaubin for the^ unpaid purchase money, were assigned by Boisaubin to one Geoffrey, on the 16th of April, 1866, and by Geoffrey further assigned to William Davidson, on the 2d of July of the same year, and notice of such assignment given to Murphy by the solicitor of David- son. The money due on the mortgage was- paid at its maturity by Murphy to Davidson'*- solicitor. That Davidson, in the transaction, was acting for Haughwout, and tliat the- money wherewith this assignment was pro- cured was paid by Haughwout, and that the proceeds when collected were realized by him, are indisputable. That the assignment was made by Geoffrey" to Davidson, as collateral security, will not affect the case. Wlien Murphy received no- tice of the prior equitable title of Haughwout,- he was entitled to have the security he had given for the unpaid purchase money sur- rendered. Tourville v Naish, 3 P. Wms. 307. The subsequent assignments were taken and the money received, with full notice of all the circumstances. The money received' on the mortgage, Haughwout still retains^ It is no answer to say that in decreeing spe- cific performance Murphy may have the mon- ey refunded to him. Haughwout might have insisted upon having the land itself, or at his option, pursued the proceeds of the- sale. He cannot have both. By accepting a security given for the purchase money, he:- FIRST PRINCIPLES OF EQUITY, GEXERALLY CALLED "MAXIMS." 35 is deemed to have affirmed the sale so far as respects the purchaser. Murray v. Lylbnrn, 2 Johns. Ch. 441; 2 Story's JEq.Jur. § 1262; Scott V. Gamble, 1 StocJet. 218. The complainants are not entitled to relief. The decree of the Chancellor is affirmed, with costs. The whole court concurred. (See, also, 1 Pom. Eq. Jur. § 368; Story, Eq. Jur. §§ 789, 790, 1212, 1313; Farrar v. Winterton, 5 Beav. 1-8; Crawford v. Bertholf, 1 N. J. Eq. 460; Worrall v. Munn, 38 N. Y. 139; Green v. Smith, 1 Atk. 572, 573; Trelawney v. Booth, 2 Atk. 307; PoUexfen v. Moore, 3 Atk. 273; Taylor v. Ben ham, 5 How. 234; Champion v." Brown, 6 Johns. Ch. 403; Kiohter v. Selin, 8 Serg. & R. 425; Mackreth v. Symmons, 15 Ves. 339, 336.) 2. Trust property. (113 Mass. 93.) MoDONOTJGH V. O'NiEL. [Supreme Judicial Court of Massachusetts. 1873.) Where a person buys land, taking a conveyance to himself, but pays for the same with the money of a third person, there arises a trust in favor of the person whose money has thus been employed. Geat, C. J. The decision of this case de- pends upon the application to the evidence of well settled rules of equity jurisprudence. Where land conveyed by one person to an- other is paid for with the money of a third, a trust results to the latter, which is not within the statute of frauds. It is sufficient if the purchase money was lent to him by the grantee, provided the loan is clearly proved. And the grantee's admissions, like other parol evidence, though not competent in direct proof of the trust, are yet admis- sible to show that the purchase money, by reason of such loan or otherwise, was the money of the alleged cestui que trust. Ken- dall V. Mann, 11 Allen, 15. Blodgett v. Hildreth, 103 Mass. 484. Jackson v. Stevens, 108 Mass. 94. In equity, a conveyance ab- solute on its face maybe shown by parol evi- dence to have been intended as a mortgage only, and its effect limited accordingly. Campbell v. Dearborn, 109 Mass. 130. The findings of a master in matters of fact are not to be reviewed by the court, unless clearly shown to be erroneous. Dean v. Emerson, 102 Mass. 480. And in equity, as at law, the omission of a party to testify in control or explanation of testimony given by others in his presence is a proper subject of consid- eration. Whitney v. Baijley, 4 Allen, 173. It appears and is not controverted that the deed was made by Godfrey to the defendant, whose wife was the testator's sister; that the purchase money was $3000, of which the testator furnished $300 of his own money, and $200 borrowed by him of Mrs. McGov- ern, upon a note .signed by himself and the de- fendant; the defendant furnished $600 of his own money, and .«400 borrowed of Dolan upon the defendant's note; and for the re- maining $1500 the defendant gave his own note, secured by mortgage on the premises, to Clements, who held a previous mortgage for a like amount, and who testified that be- fore the purchase the defendant came to see if that mortgage could lie on the property, and told him that he was going to buy the land for the testator, and was told by the mortgagee that he must give a new mortgage, as he afterwards did, in discharge of the old one. The will recites that the defendant held a deed of certain real estate in trust for the testator's benefit, and had paid certain sums of money on his account, and directs that all such sums of money, with interest, should be paid back to him, and he should then convey the property in fee to the tes- tator's wife. The attorney who drew the will certifies that he read this part of it in the testator's presence, and before its execu- tion, to the defendant, and asked him if it was right, and he said it was, and upon being asked what claims he had against the place, answered $600, besides $100 for repairs and $44.08 for taxes, and that he had received from the testator the whole amount with in- terest of the note to Dolan, except $80, and that the testator had paid the note to Mrs. McGovern. The other material testimony may be taken as staled on the defendant's brief, namely, that the defendant repeatedly "admitted that he bought the place for John B. McDonough and that he meant to assist or help hira;" that "the defendant said Mc- Donough wanted him to buy the place for liim," "that he had always wanted John to take the deed, but he had not paid up;" and "that he was ready to fix up the place when McDonough was ready to pay up." The master also reports that the defendant was present at the hearing before him, but did not offer to testify. From this evidence the master, who heard all the witnesses, was warranted in finding as matter of fact that the money paid by the defendant for the land was lent by him to the plaintiff for the purpose, and that thus the whole purchase money was the plaintiff's money. Upon examination of the wliole evi- dence, we see no sufficient cause for revers- ing the conclusion of the master; and tak- ing the facts as found by him, the inference of law follows that there was a resulting trust in favor of the testator, and that there must be a Decree for the plaintiff . (See also, 1 Pom. Eq. Jur. %% 106, 146, 874; Story, Eq. Jur. § 1301; Adams, Eq. pp. 26, S3, note; Snell Eq p 45; Thompson v. Thompson, 16 Wis. 94; Dodd v. Wakeman, 26 N. J. Eq. 484; Hunt v, Roberts 40 Me 1S7; Nelson v. Worrall, 20 Iowa, 469; Hidden v. Jordan, 21 Cal. 93.) (As to effect of statute of frauds, see Ryan v. Dox, 34 N. Y. 307; Laing v. McKee, 13 Mich. 124.) (See post, "Equitable Estates.") 36 CASES IN EQUITY. 3. Assignment of cliose in action. ;4 Mass. 308.) Dix V Cobb. (Suvreme Judicial Court of Massachusetts. 1808.) A debt evidenced by a book account is assigna- ble in equity. PARSONS, O. J. Has Whitney by liis answer to the plaintiffs' interrogatory dis- charged himself ? is the question submitted to the court. This answer admits that he formerly owed Colh about fifteen dollars on account for merchandise purchased; that when he was sued he had no knowledge that Cobb had as- signed this debt, but that he has since been informeil by the attorney of Uigginson and others that before the suit this debt had been assigned to them, and was forbidden to pay it to Vobb, but was requested to pay it to the assignees. A copy of the assignment, under the seal of Oohb, tlie trustee annexes, and makes it a part of his answer. The plaintiff insists that this debt is npt protected from his attachment by the assign- ment for several reasons. — One is the nature of the debt, resting for its evidence on an ac- count-book and on a note or bond, is such that it is incapable of assignment. — Another reason is, that he made the attachment before the trustee had notice, and also that the trus- tee, not being privy to the assignment, it may without his knowledge be fraudulent as to the creditors of the assignor. After full consideration we are satisfied that Whitney has discharged himself by his answer. The debt is a chose in action, and like other chases in action, except negotiable securities, is not assignable at "law; but all choses in action may be assigned in equity, and the assignee has an equitable right, which he may enforce at law in the name of the assignor, whose release or bankruptcy shall not defeat it. In the case of Winch vs. Keeley [1 Term R. 619.] the debtor had assigned, as in this case, a debt due for goods sold, and he after- wards becoming bankrupt, it was determined that the assignment should protect the debt against the assignees under the commission of bankruptcy. If the debtor has paid the debt to the assignor without notice of the as- signment, he shall be discharged ; for he shall not suffer by the neglect of the assignee. The doctrine which establishes the assigna- (See, also, 3 Pom. Eq. Jur. § 1370; Story, Eq. Jur. § 1039; Adams, Eq. pp. 58, 54; Snell, Eq. p. 91; Devlin v. Mayor, 63 N. Y. 8 ; Hinkle v. Wanzer, 17 How. 353 ; Row v. Dawson, 1 Ves. Sr. 831 ; Wright v. Wright, Id. 409; Squib v. Wyn, 1 P. Wms. 878-381.) (Not assignable at common law. Lampet's Case, 10 Coke, 465, 48n.) (The equitable interests of the assignee were protected later by common-law courts by allowing him to maintain an action in the name of the assignor. Master v. Miller, 4 Term R. 320 340 S41 ; Ed- wards V. Parkhurst, 21 Vt. 473; Briggs v. Dorr, 19 Johns. 95; Johnson v. Bloodgood, 1 Johns. Cas. 51.) bility in equity of c7io.9es in action, arises from the public utility of increasing the quantity of transferable property, in aid of commerce and of private credit. The assignment in this ease maybe: fraud- ulent, but on its face it appears to be regular, and for a valuable consideration; and we can- not presume fraud. When an attaching creditor has reason to believe the assignment fraudulent, of which he has knowledge before the suit, he may sue the assignee as a trustee, and compel him to a discovery on oath. — Or if he has not notice seasonably to sue the assignee as a trustee, he may, after he has recovered judgment against the principal, sue an action of debt on tliat judgment, and summon the assignee as a trustee in that action, and compel him to a discovery on oath upon the penalty of paying the debt, and if on this discovery the assignment should be fraudulent, the assignee would be adjudged a trustee so far as he had derived any benefit from it. And it is much better to leave the attaching creditor to this remedy, than to presume an assignment fraudulent, or to defeat the assignability of choses in action. Although the trustee in this case had no notice of the assignment, until after he was sued as a trustee, yet immediately on the as- signment, the equitable interest in the debt, as between the parties to it, immediately passed to the assignee. And if the assignor had afterwards received the debt, he would be obliged to pay it over to the assignee. But an attaching creditor cannot stand on a better footing than his debtor (if the assign- ment be not fraudulent as to creditors) and if he attaches any property of his debtor, it must be attached subject to all lawfully ex- isting liens created by his debtor. And con- sequently if his debtor have no equitable in- terest in a chose in action, the creditor can- not acquire any by his attachment. Therefore the want of notice in the trustee will not defeat the assignee's inteiest in this debt in favour of an attaching creditor. This point was decided in Suffolk about eight years ago in the case of Wakefield vs. Martin and trustees.'^ Judgment that Whitney be discharged as trustee. 'S Mass. 558. FIRST PKlNCirLES OF EQUITY, GENERALLY CALLED "AJAXIMS." 37 4. Sale of property not yet in existence or after-wards to be acquired. (91 Pa. St. 396.) EtrPLE V. Bindley (Supreme Court of Pennsylvania. 1879.) Demands which have no existence at the time of the contract may be assigned, and a court of equity wil' enforce the assignment when the demands are actually brought into existence. Mr. Justica Trunket deli vered the opinion of the court, October 27th 1879. The evidence was amply sufficient to war- rant a jury in finding that Ruple contracted to build a flight of stairs for Bindley for $133, Bindley to first pay out ot said sum $28.15 which Ruple owed to England & IJindley; that the order for $104.85 was given for the balance of the contract price, in con- sideration that Lewis would furnish Ruple with material and money to enable him to do the work, and they were so furnished; that Bindley had notice of the order about the time the work was commenced and before he had paid anything to Ruple; and tliat Bind- ley paid $82 to Boyd on an order given after said notice, and to Ruple the balance of the contract price. The jury were instructed that there was nothing in the evidence to justify the plaintiff's recovery. If it were material to the plaintiff's case that Bindley agreed to pay the order, on completion of the work, though he refused a written accept- ance, the conflicting testimony on this ques- tion should have been submitted. An assignment, for a valuable considera- tion, of demands having at the time no actual existence, but which rest in expectancy only, is valid in equity as an agreement, and takes effect as an assignment, when the demands intended to be assigned are subsequently brought into existence: Field ». City of New York, 6 jST. Y. 179; East Lewisburg Lumber & Manuf. Co. v. Marsh, 91 Pa. St. 96. Li Field V. City of New York, it was held that assignments of parts of a demand to diffierent persons, to secure payments to them of spe- cific sums, in succession, are good and vvill be enforced in equity. Whether such assign- ments are valid in Pennsylvania need not now be said; for the order covered the whole, after deducting the sum to be paid, by the terms of the contract, to England & Bindley. The form is immaterial so that there be a clearly expressed intention of an immediate transfer of the right to the assignee. Where one was indebted to a number of persons and remitted a sum of money to B., with orders to give specilic parts to certain creditors, it was held that B. became a trustee tor those creditors, and that they, thereupon, acquired such an interest in the trust fund as could not be divested by an attachment against the debtor, though some of the creditors had no notice of the trust before the service of the attachment: Sharplessc. Welsh, 4 Dall. 279. An order to the drawer's attorney, to pay to W. the amount of a note on H. when col- > . t'/ lected, is an assignment of the fund, by the agreement of the parties, and cannot be re- voked, even if the draft was not accepted by the drawee: Nesmith v. Drum, 8 W. & S. 9. In Caldwell v. Hartupee & Co., 20 P. F Smith 74, an order for part of a fund was held to be a valid equitable assignment. Caldwell was to receive money for use of Hartupee & Co., who were indebted to a firm of which Caldwell was a partner. Hartupee & Co. gave an order to Cuthbert for $1500, out of proceeds of the last note coming to them, which, on presentation, Caldwell re- fused to accept, saying, "Hartupee & Co. owed them money and he was going to apply it on their book account." At the time of said refusal Caldwell had in his hands only about $30, but afterwards received more than enough to pay the order. On the trial Cald- well's defence of set-off was rejected as to the amount of the order, and allowed for the balance in his hands. The defendant seems to rely on Jermyn v. Moffitt, 25 P. F. Smith 400, where it was held that a transfer of "a debt to arise for wages not yet earned, against any person by whom the assignor may afterwards be employed, although followed by a subsequent notice of the assignment to such an employer, is in- sufiftcient, without acceptance, to make a valid transfer ot the debt against the employer." The soundness of this principle is unques- tioned, and was strictly applicable to the facts of that case. Jermyn's name was not in the instrument; Leslie, the assignor, bad no con- tract with him, was not then in his employ, and, consequently, there was neither a pres- ent nor expectant fund on which the assign- ment could attach. On the trial, the point that "an assignment can only be made of moneys due or owing, and not in future of moneys to be earned," was refused, with answer that "a party is competent to assign wages to come due if the vested rights of th'ird parties are in nowise prejudiced there- by;" and this court said there was no error in that. We are of the opinion that the order by Ruple to Lewis was an equitable assignment; and, in connection with the facts which the jury might well have found, had the evi- dence been submitted, the plaintiff was en- titled to recover. For the present inquiry such facts must be considered as existing. The first, second, third and fifth assignments of error are sustained. It may be presumed that if the case had been given to the jury, the matter contained in the fourth assignment would have been properly explained. This suit is not on the alleged promise of Bindley to pay Lewis, but on the contract assigned by Ruple. Judgment reversed and venire facias dt novo awarded. (See, also, 3 Pom. Eq. Jur. i 138r; Field v. New York City, 6 N. Y. 179.) 38 CASES IN EQUITY. (64 Pa. St.- 366.) I'HILADELFHIA, W. & B. R. Oo. V. "WOELP- PEE. (Supreme Court of Pennsylvania. 1870.) Where there is a contract of sale or a mortgage of property afterwards to be acquired, such as the tolls, income, and receipts of a railroad company, equity will enforce such contract whenever the property so covered is acquired. The opinion of the court was delivered, March 10th 1870, by Shaeswood, J. — By the Act of Assembly of February 12th 1856 (Pamph. L.42) it was provided "that for the purpose of construct- ing and equipping the Philadelphia and Bal- timore Central Railroad, chartered by the legislatures of Pennsylvania and Maryland, the said company is hereby authorized to borrow money to any amount not exceeding $1,500,000," * * * "and to issue their bonds therefor," * * * "and to secure the payment of the said bonds and tlieir in- terest bypxecuting and delivering to such trustee or trustees as they may select, a mort- gage or mortgages of all or any part of their road, property, rights, liberties and franchises of the said company in the state of Pennsyl- vania." in pursuance of this power the said com- pany, on February 15th 1859, did execute and deliver to Ezra Bowen and George S. Fox, trustees, a mortgage of "all the road, property, rights, liberties, privileges, corpo- rate franchises, incomes, tolls and receipts, now held or hereafter to be acquired in the state of Pennsylvania." The first question which arises is, whether this mortgage is effectual to give a valid lien on the locomotive engines, passenger and other cars, furniture of stations, tools and materials for support and repair of the road, levied on by the sheriff of Chester county un- der a fieri facias issued upon a judgment ob- tained by the appellants in the Court of Com- mon Pleas. These articles, or by far the greater part of them, were not in existence or acquired by the mortgagors at the date of the mortgage; but it is clear, and is reported as a fact by the master in the court below, that they were in actual use upon the rail- road, and were required for the transaction of its business, and that the trains could not be run without them, and that although ac- quired since the execution of the mortgage, they are of the kind of articles which the company had at that time, and are essential to the full exercise of the franchises granted to the company, which were for the benefit of the public as well as for that of the cor- porators. It is not denied that the words of grant in the mortgage are sufficiently ample to cover all this property. But it is objected that no person, natural or artificial, can grant what he does not possess or own at the time of the grant. Qui non habet, ille nan dat. Yet even at law this rule is not without some qualifications. A man may grant the future accretions or increase of any subject which he owns at the time of the grant, as all the wo M which shall grow on his sheep for a term of years. Grantham v. Hawley, Hobart 132, was the case of a covenant by a lessor that a lessee of a term certain might take the corn that should be growing at the end of the term, and upon an issue whether it did of right belong to the lessee it was held to be a good grant. And though the lessor had it not actually in him, nor certain, yet he had it potentially; for the land is the mother and root of all fruits. Therefore he that hath it may grant all fruits that may arise upon it after, and the property shall pass as soon as the fruits are extant: Ass. 21 Henry 6. A parson may grant all the tithe wool that he shall have in such a year: 1 Plowd. 13 a. So, if a man grant veatuiam terrw, the grantee shall have the corn, grass, underwood, sweepage and the like: 1 Inst. 4 b. It is indubitable that a mortgage of land will pass all structures or fixtures that may after- wards be erected upon it by the mortgagor. But it is not necessary to maintain that the rolling-stock and equipments of a railroad are part of its accretions and fixtures, so as to make the transfer good at law. It is un- questionably good in equity. Contingent es- tates and interests, though not assignable at law, are assignable in equity; and they may also be the subject of a contract, which, when made for valuable consideration, will be spe- cifically enforced when the event happens: 2 Story's Eq. 1040 b. On the same principle equity originally took cognizance of assign- ments of choses in action, which were void at law, and when made for value carried them into execution by considering the as- signment a declaration of trust by the as- signor in favor of the assignee, compelling the assignor to allow his name to be used by the assignee in proceeding at law, and en- joining him from releasing or otherwise in- terfering with the equitable property vested by the assignment in the assignee: 2 Story 1039, 1040. It is a plain corollary from these principles that a court of equity will treat a mortgage of property to be subsequently ac- quired, whether it be real or personal, as a binding contract, which attaches to the thing when acquired. Equity considers that as actually done which a chancellor would de- cree to be done. If then, upon every acqui- sition of property within the description con- tained in the mortgage, a chancellor would decree the mortgagor to execute a mortgage of such subject, it will be considered as though it had been done, and that of every article of property as acquired there was an actual mortgage then executed. The authorities cited in the able report of the master below fully sustain this view, to which may be added Covey v. Pittsburg, Fort Wayne and Chicago Railroad Co., 3 Phila. Rep. 173, de- cided by our brother Agnew, when President Judge of the Court of Common Pleas of the 17 th Judicial District. But the principal contention here has been that the mortgage by this corporation, so far as it included subsequent acquisitions, was FIRST PKIXCIPLES OF EQUITY, GENERALLY CALLED "MAXIMA 39 ■ultra vires — beyond the power conferred upon them by the legislative grant. The «ct authorized them to mortgage all their ■property, a word of very large extent. Prop- erty (proprietan) is whatever is a man's own ijproprius). His future acquisitions, though subject to a contingency, are his own, and if, as we have seen, they can be granted or as- signed, they are his present property, valua- 4)le now to him because they can be enjoyed or used by anticipation. There is no reflne- iinent in this reasoning as applied to the con- struction of this statute. The legislature ev- idently intended it. Every law is to be in- ► terpreted according to its subject-matter. This act relates to a railroad and its usual necessary appurtenances. The words are, '"road, property, rights, liberties and fran- «hises," including the road and all its ad- juncts. The very object of the loan, and of the mortgage to secure it, as expressed in the act, was "for the purpose of constructing .and equipping the road." It evidently con- templated a condition of things in the future. The bare road, only then constructed in part, without any rolling-stock or equipments, "would have been no security, or a very inad- equate one. Had the road even been fully equipped at the date of the mortgage, can it "be doubted that the legislature meant that it -should comprise everything subsequently ac- •quired to replace old and worn-out materials, «nd to maintain and keep up the equipment? No money would have been loaned on a secu- rity daily deteriorating, and which must eventually perish entirely. As was well said by our brother Agnew, in the case before re- ferred to, "To build a railroad requires a vast «apital beyond ordinary means, and to bor- cow it to carry into effect the objects of the incorporation demands all the security within the possible power of the corporation to give. ^y necessity and practice, the money of the -creditor capitalist finishes and equips the road; and slender indeed would his security be which extends not beyond worn-out rails and rolling-stock, and equipments first in use, and these indeed not often in being at the time of the execution of the mortgage. In giving the power to borrow and pledge, it must be supposed the power was given toils fullest extent, in order to carry into effect the object of the incorporation." This con- struction does not conflict with Roberts' and Pyne's Appeal, 10 P. F. Smith 400. That was under the Act of January 11th 1867 (Pamph. L. 1372), which enabled "all iron and other manufacturing and raining corpo- rations to borrow moneys and to secure the loans to be made to them by mortgage of their property. " No special purpose is speci- fied, and the subject-matter was not such as to call for or require any other than a strict construction. It was held, therefore, not to include chattel mortgages. "It is true," says the opinion, "railroad corporations have been allowed to do this, and other corpora- tions in similar circumstances, when per- sonal interests have been of such a perma- nent or fixed character, or so incapable of removal that no inconvenience would be felt in relaxing the general rule as to movables. But in this act the term property is so wholly unexplained by its context, that it may or may not refer to chattels, and leaves the mind to hesitate and doubt whether the legislature meant more than the property accustomed to be mortgaged under the laws of the state, and for w^hich provision was made for notice by recording, and remedy by scire facias." These conclusions sustain the decree made in the court below, and dispense with the necessity of considering the other point made as to the right of the sheriff to levy upon the articles contained in the inventory independ- ently of the mortgage. Decree affirmed, and appeal dismissed at the costs of the appellants. (See, also, 3 Pom. Eq. Jur. §§ 1288-1291; Story, Eq. Jur. § 1055; Mitchell v. Winslow, 3 Story, 630; tangton v. Horton, 1 Hare, 549, 556, 557; In re Ship Warre, 8 Price, 269, note; Douglas v. Russell, 4 Sim. 524; Leslie v. Guthrie, 1 Bing. N. C. 697-708; Baxter v. Bush, 29 Vt. 465, 469; Page v. Gardner, ao Mo. 507; Williams v. Winsor, 12 R. L 9.) (As to rights of attaching creditors and the equitable owner, see 2 De Gex, F. & J. 596, and note; Jones V. Richardson, 10 Mete, Mass., 481; Head v. Goodwin, 37 Me. 183.) (But see Holroyd v. Marshall, 10 H. L. Gas. 216, which holds that the right of the equitable owner takes precedence of the attaching creditor.) 6. Sale of possibility. (40 Pa. St. 87.) Batler v. Commonwealth. (Supreme Court of Pennsyl/oania. 1861.) Where one soils a mere "possibility, " such as an estate which he expects or hopes to acquire on the death of a parent, either by descent or devise, such sale at the common law is a nullity, but in equity it may be enforced as an executory agree- 1 ment to sell if it is sustained by a sufficient con- -aideration. The opinion of the court was delivered, July 24th 1861, by Stbong, J. — The mortgage given by Mrs. Jay and her husband to Henry Bayler, was j , ^ not a pledge or conveyance of any estate which she owned at the time of its execu- tion. Nor did it profess to assure to the mortgagee any present interest. By it she bargained and sold to Henry Bayler, his heirs and assigns, "all the estate, right, title, and interest, in law or in equity, to which she would become entitled on the death of her father, Jacob Bayler, in hia estate, real, personal, and mixed, by will, descent, or otherwise. " She also covenanted jointly and severally with her husband, to 40 CASES IN EQUITY. stand seised of the said estate, right, title, and interest, to tlie use of Henry Bayler and his heirs, and to make further assurances. Her father was then living. In his estate she had no property^ — no interest. The subject of the mortgage was, therefore, nothing that she then had. It was a mere expectancy, and the instrument of mortgage was made, not for any consideration then received by her, or parted with by the mortgagee, but solely for the purpose of securing a prior debt of her husband. Such being the facts of the case, and Mrs. Jay's father having since died, the question presented is, whether the mortgage is efficacious to enable the mort- gagee to hold against her the share of the father's lands which descended to her. It is an old and well settled rule of the common law, that a mere possibility cannot be conveyed or released ; and the reason given for it is that a release or conveyance supposes a right in being: Shepp. Touch. 319; Litt. § 446; 1 Inst. 265 a; Fitzgibbons, 234; McCrackin v. Wright, 14 Johns. 193; Davis V. Hayden, 9 Mass. 514. At law, therefore, nothing passes by a deed of land of which the grantor is only heir apparent. Certainly nothing by its direct operation. And this is as true of conveyances which op-^^rate under the Statute of Uses, as of others. In such cases there is no seisin to give effect to the statute ; and without seisin a convey- ance can only operate as a common law grant. A covenant to stand seised to uses of land which the covenantor shall afterwards purchase, is void: 2 Sand, on Uses 83. A man cannot, by covenant, raise a use out of land which he hath not: Croke Eliz. 401. Becitals, it is true, and covenants, may conclude parties and privies, and estop them from denying that the operation of the deed is what it professes to be. And when a deed purports to pass a present interest, recitals and covenants have, in many cases, been held efficacious to pass to the grantee an interest subsequently acquired by the grantor. But when the deed does not undertake to convey any existing estate, when the subject of the grant is only an expectancy, it is difficult to conceive of it as anything more than a covenant for a future conveyance. In the very nature of things it must be executory. The case in hand is an apt illustration. The intention of the parties was not to convey any immediate interest, for it was known Mrs. Jay had none. The grant and the covenants alike contemplated an assurance to the mortgagee of an estate which might possibly thereafter be acquired either by descent or will, an assurance necessarily future. But though a conveyance of an expect- ancy, as such, is impossible at law, it may be enforced in equity as an executory agree- ment to convey, if it be sustained by a suffi- cient consideration. This has often been decided. In Hobson v. Trevor, 2 P. Wms. 191, Lord Chancellor Macclesfield compelled an execution of an agreement in marriage articles, to convey to the husband a thircl part of wliat should come to the father of the wife on the death of his father; and in Beckley v. Newland, 2 P. Wms. 182, the same chancellor enforced an agreement be- tween the husbands of two presumptive heirs to divide equally what should be left ta either of them. A similar agreement was enforced also in Wethered v. Wethered, 2 Sim. 183. See, also, Lyle v. Wynn, 8 Eng. Gond. Chanc. 406. These were all cases of executory agreements. Bat in Varick v. Edwards, 11 Paige 290, a formal conveyance of a possibility, or expectancy, though it had been ruled inoperative at law, was held good in equity. And in McWilliams et at. v. Nisly, 2 S. & E 507, Chief Justice Tilgh- man said, that "if one enter into articles to- con vey, in case subsequent events should make it lawful, there could be no doubt that in equity he would be decreed to convey when he subsequently acquired the power." And he added he did not think the case less strong because, instead of entering into articles, he makes an absolute conveyance. liegarding then the mortgage made by Mrs. Jay of the estate which she expected thereafter to inherit from her father, as inoperative at law, and valid only in equity, if valid at all, it is next to be seen whether a chancellor would enforce it. That he would not, unless it was made for a valu- able consideration, will not be claimed. Tlie equity of the mortgagee, if any, springs out of the consideration, and, if that is wanting, he will vainly ask the aid of a chancellor. The reason why, before the Act of April 11th 1848, the husband's voluntary assign- ment of a wife's chose in action, did not destroy her right of survivorship, although he had succeeded to her dominion over the chose, was, because a chose in action was assignable only in equity; and an assignee without value given, was regarded as desti- tute of equity. In his behalf, therefore, no chancellor would move to enforce the assign- ment: Hartman v. Dowdel, 1 Rawie 281. It is not to be doubted that a wife may mortgage her lands for her husband's debt, by uniting with him in the instrument. And if this had not been a mortgage of mere expectancy, it would have been good without the interposition of a court of equity. It is because this mortgagee must come into such a court, that it becomes material to inquire whether there was such a consideration for the instrument as to induce a chancellor to interfere to give it effect. It was given to secure an anteced- ent debt of the husband. No new consid- eration was given at the time it was exe- cuted. The wife received nothing — the husband received nothing — the creditor parted with nothing. The instrument was, therefore, no more than a collateral security given for an old debt of the husband. As between Mrs. Jay and Henry Bayler, he was not a purchaser for value : Petrie t. Clark, 11 S. & H. 377; Walker v. Geisse, 4 UOCTiJNES OF EQUITY. 41 Whart. 258; Depeau v. Waddinston, 6 Id. 220. The question, then, is r.'duced to this: Will a court of equity interfere in favour of 9ne who is an assignee or covenantee, but not for value, to enforce a wife's engage- ment to pay an old debt of her husband's? The answer is plain. If it will not decree the performance of an ordinary agreement, not founded on a valuable consideration, much less will it enforce such a contract against a feme covert. A creditor of the husband, who asks that the wife's estate shall be applied to the discharge of her hus- band's debts, must show a legal right or a complete equity. It is by no means clear that a married woman can, by any form of conveyance, even in equity, convey the estate which she expects to inherit. I know of no case in which such a conveyance has been sustained, and I doubt whether it is authorized by the Act of 1770, that estab- lished the mode by which a husband and wife may convey the estate of the wife. There are decisions in other states, that when a married woman, in conjunction with her husband, undertakes to convey her land with covenants of warranty, her deed estops her from claiming an after-acquired title. Tlie after-acquireJ estate, as in other cases, is held to feed the estoppel : Kash v. Spolford, 10 Met. 192; Hill's Lessee v. West, 8 Ohio 226. Even this, however, has been denied in New York, New Jersey, and New Hampshire. But the case is very different where the wife attempts to convey and war- rant land which she does not own, but some- thing which she hopes or expects afterwards to acquire. It may be doubted whether, to do such an act, all common law disability does not remain. Whether this be so or not, her deed is no more than an executory contract, and, if supportable in equity, re- quires a valuable consideration to give it life. There having been none for the mort- gage of Mrs. Jay — no other having been shown but a precedent debt of the husband, which the instrument was given to secure, the Court of Common Pleas committed no error in instructing the jury that it could not be enforced as the mortgage of the wife. This view of the case makes it needless to consider the exception taken to the admis- sion of evidence to contradict the commis- sioner's certificate of the wife's separate acknowledgment. The judgment is affirmed. (See, also, 3 Pom. Eq. Jur. § 1287; Snell, Eq. 73; Spence, Bq. Jur. 852; 2 Story, Eq. Jur. § 1040Z). ; HobsoQ v. Trevor, 2 P. Wms. 191; Wright v. Wright, 1 Ves. Sr. 409; Bennett v. Cooper, 9 Beav. 252; Variok v. Edwards, 11 Paige, 289; Edwards v. Varick, 5 Denio, 664, 632; Nimmo v. Davis, 7 Tex. 36; Horst V. Dague, 34 Ohio St. 371; Power's Appeal, 63 Pa. St. 443; Hannon v. Christopher, 84 N. J. Eq. 459.) (As to sale of "possibility" with ancestor's consent, see Jenkins v. Stetson, 9 Allen, 138i) paet in. DOCTRINES OF EQUITY. v^- \j^ ^^ iX^ I. CONVERSION. (10 Pet. 533.) Petek V. Beverly. {Supreme Coii/rt of the XTnited States. 1836.) Mr. Justice Thompson delivered the opin- ion of the court: This case comes up on appeal from the Cir- cuit Court of the District of Columbia for the County of Washington. The bill was filed by the appellees in the court below to enjoin the appellants from proceeding to sell cer- tain lots of land in the city of Wasliington, belonging to the estate of David Peter, for the payment of debts alleged to be due to the Bank of Columbia and the Bank of the United States. David Peter made his will bearing date the 30th of November, 1812, and shortly thereafter departed this life, and by his will he declares and directs as follows: "It is my intertion that the proceeds of all my estate shall be vested in my dear wife Sarah Peter for the maintenance and educa- tion of my children. "I wish all my debts to be as speedily paid as possible; for which purpose I desire that the tract of land on which Dulin lives, to- gether with all personal property thereon, may be sold and applied to that purpose; and in aid of that, as soon as sales can be effected, so much of my city property as may be necessary to effect that object. "I desire that no appraisement or valua- tion shall be had of any part of the property attached to my dwelling-house. "I desire that my sons shall receive as good educations as the country will afford, and my daughters the best the place can fur- nish." And he appointed his wife Sarah Peter, his brother (Jeorge Peter, and his brother-in- 42 CASES IN EQUITY. law Leonard H. Johns, the executrix and executors of his will, of whom George Peter is the only survivor. The bill charges that George Peter, the surviving executor, under color of the direc- tions in the will, was about to sell tliat part of the real estate of David Peter whicli lies in the city of Wasliington, and has actually offered the same for sale at public auction. The bill further charges that there came to the hands of the executors personal estate of the said David Peter to the amount of more than $25,000. That they harl sold the Dulin farm for $20,688.90 to George Alagruder, in the year 1813, and received one third of the purcliase money, and took for the balance, divided in equal sums, two promissory notes, one payable the 1st of January, 1815, and the other the 1st of January, 1816; one in- dorsed by Patrick Magriider and the other by Lloyd Magruder. That the purchaser, George Magruder, was put into possession of the farm and still holds it, and that the notes given for the balance of the purcliase money have been lost by the negligence of the exec- utors. The complainants deny the exist- ence of any debt due from the estate of David Peter to the said banks, or either of them; or any other debt whatsoever, for tlie pay- ment of which it is either necessary, proper or lawful for the said George Peter to sell the said city lots. And the bill prays that the executor may fully account for the real and personal estate of the said David Peter, and show how the same has been disposed of, and that the banks may be required to produce the notes or other evidence of their pretended debt, and prove the same; and praying an injunction to restrain the said George Peter and his agents from selling or in any way disposing of, or encumbering the real estate of the said David Peter in the District of Columbia, concluding with a prayer for general relief. The injunction was granted, and, on the coming in of the answer, was ordered to be continued until the final hearing of the cause. The answer of George Peter, the surviv- ing executor, alleges that the principal man- agement of the business of the estate was as- sumed by his co-executors; that believing Johns fully competent, and that he would attend to the business in a way best calcu- lated to promote the interest of his sister and her children, he left it for them to settle the estate, and to collect and dispose of the pro- ceeds thereof, and provide for the support and education of the children, as they might think best, and that all this was well known to the complainant Beverly, who married the eldest daughter of the testator in the year 1819. That he and his wife lived with her mother until within a year or two of lier death. That the debts due to the banks have been continued by renewed notes, and from time to time, drawn and indorsed by the execu- tors, in compliance with the rules of the banks, and with the understanding that such arrangement was to continue as long as the banks were willing to indulge the estate, or until the executors should be able to make sales for the payment of those debts; that this arrangement was well understood by Beverly and all the children, who were old enough to understand anything of their af- fairs, and was often talked of by Beverly and Ramsay, who always spoke of the estate as liable to the banks tor these debts. The surviving executor, to the charge of neglect in relation to the balance of the purchase money for the Dulin farm, alleges that Ma- gruder, the purchaser, was sued upon the notes given for the balance, and became in- solvent. That an ejectment was brought to recover possession of the land that it might be resold, no title having been given for the land, but only a bond for a deed, according to the terms of the sale. That the ejectment was removed to the Court of Appeals in Maryland, where he believes it is still pend- ing. That if there was any neglect or delay in recovering this land, it was the fault of the complainant Beverly, who undertook to attend to it, being then agent for the es- tate. The answer of the banks refers to the an- swer of the surviving executor for the facts stated, in relation to the arrangement be- tween the executors and the banks, which, it is averred, was entered into to save the estate of the testator from a sacrifice, and to continue the accommodation. That the ex- ecutors and the banks, and the agents of the banks, one of whom was the complainant Beverly, always so understood it, and looked to the trust estate as still liable to the banks. They exhibit statements showing the situa- tion of the debts at the death of the testator, and the various renewals by the executors afterwards, in their private capacity, with the various payments which had been made, and showing the balance now due. [ An amended bill was afterwards filed, call- I ing for an account of other moneys alleged I to have been received by the executors, and 1 charging more particularly, negligence in ■ the executors in not having suedlhe indors- ! ers of the notes of Magruder for the balance of the purchase money of the Dulin farm, and the loss thereof by reason of such neg- lect. To this amended bill, the surviving execu- tor answers, stating his knowledge and be- lief respecting the moneys for which he is called upon to account, denies the negligence imputed to him, and avers that if there was any negligence it was that of the complain- ant Beverly, who, being interested in the es- tate, and being a lawyer, undertook to attend to the recovery of the balance of the pur- chase money. That the indorsers were in very doubtful circumstances; tliat the land was considered by all parties interested as sufflcient security for the balance of the pur- chase money, and that the counsel of the ex- ecutors advised the resort to a resale of the DOCTRINES OF JiQUITT. 43 land as the best remedy for the recovery of such balance, and for that purpose an eject- ment was brought to recover the possession, and a bill in chancery filed in Maryland un- der the direction and superintendence of Beverly; and that if any negligence occurred in the prosecution of these suits it was attrib- utable to him. The cause was referred to the auditor to take and report an account of all sums of money received by the executors from the real and personal estate respectively, and of the sums paid by tliem in the due course of administration; and of any other sums oaid by them for the maintenance of the family and the education of the children, stating them separately. The auditor reports a large balance due the executors, allowing them for the maintenance of the family and the debts paid by them. To this report the com- plainants excepted, and the exceptions were overruled, and at the March Term of the Circuit Couit in 1835, a final decree was en- tered confirming the report of the auditor, and decreeing a perpetual injunction. From this decree of a perpetual injunction, the de- fendants in the court below appealed, and from so much of the decree as confirmed the report of the auditor the complainants ap- pealed, and upon these cross appeals the cause comes here for review. In examining the various questions which have been made in this case, the most natural order seems to be to consider, in the first place, the will of David Peter. Upon this depends, in a great measure, the rights of the bunks as creditors of the estate, and the rights, duties and responsibilities of the ex- ecutors; and particularly those which de- volve upon George Peter, the surviving ex- ecutor. David Peter died in the year 1813, shortly after making his will, leaving his widow with a family of five children, two daughters and three sons, the eldest about thirteen years of age, living in ease and supposed af- fluence, as appears, not only from the plead- ings and proofs in the case, but as fairly to be inferred from the provisions made for them by his will, and the disposition made of his property. His primary object seemed to be that his family should remain together and live as they had been accustomed to live. And he accordingly, in the first place, directs that the proceeds of all his estate should be vested in his wife, Sarah Peter (who is made one of his executors,) for the maintenance and education of his children. He directs that no appraisement or valuation should be had of any part of his property attached to his dwelling-house, and that his sons should receive as good educations as the country would afford, and his daughters the best the place could furnish. The family accordingly remained togetlier, except Mrs. Beverly, and were maintained and educated according to the directions of the will, until the death of the said Sarah Peter, in the year 1825. The test;itor directed his debts to be paid as speedily as possible, and for that purpose de- clared that the tract of land on which Dulin lived, together with all the personal property thereon, should be sold and applied to the payment of his debts; and in aid of that, as soon as sales could be effected, so much of his city property as should be necessary for the payment of his debts. The testator had a right, unquestionably, so far as respected his children, to charge the payment of his debts upon any part of his estate, real or personal, as he might think proper and most advantageous to his family. And if the creditors were willing to look to the fund so appropriated to that object, no one would have a right to counteract or con- trol his will in that respect. And he having thought proper to constitute his widow the trustee of the proceeds of all his estate for the maintenance and education of his chil- dren, thereby vesting in her an unlimited discretion in this respect so far as the pro- ceeds of his estate would go, the surviving executor is not accountable for anything ap- plied by her for that purpose, not even it' she would be chargeable with a decastaiiit. For it is a well-settled rule that one executor is not responsible for the devastavit of his co- executor any farther than he is shown to have been knowing and assenting at the time to such devastavit or misapplication of the assets, and merely permitting his co-execu- tor to possess the assets, without going far- ther and concurring in the application of them, does not render him answerable for the receipts of his co-executor. Each execu- tor is liable only for his own acts, and what I he receives and applies, unless he joins in the direction and misapplication of the assets. (Cro. Eliz., 348; 4 Ves., 596; 4 Johns. Ch., 23; 19 Johns. Rep., 427.) It is not intended to intimate that there was any devastavit or waste of the estate by Mrs. Peter. There is, indeed, no pretense in the bill of any misapplication of tlie es- tate by her or any other of the executors, and for the very purpose for which the proceeds of the estate were vested in her, to main- tain and educate a family of young children, it was necessary to clothe her with a large discretion; and for this reason the testator directs that there should be no appraisement or valuation of any part of his property at- tached to his dwelling-house. Tlie proceeds of all his estate being vested in his widow, would render it necessary, independent of any express direction in the will, that re- course should be had to the real estate for the payment of his debts. And this leads, in the next place, to the inquiry whether George Peter, the surviv- ing executor, has authority to sell the lots in the city of Washington. Witii respect to the Dulin farm no doubt can exist. The testator gives positive direc- tions for that farm to be sold, and the pro- ceeds applied to the payment of his debts. The executors in the sale to Magruder only gave a bond for a deed ; the title was not to 44 CASES IN EQUITY. be given until the purchase money was all paid, and that not having yet been done, no title has been conveyed, and it yet remains subject to be applied to the payment of debts; and a resale is necessary in order fully to carry into effect the will of the testator. It is a well-settled rule in chancery, in the con- struction of wills as well as other instruments, that when land is directed to be sold, and turned into money, or money is directed to be employed in the purchase of land, courts of equity, in dealing with the subject, will consider it that species of property into which it is directed to be converted. This is the doctrine of this court in the case of Craig v. Leslie (3 Wheat., 577), and is founded upon the principle that courts of equity, regarding the substance, and not the mere form of con- tracts and other instruments, consider things directed, or agreed to be done, as having been actually performed. But this principle may not perliaps apply in its full force and extent to the city lots. They are not positively di- rected by the will to be converted into money; but the sale of them was contingent, and only in aid of the proceeds of the Dulin farm, if a sale of them should become necessary for the payment of debts. But independent of this principle, there is ample power in the sur- viving executor to sell. We find, in the cases decided in the English courts, and in the elementary treatises on this subject, no little confusion, and many nice distinctions. The general principle of the common law, as laid down by Lord Coke (Co. Lit., 112, 6) and sanctioned by many judicial decisions, is that when the power given to several per- sons, is a mere naked power to sell, not coupled with an interest, it must be executed by all, and does not survive. But when the power is coupled with an interest, it may be executed by the survivor. (14 Johns. Rep., 553; 2 Johns. Ch., 19.) Bnt the ditliculty arises in the application of the rule to particular cases. It may, per- haps, be considered as the better conclusion to be drawn from the English cases on this question, that a mere direction, in a will, to the executors to sell land, without any words vesting in them an interest in the land, or creating a trust, will be only a naked power, which does not survive. In such case, there is no one who has a right to enforce an exe- cution of the power. But when anything is directed to be done in which third persons are interested, and who have a right to call on the executors to execute the power, such power survives. This becomes necessary for the purpose of effecting tlie object of the power. It is not a power coupled with an interest in executors, because they may de- rive a personal benefit from the devise. For a trust will survive though no way benefi- cial to the trustee. It is the possession of the legal estate, or a right in the subject over which the power is to be exercised, that makes the interest in question. And when an ex- ecutor, guardian, or other trustee, is in- vested With the rents, and profits of land, for the sale or use of another, it is still an au- thority coupled with an interest, and sur- vives. (1 Gaines's Ca. in Er., 16; 2 Peere Wms.) In the American cases there seems to be less confusion and nicety on this point, and the courts have generally applied to the con- struction of such powers, the great and lead- ing principle which applies to the construc- tion of other parts of the will, to ascertain and carry into execution the intention of the testator. When the power Is given to exec- utors, to be executed in their official capacity as executors, and there are no words in the will warranting the conclusion that the tes- tator intended, for safety or some other ob- ject, a joint execution of the power, as the office survives, the power ought also to be construed as surviving. And courts of eq- uity will lend their aid to uphold the power, for the purpose of carrying into execution the intention of the testator, and preventing the consequences that might result from an ex- tinction of the power; and where there is a trust, charged upon the executors in the di- rection given to them in the disposition of tlie proceeds, it is the settled doctrine of courts of chancery that the trust does not become extinct by the death of one of the trustees. It will be continued in the survivors, and not be permitted, in any event, to fail for want of a trustee. This is the doctrine of Chan- cellor Kent in the case of Franklin v. Osgood (2 Johns. Ch. 19), and cases there cited, and is in accordance with numerous decisions in the English courts. (3 Atk., 714; 2 Peere Wms., 102.) And is adopted and sanctioned by the Court of Errors in New York, on ap- peal, in the case of Franklin v. Osgood. And Mr. Justice Piatt in that case refers to a class of cases in the English courts, where it is held that although, from the terms made use of in creating the power, detached from other parts of the will, it might be considered a mere naked power to sell, yet, if from its connection with other provisions in the will it clearly appears to have been the intention of the testator that the land sliould be sold to execute the trusts in the will, and such sale is necessary for the purpose of executing such trusts, it will be construed as creating a power coupled with an interest, and will survive. This doctrine is fully recognized by the Supreme Court of Pennsylvania in the case of The Lessee of Zebach v. Smith (3 Binney, 69). The court there considered It as a settled point that if the authority to sell is given to executors, virtute officii, a surviv- ing executor may sell; and that the author- ity given by the will in that case to the exec- utors to sell, was to them in their character of executors, and for the purpose of paying debts, an object which is highly favored in the law. Although the clause in the will now under consideration does not name the executors as the persons who are to sell the land, yet it is a power vested in them by necessary imphca- tion. The land is to be sold for the purpose DOCTEINES OF EQUITY. 45 of paying the debts, which is a duty devolv- ing upon the executors; and it follows, as a matter of course, that the testator intended his executors should mal^e the sale to enable there to discharge the duty and trust of pay- ing the debts. Mr. Sugden, in his Treatise on Powers (page 167), on the authority of a case cited from the year boolss, lays it down as a general rule that when a testator directs liis land to be sold for certain purposes, with- out declaring by whom the sale shall be made, if the fund is to be distributed by the execu- tors, they shall have, by implication, the pow- er to sell. And this is the doctrine of Chancel- lor Kent, in the case of Davoue v. Fanning (2Jcihns. Ch.,254). The will, in that case, as ill this, directed the real estate to be sold for certain purposes therein specified, but did not direct expressly by whom the sale should be made; and lie held, as Lord Hardwickedid in a case somewhat similar (1 Atk., 420), that it was a reasonable construction that the power was given to th ■ executors, that it was almost impossible to mistake the testator's meaning on that point. So, in the present case, it is impossible to draw any other con- clusion than that it was the testator's inten- tion that the sale should be made by his execu- tors. Jackson v. Ferris (15 John., 349) is acase very much in point on both questions. That the power in this case is coupled with an interest, and survives, and that by impli- cation, it is to be executed by the surviving execute The testator, say the court in that case, directed that in case of a deflciency of his personal estate to pay his debts, some of his real estate should be sold, without nam- ing by whom; and one of the executors only undertooli the execution of the will, and sold the land, and the court held that this was a power coupled with an interest, and might be executed by one of the executors, it being a power to sell for the payment of debts. It has been thought proper to dwell a little more at large upon the construction of this will, and the power given to the executors to sell, than would have been deemed necessary had it not been supposed and urged at the bar that the Court of Appeals of Maryland had given a different construction to the will than the one we have adopted. This will was brought under the consideration of that court in the ejectment suit for the recovery of the Dulin farm already referred to (4 Gill & John- son, 323); and it is true the court does say that the power given in the will to sell is a mere naked power. But this was not the main point before the court. The question seemed to turn upon the demises in the dec- laration, and whether the legal estate in the land was in Mrs. Peter and her children, so as to enable them to maintain an action of ejectment. As the clause in the will direct- ing a sale of the land did not direct it to be made by the executors, it became a question whether the executors had that power by im- plication; or whether it was a case coming within the Maryland law of 1785, which pro- vides that if a person shall die leaving real or personal estate to be sold for the payment of debts, or other purposes, and shall not ap- point a person to sell and convey the proper- ty, the Chancellor shall have the power to appoint a trustee for that purpose. And the court seemed to think the will now in ques- tion came within that provision. But this case, however respectable the authority may be, cannot be admitted to control the decision in the case now before the court, where the lands in question lie in the city of Washing- ton ; and we entertain a very decided opinion that the power to sell given by this will is a power coupled with an interest, which sur- vives, and may be executed by the surviv- ing executor. The next inquiry is, whether there is any subsisting debt due from the estate of David Peter to the banks. It is contended on the part of the complainants in the court below, that this debt has been extinguished by the notes given by the executors, and no longer remains a debt due from the estate. There is no pretense that these debts have, in point of fact, been paid; and if not, the trust has not been executed, and the land still remains charged with it. If the executors have paid the debt to the banks, or the banks have ac- cepted their notes in payment in place of the notes of the testator, so that the executors became the debtors, and personally responsi- ble to the banks, the only effect of this is that the executors became the creditors of the es- tate instead of the banks, and may resort to the trust fund to satisfy the debt. (2 Peere Wms., 664, note; 7 Har. & John., 134; 4 Gill & Johns., 303; 2 Pick., 567.) But there is no ground for considering the debt of the banks extinguished. David Peter at the time of his death was largely indebted to these banks upon indorsed notes discounted by them; and to prevent these notes from ly- ing under protest, an arrangement was made between the banks and the executors to sub- stitute notes drawn by Sarah Peter, and indorsed by Leonard H. Johns and George Peter; and the notes of David Peter were re- tired Iby this substitution, and passed as cred- its to the executors in the Orphan's Court as paid, when in truth and in fact they were not paid. The substitution of the notes of the executors was only by way of renewal, and to comply with the rules of the banks, and thus to continue the debts by the indul- gence of the banks, until the executors should be able to make sales for the payment of them, without any intention or understand- ing by any of the parties that the substituted notes were offered or received as payment of the debts. That such was the arrangement made respecting these debts, and so under- stood by Beverly at least, is established by the most clear and satisfactory evidence; and there is good reason to believe that this was well understood in the family by all the chil- dren who were of an age sufficient to under- stand the business and concerns of the estate. This arrangement under such circumstances cannot, in any manner, be considered an ex- 46 CASES IN EQUITY. tinguishment of the debt. The law on this subject is well settled, and the principle well and succinctly laid down in the case of James V. Hackley (16 Johns., 277). It is, say the court, a settled doctrine that the acceptance of a negotiable note for an antecedent debt will not extinguish such debt, unless it is ex- pressly agreed that it is received as payment. It is unnecessary in the present case to carry the principle so far as to say there must be an express ngreeraent for that purpose in order to operate as payment, but the evidence must certainly be so clear and satisfactory as to leave no reasonable doubt that such was the intention of the parties. And the rule to this extent is settled by the most unquestioned authority. (11 Johns., 513; 14 John., 404; 2 Gill & Johns., 493; 7 Har. & Johns., 92.) In the original bill, the complaint against the executors for not having collected tlie balance of tlii^ purchase money can hardly be considered a charge of negligence, and much less of that gross negligence which ought to make the executor personally responsible. It barely alleges that this balance ought to have been received if the executors had only used reasonable ' diligence in regard to the collec- tion. But after the answer and explanation of the executor to this charge came in, an amended bill was filed, charging the executor with gross negligence in this respect. This seemed to be an after-thought, and rather a stale allegation. But the answer and expla- nation of the executor, uncontradicted in any manner, fully exonerates the executors from all culpable negligence. Magruder was pros- ecuted for the balance of the purchase mon- ey, he became insolvent, and no further pay- ment could be obtained from him. An eject- ment was brought to recover possession of the land, that it might be again sold; the cause was tried in the County Court, apd removed to the Court of Appeals, where the judgment was reversed, and a procedendo awarded. This business was principally under the care and direction of the complainant, Beverly, and if there was any want of due diligence in pros- ecuting the suit, it is chargeable to him, and not to the executor. And besides, the exec- utor in the whole of this business acted un- der the advice of counsel, which shows satis- factorily thiit he acted in entire good faith, and would go very far to exonerate him from the charge of negligence, even if there were circumstances leading to a contrary conclu- sion. (2 John. Ca., 376.) From this view of the case, we are satisfied that tlie direction in the will of David Peter to sell a portion of his real estate for payment of his debts, created a power coupled with an interest that survives. That the surviving executor is, by necessary implication, the person authorized to execute that power and fulfill that trust. That the debt due the banks has not been extinguished by the notes sub- stituted by the executors as renewals in the bank, or the estate of the testator in any way discliarged from the payment of the debt. That the executors are not chargeable with negligence or misapplication of the personal estate that ought to render them personally responsible for these debts; and that no rea- son has been shown why satisfaction of these debts should not be had out of the lands ap- propriated by the testator for that purpose. It remains only very briefly to notice the exceptions which were filed to the report of the auditor, and most of these have been dis- posed of by the principles laid down in the foregoing opinion. It is proper here to ob- serve that, from the report of the auditor up- on the accounts exhibited by the executors and allowed by him, there has at all times been and now is a considerable balance in fa- vor of the executors against the estate. With respect to the first and second excep- tions, it is true that the auditor has not charged the executors with the inventories; and he ought not, according to the principles upon which he makes his statement — the ob- ject of the reference to him being to ascertain whether the executors were indebted to the estate or the estate to them — and for this purpose he examined the several statements made by the executors with the Orphan's Court, and he extracted from them the sev- eral sums received and paid by them. In the account with the Orphan's Court the execu- tors are charged with the amount of the in- ventory of the personal estate, both in the District of Columbia and in Maryland; and as far as any proceeds of the personal estate came into the hands of the executors, they are charged in the statement of the auditor, but they are not charged with what the wid- ow and heirs retained in their hands, and for their own use ; and this was correct, accord- ing to the provisions in the will, for the main- tenance of the family and the education of the children. The $4,552 mentioned in the third excep- tion were properly omitted in the statement of the account against the executor. It was a portion of that part of the estate which was put into the hands of the widow, attached ta the dwelling-house, and with respect to which the testator directed that no appraisement or valuation should be made. The fourth and fifth exceptions relate to the notes taken from Magruder for the bal- ance of the purchase money of the Dulin farm. The executors, as has been already shown, are not chargeable with those notes. N» negligence is imputable to them which ought to make them personally responsible. No title has been given for the farm, and it may yet be resorted to for payment of this balance of the purchase money. The auditor has properly given credit t» the executors for the taxes on the real es- tate. There is no suggestion that the taxes were not due and paid by somebody. The amount appears to have been paid according to the account of the register, and it is fairly to be presumed that tliey were paid by the executors, although no regular vouchers are produced tor such payment. This may be accounted for, in some measure at least, by DOCTRINES OF EQUITY. 47 the circumstances stated in the answer of George Peter of the destruction by fire of the boolis and accounts of his co-executor, Leon- ard H. Johns, who had the principal manage- ment of the estate. The allowance of $6,000 for the expenses of the family for twelve years must certainly be a very moderate charge. It was a proper subject of inquiry for the auditor, and there is no ground upon which tliis court can say the allowance is exceptionable. From the nature of the expenditure for the daily ex- penses of the family, it could hardly be ex- pected that a regular account would be kept, and especially under the large discretion given by the testator in his will in relation to the maintenance of his family. The amount paid by the executors for the curtails and discounts on the notes running in the banks were properly allowed to their credit. These were debts due from the es- tate, and whatever payments were made were for and on account of the estate. These are all the exceptions taken to the re- port of the auditor, and we think they were all properly overruled by the court below. But the court erred in decreeing a perpetual injunction. The decree of the Circuit Court must ac- cordingly he reversed, the injunction dis- solved, and the bill of the complainants dis- missed. This cause came on to be heard on the tran- script of the record from the Circuit Court of the United States for the District of Colum- bia, holden in and for the County of Wash- ington, and was argued by counsel; on con- sideration whereof, it is ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court in this cause be, and the same is hereby reversed and annulled. And this court, proceeding to render such decree as the said Circuit Court ought to have rendered in the premises, doth order, adjudge and decree, that the injunction in this cause be, and the same is hereby dissolved; and that the bill of the complainants be, and the same is hereby dismissed; and that this cause be, and ttie same is hereby remanded to the said Circuit Court, witli directions to said court to carry this decree into effect. (See, also, Craig v. Leslie, supra; Adams, Eq. p. 135, note; Story, Eq. Jur. §§ 1312-1215; Snelt, Eq. p. 169; 1 Pom. Eq. Jur. § 371; Kane v. Gott, 24 Wend. 660; Willing v. Peters, 7 Pa. St. 287; Parkin- son's Appeal, 33 Pa. St. 455; Shaw v. Chambers, 48 Mich. 355, 12 N. W. Rep. 486; Perkins v. Coughlan, 148 Mass. 30, 18 N. E. Rep. 600; Leiper v. Thomson, 60 Pa. St. 177; Lent v. Howard, 89 N. Y. 169; Peterson's Appeal, 88 Pa. St. 397; Hood v. Hood, 85 H. T. 561; and cases cited under "Maxim 12.") II. ELECTION. This doctrine rests upon the maxim that do equity." "he who seeks eqtiity must (7 Cranch, 370.) Herbert v. Wren. {Supreme Court of the United States. 1813.) Where a legacy is bestowed upon a widow, and it is intended by the testator that she shall take the legacy in lieu of dower, she is put to her elec- tion which she will accept. Marshall, Ch. J., after stating the case, delivered the opinion of the Court as follows: The material questions in the cause are: 1. Has a Court of equity jurisdiction in the case? 2. Is the Plaintiff, Susanna, entitled to dower? 3. If these points be in her favor, what de- cree ought the Court to make? According to the practice which prevails generally in England, Courts of equity and Courts of law exercise a concurrent jurisdic- tion in assigning dower. Many reasons ex- ist in England in favor of this jurisdiction: one of which is, that partitions are made and accounts are taken in chancery in a manner highly favorable to the great purposes of justice. In this case, dower is to be assigned in an undivided third part of an estate, so that it is a case of partition of the original estate as well as of assignment of dower in the part of which Lewis Hipkins died seized. An additional reason and a conclusive one in favor of the jurisdiction of a Court of equity is this: The lands are in possession of a purchaser who has not yet paid tlie pur- chase money. A Court of law could adjudge to the Plaintiffs only a third part of the land itself. Now, if the Plaintiffs be willing to leave the purchaser undisturbed, to affirm the sales and to receive a compensation for her dower instead of the land itself, a Court of equity ought never, by refusing its aid, to drive her into a Court of law and compel her to receive her dower in the lands themselves. This is therefore a proper case tor application to a Court of Chancery. 2. It is perfectly clear that the provision made by Lewis Hipkins in his last will is no bar to a claim of dower, for several reasons, of which it will be necessary to mention only two. 1. It is not expressed to be made in lieu of dower. ^. 48 CASES IN EQUITY, 2. It is not averred that she has accepted the provision and still enjoys it. 3. It remains to inquire what decree the Court ought to malce in the case. The first question to be discussed is this. Is tlie Plaintiff, Susanna, entitled both to dower and the provision made for lier in the will of her late husband? The law of Virginia has been construed to authorize an averment that the provision in the will is made in lieu of dower, and to sup- port that averment by matter dehors the will. But, with the exception of this allowance to prove the intention of the testator by otlier testimony than may be collected from the will itself, the act of the Virginia legislature is not understood in any respect to vary from the previously existing common law. In the Englisli books, there are found many decisions in which the widow has been put to her election either to talje her dower and relinquish the provision made for her in the will, or to take that provision and relinquish her dower. There are other cases in which she has been permitted to hold both. The principle' upon which these cases go appears to be this: It is a maxim in a court of equity not to permit the same person to hold under and against a will. If therefore it be manifest, from the face of the will, that the testator did not intend the provision it contains for his widow to be in addition to her dower, but to be in lieu of it; if his intention discovered in other parts of the will must be defeated by the allotment of dower to the widow, she must renounce either her dower, or the bene- fit she claims under the will. But if the two provisions may stand well together, if it may fairly be presumed that the testator intended the devise or bequest to his wife as additional to her dower, then she may hold both. The cases of Arnold v. Kempstead and wife, of Villareal and lord Galway, and of Jones V. Collier and others, reported by Ambler, are all cases in which, upon the principle that has been stated, the widow was put to her election. In the case under consideration, neither party derives any aid from extrinsic circum- stances, and therefore the case must depend on the will itself. The value of the provision made for the wife compared with the whole estate is not in proof: but so far as a judgment on this point can be formed on the evidence fur- nished by the will itself, it was supposed by him to be as ample as his circumstances would justify. The only fund provided for the mainte- nance and education of his five children is the rent of 140Z. per annum, payable by P. E. Fendall. Since he has made a distinct pro- vision for his wife, the presumption is much against his intending that this fund should be diminished by being charged with her dower. That part of the will, too, which authorizes P. K. Pendall, in the event of building a mill and not receiving from the sons of the testator their half of its value, to hold the premises until the rent should discharge that debt, indicates an intention that in such caaa the whole rent should be retained. The clause, too, directing the residue of his estate to be sold for the payment of debts, is indicative of an expectation that the prop- erty stood discharged of dower, and is a com- plete disposition of his whole estate. The testator appears to have considered himself as at liberty to arrange his property without any regard to the incumbrance of dower. Upon this view of the will, it is the opin- ion of the majority of the Court that the tes- tator did not intend the provision made for his wife as additional to her dower, and that she cannot be permitted to hold both. She has not however lost the right of elec- tion. No evidence is before the Court that she accepted the provision of the will, nor that she still enjoys it. Indeed there is much rea- son to suppose the fact to be otherwise. The decree of 1803 does not except the lands de- creed to her for life from its operation, nor is the Court informed by the evidence that those lands were not sold under it. But if she had accepted that provision and still enjoyed it, there is no evidence that she considered herself as holding it in lieu of dower. On the contrary, she was in the ac- tual reception of one third of the rent accruing on the lease held by P. R. Fendall; and in the deed executed by her in 1797, before her second marriage, she conveys her dower in the lands leased to Fendall, and also her dower in the lands devised to her by her de- ceased husband. It is therefore apparent that she never intended to abandon her claim to dower. The next inquiry to be made by the Court is, to what profits is the Plaintiff, Susanna, entitled in consequence of the detention of dower? It is unnecessary to decide whether, in gen- eral, a person claiming dower from a pur- chaser can recover profits which accrue pre- vious to the institution of her suit. In this case the Plaintiff was in the actual enjoyment of dower. She received one third of the rent accruing from the premises for nine years. She was therefore in full possession of her dower estate; and when afterwards the land was sold under a decree of a Court, P. R. Fendall was one of the executors wlio made the sale, and was himself in effect the pur- chaser of the estate. Upon no principle could he justify the refusal to pay that portion of the rent which was equal to her dower in the land, unless on the principle that she was not entitled to dower. In this case therefore the Plaintiff is entitled to one third of 140L per annum for the remaining four years of the lease under which P. E. Fendall held the land, and to an account for profits after the expiration of the lease. But the Plaintiff, Susanna, cannot claim the profits on her dower and hold any portion of the particular estate devised to her, or of DOCTRINES OF EQUITY". 4» the profits on that estate. An account there- fore must be taken, if required by the Defend- ants, showing what she has received under the will of her husband. This must be op- posed to the profits to which she is entitled for dower, and the balance placed totlie credit of the party in whose favor it may be. It remains to inquire whether the allow- ance of a sum in gross in lieu of dower in the land itself, or of the interest on one third of the purchase money, might legally be made. This must be considered as a compromise between the Plaintiffs and the Defendant, Deane. His assent being averred in the bill, and the bill being taken 1)70 aonfesso as to him, this may be considered as an arrange- ment to which he has consented. This, how- ever, cannot affect the other Defendants They have a riglit to insist that, instead of a sum in gross, one third of the purchase mon- ey shall be set apart and the interest thereof paid annualJy to the tenant in dower during her life. If the parties all concur in preferring a sum in gross to the decree which the Court has a right to make, still it is uncertain on what principle seven years were taken as the value of the life of the tenant in dower. It is probably a reasonable estimate, but this Court does not perceive on what principles it was made, nor does the record furnish the means of judging of its reasonableness. This Court is of opinion that there is error in the decree of the Circuit Court in not re- quiring the Plaintiff, Susanna, to elect be- tween dower and the estate devised to her by her late husband, and in not allowing profits on her dower estate if she shall elect to take dower. The decree is to be reversed and the cause remanded for further proceed- ings in conformity with the following de- cree: This Court is of opinion tliat the Plaintiff, Susanna, is not barred of her right of dower in the lands of which her late husband, Lewis Hipkins, died seized, but that she cannot hold both her dower and the property to which she may be entitled under the will of the said Lewis. She ought therefore to have made her election either to adhere to her legal rights and renounce those under the will, or to ad- here to the will and renounce her legal rights, before a decree could be made in her favor. This Court is farther of opinion that the- Plaintiff, Susanna, having been in possessions of her dower by tlie receipt of rent for several years after the death of her late husband, is,, in the event of her electing to adhere to her claim of dower, entitled to receive from the- estate of P. R. Fendall the profits wliich have accrued on her dower estate in his possessiort from the time when he ceased to pay the same^ until the sale was made to the Defendant^ Joseph Deane, and is entitled to receive frorip thw said Joseph Deane the profits which have accrued thereon since the same was sold and conveyed to him, to ascertain which an ac- count ought to be directed. And the Court is further of opinion that an account ought also to be directed to ascertain how much the^ said Susanna has received from the estate of her late husband, and what profits she ha* received from the estate devised to her in his- will: all which must be deducted from her claim for dower. The Court is further of opinion that if the- parties or either of them shall be dissatisfied with the allotment of a sum in gross, andl' shall prefer to have one third part of the pur- chase money, given by the said Joseph Deaner for the lands in which the Plaintiff, Susanna,, claims dower, set apart and secured to her for her life, so that she may receive during^ life the interest accruing thereon, and shall apply to the Circuit Court to reform its decree- in this respect, the same ought to be done. It is the opinion of this Court that there is: no error in the decree of the Circuit Court for the county of Alexandria in determining that the Plaintiff, Susanna, was entitled to dower in the estate of her late husband. Lewis Hip- kins, deceased, but that there is error in not requiring her to elect between her dower andJ the provision made for her in the will of her late husband, and in not decreeing profits on> the same. This Court doth therefore reverse and annul the said decree; and doth reman# the cause to the said Circuit Court with in- structions to reform the said decree accords ing to the directions herein contained. (See also Washburn v. Van Steenwyk, 32 Minn. 336, 20 N. W. Rep. 324; Adsit v. Adsit, 2 Johns, Ch. 448: WUbanks v. Wilbarks, 18 111. 17; Norris v. Clark, 10 N. J. Eq. 51; Cauffman v. CaufEman, IT' Serg. & R. 16; Dillon v. Parker, 1 Swanst. Ch. 394, note; Noys v. Mordaunt, 2 Vern. 581; Whistler ▼. Webjter, 2 Ves. Jr. 367; 1 Pom. Eq. Jur. § 464; Story, Bq. Jur. g 1075; Snell, Eq. p. 201; Adams, B penalty to cover actual damages, the courts hold it to the latter. " "2. On the contrary, where the language used is clear and explicit to tliat effect, the- amount is to be deemed liquidated damages, however extravagant it may appear, unless the instrument be qualifled'by some of the- circumstances hereafter mentioned." "3. If the instrument provides that » larger sum be paid on the failure of the party to pay a less sum in the manner prescribed, the larger sum is a penalty, whatever may- be the language used in describing it." "4. When a covenant is for the perform- ance of a single act, or several acts, or tlie- abstaining from doing some particular actor acts, which are not measurable by any exact pecuniary standard, and it is agreed that the- party covenanting shall pay a stipulated sura as damages for a violation of any such cove- nants, that sum is to be deemed liquidated damages, and not a penalty." "5. Where the agreement secures the per- formance or omission of various acts of the- kind mentioned in the last proposition, to- gether with one or more acts in respect of which the damages on a breach of the cove- nant are certain, or readily ascertained by a juiy, and there is a sum stipulated as dam- ages to be paid by each party to the other foe DOCTRINES OF EQUITY. 55 a breach of any of the covenants, such sum is held to be a penalty merely." It appears, then, that the only cases in which the courts will carry into effect an agreement to pay a fixed" and stipulated amount of damages, are those wliere the na- ture of the damages provided against are not regulated by any rule of law with certainty, and cannot be readily ascertained by a jury, and the whole contract must be of this char- acter, because if, on the breach of any one covenant contained in it, the damages are ascertainable by a jury with any degree of certainty, the stipulation will be held to be a penalty to cover the damages on such breach, and cannot be changed to meet the others when the damages are uncertain. The case of Bagley v. Peddie, above quoted from, was of this kind. The case of Smith v. Smith, 4 Wend. 468, was that of one physician selling his business and a lot in a village to another, and cove- nanting that he would not locate and prac- tice in the village or within six miles of it, and in case he did so locate or practice, that he would pay the plaintiff, on demand, $500 for each month he should so practice, etc., which was held to be of such a nature that the amount stipulated could be recovered. Dakin v. Williams, 17 Wend. 446, and reported again in the court of errors where it w:is allirmed, 22 Wend. 201, was a case wliere the defendants sold to the plaintiffs a newspaper and the good will of the con- cern, and covenanted that they would not start another of the same description in the same village or county, and stipulated the damages on a breach at $3,000. It was held that the sum could be recovered. Many other cases are in the books, but the two cited are quite sufficient to illustrate the prin- ciple. Whenever the damages for the breach are susceptible of proof, the stipulation of a cer- tain amount of damages will be held to be a penalty to provide for the actual damages sustained. On this point, see 3 Johns. Cas. 297, with notes "a" and "6," where many cases are cited; 5 Cow. 144, and very learned note of reporter at the end of case; Spear V. Smith, 1 Deniu, 464, per Branson, C. J. "Where there is an agieeuient to pay a gross sum in the event of the non-perfoimance of a contract, and the case is such that a jury can ascertain, with reasonable certainty, how much damages the injured party has actu- ally sustained by the non-performance, the courts are strongly inclined to regard the gross sum as a penalty, and not as liquidat- ed damages. " Hoag v. Mc.Qinnis, 22 Wend. 163. "The distinction between a penalty for se- curing the performance of the contract, and a stipulation which makes part of the con- tract itself, may be illustrated by the rule, that if a certain rate of interest is reserved on a mortgage, with an agreement that if it be not paid punctually, the rate shall be in- creased, the larger interest is in the nature of a penalty, and may be relieved against in equity. But, on the other hand, if the larger rate be originally reserved, with an agree- ment for reduction on punctual payment, the condition for such punctual payment is part of the contract, and relief cannot be given if it is not fulfilled." Nicholls v. Maynard, 3 Atk. 619; Adams Eq. Am. Notes, [108-9]; 2 Story, Eq. Jur. §§ 1314-15-16-17; Bona- fous V. Rybot, 3 Burr. 1374. The true reason of the interference of equity in this class of cases, is stated by Chancellor Kent, in his opinion in the case of Skinner v. Dayton. 2 Johns. Cli. 535. He says, "The true foundation of the relief is, that when penalties are designed only to se- cure money or damages really incurred, if the party obtains his money or damages he gets all that he expected or required." The books abound with cases holding this view, and they universally declare the doc- trine that where the stipulation is to pay a greater sum, on default of paying a lesser one, no form of words will change it from a penalty to liquidated damages. Such stip- ulations are by their nature and effect neces- sarily com minatory, and to allow any arrange- ment of words to change that effect, would be to permit the parties to override a well fixed rule of law, that the rate of interest shall be the measure of damages. The case at bar falls distinctly within this latter class; the stipulation is, that if the de- fendants fail to pay the principal sum of the note with interest on a certain day, they will pay that sum with increased rate of interest upon principal and interest, or in other words, if they fail to pay the lesser sum as agreed they will pay a greater. The greater sum must be held to have been inserted in terrorem, and as a penalty. I am unable to find any authority that satisfies me of the propriety of abandoning this long and well settled rule. There is another reason why this stipula- tion cannot be regarded in the light of liqui- dated damages; the greater sum agreed to be paid on breach was evidently not intended to be given or received in lieu of performance of the contract, and in full satisfaction for the breach, which is an essential feature in this cliaracterof stipulation. Grayy. Crosby, 18 Johns. 219; Slosson v. Beadle, 7 Johns. 72. This point arrived at, leads us to enquire whether the stipulation to compound the in- terest can be enforced. Chancellor Wal- worth, in Quackenbush v. Leonard, 9 Paige, 345, says: "The principle of not giving effect to a stipulation for the compounding of future interest upon a debt, does not arise from the usury laws. It is merely adopted as a rule of public policy to prevent an ac- cumulation of compound interest in favor of negligent creditors, who do not collect their interest when it becomes due, which neg- ligence is found, in the end, to be an injury, rather than a benefit, to the debtor." 56 CASES IN EQUITY. In the case of The State of Connecticut v. JacTcson, 1 Johns. Ch. 13, the master reported his computation of the amount due upon a bond allowing interest upon interest. The report was sent back for correction. In this case the chancellor reviews, in an able man- iner, the cases on. the subject of compound in- terest from the earliest English decisions, in the reign of Charles the Second, to the date of the case he was deciding; from which re- view he concludes that the "decisions show the existence of the general principle, and the exceptions and limitations by which it is attended; and though creditors will be very apt to think, with Lord Thiirlow, that there is nothing unjust in compelling a debtor, who neglects to pay interest when it becomes due, to pay interest upon that interest, yet the wisdom of our laws has ordained otherwise." He then shows that the Roman law was constant in its condemnation of compound interest, and establishes, by reasons of the most unanswerable character, that to allow fluch contracts to be enforced, would be pro- ductive of the worst possible evils, harsh and oppressive, and tend to inflame tlie avarice and liarden the heart of the creditor. Van Benschooten v. Lawson, 6 Johns. Ch. 313, where 1 Jolins. Ch. 13, is cited with appro- bation. Toll V. HilUr, 11 Paige, 228; Mowry V. Bishop, 5 Paige, 98; Boyer v. Pack, 2 Denio, 107, where compound interest, which had been paid under a mistake of fact, was allowed to be recovered back. Hammond's Digest, 331. There is no limit to the authorities on this point. The principle established is, that a contract to pay interest on interest which is not yet due, is inequitable and will not be en- forced; while on the other hand, if the inter- est is due, it may be added to the principal, and a contract to pay interest on such new principal will be enforced. The only remain- ing question is, what shall determine the rate .of damages the note is to draw after breach? The statute of Minnesota on the subject of interest is quite peculiar, and must be read with care to be fully understood. Section 1 proviiles, "Any rate of interest agreid upon typaities in contract, specifying the same in writing, shall be legal and valid." Sec. 2. "When no rate of interest is agreed upon, or fipecified in a note, or other contract, seven per centum per annum shall be the legal rate. " It is quite clear that the legislature in- tended to remove all obstacles from the sub- ject of interest, and leave the parties Iree to contract for sucli rate as they should consider their money worth; and we will, in examin- ing tliis statute, be careful to make the dis- tinction between the interest that the parties .contract for, and the damagea they are en- titled to recover on a breach of the contract. The only change, then, that this law of 1851 ciakes, is to remove the restrictions which previously existed on the right to contract for Interest, and repeal all laws then in force on the subject. The counsel for the defend- ants made a very ingenious argument to show that as the law did not expressly repeal any- thing, and would only apply to the subject of interest, the old law which fixed the rate of interest, and by reason of such rate, estab- lished the measure of damages on money con- tracts, must be held to be still in force so far as the question of damages was concerned, and still fix the rate. Without discussing the principle, that the main object of the old act being the establishment of a rate of in- terest, and its being used by the courts, from that fact alone, as a just measure of damages on money contracts, if the main feature should be changed, everything incident to, and consequent upon such main feature, would undergo a corresponding change, it is quite sufficient to state that the counsel was mistaken in fact; the Revised Statutes, of which the interest law is only one chapter of a whole act, contains a provision on p. 578, § 1, which repeals expressly all laws in force either those of the state of Wisconsin or the territory, with certain express reservations, of which the interest law is not one. I make these remarks on the supposition that there was some statute on interest in force at the passage of the Revised Statutes, as the counsel has cited one, but I have been unable to find the laws of Wisconsin; how- ever, the repealing act -which I cite clears the subject of any doubts, and leaves the present interest act as the only statute law in force on the question of interest at the date of this note. The two sections which compose this chap- ter on interest stand distinct from, and inde- pendent of, each other, and either could be operative alone. The declaration in the first section, that "any rate of interest agreed up- on by parties in contract, specifying the same in writing, shall be legal and valid," is mere- ly declaratory of what would be law if noth- ing was said on the subject, but imposes the condition that the contract shall be in writ- ing. So we see that the only change it makes in the natural right to contract for interest is, that the contract shall be in writing. Suppose, therefore, to test the independency of the two sections, that the second one had not been enacted, and the first one stood alone. In tliis case, if a contract should be made which simply contained a stipulation to draw interest, without any rate being specified, it would be like any other contract, uncertain in its terms, and would draw no interest, because the law of interest required the rate to be expressed in writing; but after breach there would be no difficulty in recov- ering damages, because the current value of the money can always be readily ascertained by proof, and such value would be the meas- ure of damages. Suppose again, that a contract should be made, (the first section standing alone,) in which a rate of interest was speclfled in writing, and a breach be made by the prom- DOCTRINES OF EQUITY. 57 isor, what would be the measure of dam- ages? The courts would say the law has permitted the contracting parties to fix a rate of interest to suit themselves, and declared any rate so fixed to be "legal and valid." In a state where the law fixes the rate of interest, it measures the damages by that rate. In this state there is no legal rate of interest, ex- cept such as the parties agree upon, and by similar reasoning, that rate should control the measure of damages as being a standard of the value of money adopted by the parties to govern the particular contract in all its as- pects, as thoroughly as a statutory standard would produce the same effect. If section two stood alone upon the statute book, parties would have the same right to contract for interest that they now possess, and the only difference in the law would be, that the contract would be valid without writing, and if no rate of interest was agreed upon, seven per cent, would be the rate of in- terest, as well as the measure of damages on a breach. But if the contract specified a particular rate of interest, say three per cent, per month, and a default should be made in the payment, what would be the measure of damages? Certainly not seven per cent., be- cause we have shown that it is the rate of interest, either statutory or agreed, which governs the measure of damages after de- fault, and the second section expressly de- clares that it is inoperative in the matter of interest as concerns any contract that ex- presses a rate of interest for itself, conse- quently it must be equally inoperative upon the measure of damages on the breach of such a contract. Its own words separate it entirely from any contract that specifies its own rate of interest, and confine its influence strictly to those cases where "no rate of in- terest is agreed upon or specified in a note or other contract." Where a contract bears interest, and the rate is agreed upon and specified in writing, it falls within the first section of the interest statute, and must be controlled in all its as- pects by that section, and as if there was no other provision of law on the subject, because the second section refers to contracts of an- other and a different nature, to-wit, con- tracts where "no rate of interest is agreed upon or specified." And on the other hand, where "no rate of interest is agreed upon or specified in a note or other contract," it falls within the second section, and bears seven per centum per annum, and is equally free from any influence whatever from section one, which is confined to a totally different class of instruments. I think there can be very little doubt that the two sections are wholly independent of each other, and that a contract which by its nature falls within the first, cannot be influenced by the last, and vice versa. It is urged that seven per cent, is the general rate of interest established by law, and that the right to contract for e different rate is the exception, and that therefore the general rate is to control the measure of damages; but it seems that the more con- sistent view of the statute is, that it in- tended to inaugurate an era of perfect free- dom in money dealings, to remove all restraints upon the value of money, and throw the whole subject open to contract; and that the second section was enacted merely to cover those cases of implied con- ! tracts to pay interest, and others in which it ' was expressed, but no rate named, and with- ' out which provision the statute would have lacked symmetry and completeness. The I emancipation of money was the aim and ' object of the statute, and the seven per cent. ' clause was to provide for cases where parties I failed to avail themselves of the general ; privilege. ; The only effect that a fixed rate of interest ! by statute has upon the rate of damages ■ upon the breach of a money contract is, that I it furnishes the courts witli a standard value ; of money, which standard is arbitrarily ap- plied as the measure of damages in all such cases. Therefore, where there is no such fixed rate of interest, or standard value of money by statute, tlie courts must look to ; some other rule to apply as a measure of 1 damages, and it would seem by far the most ■ reasonable, in harmony with precedent prin- ciples, and consistent with the monetary I freedom inaugurated by tlie statute, to adopt i such standard value of money as the con- ! trading parties have by virtue of the statute ! fixed upon for themselves, and not one ! which it was the principal object of the ' statute to abolish. The rate of interest by : law controlled the damages before the stat- i ute; the rate of interest by contract, under ; the statutes, should perform the same office now. But we are not without the light of judicial ; interpretation upon this statute by our own : court. In the case ot Brewster v. Waltejield, ! 1 Minn. [352], the supreme court of the late territory of Minnesota gave the statute the : same construction, witli the exception that '' they call tlie damages which they allow after ' maturity of the note, interest. Their views ! on the statute, however, are the same as our ! own. The fact that their decision has been made ; for over two years, and stood as an interpre- I tation of the statute on this point, would be la very strong argument with this court to ' hold the same way even if we had enter- tained doubts of the correctness of the rea- soning, which we do not. Stability in de- cisions is of the utmost importance to the progress and well being of a commercial community, and we will always regard it as a weighty consideration in the determination of any question. The court below erred in allowing the plaintiff to recover the increased rale of interest as damages, and also in allowing the compound interest stipulated in the note. The true rr.te of damages sho'ild have 58 CASES IN EQUITY. been the principal sum of the note with in- terest at three per cent, per month up to the time of default, and damages at the same rate from default to judgment. The judgment is reversed and the case remanded to the district court of Ramsey county, for retaxation under the rules above established. (See, also, 1 Pom. Eq. Jur. §§ 381, 433 et seq. ; 3 Pom. Eq. Jur. § 826 ; Snell, Eq. p. 309 ; Story, Eq. Jur. pp. 637-650; Adams, Eq. p. 107; Newell v. Houlton, 33 Minn. 19; Whitev. litis, 24 Minn. 43; Livingston V. Tompkins, 4 Johns. Ch. 431, Oil Creek R. Co. v. Atlantic &G. W. R. Co., 57 Pa. St. 65; Spear v. Smith, 1 Denio, 464; Gray v. Crosby, 18 Johns. 219; Whitfield v. Levy, 35 N. J. Law, 149; Smith v. Crane, 33. Minn.- 144, 32 N. W. Rep. 633 ; Long worth v. Askren, 15 Ohio St. 370 ; Thompson v. Hudson, L. R. 4 H. L. 1 , Road Co. v. Murray, 15 111. 337 ; Carlon v. Kenealy, 12 Mees. & W. 139 ; Malcolm v. Allen, 49 N. T. 448; Smith V. Smith, 4 Wend. 468; Dakin v. Williams, 17 Wend. 447; Green v. Price, 13 Mees. & W. 695; Gushing v. Drew, 97 Mass. 445; Lange v. Werk, 2 Ohio St. 530; Jaquith v. Hudson, 5 Mich. 123; Bag- ley V. Peddie, 16 N. Y. 469; Kemble v. Farren, 6 Bing. 141, Trower v. Elder, 77 111. 453; Berry v. Wis- dom, 3 Ohio St. 341 ; Shreve v. Brereton, 51 Pa. St. 175.) (As to remedies, see Ropes v. Upton, 135 Mass. 258.) (23 Kan. 140.) National Land Co. v. PERRr. {Supreme Court of Kansas. July, 1879.) While contracts for the sale of land in which time is made of the essence of the contract are valid and enforceable at law or in equity, yet, where the circumstances are su oh that it would be grossly inequitable to enforce a forfeiture, courts of equity will, upon slight ground therefor, relieve a party therefrom, and enforce the contract as merely one of sale. And held that, under the circumstances of this case, the district court committed no error in refusing to enforce a forfeiture. Error from Dickinson district court. At the March term, 1878, of the district court. Perry had judgment against tlie Na- tional Land Company, which brings the case here. Brewer, J. In this case is presented one of those harsh time contracts for tlie sale of land, in which a forfeiture is sought to be enforced for non-p:iyment at the stipulated time. That such contracts are valid, and may be enforced, has already been decided. Missouri River, Ft. S. & G. R. Co. v. Brick- ley, 21 Kan. 275. The district court decid- ed against the forfeiture. No findings of fact were made, and the only question is whetlier there was testimony which will sus- tain such decision. And we are constrained to think that there is. "While such contracts are recognized as valid both at law and in equity, yet courts of equity are reluctant to enforce forfeitures when it would be grossly inequitable to do so, and often seize upon slight circumstances to justify a refusal of such forfeitures. Here tlie land, 160 acres, was sold for $640, one-fifth of which was paid down and possession given. The first year, only interest was due by the terms of the contract, and that was paid. The second year, one-fourth the unpaid principal and the interest became due, and an extension in writing was granted for six months. At the expiration of that time, payment was not made, but tender was made eight days after the date of second annual payment of all amount then due, and interest, and also an- other tender of the entire amount due on the contract. Both tenders were refused. The land at the time of the sale was vacant and unimproved. There is nothing to show that the price was not the fair value of the land at the time, or that anytliing had since tran- spired to affect the value other than the labor and material placed upon it by the vendee. The vendee, during the two years of his pos- session, had brought the entire tract into cul- tivation, had at the time of suit sixty acres in wheat, and a hedge-row growing of 160 rods in length. By his labor he had increased the value of the land $992. By the forfei- ture, therefore, the vendor was seeking to ob- tain, not only the cash paid, to-wit, one-fifth the price and the interest, but also $992 of another's labor. He refused to receive the stipulated price and interest, but sought to keep what money he had received, retake the land, and appropriate in addition one and one-half times its value of the vendee's labor. As to these facts, it may be remarked that there is no contradiction in the testimony. Under such circumstances, it would seem to require but little to relieve against the forfei- ture. These facts also appear in the testimony: The first annual payment of principal was due Marclj 10, 1877, and on March 17 the time of payment waa extended to September 10, 1877. In September, but whether before or after the 10th does not appear, the vendee sowed sixty acres in wheat. Thereafter he placed a mortgage on the growing wheat for $160, and on December 26th, sold the land to defendant in error. Perry, who assumed the mortgage in part payment. In January, 1878, Perry called on the vendor to obtain an extension of time, and the latter proposed to take up the old contract and execute a new one, with full payment of balance of pur- chase price in the ensuing fall. He also ad- vised Perry to borrow money and pay off thi» debt. And on March 18th the tenders here, tofore noticed were made. Now, upon these facts, we think the re- fusal of the court to sustain a forfeiture can- not be adjudged error. When the right to a forfeiture accrued, the vendor, for the time being at least, waived it, and granted an extension. And when tliis further time had expired, he took no steps to enforce the forfeiture, permitted the vendee, if not to bestow labor upon and improve the premises, at least to treat itaft DOCTRINES OF KQUlXr. 5» though he had an interest therein, to borrow money upon growing crops, and to sell and receive pay for the land. With full knowl- edge of this sale, he proposed to the pur- chaser to throw up the old and take a new contract, and also advised him to borrow money and pay off the debt. Within a rea- sonable time thereafter the purch9,ser acts upon the advice, and tenders the money for the debt. It seems to us that the court might properly say, considering all the cir- cumstances, and the gross injustice of any other ruling, that it would not enforce the- forfeiture, but give to the vendor his money and to the vendee the land. We see no other matter requiring notice, or any error prejudicial to the substantial rights of the plaintiff in error. The judgment will be alfirraed. (All the justices concurring.) (See, also, 1 Pom. Eq. Jur. § 488 et seq. ; Story, Bq. Jur. pp. 644-650, § 1315; Snell, Eq. p. 314; Ad- ams, Eq. p. 110; Atkins v. Chilson, 11 Meto. (Mass.) 113; Palmer v. Ford, 70 111. 369; Giles v. Austin, 63 N. T. 486; Dunklee v. Adams, 20 Vt. 415; Hills v. Rowland, 4 De Gex, M. & G. 430.) (Time as of the essence of a contract. Missouri River, F. S. & G. R. Co. v. Brickley, 21 Kan. 276,. note.) V. NOTICE. Notice may be either actual or constructive. (40 Minn. 319, 41 N. W. Rep. 1054.) Bailey v. Galpin. {Supreme Court of Minnesota. March 25, 1889.) 1. Where, In an action to determine adverse claims, the answer denies generally the title of the plaintifE, and by way of new matter sets forth the defendant's title, without alleging the source of plaintiff's title and defendant's prior right, the plaintiff may reply by simply taking issue upon such new matter, without denying notice or alle- ging superior equities. The "pleadings will then simply present the issue of the ownersliip of the legal title. a. Where the description of land in a deed is in- sufficient to pass the title because of the omissions therein made through the mistake of the parties thereto, and, subsequent to the record thereof, the same land is conveyed to a third party, who has no actual notice of the prior deed, the record is not constructive notice to the latter of the equita- ble rights of the former purchaser. 8. The legal title to land does not pass unless it is so described that it can be identified or located by referring to or following out the description as given. 4. Rules of construction, as applied to the de- scription in deeds, stated. 5. Registration is constructive notice only of what appears on the face of the deed, and of the description of the premises therein, and if in the deed as registered the particular land in contro- versy is not so described as to identify it with reasonable certainty, the record is not notice to subsequent bona tide purchasers. 6. The distinction between constructive notice, legally implied from the fact of registration, and actual notice, as respects the duty of ulterior in- quiry, considered. Appeal by defendant from an order of the district court for Hennepin county refusing a new trial after a trial by Loehren, J., and judgment ordered for plaintiffs. Vanderburgh, J. This is an action un- der the statute to determine the adverse claim of the defendant. The complaint contains general allegations of plaintiffs' title and ownership, and that the premises are vacant and unoccupied; that the defendant claims some estate or interest adverse to them, and asks judgment determining it. The defend- ant appears and answers, denying the plain- tiffs' title, and alleging that she acquired titlo to the land in question by deed from Sykes & Andrews, the owners thereof, on the 11th. day of August, 1883, which was recorded on the 23d of the same month. The plaintiffs, in their reply, deny the allegations of new matter in the answer, and thus a complete issue on the question of the legal title was framed by the pleadings. The pleadings did not take the form of a bill and answer in chancery, and, since the answer does not dis- close that both parties claim by deed under the defendant's grantor, and that the defend- ant's was prior in point of time, there was nothing in it necessarily calling for any alle- gations showing the bonafldesa.nd superior equities of the plaintiffs under a later deed from defendant's grantors. The psirties re- spectively claim to be the holders of the legal title. Barber v. Bcajis, 27 Minn. 92, (6 N. W. Rep. 445.) Upon the trial, however, the plain- tiffs voluntarily assumed the burden of prov- ing thut they were bona fide purchasers with- out any actual notice of defendant's deed, or of any claim thereto by her, and the court so- finds; and this fact must be assumed in dis- posing of the case in this court. The record also discloses the following facts in respect to the state of the titlei Both parties claim under Sykes & Andrews, the former owners. On the 11th day of Jan- uary, 1884, the plaintiff Bailey purclnised of Ihein the lot in question, viz., lot 12, in block 8, and 11 other lots, described in their deed to him of that date as being "all in Menage's- supplement to East Side addition to Minne- apolis, according to the plat thereof of record and on file in the otHce of the register of deeds of said county." A full consideration was paid by Bailey therefor, and the deed was duly recorded upon the nex't day. After- wards Bailey conveyed an undivided two- thirds of the lots so purchased to the otiier plaintiffs. Plaintiffs a'i tic owners of the- «0 CASES IN EQUITY. lot in controversy (lot 12, in block 8, above described) unless defendant acquired title thereto under the prior deed to her, executed and recorded as set forth in the answer, but in which the plaintiiTs claim the description was fatally defective, so that the record there- of was not constructive notice of any title or -claitn of the defendant to the lot in question described in the deed to them. Tl)e descrip- tion in defendant's deed, which, as before stated, was recorded before the execution of the deed to Bailey, is as follows, viz.: "Lot 12, Bl. 8, Menage's supplement to Minneapo- lis, according to the plat now on file or of record in the office of the register of deeds in -and for said county." Asa matter of fact the defendant intended to purchase the lot in question on the date of her deed, and paid "for the same, and the grantors, Sykes & An- drews, intended by their deed to her to con- vey the same lot. The trial court held tliat the description in the defendant's deed was insufficient to pass the legal title to the lot, although, prior to the plaintiffs' purchase, -she had an equity entitling her to a reforma- tion of the deed; and that plaintiffs acquired the legal title; and that the record of defend- ant's deed, failing to describe the lot, was not constructive notice of her equitable title ■or claim. If the plaintiffs had neither actual nor con- structive notice, the equities being equal, they, as holders of the legal title, must of -course prevail. The legal title to land does not pass by deed unless so described that it •can be identified or located by referring to or following out the description as given, and the effect of the record as constructive notice merely cannot be aided or supplemented by proof of the actual intentions of the parties to the deed, not disclosed by the record. Tice V. Freeman, 30 Minn. 389, (15 N. W. Kep. 674;) Parret v.Shaubhut, 5 Minn. 258, (323, 331,) (80 Am. Dec. 424.) If the description is sufBcient to identify the land, the form -adopted is immaterial, whether it be by ref- erence to a plat, or well-known objects, or names or monuments, or by metes and bounds. And where there are several different and ■complete descriptions of the same land, whether as appearing upon different plats or otherwise, the record of conveyances by eitlier form will be constructive notice, and will bind the title. Ames v. Lowry, 30 Minn. 283, (15 N. W. Eep. 247.) And so. where the deed or record, in addition to a correct or sufficient description, contains false particu- lars, the rule is, if there are certain particu- lars once sufficiently ascertained, which des- ignate the thing intended to be granted, the -addition of a circumstance false or mistaken will not vitiate the grant. Thorwarth v. Armstrong, 20 Minn. 419, (464;) Russell v. Hayden, 40 Minn. 88;i Slosson v. Hall, 17 Minn. 71, (95.) It is true that in some in- stances, where the subject of the grant is ■identified, mistakes or omissions in the de- ■41 N. W. Rep. 456. tails of the description may be helped by construction. But in such cases the inten- tion of the parties is reasonably clear from the face of the record. Hoffman v. Kiehl, 27 Mo. 554; Merrick v. Wallace, 19 III. 486* 497. In Partridge v. Smith, 2 Biss. 188, this rule is extended further, perhaps, than is consistent with sound principles, or the current of authority. So, if the description is sufficient to ascertain the estate, although the estate cannot agree with all the particu- lars, it will pass. But if the description in the deed is so defective and inaccurate that the subject of the grant is not properly iden- tified or indicated, so that a reformation of the instrument is required, the legal title will not pass. Roberts v. Grace, 16 Minn. 115, (126, 134.) Here the description is confessedly defect- ive on its face. It is not aided by the addi- tion of particulars containing a correct de- scription or identification, or pointing to it, as might be done, by reference to a previous deed or well-known name or locality, or any- thing of the kind. "Menage's supplement to Minneapolis" is unknown, and there is no such plat or survey. It is not a description of the land in suit, nor can it be so construed as against buna fide purchasers. An expert examiner of titles, who makes it a business to note upon his books all descriptions re- corded in the register's office, would of course have discovered this deed, and would pru- dently place it upon an abstract of the land in question; while a person confining him- self to a search of the title of the land de- scribed in the plaintiffs' deed would not have occasion to go outside of the lands embraced in the supplement to the East Side addition, and he would not be bound to examine or in- quire as to other plats or descriptions not em- bracing such lands. The description in de- fendant's deed was not shown or found to be the same or equivalent to the correct descrip- tion in plaintiffs' deed. We see no reason to question the correctness of the determina- tion of the trial court, that the description was insufficient to pass the legal title. "We come now to consider, in the next place, whether the record of the deed — there being no actual notice — was constructive notice to the plaintiffs of the equitable rights of the defendant, as between her and her grantors, to a reformation of the deed. But this could not well be; for, if the descrip. tion in the deed is altogether insufficient to locate or identify the property and pass the title, it would not be constructive notice at all to the plaintiffs, and they were not bound to notice it or look for it. ISlmmons v. Puller, 17 Minn. 462, (485, 490;) Roberts v. Grace, 16 Minn. 115, (126, 135;) Martindale, Conv. § 276 et seq. It is intended that the record should be a correct and sufficient source of information, and the statute did not mean to put purchasers upon further in- quiry by virtue of its operation making the fact of registration constructive notice; and parties are understood to purchase upon the DOCTRINES OF EQUITY. 61 faith of the title as appearing of record. Frost V. JBeekman, 1 John. Ch. 288, 298; Ledyard v. Butler, 9 Paige, 132, (37 Am. Dec. 379;) Jackson v. How, 19 John. 80; Fort V. Burch, 6 Barb. 60, 74. It is the set- tled rule that registration is constructive no- tice only of what appears on the face of the deed, and of the description of the premises therein. And if upon the face of the deed as registered the pioperty in controversy is not so described as to identify it with reason- able certainty, the record cannot be notice to subsequent bona fide purchasers. Roberts V. Grace, supra; Will. Eq. Jar. *256. Un- der the registration laws it is sometimes said in a loose and general way that the record of a deed is constructive notice to all the world, but this means simply that the record is open to all, and is notice to interested parties; and, strictly speaking, a purchaser lias not bylaw constructive notice of all matters of record, but only of such as the title deeds of the es- tate show upon their face, or refer or direct him to. And the bona fide purchaser is not constructively bound to look further than the information afforded by the record of such deeds. The record of a deed is notice only to those who are bound to search for it. Dexter v. Harris, 2 Mason, 531, 536; Maul V. Rider, 59 Pa. St. 167 ; Sanger v Craigue, 10 Vt. 555 ; Thomson v. Wilcox, 7 Lans. 376. The distinction between constructive and actual notice is also to be noticed. Construct- ive notice of the contents of a deed arises as an inference or presumption of law from the mere fact of record, and is in law equivalent to actual notice of what appears upon the faco of the record to the party bound to search for it, whether he has seen or known of it or not; that is, constructive notice un- der the recording acts may bind the title, but does not bind the conscience; while actual notice binds the conscience of the party. Undertcood v. Courtown, 2 Schoales & I*. 41, 66. Hence, where the attention of an in- terested party is directed to a defective deed or the recorded copy thereof, he may get actual knowledge of the facts sufficient to affect his conscience, and put him upon in- quiry, so as to charge him with notice, which would not otherwise be attributable to him from the record only. Thomas, Mortg. g^ 491. In tills case it is only upon the as- sumption in advance that the plaintiffs knew in fact of the existence of the defendant's deed or the description therein, or were chargeable with notice by the record thereof, that it can be claimed that they were put up- on inquiry, or that the title of these lots was bound by it. But they had no actual notice of it. The search made for them did not dis- close it. The land was not known by such description. They were not put upon in- quiry as to the particulars of the transaction, and they could not be constructively bound by a deed which did not describe the land, and inquiry of the parties to that deed did not become a duty, since they had no notice in fact. Maul v. Rider, 59 Pa. St. 167. As- was said in Barnard v. Campau, 29 Mich. 162, "in general it will not be disputed that one who seeks a benefit from the recording laws must incur all risks from failure to put his papers duly upon record, whether the fault shall be his own or that of the officer. An equitable construction cannot be placed upon such laws, by which they may be made * * * to give constructive notice of things the records do not show." And in Frost V. Beekman, supra, the chancellor says (p. 299:) "The registry was intended to contain within itself all the knowledge of the deed necessary for the purchaser's safe- ty." The defendant was at fault in not seasonably examining and correcting the de- scription in her deed; and where one of two innocent parties must suffer, the loss ought justly to fall on that one whose error has led to it. Thomson v. Wilcox, 7 Lans. 376. Order affirmed. (See. also, 2 Pom. Eq. Jur. § 591 et seq. : Story, Eq. Jur. § 399 et seq. ; Snell, Eq. p. 85; Adams, Eq. p. 151 ; t'ringle v. Dunn, 37 Wis. 449-465 ; Jones v. Lapham, 15 Kan. 540 ; Blatchley v. Osborn, 33 Conn. 226 Butcher v. Yocum, 61 Pa. St. 168-171; Lawton v. Gordon, 37 Gal. 202; Curtis v. Mundy, 3 Meto. (Masi;.)405; Stevens v. Goodenough, 26 Vt. 676 ; Jackson v. Burgott, 10 Johns. 456; Brinkman v. Jones, 44 Wis. 498-518; Cummings v. Finnegan, 42 Minn. .534, 44 N. W. Rep. 796; Williamson v. Brown, 15 N. Y. Si; 1 Hoppin v. Doty, 25 Wis. 573 ; Raritan, etc., Co. , v. Veghte, 21 N. J. Eq. 463-477 ; Chicago v. Witt, 75 CL 211; Reynolds v. Ruokman, 85 Mich. 80; Buttrick v. Holden, 13 Mete. (Mass.) 855; Maul v. Bide>v ** (Coa3tiUctive notice. Carleton College v. McNaughton, 26 Minn. 194, 2 N. W. Rep. 688; Moyer v. Hinman, 13 N. Y. 180; Grofl v. Ramsey, 19 Minn. 44, Gil. 24; Bank v. Godfrey, 23 lU. 531.) (Recitals. Stees v. Kranz, 82 Minn. 818, 20 N. W. Rep. 241 ; Frye v. Partridge, 82 lU. 267 ; Insurance Co. V. Ealsey, 8 N Y. 271.) 62 CASES IN EQUITY. VI. PRIOEITIES. TMs doctrine rests upon the two maxims that "where there are equal equities the first in time shall prevail," and "where there are equal equities the law shall prevail." (3 Hill, 238.) MUIR V. SCHBNCK. (j5 (Supreme Court of New York. July, 1843.) Where there are two equitable claims to the flame property which are conflicting the one which is first in order of time will be preferred, and is thus a prior claim. A bond and mortgage were given by de- fendant to the plaintiff in the sum of $1,500, to be paid in five installments. When three installments liad been paid to the plaintiff, ■he assigned the bond to D. as collateral se- curity. Afterwards tlie plaintiff assigned the rnortgHgeand the bond to A., who gave notice todefendant of the assignment, and defendant promised to pay him tlie money thereon, and did pay him the fourth installment, at one time, and later he paid the balance. After the payment of the fourth installment, and be- fore the payment of the balance, D. gave de- fendant notice of the assignment of the bond to him, and he himself claimed the balance. The lower court lield that the last payment to A. was good, notwithstanding D.'s no- tice. By the court, Cowen, J. The question is, whether the defendants were right in pre- ferring Austin, and making the last payment to him instead of Doty. Doty had the first assignment from the obligee, and, as between him and Austin, was entitled to the money. In a conflict of equitable claims, the rule is the same at law as in equity, qui prior est tempore, potior est jure. There was no need of notice to Austin for the purpose of secur- ing the preference as against him ; and Aus- tin might have been compelled at Uie election of Doty to pay over to him the last install- ment received from the defendants. But before that installment was paid, he chose to fix the defendants by giving notice of his right to them, and forbidding the payment of any more to Austin. The payments were correctly made to the latter, till notice. The payment afterwards, was in the defendants' own wrong. The notice, when it came, af- forded them a complete protection, and liad the farther effect to render what was before an inchoate right in Doty, perfect from the beginning. As Austin had never any right to receive, the defendants had now no riaht to pay. No one would doubt that the first as- signment divested the right of the obligee, though the legal interest remained in him. Could he transfer to Austin a greater right than his own? His legal interest was not as- signable; and he had parted with all his equi- table right. Does it not follow that nothing remained for Austin? Tlie decision at the circuit, I admit, derives some degree of countenance from the re- marlss made by Chancellor Kent in Murray v. Lylhurn, (2 John. Ch. Rep. 441, 443.) I allude to the view there taken of Redfearn V. Ferrier, (1 Bote's Pari. Cas. 60,) which the learned Chancellor supposed should per- liaps be received as a qualification of the rule laid down by Lord Thurlow, in Davies v. Austen, {I Fe.«..7MW. 249,) wlio said: "A pur- chaser of a chose in action must al?j}ays abiia by tlie case of a person from whom he buys; that I take to be an universal rule." True, his lordship was speaking of the case of the assignor, as it stood between him and the debtor; yet the same rule has been often ap- plied to a case as between him and one of his previous assignees. Nothing is better set- tled, for instance, than that the previous as- signment of a chose in action will prevent its passing to assignees by a general assign- ment under the bankrupt or insolvent acta; an assignment carrying even the legal right; and this too, without notice either to the debtor or the subsequent assignees. Ordi- narily, any notice to subsequent conventional assignees must be out of the question; for the first assignee cannot know who they will be. Notice to the debtor might, I admit, afford them a better chance; for then there would be one of whom they might enquire, and of whom they naturally would enquire. This might prevent fraud; and, to require it, would therefore perhaps be very proper. It is required by the law of Scotland, as ap- pears by Redfearn v. Ferrier, which was de- cided upon the Scotch law. By that law there must be what is called an intimation to the debtor, before the assignment is per- fect and secures a complete preference even as against a subsequent assignee. In sug- gesting, however, that sucli is perhaps tlie law of England or of this state. Chancellor Kent admitted that he was doing what was not necessary to the decision of the case un- der his consideration, which turned on a point entirely different, viz. a lis pendens operating as constructive notice. In Living- ston v. Uean, (2 John. Ch. Rep, 479.) there was actual notice. But neither Redfeamy. Ferrier, nor the two cases decided by Chan- DOCTRINES OF EQUITY. 63 cellor Kent, related to a previous express as- signment. There was scarcely the semblance of such an assignment, but only a trust to be inferred by the court of chancery from cir- cumstances — a sort of implied trust — a crea- ture peculiar to that court. The prior right claimed, was spoken of as a latent equity. As between express assignments, I take the law to be correctly laid down by Parker, G. J. in Wood V. Partridge, (11 Mass. Rep. 488, 491, 2.) He said: "Between assignor and assignee the contract is complete without any notice to the debtor;" and he considered the notice as Intended to protect tlie debtor alone. Story, J. in his learned work on the Conflict of Laws, {p. 328 to 330,) mentions the diiference between the Scotch law and our own, admitting the necessity of intima- tion in the former. He says, that according to our law, an assignment operates, per se, as an equitable transfer of the debt, and he concedes that notice is necessary to protect the debtor; adding: "But an arrest or attach- ment of the debt in his hands by any creditor ■of the assignor, will not entitle such creditor to a priority of right, if the debtor receive notice of the assignment pendente lite, and in time to avail himself of it in discliarge of the suit against him." That has been held in several cases. {Bholen v. Cleveland, 5 Mason 174, 176; Foster v. Sinkler, 4 Mass. Rep. 450; Dix v. Cobb. id. 508.) In Wood v. Partridge, this question between a previous assignee and a subsequent attacliing creditor, was considered the same in principle as that between conflicting assignees. It is undoubt- edly so. The principle has been declared by other cases. ( White's heirs v. Prentiss' heirs, -3 Monroe, 510; Madeira v. Catlett, 7 id. 477.) In Jordan v. Black, (2 Murph. 30,) the claim of the assignee presented a very strong equity. Hall, J. said, in substance that, "upon an examination of the authori- ties it would be found that the ground taken by the assignee of being a bona fide pur- chaser, is tenable by those persons only who have the legal title in them, and plead that they are purchasers for a valuable considera- tion witliout notice. By this plea they sliow that they have as much equity on their side as their opponents; and that being ttie case, a court of equity will not interfere and divest them of their legal title. All that the as- signee shows is, that she purchased the as- signor's right to a chose in action. She has no legal, but only an equitable title." No fraud upon Austin's riglits is impu- table to Doty. He entertained a con liilence that the assignor would pay his claim, and that he should therefore not find it necessary to take measures for collecting the bond. He gave notice to the defendants as soon as he found himself disappointed. Nor is it any answer to Doty's claim, that the defendants promised to pay Austin. It IS said truly, that this, in an ordinary case, would have entitled him to an action in his own name. Prima facie it brought him within the rule, that an assignee of a chose in action may sue in his own name, on an express promise by the debtor to pay him. (a) This arises from consideration and privity; but in the case at bar, the assignment to Austin having failed of effect by reason of the prior assignment to Doty, there was no consideration for the promise. The case is the same as if Austin had held no assignment even in form. The last payment by the de- fendants was, therefore, made in their own wrong; and there must be a new trial, the costs to abide the event. New trial granted. (n) See Jessel v. The WUHamsburgh Ins. Co., (3 Hill, p. 88, 9,) and the oases there cited. (See, also, Adams, Eq. p. 141 ; 1 Story, Eq. Jar. pp. 567, 569 ; 2 Pom. Eq. Jur. S 683 et seq. ; Bovey v. Smith 1 Vern. 144; Mackreth v. Symmons, 15 Ves. 339; Ferrars v. Cherry, 3 Vefti. 383; Coles v. Sims, 6 De Gex, M. & G. 1-8; Stees v. Kranz,33 Minn. 313. 20 N. W. Rep. 241; Whitney v. Railroad, 11 Gray, *59-364; Barron v. Richard, 8 Paige, 351; Trustees v. Lynch, 70 N. Y. 440; Palmer v. Williams, 24 Mich. 329; Schoch v. Birdsall, (Minn.) 51 N. W. Rep. 383; Stewart v. Smith, (Minn.) 30 N. W. Rep. 430; Jacoby v. Crowe, 36 Minn. 93, 30 N. W. Rep. 441; Banning v. Edes, 6 Minn. 4U3, GiL 8T0.) PRIORITIES. (b) (25 N. J. Eq. 416.) Tox V. Palmeb. (Court of Chancery of New Jersey. 1874.) October, Where P. gave a defective mortgage to F., which constituted an equitable lien upon certain land, but did not convey the legal title thereto, and aft- erwards gave another conveyance of the same land which did convey the legal title, held, that the equities of the last purchaser must prevail, as they are supported by the legal title. The Vioe-Chanoelt-or. The mortgage sought to be foreclosed In this suit, was put upon record after the mortgaged premises liad been conveyed by the mortgagor to his daughter, and the com- plainant seeks to enforce his mortgage lien on the ground that the daughter was not a bona fide purchaser for value without no- tice. Jo:jeph Palmer, the mortgagor, was, at 64 CASES IN EQUITY. the date of the mortgage, November 30th, 1870, the guardian of Ella L. Palmer, his daughter, then a minor between nineteen and twenty years old, and possessed of per- soniil property, consisting of stocks, bonds and money in Savings Bank, amounting in all to something less than $10,000. Her sister was the wife of Oscar F. Lund, and all of them resided in Jersey City. Lund was en- gaged in various transactions with William E. Rogers, a practicing lawyer in Jersey City, with wliom he was operating in differ- ent ways that involved the raising or bor- rowing of money. Through tlie agency of Kogeis and Lund, the premises in contro- versy, being real estate in Jersey City, were bought and conveyed to Palmer. They were conveyed to Palmer by Edward Dunn, for about $4,000, in or about October, 1870. The mortgage in question was signed by Palmer, in blank, and taken by Lund to Kogers. No bond is produced, but I think it sufficiently appears from the evidence, ■that Palmer signed a blank bond, together with the mortgage. The blank bond and mortgage were filled in with amounts and dates by Rogers, or under his direction, and were taken by Rogers and Lund to John M. Fox, the complainant, then a broker in New York, who procured, he says, from Frank W. Harris, an operator in New York, to whom the bond and mortgage are drawn, the sum named in them, to wit, $3250, and paid it over to Rogers and Lund, less his charges and fees. The bond and mortgage were afterwards assigned to Fox, who relied upon Rogers, as his attorney, to have the mort- gage recorded. Rogers neglected or omitted to have it recorded till May 25th, 1871. While the negotiations for the purchase of the property from Dunn were going on, and payments being made for it, the seouri- tiea of Ella L. Palmer were made use of by her guardian, together with Lund, for the raising of money; and in April, 1871, Ella being aware of the fact, and anxious to be (See. also, 2 Pom. Bq. Jur. § 688 at seq. ; paid or secured, took a conveyance of th& premises from her father, which was re- corded on the 13th of May, 1871. The particulars of the foregoing transac- tions, thus generally stated, have been testi- fied to in whole or in part by Ella, her father, Fox, Harris, Lund and Rogers. It is difficult to say with confldence, in view of the looseness and inaccuracy of much of th© testimony and the contradictory statements of the witnesses, what the true particulars are. My conclusion upon the whole case is, that the conveyance to Ella should be sus- tained, and the complainant's bill dismissed, but without costs. I think it cannot be doubted that the mortgage signed in blank by Palmer and afterwards filled in by Rogers, was not a valid legal deed. The most that can be claimed for it is, that it is an equi- table lien on the premises, which this court can, under proper circumstances, enforce. But, if admitted to be an equitable lien, it cannot prevail against the equitable rights of Ella, who has also the title by law. I think it altogether probable, if indeed the evidence does not prove, that the premises were purchased with the proceeds of her securi- ties. There is some indeflniteness as to amounts, but I think there can be little doubt that the full amount paid for the prop- erty was in fact hers. It is proved that she had no notice of the mortgage. There is nothing, so far as I am able to see after care- fully examining the evidence, which would justify me in saying that her legal title ig fraudulent, or that her deed should be de- creed to be a security in the nature of a mortgage, either subsequent or prior to the mortgage of the complainant. I shall, therefore, advise that the bill be dismissed. In view of the conduct of Palmer, enabling this mortgage to be made use of to raise money, I think it a case where costs should be denied for his answer, and also, generally, as against the complain- ant. (See. also, 2 Pom. Bq. Jur. § 688 at seq. : 1 Story, Eq. Jur. pp. 63-65 ; Snell, Eq. p. 23 ; PhiUips v. ^ w ^V o^ ^^^' ^- * ''■ ^"^^ Newton v. MoLeau, 41 Barb. 2S5: Downer v. Bank, 39 Vt 25; Brown V« WgIcq, 18 111. 3'13.} (See, also, cases cited under "Maxima 6 and 7. ") DOCTRINES OF EQUITY, 65 VII. BOWA FIDE PTJRCHASERS. Tc constitute a person a bona fide purchaser three things are neces- sary: First, a valuable consideration; second, absence of any notice of the rights of others in or to the subject-m.^,tter; and, third, good faith on the part of the purchaser. (49 N. T. 386.) Weaver v. Bakden. (Cov/rt of Appeals of New York. 1873.) AiLEN, J. The plaintifiE furnished the consideration for the transfer of the shares of stock frorc Finch, tiie original owner, the same having been made in satisfaction of a debt due him from the assignor. The stock was transferred into the name of a son of the plaintifE, wlio was also a son-in-law of the defendant, without the linowledge or consent of the plaintiff, who had no knowl- edge that the transfer had been made in that form until some time in 1864, long after the transfer bj the son to the defendant. The son, at the time of the transfer by Finch, was, in the language of the report of the ref- eree, "to some extent the agent of the plain- tiff in Kew York." The stock was transferred by the son of the plaintiff to the defendant in Ji^nuary, 1860, "in part payment of an indebtedness from said Llewellyn (the son) to defendant of over $2,500;" and "the defendant at the same time sold and delivered to said Llewel- lyn 280 pounds of butter, at twenty cents per pound, amounting to seventy dollars, which was a part of said indebtedness, paid in part as aforesaid." "Such purchases of said stock were made by defendant's son, acting as his agent; and the sum of $520, the amount agreed upon as the value of said stock, was, by the defendant, credited upon the indebtedness of said Llewellyn by the de- fendant. " The evidence is that the butter was sold to the assignor of the stock on the third of Jan- uary, 1860, and the stock was transferred the day following. The account between the defendant and Llewellyn Weaver was made an exhibit by the defendant, and discloses a long account, commencing in 1852; tlie last item on the debtor side of which is the charge of seventy dollars for the butter; and the first item on the credit side is the sum of $520 for the shares of stock. The transaction was simply a transfer of the shares of stock by Llewellyn Weaver, and a subsequent entry by the defendant, in his books, of the credit for the purchase- price. No security was surrendered, and no voucher given. The defendant parted with nothing as a consideration for the transfer. The capital stock of an incorporated com- OAS,BQ. — 5 pany is personal property; and it has not, neither lias the certificate or other evidence of title or ownership, any of the qualities of commercial or negotiable paper. As a rule, the purchaser or assignee of shares of the capital stock in a corporation acquires no other or better title than the seller or assignor has, and takes it subject to the legal and equitable rights of third per- sons. The riglitf ul owner may be estopped by his own acts from asserting his title, as he may be in respect to other property of a like character. If he has invested another with the usual evidence of title, or an ap- parent authority to dispose of it, he will not be allowed to make claim against an inno- cent purchaser dealing upon the faitli of such apparent ownership sMijus disponendi. {Benton v. Livingston, 9 J. R., 96; Howe v. Starkweather, 17 Mass., 244; McNeil v. Tenth Nat. Bank, lately decided in this court and not reported [46 N, Y., 325 — Rep.]; Arnold v. Ruggles, 1 R. I., 165.) The plaintiff, the owner in fact of the stock in controversy, did not give to another the external evidence of authority to dispose of it, and did not assent to placing the property, or the evidence of property, with his son. Whatever was done in the way of divest- ing the plaintiff of his property, was done in fraud of his rights and without his consent. An unauthorized sale, although for a valu- able consideration and without notice, vests no higher title in the vendee than was pos- sessed by the vendor. {Prescott r.Be Forest, 16 J. R., 159; Wheelwright v. Bepeyster, 1 id., 471; Williams v. Merle, 11 W. R., 80; Brower v. Peahody, 3 Ker., 121; Covill v. Hill, 4 Den., 323). The property in the capital stock of a corporation is not distin- guishable from other personal property; and the owner cannot be divested of his property except by his own voluntary act and consent, or by some act which would be effectual to give title as against him to other movable property and choses in action. The plaintiff is not estopped, as against tlie defendant, upon the evidence or the findings of the referee, from asserting his title to the stock and the dividends upon it. The original title of the plaintiff is conceded, and the defendant seeks to make title under one who had no legal title or authority to transfer, but the evidence of title acquired by fraud and without the authority or assent express or implied of the plaintiff. Such a title cannot avail against the rightful owner. 66 CASES IN EQUITY. {Pollock V. National. Bank, 3 Seld., 274.) The only doubt or difficulty as to the right of the plaintiff to recover, conceding all that is claimed in behalf of the defendant, to wit, that he is a bona fide purchaser for value, without notice of the title and claim of the plaintiff, grows out of the fact that the legal evidences of title never were in the plaintiff, the title having been transferred without fault of the corporation directly from Finch to Llewellyn Weaver, and from the latter to the defendant. It is not the case of a trans- fer under a forged power of attorney or by a person of the same name as the rightful holder of the stock. A party could not be divested of the title to his property by such means, and would have a remedy over against the corporation permitting the trans- fer, or might follow his stock and reclaim it from the transferee. (See Davis v. Bank of England, 2 Bing., 393; Sewall v Boston Water Power Company, 4 Allen, 277 ; Dun- can V. Luntley,2 McN. & G., 30.) The plaintiff here has no remedy against the corporation for permitting the transfer and issuing the new certificates to the son of the plaintiff. The corporation was not care- less or negligent in the transaction, and no wrongful act was committed by its officers. At the time of the transfer to the defend- ant his assignor was insolvent and continued so until his death. The only remedy, there- foie, of the plaintiff is to follow his stock in- to the hands of the defendant, and reclaim it, witli the dividends, upon the strength of liis superior title, and he is entitled to re- cover unless the defendant is a purchaser for a valuable consideration and in good faith. In Crocker v. Crocker, 31 N. Y., 507, the claimant and rightful owner of the stock had conferred the apparent right of property in bank stock upon a third party who had abused his confidence, and yet was allowed to recover except as against a purchaser in good faith and for a valuable consideration for an advance made on the faith and secu- rity of the stock. The referee, upon the facts found, held that the defendant was the owner of the shares in good faith and for a valuable con- sideration paid by him therefor, and the complaint was dismissed on that ground. The plaintiff was defeated on the ground that the defendant had acquired a title su- perior in equity to that of the plaintiff by a purchase in good faith without notice of the claim or of any defect in the title and for a valuable consideration paid. The referee was clearly right in his views that a purchase, without notice of the plaintiff's claim alone, would not protect the defendant, and that something more than a good consideration, a consideration which would be sufficient as between the parties to the transaction, was necessary to shield him against the claim of the plaintiff. He recognized the rule that the considera- tion must be valuable and actually paid, and that the defendant must have parted with value upon the faith of the purchase, and his- error was in regarding the credit of the pur- chase price in his books to the account of the- assignor as a "valuable consideration paid." In speaking of a consideration which is to- protect against prior and latent equities, the terms "price paid" and "valuable considera- tion" are used as convertible terms. ( Wil- loughhy v. Willoughly, 1 T. R., 763, 767.) To entitle a purchaser to the protection of a. court of equity, as against the legal title or a prior equity, he must not only be a pur- chaser without notice, but he must be a pur- chaser for a valuable consideration, that is, for value paid. Where a man purchases an estate, pays part and gives bond for residue, notice of an equitable incumbrance before payment ot the money, though after giving the bond, is ] sufficient. {Tourville v. Nainh, 3 P. Wms., ZQQ; Story v. Lord W^mdso;-, 2 Atk. 630.). i JMere security to pay the purchase price is ■ not a purchase for a valuable consideration. {Uardringham v. Nicholls, 3 Atk., 304;. ' Maundrell v. Maundrell, 10 Yes. 246-271;. \ Jackson V. Cadwell, 1 Cow., 622; Jewett v. \ Palmer, 7 J. C. E., 65.) The decisions are ; placed upon the ground, according to Lord I Haedwicke, that if the money is not actu- ally paid the purchaser is not hurt. He can I be released from his bond in equity. Chan- i cellor Walworth lays down the rule as fol- I lows: "To entitle a party to the character of i a bona fide purchaser, without notice of a. '. prior right or equity, such party must not ; only have obtained the legal title to the- I property, but he must have paid the pur- I chase-money, or some part thereof, at leasts or have parted with something of value upon, the faith of such purchase before he had no- tice of such prior right or equity." [De Mott V. Starkey, 3 Barb. Ch. R. 403; and see Caldwell v. Bartlett, 3 Duer, 341 ; Keyser V. Harbeck, id., 373.) In Boot v. French, (13 W. R.. 570), it was held that while a- transfer of goods by a fraudulent buyer to a purchaser in good faith, and who" gave value for them, that is, paid for them at the time of the transfer, made advances upon them, incurred responsibilities upon- the credit of them, or received them in pledge for money or property loaned upon the strength of them, might hold the goods against the seller, the original owner who- had been defrauded of them, that a trans- fer of the goods to a bo7ia flde crfditor of the fraudulent purchaser in payment of a- pre-existing debt did not constitute the cred- itor a bona flde purchaser for a valuable^ consideration. Buller v. Harrison (Cowp., 565) was cited with approval, in which it was held that the mere passing money to the- credit of another, where there is no new credit given, nor acceptance of new bills or sum advanced in consequence, it was not a. payment. The situation of the party was not changed, and he had parted with noth- ing. That is all that was done by the de- fendant here. The same principle is affirmed. DOCTRINES OF EQUITY. in Padgett v. Lawrence (10 Paige, 170). the chancellor holding that the purchaser of the legal title to property who receives a convey- ance thereof merely upon the consideration of a prior indebtedness of the grantor is not entitled to protection as a bona fide pur- chaser, without notice of a prior equity of a third person therein. But the relinquish- ment of a valid security which the purchaser before held for his debt, and which cannot be recovered, so as to place him in the same situation substantiaHy as to security as he was in prior to liis purchase, may entitle him to such protection. This case is cited with approval in Peck v. Mallnms (6 Seld., 545). This court, in Wood v. Kobinson (22 N". Y., 564), held that a mortgagee who had taken a mortgage to secure a precedent debt was not entitled to protection against a prior latent equity. Nothing was advanced at the time, and no security was given up, neither was there any definite contract for! extending the credit on the demands held by | the creditor. Judge Denio lays down the proposition broadly, and all the judges con- curred: "When a conveyance is made, or a security taken, the consideration of which was an antecedent debt, the grantee or party taking the security is not looked upon as a bona flde purchaser;" and again, "it is well settled that a grantee or incumbrancer who does not advance anything at the time, takes the interest assigned subject to any prior equity attaching to the subject." The doc- trine that a valuable consideration is neces- sary to create a defence against prior equities, is the doctrine of courts of equity in other States and in England, as applied to the transfer of real or personal property, and choses in action other than negotiable instru- ments. The only difiBculty lias been in de- termining what is a "valuable consideration." It is generally admitted that the mere ex- istence of a precedent debt is not a sufficient consideration to support a conveyance as against prior equities; but in some States it is held that when made in absolute payment and satisfaction of an antecedent debt, the purchase will be regarded as a purchase for value. But that is not the rule in this State. (Dickerson v. Tillinghant, 4 Paige, 215.) In this State the rule has been applied to the transfer of bills of exchange and promis- sory notes, and the party taking them in pay- ment of or as security for an antecedent debt when no new credit is given, security sur- rendered or obligation incurred, has not been regarded as a bona flde holder for value as against third persons having prior equities, but the decisions have not been in entire har- mony with those of the Supreme Court of the United States and some of our sister States. The rule as applied to negotiable instru- ments in this State has been criticised and quarreled with by individual judges, but whenever it has come directly in judgment, the doctrine, as first announced in Codding- ton v. Bay (20 J. R. 637), has been adhered to. The claim to distinguish between com- mercial instruments and other choses in ac- tion and property interests has been based upon the supposed interests of commerce, and the necessity of giving the freest circu- lation to instruments so generally used in commercial transactions. Bills of exchange and promissory notes do constitute in a great measure the medium of exchange between merchants and take the place of money, and they pass from hand to hand transferable by indorsement or mere delivery, and many have thought that it would have been better if, in all cases of transfer of that class of instru- ments in good faith and in the ordinary course of business and upon a sufficient con- sideration as between the parties, the same had been held valid, and to have vested a good title in the transferree, Bay v. Codding- ion (5 J. C. R., 54), affirmed in the Court for the Correction of Errors (20 J. R., 637), was to the eUect that to give title as against the rightful owner of commercial paper fraudu- lently transferred, it must be received by the transferree not only in the ordinary course of business and without notice, but also for a present value, for a fair and valuable con- sideration given or allowed at the time, that creilit must be given to and value parted with on the strength of the identical paper, and that a past consideration or antecedent debt or liability was not sufficient. A mere receipt of a bill or note in payment of or as security for a precedent debt has never, in this State, been held sufficient to protect the title of the holder as against the equities of third persons, and some new credit must be given, new advance made, or some prior security parted with, or a debt absolutely sat- is'fled and extinguished, in order to complete the title of the holder. (See cases cited in Parrington v. Frankfort Bank, 24 Barb., 554.) In this court the rule has not been de- parted from; on the contrary, it has been recognized and followed in Youngs v. Lee (2 Ker., 651); Boyd v. Cummings (17 N. Y., 101); Essex County Bank v. Russell (29 N Y., 673); Brown v. Leavitt (Slid., 113). Brown, J., in Bank of New York v. Van- derhorst, (32 N. Y., 553), says: "The rule is, that if the holder parts with anything of value, money, property or existing securities, at the time he receives the note, and upon the faith of its being paid, he is ipso facto clothed with the attribute of a holder for value." In that case the plaintiff had taken the note in controversy as a collateral secu- rity for a loan made at the time upon another note and the bank was held to be a holder for value. In Lawrence v. Clark, (36 N. Y., 128), it was decided that a party receiving a note on a precedent debt, without surrender- ing or relinquishing any security or right re- specting it, is not a bona fide holder of the same. The note, before it fell due, had been transferred " by the payees to the plaintiff, " who received and accepted it upon and in part payment of a prior existing indebtedness "of the payees to them." Bay v. Codding' 63 CASES IX EQUITY. ton, Warrington v. Frankfort Bank, sio- pra; Rosa v. Brotherson (10 W. R., 85), and Payne v. Cutler (13 id., 605) were cited with approval, and the doctrine that a creditor re- ceiving tlie transfer of a negotiable note in payment of a precedent debt without giving up any security, talses it subject to all equi- ties existing between the original parties, re- asserted. (See, also, Chrysler v. Renois, 43 N. Y., 209.) Here the defendant parted with or surrendered no security, and his situation was, in no respect, changed by the transac- tion, and if the title which he acquired is to be determined by the very liberal rules which, in view of the convenience if not the necessi- ties of commerce, have been established in respect to negotiable instruments, the defend- ant is not to be regarded as a holder for value so far as the assignment was received in part payment of the precedent debt. If the butter was sold upon the faith of the trans- fer of the stock, tt/fe defendant would be en- titled to be repaid that amount before recon- veying the stock. He would be entitled to a lien for the price of the butter. The Supreme Court properly reversed the judgment of the referee, but it was not acase for judgment absolute for the plaintiff. A new trial should have been awarded. So much of the judgment of the Supreme Court as gives judgment for the plaintiff is reversed and a new trial is granted, costs to abide event. (See, also, 2 Pom. Eq. Jur. § 745 et seq. ; Story, Eq. Jur. § 1502; Snell, Eq. p. 25; Willoughby v. "Wil- ioughby, 1 Term R. ;63, 767; Maundrell v. Maundrell, 10 Ves. 246, 260, 270; Jones v. Powles, 3 Mylne & K. 581, 597, 598; Briscoe v. Ashby, 24 Grat. 454; Hamman v. Keigwin, 39 Tex. 34; Roseman v. MDler, 84111. 297; Everts v. Agnes, 4 Wis. 343; Palmer v. Williams, 24 Mioh. 328; Wood v. Chapin, 13 N. T. 509; Gary v. White, 52 N. Y. 138, 142; Worthy v. Caddell, 76 N. C. 82; Westbrook v. Gleason, 79 N. T. 25-36.) (Antecedent debt. Stevenson v. Hyland, 11 Minn. 198, (GUI. 128;) Prey v. Clifford, 44 Cal. 335; Baldwin v. Sager, 70 111. 503; Jewett v. Palmer, 7 Johns. Ch. 65; Osborn v. Carr, 13 Conn. 195; Part- ridge V. Chapman, 81 lU. 137; Hull v. Swarthout, 29 Mich. 249.) Vin. ESTOPPEL. Estoppel rests upon the principle that "he -who ■would have equity must do equity." -CD (41 Minn. 165, 43 N. W. Rep. 870.) Dobbin v. Cordinek. (Supreme Court of Minnesota. July 2, 1889.) 1. A married woman who, at her husband's re- quest, executes and acknowledges a deed of con- veyance of real property, knowing it to be such, and allows her husband to take it away for deliv- ery to a purchaser, is estopped, as against an in- nocent purchaser under the deed, to assert that the deed was invalid because, when she executed It, no grantee was named in it, or becanse she did not know that the land described in the deed was her own and not her husband's land, she not hav- ing read the deed, nor having shown sufUcieut ex- cuse for not reading it. 2. The capacity of married women to be bound and estopped by their conduct is incident to their enlarged power to deal with others. 3. A deed is effectual as a conveyance, although there was but one subscribing witness. Follow- ing MorUm V. Leland, 6 N. W. Rep. 378, 27 Minn. 35; Johnson v. Sandhoff, 14 N. W. Rep. 889, 30 Minn. 197, and Conlan v. Grace, 30 N. W. Rep. 880, 36 Minn. 276. Appeal by plaintiff from a judgment of the district court for Hennepin county, where the action was tried by Baxter, J., (acting for a judge of the fourth district.) Dickinson, J. Tliis action is prosecuted for the purpose of securing the cancellation of a deed of conveyance from the plaintiff and her husband to the defendant. The plaintiff seeks to avoid the deed upon the grounds that, as she alleges, the deed, when executed by her, was incomplete, not con- taining the name of the grantee nor any de- scription of the property conveyed ; that, by her husband's misrepresentations, she was induced to sign and acknowledge the instru- ment in its incomplete form ; and that he afterwards, without her authority, inserted the name of the defendant as grantee, and the description of the property, anrt delivered the deed to the defendant. By the findings of the court the following facts are estab- lished : The land had been purchased by the plaintiff's husband, who paid a part of the purchase price. The conveyance was made to the plaintiff, who gave a mortgage upon the property for an unpaid part of the pur- chase price. The plaintiff's husband, having bargained with the defendant for the sale of the land to him, prepared a deed for the con- veyance of the property, complete in form, except that it did not contain the name of any grantee. He requested the plaintiff to execute it; and, without objection, she signed and acknowledged it, the husband also join- ing in the execution of it. She delivered the deed, after her acknowledgment, to her hus- band, for the purpose of completing and de- livering it to the purchaser. The husband then wrote in the name of the defendant as grantee, delivered it to him, and the latter, receiving the deed, paid the prioe to plain- DOCTEIXES OF KQUITY. 69 tiff's husband, in good faith, without notice of any defects or omissions in the making or executing of the deed. He assumed, as part of the consideration, the payment of the out- standing mortgage on the property. The plaintiff's allegations as to the fraudulent procuring of her execution of the deed are not sustained by the findings of the court. It is conceded on the part of the appellant, the plaintiff, that, in general, one executing a deed of conveyance may give authority to anotlier, by parol, to insert in the deed, after its execution, the name of a grantee, the grantee not having been before named in the deed; but it is contended that a veife cannot confer such authority upon her husband. We deem it unnecessary to decide whether this distinction can be recognized. Without regard to that question, and however it might be decided, we are of the opinion that by her conduct the plaintiff is precluded, up- on the principle of estoppel, from asserting, as against the defendant, the invalidity of this deed. Our statutes have gone far to re- move the common-law disabilities of married women. The property held by them at the time of their marriage continues to be their separate property after marriage. They may, during coverture, receive, hold, use, and enjoy property of all kinds, and the rents, issues and profits thereof, and all avails of their contracts and industry, free from the control of their husbands. They are capa- ble of making contracts by parol or under seal. They are bound by their contracts, and responsible for their torts, and their property is liable for their debts and torts, to the same extent as if they were unmarried. Their power to contract, and to convey real estate, is, however, so far qualified that they cannot contract with their husbands relative to the real estate of either, or by power of attorney or otherwise authorize their hus- bands to convey their real estate or any in- terest therein; and, in general, in all con- veyances by married women of their real es- tate, their husbands must join. Married women cannot enjoy these enlarged rights of action and of property and remain irrespon- sible for the ordinary legal and equitable re- sults of their conduct. Incident to this power of married women to deal with others is the capacity to be bound and to be estopped by their conduct, when the enforcement of the principle of estoppel is necessary for the protection of those with whom they deal, al- though there are, without doubt, limitations upon the application of this doctrine. Nor- ton V, Nichols, 35 Mich. 148 ; Reed v. Mor- ton. 24 Neb. 760, (40 N. W. Rep. 282;) Knight v. Thayer, 125 Mass. 25; Bodine v. KilLeen, 53 N. Y. 93; Powell's Appeal, 98 Pa. St. 403; Fryer v. Rishell, 84 Pa. St. 521; Godfrey v. Thornton, 46 Wis. 677, (1 N. W. Rep. 362;) Lavassar v. Washburne, 50 Wis. 200, (6 N. W. Rep. 516;) Bawn v. Mullen, 47 N. T. 577 ; Patterson v. Lawrence, 90 111. 174; Reis v. Lawrence, 63 Cal. 129; Sliarpe V. Foy, L. R. 4 Ch. App. 35; In re Lush's Trusts, Id. 591; 2 Pom. Eq. Jur. § 814. This plaintiff had power to convey her es- tate by deed In which her husband should join. She executed and acknowledged this deed, knowing that it was a deed of convey- ance, and contemplating that it was to be delivered and have effect as such, and that the purchaser would pay a consideration therefor. The deed was delivered, as she in- tended it should be, to a purchaser, who, in good faith, supposing the conveyance to be in all respects valid and effectual, has paid the considerntion therefor. Even if her au- thority to her husband, implied from the cir- cumstances, to fill in the name of the grantee was ineffectual to legally empower him to do so, she ought not now to be allowed, in a court ot equity, to defeat the title of the pur- chaser upon that ground. A grantor not un- der disability from coverture, would be es- topped under such circumstances. Pence v. Arhuckle, 22 Minn. 417. it is equitable tiiat the same principle be applied here for the protection of the defendant; and to so apply it does not, we think, defeat the purposes of tlie statute declaring invalid any power of attorney or other authority, as between hus- band and wife, to convey real estate. It is immaterial, in our view of the case, whether or not there was an express authorization of the husband to fill in the name of the gran- tee. It is enough that the plaintiff intended the instrument to have effect as a convey- ance, and that she allowed her husband to take it, after she had executed it, for the pur- pose of delivering it to the purchaser as a deed of conveyance executed by her. That the plaintiff supposed that her husband was to deliver this deed to the purchaser is shown by her own testimony. The extent of the proof on the part of the plaintiff, as to the misrepresentation of her husband, was that he said to her, when he asked her to execute the deed, that he would like to sell a lot. Without considering what might have been the effect of fraudulent misrepresentations of the husband in a case where the wife was not chargeable with negligence in the trans- action, we regard this evidence as wholly in- suflicient to justify the granting of relief as against an innocent purchaser. With regard to tiie rights of purchasers it was culpable negligence on the part of the plaintiff to ex- ecute the conveyance unless she is to be bound by it. The language of her husband did not justify her in executing the deed with- out reading it, or at least without more defi- nite information as to its contents, unless she was willing to allow the deed to have ef- fect whatever the property conveyed might be. It is therefore unnecessary to pass upon the question of the admissibility of the hus- band's testimony going to rebut the plain- tiff's testimony in this particular, and which, as it seems, the court below did not consider. The deed was effectual as a conveyance, although there was but one subscribing wit- 70 CASES IK EQUITY. ness. Morton v. Lelmid, 27 Minn. 35, (6 tf. W. Kep. 378 ;) Johnson v. Sandhoff, 80 Minn. 197. (14 N. W. Rep. 889;) Conlan v. Grace, 36 Minn, 276, (30 N. "W. Rep. 880.) evidence justified the findings of fact. Judgment affirmed. The (See, also, 2 Pom. Eq. Jur. § 801 ; 3 Story, Eq. Jur. p. 860 ; Id. § 1533, note ; Piokard v. Sears, 6 Add. & E. 469, 473 ; Slim v. Croucher, 1 De Gex, F. & J. 535 ; Hartshorn v. Potroff, 89 111. 509 ; Pence v. Ar- buckle, 23 Minn. 417; Eldred v. Hazlett, 33 Pa. St. 807; Nichols v. Pool, 89 lU. 491; Angell v. Johnson, 51 Iowa, 635, 3 N. W. Rep. 435; Williams v. Insurance Co., 50 Iowa, 561; Sebright v. Moore, S3 Mich. 93; McStea v. Matthews, 50 N. Y. 166; Favill v. Roberts, Id. 233; Bodine v. KlUeen, 53 N. Y. 93; Stewart v. Munford, 91 111. 58; Bigelow v. Poss, 59 Me. 163; Millingar v. Sorg, 61 Pa. St. 471; Patter- son V. Lawrence, 90 111. 174; Bigelow, Estop, p. 556, and cases cited.) (Equitable estoppel available at law. Drexel v. Berney, 123 U. S. 241, 7 Sup. Ct. Rep. 1200; Mining Co. V. Ormsby, 47 Vt. 709; Bannard v. Seminary, 49 Mich. 444, 13 N. W. Eep. 811.) IX. MERGER. The doctrine of merger is based upon the maxim that " equity looks to the intent rather than the form." (10 Minn. 376, GiL 302.) Davis v. Pieroe, (Supreme Court of Minnesota. 1865.) When the holder of the legal title to real estate purchases an outstanding mortgage upon it, not intending that the mortgage should merge or be extinguished if it be for his interest that it should remain a lien, it will not be merged. [Wilcox v. Davis, 4 Minn. 197, (Gil. 139.) Horton v. MafBt, 14 Minn. 289, (Gil. 316.)] Appeal from judgment of district court, Ramsey County. The plaintiff purchased real estate upon which there were two mortgages outstanding. He subsequently purchased and took an as- signment of the first, in date, of these mort- gages. The second was assigned to defend- ants Wilcox and Barber. Plaintiff brings the action to foreclose the first mortgage. The answer claimed that the mortgage had merged in the legal estate. The finding of the court below upon the fads connected with plaintiff's purchase of the mortgage is stated in the opinion. Wilson, C. J. The only question in this case is whether in the purchase of the March mortgage by the plaintiff, the estate or inter- est thus acquired merged in the legal estate. In equity, where the legal and equitable estates become united in the same person, the equitable is merged in the legal, unles.s the party in whom they meet intends to keep them separate (which intention must be just, and injurious to no one); and where no such intention is expressed, it will be pre- sumed, if it is for the interest of the party in whom the estates meet. Wilcox & Barber V. Davis, 4 Minn. [197]; Starr v. Ellis, 6 Johns. Ch. 895; Forbes v. Moffatt, 18 Ves. 384; Clift V. White, 12 N. Y. 536; 4 Kent Com. 102; Jamas v. Morey, 2 Cow. 246. The question here, then, is one purely of inten- tion declared or presumed. The judge who tried the cause below has found as a matter of fact that the plaintiff did not in taking the assignment of said mortgage, intend either that it should be extinguished or merged, or that it should not remain a valid or first lien upon the premises therein described, and has also found that it was for the interest of the plaintiff that the mortgage should remain a lien. To this finding defendants' counsel ob- jects (1), that it does not show affirmatively that the plaintiff intended to keep said mort- gage lien alive; (2), that it was not compe- tent for the plaintiff to prove or for the court to find that it was for the plaintiff's interest to keep the estate separate, that fact not hav- ing been alleged; (3), that it is not the prov- ince of the court in any case to find as a fact that it is for the plaintiff's interest, etc., but that the fact must be found from which this is inferred. It is true that in this finding it is not affirmatively and positively stated that in taking the assignment plaintiff intended to keep alive the lien; but from the facts found the court was authorized and bound to presume such intention. See authorities above cited. If there was any error, therefore, in the finding in that respect it was technical and formal merely, and should be disregarded. An averment of the plaintiff's interest in keeping alive the lien, was not necessary in order to justify the reception of evidence of that fact. The interest of the plaintiff was shown merely as evidence of his intentions — it being presumed that he intended to act in accordance with his interest. With reference to defendants' third objec- tion, even if we should regard the finding of the court as the finding of a legal conclusion rather than of facts, it would not be a fatal error, as the facts from which this is inferred GKOUNDS rOR EQUITABLE RELIEF. 71 are all found by the court. The evidence, we think, was clearly sufficient to justify ■the finding. Judgment below affirmed. {McMillan, J., being of counsel for some of defendants, took no part in the hearing or decision of this cause.) ton' 3 vts 339?Wvk^^'i'"'-i'^^S' * ^f°T*; ^°™'°- ^^'^ ^'^''y' ^1- J"""- « '"SSb, note; Selby v. Als- RlaWfi i?7ti^^ «o °r^^ ^- P?t«rson, 35 N. J. Law. 127; Crosby v. Taylor, 15 Gray, 64; Aldrioh v. •v. H^seyt IJohns. Ck l?|.r- ^"P^^' ^^ ^- ^- ^- ^^''' ^^"'^^"^ '• Townaeud. 18 N. y! 675; Nicholaon Part IV. GROUNDS FOR EQUITABLE RELIEF. I. ACCIDENT. •"Accident is an unforeseen and unexpected event occurring external to the party affected by it, and of which his own agency is not the proximate cause, whereby, contrary to his own intention and wish, he loses some legal right or becomes subject to some legal liability, and another person acquires a corresponding legal right w^hich it would be a violation of good conscience for the latter person, under the circumstances, to retain." 2 Pom. Eq. Jur. § 823. Xost sealed instruments. (70 111. 73.) PATTON et al. v. CAMPBELL. Supreme Court of Illinois. Sept. Term, 1873. Bentley, Swett & Quigg, for appellants. Waite & Clarke, for appellee. CRAIG, J. This was a biU in chancery, •filed in the superior court of Cook county, ■by George W. Campbell, as assignee in bank- ruptcy of the late firm of Durham & Wood, -against William Patton and others, to re- cover the value of certain goods which had been replevied by Patton & Co. from Dur- ham & SVood. It appears from the record that on or about ithe 20th of October, 1870, Patton & Co., of New York, sold Durham & Wood, of Chi- cago, a bill of goods, amounting to $1,600, on a credit of four months. About the first of November, after the sale, Durham & Wood failed, and Patton & Co. commenced an ac- tion of replevin to recover the goods they had sold. A replevin bond in the penal sum of .¥1,000, in the usual form, was filed with the papers in the action, and $800 or $900 -worth of the goods were replevied. In the fire of October 8th and 9th, 1871, the papers in the case, including the bond, were "destroyed. Subsequently the action was dis- jnissed. The defendants answered the bill, to which replication was filed, the cause was heard on the proofs taken, and decree rendered In favor of complainants for $850. The defendants bring the cause to this court, and seek to reverse the decree on two grounds: First. For the reason a court of chancery has no jurisdiction, the remedy of complain- ants being complete at law. Second. The purchase of goods from Pat- ton & Co., by Durham & Wood, was fraudu- lent, and Patton & Co., upon discovery of the fraud, had the right to rescind the sale and replevy the property. The questions wiU be considered In the order in which they are raised. The bill in this case is filed to recover upon an instrument under seal, which had been destroyed. The jurisdiction of a court of equity aris- ing from accident is a very old head, in equity, and probably coeval with its exist- ence. But it is not every case of accident which will justify the interposition of a court of equity. The jurisdiction will be maintained only when a court of law can not grant suitable relief; and where the party has a conscientious title to relief. 1 Story, Eq. Jur., § 79. In case, however, of lost instruments under seal, equity takes jurisdiction, on the ground that, until a recent period, it was tlie settle' 72 CASES IN EQUITY. doctxine that tliere was no remedy on a lost bond in a court of common law, because ttiere could be no profert of the instrument, with- out which the declaration would be defect- ive. The jurisdiction having been assumed and exercised on this ground, it Is still re- tained and upheld. 1 Story, Eq. Jur., § 81; Walmsley v. Child, 1 Vesey, Sen., 341; Fisher V. Sievres, 65 lU. 99. Under the allegations, in the bill in this cause, we think it is well settled that a court of equity had jurisdiction. The remaining question in the case is, were the goods purchased under such circum stances as gave the appellants the right of rescission on the ground of fraud, or was there such a fraud practised that the title to the property did not pass to Durham & Wood? The evidence shows that Hart, who was a traveling agent for appellants, called on Dur- ham & Wood, in Chicago, to sell them goods. They examined his samples and told him they wanted to make a large order, and wanted to buy on four months' time. Hart told them, Patton & Co. hardly ever vary from three months' time. Durham remarked, he had bought and could buy of A. T. Stewart & Co., of New York, on four months' time. On this statement, Hart sold the goods on four months' time. It turned out, on investigation, that Dur- ham & Wood had only bought two bills of goods of Stewart & Co., and they were sold on thirty days' credit. While it is true the statement made by Durham, that he had bought and could buy goods of Stewart & Co. on four months' time, was false, yet, It does not appear that this statement induced Hart to sell the goods; it only had the effect to cause him to give one month longer credit on the goods than he otherwise would, which did not, in this case, in anywise affect the rights of ap- pellants, for the reason that the failure oc- curred and the goods were replevied within less than two months after the sale. It appears, from the evidence, that Hart made no objection to seU the goods on three months' time; he neither asked nor required any reprasentations from Dm-ham, as to the standing or responsibility of the firm, to in- duce him to seU the goods on a credit of three months. At the time the goods were purchased. It does not appear that Durham & Wood were in failing circumstances, in- solvent, or in any manner pressed by their creditors; for aught that appears they were^ at that time solvent, and responsible for all their contracts. Neither does it appear that they made any false representations in regard to what they were worth, what property they owned, or the amount of debts they had contracted. It is not shown that the goods were bought with the intent not to pay for them, or with a view to make an assignment. We understand the rule to be, that if a party, knowing himself to be insolvent, or in failing circumstances, by means of fraudu- lent pretenses or representations, purchases goods with the intention not to pay for them> but with the design to cheat the vendor out of his goods, such facts would warrant the vendor in rescinding the contract for fraud, and would justify him in recovering posses- sion of the property by replevin, where the goods had not in good faith passed into the hands of third parties. Henshaw v. Bryant, 4 Scam. 97. But the case under consideration does not come within this rii!e. There is no evidence in this record to show that the goods were bought with any impure or wrong motives. It is true that, some two months after the purchase of the goods, the parties went into bankruptcy, but this was involuntary, and does not, of itself, show the condition of the firm at the time the goods were bought. Upon a careful examination of the whole record, we are satisfied the decree of the coiirt below was correct, and it will be af- firmed. (Bee, also, 8 Pom. Eq. Jur. § 831; East India Co. v. Boddam, 9 Ves. 464; Walmsley v. Child, 1 Ves. Lost unsealed instruments. \ (53 Ga. 36.) HARDEMAN et al. v. BATTBRSBY. Supreme Court of Georgia. July Term, 1874. R. F. Lyon, for plaintiffs in error. Lanier & Anderson, for defendant. WARNEE, C. J. This was a biU filed by the complainant, as the surviving copartner of the firm of William Battersby & Company, against defendants, in which the complainant alleges that in May, 1864, Battersby «& Com- pany placed in the hands of one North cer- tain cotton receipts given by the defendants. as warehousemen, to have the cotton speci- fied therein shipped to them at Savannah, the cotton being the property of complainant; that North died without having removed or disposed of thirty bales of said cotton; that complainant is unable to find defendants' receipts for the cotton among the papers of North, after a careful seai'ch; that the same were lost, destroyed or misplaced whilst in the possession of North, and cannot be found; that complainant has demanded the cotton of defendants, which they said they would deliver on th9 production of their re- ceipts, complainants then and there offering GROUNDS FOR EQUITABLE RELIEF. 73 to indemnify them from liability to any other person or persons on said cotton receipts, as ho was nnable to produce them, said receipts having been lost, destroyed or misplaced, as before stated. The defendants refused to de- liver the ootton. The complainant prays that defendants may be decreed to account to him for the value of the cotton, after allowing tliem aU proper charges and expenses for and on account of the storage of said cotton, upon his giving bond and secittity as hereto- fore offered by him. Such are substantially the allej-'utions in complainant's biU, which was filed in the clerk's office on the 19th of October, 1867, and was pending in com-t without any de- murrer thereto, until the 23d of January, 1874, when the complainant amended his bill, at which term of the court the case came on for trial. The defendants then de- murred to the complainant's bill on the ground that there was no equity in it, inas- much as the complainant had an adequate and complete remedy at common law. The co;u-t overruled the demurrer, and the de- fendants excepted. 1. The receipts for the cotton were not given by the defendants to the complainant, and we Infer from the description given In the complainant's biU of the narks upon the several bales, that the receipts were given and delivered by the defendants to the planter, or to the parties who originally stored the cotton in their warehouse. In Patten v. Baggs, 43 Ga. 167, it was held that .where a warehouseman was sued in trover by one who claimed to be the assignee of his receipt for a number of bales of cot- ton, that it was not sufficient evidence of a (See, also, Hickman v. Painter, 11 W. Va. 386; conversion to show that the defendant re- fused to deliver the cotton to the claimant until the receipt was produced, or good se- curity given to indemnify the warehouseman, 2. The point decided in that case, as appli- cable to the case now before us, is that the defendants, as warehousemen, are entitled to ba indemnified before they can be required to deliver the cotton to the plaintiff, or to ac- count to him for its value. Before the adop- tion of the Code allowing the common law courts to mould verdicts as verdicts and de- crees are rendered and framed in equity pro- ceedings, there can be no doubt, we think, that a court of equity would have had juris- diction of the case as made by the com- plainant's biU, for the reason that the rem- edy in the common law court would not have been adequate to have decreed indemnity for the protection of defendants against their liability on their receipts. Inasmuch as a court of equity would originally have had jurisdiction of the case, the fact that con- current jurisdiction has been given to the common law courts does not deprive a court of equity of the jurisdiction which it origi- nally had; and when a court of equity and a common law court have concurrent juris- diction, the court first taking will retain it: Code, § 3096. 3. The court of equity in this case having first taken jurisdiction of it, the demurrer was properly overruled, the more especially if the complainant's biU had been dismissed for want of jurisdiction, his remedy in the common law court might have been barred by the statute of limitations. Let the judgment of the court below be affirmed. Allen V. Smith, 29 Ark. 74.) Lost negotiable instruments. (27 N. J. Eq. 408.) FOKCE V. CITT OF ELIZABETH. Court of Chancery of New Jersey. October Term 1876. BUI for relief and general demurrer. E. E. Ohetwood, for demurrer. B. Gum- mere, for complainant. THE CHANCELLOR. The complainant, on the 21st of January, 1872, was the owner of two bonds payable to the bearer thereof, executed and issued by the defendant—one for $500 and the other for 31,000, each pay- able with interest. The interest was pay- able on the presentation of coupons or war- rants, also payable to the bearer thereof, attached to the bonds. The bonds, with the coupons attached, were, on the day above mentioned, stolen from the vault of the Tren- ton Banking Company, where the complain- ant had deposited them for safe keeping. She gave notice by advertisement of her loss. but faUed to recover either the bonds or the coupons. In April, 1875, she tendered to the defendant proper indemnity, and de- manded payment of the principal and inter- est of the bond for $500, the principal of which was then due, and of the interest due on the other bond. The principal of that bond was not due. Payment was re- fused. She subsequently instituted this suit to compel the defendant to pay to her the amount due, and to become due during the pendency of this suit, on the bonds, offering to indemnify the defendant against loss or damage by reason of the payment, in such manner and with such sureties as this court might direct. In sujjport of the demurrer, the defendant's counsel insists that the com- plainant is not entitled to relief in equity, because the loss alleged in the bill was through theft, and the bonds and coupons were not due at the time when they were stolen, and were of the character of nego- tiable paper; and furtlier, because she has ^4 CASES IN EQUITY. an adequate remedy at law. Neither of these grounds is tenable. Equity, in reliev- ing against the loss of such instruments as these bonds, makes no discrimination against loss by theft. If the complainant has a remedy at law, it is by virtue of the statu- tory provision that "in an action upon any negotiable instrument which is lost, or upon any plea or notice of set-off founded on such instrument, the fact that such instru- ment was lost while negotiable by delivery •or otherwise, shall not prevent a recovery thereon in a court of law; but a com-t of law shall give judgment in the same manner (See, also, Savannah Nat. Bank v. Haskins, 101 as if such note was not lost, and may take the same order thereon as a court of equity would to Indemnify the party charged against the payment thereof." Revision, 898, § 7. Apart from the question suggested, whether the use of the word note, in the latter clause of the section above quoted, does not limit the power given by the section to suits upon or set-offs of lost promissory notes, it is enough to say that this court is not ousted of any part of its original juris- diction by the fact that a court of law ex- ercises the same or a similar jurisdiction. The demurrer will be overruled, with costs. Mass. 370; Tuttle v. Standish, 4 Allen, 481.) Xiost judgments. (65 111. 99.) FISHER V. SIEVRES. Supreme Court of Illinois. Sept. Term, 1872. Story &, King, for appellant. John Lyle King, for appellee. SHELDON, J. The bill In chancery in this case, filed in the circuit court of Cook county, sets forth that on the 2d day of August, 1871, in a suit at law, wherein Sievres was plaintiff and Fisher defendant, a judgment was recovered by the former against the lat- ter in the said circuit comrt for the sum of $125, and that on the 9th day of October, 1871, the court house in the city of Chicago, together with all the books, papers and rec- ords of said court, and of its clerk's office, among which were the files and the record •of said suit and said judgment, was wholly consumed and destroyed by fire. The bill further alleges that no execution ■ever issued on the judgment; that the court had denied a motion for an order that ex- ecution issue on It, and prays that the judg- ment be made and declared a decree of the circuit court, or that Fisher be declared in- debted to the complainant in the amount of the judgment, and be decreed to pay the same, or that execution issue against Fisher. The bin waived the answer of the defend- ant, under oath. The court rendered a de- cree against Fisher for the amount of the judgment He appeals, and makes the objection that the biU should have been dismissed, because there was a complete remedy at law. A coiu-t of equity not unfrequently takes Jurisdiction in the case of lost or destroyed instruments of evidence, under the familiar head of equity jurisdiction arising from ac- cident; but it is not every case of accident which wiU justify the interposition of a court of equity. The jurisdiction wiU be exercised only when a court of law cannot gi-ant suitable relief. 1 Story, Eq. Jur. § 79. In the case of lost instruments of writing under seal, equity interposes, for the reason that, until a recent period, the doctrine pre- vailed that there could be no remedy on a lost bond, in a court of common law, because there could be no profert of the instrument, without which the declaration would be de- fective; and as the jurisdiction was original- ly assumed for that reason, it is still retain- ed. And in the case of lost negotiable secu- rities, where the pm-poses of justice may re- quire that a suitable bond of indemnity should be given, a remedy may be had in equity, where an offer of indemnity may be made and the indemnity be provided for. We apprehend the biU must always lay some ground besides the mere loss of the in- strument of evidence, to justify the interpo- sition of a court of equity to grant relief. 1 Story, Eq. Jur. §§ 84, 86. No other ground is here laid besides the destruction of the record. It does not appear wherein a court of law could not grant the needed relief, wherej as here, no more is sought than a decree for the payment of the amount of a judgment and process for its collection. We do not perceive why an ac- tion at law might not as well have been brought upon this judgment as a suit in eq- uity; why the same evidence would not have been admissible in the one court as in the other, and why the same proof that would have justified a decree in chancery for the amount of the judgment would not have warranted a judgment at law for the re- covery of the same amount. Besides, there was a remedy at law, by motion in the court in which the judgment was rendered, to supply the record. We are of opinion the bill should have been dismissed, because there was an ade- quate remedy at law. The decree is reversed and the bill dis- missed without prejudice. Decree reversed. BREESE, .T. I concur in holding the rem- edy was complete at law by motion in the court in which the judgment was rendered. GROUNDS rOR EQUITABLE BELIEF. Accidental forfeitures. (35 Conn. 19S.) BOSTWICK V. STILES. Supreme Court of Errors of Connecticut. Aug. Term, 1868. E. W. Seymour and M. J. Warner, for peti- tioner. G. C. WoodrufE and Peet, for re- spondent. PARK, J. We have had this case under .advisement for a considerable length of time, and have thoroughly considered the several questions involved, and on the whole we have come to the conclusion that the court ought to Interfere in behalf of the petitioner, and allow him another opportunity to re- deem the premises. It is the peculiar province of a court of equity to grant relief in cases of fraud, ac- cident, or mistake, where there has been no fault on the part of the party seeking re- lief. Bank v. Eldredge, 28 Conn. 556; 1 rStory, Eq. Jur. § 439. The equitable defini- tion of the term accident includes not only Inevitable casualties, and such as are caused Toy the act of God, but also those that arise from unforeseen occurrences, misfortunes, losses, and acts or omissions of other per- sons, without the favilt, negligence, or mis- conduct of the party. 1 Story, Eq. Jur. § 78. Relief on the ground of accident is limited to obligations Imposed by law, and -does not apply to contracts voluntarily en- tered into by the parties. In relation to the latter, no relief can be granted for their non- fulfillment on the ground of accident, for the risk was voluntarily assumed. 1 Story, Eq. Jur. § 101. It is found as a fact in the case, that the petitioner intended and iexpected to redeem the premises, and never entertained the thought of allowing the time limited by the court for redemption to expire without meet- ing the payment. But he had but little proper- ty besides the mortgaged premises, and had to resort to his friends to assist him to the necessary funds for the purpose. The amount to be raised was a large sum for a man in his pecuniary circumstances, and, considering the great disparity between the mortgage debt and the value of the mort- gaged property, it would be strange indeed if lie ueglocted to exercise the utmost dili- gence to make sure of the necessary funds in time for the payment. He had more than .eight thousand dollars worth of property mortgaged for a sum less than four thou- sand, and that property was nearly nil he ■owned. Negligence under such circumstances would seem to be almost impossible. He knew that he must comply with the decree ■of the court or lose his property, and we should expect that he would not rest either day or night till he had secured the neces- sary funds to be forthcoming at the time appointed. The case finds in efCect that this wa.s true. He applied to his uncle, a gentleman of am- ple property, for the necessary amount, and was promised that he should have it on Sat- urday, the third day of August. The time limited for redemption expired on Monday, the fifth day of August. The case finds that the petitioner had good reasons to suppose that the money would be fm-nished in accord- ance with the agreement; but for some rea^ son, not fully explained, he was wholly dis- appointed. It was said in the argument that the uncle was unexpectedly detained on his way home from a journey, and did not arrive in season. But however this may be, the question is, whether these facts are sufficient to show tliat the failure to pay the respondent on the fifth day of August was occasioned by accident, without any fault or negligence on the part of the petitioner. If the petitioner had collected the amount, and had it in his house to pay the respond- ent on that day, but on the night previous his dwelling had taken fire, and the money had been consumed, no one would doubt that the nonpayment was the result of accident. If the petitioner had made arrangements with a bank, and they had agreed to furnish the money on certain security, and the se- curity had been given, but owing to some sudden and unexpected revulsion in finan- cial affairs they had refused to fulfiU their agreement at the last hour, could there be any doubt that the failure to pay according to the decree was owing to accident? Where- in does this case differ in principle? The uncle of the petitioner was both able and willing to furnish the money. He had agreed to do so, and, looking at probabiUUes in relation to future events, it was as morally certain that the money would be fm-nished in the case of the uncle as in the case of the bank. There is a degree of uncertainty in regard to all expectations, and no more ought to be required in relation to future obligations im- posed by law, than that such measures shall be taken to fulfill them as will render it rea- sonably certain, so far as human sagacity can foresee, that they will be performed. If such measures are taken and they result in a failure to pay as the decree requires, how can it be said that a pai-ty has been guilty of negligence? Even in actions at law no greater degree of care is required to avoid injuries to others while in the perfonn- ance of lawful acts, and if damages result they are regarded as occasioned by inevita- ble accidents. Applying this rule, and con- sidering the case at the time the promise was made, was there any reasonable doubt, that would suggest itself to a man of pru- dence and sagacity, that the money might 76 CASES IN EQUITY. not be furnished? The relation of the par- ties was that of imcle and nephew. The uncle had agreed to furnish the money. The case removes aU doubt of his ability to do BO. He knew the importance of fulfilling his promise. He knew his nephew was de- pending npon him, and that it would be worse than cruelty to disappoint him at the last Every person in like circiunstances would be led to suppose that the promise of the uncle was equivalent to having the money in hand. We think therefore that the petitioner was prevented from paying the respondent the amount of his claim on the third day of Au- gust as he had intended, by the happening of some unforeseen event, over which the petitioner had no control, and that he was consequently free from fault These considerations seem to decide the case for the petitioner, for he had but one day remaining In which to comply with the decree of the court, and it would be quite remarkable if a man in his pecuniary cir- cumstances could raise so large a sum of money in a few hours. But it appears that he found a man by the name of Russell who had United States bonds sufficient to pay the amount due, but not the money. Mr. Russell was willing to advance the bonds, if the respondent would accept them in pay- ment. At the request of the petitioner he went to the house of the respondent between nine and ten o'clock in the evening of the fifth day of August, and foimd that he had retired. He made known his business to the wife of the respondent, and requested her to inform her husband that he had come at the request of the petitioner to redeem the mortgaged premises, and was prepared to do it. The message was delivered to the re- spondent and word was returned by him that he was sick; and the attempt to redeem the premises failed. There is no finding in the case that he was in fact sick. If he had been in that condition he would have been anxious to have shown it, and the fact would have appeared, especially after evidence had been given of the word sent to Mr. Russell. The statement was doubtless untrue, and made for the purpose of avoiding Mr. Rus- sell. He was anxious to get the four thoii- sand dollars worth of property in addition to his mortgage claim, and if he could ob- tain it by a falsehood he was ready and willing to make the statement. It is true he was not bound to take the bonds in payment; but the word that was sent by Mr. Russell was, that he was prepared to redeem the premises. The respondent therefore sup- posed that he had the money. This con- duct of the respondent is in keeping with his conduct afterwards. The petitioner in- formed him some time after, (how long does not appear,) that he was desirous of redeem- ing the premises and expressed his readiness to pay the money if the respondent would accept it The respondent said that aU he wanted was his money and interest The petitioner then requested him to name a time for doing the business, but the respond- ent never fixed any time for that purpose. The sum to be paid was large, and the re- quest was reasonable if the respondent was sincere in what he stated. But it is easy to see there was no sincerity in it If he had been willing to accept the money he would have named a time, for he would have been anxious to have the business closed. The motive that induced him to give a false ac- count of his condition, in order to avoid re- ceiving payment from Mr. Russell on the evening of the last day of redemption, was actuating him now. He had got more than eight thousand dollars worth of property for considerably less than one-half of its value, and he intended to keep it. He did not think it advisable to say so directly, and thought it expedient to deceive the petitioner for a time by the show of willingness to take the money, but took good care not to name a time when he would accept it. If the peti- tioner had tendered the amount the day aft- er the time limited for redemption had ex- pired, it is dear he would have refused It, and the tender would have been useless. This conduct of the respondent does not en- title him to favor in a court of equity, and on the whole we are of the opinion that the prayer of the petition should be granted, and so we advise the superior court. In this opinion the other judges concmred. (Accidental judgments. Stowell v. Eldred, 26 Wis. .504; Foster v. "Wood, 6 Johns. Ch. 87.) (As to overpayments by executors, see Orr v. Kaines, 2 Ves. Br. 194; Edwards v Freeman 2 P Wms. 435; Anon., IP. Wms. 495.) »", « i- GROUNDS FOR EQUITABLE RELIEF. 77 As a general vuLe, accident is not liabilities. a ground for relief as to contract (35 Conn. 530.) SCHOOL DIST. NO. 1 v. DAUCHY. Supreme Court of Errors of Connecticut. Feb. Term, 1857. Hawley & Ferry, in support of the motion. Dntton & Carter, contra. ELLSWORTH, J. It is not important, wliether we consider the question in this case as arising out s>t the objection to the defendant's evidence, or out of the charge to the jury. The question Is the same in either case, and it is this. Was the defend- ant discharged from liis contract to com- plete and deliver the said school-house by the time agreed, the first Monday of May, 1854, by reason of the fact, that just before that day it was burnt and wholly destroyed by lightning? There is no dispute as to the terms of the contract, nor as to their import and force. The defendant did agree absolutely and miqualifiedly, that the building should and would be completed and ready to be de- livered to the plaintiffs by che first Monday of May at the farthest. This he has not done. The building has not been completed nor delivered, although it is true he nearly finished it, and it is found could and would have completed it, had it not been destroyed by lightning. In the contract, he made no provision for any contingency or event what- ever, and the question is, can he now incor- porate into his contract a provision for a con- tingency or a condition, or must he abide by his positive and absolute imdertaking. We believe the law is well settled, that if a person promises absolutely, without excep- tion or qualification, that a certain thing shall be done by a given time, or that a certain event shall take place, and that the thing to be done or the event is neither impossi- ble or unlawful, at the time of the prom- ise, he is boimd by his promise, imless the performance, before that time, becomes un- lawful. Any seeming departure from this principle of Jaw, (and there are some in- stances that at first view appear to be of that character,) will be found, we think, to grow out of the mode of construing the contract or affixing a ("oniiition, raised by implication from the nature of tlie sub- ject, or from the situation of tlie parties, rather than from a denial of the principle itself. Such, for instance, as a promise to marry, where it must be presumed that the parties agree to intermarry if they shall be alive; or a promise to deliver a certain horse at a future time, and before the day arrives, the horse dies; in which case, the parties are held to have contracted in view of that contingency. In these and like cases, the court wiU hold that the parties did not im- derstand that the thing was to be done, un- less the life of the persons, or of the horse, was continued, so that there would be an object and an interest in the execution of the contract. These and a few other ex- ceptions of a similar character, are to be found in the books, but they are not so much exceptions after all, as cases where the in- tention of the parties is presumed or inferred, though not expressed, from their peculiar situation, or from the subject matter itself. It is said, however, that there is one real exception to the rule, viz., where the act of God intervenes to defeat the performance of the contract; and that is the exception on which the defendant reUes in this case. The defendant insists, that where the thing con- tracted to be done becomes impossible by the act of God, the contract is discharged. This is altogether a mistake. IJhe cases show no such exception, though there is some sembliince of it in a single case which we will mention. The act of G-od WiU excuse the not doing of a thing where the law had created the duty, but never where it is created by the positive and ab- solute contract of the party. The reason of this distinction Is obvious. The law never creates or imposes upon any one a duty to perform what God forbids or what he ren- ders impossible of performance, but it allows people to enter into contracts as they please, provided they do not violate the law. It is further said, that the books declare, that where the condition of a bond becomes im- possible by the act of God, or is prohibited by the law, the condition becomes void and the bond is absolute, or if it be a subsequent condition for the devesting of title, that the condition becomes void, and the title remains good. Whether even this is true, without some qualification, we are not quite confi- dent, nor win we stop to consider; but if so, still, the doctrine of that class of cases does not reach the pfesent one, as the same books abundantly declare. In Piatt on Covenants, p. 582, it said that the rule daid down in Paradine v. Jane, Aleyn, 27, has often been recognized in courts, as a sound one, viz.: where a party by his own contract creates a duty or charge upon himself, he is bound to make it good, if he may, notwitlistanding any accident by inev- itable necessity, because he might have pro- vided against it by his contract; therefort- if a lessee covenants to repair, tlie circum- stance of the premises being consumed by lightning, or thrown down by an inevitable flood of water, or an irresistible tornado, wiU not effect his discharge. But where the law creates a duty or charge, and the party is disabled to perform it without any de- fault in him, and hath uo remedy over, there 78 CASES IN EQUITY. the law wiU excuse him, as In the case of waste where the house Is destroyed by a tempest. In some cases where the act of God renders performance absolutely Impos- sible, the covenants shaU be discharged quia impotentia excusat legem; as if a lessee covenants to leave a wood in as good plight as the wood was at the time of the lease, and afterwards the trees are blown dovsTi by tempest; or if one covenants to serve another for seven years, and he dies before the expiration of the seven years, the cove- nant is discharged, because the act of God defeats the possibility of performance. I should rather say because It is implied that the thing shaU exist or life be prolonged, or else the contract of course cannot be broken. Chit, on Cont. (5 A.mer. Ed.) p. 60, says, "But a promise is not void against the party who makes It, merely because Its exe- cution is improbable or difficult, or because the impossibility of performing It applies only to the promisor individually, the law not for- bidding the thing to be done, and there be- ing no breach of moral duty involved in it. If a party by his own contract, lay a charge upon himself, he is bound to perform the stipulated act or pay damages for the non- completion, unless the matter was, at the time, manifestly and essentially Impractica- ble." The same is laid down in 2 Pars. Cont. 184. In Com. Dig. tit. Condition d. 1, it is said, "And if a man covenants or promises to do a certain thing, at a certain time, and it becomes impossible by the act of God, he shaU not be excused." See the cases of Bullock v. Dommitt, 6 Term B. 650, where the lessee was held bound to rebuild in case of fire, Monk v. Cooper, 2 Str. 763, and At- kinson V. Kitchie, 10 Bast, 530, where the freighter of a vessel covenanted to proceed to St. Petersburgh and there take a fuU car- go, but was prevented by an embargo. Lord Mansfield and the other judges held that no exception not contained in the contract itself, could be engrafted upon It by implication, as an excuse for its non-performance. The rule laid down in the case of Paradlne v. Jane, Aleyn, 27, has been often recognized in courts as a sound one, that where the (See, also, Stees v. Leonard, 20 Minn. 494, [Gil. 448.]) (Equity will not protect one Irom the results of his own negligence. Town of Barnet v. Passump- Bio Turnpike Co., 15 Vt. 757. Kor will it aid one who has no vested rights. Whitton v. RusselL 1 Atk. 448.) ^ party by his own contract creates a duty or charge upon himself, he is boimd to make It good, if he may, notwithstanding any ac- cident by inevitable necessity. In Barret v. Button, 4 Camp. 333, Gibbs, C. J., says, "Ice being in the Thames, which rendered it im- possible, did not excuse the non-performance of the charter party: there was an absolute imdertaking by the freighter of this ship tO' load and discharge her In thirty days, and whether It was or was not possible for him to do so from the state of the weather, is quite immaterial." So in Barker v. Hodg- son, 3 H. & S. 207, it was held, that an in- fectious disease at a port, which prevented commercial intercourse, did not discharge or qualify the covenant In the charter party. So In Shubrick v. Salmond, 3 Burr. 1637, it was held, that though contrary winds and bad weather would not allow of the cap- tain's proceeding with his vessel to her port in South Carolina, as he had agreed to do, the covenanter was liable. The same prin- ciple is laid down in Harmony v. Bing- ham, 2 Keman, 106, that "where a party engages imcondltlonaUy by express contract to do an act, performance is not excused by inevitable accident or other unforeseen con- tingency, not within his control." So in Ad- ams V. Nichols, 19 Pick. 275, the court held that where a person contracted to buUd a house on the land of another, and the house was, before its completion, destroyed by fire, without his fault, he was not thereby dis- charged from his obligation to fulfill his contract. The court most fuUy recognize the rule, that the act of God will not operate to discharge a promise which Is absolute and unqualified In Its terms, though the contin- gency is beyond the power of the contractor. The same is held in Lord v. Wheeler, 1 Gray R. 283, though the case was taken out of the iTile by its peculiar circumstances. These and other authorities which might be cited, satisfy us that the law was not correctly laid dovvTi in the coiu't below, and concur- ring as we do with the doctrine of those cases, we advise a new trial. STORRS and HINMAN, JJ., concm-red. GROUNDS FOR EQUITABLE RELIEF. 79 II. MISTAKE. "Mistake is an erroneous mental condition or conviction induced by Ignorance misapprehension, or misunderstanding of the truth, out -(j^thout negligence, and resulting in some act or omission done or suffered erroneously by one or both the parties to a transaction, out without Its erroneous character being intended or known at the time." 2 Pom. Eq. Jur. § 839. (a) MISTAKE OF LAW. Ignorantia legis neminem excusat. (47 N. Y. 57.) JACOBS V. MORANGB. Court of Appeals of New York. Dec, 1871. Appeal from judgment of the New York common pleas, affirming judgment for plain- tiff. Samuel Hand, for appellant. Bhedt, for respondent. M. A. Kur- PECKHAM, J. The defendant in this suit Is a lawyer. The plaintiff some years since brought an action against the defendant in the marine court, in the city of New York. The defendant recovered a verdict in that suit, of $86 against the plaintiff. Without taking the case to the general term of that court, the plaintiff carried it for review to the com't of common pleas of that city, and after argument there that court reversed the judgment, with costs. The defendant paid these costs voluntarily without the entry of any judgment. Within a year thereafter the court of appeals decided that the court of common pleas had no jurisdiction of a case from the marine court, until it had been first heard and decided by the general term of that court The common pleas had previously held the other way, viz., that it had jurisdiction in such case. Some nine years after this reversal in the common pleas the defendant issued an execution in the marine court, and then the plaintiff in- stituted this suit in equity to stay his pro- ceedings, and a judgment is obtained for a peri)etual stay on the ground that the judg- ment in the marine court was erroneous, and that both pnrties in the review in the common pleas had acted under a mutual mis- take of law. This presents the question, can a court of equity grant relief in a case of this charac- ter upon the sole ground of a mistake of law? There is no circumstance of any description that adds .anything to this gi-ound of relief. Ignorantia legis neminem excusat and kin- dred maxims are old in the law. If they are true, this judgment is erroneous. In early times the jurisdiction of the court of chancery in the hands of chancellors un- sldlled in the law was almost without limit; but for very many years that com-t has been guided by rxiles and precedents, by the sci- ence of the law as much as courts of com- mon law. Their jurisdiction and modes of relief are well settled. The statutes and laws of the land are as much the law there as in any other court. 1 Story Bq., § 19; Id., §§ 17, 18. The whole basis for this relief is founded upon the fact that an inferior court made an. erroneous decision upon a question of law; that the plaintiff was misled thereby and suffered this loss. This is the best position the plaintiff can take. This must be the "surprise" sometimes spoken of in the books. Jeremy Eq. Jur. 366. What a flood of litigation would such a rule open? If this can be regarded as the "surprise" that requires or justifies equita- ble relief, how broad is the principle, how extensive its ramifications? Almost every case reversed by this court would form a basis for such "sm-prise," especially where courts of last resort reverse or modify their own decisions. How many cases are lost at the trial or upon review by the ignorance of counsel in failing to perceive the point, or in failing to present it properly for review. How easy to get up cases, in the ordinary affairs of life, of a misunderstanding of the law. Thus the same principle would extend to com-ts of equity for errors committed or assumed to be committed there. Under such a system of jurisprudence it would be difii- cult to reach the end of a lawsuit. In this case the statute of this state pro- vided a mode of review of judgments ren- dered in the marine court. The time and the manner were prescribed. This statute was well Icnown to these parties, or should have been but for their negligence. Yet the plaintiff, with the statute before him, passed for the sole purpose of enabling the party aggi-ieved to review a judgment in the ma- rine court, comes to a court of equity for relief against his ignorance of the manner of obtaining such review. «0 CASES IN EQUITY. We are referred to no principle or author- ity to sustain such an action, and I think none can be found. On this point Chancellor Kent observed: "A subsequent decision of a higher court in a different case, giving a different exposition of a point of law from the one declared and known when a settlement between parties takes place, cannot have a retrospective ef- fect and overtinra such settlement. Every man is to be charged at his peril with a knowledge of the law." Lyon v. Richmond, 2 Johns. Ch. 51, 60. Though the decree in that case was re- versed by the court of errors (14 Johns. 501), it was entirely upon other grounds. In Storrs v. Barker, 6 Johns. Ch. 166; 10 Am. Dec. 316, where ignorance of the law was set up as a ground of defense, the court affirmed the rule that ignorance of the law with a knowledge of the facts was no ground of defense. See 1 Story Eq., § 120, to the same effect. Suppose the plaintiff had misunderstood the statute as to the time of appeal, could a court of equity extend the time prescribed by the statute? Many such cases have oc- curred from a misapprehension of the law as to when a judgment is perfected. Courts of law could grant no relief, and I am not aware that any lawyer has supposed that a court of equity had any more power to ex- tend the statute. In ChampUn v. Lay tin, 18 Wend. 407; 31 Am. Dec. 382, in the court of errors on appeal from chancery, Bronson, J., review- ed the authorities in a sound opinion, show- ing as he claimed that there was really no authority against the rule that ignorance of the law simply was no ground for relief. The opinion of Paige, Senator, the other way, does not seem to me to be well ground- ed. He was of opinion that the judgment in that case could be affirmed upon other grounds. But the principle laid down by him denies relief to the plaintiff in this case. He recognized a difference between igno- rance of the law and a mistake of the law. Adopting the language of Johnson, J., in Lawrence v. Beaubien, 2 Bailey, 623; 23 Am. Dec. 155, who says: "The former is pas- sive, and does not presume the reason. The latter presumes to know when it does not, and supplies palpable evidence of its ex- istence." He would grant relief in the for- mer not in the latter. The difficulty of proving the one or the other seems to constitute all the difference in the cases. Without any special review of authorities on this question which we have particularly examined, it is enough to say that it is con- ceded that no case has been found wairant- ing the interference of a court of equity uj)- on facts like these, and no sound principle will authorize it. The decree must be reversed, without costs. AU concur. (See, also, Bilbie v, Lumley, 2 East, 468; Hunt v. Administrators of Rousmaniere, 1 Pet. 1; Bank of U. B. V. Daniel, 13 Pet. 32; Goltra v. Banasack, 53 III. 456; Hellish v. Robertson, 25 Vt.603: ShotweU V. Murray, 1 Johns. Ch. 512; Stoddard v. Hart, 23 N. T. 556.) LIMITATION OF FOREGOING RULE. Whatever exceptions there may be to this rule, they will be found on careful examination to involve some peculiar considerations controlling the decision. i'^' (19 Tex. 303.) MORELAND v. ATCHISON. Supreme Court of Texas. Tyler Session, 1857. Evarts & Hendricks, for appellant. J. T. MUls, for appellee. WHEELER, J. Whatever differences of opinion adjudged cases may exhibit, as to the cases where the pm'cliaser of land wiU be entitled to have the contract rescinded, or to be relieved against securities given for the purchase money, where there is no charge of fraud, it is clearly settled beyond controversy, that chancery will decree a re- turn of the purchase money, for Insufficiency of title, even after the pm-chase has been carried completely into execution, by deliv- ery of the deed and payment of the money, and whether the deed was with or without covenants, provided there had been a fraud- ulent representation as to tlie title. (Ed- wards V. McLeay, Cooper's Eq. R. 308; Fenton v. Browne, 14 Ves. 144; Denston v. Morris, 2 Edwards' Ch. R. 37; 2 Kent, Com. 471.) The petition avers such fraudulent representation; and the only question is, whether it was of a matter respecting which the party can claim to be relieved, on the ground of the deception and fraud,— whether he was not bound to know the law, which disabled the defendant from niaking title, and whether, to grant him relief would not be to relieve against ignorance or mistake of law. The maxim ignorantia legis nemi- nem excusat, is respected equally in courts of equity and law. The legal presumpUou GROUNDS FOR EQUITABLE RELIEF. 81 is, that every man who is not non compos mentis, knows the law, where he knows the facts; and this presumption, though arbi- trary and false In fact, is foimded upon rea- sons of sound poUcy; for although a thor- ough knowledge of the law presupposes a life devoted to the laborious study of its principles, and in the application of the knowledge thus acquired, to the complicated affairs of men, there will questions arise upon which the best informed will differ in opinion, and no such thing as absolute cer- tainty can be attained, yet without some ar- bitrary rule, imposing upon all the duty of well considering and miderstanding the con- sequences of their acts and contracts, there would be no limit to the excuse of ignorance, no safety to society, and no security in any obligation. The law presumes therefore that every man who makes a contract, acts ad- visedly and with a knowledge of its legal effect and consequences. The question whether, in any case, mere ignorance or mis- take of law will entitle a party to relief, has been much discussed by judges and com- mentators, and is still a disputed question. (1 Story's Eq. Ch. 5, Sec. Ill to 138.) Judge Story says that "agreements made and acts done under a mistake of law, are (if not otherwise objectionable) generally held valid and obligatory. The doctrine is laid down In this guarded and qualified manner, be- cause it is not to be disguised, that there are authorities which are supposed to con- tradict it, or at least to form exceptions to it" (Id. Sec. 116.) Chancellor Kent was equally guarded in his statement of the rule, in Storrs v. Barker, (6 Johns. Ch. R. 169, 170.) The supreme court of the United States, in Hunt V. Rousmanler, (8 Wheaton, 214,) while they expressed a decided affirmation of the general rule, qualified it by the admission that it was not universal, and that there may be cases in which mere ignorance of law alone would entitle a party to relief in a clvU matter, on the ground of the presump- tion of Imbecility, or fraud, which might arise. In noticing this case. Chief Justice Robertson, in delivering the opinion of the court of appeals of Kentucky in Underwood V. Brockman, (4 Dana, 309,) where he ex- amines the subject in an elaborate opinion, says the court might have added also, the additional and more conclusive and plain ground of a want of consideration. In South Carolina and Kentucky the universal application of the general rule is not admit- ted. (Lowndes v. Chlsholm, 2 McCord Ch. 455; Lawrence v. Beaubien, 2 Bail. 623; Hop- idns' Ex'rs v. Mazyck, 1 Hill. Ch. 242; Un- derwood V. Brockman, 4 Dana, 309.) The review of the decisions by Judge Story, shows that there are very many apparent, and he dares not deny that there are some, though he thinks but few, real exceptions to the general rule; and he says they gen- OAS.EQ. — 6 erally stand upon some very urgent pressure of circumstances. (Story's Eq. Sec. 137.) The general rule, it has been truly said, is justified by considerations of public policy; and yet so harsh a rule, foimded upon a pre- sumption so arbitrary, ought to be modified in its appUcation, by every exception which can be admitted without defeating its policy. "If there be, at the time a contract is en- tered into, a mistake of the law applicable thereto, which entirely modifies it, to enforce such an agreement is to create a new con- tract, which was never assented to tmder- standingly, and to Impose duties and liabil- ities, which the party never contemplated assuming. So, also, if there be a promise,, or an actual performance of a contract, upon the supposition of liability, that liability be- comes the very basis of the contract, and its non-existence being an utter failure of con- sideration, an executory or executed con- tract founded thereupon, would, by one of the first principles relating to contracts, be wholly void." (Story on Con. 407, note.> Admitting the rule that ignorance of the law, with a knowledge of the facts, cannot generally be set up as a defence, (6 Johns. Ch. R. 169, 170,) there are other elements in the present case, which bring it within the exceptions, or take it out of the opera- tion of the rule, and entitle the party to re- lief. It is not a case of mere ignorance of law, unmixed with fraud and ignorance of fact. There was both fraud and ignorance of fact, as well as law. And it has been, the constant practice of courts of chan- cery to grant relief, where the case did not depend upon a mere mistake of law, stripped of all other circumstances, but upon an ad- mixture of other Ingredients, going to estab- lish misrepresentation, imposition, undue cionfidence, undue influence, or advantage taken of another's situation. (Story's Eq. 120, et seq. and notes.) There was, in this case, misrepresentation and fraud, if corrupt- ly deceiving one, as to matter of Jaw, amounts to fraud, in a legal sense; and we do not doubt that it may, where, as in this case, advantage is taken of the ignorance of the party. An immigrant arrives in the country, and his first object is to procure a home. He, of course, is ignorant respecting the land titles of the country; and he meets with an old citizen who professes familiarity with them, and who proposes to sell him land to which he assures him he had a per- fectly good title. The Immigrant relies on his superior Information, and trusts to his representation; and has he not a right to do so? When one who has had superior means of information, professes a superior knowl- edge, even of the law, and thereby obtains an unconscientious advantage of another, who is confessedly ignorant, and who has not been in a situation to be Informed, is not the In- jiu-ed party as much entitled to relief, on th& 82 CASES IN EQUITY. ground of fraud, as If the misrepresentation were of a matter of fact? We think he is. The plaintiff is not sup'posed to have had a Bmowledge of the laws of this state until Ihe came within their influence. Ignorance of the law signifies ignorance of the laws of one's own country; ignorance of the law of a foreign government, is ignorance of fact. (Haven v. Foster, 9 Pick. R. 112, 130.) To deny him relief against a ruinous Contract, induced by the misrepresentation of one who professes a knowledge of the subject, and who has been in a situation to be Informed, while he has not, and when. If he had been informed, he would not have made the con- tract, would not only be extremely imrea- sonable and unjust to the injvired party, but it would be giving a premium to the other party for taking advantage of his ignorance. It would be plainly repugnant to good morals and fair dealing. There can be no good rea- son why the law. In this case more than any other, should suffer one who has no right or title, to retain that which is the property of another. But the truth or falsehood of the repre- sentation did not depend upon a mere ques- tion of law; nor would a knowledge of the law alone have enabled the plaintiff to de- tect its falsehood. He might have known that the land included within the boundaries of the colony was reserved by law from loca- tion and pre-emption, and still have been Ignorant of the fact that this land was with- in the bounds of the reserved territory. Whether the defendant had or could make a good title to the land was a question of fact as weU as law, no less in this, than in other cases where there had been a prior appropri- ation of the land. The misrepresentation, therefore, was of matter of fact, as weU as law. The consequence is, that the defend- ant has obtained the property of the plain- tiff without consideration, and by means which does not divest the latter of his title, and ought not, on principle, to deprive him of his remedy. We conclude that the plain- tiff has stated a case which entitled him to his action to recover back his property or its value; and that the court erred in dismissing the petition. The judgment is therefore re- versed and the cause remanded. (See, also, Bigelow, Bq. 176; Cooke v. Nathan, 16 Barb. 342; LangstafEe v. Fenwiok, 10 Ves. 405: Whelen's Appeal, 70 Pa. St. 4t0; Dill v. Shahan, 25 Ala. 694.) Mistake as to the legal effect of the terms employed is not ground for equitable relief. (9 Conn. 96.) WHEATON V. WHEATON. Supreme Court of Errors of Connecticut. July Term, 1831. A. bought a farm of his father for $4,000, giving him two promissory notes of $2,000 each, under an agreement that they should not be payable until the decease of B., and that then the notes should he surrendered to A. as his part of B.'s estate. One of the notes was drawn payable in three years, vrithout the provision that it should be deliv- ered up to A. on B.'s death being inserted. A., being ignorant of the legal effect of the ■words "payable In three years," not under- :standing that the note could be enforced prior to his father's death, signed and deliv- ered the note to his father. After due, B. sues on the note, and A. prays for an injunc- tion and other relief. H. Strong and Judson, in support of the motion. Goddard and Welch, contra. BISSELL, J. It is unquestionably, the province of a court of chancery to relieve against fraud, accident and mistake;— and In such cases, parol evidence is admitted, to show that the party is entitled to the relief sought. In this case, there Is no pre- tence of fraud. The bill proceeds wholly on the ground of a mistake; and the only ques- tion is, whether such a mistake is here al- leged, as falls within the general principles, and caUs for the interposition of a court of chancery. The bUl contains no averment of a mistake in any matter of fact. It is not alleged, that the writings were not so drawn, as to effectuate the intention of the parties, through the mistake of the scrivener. On the con- trary, it is alleged, that the scrivener was not even informed what the agreement between the parties was. Nor does the plaintiff pre- tend that the note was executed by him im- der any mistake or misapprehension in re- gard to its terms. He knew it was a note, on the face of It, payable in three years. Indeed, the whole bill is so framed as to preclude the idea of a mistake in any one matter of fact. The mistake, if any, was in a mere matter of law; and that, a mistake of rather an extraordinary character. It is simply, that the plaintiff mistook the legal effect of a plain note of hand: Tliat he ig- norantly supposed a note, payable, by the terms of it, in three years, to be, in law, a note payable at the death of the obligee; and tlien not actually to be paid, but to be delivered up. And to show this mistake. GKOUNDS FOR EQUITABLE RELIEF. 83 -we are asked to let in parol evidence. It ■woiUd perhaps be not a little difficult to point to the source from which evidence of such a •character could be derived. But waiving the difficulty, we are brought to consider the question, whether parol proof be admissible to show a mistake in law? This is tin, inaked question, presented by this motion. The only English authority, from which the affirmative of this question derives any sup- iport, is that of LansdovsTi v. Lansdown, re- ported in Mosaly, p. 364. Lord Mansfield pronounced the book to be of no authority; and the case has been often questioned; and the doctrine involved in that decision has been overruled, by the whole train of decisions on this subject. Pullen v. Ready, 2 Atk. 587. Lord Irnham v. Child, 1 Bro. Ch. Ca. 92. Underbill v. Horwood, 10 Ves. 209. 228. Lyon v. Richmond, 2 Johns. Ch. Kep. 51. The case of Hunt v. Rousmanier, 8 Wheat. 174, has been relied on, by the plaintiff's •counsel. That case would, indeed, seem to sustain the position, that a court of chancery will relieve against a mistake In law. The bill in that case stated, that the plaintiff loaned to the defendant's intestate two sums •of money of 1450 dollars and 700 dollars, for which his promissory notes were given; :and as collater.al seciu-ity, a power of at- torney authorizing the plaintiff to execute a "bill of sale of two vessels, the Nerens and the Industry, to himself or any other person; and in case of loss, to collect the money, which should be due on a policy, by which said vessels and their freight were insured. The instrument contained a proviso, that the' power was given as a collateral security of the notes, and was to be void on their pay- ment; on the failure of which, the plaintiff was to pay the amount thereof and all ex- penses out of the proceeds of the said pi-op- •erty, and to return the surplus to the said Rousmanier. The biU then charged, that the said Rousmanier died insolvent, having paid ■only 200 dollars, on said notes. The plain- tiff gave notice of his claim, took possession •of the vessels on their return from sea, and offered the intestate's interest In them for sale. The respondents forbade the sale, and the bill was brought to compel them to join in It. The amended bill further stated, that It was agreed between the parties, that Rous- manier was to give a specific security on the vessels, and offered to give a mortgage;— that counsel was consulted on the subject, who advised, that a power of attorney, such as was actually executed, should be taken, in preference to a mortgage;— that the powers were accordingly executed, with the full be- lief that they would, and with the intention that they should give the plaintiff as full and perfect security as would be given by a mortgage. To this biU there was a demur- a-er; which was sustained by the circuit court of Rhode Island, and the bill dismissed. From tills decision, the plaintiff appealed to the supreme court. The decree of the circuit court was reversed; but it being a case in which creditors were concerned, the court passed no final decree, but remanded the cause, that the circuit court might permit the defendants to withdraw their demurrer anu answer the bill. Chief Justice Marshall, viho pronounceij the opinion of the court, in that case, fully recognized the principle, that parol evidence is not admissible to vai-j- a written instrument; and that the rule prevailed, as well in courts of equity, as in courts of law; that courts of equity grant relief in cases of fraud and mistake; and that in general, the mistakes against which a com-t of equity relieves, are mistakes in fact. He undertakes to derive an analogy from that class of cases, in which a joint obligation has been set up, in equity, against the representa.-ives of a deceased obligor, who were discharged at law. The case of Lansdown v. Lansdown is cited, with the remark, that if it be law, it has no inconsid- erable bearing on the case. The court re- mark: "We find no case which we think precisely in point; and are unwilling, where the effect of the instrument is acknowledged to be entirely misunderstood, by both par- ties, to say that a court of equity is incapa- ble of affording relief." The case being remanded to the circuit court, was there tried, on the answer of the defendants; and that court decreed, that the plaintiff was not entitled to the relief sought, and dismissed the bill. On an appeal, the case came again before the supreme court, (1 Pet. U. S. Rep. 1,) and the decree of the circuit court was affirmed. Washington, J., in pronouncing the opinion of the court, says: "The question then, is ought the court to grant the relief which is asked for, upon the ground of mistake arising from any igno- rance of law? We hold the general rule to be, that a mistake of this character is not a ground for reforming a deed, founded on such mistake; and whatever exceptions there may be to this rule, they are not only few in number, but they will be found to have something very peculiar in their characters." He then adverts to the case of Lansdown v. Lansdown, and remarks: "Admitting, for the present, the authority of this case, it is most apparent, from the face of it, that the deci- sion of the court might well be supported, upon a principle not involved in the question we are examining." It would not, perhaps, be going too far to say, that the doctrines laid down by Ch. J. Marshall, in this case, were greatly shaken, by the subsequent opin- ion of Judge Washington; and that taking the whole case together, it will hardly war- rant a departure from principles long con- sidered as settled. It Is not an authority for the plaintiff. A decision In his favor would; 84 CASES IN EQUITY. most obviously, be followed by aU the mis- chiefs of parol evidence, as applied to writ- ten instruments; and would, most effectually, abrogate the rule on this subject. I am satisfied, that this ought not to be done; and consequently a new trial must be refused. The other judges were of the same opinion. New trial not to be granted. See Chestnut Hill Reservoir Co. v. Chase, 14 Conn. 133. Wooden v. Haviland, 18 Conn. 105. Whitaker v. Gavit, 18 Conn. 526. Coley v. Coley, 19 Conn. 120. Opbom v. Phelps, 19 Conn. 70. Stedweli v. Andeison, 21 Conn. 143. Northrop v. Graves, 19 Conn. 548. (See, also, 2 Pom. Eq. Jur. § 307; Powell v. Smith, L. R. 14 Eq. 85; Paine v. Smith, 33 Minn. 495, 24- N. W. Rep. 305; Gerald v. EUey, 45 Iowa, 322; Moorman v. Collier, 32 Iowa, 138.) (Mistake as to legal rights, see 2 Pom. Eq. Jur. § 849; Hearst v. Pujol, 44 Cal. 230; Whelen's Ap- peal, 70 Pa. St. 410; Broughton v. Hutt, 3 De Gex & J. 500; Cooper v. Phibbs, L. R. 2 H. L. 149.) V Failure of the parties to use words expressing their mutual agreement is ground for equitable relief. tion assumed by said Pitcher. M. Hennes- sey. Edwin Pitcher. Dated Oswego, Nov. 22, 1864." These two instruments are to be construed together precisely as If they were embodied in one. By the agreement, as thus reduced to- writing, the plaintiff became the owner of the boat, and the defendant agreed to take on a cargo and run her for the plaintiff tO' Martinsburgh; and this he agreed to do ab- solutely, unless prevented by some "risk of navigation." He was prevented because the boat was too large to pass the locks on the Black River canal with her cargo, and the first question to be determined is, whether the risk of passing the locks was a "risk of navigation." The learned judge who wrote the opinion of the general term held that these words had a fixed legal signification,, and meant the same as perils of the sea or perils of navigation. These latter terms are held to cover losses or damage occasioned by stress of weather, winds, waves, light- ning, tempest, rocks, sands and other ex- traordinary causes which no human tare or foresight could guard against or prevent (Story Cont, § 166; 2 Pars. Mar. Law, 219; Aug. Carr., § 168), and very likely they would not cover this peril. But there is no case holding that "risk of navigation" means the same thing as "perils of navigation," and there is no authority that I have been able to find defining or fixing the meaning of this term. Hence we are to construe these words in the connection in which they are used, applying the ordinary canons of construction. We are to consider the cir- cumstances and condition of the parties, and the objects they had in view, and thus ascertain, as weU as we can, what they meant by these words. Both parties were ignoi-ant of the precise size of the locks, and both undoubtedly supposed that the boat could pass through the loclis. The plaintiff owned the boat and cargo; and the de- fendant was to run the boat with the cargo to Martinsburgh. The defendant was un- (48 N. Y. 415.) PITCHER V. HENNESSEY. Commission of Appeals of New York. Jan. Term, 1872. Appeal from judgment in favor of plaintiff. Action for breach of contract J. R. Swan, Jr., for appellant Water- man & Hunt, for respondent. EARL, O. The plaintiff purchased three thousand bushels of wheat in Oswego, and he could get no one, neither the defendant nor any one else, to freight it for him. For the purpose therefore of securing the transportation of his wheat, he made an agreement with the defendant to purchase his boat for the sum of $1,800, and the de- fendant agreed to load the wheat on the boat and run the boat and transport the wheat to Martinsburgh. The sale of the boat and the contract to load and run her were all one entire agreement, the consid- eration of which, on the part of the plaintiff, was the $1,800 to be paid by him. The plaintiff evidently would not have bought the boat unless the defendant had agreed to run her and carry the wheat; and the defendant would not have agreed to carry the wheat unless the plaintiff had bought the boat. This agreement was re- duced to writing in two separate instru- ments, drawn and executed at the same time and place, one of which was a mere bill of sale signed by the defendant, trans- ferring the boat and her appurtenances, and the other was signed by both parties and was as follows: "Michael Hennessey is to run boat T. Matthews, this day sold to Edwin Pitcher of Martinsburgh, Lewis county, to the warehouse of said Pitcher on the Black river, in Martinsbiu-gh, loaded at his, said Hennessey's, expense, except the tolls and Insurance, which said Pitcher is to pay. Said boat to run there with ordinary dispatch and- to start Immediately. Risk of naviga- GROUNDS FOR EQUITABLE RELIEF. 85 ■willing to bear the risks which were be- jrond his control and were incident to navlga- of the canal, and these risks the plain- tiff was willing to assume. If the boat and -cargo were lost without the fault of the de- fendant, the loss was to fall upon the plain- tiff. If the defendant was prevented from reaching Martinsburgh with the boat and <;argo by the freezing of the canal, or any- other unforeseen or unavoidable peril of navigation, he was to be excused. He was to be excused if the canal should give away, or a lock should break without his fault And yet, can we hold that he assumed the risk that the canal or locks were of snffl- <;ient size for his boat? Taking the relation and situation of the parties into view, I think that it is clear that the defendant meant only to assume all the risks occasioned T)y the negligence and misconduct of him- self and his servants; and that the plaintiff meant to assume all the risks attending upon the navigation through the canal which were beyond the control of the defendant The plain, ordinary meaning of the lan- guage used admits of this construction, and it seems to me to be in accordance with the presumed intention of the parties. Hence I am of the opinion that the court erred in holding that the defendant had, and that the plaintiff had not, by the terms of the agree- anent, assumed the risk in question. But if I am wrong in this conclusion, then I think the court erred in not allowing proof for the reformation of the contract. On the trial the defendant claimed that by the terms of the written agreement, the risk in •question was assumed by the plaintiff; and that if this was not the true construction of the written agreement, then it did not ex- press the intention of the parties, and should be reformed. After the court had held that this risk under the written contract was not iissumed by the plaintiff, and rested upon the defendant, the defendant, (1) for the purpose of procuring a reformation of the contract; and (2) to explain any ambiguity there might be upon the face of said con- tract, and the meaning of the words "risks of navigation," as understood by the par- ties, offered to prove "conversations which toolc place between the plaintiff and de- fendant before the execution of the writ- ten contract between the parties which has been given in evidence. That in such con- versations the defendant desired the plain- tiff to furnish men and teams at Rome to assist in getting boat and cargo to Martins- burgli, where plaintiff wanted the wheat. ■The defendant told the plaintiff he knew nothing of the Black River canal or the size of its locks, and inquired of Mr. Pitcher if be knew the size of the locks, and said to bim that he, Hennessey, would take no risk as to the length of the locks or the freezing up of the canal, and that plaintiff said he would take those risks." The coimsel for the plaintiff objected to this evidence on the ground "that it was incompetent and immaterial, and that all conversations prior to said contract were merged in the written agreement; and ttiat there was no ambiguity upon the face of the contract which required explanation; that such testimony was incompetent and immaterial for the pvupose of reforming the contract; and that defendant's answer did not present a case or contain the allega- tions necessary for the reformation of said contract" The court overruled the offer and excluded the evidence, and held and decided (1) that there was no ambiguity in the language of the contract which ad- mitted of or required explanation. (2) That aU communications and verbal agreements between the parties prior to the execution of the written contract l)etween them in re- lation to the subject-matter thereof, were merged in the vsnritten contract, and could not be proved to contradict or vary the same, or give it a meaning beyond its plain and obvious tenor. (3) That the testimony was inadmissible for the purpose of reform- ing the contract, on the ground that no case was presented by defendant's answer for a reformation of the contract It does not allege the facts upon which such reforma- tion could be made. The judge further re- marked that independent of the pleadings the reformation of a contract was a matter of equitable jurisdiction, and could not come up before the jury. To each of which rulings and decisions of the court the defend- ant excepted. The court clearly erred in holding that the equitable defense or counter-claim set up by the defendant could not be tried in this ac- tion. That it could be is too thoroughly settled to admit of further dispute. New York Ice Co. v. North-Westem Ins. Go., 21 How. Pr. 296; Dobson v. Pearce,12 N.Y. 156; 62 Am. Dec. 152; Phillips v. Gorham, 17 N. Y. 270; Bartlett v. Judd, 21 id. 200, 78 Am. Dec. 131; Lattin v. McCarty, 41 N. Y. 107. Hence if this equitable defense was suffi- ciently set up in the answer it should have been tried and determined by the court; and the next question to be considered is, whether the answer was sufficient to authorize a ref- ormation of the contract, and I cannot doubt that it was. It avers "that by the ver- bal agreement between the said plaintiff and defendant in relation to the delivery of said boat and cargo at Martinsburgh, aforesaid, which preceded the execution of said writ- ten contract, and in pursuance of and in con- formity with which said verbal agreement, the said written contract was, as this defend- ant believes and avers, by both of said par- ties intended to be and understood to have been drawn, this defendant vra.s not to as- sume or take any risk in respect to the size of the said canal-boat, as compared with the size and capacity of the locks on the Black 86 CASES IN EQUITY. River canal through which the said boat would be obliged to pass on the route to Martinsburgh aforesaid, or in respect to the practicability of passing the said canal-boat through said locks, but on the contrary such risk, it was understood by both of said parties, should be and was understood by them to have been assumed by the said plaintiff in and by the tenns of the said writ- ten contract for the delivery of said boat at Martinsburgh aforesaid," and prays that the written contract "be corrected and re- formed by inserting therein a clause or pro- vision that the risk of the impracticability of passing the said boat and cargo through the locks of the Black River canal be as- sumed by the plaintiff, should such correc- tion become necessary to attain justice be- tween the parties." The prayer for relief is sufficient It indicates with sufficient cer- tainty the correction or reformation desired, and I am unable to see why the facts al- leged as the ground, for the relief prayed for are not also sufficient. They are in sub- stance, 1. That the parties made a parol agreement by which the defendant was not, and the plaintiff was, to assume the risk in question. 2. That both parties intended this agreement should be embodied in the written contract. 3. That they both under- stood it was so embodied. 4. That the con- tract was so drawn that the plaintiff as- sumed only the risk of navigation, and this, the com-t below held, did not include this risk. It is true that the answer does not in so many words aver any mistake; but the facts alleged clearly show a mutual mistake, and point out vwth entire certainty in what the mistake consisted. No one could doubt from the allegations contained in the answer, the ground upon which the reformation of the contract was claimed; and the court could see from the allegations in the answer, if they were proved precisely as made, how the contract was to be re- formed. What more could be needed to an- swer any rule of pleading? We have then a case as made by the answer, where a mutual mistake was made in reducing the parol agreement to writing and in signing the written contract. In such a case equity will conform the written instrument to the parol agreement which it was intended to embody. Story, in his Equity Jurisprudence, section 115, says: "Where an insti-ument is drawn and executed which professes or is intended to carry into execution an agree- ment previously entered into, but which by mistake of the draftsman, either as to fact or to law, does not fulfill that intention, or violates it, equity will correct the mistake so as to produce a conformity to the instru- ment." And this language was taken from the learned opinion of Mr. Justice Washing- ton, in Hunt v. Rousmaniere's Adm'rs, 1 Pet 13. Parties to an agreement may be mistakem as to some material fact connected therewith, which formed the consideration thereof or inducement thereto on the one side or the- other; or they may simply make a mistake- in reducing their agreement to writing. In the former case, before the agreement can be reformed it must be shown that the- mistake is one of fact, and mutual; in the latter case it may be a mistake of the- draftsmen, or one party only, and it may be- a mistake of law or of fact. Equity inter- feres in such a case to compel the parties to execute the agreement which they hav& actually made. Sometimes it happens that parties agree, as in the case above cited from Peters, to carry out their agreement by an instniment which, by their mistake of th& law, will not effectuate their intention. In such a case equity will not reform the ia- srtrument, or substitute another instrument which wiU in. law give effect to their in- tention, because they adopted and agreed upon the pai-ticular instrument, and equity wiU not compel them to execute an agree- ment which they never agreed to execute, and thus make an agreement for them. But in this case the parties intended, according to the answer, to reduce their parol agree- ment to writing, and to embody it in the instrument; and either because they or their draftsmen did not understand the force of language, or because some language which they intended should have been inserted in the instniment was omitted by mistake, their intention was not carried into effect and the instrument failed to embody their agree- ment. It is claimed on the part of the plaintiff that if the mistake occm-red because both parties misunderstood the meaning of the terms "risk of navigation," both parties be- lieving that these terms would include the risk in question, then no reformation of the contract can be had. This claim is not weU founded. When pai-ties have made .an agreement, and there is no allegation of any mistake in it, and in reducing it to writing,, they by mistake, either because they did not understand the meaning of the words used, or their legal effect, failed to embody their intention in the instrument, equity will grant relief by reforming the instrument and compelling the parties to execute and perform their agreement as they made it; and it matters not whether such a mistake be caUed one of law or of fact Oliver v. Mutual Commercial Ins.. Co., 2 Curtis, 277. Hence I conclude that the learned judge at the circuit erred in excluding proof of the alleged mistake, and in holding that the equitable defense could not be litigated at the trial. I therefore favor a reversal of the judgments and a new trial, costs to abide event All concur. GROUNDS FOR EQUITABLE RELIEF. 87 Compromise. (11 Gray, 506.) LEACH et al. v. FOBES. Supreme Judicial Court of Massachusetts. Oct. Term, 1858. One Isaac Fobes died on June 22, 1855, leaving wliat purported to be his last wiU,' whereby he gave the most of his property to his wife, Oline M. Fobes. He also left one daughter by a former marriage, who claimed that tills will had been procured by undue influence. While the proof of the will was pending in the probate court, the daughter and her husband compromised the matter with the stepmother by agreeing that the provisions of the wiU as to the daughter should be set aside, and that the testator's real estate, some shares in a corporation, and other personal property should be di- vided between the widow and daughter, and the agreement was reduced to writing, signed, sealed, and delivered. The plaintiff offered to make certain conveyances pursuant to such agreement, but the defendant refused to make others which she had agi-eed to make, and this suit is brought for a specific per- formance of the agreement. E. Ames, for plaintiffs, defendant. B. Sanford, for BIGELOW, J. The agreement set out in the bill is of a nature which is entitled to the highest favor at the hands of a court of equity. It is the result of a family com- promise of a controversy which h.id arisen between the heir at law and the devisee of a testator, concerning his sanity and free agen- cy at the time of making his last will. Such contracts are not against public poUcy. On the contrary, as they contribute to the peace and harmony of families and to the preven- tion of litigation, they will be supported in equity without an inquiry into the adequacy of the consideration on which they are found- ed. Stapilton v. Stapilton, 1 Atk. 2. Naylor V. Winch, 1 Sim. & Stu. 565. Westby v. Westby, 2 Dru. & AVar. 503. There is nothing in the agreement, which tends to show that its fulfillment and com- plete execution by the defendant would be inequitable or operate with hardship on her. Nor are there any facts disclosed in the bill and answer, which lead to any just inference that there was any omission to disclose ma- terial facts concerning the matters in contro- versy, or that the agreement was entered into under any misapprehension or mistake on the part of the defendant. The finding of the jury distinctly negatives all fraudu- lent or unfair practices by the plaintiffs or either of them in procuring the defendant to execute and deliver the agreement of compro- mise. Averments in the answer, not re- sponsive to the allegations in the bill, or set- ting up new matter in avoidance of the case made by the plaintiffs, must be supported by proof; otherwise, they cannot be regarded in adjudicating on the rights of pai-ties at a hearing upon an issue of fact. It is only when the defendant denies allegations in the bill under oath, that the answer, in the ab- sence of evidence, is deemed to be conclusive. We see no sufficient reason in any of the facts which are duly proved or admitted, to justify us in withholding from the plaintiffs the relief which they seek, on the ground of any want of equity. Nor have we any doubt as to the right of the plaintiffs to ask for the enforcement of this contract by a decree in chancery. The remedy at law is not adequate and complete. The agreement is not one for the transfer of shares in a corporation merely. It is a con- tract also for the conveyance of a certain right or interest in real estate, which is an appropriate subject for specific relief in equi- ty. The court has jurisdiction to decree that the land which is the subject of the agi-ee- ment shall be conveyed to the plaintiffs; and, as it will give relief for this part of the contract, it will also entertain jurisdiction of the whole agreement, and enforce the other stipulations respecting the transfer of shares in tJie incorporated companies named in the bill, instead of turning the paxty over to seek his remedy therefor by an action at law. The more recent authorities are quite de- cisive as to the authority of a court of chan- cery to decree the specific performance of a contract for the transfer of shares in joint stock companies or corporations, in cases in which it appears that the capital stock is fixed at a certain amount and the number of shares is limited. Duncuft v. Albrecht, 12 Sim. 189. Shaw v. Fisher, 2 De Gex & Sm. 11, and 5 De Gex, Macn. & Gord. 596. Cheale v. Kenward, 3 De Gex & Jon. 27. But without deciding whether a suit in equity can be supported for the sole pm-pose of en- forcing a contract for the sale of shares in a corporation, we are of opinion that such an agreement may be enforced in equity when it forms part of a contract for the sale and transfer of real estate, and the suit is brought for the conveyance of the land as well as for the transfer of the shares. Decree ac- cordingly. (See, also, Stapilton v. Stapilton, 1 Atk. 2; McKinley v. Watkins, 18 111. 140; Kerr v. Lucas, 1 Al- len, 879; Blake v. Peck, 11 Vt. 483; Wistar's Appeal, 80 Pa. St. 484.) 88 CASES IN EQUITY. Payment of money made under mistake of law. (40 N. W. Rep. 567, 89 Minn. 461.) ERKENS V. NICOLIN. Supreme Court of Minnesota. Nov. 28, 1888. 1. Money paid under mistake of law cannot be recovered back where the transaction is unaffected by any fraud, trust, confidence, or the like, and both parties knew all the facts. 2. Applied to a case where a party, under igno- rance of the rule of law that distances must yield to natural boundaries called for in the deed, paid money for a quitclaim of property which, under this rule, already belonged to him. Appeal by defendant from an order of the district court for Scott county, Edson, J., presiding, refasing a new trial after a trial by the court. Peck & Brown, for appellant. E. South- worth, for respondent. MITCHELL, J. Action to recover back the money paid by plaintiff to defendant for a quitclaim deed of a piece of land in the vil'age of Jordan. The facts, as disclosed by the evidence, are that defendant platted Into lots a tract of land, of which he was the owner, lying between Water street and Sand creek. As shown upon the plat, the north and south lines of the lots extend from Water street to the creek. The distance marked on the plat gave the length of these lines as 80 feet, but the actual distance from Water street to the creek was 110 feet. One of these lots, and the adjoining 35 feet of another, had been conveyed by defendant, according to the plat, to plaintiff or plaintiff's grantor. Subsequently defendant claimed and stated to plaintiff, in substance, that the lots only extended back 80 feet, according to the dis- tance indicated on the plat, and hence that he still owned the strip of 30 feet next to the creek. Plaintiff knew that defendant's claim was based wholly upon the theory that the distance given on the plat would control, and hence that his claim of title was in fact but expressions of opinion as to the legal ef- fect and construction to be given to the plat. So far as the evidence shows, defend- ant made this claim in good faith, and honest- ly supposed that his deeds of the lots only conveyed 80 feet. Plaintiff took the matter under consideration for nearly a month, and went to the register's office and examined the plat for himself. He then obtained from defendant and wife a quitclaim deed of all the land down to the creek, and paid there- for the money which he now seeks to re- cover. When he paid the money he knew all the facts, and had the same means of knowl- edge of them which defendant had. The transaction was unaffected by any fraud, trust, confidence, or the like. The parties dealt with each other at arm's length. Plain- tiff was not laboring under any mistake of facts. He took the deed and paid his money under a mistake of law as to his antecedent existing legal rights In the property, suppos- ing that, according to the proper legal con- struction of the plat, the lots were only 80 feet deep. However, under the doctrine of Nicolin v. Schneiderhan, 37 Minn. 63, 33 N. W. Rep. 33, since decided by this court, it is now settled that a deed of lots according to this plat would cover all the land down to the creek, under the rule that distances must yield to natural boundaries called for in a deed. We are unable to see that this case differs in principle from Perkins v. Trinka, 30 Minn. 241, 15 N. W. Rep. 115, and Hall v. Wheeler, 37 Minn. 522, 35 N. W. Rep. 377. It is unnecessary to enter into any discus- sion of the question (left in great confusion in the books) when, if ever, relief wiU be granted on the ground of mistake in law alone, or whether there is any difference be- tween mistake of law and ignorance of law, or between ignorance or mistake as to a general rule of law and ignorance or mistake of law as to existing individual rights in the property which is the subject-matter of the contract. We hold that money paid under mistake of law cannot be recovered back where the transaction is unaffected by any fraud, trust, confidence, or the Uke, but both parties acted in good faith, knew aU the facts, and had equal means of knowing them, especially where, as was evidently the fact in this case, the transaction was Intended to remove or settle a question of doubt as to title. It would be impossible to foresee all the consequences which would result from al- lowing parties to avoid their contracts in such cases on tlie mere plea of igno- rance or mistake of law affecting their rights. It would be difficult to tell what titles would stand, or what contracts would be binding, if grantors and grantees were at liberty to set up such a plea. This may seem to work inequitably in the present case, but more mischief will always result from at- tempting to mould the law to what seems natural justice in a particular case than from a steady adherence to general principles. Order reversed. (See, also, 2 Pom. Eq Jur. § 842; 1 Whart. Cont § 198; Bisp. Eq. § 189; Freeman v. Curtis, 51 Me. 140; Haven v. Poster 9 Pick. 112; Bank of U. S. v. Daniel, 13 Pet. 32; Lamborn v. Com'rs, 97 U. S. 181: Pinkham V. Gear^ 8 N H 163; (Clarke v. Dutcher, 9 Cow. 674; Real Estate Inst. v. Linder, 74 Pa. St 371; Gibbons v. Gaunt, 4 Ves. 849; Stevens v. Lynch, 12 East, 38 ) (Examine carefully Northrop v. Graves, 19 Conn. 548.) GROUNDS FOR EQUITABLE RELIEF. 8d (6) MISTAKE OP FACT. ^'^"j^t? W^fo^^^^'^^^'"^ *^^^^ ^^" ^^^^ ^ "^i^*^k« ^« to "tatters of £rf«l o«o T^'J^^^t !^°^ relief (1) the fact must have been a ma- Jf5f^gr;x7^'''.^^?^*'°ll«d *^« ^«*i°^ °f t^e party asking the iiei, (^) the mistake must not have been the result of his negligence; (3) he must announce his purpose to rescind his ^ui.- tract at once on discovering the mistake; and (4) there must exist m the facts and circumstances of the case an imperative demand for equitable interference. re- o-wn con- OS U. S. 55.) GRYMES V. SANDERS et al. Supreme Court of the United States. Oct. Term, 1876. Appeal from the circuit court of the United States for the eastern district of Virginia. Conway Robinson and Mr. Leigh Robinson, for appellant. Edwin L. Stanton and George M. Dallas, for appellees. Mr. Justice SWAYNE. The appellant was the defendant in the court below. The rec- ord discloses no ground for any imputation against him. It was not claimed in the dis- cussion at the bar, nor is it insisted in the printed arguments submitted by the counsel for the appellees, that there was on his part any misrepresentation, intentional or other- wise, or any indirection whatsoever. Nor Tias it been alleged that there was any inten- tional misrepresentation or purpose to de- ceive on the part of others. The case rests entirely upon the ground of mistate. The question presented for our de- termination is whether that mistake was of such a character, and attended with such cir- cumstances, as entitle the appellees to the relief sought by their bill and decreed to them by the court below. Peyton Grymes, the appellant, owned two tracts of land in Orange county, Va., lying about twenty-five miles from Orange court- house. The larger tract was regarded as val- uable, on account of the gold supposed to "be upon it. The two tracts were separated tj intervening gold-bearing lands, which the appellant had sold to others. Catlett applied to him for authority to sell the two tracts, which the appellant still owned. It was given by parol; and the appellant agreed to give, as Catlett's compensation, all he could get for the property above $20,000. Catlett offered to sell to Lanagan. Lanagan was imable to spare the time to visit the proper- ty, but proposed to send Howel Fisher to ■examine it This was assented to; and Cat- lett thereupon wrote to Peyton Grymes, Jr., the son of the appellant, to have a convey- ance ready for Fisher and himself at the court-house upon their arrival. The convey- ance was provided accordingly, and Peyton ■Grymes, Jr., drove them to the lands. They arrived after darli, and stayed aU night at a house on the gold-bearing tract. Fisher in- sisted that he must be back at the court- house in time to take a designated train east the ensuing day. This involved the necessity of an early start the next morning. It was arranged that Peyton Grymes, Jr., should have Peyton Hume, who lived near at hand, meet Fisher on the premises in the morning and show them to him, while Grymes got his team ready for their return to the court-house. Hume met Fisher accord- ingly, and showed him a place where there had been washing for surface-gold, and then took him to an abandoned shaft, which he supposed was on the premises. There Fisher examined the quartz and other debris lying about. But a very few minutes had elapsed when Grymes announced that his team was ready. The party immediately started back to the court-house. Arriving too late for the train, they drove to the house of the appel- lant: and Fisher remained there until one o'clock that night. While Fisher was there, considerable conversation occurred between him and the appellant in relation to the prop- erty; but it does not appear that any thing was said material to either party in this controversy. Fisher proceeded to Philadel- phia, and reported favorably to Lanagan, and subsequently, at his request, to Repplier, who became a party to the negotiation. He represented to both of them that the aban- doned shaft was upon the premises. Cat- lett went to Philadelphia, and there he sold the property to the appellees for $25,000. Fisher was sent to the coiu-t-house to inves- tigate the title. He employed Mr. Williams, a legal gentleman living there, to assist him. A deed was prepared by Mr. Williams, and executed by the appellant on the 21st of March, 1866. On the 7th of April ensuing, the appellees paid over $12,500 of the pur- chase-money, and gave their bond to the ap- pellant for the same amount, payable six months from date, with interest. The deed was placed in the hands of a depositary, to be held as an escrow until the bond should be paid. Catlett, under a power of attorney, received the first installment, paid over to the appellant $10,000, and retained the residue on account of the compensation to which he was entitled under the contract between 90 CASES IN EQUITY. them. The vendees requested Hume to hold possession of the property for them until they should make some other arrangement. He occupied the premises until the following July, when, with their consent, he transfer- red the possession to Gordon. In that month, Lanagan and Kepplier came to see the property. Hume was there washing for gold. He began to do so with the permission of the appellant before the sale, and had con- tinued the work without intermission. The appellees desired to be shown the boundary- lines. Hume said he did not know where they were, and referred them to Johnson. Johnson came. The appellees desired to be taken to the shaft which had been shown to Fisher. Johnson said it was not on the premises. Hume thought it was. Johnson was positive; and he was right. The appel- lees seemed surprised, but said little on the subject. They proceeded to examine the premises within the lines, and, before taking their departure, employed Gordon to explore the property for gold. Subsequently this ar- rangement was abandoned, and they paid him for the time and money he had expend- ed in getting ready for the work. In Septena- ber, they sent Bowman as their agent to make the exploration. On his way. he stop- ped at the court-house, and told the appel- lant that the shaft shown to Fisher as on the land was not on it. The appellant replied instantly, "that there was no shaft on the land he had sold to Repplier and Lanagan, and that he had never represented to any one that there was a shaft on the land, and that he had never authorized any one to make such a representation, nor did he know or have reason to believe that any such rep- resentation had, in fact, been made by any one." It does not appear that his attention had before been called to the subject, or that he was before advised that any mistaie as to the shaft had occm-red. Bowman spent some days upon the land, and made a num- ber of cuts, all of which were shallow. The deepest was only fifteen feet in depth. It was made under the direction of Embry and Johnson, two experienced miners living in the neighborhood. It reached a vein of quartz, but penetrated only a little way into it. They thought the prospect very encour- aging, and urged that the cut should be made deeper. Bowman declined to do anything more, and left the premises. No further explora- tion was ever made. Johnson says, "I know the land well, and know there has been gold found upon it, and a great deal of gold, too,— that is to say, surface-gold,— but it has never been worked for vein-gold. The gold that I refer to was found by the defendant, Grymes, and those that worked under him." He con- sidered Bowman's examination "Imperfect and insuflicient." He had had "twenty-three years' experience in mining for gold." Embry's testimony is to the same effect, both as to the surface-gold and the charac- ter of the examination made by Bowman. The premises lie between the Melville and the Greenwood Mines. Before the war, a bucket of ore, of from three to fomr gallons, taken from the latter mine, yielded $2,400 of gold. This, however, was exceptional. In the spring of 1869 a vein was struck, from forty to fifty feet below the surface, yielding $500 to the ton. Work was stopped by the influx of water. It was to be resumed as soon as an engine, which was ordered, should arrive. Ore at that depth, yielding from eight to ten dollars a ton, wiU pay a profit. Embry says he is well acquainted with the courses of the veins in the Melville and the Greenwood Mines, and that "the Greenwood veins do pass through the land In contro- versy, and some of the Melville veins do also." Speaking of Bowman and his last cut, he says: — "At the place I showed him where to cut he struck a vein, but just cut into the top of it; he did not go down through it, or across it. From the appearance of the vein, I was very certain that he would find gold ore, if he would cut across it and go deep into it, and I told him so at the time; but he said that they had sent for him to return home, and he couldn't stay longer to make the examination, and went off, leaving the cut as it was; and the exploration to this day has never been renewed. I am still sat- isfied, that, whenever a proper examination is made, gold, and a great deal of it, will be found in that vein; for it is the same vein which passes through the Greenwood Mine, which was struck last spring, and yielded $500 to the ton. His examination in other respects, as well as this, was imperfect and insuflicient. I don't think he did any thing like making a proper exploration for gold. I don't think he had more than three or fom* hands, and they were not engaged more than eight or ten days at the utmost." In September, 1866, Repplier Instructed Gatlett to advise the appellant, that, by rea- son of the mistake as to the shaft, the appel- lees demanded the return of the pm-chase- money which had been paid. In the spring of 1867, Lanagan, upon the same ground, made the same demand in person. The ap- pellant replied, that he had parted with the money. He promised to reflect on the sub- ject, and address Lanagan by letter. He did write accordingly, but the appellees have not produced the letter. This bill was filed on the 21st of March, 1868. A mistake as to a matter of fact, to war- rant relief in equity, must be material, and the fact must be such that it animated and controlled the conduct of the party. It must go to the essence of the object in view, and not be merely incidental. The court must be satisfied, that but for the mistake the complainant would not have assumed the obligation from which he seeks to be re- GROUNDS FOR EQUITABLE RELIEF. 91 Ueved. Kerr on Mistake and Fraud, 408; Trigg V. Read, 5 HTimpli. 529; Jennings v. Broughton, 17 Beav. 241; Thompson v. Jack- son, 3 Rand. 507; Harrod's Heirs v. Cowan, Hardin, 553; Hill v. Bush, 19 Barb. (Ark.) 522; Juzan v. Toulmin, 9 Ala. 0G2. Does the case in hand come within this category ? When Fisher made his examination at the shaft, it had been abandoned. This was pri- ma facie proof that it was of no account. It does not appear that he thought of having an analysis made of any of the debris about it, nor that the debris indicated in any wise the presence of gold. He requested Hume to send him specimens from the shafts on the contiguous tracts, and it was done. No such request was made touching the shaft in question, and none were sent. It is nei- ther alleged nor proved that there was a purpose at any time, on the part of the ap- pellees, to work the shaft. The quartz found was certainly not more encouraging than that taken from the last cut made by Bow- man under the advice of Embry and John- son. This cut he refused to deepen, and abandoned. When Lanagan and Repplier were told by Johnson that the shaft was not on the premises, they said nothing about abandoning the contract, and nothing which manifested that they attached any particular consequence to the matter, and certainly nothing which indicated that they regarded^ the shaft as vital to the value of the prop- erty. They proceeded with their examina- tion of the premises as if the discovery had not been made. On his way to Philadelphia, after this visit, Lanagan saw and talked sev- eral -times with Williams, who had prepared the deed. Williams says, "I cannot recollect all that was said in those conversations, but I do know that nothing was said about the shaft, and that he said nothing to produce the impression that he was dissatisfied or disappointed in any respect with the proper- ty after the examination that he had made of it." Lanagan's conversation with Hofise- worth was to the same effect. The subsequent conduct of the appellees shows that the mistake had no effect upon their minds for a considerable period after its discovery, and then it seems to have been rather a pretext than a cause. Mistake, to be available in equity, must not have arisen from negligence, where the means of knowledge were easily accessible. The party complaining must have exercised at least the degree of diligence "which may be fairly expected from a reasonable person." Kerr on Fraud and Mistake, 407. Fisher, the agent of the appellees, who had the deed prepared, was within a few hours' travel of the land when the deed was exe- cuted. He knew the grantor had sold contig- uous lands upon which veins of gold had been found, and that the course and direction of those veins were important to the premises in question. He could easily have taken measures to see and verify the boundary- lines on the ground. He did nothing of the kind. The appellees paid their money with- out even inquiring of any one professing to know where the lines were. The courses and distances specified in the deed show that a surveyor had been employed. Why was he not called upon? The appellants sat quietly in the dark, until the mistake was developed by the light of subsequent events. Full knowledge was witljin their reach all the time, from the beginning of the negotiation until the transaction was closed. It was their own faiUt 1:hat they did not avail them- selves of it. In Shirley v. Davis, 6 Ves. 678, the complainant, being desirous to become a freeholder In Essex, bought a house which he supposed to be in that county. It proved to be in Kent. He was compelled in equity to complete the purchase. The mistake there, as here, was the result of the want of proper diligence. See also Seton v. Slade, 7 Ves. 269; 2 Kent's Com. 485; 1 Story's Eq., sects. 146, 147; Attwood v. Small, 6 CI. & Fin. 338; Jennings v. Broughton, 17 Beav. 234 r Campbell v. Ingilby, 1 De G. & J. 405; Gar- rett V. Burleson, 25 Tex. 44; Warner v. Dan- iels et al., 1 Woodb. & M. 91; Ferson v. San- ger, id. 139; Lamb v. Harris, 8 Ga. 546 j Trigg V. Read, 5 Humph. 529; Haywood v. Cope, 25 Beav. 143. Where a party desires to rescind upon the ground of mistake or fraud, he must, upon the discovery of the facts, at once announce his piu'pose, and adhere to it. If he be si- lent, and continue to treat the property as his own, he will be held to have waived the objection, and ycill be conclusively bound by the contract, as if the mistake or fraud had not occurred. He is not permitted to play fast and loose. Delay and vacillation are fatal to the right which had before subsist- ed. These remarks are peculiarly applicable to speculative property like that here in question, which Is liable to large and con- stant fluctuations In value. Thomas v. Bar- tow, 48 N. Y. 200; Flint v. Woodin, 9 Hare, 622; Jennings v. Broughton, 5 De G., M. & G. 139; Lloyd v. Brewster, 4 Paige, 537;: Saratoga & S. R. B. Co. v. Row, 24 AVend. 74; Mintm-n v. Main, 3 Seld. 220; 7 Rob. Prac, c. 25, sect. 2, p. 432; Campbell v. Fleming, 1 Ad. & El. 41; Sugd. Vend. (14th' ed.) 335; Diman v. Providence, W. & B. R. R. Co., 5 R. I. 130. A com-t of equity is always reluctant to re- scind, unless the parties can be put back In statu quo. If this cannot be done, it will give such relief only where the clearest and strongest equity Imperatively demands it. Here the appellant received the money paid on the contract in entire good faith. He parted with it before he was aware of the claim of the appellees, and cannot conven- iently restore it. The imperfect and abortive exploration made by Bowman has injiu-ed ■92 CASES IN EQUITY. the credit of the property. Times have since changed. There Is less demand for such property, and It has fallen largely in market value. Under the circumstances, the loss ought not to be borne by the appellant. Hunt V. Silk, 5 East, 452; Mintm-n v. Main, 3 Seld. 227; OklU v. Whittaker, 2 Phill. 340; Brisbane v. Dacres, 5 Taunt. 144; Andrew V. Hancock, 1 Brod. & B. 37; Skyring v. ■Greenwood, 4 Barn. & C. 289; Jennings v. Broughton, 5 De G., M. & G. 139. The parties, in dealing with the property in question, stood upon a footing of equality. They judged and acted respectively for them- selves. The contract was deliberately enter- ed into on both sides. The appellant guaran- teed the title, and nothing more. The appel- lees assumed the payment of the purchase- money. They assumed no other liability. There was neither obligation nor liability on ■either side, beyond what was expressly stip- ulated. If the property had proved unex- pectedly to be of inestimable value, the ap- pellant could have no further or other claim. If entirely worthless, the appellees assumed the risk, and must take the consequences. Segur V. Tingley, 11 Conn. 142; Haywood r. Cope, 25 Beav. 140; Jennings v. Broughton, 17 id. 234; Attwood v. Small, 6 CI. & Fin. 497; Marvin v. Bennett, 8 Paige, 321; Thom- as V. Bartow, 48 N. Y. 198; Hunter v. Goudy, 1 Ham. 451; Hall v. Thompson, 1 Sm. & M. 481. The bin, we have shown, cannot be main- tained. In our examination of the case, we have assumed that those who are alleged to have spoken to the agent of the appellees upon the subject of the shaft, before the sale, had the requisite authority from the appellant. Considering this to be as claimed by the appellees, our views are as we have express- ed them. We have not, therefore, found it necessary to consider the question of such authority; and hence have said nothing upon that subject, and nothing as to the aspect the case would present if that question were resolved in the negative. Decree reversed, and case remanded with directions to dismiss the biU. (See, also, M'Ferran v. Taylor, 7 U. S. [3 Craneh,] 270, note; 1 Story, Eq. Jur. § 140, note.) Payments oi money made under mistake of fact. (46 N. W Rep. 364, 44 Minn. 278.) COBB et al. v COLE. Supreme Court of Minnesota. Aug. 19, 1890. 1. A mistake of fact in an accounting between copartners upon dissolution of the partnership afEords ground for relief in equity, irrespective of any express agreement that mistakes should be corrected. 3. In an equitable action, specific issues having been tried before a jury by order of the court, leaving other material issues untried, the court, upon the verdict of the jury, ordered judgment for the defendant. Held, that the plaintiffs were not entitled to a new trial for such error, but only "to a trial of the untried issues, upon motion being made therefor. 3. The court may direct specific issues, in an equitable action, to be tried by a jury. (Syllabus by the Court. ) Appeal by plaintiffs from an order of the district court for Dakota county; Crosby, J., presiding, refusing a new trial. Cole, Bramhall & Morris, for appellants. Hodgson & Schaller, for respondent. DICKINSON, J. It appears from the pleadings that the plaintiffs and thedefeiid- ant hud formerly been engaged in partner- ship business. The partnership was dis- solved by mutual consent, it being agreed, as is alleged in the complaint, that the de- fendant should retire from the firm, and sell his interest therein to them; thatheshould pay to the plaintiffs "such sum as would make bis interest in said firm equal to that of each of the plaintiffs therein, to- wlt, one-third interest, " (except as to a matter which need not be particularly re- ferred to,) and the plaintiffs were to" Day defendant "a sum equal to his one-third interest in the firm business, as the same then appeared upon the books of the firm." The complaint alleges that a statement was made, from thebooks, of the resources and liabilities of the firm and of the inter- est of each partner therein; and that, re- lying upon the correctness of that state- ment, the plaintiffs paid to the defendant the amount thus appearing to be the value of the defendant's interest, it having been mutually agreed that if any errors should be discovered in the statement they should be corrected. The complaint then alleges the existence of errors in the statement, since discovered, which rendered the result of tne computation of the defendant's in- terest in the partnership erroneous to the extent of more than $1,400, as appears from the boolts of the firm, by reason of which mistake the plaintiffs overpaid the defendant in an amount stated, which they seek to recover in this action. The de- fendant put in issue (I) the alleged mis- take; (2) the allegation that he agreed to pay to the plaintiffs such sum as would make his interest equal to that of each of the plaintiffs; (3) the allegation of an agreement that any errors in the state- ment of the accounts should be corrected ; and (4) the defendant alleged that the plaintiffs, having charge of the books of the firm, and representing to the defend- ant the state of the accounts, which they professed to know, offered to pay to the defendant a specified sum for his interest in the partnership business, (excepting as to certain matters,) which sura, being ac- cepted bj' him, was paid. When the cause was called for trial the defendant demand- GROUNDS FOR EQUITABLE RELIEF. 93 ed a trial of all the issues by a jury. The plaintiffs moved the trial of the cause by the court. The court, in terms, denied both motions, and directed tlaat these two issues be submitted to a jury : Fh-st, whether there was any express agreement between the parties that errors wliich miftht be discovered In the statement of the accounts should be corrected; and, second, whether the defendant agreed to pay to the plaintiffs such sum as would malie his interest in the firm equal to that of each of the plaintiffs. The court added that the other issues in the action would be tried by the court or a referee, as the court might determine. A jury was then called, and the trial proceeded before the jury. When the evidence was closed the court instructed the jury as to the two issues submitted to them. The jury re- turned a negative answer to each of the questions put to them. Some time subse- quently the plaintiffs moved the court that the findings of the jury be disregarded as immaterial, and that the court try the case without a jury, as a court case. The defendant at the same time moved the court for judgment in his fjivor " upon the evidence and the findings of the jury." The court denied the motion of the plain- tiffs, but directed judgment to be entered in favor of the defendant "upon the find- ings of the jury," the court considering that the findings of the jury disposed of the whole case. The plaintiffs then moved for a new trial, which was refused, and from that refusal this appeal is taken. We do not understand that judgment was in fact entered. The action was of an equitable nature, properly triable by the court. It involved, aside from the specific issues submitted to the jury, the issue as to whether there had been a mutual mis- take of fact as to the state ol the accounts by reason of which the plaintiffs had been led to pay to the defendant more than, by the terms of the agreement, the latter was entitled to. That would constitute a cause of action, even though there were no- express agreement that it mistakes should be discovered they should be corrected. The attention of the court seems to have been diverted from the alleged mistake, as of itself entitling the plaintiffs to a remedy in equity, by the allegation of an express agreement that mistakes should be cor- rected, upon which the defendant joined issue. The determination of tlie issue as to the express agreement left the issue of mistake in fact still undetermined, and judgment should not have been entered upon the special verdict which did not fully decide the issues in the case. It is obvious from the statementwe havemade of the case that the only issues tried were the two which were submitted to the jury. But the plaintiff's motion for a new trial of the cause was properly refused, for the plaintiffs were only entitled to a trial of the issues as yet untried. The court had! authority, of its own motion, to direct the trial of specific questions by a jury, as it did do, (Gen. St. 1878, c. 66, § 217;) and we find no error justifying a new trial. While it may be probable, from the fact that the court ordered judgment to be entered on the verdict of the jury, that the court would have refused to try the issues which had not been tried, still the order refusing a new trial was noterroneous, and should be aflirmed. The order for judgment was probably erroneous, for the reasons above stated, but that error is not reached by a motion for a new trial. Order affirmed. A motion for rear^umentof this case was denied October 7, 1890. (See, also, 2 Pom. Eq. Jur. § 869; Adams, Eq. § 188; 1 White & T. Lead. Cas. Eq. § 197; Pearson v. Lord, 6 Mass. 84; Waite v. Leggett, 8 Cow. 195; Mayor v. Erben, 38 N. Y. 305; Burr v. Veeder, 3 Wend. 412; Lazell v. Miller, 15 Mass. 208; Bell v. Gardiner, 4 Man. & G. 11.) (As to the power of equity to reform Instruments on the ground of mistake, see Glass v. Hulbert, 102 Mass. 24; Hoppough v. Struble, 60 N. T. 430; Burgin v. Giberson, 26 N. J. Eq. 72 -Miner v. Hess^ 47 111 170- Gerdine v. Menage, 41 Minn. 417, 43 N. W. Rep. 91; Olson v. Erickson, 42 Minn. 440, 44 N. W Rep.317; Rioev, Kelset, 42Minn. 511,44N. W. Rep.535.) rivr ,. t ..1 w (Mistake as to boundaries. Caufleld v. Clark, [Or.] 21 Pac. Rep. 443; Levy v. Terga, [Neb.J 41 N. ^■(Descrip^tion. Knight v. Glasscock, [Ark.] 11 S. W. Rep. 580; Barth v. Deuel, [Colo. Sup.] 19 Pac. ^To secure equitable relief, strong proof of the right must be produced. Giles v. Hunter, [N. CJ 9 S. E. Rep. 549.) 94 CASES IN EQUITY. FRAUD. "Fraud in equity includes all willful or intentional acts, omisswnd, and concealments, which involve a breach of either legal or equitable duty, trust, or confidence, and are injurious to another, or by which an undue or unconscientious advantage over another is ob- tained." 2 Pom. Eq. Jur. § 873. I. ACTUAL FRAUD. (o) FRAUDULENT MISREPRESENTATIONS. If one party states that to be true which he knows to be false, in order to induce the other party to act as he otherwise would not act, such statement respecting a material fact is of course fraudu- lent, and furnishes ground for equitable relief. (30 N. J. Eq. 82.) PERKINS V. PARTRIDGE et al. Court of Chancery of New Jersey. Oct. Term, 1878. Bill for relief. On final hearing, on plead- ings and proofs. B. A. Vail, for complainant, inson, for defendants. S. M. Dicli- THE CHANCELLOR. The complainant seeks to set asiide a conveyance made by him to Charles F. Partridge, on the 1st of August, 1875, whereby he conveyed in fee to the latter his house and lot in Woodbridge township. In the county of Middlesex, for the consideration (including the price of cer- tain household furniture sold with the prop- erty) of $10,000, subject, however, to a mort- gage of $3,000 thereon. For the balance, $7,- 000, of the purchase-money, after deducting the amount of the mortgage, he agreed to receive, and did receive accordingly, a mort- gage of that amount then held by the defend- ant, Charles Partridge, father of the gran- tee, on nineteen hundred and twenty acres of wild land in Brown's tract, in Herkimer county. New York. The ground of the com- plainant's complaint is that he was induced to accept the last-mentioned mortgage through false and fraudulent representations in ref- erence thereto made by the defendants. These representations, according to the bill, were, that the property was a good and safe security for the money the payment of which the mortgage purported to secure; and that the mortgaged land was sold by Charles Partridge to the mortgagor at the rate of $25 an acre. The bill alleges that, in fact, the mortgagor (who was also the obligor in the bond therein mentioned, and the pay ment of which it was made to secure) was a man of no pecuniary responsibiUty; and that the mortgaged premises were not sold by Charles Partridge for any such sum of money as the defendants represented, and were worth only about $2,000. That the complainant was defrauded . by the representations of the defendants, is clear from the evidence. His property was brought to the notice of Charles F. Part ridge by Frederick Reed, a real estate agent, to whom Partridge had applied with a view to obtaining an exchan'ge of some Brooldyii property of his for country property. Reed had the complainant's property also in hand' to find a purchaser for it He mentioned to: each of the pailies the property of the oth- er, with a view to exchange. The com- plainant was not satisfied to exchange at the price at which the Brookdyn property was held. This was communicated by the agent to Partridge, who then said he had made up his mind to retain his Brooklyn property and get a country place in some other way. He then said that "his father (the defend- ant, Charles Partridge,) had a mortgage of $7,000 on land in Herkimer coimty which was good, which he would put in in ex- change; that his father would let him have It to use, but not for a cent less than the face of it; and that he would have to pay his father for it." After the contract was signed, and on the day when the deed was delivered and before the papers were ex- changed, the complainant and Charles F. Partridge and his father being then at the lawyer's ofiice to exchange the papers. Reed, who was there also, sought and obtained a private interview with Charles Partridge, the father (who seems to have interested GROUNDS FOR EQUITABLE RELIEF. 9b bimself In getting the contract drawn and signed), and ttien said to him that the com- plainant, as he, Reed, had learned, knew nothing about the $7,000 mortgage, had had no time to search the title or investigate the matter at all, and woiild have to rely en- tirely on what he. Partridge, said about it. Partridge then said that it was a perfectly good, first-class mortgage; that the parties were good, and that the interest had always been paid promptly; and that he had sold the liind for $25 an acre, and would not sell any more of the tract for less than $30 an acre. Reed thereupon informed the com- plainant of the purport of the conversation, and the deed was then delivered and the mortgage accepted. The complainant testi- fies that Charles Partridge came to see his property befi -e the contract was entered in- to, and then mentioned the mortgage to him, saying that it was a good mortgage, and that he had sold tlie land on which it was for $25 &n acre. The complainant testifies that Charles F. Partridge told him, both before and after the conveyance had been made, that he would have to pay his father $7,000 for the mortgage; that $6,999 would not buy it. The complainant's wife corroborates him in this statement as to one occasion, she having been present when Charles F. Partridge said substantially the same thing to him. The fact appears to be that Chai-les Partridge not only did not sell the mortgaged premises for $25 an acre, but did not sell them at all. He swears, indeed, that he sold them to the mortgagor, Thomas H. Phillips, and the deed to the latter probably - peal to the supreme court, and time has been al- lowed in which to perfect it, is not an error upon such appeal to the supreme court. Appeal from county court, Boulder county. The complaint sots out that on the sixth day of October, 1881, William Stimson leased to the defendants in error the S. W. % of sec- tion 21, in township 1, range 70 west, in said county, for the period of four years and six months, for the purpose of mining for coal, under the conditions of said lease; that they had no knowledge of the location of the boundary lines of said tract at the time of the leasing, and that they so informed Stim- son, the defendant in the case; that they re- quested Stimson to go with them and show them the boundary lines; that the defendant, pretending to know the lines bounding said land, and their exact locality, went then and there with plaintiffs, and showed and pointed out to them what he said was the leased land, and the boundary lines thereof, es- pecially the north and south lines thereof; that plaintiffs not then knowing the lines bounding said land, nor the exact location thereof, and relying upon what the defendant then and there pointed out to them as the leased land, and the lines thereof, then and there proceeded to work on the land pointed out, and sank shafts for mining coal thereon, and made sundry improvements thereon,— made buildings, laid tracks, etc.; that all the said work was done and labor performed and improvements made on the land pointed out by defendant to plaintiffs as the leased land, and that plaintiffs, relying upon the statements of defendant as aforesaid, and not knowing otherwise, believed they were performing the work, and making all the im- provements on the land they had so leased, which they did by direction of the defend- ant; that while they were working on the said land Stimson was frequently present, and told the plaintiffs they were on his land, and received royalty from ore taken there- from; that about April 10, 1882, they were notified to quit mining on said ground by the Marshall (3oal Mining Company; that the land belonged to said company; that none of the said improvements were put on said leased land; and that they were compelled to quit work and mining thereon; that the improvements made by them were worth $2,- 000; that Stimson falsely represented to- them other and different hues than the true boundaries of said premises, and showed and pointed out to them other and different lands than the lands leased them, and thereby de- ceived them, and damaged them, in the sum of $2,000. Issue joined, and trial to the com-t. Motion by defendant's counsel for judgment on the pleadings, and evidence overruled. Judgment for the plaintiffs in the sum of $2,000, and costs. Wright & Grifan, for appellant, ley, for appellees. G. Berk- ELBERT, J. The law holds a contracting party liable as for fraud on his express rep- resentations concerning facts material to the GROUNDS FOR EQUITABLE RELIEF. 97 treaty, the truth of which he assumes to know, and the truth of which is not known to the other contracting pai-ty, where the representations were false, and the other party, relying upon them, has been misled to his injury. Upon such representations so made the conti-acting party to whom they are made has a right to rely, nor is there any duty of investigation cast upon him. In such a case the law holds a partj- bound to know the truth of his representations. Big- I'low, Fraud, 57, 60, 63, 67, 68, 87; Kerr, Fraud & M. 54 et seq.; 3 Wait, Act. & Dof. 436. This is the law of this case, and, on the evidence, warranted the judgment of the com-t below. The objection was made below, and is re- newed here, that the complaint does not state sufficient facts to constitute a cause of ac- tion. Two points are made: (1) That the complaint does not allege that the defendant Imew the representations to be false; (2) that it does not allege intent to defraud. It is not necessary, in order to constitute a fraud, that the party who makes a false representation should know it to be false. He who malies a representation as of his own knowledge, not knowing whether it be true or false, and it is in fact untrue, is guilty of fraud as much as if he knew it to be untrue. In such a case he acts to his own knowledge falsely, and the law imputes a fraudulent intent. Kerr, Fraud & M. 54 et seq., and cases cited; Blgelow, Fraud, 63, 84, 453; 3 Wait, Act. & Def. 438 et seq.; 2 Estee, Pr. 394 et seq. "Fraud" is a term which the law applies to certain facts, and where, upon the facts, the law adjudges fraud, it is not essential that the complaint should, in terms, allege it. It is sufficient if the facts stated amount to a case of fraud. Kerr, Fraud & M. 366 et seq., and cases cited; 2 Estee, PI. 423. The complaint in this case states a substantial cause of ac- tion, and is fully supported by the evidence. The action of the county court in refusing to allow the appellant to appeal to the dis- trict court after he had given notice of an ap- peal to this court, and time had been given in which to perfect it, cannot be assigned as error on this record. If it was an error, it was error not before, but after, the final judgment from which this appeal is taken. The judgment of the court below is af- firmed. [Note from 10 Pac. Rep. 292.] A contract secured by false and fraudulent reDresentations cannot be enforced. Mills v. Collins, 67 Iowa, 164, 25 N. W. Rep. 109. A court of equity will decree a rescission of a contract obtained by the fraudulent represen- tations or conduct of one of the parties thereto, on the complaint of the other, when it satis- factorily appears that the party seeking the rescission has been misled in regard to a ma- terial matter by such representation or conduct, to his injury or prejudice. But when the facts are known to both parties, and each acts on his own judgment, the court will not rescind the contract because it may or does turn out that j CAS.EQ. — 7 they, or either of them, were mistaken as tcy the legal effect of the facts, or the rights or ob- ligations of the parties thereunder, and particu- larly when such mistake can in no way injuri- ously affect the right of the party complaining" under the contract, or prevent him from obtain- ing and receiving all the benefit contemplated^ by It, and to which he is entitled under it. See- ley V. Reed, 25 Fed. Rep. 3G1. When, by false representations or misrep- resentations, a fraud has been committed, and by it the complainant has been injured, the gen- eral principles of equity jurisprudence afford a remedy. Singer Manuf'g Co. v. Yarger, 12r Fed. Rep. 487. See Chandler v. Childs, 4? Mich. 128, 3 N. W. Rep. 297; Cavender v, Roberson, 33 Kan. 626, 7 Pac. Rep. 152. When no damage, present or prospective, cam result from a fraud practiced, or false repre- sentations or misrepresentation made, a court, of equity will not entertain a petition for relief, Dunn V. Remington, 9 Neb. 82, 2 N. W. Rep, A person is not at liberty to make positive assertions about facts material to a transactioro unless he knows them to be true; and if s- statement so made is in fact false, the as- sertor cannot relieve himself from the imputa- tion of fraud by pleading ignorance, but must respond in damages to any one who has sus- tained loss by acting in reasonable reliance upore such assertion. Lynch v. Mercantile Trust Co., 18 Fed. Rep. 480. Equity will not relieve a,gainst a misrepre- sentation, unless it be of some material matter constituting some motive to the contract, some- thing in regard to which reliance is placed by one party on the other, and by which he wa& actually misled, and not merely a matter of opinion, open to the inquiry and examination" of both parties. Buckner v. Street, 15 Fed, Rep. 365. False representations may be a ground for relief, though the person making them believes- them true, if the person to whom they were made relied upon them, and was induced there- by to enter into the contract. Seeberger v. Ho- bert, 55 Iowa, 756, 8 N. W. Rep. 482. Fraudulent representations or misrepresenta- tions are not ground for relief, where they are- immaterial, even though they be relied upon. Hall V. Johnson, 41 Mich. 286, 2 N. W. Rejp', 55. See, to same effect. Lynch v. Mercantile- Trust Co., 18 Fed. Rep. 486; Seeberger v. Ho- bert, 55 Iowa, 756, 8 N. W. Rep. 482. In fraudulent representation or misrepresenta- tion the injured parties may obtain relief, even« though they did not suppose every statement: made to them literally true. Heineman v. Stei- ger, 54 Mich. 232, 19 N. W. Rep. 965. Where the vendor honestly expresses an in- correct opinion as to the amount, quality, an(f value of the goods he disposes of in a sale of" his business and good-will thereof, and the- purchaser sees or knows the property, or has am opportunity to know it, no action for false rep- resentations will lie. Collins v. Jackson, 54- Mich. 186, 19 N. W. Rep. 947. Mere "dealing talk" in the sale of goods, un- less accompanied by some artifice to deceive- the purchaser or throw him off his guard, or some concealment of intrinsic defects not easily detected by ordinary care and diliRence, does not amount to misrepresentation. Reynolds v- Palmer, 21 Fed. Rep. 433. False statements made at the time of thcr sale by the vendor of chattels, with the fraud- ulent intent to induce the purchaser to accept an inferior article as a superior one, or to giver an exorbitant and unjust price therefor, wilB render such purchase voidable; but such false- statement must be of some matter affecting the- character, quantity, quality, value, or title of such chattel. Bank v. Yocum, 11 Neb. 328, 9* N. W. Rep. 84. A statement recklessly made, without knowl- edge of its truth, is a false statement knowing- «8 CASES IN" EQUITY. Sy made, within the settled rule. Cooper v. :Schlesinger, 111 U. S. 148, 4 Sup. Ct. Rep. 360. Whether or not omission to communicate "known facts will amount to fraudulent repre- ;sentation depends upon the circumstances of the particular case, and the relations of the f)arties. Britton v. Brewster, 2 Fed. Rep. 160. Where a vendor conceals a material fact, which is substantially the consideration of the contract, and which is peculiarly within his knowledge, it is fraudulent misrepresentation. Bowling V. Lawrence, 58 Wis. 282, 16 N. W. Rep. 5.52. Evidence of fraudulent representations must bfe clear and convincing. Wiekham v. More- house, 16 Fed. Rep. 324. Where a man sells a business, and the con- tract of sale contained a clause including all right to business done by certain agents, evi- dence that the seller was willing to engage in the same business with such agents is not proof of fraud in making the contract. Taylor v. Saurman, 110 Pa. St. 3, 1 Atl. Rep. 40. It was recently held by the supreme court oif Indiana, in the case of Cook y. Churchman, 104 Ind. 141, 3 N. E. Rep. 759, that where money- is obtained under a contract, any fraudulent representations employed by a party thereto as a means of inducing the loan to be made, if otherwise proper, are not to be excluded be- cause of the statute of frauds; also that where parol representations are made regarding the credit and ability of a third person, with the in- tent that such third person shall obtain money or credit thereon, the statute of fraud applies, and no action thereon can be maintained, al- though the party making the representations may have entered into a conspiracy with such person with the expectation of obtaining some incidental benefit for himself. (See, also, Knappen v. Freeman, 47 Minn. 491, 50 N. W. Rep. 533; Stone v. Covell, 89 Mich. 359; Beebe v. Knapp, 28 Mich. 52; Bennett v. Judson, 21 N. Y. 238.) Where, to influence another to act, one party makes a statement re- specting a material fact, the truth or falsity of -which is peculiarly "writhin his own kno-wledge, such statement, if untrue, is fraudu- lent and ground for equitable relief, even though the party be- lieved the statement to be true at the time he made it. (19 Minn. 32, Gil. 14.) KIEFER V. ROCJERS et al. Supreme Court of Minnesota. Jan., 1872. 1. R. sold real estate to K., representing that there was but one mortgage on It, when in fact there were two. He was ignorant of the sSeotad mortgage, but his ignorance arose from his gross neglect to read a mortgage executed by him, in which the real estate had bfeen inserted. Belox, a fraud. [Faribault v. Sater, 13 Minn. 223, Gil. 210. Brooks v. Hamilton, 15 Minn. 26, Gil. 10.] 2. Although incumbrances on real estate may b6 of record, a purchaser has a right to rely on thfe vendor's representations as to the incum- brances. [Kelly V. Rogers, 21 Minn. 146. Port- .er.v. Fletcher, 25 Minn. 493.] 3. An action by a grantee to rescind on the rgriiund of fraud may be maintained without a tpr^vious offer to reconvey. [Faribault v. Sater, 13 Minn. 223, Gil. 210. Brooks v. Hamilton, -15 Minn. 26, Gil. 10.] 4. In such case a tender by plaintiff of a quit- "daiia deed with a nominal consideration, and •with covenants against the acts of plaintiff, is ;«iiffici6nt. 5. A refusal of permission to amend the an- swer at the trial held proper. 6. In an action to rescind for fraud, property the title Of which is in defendant's wife may be .charged with so much of the proceeds of plain- tiff's property given in exchange for that con- veyed to him, as was used in purchasing the jproperty so vested in her. Appeal by defendants from a judgment of thS district court, Riimsey county. The action was to rescind a transaction in which the defendant GrifC H. sold and con- veyed to ijlaintifC certain real estate in Wash- ington county, and in consideration thereof plaintiff transferred to defendant certain leasehold property in Ramsey county and a stock of goods, to recover the stock of goods, und have a lien decreed him upon real estate of Mrs. Rogers, paid for in part by defend- ant's transfer of said leasehold interest. The property conveyed to plaintiff had at the time two mortgages upon it, — one for $4,- 000, and one for .¥2,250. The defendant GrifT in the negotiation represented that the $4,- 000 mortgage was the only incumbrance on the real estate, and against this he agreed to indemnify the plaintiff. The plaintiff re- lied on this representation, received defend- ants' conveyance of the real estate, with a bond to indemnify him against the $4,000 mortgage, and transferred to defendant Grift a stock of goods and certain leasehold prop- erty held by him in Ramsey county. Th6 defendant, though he executed the $2,250 moi-tgage, was actually ignorant that the real estate in question was included in it, he having executed under the circumstances stated in the opinion. He afterwards ex- changed the leasehold property, with real estate of the defendant Mrs. Rogers, for oth- er real estate, which was conveyed to her. The court below, after a trial without a jury, rendered judgment canceling the con- veyances and transfers between the parties, and giving plaintiff a lien for the value of the leasehold property upon the said real estate so conveyed to Mi-s. Rogers, and for the recovei-y from Griff of the value of the stock of goods. H. H. Finley and Davis & O'Brien, for ap- pellants. John B. & W. H. Sanborn, for re- spondent. RIPLEY, C. J. The court below finds that the plaintiff bought the property in ques- tion, relying upon the representation of the GROUNDS FOR EQUITABLE RELIEF. 99 'defendant that there was no other incum- brance thereof than the mortgage for $4,000. Although the defendant was then ignorant of the existence of the incumbrance thereon of the mortgage for $2,250, there is no doubt but tliat, under the circumstances, his repre- sentation must be treated as fraudulent, — as much so as if he had told a willful false- hood. The court finds that said record incum- brance arose as foUows: One Colter had sold the defendant the property in question, subject to said mortgage for $4,000, and for part of the purchase money, viz., said $2,- .250, defendant had agreed to give a mort- 1 gage on other land. Before its execution, ■ however, Colter told defendant he should ! want other property put in the mortgage, i and defendant fold him he might put any [ ■other property in it, whereupon said Colter caused the property in question to be insert- ed therein, and the mortgage to be presented to defendant, who executed without reading it, and it was at once recorded. BefeQdanfs ignorance of the existence of isnch incumbrance was, tlierefore, the result of gross negligence; and, in the view of a -court of equity, a false representation, found- ed on mistake resulting from such negli- gence, is a fraud. Smith v. Richards, 13 Pet. 26, 38. It is said, however, that this second mort- gage was, in point of fact, no incumbrance on the property in question, because neither the defendant nor any one else ever directed the couveyancer to insert the description of the property in question therein, and because the uncontradicted testimony of defendant 4ind Colter goes to show that none of the par- ties intended to incumber the land in ques- tion. It is not necessary to consider the ques- tion as to what the right of plaintiff in this case would have been had the property been so inserted by the scrivener's mistalie, nei- ther defendant nor Colter intending that he rshould do so; for the evidence, in our judg- ment, by no means answers the defendant's •description of it. The uncontradicted testi- mony of Colter, for example, is that he "gave Hoffman (the scrivener) instruction to Insert the description of the land sold plaintiff in the $2,250 mortgage." The court below finds that plaintiff wholly relied upon these representations aforesaid of defendant in concluding said purchase, and would not have bought the propei-ty had he known of the existence of said incum- "brance. The defendant contends that as the records were open to plaintiff, and he had an oppor- tunity to examine the title before purchas- ing, it was his duty to do so, and, not hav- ing done so, the rule caveat emptor apphes. If the defendant, instead of positively as- serting that there was no other incum.- brance on the property, had hiformed the plaintiff of the facts found by the court, it is beyond doubt that plaintiff would have re- fused to buy until he had searched the rec- ords and ascertained that the mortgage did not cover the farm he proposed tO' buy. But since the defendant chose to substitute his own positive, unqualified assertion that no such mortgage existed. It does not lie in his mouth to say that it was the plaintiff's own folly to believe him, instead of going to Stillwater to ascertain whether or not he was stating the truth. The purchaser con- fided in the statement of the defendant, upon the assumption that * the owner knew his own property, and truly represented it, (Smith V. Richards, supra,) and nothing could be more legitimate than such an assumption, for there is certainly no presumption in favor of ignorance and dishonesty. Vide Campbell V. Whlttingham, 5 X J. Marsh. 96. It is further objected, however, that to entitle the plaintiff to a rescission the tender made by him at the trial of a reconveyance should have been made before the com- mencement of the action, and kept good by a deposit of the deed with the court. Since, however, the plaintiff's right to rescind springs out of the defendant's fraud, no such ten- der was a condition precedent to his right to apply to a court of equity for the enforce- ment of that I'ight. A bill to rescind a contract on the ground of fraud, it is held, may be maintained without a previous offer to restore what the plaintiff received. Mar- tin V. Martin, 35 Ala. 560; Garner v. Lev- erett, 32 Ala. 410. It is further objected that the deed ten- dered at the hearing was in itself defective and Insufficient as the basis of a decree for the relief prayed. It is a quitclaim, with covenant against incumbrances arising by, from, or under him, and warranty against all lawful claims so arising. It is said that this, if accepted, would not leave defendant's title as it was prior to the conveyance from de- fendant to plaintiff. It is not stated, and we cannot see, why it would not. The consideration stated in the deed is $500. This, it is said, is insufficient; but as this is not a sale and conveyance by plain- tiff to defendant, but merely to revest the legal title in defendant of land in which, as he avoids the contract for fraud, the plain- tiff claims no beneficial interest, a nominal consideration would have been enough. It is also objected that the lands are there- in described as in Ramsey county, whereas they are in Washington county. This is im- material: the description of the land by metes and bounds locates it with such ex- actness that the error in the name of the county is patent in the face of the deed, and could not mislead. The deed, as copied in the paper book, does not appear to have been stamped. The court below, however, finds that it was duly stamped, and as the stamp is no part of the instrument, the fact 100 CASES IN" EQUITY. that what purparts to be a copy of the deed does not show that the deed was stamped, does not tend to prove that the finding of the coiu"t is against the evidence. As to these last two objections, however, it is also sufficient to say that they were not made at the trial. The defendant's only objection to the ten- der, then, was that it came too late, and that the consideration was too small. The court below finds, however, that before the commencement of the action defendant of- fered to indemnify plaintiff against said in- cumbrance, and that plaintiff declined; and defendant also insists (though the court does not so find) that defendant also offered to procure a release of said incumbrance. Tak- ing it to be proved that he did, then de- fendant contends that, as equity always con- siders that as done which ought to be done, it was the same to the plaintiff that the release was offered to be procured before suit brought, as if it had been handed to him at the time he bought the land, or as if the incumbrance had never existed at all. On this theory we do not see the impor- tance of any offer to produce a release be- fore suit brought. If defendant ought to have made an offer to procure a release, — and equity always considers that as done which ought to be done,— there would seem to be as much reason for considering the offer as made, though it were not, as for considering the release as actually executed. The defendant's theory, it is moreover to be observed, requires this release to be con- sidered as executed, in the face of the find- ing of the court below that though Colter at one time before the commencement of the suit promised defendant to release, yet that he afterwards refused to do so, and, did not in fact execute any such release. , It is enough, however, with reference to this ground of defense, that it proceeds upon an entire misapplication of the maxim in nsidered as well settled in this state, by the cases above cited, that an action for damages caused by misrepresentation cannot ordinarily be maintained, without proof of actual fraud, or such gi-oss negli- gence as amounts to fraud. When, however, a person claims the benefit of a contract Inta which he has induced another to enter by means of misrepresentations, however hon- estly made, the same principles cannot be applied. It is then only necessary to prove that the representation was material and substantial, affecting the identity, value or character of the subject-matter of the con- tract, that It was false, that the other party had a right to rely upon it, and that he was Induced by it to make the contract. In order to entitle him to relief either by rescission of the contract or by recoupment In a suit brought to enforce it In this case it is fully proved that the 104 CASES m EQUITY. representations made, materially affected the identity and value of the property sold, that they were made for the purpose of inducing Mulvey to make the purchase, that he be- lieved them to be true and therefore bought the property, which he would not otherwise have done, and that they were false. But (the testimony also fuUy proves that King was guilty neither of fraud nor of gross neg- ligence in making those representations, his mistake having been occasioned by that of a surveyor in previously establishing the boundary line. The facts thus proved bring the case with- in the principles above stated and give a right of recoupment in an action for the balance of the purchase money, to the ex- tent of the deficiency in the value of the property purchased. The rights of the pur- chaser do not rest upon the ground of fraud, actual or constructive, but that, to the ex- tent of the difference in value between the property as it was represented to be, and the property conveyed, there is no cpnsideration for his promise. He cannot, upon any prin- ■ciple of law or equity, be compelled to pay tor what the vendor did not own, and could not convey. The maxim caveat emptor does ■not apply to such representations as were made in this case, upon wliich the purchaser under the circumstances had a right to rely, and in reference to which he was guilty of tio negligence. Judgments of the district court and court of common pleas reversed, and cause re- manded. (77 Pa. St. 50.) HOLMES'S APPEAL. Supreme Court of Pennsylvania. Oct. 26, 1874. Before AGNEW, C. J., and SHAJRSWOOD and MEECUE, JJ. Bayne & Magee, for appellant. T. 0. La- zear, for appellee. PEE CUEIAM. When the treaty between the parties for the exchange was in prog- ress, both Heckler and his wife were anxious to know whether ague and fever existed in the vicinity of the Indiana farm, and in- quired of Holmes as to the fact. He repre- sented that none existed, and that the health of that locality was good in this respect. The facts show clearly that this was a misrepresentation on his part It is evident Heckler and his wife made the absence of that disease a material ground for accepting the offer of .Holmes. Now clearly, equity, under such circumstances, wiU not compel a man thus misled to perform specifically a contract of exchange at the risk of his health and that of his family. Even had there been no misrepresentation on Holmes's part, it would be doubtful whether a chancellor would compel specific performance against one who was ignorant of the fact; but when this conduct of the plaintiff is added, there can be no hesitation. The other question does not necessarily arise under this view of the case. Decree afilrmed with costs, to be paid by the appellant, and the appeal dis- missed. (See, also, 3 Pom. Eq. Jur. § 889; Pom. Spec. Perf. Cont. §§ 217, 318; Fry, Spec. Perf. § 454: Veth v. Gierth, 93 Mo. 97, 4 S. W. Rep. 432; Dunn v. White, 63 Mo. 182; Isaacs v. Skrainka, (Mo. Sup.) 8 S. "W. Rep. 437.) (6) FRAUDULENT CONCEALMENT. If a party conceals some material fact in a transaction which it is his duty to disclose, such concealment amounts to actual fraud, and furnishes ground for equitable relief. (14 Atl. Rep. 574.) COLLINS v. COOLEY et al. "Court of Chancery of New Jersey. June 16, 1888. Bill to foreclose a chattel mortgage. Carroll Kobbins, for complainant, Eliza- tieth Collins. James Buchanan, for defend- :ant Wentz. G. D. W. Vroom, for defend- .ants Lockwood & Co. Edwin E. Walker, for defendants Harbison & Co. BIED, v. C. This is a contest between certain chattel mortgagees and the vendor of a portion of the goods mortgaged. The defendants Harbison & Co. allege that ■Cooley, the mortgagor, obtained the goods in- volved, of them, by fraud, and that, as against the mortgagees, who hold the goods under mortgages given to secure moneys which had been previously loaned, they (Har- bison & Co.) can hold them under tlieir re- plevin. Was any fraud perpetrated by Coo- ley at the time of the sale? This is the only question. Cooley had been in business in Brooklyn, and was about going to Hagers- town, Md., when he called on Harbison & Co. for additional credit, (having dealt with them for years on credit.) He selected about $1,300 of goods, and then Harbison called his attention to their long-continued friend- ship and business intercourse, and also to the fact that his efforts in Brooklyn had not been a success, and said: "Now, I would like to know how you stand?" Whether, in his reply to this inquiiy, Cooley said that he would take $13,000 or $14,000 worth of GROUNDS FOR EQUITABLE RELIEF. 105 goods to Maryland, as he insists, or $18,000, as Harbison says, is not so material as an- other point raised by the inquiry. Oooley said his indebtedness was $4,000 to $5,000; but he says that, whatever the amount of the indebtedness which he named was, it uid not include his individual indebtedness, but only his Indebtedness on merchandise ac- count. He makes a distinction. Now, at this very time, he was indebted to the chat- tel mortgagees, although they did not take their mortgages tUl long after, in the sum of $9,000 and over, for money borrowed. This money he had put in his business as a merchant, and had given the lender credit for it on his boolis. He says he did not in- clude the amount of this indebtedness in his statement to Harbison because the latter did not ask for it; and it is urged that he was not bound to disclose this fact. Surely, the complainant's counsel must be wrong in this. If one business man, a vendor, asks his ven- dee for a statement of his financial condition, or asks him how he stands, it cannot possi- bly be that he answers fairly and fuUy if he only speaks ■with reference to the business he proposes to promote by the particular purchase. This case shows that, if such par- tial statements were to be regarded as suffi- cient, most extraordinary wrongs would be inflicted on honest business men. I think Harbison was entitled to full disclosure of the situation, and that the concealment, by Cooley, of his indebtedness for money bor- rowed, was a fraud. It was his duty to tell the whole truth. See Bigelow, Fraud, 503, 504. The following cases aid in reaching a just conclusion: Stoutenburgh v. Konkle, 15 N. J. Eq. 33; Hicks v. CampbeU, 19 N. J. Eq. 183; Ensign v. Hoffleld, (Pa. Sup.) 4 Atl. Rep. 189; Robinson v. Levi, 81 Ala, 134, 1 South. Rep. 534; Doane v. Lockwood, 115 m. 490, 4 N. E. Rep. 500; Atwood v. Dear- bom, 1 Allen, 483. The cases in which the right of the vendor to recover the goods be- cause of^raud have been considered, togeth- er with the right to pursue them when the vendee has parted with them wholly or par- tially, all hold that he is entitled to them as against every one who is not a bona fide purchaser for value. See the cases above cited. I find the value of the goods sold by the re- ceiver, which had been replevied by Harbi- son & Co., is $499.79. This amount the re- ceiver should pay to Harbison & Co., and also their costs, out of the funds in his hands. I will so advise. Cases in Law. (Insolvency. Fitzsimmons v. Joslin, 21 Vt. 130, note; Lee v. Simmons, [Wis.] 27 N. W. Rep. 174, note; Oswego Starch Factory v. Lendrum, [Iowa,] 10 N. W. Rep. 900; Donaldsoa v. Parwell, 93 U. S. ■631.) (Insurance. Burritt v. Saratoga, etc., Ins. Co., 5 Hill, 189; New York Bowery Ins. Co. v. N. T. Fire Ins. Co., 17 Wend. 359 ; Baker v. Humphrey, 101 U. S. 503 ; 1 May, Ins. § 102, note.) (Sale of chattels. Paddock v. Strobridge, 39 Vt. 471, note.) (Silence. Parrish v. Thurston, 87 Ind. 437.) (As to what one Is bound to disclose. Bench v. Sheldon, 14 Barb. 66.) (See, also, 2 Pom. Eq. Jur. § 900; 1 Story, Eq. Jur. § 207; Stoutenbourgh v. Konkle, 15 N. J. Eq,. 38; DureU v. Haley, 1 Paige, 493.) II. CONSTRUCTIVE FRAUD. Corrupt conduct is not an essential element in constructive fraud. Equity declares it to exist in numerous transactions, sucli as con- tracts in restraint of trade, in restraint of marriage, and many others as against public policy, and also transactions between persons standing in confidential or fiduciary relations. (79 111. 346.) CEAFT et al. v. McCONOUGHY. Supreme Court of Illinois. Sept. Term, 1875. M. D. Hathaway, WiUiam Barge, and Sher- wood Dixon, for plaintifCs in error. James K. Edsail, for defendant in en-or. CRAIG, J. This was a bill in equity, brought by James O. McConoughy against Richard C. Craft and others, for an account and distribution of the profits of an aUeged partnership claimed to have existed under a written contract, to the following effect: "Articles of agreement made and entered into this 20th day of April, A. D. 18G9, be- tween the following persons, viz.: E. P. Sex- ton, Dr. John McConougliy, O. B. Boyce, R. C. Craft and WiUiam Wiswell, for the pm-- pose of systematically pui-suing the gi-ain trade in Rochelle, and for mutual protection against losses. The said parties covenant and agree to enter into the grain ti-ade for one year from this date, upon the following 106 CASES m EQUITY. terms: Our several grain houses shall be put into the business upon the basis of twen- ty-seven shares as the aggregate, divided as follows: 0. B. Boyee and K. O. Oraft shall be entitled to nine shares, E. P. Sexton to six shares, J. McConoughy to six shares, and WiUiam WisweU to six shares. Each sep- arate firm shall conduct their own houses as heretofore, as though there was no part- nership in appearance, iieep their own ac- counts, pay their own expenses, ship their own grain, and furnish their owa funds to do business with; a list of aU the grain pur- chased by each firm to be made every day and handed to the general bookkeeper, with amounts paid for the same; also every car shipped to be reported at the time, and ev- ery account of sale to be handed in to said bookkeeper, as weU as all sales made at the warehouse from time to time. It shall be the duty of the booljkeeper to make a faith- ful record of all the grain bought by each party, the amount of money paid for the same, and place to his debit, and also to credit him with all account of sales, as well as any transactions made at the warehouse, and, at the end of every month, each indi- vidual's account to be balanced, showing the profits or loss, which amount is to be di- vided pro rata, according to the number of shares held by each party. It is further agreed, that there shall be no grain held for advance in price, or for any other cause, by any of the above named parties, "Prices and grades to be fixed from time to time, as convenient, and each one to abide by them. AU grain taken in store shall be charged one aiid a half cents per bushel, monthly; but if sold inside of thirty days, no storage to be asked. No grain to be shipped by any party at less than two cents per bushel." In November following the execution of the agreement, John McConoughy died, and it is the theory of the bill that the com- plainant, who was his son, by mutual con- sent came in and took his place imder the contract It is set up in the answer, that the contract was made in restraint of trade, and is against public policy, and void; that all tr.insactions with complainant or with his fatlier and de- fendants, under or in pursuance of it, and under the alleged arrangement with com- plainant after the death of his father, were in restraint of trade, against public policy, and void. Two questions arise upon the record: First, whether the contract set out in the bUl is void. Second, if illegal and void, will a court of equity, after it has been executed, require one of the parties to account to an- other for a portion of the gains arising un- der the contract? Prior to and up to the time of the execu- tion of the agreement set out in the bill, the four parties were engaged in the grain busi- ness in the town of BocheUe, each one on his^ own accoimt, and in competition with each other, but, after the agreement was executed, all competition ceased. All the warehouses in the city, and every lot suitable to erect a warehouse upon, were controlled by the com- bination. Some were purchased and others leased, so that the combination formed ef- fectually excluded aU opposition in the pur- chase, sale, storage and shipment of grain in that market. Secret meetings were held in the night- time by the parties to the contract, at which the price to be paid for grain was agreed upon, rates for storage and shipment fixed, in order that the public should be kept in ignorance of the plans and operations of this illegal combination. To the public the four houses were heW out as competing firms for business. Se- cretly they had conspired together, and wer«- working in a common cause, in the sole in- terest of each other. The language used in the contract itself leaves no room for doubt as to the purpose for which the agreement was entered into, as a few extracts will show: "Each separate firm shall conduct their own business as here- tofore, as though there was no partnership- in appearance, keep their accounts, pay their own expenses, ship their own grain, and furnish their own funds to do business with." * * * "Prices and grades to be fixed from time to time, as convenient, and each one to abide by them. All grain taken in store shall be charged one and one-half cents per bushel, monthly." * * * "No grain to be shipped by any party at less rates than two cents per bushel." While the agreement, upon Its face, would seem to indicate that the parties had formed a copartnership for the purpose of trading in grain, yet, from the terms of the contract, and the other proof in the record, it is ap- parent that the true object was, to form a secret combination which would stifle all com- petition, and enable the parties, by secret and fraudulent means, to control the price of gram, cost of storage, and expense of ship- ment. In other words, the fom- firms, by a shrewd, deep-laid, secret combination, at- tempted to control and monopoUze the entire grain trade of the town and surrotmding country. That the effect of this contract was to resti-ain the trade and commerce of the coun- try, is a proposition that can not be success- fully denied. We understand it to be a well settled rule of law, that an agreement in general restraint of trade, is contrary to public policy, illegal and void, but an agreement in partial or par- ticular restraint upon trade has been held good, where the restraint was only partial, consideration adequate, and the restriction reasonable. This subject was ably discussed in the GBOUNDS FOR EQUITABLE RELIEE. 107 leading case of Mitchel v. Reynolds, 1 P. Wms. 181; see, also, 1 Smith's Lead. Gas. 772, and notes, and the rule of law estab- lished, which has been followed and adhered to in numerous cases since. In reference to the point, what might be regarded a reasonable restriction, numer- ous cases might be cited, but what was said in Horner v. Graves, 7 Bing. 743, wiU illus- trate the principle. Tindal, O. J., said: "We do not see how a better test can be applied to the question, whether reasonable or not, than by considering whether the restraint is such only as to afford a fair protection to the interest of the party in favor of whom it is given, and not so large as to Interfere with the interest of the public. Whatover restraint is larger than the necessary protec- tion of the party, can be of no benefit to either. It can only be oppressive, and if oppressive, it is, in the eye of the law, un- reasonable. Whatever is injurious to the in- terest of the public. Is void, on the ground of public policy." If, therefore, the restraint Imposed by the contract in question was but partial, as in- sisted upon by the complainant, as it was unreasonable, oppressive and Injurious to the public, it can not be sanctioned in a court of equity. While these parties were in business, in competition vrith each other, they had the undoubted right to establish their own rates for grain stored and commissions for ship- ment and sale. They could pay as high or low a price for grain as they saw proper, and as they could make contracts with the producer. So long as competition was free,, the interest of the public was safe. The laws of trade, in connection with the rigor of com- petition, was all the guaranty the public re^ quired, but the secret combination created by the contract destroyed aU competition and created a monopoly against which the public interest had no protection. Morris Run Coal Co. V. Barclay Coal Co., 68 Pa. St 173. It Is, however. Insisted that, even if the contract was contrary to public policy, as it has been executed, a court of equity will re- quire an account. The rule is, however, well settled In this- state, that a court of equity wiU not lend Its; aid in the division of the profits of an il- legal transaction between associates. Neu- stadt V. Hall, 58 111. 172; Skeels v. PhiUips,. 54 111. 309; Jerome v. Bigelow, 66 111. 452. The complainant and the defendants were equally Involved in the unlawful combina- tion. A court of equity will assist neither. The decree wiU be reversed and the cause- remanded. Decree reversed. 2.) (In restraint of trade. Berlin Machine Works v. Perry, [Wis.] 38 N. W. Rep. I (Marriage brokerage. Duval v. Wellman, [Com. PI. N. Y.] 1 N. Y. Supp. 70.) (Corruption of public ofBcers. Bartle v. Nutt, 4 Pet. 184; Robinson v. Patterson, [Mich.] 89 N. W. Kep. 21, State v. Cross, [Kan.] 17 Pac. Rep. 190.) (Lobbying. Trist v. Child, 21 Wall. 441.) (Gambling contracts. Paine v. Prance, 25 Md. 163 ; Chapin v. Dake, 57 111. 295.) (The presumption of law is against the validity of contracts between parties standing in confi- dential, fiduciary, and kindred relations; as, attorney and client, principal and agent, trustees and cestuis que trust, guardian and ward, and others,— so that the duty of proving the contract tj he fair- and honest rests upon the party in the superior position. Bigelow, Eq. p. 135.) (Attorney and client. Post v. Mason, 91 N. Y. 589.) „► .„ -kt -m- „ mo ^ (Parent and child— Guardian and ward. Ashton v. Thompson, 32 Minn. 25, 18 N. W. Rep. 918.) APPENDIX. (41 Barb. 285.) NEWTON et al. v. McLEAN et aL Supreme Court of New York. Sept. 7, 1863. On the 24th of June, 1844, Donald McLean con-veyed certain lands to Hector McLean, with an understanding at the time that Hec- tor slioiUd manage the land for the use and benefit of the gi-antor, though Donald was to remain in possession. Hector afterwards mortgaged the premises to one OhappeU, the plaintiff's testator. This suit is brought to foreclose the mortgage. Before SMITH, JOHNSON, and WELLS, JJ. Scott Lord, for appellant, for respondent M. S. Newton, E. DARWIN SMITH, J. Upon the facts found by the referee, I do not see why the conclusions of law based thereupon were not entirely legitimate and sound. The plaintiff made out a clear case upon his evidence, and the referee finds as matter of fact tliat the matters set up in the defendant's answer were not established. It foUows that as no defense was made out the plaintiff was en- titled to judgment for the foreclosure of the mortgage set out in his complaint. It there- fore becomes necessary to inquire whether the exceptions to the exclusion of evidence offered by the defendants were any of them well taken. The first exception relates to the evidence offered to prove that the de- fendant Donald McLean was an illiterate person, and had been afraid of being cheated by people, and that at the time of the exe- cution of the deed from him to Hector Mc- Lean there was a verbal agreement that the latter should take a deed of the premises, and manage them for Donald's use and ben- efit, and he, Donald, should remain in pos- session in the mean time; that the deed to Hector was executed in pursuance of such agreement; and that Donald had remained in possession ever since the execution of such deed. This evidence was objected to, and excluded by the referee. The whole offer, taken together, tended to establish that the defendant Donald McLean was the equitable owner of the premises in question, and that Hector took and held them In trust for his benefit. This offer was doubtless excluded upon the ground that it did not go far enough to displace the plaintiff's equity as a bona fide purchaser of the premises. Hector was invested with the legal title by the deed to him of the defendant Donald, given in evi- dence, of the date of June 21, 1844. And, being thus apparently upon the face of the record invested with such legal title, he con- veyed the same to the plaintiff's testator, for a valuable consideration. To overreach the mortgage to Chappell, which vested him with. a legal estate in the premises, the defendant was bound to go further than simply to show his prior eqifity. He was bound to show- that Chappell had notice of such prior eq- uity, before he advanced the considei-ation for the mortgage; that is to say, before he indorsed the notes of Hector which the said mortgage was given to secure. The rule in equity is that as between two parties hav- ing equal equities the prior equity must pre- vail; but if the party having the subsequent equity clothes himself with the legal title before he has notice of the prior equity, such legal title must prevail. So far as the de- fendant's offer went, it did not propose to show that Chappel had any notice of the prior equity of the defendant Donald Mc- Lean when he took his mortgage and in- curred the liabiUty It was given to secure. The exception must be considered as though the evidence had been received, and such evidence must in this sense be considered in connection with the other evidence In the cause. And if in connection with such evi- dence it would have made out a defense im- der the pleadings, It ought to have been re- ceived. It appears from the case that evi- dence was given and received tending to es- tablish the fact that Chappell had notice of this prior equity, and such evidence was con- troverted, and the issue thus made on the evidence is found by the referee against the defendiuit. In this View the evidence tend- ing to show the prior equity, thus excluded, would have been of no benellt to the defend- ant and would not have established a de- fense. To charge Chappell with notice of the prior equity it was necessary for the defend- ant to show that he had notice of such prior equity. The argument that he had construct- ive notice of such equity In the fact that Donald McLean was in possession of the premises fails, for the reason that it is not proved that Chappell knew such fact In Grimstone v. Cartel-, (3 Paige, 437,) It Is held that if the party claiming the prior equity is In possession of the estate, and the sub- sequent purchaser has notice of that fact, it is sufficient to put him upon inquiry as to the actual rights of such possession, and Is good constructive notice of such rights. This CAS.BQ. (109) no CASES IN EQUITY. is soomd law and the settled rule In equity in STicli cases. Tlie offer of the defendant did not propose such proof, and the referee, having admitted evidence tending to establish such fact, has foimd that it was not proved. It seems therefore that the defendant was not injured by the exclusion of this evidence; for the proof given assumed the very fact offered to be proved,— that Donald McLean had the prior equitable title to the premises in ques- tion, and the referee has found for the plain- tiff on that issue. This exception, I thinls, therefore, is not well taken. The next exception is to the exclusion of the proof tending to show that the de- :fendant Donald McLean was in possession claiming to hold adversely, and it is claimed that the plaintiffs' mortgage was therefore void under the statute avoiding deeds where the grantor is not in possession, and has not "been, for one year preceding the making of such deed. (1 R. S. 739, § 148.) This ex- ception Is not well taken. Donald could not claim to hold adversely imder his own trus- tee. His occupation was like that of a tenant at will. It was not under claim of title adverse to that of his trustee whose title was derived from him. He could not claim adversely to his own title, or the title of Hector derived from him, and under which he had remained and held possession. The possession whicli avoids a deed for champer- ty must be under claim of a title adverse to that of the grantor in the deed sought to be avoided. (Crary v. Groodman, 22 N. Y. Rep. 170. Holdridge v. Stiles, decided by court of appeals, Decs, term, 1862, and not yet re- ported.) Donald McLean could not make any such claim, and the evidence was there- fore properly excluded. The evidence of the title papers, claimed to have been destroyed by fire, was properly excluded. It was im- material in fact, and it was a matter in the discretion of the referee whether he would or would not open the case to receive it. I cannot see that the evidence. If received, would in any degree have varied the case. It was simply additional evidence to estab- lish a prior equity In Donald McLean, which was virtually assumed in the disposition made of the case by the referee as I have stated. The motion for a new trial, on the ground of newly discovered evidence, should be de- nied. The evidence offered would be cu- mulative merely, on the single issue of the prior equity of the defendant Donald Mc- Lean. The case presents no basis, that I can see, for a claim that the prior equity of Donald McLean should prevail over the equity of the plaintiffs. Donald McLean con- veyed his property to his son for his own use and benefit, and thus enabled him to com- mit what would be a great fraud upon the plaintiff's testator, if the claim arising upon his equitable title were to prevail over the legal estate acquired by ChappeU imder the mortgage. A party who enables another to commit a fraud ought rather to suffer the consequences of such fraud than to subject an innocent person, acting In good faith and relying upon the evidences of title given by such original owner of the estate, to suffer injiu-y from such fraud. I think the judgment should be affirmed, with costs. WEST PUBLIBHlNa CO., PBCfTEBS AND BTEBBOTTPEBS, BT, PAUXj, lONir. .■trot