•fSfK^vi :.'^'^^'w: .<■<. •'*ns*, m iiara^all iEqutty ffiollerttntt / dift 0f / IE. 3I.^iiar0lfaU. ?C.2]. 1. 1034 CORNELL UNIVERSITY LIBRARY 3 1924 084 263 213^ COFVllIGHT, 1902, BT WEST PUBLISHING COMPANY. Copyright, 1903, By WEST PUBLISHING COMPANY. TABLE OF CONTENTS. MAXIMS OF EQUITY. Page 1. Southern California K. Co. v. Ruther- ford 3 2. Rees v. City of Watertown 5 3. Dibrell v. Carlisle 9 4. Speidel v. Henrici 15 5. Hawker v. Moore 17 6. Economy Sav. Bank v. Gordon 19 7. Rice V. Rice 23 8. Comstock T. Johnson 26 9. Brown, Bonnell & Co. v. Lake Superior Iron Co 28 10. Bleakley's Appeal 31 11. Kahn v. Walton 32 12. Craig v. Leslie 39 13. Wyman v. Ft. Dearborn Nat. Bank of Chicago 44 14. Stlnchfield v. Milliken 47 15. McLarren v. Brewer 49 16. Clements v. Tillman 51 17. Hart v. Sansom 53 18. Adams v. Messenger 55 PENALTIES AND FORFEITURES. 1. Bwing V. Litchfield 57 2. Craig v. Hukill 60 3. Kunkle v. Wherry 61 4. Jaguith v. Hudson 62 5. Keeble v. Keeble ^ . 68 PRIORITIES AND NOTICE 1. Heyder v. Excelsior Building & Loan Ass'n 70 2. Phillips V. Phillips 72 3. Knapp v. Bailey 75 4. Kirsch y. Tozier 77 5. Knobloch v. Mueler 80 6. Mayor, etc., of City of Baltimore v. Whittington 84 7. Williams*! v. Brown 86 8. Thomas vT Burnett 90 9. Pringle t. Dunn 92 10. Deason v. Taylor 97 LIS PENDENS. 1. Houston T. Timmerman 98 EQUITABLE ESTOPPEL. L Horn v. Cole 101 2. Dickerson v. Oolgrove 109 3. Continental Nat. Bank v. National Bank of Commonwealth 112 4. Galbraith t. Lunsford 117 5. Starry v. Korab 122 ELECTION. 1. Penn v. Guggenheimer 123 2. Fitzhugh V. Hubbard 128 3. Wilbanks v. Wilbanks... 129 4. Rogers v. Jones 131 5. Konvalinka v. Schlegel 132 6. Reed v. Dickerman 184 7. Van Dyke's Appeal 136 SATISFACTION. 1. Strong V. Williams 140 2. Deichman v. Arndt 142 Pago 3. De Witt V. Tates '. 144 4. Edwards v. Rainier's Ex'rs 140 5. Roquet v. Eldridge 150 6. Rogers t. French 152 7. Clark v. Jetton 155 CONVERSION AND RECONVERSION. I.Craig y. Leslie 39 2. Keep v. Miller 157 3. Wheless v. Wheless 160 4. Prentice v. Janssen 163 ACCIDENT. 1. Kopper T. Dyer 166 2. Patton V. Campbell 171 3. Brewer v. Herbert 173 MISTAKE OF LAW. 1. Hunt V. Rousmanier's Adm'rs. .. .177, 182 2. Jordan v. Stevens 188 3. Stafford v. Fetters 191 4. Green v. Morris & E. R. Co 193 5. Griswold y. Hazard 197 6. Marshall v. Westrope 208 7. Renard v. Clink 1 212 8. Titus y. Rochester German Ins. C«... 213 9. Erkens t. Nicolin 216 MISTAKE OF FACT. .1. Grymes v. Sanders 217 2. Riegel v. American Life Ins. Co. 221 3. Newton v. ToUes 225 4. Dambmann v. Schulting 227 5. Conner v. Welch 230 6. Park Bros. & Co. v. Blodgett & Clapp Co 234 MISTAKE— PAROL EVIDENCE TO CORRECT. 1. Walden v. Skinner 238 2. Metropolitan Lumber Co. v. Lake Sape- rior Ship Canal, Railway & Iron C«. 244 3. Hitchins v. Pettingill 246 4. Hunter v. Bilyeu 248 5. Glass V. Hulbert 254 6. Davis V. Ely 262 FRAUD— JURISDICTION OF EQIHTY. 1. Miller v. Scammon 265 2. Buzard v. Houston 268 3. Teft v. Stewart 271 ACTUAL FRAUD. Hicks V. Stevens 273 Stimson v. Helps 277 Mitchell V. McDougall 279 Southern Development Co. of Nevadaj V. Silva 282 Prewett v. Trimble 287 Hadcock v. Osmer 289 Borders v. Kattleman 292 Dambmann v. Schulting 227' Neill V. Shamburg 294 Porter V. Woodruff 296 H.& B.EQ.(2d Ed.) (iii) IV TABLE OP CONTENTS. Page 11. Virginia Land Co. v. Haupt 302 12. Zahn v. McMillin 304 CONSTRUCTIVE FRAUD. 1. Phillips V. Pullen 308 2. Rakestraw v. Lanier 310 3. Cowee v. Cornell 316 4. Allore v. Jewell 320 5. Oreene v. Roworth 323 6. Brown v. Pierce 326 7. Francis v. Wilkinson 331 8. Ross V. Conway 335 9. Tate v. Williamson 337 10. Price v. Thompson 340 11. Elmore v. Johnson 343 12. Solinger v. Earle 351 13. Hanover Nat. Bank of City of New York V. Blake 353 14. Chandler v. HoUingsworth 357 EXPRESS TRUSTS. 1. Hutchins v. Van Vechten 364 2. Urann v. Coates 366 3. Bates v. Hurd 368 4. McVay v. McVay 370 3. Danser v. Warwick 372 6. Tobias v. Ketchum 374 EXPRESS TRUSTS— PRECATORY WORDS. 1. Warner v. Bates 377 2. Hess V. Singler 380 3. Clay V. Wood 382 EXPRESS TRUSTS— VOI.UNTART TRUSTS. 1. Richards v. Delbridge 385 2. Young V. Young. .' 387 3. Webb's Estate, In re 392 4. Martin v. Funk 393 5. Beaver v. Beaver. 396 6. Bath Sav. Inst. v. Hathorn 400 TRUSTS— ACTIVE AND PASSIVE. 1. Kirkland v. Cox 404 POWERS IN TRUST. 1. Deltmey v. McCormack 407 TRUSTS— PUBI.IC OR CHARITABI^•'-^*^'«-^ . ^Cyt^^^JU-^ -^Cct^-trt^ ,XX-n^ -tv^-Zow^ -v^ C^^. — / Uu^ — '''' [// ^ ..^■cyC^ -;^^t>^CLL*T-v-C ^--'C^c^ -ci(C-ot/ / Vv MAXIMS Of'^bIqUITY. SOUTHERN CALIFORNIA RY. CO. v. RUTHERFORD et al. (62 Fed. 7i)6.) Circuit Court, S. D. California. June 30, 1894. Suit by the Southern California Railway Company, a corporation of the state of Cali- fornia, against C. C. Rutherford and others for injunction. W. J. Hunsaker, for complainant. ROSS, District Judge. Time does not ad- mit of an extended statement of the facts of the case or of the reasons for awarding the injunction applied for. The bill shows, among other things, that the complainant r ailway company is one link in a "through line I of road extending from National City, San ' "Di_ego county, Can ^to the city of ChicagoT ln the state oFlllinoisT engaged in the trins- ; portation, among other things, of interstate commerce and the mails of the United i States; its connecting roads being the At- 1 lantic & Pacific and the Atchison, Topeka & I Santa F6 Railroad Companies. That there is a valid existing contract between the com- plainant company and its connecting com- panies and the Pullman Palace Car Com- pany by which all regular passenger trains t running over the said through line of road, including that of the complainant, carrying the mail and passengers, shall carry Pullman cars. That the defendants are in the em- ploy of the complainant company, and were employed by it to, among other things, handle and operate its trains so engaged in carrying the United States mail and passen- gers and freight between National City, Cal., and Chicago, 111., and to and from interme- diate pomts, and from the time of their em- ployment up to the time of the commission of the acts complained of by the complain- ant were duly accustomed to handle and operate such trains, including Pullman cars. /'That subsequently the defendants, although remaining In the employment of the com- plainant company, refused, and still refuse, to handle or operate any train of cars of the complainant company to which a Pullman \car is attached; and because of the dis- charge by the receivers in possession and control of the Atchison, Topeka & Santa FS Railroad Company of certain employes of theirs for refusing to handle or operate any train of that road to which a Pullman car is attached, the defendants to the present .bill, while remaining in the employment of the complainant company, refused, and still refuse, to handle or operate any of the trains of tlje complainant company engaged in car- rying the mall of the United States and in the aforesaid Interstate commerce, which their regular and accustomed duties as such employes required, and still require, them to operate and handle. Undoubtedly, in the absence of a valid existing contract obligat- ing the defendants to remain in the employ- ment of the complainant company, they would ordinarily have the legal right to quit the employment and cease work at any time. __ But the bill alleges that the defendants con- tinue in the employment of the complainant company, and yet refuse m perform their regular and accustomed duties as such em- ployes; and it further shows that such re- fusal subjects and will continue to subject the complainant to a multiplicity of suits and to great and Irreparable damage, in that there is an existing valid contract requiring complainant to attach a Pullman car or cars on all of its through trains for the carriage of passengers and the mail, and alsa retards and interrupts the complainant in the trans- mission of the United States mail and the in- terstate commerce aforesaid. *^ It is manifest that for this' state of affairs \ the law— neither civil or criminal— affords an adequate remedy. But the proud boast of equity is, "TTM ji^s, ihi i -PTpen|inm:" It is the .— maxim which forms the root of all equitable decisions. Why should not men who re- main in the employment of another perform the duties they contract and engage to per- form? It is certainly just and right that they should do so, or else quit the employ- ment. And where the direct result of such refusal works irreparable damage to the em- ployer, and at the same time interferes with the transmission of the mail and with com- merce between the states, equity, I think, will compel them to perform the duties per- taining to the employment so long as they continue in it. If I unlawfully obstruct by a dam a stream of flowing water, equity, at the suit of the party Injured, will compel me by Injunction, mandatory in character, to re- move the dam, and, prohibitory in charac- ter, from further interfering with the flow of the stream; and if I unlawfully erect a wall shutting out the light from another, equity will compel me to tear it down, and to refrain from further interference with the other's rights. It is true that such cases are not precisely like the present one, yet the principle upon which the court proceeds in such cases is not substantially different. And if it be said that there is no exact precedent for the awarding of an injunction in the present case, I respond, in the lan- guage of the court In the case of Toledo, etc., Ry. Co. v. Pennsylvania Co., 54 Fed. 751: "Every just order or rule known to^ equity courts was born of some emergency, to meet some ne* conditions, and was there- fore, in its time, without precedent. If based on soun^ principles, and beneficent results follow their enforcement, affording necessary relief to the one party witliout im- posing illegal burdens on the other, new remedies and unprecedented orders are not unwelcome aids to the chancell.r to meet the constant and varying demands for equi- table relief." y Moreover, the rights of. the public in a* case__fif__this" _sort _sKu!d be considered. 'Railroads," said the supreme court in tKe MAXIMS OF EQUITY. case of Joy v. St Louis, 138 tJ. S. 50, 11 Sup. Ct. 243, "are common carriers, and owe du- ties to the public. The rights of the public in respect to these great highways of com- munication should be fostered by the courts; and it is one of the most useful functions of a court of equity that its methods of pro- cedure are capable of being made such as to accommodate themselves to the develop- ment of the interests of the public, in the progi-ess of trade and traflBc, by new methods of intercourse and transportation." For the reasons thus hastily and briefly stated, I shall award an injunction requir-^ ing the defendants to perform all of their regular and accustomed duties so long as they remain in the employment of the com- plainant company, which injunction, it may be as well to state, will be strictly and rigidly/ enforced. MAXIMS OF EQUITY. RBES v. OITT OF WATERTOWN. (19 Wall. 107.) Supreme Court of the United States. 1873. Mr. Justice HUNT delivered the opinion of the court. This case is free from the objections usual- ly made to a recovery upon municipal bonds. It is beyond doubt that the bonds were issued by the authority of an act of the legis- lature of the State of Wisconsin, and in the manner prescribed by the statute. It is not denied that the railroad, in aid of the con- struction of which they were issued, has been built, and was put in operation. Upon a class of the defences interposed in the answer and in the argument it is not necessary to spend much time. The theories upon which they proceed are vicious. They are based upon the idea that a refusal to pay an honest debt is justifiable because it would distress the debtor to pay it. A vol- untary refusal to pay an honest debt is a high offence in a commercial commu- nity and is just cause of war between na- tions. So far as the defence rests upon these principles we find no difficulty in overrul- ing it. There is, however, a grave question of the power of the court to grant the relief asked for. We are of the opinion that this court has not the power to direct a tax to be levied for the payment of these judgments. This power to impose burdens and raise money is the highest attribute of sovereignty, and is exercised, first, to raise money for public purposes only; and, second, by the power of legislative authority only. It is a power that has not been extended to the judiciary. Especially is it beyond the power of the Fed- eral judiciary to assume the place of a State in the exercise of this authority at once so delicate and so important. The question is not entirely new in this court. In the case of Supervisors v. Rogers,* an order was made by this court appointing the marshal a commissioner, with power to levy a tax upon the taxable property of the county, to pay the principal and interest of certain bonds issued by the county, tlie pay- ment of which had been refused. That case was like the present, except that it occurred m the State of Iowa, and the proceeding was taken by the express authority of a statute of that State. The court say: "The next question is as to the appointment of the marshal as a commissioner to levy the tax in satisfaction of the judgment. This de- pends upon a provision of the code of the State of Iowa. This proceeding is found in a chapter regulating proceedings in the writ of mandamus, and the power is given to the court to appoint a person to discharge the duty enjoined by the peremptory writ which the defendant had refused to perform, and for which refusal he was liable to an at- •7 Wallace, 175. tachment, and is express and unqnalifled. The duty of levying the tax upon the tax- able property of the county to pay the princi- pal and interest of these bonds was specially enjoined upon the board of supervisors by the act of the legislature that authorized their issue, and the appointment of the mar- shal as a commissioner in pursuance of the above section is to provide for the perform- ance of this duty where the board has dis- obeyed or evaded the law of the State and the peremptory mandate of the court." — The State of Wisconsin, of which the city of Watertown is a municipal corporation, has passed no such act. The case of Supervisors v. Rogers is, therefore, of no authority in the case before us. The appropriate remedy^ of the plaintiff was and is a writ of raan- damus.f This may be repeated as often as the occasion requires. It is a judicial writ, a part of a recognized course of legal pro- ceedings. In the present case it has been thus far unavailing, and the prospect of its future success is, perhaps, not flattering. However this may be, we are aware of no authority in this court to appoint its own officer to execute the duty thtis neglected by the city in a case like the present. In Welch v. St. Genevieve* ai a Circuit Court for the district of Missouri, a tax was ordered to be levied by the marshal under similar circumstances. We are not able to recognize the authority of the case. No counsel ap- peared for the city (Mr. Reynolds as amicus CMn'cBonly); no authorities are cited which sustain the position taken by the court; the power of the court to make the order is disposed of in a single paragraph, and the execution of the order suspended for three months to give the corporation an oppor- tunity to select officers and itself to levy and collect the tax, with the reservation of a longer suspension if it should appear advis- able. The judge, in delivering tlie opinion of the court, states that the case is without precedent, and cites in support of its de- cision no other cases than that of Riggs v. Johnson County,** and Lansing v. Treas- urer.X The first case cited does not touch the present point. The question in that case was whether a mandamus having been issued by a United States court in the regu- lar courae of proceedings, its operation could be stayed by an injunction from the State court, and it was held that it could not be. It is probable that the case of Superoisors v. Rogers^ was the one intended to be cited. This case has already been considered. The case of Lansing v. Treasurer (also cited), arose within the State of Iowa. It fell within the case of Supervisors v. Rogers, tElggs V. Johnson County, 6 Wallace, 193. *10 Am. Law Reg. (N. S.) 512, Fed. Cas. No. Vi - 372. ' •*6 Wallace, 166. t9 Am. Law Reg. (N. S.) 415, Fed. Cas. No. 1(^688. S7 Wallace, 176. 6 MAXIMS OF EQUITY. and was rightly decided because authnrized by the express statute of the Istate of Iowa. It offered no precedent for the decision of a case arising in a State where such a statute does not exist. These are the only anthorities upon the power of this court to direct the levy of a tax under the circumstances existing in this case to which our attention has been called. The plaintiff insists that the court may accomplish the same result under a differ- ent name, that it has jurisdiction of the per- sons and of the property, and may subject the property of the citizens to the payment of the plaintiff's debt without the intervention of State taxing officers, and without regard to tax laws. His theory is that the court should make a decree subjecting the indi- vidual property of the citizens of Watertown to the payment of the plaintiff's judgment; direct the marshal to make a list thereof from the assessment rolls or from such other sources of information as he may obtain; re- port the same to the court, where any objec- tions should be heard; that the amount of the debt should be apportioned upon the sev- eral pieces of property owned by individual citizens; that the marshal should be directed to collect such apportioned amount from such persons, or in default thereof to sell the property. As a' part of this theory, the plaintiff argues that the court has authority to direct the amount of the judgment to be wholly made from the property belonging to any in- habitant of the city, leaving the citizens to settle the equities between themselves. This theory has many difliculties to en- counter. ^In seeking to obtain for the plain- tiff his just riglits we must be careful not to invade the rights of othersS If an inhab- itant of the city of Watertown should own a block of buildings of the value of $20,- 000, upon no principle of law could the whole of the plaintiff's debt be collected from that property. Upon the assumption that individual property is liable for the pay- ment of the corporate debts of the munici- pality, it is only so liable for its proportion ate amount. The inhabitants are not joint and several debtors with the corporation, nor does their property stand in that relation to the corporation or to the ere.lilor. This is not the theory of law, even in regard to tax- ation. The block of buildings we have sup- posed is liable to taxation only upon its value in proportion to the value of the entire property, to be ascertained by assessment, and when the proportion is ascertained and paid, it is no longer or further liable; It is discharged. The residue of the tax is to be obtained from other sources. There may be repeated taxes and assessments to make up delinquencies, but the principle and the general rule of law are as we have stated. In relation to the corporation before us, this objection to the liability of individual property for the payment of a corporate deht Is presented in a specific form. It L? of a statutory character. The remedies for the collection of a debt are essential parts of the contract of indebt- edness, and those in existence at the time it is incurred must be substantially pre- served to the creditor. Thus a statute pro- , bibiting the exercise of its taxing power by "/ the city to raise money for the payment of i these bonds would be void.'* But it is otherwise of statutes which are in existence at the time the debt is contracted. Of these the creditor must take notice, and if all the remedies are preserved to him which were in existence when his debt was con- tracted he has no cause of complaint.f By section nine of the defendant's charter It is enacted as follows: "Nor shall any real or personal property of any inhabitant of said city, or any individual or corporation, be levied upon or sold by virtue of any exe- cution issued to satisfy or collect any debt, obligation, or contract of said city." If the power of taxation is conceded not to be applicable, and the power of the court is invoked to collect the money as upon an execution to satisfy a contract or obligation of the city, this section is directly applicable and forbids the proceeding. The process or order asked for is in the nature of an execu- tion ; the property proposed to be sold is that of an inhabitant of the city; the purpose to which it is to be applied is the satisfaction of a debt of the city. The proposed remedy is in direct violation of a statute in existence when the debt was incurred, and made known to the creditor with the same solemnity as the statute which gave power to contract the debt. All lavys in existence when the contract is maile are necessarily referred to in it and form a part of the measure of the obligation of the one party, and of the right acquired by the other.| But independently of this statute, upon the general principles of law and of equity jurisprudence, we are of opinioji that we can- not grant the relief asked for.C The plaintiff! invokes the aid of the principle that all legal remedies having failed, the court of chancery must give him a remedy; that there is a wrong which cannot be righted elsewhere, and hence the right must be sustained in chancery. The difficulty arises from too broad an application of a general principle. The great advantage possessed by the court of chancery is not so much in its enlarged jurisdiction as in the extent and adaptabil- ity of its remedial powers. ^Generally its jurisdiction is as well defined and limited as is that of a court of law.^ It cannot exercise jurisdiction when there is an adequate and complete remedy at law. It cannot assume control over that large class of obligations called imperfect obligations, resting upon •Van Hoffman u. City of Quinoy, 4 Wallace, 533. tCooley, Constitutional Limitations, 385, 387. tCooley, Constitutional Limitations, 385, MAXIMS OF EQUITY. jonscience and moral duty only, unconnected with legal obligations. S Judge Story says.f "There are cases of fraud, of accident, and of trust which neither courts of law nor of equity presume to relieve or to mitigate," of which he cites many instances. Lord Tal- bot says:| "There are cases, indeed, in which a court of equity gives remedy where the law gives none, but where a particular remedy is given by law, and that reme^iy bounded and circumscribed by particular rules, it would be very improper for this court to take It up where the law leaves it, and extend it further than the law allows." Generally its jurisdiction depends upon legal obligations, and its decrees can only en- force remedies to the extent and in the mode by law established. With the subjects of fraud, trust, or accident, when properly be- fore it, it can deal more completely than can a court of law. These subjects, however, may arise in courts of law, and there be well ^sposed of.* £X court of equity cannot, by avowing that there is a right but no remedy known to the law, create a remedy in violation of law, or even without the authority of law! It acts upon established principles i(Bi only, but through established channels. Thus, as- sume that the plaintiff is entitled to the pay- ment of his judgment, and that the defend- ant neglects its duty in refusing to raise the amount by taxation, it does not follow that this court may order the amount to be made from the private estate of one of its citizens. This summary proceeding would involve a violation of the rights of the latter. He has never been heard in court. He has had no opportunity to establish a defence to the debt itself, or if the judgment is valid, to show that bis property is not liable to its payment. It is well settled that legislative exemptions from taxation are valid, that such exemptions may be perpetual in their duration, and that they are in some cases be- yond legislative interference. The proceed- ing supposed would violate that funda- mental principle contained in chapter twen- ty-ninth of Magna Charta, and embodied in the Constitution of the United States, that no man shall be deprived of his property without due process of law — that is, he must be served with notice of the proceeding, and have a day in court to make his defence.** "Due process of law (it is said) undoubt- edly means in the due course of legal pro- ceedings, according to those rules and forms which have been established for the protec- tion of private rights. "|| In the New Eng- land States it is held that a judgment ob- tained against a town may be levied upon and made out of the property of any inhab- itant of the town. The suit in those States is brought in form against the inhabitants of the town, naming it; the individual Inhah- itants, it is said, may and do appear and de- fend the suit, and hence it is held that the individual inhabitants have their day in court, are each bound by the judgment, and that it may be collected from the property of any one of them.* This is local law pe- culiar to New England. It is not the law of this country generally, or of England.|| It has never been held to be the law in New York, in New Jersey, in Pennsylvania, nor, as stated by Mr. Cooley, in any of the W.est- em States.f So far as it rests upon the rule that these municipalities have no common fund, and that no other mode exists by which demands against them can be enforced, he says that it cannot be considered as ap- plicable to those States' where provision is made for compulsory taxation to satisfy judgments against a town or city.§ The general principle of law to which we have adverted is not disturbed by these references. It is applicable to the case be- fore us. Whether, in fact, the individual has a defence to the debt, or by way of ex- . emption, or is without defence, is not im> portant. To assume that he has none, and therefore, that he is entitled to no day in court, is 'to assume against him the very point he may wish to contest. Again, in the case of Smerio v. Gilman, before cited, it is said: "The inhabitants of a county are constantly changing; those who contributed to the debt may be non-residents upon the recovery of the judgment or the levy of the execution. Those who opposed the creation of the liability may be sub- jected to its payment, while those, by whose fault the burden has been imposed, may be entirely relieved of responsibility. . . . *To enforce this right against the inhabitants of a county would lead to such a multiplicity of suits as to render the right valueless/J We do not perceive, if the doctrine con- tended for is correct, why the money might not be entirely made from property owned by the creditor himself, if he should happen to own property within the limits of the cor- poration, of sufficient value for that pur- pose. The difficulty and the embarrassment aris- ing from an apportionment or contribution among those bound to make the payment we do not regard as a serious objection. Con- tribution and apportionment are recognized beads of equity jurisdiction, and if it be as- sumed that process could issue directly against the citizens to collect the debt of the city, a court o^ equity could make the appor- tionment mole conveniently than could a court of law.f tl Equity Jurisprudence, S 61. IHeardu Stanford, Cases Tempore Talbot, 174. •1 Story's Equity Jurisprudence, % 60. •* Wester velt v. Gregg, 13 New York, 209. lib. •See the oases collected In Cooley's Constlttt tional Limitations, 240-245. IRussell V. Men of Devon, 3 Term R. 667. t See Emerio v. Gilman, 10 California, 408, wher* all the cases are collected. •SCooley'B Constitutional Limitations, 240. tl Story's Equity Jurisprudence, § 470 and on- wards. 8 MAXIMS OF EQUITY. We apprehend, also, that there Is some contusion in the plaintiff's proposition, upon which the present jurisdiction is claimed.^ It is conceded, and the authori- ties are too abundant to admit a question, that there is oo chancery jurisdiction where there is an adequate remedy at law.^The writ Qf mandamus is, no doubt, the regular remedy in a case like the present, and or- dinarily it is adequate and its results are satisfactory^ The plaintiff alleges, however, in the preset case, that he has issued such a writ on three different occasions; that, by means of the aid afforded by the legisla- ture and by the devices and contrivances set forth in the bill, the writs have been fruit- less; that, in fact, they afford him no remedy. The remedy is in law and in theory ade- quate and perfect. The difficulty is In its execution only. The want of a remedy and the inability to obtain the fruits of a remedy «re quite distinct, and yet they are con- founded in the present proceeding. To il- lustrate: the writ of habere facias posses- sionem is the established remedy to obtain tlie iruits of a judgment for tlie plaintiff in ejectment. It is a full, adequate, and com- plete remedy. Not many years since there existed in Central New York combinations of settlers and tenants disguised as Indians, and calling themselves such, who resisted the execution of this process in their counties, and so effectually that for some years no landlord could gain possession of his land. There was a perfect remedy at law, but through fraud, violence, or crime its execu- tion was prevented. It will hardly be argued that this state of things gave authority to in- voke the extraordinary aid of a court of chancery. The enforcement of the legal remedies was temporarily suspended by means of illegal violence, but the remedies remained as before. It was the case of a miniature revolution. The courts of law lost no power, the court of chancery gained none. The present case stands upon the same principle. VChe legal remedy is ade- quate and complete, and time and the law must perfect its execution.N Entertaining the opinion that the plaintiff has been unreasonably obstructed in the pur- suit of bis legal remedies, we should be quite willing to give him the aid requested it the law permitted it. We cannot, however, find authority for so doing, and we acquiesce in the conclusion of the court below that the bill must be dismissed. JUDGMBNT AFFIRMED. l5^ MAXIMS OF EQUITY. 9 DIBRBLL y. CARLISLE et al. (48 Miss. 691.) Supreme Court of Mississippi. 1873. Appeal fromi chancery court, CMckasaw county; Bradford, Chancellor. The complainant in the court below, Charles C. Dibrell, filed his biU to the April term, 1868, alleging that on the 4th Decem- ber, 1866, William F. Walker, then largely indebted in a sum exceeding $60,000 to his wife, Eliza E. Walker, on account of her separate estate, executed and delivered a deed of conveyance to one Thomas J. Denton, a citizen of said county, and his successors in office, as trustee for said Eliza, and the heirs of her body, by which he granted, bar- gained, and sold to said trustee certain real and personal property particularly described in the bUl, and states its value at $29,942, and that it was intended to be, and was received by the parties ag, a payment to that extent on the indebtedness of Walker to his wife. The deed is filed as an exhibit to the bill. It is further stated in the bill that Denton, the trustee, accepted the trust, entered im- mediately upon the discharge of his duties, residing within a few miles of the property transferred to him, ready at all times to do and perform all acts contemplated in the deed, until the 4th March, 1868; that on the 6th of March, 1868, under the provisions of said deed, the complainant was duly and legally appointed as successor to said Den- ton by the probate judge of said county; that on the 20th March, 1867, the said Wil- liam F. Walker, confederating with Henry G. Hmnphrles and E. K. Carlisle, commis- sion merchants and citizens of Mobile, Ala., to divest the said Eliza of her equitable in- terest in said lands, induced her to execute jointly, with her husband, a mortgage on said lands, to secure the payment of an as- serted debt of $7,337.64, which the said Wil- Uam F. had contracted with said Humphries & Carlisle, maturing on the 19th December, 1867; that said deed of mortgage authorized Carlisle & Humphries, in default of pay- ment of said debt, upon giving 30 days' no- tice, to sell said lands at auction and divest the title from the trustee and the said Eliza, and forever bar her equity of redemption. The mortgage is filed as an exhibit to the bill. It is further charged that said Humphries & Carlisle were fully apprised of the true condition of the title to the land when they affected the negotiation; that they were ex> pressly notified of the deed of trust first mentioned, and knew that the property they were seeking to incumber was trust prop- erty, settled upon the said Eliza and the heirs of her body; that she was ignorant of the legal effect to be given to the deed of mortgage by the draftsman; that but a small portion of the debt claimed was for her family supplies and necessaries, wearing ap- parel of herself or children, or their educa- tion, or household furnitm-e, or carriages and horses, buildings on her land and premises, or repairs thereof, or materials, work, anc labor for the benefit and Improvement of her separate estate. The bill "protests against another clause of the said deed of mortgage, as being not only manifestly against his . rights, but in direct violation of the deed from said Walk- er to complainant's predecessor"; alleges that the land in the deed is estimated at $20,750; that indebtedness in the mortgage is $7,337.- 64, far less than the value of the land; charges that, since the execution of the mortgage, said William F. has raid $1,800 or $2,000 to Carlisle & Humphries, which should have been credited on said indebted- ness, and that the mortgage provides that the surplus from the land sale shall be paid to Walker and wife, and not to the trustee, the complainant The bill fm-ther states that said Humph- ries & Carlisle, by their agent and attorney, J. N. Carlisle, Esq., have advertised the lands for sale under the mortgage, and also about 6,000 bushels of corn, on the second Monday in March, 1868. A copy of the advertise- ment is filed as an exhibit. H. G. Humphries, E. K. Carlisle, J. N. Carlisle, and William F. Walker are made defendants, and injunction, etc., prayed for to restrain the sale. There is also a prayer for discovery, by Humphries & Carlisle, of the amount due them, and that on final hear- ing the injunction be made perpetual, that the mortgage be canceled. On the 6th March, 1868, the chancellor in- dorsed on the bUl his fiat for injunction, up- on the complainant entering into bond with sureties in the sum of $2,000. The bond was given, and writs of injunction and subpcena issued. Exhibit No. 1, referred to in the bill, is as follows: "The State of Mississippi, Chickasaw Coun- ty. This Indenture, made and entered into this 4th day of December, 1866, between WUliam' F. Walker, of the first part, Eliza K. Walker, his wife, of the second part, each of the county and state aforesaid, and Thomas J. Denton, of the same county and state, of the third part, witnesseth: That the said party of the second part, having been the owner In her own right at the time of her marriage, in the year of our Lord one thousand eight hundred and fifty-three, with the said party of the first part, of a large personal estate, which was received by, con- trolled, possessed, used, and enjoyed by him, as hereinafter set forth, that is to say, thirty- three negro slaves, which went into his pos- session on the first day of January, 1854, and were worked and controlled in raising cotton, etc., and whose hire was worth as stated," etc. The deed them proceeds to give the names and value of the hire of each 10 MAXIMS OF EQUITY. negro for eleven years, the aggregate hire ■valued at $34,250, and continues: "And the said party of the second part having received large sums of money from the separate es- tate of the said Eliza, as follows: The sum of fifteen thousand dollars on the first day of January, 1854; seven thousand dollars on the 1st July, 1855, and six thousand dollars on the 1st July, 1866, amounting to twenty- eight thousand dollars; and the said Wil- liam F. having assumed the entire manage- m'ent and control of the separate estate of the said Eliza, and with the funds realized from the proceeds raised by her negro slaves as aforesaid, and with the cash received by him as above set forth, he purchased real and personal property as hereinafter describ- ed and valued, that is to say," etc. The deed here describes the tract of land in con- troversy, and a number of mules, horses, wagons, carriage and harness, farming uten- sils, carpenters' and blacksmiths' tools, house- hold and kitchen fm-niture, jewelry, plate, stock hogs, etc., valued at $8,192, and pro- ceeds: "And the said William F. being anxious to secure, so far as he has the abil- ity to do so, the payment of this debt he owes to his wife, amounting to the sum of sixty-two thousand two hundred and fifty dollars, taking the hire of the negro prop- erty as the basis of his liability for their use and employment. Now, in consideration of the premises, and for and in consider- ation of the sum of ten dollars, paid by the said party of the third part, the receipt of which Is hereby acknowledged, the said par- ty of the first part hath granted, bargained, and sold, and by these presents doth grant, bargain, and sell, unto the said party of the third part, all the real and personal prop- erty above described, to wit" (giving de- scription of land and personal property be- fore referred to): "In trust, nevertheless, for the use, benefit and behoof of the said party of the second part and the heirs of her body forever, who are to retain the possession, management, direction, apd control of the property conveyed. The said trustee or his successor, to be designated by the judge of the probate court of the county and state aforesaid, in term time or in vacation, to take such possession or direction as may then be necessary for faithfully carrying out this trust according to its true intent and meaning, such as bringing and defending suits, executing bonds, signing papers, or ap- pointing an attorney in fact to do and per form whatever may be necessary and proper to be done in protecting and defending the said estate to the party of the second part and the heirs of her body." The deed then states that the property conveyed, valued at $29,942, "is intended to be to that extent in part payment of the sum of $62,250, the amount admitted to be due," etc., and con- cludes with warranty of title, etc. Exhibit No. 2 of the bill is in the words and figures following: "The State of Mississippi, Chickasaw County. This deed of mortgage, made the this 20th day of March, 1867, between W. F. Walker, with B. K. Walker, his wife, both of the county of Chickasaw and state of Mississippi, of the first part, and E. K. Car- lisle, with H. G. Humphries, commission merchants, of Mobile and state of Alabama, of the other, witnesseth: That whereas the said W. F. Walker, ^vith B. R. Walker, his wife, are indebted to the said E. K. Carlisle and H. G. Humphries in the sum of seventy- three hundred and thirty-seven dollars and sixty-four cents, said sum of money being advanced to said W. F. Walker and E. R. Walker on their crop of cotton, to be raised in and during the year. Anno Domini, 1867, on the plantation under the superintendence of W. F. Walker, Jno. D. Poyner, and Thos. McCarthy. Said sum of money is further secured by their certain promissory notes, bearing date the nineteenth day of January, A. D. 1867, for the said sum of seventy- three hundred and thirty-seven dollars and sixty-four cents, subscribed with their hands and delivered to the said E. K. Carlisle and H. G. Humphries, whereby the said W. F. Walker and E. R. Walker promised to pay the said Carlisle & Humphries, or order, seventy- three hundred and thirty-seven dollars and sixty-four cents, on or before the nineteenth day of December, 1867, for value received. And whereas, the said W. F. Walker and E. R. Walker, his wife, are willing to give this deed for satisfaction of what may be due and unpaid to the said Carlisle & Humphries on the nineteenth day of December, 1867, next: Therefore the said W. F. Walker and B. R. Walker bargain, sell, alien, and convey to the said Carlisle & Humphries all those tracts or parcels of land situated and lying in the county of Chickasaw and state of Mississippi, known and described as the west half of section twelve, in township thirteen, range five east, and the west half of section thirteen, to'n-nshjp thirteen, range five east, containing six hundred and seventy acres, more or less; also convey all the cotton crop that is raised on said lands or plantation un- der the direction or superintendence of W. F. Walker, .John D. Poyner, and Thomas Mc- Carthy, which said cotton is to be shipped to said Carlisle & Humphries aforesaid as soon as is practicable after ginning and baling the same; to have and to hold the same with all the rights and appurtenances to the said Car- lisle & Humphries, their heirs, executors, and administrators. But this conveyance is upon condition, if the said W. F. Walker and E. R. Walker shall, on or before the nineteenth day of December, 1867, well and fully pay the said sum of money, then this deed Is to cease and to be void; but if after that day said sum, with any part thereof, be unpaid, then it shall be lawful for the said Carlisle & Humphries, or their legal representative, after giving thirty days' notice by advertise- ment in some newspaper in Chickasaw coun- MAXIMS OF EQUITY. 1] ty of the cause, day, and place of sale, to proceed to sell at public auction at Okolona the mortgaged property, or a sufficiency thereof, for cash to the highest and best bid- der, and out of the proceeds, after defraying the cost of advertisement and sale, they may retain the full amount of mortgage money due, and if there be a surplus they are pres- ently to pay It to W. F. Walker and B. E. Walker, or their legal representatives, and to make to the vendee or vendees a deed of conveyance, transmitting the quit of purchase of all right, title, or interest of the parties and their heu:s, or of all claiming under them, and thereupon all the right and title of the W. F. Walker, with E. E. Walker, his wife, to redeem, shall be as effectually bar- red and foreclosed as if upon a decree in equity; and the said W. F. Walker, with B. R. Walker, his wife, hereto put their names and seals, the day and date aforewritten. "[Signed] W. F. Walker. [Seal.] "B. E. Walker. [Seal.]" Carlisle & Humphries filed their answer, averring that they knew nothing of the ex- istence of the debt alleged .to be due Eliza E. Walker by W. F. Walker, her husband, except what they learn from the said exhibit No. 1 In the bill, and that they believe the debt fictitious; that there was no valid con- sideration in law or equity passing from said Eliza to said W. P. Walker for the convey- ance; that said conveyance is fraudulent and made with the intent to defraud the cred- itors of said W. F.; that the appointment of T. J. Denton as trustee was merely nominal, and for the better serving to cloak and con- ceal the said property and more effectually defrauding the creditors of the said W. F.; that said Denton, under a provision in the deed of trust, appointed the said W. P. his attorney In fact, clothing him with full pow- er to act in all things pertaining to said trusteeship, as if he, the said W. F., had been trustee; that the said W. P. executed the said mortgage in the biU mentioned as such attorney in fact; that the complainant, O. C. Dibrell,. ignoring the action of his pre- decessor, Denton, filed his bill with the in- tent to deprive respondents of their rights and powers vested in them as mortgagees; that said T. J. Denton, being aware of the execution of said attorneyship to W. P. Walk- er, refused to join in said bill of complaint, but, actuated by the dictates of honor and honesty, decliued entering Into such fraudu- lent interference with respondents' rights; denies all confederating by Carlisle & Humphries to defeat Mrs. Walker's interest in said lands; denies inducing her to join her husband in executing the mortgage; al- leges that the mortgage was made by W. P. Walker, as attorney in fact for the trustee and by Mrs. Walker, freely and voluntarily, without any persuasion, and by her so ac- knowledged In a private examination by an oflScer authorized to take such acknowledg- ment; denies all knowledge of the trust un- der which Mrs. Walker held the lands, and supposed W. P. Walker fully empowered to convey or incumber them. Eespondents assert that the $7,337.64 was money actually advanced to the said W. P. Walker and his wife during the year. 1867, for the necessary supplies of the plantation of said Walker and wife, and believe that it was used for them and their children; denies that the property mortgaged is and was worth $20,750, but insists that its value at the date of the mortgage and now does not exceed respondents' debt; denies that the execution of the mortgage was against the rights of the trustee, Dibrell; alleges that W. P. Walker was notoriously acting as the agent of his wife, and with the knowledge and consent of Denton, trustee; that, if the allegations In complainant's bill be true, said Walker, under false and fraudulent pre- tenses, obtained respondents' money; that said Walker and wife have never paid but $873.20, and this amount was duly credited on the debt. Eespondents say that they are led to believe that Dibrell, complainant, through the solicitation and procurement of W. P. Walker, accepted the appointment of trustee, and, without a knowledge of what his predecessor had done, has filed this bill and made the representations and allegations therein from false representations of W. P. Walker; that DibrelVs action is in direct contravention of the action of his predeces- sor, Denton; that W. P. Walker's interest is not with respondents as defendants in this suit, but identified with the complainant; and that he cunningly devised his joinder with respondents as defendant for fraudu- lent purposes. Eespondents insist that the advances made by them were solely on the credit of Mrs. Walker and her children, the beneficiaries of the pretended deed of trust, and for their benefit and use, and not on the credit of W. P. Walker; that he was insolvent and unable to obtain credit at the time; that the writ of injunction was illegally issued because of the want of good sureties on the bond; that said bond has no date and bears no evidence of having been duly executed as the law di- rects; that the fiat only requires a bond for $2,000, whilst the amount of Indebtedness enjoined is $6,464.36, and the bond is not in double the sum so enjoined. The mortgage referred to in the bill as Exhibit No. 2 is made an exhibit in the an- swer also. Another exhibit to the answer consists of an account of the debts due by W. F. and Eliza Walker to Carlisle & Humph- ries, showing balance of $7,337.64. Exhibit C ig as follows: "The State of Mississippi, Chickasaw Coun- ty. To whom these presents may come, greeting: Know ye that I, Thos. J. Denton, reposing entire confidence in the probity and integrity of W. P. Walker, a citizen of the county of Chickasaw and state of Mississippi, do by these presents constitute him my true 12 MAXIMS OF EQUITY. and lawful attorney in fact for me as trus- tee, appointed under a deed executed by the said Walker in favor of Eliza R. Walker and the heirs of her body as cestui que trust, on the 4th day of December, 1S66, conveying real and personal property valued at $29,- 942, and in my name to sign all papers, bonds, affidavits, contracts, and to make, do, and perform all and every act necessary or proper to be made, done, or performed for the protection of said trust estate, or for carrying out the true intent and meaning of said trust deed, and to every act in the premises which I could do if personally present, and I hereby ratify and confirm whatever he may lawfully do in the premises. Given under my hand and seal this the 4th day of December, 1866. "[Signed] T. J. Denton. [Seal.]" This power of attorney was acknowledged and recorded in Chickasaw county. J. A. On- and Harris & Withers, for appel- lant. Gholson & Hooper, James T. Harrison, and George L. Potter, for appellees. PEYTON, J. This was an injunction bill brought by the appellant in the chancery court of Chickasaw county to restrain the appellees, E. K. Carlisle and H. G. Humph- ries, from executing a power of sale contain- ed in a mortgage given to them by William F. Walker and Eliza R. Walker, his wife. The material facts of the case are these: William P. Walker, being indebted to his wife, Eliza R., in a large amount of money, on the 4th day of December, 1866, conveyed to one Thomas J. Denton certain real and personal estate situated in the said county of Chickasaw, In this state, in trust for the use of the said Eliza R. Walker and the heirs of her body forever, which deed of con- veyance was duly acknowledged and record- ed. That on the 20th day of March, A. D. 1867, the said William F. Walker and Eaiza R., his wife, made and executed their deed of mortgage of six hundred and seventy acres of the land, covered by the said deed of trust, to said Carlisle & Humphries, to secure the payment of a promissory note for $7,337.64, made by said Walker and wife, dated the 19th day of January, 1867, and payable to said Carlisle & Humphries on the 19th day of December, 1867. The said mortgage deed, which was duly acknowledged and recorded, gives to the mortgagees a power of sale of the mortgaged property in default of payment of the note at maturity. The note not having been paid, the mort- gagees were proceeding to sell the property, when they were enjoined from so doing by the appellee, who was appointed trustee, van- der a power in the deed creating the trust estate, to succeed the original trustee, who had resigned the trust. The appellees, Carlisle & Humphries, In their answer, admit the conveyance in trust as set forth in the bill of complaint, but deny that there was any valid consideration there- for, and insist that It was made to hinder,, delay, and defraud creditors. They admit the execution of the mortgage stated in the bill, and insist that they had a right to sell the mortgaged property to pay the amount due on the debt therein specified. They aver that the amount specified in the said note and mortgage was actually advanced by them to the said W. F. and E. R. Walker for the necessary supplies of the plantation of the said Walker and wife, and that they be- lieve that the said money was used by the said Walker and wife for the use and benefit of the said B. R. Walker and her children, and that the advances were made solely on the credit of Mrs. E. R. Walker, and not on that of her husband, who was insolvent and imable to obtain credit at the time the ad- vances were made. The appellees, Carlisle & Humphries, mov- ed the court below to dissolve the injunction on bill, answer, exhibits, and proofs. The motion was sustained and the injunction dis- solved. And from this decree the cause is brought to this court by appeal on the part of the appellee. This record presents three important ques- tions for our consideration: (1) What interest does Mrs. Walker take under the conveyance to a trustee for the use of herself and the heirs of her body for- ever? (2) Where the wife has joined ynth her husband in a mortgage of her separate estate to pay the debt of her husband, can the cor- pus of that estate, under the existing laws, be subjected in a court of equity to the pay- ment of such debt? (8) Is the separate estate of Mrs. Walker liable in equity to the payment of the debt specified in the mortgage or any part there- of? The first question involves the construction of the limitations in the deed creating the trust estate. It is a common maxim that equity follows the law: IDquitas sequitur legem. Where a rule of the common or stat- ute law is direct and governs the case with aU its circumstances or the particular point, a court of equity is as much bound by it as a court of law, and can as little justify a de- parture from it. A court of equity cannot disregard the canons of descent. In general, in courts of equity, the same construction and effect are given to perfect trust estates as are given by courts of law to legal es- tates. The incidents, properties, and conse-_ quences of the estates are the same. The" same restrictions are applied as to creating estates and bounding perpetuities and giving absolute dominion over property. The same modes of construing the language and limita- tions of the trusts are adopted. 1 Story, Eq. (Redf. Ed.) pp. 53-55, i 64. The words "heirs of the body," in the coo- veyance of a legal estate, are words of lim- itation of the estate to the donee, and not words of purchase for the heirs of the body. MAXIMS OF EQUITY. 13 Warren v. Haley, Smedes & M. Oh. 647. These words create an estate In fee tail, which, by our statute, is converted into an estate in fee simple. Bev. Code, p. 307, art. 3. And, if it be true that the same modes of construing the language and limitations of trust estates are adopted as apply to legal estates, we cannot resist the conclusion that Mrs. Walker takes, under the terms of the deed, the entire trust estate absolutely. With regard to the second question it may be remarked that it is a familiar rule of eq- uity jm-isprudence that general debts or gen- eral personal engagements of a married wo- man, contracted during coverture, are not chargeable upon her separate estate; and, un- less a feme covert who contracts a debt or enters into an engagement designs that such engagement or debt shall constitute a charge upon her separate estate, a court of equity wiU not entertain jurisdiction to enforce payment thereof out of such separate estate. When real property is conveyed absolutely to the separate use of a married woman, she can dispose of the trust estate only in the mode and manner prescribed by the instru- ment creating the trust estate, and, if none be prescribed and limited therein, then in ac- cordance with the provisions of the statute. Prior to the adoption of our present Code, in 1857, it has been repeatedly decided by this court that the wife may bind the corpus of her separate estate, by deed in trust or mortgage, as a security for the debts of her husband. James v. Fisk, 9 Smedes & M. 144; Sessions v. Bacon, 23 Miss. 272; Arm- strong V. Stovall, 26 Miss. 280; Euss T. Win- gate, 30 Miss. 445; Stone v. Montgomery, 35 Miss. 83-105; Prewett v. Land, 36 Miss. 495. Since the adoption of the Code, a married woman has no power to incumber the corpus of her separate estate by deed of trust, mort- gage, or otherwise, for the debt of her hus- band, but only the income thereof. The stat- ute expressly proA^des that no conveyance or incumbrance for the separate debts of the husband shaU be binding on the wife beyond the amount of her income. Rev. Code, p. 336, art. 23. This is a wise provision intend- ed to secure to the wife the enjoyment of her separate estate against any possible con- tingency of loss through the fraud, force, or undue influence of her husband. The solution of the third question depends upon the facts of the case as they may be developed and established by the evidence. With a view to the more beneficial enjoy- ment and productiveness of the separate es- tate of a married woman, the law has pro- vided that all contracts made by the husband and wife, or by either of them, for supplies for the plantation of the wife, or for the employment of an agent to superintend the planting operations, may be enforced, and satisfaction had out of her separate estate. And all contracts made by the wife, or by the husband with her consent, for family supplies or necessaries, wearing apparel of herself and children, or for their education, or for household furniture, or for carriage and horses, or for buildings on her land or premises, and the materials therefor, or for work and labor done for the use, benefit, or Improvement of her separate estate, shall be binding on her, and satisfaction may be had out of her separate property. Bev. Code, p. 336, art 25. And it has been decided that a married woman is liable on a promissory note given by her for a horse purchased by her for the supply and use of her plantation, Robertson v. Ward, 12 Smedes & M. 490. This adjudication was made under the act of 1846, which made the income only of her separate estate liable to the payment of the debt. And, under the act of 1857, this court has decided that the wife is liable out of the corpus of her separate estate to the payment of a note given by herself and husband for money advanced for the purpose of purchas- ing supplies for her plantation, and which was actually applied to that purpose. Bow- man V. Thomas E. Helm. These cases are regarded as coming within the equity of the respective statutes under which the debts were contracted. It results, therefore, from this view of the law, that Mrs. Walker is liable to payment out of her separate estate for the amount of supplies furnished by Carlisle & Humphries for her plantation, and for the amount of the money advanced by them to Walker, or Walker and wife, for the purchase of sup- plies for her plantation, or the improvement of her separate estate, and which were ac- tually applied to that use and purpose. And for that portion of the debt secured by the mortgage, which was not applied to these purposes, she is liable to payment out of the income only of her separate estate. The record contains no evidence as to what por- tion of the debt secvffed by the mortgage was for supplies actually furnished by Car- lisle & Humphries for the plantation of Mrs. Walker, or which was applied to the pur- chase of such supplies. Nor is there any proof as to what amount of the money ad- vanced by Carlisle & Humphries was applie'd by Walker to his own use. The most appropriate remedy of Carlisle & Humphries will be found in a court of eqiiity, in which an account can be taken of what portion of the note secured by the mortgage was for supplies for Mrs. Walk- er's plantation, and what part of the money was advanced by them for the purchase of such supplies, and which was actually so applied, and what part of the same was used by Walker for his own purposes. When these facts are ascertained, the court will made a decree in accordance with the prin- ciples above laid down, subjecting the sep- arate estate of Mrs. Walker to sale to pay for the supplies for her plantation, and de- creeing that the trustee of the estate and Mrs. Walker pay to Carlisle & Humphries u MAXIMS OF EQUITY. the amount of the debt, secured by the mort- gage, found due them by William F. Walk- er, out of the income of her separate estate. It is insisted by some of the counsel of the appellees that the mortgage was void because the trustee did not join in the mortgage deed. This was not necessary. In a case free from fraud or imdue influence, a married woman can bind her separate property without the trustees, unless their assent be made neces- sary by the instrument which gave that property. And in the case at bar the charge made upon the separate estate by the wife is totally unrestrained by the deed creating the trust estate, and is valid and binding, and a court of equity is bound to enforce it, so far as to subject the separate estate to the payment for supplies for carrying on the wife's plantation, and so far as she was surety for her husband, and had mortgaged her property to pay his debt, to subject the rents, issues, and profits of her separate es- tate to the payment of that debt. With respect to the duty of trustees in relation to real property, it is still held, in conformity to the old law of uses, that per- nancy of the profits, execution of estates, and defense of the land, are the three great prop- erties of the trust. Therefore a court of chancery will compel trustees (1) to permit the cestui que trust to receive the rents and profits of the land; (2) to execute such con- veyances aa the cestui que trust shall direct; (3) to defend the title of the land in any court of law or equity. Tiff. & B. Trusts, 815. A cestui que trust may lawfully dispose of his trust estate, notwithstanding his title is contested by the trustee, for the latter can never disseize the former of the trust estate; but, so long as it continues, the possession of the trustee is treated, at least in a court of equity, as the possession of the cestui que trust Baker v. Whiting, 3 Sumn. 475, Fed. Cas. No. 787. It is insisted that the power of sale con- tained in a mortgage deprives the mortgagor of his equity of redemption, and therefore cannot rightfully be exercised. The principle seems to be now well established, though after great doubt and discussion, that a clause may legally be inserted in the mort- gage deed empowering the mortgagee, upon breach of condition, to mal^e sale of the mortgaged premises, to pay his debt from the proceeds, and account with the mortgagor for the balance. The power of sale is to apply solely to the remedy, and not to impair any right of the mortgagor. The power of sale does not bar the mortgagee's right to foreclose by judicial proceedings. The rem- edy is cumulative merely, and in no respects affects the jurisdiction or proceedings of a court of chancery. 1 Hil. Mortg. 128, 129. And such sale, made after the law day or breach of condition, and in pursuance of the terms of the mortgage, vests in the pur- chaser all the title conveyed by the mort- gage, free from the right of redemption. There is nothing in the record tending in any way to impeach the validity of the mortgage. There is no evidence of any un- due influence or improper conduct or con- trol on the part of the husband to obtain the wife's assent and signature to the mort- gage deed. And the debt in question was not incurred for the husband alone, or for unworthy purposes. It was for money ad- vanced and articles supplied, partly for the family, partly for the use of Mrs. Walker, and partly for the benefit of the trust es- tate. We can, therefore, perceive no good reason why the mortgage should not be en- forced against the separate estate or Its in- come, according to the nature, extent, and character of the liability, when ascertained by proof. It is objected that the mortgagees had no right to sell the corn advertised, under the power of sale contained in the mortgage deed, for the reason that there was no corn mortgaged. This objection is well taken, for it is very clear that the mortgagees can sell under the power only the property covered by the mortgage. For the reasons set forth in this opinion, we think the court below erred in dissolving the injunction. The decree must therefore be reversed and cause remanded. MAXIMS OF EQUITY. 15 '^ SPBIDEIi et al. v. HENRICI. (7 Sup. Ct 610, 120 U. S. 377.) Supreme Court of the United States. March 7, 1887. Appeal from the Circuit Court of the United States for the Western District of Pennsylvania. Wm. Reinecke, Geo. Hoadly, E. M. John- son, and Edwd. Colston, for appellants. George Shiras, Jr., for appellees. GRAY, J. This bill was filed against the trustees of the Harmony Society, an unin- corporated association of persons living to- gether as a community, by a former member of the society, claiming a share in property ..^In the hands of the trustees. The bill is sought to be maintained on the ground that the trust was not a charity, in the legal sense, and the members of the society were equitable tenants in common of the property held in trust. The learned counsel for the appellants differ in theif views of the trust; the one insisting that it was unlawful, be- cause founded in fraud and against public policy, and should therefore be dissolved; and the other contending that it was a law- ful and continuing trust. We have not found it necessary to consider which of these is the sound view, because we are of opinion that the plaintiff did not show him- self to be entitled to involie the interposi- tion of a court of equity. As a general rule, doubtless, length of time is no bar to a trust clearly established, and express trusts are not within the stat- ute of limitations, because the possession of the trustee is presumed to be the possession of his cestui que trust. Prevost v. Grata, 6 Wheat. 481, 497; Lewis v. Hawkins, 23 Wall. 119, 126; Railroad Co. v. Durant, 95 U. S. 576. But this rule is, in accordance with the reason on which it is founded, and as has been clearly pointed out by Chan- cellor Kent and Mr. Justice Story, subject to this qualification: that time begins to run against a trust as soon as it is openly dis- avowed by the trustee insisting upon an ad- verse right and Interest which is clearly and unequivocally made known to the cestui que trust; as when, for instance, such transac- tions take place between the trustee and the cestui que trust as would, in case of tenants in common, amount to an ouster of one of them by the other. Kane v. Bloodgood, 7 Johns. Ch. 90, 124; Robinson v. Hook, 4 Mason, 139, 152, Fed. Cas. No. 11,956; Baker v. Whiting, 3 Sum. 475, 486; Oliver v. Piatt, 3 How. 333, 411. This qualification has been often recognized in the opinions of this court, and distinctly affirmed by its latest judg- ment upon the subject Willison v. Wat- kins, 3 Pet. 43, 52; Boone v. Chiles, 10 Pet 177, 223; Seymour v. Freer, 8 Wall. 202, 218; Bacon v. Rives, 106 U. S. 99, 107, 1 Sup. Ct 3; Philippi v. Philippe, 115 U. S. 151, 5 Sup. Ct. 1181. In the case of an implied or con- structive trust unless there has been a fraudulent concealment of the cause of ac- tion, lapse of time is as complete a bar in equity as at law. Hovenden v. Annesley, 2 Schoales & L. 607, 634; Beckford v. Wade, 17 Ves. 87. In such a case. Chief Justice Marshall repeated and approved the state- ment of Sir Thomas Plumer, M. R., in a most important case in which his decision was affirmed by the house of lords, that, '"'both on principle and authority, the laches and non-claim of the rightful owner of an equitable estate, for a period of 20 years, (supposing it the case of one who must with- in that period have made his claim in a court of law, had it been a legal estate,) under no disability, and where there has been no fraud, will constitute a bar to equitable re-^ lief, by analogy to the statute of limitationSj if, during all that period, the possession has been under a claim xmequivocally adverse, and without anything having been done or said, directly or indirectly, to recognize the title of such rightful owner by the adverse possessor." Elmendorf v. Taylor, 10 Wheat. 152, 174; Cholmondeley v. Clinton, 2 Jac. & W. 1, 175, and 4 Bligh, 1. Independently of'' any statute of limitations, courts of equity uniformly decline to assist a person who has slept upon his rights, and shows no excuse for his laches in asserting them. A "A court of equity," said Lord Camden, "has always refused its aid to stale demands, where the party slept upon his rights, and acquiesced for a great length of time.^ Nothing can call forth this court into activity but conscience, good faith, and reasonable diligence^ where these are wanting, the court is passive, and does nothing. Laches and neglect are al- ways discountenanced, and therefore, from the beginning of this jurisdiction, there was always a limitation to suits in this court." Smith V. Clay, 2 Amb. 645, 3 Brown, Ch. 640, note. This doctrine has been repeated- ly recognized and acted on here. Piatt v. Vattier, 9 Pet. 405; McKnight v. Taylor, 1 How. 161; Bowman v. Wathen, 1 How. 189; Wagner v. Baird, 7 How. 234; Badger V. Badger, 2 Wall. 87; Hume v. Beale, 17 Wall. 336; Marsh v. Whitmore, 21 Wall. 178; Sullivan v. Railroad, 94 U. S. 806; Godden v. Kimmell, 99 U. S. 201. In Hume v. Beale, the court in dismissing, because of unex- plained delay in suing, a bill by eestuis que trust against a trustee under a deed, ob- served that it was not important to deter- mine whether he was the trustee of a mere dry legal estate, or whether his duties and responsibilities extended fm'ther. 17~ Wall. 348. See, also. Bright v. Legerton, 29 Beav. 60, and 2 De Gex, F. & J. 606. When the bill shows upon its face that the plaintiff, by reason of lapse of time and of his own laches. Is not entitled to relief, the objec- tion may be taken by demurrer. Maxwell V. Kennedy, 8 How. 210; National Bank v. Carpenter, 101 U. S. 567; Lansdale v. Smith, 106 U. S. 391, 1 Sup. Ct. 300. 16 MAXIMS OF EQUITY. The allegations of this bill, so far as they are material to the defense of laches, are In .substance as follows: The Harmony So- ciety Is a voluntary association, formed In 1805 by the plaintiff's parents and other heads of families, who had emigrated from Germany under the leadership of one Rapp, and become subject to his control in both spiritual and temporal affairs. In that year, Rapp, for the purpose of acquiring absolute dominion over their means and mode of liv- ing, falsely and fraudulently represented to them that they could not be saved from eternal damnation except by renouncing the plan of a separate home for each family, yielding up aU their possessions, as had been done by the early Ohristians, and laying them at the feet of Rapp as their apostle, to be put into a common fund of the society, and thenceforth living as a community under his control, receiving in return only the neces- saries of life; and they, Induced by and re- lying on his false and fraudulent representa- tions, immediately yielded up all their pos- sessions to the common fund of the society, and placed the fund in his keeping as their trustee, and thenceforth lived as a commu- nity or common household, submitted them- selves and their families to do for the com- munity such work as he directed, allowed the avails thereof to form part of the com- mon fund, and relinquished to him and his successors m the leadership of the commu- nity the management of the trust fund and the control of their own persons and those of their wives and children, and received only the necessaries of life in return. Rapp received and accepted the trust fund, and all the accretions to it by the work of the in- habitants of the community or otherwise, not as his own, but in trust for the members of those families and the contributors to the fund, and for their common benefit; and al- ways, up to his death in 1847, recognized and acknowledged said trust, and disclaimed any greater interest in the fund than that of any other contributor, and any other right to Its management and control than by vir- tue of his leadership of the community. In 1807 Rapp obliged his followers to abjure matrimony, and theqceforth did not permit them to marry in the community, and com- pelled any one about to marry to leave it. The plaintiff was born in the community in 1807, and was reared in and as a part of it, under Rapp's teachings and control, and faithfully worked for it from the age of 12 to the age of 24 years, and allowed the avails of his work to become part of the common fund, and received in return nothing but the necessaries of life, which were of far less value than the avails of his work; and in 1831, being about to marry, had to leave and did leave the community. The trust fund so received and accepted by Rapp, with its profits, interest, and accretions, now amounts to $8,000,000, and yields an annual Income of $200,000, and is held by the defendants on the same trust on which Rapp held it in his life-time; and neither Rapp nor the de- fendants ever rendered any account to the plaintiff or to the beneficiaries of the fund, although the plaintiff, before bringing this suit in May, 1882, demanded of the defend- ants an account and a settlement of his share. The trust on which Rapp, and the defendants as his successors, held the com- mon fund of the Harmony Society, is de- scribed In one place in the bill as "for the members of said families and the contribu- tors of said fund, and for their common ben- efit;" that is to say, as is clearly explained by what goes before, in trust for then: com- mon benefit as a community, living together in the community, working for the com- munity, subject to the regulations of the community, and supported by the commu- nity. This was the "said trust," which, as the bill afterwards alleges, Rapp, up to his death, and his successors, until the bringing of this suit, "always recognized and ac- knowledged." The constant avowal of the trustees that they held the trust fund upon such a trust is wholly Inconsistent with and adverse to the claim of the plaintiff that they held the fund in trust for the benefit of the same persons as Individuals, though withdrawn from the community, living by themselves, and taking no part in its work. The plaintiff, upon his own showing, with- drew from the community in 1831, and never returned to it, and, for more than 50 years, took no step to demand an account of the trustees, or to follow up the rights which he claimed In this bill. If he ever had any rights, he could not assert them after such a delay,— not on the groimd of an express and lawful trust, because the ex- press trust stated in the bill, and constantly avowed by the trustees during this long pe- riod, was wholly inconsistent with any trust which would sustain his claim; not on the ground that the express trust stated in the bill was unlawful and void, and therefore the trustees held the trust fund for the ben- efit of all the contributors in proportion to the amounts of their contributions, because that would be an implied or resulting trust, and barred by lapse of time. In any as- pect of the case, therefore. If it was not strictly within the statute of limitations, yet the plaintiff showed so little vigilance and so great laches, that the circuit court rightly held that he was not entitled to re- lief in equity. It Is proper to add that this decision does not rest in any degree upon the judgments of the supreme court of Pennsylvania and of this court, in the cases cited at the bar, in favor of the trustees of the Harmony Society in suits brought against them by other members, because each of those cases differed in its facts, and especially in show- ing that the society had written articles of association, which are not disclosed by this bill. Schriber v. Rapp, 5 Watts, 351; Baker v. Nachtrleb, 19 How. 126. Decree affirmed. >. "MAXIMS OF EQinTT. 17 HAWKER T. MOORE et al. (20 S. E. 848, 40 W. Va. 49.) Supreme Court of Appeals of West Virginia. Dec. 8, 1894. Appeal from circuit court, Harrison county. Bill by Owen Hawker against Wilson Moore and others. From a decree for plain- tiff, defendant Moore appeals. Affirmed. J. Philip Clifford, for appellant John Baa- sel, t- lent grantee, is well sustained by authority. 4 Kent, Gomm. 464; Sleeper v. Chapman, 121 Mass. 404; Phelps v. Morrison, 24 N. J. Eq. 195; Totten v. Brady, 54 Md. 170; Swan v. Dent, 2 Md. Gh. Ill (note 9, Brantly's Ed.); Wait, Fraud. Conv. § 369. In the case of Bank v. Brooke, 40 Md. 257, the title of a bona fide purchaser of a mortgage note to the lien of the mortgage securing it was upheld against the suit of the creditors of the mort- gagor, although It was admitted that the note and mortgage had been given in prejudice of the rights of his creditcffs, and would have been void as against them in the hands of the mortgagee. The fact that the mortgage in that case was accompanied by a promissory note distinguishes it from the case at bar, but the circumstance of the negotiability of the mortgage debt was not expressly men- tioned or dwelt upon in the court's opinion. See, also, Danbury v. Robinson, 14 N. J. Eq. 218, 219. A bona fide mortgagee from a fraudulent grantee has in a number of cases been held to be entitled to protection, to the extent of the debt due him, against the creditors of the fraudulent grantor, upon the ground that a ~Biortgagee is to be treated as a purchaser, to the extent of his interest, within the mean- ing of the term "purchaser" as used in stat- utes such as that of 13 BJiz. c. 5; and this where the mortgage was not accompanied by a negotiable instrument. Ledyard v. Butler, 9 Paige, 136, 137; Murphy v. Brlggs, 89 N. Y. 451; Shorten v. Drake, 38 Ohio St. 76; Moore V. Bank, 55 N. Y. 41. If the mortgage in the present case had been made directly from Cecil K. Atkinson to the appellant, no ques- tion could be made by Atkinson's creditors as to the appellant's lien upon the mortgaged property to the extent of the money advanced bona fide upon the faith of the property at the time the mortgage was made. When, therefore, Atkinson clothed Steers with the appearance of a good mortgage title of rec- ord to the property, for the purpose of enabl- ing him to raise money upon the mortgage, and the appellant, relying upon this appear- ance of good title in Steers, after a careful examination of the public records, and a fail- ure to find any prior Incumbrances upon the p» property, parted with its money in good faith, it Is entitled to the favor of a court of equity in the consideration of the relative equities of the parties to the controversy. This court, In r Seldner v. McCreery, 75 Md. 296, 23 Atl. 643. J said, "Where title is perfect on its face, and no known circumstances exist to impeach it ^; or put a purchaser on Inquiry, one who buys bona fide and for value occupies one of the most highly favored positions in the law."_> The appellant did not trust to the personal responsibility of the mortgagor, but lent its money upon the faith of the particular prop- erty covered by the mortgage, and required an assignment of the mortgage at the time of so doing. On the contrary, the appellees trusted to the mortgagor, or to such other col- laterals as he lodged with them; and the ap- pellee Gordon, although he knew when he lent his money that Cecil B. Atkinson owned the Howard street warehouse, did not insist upon having a lien on it for his loan, but deliberately relied, so far as the warehouse was concerned, upon his rights as an ordinary creditor of its owner. The equities of the ap^*" pellant are at least equal to those of the ap- pellees, and, having the' legal title to the warehouse, it has the stronger claim thereon, under the familiar principle that where eqtii- ties are equal the legal title must prevail,^^,>t» Pom. Eq. Jur. § 417; Wait, Fraud. Conv. § 370; Townsend v. Little, 109 V. S. 512, 3 Sup. Ct. 357, 27 L. Ed. 1012; Black v. Cord, 2 Har. & G. 103; Bassett v. Noteworthy, 2 Lead. Cas. Eq. (4th Am. Ed.) 1. In Dyson v. Simmons, 48 Md. 214, it was held, upon the authority of many cases there cited', that If a party makes, or affects to make, a mortgage which proves to be defective by reason of some in- formality or omission, even on the part of the mortgagee himself, the conscience of the mortgagor is bound, and equity will recognize and enforce the lien of the defective' mort- gage, and give it precedence over the sub- sisting creditors of the mortgagor, and also over judgments obtained against him after the date of the mortgage. General creditors have no lien on the property of the debtor, and a judgment is only a general lien, and is for that reason subordinate to the prior spe- cific equitable lien of such a defective mort- gage. The case at bar does not come direct- ly within the principle asserted in the last- mentioned case, but it is certainly one in which, by reason of its peculiar facts, the conscience of the mortgagor was especially bound to the appellant; and we think that the same course of reasoning might well be applied, within proper limits, to the appel- lant's protection. This court has frequently been called upon to assert and define the rights of the credit- ors of a grantor, as against a conveyance made by him which, by reason of inadequacy or want of consideration, or even by design, operated to hinder, delay, or defraud them. The court has not hesitated to sti-ike down such conveyances at the suit of the creditor, holding that one cannot make a voluntary con- veyance of his property, as against the rights of subsisting creditors, nor can he, as against such creditors, sell it for a consideration that bears no adequate relation to its real value. When, however, in such cases, the rights of parties, even if they were the immediate 22 MAXIMS OF EQUITY. grantees under the conveyance, who had in good faith parted with value in reliance upon the conveyance, have had to be measured against those of the creditors, it has uniform- ly been held that, in order to do full justice to all the parties In such cases, a court of equity, in setting aside the deed, will allow it to stand as security for the consideration ac- tually paid, and apply the balance to the pay- ment of the vendor's debts. These proposi- tions were distinctly upheld in the cases al- ready cited of Cone v. Cross, Hull v. William Deering & Co., Hinkle v. Wilson, and Worth- ington V. Bullitt. We regard the principle of the last-mentioned cases, in none of which was the position of the party claiming under the conveyance strengthened by any element of negotiability in the subject-matter of the thing assigned to him, as properly applicable to the one at bar. The mortgaged property should be sold, and the proceeds of sale, after deducting proper expenses, applied first to the payment of the $5,000 lent by the appellant to Steers, with interest thereon, and then to the payment of the creditors of Cecil R. Atkinson, the mortgagor, who have come or may comp into the case, according to their legal priori- ties. We do not mean by this decision to disturb the authority of the Cumberland Coal & Iron Co. Case, upon which the learned judge be- low mainly relied in changing his opinion, nor that of the Copeland Case. In each of those cases the issue on trial was between the own- er of property, who had been fraudulently in- duced to execute a mortgage upon It, and an assignee of the fraudulent mortgage, and they were both cases of flagrant fraud In fact. The rights of the creditors of the grantor were not in issue in either case. In the Cumberland Coal & Iron Co. Case the court asserted the proposition that the transfer of a mortgage is so far within the rule which applies to choses in action, that when the as- signment is made without the concurrence of the mortgagor, as in that case, the assignee talses subject to the same equities and de- fenses to which the assignor was liable. We do not, however, understand the court, by what was said in that opinion, to intimate that, when the equities in behalf of the cred- itors of the mortgagor in such a case came to be asserted, their claims would be en- forced, without regard to the proposition, so frequently upheld by this court in setting aside fraudulent conveyances at the suit of the creditors of the grantor, that, in order to do justice to all parties in such cases, the con- veyances will be allowed to stand as security for the consideration actually paid on the faith of it by the party holding the legal title under it. Decree reverse^ jure." This is an incorrect statement of the rule, for that proposition is far from being universally true. In fact not only is it not universally true as between persons having only equitable interests, but it is not uni- versally true even where their equitable in- terests are of precisely the same nature, and in that respect precisely equal, as in the com- mon case of two successive assignments for valuable consideration of a reversionary in- terest in stock standing in the names of trustees, where the second assignee has given notice and the first has omitted it. Another form of stating the rule is this, "As between persons having only equitable interests, if their equities are equal, qui prior est tempore potior est jure." This form of stating the rule is not so obviously incorrect as the former; and yet even this enunciation of the rule (when accurately considered) seems to me to involve a contradiction, for, when we talk of two persons having equal or unequal equities, in what sense do we use the term "equity?" For example, when we say that A. has a better equity than B., what is meant by that? It means only that, according to those principles of right and justice which a court of equity recognizes and acts upon, it will prefer A. to B., and will interfere to enforce the rights of A. as against B., and therefore it is impossible, (strictly speaking) that two persons should have equal equities, except in a case in which a court of equity would altogether re- fuse to lend its assistance to either party as against the other. If the Court will inter- fere to enforce the right of one against the other on any ground whatever, — say on the ground of priority of time,— how can it be said that the equities of the two are equal? i. e., in other words, how can it be said that the one has no better right to call for the in- terference of a court of equity than the other? To lay down the rule therefore with perfect accuracy, I think it should be stated in some such form as this, "As between per- ( sons having only equitable interests, if their / equities are in all other respects equal, prlor-j ity of time gives the better equity, or qui) prior est tempore potior est jure." i— -r I have made these observations, not of course for the purpose of a mere verbal criti- cism on the enunciation of a rule, but in or- der to ascertain and illustrate the real mean- ing of the rule itself, and I think the mean- ing is this, that, in a contest between per- sons having only equitable interests, priority of time is the ground of preference last re- sorted to, i. e., that a court of equity will not prefer the one to the other, on the mere ground of priority of time, until it finds upon an examination of their relative merits that there is no other sufficient ground of prefer- ence between them, or, in other words, that their equities are in all other respects equal, and that, If the one has on other grounds a better equity than the other, priority of time Is Immaterial. In examining into the relative merits (or equities) of two parties having adverse equitable Interests, the points to which the court must direct its attention are obviously these, the nature and condition of their re- spective equitable interests, the circumstan- ces and manner of their acquisition, and the whole conduct of each party with respect thereto. And in examining Into these points It must apply the test, not of any technical rule or any rule of partial application, but the same broad principles of right and justice which a court of equity applies universally in deciding upon contested rights. Now in the present case each of the par- ties in controversy has nothing but an equita\ ble Interest; the plaintiffs' interest being a vendor's lien for unpaid purchase money, and the defendant Ede having an equitable mort- gage. Looking at these two species of equitable interests abstractedly, and without reference to priority of time, or possession of the title deeds, or any other special circum- stances, is there anything in their respective natures or qualities which would lead to the conclusion that In natural justice the one Is better, or more worthy, or more entitled to protection than the other? Each of the two equitable interests arises out of the forbearance by the party of money due to him. There is, however, this differ- ence between them, that the vendor's lien for unpaid purchase money is a right created by a rule of equity, without any special con- tract. The right of the equitable mortgagee is created by the special contract of the par- ties. I cannot say that in my opinion this constitutes any sufficient ground ' of prefer- ence, though, if it makes any difference at all, I should say it is rather in favor of the equitable mortgagee. Inasmuch as there is no constat of the right of the vendor to his lien for unpaid purchase money imtil It has been declared by a decree of a court of equity, whereas there is a clear constat of the equl- 24 MAXIMS OF BQUITX. table mortgagee's title immediately on the contract being made; but I do not see in this any sufficient ground for holding that the equitable mortgagee has the better equi- ty. So far, then, as relates to the nature and quality of the two equitable interests ab- stractedly considered, they seem to me to stand on an equal footing; and this I con- ceive to have been the ground of Lord El- don's decision in Mackreth v. Symmons, 15 Ves. 329, where, in a contest between the vendor's lien for unpaid purchase money and the right of a person who had subsequently obtained from the purchasers a mere con- tract for a mortgage, and nothing more, he decided in favour of the former, as being prior in point of time. If, then, the vendor's lien for unpaid pur- chase money, and the right of an equitable mortgagee by mere contract for a mortgage, are equitable interests of equal worth in re- spect of their abstract nature and quality, is there anything in the special circum- stances of the present case to give to the one a better equity than the other? One special circumstance that occurs Is this, that the equitable mortgagee has the possession of the title deeds. The question therefore arises, between two persons having equitable interests of equal worth, does the possession of the title deeds by one of them give him the better equity? In Foster v. Blackstone, 1 Myl. & K. 307, Sir John Leach, M. R., says, "A declaration of trust of an outstanding term, accompanied by a delivery of the deeds creating and continuing the term, gives a better equity than a mere declaration of trust to a prior incumbrancer." That is a case in which the two parties have equitable interests in the term of precisely the same nature, viz., a declaration of trust of the term without an actual assignment; and there the delivery of the deeds to the subsequent Incumbrancer gives him the bet- ter equity. To the same effect is the de- cision in Stanhope v. Lord Vemey, according to Lord St. Leonards' view of it, as reported in Butl. Co. Lltt. p. 290, 1 Mylne & K. note 1, § 15 (which seems a more satisfactory re- port than that in 2 Eden, 81). Lord St Leonards, 3 Sugd. Vend. 218, states it thus, "In Stanhope v. Earl Vemey, Lord Northing- ton held that a declaration of trust of a term in favour of a person was tantamount to an actual assignment, unless a subse- quent incumbrancer, bona fide and without notice, procured an assignment, and that the custody of the deeds respecting the term, with the declaration of the trust of it in favour of a second incumbrancer, was equivalent to an actual assignment of it, and therefore gave him an advantage over the first incumbrancer, which equity could not take from him." The same doctrine appears to be recognized by Lord Eldon in Maun- drell V. Maundrell, 10 Ves. 271, where he says, "It is clear, with regard to mortgagees and Incumbrancers, that if they do not get in the satisfied term in some sense, either taking an assignment, making the trustee a party to the instrument, or taking possession of the deed creating the term, that term can- not be used to protect them against any per- son having mesne charges or incumbrances," implying that taking possession of the deed creating the term would confer on a subse- quent incumbrancer such right of protection by means of the term. We have here, then, ample authority for the proposition, or rule of equity, that as between two persons whose equitable interests are of precisely the same nature and quality, and in that respect precisely equal, the possession of the deeds gives the better equity; and, applying this rule to the present case, it appears to me that, the equitable interests of the two par- ties being in their nature and quality of equal worth, the defendant having posses- sion of the deeds has the better equity, and that there Is, therefore, in this case, no room for the application of the maxim, "Qui prior est tempore potior est jure," which is only applicable where the equities of the two par- ties are in all other respects equal. I feel all the more confidence In arriving at this conclusion inasmuch as it Is In accordance with the opinion expressed by Lord St Leonards in his work on vendors and pur- chasers; and I have no doubt that in Mack- reth V. Symmons, if the equitable mortgagee had, in addition to his contract for a mort- gage, obtained the title deeds from his mort- gagor. Lord Eldon would have decided in his favour. I must however, guard against the sup- position that I mean to express an opinion that the possession of title deeds will in all cases and under all circumstances give the better equity. The deeds may be In the possession of a party in such a manner and under such circumstances as that such pos- session will confer no advantage whatever. For example, in Allen v. Knight 5 Hare, 272 (affirmed by the Lord Chancellor and report- ed on appeal in 11 Jur. 527), the deeds had been delivered to the first equitable mort- gagee, and by some unexplained means they had got back into the possession of the mort- gagor who delivered them to a subsequent equitable mortgagee. It was insisted by the latter that it must be presumed that it was by the fault or neglect of the first mortgagee that the deeds had got out of his possession, or that at all events the court should direct an inquiry as to the circumstances. But the court held that the onus lay on the second mortgagee of proving such alleged fault or neglect of the first mortgagee; and, as he had failed to prove it the court could not presume it nor du-ect an inquiry on the sub- ject, and decreed in favour of the first mort- gagee. I think It may be clearly Inferred from this case that if the first mortgagee had never had the deeds delivered to him, or if it had been proved that the deeds had got back to the mortgagor through his fault or MAXIMS OF EQUITY. 25 Qeglect, the decision would have been in fa- vour of the second mortgagee who had the deeds. So the deeds may have come into the hands of a subsequent equitable mortgagee by means of an act committed by another person which constituted a breach of an ex- press trust as against the person having the prior equitable interest In such a case it would be contrary to the principles of a court of equity to allow the subsequent mortgagee to avail himself of the injury which had been thus done to the party having the prior equi- table estate or interest. Indeed it appears to me that in all cases of contest between persons having equitable in- terests the conduct of the parties and all the circumstances must be talien into considera- tion, in order to determine which has the bet- ter equity; and, if we take that course in the present case, everything seems in favour of the defendant, the equitable mortgagee. The vendors, when they sold the estate, chose to leave part of the purchase money unpaid, and yet executed and delivered to the purchaser a conveyance, by which they declared in the most solemn and deliberate manner, both in the body and by a receipt indorsed, that the whole purchase money had been duly paid. They might still have re- quired that the title deeds should remain in their custody, with a memorandum by way of equitable mortgage as a security for the un- paid purchase money, and. If they had done so, they would have been secure against any subsequent equitable incumbrance; but that they did not choose to do, and the deeds were delivered to the purchaser. Thus they volun- tarily armed the purchaser with the mesins of dealing with the estate as the absolute le- gal and equitable owner, free from every shadow of incumbrance or adverse equity. In truth it cannot be said that the purchas- er in mortgaging the estate by the deposit of the deeds has done the vendors any wrong, for he has only done that which the vendors authorized' and enabled him to do. The de- fendant, who afterwards took a mortgage, was in effect invited and encouraged by the vendors to rely on the purchaser's title. They had, in effect, by their acts, assured the mortgagee that, as far as they (the vendors) were concerned, the mortgagor had an abso- lute indefeasible title both at law and in equity. The mortgagee was guilty of no negligence. He was perfectly justified in trusting to the security of the equitable mortgage by deposit of the deeds, without the slightest obligation to go and inquire of the vendors whether they had received all their purchase money, when they had already given their solemn assurance in writing that they had received every shilling of it and had conveyed the estate and delivered over the deeds; and I do not think that the fact of the conveyance bearing date only the day before the mort- gage imposed on him anj' such obligation. The defendant omitted nothing that was nec- essary to constitute a complete and effectual equitable mortgage; and although the mort- gage was taken, not for money actually ad- vanced at the time, but for an antecedent debt, the forbearance of that debt constitutes a full and sufficient valuable consideration. Upon a comparison then of the conduct of the two parties, and a consideration of all the circumstances of the case, and especially the fact of the possession of the deeds, which the mortgagee acquired with perfect bona fides, and without any wrong done to the vendors, I am of opinion that the equity of the mortgagee is far better than that of the vendor, and ought to prevail. I may, in conclusion, venture to make the suggestion that the point now under consider- ation is often put by text-writers in a form calculated to mislead, when it is propounded as a question whether the vendor, in re- spect of his lien for unpaid purchase money, or an equitable mortgagee, ought to be pre- ferred, or when an opinion is expressed that ttie one or the other has the better equity. If I am right in my view of the matter, nei- ther the one nor the other has necessarily and under all circumstances the better eq- uity. Their equitable Interests, abstractedly considered, are of equal value in respect of their nature and quality; but whether their equities are in other respects equal, or wheth- er the one or the other has acquired the bet- ter equity, must depend upon all the circum- stances of each particular case, and especial- ly the conduct of the respective parties. And among the circumstances which may give to the one the better equity the possession of the title deeds is a very material one. But if, after a close examination of all these matters, there appears nothing to give to the one a better equity than the other, then, and then only, resort must be had to the maxim, "Qui prior est tempore potior est jure," and priority of time then gives the better equity. 26 MAXIMS OP EQUITY. COMSTOCK V. JOHNSON. (46 N. Y. 615.) Court of Appeals of New York. 1871. Appeal from judgment of the general term of the supreme court in the Sixth judicial district, alHrming judgment in favor of plain- tiff entered upon the decision of the court ^at special term. This action was brought to restrain the defendants from diverting or vrithholding the waters of their mill dam and flume on the Oaks creek, In the town of Otsego, from flowing to the carding machine and fulling mill of the plaintiff, situated on said creek be- low said mill dam. Prior to the 24th of January, 1824, William Johnson and James Johnson were the own- ers of lands on both sides of said creek, upon which were a dam, grist mill, a saw mill, and a carding machine and clothing works, all run by water power from the same dam, and all owned by said Johnsons. On the 24th of January, 1824, the Johnsons conveyed to one Plumb the carding machine and cloth- ing works, and the land whereon they stood, the terms of the deed in respect to the sub- ject of the conveyance being as follows: "Those certain pieces or parcels of land, with the messuages and tenements thereon, situate, lying, and being in the town of Otse- go, aforesaid, and being the same on which the carding machine, and clothing works and shops, now occupied, etc., now stand, with the privilege of drawing from some conven- ient place from the mill dam, situate on- Oaks creek, immediately above said carding machine and clothing works, a suflScient quantity of water for the use of said works: provided, nevertheless, that said works do not draw more than a fair proportion of the wa- ter from the grist mill, which is situated on the same dam; that is, in time of scarcity of water the said works shajl be permitted to card and full the same length of time that the grist mill grinds; and provided that no more machinery shall be put in operation for card- ing than a breaker, a roller, a picker, all to be single, together with the hereditaments and j^ppurtenandes thereunto belonging or apper- taining; the grist mill to have all the water on Sundays, except what will be necessary to scour cloth." Plumb entered into possession of said card- ing machine and clothing works at the date of the deed to him, and used the open ground in front of the same as a means of access thereto, and for piling wood for the works, and continued to occupy and enjoy the same until April 1, 1842, when he con- veyed the same premises and rights to the plaintiff, by a deed describing the subject of conveyance in the same manner as in the said deed to him, from the date of which deed to the time of the trial the plaintiff has been in possession of the premises so occu- pied by said Plumb, occupying and enjoy- ing them in the same manner. For about nine years past, the plaintiff has discontinued his fulling works, but still runs his carding machines with the water drawn from said dam. For about the same length of time, and since the discontinuance of the clothing works, the plaintiff has every spring drawn water for a few days from the dam for the purpose of operating a buzz or circular saw for sawing his own (and last spring his son's) fire wood, and has been accustomed to run said saw and saw wood in front of the cloth- ing works and carding machine shop, about thirteen and one-fourth fe(?t from the same, upon the open grounds In front of the same, being land not conveyed to said Plumb or to the plaintiff, but which belongs to the de- fendants, and constituting a part of their grist-mill yard, where teams of customers drive up to the grist mill and the clothing and carding machine works, and have been so used since the giving of said deeds. The saw was placed at a point thirteen and one-fourth feet from the center of the highway leading across the creek, and horses going to the plaintiff's grist mill and along the said highway were sometimes frightened by plaintiff's saw. Less water was used by plaintiff in oper- ating his saw than was necessarily used for operating his mill before it ran down. On the 13th of April, 1867, the plaintiff was running his saw as aforesaid, when the de- fendants shut off the water from the plain- tiff, so that he could not run so much, claim- ing that he (the plaintiff) had no right to the water for that purpose. They also shut the water off from the carding machine by firm- ly nailing a plank over the mouth of the trunk conveying the water from the big flume to the carding machine, declaring to the plain- tiff at the same time that he had forfeited his right to the water. CHURCH, C. 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 tjiis 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 plain tiS 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 whicl) lie 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 MAXIMS OF EQUITY. 27 is limited to the land upon which the mill stands i but he did acquire an easement in such land for the purpose of ingress and egress, 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, ap- purtenant to the land conveyed. (2 Kent's Com., 467; Blaine's Lessee v. Chambers, 1 Serg. & Rawle, 174.) But this would not au- thorize the plaintiff to erect and use ma- chinery upon this land not necessary to the 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 the 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 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 judgmest 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, the judgment against the- defendants la fully warranted by the findings; and theques- 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., 143; McDonald v. Neilson, 2 Oow., 190; Caslei- 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; aud 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- I peciallyin asserting a forfeiture; and, as both ! parties are in court to insist upon their strict legal rights, we thinksubstantial 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 affirmed, without costs to either party against the other in this court. All concur. Judgment accordingly. 28 MAXIMS OF EQUITY. BROWN, BONNELL & CO. v. LAKE SUPE- RIOR IRON CO. et al. (10 Sup. a. 604, 134 U. S. 530.) Supreme Court of the United States. April 7, 1800. Appeal Irotn the circuit court of the Unitea States for the nortliern district of Ohio. Henry Craw foi d, lor appellant. Francis Wing, C. C. Baldwin, S. iSbellabarger, and J. M. Wilson, for appellees. Bkewer, J. On February 20, 1883, two of the appellees, the Lake Superior Iron Company and the JacksojQ Iron Company, together with the Negaunee Concentrating Company, filed their bill against the appel- lant, -iii the circuit court of the United States for the northern district of Ohio. Tlie appellant was a corporation, created under the laws of the state of Ohio, and each of the complainants was a creditor; two holding claims evidenced by notes not then due, and the other, the Negaunee Concentrating Company, holding a judg- ment. The prayer of the bill was for the appointment of a receiver to take charge of the property and assets of the defendant, and for such other and further relief as ■was proper. On the same day the defend- ant entered its appearance, and accepted service of notice of a motion for the ap- pointment of a receiver; and Fayette I3rown was thereupon immediately ap- pointed receiver. On the next day subpoe- na was served on the defendant. On March i!8th a supplemental bill was filed making other parties defendants, and on June 14th an order pro confesso was en- .tered against all of the defendants in the original and supplemental bills. On April 23d an order was entered directing all cred- itors to file their claims by petition, and on October 20th nearly every creditor had appeared and filed his petition. On July 17th an order was entered appointing a special master to report on the claims of creditors, and marshal the liens thereof. Up to the 23d of November the appellant made no opposition to the proceeding, and apparently assented to the action which was being taken by the creditors, looking to the appropriation of its property to the payment of their claims. On that day a change took place in its attitude towards this suit. It went into the state courts, and confessed judgment in behalf of sever- al of its creditors ; and on the 24tb deposit- ed in the registry of the circuit court mon- ey enough to pay off the judgment in favor of the concentrating company, and filed two pleas,— one setting forth the fact of payment, and the other that the original and supplemental bills disclosed that the complainants had a plain, adequate, and complete remedy at law, and that there- fore the court, sitting as a court of equity, had no jurisdiction; and praying a dis- missal of the bills. Subsequently, on De- cember 18th, it filed a motion to discharge the receiver. This motion was overruled, the pleas seem to have been ignored, the master reported upon the claims present- ed, and on February 23, 1886, the court en- tered a decree which, finding the indebted- ness to be as stated by the master, also what property was In possession of the re- ceiver, decreed that upon default in the -payment of those debts the property be sold in satisfaction thereof. From this decree the defendant has brought this ap- peal, and its principal contention Is that the circuit court had no jurisdiction what- ever over the subject-matter of the suit, because it appeared upon the face of the bills, original and supplemental, that the complainants had a plain, adequate, d.nd. complete remedy at law. As heretofore stated, the bill showed that two of the complainants held claims not yet due, and thethirdonlya judgment, with no execution. The supplemental bill alleged that execution had, since the filing of the original bill, been issued on that judgment, and returned nulla bona. The original bill, besides disclosing the nature of complainants' claims, set forth that they were proceeding not alone in their own behalf, but in that of all other credit- ors, whose number was so great as to make it impossibleto join them as parties. It then averred the insolvency of the de- fendant; that it was engaged in large and various business, manufacturing, and min- ing ; that its plant and good- will was of great extent and value; and that it em- ployed operatives to the number of at least 4,000; and then alleged as follows: "And your orators further say that vex- atious litigation has been commenced against the said defendant, and many more such are threatened, and that such litigations are accompanied by attach- ments and seizures of property, and such threatened litigations will also be accom- panied by attachments and seizures, and that such attachments and seizures will give to those creditors who are pursuing them undue and unfair advantage and priority over your complainants, whose claims are not yet due, and make them ir- • reparable injury and damage; that if such litigations be further instituted and its property seized in attachment, as it al- ready has been, there is great dangler that the valuable property of the defendant will be irreparably injured, and to a great ex- tent destroyed; and your orators say that such seizures and interference with the business and the property of the defendant would wholly destroy the value of the good-will of the company as an asset, and wholly break up its long-established busi- ness, and thereby cause detriment and ir- reparable injury to your orators and all other creditors. And your orators further say that, unless this court shall interfere and protect and preserve the property and assets of said defendant by putting it into the hands of a receiver, the said property will be in great danger of destruction and dissipation by the large number of oper- atives who would necessarily be discharged and left without work or means of obtain- ing it ; and such operatives, by reason of the great distrust they already have, and on account of a fear that they will not in tutiare receive remuneration, will abandon their employment, and thereby cause a stoppage of the extensive business of said MAXIMS OF EQUITY, 29 u defendant, to the extent that the creditors of said defendant would not be able to realize one-half of the amount upon the several claims that they would if the said business of the defendant were continued," The appellees, while admitting the gen- eral rule to be that creditors must show that they have exhausted legal remedies before coming into a court of equity, insist that the bill disclosed a case in equity on two grounds : First, that upon the insolv- ency of a corporation its properties become a trust fund forthe benefit of its creditors, which can be seized and disposed of by a receiver, and in equitable proceedings ; and, second, that the vast interests and prop- erties of this corporation, with their threat- ened disintegration through several at- tachment suits, justified the interference of a court of equity to preserve, for the ben- efit of creditors, that large value which re- sulted from the unity of the properties. In support of these propositions counsel cite, as especially applicable.Terry v. Anderson, 95 U. S. 628 ; Union Trust Co. v. Illinois M. Ky. Co., 117 U. S. 434, 6 Sup. Ct. Rep. 809; Sage V. Railroad Co., 125 U. S. 361, 8 Sup. Ct. Rep. 887; Mellen v. Iron -Works, 131 U. S. 352, 9 Sup. Ct. Rep. 781; Barbour v Bank, 45 Ohio St. 133, 12 N. E. Rep. 5; Rouse v. Bank, 46 Ohio St. 493, 22 N. E. Rep. 293. But were it conceded that the bill was defective; that a demurrer must have been sustained; and that the appellant, if it had so choseTi to act in the first instance, could have defended its possession, and defeated the action, — still the decree of the circuit court must be sustained. Whatever rig h t s of o bjection a.nd defense theap peiia.nt, harl. It losTtiy 'inactionandacgni^ipceTice. Ob- Viouslycnt! piucesaings naff were with its consent. Immediately on filing the bill it entered its appearance ; and the same day tL receiver was appointed, without objec- tion on its part. It suffered the bills to be taken pro confesso. It permitted the re- ceiver to go on in the possession of these properties for nine months, transacting large business, entering into many con- tracts, and assuming large obligations, without any intimation of a lack of author- ity, or any objection to the proceedings. After a lapse of nine months, suddenly its policy changed; it contested where thereto- fore it had acquiesced. And this, not be- cause of any restored solvency or purpose to resume business, but with the evident Intent to prevent the equality among cred- itors which the existing equitable proceed- ings would secure, and to give preference to certain creditors ; for clearly it was the thought of the president of the corpora- tion, himself the owner of a large majority of its stock, whose management had wrought its financial ruin, that after the setting aside of the equitable proceedings the lien of the confessed judgments would attach, and thus those favored creditors would be preferred. So the case stands in this attitude : The corporation was insolvent. Its extensive and scattered properties had been brought into single ownership, and so operated to- gether that large benefit resulted in pre- serving the unity of ownership and op- eration. Disintegration was threatened through separate attacks, by different creditors, on scattered properties. The preservation of this unity, with its conse- quent value, and the appropriation of the properties forthe benefit of all the creditors equally, were matters deserving large con- sideration in any proper suit. Certain creditors, acting for all, initiated proceed- ings looking towards this end. In such proceedings the corporation acquiesced. Substantially all of the creditors came in- _ to the proceedings. After months had j passed, much business had been transact- ed and large responsibilities assumed, the corporation, for the benefit of a few cred- itors and to destroy the equality between all, comes in with the technical objection that the creditors initiating the proceed- ings should have taken one step more a^r' law before coming into equity. But the maxim, "He who seeks equity must do equity, " is as appropriate to the conduct "^ of the defendant as to that of the com- plainant; and it would be strange if a debtor, to destroy equality and accomplish partiality, could ignore its long acquies- cence, and- plead an unsubstantial techni- cality to overthrow protracted, extensive, and costly proceedings carried on in reli- ance upon its consent. Surely no such im- perfection attends the administration of a court of equity. Good faith and early as- sertion of rights are as essential on the part of the defendant as of the complain- ant. This matter has recently been before this court in Reynes v. Dumont, 130 U S. 354, 395, 9 Sup. Ct. Rep. 486, and was care- fully considered, and the rule, with its lim- itations, thus stated: '"The rule as stated inl Daniell's Chancery Practice, (4th Amer. Ed.) 555, is that if the objection of want of jurisdiction inequityisnottaken in proper time, namely, before the defendant enters into his defense at large, the court, having the general jurisdiction, will exercise it; and, in a note on page 550, many cases ^ are cited to establish that, ' if a defendant in a suit in equity answers and submits to the jurisdiction of the court, it is too late "^ for him to object that the plaintiff has a plain arid adequate remedy at law. This objection should be taken at the earliest opportunity. The above rule must be taken with the qualification thatitis com- petent for the court to grant the relief sought, and that it has jurisdiction of the subject-matter.' • * * It was held in Lewis V. Cocks, 23 Wall. 466, that if the court, upon looking at the proofs, found none at all of the matters which would make a proper case for equity, it would be the duty of the court to recognize the fact, and give it effect, though not raised by the pleadings nor suggested by counsel. To the same effectis Oelrichs v. Spain, 15 Wall. 211. The doctrine of these and similar cases is that the court, tor its own protec- tion, may prevent matters purely cogniza- ble at law from being drawn into chancery at the pleasure of the parties interested ; but it by no means follows, where the sub- ject-matter belongs to the class over which a court of equity has jurisdiction, and the objection that the complainant has an ad- equate remedy at law is not made until the bearing in the appellate tribunal, that 30 MAXIMS OP EQUITY. the latter can exercise no discretion in the disposition of such objection. Under the circnmstanceB of this case, it comes alto- gether too late, even though, if taken in limine, it might have been worthy of at- tention. " See, also, Kilbourn v. Sunder- land, 130 U. S. 505, 9Sup. Ct. Rep. 594 ; Union Trust Co. V. Illinois M. Ry. Co., 117 U. S. 434-468, 6 Sup. Ct. Rep. 809. Further com- ment is unnecessary. The ruling of the cir- cuit court was correct, and its decree is therefore aflflrmed. '(\ MAXIMS OF EQUITY. 31 BtiBlAKLBY'S APPEAL. (66 Pa. St 187.) Supreme Court of Pennsylvania. Oct. 27, 1870. AGNEW, J. The facts of this case ara few. Robert IJamberton was the owner of a judgment for $31,000, entered against Sam- uel P. Irvltt on the 8th day of June, 1865. Irvin had purchased of P. 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 pro- vision for forfeiture of the contract in case of non-payment for thirty days after it fell due. On the 19th of July, 1865, Irvin as- signed his contract to James Bleakley, binding him to pay the $820 to save the for- feiture, and with the admitted understand- ing that Irvin should refund the $820 to Bleakley, settle his Indebtedness to the bank, of which Bleakley was cashier, and that then Bleakley should reconvey to Irvin's wife. But the assignment was antedated to the 1st of May, 1865, thurf overreaching Lam- berton's judgment. The master finds that this was done to defraud the plaintiff. The finding is ably vindicated In the opinion of Judge Trunkey. The absolute character of the paper, though but a security, the agree- ment to reconvey to Irvin's wife instead of himself, and the attempt of Bleakley to use the paper to defeat the sherifC's sale of the property by Lamberton on his judgment, evince the true motive for antedating the paper. Bleakley paid the $820 to Elinnear, and now claims 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 con- vey to Lamberton, whenever the covinous assignment 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 Ir- vin, to defeat Lamberton's judgment. Bleak- ley is made a party to the bUl only for the purpose of putting aside the covinous as- signment to enable Kinnear to convey to Lamberton. The question then Is whether a chancellor would require Lamberton to re- fund the $820 to Bleakley, as a condition to setting aside the assignmeiit and entitling Lamberton to specific performance of Kin- near. 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 Pa. St. 103. On what pre- tence, in foro conscientiEB, can a party at- tempting to carry out a scheme of fraud against another, by a payment, claim com- pensation of the party he has attempted to defraud? Conscience and benevolence revolt at such an Iniquily. 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 pay- ment was accepted by Kinnear in ignorance of the attempted fraud. There can be no legal intendment 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 fraud- ulent and intended to displace his judgment, but it was also voluntary. It was not paid at Lamberton's request nor for his use and benefit; but on the contrary was intended to defeat his right, as a creditor by over- lapping his judgment, by means of the cov- inous transfer. Bleakley is therefore nei- ther a purchaser, nor a creditor of Lamber- ton, nor an object of benevolence, but is forced upon the record to compel him to put out of the way the fraudulent barrier to Kinnear's specific performance to Lamber- ton. He cannot, thus standing before a chan- cellor, ask him to make repayment to him a condition to a decree to remove the fraudu- lent 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 assist a party, who had paid money to enable him to perpetrate a fraud, to recover his money, just when the chan- cellor was engaged In thrusting out of the way of his doing equity to the injured party, the very instrument of the fraud. Who does iniquity shall not have equity. Hershey v. Weiting, 50 Pa. St 244, 245. We are therefore of opinion the court com- mitted no error in refusing compensation^ and the decree of the court below is con- firmed. 32 MAXIMS OF EQUITY. KAHN V. WALTON et al. (20 N. B. 203, 46 Ohio St 195.) Supreme Court of Ohio. Jan. 8, 1889. Error to circuit court, Greene county. On the 15th day of Februai-y, 1882, Moses A. Walton commenced his action in the court of common pleas of Greene county against the plaintiff in error, Charles Kahn, Jr., and the Citizens' National 'Bank, of Xenla, to en- join the bknlc from paying two checks, one for $1,500 and the other for $500, dra-wn by him upon the bank in favor of Kahn. The petition alleges "that on the 14th day of Feb- ruary, A. D. 1882, the defendant, Charles Kahn, Jr., by fraud and misrepresentation, obtained from the plaintiff his two certain checks of that date for the sums of $1,500 and $500, respectively, drawn by him upon the Citizens' National Bank of Xenda, a cor- poration duly incorporated under the laws of the United States; that said checks were given and are wholly without consideration, and the plaintiff received no value therefor whatever; that defendant, Kahn, is about to present the same for collection, and the bank is about to, and will, unless restrained by the order of the court, pay the checks, which, will be an irreparable Injury to the plaintiff, and for which he has no adequate remedy at law; that Kahn is not a resident of said county, and has no property therein, and who is, as plaJntifC is informed and believes, s^ wholly insolvent." The petition prays "that the bank be restrained and enjoined from paying said checks, and that they may be ordered to be canceled and delivered up to the plaintiff; and for all other and further relief to which in equity he may be enti- tled." At the commencement of the action, the plaintiff obtained a temporary injunction as prayed for, and on the 6th day of March amended his petition by adding to its aver- ments the following: "That no considera- tion exists for said check in said petition mentioned other than certain gaming con- tracts entered Into by said plaintiff on or about the day of February, 1882, in the city of Cincinnati, Ohio, with the said Kahn, a broker and commission merchant of said city, for the purpose of speculating In the price of wheat, pork, and lard, and which said contracts made by said Kahn were in violation of the statute of gaming, and against public policy, and were false and feigned, and by which he undertook in form to buy and sell wheat, pork, and lard for and with this plaintiff, without intending thereby either to receive or deliver said y wheat, pork, or lard, but solely to wager In the market price thereof, and to pay or re- ceive the difference between the price In the contracts and the market rates at any time during the month of March, 1882, at the op- tion of said Kahn, whichever the same would be; that said contracts were made as a cover for gambling in the prices of wheat, pork, and lard; that no wheat, pork, or lard was actually to be delivered or received, but the difference In price only was to be paid on the one side or received on the other at any time during the said month of March, at the option of said Kahn; tliat In pursu- ance of the said gaming contracts, and In addition to the execution and delivery of said checks, this plaintiff delivered and paid to said Kahn the sum of $500; that no con- sideration for the payment of said sum of $500 passed to the plaintiff other than that set forth aforesaid; that the said Kahn re- ceived to the plaintiff's use said sum of $500 so lost and paid to said defendant, and said defendant, Charles Kahn, Jr., is Indebted to plaintiff In the said sum of $500, with in- terest from the day of February, 1882. Wherefore plaintiff prays as in his original petition, and for judgment against said de- fendant Kahn, for said sum of $500, with Interest from February — , 1882." The tem- porary Injunction was, on motion of the de- fendant, Kahn, dissolved, and the plaintiff appealed to the district court, where, on the 28th of April, 1882, the plaintiff, by leave of that court, filed another amendment to his petition, adding the following averments: "That at the time of the execution and de- livery of the said checks the plaintiff had on deposit with said bank sufficient money to pay said checks; that prior to the presenta- tion thereof said Kahn, who Is insolvent, by his agent, made inquiry of said other de- fendant as to whether said checks were good and would be paid on presentation; to which Inquiry said bank made answer that said checks were good, and would be paid, and said bank claims to have certified to said checks, and bound Itself thereby to pay the same; that prior to the filing of the petition herein, and the allowance of said restrain- ing order, this plaintiff requested and noti- fied said bank not to pay said checks; but said bank refused said request, and threat- ened to, and will, unless restrained, pay said checks." The defendant, Kahn, then answered, ad- mitting "the corporate character of said bank; that said Kahn was about to present said checks for collection; his non-residence; that plaintiff had said money on deposit In said bank; said Inquiries whether said checks would be honored, and the response of said bank that they would; that said bank claims to have certified the same, and bound Itself to pay the same, and said noti- fication to said bank not to pay the same, and the refusal of said bank; that a con- tract was made between said Kahn and plaintiff for the sale of property; that sales were made, and $500.00 cash and said checks were paid thereon. But said Kahn denies each and every other allegation of said peti- tion." The record shows that at the April term, 1884, of the district court the cause was by MAXIMS OF EQUITY. 33 consent of the parties submitted to tlie court upon the pleadings and evldeuce, and the court found the equities of the case in favor V of the plaintifC and against said defendant, Kahn, made the injunction perpetual, and udjudged the costs against Kahn. A motion for a new trial, filed by Kahn, was over- ruled, and a bill of exceptions was duly tak- en, containing all the testimony given on the trial of the cause. It also appears in the bill of exceptions that at the close of the testi- mony the defendant, Kahn, requested the court to find the facts, and state its conclu- sions of law and of fact separately, and also to find "the following conclusions of fact: (1) Whether there was any agreement be- tween the plaintiff and Charles Kahn, Jr., that the property purchased should not be delivered; but that simply the difference, if any, between the price at which the property was purchased and the price at whicji it should rale in March, 1882, should be paid. (2) Whether Charles Kahn, Jr., N. B. Ream & Co., or the persons of whom the property was purchased in January, 1882, intended that it should not be delivered, and that simply the difference, if any, between the price at which it should rule in March, 1882, and the price at which it was purchased should be paid, and who so intended. (3) Whether the court finds that simply the difference was to be paid, and no' property delivered, from the circumstances of the . transaction, and, if so, what are the circum- stances upon which said finding is predi- cated? (4) Whether the price of said prop- erty on the Chicago Board of Trade, in March, 1882, was more or less than the purchase price In January, 1882, and, if less, how much less. (5) Whether, by the terms of the contract between the plaintiff and Kahn, or by reason of notice to plaintiff, Kahn was justified in selling said property on March 1, 1882. (6) Whether the persons of whom the property was purchased in January, 1882, or their brokers, N. B. Ream & Co., had the property on hand ready to deliver on March 1, 1882, and whether they gave Kahn notice, and whether Kahn gave plaintiff notice of their readiness to deliver the property, and that it would be sold March 1, 1882, If plain- tiff would not take it. (7) Upon whom the court finds the burden of proof rests to es- tablish the character of the transaction; whether it was or was not a gambling trans- action. (8) Whether Charles Kahn, Jr., was simply a broker, agent, and employe of plain- tiff in causing the purchase and sale of said property on commission, without any inter- est in the profit or loss In the transaction." And it further appears from the bill of ex- ceptions that the court, in response to the foregoing request, found as follows: "Answer to Requests 1 and 2. We find that the transactions in which the parties were engaged were mere speculations or ven- tures on the future prices of the products named in the pleadings, without any inten- H.& B.BQ.(2d Ed.)— 3 tion on the part of Walton, Kahn, or Ream & Co. that the property would be either paid for or delivered, but that the intention was that settlements between buyer and seller would be made on the differences between the market prices at the date named for de- livery and the prices named in the contracts; that this was understood by all parties inter- ested in the deals; that the same were gam- bling transactions, and illegal. "Answer to Request 3. We find the fore- going facts from all the circumstances in the case and surrounding the transactions, and particularly from the fact that if any in- quiry had been made it would have devel- oped the fact that Walton was wholly un- able to pay one-fourth the amotnt of the price of the property ostensibly purchased, (being $43,000,) and that in fact said Wal- ton was not worth over $3,000 or $4,000 at the time. "Answer to Requests 4 and 5. We find that in March, 1882, the price of property embraced in the deals mentioned had de- clined to an extent that absorbed the mar- gins put up, and that, under the rules of the Board of Trade of Chicago, Kahn was justified in selling whatever interest Walton had in any property under his (Kahn's) con- ti'ol; but we have not regarded this as an important fact in the case. "Answer to Request 6. We find it probable that Ream & Co. had control of an amount of property equal in bulk and quality to that named in the several contracts, and could have delivered it on demand March 1, 1882; but we furtlaer find that in said deals they had no intention of so delivering it, nor had Kahn any intention of receiving it Ream & Co. gave Kahn notice, and Kahn gave Walton notice, of their readiness to deliver the property, and that it would be sold March 1st if plaintiff did not take it; but this was done after the commencement of this suit, and with, knowledge that it would not be so taken by plaintiff. "Answer to Request 7. Upon the plaintiff. "Answer to Request 8. Kahn was, as be- tween plaintiff and defendant, a broker agent, interested only to the amount of his commissions. "We further find that after' the checks named in the pleadings were delivered to Kahn, a bank in Cincinnati telegraphed the Citizens' National Bank of Xenia as follows: 'Are M. A. Walton's checks for $2,000 goodV To which said Citizens' Bank sent an answer as follows: 'Yes, sir.' We find that this does not amount to 'certifying' the checks, and the Citizens' Bank did not thereby be- come bound to the holders of the checks for the amounts. We find that the contract was not executed by the giving of the checks, and that by enjoining the payment of the checks we simply stop the carrying out of a gambling contract, and thereby leave the parties where we find them." Judgment having been rendered against 34 MAXIMS OF EQUITY. Kahn, as before stated, he prosecutes error to this court to reverse the same, upon the grounds that the conclusions of law are not supported by the facts found, and the evi- dence does not sustain the finding of facts. Jordan & Jordan, for plaintiff in error. John Little, for defendants in error. WILLIAMS, J. The evidence tends to prove the facts found by the district court, and as this court is not required to deter- mine the weight of the evidence, the facts 'so found will, in the disposition, of the case, be regarded as established by the evidence. The case shown by these facts, and those r admitted by the pleadings, is that Kahn was a commission broker in Cincinnati, doing business with and for Ream & Co., brokers and commission merchants in Chicago, and bought of or through them wheat and pork for future delivery, so called, on Walton's account. The transactions were mere spec- ulations or ventures on the prices of the commodities named, without any intention on the part of the parties concerned, that the property should either be delivered or paid for; but all the parties understood and in- tended that settlements should be made be- tween them, on the differences between the market prices, at the dates fixed for de- livery, and those named in the contracts. Kahn was to have a commission for his services, and he advanced margins on the deals. Walton was loser, and drew his two checks, amounting to $2,000, on the bank where he had funds, payable to Kahn, for moneys paid by him on the deals and losses. Walton also paid Kahn $500 in money on the same account. Kahn telegraphed to the bank, inquiring if Walton's checks for the amount of those drawn to him were good, and received an affirmative answer. Wal- ton notified the bank not to pay the checks, and before their presentation brought his action to enjoin their payment. 1. Upon this state of the case, the first in- quiry naturally is, were the speculative trans- actions in which the parties engaged in the nature of wagers, and, for that reason, ille- gal? In the determination of this question it Is not deemed material whether they fall within the provisions of our statutes against gaming and wagering, or do not; for it is generally held in this country that wager- ing contracts, though not prohibited by stat- ute, are illegal, and void as against public policy, and the great weight of authority V is to the effect that contracts of the kind the district court found those involved in this case to be are void as wagering agree- ments. This has been held by the courts of last resort in every state where the ques- tion has been presented, and by the su- preme court of the United States. The rule generally accepted is that contracts for the r— sale of personal property to be delivered in \ the future are valid if the parties really in- tend and agree that the property is to be de- livered by the seller, and the price is to be paid by the purchaser, though the seller has not the goods, nor any other means of get- ting them, than to go into the market and buy them. But if the real intent be mere- ly to speculate on the rise and fall of prices, and the goods are not to be delivered, but one party is to pay to the other the differ- ence between the contract price and the mar- ket price of the goods at the date fixed for executing the contract, then the contract partakes of the nature of a wager, and is void. Irwin v. Williar, 110 U. S. 499, 4 Sup. Ct. 160; Higgins v. McCrea, 116 U. S. 671, 6 Sup. Ct. 537; Mann v. Bishop, 136 Mass. 495; Gregory v. Wendell, 40 Mich. 432; Cole V. Milmine, 88 111. 349; Kingsbury v. Kir- wan, 77 N. Y. 612; Lowry v. Dlllman, 59 Wis. 197, 18 N. W. 4. 2. The facts found by the district court plamly define Kahn's relation to the unlaw- ful agreements. He was directly connected with them, and, with full knowledge of their character, performed services and expended money to promote and forward them. It was his intention, as well as the intention of the other parties, that the property should not be delivered or paid for, but that the differences in the prices should be adjusted in money. It is true, Kahn was the broker, and had no pecuniary Interest in the busi- ness except his commissions, and the repay- ment of whatever sums he might advance for margins, and to pay losses as the busi- ness progressed. He, nevertheless, negoti- ated the wagering contracts, and was part}' to them. The legal effect of such relation to contracts of that nature was determined in the ease of Irwin v. Williar, supra. The conclusion of the court is thus stated: "In Rountree v. Smith, 108 U. S. 269, 2 Sup. Ct. 630, it was said that brokers who had nego- tiated such contracts, suing, not on the con- tracts themselves, but for services per- formed, and money advanced for defendant, at his request, though they might, under some circumstances, be so connected with the immorality of the contract as to be af- fected by it, they are not in the same posi- tion as a party sued for the enforcement of the original agreement. It is certainly true that a broker might negotiate such a con- tract without being privy to the illegal in- tent of the principal parties to it, which ren- ders it void; and in such case, being inno- cent of any violation of law, and not suing to enforce an unlawful contract, has a meri- torious ground for the recovery of compen- sation for services and advances. But we are also of the opinion that when the broker is privy to the unlawful design of the par- ties, and brings them together for the very pm-pose of entering Into an illegal agree- ment, he Is particeps criminis, and cannot recover for services rendered or losses in- curred by himself on behalf of either in MAXIMS OF EQUITY. 33 forwarding the transaction." We accept tbis as a sound and wholesome rule, and under its operation the checks given by Walton to Kahn for services rendered and losses paid by him In the unlawful enterprise are taint- ed with the vice of their origin, and are sub-_ Ject to aU the infirmities of securities given for illegal considerations. 3. It is contended that the drawing of the checks by Walton on the bank, where he had sufBclent funds to pay them, and the bank's response to the inquiry of Kahn's agent that checks to their amount were good, was a specific appropriation of the funds, and amounted to payment of the debt for which they were drawn, whereby the contract became fully executed. A check, being simply a written order of a depositor (^^ to his banker to make a certain payment out ' of his funds, is executory, and, of course, revocable at any tim-e before the bank has paid it or committed itself to its payment. It operates, it is true, as an assignment of the fund on wliich it is drawn pro tanto, and binds the bank to its payment out of the fund when presented, unless revoked; but it is not itself payment of the debt for which it is drawn, unless it be so agreed between the parties. Ordinarily it is only a means of payment, and the debt is not extinguished unless and until the check be paid, or the holder be guilty of laches, which may "operate as a discharge of the drawer. The bank Is the agen^ of the drawer. Its duty is to pay his money as he directs. It owes no duty to the holder except under the drawer's directions, until, by virtue of those directions, it assumes some obligation to the holder. Up to that time the latest order from the drawer governs. But after the bank has paid the check, or placed itself under an obligation to pay it, the drawer's power of revocation is ended. This obli- gation may be incurred by acceptance. It is sometimes said that the legal effect of the acceptance is to place the holder of the check in the position of a depositor. By the acceptance a new and specific engagement is entered into by the bank, which is to un- conditionally pay the sum named to the legal holder of the cheek. The acceptance or cer- tification is sometimes evidenced by writing the word "good" on the check by the au- thorized officer or agent of. the bank; but no particular mode or form is necessary, and it is generally held that a verbal acceptance is sufficient. But whatever the word or form employed, there must be enough to indicate the acceptance of the particular check. V It is manifest there was no acceptance or certification of the checks in question in this case. The telegraphic correspondence be- tween the bank and Kahn's ag«nt amounted to no more than an assurance that valid checks to the amount stated, drawn by Wal- ton, or that might be drawn by him, were then good. No particular checks were men- tioned in the inquiry, nor any intimation given that the inquirer had received, or was about to receive, such checks; nor had the bank any means of identifying the checks to which the inquiry related. Its telegram, therefore, did not commit the bank to the payment of any particular check. At most it was information that Walton had, at its date, money on deposit to the amount stated, subject to check. Espy v. Bank, 18 Wall. (504. If, therefore, before the checks were presented for payment, and before they were certified or accepted by the bank, or it otherwise became committed to their pay- ment, Walton revoked them, and notified the bank not to pay them, as he claims, and as the district court found he did, his de- fensive remedy at law would appear to be adequate. 4. But what standing has the plaintifC in a court of equity? The transactions upon which he founds his claim for relief were unlawful, and the remedy he seeks is pro- tection against the consequences of his own participation in them. In such cases equity keeps its hands ofC, and leaves the parties where It finds them. It is a fundamental ■, rule of equity that parties wanting its aid:"^ must come with clean hands. Courts of equity require honesty, good faith, and le- gality in transactions between men, and if a party would pursue his remedy therein, his demand must not rest on a violation of law for its foundation, or arise from his own Illegal acts, or conduct contra bonos morals. 1 Wait, Act. & Def. 153; 3 Wait, Act. & Def. 685. It was said by Lord Mansfield, in Holman v. Johnson, Cowp. 341, that "no-^' court will lend its aid to a man who founds his cause of action upon an immoral or ille- gal act. If, from the plaintiff's own stating, or otherwise, the cause of action appears to arise ex tm'pl causa, or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes, not for the sake of the defendant, but because they will not lend their aid to such a plain- tiff. So, If the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of It; for where both are equally In fault, potior est conditio defendentis." In Atwood v. FIsk, 101 Mass. 363, which was a bill in equity to compel the surrender and cancel- lation of a note, and mortgage given to se- cure Its payment, on the ground that the consideration for them was illegal, the court, in denying the relief sought by the bill, de- clares it to have long been settled "that the — \ law will not aid either party to an illegal contract to enforce it against the other; neither will it relieve a party to such a con- tract who has actually fulfilled it, and who seeks to reclaim his money or whatever arti- cles of property he may have applied to such a purpose. The meaning of the familial 3G MAXIMS OP EQUITY. maxim in pari delicto potior est conditio de- C^fendentis is simply that the law leaves the parties exactly where they stand; not that it prefers the defendant to the plaintiff, but that it will not recognize a right of action founded on the Illegal contract in favor of either party against the other. They must settle their own questions in such cases without the aid of the courts." The state- ment of the rule by OhanceUor Walworth, in Harrington v. Bigelow, 11 Paige, 349, may be applied directly to this case. He says: "Where both parties have been en- gaged in an illegal transaction, the court will not lend its active aid to the one party to get rid of the securities taken upon the illegal transaction, nor will it aid the other party in retaining them, but will leave both to their strict technical rights." In Weakley v. Watkins, 7 Humph. 356, It is held that "no court of chancery will en- tertain a bill to cancel an obligation, the consideration of which was a violation of chastity, compounding a felony, smuggling of goods, gaming, false swearing, or the commission of any crime, ' or a breach of good morals." This was a bill in chancery tiled by Weakley against Watkins and Fer- guson to obtain the cancellation of a note under seal executed upon a gaming consid- eration. A demurrer was filed to the bill, and the court in the opinion says: "It is true that a court of chancery, upon the principle of quia timet, will order said in- struments to be delivered up and canceled. But this is when the complainant has been imposed upon, and executed an instrument void for fraud, accident, mistake, or other cause, which renders it iniquitous and un- just that it should be enforced against him, and when, in the execution of it, he has him- self been guilty of no violation of law or good morals. But this principle has never been held applicable to instruments know- ingly executed in violation of good morals or express prohibition, either by common or statute law. For instance, no court of chan- cery will entertain a bill to cancel an obli- gation, the consideration of which was a violation of chastity, compounding a felony, the smuggling of goods in violation of the revenue law, gaming, false swearing, etc.; and this for very obvious reasons. The complainant shall not be permitted to charge himself with crime, and obtain relief out of it; and because pubUc policy requires that the execution of all such contracts shall be discouraged, which cannot be more effect- ually done than by repelling aU actions upon them in courts of justice. In contracts of the kind now under consideration we have held that they are inoperative, and void, as contrary to good morals and positive en- actment, and that, as such, they are not fit subjects for the action of a court. It Is tme that in the cases we have heretofore had the attempt has been to enforce them, but we can see no difference in the position of the winner and loser, so far as to their right in becoming active movers upon such contracts in the courts; the one seeking to enforce them by the judgment of a court of law, the other seeking by the aid of a court of chancery to have them delivered up and canceled. They axe equally repelled upon reason and authority." It was said by this court, in Roll v. Raguet, 4 Ohio, 400, that "whenever an agree- ment appears to be illegal. Immoral, or against public policy, a court of justice leaves the parties as it finds them. If the agree- ment be executed, the court will not rescind it; if executory, the court will not aid in its execution." This was again held In Raguet V. Roll, 7 Ohio, pt. 1, p. 77. And see Raguet V. Roll, 7 Ohio, pt 2, p. 70. The doctrine of these cases has recently been approved and enforced by this court. McQuade v. Rose- crans, 36 Ohio St. 442; Williams v. Bngle- brecht, 37 Ohio St. 383. And in Thomas v. Oronise, 16 Ohio, 54, it Is laid down as "a universal principle both in law and equity that where an agreement is founded upon a consideration illegal, Immoral, or against pub- lic policy, a court will leave the parties where it finds them." In Hooker v. De Palos, 28 Ohio St. 251, the same doctrine is announced in the following language: "The maxim 'Ex turpi causa non oritur actio' is an old and familiar one, resting on the clearest prin- ciples of public poBcy, and never to be Ig- nored. In accordance with this maxim noth- ing is better settled than that, in regard to contracts, which are entered into for fraudu- lent or Illegal purposes, the law will aid nei- ther party to enforce them while they remain executory, either in whole or in part, nor, when executed, will it aid either party to place himself in statu quo by a rescission, but will In both cases leave the parties where it finds them. It is true that particular stat- utes have been from time to time enacted In this state as well as In many of our sister states, which are to some extent In contra- vention of this common-law doctrine. The statutes of this state which allow money won by gaming or betting to be recovered back by the loser, furnish an example of this kind. But such statutes are a recognition of the established rule that no recovery could be had in such eases at common law. They are exceptional In their character, are in deroga- uon of the common law, and therefore are to be construed strictly, and not extended by implication beyond the particular cases of illegality for which they provide." The stat- utes adverted to change the common law so far as to give the loser the right 1;o recover back what he has lost, and provide a rem- edy therefor, but no further. In all other respects the common law governs. Whether the statutes have any application to contracts like those under discussion need not now be decided, for If It be granted that they have, yet, since they make no provision for equita- ble actions for injunctions, the right to such MAXIMS OF EQUITY. remedy most be determined by considera- tions independent of tlie statutory regula- .tions. Veach v. Elliott, 1 Ohio St 139; Thomas v. Cronise, 16 Ohio, 54. The legislature, apparently recognizing the inapplicability of the statutes theretofore in force to such contracts and transactions, en- acted that of May 4, 1885, (82 Ohio Laws, p. r^ 254,) which declares all contracts for the sale of grain, provisions, and other specified ar- ticles, when there is no intention to deliver or pay for the articles sold, to be void, and makes them gambling and criminal acts. This statute, having been passed after the contracts between the parties were made, of course cannot affect the decision of the case, and. If it were otherwise, they do not confer upon the plaintiff the right to maintain the action prosecuted by him. Precisely what effect has been given the English statutes in the decisions of the courts of that country upon this subject is not very clear. It is, never- theless, true that parties to gaming securities were expressly authorized by statute to go into chancery for discovery, which gave ground for the application of the familiar rule that courts of chancery, having jurisdic- tion for one purpose, will retain the case for final relief. In the case of Rawden v. Shad- well, 1 Amb. 268, which was a bill for dis- covery and cancellation, the report states: "Lord Hardwicke decreed with great clear- ness, and said that by St. 9 Anne all secm-- Ities for money won at play are made void. Consequently the payment under any such se- curity cannot be supported." And Baker v. Williams is referred to In the report as an authority for the decree. In the note to the case it Is said that the statute of 9 Anne "gives leave to come into a court of chan- cery for discovery;" and Sir J. Jekyll, M. E., in the note, citing Baker v. WlUlams, said: "And if it [the note] was put In suit at law, no doubt but the party might make a de- fense against It under the act; but that is no objection against coming Into this court, [chancery,] for the person giving the note is entitled to a discovery here. It could not be the intention of the legislature that, after the discovery, he should be sent to another court for relief. So it is that upon the dis- covery of assets the court grants relief with- out sending the party to law." And it may be noticed that in Woodson v. Barrett, 2 Hen. & M. 88, the supreme court of Virginia fol- lowed Rawden v. Shadwell, under a statute which was an exact copy of 9 Anne, except that the word "contract" was inserted in it, which was omitted in the statute of Anne. And the case Is followed by the same court in Skipwith v. Strother, 3 Rand. (Va.) 216. In this respect the statute of Anne differs es- sentially from ours. The only actions provid- ed for by our statute are the purely legal ones to recover back the money lost, and for the conversion of the goods won of the plaintiff. Xo suit in equity is authorized or contemplat- ed. The provision of the statute that the plaintiff may annex to his petition In the legal actions it permits Interrogatories for discovery at once removes the necessity and cause for recourse to equity, and the statute which created the right having es- pecially prescribed the legal remedies men- tioned, and none other, they must be deemed exclusive. It cannot be denied, however, the courts have differed in the application of these kindred maxims, "ex turpi causa non oritur actio," and "in pari delicto potior est conditio defendentis;" especially to gaming se- curities, which, it has been held by some courts, are so far excepted from the opera- tion of the maxims that equity will decree them to be surrendered and canceled. The reasons given for so holding are that "the circulation of gaming bonds Is no less to be discountenanced than the giving of them, and no means are more likely to prevent the giv- ing of them than to put an effectual stop to their circulation;" and that because the losers are permitted to defend against securities given by them, on the ground that they were given for a gaming consideration, courts of equity should entertain suits for their can- cellation. These appear to be arguments not so much in favor of the asserted exception as against the maxims themselves, for it is apparent that the same reasoning would, in the same measure, exclude from their operation every contract and security founded upon any other Illegal consideration. The circulation of all bonds and securities given for any illegal or immoral consideration Is quite as much to be discountenanced as the giving of them,— gam- ing bonds and securities, no more than oth- ers; and if putting a stop to the circulation of gaming bonds, by a resort to a court of equity to compel their surrender and can- cellation, be the most effective means of pre- venting the giving of them, then the same means should be permitted and adopted, and for the same reason, to accomplish the same end, with regard to bonds and securities given for any other illegal consideration. And if because parties may defend against secur- ities given by them, on the ground that they were given for a gaming consideration, is a valid reason why a court of equity should en- tertain a suit for the cancellation of such se- curities. It is an equally valid reason why that court should entertain suits for the can- cellation of instruments founded upon any other illegal consideration; for such consid- eration may also be made a ground of de- fense to them. Such is the logical result of the argument In favor of the exception con- tended for; and some English cases have gone to that extent. In Neville v. Wilkin- son, 1 Brown, Ch. 547, Lord Chancellor Thur- low is reported to have said "that In all cases where money was paid for an unlawful pur- pose, the party, though particeps crimlriis, might recover at law, and that the reason was that if courts of justice mean to prevent the perpetration of crimes it must be not by 38 MAXIMS OF EQUITY. allowing a man who has got possession to re- main in possession, but by putting the par- ties back to the state In which they were be- fore." But Mr. Justice Story, referring to the words of the lord chancellor, says: "This is pushing the doctrine to an extravagant ex- tent, and effectually subverting the maxim 'in pari delicto potior est conditio defend- entis.' The ground of reasoning upon which his lordship proceeded is exceedingly ques- tionable in itself, and the suppression of ille- gal contracts is far more likely in general to be accomplished by leaving the parties with- out remedy against each other, and by thus introducing a preventive check naturally con- nected with a want of confidence, and a sole reliance upon personal honor. And so, ac- cordingly, the modern doctrine is establish- ed." 1 Story, Eq. Jur. § 298. The difference between the earlier cases and the current au- thorities on the subject is pointed out in the following note to this section: "I say at present, for there has been considerable fluc- tuation of opinion, both in courts of law and equity, on this subject. The old cases often gave relief, both at law and in equity, where the party would otherwise derive an advan- tage from his iniquity. But the modern doc- trine has adopted a more severely just, and, probably, politic, moral rule, which is to leave the parties where it finds them, giving no relief and no countenance to claims of this sort." Mr. Blspham, in his Principles of Equity, (section 223,) says: "The rule, both at law and in equity, in regard to gambling transactions, now seems to be that the' courts will not only refuse to lend their aid for the purpose of enforcing such contracts, but they will not assist the losing party in setting the contract aside, or recovering back the mon- ey paid. The maxim applicable to such cases is potior est conditio possidentis." The opinion of the supreme court of Massa- chusetts, in the case of Atwood v. Fisk, be- fore cited, is to the same effect. It is there stated as the prevailing doctrine that "the suppression of illegal contracts is far more likely in general to be accomplished by leav- ing the parties without remedy against each other; and so the modern doctrine is estab- lished that relief is not granted where the parties are in pari delicto." A review of all the authorities would occupy much space and be of little practical value. The test for determining when the objec- tion that the parties are in pari delicto can be sustained is whether the plaintiff can I .d ^ lA" ^1'^ 111 make out his case otherwise than through the medium and by the aid of the illegal transaction to which he was himself a party, and, when applied to this case, is conclusive against the plaintiff. He asserts that he knowingly entered into an unlawful engage- ment; one contrary to good morals and against public policy. He entered into it with knowledge that either he or the other party must lose, and with the intention of reaping the fruits of his unlawful venture, if he should prove to be the winner. His ex- pectations were disappointed. He lost, paid part of the loss, and, for the purpose of mak- ing further payment, drew his check on a bank in which he had sufficient funds on de- posit to pay them. These checks he deliver- ed to the winner, or his agent, and, having gone thus far, he appeals to a court of equity to Interfere in his behalf, and interpose Its extraordinary aid by injunction to stop their payment. After he lost, he might have re- fused further to act, and still be safe, and If, by giving the checks, the other party has ac- quired an advantage over him, it results from his voluntary act on the executor of his ille- gal enterprise. We fail to perceive how to relieve parties in cases like this from the consequences in which their own wrongful conduct has involved them would tend to dis- courage such adventures, promote good morals, Increase respect for the law, or ac- cord with a sound public policy. In reaching this conclusion, we have not overlooked the rule that a party who ad- vances money upon an undertaking or agree- ment to do an act that is illegal, immoral, or against public policy, may, at any time before the wrongful act is done, and while the agree- ment or undertaking remains wholly unex- ecuted, repent and retract. He may wholly rescind the contract, prevent the act from be- ing done, and recover back. The law en- courages such repentance and abandonment of the unlawful undertaking, and will aid the party, because it tends to prevent wrong- doing. But to be eflSicacious the repentance must be timely, and it comes too late aftei the unlawful act has been done, and the un- dertaking in whole or in part performed. Then the law will assist neither party In its further execution, nor to undo what has been done in its execution. Hooker v. De Palos, 28 Ohio St. 251. Judgment reversed and petition dismissed. MINSHALL and SPEAR, JJ., dissent. ^ 1 r ^ MAXIMS OF EQUITY 39 CRAIG V. LESLIE. (3 Wheat 563-576.) Supreme Court of the United States. 1818. Robert Craig's will contained the follow- ing clause: "I give and bequeath to my brother, Thomas Craig, of Baith parish, Ayr- shire, Scotland, all the proceeds of my es- tate, t)oth real and personal, which I have herein directed to be sold, to be remitted to him, according as the payments are made." Thomas 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 le- gal or equitable estate in real property, is not disputed by the counsel for the plain- tifC; and it is admitted by the counsel for the state of Virginia, that this incapacity does not extend to personal estate. The on- ly inquiry, then, which this court has to make is, whether the above clause in the will of Robert Craig is to be construed, un- der all the circumstances of this case, as a bequest to Thomas Craig of personal prop- erty, or as a devise of the land itself. Were this a new question, it would seem extremely difficult to raise a doubt respect- ing It The common sense of mankind would determine, that a devise of money, the pro- 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 purchased, 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. 1 The settled doctrine of the courts of equi- ty corresponds with this obvious construc- tion of wills, as well as of other instruments, whereby 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 case of Fletcher V. Ashburner, 1 Brown, Ch. 497, the master of the rolls says, that "nothing is better es- tablished than this principle, that money directed to be employed in the purchase of land, and land directed to be sold and turn- ed into money, are to be considered as that species of property into which they are di- rected to be converted, and this, in what- ever manner the direction is given." He adds, "the owner of the fund, or the 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 1 Equity considers land, directed to be sold and converted into money, as money; and mon- ey di-ected to be employed in the purchase of land as land. 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 court of equity, regarding the substance, and not the ' mei'e forms and circumstances of agreements and other Instruments, considers things di- rected or agreed to be done, as having been actually performed, where nothing has in- tervened which ought to prevent a perform- ance. This qualification of the more con- cise and general rule, that equity considers that to be done which is agreed to be done, will comprehend the cases which come un- der this head of equity. 2 Thus, where the whole beneficial Interest in the money in the one case, or In the land in the other, belongs to the person for whose use It is given, a court of equity will not compel the trustee to execute the' trust against the wishes of the cestui que trust, but will permit him to take the money or the land, if he elect to do so before the con- version has actually been made; and this election he may make, as well by acts or declarations, clearly Indicating a determina- tion to that eifect, as- by 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 en- titled to the beneficial Interest. If this election be not made in time to stamp the property with a character dif- ferent from that which the will or other in- strument gives it, the latter accompanies It, with all its legal consequences. Into the hands of those entitled to It in that char- acter. 8 So that in case of the death of the cestui que trust, without having determined his election, the property will pass to his heirs or personal representatives, In the same manner as it would have done had the trust been executed, and the conversion actually made In his lifetime. In the case of Kirkman v. Milles, 13 Ves. 338, which was a devise of real estate to trustees 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, considered and treated as personal property, notwithstanding the cestui que trusts, after the death of the testator, had entered upon, 2 Where the whole beneficial interest in the land in one case, or in the money in the other, belongs 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. 8 But if the cestui que trust die, without hav- ing 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 exe- cuted in his lifetime. 40 MAXIMS OF EQUITY. 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 mas- ter of the rolls was of opinion, that the oc- cupation of the land for two years was too short to presume an election. He adds: "The opinion of Lord Rosslyn, that proper- ty was to be taken as it happened to be at the death of the party from whom the rep- resentative 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. Countess 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 having 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 disposition of it would have been re- garded; 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 de- cide, and would render any farther investi- gation of it useless, were it not for the case of Roper v. Radeliffe, which was cited, and mainly relied upon, by the counsel for the state of Virginia. The short statement of that case is as fol- lows: John 'Roper conveyed all his lands to trustees and their heirs, in trust, to sell the same, and out of the proceeds, and of the rents and profits 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 otherwise, should appoint, and for want of such appointment, for the benefit of the said John Roper, and his heirs. By his will reciting the said deed, and the power re- served to him in the surplus of the said real estate, he bequeathed several pecuniary leg- acies, and then gave the residue of his real and personal estate to William Con- stable and Thomas Radeliffe, and two others, and to their heirs. By a codicil to this will, he bequeathed other pecuniary legacies; and the remainder, whether in lands or personal * The case of Roper v. Radeliffe, 9 Mod. 1G7, examined. estate, he gave to the said W. C. and T. R. Upon a bill filed by W. O. and T. R. against the heir at law of John Roper, and the oth- er trustees, praying to have the trust exe- cuted, and the residue of the money arising from the sale of the lands to be paid over to them; the heir at law opposed the execu- tion of the trust, and claimed the land as a resulting trtist, upon the ground of the in- capacity of Constable and Radeliffe to take, they being papists. The decree of the court of chancery, which was in favour of the papists, was, upon appeal to the bouse of lords, reversed, and the title of the heir at law sustained; six Judges against five, be- ing in his favour. Without stating at lai;ge the opinion upon which the reversal took place, this court will 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 upon 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 resulting trust in such land, so far as it is of value, after the debts and legacies are paid, and that he may come into equity and restrain 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 ease, 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 privilege, 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 prin- ciple 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 ef- fectually disposed of by the wiU, (whether it arise from some omission or defect in the will itself, or from any subsequent accident, which prevents the devise from taking ef- fect,) results to the heir at law, as the old " Land, devised to trustees, to sell for pay- ment of 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 sellmg more than sufficient to pay them, or may offer to pay them himself, and pray a conveyance 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. MAXIMS or EQUITY. 41 use not disposed of. Such was the case of CruBe V. Barley, 3 P. Wms. 20, where the testator having two sons, A. and B., and three daughters, devised his lands to he 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 talie effect. The court decided that the £200 should be considered as land to descend to the heir at law of the testator, because it was in effect the same as if so much land as was of the value of £200 was not directed to be sold, but was suffered to descend. The case of Ackroyd v. Smithson, 1 Brown, Ch. 503, Is one of the same l^ind, and estab- lishes the same principle. So, likewise, a money provision under a marriage contract, to arise out of land, which did not take ef- fect, on account of the death of the party for whose benefit it was intended, before the time prescribed, resulted as money to the grantor, so as to pass under a residuary clause in his will. Hewitt v. Wright, 1 Brown, Ch. Cas. 86. 6 But even in cases of resulting trusts, for the benefit of the heir at law, it is set- tled that if the intent of the testator ap- pears to have been to stamp upon the pro- ceeds of the land described to be sold, the quality of personalty, not only to subserve the particular purposes of the will, but to all intents, the claim of the heir at law to a resulting trust is defeated, and the estate is considered to be personal. This was de- cided 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 estate, 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 decreed the heir to join in the sale of the land, and the money arising there- from to be paid over as personal estate to the representatives of the annuitant, and to those of the residuary legatee. In the case of Fletcher v. Ashburner, before referred to, the suit was brought by the heir at law of the testator, against the personal representa- tives and the trustees claiming the estate upon the ground of a resulting trust. But the court decreed the property, as money, to the personal representatives of him to whom the beneficial interest In the money was be- queathed, and the master of the rolls ob- serves, that the case of Bmblyn v. Freeman, and Cruse v. Barley, are those where real estate being directed to be sold, some part • But if the Intent of the testator appears to have been to stamp upon the proceeds of the land directed to be sold, the quality of person- alty, not only for the particular purposes of the will, but to all intents, the claim of the heir at law to a resulting trust is defeated, and the es- tate is considered to be personal. of the disposition has failed, and the thing devised has not accrued to the representa- tive, or devisee, by which something has re- sulted to the heir at law. It is evident, therefore, from a view of the above cases, that the title of the heir to a resulting 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 ap- pears 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 whatever is not disposed remains to him, and partakes of the old use, as if it had not been directed to be sold. The third proposition laid down in the case of Roper v. Radcliffe, 9 Mod. 167, Is, that equity will extend the same privilege to the residuary legatee which is allowed to the heir, to pay the debts and legacies, and call for a conveyance of the real estate, or to restrain the trustees from selling more than is necessary to pay the debts and lega- cies. 7 This has. In effect, been admitted in the preceding part of this opinion; because, if the cestui que trust of the whole benefi- cial interest in the money to arise from the sale of the land, may claim this privilege, it follows, necessarily, that the residuary legatee may, because he is, in effect, the beneficial owner of the whole, charged with the debts and legacies, from which he will be permitted to discharge it, by paying the debts and legacies, or may claim so much of the" real estate as may not be necessary for that purpose. 8 But 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 in equity, though in respect to the creditors and specific legatees it Is deemed as money. It is admitted, with this qualification, that if the residuary lega- tee thinks proper to avail himself of the privilege of taking it as land, by making an election in his life time, the property will then assume the character 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 T Equity will extend the same privilege to the residuary legatee which is allowed to the heir, to pay the debts and legacies, and call for a conveyance of the real estate, or to restrain the trustees from selling more than is necessary to pay the debts and legacies. 8 The conclusion— which, in Roper v. Rad- cliffe, is deduced from the above prmciples, that in respect 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. 42 MAXIMS or EQUITY. seem to the court to be conclusive upon this point; and none were referred to, or have come under the view of the court, which sanction the conclusion made In the unquali- fied terms used in the case of Eoper v. Rad- cliffe. 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 shown to be, to principle and authorities. Before any thing can be made of the proposition, it should be shown that this right of privilege of election is so indissolubly united with the devise, as to constitute a part of it, and that it may be exercised 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 extend this privilege in all cases to the cestui que trust It will be refused if he be an in- fant. In the case of Seeley v. Jago, 1 P. 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 di- vided: On the death A., his infant heir, together with B. and C, filed their bill, claiming to have the money, which was de- creed 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 incapable 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 Foone v. Blount, Cowp. 467, Lord Mansfield, who is compelled to acknowledge the authority of Roper v. Rad- cliffe in parallel cases, combats the reasoning of Chief Justice Parker upon this doctrine of election, with irresistible force. He sug- gests, 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 taie the property as money. This ease of Walker v. Deime, 2 Ves. Jr 170, seems to apply with great farce 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 op- tion given by the will; and a deed of ap- pointment by one of the cestui que trusts, though a feme covert, was held a sufficient in- di''ation of her intention that it should con- tinue personal against her heir claiming it as inefCectually disposed of for want of her ex- amination. This case is peculiarly strong, from the circumstance, that the election is embodied in the devise itself; but this was not enough, because the crown had no equity to force an election to be made for the pur- pose of producing an escheat. Equity would surely proceed contrary to its regular course, and the principles which universally govern it, to aJlow 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, upon no other reason, but because, by law, he is incapable to hold the land: In short, to consider him in the same situation as if he had made an election, which would have been refused had he asked for a conveyance. The more just and correct rule would seem to be, that where the cestui que trust is in- capable to take or to hold the land beneficial- ly, the right of election does not exist, and consequently, that the property is to be con- sidered as being of that species into which it is directed 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 & 12 Wm. III., c. 4, and of an alien at common law, are extremely dissimilar. The former is incapable to take by purchase, any lands, or profits out of lands; and all estates, terms, and any other interests or profits whatsoever out of Istuds, 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 utterly 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 relation to the be^juest 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 incon- testable. The cases above cited have fully established that principle. In that case, too, the rents and profits, till the sale, would have belonged to the papists, if they were capable » The case of Roper v. RadclifEe distinguished from the present case. MAXIMS OF EQUITY. 43 of taking, which brought the case still more strongly within the statute; and this was much relied on, not only in reasoning upon the words, but the policy of the statute. 10 Now, what ^s the situation of an alien? He cannot only talie an interest in land, but a freehold interest in the land Itself, and may hold it against all the world but the 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 bMr, 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 of the money. The points of difference be- tween the two cases are so striking that it would be a waste of time to notice them in 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 re- luctance, and is strictly confined in its ap- plication to cases precisely parallel to it. Lord Mansfield in the case of Foone v. Blount, speaJis of it with marked disappro- bation; and we know, that had Lord Trevor 10 An alien may take, by purchase, a freehold, or other interest in land, and may hold it against all the world except the king; and even against him until office found; and is not ac- countable for the rents and profits previously received. 11 Vide 3 Wheat IZ Jackson ei dem. State of New York v. Clarke, note c. been present, and declared the opinion he had before entertained, the judges woHild have been equally divided. The case of the Attorney General and Lord Weymouth, Amb. 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 decided, is even stronger in its expression than the statute against papists, and the chanceUor 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, however, that in this case, the chancellor avoids expressing any opinion upon the ques- tion, whether the money to arise from the sale of the land, was to be taken as personal- ty or land; and, although he mentions the case of Roper v. Radcliffe, he adds, that he does not depend upon it, as it is 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 considered as a bequest of personal estate, which he is capable of taking for his own benefit. Certificate accordingly. / u MAXIMS OF EJQUITY. WTMAN V. FT. DEARBORN NAT. BANK et al. (54 N. Ew 946, 181 III. 279.) Supreme Court of Illinoia Oct. 16, 1899. Appeal from appellate covirt. First district. Bill by Walter Wyman against the Ft Dearborn National Bank and others. From a decree of the superior court of Cook county in favor of complainants, defendants sued out a writ of error to the appellate court, ■where the decree was reversed. 80 111. App. 150. Plaintiff appealed. Reversed. On September 1, 1896, the First National Bank %t Helena, Mont., drew its check upon the Ft Dearborn National Bank of Chicago for $10,000, in favor of appellant J At the time this check was given, the Ft. Dearborn National Bank had in its possession, on de- posit to the credit of the First National Bank of Helena, $20,523.67. The Ft Dearborn National Bank at the same time held a cer- tificate of deposit of date May 15, 1895, from the First National Bank of Helena, in the sum of $25,000, which latter was secured by collateral for the face amount of $30,000 of notes taken by the First National Bank of Helena and indorsed to the Ft Dearborn National Bank. The Helena bank was in- debted to the Ft. Dearborn National Bank, on account $649.89. On the 4th day of Sep- tember, 1896, the Helena bank was placed in the hands of a receiver, and on the same day the Ft. Dearborn National Bank trans- ferred the account on deposit with it to the amount of $20,523.67 to itself, and credited its certificate of deposit with that amount debiting the Helena bank with the same sum, and leaving a balance due the Ft. Dearborn National Bank of $2,321.39, with interest thereon. On the 5th day of September the check drawn in favor of appellant was pre- sented for payment to the Ft Dearborn Na- tional Bank, which was refused. On the 21st day of January, 1897, the appellant filed in the superior court of Cook county his bill, making the Ft. Dearborn National Bank and the receiver of the Helena bank defendants, and sought to marshal assets. To this bill of complaint a demurrer was interposed and overruled. Subsequently the defendants to the bill filed an answer, and the cause was submitted upon bill and answer, and a de- cree was entered in accordance with the prayer of the bill, to reverse which the de- fendants sued out a writ of error to the ap- pellate court for the First district where the decree was reversed, and the cause remand- ed, with directions to dismiss the bill, where- upon the appellee in the appellate court prosecuted this appeal. Peckham, Brown & Packard, for appellant Gilbert & Fell, for appellees. PHILLIPS, J. (after stating the facts). It is Insisted by the appeUant that by the execution and delivery of its check for $10,- 000 against the deposit account of the Ft. Dearborn National Bank the First National Bank of Helena assigned and transferred to the appellant from that deposit account, an amount sufficient to pay the check on September 1, 1896, the time at which it was drawn; and as sustaining this contention appellant cites National Bank of America v. Indiana Banking Co., 114 111. 483, 2 N. E. 401; Abt V. Bank, 159 lU. 467, 42 N. E. 856; and Gage Hotel Co. v. Union Nat Bank, . 171 lU. 531, 49 N. E. 420. The principle is i clearly established by the foregoing ' and I other authorities in this state that the check jof a depositor upon his banker, delivered I to another for value, transfers to that other jthe title to so much of the deposit as the ! check calls for, and the banker becomes I the holder of the money for the use of the / holder of the check, and is bound to account [ to him for the amount thereof, provided the party drawing the check has funds to that \ amount on deposit, subject to his check, at Uhe time the same is presented. Munn v. Burch, 25 111. 21. The check operates as an absolute assigument of the fund on which it is drawn from the time it is delivered, as between the drawer and the payee, and the bank is bound as soon as the check is presented, and whatever sum stands upon the books to the credit of the depositor at the time of such presentation Is absolutely assigned to the holder of the check. Bick- ford V. Bank, 42 111. 238; Brown v. Leckie, 43 111. 497; Fourth Nat Bank v. City Nat Bank, 68 111. 398; Union Nat. Bank v. Ocea- na Co. Bank, 80 111. 212; Bank v. Jones, 137 111. 634, 27 N. E. 533; Niblack v. Bank, 169 111. 517, 48 N. E. 438. And the relation ex- isting between the drawer, the check holder, and the banker becomes such, when there are sufficient funds on deposit to meet the cheek at the time of presentation, that, be- cause such funds were appropriated at the tjpie of the drawing of the check, the con-^ tract to be Implied between the depositor, the banker, and the check holder Is that the check holder, whoever he may be, may have his action, and recover against the bank the amount, pro tanto, of the check. Gage Ho- tel Co. V. Union Nat. Bank, supra. In the latter case It was said (page 536, 171 111., and page 422, 49 N. E.): "If the funds are In the bank when the check Is drawn, the drawing is_ an appropriation, as between the drawer and the payee, of the sum of money named In the check, which Is to lie in the bank vmtil called for by a presentation of the check. It is true that in such a case there is no privity between the bank and the check holder until presentment and that priomy^ in drawing a check does not give priority of ^igEtTojthe Tund as againstljthe bffiEerTbut that such priority of ripiTls de- termmed by the order of presentation." It was held In Niblack v. Bank, supra (page 521, 169 lU., and page 439, 48 N. E.): "It MAXIMS OF EQUITY. 45 is also the law, where a bank holds a de- mand note, or a note past due, it has the right to charge such obligation up against the maker's deposit account; and, if it does so before a check drawn by the depositor is presented for payment, it will be entitled to hold the deposit against any check after- wards presented." In this case, on the 4th of September— at least one day before the presentment of the check for payment— the Chicago bank transferred the account, and by proper entries on its books credited the Helena bank with all the money held by it to the credit of the latter bank, which cred- it was made on a certificate of deposit, which was, in effect, a demand note. Hunt v. Divine, 37 HI. 131; Tripp v. Curtenius, 36 Mich. 494. Appropriating the deposit fund in good faith, in pursuance of strict legal rights, for the purpose of protecting its own Interests, and without notice of the appro- priation of the money by drawing the check in favor of appellant, was not a wrongful act, but one authorized by law, and absolute- ly transferred the legal and equitable right to the fund so deposited to the Ft. Dearborn National Bank, the check not having been presented to it, nor it having any notice of the same, until the day after the transfer / of the account. Under the recognized rule in this state there was between the Helena bank and the payee of the check an abso- lute assignment of 510,000, then on deposit with the Ft. Dearborn National Bank, and no right existed in the Helena bank to change that deposit in any way, or to so draw against it as to prevent the assignment pro tanto from being carried out. It is clear that the holder of the check had an interest in the fund so assigned, while it is equally clear that until the bank had notice it could pay subsequently drawn checks, or credit the amount of the deposit on any overdue paper of its own. The equitable interest of the check holder, however, remained the same. It is a principle controlling the marshaling of securities that where one creditor can resort to two funds, and another to one of them only, the former must seek satisfaction out of that fund which the latter cannot touch. In Pom. Eq. Jur. § 1414, it is said: "If, therefore, the prior creditor resorts to the doubly-charged fund, the subsequent creditor wiU be substituted, as far as possi- ble, to his rights. These rules must be tak- en with the modifications and exceptions that in their application the paramount in- cumbrancer shall not be delayed or incon- venienced in the collection of his debt, • • * that the rights of third parties shall not be prejudiced, and that the parties themselves are creditors of the same debt- or." Numerous authorities are there cited as sustaining these pfopositions. The prin- ciple of marshaling securities has been fre- quently applied to cases where there Is an equitable interest or lien on collateral secu- rities. In Colebrooke on Collateral Securities it is said (section 98): "By this rule, a cred- itor having a lien upon two funds for the payment of his debt, and a subsequent cred- itor a lien upon one only of such funds, the former is required to exhaust his remedy against the fund which is especially for his security before resorting to that In which the subsequent creditor is interested. The rule, however, is never enforced in cases where it would cause an injury or damage to the creditor holding such liens upon sep- arate funds, or would work injustice to other parties. The rule was applied where a merchant had forwarded his note to a broker for sale, and the proceeds, less commissions, remitted. The broker fraudulently pledged the note, with other collaterals, to a bank, to secure a loan to himself, of which the merchant received nothing. The merchant, learning of the misappropriation, gave no- tice to the bank, and claimed to be subro- gated to any surplus arising from other securities held by it after the payment of the loan. Subsequently, and before the ma- turity of thft loan, the note fell due, and was paid without suit. Upon realizing the other securities, the bank held a surplus in its hands. The merchant was entitled to be paid from such surplus, his voluntary pay- ment not affecting his right of recovery." This principle Is sustained by Parwell v. Bank, 90 N. Y. 483. In that case the mer- chant had an equitable Interest in collater- als, which, with his note, were put up to secure the loan to the broker by reason of the broker's misappropriation of the note, and it is not, equitably, a stronger case for the marshaling of assets than where, as in this case, the bank had as security for its certificate of deposit and for its account due notes aggregating about $30,000, and a deposit of over $20,000. Here, $10,000 of the amount deposited having been equitably as- signed to the complainant, by reason of its appropriation by the bank before receiving notice of the drawing of the check the com- plainant was deprived of all interest in the deposit, and the Helena bank, or Its receiver (who could have no greater interest than the bank itself), received the benefit of th* application of the deposit by the Ft Dear- born National Bank on Its certificate of de- posit, and the complainant, as holder of the check, had such an Interest in the sum de- posited that he should be SiUbrogated, as against the Helena bank or its receiver, to the notes held by the Ft. Dearborn National Bank after the payment of the residue due the latter bank; and this principle of sub- rogation Is applicable because, by reason of the appropriation of the fund by the bank with which the deposit was made to the payment of a debt for 'which It held two dis- tinct characters of securities, one of those securities is, to an extent sufficient to pay the complainant, released from liability so far as the Ft. Dearborn National Bank was concerned, and the latter bank had lawfully 46 MAXIMS OF EQUITY. used 510,000 of a deposit theretofore assign- ed to the complainant by the Helena bank. 2 Beach, Mod. Eq. Jur. § 784; 1 Story, Eq. Jur. §§ 635, 636. It is a maxim of equity that "equity re gards and treats that as done which in good conscience ought to be done," and in writing of this maxim Mr. Pomeroy, in his work on Equity Jurisprudence (section 365), says: "The principle involves the notion of an equi- table obligation existing from some cause; of a present relation of equitable right and duty subsisting between two parties; a right held by one party, from whatever cause arising, that the other should do some act, and the corresponding duty— the 'ought'— resting upon the latter to do such act. Equity does not re- gard and treat as done what might be done or what could be done, but only what ought to be done. Nor does the principle operate Id favor of every person, no matter what may be his situation and relations, but only in fa- vor of him who holds the equitable right to have the act performed, as against the one upon whom the duty of such performance has devolved." A court of equity, acting upon this fundamental principle, may go beneath the appearance of things, and deal with the real facts, where the interest is a purely equi- table one, recognized by courts of equity alone. When, therefore, a prior incumbrancer of two funds, by his election of remedies, deprives a junior incumbrancer, who has a lien upon one of the funds only, from reaching the particu- lar fund on which he has a lien, the junior incumbrancer, to the extent of his lien, should be substituted to the lien of the paramount in- cumbrancer upon the other fund bound, as against the debtor and all claiming under him by lien or title subsequent in time. Gibson V. Seagrim, 20 Beav. 614; James v. Hubbard, 1 Paige, 228; CSowes v. Diclienson, 5 Johns. Oh. 235. Under a bill for marshaling securi- ties relief may be had In that character of case. The Ft. Dearborn National Bank had a right to apply the deposit In payment of the indebtedness pro tanto to the extent of the deposit, and deprive the check holder of any part of that deposit as a fund assigned to him: but he had such an equitable interest in that fund, by reason of its assignment by the check, that he Is entitled to be subrogated to the extent of his check, with interest thereon from the time it was presented, to the fund to be derived from the collection or sale of the collateral securities held by the Ft. Dearborn National Bank as security on its certificate of deposit and bank account, after the residue Is paid to it. The superior court erred in de- creeing that the Ft. Dearborn National Bank should deliver to the receiver of the First National Bank of Helena the collateral notes, but did not err in decreeing that from the pro- ceeds of the same there should first be paid to the Ft. Dearborn National Bank the amount, including Interest, due It, and to pay to Wyman the amount due on said check and interest, and to retain the balance as part of the assets of the First National Bank of Helena. Nor was there error in the decree of the superior court in directing, if there was not enough to pay Wyman in full, the amount unpaid should be allowed as a claim against said First National Bank of Helena, to be paid in due course of administration of Its assets, and that the receiver pay the costs. It was error In the appellate court for the First district to reverse the entire decree of the superior court, and remand the cause with directions to dismiss the bill. So far as the superior court decreed that the Ft. Dearborn National Bank deliver to the receiver of the First National Bank of Helena the collateral notes, its decree Is reversed, but in all other respects the decree of said court Is affirmed. For the error of the appellate court for the First district In reversing the entire case, and remanding with directions to dismiss the bill, its decree is reversed, and the cause Is re- manded. Reversed and remanded. ^ MAXIMS OF EQUITY. STESrCHFIELD v. MILLIKEN. (71 Me. 567.) Supreme Judicial Court of Maine. December, 1880. PETERS, J. The following fads are de- ducible from the evidence in this case: The complainant purchased of the defendants, certain steam-mill machinery, for removal from Hallowell to Danlorth, 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 Eiissell, who was to deed the lot directly to the defendants. The complainant was also to procure a deed of his home (another) lot to the defendants from the heirs of H. E. Prentiss, who held an absolute title thereof as security for the complainant's indebtedness to them, tnere being a small balance only unpaid, which the defendants were to pay for him. Tlie de- fendants were to give an s^greement, 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 complainant 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, Russell 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, re-spectively, 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. The 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 s conditional sale. It was not a legal mortgage: Because the defeasance has no seal, Warren v, Zovis, 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 y. 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 mav be ascertained from all pertinent tacts either within or without the written parts of the transaction. Where th« 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 equity a mortgage." Flagg v. Mann, 2 Sumn. 533, Fed. Cas. No. 4,847. 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- I curity for its collection. A legal mortgage I was avoided; an equitable mortgage was • made. I Although different at law, in equity a mortgage is not prevented because the con- 1 veyance does not come from the equitable : mortgager. It is suflBcient that the debtor \ has an interest in the property' conveyed, I either legal or equitable. Having such an : interest, if he procures a conveyance to one who advances money upon it for him, taking tlie property as security for the money ad- vanced, he has a right to redeem. Tlie grantee in such case, acijuiring the title by j his act, holds it as his mortgagee. Jones on Mort. 2d ed. § 331. Stoddard v. Whiting, : 46 N. Y. 627; Carr v. Carr, 52 N. Y. 251. I It is denied that this court lias the power I to declare that an absolute deed shall be I deemed to be a mortgage, allowing an equi-l j table mortgager the right to redeem. At law| it has no such power. Nor, when the court I had a limited jurisdiction in equity, was the j doctrine admitted. It was always under- stood, however, that, in a case like the pres- i ent, if, instead of a demurrer, an answer was filed admitting the facts alleged, the court had the power to apply the remedy. Thomaston Bank v. Stimpson, 21 Maine, 195; Whitney v. Baohelder, 32 Maine, 313; Howe v. Russell, 36 Maine, 115; Eiohardson V. Woodbury, 43 Maine, 206. But since the act of 1874 conferred general chancery pow- ers upon the court, it has full and comfdete jurisiliction in such cases. Rowell v. Jewett, 69 Maine, 293-303; Jones, Mort. (2d ed.) §282. Courti 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 that endless frauds and oppressions 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. Eouity allows reoaralioa to be 48 MAXIMS OP EQUITY. made by admitting a verbal defeasance to be proved. The cases which support this view are too numerous to cite. The American cases are collected in Jones, Mort. 2d ed. § 241, et teq. See Campbell v. Dearborn, 109 Mass. 130; and Hassam v. Barrett, 115 Mass. 256. The complainant seelts to separate the arti- cles originallj 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 the real as originally designed to be. It was affixed and solidly bolted there- to. The mortgage was evidently only to serve a temporiiry 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. Ko 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. CusJiing v. Thomp- son, 34 Maine, 496; Pierce v. Faunae, 58 Maine, 351. The head note in Larrabee v. Lumbert, 32 Maine, 97, is erroneous in that respect. It was allowed in that case by con- sent. Insurance Co, v. Woodbury, 45 Maine, 447. But where a mortgagee insures the prop- erty by the authority of the mortgager, and charges him with the expense, then any in- Bifrance recovered should be accounted for. And if a mortgager covenants to insure, and fails to do 80, the mortgagee can himself in- , sure at the mortgager's expense. \<, One of the 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 bis 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 the proceeding was pre- mature, it will probably be ior 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 aeeordingly, APPLETON, C. J., WALTON, DAN- FOBTH, VIRGIN, and LIBBEY, JJ., con- curred. (5) MAXIMS OF EQUITY. 49 McLARREN v. BREWER, (51 Me. 4D2.) Supreme Judicial Court of Maine. 1863. IBi^i^egn^y. Heard on demurrer. B. Bradbury, for complainant A. Hay- den, for defendants. KENT, J. The case, as stated in the bill, to which a general demurrer has been filed, is in substance this: I. N. M. Brewer, the intestate, on the 25th of October. 1851. gave to the complainant a mort{;age of a Ijien on the stocks, to secur e all s ums of money then due, and such further sums as " the co inpTaJnant might furnish anST advance to said Brewer," for "the purpose' of, flnishiiig said ship a nd fittin gs har for_sea. The vessel was c ompleted, and was ^regist^^]jn_the name of said Brewer as owne r, of seven - eigiiflis, an'g o F^yat lia nlei XyFr""'^^ "^ """^ Sghth. The said Brewer, on th e bac k of said mortgage, acEHgWTSgg Eirih'Wrinrigj Et ^e ship thttgTesig^gar' ws the vess'ffVam- e3" InTSe^ mprt ^^e. The mortgage was dulj recorded, on the day of registry, in the cnR- tom house, and afterwards in the town clerk's office . Soon after wajds_tte, s hip ^ror eeeded -to sea, a nd has never since bg^.iii this state, except in June. 1858. and -Aha complainant has not exercised control over her or received any possession nndfr hiy mortgage, in February. 1858, the ship being in New Orleans, the said Brewer sold to said French tne seven-eigntns of tne ship, which then stood in his name, for their full value! making no reservatio n of. -the... rig hts f^f thi» complainant under his mortgag e, but giving an absolu te bill of. sai.e,^jEliJi warranty, of. said seven-eighths . Upon the sale. Brewe r receivea from ji'rench, as~part ot the consid - eration, his three negoti nhli ^ notes, arnnnnt- mg in all to $12.240, in nearly equal sums, and payable at differen t dates , the lat^ being" the first day ot Marcn. i8t)t): t^e sa ^,(f notes being secure d by a mortgage , oL-Baill jsmsL.£isssL,Jss..JJSmSZjoZMmsL, ip_ March. 1858, a few weeks after the sale. Brewer died, and the respondent has been appoi nted as aaministratrix on his estate. an d said notes and mortgage to Brewer hav e coime into her hands as such administratrS^ One of ttip nntpg )^a,p ho en paid to her, and ghe still holds the flthpr nntea and mf)rt;sflf;e. Brewer[s _estate Is reDresented-.as JnsQlxent andn:ommissioners have been appointed, and have repnrtpfl tliaJJJTg^claJirj of the cnpipjain- anFIs ^3^.85; and, jjt the,tiine-Jit_H3£_de:, cease of fi'rewer, a large part of the debt iateBSfirTtn hp. -«ef nEed..by...fl5i.jagEtgagfc. to him was due and unpai.d,_ and.Jia8.Jiat aiTlCft ^?m~pald Z ^ Pie prayer of the bill is that the proceed s BTx~1i5rt&e pa yment of the complainan t's "debT secure d by the mortgage , an d for such H.& B.EQ.(2d Ed.)— 4 relief as the nature of the case may require. The principal question which arises is* whether .- a Tifinrf gfl|3 ^^e nf a vessel which has_ been sold in another and a distant s tate, by the mortgagor in possession, by an absolute .bi ll of sale o f the entire ves sel'or igt'erest, and. wJth.. warr anty^ without any priSF , au- thority from the mortgagee, can follow the proceeds of the sale, existing in ' ttie""p'6t68 ^iven for"the purc haseTaDdTn" the possession of the itiortgag6r,""or~Sis represeSStiver ' It is a well-settled doctrine, both in law and in equity , that a mer e change ot p rop^ erty fro m one form to another _ can not. 4a. jij:self. divest the owner, ffij&agg who have distinct and i mmediate rights in the thing. ih.ita original shap e, of their property hi it, As a general rule, t hat right attaches to the new form , so long as such new p ro perty is capable of being lflenti%d and distinguished from all other property. &116, np rights o f ..any bona fide purchaser for a valuable -c onaider- ation, without notice. Intervenct It makes no difference. In law, into what other form the change may have been made, whether into promissory notes received as the consid- eration of the transfer, or into other mer- chandise. The product is substituted for the original thing, and so remains, as long as it can be clearly shown to be such substitute. It ceases when the means of distinguishing and identifying fail. Scott v. Surman, Willes, 400; Whitcomb v. Jacobs, Salk. 160; Taylor V. Plumer (a leading case) 3 Maule & S. 562; Story, Eq. Jur. §§ 1258, 1259. Money itself may be followed if it can be thus identified. The difficulty in relation to money usually is that, as it has "no ear mark," it cannot be thus distinguished; but this is simply a failure of proof, but does not alter or disprove the principle. Taylor V. Plumer, above cited. This doctrine has been often applied to agents, factors, and trustees, where the sale has been rightfully made, and the proceeds are existing in notes or other property, and the agent dies or becomes insolvent. Thomp- son V. Perkins, 3 Mason, 232, Fed. Oas. No. 13,972; Story's Equity, before cited. This class of cases is where the sale was made by a person intrusted with the prop- erty with a power to -sell, or where the sale has been subsequently ratified and con- . firmed. But the same principle applies to cases where the property of a party has been mis- applied, or a trust fund has been wrongfully converted. "An abuse of trust can confer no rights upon the party abusing it, or on those who are in privity with him." Story, Bq. Jur. § 1258. The case of Taylor v. Plumer, before cited, was one of fraudulent transfer. Mr. Justice Story, In Conrad v. Insurance Co., 1 Pet. 448, says that this general principle "has been extended to Cases where there has been a fraudulent or tor- tious misapplication of property." It may be admitted that the relation of 50 MAXIMS OF EQUITY. mortgagor and mortgagee does not of itself, and unconnected with other facts, create the relation of principal and agent, or give any right to the mortgagor to sell the whole property by an absolute bill of sale, with warranty of a perfect title. The mortgagor in possession may sell his interest^ 1. e.. his right to redeem, but h e.Ja^iaL-Wr ongdoe.r.if he b61Is aiid deliver s ., tiip pntire property to a purchaser without thp knr;>-^leflg;ft nr {issen);: of the mo rtgagee. S uch sale, if the existence of the mo rtga' ^elS n nt ^^ispfnaprl ia nn-yg ffTSTJ^ a PT-iminfll ftfFpnse . St. 1860, c. 150. I t may also be granted t hat, as to^tJie mortgagee and In j" title and mter est, sucn saie ao^s not con - vey, nor'impair his title, and that he may_^ l5ur'sii6 aB'tf~eafQfc.O iig.. ri ght to the, thing. jKtieffiifiE Jia.majr.„find. it. But w e thinlt that, unde r the circumstances stateg~ m this b ill, he h^_an el ection to~5o 55r or to ' follow" the proce e ds ^e x istin g' in t^ flEw" foi- m of negotiable notes in the ha nds ^II^J"2ll£^.^^LS^ tho_copi:eRaii t flti,vp ^f ^iij^ estate.' iB emaydo this on the ground that he"as^nts to and affirms me saie, and to tn e change x)f the prpjei tS-Jaartgaged to._^ from a vessel to the notps t,f>\pp. ST^subse- quent ratification is equivalent to a prior authority. We have seen that, if he had had prior authority, he would have come under the rule so often applied, to agents and fac- tors. "^ He may do this, also, on the nthpr p;r^>mn1.. thatit was a wrongful, If not a fraudulent^ conversion of his pro perty.by.the mortgage lii possess i on, ana he ma x, so ^^- waive.. thg tort as to pursue the proceeds in the JOSS'' form, whilst jjhfiy. n an bp identified He. must elect wbic iTcn,n,l'sg tn pirrgnf ■ He cannot hav e both_£fiaieiiifia. Murray v. Libbern, 2 Johns. Ch. 441; Murray v. Ballon, 1 Johns. Ch. 566. The bill suflaciently sets out an indebted- ness covered by the mortgage. The com- plainant must, of course, establish such in- debtedness, i. e., for money advanced for the purpose of finishing the ship and fitting her for sea. No other debt or claim is covered by the mortgage. But as to this debt, under the circumstan- ces of this case, the la w ^ imputes a trust in the mortgagor during his life, anS that trust' follows t he notes in the hands of his per - sonal representative . The proceeds ot the s ale of the sh i p, _ in her ^ "i^s , stand in place^ "O^.^^'""^ ^"''^- ^ P^ sho^Tld be anal ifid as' we ha ve a ri^ht to presume Mr., BESffiec-Jf h'eT] a^'U^d. would haYfi-applied them, so far as_needed,„^„i]iS. discharge nf the ripht.qg-^ cured,^by the mo rt;p;^ p^ . * In this case there is not a plain and ade- q uate remedy at law . xne estate is insol- vent, and, to say the least, it would require a peculiar action and judgment in law to take these proceeds out of the general" mass of the estate, which by law should be dis- tributed pro rata among all the creditors, and appropriate it specifically to the com- plainant's debt. Such appropriation is pecul- iarly the proper province of a court of equity. According to the statement in the bill, the claim of the complainant is not equal to any one of the notes, and it would be difficult to find any principle of law by which an action of trover could be maintained for them. The estate is entitled to the notes and the pro- ceeds after the mortgage debt is paid, and the claim set up is based on an Imputed t rust ana not on a legai tme to the notw.j '"'^ ^ it is worthy ot oDservation that tne words limiting the equity powers of this court to cases, "where the parties have not a plain and adequate remedy at law," wMch are found in Rev. St. 1841. c. 96, are omitted in the present Revised Statutes. We are not called upon, in this case, to determine wheth- er the omission of these words does in fact enlarge or alter the equity powers of this court. It seems to leave them under the gen- eral rules of equity in all cases where the subject-matter Is made by statute cognizable in equity. It was declared by this court,' In Tappan V. Deblois, 45 Me. 131, that "by the Revised Statutes of this state (1857) ye have jurisdic- tion of all cases of trust, whether aris ing py implication of law or created by deea or- — Vlll."' — ■ Demurrer overruled. APPLETON, O. J., CUTTING, DAVIS, DIOKERSON, and BARROWS, JJ., concur- red. MAXIMS OF EQUITY. 51 CLEMENTS y. TILLMAN et a l. (5 S. E. 194, 79 Ga. 451.) Supreme Court of Georgia . February 13, 1888. Error from superior court, Muscogee coun- ty; Smith, Judge. Su it by Hattie E. Tillman and William L|. Tillman, plaintiffs and defendants in error , against Jonn W. Clements, dernndant an d plaintiff in error, for an account and settle- ment of~a legacy due"saia" Hattie hi. mi - man under the will of one Jacob A. Clem - ents. John W. Cle niCTts__Deing^ an executor of the same. The following is the official report: Hattie E. Tillman, n legatf-e nnrlpr th(> will of Jacob A. Cleme nts, deceaspfl- with ht^r husband and trustee. Willifl.m„L. Tillmnn forced by__a iracnmeni: tor contematf-rV'E'isatfa., becau se J;he verdict was a 'money verdicti and t£e^same7:ould oniy be enfof ceff by eX' ecution; jsecong'f' fT^P OTl^S'tBe" verdict of the Jury was a money verdict, ana couig''g5r^ and could only be enforced by execution; ^tiirdJ b ecause t hgTerStcTof 'fcejury was' a money v erdictrjTna was 'k debt, and to en- force" the de cree^by 'ag''imgB TOP ri'or con- tempt w ould be to Tmpr'is'on"*ffie' defendant i^i' jt-ilji. !,.•_,; '■ '!^"-i?frn""!s"-i5«i««iii«««iijiii«!J!!iTa':. filed their bill fo r .qcconnt anri s ettlemen t against John W. Clements, executor, and Sa- tion of the stajEef f our&.Tecaus"e the decree souglit and moved for provides botn for the entorc e inent of it by execution, and an at- tachment for contempt; and the complain- ant should be required to. elect whether she ftm -BT-CIgments. .executri The_b ill contamed charges, of mismana^e- ment 6r"the estate, viQ^ations pf the provi - sron§"6r saig bill, a na nQn:rn8'yr"»nt by t^° SecutSr s of the intei'est "f (if>Tnp]|fiii^,r^j; q,|3 iegafefe. i.'he defendants answered the bill; but as "their answers are not material or nec- essary to an understanding of the errors com- plained of, they are not set forth. The jury returned the following verdict: " We. the jury, find that Sarah B. Clements has no property or eiTects of the estate of Jacob A. Clements, de ceased, in he r hands, as execu - /.Mg or otnerwise. wej the Jury, fju-therfind that John W. Clements, as executor of the will of Jacob A. Clements, deceased, has now in his hands tIie,sum _of^eight hundred andjjpia 'dolla rs princi pal and^ve hundrea'^'nars^- leresl, Ijelohgillg' KrHnt ng'Er Tiirma h. as lega - tee under the will of Jaco b A. Cleme nt s. " Upon this verdict tEe following decree was i-eudertid Uy IhH court: "Whereupon, the OTtJlulHUa (ioiusiaered. it is ordered, adjudged , a na decreed by the cou rt that the complainan t do t-ecover the same sum or eignt hundred and ten doii ars^riricipal an3"'the' furth er sum of five -nunafga" dollars Interest to this date, and "the fu rthe r stm o f ""'" "" doll ars, coits "of suit in this behalf laid ^uF ana_ ^^ended, ToT W hlCli" saig~ge veraTsums let execuHorns- sue, to TBie^ levied in~the" first "2^6 of the goodg-g HCT" chattelg, lands and tenem'ents, "of saidTacoF Al. Clements, -agcgaBeO" in'^Si " {lands o f Jo hn W. Clements. execu'toV of th e gilL-fifL- gaid Jaco b_A ^'qni?"tSr '"<* ^" ^"^ foun d; an d If notto be found, then to be levie^of the'pbrsonal goods and chattels. lands and tenements^^of said John Yft <''g"'' ents.. , it is turther ordere d and decreed by ^ said court thgrj-lltt iiaiU J^n W. Clements do satisfy and pay the aforesaid amounts, principal, interest, arid cSS ST to We^safa complainant, onOT_before^'tEe , arst""^y jaf Taniiary 'Seftl a'n'ct,'iir "def.ault Jjaeieof, that Ee he heidTand deemedjto be in con tempt o f "^the^order and dec ree of this^court " Plainlj g, ia^rrni; p^epta" to the' portion of the decree embodied by the last sent ence, and says the court erred in rendering a gecreerto I;?!? ptF enforced by . a.n~gCtgchmeht for contempt. for debt. whichirBroEmtea'ti g:t TO^;ijsj^^^^^ would proceed to enf orceit bv execution or attachment foi:_£aBtamBtJf the court deter- mined that it could be enforced by attach- ment for " contempt."/ C. J. Thorn ton,._f or. plaintiff in_ error. L. F. Garrard, for defendants in error. KIBBEE, J.i 'Originally, in the absence of statutes providing otherwise, decre es of courts of ec j uitv. of vyhatever kind or natureT" operatq.^ stf;^ptlv and exclu«iv|ly ..i^ iff^- Jgg^-. The only remedy for their enforce - ment was by what is termed "process of conteiililit," Uhfler wnich t he party falling to obgy^ jhem wa s arrestea and^mpirlsoned until he yielded "o6^^ia £fiL."orr^Sid--tihe pontempt by showinig 'that-disfl.bfiidienca yt^s not wilful, but the _ result^_of jnabillty, just produced by his Q .wn,_fa3;lt,Qr^oatMmafi£,. The writ.df .assistance to deliver possession, and even the sequestration to compel the performance of a decree, are comparatively of recent origin. Our statutes expressly pro- vide that "all orders and decrees of.,flja^£ftm;t S^he' enforCe dTy atta ch|ngnt against the person ;_ decrees for money, may be enfoceed by execution against jthe^aESBSEty." Code, §"3099. ' " JTdecree in favor of any party, for a spe cific su m of money, o r for regu lar in - "st'anmenig"^° 1Eone^^ shall ^ be enforcigi^ b .v ^MWfl againsT'prop^r^'v as at law " flnrlo i 4;il5. " Every decree or order of a court of equity may be enforced by attaghme pt agajng t the person for contempt: and Jf^jafissftaJafi partly for money and partly for the,.per- rormance^f^a duty, the fo n per. may Jifiuen- rorced'byexecution, a,nd the^Iatter by^ atj:^.^^- inent orjoth^process." 7!fode','§' 4216. The clear Tegislative intent is manifest to en- large and render more efficacious equitable remedies, while preserving the remedies the courts had previously employed in the ab- sence of statutes providing others. Tjndpi- our statutes, when a party is decreed to per- "lorm a autv. or fo rin any i^ct other tha.n thp 1 Blandford, J., being disqualified, Judge Kib- bee, of the Oconee circuit, was designated to preside in his stead. 52 MAXIMS OF EQUITY. mere pa yment of money, which the cotirt has Ju risdiction to adjudge He shall do. jFEe* disolbgya'.J£e anJtJi6ri'£y' oj tTEie "~court Is defied;. ___ .^^^_ JSe^is g uiltg-itf contempt, an d the arrest and. TKer^'Kerr that, "o'Mili'arily, it would be im- ' imprisonment . of .hi§_i Lej:gaiUOiaLimBasfla: ment for_ debt in any a,pprogriate sense je£ 'the "ferm." " ^uTiTF cour rnf"errii'itv shmild pn a f rBnder"«:'^ Himpl^ dpprpo fny iTi^f^<»v simple , money ,_yerdict, — a d^^ i y^e which. . It Taw^pc6^3ji.g.ainst.^i:aBfiCt£j=ttig. fa,ilnre.ia pay the decree HfiJJ^J^ot, be JSOjEtemakhftj. , could compulsory process.. .again^t.,,th.e., per- 8on of t he p arty in 5e|3iilt be r ^sR ^.tj ^ , to-ta C enforce p a;^B |£^n t. In Coughlin v. Bhlert, 39 Mo. 28Si, ithe court uses the following lan- guage: "We do not mean to say that a party may not be put in contempt for dis- obeying a decree for the performance of acts which are within his power, and which the court may properly order to be done. If it were shown, for instance, that the party £ad in his possession a certain speciflc sum of money or other thin g which he refused to deliver up, under, the! order of the court fo r any .purpose^ it may very well be that his disobedience would be a contem p t fo r which he m ight lawfu lly be, im| ] gri, ^ ]j ]fed^" TnTSanEoTyTtlJarTtonril Ga. 220, JudgeMc- Cay, delivering the opinion, says: "We do not intend to say that simply because a debt is adjudged by a decree In chancery, in- stead of by a judgment at law, It may there- fore be enforced by imprisonment. Tfte.igr^;, , n t must be cleaxLv ^'"Hiiifflf (^^ntpmnt ■""li tiniiii"Ti "".2 unwilling to I ' or the process of the court, W!iio Is able and Unwilling to obey the order ^oTlTBfe courL_ 't » » It ought never to be ■ resorted to except as a penal process, round- ed on th e nnwil lingness o? tEe"pari£yTo obey. Th p , mome nt It appears that there Jj it^itwo^3[cle^^|TeTBe'3iH^of^ "to (Jisc"iiarge the "part'y,*'*etc. proper to include in the order the alternative order for imprisonment on failure, since it la not to be presumed that a contempt will en- orovisiony "there s hall be no lmpBijl()ftlB^nt for debf'^as not Int ended to intCTfere with the traditional ~ power ot cnancei7^urtsJo"punish for con - " tempf'aIl,refuBaI g''t5~ oBey their T a wiui He - creeB ^na^sscSBXK" Tfiis proposition may be conceded to be sound without affecting the case at bar In any respect "The power in question was never exercised by chancery courts except in those cases where a trust in the property or fund arose between the par- ties litigant, or some specific interest in it was claimed, or the chattel had some pe- culiar value and Importance that a recovery of damages at law for its detention or con- version was Inadequate. Such interference was in the nature of a bill quia timet, and was asserted only on a proper showing that the fund or property waS in danger of loss or destruction." 1 Story, Eq. Jur. §§ 708- 710. "No jurisdiction to compel the pay- ment of an ordinary money demand uncon- nected with such peculiar equities ever ex- isted in chancery courts, nor had they the power to compel such payment by punishing the refusal to pay under the guise of con- / IgJ^lJ^, nffy aFEar tne cteCTge was.jight In ' awarding an^gSe cuiion agalnat-thfi-fiseciitQi as set forth in said decree, but ffie facta did lot au'^faorize a!n 'alternative order iniprigpn- ing H'e'''fle!fenda nt on'Siflure 'to pa.j ._ J)i^-\ lenFreversecC ' (2) MAXIMS OF EQUITY. 53 HART V. SANSOM et al. (3 Sup. Ct 586, 110 U. S. 151.) Supreme Co urt, qf thg TTnited States. January Error to the CircTiit Court of the United States for the Northern District of Texas. Henry J. Leovy and W. Hallett Phillips, for plaintifE in error. A. S. Lathrop, for de- fendants in error. GBAY, J. This is a writ of error sued out by Edmo nd J. Hart, a citizen of Louisiana , to'reyerse a j udg ment r endered against him in tiie circuit court of Jhe^ United^tates J^ ffie''Northern drsfflct of Texas, In an action brought by him against,^aHfin_ Japspgi, aiid the heirs at law of Jphomas^M, Xieagu^cit-' izens of Texas, to recover a t ract of land in Johnson county, 'lu l lmi tiiat fe, of whicn tney had ' tHspuftSt i e ii^ ea- 'EiSu St~the trial. Hart ^^^STTSis title iffld^ a jBat gnt from me fe - pubfic of Texa s to League, £d_a_deed with ^^erarbovenants^of warranty f fom~League, c[a"ted_ August 1 9, _184g^^ nd"boffi ~ recorded "on DecemBer 9, 1879, and^tt^j^^^^tEat-ilie defendant Sansom held p ossesi on of t^e land i3iider"a"Iease from the other de fendants a nd as" their tenant'" TEe""aeferiaants offered in eviSence tEe record of a judgment rendered by the district court of Johnson county, on August 24, 1875, upon a petition filed June 11, 1873, by the heirs at law of League, (who died intestate November 5, 1865,) against Virgil Wilkerson, Orlando Dorsey, and sev- eral other persons, and Hart, alleging that Wilkerson ejected the plaintifCs from this land, and BnlawfuUy withheld possession thereof from them; that on October 29, 1870, the defendant Dorsey, by deed diuly recorded, conveyed to some of the other defendants than Wilkerson and Hart three-fourths of the land, reserving in that deed the remain- ing fourth to himself, and that other deeds (particularly set forth) of parts of the land were afterwards made to the rest of such other defendants and recorded; t jiat the de- fendant Har t "sets up some pretende d., clajffl ^4g.'Ja tIetosai d-ttffla-;" and that "the de- fendant Wilkerson'Ts~S. naked trespasser up- on the land of the plaintiffs, and that the several other defendants' several deeds, which appear upon the record of deeds of Johnson county as aforesaid, are fraudulent and void, and that the said pretended claims and deeds, and each and all of them, cast a cloud upon the title of the plaintiffs;" ^nd praying "tha t they have judg ment, that the SiSSd-HB^ISL. ^'^'^""^"^^^ plsiiniHffg^^crMted by^the- severaX*9Beds~aforesaia, oeremoved", and that the said aecds, ana~' ^:eB35a~ail oOSeii7 ^""gecIgf^d_null and Toid7"ana~T?g canceled_andL2lks5SEi®i^? ""^"I^i-SSiji^l the title of the plalB tiffa in an?lo"said pr em- is^^nff'evefy part thereof, ma y De^ onSrm^ ana establi^ed -aff" agalBsT said" ' ■^efioaahts and each and every of them, and all per- sons claiming through or under them," aiiii for a writ of possession, damages, and. costs That record also showed the issue and due service of citations to all the defendants ex-' cept Dorsey and Hart; the issue..gl..a_i!ita- tion directing l^ e s heriff _^'s erve Hart,_being a citizen of Louisiana, by publication^^" and "the sKerffi's return^ showing 3ffie"\xec"ifltion of tire"HEa1:ioii,Jdry .aj^h^Bublication in a^ijews- paper of the county four successive weeks Bef ore t he return day, and "a like servTce' by TniBIication on" Dorsey, a citizen of New York. That record further showed a default of all the defendants; and that upon a wfit of inquiry the jury assessed damages against . Dorsey and Hart; fmrnij_asi fai^« t>ie issufi _r^,';^'^ Pn^"""*" tn.J.pafnio nT^r^ ftiR t^"g "<* the pl aintiffs a s Jus hgirs; jthftLjaact "glaimed teiid lanffy""""and that a deed' was made by ' borsey and "recorded, as alleged in the peti- tion, but that Hart and Dorsey respectively had no title of record or otherwise; ^d re- turned a v erdict " for the p laintiffs: and tfia? tliey rec""ovef~SSe j' and desCT iEearin.'-tB.e.„ peti- ti on." That record finally showed a judg- ment '''that the plaintiffs recover of the de- fendants the premises described," and "that the several deeds in the plaintiff's petition mentioned be and the same are hereby an- nulled and canceled, and for naught held, >- and the cloud thereby removed," and for costs, and that execution issue for the costs. The circuit court, against the plaintiff's ob- jection, admitted the judgment in evidence, instructed the jiury that it divested the plain- tiff of his title to the land, and directed a verdict for the defendants. The plaintiff, deriving his title under a \ deed with covenants of general warranty from League, is entitled to maintain this action against League's heirs, who are es- topped by those covenants, unless the former judgment in the action brought by them in the state court has adjudicated the title as between them and the present plaintiff. It is therefore necessary to consider the nature and effect of that judgment. The petition combined, in accordance with the practice prevailing in that state, an action in the na- ture of ejectment to recover possession of the land, and a suit in equity to remove a cloud upon the plaintiffs' title; and the service by publication was in the form authorized by the lodal statutes against non-residents. 1 Pasch. Dig. Laws Tex. (4th Ed.) art. 25. The petition alleges that Wilkerson was in possession; and that the other defendants, except Hart, held recorded deeds, which were fraudulent and void, and cast a cloud upon the plaintifts' title. But as to Hart, It did not allege that he was in possession, or was In privity with the other defendants, or that he held any deed, but only that he set up some pretended claim and title. And the verdict finds that he claimed the land, but had no title of record or otherwise there- in. The judgment is that the plaintiffs re- cover the land of the defendants, and that ^ 54 MAXIMS OF EQUITY. the deeds mentioned in the petition be and are annulled and canceled, and the cloud thereby removed, and for costs; and execu- tion Is awarded for costs only, and not for any writ or process in the nature of a writ of possession or habere facias. It is difficult to see how any part of that judgment (except for costs) is applicable to Hart; for that part which is for recovery of possession certainly cannot apply to Hart, who was not in possession; and that part which removes the cloud upon the plaintiff's title appears to be limited to the cloud creat- ed by the deeds mentioned in the petition; and the petition does not allege, and the ver- dict negatives, that Hart held any deed. But if there is any judgment (except for costs) against Hart, it is, upon the most liberal construction, only a decree removing the cloud created by his pretended claim of title, and is no bar to the present action. Gen- erally, jfnot unive rsal ly, equity juri|d|£tij>n .'TS~exer"cisey''iiriperson'am,'"and' ^Wt i^ rem, and depends up0ll'"tE5^6nff61 "oT the court over the parties, by reason of their presence or residence, and not upon the place where ^the land lies in regard to which relief is sought Upon a bill for the removal of a cloud upon title, as upon a bill for the spe- cific performance of an agreement to convey, the decree, imless otherwise expressly pro- vided by statute, is clearly not a judgment in rem, establishing a title in land, but oper- \ates in personam only, by restraining the de- 'fendant from asserting his claim, and direct- I Ing him to deliver up his deed to be can- celed, or to execute a relief to the plaintiff. Langd. Eq. PI. (2d Ed.) §§ 43, 184; Masaie V. Watts, 6 Cranoh, 148; Orton v. Smith, 18 How. 263; Vandever v. Freeman, 20 Tex. 334. It would doubtless be within the power of the state in which the land lies to provide by statute that if the defendant is not found within the jurisdiction, or refuses to make or to cancel a deed, this should be done in his behalf by a trustee appointed by the court for that purpose. Felch v. Hooper, 119 Mass. 52; Ager v. Murray, 105 U. S. 126, 132. But in such a case, as in the or- dinary exercise of its jurisdiction, a court of equity acts in personam, by compelling a deed to be executed or canceled by or hi be- half of the party. It has no inherent power, by the mere force of its decree, to annul a deed or to establish a title. In the judgment in question, no trustee to act in behalf of the defendant was appointed by the court, nor have we been referred to any statute authorizing such an aPDOui1;ment to be made. { The utmost ettect which can be attributed to the judgment, as against Hart, is that of an ordinary decree for the removal by him, as well as by the other defendants, of a cloud upon the plaintiff's title. tTSuch a decree, being in personam merely, can only be supported against a person who is not a citizen or resident of the state in which it is rendered, by actual service upon him within its jurisdictioS and constructive service by^ publication ina newspaper is not sufficient. The courts of the state might perhaps feel bound to give effect to the sgrvice inada as ^ directed by its statutes. jBut no court de- riving its authority from another government [ will recognize a merely constructive service ! as bringing the person within the jtu-isdic- | tion of the court. The judgment would be^ allowed no force in the courts of any other state; and it is of no greater force, as against a citizen of another state, in a court of the United States, though held within the state in which the judgment was rendered. Hollingsworth v. Barbour, 4 Pet. 466, 475; Boswell's Lessee v. Otis, 9 How. 336; Bis- choff V. Wethered, 9 Wall. 812; Knowles v. Gaslight Co., 19 Wall. 58; Pennoyer v. Neff, 95 U. S. 714. See, also, Schibsby v. Wes- tenholz, L. K. 6 Q. B. 155; The City of Mecca, 6 Prob. Div. 106. The circuit court having ruled and in- structed the jury otherwise, its judgment must be reversed, and the cause remanded with directions to set aside the verdict, and to order a new trial. \ v^) ilAXIMS OF EQUITY. 55 ADAMS V. MESSENGER. a? N. E. 491, 147 Mass. 185.) Supreme Judicial Court of Massacliusettb. Middlesex. June 19, 1888. Appeal from supreme judicial court, Mid- dlesex county. Bill In equity, b y Oeorge B. A{\nmn affai"st Wil liam T .. Messens^r, to compel fflft per- formance of an agre e ment to furn ish t he plamtiH wlffi''""cerEam'"peiTecr~working ^ in- jectors for steataqgcrtiei'^'--aga'To "apply 'for and -asslgn tcr p KlHtlg cer t^aZIgt^g paienF - urtEi d ominion ot Oanaaa! Hearing in the supreme juQiciarcburTupon defendant's de- murrer, which was sustained, and the plain- tiff appealed. The facts are stated in the opinion. Wm. B. Durant, for plaintiff. Charles S. Knowles, for defendant. DBVENS, J. It is the co ntention of defendant that the plaintiff bas^Ji^fullj^cMj:. plete, and adequate remedy-at-jcomiopn J|^ By a suit for dam ages , a nd that the court ,, gtcnag' 'Iff'equityT iSnnot ^ant We sought by the prayers of the" ^IT ~ Thef con - B'overs y arises from the iailure "Eo perform an exe cutorywritten~ ^ontractr "So'Tar as "THis relates to personaTpPeptP^, the objec- tions arising from the statute of frauds, which haye sometimes been found to exist when oral contracts were sought to be en- forced, haye, of course, no application. The general rule that contracts as to the pur- chase of personal property are not specifical- ly enforced, as are those which relate to real property, does not rest on the ground of any distinction between the two classes of prop- erty other than that which arises from their character. Contracts which relate to real property can necessarily only be satisfied by a conyeyance of the particular estate or par- cel contracted for, while those which relate to personal property are often fully satisfied by damages which enable the party injured to obtain elsewhere in the market precisely similar property to that which he had agreed to purchase. The distinction between real and personal property is entu-ely subordinate to the question whether an adequate remedy can thus be afforded. If^fro m the nature of the p eisflCaL _property,_ it cannot, a court iS'equity wi ll entertam jurisdiction to en - Tcitvw^tSeToSSact . i Istory, Jilq. Jur. § 717; 6lark y. Flint, 22 Pick. 231. A conti-act for bank, railway, or other corporation stock, freely sold in the market, might not be thus enforced, but it would be otherwise where the stock was limited in amount, held in a few hands, and not ordinarily to be obtain- ed. White y. Schuyler, 1 Abb. Prac. (N. S.) 300; Treasurer v. Mining Co., 23 Cal. 390; Poole y. Middleton, 29 Beay. 646; Doloret V. Eothschild, 1 Sim. & S. 590. ■^hfij:&-Mti- cles of person al prop prtr, "^""1 frp r°"!jJiar and indlyidua l in thek character, or h ayS-fln especla:! value^on^accpuM &i&'S..8;SSM connected IwlthJthCTQ, as pictures, 'cmq^Jties, family furntturer^iTi heirlooms, specjfit-per- fofmanceof a cpntractjn relation to^them wiU be decreed.' Lloyd y. Loaring, 6 Ves. 773; "Fells y. Read, 3 Ves. 70; Lowther v. Lowther, 13 Ves. 95; Williams v. Howard, 3 Murph. 74. An agreement to assign a pat- ent will be specifically enforced. Blnney y. Annan, 107 Mass. 94. Nor do we p e rceiye any reason why an agre ement t ofurnish ar- ti cles which the yendor"'aloh"e'^ii'' supply, whetKTbecause their'manufaetufe is guard- ed by a patent or for any j)ther_reason, "should not also be thus enforced. Hapgood yrTE£osenstockr23 Fed. 86. "As the yalue of a pateut-right cannot be ascertained by com- putation, so it is impossible, with any ap- proach to accuracy, to ascertain how much a yendee would suffer from not bein^ able to obtain such articles for use in his busi- ness. The contract of the defendant . was two- fold: to fumisli and delly^E certain describ- ed "worEIng'steam-injectors, withm a speci- fied time, to the^plamtiff| ariS'also tha.t_if the JHefendant "shall make im^i^'SBai^ts in^ injectors for steamBoilers, and shall take wiTpatgnt s therefOTjn_Jhe ynited..§tates, he will_a^^^for letters patent Jn£8flada, and, onTo EtSning them,_wni7?ssisii and, . cony ey the same" to^ the plaintiff, andjjia,t,he will iiot do 'any""act*'prejndi cial to these^ lg£tfiSS patent or Can ada, or the monpEflE^thus se- gure 5r"'ii:' 'TF^said' "tEaF" the_court will not egfaccsua. contract ffi):.pei:sflnal. services when such services require the exercise of peculiar s5ill, IhtellecEuaTabiutyr^Hd judgment, and that, therefore, the defendant cannot be or- dered to make and deliver the injectors con- tracted for. But the principle on which it Is held that a court of equity cannot decree one to perform a personal service involving peculiar talent or skill, because it cannot so mould its order and so supervise the in- dividual executing it that it can determine whether he has honestly obeyed it or not, has no application here. The defendant has agreed to furnish and deliver certain inject- ors, which the contract shows to be patented articles. Ther e is nothing in th e JnlL-from whlchjtjs'to tie inferred that t hey were jret to be made~wESrthe conti*act"was executed; Birt,~if'"tt be assumed- that they-were, there is nothing from which it can be inferred that any skill peculiar to the defendant was required to construct them. For aught that' appears, they could be made by any intelli- gent artificer In the metals of which they were composed. The details of their manu- facture are given by reference to the pat- ents, which are referred to In the agreement; so that no difficulty, such as has sometimes been experienced, could have been found In describing accurately and even minutely the articles to be furnished. Nor are there found in the case at bar any continuous du- 56 MAXIMS OF EQUITY. ties to be done, or work to be performed, requiring any permanent supervision, wMch, as it could not be concluded within a definite and reasonable time, has sometimes been held an obstacle to the enforcement of a con- tract by the court. Agreements to make an archway under a railway, or to erect a sid- ing at a particular point for the convenience of the land-owner, have been ordered to be specifically enforced. Although the party ag- grieved might have obtained damages which would have been sufficient to have enabled him to pay for constructing them, and al- though the work to be done necessarily In- volved engineering skill as well as labor, he was not bound to assume the responsibility or the labor of doing that which the defend- ant had agreed to do. Storer v. Railway Oo., 2 Youuge & C. Ch. 48; Greene v. Railway Co., L. R. 13 Eq. 44. The case at bar Is readily, distinguishable from that of WoUen- sak V. Briggs, 20 Bradw. 50, on which the defendant much relies. In that case the de- fendant was to construct for the plaintiff certain improved machinery for a particular erating the proposed machine. It was ob- viously a contract too indefinite to enable the court to order its specific enforcement. ■^ It is urged that specific performance of a part only of a contract will not be ordered when it is not in the power of the court to \order the enforcement of the whole, and that it would not be possible to enforce that por- tion of the contract which relates to the ap- plication for letters patent in Canada, and the subsequent assignment of them.^But where iTtwo parts of a contract are distinctly separa- / ble, as in the case at bar, there is no reason -| j why one should not be enforced, and the I plaintiff compensated in damages for the V^breach of the other. When a contract relates • to but a single subject, and it Is Impossible for the defendant to perform it except par- tially, the plaintiff is entitled to tlie benefit of such partial performance, and to compensa- tion, if it be possible to compute what is just, s^so far as it is unperformed. It was therefore held in Davis v. Parker, 14 Allen, 94, that where one had agreed to convey land, vdth release of dower, and was unable to procure a release of dower, the purchaser was en- titled to a conveyance without such release, with an abatement from the purchase money of the value of the wife's Interest at the time of the conveyance. See, also, Milkman V. Ordway, 106 Mass. 253; Curran v. Water- Power Co., 116 Mass. 90. We have assumed, in favor of the defend- plaintifE could obtain for the breach of that portion of the agreement which relates to the application for a patent in Canada for the improvements which defendant had made, would be in damages. We have not Intended thus to decide. That equity, by virtue of its control over the persons before the court, takes cognizance of many things which they may do or be able to do abroad, while they are themselves personally here, will not be controverted^ One may be enjoin-> ed from prosecuting a suit abroad. He may be compelled to convey land situated abroad, although the conveyance must be according to the laws of the foragn country, and must be sent there for record. Pingree v. Coffin,"^ 12 Gray, 288; Dehon v. Foster, 4 Allen, 545; Cunningham v. Butler, 142 Mass. 47, 6 N. E. 782; Bailey T. Ryder, 10 N. Y. 363; New- ton V. Bronson, 13 N. Y. 587. There is noth- ing to show that the plaintiff, in making his application in Canada for the patent, is com- pelled to leave the state, any more than he would be compelled to do so if he was an applicant at Washington. The grant of such purpose, but no details were given as to the jj^ patent is an act of administration only, form, structure, principle, or mode of op- ant's contention, that the only relief that the ■"'If it were to be granted here, the party jOBTOuld be ordered to make application. It was held in Runstetler v. Atkinson, 4 Mac- Arthur, 382, that where a formal assignment of an invention had not been made, but a valid agreement had been made so to assign, equity would order the party to make the formal assignment, and also to make appli- cation for the patent, which, in such case, would issue to the assignee. The laws of Canada, which we can know only as facts, are not before us by any allegations as to them. If all that is required by them is a formal application in writing by the inven- tor, there would seem to be, from the alle- gations of the bill, sufficient reason why the defendant should be required to make and forward it, or place it in the hands of the plaintiff to be forwarded, to the Canadian authorities. In any event, as the application is preliminary only to obtaining letters pat- ent for the purpose of assigning them to the plaintiff, the averments of the bill, taken in connection with the terms of the agreement, set forth a good reason why the plaintiff may ask an assignment of his title to the im- provements in question from the defendant, so far as the dominion of Canada is con- cerned, and also why the defendant should be restrained from alienating or in any way Incumbering any right he may have to let- ters patent from Ganada if plaintiff should decide to seek his remedy in this form, rather than in damages for breach of this part of the contract. Demurrer overruled. PENALTIES AND FORFEITURES, 57 EWING V. LITCHFIELD et aL (22 S. E. 362, 91 Va. 575.) Supreme Court of Appeals of Virginia. June 27, 1805. Appeal from circuit court, Washington county; Sheffey, Judge. Bill by one Litchfield and others against Thomas Ewing. Decree for complainants, and defendant appeals. Reversed. White & Fenn, for appellant. Daniel Trigg, for appellees. KEITH, P. This bUl was filed in the circuit court of Washington county by Litchfield and others, and sets forth the following facts: In January, 1890, the plaintiffs entered into a conti-act with J. D. Imboden, by which the plaintiffs and the said Imboden agreed to pro- cure $100,000 of the stock of the Virginia & Tennessee Coal & Iron Company at the price of $10 or less per share of $loo each. These shares, together with 15,000 shares owned by the plaintiffs, were to be TOted in a stock- holders' meeting, to be held within a period named, and upon a notice prescribed in the contract, so as to acquire the control of $1,- 950,000 of the stock which remained in the treasury of the Virginia & Tennessee Coal & Iron Company. This block of 19,500 shares of stock was to be sold to Imboden at $10 per share, and in consideration of his purchase of the said treasury stock at this reduced rate he undertook to secure and cause to be sub- mitted to the said meeting of stockholders, for their ratification, a contract, by and on behalf of the Danville & East Tennessee Railroad Company and the Atlantic & Dan- vUle Railroad Company with the Virginia & Teimessee Coal & Iron Company, binding the railroad companies to extend their roads into the lands and coal fields of the coal and iron company, or to make connections therewith satisfactory to the said parties by means of other railroads, by the 1st of January, 1893, and to complete and have in operation the line of said railroad companies from Abing- don to Damascus on or before the 1st day of January, 1891, and to complete and have in operation all that part of the line of said railroads and their connections, so as to con- nect Abingdon and the coal fields, by the 1st of January, 1893, and then binding the said railroad companies, under certain terms therein named, for the transportation of the product of the coal fields, owned by the Vir- ginia & Tennessee Coal & Iron Company. It is further provided that, unless the party of the first part, J. D. Imboden, or his assignees, shall, at the meeting of the stockholders pro- vided in the contract, purchase the treasury stock and delivesr or cause to be delivered the contract of the railroad companies, as here- inbefore provided, or in the event of the fail- ure of the first party to notify the parties of the second part of his readiness to conform to and to comply with the provisions of this agreement, then the contract entered into was to be nuU and void, except that the parties of the second part "shall be entitled to demand and receive from the party of the first part the amount of $50,000 of the stock of the Vir- ginia & Tennessee Coal & Iron Company, or $5,000 in lieu thereof by way of ascertained and liquidated damages on account of the breach of this contract." There are details of the contract entered into between the parties which I have thought it unnecessary to set out, but have contented myself with reciting what I conceived to be the features of the contract upon wtilch this controversy de- pends. The $50,000 of stock was to be de- posited with the Exchange National Bank of Lynchburg by the party of the first part, to be held in accordance with the provisions of the contract, and it was also provided that the party of the first part should have the right to elect to pay either the stock or the money in cash as damages, in the event of his failure to comply with his contract. Sub- sequently an amended bill was filed, and Thomas Ewing was made a party defendant, it appearing that J. D. Imboden, in execut- ing the contract set out in the original bill, was acting as the agent of Ewing, and that Imboden had no personal interest In It To this bill there was a demurrer, which the circuit court overruled, and such proceedings were had that a final decree was entered in the cause, from which Thomas Ewing has appealed, and his appeal presents for our consideration at the outset the propriety of the decree of the circuit court upon the de- murrer to the bill. It wiU be observed that this suit Is not brought to enforce the specific performance of that which the defendant contracted to do, —that is, to procure contracts from certain railroad corporations to build a line of rail- way into the coal fields controlled by the plaintiffs within a stipulated period; in other words, it is not a suit for the specific per- formance of the principal contract entered in- to between the parties. Stated broadly, that was a contract upon the part of Ewing to con- Btruct, or for him to procure others to con- struct, certain lines of road to certain points named In the contract, the object being to de- relop the coal fields owned by the Virginia & Tennessee Coal & Iron Company, in which company the plaintiffs were large stockhold- ers. Vpon the part of the plaintiffs, in con- sideration of Ewing procuring this road to be Duilt, or procuring a satisfactory contract up- on the part of others to build It, they were to unite with him, who, In the meantime, with their aid, was to secure $100,000 of the stock of the Virginia & Tennessee Coal & Iron Company, thus constituting a controlling Interest in the company, and thereby give to the appellant the control of 19,500 shares of stock, at $10 per share. In a proper case a court of equity delights specifically to en- force contracts where the parties have no other remedy, or the remedy afforded else- where is less complete or satisfactory; but 58 PENALTIES AND PORFEITTTRBS. here the undertaking of the defendant Is to build a railroad, or to procure others to build it, and courts of equity will not enforce con- tracts for that . purpose. This seems to be well settled. The object, and the only object, of this bill is to recover what the parties have agreed up- on, either as a penalty or forfeiture, or as liquidated damages. The breach of the con- tract Is recognized as the foundation of thp relief sought, and the plaintiffs have resorted to this court, and Invoked its aid to enable them to gather in the form of damages the fruits of a mere breach of contract. There are cases in which courts of equity will award damages, but they are cases where, having obtained jurisdiction over the subject and of the parties, under some of the well- recognized sources of equity jurisdiction, it is found necessary to award damages in or- der to do full and complete justice by way of compensation, as when. In the enforce- ment of a contract for the sale of land, the court finds Itself unable to give the party seeking and entitled to its aid all that, under his contract, he should recover. In such a case the court will, as far as possible, spe- cifically execute the contract, and then ascer- tain the damages accruing by reason of Its inability in the particular case thus to afford complete relief. The giving of the damages Is ancillary or auxiliary to the jurisdiction specifically to enforce the performance of the contract. See Nagle v. Newton, 22 Grat. 814. The case before ns being in Its essence for the recovery of damages for a breach of contract, a court of equity Is not to be beguiled into granting the relief sought because It is In- geniously and artfully concealed under cover of a prayer to compel the assignment of cer- tain shares of stock. The great weight of au- thority in this countESr Is that a court of equi- ty wIU not entertain a bill for such a purpose, though In England It seems to be otherwise. Had the subject and object of the principal contract between the parties in this case been the sale and purchase of the $50,000 of the stock in question, a court of equity would have left them to their remedy at law, and will certainly not barken to their prayer when It appears that the stock, the assignment of which is sought, Is Itself but one form of the penalty or liquidated damages agreed upon as the measure of the injury sustained by the breach of the contract entered into. Much of the argument addressed to us had for its ob- ject to enable us to determine whether or not the stock, or In lieu thereof the $5,000 in money, a^eed to be transferred or paid by the appellant in ease of a failure to perform the contract, was to be considered as a pen- alty or as liquidated damages. This Is a feature of the controversy which it Is not necessary for us to determine, because in neither aspect of it are the plaintiffs entitled to the relief sought, £^ A court of equity will neither enforce a penalty or- forfeltnre, nor permit it to be enforced in a court of lawi It will go even further than this. It will not permit a party, by the voluntary payment of the agreed penalty, to defeat the enforcement of the alternative contract It will not en- tertain a suit for the recovery of damages merely, nor will it undertake to give damages ssLve, as before observed, as ancillary or aux- iliary to some one of Its recognized subjects of jurisdiction; and so far from liquidated damages constituting an exception to the rule that courts of equity wUl not entertain suits for damages for breach of contract, it seems that, if the damages for the breach of a con- tract have been liquidated by the parties to the contract (that is, ascertained and agreed j upon), that fact, so far from inviting thej assistance of a court of equity, is sufficient to repel it. Indeed, this must of necessity be so, for, as the jurisdiction of the court to en- force contracts specifically rests upon the in- sufficiency of damages as a redress or remedy for failure to comply with a contract, the very foundation of jurisdiction seems wanting in those cases where the parties themselves have otherwise determined, and have fixed a money value in the form of liquidated dam- ages upon the injury sustained by its breach. In this view is found an explanation of the leaning shown by courts of equity, in doubt- ful cases, to construe such agreements as we are here considering as creating a penalty or( forfeiture rather than liquidated damages.! For, if It be determined that It Is but liqui- dated damages, the jurisdiction of a court of equity is at an end, but If It be construed as a forfeiture or penalty, then it afCords no ob- struction to the interpretation of the court of equity, because it will prohibit either the enforcement or the voluntary payment of the penalty or forfeiture, and will compel the performance of the alternative contract If a proper case be made. Courts of equity, there- ll^ fore, always strongly Incline to that construe- 'j| tion which declares it to be a forfeiture or j penalty rather than liquidated damages. In / this case, however, a court of equity is with- out motive to prefer the one to the other con- struction. The alternative for which the pen- alty is given. If It be a penalty, is the securing of a contract for the building of a railroad. It is obviously impossible to compel the de- fendant either to build it himself or to pro- cure others to build it. It will leave the par- ties, in the forum appropriate for that relief, to recover damages for its breach,— liquidated damages, if a court of law shall be of opinion \ that the parties so intended the stipulation in 1 the contract, or damages in ordinary cases, if a court of law shall be of opinion that the stock or money stipulated to be paid was a penalty. We have not referred to cases. Cases upon the subject of the specific per- formance of contracts and other subjects dis- cussed are too numerous even for citation. The whole subject has been treated with great fullness and ability In Pomeroy's Equi- ty, and we shall content ourselves with re- ferring to the appropriate chapters In that PENALTIES AND FORFEITURES. 59 work, and especially to sections 446, 447, 1401-1403, and to Lawson, Rights, Rem. & Prac. pp. 2588, 2590, 2591, as sustaining the views here presented. We are of opinion that the demurrer to the bill should have been sustained, and the bill dismissed, and therefore enter a decree re- versing the decree of the circuit court. BUCHANAN, J., absent. 60 PENAXiTIES AND FORFEITURES. CRAIG V. HUKILD et al. (16 S. B. 363, 37 W. Va, 520.) Supreme Court of Appeals of West Virginia. Dec. 22, 1892. Appeal from circuit court, Monongalia coun- ty. Bill by Joseph W. Craig against B. M. Hukill & Co. and others for partition of land. There was a decree for partition. De- fendant B. M. Hukill appeals. Reversed. Okey Johnson, W. P. Hubbard, and Keck, Son & Fast, for appellant. Cox & Baker, for appellee. BRANNON, J. W. M. Davis executed to David Kennedy a lease of a tract of land for a term of years, for the purpose of drilling for petroleum oil, which lease has come by assignment to B. M. Hukill. The deed of lease contains a covenant on the part of the lessee to commence operations for oil develop- ment within nine months, or for payment of a certain sum of money per month until com- mencement of work, with a provision that a failure to do one or the other should work an absolute forfeiture of the lease. After- wards Davis executed an instrument by which he agreed to sell to H. P. Griffith all the oil and gas under the said tract, and Griffith transferred all his right in said tract to Joseph W. Craig. Davis had a life estate in said tract, with remainder in fee to his children; and, by the death of one of them, he inherited an undivided one-fifth share therein. Hukill, claiming under the first-mentioned lease, as also under a lease from the guard- ian of the surviving children, bored for and produced oil on the premises. Craig brought a suit in equity in the circuit com't of Monon- galia county against Hukill, Davis, and oth- ers, praying that the tract be partitioned, and one-fifth assigned as the share of Davis in fee, and that all the oil and gas under it be assigned to the plaintiff, Craig. The theory of Ci'aig for relief is that by reason of failure to commence operations, or to pay money in lieu thereof, as provided in the lease to Kennedy, it had become forfeited, and he had, by the said agreement between Davis and Griffith, become entitled, in exclusion of all rights under the Kennedy lease, to all oil which Davis could convey. Obviously, Craig can get relief only through an enforce- ment of the forfeiture of the Kennedy lease. Thus, at the threshold of the case, we are met with the question whether a court of equity will enforce this alleged forfeiture. Affirmative relief against penalties and for- feitures was one of the springs or fountains of equity jurisdiction, and the jurisdiction was very early exercised; and it would be going in the very opposite direction, and act- ing contrary to its essential principles, to af- firmatively enforce a forfeiture. The ele- mentary books on equity Jurisprudence state the rule as almost an axiom, that equity nev- er enforces a penalty o f_forfeiture. 2 Story, TSqrjur. § 1319; 1 Pom. Eq. Jur. § 459; Bisp. Eq. § 181; Beach, Mod. Eq. Jur. § 1013. Mr. Pomeroy, in 1 Pom. Eq. Jur. § 460, says that rule is without exception; and I con- fess my search has led me to the same con- clusion. This doctrine is supported in Amer- ica by decisions of the highest authority, com- ing from jurists of the most eminent name, —among them, Kent and Marshall; and there seems to be no change or qualification in later decisions. Livingston v. Tompkins, 4 Johns. Ch. 415; Horsburg v. Baker, 1 Pet 232; Marshall v. Vicksburg, 15 Wall. 146. The estate under the Kennedy lease certainly vested; and the plaintiff seeks, by a suit in equity, to divest it, which he can only do by declaring and enforcing the forfeiture of that lease, for the plaintiflE's right must depend for its birth and existence on that forfei- ture. In Livingston v. Tompkins, supra, it was held that "equity wiU not assist the re- covery of a penalty or forfeiture, or anything in the nature of a forfeiture," and "will not! lend its aid to divest an estate for the breach of a condition subsequent." McKlm V. Mason, 2 Md. Oh. 510; Warner v. Bennett, 31 Conn. 468; Smith v. Jewett, 40 N. H. 530. In Oil Creek R. Co. v. Atlantic & G. W. R. Co., 57 Pa. 65, a bill was filed to en- force a forfeiture of a lease because of failure to build a road according to the express pro- visions of the lease; and the court refused, on the ground that equity never lends its aid in enforcement of a forfeiture, but will leave the parties to their legal remedies. Many cases cited in the text-books above cit- ed sustain this principle. Though equity has jurisdiction in partition, yet it will not exer- cise it when it can be done only by enforcing a forfeiture, when the plaintiffs right grows only out of a forfeiture. As equity has no Jurisdiction, we cannot decide the merits of the case, and therefore reverse the decree and_dismiMiJheJ)ill, without prejudice to the plaintiff to seek to assert his rights by any appropriate legal remedy. PENALTIES AND FORFEITURES. 61 KUNKLE et al. ▼. WHERRY. (42 AU. 112, 189 Pa. 198.) Supreme Court of Pennsylvania. Jan. 2, 1899. Appeal from court of common pleas, AUe- gheny county. Action by H. H. Kunkle and Conrad Jor- dan, partners doing business as Kunkle & Jordan, against James Wherry, to recover a balance alleged to be due on a contract for granite construction. Judgment for plain- tiffs, and defendant appeals. Reversed. R. A. & Jas. Balph, for appellant J. S. & E. G. Ferguson, for appellees. FELL, J. The defendant was the contractor for the construction of a large, 10-story build- ing, which he was required to complete in 11 months. By the terms of his contract with the owner, he was to receive $100 for each day less than the time limit, and to pay $1,000 for each day that he should exceed it, in the completion of the work. He en- tered into a contract with the plaintiffs for the stone and granite work. They agreed to furnish the materials, and to finish the work to the top of the second story, ready for the bricldayers, in six weeks' time after three stories of ironwork had been erected, and bound themselves "to pay the sum of $150 per day as a penalty for each and every day thereafter that the said work remains unfin- ished, as and for liquidated damages." The learned judge held that this stipulation should be regarded as a penalty, and not as liqui- dated damages, and that the defendant could, set off against the plaintifEs' claim such dam- ages only as he proved to have been actually sustained by him because of the delay of the plaintiffs in completing the work. The rule that in actions ex contractu, where the breach of an agreement admits of com- pensation, the recovery may be limited to the loss actually sustained, notwithstanding a stipulation for a penalty. Is founded upon the principle that one party should not be allowed to profit by the default of the other, and that compensation, and not forfeiture, is the equitable rule. Equity will regard a pen- alty or forfeiture as Intended to secure the fulfillment of a contract, and It may preclude the injured party from recovering more than a just compensation, or from obtaining a col- lateral advantage. Notes to Peachy v. Duke of Somerset, 2 White & T. Lead. Cas. Bq. 2044; BIsp. Eq. 178. Whether a sum named as compensation for the breach of a contract Is to be considered as a penalty to secure its fulfillment, from which equity will relieve, or as damages liquidated by the parties them- selves, is a question which cannot be an- swered by the application of any general rule. The question is always one of construction, and any rule upon the subject is a mere guide to the tutention of the parties. The grounds on which each case is to be considered and determined are clearly stated by our Brother MitcheU in Keck v. Bieber, 148 Pa. St. 645, 24 Atl. 170: "The general principle upon which the law awards damages is compensa- tion for the loss suffered. The amount may be fixed by the parties in advance, but, where a lump sum Is named by them, the court will always look into the question whether this , is really liquidated damages, or only a pen- alty; the presumption being that it is the lat- ter. The name by which it is called is of but slight weight; the controlling elements being the intent of the parties, and the special cir- cumstances of the case." And he quotes with approval March v. AUabough, 103 Pa. St. 335: "The question • • • Is to be de- termined by the intention of the parties, drawn from the words of the whole contract, examined in the light of its subject-matter and its surroundings; and in this examina- tion we must consider the relation which the sum stipulated bears to the Injury which may be caused by the several breaches pro- vided against, the ease or difficulty of meas- uring a breach In damages, and such other matters as are legally or necessarily Inherent in the transaction." From the nature of this case, the actual damages which would result from a breach of the contract would not read- ily be susceptible of ascertainment, and it seems to us that It was the manifest Intention of the parties not to leave them to the un- certain estimate of a jury, but to fix them by express agreement "Uncertainty as to the extent of the injuries which may ensue" was said in Powell v. Burroughs, 54 Pa. St 329, and Coal Co. v. Schultz, 71 Pa. St 180, "to be a criterion by which to determine whether It is a case of liquidated damages or a pen- alty." The damages named were for the breach of a single stipulation, and were not disproportionate to the loss which would j probably result to the defendant from the I failure of the plaintifCs to complete their ' work In time. The fifth and seventh assign- ments of error are sustained, and the judg- ment is reversed, with a venire facias de novo. CO \ ' PENAL.TIES AND FORFEITURES, ,' JAQUITH V. HUDSON. (5 Mich. 123.) Supreme Court of Michigaa. May Term, 1858. EiTor to circuit court, Wayne county. The action was by Jaquith against Hud- son, upon a promissory note for one thou- sand dollars, given by the latter to the for- mer, April 15th, 1855, and payable twelve months after date. Defendant pleaded the general issue, and gave notice that on the trial he would prove that, previous to said 15th day of April, 1855, plaintiff and defend- ant had been and were partners in trade, at Trenton, in said county of Wayne, under the name of Hudson & Jaquith; that, on that day the copartnership was dissolved, and the parties then entered into an agree- ment, of which the following is a copy: "This article of agreement, made and en- tered into between Austin B. Jaquith, of Trenton, Wayne county, and state of Michi- gan, of the first part, and Jonathan Hudson, of Trenton, county of Wayne, and state of Michigan, of the second part, wltnesseth, that the said Austin B. Jaquith agrees to sell, and by these presents does sell and con- vey unto the said Jonathan Hudson, his heirs and assigns, all his right, title, and in- terest in the stock of goods now owned by the firm of Hudson and Jaquith, together with all the notes, books, book accounts, moneys, deposits, debts, dues, and demands, as well as all assets that in anywise belong to the said firm of Hudson & Jaquith; and that the copartnership that has existed be- tween the said firm of Hudson & Jaquith is hereby dissolved; and that the said Austin I E. Jaquith, by these presents, agrees that he / will not engage in the mercantile business. In ) Trenton, for himself, or in connection with any other one, for the space of three years ( from this date, upon the forfeiture of the / sum of one thousand dollars, to be collected by the said Hudson as his damages. In eon- ^ sideration whereof, the said Jonathan Hud- son, of the second part, agrees for himself, his heirs and administrators, to pay unto the said Austin E. Jaquith the sum of nine hun- dred dollars, for his services in the firm of Hudson & Jaquith, together with all the money that he (the said Austin B. Jaquith) paid into said firm, deducting therefrom the amount which he (the said Austin E. Jaq- uith) has drawn from said firm; the re- mainder the said Hudson agrees to pay to the said Jaquith, his heirs or assigns, at a time and in a manner as shall be specified in a note beaiing even date with these presents. And the said Hudson, for himself, his heirs and assigns, agrees to pay all th« debts, notes and liabilities of the firm of Hudson & Jaquith, and to execute unto the said Jaq- uith a good and sufficient bond of indemnifi- cation against all claims, debts, or liabilities of the firm of Hudson & Jaquith. "Trenton, April, 1855. "Austin B. Jaquith. [L. S.] "Jonathan Hudson. [L. S.] "Witness: Arthur Edwards. Arthur Ed- wards, Jr." And defendant further gave notice, among other things, that he would show, on the Ixial, that, after the execution of said agree- ment in writing, and the giving of said note in pursuance thereof, and on or about the 15th day of July, 1855, plaintiff, in violation of said agreement, entered into the mercan- tile business at Trenton, and had continued to carry on the same ever since; by means whereof the consideration of said note had failed. And he further gave notice, that he (the defendant) continued to carry on the mercantile business at Trenton, after the dis- solution of said copartnersMp; and by means of the breach of said articles by plaintiff, defendant had sustained damages to the sum of one thousand dollars, liquidated by said articles for a breach thereof, which sum he would claim to have deducted from the amount of said note, on the trial. On the trial, the plaintiff, having intro- duced the note in evidence, rested his case. Defendant then proved by Arthur Edwards the due execution of said agreement. The defendant also proved by the said witness that the plaintiff resumed mercantile busi- ness in July, 1855, in the village of Trenton, within eighty rods of the old stand of Hud- son & Jaquith, and had ever since continued in such business. On cross-examination, Capt Edwards tes- tified that the above agreement was made in duplicate, and signed by the parties about the middle of April, 1855, which duplicates were placed in his hands, to be kept till the bond of indemnity and note mentioned in the agreement were executed; that the dupli- cates were not to be delivered till both par- ties came and demanded them. Hudson at once took exclusive possession of the store, goods, books, and papers of the old firm of Hudson & Jaquith, where the duplicate agreements were signed, and they were left in witness' hands until the other papers men- tioned in them were executed. Witness did not recollect whether it was said by the par- ties that the agreement was not to take ef- fect till both parties came for the duplicates. Witness never delivered to the defendant the agreement now produced by him, and cannot tell how it eame into his possession. The plaintiff and defendant never came and joint- ly demanded the duplicates of him. He has no recollection that either of the parties ever notified him not to deliver over the papers. On re-examination, witness said he lived at Trenton in 1855, and his papers were for the most part kept there. Witness cannot remember delivering this duplicate to de- PENALTIES AND FORFEITURES. 63 fendant It might have been delivered by him to defendant, but witness has no recol- lection of it. The defendant then, by another witness, gave evidence tending to show that, not long after the date of said agreement, the bond of indemnity mentioned in the agreement was executed by defendant and delivered to the plaintlfE. No evidence was given to show any dam- age sustained by the defendant by reason of plaintiff's again engaging in business in Tren- ton. The plaintifC then called as a witness Ar- thur Edwards, .Jr., who testified that he was one of the subscribing witnesses to said agreement. The duplicate agreements were to go into Capt Bdwai-ds' hands, and to be delivered only when plaintiff and defendant came together for aid demanded them. When they were ready for signing, plaintiff hesitated about signing the duplicates, but ; witness thinks that Capt Edwards then said that plaintiff could sign them safely, as he (the said Capt. Edwards) would hold them until they were jointly demanded; cannot remember whether Hudson or Edwards made the remark, but one of them made some remark which gave witness the im- pression that these duplicate papers were to be null until they should be both simultane- ously delivered to the parties. Witness was in and out of the room, and did not hear the whole conversation, and cannot say pos- itively whether Hudson was there when this remark was made. There was something said about some other papers, but witness could not recollect it distinctly. The court was then asked by plaintiff's counsel to charge the jury as follows: "(1) That a delivery to both parties, at the same time, of the agreement in duplicate, by Capt. Arthur Edwards, was essential to give it effect, and render it operative be- tween the said plaintiff and defendant; and, before the defendant can claim the full bene- fit of it, he must show either such a de- livery as was agreed upon, or a willful re- fusal, on the part of the plaintiff, that such delivery should be made. "(2) That, even if the agreement set up was, in the opinion of the jury, properly de- livered, as between the parties, the defendant can not recoup any damages against the plaintiff, except upon evidence showing that some damage was actually sustained by him; that the clause in the agreement as to damages cannot, of itself, and in the ab- sence of evidence, operate to the reduction of the claim of the plaintiff, as the sum fixed In the agreement is in the nature of a pen- alty, and not liquidated damages; and no damages can be recovered under it except such as are proven." The court refused so to charge; and plain- tiff excepted. The court then charged the jury in sub- stance as follows: That, if the jury were satisfied that the duplicate agreements were placed in Capt. Edwards' hands under the agreement be- tween the parties that the same were not to become operative until both parties called on him to deliver them, that then they must be satisfied that such a delivery had taken place, or the agreement had never taken effect; but if, on the other hand, they should be satisfied that the real nature of the trans- action was that the said duplicate agree- ments were to be placed in Capt. Edwards' hands solely to await the future execution and delivery of the bond, note, etc., mention- ed in the agreement, and were thereupon to become operative, that then no formal de- livery of said duplicates was necessary. The agreement in such case would take ef- fect as soon as the bond, note, etc., men- tioned, were made and delivered to plaintiff. The court further charged the jury, that it was not necessary for the defendant to prove any actual damage under the plaintiff's breach of the said agreement, as the dam- ages therein fixed were liquidated damages, and not a penalty. The issue was then submitted to the jurV^ j on the evidence, who found a verdict for the plaintiff, in the sum of eighteen dollars and eight cents, allowing the defendant the sum of one thousand dollars mentioned in the j agreement. ! Plaintiff brought the case to this court, by writ of error, accompanied by bill of excep- tions. D. Bethune Duflield, for plaintiff in error. G. v. N. Lothrop, for defendant in error. CHRISTIANCY, J. The first point upbn which the court below was requested to charge, and for the refusal of which the first exception is taken, assumed that, by the ar- rangement between the parties, the contract was not to become operative, or to have any force or effect, until the duplicates should be delivered by Capt. Edwards to both parties at the same time. Whether such was the effect of the ar- rangement, or whether the agreements were placed in the hands of Capt. Edwards solely to await the execution and delivery of the bond and note mentioned in the contract, and thereupon to become operative, was a question which depended upon the intention of the parties, to be gathered from the whole transaction, their acts and declarations, and, in some measure, upon the nature and pro- visions of the contract itself. It was a ques- tion of fact involved in the issue. The court had no right to assume the truth or false- hood of either side of the question. The evi- dence bearing upon the point was conflict- ing. It was as clearly a question of fact for the jury as any other fact in issue in thi cause. To have charged the jury as re quested would have been an encroachment by the court upon the province of the jury. 64 PENALTIES AND FORFEITURES. The question was, therefore, properly sub- mitted to the jury. The charge of the court In this particular was in all respects fair and correct, and the verdict of the jury is conclu- sive upon this point. The first exception, therefore, is not well taken. The second exception raises the single question, whether the sum of $1,000, men- tioned in the covenant of Jaquith not to go into business in Trenton, is to be construed as a penalty, or as stipulated damages— the plaintifC in error insisting it should be con- strued as the former, the defendant as the latter. We shall not attempt here to analyze all the decided cases upon the subject, which were read and cited upon the argument, and which, with others, have been examined. It is not to be denied that there is some con- flict, and more confusion, in the cases; judges have been long and constantly complaining of the confusion and want of harmony in the decisions upon this subject. But, while no one can fall to discover a very great amount of apparent conflict, stUl it will be found, on examination, that most of the eases, however conflicting in appearance, have yet been decided according to the justice and equity of the particular case. And while there are some isolated cases (and they are but few), which seem to rest upon no very intelligible principle, it will be found, we think, that the following general principles may be confidently said to result from, and to reconcile, the great majority of the cases, both in England and in this country: First. The law, following the dictates of equity and natural justice, in cases of this kind, adopts the principle of just compensa- tion for the loss or injury actually sustained; considering it no greater violation of this principle to confine the injured party to the recovery of less, than to enable him by the aid of the court to extort more. It is the application, in a court of law, of that prin- ciple long recognized in courts of equity, which, disregarding the penalty of the bond, gives only the damages actually sustained. This principle may be stated, in other words, to be, that courts of justice will not recog- nize or enforce a contract, or any stipulation of a contract, clearly unjust and unconscion- able; a principle of common sense and com- mon honesty so obviously in accordance with the dictates of justice and sound policy as to make it rather matter of surprise that courts of law had not always, and in all cases, adopted It to the same extent as courts of equity. And, happily for the purposes of justice, the tendency of courts of law seems now to be towards the full recognition of the principle, in all cases. This principle of natural justice, the courts of law, following courts of equity, have, in this class of cases, adopted as the law of the contract; and they will not permit the parties by express stipulation, or any form of language, however clear the Intent, to set it aside; on the familiar ground, "conventus privatorum non potest publico juri derogare." But the court will apply this principle, and disregard the express stipulation of par- ties, only in those cases where it is obvious from the contract before them, and the whole subject-matter, that the principle of com- pensation has been disregarded, and that to carry out the express stipulation of the par- ties, would violate this principle, which alone the court recognizes as the law of the con- tract. The violation, or disregard, of this prin- ciple of compensation, may appear to the court In various ways,— from the contract, the sum mentioned, and the subject-matter. Thus, where a large sum (say one thousand dollars) Is made payable solely In conse- quence of the non-payment of a much small- er sum (say one hundred dollars), at a cer- tain day; or where the contract Is for the performance of several stipulations of very different degrees of importance, and one large sum is made payable on the breach of any one of them, even the most trivial, the damages for which can. In no reason- able probability, amount to that sum; in the first case, the court must see that the real damage is readily computed, and that the principle of compensation has been over- looked, or purposely disregarded; In the second case, though there may be more diffi- culty In ascertaining the precise amount of damage, yet, as the contract exacts the same large sum for the breach of a trivial or com- paratively unimpoi;tant stipulation, as for that of the most important, or of all of them together. It is equally clear that the parties have wholly departed from the idea of just compensation, and attempted to fix a rule of damages which the law will not recognize or enforce. We do not mean to say that the principle above stated as deduclble from the cases, is to be found generally aimounced In express terms. In the language of the courts; but It will be found, we think, to be necessarily implied in, and to form the only rational foundation for, all that large class of cases which have held the sum to be in the nature of a penalty, notwithstanding the strongest and most explicit declarations of the parties that it was intended as stipulated and as- certained damages. It is true, the courts In nearly aU these cases profess to be construing the contract with reference to the intention of the par- ties, as if for the purpose of ascertaining and giving effect to that Intention; yet It is ob- vious, from these cases, that wherever It has appeared to the court, from the face of the contract and the subject-matter, that the sum was dearly too large for just compensation, here, while they will aUow any form of words, even those expressing the direct con- trary, to Indicate the Intent to make it a penalty, yet no form of words, no force of language, Is competent to the expression ot PENALTIES AND FORFEITURES. 65 the opposite intent. Here, then, is an in- tention incapable of expression in words; and as all written contracts must be ex- pressed in words, it would seem to be a mere waste of time and effort to look for such an intention in such a contract. And as the question is between two opposite in- tents only, and the negation of the one necessarily implies the existence of the other, there would seem to be no room' left for construction with reference to the intent. It must, then, be manifest that the intention of the parties in such cases is not the govern- ing consideration. But some of the cases attempt to justify this mode of construing the contract with reference to the intent, by declaring, In sub- stance, that though the language is the strongest which could be used to evince the intention in favor of stipulated damages, still, if it appear clearly, by reference to the subject-matter, that the parties have made the stipulation without reference to the prin- ciple of just compensation, and so excessive as to be out of all proportion to the actual damage, the court must hold that they could not have intended it as stipulated damages, though they have so expressly declared. See, as an example of this class of cases, Kemble v. Farren, 6 Bing. 141. Now this, it is true, may lead to the same result in the particular case, as to have placed the decision upon the true ground, viz., that though the parties actually intend- ed the sum to be paid, as the damages agreed upon between them, yet it being clearly un- conscionable, the court would disregard the intention, and refuse to enforce the stipula- tion. But, as a rule of construction, or in- terpretation of contracts, it is radically vi- cious, and tends to a confusion of ideas in the construction of contracts generally. It is this, more than anything else, which has produced so much apparent conflict in the decisions upon this whole subject of penalty and stipulated damages. It sets at defiance all rules of interpretation, by denying the intention of the parties to be what they, in the most unambiguous terms, have declared it to be, and finds an intention directly op- posite to that which is clearly expressed— "divinatio, non interpretatio est, quae omnino recedit a Utera." Again, the attempt to place this question upon the intention of the parties, and to make this the governing consideration, nec- essarily implies that, if the intention to make the sum stipulated damages should clearly appear, the court would enforce the contract according to that intention. To test this, let it be asked, whether, in such a case, if it were admitted that the parties actually in- tended the sum to be considered as stipulat- ed damages, and not as a penalty, would a court of law enforce it for the amount stipu- lated? Clearly, they could not, without go- ing back to the technical and long exploded doctrine whicli gave the whole penalty of H.&B.EQ.(2dEd.)— 5 the bond, without reference to the damages actually sustained. They would thus be sim- ply changing the names of things, and en- forcing, under the name of stipulated dam- ages, what in its own nahire is but a pen- alty. The real question in this class of cases wUl be found to be, not what the parties intended, but whether the sum is. In fact, in the nature of a penalty; and this is to be determined by the magnitude of the sum; in connection with the subject-matter, and not at all by the words or the understanding of the parties. The intention of the parties can not alter it. While courts of law gave the penalty of the bond, the parties intended the payment of the penalty as much as they now intend the payment of stipulated dam- ages; it must, therefore, we think, be very obvious that the actual intention of the par- ties, in this class of cases, and relating to this point, is wholly immaterial; and though the courts have very generally professed to base their decisions upon the intention of the parties, that Intention is not, and can not be made, the real basis of these decisions. In endeavoring to reconcile their decisions with the actual intention of the parties, the courts have sometimes been compelled to use language wholly at war with any Idea of Interpretation, and to say "that the par- ties must be considered as not meaning ex- actly what they say." Homer v. FllntofC, 9 Mees. & W., per Park, B. May it not be said, with at least equal propriety, that the courts have sometimes said what they did not exactly mean? The foregoing remarks are all to be con- fined to that class of cases where it was clear, from the sum mentioned and the sub- ject-matter, that the principle of compensa- tion had been disregarded. But, secondly, there are great numbers of cases, where, from the natm-e of the con- tract and the subject-matter of the stipula- tion, for the breach of yphich the sum is provided, it is apparent to the court that the actual damages for a breach are un- certain in their nature, difficult to be ascer- tained, or impossible to be estimated with certainty, by reference to any pecuniary standard, and where the parties themselves are more Intimately acquainted with all the peculiar circumstances, and therefore better able to compute the actual or probable dam- ages, than courts or juries, from any evi- dence which can be brought before them. In all such cases, the law permits the par- ties to ascertain for themselves, and to pro- vide in the contract itself, the amount of the damages which shall be paid for the breach. In permitting this, the law does not lose sight of the principle of compensa- tion, which is the law of the contract, but merely adopts the computation or estimate of the damages made by the parties, as be- ing the best and most certain mode of as- certaining the actual damage, or what sum 66 PENALTIES AND FORFEITURES. will amount to a just compensation. The reason, therefore, for allowing the parties to ascertain for themselves the damages in this class of cases, is the same which denies the right in the former class of cases; viz., the courts adopt the best and most practicable mode of ascertaining the sum which will produce just compensation. In this class of cases where the law per- mits the parties to ascertain and fix the amount of damages In the contract, the first inquiry obviously is, whether they have done so in fact? And here, the intention of the parties is the governing consideration; and In ascertaining this intention, no merely technical effect will be given to the particu- lar words relating to the sum, but the en- tire contract, the subject-matter, and often the situation of the parties with respect to each other and to the subject-matter, will be considered. Thus though the word "penal- ty" be used (Sainter v. Fergason, 7 Man., G. & S. 716; Jones v. Green, 3 Younge & J. 299; Pierce v. Fuller, 8 Mass. 223), or "for- feit" (Noble V. Noble, 7 Cow. 307), or "for- feit and pay" (Fletcher v. Dycke, 2 Term R. 32), it will still be held to be stipulated dam- ages. If, from the whole contract, the sub- ject-matter, and situation of the parties, it can be gathered that such was their inten- tion. And In proportion as the difficulty of ascertaining the actual damage by proof Is greater or less, where this difficulty grows out of the nature of such damages, in the like proportion is the presumption more or less strong that the parties intended to fix the amount. It remains only to apply these principles to the case before us. It is contended by the plalntifE in error, that the payment of the one thousand dollars mentioned in the , covenant of Jaquith is not made dependent solely upon the breach of the stipulation not to go into business in Trenton, but that it applies equally-^First, to the agreement to sell to Hudson his interest in the goods; second, to sell his interest in the books, notes, accounts, etc.; and, third, to the agree- ment to dissolve the partnership. But we can perceive no ground for such a construc- tion. The language in reference to the sale of the interest In the goods, books, notes, accounts, etc., and that in reference to the dissolution, is not that of a sale in futuro, nor for the dissolution of the partnership at a future period, but it is that of a present sale and a present dissolution— "does hereby sell," and "the copartnership is hereby dis- solved," is the language of the instrument. It is plain, from this language, from the subject-matter, and from all the acts of the parties, that these provisions were to take, and did take, immediate effect. There could be no possible occasion to provide any pen- alty or stipulated damages for the non-per- formance of these stipulations, because this sale and dissolution would already have been accomplished the moment the contract took effect for any purpose; and, until It took effect, the stipulation for the one thousand dollars could not take effect or afford any security, nor would Hudson be bound or need the security. But it remained to pro- vide for the future. If Jaquith were to be at liberty to set up a rival store in the same village, it might seriously affect the success of Hudson's business; and we are bound to infer, from the whole scope of this contract, that Hudson would never have agreed to pay the consideration mentioned in it, nor to have entered into the contract at all, but for the stipulation of Jaquith "that he will not engage in the mercantile business in Trenton, for himself or m connection with any other one, for the space of three years fromi this date, upon the forfeiture of the sum of one thousand dollars, to be collected by said Hudson as his damages." This stipulation of Jaquith not to go into busi- ness, is the only one on his part which lookb to the future; and it is to this, alone, that the language in reference to the one thou- sand dollars applies. Any other construction would do violence to the language, and be at war with the whole subject matter. The damages to arise from the breach of this covenant, from the nature of the case, must be not only uncertain in their nature, but impossible to be exhibited in proof, with any reasonable degree of accuracy, by any evidence which could possibly be adduced. It is easy to see that while the damages might be very heavy, it would be very diffi- cult clearly to prove any. Their nature and amount could be better estimated by tBe parties themselves, than by witnesses, courts, or juries. It is, then, precisely one of thai class of cases in which it has always been recognized as peculiarly appropriate for the parties to fix and agree upon the damages for themselves. In such a case, the lan- guage must be very clear to the contrary, to overcome the inference of intent (so to fix them), to be drawn from the subject-matter and the situation of the parties; because, it is difficult to suppose, in such a case, that the party taking the stipulation intended it only to cover the amount of damages actual- ly to be proved, as he would be entitied to the latter without the mention of any sum in the contract, and he must also be sup- posed to know that his actual damages, from the nature of the case, are not susceptible of legal proof to anything approaching their actual extent. That the parties actually in- tended, in this case, to fix the amount to be recovered, is clear from the language itself, without the aid of a reference to the sub- ject-matter, "upon the forfeiture of the sum of one thousand dollars, to be collected by the said Hudson as his damages." It is manifest from this language that it was in- tended Hudson should "collect," or, in other words, receive this amount, and that it should be for his damages for the breach of the stipulation. This language Is stronger PENALTIES AND FORFEITURES. G7 than "forfeit and pay," or "under the pen- alty of," as these might be supposed to have reference to the form of the penal part of a bond, or to the form of action upon it, and not to the actual "collection" of the money. It is, therefore, very clear, from every view "we have been able to take of this case, that it was competent and proper for the parties to ascertain and fix for themselves the amount of damages for the breach com- plained of, and equally clear that they have done so in fact. From the imcertain nature of the damages, we cannot say that the sum In this case exceeds the actual damages, or that the principle of compensation has been violated. Indeed, It would have been per- haps difficult to discover a violation of this principle had the sum in this case been more than it now Is, though, doubtless, even in such cases as the present, if the sum stated were so excessive as clearly to exceed all reasonable apprehension of actual loss or Injury for the breach, we should be com- pelled to disregard the intention of the par- ties, and treat the sum; only as a penalty to cover the actual damages to be exhibited in proof. In this case the party must be held to the amount stipulated in his contract. The second exception, therefore. Is not well taken; the court properly refused to charge as requested, and no error appearing in the record, the judgment of the circuit court for the county of Wayne must be affirmed. The other justices concurred. P> \^^ y GS PENALTIES AND FORFEITURES. K 'V KEEBLB V. KEEBLE. V; (5 South. 149, 85 Ala. 552.) V Supreme Court of Alabama. Dec. 8, 1888. Appeal from city court, Dallas county; John Haralson, Judge. This was an action brought by the appel- lant, Henry C. Keeble, against the appellee, Julia P. Keeble, as the executrix of R. C. Keeble, deceased, for the recovery of money alleged to be due the plaintiff by the de- fendant's testator. The defendant pleaded the general issue, payment, accord and satis- faction, and set-off. The only question in the case arose on the instruction given the jury by the court, founded on the facts set out in the seventh plea. The demurrer to this plea was overruled by the court. It was, in substance, that plaintiff and defendant's tes- tator had been in partnership in the mercan- tile business. Plaintiff sold out to defend- ant's testator, but was employed by the lat- ter as business manager. The terms of the ii employment imposed on plaintiff the obliga- tion to wholly abstain from the use of in- ^>toxicating liquors, and, in the event he should / become intoxicated, that he should pay, "as liquidated damages," the sum of $1,000. The plea alleged that plaintifE violated his promise to keep sober, and thereby became bound to pay to defendant's testator said sum of $1,000, which sum was offered as a set-off to plain- tiff's demand. Mr. Roy and White & White, for appellant Pettus & Pettus, for appellee. SOMERVILLE, J. The only question in this case is whether the sum of $1,000, agreed to be paid by the appellant, Henry C. Keeble, to Richard C. Keeble, the testator of the ap- pellee, as mentioned in the written contract of employment between the parties, is to be regarded by the court as a penalty or as liquidated damages. The city court held it, in effect, to be liquidated damages, by char- ging the jury to find for the defendant, if the facts set out in the seventh plea were satisfactorily proved. The solution of this question is one which the courts have often confessed embarrassment in determining. No one rule can be announced which will fur- nish a single test or criterion for all cases, but, in most cases, a multitude of considera- tions are to be regarded in seeking to reach the real intention of the parties. The follow- ing general rules may be deduced from the authorities, each having more or less weight, according to the peculiar circumstances of each case, and the nature of the contract sought to be construed: (1) The court will always seek to ascertain the true and real in- tention of the contracting parties, giving due weight to the language or words used in the contract, but not always being absolutely con- trolled by them, when the enforcement of such contract operates with unconscionable hardship, or otherwise works an injustice. if the sum to be / ," or as "a pen- j the court as to I h desismated aa ' (2) The mere denomination of the sum to be J paid as "liquidated damages,' alty," is not conclusive on the its real character. Although designated as "liquidated damages" it may be construed as a penalty, and often when called a "penalty" it may be held to be liquidated damages, where the intention to the contrary is plain. (3) The courts are disposed to lean against any interpretation of a contract which will make it liquidated damages; and, in all cases of doubtful intention, will pronounce the stip- ulated sum a penalty. (4) Where the pay- ment of a smaller sum is secured by an obli- gation to pay a larger sum, it will be held a penalty, and not liquidated damages. (5) Where the agreement is for the performance or non-performance of a single act, or of sev- eral acts, or of several things which are but minor parts of a single complex act, and the precise damage resulting from the violation of each covenant is wholly uncertain or in- capable of being ascertained save by con- jecture, the parties may agree on a fixed sum as liquidated damages, and the courts will so construe It, unless it is clear on other grounds that a penalty was really Intended. (6) When the contract provides for the per- formance of several acts of different degrees of importance, and the damages resulting from the violation of some, although not all, of the provisions are of easy ascertainment, and one large gross sum is stipulated to be paid for the breach of any, it will be con- strued a penalty, and not as liquidated dam- ages. (7) When the agreement provides for the performance of one or more acts, and the stipulation is to pay the same gross sum for a partial as for a total or complete breach of performance, the sum will be construed to be a penalty. (8) Whether the sum agreed to be paid is out of proportion to the actual damages, which will probably be sustained by a breach, is a fact into which the court wiU not enter on inquiry, if the intent is other- wise made clear that liquidated damages; and not a penalty, are in contemplation. (9) Where the agreement is in the alternative, to do one of two acts, but is to pay a larger sum of money in the one event than in the other, the obligor having his election to do either, the amount thus agreed to be paid will be held liquidated damages, and not a penalty. (10) In applying these rules, the controlling purpose of which is to ascertain the real in- tention of the parties, the court will consider the nature of the contract, the terms of the whole instrument, the consequences naturally resulting from a breach of its stipulations, and the peculiar circumstances surrounding the transaction; thus permitting each case to stand, as far as possible, on its own merits and peculiarities. These rules are believed to be sustained by the preponderance of ju- dicial decisions. Graham v. Bickham, 1 Am. Dec. 328, and note, pp. 331-340; WiUiams v. Vance, 30 Am. Rep. 26, and note, pp. 28-36; 1 Pom. Eq. Jur. §§ 440-446; MePherson v. PENALTIES AND FORFEITURES. 69 Robeiipon, 82 Ala. 459, 2 South. 333; Hooper V. Railroad Co., 69 Ala. 529; Watts v. Shep- pard, 2 Ala. 425; Bish. Cont. § 1452; Curry V. Larer, 7 Pa. St. 470; Foley v. McICeegan, 4 Iowa, 1; Nash v. HermoslUa, 9 Cal. 584; Muse V. Swayne, 2 Lea, 251; 2 Greenl. Ev. ! 258. The appellant was In the employment of the appellee's testator as a business manager, at very liberal wages, having been a partner with him in the mercantile business, under the firm name of R. C. Keeble & Co. Al- though he was but an employfi, having sold to R. C. Keeble his entire interest in the part- nership business, he remained ostensibly a partner. The terms of the employment, re- duced to writing. Imposed on the appellant, Henry Keeble, the obligation, among other duties, "to wholly abstain from the use of intoxicating liquors," and "to continue and re- main sober," giving his diligent attention to the business of his employer, and promising, in the event he should become intoxicated, that he would pay, "as liquidated damages," the sum of $1,000, which the testator, Rich- ard Keeble, was authorized to retain out of a certain debt he owed the appellant. The appellant violated his promise by becoming intoxicated, andiremained so for a long time, and acted rudely and insultingly towards the customers and employes of the testator, and otherwise deported himself, by reason of In- toxication, in such manner as to do Injury to the business. It Is not denied by appellant's counsel that this is a total breach of the prom- ise to keep sober; nor is it argued that the damage resulting from the violation of such a promise can be ascertained with any degree of certainty; nor even that the amount agreed to be paid as liquidated damages, in the event of a breach, is disproportionate to the dam- ages which may have been actually sustained in this case. But the contention seems to be that, inasmuch as it was possible for a breach to occur with no actual damages other than nominal, the amount agreed to be paid should be construed to be a penfilty. Unless this view is correct, the application of the fore- going rules to the construction of the agree- ment manifestly stamps It as a stipulation for liquidated damages, and not a penalty. It is argued. In other words, that becoming intoxicated in private, while off duty, would be a violation of the contract, but would be attended with no actual damage to the busi- ness of R. C. Keeble & Co. This fact would, In our opinion, except the case from the oper- ation of the rules above enunciated. There are but few agreements of this kind where the stipulation is to do or not do a particular act. In which the damages may not, accord- ing to circumstances, vary, on a sliding scale, from nominal damages to a considerable sum. One may sell out the good-will of his busi- ness in a given locality, and agree to abstain from Its further prosecution, or, in the event of his breach of his agreement, to pay a cer- tain sum as liquidated damages; as, for ex- ample, not to practice one's profession as a physician or lawyer, not to run a steam-boat on a certain river or to carry on the hotel business in a particular town, not to re-estab- lish a newspaper for a given period, or to carry on a particular branch of business with- in a certain distance from a named city. In all such cases, as often decided, it is compe- tent for the parties to stipulate for the pay- ment of a gross sum by way of liquidated damages for the violation of the agreement, and for the very reason that such damages are uncertain, fluctuating, and incapable of easy ascertainment Williams v. Vance, 30 Am. Rep. 29-31, note; Graham v. Bickham, 1 Am. Dec. 336-338, note; 1 Pom. Eq. Jur. § 442, note 1. It is clear that each of these various agreements may be violated by a sub- stantial breach, and yet no damages might accrue except such as are nominal. The obligor may practice medicine, and possibly never interfere with the practice of the other contracting party; or law, without having a paying client; or he may run a steam-boat without a passenger; or an hotel without a guest; or carry on a newspaper without the least Injury to any competitor. But the law( will not enter upon an investigation as to the \ quantum of damages in such cases. This is ' the very matter settled by the agreement of the parties. If the act agreed not to be done is one fi:om which, in the ordinary course of events, damages, incapable of ascertainment save by conjecture, are liable naturally to fol\ low, sometimes more and sometimes less, ac-\ cording to the aggravation of the act, the I court wiU not stop to Investigate the extent of ] the grievance complained of as a total breach", but will accept the sum agreed on as a proper \ and just measurement, by way of liquidated damages, unless the real intention of the par- ties, under the rules above announced, de- signed it as a penalty. We may add, more- over, that no one can accurately estimate the physiological relation between private and public drunkenness, nor the causal connec- tion between intoxication one time and a score of times. The latter, in each instance, may follow from the former, and the one may naturally lead to the other. There would seem to be nothing harsh or unreasonable in stipulating against the very source and be- ginning of the more aggravated evil sought to be avoided. The duty resting on the court, in all these cases, is to so apply the settled rules of construction as to ascertain the legal- ly expressed and real intention of the parties. Courts are under no obligations, nor have they the power, to make a wiser or better contract for either of the parties than he may be sup- posed to have made for himself. The court below, in our judgment, did not err in hold- ing, as it did, by its rulings, that the sum agreed to be paid the appellee's testator was liquidated damages, and not a penalty. Af- firmed. )J> fo PRIORITIES AND NOTICE, HEYDER et a!, v. EXCELSIOR BUILDING LOAN ASS'N NO. 2 OF CITY OF NEWARK. (8 Atl. 310, 42 N. J. Eq. 408.) Court of Errors and Appeals of New Jersey. March 5, 1887. C. T. Glen, for appellants. Guild & Lum, for respondents. A. h KNAPP, J. The learned master who de- cided this cause reached the conclusion on ,_the evidence that the purchaser of the prem- ises, and not the mortgagee, should bear the loss incident to the fraudulent cancellation of the mortgage made upon the record prior to the purchase, on the faith of which cancella/- tion the buyer parted with the whole puiv chg.se money believing the property to be un- incumbered. After a careful review of the case, I am led to an opposite result. I am fully impressed with the importance of se- curing due protection to the holders of mort- gage securities, where, in pursuit of the pro- visions of the registry laws, the lien has been made apparent on the record. The security afEorded by registry should remain undisturb- ed by a cancellation effected through mis- take, accident, or fraud of third persons, even if by such cancellation subsequent mortga- gees or purchasers are made to suffer loss. Such after-acquired rights ought not to pre- vail against the just claims of an innocent non-negligent incumbrancer, because the rec- ord has been wrongly effaced. Ceincellation of a mortgage on the record is only prima facie evidence of its discharge, and it is left to the owner making the allegation to prove the canceling to have been done by fraud, accident, or mistake. Such proof being made, the mortgage will be established, even against subsequent purchasers or mortgagees without notice. Banking CO. v. Woodruff, 2 N. J. Eq. 117; Harrison v. Railroad Co., 19 N. J. Eq. 488. Between a mortgagee whose mortgage has been discharged of record solely through the unauthorized act of another party, and a purchaser who buys the title in tiie belief, induced by such cancellation, that the mort- gage is satisfied and discharged, the equities are balanced, and the rights in the order of time must prevail. The lien of the mortgage must remain despite the apparent discharge. But this i3 apart from any default attributa- ble to the holder of the lien. If through his negligence the record Is permitted to give notice to the world that his claim is satisfied, he cannot, in the face of his own. careless- ness, have his mortgage enforced against a bona flde purchaser taking his title on the faith that the registry is discharged. Where one gives to another the power to practice a fraud upon Innocent parties, the court will not interfere in his protection at the expense of those who have been deceived and misled by such fraud. What circumstance shall be sufficient to establish negligence, euch as shall preclude a mortgagee from a decree establishing his canceled paper, must be de- termined as a question of fact in each par- ticular ease, tested by those rules of conduct which men of common prudence usually ob- serve in the care and management of such securities. That it is negligence In the own- er of a mortgage to permit It to be in the custody and control of the mortgagor or own- er of the mortgaged premises, in view of the provisions of our statute of registry, will not admit of denial. Such an occurrence is so unusual, so imperils the owner, and there- fore so unlikely to happen in business deal- ings, that it was regarded in Harrison v. Rail- road Co. as ground for the gravest suspicion of the truthfulness of a witness who had tes- tified to such custody by the assent of the owner of the security. The minute of discharge of this mortgage made upon the record by the register ex- pressed, in general form, thie fact of cancella- tion. The entry was made upon evidence presented to the register such as the statute has declared to be suflScient authority for so doing. The mortgage was produced by the mortgagor, canceled, and there is no doubt that upon the faith of this cancellation the purchaser took title to the property, and paid the consideration. But it clearly appears that the mortgage was unpaid, and that the act of the mortgagor in procuring the entry of the discharge was fraudulent, and without the knowledge or assent of the mortgagee. If this were all of the case, and no default appeared on the part of the mortgagee, nol)- withstanding the forcible language of the act which declares such minute to be a full and absolute bar to and discharge of the said pntry, registry, and mortgage, the right of the respondent to the lien of its security should be maintained; and it is solely upon the ground that the respondent is chargeable with negligence which tended to and actual- ly did produce the injury that I think the decree should be reversed. The mortgage was in the possession and imder the control of the mortgagor at the time when it was produced for cancellation on the record. How long he had such custody does not positive- ly appear, but the strong Inference from the testimony is that it was during the whole time between the registry of the mortgage and its cancellation. Neither the president of the association, nor Its treasurer, who had charge of its securities, were able to say that they ever had the actual custody of this mort- gage; and they further declare that the mortgagor, although an officer of the com- pany, had no access whatever to the securi- ties in the possession of the treasurer. It is therefore impossible that he should have ob- tained its possession by means resembling theft. His possession must, I think, be at- tributed either to the assent or to the negli- gence of the officers of the association respouf sible for its securities. If we regard the the- PRIORITIES AND NOTICH. 71 ory that the mortgagor, at the conclusion of his transaction of the loan, fraudulently sub- stituted a copy of the mortgage for the orig- inal paper, and delivered that to the associa- tion, I am still forced to the conclusion that the officers were culpably negligent in per- mitting themselves to be thus'imposed upon. The fact that he was the law officer of this body would not justify so Implicit a trust in him in the matter of a loan to himself. We must assume that these officers were men of business capacity and skill. The trans- action was in the line of their ordinary du- ties. Indeed, they did not trust to him, but employed other counsel to make searches against his property. In their ordinary trans- actions their habit was to submit to counsel the securities received for loans for inspec- tion and approval. The slightest examina- tiori of the paper received by them would have shown it to be but a copy. They sub- mitted it to no legal adviser; they gave it no examination. If it were not intended to be, as was its purport, a mere copy, leaving the original in other hands, any degree of care, exceeding the blindest confidence, must have revealed the deception. The theory fails to lead us out of the difficulty. I do not think that any circumstance presented In this case made it the appellant's duty, in order to avail himself of the rights of a bona fide purchaser, to institute personal inquiry of the mortgagee. Any rule placing him under this exaction would embrace every case of a purchase of lands that had ever been sub- ject to mortgage which the record showed to be canceled. Such a rule, it is needless to say, would render this provision of the regis- try act entirely nugatory. A purchaser could then only buy with safety when the registry had been discharged, and an admission of payment obtained from the mortgagee. Doubtless circumstances may, and frequently do, arise to put the purchaser upon Inquiry, and charge him with notice. It seems to me that nothing appears in this transaction which should have put this purchaser upon further inquiry. He was permitted to rely upon the record. He did so, purchasing upon the belief that it spoke the fact truly. It was false, but the deception was directly traceable to the culpable negligence of the mortgage owner, and the loss should fall up- on the party chargeable with the fault. The decree below should be reversed, and the bill of complainants be dismissed. 72 PEIORITIBS AND NOTICE. ^ Y> 1 r- r y PHILLIPS V. PHILLIPS. (4 De Gex, F. & J. 208.) Court of Appeal in Chancery. Jan. 11, 1862. F. O. Haynes, for plaintiff. Mr. Malins and John Pearson, for defendants. The LORD CHANCELLOR. When I reserved my judgment at the con- clusion of the argument in this case, it was rather out of respect to that argument than from a feeling of any difficulty with regard to the question that had been so strenu- ously contested before me. The case is a very simple one. The plain- tiff claims as the grantee of an annuity granted by a deed dated in the month of February, 1820, to issue out of certain lands in the county of Monmouth, secured by powers of distress and entry. The annuity or rent charge was not to arise until the death of one Rebecca Phillips, who died in the month of December, 1839, and the first payment of the annuity became due on the 8th March, 1840. The case was argued on both sides on the admitted basis that the legal estate was out- standing in certain incumbrancers, and is stlU outstanding. Subject to the annuity the grantor was entitled in fee simple in equity. In February, 1821, the grantor in- termarried with one Mary Phillips. On the occasion of that marriage a settlement, dated in February, 1821, was executed, and un- der this deed the defendants claim, and claim, therefore, as purchasers for a valu- able consideration. No payment has ever been made in respect of the annuity. The bill was filed within twenty years, and seeks the ordinary relief applicable to the case. The defendants by their answer Insist thai the deed was voluntary, and therefore void, under the statute of Eliza- beth, as against them in their character of purchasers for valuable consideration, and they also insist upon the statute of limita- tions. But in the answer the defense of purchase for valuable consideration with- out notice is not attempted to be raised. At the hearing an affidavit of Mary Phil- lips and another person was produced, de- nying the fact of notice of the annuity at the time of the grant and at the time of the creation of the marriage settlement, and the contention at the bar was that the defense of purchase for valuable consideration with- out notice was available for the defendants under these circumstances, and ought to be allowed as a bar to the claim by the court The vice chancellor in his judgment refused to admit the defense of purchase for valu- able consideration without notice, and I en- tirely agree with him in the conclusion that such a defense requir«s to be pleaded by the answer, more especially where an an- swer has been put in. But I do not mean to rest my decision upon that particular ground because I have permitted the argument to proceed with ref- erence to the general proposition, which was maintained before me with great energy and learning, viz., that the doctrine of a court of equHjif was this, that It would give no relief whatever to any claimant against a purchaser for valuable consideration with- out notice. It was urged upon me that au- thority to this effect was to be found in some recent decisions of this court, and particularly in the case decided at the rolls of Attorney General v. Wilkins, 17 Beav. 285. I undoubtedly was struck with the nov- elty and extent of the doctrine that was thus advanced, and in order to deal with the argument it becomes necessary to re- vert to elementary principles. I take it to be a clear proposition that every convey- ance of an equitable interest is an innocent conveyance, that Is to say, the grant of a. person entitled merely in equity passes only that which he is justly entitled to and no more.' If, therefore, a person seised of an equitable estate (the legal estate being out- standing) makes an assurance by way of mortgage or grants an annuity, and after- wards conveys the whole estate to a pur- chaser, he can grant to the purchaser that which he has, viz., the estate subject to the mortgage or aimuity, and no more. The subsequent grantee takes only that which is left in the grantor. Hence grantees and incumbrancers claiming in equity take and are ranked according to the dates of theh: securities; and the maxim applies, "Qui prior est tempore potior est jure." The first grantee is potior, that is potentior. He has a better and superior, because a prior, eq- uity. The first grantee has a right to be paid first, and it is quite immaterial wheth- er the subsequent incumbrancers, at the time when they took their securities and paid their money, had notice of the first in- cumbrance or not. These elementary rules are recognized in the case of Brace v. Duchess of Marlborough, 2 P. Wms. 491, and tbey are further illustrated by the fa- miliar doctrine of the court as to tacking securities. It Is well known that if there are three incumbrancers, and the third in- cumbrancer, at the time of his incumbrance and payment of his money, had no notice of the second incumbrance, then, if the first mortgagee or incumbrancer has the legal estate, and the third pays him off, and takes an assignment of his securities and a conveyance of the legal estate, he is enti- tled to tack his third mortgage to the first mortgage which he has acquired, and to ex- clude the intermediate Incumbrancer; but this doctiioe is limited to the case where the first mortgagee has the legal title, for. If the first mortgagee has not the legal title, PRIOBITIBS AND NOTICE. 73 .k 4 S, the third does not, by the transfer, obtain the legal title, and the third mortgagee, by payment off of the first, acquires no pri- ority over the second. Now the defense of a purchaser for valuable consideration is the creature of a court of equity, and it can never be used in a manner at variance with the elementary rules which have already been stated. It seems at first to have been used as a shield against the claim in equity of persons having a legal title. Bassett v. Nosworthy, Finch, 102, 2 White & T. Lead. Cas. Bq. 1, is, If not the earliest, the best early reported case on the subject. There the plaintiff claimed under a legal title, and this circumstance, together with the maxim which I have referred to, probably gave rise to the notion that this defense was good only against the legal title; but there ap- pear to be three cases in which the use of this defense is most familiar: '^ First, where an application is made to an auxiUary jurisdiction of the court by the possessor of a legal title, as by an heir at ij^\i law (which was the case in Bassett v. Nos- ^ worthy, Finch, 102, 2 White & T. Lead. Cas. ^ ; Eq. 1), or by a tenant for life for the deliv- ery of title deeds (which was the case of Wallwyn v. Lee, 9 Ves. 24), and the de- fendant pleads that he is a bona fide pur- chaser for valuable consideration without notice. In such a case the defense Is good, i I and the reason given Is that, as against a K purchaser for valuable consideration with- out notice, th^ court gives no assistance, that is, no assistance to the legal title. But "y I this rule does not apply where the court ex- I I ercises a legal jurisdiction concurrently with , ' courts of law. Thus it was decided by Lord ^' Thurlow in Williams v. Lambe, 3 Brown Y' Ch. 264, that the defense could not be plead- i \ ed to a bill for dower, and by Sir J. Leach in Collins v. Archer, 1 Russ. & M. 284, that j \ it was no answer to a bill for fines. In j "\ those cases the court of equity was not \ asked to give the plaintiff any equitable, as i distinguished from legal, relief. J' \, The second class of cases Is the ordinary one of several purchasers or incumbrancers, each claiming in equity, and one who is later '^ and last in time succeeds in obtaining an outstanding legal estate not held upon exist- ing trusts or a judgment, or any other legal advantage the possession of which may be a protection to himself or an embarrassment to other claimants. He will not be deprived of this advantage by a court of equity. To a bill filed against him for this purpose, by a prior purchaser or incumbrancer, the de- fendant may maintain the plea of purchase for valuable consideration without notice, for the principle is that a court of equity will not disarm a purchaser, that is, will not take from him the shield of any legal advantage. This is the common doctrine of the tabula In naufragio. Thirdly, where there are circumstances Vj that give rise to an equity as distinguished from an equitable estate,— as, for example, an equity to set aside a deed for fraud, or to correct It for mistake,— and the purchaser under the instrument maintains the plea of purchase for valuable consideration without notice, the court will not Interfere. Now these are the three cases In which the defense in question Is most commonly foimd. None of them involve the case that Is now before ^fi, _^ ~^ ~|^^^--Trwas Indeed said at the bar that the de- fendants, being In possession, had a legal advantage in respect, of the possession, of which they ought not to be deprived; but that Is to confound the subject of adjudi- cation with the means of determining it. The possession is the thing which is the sub- ject of controversy, and is to be awarded by the court to one or to the other; but the subject of controversy and the means of de- termining the right to that subject are per- fectly different. The argument, In fact, amounts to this, "I ought not to be deprived of possession, because I have possession." The purchaser will not be deprived of any- thing that gives him a legal right to the pos- session, but the possession itself must not be confounded with the right to it. , The case therefore that I have to decide Is the ordinary case of a person claiming, un- der an innocent equitable conveyance, that interest which existed in the grantor at the time when that conveyance was made; but, as I have already said, that interest was di- minished by the estate that had been pre- viously granted to the annuitant, and, as there was no ground for pretending that the deed creating the annuity was a voluntary deed, so there is no ground whatever for con- tending that the estate of the person taking under the subsequent marriage settlement is not to be treated by this court, being an equitable estate, as subject to the antecedent annuity, just as effectually as if the annuity itself had been noticed and excepted out of the operation of the subsequent instrument I have no difflculty, therefore, in holding that the plea of purchase for valuable con- sideration is upon principle not at all ap- plicable to the case before me, even If I could take notice of It as having been rightly and regularly raised. We next come to examine the authorities upon which the defense relies. Now, un- doubtedly, I cannot assent to some observa- tions which I find attributed to the master of the rolls in the report of the case of Attorney General v. Wllkins, 17 Beav. 285, but to the decision of that case, as explained by his honor in the subsequent case of Oolyer t. Finch, 19 Beav. 500, I see no reasonable ob- jection, and the principles that I have here been referring to are fully explained and acted on by the master of the rolls In the case of Oolyer v. Finch, 19 Beav. 500. It is Impossible, therefore, to suppose that he in- 74 PRIORITIES AND NOTICE. tended to lay down anything In the case of Attorney General v. Wilkins, 17 Beav. 285, which is at variance with the ordinary rules of the court as I have already explained them, or which could give countenance to the argument that has been raised before me at the bar. I have consequently no difficulty In holding that the decree of his honor the vice chancel- lor is right upon the grounds on which he placed it in the court below, and that also it would have been right if he had considered the grounds which have been urged before me in support of this petition of rehearing. I therefore affirm the decree and dismiss the petition of rehearing; but, inasmuch as the plaintlfiC sues In forma pauperis, of course It must be dismissed without costs. Mr. Pearson, for appellant, asked for a re- turn of the deposit. The LORD OHANCJEILIiOR. I think that the respondent should have the benefit of the deposit. You purchase the lib- erty of coming here by the deposit. I do not think that I can give the appellant any fur- ther costs against you, but I can give him the benefit of the deposit which, according to the rules of the court, you have made. There- fore the deposit will be given to him, unless it exceeds the costs of the appeal. PRIORITIES AND NOTICE. 75 KNAPP V. BAILEY. (9 AU. 122, 79 Me. 195.) Supreme Judicial Court of Maine. March 1, 1887. On appeal from decision of single justice at nisi prius, Penobscot county. Bill in equity brought to remove a cloud from the complainant's title, and to redeem the land from an equitable mortgage. The judge at nisi prius rendered a decision in fa- vor of the complainant, and the respondent appealed to the law court A. W. Paine and C. P. Stetson, for com- plainant. Davis & Bailey, for respondent PETERS, C. J. This bill seeks to remove a cloud overhanging the complainant's title to an imdivlded parcel of land,— in efEect, to redeem the land from an equitable mortgage, the allegation being that the debt has been paid. We can have no reasonable doubt of the facts thus far alleged. The defendant's grantor was caUed as a witness by the com- plainant The defendant contends that his testimony was inadmissible, and cites cases which sustain the ordinary principle that a grantor cannot dispute with his grantee the title which he has assumed to convey. The objection goes to the testimony, and not to the witness personally. The principle of es- toppel, which is invoked, Is aimed, not against the witness because he is a grantor, but against any oral testimony to contradict the terms of a deed. As said by Judge Cur- tis in answer to the same objection: "The facts to be proved were dehors the record, and one witness was as competent, in point of law, [to prove them,] as another." Where a grantor is allowed to prove a fact by an- other, he may do so by himself. Holbrook v. Bank, 2 Curt 246. It is true, as a general rule, that the effect of a deed cannot be controlled by oral evi- dence. But among the exceptions to the rule is that in equity, where the proof is clear and convincing, a deed absolute on its face may be construed to be an equitable mort- gage. In Rowell V. Jewett, 69 Me. 293, this exceptional doctrine was first allowed to have operation in this state. It was fully accepted in Stinchfleld v. Mllllken, 71 Me. 567, where the opinion says: "But ttie trans- action was in equity a mortgage,— an equita- able mortgage. The criterion is the Intention of the parties. In equity this Intention may be ascertained from all pertinent facts, ei- ther within or without the written parts of the transaction. Where the intention is clear that an absolute conveyance Is taken as a security for a debt, it Is in equity a mort- gage. The real intention governs." In Lew- is V. Small, 71 Me. 552, the same doctrine is admitted. It has since been aflBrmed in other cases, receiving an able discussion in the late case of Reed v. Reed, 75 Me. 264. The effect of many of the older cases in this state has been swept away by this new prin- ciple in our legal system,— a product of the growth of the law, very greatly promoted by legislative stimulation. The present case must be governed by the equitable rule de- clared in the later decisions. Another question presented by the case is whether the statutory provision (Rev. St. c. 73, § 12) which declares that a title of a pur- chaser for a valuable consideration cannot be defeated by a trust, unless the purchaser had notice thereof, means actual or con- structive notice. Section 8 of the same chap- ter requires "actual notice" of an unrecorded deed to defeat a subsequent purchaser's, title from the same grantor. The two sections were incorporated in our statutory system at the same time,— in the Revision of 1841. One requires "notice," the other "actual no- tice." We think the difference In phrase- ology may be accounted for partly on the idea that section 8 would be applicable more to law cases, and section 12 more to ques- tions in equity. We can have no doubt that there may be cases of constructive trusts where section 12 would apply. At the same time, where the facts present questions analogous to those ordinarily arising under the other section, we think actual notice would be required; that under either sec- tion, in cases generally, actual notice, as we understand the meaning of the term, would be the rule; and that actual notice applies in the present casa There is a conflict In the cases and among writers as to what is actual notice. Much of the difference Is said to be verbal only,— more apparent than real. Certain proposi- tions, however, are quite well agreed upon by a majority of the authorities. Notice does not mean knowledge; actual knowledge is not required. Mr. Wade describes the modes of proving actual notice as of two kinds. One he denominates express notice, and the other implied. "Implied, which imputes knowl- edge to the party because he is shown to be anxious of having the means of knowledge, though he does not use them; in other words, where, he chooses to remain volun- tarily ignorant of the fact, or is grossly neg- ligent in not following up the inquiry which the known facts suggest." Wade, Notice (2d Ed.) § 5. Some writers use the word "im- plied" as meaning constructive, and would regard what Is here described to be implied actual notice as constructive notice merely. As applicable to actual notice, such as is re- quired by the sections of the statute under consideration, we think the classification of the author whom we quote is satisfactory. The author further explains the distinction by adding that "notice by implication differs from constructive notice, vrith which it is frequently confounded, and which it greaUy resembles, with respect to the character of the inference upon which it rests; construct- ive notice being the creature of positive 76 PRIORITIES AND NOTICE. law, or resting upon strletly legal inference, while implied notice arises from inference of fact." It amounts substantially to this: that actual notice may be proved by direct evidence, or it may be inferred or implied (that is, proved) as a fact from indirect evi- dence,— by circumstantial evidence. A man m^j have notice or its legal equivalent. He may be so situated as to be estopped to deny that he had actual notice. We are speaking of the statutory notice required under the conveyances act A higher grade of evidence may be necessary to prove actual notice ap- pertaining to commercial paper. Kellogg v. Curtis, 69 Me. 212. The same facts may sometimes be such as to prove both construct- ive and actual notice; that is, a court might Infer constructive notice, and a jury infer actual notice, from the facts. There may be cases where the facts show actual, when they do not warrant th€ inference of con- structive, notice; as where a deed is not regularly recorded, and not giving construct- ive notice, but a second purchaser sees it on the records, thereby receiving actual notice. Hastings v. Cutler, 24 N. H. 481. Mr. Pomeroy (2 Eq. Jur. 596, note) sum- marizes the effect of the American cases on the point under discussion in the following words: "In a few of the states the courts have interpreted the intention of the legis- lature as demanding that the personal infor- mation of the unrecorded Instrument should be proved by the direct evidence, and as ex- cluding all instances of actual notice estab- lished by circumstantial evidence. In most of the states, however, where this statutory clause is found, the courts have defined the 'actual notice' required by the legislature as embracing all Instances of that species in contradistinction from constructive notice; that is, all kinds of actual notice, whether proved by direct evidence or inferred as a legitimate conclusion from circumstances." The doctrine of actual notice Implied by circumstances (actual notice in the second degree) necessarily involves the rule that a purchaser, before buying, should clear up the doubts which apparently hang upon the title, by making due Inquiry and investigation. If a party has knowledge of such facts as would lead a fair and prudent man, using ordinary caution, to make further inquiries, and he avoids the inquiry, he Is chargeable with notice of the facts which by ordinary diligence he would have ascertained. He has no right to shut his eyes against the light before him. He does a wrong not to heed the "signs and signals" seen by him. It may be well concluded that he Is avoid- ing notice of that which he in reality be- lieves or knows. Actual notice of facts which to the mind of a prudent man indi- cate notice is proof of notice. 3 Washb. Real Prop. (3d Ed.) 335. It must be admitted that our present views are not fully supported by the case of Spof- ford V. Weston, 29 Me. 140, a decision made A 40 years ago. But the doctrine has growu liberally since that day, and the correctness of some things pronounced in that opinion is virtually denied In subsequent cases. Por- ter V. Sevey, 43 Me. 519; Hull v. Noble, 40 Me. 459; Jones v. McNarrin, 68 Me. 334. Many cases which affirm the doctrine con- tended for by the complainant, as well as many opposing cases, are cited by the text writers. Wade, Notice, §§ 10, 11, et seq., and cases in notes; 2 Pom. Eq. Jur. § 603, and notes. The decided preponderance of author- ity supports the position that the statutory "actual notice" is a conclusion of fact capa- ble of being established by all grades of legitimate evidence. As to what would be a sufficiency of facts to excite inquiry no rule can very well estab- lish. Each case depends upon its own facts. There is a great Inconsistency in the case* upon this point. But we are satisfied that In the case before us the defendant must be charged with notice that his grantor held title by what equity must declare to be an invalid deed. He saw the grantor was out of possession. He could have easily ascertained, that he never had possession. He knew that others had controlled the property in many ways for many years. He examined the registry when he discovered the deed In question, and there must have seen evidence of other conveyances Inconsistent with Its full validity. He purchased the property for $40, while worth, had the title been perfect, nearer $1,000. He took a quitclaim deed; and it Is held by some courts that such an Instrument of conveyance does not make him a bona fide purchaser without notice (Baker v. Humphrey, 101 tJ. S. 404), al- though in our system it is a circumstance only bearing on the question (Mansfield v. Dyer, 131 Mass. 200). More than all else, perhaps, the defendant made no inquiry of the grantor whether he had any real title or not, asking no explanations, but Insisting to him that he had no valuable title. It Is Im- possible for us to say, in the light of these- Impressive illuminating proofs, that the de- fendant purchased without notice. He pur- chased on the basis of a merely nominal title. We would not say that he did not believe- he could legally purchase, encouraged, as he was, by the doctrine of the earlier cases, now abrogated; nor do we Impute more than a want of caution and of diligence. Men's in- terests spur their judgments to one-sided conclusions oftentimes. The great dramatist makes a character reluctant to acknowledge the situation say, "I cannot dare to know that which I know;" while another, more- quick-sighted, because anxious to believe, ex- claims, "Seems, Madam! Nay, it Is. I know- not seems." One rejects proof on the clear- est facts; the other accepts it on the slight- est. Judgment affirmed. WALTON, DANFORTH, EMERY, POS- TER, and HASKELL, JJ., concurred. cv q.- N\ PRIORITIES AND NOTICE. 77 KIRSCH et al. v. TOZIER et al. (38 N. B. 375, 143 N. T. 380.) <3ourt of Appeals of New York. Oct. 23, 1894. Appeal from supreme court, general term, fifth department Action brought by Theodore Kirsch and another against Orange Li. Tozier, the Buf- falo Savings Bank, and others, to reinstate a mortgage executed by defendant Lester H.' Tozier and wife to defendant Orange L. Tozier, in trust for plaintiffs, to set aside its discharge, and for its foreclosure. The bank held a subsequent mortgage. From a judg- ment of the general term (18 N. Y. Supp. 334) aflELrming a judgment for plaintiffs, de- fendants appeal. AflSrmed. This action was brought to reinstate a mortgage executed by the defendant Lester H. Tozier and his wife to the defendant Or- ange L. Tozier, which was made in trust for the plaintiffs, Michael Kirsch and Theodore Kirsch, and for Peter Kirsch, now deceased, minor children of John Kirsch, to set aside a discharge of such mortgage executed by Orange L. Tozier, and for foreclosure of the mortgage and sale of the mortgaged premises for the benefit of the persons named, ,as ces- tuis que trustent. Th6 lands in question con- sist of 102 acres, situate in the town of Shel- •don, Wyoming county, N. Y., of which John Kirsch died seised in the year 1872. On the 8th day of January, 1873, the defendant Or- ange L. Tozier was appointed general guard- ian of the infant children, Michael J., Theo- dore and Peter Kirsch. At the time of his death John Kirsch owed debts which, with the incumbrances upon his real estate, ex- ceeded the value of both his personal and real property. Orange L. Tozier and Eliza- beth Kirsch, the latter the widow of the de- ceased, were appointed administrators of the estate of John Kirsch. Subsequently to this it was agreed between them and Les- ter H. Tozier, a son of Orange L. Tozier, that they should purchase the mortgages then ex- isting on the farm, foreclose them, and pro- cure a title to the land, and convey the same to Elizabeth Kirsch, who should. In turn, by mortgage thereon, secure to Lester H. Tozier the amount paid by him, and give a mort- gage upon the farm of $1,000 to these three children. This arrangement was carried out, except that upon a sale of the lands, either by direct purchase at the sale or by deed coming immediately from the purchas- er, Lester H. Tozier became the owner for the consideration, in all, of $1,131.56. There- upon it was further arranged between Or- ange L. Tozier and the widow, Elizabeth Kirsch, that the widow should convey to the then holder of the title, Lester H. Tozier, all her interest in the lands to which she was entitled as widow, and that a mortgage should be executed by Lester H. Tozier to Orange L. Tozier, in trust for the three chil- dren, in the sum of $1,000, one-third thereof payable to each of the three children when he should arrive at age, with interest In the meantime. Having received the deed from Mrs. Elizabeth Kirsch, Lester H. Tozier and his wife executed to Orange L. Tozier, in trust for Michael Kirsch, Peter Kirsch, and Theodore Kirsch, "minor children of John M, Kirsch, deceased," the mortgage in question, dated the 15th day of October, 1875, ex- pressing a consideration of $1,000 payable as follows: The sum of $333.33 November 13, 1887; the sum of $333.33 March 18, 1891, and the sum of $333.33 October 6, 1892,— with interest, payable annually, from the 1st day of April, 1876. This instrument was deliv- ered to Orange L. Tozier, who caused the same to be recorded in the proper clerk's ofBce on the 23d day of October, 1875. Tha mortgagee and trustee paid the interest up- on this mortgage to Elizabeth Kirsch, tha mother of the children, in pursuance of a previous arrangement, until the spring of 1886, since which time no part of the princi- pal or interest has been paid thereon by the trustee for the benefit of either of the chil- dren. On the 3d day of September, 1883, Lester H. Tozier and his wife executed and delivered a deed of the farm to Orange L. Tozier, at a consideration, as expressed in the deed, of $4,000, and the record title of such farm has since been in Orange L. To- zier. After acquiring this title, and on the 19th day of February, 1886, Orange L. To- zier executed and acknowledged a discharge of the mortgage, and caused the same to be recorded in the proper clerk's office on the 9th day of March, 1886. On the 27th day of January, 1886, before the execution of such discharge, Orange L. Tozier applied to the defendant the Buffalo Savings Bank for a loan of $2,000 upon his farm, which applica- tion was granted on the 1st day of Febru- ary, 1886; and on an examination of the titie of such farm, submitted to the officers of the bank, tha-e was an abstract certified by the proper clerk of Wyoming county to the effect that Orange L. Tozier appeared to be the owner of the farm. On such ab- stract a memorandum of the mortgage sought by this action to be reinstated described the mortgage simply as being given for $1,000 and interest, "in trust for Michael Kirsch, Theodore Kirsch, and Peter Kirsch, minor children of John M. Kirsch, deceased," hav- ing written across the face of the memoran- dum as follows: "Discharged March 9, 1886. E. M. Jennings, Clerk." The defend- ant the Buffalo Savings Bank, at the time of taking its mortgage and advancing the money thereon, had not, either through any of its officers or attorneys, any knowledge or notice of the existence of this mortgage now sought to be reinstated in this action, except the memorandum on the abstract of title of its discharge, and the constructive notice given by the record of such mortgage. Adolph Rebadow, for appellants. Peck, for respondents. F. a 78 PRIORITIES AND NOTICE. ANDREWS, O. J. (aftar stating the facts). The ouly serious question presented on the record arises on the claim of the Buffalo Sav- ings Bank that It was not chargeable with notice nor put upon inquiry to ascertain that the defendant Tozier had no authority to dis- charge the mortgage in question. The sav- ings banli, when it took its mortgage, had con- structive notice of every fact which could bave been ascertained by an inspection of the deeds or mortgages or record in the chain of title. An inspection of the records of the title to the land upon which Its mortgage was taken would have disclosed the mortgage giv- en by Lester H. Tozier in October, 1875, and that it was given "in trust" for the three mi- nor children of John M. Kirsch, deceased; that the lands covered by the mortgage were subsequently, in 1883, conveyed by Lester H. Tozier to Orange L. Tozier, the mortgagee named in the mortgage given In trust for the minor children of John M. Kirsch; that after such conveyance, and In March, 1886, Orange L. Tozier, then being the owner of the lands, and also the mortgagee "In trust" In that mortgage, himself executed and caused to be recorded a satisfaction of the mortgage, and that this occurred before any part of the sum secured by the mortgage had become due. There can be no doubt that the satisfaction of the mortgage was, as to the defendant Orange L. Tozier, a breach of trust The satisfac- tion was without consideration. The ques- tion whether Tozier held the mortgage as trus- tee impressed with a trust in favor of the three children of John M. Kirsch admits of no doubt. The implication from the nature of the instrument, the character of the bene- ficiaries, and the division of the payments in- to three equal parts, payable at specified, but different, dates in the future, is that the in- strument was Intended to secure to the sev- eral beneficiaries as they became of age an equal share of the sum for which the mort- gage was given. The acceptance by Orange L. Tozier of the mortgage containing the dec- laration of the trust was an acknowledgment of the trust on his part, and boimd him to perform it The trust was expressed in the instrument, although not fully set out In words, and any act thereafter done by him in contravention of the trust was by the com- mon law and by the statute void. Statute of Uses and Trusts (1 Rev. St 730, § 65). The discharge of the mortgage was not inlouded for the benefit of the infants, but to deprive them of the benefit of the security, and, as we have said, was a plain breach of trust The bank knew, or must be presumed to have known, when it took its mortgage, because an examination of the records would have disclosed the facts, (1) that the mortgage was taken by Tozier In trust for Infants; (2) that he satisfied It before It became due; (3) that his relation to the property had changed, so that when he executed the satisfaction he was himself the owner of the land, having an adverse interest to those beneficially inter- ested in the security; and (4) that in satisfy- ing the mortgage he was dealing with him- self. Persons dealing with a trustee must take notice of the scope of his authority. An act within his authority will bind the trust estate or the beneficiaries as to third persons acting In good faith and without notice, al- though the trustee intended to defraud the es- tate, and actually did accomplish his purpose by means of the act In question. It has fre- quently been held that a peison dealing with a,n executor, administrator, or trustee, who, from the nature of his office, or by the terms of the trust has power to satisfy or transfer the securities of the estate, or to vary the in- strument from time to time, Is not bound to go further, and ascertain whether In fact the act of the executor or trustee is justified, and that no breach of trust was intended. It is sufB- cient for his protection that he acts in good faith, and. If the act of the executor or trus- tee is justified by the terms of the power, the party dealing with him is protected. Field V. SchiefCelin, 7 Johns. Oh. 153. But circum- stances were disclosed by the record when the bank took its mortgage which precluded the bank from relying upon the recorded sat- isfaction of the prior mortgage. There was "^ no indication in the mortgage that any power was vested In the trustee, Tozier, to accept payment of the mortgaig© before It became due, or to vary the trust security. There was no such affirmative power conferred upon him in fact, and the case of McPherson v. Rollins, 107 N. Y. 316, 14 N. B. 411, seems to be a de- cisive authority that there Is no implication of such a power In case of a trustee of a speci- fied security for the benefit of minors, and no other evidence of his actual authority exists than may be implied from the fact that he is trustee of the security. The rule declared in that case opwated with great severity upon one who, without any actual notice, bought the property upon an official certificate that no lien existed on the premises, paying full value therefor. There the mortgage was giv- en to secure the payment of an annuity to the mortgagee, and also annuities to two minors until they should become of age. The mort- gagee afterwards, and before the expiration of the minority of the two children, without consideration, assumed to discharge the mort- gage, and the satisfaction was duly recorded. It was held that the trustee had no power to satisfy the mortgage before the termination of the trust, and that the pm-chaser was not protected. It is difficult to perceive any solid distinction between that case and the present In McPherson v. Rollins there was no ex- press direction that the mortgage security should remain unchanged during the term of the trust It was given to secure annuities, presumably for maintenance. Here the mort- gage was given to secure a gross sum, for the benefit of infants, the shares being payable, as was to be Infared, on their severally at- taining full aso. There is a very pregnant circumstance in the present case bearing up- PRIORITIES AND NOTICB. 79 on the point of constructive notice. The bank relied upon a discharge by Tozier of a lien iield by him as trustee on his own land. The transaction as disclosed by the record showed that In executing the satisfaction Tozier was iA dealing with himself, and that the act was in his own Interest; and not only so, but that the mortgage was not due. Tozier was act- ing in the double capacity of owner of the land and trustee of a lien thereon for other persons. The transaction was unusual and special, and the sayings bank, with knowl- edge of Toziar's relation to the land as owner fN/ and trustee, was, we think,rbound to inquire by what authority he acteo; and, If Inqtulry had been made, the invalidity of the transac- tion would or might have been disclosed? What circumstances will amount to construct- ive notice, or wiU put a party upon inquiry. Is in many cases a question of much difficulty. A. purchaser is not required to use the utmost circumspection. He is bound to act as an ordinarily prudent and careful man would do under the circumstances. He cannot act In contravention to the dictates of reasonable prudence, or refuse to inquire when the pro- priety of inquiry is naturally suggested by circumstances known to him. The circum- stances of this case made it, we think, the duty of the bank to inquire in respect to the authority of Tozier to discharge the prior mortgage, and, having failed to do so, It is not entitled to protection as a bona fide purchas- er. Baker v. Bliss, 39 N. Y. 70, and cases cited; Story, Eq. Jur. § 400 et seq. The other questions are satisfactorily disposed of in the opinions of the referee and at general term, and do not require furthra: ela;boration. The Judgment should be athrmed, wltb costs. AU concur. Judgment affirmed. 80 PRIORITIES AND NOTICE. KNOBIiOCH V. MUELER. (17 N. a 696, 123 111. 554.) Supreme Court of Illinois. Jan. 20, 1888. Appeal from circuit court, St Clair county; A. Watts, Judge. George Christian Mueler died March 27, 1870. By his wUl, dated March 14, 1870, his real estate was devised to his sons, George and Solomon Mueler. The ■will was admitted to probate, but afterwards, at the January term, 1871, in the circuit court of St Clair county, this instrument was, on bill filed for that purpose, set aside, and de- clared not to be the will of said deceased. This decree was affirmed by this court Mueller v. Rebhan, 94 111. 142. On the 27th day of March, 1879, Catharine Rebhau, one of the heirs at law of said George C. Mueler, deceased, filed in the circuit court of St. Clair county her bill for partition of the W. % N. W., and the N. B. N. W. %, of section 28, town 1 N., range 7 W.,— alleging the death of said George C. Mueler intestate; that at his death he left him surviving George Mueler and Solomon Mueler, Mar- garite Rhinehardt and complainant Cathar- ine Rebhau, his children and only heirs at law, to whom descended in equal parts the said lands; that on the death of said ances- tor, George and Solomon had taken posses- sion of the land jointly, and received the rents thereof until February 29, 1875, when George died, leaving all his property to Solo- mon by his will duly probated, etc., since when said Solomon has received the rents and profits of said land. The bill alleged that Solomon was the owner In fee of the undivided one-half of said lands, and the complainant and Mrs. Rhinehardt were each the owner in fee of the undivided one-fourth part thereof, as tenants In common, and prayed for partition of the land, and that Solomon be required to account for the rents and profits, etc. At the February term, 1880, of said court, said bill was taken as con- fessed as to Mrs. Rhinehardt, and Solomon Mueler and his wife, who was also made a party, filed their answer, admitting the ma- terial allegations of the bill, and consenting to partition of said premises according to the prayer thereof. Subsequently an amended answer and cross-bill was filed, setting up that said Solomon had made lasting and valuable improvements on the land, etc. On hearing, said defendant Solomon admitted in open court the allegations of the bill in re- spect of the Interest of the parties as tenants in common,, the death and Intestacy of the ancestor, and consented to a decree of parti- tion; and a decree declaring the several in- terests of the parties as set up in the bill as heirs at law of said George O. Mueler, deceased, In and to said land, was entered by the court by consent, and commission- ers were appointed to make partition accord- ingly. At the May term, 1880, of said court, on proof that defendant Solomon had pur- chased the interest of hla co-defendant Mar- garite Rhinehardt the decree was, on his mo- tion, so changed as to require the commis- sioners theretofore appointed to set off to the said Solomon three-fourths, and to the complainant one-fourth, of said land. The Issue as to rents and profits and improve- ments was referred to the master for proofs. At the same term the commissioners filed their report, setting off to the complainant Mrs. Rebhau, as and for her one-fourth in- terest in said land, lot 10, as shown In their report, containing 48 acres of the land; and set off the residue of said tracts of land to the said Solomon. Exceptions to the report were filed, which were, at the May term, 1881, overruled by the court, and the report approved by decree duly entered. No writ of error was prosecuted or appeal taken from the decree of partition. At the February term, 1883, of said court on hearing of the Issues as to rents and profits, a decree was rendered In favor of complainant Rebhau for $1,638.97, from which an appeal was prosecuted to the appellate court. On the 8th day of March, 1881, in consideration of $5,050, Mrs. Rebhau, and Emil, her husband, by their warranty deed, conveyed the undi- vided one-fourth part of the premises of which her father died seized, and all their right, title, and Interest in the whole of said land, to appellant Thomas Knobloch; re- serving, however, her rights to rents and profits theretofore accrued. This deed was filed for record March 10, 1881. At the Feb- ruary term, 1882, appellant brought an action of trespass against said Solomon for alleged trespasses upon said 48 acres of land set off to Mrs. Rebhau, and afterwards brought ejectment to recover the same. In March or April, 1883, appellee found a paper dated March 9, 1855, purporting to be the last will and testament of George Christian Mueler, deceased, in and by which the testator de- vised all his land to his two sons, George and Solomon, subject to the payment of $1,500 to Catharine Rebhau. This will was duly admitted to probate. On July 6, 1883, Solomon Mueler, appellee here, filed in the St. Clair circuit court the present bill against appellant, Catharine Rebhau, Emil Rebhau, Margarlte Rhinehardt and Edward Abend, who, prior to the probate of the last will, had been appointed administrator of the es- tate of said George C. Mueler, deceased, substantially setting up the foregoing facts, and praying that said will (1855) stand as the last will and testament of the said George Christian Mueler; that the deed from Cath- arine and EmU Rebhau to said Knobloch be set aside as being a cloud upon complainant's title; that all proceedings in partition re- garding said land, and the stating of an ac- count of rents and profits now pending In the appellate court, and all actions commenced by said Edward Abend as aforesaid, and by said Knobloch, be no further prosecuted; and that the defendants, their attorneys, PRIORITIES AND NOTICE. SJ agents, etc., be perpetually enjoined from taking any further steps in regard to said action. An injunction was granted as pray- ed in the bUl of August 25, 1883. Appellant answered, setting up that he had purchased in good faith and paid $5,050 for the interest of Mrs. Rebhau in said land, without any notice of any adverse claim or title, and also setting up that complainant, Solomon, is es- topped, by the decree of partition rendered by his consent in open court, from disputing complainant's title. At the September term, 1885, of said circuit court, a decree was en- tered perpetually enjoining the prosecution of said suits, and setting aside the deed from Mrs. Rebhau and her husband to appellant as a cloud on complainant's tiUe. From this decree appellant, Knobloch, alone appealed. W. C. Kueffner and James M. Dill, for appellant. A. R. Halbert, for appellee. SHOPB, J., (after stating the facts as above.) The bUl in this case seelis to re- move, as a cloud upon the title of appellee, Solomon Mueler, derived under the will of 1855, the deed of Catharine and Emil Reb- hau to appellant; and restrain by injunction the prosecution of an action of ejectment brought by appellant to recover the land par- titioned to Catharine Rebhau in the proceed- ings instituted by her for partition of the lands of which her father died seized, and to enjoin a certain trespass suit brought for al- leged trespasses upon said land by appellee, and to restrain Mrs. Rebhau from collecting $1,638.97, decreed as rents and profits in said partition proceeding. Mrs. Rebhau not hav- ing appealed from the decree against her, the latter branch of the case made by the bill is not before us. When the instrument dat- ed March 14, 1870, purporting to be the last vrill and testament of George C. Mueler, who died March 20, 1870, was set aside upon bill filed for that purpose. It was supposed by all the parties in interest that his estate had de- scended to his heirs at law as intestate es- tate, and letters of administration were granted accordingly. All the parties ac- quiesced in this condition of affairs, and rest- ed in the belief that the property had so descended until the discovery, in March or April, 1888, 13 years after the death of the ancestor, of the will of the 9th of March, 1855, by which the estate in question was devised to George and Solomon Mueler. The good faith of the parties is not questioned, no fraud or misconduct is alleged, or laches imputed or imputable to any one, on accoimt of the delay in the production of this will, or in any of the proceedings had in respect to the real or personal estate prior to its dis- covery. When Catharine Rebhau, daughter and one of the heirs at law of said George C. Mueler, deceased, on the 22d day of March, 1879, filed her bill for partition of the real estate of which said George 0. had died seized; and when Solomon Mueler filed his answer, admitting the intestacy of his H.& B.EQ.(2d Ed.)— 6 father and consenting to the partition to Mrs. Rebhau and Mrs. Rhlnehardt, his sis- ters, each a one-fourth part or Interest in the land of which their common ancestor died seized, and consented to the decree therefor, the several parties in good faith believed the facts alleged in her bill to be true, and that the land had descended to the four children of George C. Mueler, deceased, in equal parts in fee. It Is also equally clear that when appellant, Thomas Knobloch, purchas- ed the interest of Catharine Rebhau in said land, and paid her therefor $5,050, that he did so in good faith, relying upon the tiUe of said Catharine as found and declared by the circuit court of St. Clair county In said partition proceeding by the consent of appel- lee. Upon the production and probate of the will of 1855, in April, 1883, it became mani- fest that the titie to said land had not In fact so descended to the heirs at law of said George Christian Mueler; but by virtue of that will the legal title thereto, at the death of the testator, vested in the devisees, George and Solomon Mueler, and that by the last will of said George Mueler, who died Feb- ruary 29, 1875, the legal title to the whole of said land became vested in appellee, Solo- mon Mueler. It is apparent that all parties, while acting in good faith, were mistaken, and that the decree of the circuit court, find- ing one-fourth interest of said land in fee in Catharine Rebhau, would not have been en- tered had the court or parties been aware of the true condition of the titie to the land. It is said by counsel for appellee that this bill may be maintained, if upon no other ground than as a bill in the nature of a bill of review. This is manifestiy a misappre- hension. In neither the frame of the bill, or in the prayer, has the pleader attempted a review of the decree rendered in the partition proceeding of Rebhau against Mueler et al. The bill sets out the filing of that bill, the decree of partition, and for rents and profits; but it nowhere seeks to reopen that decree, or reverse. Impeach, or alter it, or to pro- cure a rehearing of that cause upon the al- leged newly-discovered matter. The prayer is to remove appellant's title, derived there- under, as a cloud upon appellee's titie, and to restrain proceedings under that decree vpith- out reopening it or setting it aside. The whole scope of the bill is to procure the relief sought upon the equitable ground of mist.8Jrp of fact, as to the title at the time of the entry of that decree, without in any way in- terfering with it by seeking to enjoin pro- ceedings under it. The two grounds upon which a bill of review, or bill in the nature of a bill of review, will lie, are: Elrrors of law, appearing on the face of the decree, without further examination of facts; and new fact or facts, discovered since the de- cree, which are material, and which it was impossible for the party to produce at the time the decree passed. 2 Daniell, Ch. Prac. 1576; 2 Smith, Ch. Prac. 50. Bills contain- 82 PRIORITIES AND NOTICE. ing newly-discovered matter are in the na- ture of original bills, in so far as such new- matter presents an issuable fact, and there- fore admits an answer and the formation of an issue; but only so far as it relates to the truth and sufficiency of the alleged new mat- ter, and its admissibility for the purpose of affecting and opening the original decree. Authorities supra; Bufflngton v. Harvey, 95 TJ. S. 99. The purpose of a bill of the char- acter named is to procure a reversal, alter- ation, or explanation of the former decree, ihe bill should state the former bill, the pro- ceedings thereon, and the decree rendered by the court, the grievance under the decree of the party presenting the bill, and the error of law or new matter discovered upon which it is sought to reverse, reopen, or impeach it. In bills of review, if the former decree has not been carried into execution, the prayer may simply be that the same may be reversed and set aside; If the former decree has been executed, that the decree be reversed, and the complainant be restored to his former con- dition or status, as if it had not been ren- dered. In bills in the nature of bills of re"- vlew, instead of praying the reversal of the former decree, the prayer should be that the cause be reheard in respect to and consider- ing the new matter at the same time It is reheard upon the original bill, etc. 2 Daniell, Ch. Prac. 1581, 1582. The decree of partition rendered at the February term, 1880, and the subsequent de- cree approving the report of the commission- ers rendered at the May term, 1881, of said court, remain unreversed and in full force and effect. The court had jurisdiction of the subject-matter and of the parties, and ren- dered Its decree determining the several in- terests of the complainant Catharine Rebhau and appellee, by the consent of appellee, as appears by his answer filed in said cause, and by the recitals in said decree of partition. Decrees of courts of chancery, in respect of matters within their jurisdiction, are as bind- ing and conclusive upon the parties and their privies as are judgments at law; and a de- cree by consent in an amicable suit has been held to have an additional claim to be con- sidered final. Allason v. Stark, 9 Adol. & E. 255. Decree so entered by consent cannot be reversed, set aside, or impeached by bill of review or bill in the nature of a bill of re- view, except for fraud, unless it be shown that the consent was not in fact given, or something was Inserted, as by consent, that was not consented to. 2 Daniell, Ch. Prac. 1576; Webb v. Webb, 3 Swanst. 658; Thomp- son V. Maxwell, 95 U. S. 391; Armstrong y.\ Cooper, 11 111. 540; Cronlj v. Trumble, 66 111. 432; Haas v. Society, 80 111. 248; Atkinson V. Manks, 1 Cow. 693; Winchester v. Win- chester, 121 Mass. 127; Allason v. Stark, 9 Adol. & B. 255; Earl of Hopetoun v. Ram- say, 5 Bell, App. Cas. 69. See, also, note to Duchess of Kington's Case, 2 Smith, Lead. Cas. '826 et seq. It Is the general doctrine that such a decree is not reversible upon ap- peal or writ of error, or by bill of review for error. Armstrong v. Cooper, 11 111. 540. No exceptions were taken to the decree of parti- tion, or attempt made in the cause in which it is rendered to vacate or modify it. It is undoubtedly true that, as between the parties and those chargeable with notice, courts of equity will entertain jurisdiction and grant relief, on proper bill filed, from the injurious effects of admissions and confessions of ma- terial facts, made in course of judicial pro- ceedings, in ignorance of the rights of the party making them, where he has been guilty of no negligence, either in the discovery of the fact, or in applying to the proper forum for relief; but such relief can only be granted upon such grounds and for such reasons as would authorize the court to set aside agree- ments or contracts entered into by the par- ties. Attorney General v. Tomline, 7 Ch. Div. 388; Millspaugh v. McBride, 7 Paige, 509; Purnival v. Bogle, 4 Russ. 142; The Hiram, 1 Wheat. 440. But it is apparent that the decree in the partition proceedings can only be attacked, reversed, annulled, or set aside by direct proceedings in that case, or upon bill of review, or bill in the nature of a bill of review. If this were not so, however, there is an- other ground upon which the decree must be reversed. It is the well-settled doctrine of this court that no relief will be granted In equity, in cases of this sort, injuriously af- fecting intervening rights acquired in good faith, after the rendition of a Judgment or decree, and in reliance thereon. So it has 'been held that amendments may be made in judicial proceedings, but not so as to affect I the intervening rights of third persons accru- / ing prior to such amendment. Shirley v. Phillips, 17 111. 473; Coughran v. Gutcheus, 18 111. 390; Sickmon v. Wood, 69 111. 329; 1 Story, Eq. Jur. 165. Relief will not be granted to the prejudice of appellant, if he has an equal equity with appellee, and is equally entitled to the protection of the court. 1 Story, Eq. Jur, 165. As already seen, all the parties to the partition proceedings sup- posed in good faith that Mrs. Rebhau was the owner in fee of the undivided one-fourth of the lands of which her father died seized, and that on the 8th day of March, 1881, ap- pellant purchased her interest in such lands for a full and adequate consideration, with- out notice, actual or constructive, of any de- fect in her titie, and in good faith. All the elements to constitute him a bona fide pur^ chaser are present; that is, a valuable con- sideration paid, absence of notice, and pres- ence of good faith. 2 Pom. Eq. Jur. § 745. His grantor had, by a court of competent jurisdiction, in a proceeding Instituted to find and declare her interests in these lands, been adjudged, by the consent and admission of appellee, to be the owner in fee of the un- divided one-foiu:th part thereof, and there was nothing in the record or elsewhere ap- 4 ^^*\ t-V'l ■<_ -J -^ u \ ■' X. / PRIORITIES AND NOTICE. ..3 . w->^^ ,1 83 parent to disclose that she, who was thus clothed with apparent legal title, was not the owner in fact of that interest in the land. Nor is it shown or claimed that further in- quiry would then have disclosed anything to cast suspicion upon her title. The defense of a bona fide purchaser had its rise in eq- uity, upon the doctrine that a court of eq- uity acts upon the conscience of him against whom relief is sought; and if he has done no wrong, or it would be unconscientious or in- equitable to grant the relief, the court will refuse to exercise its jurisdiction. If, in equity and good conscience, the complainant should not obtain what he seeks, or the de- fendant ought not to suffer what is demand- ed, then the court will withhold its power. In theory, it is said, the defense of a bona fide purchaser presupposes some defect in purchaser's title; but the court refuses to investigate the validity of the title of either party, upon the ground that good conscience does not dictate that he who* has dealt hon- estly, in good faith, and without notice, should be deprived of the legal right he has thereby gained. Id. § 739. There was for- merly much apparent conflict In the adjudg- ed cases as to when the defense of a bona fide purchaser would be availing. In Phillips v. Phillips, 4 De Gex, P. & J. 208, Lord West- bury grouped the cases in which a bona fide purchaser will be protected into three general classes, and reduced the doctrine to a for- mula, which it is said by Pomeroy (2 Eq. Jut. § 742) has been accepted, by subsequent judges almost without exception. The doc- trine thus formulated, so far as applicable here, is: "Thirdly, when there are circum- stances which give rise to an equity, as dis- tinguished from an equitable estate,— as, for example, an equity to set aside a deed for fraud, or to correct it for mistake,— and the purchaser under the instrument maintains the plea of purchase for valuable considera- tion without notice, the coifft will not inter- fere." Without extended discussion, it is apparent that the bUl here filed seeks relief ancillary to the legal estate of appellee. The purpose of the bill is to remove the deed to appellant as a cloud upon appellee's legal title, and to enjoin the assertion of rights by appellant thereunder. The right to the relief sought exists, if at all, upon the equity arising out of the alleged mistake as to the title to said land in the grantor of appellant This brings the case directly within the rule above giv- en, which is sustained by the weight of mod- ern authority; and, if appellant has made out his defense as bona fide purchaser, he should have prevailed in the court below. The de- cree of partition, as seen, was rendered by a court of competent jurisdiction, having juris- diction of the person and of the subject-mat- ter, and by appellee's consent. Appellant without notice, for full value, and In perfect good faith, acquired the title, sought to be removed as a cloud upon appellee's title, from the party found and declared by that decree to be the owner, and we can perceive no principle upon which a court of conscience can hold that appellant shall lose in conse- quence of the mutual mistake, rather than appellee. It cannot be said that the equi- ties of appellee are superior to those of ap- pellant in respect of the title thus acquired, and, the equities being equal, the court will ^ give no assistance to the legal title, (2 Pom. Eq. Jur. § 742, and cases cited,) but will re- mit the complainant to his remedy at law. It is said, however, that, at the time ap- pellant purchased, the report of the com- missioners had not been confirmed by the court, and that he purchased subject to hav- ing ttie interest of his grantor, as found by the commissioners, set aside. It is true that exceptions to the report of the commissioners were then pending, but none of the excep- tions questioned the right or title of Cath- arine Eebhau to the undivided one-fourth part of the real estate of which her father died seized. Such exception related simply to the manner of partition, and the conduct of the commissioners in making the same. There was nothing therein to put appellant upon notice or inquiry as to the title of Mrs. Reb- hau. He bought subject, as a matter of course, to having the amount set off to Mrs. Rebhau changed or diminished by subse- quent action of the commissioners, or to have their report set aside by the court; but his purchase was of her interest in the land, which was conceded by appellant and de- clared by the court to be a one-fourth inter- est therein. It Is also said by counsel for appellee that appellant may rely upon the covenants of warranty in his deed from the Rebhaus, and therefore the equities are with appellee. It is not shown whether Mrs. Rebhau, and her husband, who joined in the execution of said deed, are solvent or insolvent, and we per- ceive no principle, nor is any suggested by counsel, upon which appellant should be driven to resort to his legal remedy against his grantor for indemnity from loss, especial- ly in view of the fact that it is not shown that such remedy would be availing. It will not be proper for us to here discuss or deter- mine the right of appellee to the money paid . by appellant for the land in question, or as to whether he has any remedy In respect of the same. We are of opinion that the defense of a bona fide purchaser has been maintained, and, upon both of the grounds indicated, the right of appellee to the relief sought should have been denied, as against appellant, Knobloch, and the bill dismissed as to him. For the error of the court in this regard, the decree, in so far as it affects the appel- lant, Knobloch, will be reversed, and the cause remanded to the circuit court of St. Clair county, with instructions to enter a de- cree in conformity with this opinion, dismiss- ing the bill as to said appellant 84 PRIORITIES AND NOTICE. MAYOR, ETC., OF CITY OF BALTIMORE et al. Y. WHITTINGTON. (27 Atl. 984, 78 Md. 231.) Court of Appeals of Maryland. Nov. 16, 1893. Appeal from circuit court of Baltimore city. Suit by Jacob Craft Whittlngton against the mayor and city council of Baltimore and Clarence M. Ellinger for injunction. Prom a decree for complainant, defendants appeal. Affirmed. Argued before ROBINSON, O. J., and BRISCOE, BRYAN, FOWLER, and Mo- SHERRY, JJ. TboB. G. Hayes, Jas. P. Gorter, Wm. 8. Bryan, Jr., and F. W. Story, for appellants. F. O. Slingluff and T. WaUis Blakiston, for appellee. McSHERRY, J. By section 47, art. 49, of the Municipal Code of Baltimore City, it is enacted, in substance, that when any lots of ground are chargeable with the payment of taxes, and are subject to ground rents or leases for terms of years, renewable for- ever, the collector shall, in the sale of such lots for nonpayment of taxes, first sell only the leasehold interest, if it should sell for an amount sufficient to pay the taxes, but, if it should not, then that he shall sell the whole fee-simple estate, provided these pro- visions "shall not apply to cases where the books of the city do not disclose the fact that the lot or lots are on lease as aforesaid, or unless the collector shall have actual no- tice of such lease prior to the sale thereof." The dty tax collector of Baltimore sold in March, 1891, for the nonpayment of state and city taxes, the fee-simple estate in a lot of ground on Druid Hill avenue, and the mayor and city council became the pur- chaser. The sale was reported to the circuit court of Baltimore city, and was ratified in May. 1892. In October following, the city, through and by its comptroller, sold the lot to Clarence M. Ellinger, to whom it was thereafter conveyed. When the sale was made by the collector, the lot was subject to a lease for 99 years, renewable forever, which was owned by J. Hem-y Weber, and the reversion or fee was owned by the ap- pellee, Whittington, The unpaid taxes were due by the owner of the leasehold estate, but the collector sold the whole fee, without hav- ing first offered, or having attempted to sell, the leasehold, as required by the section of the City Code to which reference has been made. There was no entry on the books of the collector showing that the lot was sub- ject to a lease, and the single question in- volved in the case is whether, when the col- Y lector made the sale, he had "actual notice" of the existence of the lease. If he had, the sale was irregular. If it was irregular, the decree of the circuit court of Baltimore city, restraining by injunction the mayor and cily council, and its grantee, Ellinger, from dis- turbing the possession of the owner of the reversion, must be affirmed. It appears by the record that in 1883 pro- ceedings were instituted In the circuit court of Baltimore city by Rebecca and Maiy Mc- Koen against J. Henry Weber for a sale of this same leasehold estate imder a mortgage thereon executed by Weber in 1881. Mr. T. WaUis Blackiston was appointed trustee to make the sale. He took possession of the property, and collected the rents and profits, but, owing to a depreciation in its value, made no sale of it. In the meantime the ground rent was regularly paid to the ap- pellee, up to July, 1892, but the state and city taxes for the eight years beginning with 1882 remained unpaid. On the 1st day of December, 1890, Lewis N. Hopkins, city c(A- lector, filed a petition in the foreclosure pro- ceedings representing that taxes for the years just mentioned were In arrear upon the property "decreed to be sold." The peti- tion further stated that the collector was unar ble to enforce the collection of those taxes by reason of the pendency of the foreclosure proceedings, and it prayed that the trustee might be required to pay the taxes out of the rents theretofore collected from the prop- erty, or that the collector might "be allowed to proceed to collect said taxes by sale of the property in the ordinary way." This peti- tion was signed by the late Mr. W. A. Ham- mond, "city solicitor, attorney for petitioner," and was sworn to by the deputy city col- lector. Subsequently, an order was passed, requiring the trustee to pay the taxes within five days out of the fimds previously collected by him "as rents from the property decreed to be sold," and directing, upon his failure to do so, that the property be sold in the ordi- nary way by the collector. The trustee did fail to pay the taxes, and the collector made, under authority of this order, the sale of March, 1891, already mentioned. It is upon these facts that the appellee relies to sho-n that the collector had "actual notice" of the existence of the leasehold estate. Notice is of two kinds,— actual and con- structive. Actual notice may be either ex- press or implied. If the one, it is estab- lished by direct evidence; If the other, by the proof of circumstances from which it is inferable as a fact Consitructive notice is, on the other hand, always a presumption of law. Express notice embraces, not only knowledge, but also that which is communi- cated by direct information, either writtei* or oral, from those who are cognizant of the fact communicated. Wade, Notice, i 6. Im- plied notice, which Is equally actual notice, arises where the party to be charged is shown to have had knowledge of such facts and circumstances as would lead him, by the exercise of due diligence, to a knowledge of the principal fact 16 Amer. & Eng. Enc. Law, 790. Or, as defined by the supremfe court of Missouri in Rhodes t. Outcalt, 48 PRIORITIES AND NOTICE. 85 Mo. 370, "a notice Is regarded In law as ac- tual when the party sought to be affected by it knows of the particular fact, or Is con- scious of having the means of knowing it, although he may not employ the means in his possession for the purpose of gaining fur- ther information." It is simply circumstan- tial evidence from which notice may be la ferred. It differs from constructive notice> with which it is frequently confounded, and which it greatly resembles, in respect to the character of tie inference upon which it rests; constructive notice being the creature of positive law, resting upon strictly legal presumptions, which are not allowed to be controverted, (1 Story, Eq. Jur. § 399; Town- send V. Little, 109 U. S. 504, 3 Sup. Ct. 357,1 while implied notice arises from inference of fact, (Williamson v. Brown, 15 N. Y. 354; Wade, Notice, § 3.) With constructive no- tice we are not now concerned, and it is not pretended that the city collector had express notice, or knowledge personally, of the exist- ence of the leasehold estate. But he be- came a party to the equity proceeding, where- in a decree had been passed directing a sale of the leasehold interest He did more. He asked, notwithstanding the decree bad been long before signed and enrolled, that be be permitted to sell for the nonpayment of taxes, tmder the summary process of dis- traint, the identical property previously do- creed to be sold, and no other or different Interest; and the property which had been thus previously decreed to be sold was not J~, the fee simple, but only the leasehold interest in the lot In question. He obviously knew there was a proceeding pending in the cir- cuit court of Baltimore city, having for its object the sale of some interest in the prop- erty. He knew, further, the equity proceed- ing interfered with the execution of his dis- traints, and he applied to the court for leave to proceed, in spite of the decree, to sell the same prcq)erty which had been decreed to be sold. We say he knew these things, and we say so, not because the record shows that he was personally aware of them, as mat- ters of actual knowledge, but because the deputy dty collector and the collector's at- torney, botii of whom were his agents in this transaction, did have such knowledge; the one having sworn to the facts stated in the petition, and the other having signed the pe- tition itself. So both the attorney and the deputy collector knew, or at least were in y possession of facts which would necessarily N lead, upon the exercise of the slightest dili- / gence, to a knowledge or notice, of the exist- ence of the lease. They must therefore be regarded as knowing that which, with ordi- nary diligence, they might have known, or that which they were conscious of having the means of knowing. This result is not a legal presumption, but an inference of fact, and it seems to us an irresistible inference. It would be idle to say that the collector was Ignorant of facts relating to the title to prop- erty which he was about to sell for the non- payment of taxes, when his deputy, acting for him and in his name, was in full posses- sion of them, or that he did not know the things which his attorney was aware of in that particular proceeding respecting the state of the title; and it would be equally idle to say that the deputy, when he swore to the petition, and the attorney, when he signed it, filed It, and procured a court's order upon It, were not-apprised of the character of the es- tate previously decreed to be sold, or were not in a iwsition where they were conscious of having the means of knowing precisely what property the decree affected. At all •/ events, the exercise of ordinary diligence • would most assuredly have informed both of ' these agents of the collector of every fact which the records in the equity case dis- closed, and among those facts was the mate- rial and important one that the lot was sub- ject to a lease for 99 years, renewable for- ever. It is consequently a legitimate infer- ence of fact that both of these representa- tives of the collector knew what the record in the foreclosure case disclosed as to there be- ing a leasehold estate In Weber, and not a fee, and this was implied actual notice. No- i tice to the attorney, as well as notice to the j depvity, was notice to the collector, and was - actual, and not merely constructive, notice to him, for the principal Is bound by and affected with notice to his agent, and he Is equally bound by notice received by his attor- ney in the same transaction. Astor v. WeUs, 4 Wheat 466; Reed's Appeal, 34 Pa. St 209; Houseman t. Association, 81 Pa. St 256; Smith T. Ayer, 101 U. S. 320. If this were not so, then, in every case where notice is necessary, it might be avoided by simply em- ploying an agent. We are, for the reasons we have given, of opinion that the collector had, through the means we have indicated, such actual notice of the existence of the lease as to bring him within the proviso quoted from the City Code, and that he was therefore not authorized to sell the fee-simple estate until he had first offered the lease- hold for sale. It results, then, that the sale made by him was Irregular, and the decree granting the injimction applied for by the ap- pellee must be affirmed. Decree affirmed, with costs In this court and In the court be- low. 86 PRIORITIES AND NOTICE. WILLIAMSON V. BROWN. (15 N. T. 354.) Court of Appeals of New York. 1857. The plaintiff was the grantee of fifty acres of land on which there was no recorded in- cumbrance. His grantor purchased the land of the defendant, giving ba^ck a mortgage for a part of the purchase price. The defendant commenced to foreclose his mortgage by advertisement, whereupon this action was brought to restrain the foreclo- sure. The other material facts appear in the opinion. D. H. Marsh, for appellant. J. R. Law- rence, for respondent. SBLDEN, J. The referee's report is con- clusive as to the facts. It states, in sub- stance, that the plaintiff had sufficient in- formation to put him upon inquiry as to the defendant's mortgage; but that, after mak- ing all the inquiry which upon such informa- tion it became his duty to make, he failed to discover that any such mortgage existed. This being, as I think, what the referee in- tended to state, is to be assumed as the true interpretation of his report. The question in the case, therefore, is, as to the nature and effect of that kind of no- tice so frequently mentioned as notice suffi- cient to put a party upon inquiry. The counsel for the plaintiff contends that while such a notice may be all that is required in some cases of equitable cognizance, It is not sufficient, in cases arising under the registry acts, to charge the party claiming under a recorded title with knowledge of a prior un- registered conveyance. He cites several au- thorities in support of' this position. In the case of Dey v. Dunham, 2 Johns. Ch. 182, Chancellor Kent says, in regard to notice under the registry act: "If notice that is to put a party upon inquiry be suffi- cient to break in upon the policy and the express provisions of the act, then indeed the conclusion would be different; but I do not apprehend that the decisions go that length." Again, In his Commentaries, speaking on the same subject, he says: "Implied notice may be equally effectual with direct and positive notice; but then it must not be that notice which is barely sufficient to put a party up- on inquiry." So in -Jackson v. Van Valkenburgh, 8 Cow. 280, Woodworth, J., says: "H these rules be applied to the present case, the notice was defective. It may have answered to put a person on Inquiry, in a case where that species of notice is sufficient; but we have seen that to supply the place of registry, the law proceeds a step further." A reference to some of the earlier decisions under the registry acts of England will tend, I think, to explain these remarks, which were probably suggested by those decisions. One of the earliest, if not the first of the English recording acts was that of 7 Anne, chapter 20. That act differed from our general regis- try act in one important respect. It did not, in terms, require that the party to be pro- tected by the act should be a bona fide pur- chaser. Its language was: "And that every such deed or conveyance, that shall at any time after, etc., be made and executed, shall be adjudged fraudulent and void, against any subsequent purchaser or mort- gagee for valuable consideration, unless," etc. The English judges found some difficulty at first in allowing any equity, however strong, to control the explicit terms of the statute. It was soon seen, however, that ad- hering to the strict letter of the act would open the door to the grossest frauds. Courts of equity, therefore, began, but with great caution, to give relief when the fraud wag palpable. Hlne v. Dodd, 2 Atk. 275, was a case in which the complainant sought relief against a mortgage having a preference un- der the registry act, on the grovmd that the mortgagee had notice. Lord Hardwicke dismissed the bill, but admitted that "ap- parent fraud, or clear and undoubted notice would be a proper ground of relief." Again, he said: "There may possibly have been cases of relief upon notice, divested of fraud, but then the proof must be extremely clear." Jolland V. Stainbrldge, 3 Ves. 478, is an- other case in which relief was denied; The master of the rolls, however, there says: "I must admit now that the registry is not conclusive evidence, but it is equally clear that it must be satisfactorily proved, that the person who registers the subsequent deed must have known exactly the situation of the persons having the prior deed, and know- ing that, registered in order to defraud them of that title." Chancellor Kent refers to these cases tn Dey V. Dunham (supra) and his remarks in that case, as to the effect, under the registry acts, of notice sufficient to put a party upon Inquiry, were evidently made under the in- fluence of the language of Lord Hardwicke and the master of the rolls, above quoted. But the English courts have since seen, that If they recognized any equity founded upon notice to the subsequent purchaser of the prior unregistered conveyance, it be- came necessarily a mere question of good faith on the part of such purchaser. They now apply, therefore, the same rules in re- gard to notice, to cases arising under the registry acts, as to all other cases. It will be sufficient to refer to one only among the modem English cases on this sub- ject, viz.: Whitbread v. Jordan, 1 Younge & C. 303. The plaintiff was a London brew- er, and supplied Jordan, who was a publican, with beer. It was the common practice with brewers In London to lend money to pub- licans whom they supplied with beer, upon a deposit of their title deeds. Jordan had- de- posited certain deeds with the plaintiff, pur- PRIORITIES AND NOTICE. 87 euant to this custom. He afterward gave to one Boulnois, a wine merchant, a mortgage upon the property covered by the deeds de- posited, which was duly recorded. Boulnois had notice of Jordan's debt to the plaintiff, and of the existing customs between brewers and publicans, but he made no inquiry of the brewers. The suit was brought to enforce the equitable mortgage arising from the de- posit. Baron Alderson held that the notice to Boulnois was sufficient to make it his duty to inquire as to the existence of the deposit; that his not doing so was evidence of bad faith; and the plaintifC's right, under his equitable mortgage, was sustained. No case could show more strongly that notice which puts the party upon inquiry is sufficient even under the registry act. The cases in our own courts, since Dey v. Dunham and Jackson v. Van Valkenburgh (supra), hold substantially the same doctrine. - trine like that of constructive notice is to be refined upon until it is extended to cases like the present." Possession by a third person, under some previous title, has frequently but inaccu- rately been said to amount to constructive notice to a purchaser, of the nature and ex- J tent of such prior right. Such a possession puts the purchaser upon inquiry, and makes j it his duty to pursue his inquiries with dili-| gence, but is not absolutely conclusive upon i him. In Hanbury v. Litchfield, 2 Mylne &1 K. 629, when the question arose, the master of the rolls said: "It is true that when a ten- ant is in possession of the premises, a pur- chaser has implied notice of the nature of his title; but, if, at the time of his purchase, the tenant in possession is not the original lessee, but merely holds under a derivative lease, and has no knowledge of the cov- enants' contained in the original lease, it has never been considered that it was want of due diligence in the purchaser, which is to fix him with implied notice, if he does not pursue his inquiries through every derivative lessee until he arrives at the person entitled to the original lease, which can alone convey to him information of the covenants." This doctrine Is confirmed by the language of Judge Story in Flagg v. Mann, 2 Sumn. 554, Fed. Gas. No. 4,847. He says: "I admit that the rule in equity seems to be, that where a tenant or other person is In posses- sion of the estate at the time of the puiv chase, the purchaser is put upon inquiry as to the title; and if he does not inquure, he is bound in the same manner as if he had inquired and had positive notice of the title of the party in possession." It Is still further confirmed by the case of Rogers v. Jones, 8 N. H. 264. The language of Parker, J., in that case is very emphatic. He says: "To say that he (the purchaser) was put upon inquiry, and that having made all due investigation without obtaining any knowledge of title, he was still chargeable with notice of a deed, if one did really exist would be absurd." J£ these authorities are to be relied upon, and I see no reason to doubt their correct- ness, the true doctrine on this subject Is, that where a purchaser has knowledge of any fact sufficient to put him on inquiry as to the existence of some right or title in con- flict with that he is about to purchase, he is presumed either to have made the inquh^ and ascertained the extent of such prior right, or to have been guilty of a degree of negligence equall.v fatal to his claim to be considered as a bona fide purchaser. This presumption, however. Is a mere inference of fact, and may be repelled by proof that the purchaser failed to discover the prior right, notwithstanding the exercise of proper dili- gence on his part. The judgment should be reversed, and there should be a new trial, with costs to abide the event. PAIGE, J. The question to be decided Is, whether, under the finding of the referee, the plaintiff is to be deemed to have had at /the time of his purchase legal notice of the jfprior unrecorded mortgage of the defendant f The referee finds that the plaintiff had suffi- cient information or belief of the existence of such mortgage to put him upon inquiry, but that upon pursuing such inquiry to the extent of such information and belief, he did not find that such mortgage existed or had ', been given. It seems to me that the two i\findings are Inconsistent vnth each other. 'T.f the plaintiff, on pursuing an Inquiry to y the full extent of his information and belief/ as to the existence of the defendant's mort- gage, was unable to find that It either then existed or had been given, the highest evi- dence Is furnished that the Information re- ceived or belief entertained by the plaintiff was not sufficient to put him on inquiry as to the existence of such mortgage. The last part of this finding effectually disproves the fact previously found of the sufficiency of notice to put the plaintiff on Inquiry. The two facts are utterly Inconsistent with each other, and cannot possibly co-exist. PRIORITIES AND NOTICE. 89 The remarks of Parker, J., In Rogers v. Jones, 8 N. H. 264, 269, are directiy apposite to the facts found by the referee. Judge Parker says: "To say that he (demandant) was put upon Inquiry, and that having made all due investigation without obtaining any knowledge of title, he was still chargeable with notice of a deed, if one did really eicist, would be absurd." The sound sense of these observations is clearly shown by the princi- ple of the rule that information sufficient to put a party upon inquiry is equivalent to evi- dence of actual notice or to direct and posi- tive notice. That principle is that such infor- mation will, if followed by an inquiry pros- ecuted with due diligence, lead to a knowl- edge ot the fact with notice of which the party is sought to be charged. Hence, in all cases where the question of implied notice of a prior unrecorded mortgage or convey- ance arises as a question of fact to be deter- mined, the court must decide whether the in- formation possessed by the party would, If it had been followed up by proper examina- tion, have led to a discovery of such mort- gage or conveyance. If the determination is that such an examination would have result- ed in a discovery of the mortgage or convey- ance, the conclusion of law necessarily re- sults that the information possessed by the party amounted to implied notice of such in- strument. But if the determination is the converse of the one stated, the information of the party cannot be held to be an implied notice of the deed or mortgage. These prop- ositions will be found to be fully sustained by authority. (Kennedy v. Green, 3 Myhie & K. 699; 2 Sugd. Vend. 552 [Am. Ed. 1851] marg. p. 1052; 4 Kent, Comm. 172; Insur- ance Co. V. Halsey, 4 Sandf. 577, 578; Id., 8 N. T. 274, 275; 1 Story, Eq. Jur. §§ 398-400, 400a; Jackson v. Burgott, 10 Johns. 461; Dunham v. Dey, 15 Johns. 568, 569, in error; Jackson v. Given, 8 Johns. 137; Jolland v. Stainbridge, 3 Ves. 478; Pendleton v. Fay, 2 Paige, 205.) Where the information is suf- ficient to lead a party to a knowledge of a prior unrecorded conveyance, a neglect to make the necessary inquiry to acquir« such knowledge will not excuse him, but he will be chargeable with a linowledge of its existence; the rule being that a party in possession of certain information will be chargeable with a knowledge of all facts which an inquiry. suggested by such Information, prosecuted with due diligence, would have disclosed to him. (4 Sandf. 578; 3 Myhie & K. 699.) In this case the fact being found by the referee that the plaintiff, after pursuing an inquiry , to the extent of his information, failed to dis- T cover the existence of the defendant's mort- gage, it seems to me that neitlier law nor justice will justify us in holding the plaintiff chargeable with implied notice of such mort- gage. The doctrine of notice and its opera- tion in favor of a prior unrecorded deed or mortgage rests upon a question of fraud, and on the evidence necessary to infer it. (4 Kent, Comm. 172.) Actual notice affects the conscience, and convicts the junior purchaser , of a fraudulent intent to defeat the prior con- veyance. His knowledge of facts and cir- cumstances at the time of the second pur- chase sufficient to enable him, on due inquiry, to discover the existence of the prior convey- ance, is evidence from which a fraudulent in- tent may be inferred. (15 Johns. 5^; 2 Johns. Ch. 190; Jackson v. Burgott, 10 Johns. 462.) Now, if it is ascertained and found as a fact, that the facts and circumstances within the knowledge of the second purchas- er, at the time of his purchase, were Insuffi- cient to lead him, on a diligent examination, to a discovery of the prior conveyance, how upon this finding can a fraudulent intent be inferred, and if not, how can he be charged with notice which implies a fraudulent in- tent? It is not in the nature of things, that a knowledge of the same facts and circum- stances shall, at one and the same time, be held evidence of both innocence and guilt. I think the rule well established, that an in- ference of a fraudulent intent on the part of a junior purchaser or mortgagee must, in the absence of actual notice, be founded on clear and strong circumstances, and that such inference must be necessary and unques- tionable. (McMechan v. Grifflng, 3 Pick. 149, 154, 155; Hine v. Dodd, 2 Atk. 275; Jack- son V. Given, 8 Johns. 137; 2 Mass. 500; 2 Johns. Ch. 189; 15 Johns. 569; 8 Oow. 264, 266.) For the above reasons, both the judgment rendered on the report of the referee and the Judgment of the general term affirming the same, should be reversed, and a new trial should be granted. Judgment reversed. C^^ I (of .- l^i^ 90 PRIOEITIES AND NOTICE. THOMAS et al. v. BURNETT. (21 N. E. 352, 128 111. 37.) Supreme Court of Illinois. April 5, 1889. Error to circuit court, Randolph county; George "W. Wall, Judge. Charles W. Thomas, pro se, James A. Watts, for defendant in error. Shope, J. This was a bill filed by Martha J. Burnett against Charles W. Thomas and the sheriff of Kandolph county, to set aside a certificate of purchase held by Thomas up- on a 40-aere tract of land owned by the com- plainant, as a cloud on her title, and to en- join the sheriff from making a deed under such certificate. Both parties claimed title under James Burnett, a son of the complain- ant.- It is conceded that on the 29th day of March, 1882, Jamec Burnett was the owner of the tract of land in controversy, which was inclosed and in cultivation, but upon which there was no house. On that day the complainant, as it is shown, bought the land in good faith from her son for the sum of $1,600. No deed was made until in the month of April following, when James Bur- nett conveyed the land to complainant. No question arises in respect to the payment of the purchase money at the date of the pur- chase. The land had been fenced, and under cultivation for over 20 years. David C. Thompson had for some years acted as the agent of James Burnett, while he was owner, and had rented the land from year to year. The deed to complainant was not recorded until October 22, 1884, and the land stood on the assessment books in the name of James Burnett, until 1885. The complainant, after her purchase, retained Thompson as her agent in respect of this land, who, in August, 1882, rented the land as the complainant's to one Jordan for one year, who raised a crop thereon, and retained possession of the same until in August, 1883, when he surrendered possession to Thompson. In March, 1884, the agent rented the lands to Tagle. At each renting the agent informed the tenants that complainant was the owner of the premises, and that he was renting it for her. A crop was raised on the land each year aft- er 1882 by the tenants of complainant, and the fences were kept in repair by her agent, who collected the rent, and paid the same to her. On the 10th day of October, 1883, Margaret Gilfillen sued out an attachment against James Burnett in the Randolph cir- cuit court returnable to the March term thereof, then following, and this land was levied upon on that day as the property of James Burnett, and a certificate of levy duly filed. At the September term, 1884, of said court, said plaintiff in attachment recovered judgment for $2,500 against said Burnett. Special execution was issued thereon, under which, on October 22, 1884, the tract in con- troversy was sold to defendant Thomas, at- torney of the plaintiff in question, for $1,900, and the sheriff delivered to Thomas a certifi- cate of purchase, which is the certificate now sought to be set aside. Section 31 of the conveyance act declares that all deeds, etc., authorized by law to be recorded, "shall take effect and be in force from and after the time of filing the same for record, and not before, as to all creditors and subsequent purchasers without notice; and all such deeds and title papers shall be ad- judged void as to all such creditors and sub- sequent purchasers without notice, until the same shall be filed for record." An attach- ing creditor, who levies his attachment with- out notice of a prior unrecorded deed of his debtor, either actual or constructive, acquires a lien, which, if perfected by judgment, exe- cution, sale, and deed, will bold the legal estate as against the grantee in a prior unre- corded deed. Having acquired a lien as an innocent creditor without notice, he will have a right to enforce the same, notwithstanding he may have, subsequently to the levying of his attachment, received notice of the deed. Martin v. Dryden, 1 Gilman, 187; Stribling V. Ross, 16 111. 122; Jones v. Jones, Id. 117; Henderson v. Downing, 24 Miss. 106. Un- less, therefore, the plaintiff in attachment had notice, either actual or constructive, of the unrecorded deed from James Burnett to Mrs. Burnett, the lien thereby acquired must prevail over the rights of the complainant under that deed. The statute makes her deed void as against the attacliing creditor if a lien on the property was thereby secured in good faith, and without notice of her rights. Complainant's right to the relief sought de- pends, therefore, upon the fact whether the plaintiff in attachment, at the time of the levy of the writ, had notice of her rights. There is no pretense that she had actual notice of the unrecorded deed, but it is claimed that she had constructive notice, arising from the possession of the land by complainant. Com- plainant took possession after her purchase by her agent and tenants, as we have seen, long prior to the levy of the attachment, and which possession she has ever since retained. It is well settled that actual possession of land by a party under an unrecorded deed is constructive notice of the legal and equitable Jight of the party in possession. The posses- ^sion by tenant is the same in all respects as if by the party himself. Franz v. Orton, 75 111. 100; Whitaker v. Miller, 83 111. 381; Coari v. Olsen, 91 111. 273. It is claimed by plaintiff in error that possession, to have the effect of notice, must be of that character which will arrest attention, and the case ol Loughridge v. Bowland, 52 Miss. 546, is re- ferredtoassustainingthat positio n . In that case the grantor of the land at the time of the conveyance was in possession of the same by his tenant. After the sale the same tenant continued to hold possession under an agree- ment to pay rent to the grantees. There was then nothing more than a technical attorn- ment by the tenant to the purchaser. And the court held that the mere attornment of the tenant, without any visible change in the PRIORITIES AND NOTICE. 91 character of the holding, was not sufficient to put a creditor or subsequent purchaser on in- quiry. It is not necessary to the decision of this case to express any opinion in respect of the doctrine there announced, for the reason that after the complainant's purchase she, through her agent made a lease of the prop- erty to Jordan. This was in August, 1882, and for one year, and under it a crop was raised. The tenant was informed tliat his landlord was Mrs. Burnett, the compiainant. The agent, as before stated, Itept the place in repair as her agent, collected the rents, and paid them to her. Here were open, notorious acts of ownership asserted in an unequivocal manner by the complainant. Thompson, the agent, was not himself in possession of the property, but the tenants of complainant were, and it was their possession which constituted notice. It is, however, said that there was no tenant in actual possession at the time of the levy of the attachment, and therefore the plaintiff in error was not chargeable with p( notice of the unrecorded deefl. The tenant's I possession of land is that of his landlord. |3?he Jordans occupied the land up to August, f:1883, and this was notice to the world of Mrs. jjfBurnett's title, to all intents as if she had oc- cupied it. Actual residence is not essential to continuous possession. If the party is in actual possession of the land, and there are continuous acts of ownership, it is sufficient. Coleman v. Billings, 89 111. 183; Ford v. Marcall, 107 111. 136. The land here in con- troversy was improved, and under fence. In such case, the owner will not lose his posses- sion by failing to be continuously in the actual occupancy or use of the land by him- self or tenant. The fact that a short time may have elapsed between the actual occu- pancy by one tenant, before another tenant takes possession, will not be a loss of posses- sion by the owner. The improvements, the fact that a crop had been raised the previous season, will clearly indicate the possession, and will be sufficient to put others dealing with the property upon inquiry. The attach- ment here was levied October 10, 1883, a short time after the tenants had surrendered posses- sion, to Thompson, complainant's agent, who still continued to act as such agent in taking care of the property, and the plaintiff should have made inquiry before levying her writ of attachment. It is apparent this could have been done, either of the outgoing tenants or of the agent. Any reasonable, prudent man, contemplating a purchase of the prop- erty, would have made such inquiry; and it is clear that an inquiry of the Jordans or of Thompson would have led to notice of the claim of complainant, and of the existence ■ of the unrecorded deed. We think the cir-M cumstanees are such as to charge the attach- \\ ing creditor with notice of the deed from j\ James Burnett to the complainant. This be- / / ing so, the circuit court committed no error in granting the relief prayed, and its decree will be affirmed. 92 PRIORITIES AND NOTICE. PRINGLE V. DUNN et aL (37 "Wis. 449.) Supreme Court of Wisconsin. Jan. Term, 1875. Appeal from circuit court, Milwaukee coun- ty. Action by one Pringle against Andrew Dunn and wife and others to foreclose a mortgage given to the La Crosse & Mil- wauliee Railroad Company to secure a bond of said company for $5,000, payable Jan- uary 1, 1864, said mortgage bearing date April 11, 1854, and alleged to have been re- corded on such date, and afterwards assigned to plaintiff, as a bona fide purchaser for value. There was no record of the assign- ment. The court found that the witnesses to the mortgage did not subscribe it at the time of its execution, but after It had been recorded; that, after such subscription, it was not again recorded; that the plaintiff was the bona fide holder of the bond and mortgage; that the defendants other than Andrew Dunn and wife had no actual knowl- edge of the mortgage, and the recording of the mortgage before it was subscribed was not constructive notice; and dismissed the complaint. Plaintiff appeals. Modified. Mariner, Smith & Ordway, for appellant. Guy C. Prentiss, J. P. C. Cottrill, and John W. Gary, for respondents. COLE, J. Before approaching the legal questions involved in this case. It is neces- sary to determine a question of fact; and that Is, does the evidence show that the mortgage sought to be foreclosed was prop- erly attested when first left at the oflace of the register, so as to entitle it to record? There is considerable testimony in the case which tends strongly to prove that the mort- gage had no witnesses when it was record- ed. And the court found as a fact that the mortgage was not subscribed by the wit- nesses Baker and McFarlane at the time of Its execution, and before It was tran- scribed upon the records and entered in the general index, but was subscribed by these witnesses after It was recorded, and that it was not again recorded. This finding af- firms one important fact, which Is much contested by the defendants, which is the genuineness of the signature of the witness A. J. McFarlane to the Instrument. An at- tempt is made to prove, and it is argued that the evidence shows, that McFarlane never signed the mortgage as a witness, and that his signature thereto is a forgery. On this point we wUl only make the re- mark that we are satisfied from the evi- dence, and especially by an inspection of the writings themselves, of the authenticity of the signature. Whether the mortgage was subscribed by the witnesses at the time of its execution and before it was left at the ofiBce for registry Is a question of more doubt upon the evidence. The testimony is quite strong and positive that the mortgage had no subscribing witnesses when it was re- corded. But this testimony is contradicted; and, considering the circumstances attend- ing the execution and delivery of the mort- gage, we think the probabilities favor the inference that the instrument was witnessed '^ when it was left for record. According to this view, there was a mistake in transcrib- ing the mortgage upon the record by omit- ting the names of the witnesses. The weight of the evidence, to our minds, supports this inference or conclusion. It is to be observed that the mortgage is perfect and fair on its face, showing two witnesses. A strong pre- sumption fairly arises from the instrument itself that it was witnessed at the time of its execution. This presumption is not over- come nor repelled by the testimony offered to show that it was not witnessed at that time. In respect to the degree or quantity of evidence necessary to justify a finding that the subscribing witnesses signed the instrument after it was executed and re- corded, the case would seem to come within the rule laid down in Kercheval v. Doty, 31 Wis. 478, where it is said: "The prop- osition being to set aside or invalidate a written contract by evidence of a far less certain and reliable character than the writ- ing itself, the greatest clearness and certainty of proof should be required. It is like the cases where the object is to correct or re- form a deed or other instrument on the ground of mistake, or to set aside or rescind it on the same ground; where the rule is that the fact must be established by clear and satisfactory evidence." The testimony offered to show that the mortgage was not witnessed when executed and before it was recorded falls short of this rule. The fact is not established by clear and conclusive proof that it was not witnessed when ex- ecuted. It would serve no useful purpose to go Into a detailed discussion of the evi- dence upon this point, and we shall not do so. It is sufiicient to say that, giving to the testimony offered to show that the mort- gage was not witnessed before it was re- / ceived for record all the weight to which / it is entitled. It falls to establish that fact/ In a clear, satisfactory manner. Assuming, then, that the mortgage was witnessed when it was left at the oflBce of the register to be recorded, the further im- portant inquiry arises as to what effect must be given to the record as constructive no- tice to subsequent bona fide purchasers for value. This record was in this state. The entry of the mortgage was made in the gen- . eral index book, but the full record of the -7 Instrument had no subscribing witnesses; and therefore the question Is, would such a record operate as constructive notice to subsequent purchasers for value, independent of any actual notice? It Is claimed by the counsel for the plaintiff that the record does and should so operate, notwithstanding the t ii^ PRIORITIES AND NOTICE. mistake In the registration or recording of the instrument in extenso. This presents a question of no little difllculty, which must be solved by the application of general prin- ciples of law to the provisions of our stat- ute. It is a familiar mle that an instrument must be properly executed and acknowledged so as to entitle it to record, in order to make the registry thereof operate as con- structive notice to a subsequent purchaser. Says Mr. Justice Story: "The doctrine as to the registration of deeds being construc- tive notice to aU subsequent purchasers is not to be understood of all deeds and con- "veyances which may be de facto registered, 1)ut of such only as are authorized or re- ^luired by law to be registered, and are duly registered in compliance with law. If they are not authorized or required to be regis- tered, or the registry itself is not in com- pliance with the law, the act of registration is treated as a mere nuUityj and then the ■subsequent purchaser is afCected only by such actual notice as would amount to a fraud." 1 Eq. Jur. § 404. See, also Ely v. "Wilcox, 20 Wis. 528; Fallass v. Pierce, 30 Wis. 444; Lessee of Heister v. Fortner, 2 Bin. 40; Shove v. Larsen, 22 Wis. 142, and •cases cited on page 146. Under our statute, among other requisites, two witnesses are essential to a conveyance, to entitle it to record. The statute requires every register to keep a general index, each page of which shall be divided into eight columns, with heads to the respective columns as pre- -scribed; and the duty is imposed upon the register to make correct entries in said in- dex of every instrument received by him for record, imder the respective and appro- priate heads, and immediately to enter in the appropriate column, and in the order of time in which it was received, the day and hour of reception; and it is declared that the instrument "shall be considered as re- «orded at the time so noted." Rev. St. 1858, ■c. 13, §§ 142, 143. In Shove v. Larsen, supra, the effect of this index containing correct ■entries of matters required to be made there- in was considered, and it was held that by ^, force of the statute it operated as construc- tive notice to a subsequent purchaser. In that case the index contained an accurate •description of the land mortgaged, but in transcribing the mortgage at large upon the records a mistake was made in the descrip- •Uon; and it was claimed In behalf of the subsequent purchaser that it was the regis- tration of the instrument at large which alone amounted to constructive notice. But this construction of the statute was not adopted, the court holding that a subsequent purchaser was bomid to take notice of the entries in the index, which the law required the regis- ter to make. This result seemed to foUow necessarily from the language of the statute, ■which declared that the instrument should ■/U-ft Oil -/,•-/-(' ,, , / be considered as recorded at the time noted. Time might elapse before the instrument was transcribed at large on the record, or It might be lost, and not transcribed at all, leaving the Index the only record of its con- tents. And the manifest intention of the srtatute seemed to be to make the index no- tice of all proper entries from its date, and also of the instrument itself until it was registered In full. The further consequence would seem necessarily to result from this view of the statute that the registration of the conveyance in extenso relates back to the registration in the index, and from thence there is constructive notice of the contents of the instrument. The doctrine of Shove V. Larsen was approved in Hay v. Hill, 24 Wis. 235i but the court refused to make the entry In the index In that case operate as constructive notice, because upon its very face it bore conclusive evidence that it was not made at its date; in other words, the rectitude and Integrity of the index were successfully impeached by the index itself. See, also. Insurance Co. v. Scales, 27 Wis. 640. Where there Is nothing upon the face of tlie Index to impeach or throw suspicion upon Its accuracy, there it would afCect a subsequent purchaser with notice of those facts which the law required to appear there- in. Doubtless, a still further consequence fol- lows from this construction of the statute, namely, that where, by some mistake, there is a discrepancy between the proper index entries and the instrument as registered, , , there each supplies the defects of the other J/ in the constructive notice thereby given; that is, It appears to be the Intention of the stat- ute to charge the subsequent purchaser con- structively with such knowledge as the prop- er Index entries afford, as well as with notice of those facts derived from the regis- tration itself. He is presumed to have ex- amined the whole record, and Is affected with ~ notice of what It contains. But when the instrument, as registered In full, appears defective in some material and essential parts, which are not supplied by the index entries, what effect, then, must be given the record as constructive notice? This is real- ly the difficult question In this case. Prom the entries in the index It would not appear whether the mortgage was witnessed or not. The presumption from the mere entries them- \ selves would be that it was witnessed and I acknowledged, so as to entitle it to record; / but when the mortgage, as registered In full, was examined, it would be found that it had no witnesses, and had no business on the records. As the record itself is only constructive notice of its contents. It is dif- ficult to perceive how it can go beyond the facts appearing upon it, and charge a pur- chaser constructively with knowledge of a fact not In the record. One of the counsel for the defendants states the argument on this point as follows: He 94 PRIORITIES AND NOTICE. Insists and claims that the entries in the index hool^s, so far as they indicated that the mortgage had been filed for recordy in- dicated also that the mortgage was so ex- ecuted as to entitle these entries of it to be made; but that, when the full record was looked at for all the particulars of the mortgage, and perhaps for the express pur- pose of verifying the entries in the index, it is found that the apparent assertion by the index entries that the mortgage was properly executed was wholly untrue, and that the mortgage in fact was no incum- brance. The fact, as truly shown to exist by the full record, overcomes and destroys the false assertion as to the fact in the index. And, it appearing by the instrument ^ registered that it was not entitled to record, both the registration and index itself cease to affect the purchaser with constructive no- tice. It is not readily perceived wherein this ar- gument as to the effect of our various pro- visions upon the subject of registration is unsound. The question mainly depends up- on the construction of our own statutes. So far as we are aware, this is the first time the point has been presented in this court for adjudication. We have derived but little aid from the decisions in other states, for the reason that few of them have similar statutory provisions. We have been referred by the counsel for the plaintiff to two cases in Michigan,— Brown v. McCormick, 28 Mich. 215, and Starkweather v. Martin, Id. 472. In Brown v. McOormick the effect of the reg- istry, as notice to subsequent purchasers, was made to turn upon the curative act of 1861, mentioned in the opinion. In Stark- weather V. Martin the question was, how far the absence, on the registry of a deed, of any mark or device indicating a seal, or of any statement of the register that the orig- inal was sealed, affected the validity of the record entry as evidence of title. The rec- ord entry of the deed was made more than forty years before the cause was decided, by the proper officer, and in the appro- priate place for the registry of deeds, under the law permitting the registry of only seal- ed instruments; and the instrament was in the form of a warranty deed, purporting to be acknowledged and dated at a time when it was the common and lawful course to seal conveyances, and contrary to official duty to take the acknowledgment unless the conveyance was sealed, and where the con- clusion, attestation clause, and certificate of acknowledgment of the instrument all spoke of it as under seal. The court said that these facts and incidents, taken together, afforded a very strong presumption that the original was sealed. The doctrine of this case does not seem to have a very strong bearing upon the ques- tion under consideration. It may be said that it was contrary to the duty of the reg- ister to record the mortgage unless It was properly acknowledged and witnessed, and that a presumption arises that he would not have done so. But in answer to this it may also be said that the law made it the duty of the register to record the mortgage unless it was properly acknowledged and witness- ed, and that a presumption arises that he would not have done so. But in answer to this it may also be said that the law made it the duty of the register to record, or cause to be recorded correctly, all instruments au- thorized by law to be recorded. Section 140, c. 13, Rev. St. 1858. And the presumption that he performed his duty in recording the mortgage correctly is as strong as the pre- sumption that he would not have recorded it unless it was entitled to registry. la Shove v.-Larsen, a number of cases are referred to which hold that a mistake in re- cording a deed, or recording it out of Its order, renders the registration ineffectual as notice to subsequent incumbrancers and pur- chasers. The doctrine of those cases would seem to be applicable to the case before us. The registration and index entries being In- complete, because showing that the mort- gage had no subscribing witnesses, construc- tive notice could not be presumed of such a record; for the principle ."that the registry is notice of the tenor and effect of the Instru- ment recorded only as It appears upon that record" fully applies. Shepherd v. Burkhal- ter, 13 Ga. 443. See, In addition to the cases cited in Shove v. Larsen, Brown v. Kirkman, 1 Ohio St. 116; Stevens v. Hampton, 46 Mo. 404; Bishop v. Schneider, Id. 472; Terrell v. Andrew Co., 44 Mo. 309; Frost v. Beekman, 1 Johns. Ch. 288. The question, then, arises whether the evi- dence shows that any of the defendants were affected with actual notice of the mortgage. This question, we think, must be answered in the affirmative, so far as the defendants Thomas Maloy and Stanislaus Bartosz are concerned. In the deposition taken on his own behalf, but read as a part of the plaintiff's case, Thomas Maloy distinctly admits that he had heard, when he purchased his lots, that there was a defective railroad mortgage upon them, but that he did not look for It, because his abstract did not show it It is claimed by one of the counsel for the defendants that this related to the Aiken mortgage, and not to the one upon which this action is brought It seems to us, however, that this is a total- ly inadmissible construction of the testi- mony. He most certainly refers to, the mort- gage in suit. And what he had heard about there being a defective railroad mortgage upon the property was sufficient to put him upon inquiry. Parker v. Kane, 4 Wis. 1. "What Is sufficient to put a purchaser upon an inquiry is good notice; that is, where a man has sufficient information to lead him to a fact, he shall be deemed conusant of it." J\ ^ PRIORITIES AND NOTICE. 95 Sugd. Vend. (9th London Ed.) p. 335. "In re- gard to the inquiry required of a party, it should be such as a prudent and careful man would exercise in his own business of equal importance. Accordingly, where the mortga- gee is informed that there are charges afEect- ing the estate, and is cognizant of two only, he cannot claim to be a purchaser without notice of other charges, because he believes that the two, which satisfy the word "char- ges," are all the charges upon it. He is bound to inquire whether there are any oth- ers. The rule with respect to the consequen- ces of a purchaser abstaining from making inquiries does not depend exclusively upon a fraudulent motive. A man may abstain from mere heedlessness or stupidity, and be none the less responsible for the consequences; but, if he make reasonable inquiry, and is deterred by a false answer, he is excusable, if it be of a character to delude a prudent man." 1 Story, Eq. Jur. § 400b; Jackson v. Van Valkenburgh, 8 Cow. 260. Independent- ly of the record, Maloy had notice of the ex- istence of the mortgage, or had a knowledge of such facts as to call for further inquiry. He cannot, therefore, be protected as an in- nocent purchaser for value. The defendant Bartosz must be charged with notice of the mortgage by the recitals in the deed from Tenney and wife to his im- mediate grantor. He was present when that deed was executed and delivered to his uncle, He testifies that he did not know whether anything was said about the railroad mort- gage at that time or not; that he did not un- derstand English very well. The purchase was really made by his uncle for him. And, whether he fully understood the conversa- tion at the time about Incumbrances, he must be chargeable with notice of what aj)- pears in his chain of title. This clause was in the deed to his uncle; "Said premises are free and clear from all incumbrances except a mortgage to the La Crosse Railroad Co., which I am to save said Bartosz harmless from." The general rule upon this subject is "that, where a purchaser cannot make out a title but by a deed which leads him to an- other fact, he will be presumed to have knowledge of that fact." The following au- thorities are very clear and decisive upon that point: Pitzhugh v. Barnard, 12 Mich. 105; Case v. Erwin, 18 Mich. 434; Baker v. Mather, 25 Mich. 51; Insurance Co. v. Hal- sey, 8 N. Y. 271; Frost v. Beekman, 1 Johns. Ch. 298; Gibert v. Peteler, 38 N. Y. 165; Acer V. Westcott, 46 N. Y. 384; Coles v. Sims, 5 De Gex, M. & G. 1. The clause in the deed referred to the mortgage as an existing in- cumbrance, and he cannot now, in good faith, claim that it is not a lien upon his property. The counsel for the plaintiff claims that the defendant McLindon had actual knowl- edge of the existence of the mortgage. It Is true, he testified that when he purchased he knew by report that there was a railroad mortgage upon the property, but he says 4 f that the report stated that the mortgage was void. Were he not protected by another prin- cipal, he could not certainly be regarded as a bona fide purchaser. But he purchased from S. S. Johnson, or claims through Johnson, in whom the title stood free from any taint. For the rule is well settled that a purchaser ^ affected with notice may protect himself by ■* purchasing of another who is a bona flde purchaser for a valuable consideration. For a similar reason, if a person who has notice . sells to another who has no notice, and is a bona flde purchaser for a valuable considera- tion, the latter may protect his title, al- though it was affected with the equity aris- ing from notice in the hands of the person from whom he derived it. Mr. Justice Story says this doctrine, in both of its branches, has been settled for nearly a century and a half in England. 1 Eq. Jur. § 410. He states an exception to the rule, which was recog- nized and enforced in Ely v. Wilcox, 26 Wis. 91, where the estate became revested in the original fraudulent grantee, when the orig- inal equity was held to reattach to it. There is no pretense that McLindon comes within the exception; and, as a bona flde purchase of an estate for a valuable consideration purges away the equity from the estate lA / the hands of all persons who derive title"^ under it, he is protected. It is said that it does not appear that Johnson's title was de- rived from the common source. As we un- derstand the bill of exceptions, an abstract was offered in evidence to show title from Bunn, by various intermediate conveyances, to the defendant, which was ruled out on the plaintiff's objection. But perhaps it is a better answer to the objection to say that the plaintiff has made the defendants parties under the general allegation that they claim some interest in or title to the mortgaged premises, which was subject to the mort- gage. This allegation implies that this in- terest was not adverse, but was derived from Dunn, though subsequent in date, and inferior in right, to the plaintiff's mortgage. It was further insisted that the evidence showed that the defendant Mary Maloy had actual notice of the mortgage. We do not think this position is sustained by the tes- timony. It is attempted to charge her with the same actual knowledge her husband had, because he aided her when she made her pur- chase of Martin Maloy. It does not appear that anything was said at this time about the rail- road mortgage, or that she ever had any notice of it. It does not appear, even, that he was acting as her agent in any legal sense; and, besides, if he were, his knowledge, acquired at another time, when not engaged in her business, ought not to be imputed to her. Notice, to bind the principal, should be brought home to the agent while engaged in the business or negotiation of the prin- cipal, and when it would be a breach of trust in the former not to communicate the knowl- edge to the latter. 1 Story, Eq. Jur. § 408, 96 PRIORITIES AND NOTICE. and cases cited in note 1. The evidence falls to bring her within that rule. A number of other questions were discuss- ed upon the argument; but we believe these observations dispose of all the more impor- tant ones. The judgment of the circuit court as to the defendants Thomas Maloy and Stanislaus Bartosz must be reversed, and the cause re- manded for further proceedings in accord- ance with this decision. It is so ordered. r PRIORITIES AND NOTICE. 97 DBASON et al. v. TAYLOR. (53 Miss. 697.) Supreme Court of Mississippi. Oct., 1876. Appeal from chancery court, Lincoln coun- ty; Thomas Y. Berry, Chancellor. Bill in equity by Bentonville Taylor against J. B. Deason, M. W. Hoskins, and G. W. Hoskins, her husband, Ellen McClen- don and A. D. McClendon, her husband, to recover the balance of the purchase money of certain land, and to subject land to the payment of th,e same. The bill showed that on February 16, 1872, the complainant sold and conveyed the land in question to J. B. Deason; the deed, which ,, was duly recorded on February 19, 1872, re- citing a consideration of "the sum of $700, to be paid to the party of the first part on or before the first day of July, 1872, by the ,^j)arty of the second part." For the purchase money Deason gave his note, of even date with the deed, as follows: "On or before the first day of July next, I promise to pay Bentonville Taylor, or bearer, the sum of $700, for town lots conveyed by him to me — ^ ttis day.Xl^his sum is to be paid in Missis- sippi state certificates of indebtedness at par." After maturity of the note, Deason sold and conveyed the lots to the defendant M. W. Hoskins, and the latter and her hus- band sold and conveyed the same to the defendant Ellen McClendon. When Deason sold and conveyed the lots to the defendant Hoskins, he informed her agent that be had paid Taylor aU the purchase money. The defendants demurred to the bill, on the ground that the complainant had no vendor's lien. It appearing on the face of the bill that the consideration for the sale of the lands was not money or United States currency; and because the recital in the deed was not notice to the defendants Hos- kins and McClendon of the complainant's equity. The demurrer was overruled, and an an- swer filed, and upon final hearing a decree was rendered for the complainant for the balance of the purchase money due him, and foreclosing his vendor's lien on the land. The defendants appeal. Ses^onB & Cassedy, for appellants. Chris- man & Thompson, for appellee. Bentonville Taylor, pro se. CHALMERS, J. We are content with the finding of the chancellor on the facts. If any injustice was done In fixing the amount "^^ due, it was to the appellee, and not to the appellants. The fact that the note was dis- chargeable in Mississippi certificates of In- debtedness (known as Alcorn money) did not deprive it of the protection of the vendor's "^ equitable lien. Harvey v. Kelly, 41 Miss. 490. In the face of the deed which Taylor exe- H.& B.EQ.(2d Ed.)— 7 cuted to Deason was this recital: "The par- ty of the first part (the vendor), for and in consideration of the sum of $700, to be paid on or before the first day of July, 1872, by the party of the second part" (the vendee), &c. For this sum of $700, Deason, the ven- dee, executed his note to Taylor, due 1st of July, 1872. The deed was recorded at once, and Deason took possession of the premises. Without having completed payment In full of the note, Deason sold the premises in 1874 to Hoskins, who subsequently sold to Mrs. McClendon. Both Hoskins and Mrs. McClendon deny actual knowledge, at and before their purchases, that any thing re- mained due to Taylor. Did the law give them constructive notice of Taylor's rights? Nothing is better set- tled than that the purchaser of real estate is bound to take notice of all recitals In the chain of title through which his own title is derived. Not only is he bound by every- thing stated In the several conveyances con- stituting that chain, but he Is bound fully to investigate and explore everything to which his attention is thereby directed. Where, therefore, he is Informed by any of the preceding conveyances, upon which his ovm deed rests, that the land has been sold on a credit, he is bound to inform himself as to whether the purchase money has been paid since the execution of the deed. Wise- man V. Hutchinson, 20 Ind. 40; Croskey v. Chapman, 26 Ind. 333; Johnston v. Gwath- mey, 4 LItt. (Ky.) 317. It is argued, however, that this principle only applies before the maturity of the notes, as shown by the recitals of the deed, and that it will not apply where, as in the case at bar, subsequent purchasers have bought after the notes were past due. It Is said that, in such case, the subsequent purchas- ers may rely upon a presumption that the original debt has been paid. We know of no principle which would justify a reliance upon such a presumption, and it Is expressly negatived by the cases of Honore v. Bake- well, 6 B. Mon. 67, and Thornton v. Knox, Id. 74. They may rely upon such presump- tion after sufficient time has elapsed to bar the notes, although, in fact, they may have been renewed. Avent v. McCorkle, 45 Miss. 221. It appears in the case at bar that the sub- sequent purchasers knew that Deason had bought the realty on a credit, because they asked him at the time of their purchase if he had paid all the money due Taylor. It was their own folly if they relied upon his assurances, instead of applying for informa- tion to Taylor, who lived In an adjoining county, and is shown by the bill to be a practising lawyer, well known in Brook- haven, where the lots were situated and all the defendants resided. Decree affirmed. / 98 LIS PENDENS. HOUSTON y. TIMMERMAN.i (21 Pac. 1037, 1/f Or. 499.) Supreme Court of Oregon. May 3, 1889. Appeal from circuit court, Linn county. Hewitt & Bryant and Tilman Ford, for appellant. /. K. Weatherford and D. S, jBT. Blackburn, for respondent. LORD, J. This was a suit to partition cer- tain lands described herein. The defendant denied that the respondent had any interest in said lands, and alleged that she was Wie \ owner in tee-siinple, and entitled to the pos- session of the whole of said premises. The plaintiff, in reply, denied this, and alleged affirmatively that some time in July, 1884, she commenced a suit against A. J. Houston for a divorce and alimony, and for an equal undivided one-third of the real property then owned by said Houston, and that he was the owner in fee of said real property, which was duly described therein. That the sum- mons in said divorce suit was served on , 1884, and that prior to that time and prior to the 26th day of September, 1884, the defendant Timmerman had notice that the complaint for divorce and one-third of said real property had been filed by the plaintiff against her husband. That on the 5th day of February, 1886, a decree was entered, granting a divorce in favor of the plaintiff, and adjudging her to be the owner of the un- divided one-third of said real property, etc. The court below, after a trial of said cause, rendered a decree therein, granting the prayer of plaintiff for partition, except as to the 160 acres of land mentioned therein, and partition was ordered and made on June 26, 1888, and confirmed by the court. The de- fendant Timmerman derived her title to the premises in dispute in this wise: On the 15th day of March, 1880, the plaintiff's hus- band, A. J. Houston, for value, made and delivered his promissory note to the defend- ant Timmerman for the sura of $3,400, with interest at the rate of 10 per eent. per an- num from date; that, the said A. J. Hous- ton failing to pay said note, the defendant Timmerman commenced suit on the 26th day of September, 1884, and caused service of summons to be made upon him on that day, and that on October 27, 1884, the de- fendant Timmerman recovered judgment against the said A. J. Houston for the sum of $5,463.87, which, on the same day, was duly docketed in the judgment lien docket, and thereupon became a lien upon all the real propeity mentioned in tlie complaint in this suit. It further appears that on March 19, 1883, said A. J. Houston made and de- livered his promissory note to J. T. Williams for $1,000, with interest from date at the rate of 10 per cent, per annum, payable six months after date, and to secure the pay- ment of the same executed a mortgage, which was duly recorded, upon the 160 acres of land set out in tlie complaint. The said Houston ' Upon the subject oJ lis pendens generally, e note to Newman v. Chapman, 14 Am. Deo. 774-779. failing to pay said note, the mortgage was foreclosed against the said Houston and the plaintiff herein. The defendant Timmer- man, however, answered, setting up her judgment, and asked, if the property be sold to foreclose said mortgage, that the over- plus, if any, should be applied in payment of her judgment, and a decree was accordingly so entered, etc.; that execution was issued upon said decree, and said 160 acres was sold to the defendant Timmerman for $2,500; that thereafter, on May 13, 1885, execution was issued upon said judgment, and the re- mainder of the premises described herein was sold to the defendant Timmerman, and said sale confirmed, and deeds were duly ex- ecuted by the sheriff to said defendant. It will be noticed that the suit of the de- fendant Timmerman to recover the amount due on the note against A. J. Houston, who was then the husband of the plaintiff herein, was commenced after the suit of the plaintitf for divorce against her husband, and that a judgment was recovered and docketed before a decree in the divorce suit was ren- dered, and in which one-third of the real es- tate then owned by the husband was decreed the plaintiff. It is true, there was no direct proof of the date of the service of the sum- mons in the divorce suit; but, as this will not affect the result reached, it is immaterial. The contention is that the defendant Tim- 1 merman was a purchaser pendente lite. * There is, however, a preliminary question to be first disposed of, namely, that the appeal was not taken within six months as allowed by law. The answer to this is that the ob- jection relates to the interlocutory or first de- cree, and not to the final decree, and that, as our own Code does not authorize an appeal from interlocutory judgments or decrees, but only from such as are final, and, the appeal from the final decree being within six months, there was a right of appeal, and the objection, therefore, is unavailing. An examination of the statutes of the two states from which the authorities were read, to tlie effect that an appeal might be taken before a final judgment or decree was entered shows that appeals in those states may be taken from interlocutory judgments or de- crees, which, not being the case under our Code, they fail on application. See Freem. Co-tenancy, §^ 519, 527. But to return. Among the ordinances or rules adopted by Lord Chancellor Bacon "for the better and more regular administration of justice" was one which provided that, where a person "comes in pendente lite, and while the suit is in full prosecution, and without any color of allowance, or privity of the court there regularly, the decree bindeth." Chancellor Kent said that a "lis pendens duly prose- cuted and not conclusive is notice to a pur- chaser so as to affect and bind his interest by the decree. " Strictly speaking, however, the doctrine of lis pendens is not founded upon notice, but upon reasons of public policy, founded upon necessity. "It affects him," said Lord Chancellor Ceanworth, "not be- LIS PEMDENS. 99 cause it amounts to notice, but because the law does not allow litigant parties to give to others, pending the litigation, rights to the property in dispute, so as to prejudice the opposite party." * * * The necessities of mankind require that the decision of the court shall be binding, not only on the liti gant parties, but also on those who derive title under them by alienation made pending tlie suit, whether such alienees had or had not notice pending proceedings. If this were not so, there could be no certainty that litigation would ever come to an end." Bel- lamy V. Sabine, 1 De Gex & J. 566. The main purpose of the rule is to keep the sub- ject-matter of the litigation within the power of the court until the judgment or decree shall be entered; otherwise, by successive alienations, its judgment or decree could be rendered abortive, and thus make it impossi- ble for the court to execute its judgments or decree. Hence the general proposition that one who purchases of either party to the suit the subject-matter of the litiga.tion, after tlie court has acquired jurisdiction, is bound by the judgment or decree, whether hepuf chased for a valuable consideration or not, aud with- out any express or implied notice in point of fact, is sustained by many authorities, and disputed by none. Eyster v. Gaff, 91 U. S. 521; Grant v. Bennett, 96 111. 513; Randall v. Lower, 98 Ind. 261; Daniels v. Henderson, 49 Gal. 242; Blanehard v.Ware, 43 Iowa, 530; Oarr v. Lewis, 15 Mo. App. 551; Gurrie v. Powler, 5 J. J. Marsh. 145; Hiern v. Mill, 13 Ves. 120; 1 Story, Eq. Jur. § 405. The doctrine of lis pendens was introduced in analogy to the rule at common law in a real action "where if the defendant aliens after pendency of the writ, the judgment in the action will overreach such alienation." Sor- rell V. Carpenter, 2 P. Wms. 482. And this may account for the leaning in some of the courts to restrict the application of the rule of lis pendens to actions or suits affecting title to real property. McLaurine v. Mon- roe, 30 Mo. 469; Winston v. Westfeldt, 22 Ala. 760; Baldwin v. Love, 2 J. J. Marsh. 489; Murray v. Lylburn, 2 Johns. Ch. 441. But it is hardly considered well settled that it may not with equal propriety be applied to the sales of chattels. Two things, however, seem indispensable to give it effect: (1) That the litigation must be about some specific thing, which must necessarily be affected by the termination of the suit; and (2) that the >, particular property involved in the suit t "must be so pointed out by the proceeding as , to warn the whole world that they intermed- / die at their peril." Preem. Judgm. §§ 196, ? 197. Now, the divorce suit of the plain- ' tiff was not brought specifically to recover the one-third of the real estate of her hus- band,, as was decreed in the divorce proceed- i ing. Theland was not the subject-matter of \ the litigation, and the subject of the suit was I not to recover title that belonged to the ; plaintiff. It was incidental and collateral to ■ the divorce proceeding. The court has no jurisdiction to affect the title of the husband to his lands, or decree that one-third of them shall be set apart for her in her own right and title, independent of a decree for divorce. Nor has the plaintiff any title on which to base a suit to recover any portion of the same, except as it comes by force of the statute upon a decree for divorce. A proceeding in divorce is partly in personam and partly in rem, and, in so far as it is to affect the mar- riage Hiatus, it is to change a thing independent of the parties, and is a proceed- ing not against the parties in personam, but against their status in rem. 5 Amer. & Eng. Cyclop. Law, "Divorce," 751. The matter upon which the jurisdiction acts is the sia- tiis. The marriage is the thing which the suit is brought to dissolve. It is the subject of the litigation; but, as incidental to it, the court may grant temporary dWraony pendente lite, or permanent alimony, when a decree for divorce is rendered. And the general rule is that bills for alimony do not bind the property of tho defendant with Us pendens. iStDry, Eq. Jur. §196; Brightman v. Bright- man, 1 R. I. 112; Isler v. Brown, 66 N. 0. 556; Almond v. Almond, 4 Rand. (Va.) 662. But the court cannot affect the title of the real property of the defendant in a divorce proceeding until the point is reached that a decree of divorce is to be rendered. Tempo- rary alimony may be granted pendente lite, but the title of the real estate of the defend- ant remains intact, and cannot be affected during the pendency of the proceeding, but only when the proceeding for a divorce has terminated, and a decree rendered that the marriage is dissolved, and then only by force of the statute. Our statute provides: "Whenever a mar- riage shall be declared void or dissolved the party at whose prayer such decree shall be made shall in all cases be entitled to the un- divided one-third part in his or her undivided right in fee of the whole of the real estate owned by the other at the time of such decree; and it * * * shall be the duty of the court to enter a decree in accordance with this provision." Code Or. § 499. It is " whenever a marriage shall be declared dissolved" that the statute oper- ] ates, not before, or pendente lite; and they court then becomes authorized, and it is its "duty, " "to enter a decree" for the undivided one-third part in fee of the whole of the real estate "owned by the defendant at the time of such decree" for a divorce. It must be manifest, then, that the primary object of the suit is to affect the marriage relation, — its status; that it is the specific matter in con- troversy to be affected; and that it is only when the status is changed by a decree of di- vorce that the statute operates to divest title "owned" by the defendants, and that it then becomes the duty of the court to enter a de- cree in accordance with its provisions. Nor do the cases cited by counsel sustain his con- tention. In Tolerton v. Williard, 30 Ohio St. 586, the suit was of "double aspect," as said i) 100 LIS PENDENS. by the court, and was brought to protect her equitable right in property which was the subject of dispute. This property was bought with the wife's money, and she sought a res- toration of her riglits. The court says: "It is evident that the court in coming to its con- clusion did take tliese equities into consider- ation, so that the decree may fairly be con- sidered an equitable one in her favor." And again: "In a proceeding like the one under consideration where the wife claims rights in her husband's property other than those aris- ing from the maritnl relation, and insists up- on them in connection with her claim for ali- mony, the court is fully authorized to pass upon them." In Daniel v. Hodges, 87 N. C. 97, the proceeding was for alimony, and the only property which the husband owned was a lot that the wife sought to have sub- jected to her claim, and was in actual pos- session of it by order of the court when her husband, pending the litigation, conveyed it to another, and the court held, under the ex- ceptional circumstances of the case, that the doctrine of lis pendens applied. There the proceeding was to subject the specific thing to her claim, which the husband attempted to defeat by conveying away the property, and the court, while admitting the general doctrine that a Us pendens was not applicable in such cases, said: "We are of the opinion the petition for alimony under the particular circumstances of the case constituted such a Us pendens as affected the purchaser with notice, independent of the actual notice had, and rendered the deeds void." But this has no relevancy to the case at bar. There she sought to subject the property to her claim for alimony, and the suit was directed specif- ically against it, and she was put in actual possession by order of the court, and then it was only "under the peculiar circumstances of the case" that the court thought the purchaser from the husband pending the liti- gation was affected with the rule of Us pen- dens. Here there was no alienation of the property, which was only incidentally in- volved, or any cliarge of any act on the part of the defendant Houston to defeat any right whatever which might accrue to the plaintiff, if the marriage should be dissolved. If the defendant Houston had conveyed away the property to another with the object of defeat- ing her right, upon a decree for divorce, to any interest in his lands, such purchaser may be affected with the rule of lis pendens in such case ; but that is not the question here, and which it wiU be time enough to decide when properly presented for our considera- tion. The debt which the defendant Hous- ton owed the defendant Timmerman was contracted long before the suit for divorce was commenced, or the cause or ground of the divorce existed, and doubtless the credit was given on the faith of the property, a part of which included the property in dispute, then owned by Houston. There is no pre- tense of any fraud or collusion, or that the debt is not an honest obligation which Hous- ton ought to have paid long before the di- vorce proceeding was instituted. Although the commencement of the divorce suit might result in a decree which would affect the property of the defendant, the property was not the subject specifically of the litiga- tion, and by reason thereof was not with- drawn from such burdens as might be legally imposed upon it for just claims upon judg- ments recovered and docketed against its owner, prior to divesting him of his title by force of the statute under the decree. The defendant Timmerman had the legal right to commence her action to recover the money due on the note of Houston, and the fact that the wife of Houston had instituted proceed- ings for a divorce did not aSect that right, but when judgment was recovered thereon, and docketed, by force of law, the lands then owned by him in that county, including tlie land in dispute, became subject to the lien of such judgment; and, as the facts show that this was before any decree was rendered in the divorce whereby title to such lands could be divested, it follows that whoever took title from him subsequently, either by contract or by operation of law, took said title cmto onei-e, or subject to the lien of such judgment. It results, as a purchaser of said lands at an ex- ecution sale upon such judgment, the defend- ant Timmerman was not affected by or sub- ject to the rule of Us pendens, and her deed thereby rendered invalid. It is true, in the divorce suit the property was described in the complaint and decree, which, since the decision in Bamford v. Bamtord, 4 Or. 30, has been deemed essential to reach the prop- erty of the guilty party, but it is apprehended that neither allegation or proof concerning the lands is necessary, but that it is enough and a suflBcient compliance with the latter clause of section 499, Code Or., to say in ef- fect that the party obtaining the divorce is hereby entitled to one-third of the real prop- erty owned by the other, whatever it may be. In this view, if any question arises as to what property was so owned by him, it can be determined by appropriate proceedings for that purpose between the parties interested, much better than in a divorce suit, in which it is neither proper nor convenient that third parties, in order to protect their rights, should be compelled to intervene and become parties to a controversy between husband and wife in a divorce proceeding. Barrett v. Failing, 6 Sawy. 475, 3 Fed. Rep. 471. So that, how- ever we look at the facts of this record, our conclusion is that the decree of the lower court must be reversed, and it is so ordered. '. ' EQUITABLE ESTOPPEL. "^ \i01 HORN V. COLE et al. (51 N. H. 287.) Supreme Judicial Court of New Hampshire. July Term, 1868. Trover by one Horn against one Cole and another. There was verdict for defendants. On motion to set aside the verdict Judg- ment on the verdict. It appeared on trial that the plaintiff was contemplating to remove West; that his son, Charles B. Horn, had removed before, and was residing at Jefferson, Illinois. The plain- tiff packed a box of goods and delivered them to the freight agent at East Milan, directed to Charles E. Horn, Jefferson, Illi- nois, and ordered them to be forwarded by freight on the railroad. The box started from Milan In the freight cars on the 29th of August, 1864. The defendant Cole, having a note against Charles E. Horn, instituted a^suit on It, and had the box and contents attached on the writ at Northumberland on the same 29th of August; and the defendant Green is the officer who made the attachment. The plain- tiff brought this suit on the 31st of the same August. On the 3d of September he pro- cured a receipter for the goods, and had them forwarded according to the original direction. The suit of Cole against Charles E. Horn was settled by payment of debt and costs. The plaintiff, on his arrival at Jef- ferson, found the box and contents there In good condition. The plaintiff claimed dam- ages for the detention of the goods, and for consequential damages. The plaintiff testi- fied that the goods all belonged to him when they were delivered to the railroad, and when they were attached. The defendant Cole tes- tified that the plaintiff, when carrying the box to the depot, passed by Cole's shop, and that he said to the plaintiff, "Are you going to leave us, Horn?" that Horn replied, "No; but Charles had some things at my house, and I took them, and put a few of my things with them into the box, and am sending them to Charles;" that the plaintiff then procured Cole to mark the box, as before stated. The evidence tended to show that the plaintiff made similar statements to others, before and after, as to the ownership of Charles B. Horn. There was no evidence that the plain- tiff knew Cole had any demand against Charles B. Horn. The defendant Cole also testifies that, relying on this representation to him that the goods belonged to Charles E. Horn, he had procured his writ and caus. ed the property to be attached as belong- ing to Charles E. Horn. The plaintiff was not Indebted to Cole, but there was evidence that he was Indebted to others. Mr. Fletcher, for plaintiff. Mr. Ray, for defendants. PERLEY, C. J. There Is no complaint that the rulings and instructions of the court on the trial were err\)nebiiis or' improper, pro- vided the evidence wayraiit«Ltlief J?try In re- turning a verdict for ttife4efenjdldiifii''and the' verdict must stand, if the efWetiee was com- petent to prove such representations by the plaintiff as would estop him to set up his title to the goods attached to the property of Charles E. Horn. The evidence reported in the case was com- petent to prove that the plaintiff made the representations on the occasion and in the circumstances testified to by Cole; that the plaintiff, though not Indebted to Cole, was in debt to others; that Cole, believing the representations to be true, and relying on them as true, caused the goods to be at- tached as the property of Charles B. Horn; and, also, that the plaintiff made these rep- resentations knowing them to be false, with the intention that all persons who were in- terested in the subject should take them to be true, and act on them as such, and with the intention to mislead and deceive all to whom the representations were communi- cated, and induce them to act on them as true; that his intention was to deceive his own creditors, and prevent them from taking the goods as his for the debts which he owed to them. These facts must be taken to have been established by the verdict. But, as there was no evidence that the plaintiff knew Cole had any demand against Charles E. Horn, we cannot infer that the plaintiff had Cole in his mind as an individ- ual whom he meant to deceive by his false representations, or that he had an intent to prevent Cole from taking the goods for a debt which he owed to Cole, as he owed no such debt; and, on the evidence reported, the jury were not at liberty to find that the plaintiff had Cole In his mind as an individ- ual whom he meant to deceive and defraud by inducing him to take the goods for his demand against Charles B. Horn. This rais- es the point, which the counsel for the plain- tiff takes, whether, to estop a party from showing that his representations were false, it is necessary that the false representations should have been intended to deceive and de- fraud the individual party who trusted to them and acted on them, provided there was a general intention to deceive and defraud all persons who were interested in the subject- matter of the false representations. The ground on which a party is precluded from proving- that his representations on which another has acted were false is, that to permit it would be contrary to equity and good conscience. This has been sometimes called an "equitable estoppel," because the jurisdiction of enforcing this equity belong- ed originally and peculiarly to courts of equi- ty, and does not appear to have been fa- miliarly exercised at law until within a com- paratively recent date; and, so far as relates to suits at law affecting the title to land, I understand that in England and in some of the United States the jurisdiction is still 102 EQUITABLE ESTOPPEL. confined to courts of equity. Storrs v. Bar- ker, 6 Johns. Oh. 166, 168; Evans v. Bicknell, 6 Ves. 174, 178; Plckard v. Sears, 6 Adol. & E. 469. The doctrine, however, is a very old head of equity, and is recognized and applied in a great number of the early cases. Dyer v. Dyer, 2 Ch. Gas. 108; Teasdale v. Teasdale, 13 Vin. Abr. 539; Hobbs v. Norton, 1 Vern. 136; Gale v. Lindo, Id. 475; Huns- den V. Gheyney, 2 Vern. 150; Lainlee v. Hanman, Id. 499; Raw v. Pote, Id. 239; Blanchet v. Foster, 2 Ves. Sr. 264; East In- dia Co. V. Vincent, 2 Atk. 83; Stiles v. Gow- per, 3 Atk. 693; Webber v. Farmer, 13 Vin. Abr. 525; 2 Brown, Pari. Gas. 88; 2 Eq. Gas. Abr. 481; Neville v. Wilkinson, 1 Brown, Ch. 543; Storrs v. Barker, 6 Johns. Ch. 166; Strong v. Ellsworth, 2G Vt 366. Many of these cases related to underhand agreements in fraud of marriage settlements; but the principle is of general application. 1 E'onbl. Eq. 267, note x. Relief was given according to the circumstances of the case, — sometimes by enjoining suits at law. In which the legal title was set up, and some- times by decreeing conveyances and the can- celling of deeds and other instruments; but in all these cases relief was given in equity contrary to the strict legal rights of the de- fendants. Thus, in the case of an equitable estoppel, a party Is not allowed to assert his strict le- gal right because, in the circumstances of the individual case, it would be contrary to equity and good conscience. Take the pres- ent case for an illustration. In trover, fol- lowing the legal definition of the action, if the plaintiff proves property in himself and a conversion by the defendant, he has main- tained his action, and is entitled to a ver- dict and judgment. It is conceded that the plaintiff owned the goods, and that the de- fendants converted them. The defense here set up appeals from the strict rule at law to the equitable doctrine that a party shall not be allowed to exercise his legal right of proving the facts, if, on account of his pre- vious declarations or conduct, it would be contrary to equity and good conscience. So in a writ of entry; by the technical rules at law, if the demandant proves seisin in himself and a disseisin by the tenant within the time of limitation, he is entitled to judg- ment; but if the demandant, having a dor- mant title to the land demanded, concealed his title, and encouraged the tenant to pur- chase from another, he is not allowed, in our practice, to set up his legal title, because it would be contrary to equity and good con- science. It thus appears that what has been called an "equitable estoppel," and sometimes, with less propriety, an "estoppel in pais," is prop- erly and peculiarly a doctrine of equity, orig- inally introduced there to prevent a party from taking a dishonest and unconscientious advantage of his strict legal rights,— though now with us, like many other doctrines of equity, habitually administered at law. But formerly the practice was different, and suits at law, the courts being incapable of giving effect to this equity, were often enjoined where the party insisted on his rights at law contrary to the equitable doctrine, as in Raw V. Pote, Stiles v. Cowper, and Webber V. Parmer, qua supra. It would have a tendency to mislead us In the present inquiry, as there is reason to sus- pect that it has sometimes misled others, if we should confound this doctrine of equi- ty with the legal estoppel by matter in pais. The equitable estoppel and legal estoppel agree Indeed in this, that they both preclude from showing the truth in the individual case. The grounds, however, on which they do it are not only different, but directly op- posite. The legal estoppel shuts out the truth, and also thQ equity and justice of the individual case on account of the suppos- ed paramount importance of rigorously en- forcing a certain and unvarying maxim of the law. For reasons of general policy, a record is held to import incontrovertible verity, and for the same reason a party is not permitted to contradict his solemn ad- mission by deed. And the same is equally true of legal estoppels by matter in pais. Certain acts done out of court and without deed were, by a technical and unyielding rule of law, upheld on like grounds of public pol- icy, and followed always by certain legal consequences. The legal effect of such acts was not permitted to be controverted by proof. Thus, if one accepts a lease and enters under it, he is estopped to claim any other estate in the land during the term; he can- not show that he owned the land when the lease was made. Estoppels by matter m pais were few in number, and all of this general and well defined character; and they all enforced some technical rule of the law against the truth, and also against the justice and equity of the individual case. Coke, in his examination of the different kinds of estoppel by matter in pais, enumer- ates the following: "By livery, by entry, by acceptance of rent, by partition, and by ac- ceptance of an estate." Go. Litt. 352a. In Lyon V. Reed, 13 Mees. & W. 309, Parke, B., speaking of legal estoppels by matter in pals, says: "They are but few, and are point- ed out by Lord Coke, Go. Litt. 352a. They are all cases which anciently really were, and in contemplation of law have always continued to be, acts of notoriety no less sol- emn than the execution of a deed, such as livery, acceptance of an estate, and the like. Whether a party had or had not concurred in an act of this sort was deemed a matter which there could be no difficulty in ascer- taining, and then the legal consequences fol- low." In the authorities which contain the most complete enumeration of the different kinds of legal estoppels and the fullest discussion of EQUITABLE ESTOPPEL. 103 tbe law on the subject, I find no allusion to the equitable estoppel which we are now con- sidering. All legal estoppels, whether by rec- ord, by deed, or by matter in pais, depended on, strict legal rules, and shut out proof of the truth and justice of the individual case. Vin- er, Abr., "Estoppel," passim; Lyon v. Reed, 13 Mees. & W. S09; Freeman v. Cooke, 2 Exch. 658. For this reason, because legal estoppels, whether by record, deed, or matter in pais, shut out proof of the truth and justice of indi- vidual cases, they have been called odious, and have been construed with much strictness against parties that set them up. They were formerly required, like other defences regard- ed as inequitable, to be pleaded with certainty to a certain intent in every particular. If they were relied on by way of averment, and tried by the jury, the jury might find, and according to some authorities were bound by their oath veritatem dicere to find, according to the truth of the case, regardless of the es- toppel. Trials Per Pals, 284; Co. Litt 22Ta; Com. Dig. "Estoppel," B, 10. The practice is now different, and legal estoppels may be re- lied on, when given in evidence, without being specially pleaded. Legal estoppels exclude evidence of the truth and the equity of the particular case to support a strict rule of law, on grounds of public policy. Equitable estoppels are admitted on the ex- actly opposite ground of promoting the equity and justice of the Individual case by prevent- ing a party from asserting his rights imder a general technical rule of law, when he has so conducted himself that It would be contrary to equity and good conscience for him to al- lege and prove the truth. The facts upon which equitable estoppels depend are usually proved by oral evidence; smd the evidence should doubtless be carefully scrutinized, and be full and satisfactory, before it should be admitted to estop the party from showing the truth, especially In cases affecting the title to land. But where the facts are clearly proved, the maxim that estoppels are odious— which was used in reference to legal estoppels, be- cause they shut out the truth and justice of the case — ought not to be applied to these equitable estoppels, as it has sometimes been. Inadvertently, as I think, from a supposed an- alogy with the legal estoppel by matter in pais, to which they have, in this respect, no resem- blance whatever. Lord Campbell, in Howard V. Hudson, 2 El. & Bl. 10; Andrews v. Lyons, 11 Allen, 349, 351. In other cases, where more attention has been paid to the real nature of this equitable doctrine, it has been held that such estoppels are not odious, and to be construed strictly, but are entitled to a fair and liberal application, like other equitable doctrines which are admitted to suppress fraud and promote honesty and fair dealing. Mellor and Compton, JJ., in Ashpitel v. Bryan, 3 Best & S. 474; Gowen, J., in Dezell v. Odell, 3 Hill, 220; Com. v. Moltz, 10 Pa. St. 530, 531; Buckingham v. Hanna, 2 Ohio St 557; Van- Rensselaer v. Kearney, 11 How. 32G; Preston V. Mann, 25 Conn. 118, 128. y^ In this equitable estoppel, the party is for- \f bidden to set up his legal title because he has so conducted himself that to do it would be contrai'y to equity and good conscience. As in other cases of fraud and dishonesty, the circumstances out of which the question may arise are of infinite variety; and, unless courts at law are willing to abdicate the duty of ad- ministering the equitable doctrine effectually in suppression of fraud and dishonesty, the ap- plicatlMi of it cannot be confined within the limit of any narrow technical definition, such as will relieve courts from looking, as in other cases depending on fraud and dishonesty, to the circumstances of each individual case. Certain general rules will doubtless apply, as in other cases where relief is sought on such groomds. But I find myself unable to agree with the authorities where the old maxim that legal estoppels are odious has been applied to this equitable estoppel, and where attempts have been made to lay down strict definitions, such as would defeat the remedy in a large proportion of the cases that fall within the principle on which the doctrine is founded. The doctrine having been borrowed from equity, courts at law that have adopted it should obviously look to the practice in equity for their guide in the application of it; and in equity, the doctrine has been liberally applied to suppress fraud and enforce honesty and fair dealing, without any attempt to confine the doctrine within the limits of a strict defini- tion. For instance, the doctrine has not In equity been limited to cases where there was an actual Intention to deceive. The cases are numerous where the party who was estopped by his declarations or his conduct to set up his legal title, was ignorant of it at the time, and of course could have had no actual inten- tion to deceive by concealing his title. Yet, if the circumstances were such that he ought to have informed himself, it has been held to be contrary to equity and good conscience to set up bis title, though he was in fact Ignorant of it when he made the representations. Hobbs V. Norton, Hunsden v. Cheyney, Teas-' dale V. Teasdale, qua supra; and Burrowes v. Lock, 10 Ves. 470. So, if the party knew the facts, but mistook the law. Storrs v. Barker, 6 Johns. Ch. 166. Nor is it necessary In equity that the intention should be to deceive any particular individual or individuals. If the representations are such, and made in such circumstances, that all persons interested in the subject have the right to rely on them as true, their truth cannot be denied by the party . that has made them against any one who has trusted to them and acted on them. Gale v. Lindo, Webber v. Farmer, qua supra. In the much and well considered case of Preston v. Mann, 25 Conn. 118, 128, Storrs, J., delivering the opinion of the court, says: "The doctrine of estoppel in pais, notwith- standing the great number of cases which have turned upon it and are reported in the 104 EQUITABLE ESTOPPEIi. books, cannot be said even yet to rest upon any determinate legal test which wUl reconcile the decisions, or will embrace all transactions to which the general principles of equitable necessity wherein it originated demand that it should be applied. In fact, it is because it Is so peculiarly a doctrine of practical equity, that its technical application is so difficult, and its reduction to the form of abstract formulas is still unaccomplished." This was said in 1850, and little has since been done towards extricating the doctrine from the confusion and conflict of authority with which it was then embarrassed. This, as I think, has been caused by the fact that courts have continued to exercise their ingenuity in the vain attempt to compress a broad doctrine of equity within the narrow limits of a technical definition. The case of Pickard v. Sears, 6 Adol. & B 469, decided as late as 1837, appears to have been regarded, both in England and in this country, as the leading case at law on this subject. It was trover by the mortgagee of personal goods against the defendants, who were purchasers at a sheriff's sale on execu- tion against the. mortgagor. The facts set up in defence were, that the plaintiff was pres- ent at the sale, did not disclose his title as mortgagee, and encouraged the defendants to purchase. The question on trial was as to the property of the plaintiff in the goods, and Lord Denman directed a verdict for the plain- tiff. A rule to show cause why the verdict should not be set aside was made absolute. In delivering the judgment of the court. Lord Denman said: "His [the plaintiff's] ti- tle having been established, the property could only be devested by gift or bale, of which no ,.- Bpeciflc act was even surmise^. But the rule /of law, is clear that where one, by his words / or conduct, willfully causes another to believe the existence of a certain state of things, and induces him to act on that belief so as to alter his own previous position, the former Is con- cluded from averring a different state of things as existing at the same time; and the plaintiff might have parted with his Interest In the property by a verbal gift or sale, with- out any other formalities that threw technical difficulties In the way of legal evidence. And we think his conduct in standing by and giv- ing a kind of sanction to the proceedings un- der the execution was a fact of such a nature that the opinion of the jury ought to have been taken whether he had not, in point of ^ fact, ceased to be the owner." It is worthy of note that in this suit at law the court, so late as 1837, after stating the general equitable doctrine, did not venture to put the defence directly on the ground that the plaintiff was estopped by his conduct to prove the truth of the case, but allowed the facts to go to the jury as evidence that the plaintiff, in some undefined and mysterious way, had parted with his property in the goods. So late and so reluctant were the courts to admit in suits at law this defence, which depended on fraud and dishonesty, and which belonged, originally and appropriately, to the jurisdiction in equity. It can hardly be supposed mat Lord Den- man, in the statement which he made of this equitable doctrine In reference to the facts of that case, understood that he was laying down a technical definition fixing the limits of the doctrine, and excluding all cases that did not come clearly within the terms which he used on that occasion. Nevertheless, the remarks of Lord Denman have often been treated as a sort of authoritative text covering the whole ground, which it was the business of courts in later cases to expound and explain. And it is curious to observe what different and con- tradictory interpretations have been put on his statement of the equitable doctrine;. It has been cited in Massachusetts as authority for decisions tn which it has been held that the representations, to estop the party from show- ing they were not true, must have been made with the intent to deceive, and the intent to deceive the party who sets up the defence. Plumer v. Lord, 9 Allen, 455; Andrews v. Ly- ons, 11 Allen, 349. And in California the same case has been relied on for the rule that where a representation comes in any way to the ears of a party, who acts on it, the party making the representation Is estopped to deny its truth, unless it had the character of a confi- dential communication. Mitchell v. Reed, 9 Gal. 204. In England it has been treated as a statement of the equitable doctrine made in reference to the circumstances of that case, and not Intended as a formal and complete definition. Freeman v. Cooke, 2 Exch. 654; Gregg v. Wells, 10 Adol. & E. 90; Jorden v. Money, 5 H. L. Oas. 212. It would be a laborious and not a profitable task to attempt an analysis of all the recent decisions on this subject. I will briefly advert to some of those which appear to be the most Important. In Plumer v. Lord, 9 Allen, 455, it was held that to create an estoppel in pais, the declarations or acts must have been accom- panied with a design to mislead; and Lang- don V. Doud, 10 Allen, 433, is to the same point. In Andrews v. Lyons, 11 Allen, 349, the court went one step further, and decided that the declarations or acts must have been accompanied with a design to deceive the party who sets up the estoppel, and induce iiim to act on them; and in this last case it is said that such an estoppel shuts out the truth, and is odious, and must be strictly oroved. In Hawes v. Marchant, 1 Curt 144, Fed. Gas. No. 6,240, the rule Is laid down that to be estopped the party must have de- signedly made £ldmIssions inconsistent with the defense or claim which he proposes to set up, and another, with his knowledge and consent, so acted on this admission, that he will be Injured by allowing the admission to be disputed; and this rule is dted and apparently approved in Audenrled v. Bette- ley, 5 Allen, 382. In these cases, it is to be observed, the EQUITABLE ESTOPPEL. 105 court have not been content with saying, in reference to the facts before them, that, if certain things concurred in the case, it would fall within the equitable doctrine, and the party would be estopped, but they have un- dertaken to lay down a strict legal defini- tion of general application, excluding from the operation of the doctrine all cases that do not fall within the terms of the definition. Applying the rule as laid down in Hawes v. Marchant to the present case, if Horn had known that Oole had a demand against Charles E. Horn, had falsely represented to Cole that the goods belonged to Charles, with the design to deceive him and induce him to attach the goods as the property of Charles, and Cole, relying on the representa- tion, had taken the goods as the property of Charles, and as Horn intended, yet if, after he had made the false representation, he did not know that the goods were taken as the property of Charles, and assent that they should be so taken, he would not be estop- ped to set up his own title In the goods. The statement that another party must have act- ed on the false statement with his knowl- edge and assent must mean this, or it can mean nothing; for he could not know that he had acted on it at all until the act was done and accomplished. The remark of Lord Campbell in Howard V. Hudson, qua supra, though not called for by the case, is to the effect that the repre- sentation must have been intended to de- ceive. These authorities would seem to sustain the plaintiff's coimsel fully In his position that the false representation must not only be Intended to deceive but also to deceive the identical party that acted on them. There are, however, authorities of equal respectability, and In greater numbers, which maintain a different doctrine. In England, the case of Pickard v. Sears does not appear to have been understood as Intended to lay down a complete definition of the equitable doctrine excluding all cases that could not be brought within the terms of the remarks made by Lord Denman. In Freeman v. Cooke, 2 Excb. 654, it was held that the term "willfully," used in Pickard v. Sears, was not to be understood In the sense of "maliciously"; and that, whatever a man's real meaning may be, if he so con- ^ ducts himself that a reasonable man would / take the representation to be true, and be- / lieve it was meant he should act on It, and j he did act on It as true, the party making 1 the representation would be equally preclud- j ed from contesting its truth. This is wholly \ inconsistent with the notion that an inten- \ tion to deceive is an essential ingredient of Hbe representation, which precludes the par- ty making it from showing that it was false. So in Jorden v. Money, 5 H. L. Cas. 212, it was held not to be necessary that the party making the representations should know that they were false; that no fraud need h have been intended at the time; but, if the party unwittingly misled another, you must add that he has misled him under such cir- cumstances that he had reasonable ground for supposing that the pei-son whom he was misleading would act upon what he was say- ing. In Gregg v. Wells, 10 Adol. & E. 90, Lord Denman says: "Pickard v. Sears was in my mind at the time of the trial, and the prin- ciple of that case may be stated even more , broadly than It is there laid down. A party , who negligently or culpably stands by and \ allows another to contract on the faith and ) understanding of a fact which he can con- tradict, cannot afterwards dispute that fact ; in the action against the person whom he / has himself assisted in deceiving." This ' shows that Lord Denman did not himself understand that his remarks in Pickard v. Sears were to be taken as a definition and limitation of the equitable doctrine, for he says the principle of the case might be stat- ed more broadly than it is laid down there, and may Include the case of a culpable neg- ligence. So Hobbs V. Norton, 1 Vern. 136; Hunsden v. Cheyney, 2 Vern. 150; Teasdale" V. Teasdale, 13 Vin. Abr. 539; Burrowes v. Lock, 10 Ves. 475,— before cited, show that the practice In equity does not require that there should in all cases be an intention to de- ceive, or even a knowledge that the repre- sentation was false. We come now to the decisions in this coun- try, which give a broader application to this doctrine than those before cited. In Dezell v. Odell, 3 Hill, 221, the general doctrine is said to be that when a party, ei- ther by his declarations or his conduct, has Influenced a third person to act In a particu- lar manner, he will not be afterwards per- mitted to deny the truth of the admission if the consequence would be to work an injury to such third person, and that in such case it must appear— First, that he made an ad- ' mission which is clearly inconsistent with ; the evidence he proposes to give, or the claim which he proposes to set up; second, that the party has acted on the admission; i third, that he will be injured -by allowing i the truth of the admission to be disputed. \ According to this interpretation of the equi- j table doctrine, it would seem not to be nee- ! essary that the representation should be In- tended to deceive, or that the party making j it should know it to be false, or ihat it i should be intended the imrty should act on i It, who does so In fact, and is deceived by it. , The rule of this case has been adopted and j followed in Newman v. Hook, 37 Mo. 207; ' Carpenter v. Stillwell, 12 Barb. 135; and Eldred v. Hazlett, 33 Pa. St. 316. In Eoe V. Jerome, 18 Conn. 138, the gen- eral doctrine is stated to be that where one person, by his words or conduct causes an- other to believe in a certain state of things, and thus induces him to act on that belief, BO as injuriously to affect his previous posl- 106 EQUITABLE BSTOPPBIj. tlon, he Is concluded from averring a differ- ent state of things as existing at the time; and this rule was followed in the later cases of C!owles V. Bacon, 21 Conn. 451, and Dyer V. Cady, 20 Conn. 563; and In Preston -v. Mann, 25 Conn. 118, before cited, it is said that the doctrine did not then rest on any determinate, legal test which will embrace all transactions to which the general princi- ples of equity. In which it originated, de- mand that It should be applied. Buchanan v. Moore, 13 Serg. & R. 304, 306, is to the point that, though the party be- lieved his representation to be true, and made it under a mistake, he Is estopped to show that he made the representation inno- cently believing it to be true, provided the other party acted on it, and had reason to act on it, as true. So in Strong v. Ells- worth, 26 Vt. 366, It is said by Redfield, C. /j., that he who by his words or actions, or his silence even, intentionally or carelessly / Induces another to do an act which he ( would not otherwise have done, and which \ will prove injurious to him If he Is not al- \ lowed to insist on the fulfillment, may insist ^N.on such fulfillment; and that the doctrine of equitable estoppels lies at the foundation of morals. In MitcheU v. Reed, 9 Cal. 204, It was held that where a statement made to a third person is not confidential, but gen- eral, and is acted on by others, the party making the declaration Is estopped to deny Its truth; that the intention with which the declaration is made is not material, except, perhaps, where It Is confidential. This case and Quirk v. Thomas, 6 Mich. 76, are au- thorities that to work the estoppel it is not necessary the declaration should be made to the party who acts on It, nor In his presence, nor that the declaration should be Intended Vtp come to the knowledge of any particular person. In a suit at law to recover damages for a false affirmation that the signer of a note was of age. it was decided, in Lobdell v. Baker, 1 Mete. (Mass.) 193, that It was not necessary to allege or prove th-at the defend- ant knew the slgn-r wa^ an Infaot. Wilde, J., in dellveiing the opinI"n of the coiu^, ?aid: "A party may render himself liable In an ac- tion for damages to a party prejudiced by a false affirmation, thougli not made with any fraudulent Inteution." This, It may be sa'Kl. is not directly In point, but the only dif- ft-rencu Is in the form of the remedy. The principle involved is the same, whether the question is raised In a suit to recover d.am- ages for the false representation, or redress is sought by estopping the party to prove the falsehood of the representation. Both cases go on the same general ground that the party is responsible for the consequences of his false representation. There are numerous authorities that It la not necessary to the estoppel that the decla- rations or conduct should be Intended to de- ceive any particular person or persons; that. if they were intended to deceive generally, or were of such a character, and made In sucb circumstances, that It must have been under stood they were likely to deceive, and any person using due diligence was In fact de- ceived by them, it Is enough. Gregg v. Wells, 10 Add. & E. 90; Wendell v. Van Rensselaer, 1 Johns. Oh. 353; Adams v. Brown, 16 Ohio St. 78; Dezell v. Odell, 3 Hill, 221; Quirk V. Thomas, 6 Mich. 76; Mitchell v. Eeed, 9 Cal. 204. It has been declared in many cases that this equitable estoppel Involves a question of legal ethics, and applies wherever a party has made a representation, by. words or con- duct, which he cannot In equity and good conscience prove to be false; and that this kind of estoppel, being a broad doctrine of equity, cannot be limited In application by the terms of any narrow legal definition. In Canal Co. v. Hathaway, 8 Wend. 483, it is said by Sutherland, J., that the party is estopped when in good conscience and equity he ought not to be permitted to gain- say his admission; and In the same case, by Nelson, J.: "From the means In which the party must avail himself of these estoppels, it Is obvious there can be no fixed and settled rules of universal application." And in De- zell V. Odell, 3 Hill, 225, Bronson, J., adopting the language of Nelson, J., in Canal Co. V. Hathaway, adds, "It is a question of eth- ics." In Strong v. EUsworth, 26 Vt. 366, Redfield, J., says the doctrine lies at the foundation of morals. In Lucas v. Hart, 5 Iowa, 415, the court holds that: "In these estoppels there can be no fixed and settled , rules of universal application to regulate them as in technical legal estoppels; that in many, and probably In most. Instances, '; whether the act or admission shall operate as an estoppel or not must depend on the cir- ^^ cumstances of the case, though there are '^i some general rules which may materially as- sist in the examination of such cases." In the application of these general rules to that case the court decided that the acts and ad- missions of the respondent estopped him from asserting his title to the property in question; that to permit him to do It would be "un- conscionable, and contrary to that faimeas and honest dealing which courts of equity seek ever to promote and encourage." In Frost v. Saratoga Ins. Co., 5 Denlo, 154, it Is said by Beardsley, C. J., that such an estoppel Is a question of ethics, and is al- lowed to prevent fraud and injustice, and exists wherever a party cannot In good con- science gainsay his own acts or assertions. The case of Preston v. Mann, 25 Conn. 118, Is strong to the point that this estoppel, de- pending on a broad doctrine of equity, cannot be governed In application by narrow and strict rules of construction, such as have pre- vailed in legal estoppels In some. If not in most, of the cases. In which It Is said that if a party makes repre- sentations Intending to deceive the party that EQUITAULE ESTOPPEL. 107 acts on them, the equitable estoppel applies, It was not intended, as I think, to lay down a rule excluding all cases that did not fall within the statement made in reference to the facts of the case then under considera- tion; that what is said is not to be taken as a rule to limit and define the doctrine and exclude all other cases. They say, if such and such things concur, "this case will fall within the doctrine"; but they do not intend to say no other cases are within it For ex- ample, in Kinney v. Pamsworth, 17 Conn. 361, Storrs, J., says that "admissions which have been the means, designedly, of leading others to a particular com-se of conduct, can- not afterwards be conscientiously retracted by one who has made them." He could not have intended to lay down the rule that one would in no case be estopped by a repre- sentation not designed to deceive, because the same judge, in Preston v. Mann, says: "The doctrine Is not reduced to the limits of any formula," and, "whatever the motive may be, if one so acts or speaks that the natui-al consequence of his words or conduct will be to influence another to change his con- dition, he is legally charged with the intent to induce the other to believe and to act on that belief, if such proves to be the result." So Lord Denman, speaking, in Gregg v. Wells, 10 Adol. & B. 90, of his judgment In Pickard v. Sears, says: "The principle of that case may be stated even more broadly than it is there laid down." In this state we have several cases where the general question has been more or less considered. In Wells v. Pierce, 27 N. H. 503, the doctrine of equitable estoppel was traced to its origin in equity, and it was held that If the owner actively encourages the pur- chase of his property from another, he will be precluded from claiming it, though he was not aware of his interest at the time; which is clearly in conflict with the notion that the representation must be accompanied with an intention to deceive. In Davis v. Handy, 37 N. H. 65, the doctrine of Wells v. Pierce was approved and applied. In the recent case of Drew v. Kimball, 43 N. H. 285, one point directly involved was whether it was necessary that the party to be estop- ped should intend to deceive and defraud the individual to whom the representation was made, and who set. up the defence; and it was held that it was not necessary. Indeed it seems to me that it would be trifling with a doctrine depending on equity and good con- science to hold otherwise. So, if a repre- sentation was intended to deceive one man, and it in fact deceived and defrauded an- other. Then, again, if the representation were intended to have one operation, and, as it turned out, deceived and defrauded by another method not contemplated by the party at the time, but still the natural con- sequence of the representation. It would be quibbling with a doctrine depending for its application on the morality of the act to hold that the party would not be answerable for the consequences of his false and fraudulent representation as much as if it had taken effect on the party and in the manner intend- ed. In a case depending on a question of "legal ethics," it would bring down the mor- ality of the law to a very low standard to hold that a party was not liable for the wrong caused by his fraud to one man, be- cause the fraud was contrived against an- other man. In Drew v. Kimball the case did not raise the precise point taken in this case. But, on a full discussion of the general doctrine, and a review of the authorities, the court, adopt- ing the hypothetical case put by Parke, B., in Freeman v. Oooke, say: "If, whatever a man's intentions may be, he so conducts him- self that a reasonable man would take the representation to be ti'ue, and believe it was meant he should act upon it, and he Aid act upon it, as true, the party making the repre- sentation would be equally precluded from contesting its truth. In short, the repre- sentations are to be regarded as willful when the person making them means them to be acted on, or if, without regard to intention, he so conducts himself that a reasonable man would take the representation to be true, and believe it was meant he should act on it." There have been several other cases in this state where thijs equitable doctrine has been considered and applied. Thompson v. San- born, 11 N. H. 201; Simons v. Steele, 36 N. H. 73; McMahon v. Portsmouth Mut. Fire Ins. Co., 22 N. H. 15; Odlin v. Gove, 41 N. H. 473; Corbett v. Norcross, 35 N. H. 99, 115; Richardson v. Chickering, 41 N. H. 380, 385. Though I do not find that the precise point taken here for the plaintiff has been directly decided in any of our cases, yet the\ general current of our decisions on the sub- ject tends to a liberal application of the doc- trine for the suppression of fraud and dis- honesty, and the promotion of justice and fair dealing. No disposition has been shown in the courts of this state to treat this equita- ble estoppel as odious, and embarrass its ap- plication by attempts to confine it within the limits of a narrow technical definition. We are content to follow where the spirit and general tone of these decisions lead; and they 1 lead plainly to the conclusion that, where a \ man makes a statement disclaiming his title to property, in a manner and under circum- stances such as he must understand those who heard the statement would believe to be true, and, if they had an interest in the sub- ject, would act on as true, and one, using his own means of knowledge with due dili- gence, acts on the statement as true, the [party who makes the statement cannot show I that his representation was false, to the in- jury of the party who believed it to be true, and acted on it as such; that he will be lia- ble for the natural consequences of his rep- resentation, and cannot be heard to say that 108 EQUITABLE ESTOPPEL. the party actually injured was not the one he meant to deceive, or that his fraud did not take effect In the manner he intended. Our conclusion is that, on the facts which the verdict has established, the plaintiff was estopped to show his representation that the goods belonged to Charles E. Horn to be false, though he did not know that the de- fendant Cole had any- demand against Charles E. Horn, and though he had not Cole in his mind as the party whom he meant to deceive. Judgment on the verdict. ;V.^^ r EQUITABLE ESTOPPEL. .^vi 109 V \ DICKBRSON V. OOLGROVB. aOO U. S. 57&) Supreme Court of the United States. Oct., 1879. Error to the Circuit Court of the United States for the Western District of Michigan. George W. Lawton, for plaintiff in error. M. J. Smiley, for defendant in error. Mr. Justice SWATNE delivered the opinion of the court. This Is an action of ejectment brought by Diclierson and Wheeler. The latter died during the progress of the suit The parties agreed in writing to submit the case to the court without the intervention of a jury. The court found the facts. So far as it is necessary to state them, they may be thus summarized: Mlcajah Chauneey owned the land In controversy. He died on the day of February, 1853, leaving two children, Edmund Chauneey and Sarah Kline. They were his only heirs at law. He is the com- mon source of title of all the parties in this litigation. On the 3d of March, 1853, John Kline and Sarah, his wife, conveyed by war- ranty deed the entire premises to Lowell Morton. The deed was duly recorded on the 6th of March, 1854, and on the 1st of April, 1854, Lowell Morton entered into possession of the preinlses. He and the defendants have ever since been in actual possession, claiming to own and hold the property as tenants in common. The latter were In possession at the commencement of this suit, claiming title through conveyances from Lowell Morton. Prior to the 1st of April, 1856, Lowell Mor- ton learned that- Edmund Chauneey was one of the children of Mlcajah Chauneey, and that he lived In OaUfomla. Whereupon Low- ell Morton procured Eleazer Morton to write to Edmund Chauneey to learn whether he made any claim to the premises. On the 1st of April, 1856, Edmund Chauneey, still living In California, addressed a letter to his sister, Sarah Kline, then living In Michigan, wherein he disavowed, in strong terms, the intention ever to assert s^ich a claim. The contents of this letter subsequently came to the knowledge of Lowell Morton, ^who thereafter conveyed to the defendants "by warranty deeds. Under these deeds they have since held and claimed title, and have I occupied and Improved the property. On the 9th of July, 1865, Edmund Chauneey convey- ed the undivided half of the premises, by quitclaim deed, to Orlando B. Dicljerson and James WItherell. On the 1st of May, 1868, WItherell conveyed all his right, title, and in- terest to William W. Wheeler, one of the original plaintiffs. The suit was Instituted on the 6th of March, 1873. Lowell Morton and the defendants had then been in posses- sion eighteen years and eleven months. The court below held as conclusions of law that the action was barred by the statute of lim- itations of Michigan of 1863, and by an es- toppel in pais, and gave judgment according- ly. The plaintiff thereupon sued out this writ of error. Both the conclusions of law are relied upon as errors for the reversal of the judgment. Our remarljs will be confined to the point of estoppel. This defence is founded upon the letter of Edmund Chauneey. The contents of the let- ter of Morton, to which it refers, are not given in the finding of facts, but the sub- ject of that letter and the inquiry which it made appear clearly in the letter of Chaun- eey. He said: "Mr. Morton wrote me a let-! ter. He wanted to know if I Intended to claim any of the Conger farm" (meaning the premises In controversy). "You can tell Mr, Morton for me, he need not fear any thing from me. Thank God, I am well off here, and you can claim all there. This letter will be enough for him. I intended to give you and yours all my property there, and more if you need it." The phrase, "I intended to give," etc., Implies that he knew his half of the farm had already been sold to Morton, and that he could not, therefore, give his sister, to whom the letter was addressed, any part of that property. It does not appear that there was any other property held by them as coparceners. He says furthar, that he In- tended to give her more If she needed It. All this was communicated to Lowell Morton. What was the effect upon him? He was lulled Into security. He took no measures to perfect his title, nor to procure any redress from the Klines, who had conveyed and been paid for the whole of the property while they ovmed but the half. On the contrary, he gave thereafter deeds of warranty to all the defendants,— who are sixty-two in number,— and he and they occupied and improved the premises down to the commencement of this suit. Between that time and the date of the letter was a period of nearly seventeen years. What Improvements were made and how far the property had risen in value are not dis- closed, nor does it appear what stimulated Chauneey to violate his promise and com- mence this attack on the defendants. The estoppel here relied upon is known as an equitable estoppel, or estoppel In pals. The law upon the subject is well settled. The vital principle is that he who by his lan-^ guage or conduct leads another to do what he would not otherwise have done, shall not subject such person to loss or Injury by dis- appointing the expectations upon which he acted. Such a change of position is sternly forbidden. It Involves fraud and falsehood, and the law abhors both. This remedy Is al- ways so applied as to promote the ends of justice. It is available only for protection, and cannot be used as a weapon of assault. It accomplishes that which ought to be done between man and man, and is not permitted to go beyond this limit It Is akin to the principle Involved in the limitation of ac- ^ M 110 EQUITABLE ESTOPPEL. tlons, and does its work of justice and re- pose where the statute cannot be invoked. Here, according to the finding of the court, the time of adverse possession lacked but a year and a month of being twenty years,— when- it is conceded the statutory bar would have been complete. In Faxton v. Faxon, 28 Mich. 159, a mort- gagee holding several mortgages prevailed on a son of the deceased mortgagor, then intend- ing to remove to a distance, to remain on the premises and support the family, by assuring him that the mortgages should never be en- forced. The son supported the family, and the property grew in value under his tUlage. After the lapse of several years the mort- gagee proceeded to foreclose. He was held to be estopped by his assurances upon which the son had acted. The court said: "The Bomplainant may have estopped himself with- out any positive agreement, if he intentional- ly led the defendants to do or abstain from doing any thing involving labor or expendi- ture to any considerable amount, by giving them to understand they should be relieved from tbe burden of the mortgages. In Hark- ness V. Toulmin, 25 Mich. 80, and Truesdale V. Ward, 24 Mich. 117, tliis principle was ap- plied, in the former case, to the extent of de- stroying a -chattel mortgage, and in the lat- ter, of forfeiting rights under a land con- tract, where parties were led to believe they were abandoned. There is no rule more nec- essary to enforce good faith than that which compels a person to abstain from asserting claims which he has induced others to sup- pose he would not rely on. The rule dores not rest on the assumption that he has ob- tained any personal gain or advantage, but on the fact that he has induced others to act in such a manner that they will be serious- ly prejudiced if he is allowed to fail in carry- ing out what he has encouraged them to ex- pect." Cooley, J., was inclined to doubt the sufficiency of the proof, but said, finally: "His" (the mortgagee's) "assurances have un- doubtedly been relied upon and acted upon by the defendantfl, and, considering the great lapse of time without any claim under the mortgages on the part of the complainant, I am not disposed to dissent from the conclu- sion of my Brethren." The case before us arose also in Michigan. In Evans v. Snyder, 64 Mo. 516, the heirs assailed an adminis- trator's sale. No order of sale could be found. This was held to be a fatal defect But the supreme court of the state held that where they stood silently by for years, while the occupant was making valuable and last- ing improvements on the property, and re- deeming it from the lien of the ancestor's , debts, they would be estopped from after- wards asserting their claim. Here, as by Judge Cooley, stress is laid upon the lapse of time. This is also a feature of the case in hand. Other authorities to the same effect are very numerous. They may be readily found. It is unnecessary to extend this opinion by re- ferring to them. We think the facts disclosed In the record make a complete case of estoppel in pals. But it is said this objection to the plain- tifC's claim is not available at law, and must be set up in equity. "This is certainly not the common law. Ldttleton says: 'And so a man can see one thing in this case, that a man shall be es- topped by matter of fact, though there be no writing, by deed or otherwise.' Lord Coke, commenting hereon, gives an instance of es- toppel by matter in fact,— this very case of partition. Co. Litt. 356, § 667. And such an award has been held sufficient to estop a party against whom ejectment was brought. Morris v. Eosser, 3 East, 15." Brown v. Wheeler, 17 Conn. 345, 353. In City of Cincinnati v. White's Lessee, 6 Pet. 431, the proprietors of the city plat, in 1789, dedicated the ground between B^ont street and the Ohio river to the public for commercial and other purposes. The legal title had not then emanated from the govern- ment of the United States. In this state of things the statute of limitations does not run. White long subsequently acquired the legal title and brought ejectment for the premises. This court said (page 441): "This is a pos- sessory action, and the plaintiff, to entitle himself to recover, must have tiie right of possession; and whatever takes away this right of possession will deprive him of the remedy by ejectment. Adams, Bj. 32; Starkie, part 4, 505-507." This is the rule laid down by Lord Mansfield, in Atkyns v. Hoarde, 1 Burr. 119. "Ejjectment," says he, -, "is a possessory remedy, and only competent 1 where the lessor of the plaintiff may enter, and every plaintiff in ejectment must show a right of possession as well as of property." , If the plaintiff in the present c%se was not entitled to possession, how, according to this authority, could he recover? If he had re- covered, and a court of equity would have en- joined him from executing the judgment by a writ of possession, we ask, again, how could he recover in this action? Is not the conces- sion that relief could be had in equity fatal to the proposition we are considering? In Stod- dard V. Chambers, 2 How. 284, it was said by this court: "On a title by estoppel, an action of ejectment can be maintained." We do not overlook the fact that a land claim had been conveyed before it was confirmed by an act of congress to the assignor and his legal rep- resentatives. It was held that on such con- firmation the legal title became vested in the former, "and inured, by way of estoppel, to his grantee and those who claimed by deed under him." In that case, as in this, there was no formal transfer of the title. The transfer was made, as under a statute of lim- itations, when the bar is complete, by opera- tion of law. Leffingwell v. Warren, 2 Black, 599. Why may not a like transfer be held to have been made in this case? The reason EJQUIXABLE ESTOPPEL, 111 given for the rule of Inurement and estoppel by virtue of conveyances is, that it avoids circuity of action. Does not the same con- sideration apply, with equal force, In cases of estoppel in pais? Why is it necessary to go into equity in one case and not in the other? It has never been held that the statute of frauds applies to cases of inurement, and it has been conceded that it does not affect cases of dedication. Where is the difference in principle in this respect between those cases and the one before us? But here this point cannot arise, because the promise relied upon was in writing. In City of Cincinnati v. White's Lessee, supra, this court, speaking of the dedication there in question, said, "The law considers it in the nature of an estoppel in pais, which precludes the original owner from revoking such dedication," and that a grant might have been presumed, "if that had been necessary, and the fee might be considered in abeyance until a cojnpetent gran- tee appeared to receive it; which was as ear- ly as the year 1802, when the city was incor- porated." Here there was a grantee capable of taking the fee aU the time from the date of the letter. The common law is reason dealing by the light of experience With hu- man affairs. One of its merits is that it has the capacity to reach the ends of justice by the shortest paths. The passage of a title by inurement and es- toppel is its work without the help of legis- lation. We think no sound reason can be given why the same thing should not follow in cases of estoppel in pais where land is con- cerned. This subject has been carefully examined in Elgelow, Estop, pp. 533, 537. The learn- ed author comes to no final conclusion wheth- er in cases like this the defence may be made at law, or whether a resort to equity is neces- sary. The former is om- view. Whether the title passed or not, the fact that the plaintiff was not entitled to possession of the prem- ises was fatal to the action. Chauncey conveyed to the plaintiff in error by deed of quitclaim. He is not, therefore, a bona fide purchaser. Piatt v. Oliver, 3 How. 333; May v. Le Claire, 11 Wall. 217. Morton and the defendants were in posses- sion. For both these reasons, he took what- ever title he acquired subject to all the rights, legal and equitable, of Morton and of the de- fendants, who deraigned their titles from the latter. Judgment aflJrmed. / 112 EQUITABLE ESXOPPBIi. OONTINBNTAIi NAT. BANK v. TIONAL BANK OF COM- MONWEALTH. NA- (50 N. T. 575.) Court of Appeals of New York. 1872. Action by the Continental National Bank against the National Bank of the Common- wealth. From a judgment of the General Term affirming a judgment for plaintiff, de- fendant appeals. Affirmed. This controversy arises over a sum of $63,- 062.50 paid by the Continental Bank on a check drawn on that bank by one Ross, who kept an account thereat, to the order of J. S. Cronise & Co. A certification purporting to be by the teller of that bank was forged on the check, but the check was received by Cronise & Co. as a certified check and was so deposited in the Commonwealth Bank. The day before the drawing of the check Cronise & Co. sold $50,000 of gold to brokers, who gave the name of Ross as their princi- pal, which was accepted by Cronise & Oo.'s clerks. The next day Ross went to Cronise's office, asked for the gold, and stated to whom he intended to deliver it. Cronise's clerk took the check, presented it to the teller at the Continental Bank, who said that it was "all right," whereupon the clerk returned to Cronise. In the meantime Ross had been given gold checks and certificates to the amount of $50,000, payable to bearer, and had left the office. He went with them to the Bank of New York, was there Identified, received the gold, and left for parts unknown. Cronise & Co. had relied entirely on the in- formation obtained from the Continental Bank, and had taken no steps to pursue Ross. They indorsed the check and deposit- ed it in the Commonwealth Bank the same afternoon. It was sent in through the clear- ing house and charged to the Continental Bank in the usual way on the following day, on the afternoon of which notice was given to the Commonwealth Bank that the certifi- cation was a forgery. The following requests to charge were re- fused except as otherwise contained in the •charge given. (2) That, to estop plaintiff, the check must have been taken for value on the faith of the acts or declarations of the plaintiff's teller. (3) That it was not enough to show acts or declarations of plaintiff's teller inducing the belief that the certification was genuine, but it must be shown that the check was taken for value on the faith of such acts or dec- larations. (5) That if the cheek was not shown to plaintiff's teller until after Cronise & Co. had actually delivered the gold checks and certificates to Ross, then the only question was the question of forgery. (6) That if nothing further remained to be done by Cronise & Co. to complete their contract with Ross, then the delivery was j not made on the faith of the statements <>f plaintiff's teller. (7) That the jury could not speculate upon what might have been done or attempted by Cronise & Co. after the delivery by them of the gold certificates or checks to Ross, had they been apprised that the certification was a forgery after such delivery. (8) That defendant's rights were not su- perior to those of Cronise & Co. (9) That plaintiff was bound by the acts and declarations of its teller only so far as the same were within the scope of his an- ithority; and that his verbal admission was not binding on plaintiff, unless authority to make such was proved or the statement rati- fied. Luther R. Marsi, for appellant James Bmott, for respondent. FOLGER, J. The jury have found to be a forgery, the writing on the check, which purports to be a certification thereof by the • plaintiff's teller. They have also found that the teller, when resorted to, In effect pro- nounced 'K genuine. That the plaintiff would be bound by the act of its teller, had he in fact certified the check, is settled. Farmers' & Mechanics' Bank v. Butchers' & Drftvers' Bank, 16 N. Y. 125, 69 Am. Dec. 6781 14 N. Y. 623. Not do we doubt that an admission by liim that it was genuine, made on the presentation to him of the counterfeited certification and In- quiry put, also binds the plaintiff. We can see no difference in result, and effect upon others dealing with the check on the strength of that admission, between writing "Timp- son, teller," signifying good, upon a worth- less check, and declaring that the words "Timpson, teller," already there, were writ- ten there by him. In the one case they are his own, and Signify good. In the other he adopts them as his own, and so makes them his own, and they signify good. This was the effect of his admission. And see 53 Me. 103, and Bank v. Crafts, 4 Allen, 447. There seems to be no dispute but that the defendant takes the place of Cronise & Oo., and may avail itself of any defense to tie action of the plaintiff which that firm of brokers could have made. The question then arises, is the plaintiff, by the other facts presented, estopped from maintaining that in truth the certification was a forgery, and the admission of its tel- ler an Innocent mistake? There is no disagreement as to the gen- eral definition of an estoppel in pais. It Is agreed that there must have been some act or declaration of the plaintiff or of its agent to the defendant's assignors, which so af- fected the conduct of the latter to their Injury, as that it would be unjust now to permit the plaintiff to set up the truth of the case to the contrary of its mistaken act or declaration. EJQUITABLE ESTOPPEL. 113 f^ But the plaintiff insists that there are cer- tain limitations to be put upon this gener- ality. 1st The plaintiff claims that it is neces- sary that its act or declaration must have been made to mislead. To this proposition the plaintiff cites Pick- ard V. Sears, 6 Adol. & E. 469; 33 Eng. Com. Law, 115, where the court say: "Where one by his words or conduct willfully causes an- other," etc. But this word "willfully," used In the decision in that case, has subsequent- ly received judicial comment and limitation. Thus in Freeman v. "Cooke, 2 Exch. 654, the court say: "By the term 'wUlfully,' how- ever, in that rule, we must understand, if, whatever a man's real intentions may be, he so conducts himself that a reasonable man would take the representation to be true, and believe that it was meant that he should act upon it, and he did act upon it as true, the party making the representa- tion would be equally precluded from con- testing its truth; and conduct by negligence or omission, where there is a duty cast upon any person by usage of trade^ or* otherwise to disclose the truth, may often have the same effect" So in Cornish v. Abington, 4 Hurl. & N. 549, Pollock, C. B., says: "The jury having found that the defendant, whether inten- tionally or not, led the plaintiff to form an opinion that he was dealing with the defend- ant and induced him to furnish goods to the defendant, the defendant must pay him for them." And referring to Freeman v. Cooke, and Pickard v. Sears, supra, the learned chief baron remarks to the effect that the word "willfully" means nothing more than "voluntarily," and he holds that if the rep- resentation was made voluntarily, though the effect upon the hearer was produced un- intentionally, the same result would foUow; and that if a party uses language which, in the ordinary course of business and the gen- eral sense in which words are understood, conveys a certain meaning, he cannot after- ward say that he is not bound, if another so understanding it has acted upon it Of course, this general language here extracted should be read in connection with the facts of that case to prevent carrying the force o* these words too far. But it is shown that "willfully" and "voluntarily," as used in the definition of an estoppel, are convertible. In Manufacturers' & Traders' Bank v. Hazard, 30 N. Y. 226, it is said that it is not necessary to an equitable estoppel that the party should design to mislead. Be this dic- tum or rule, we do not find that it has been in this state disputed or questioned. In In re Bahia & S. P. Ry. Co., L. R., 3 Q. B. 584, it is held that if a representation is made with the Intention that it shall be acted upon by another, and he does so, there is an estoppel from denying the truth of what was represented to be the fact, and that the case is within the principle of Pick- H.& B.EQ.(2d Ed.)-8 ard V. Sears, as explained by Freeman v. Cooke, both supra. The word "wiUful" does not mean malo anlmo, but so far willfully that the party, making the representation acted upon, means that it shall be acted upon in that way. Per Compton, J., in Howard v. Hudson, 2 Ell. & Bl. 1. And we hold that there need not be, upon the part of the person making a declaration or doing an act an intention to mislead the one who is induced to rely upon it There' are cases in which parties have been es- topped where their acts or declarations have been done or made in ignorance of their own rights, not knowing that the law of the land gave them such rights. Here, certainly, there could be no purpose to mislead others, for there was not the knowledge to inform the purpose, and both parties were equally and innocently misled. Storrs v. Barker, 6 Johns. Ch. 166, 10 Am. Dec. 316. Indeed, it would limit the rule much within the rea- son of it if it were restricted to cases where there was an element of fraudulent purpose. In- very many of the cases in which the rule has been applied, there was no more than negligence on the part of him who was ea topped. And it has long been held, that where it is a breach of good faith to allow the truth to be shown, there an admission will estop. Gaylor v. Van Loan, 15 Wend. 308. There are decisions where the rule has been stated as the plaintiff claims it We have looked at those cited by it. It was not necessary to the conclusions of the court in those, that such restriction should be put upon the rule, and we do not think that the language employed was used with the inten- tion of making such a limitation, for the facts of the case did not require it. 2d. The plaintiff further claims that Cron- ise & Oo. parted with the gold and took the check before the declaration of the teller was made known to them, and that before an estoppel can be insisted upon, it must ap- pear that they acted in reliance thereupon, or altered their position in consequence thereof, or parted with some value on the faith therein. The fair result of the testimony is, that Ross left the office of Cronlse & Go. before the return of their messenger to it from the bank, and Cronlse & Co. had then delivered the gold checks. They did not act after his return, relying upon the declaration of the teller which the messenger brought to them. Assuming, for the present, that they did in reliance upon that declaration refrain from action and left untaken any measures for the arrest of Boss or the stoppage of payment on the checks he had received; as- suming that It is reasonably probable, that If they had been told by the plaintiff the reverse of what they were told, they would have acted and would have taken those measures; assuming that it is reasonably probable that action and such measures 114 EQUITABLE ESTOPPEI.. would have prevented tlie whole or some part ot the damage which befell, can it be held that the conduct of Cronise & Co. was so affected to their injury by the declara- tion of the plaintiff as that the defendant may set up the declaration in estoppel of the plaintiff? The proposition contained in thi.» query we understand the plaintiff to resist. And this, because the act, the affirmative act, had been done which changed the posi- tion of Cronise & Oo. toward Koss and the transaction before the declaration was made known to them, and had not been done in reliance upon it. And this is a denial, that after a declaration is made and is relied upon, an omission thereby induced to act and to take such measures as will arrest an impending evil, and an injury resulting from such omission, can be made available as an estoppel. In Howard v. Hudson, supra. Lord Camp- bell, Ch. J., recognizes the existence of the principle, that doing an act and omission to act are the same. And see Helme v. Insur- ance Co., 61 Pa. 107, 100 Am. Dec. 621. In Knights V. Wiffin, L. R., 5 Q. B. 660, the per- son who relied upon the declaration had be- fore it was made and not in reliance upon it, paid his money for property not delivered, but after it was made, relying upon it, took no active course of conduct, remaining con- tent and passive. Had the declaration been the reverse of what it was, which would then have been true, he might have taken active measures tending to retrieve his posi- tion. He rested satisfied in the belief, as a reasonable man, that the property had been passed to him as agreed. And he was damaged. The right of estoppel was there upheld, and it was maintained upon the ground of the plaintiff relying upon the statement and taking no steps further, and of his abstaining from active measures of re- covery in consequence of the statement. It was there held, that acquiescent reliance upon the defendant's statement was an alter- ation of the plaintiff's position. In Bank v. Keene, 53 Me. 103, the ques- tion was presented. The plaintiff there held a note purporting to have been signed by the defendant. Hearing that the same was forged, the plaintiff asked the defendant, who, looking at the note, admitted the signa- ture to be genuine. The plaintiff, in reli- ance on that admission, refrained from tak- ing any proceedings against him who passed the note to it, so as to secure payment from him. The instructions to the jury were: That if the plaintiff, relying upon the de- fendant's admission, was induced to refrain from obtaining security by arrest of the one passing the note upon it, or by attachment of his property, and thereby sustained an Injury, the defendant would be estopped from denying his signature. This Instruction was declared by the court on review to be Im harmony with the principles applicable to es- toppels in pais. And see 15 Wend. 308, and Brown v. Sprague, 5 Denio, 545. These cases appear to us to lay down a sound rule. It must be that the conduct of men. which may be influenced by the dec- larations of those with whom they deal, Is aot confined to that which is shown by affirmative and positive acts following upon find induced by those declarations. Conduct iS not alone that which is active, positive and aflirmatlve. Conduct, as limited to this inquiry, is the reserve of one's own powers of person and property, and of those means of help which can be summoned from friend- ly or accommodating sources and from the tribunals and officers of justice, and is as often forbearance of their use and quies- cence and contentment with affairs as they are, as action designed to change affairs. And such quiescence and content, induced by false or erroneous statement, may be quite as damaging as any result from ac- tion. It is as bad to fail to recover property gone, when with the knowledge of an exist- ing fact it might have been retrieved, as it is to lose It. And so it is as damaging to rely in quiet upon an untrue statement, to the neglect of using the means of recovery, as It Is to rely upon an untrue statement, and by action thereon meet with loss irrep- arable. To hold otherwise, would be to as- sert that the law makes a difference between damage received by action and omission to act, in circumstances precisely similar, save in these elements. When an act produces conduct from which flows injury. It cannot matter whether that conduct be affirmative or negative, active or quiescent. We assumed, for the purpose of the pre- vious consideration of one branch of the sub- ject, that Cronise & Co. did. In rriianee upon the declaration of the plaintiff, refrain from action and leave untaken any measures. The jury have so found the fact, and the finding Is sustained by the testimony. We also assumed that It was reasonably prob- able that if they had been told the truth by the plaintiff they would have acted, and have taken measures which would have prevented the whole or some of the injury which be- fell. The jury have found that this assump- tion Is well founded. Though, as Is conceded herein, Ross left the office of the brokers before their messen- ger returned, he had left but a very short time; a time so short that had the plaintiff declared the certification a forgery and the check worthless, there was ground for the jury to find that there was time for the broker's clerk, with his speed of foot, to have gone from the bank of plaintiff to the office of Speyers, there have learned the falsity of Ross' assertion of a delivery of gold to Spey- er, and thence to the office of Cronise & Co., and have delivered his message soon enough for measures to have been decided upon and taken for the stoppage of the payment of EQUITABLE ESTOPPEL. 115 the checks at the Bank of New York. We leave out of view for the present the checks upon the sub-treasury. Nor was it a strained, unnatural nor unjus- tified inference for the jury to make that the clerk would so have done, and that Cronlse & Co. would have taken such measures and made stoppage of payment. It was but ap- plying to the facts of the case and to the position of the parties in this transaction, the common Itnowledge of human nature and its workings under powerful Incentives, and at a particular spot in the state and a particu- lar hour of the day when those incentives are pressed in their greatest strength. And from these findings thus authorized, it was a legitimate conclusion that Cronise & Co. suffered injury by the declaration to them of the plaintiff. And if there is nothing else in the case the verdict and judgment are to be sus- tained. The plaintiff Insists however that the learned judge at circuit made several errors in his refusals to charge as requested, and in the charge which he delivered to the jury. We wiU notice all of these instances which are indicated upon the points handed up, alluding to the requests by the numbers given to them in the points. The second, third and fifth requests are already covered by what we have said. The seventh request is: "That the jury cannot speculate upon what might have been done or attempted by Cronise & Co. after the delivery by them of the gold certificates or gold checks to the person calling himself John Ross, had they been apprised that the certificate was a forgery after such deliv- ery." If by the word "speculate," which Is the word of controlling meaning in the request, was meant to guess, or to reason to practical results from unproven premises, doubtless the jury had no right so to do. And there would have been no error in the learned judge if he had so told the jury. But It would have been in the nature of an abstract proposition not necessarily involved in not growing out of the particular case. Hence It was not error for him to decline to charge, except as he did thereafter charge. He did charge them that Cronise & Co. to set up an estoppel must have had time to stop pay- ment of the gold; that the circumstances must have been such as that they could have done it; that they must have occupied such a relation to the transaction as that they could with reasonable diligence have arrest- ed the crime in its consummation and have secured the gold; that they must have still stood in a position where they could have corrected any act and could have saved the gold. This put the jury upon the proper in- quiry. Nor can we concede that at the close of the trial the question of estoppel had be^ come one of law only and for the court, as is claimed by the learned counsel for the plaintiff. He admits that there were two questions yet for the jury; whether the cer- tification was forged or not, and whether its genuineness was admitted. And surely it was still a question of fact how much rela- tive time had been spent by the respective actors from the moment Ross left the office of Cronise & Co." until the payment of the checks at the Bank of New Xork, and con- sidering the relative positions of the differ- ent business places, whether in that lapse of time Cronise & Co. under all the circum- stances could have made effectual interpo- sition to stop payment of the checks deliv- ered to him, or have made any successful effort at recaption of the gold if he had re- ceived it. It is claimed that the learned judge erred in charging the jury that the delivery of the gold checks was not in law a delivery of the gold. The points call our attention to that part of the charge in which the language of the judge is: "The delivery of these gold checks on the part of Mr. Cronise, it is insisted upon, is in law a delivery of the gold. I think that it was not." It is proper to see in what connection this was said. For standing alone or applied to any and every case of a delivery of checks, it might be in some of them erroneous. What was the practical application of it for the minds of the jury? The topic then un- der the learned judge's and the jury's atten- tion was whether Cronise & Co. could, un- der the facts of the case, in any proper view of them, be considered as injured by the plaintiff's declaration; and the judge pre- cedes the remark excepted to by saying: "If Cronise, in point of fact, had done all that could be done on his part at that time, and had put himself in such a position that this admission could not affect his action to his prejudice, then the principle of estoppel would have no ajpplication to the case so far as he is concerned." Then he tells them, in the remark excepted to, in effect: It Is insisted that the delivery of these checks was a delivery of the gold, In law, so that he could not reclaim it; and if he could not reclaim it then he was not injured by the declaration, for there was nothing he could do after such delivery. We may infer, prop- erly, from the words "it is insisted," that all this had passed before the jury In the argu- ment of counsel, either to the jury or to the court, and was a reference thereto. If It should be admitted to be technically iHaccu- rate as a statement of law, applicable to all cases, it did not tend to mislead on this oc- casion; and for the purpose for which it was uttered, it was correct. Doubtless the banding over of the checks was a delivery of the gold to fulfill the contract for the sale 116 EQUITABLE ESTOPPEL. of It, in accordance with the rules of the broilers' board under which the original par- ties to the transaction acted. But it was not such a delivery as prevented Cronise & Co. from Intercepting the checks at the counter of the Bank of New York, and there forbidding and stopping payment of them. And this is true, whether the gold be dol- lars, in which to make payment of a debt payable, or a commodity to be transferred in satisfaction of a contract for the sale and delivery of a chattel. The scope of the re- marks of the court to the jury was that not- withstanding Cronise & Oo. had put these checks into the hands of Ross, stOl they could stop payment of them at the place of payment. And, so considered, it did not mis- lead the jury from the question at issue, or give them an erroneous rule of law by which to dispose of it. The plaintiff claims that even if it should be held that it is estopped to show the truth, as to so much of the gold as was paid to Ross over the counter of the Bank of New York, it should not be as to so much of it as was represented by the checks on the sub- treasury. And if these checks were alone concerned in the transaction, it might be said with force that Ross could have as soon got payment on them and clear escaped, as Harmon, the clerk, could have made his er- rand and returned. But these checks are connected with those on the Bank of New York; and Ross did not depart with the avails of the one until he had got the avails of the other. If Ross first went to the sub- treasury and obtained payment, then he aft- erward went to the Bank of New York; and he was there, or to and from there, from ten to fifteen minutes; and this op- portunity for stopping payment of the checks at the Bank of New York was also oppor- tunity for arrest of his person, and obtaining from him the gold got at the sub-treasury. And If it be said that he may have passed away the checks on the sub-treasury in the street to a confederate, still he was at the Bank of New York to be seized, and the coercion of arrest to be used upon him. In 53 Me. 103, arrest Is named as one of the means of obtaining security which the plain- tifC had let slip; and in L. R., 5 Q. B. 660, Blackburn, J., goes so far as to say that it needs not that it should appear that any benefit would result from the attempt to se- cure payment, but that the injured party had the right to make that attempt; and losing the exercise of the right by his reli- ance on the declaration, the declarant was estopped. We need not go so far here. Ar- rest and detention of the swindler Is a pow- erful means in coercing restoration; and ar- rest and detention were as probably in the power of Cronise & Co. as the stoppage of the payment of the checks at the Bank of New York. The judgment appealed from should be affirmed, with costs to the respondent All concur except RAPALLO, J., who con- curs as to all but the sub-treasury gold. Judgment affirmed. EQUITABLE ESTOPPEL. 117 GAIiBRAITH et al. v. LUNSFORD.i (9 S. W. 365, 87 Tenn. 89.) Supreme Court of Tennessee. Oct 18, 1888. Appeal from chancery court, Knox county; Henry R. Gibson, Chancellor. Ejectment by .T. P. Galbralth and others against B. P. Limsford; the controversy be- ing as to the location of a division line. In the plot referred to by the arbitrator the line from P to E represents the original botmd- ary, and the one ■which complainant now seeks to have established as the true one. The line from O to P represents the bound- ary as recognized for many years, and al- leged by defendants to have become the boundary by estoppel. Defendant had judg- ment and complainant appealed. Luckey & Yoe and Pickle & Turner, for complainants. Jesse L. Rogers, for respond- ent. POLKES, J. This is an ejectment bill, the disposition of which was dependent upon a question of boundary. After answer and proof, the cause was submitted to Mr. Je- rome Templeton, a solicitor of this court, as an arbitrator, who was "to hear and decide the same according to the law and the evi- dence." The award was to be in writing, and was to be made tte decree of the court The arbitrator presented his award, wherein was stated his findings of fact and of law, adjudging that the bill should be dismissed. Complainants excepted to the award, upon the groimd that the arbitrator manifestly undertook, as he was required by the sub- mission, to decide the case according to law; but that he had misconceived the law, and determined the case contrary thereto, upon the facts as found by him. The chancellor overruled the exceptions, and entered a final decree, making the award the judgment of the court Complainants have appealed, as- signing as error the action of the court in refusing to set aside the award, and in en- tering decree thereon. Under the submission the arbitrator was judge of the facts and the law, and was not required to give the grounds of his decision; in which event it would have been presumed that he had de- cided according to law. But, having stated his findings of fact, it was proper for the court to determine, on the exceptions pre- sented, whether the conclusions of law an- nounced by the arbitrator were warranted by the facts as found in a case where, by the terms of the submission, the award was to be in accord with the law. PoweU v. Riley, 15 Lea, 153. The proof is not in the record, having properly been omitted, inasmuch as no question was made — ^if, indeed, any could have been made— as to the correctness of the conclusions of fact reached by the arbitrator. 1 Upon the subject of equitable estoppel gen- erally, see note to this case in 1 L. R. A. 522- 524. We are therefore to consider only the ques- tion propounded in the exception to the award, to wit, that the deductions of law upon the facts as found are contrary to law. The complainants, in support of their ex- ceptions in the court below, now advance the following propositions In their assign- ments of error in this court: (1) "A line which could be easily ascertained by survey, and which had been known, and was lost or overlooked by mutual mistake, was and is not a doubtful line, that could be agreed upon or fixed, or become the true line, and binding by recognition, because void under the statute of frauds." (2) "Recognition of a line under a mistake of fact, where it was mutual, and either could have discovered the mistake by survey or otherwise, is not bind- ing on either party, and neither party can set up the mistake against the other, by way of estoppel or otherwise; as mistake is as much that of one as the other, and fault, if any, is equal; and, besides, one's admission, made under mistake, will be relieved against in equity, more especially when mistake is mutual." (3) "Recognition of a line, not the true one, will not divest title to land out of a married woman nor minor, by estoppel or otherwise, as a married woman cannot be divested or part with title to land in that way; but more especially when it was by mistake of fact, as well upon the part of her adversary as that of her own, and when either could have easily discovered the mis- take; nor is such married woman or de- scendant estopped to set up the truth, and recover accordingly; and more especially in a court of equity." Robbed of their verbiage, the assignments of error are to the effect (1) that the line or boundary, under the facts as found by the arbitrator,— there being, as assumed by the assignments, no bona fide doubt, as to the true line, entertained by both parties,— was not such a doubtful boundary as could be established by parol or acquiescence. .(2) That the doctrine of equitable estoppel does not apply at all to the facts as found. (3) And, if applicable, it cannot be effectual, as against married women. Before disposing of these propositions, let us see what are the findings of the arbitra- tor, as shown by the award itself. We quote: "Without going Into the details of the proof, I find as follows: "(1) The south boundary line of grant No. 18,417, to Wm. Cox, issued October 3, 1833, is the line from P to E in plot (Exhibit A) to the deposition of P. W. Galbraith. I fur- ther find that, as an original proposition, the north boundary line of the 250-acre tract- Wm. Cox to Jacob Pate, September 22, 1814 —was the line from I to T, on same plot; and in 1833, when said grant was issued, the two tracts adjoined the lines here above de- scribed,— being the same as far as the latter extended, and being the dividing line of the 118 EJQUITABI/E ESTOPPEIj. tracts. I add that, If I am mistaken as to the true south boundary of said grant, the result would be the same, because the deed— Geo. M. Combs to Wm. Cox, February 10, 1814— covered both tracts, and both parties to this suit derive title from Wm. Cox; and I am convinced the north boundary line of the 250-acre tract is the line I to T; that is, it not under said grant, certainly under the Combs deed, so far as these parties are con- cerned, Wm. Cox owned the land in contro- versy. "{2) I find that somewhere between Au- gust 11, 1846, and March 28, 1857,— that is, while Presley S. Chesher owned the 250- acre tract, or prior to August 11, 1846,— \ said dividing line was lost, or at least its y^Mocation became doubtful. As a consequence, / Chesher, between the point, I, and the New Market road, on said plot, cleared and in- closed the land up to and along the line from O to P on said plot, being the disputed line, as defendants claim it. Chesher did this under a claim of right, which, I infer from the circumstances, he thought that was his line. There is a marked line there, not as old as the line from F to E, but still an old line. Further, B. F. McFarland and wife, Sarah M. L. McFarland, a daughter, and the ven- dee of Wm. Cox, made the same mistake. They either forgot or never knew where the true dividing line was, and they clearly rec- ognized the line from O to P as the dividing line between them and Chesher. I find no evidence that Mrs. McFarland ever recog- nized said last-named line before her mar- riage. The deed to her from her father, con- taining the boundaries of said grant, is dat- ed April 16, 1841, and conveys to her by her maiden name. Her marriage was subse- quent, but the date does not appear. On one occasion, while John E. Hopkins owned the 82-acre tract, being the northern portion of the 250 acres,— that is, after November 3, 1866, and prior to 1869, when Mrs. McFar- (land died,- she and John E. Hopkins went along the Chesher fence, along the line from O to P, talking about a trade as to Mrs. McFarland's land north of said line. She then recognized said line as the dividing line between her and Hopkins. This is cited as showing the recognition of said line, as de- fendants claim it, was not by B. F. Mc- Farland only, but also by his wife. This recognition extends as far back as 40 years ago, or to 1848. In 1870 the heirs at law of Sarah M. L. McFarland, deceased, recogniz- ed the same line, O to P, when they parti- tioned among themselves the lands inherited from their mother. When John Neal bought the 82-acre tract from B. F. McFarland, No- vember 3, 1863, and when Hopkins bought the same from Neal, in 1866, said line, O to P, was the dividing line, being lived up to and recognized by McFarland and wife; and . we may assume that both Hopkins and Neal 1 bought with that understanding, well Justi- ' fled by the conduct of McFarland and wife. In 1870 the commissioners making partition did the locating of lines; but that only shows v the mistake about the division line had be- \ come the understanding of the neighborhood. By accepting the partition, the heirs showed/-' themselves ignorant of any mistake, so long had it (the line) been recognized. In 1873, John E. Hopkins, desiring to build a new dwelling-house, procured the division line to be run by J. P. Galbraith, the husbajpd of one of the McFarland heirs, who showed him where to build. Several other of the McFarland heirs were then at home in the neighborhood, and must have known of the building of the house, which was on their land, as they claim it now; but was on Hop- kins' land, and. just south of the division line, as they must have known Hopkins \ claimed it. To say the least of it, they were silent when they should have spoken. In 1877, R. M. Barton, Jr., and wife, Jennie M. Barton, the latter being one of the Mc- Farland heirs, by deed called for the Hop- kins division line from O to P. In July, 1877, Barton and wife sold the residue of the land partitioned to the latter to Wm. Galbraith; and some time afterwards, and prior to June, 1882, when Wm. Galbraith filed his bill against John E. Hopkins, the discovery was made that the line, so long recognized and lived up to on both sides as the true division line,- that is, the line from O to P,— was a mistake, and that the true line was from F to E or from 3 to J on said plot The line from O to P never was con- sistent with the 2d call, 'thence north 10 poles to a stake,' or with the fourth call, 'thence north 44 poles to a stake,' in the deed from McFarland to John Neal, made hi 1863. Nor was the same consistent with the calls of the deed from Wm. Cox to Jacob Pate, made September 22, 1814; nor was the same consistent with the oldest marked line on the ground. An accurate survey, at any time, ought to have discovered the true line. But so it was, the parties on both sides the line made a mutual mistake, without taking the trouble of a survey, on which they acted from some time prior to 1848 to some time after 1877. After so long a public acquies- cence, and so many public acts, some by solemn deeds of record on the part of Sarah M. Ia McFarland, her husband, and her heirs, under the influence and with the knowledge of which strangers have bought \ the adjoining land, and built a valuable I house thereon worth many more times the I value of land involved, can the McFarland \ heirs now be heard to complain of said mis- take, and be allowed to correct the same? '"' "Where the true locality of the line is doubt- ful, such acts are regarded as furnishing evidence that the line so recognized is the true line; nor are either of the parties at liberty afterwards to abandon such line, al- though the line should afterwards be ascer- tained at a difCercnt place. Gilchrist v. Me- Geo, 9 Yerg. 458, 459, Green, J. See, also. EQUITABLE ESTOPPBL. 119 ilerrl wether v. Larmon, 3 Sneed, 446, 448. In tlie application of the principle of equi- table estoppel, there is no exception in the case of married women. 2 Herm. Estop. 1232. See, also, Howell v. Hale, 5 Lea, 405; 2 Pom. Eq. Jm:. §§ 814-818; Crittenden v. Posey, 1 Head, 320; Stephenson v. Walker, 8 Baxt. 289. And the doctrine applies to Infants having such intelligence as to enable them to comprehend the Import of their con- duct. Barham v. Turbeville, 1 Swan, 438. If this authority is doubted, still the only infant affected is Mrs. Barton; who with her husband, after her majority, ratified her for- mer recognition of the line so long lived up to. I do not think the case of Wm. Gal- braith v. John E. Hopkins, is res adjudicata, because (1) complainants in this cause (ex- cept Barton's wife) were not parties to that suit; (2) the land involved here was not in- volved in that suit. The subject-matter was not the same. Being clear In my convictions above expressed, without discu^ing the ques- tion of the statute of limitations, I decide, having considered the case as arbitrator, ac- cording to the submission made hi the case, that complainants' bill be dismissed, with costs. ISigned] Jerome Templeton." We have given the entire award, so that it may be seen what were the findings of fact and of law. The award must be taken as a whole, and not in detached sentences. It will not do to cull out words here and there, and from them argue that the parties knew where the true line was. The mutual- ity of the mistake, and the ease with which the parties might have discovered the same, had they taken the old deeds and procured the services of a competent surveyor, does not render it any the less a mistake. The fact still remains that there was an honest ignorance of the whereabouts of the true line, and a bona fide recognition of the line indicated on the plot as O to P. If, with full knowledge of the true line, another be fixed by verbal agreement, such agreement is within the statute of frauds, and conse quently void; but, where there is doubt or ignorance as to the true locality of the line, a parol agreement, fixing the line between adjoining owners, is not within the statute; and, where satisfactorily established, will be enforced by the courts, notwithstanding it may afterwards be demonstrated that the agreed line was erroneously fixed. And such adjustment may be shown, as well by cir- cumstances and recognition, as by direct evi- dence of a formal agreement, when parties have acted thereon. Houston v. Matthews, 1 Terg. 116; Gilchrist v. McGee, 9 Yerg. 458: Merriwether v. Larmon, 3 Sneed, 451; Lewallen v. Overton, 9 Humph. 76; Rogers V. White, 1 Sneed, 69; Riggs v. Parker, Meigs, 49; Yarborough v. Abernathy, Id. 420. The cases on this subject are numerous in this state, and citations might be multi- plied; but they clearly make the distinction, and establish the principles as stated above. This being so, It is not difficult to apply them to the findings of fact made by the arbitrator in the case at bar. We have ad- missions and declarations, we have convey- ances made, and partitions had, calling for the line O to P. We have long acquiescence on the part of complainants, and those un- der whom they daimi, coupled with the ex- penditure of money by defendant in building Improvements upon the property In dispute, largely in excess of the value of the land itself. Induced not only by what had long been the understanding of the parties as to the location of the line, but by positive point- ing out of the line, with knowledge that the improvements were then about to be made. And during all this time we have absolute Ignorance on the part of the adjoining owner as to the true line; ignorance none the less absolute by reason of the fact that. In the opinion of the arbitrator, it might have easily been removed by a survey. There was no survey, and the honest ignorance remained, until shortly before the filing of the bill In this cause. This Is not a case of silence, but of numerous afiirmatlve acts and admis- sions that were calculated to and did In- fluence the conduct of defendants, and which acts and admissions are inconsistent with the claim of title now sought to be set up. The facts as found would seem to make out a case of estoppel, unless the disability of coverture prevents the application of this doctrine, as Is strenuously insisted upon by the learned counsel for complainants. Let us see how this is. The contention Is that, as a married woman cannot, m reference to her lands, bind herself by title-bond, power of attorney, contract of sale, or even a deed, without privy examination, and certificate of aclinowledgment In a prescribed form show- ing that it was done freely, voluntarily, and understandingly, it would be an anomaly In the law to hold that she might part with her title indirectly, when she had no pur- pose to do so, and when, instead of doing so freely, voluntarily, and understandingly, she was actually In ignorance, or laboring under a mistake of fact. And cases are cit- ed which seem to sustain the contention. It must be admitted that the cases on this subject are to a certain extent conflicting. But much of the difficulty and confusion is due to a failure to observe the distinction between the cases which seek, by the doc- trine of estoppel, to validate those contracts of a married woman which by law are de- clared void, and the cases where, in the absence of any contract, and independent of any contract or agreement, her conduct has been held to prevent her from asserting what would otherwise be a right. To the former class belongs the case of Dodd v. Benthal, 4 Heisk. 601. And the language of the judge delivering the opinion in that case, at page 607, where he says: "The complainant be- ing both an Infant and feme covert at tEe time of the execution of the deed tn ques- 120 EQUITABLE ESTOPPEL, tfon, no act of afiarmance or disaffirmance in pais on her part during coverture could be binding upon her," etc.,— is correct when con- fined to a contract of a person under dis- ability, which by law. is void in consequence of such disability. To the latter class, above referred to, belongs the case of Howell v. Hale, 5 Lea, 405. Here the conduct of the married woman, independent of any con- tract, operates to estop her in the same man- ner and to the same extent as if she were a feme sole. So in the case at bar, while there are facts and circumstances upon which a contract might be implied that would be binding upon a person sul juris, yet there are also such admissions, statements, and conduct on the part of the complainants and their ancestor as are amply sufficient to create an estoppel entirely independent of, and altogether outside of, any idea or claim of a contract. Mr. Pomeroy says "that [\ while, upon the question how far the doc- I trine of equitable estoppel by conduct applies I to married women, there is some conflict 1 among the decisions, the tendency of modern \ authority, however, is strongly towards the \ enforcement of the estoppel against married women, as against persons sul juris, with little or no limitation on account of their disability;" and that the decisions to the contrary seem' to be in opposition to the general current of authority. Modern Eng- lish cases, as well as American, are cited to sustain the text. Section 814, and notes. The case of Morrison v. Wilson, 13 Cal. 495, relied on so confidently by counsel for com- plainants, seems to not only deny the ap- plication of an estoppel in pais to a married woman, but goes so far as .to hold that af- firmative fraud on her part will not effect that result. It is sufficient to say of this case that it not only loses sight of the dis- tinction referred to as to the defective exe- cution of a contract, but is directly opposed to our own adjudged cases, so far as the element of fraud is concerned. The doctrine V of estoppel has, by courts of this state, been ^applied to married women and infants. Thus in Howell v. Hale, 5 Lea, 405, she was held estopped by matter in pais. She had by her conduct Induced Thomhill to purchase the mortgage debt on her land, leading him to believe that the land should stand liable therefor. This court held her estopped by her conduct to make defense to said mort- gage, whether she might have done so or not, as against the original mortgagee. In Cooley V. Steele, 2 Head, 606, we have a clear case of estoppel in pais applied to a married woman. She had, in a deposition, made a statement, as to title to certain shares, contrary to what she there asserted in the case before the court. This court said: "Complainant would be clearly enti- tled, upon well-established principles, to the relief sought, but for the estoppel created by her oath in the before-mentioned deposition.*' To the same effect is Pilcher v. Smith, Id. 208, where it Is said: "The legal disability^ of coverture carries with it no license or ) privilege to practice fraud or deception on / other persons." Estoppel in pais has also^ been applied to infants by this court. Bar- ham V. Turbeville, 1 Swan, 437; Adams v. Fite, 3 Baxt 69. In the latter case the court, after finding the weight of the proof in favor of the complainant having been of age at time of the execution of the deed, continuing, said: "Both on the ground of long acquiescence, and of the concealment of the fact that he was not of age, when com- plainant had good reason to know that Ewlng was trading with him as sui juris, complainant is repelled, even if he was In fact only twenty years of age when he made the deed." It is true that in the case of Barham v. Turbeville the infant was not merely silent, but actively proclaimed his father's title to the property he subsequent- ly sued for; and the court puts the estoppel upon the ground of actual and purposM fraud, which was right and proper, under the facts of that case. But, so far as the opinion in this case undertakes to hold that actual and positive fraud, at the time of the act set up as constituting the estoppel, U essential to the application of the doctrine of estoppel, it is obiter and unsound, as we shall presently undertake to show. It is also urged that actual fraud must exist before an estoppel can be maintained against one sui juris; and a forUori before it can be applied to a married woman, if against the latter it can be invoked at all. It is true that there is a theory which makes the essence of equitable estoppel to consist of fraud; but this theory is not sustained by principle nor authority. There are many well-settled cases of estoppel familiar to courts of equity, which do not rest upon fraud; and Instances are admitted, even by the courts, which maintain this theory, which cannot be said to involve any element of fraud, unless by a complete perversion of language and misuse of terms. The con- fusion to be found in some of the books on this subject is due doubtless to the fact that the fraud referred to has its origin In the effort afterwards to set up rights contrary to the conduct of the party, although at the time of the act constituting the estoppel there was the most perfect good faith. The term, as used in such cases, is, as Mr. Pomeroy ex- presses it, virtually synonymous with "un- conscientious" or "inequitable." It Is in this sense that it may be said that It Is a fraud or fraudulent to attempt to repudiate the conduct which has induced the other party to act, and upon which the estoppel is predi- cated; but it is entirely another thing to say that the conduct Itself— the acts, words, or silence of the party— constituting the estop- pel must be an actual fraud, done with the Intention of deceiving. It may therefore be safely said that although fraud may be, and often is, an ingredient in the conduct of the EQUITABLE BSTOPPBOfc 121 party estopped, It Is not an essential element. If the word is used in its commonly accepted sense; and the use of the term is unneces- sary, and often improper, unless applied to the effort of the party estopped to jrepudiate his conduct, and to assert a right or claim in contravention thereof. The best-consider- ed cases are In accord with the views above expressed. Bank v. Bank, 50 N. Y. 5T5; War- ing V. Sombom, 82 N. Y. 604. And although the earlier Pennsylvania decisions generally leaned strongly in favor of the theory that an actual fraud is of the essence of every such estoppel by conduct. It is worthy of note that in the late case in that state of Bidwell V. Pittsburgh, 85 Pa. 412, it Is said: "It is not necessary that the party against whom an estoppel is alleged should have in- ' tended to deceive. It is suflBcient if he in- tended that his conduct should induce an- I other to act upon it, and the other, relying on it, did so act." 2 Pom. Eq. Jur. §§ 804, 805, et seq. The ease of Brant*v. Coal Co., 93 U. S. 326, pressed upon us by counsel for complainant as establishing the contention that fraud is an essential element in the ap- plication of the doctrine of estoppel, and that it is essential that the party invoking the es- toppel was himself not only destitute of the knowledge of the true state of the title, but also of any convenient or available means of acquiring such knowledge, merits special mention. In addition to what we have al- ready said as to the first proposition, we will be content to adopt Mr. Pomeroy's note upon this case, where, after quoting freely of the opinion, he says: "With great deference to the opinion of so able a judge, I think his error in this passage is evident It consists In taking a special rule, established from motives of policy for a particular condition of fact, and raising It to the position of a universal rule. Where an estoppel by con- duct is alleged to prevent a legal owner of land from asserting his legal title, courts of equity, in order to avoid the literal re- quirements of the statute of frauds, were driven to the element of fraud in the con- duct as essential. See the text, sections 805- 807. The passage quoted from Judge Story Is dealing with this long-settled rule of eq- uity, and not with the subject of equitable estoppel in general. When this special rule is made universal, its inconsistency with many familiar Instances of equitable estop- pel becomes apparent, and Judge Field is forced to escape from the antagonism by denying that these instances do in fact be- long to the doctrine. If this conclusion be correct, then some of the most important and well-settled species of the estoppel, uniformly regarded as such by text writers and courts, must be abandoned, and the beneficent doc- trine itself must be curtailed In its operation to one particular class of cases. This result is in direct opposition to the tendency of ju- dicial decisions, and of the discussion of text writers." See note 1 to section 806, Pom. Eq. Jut., and cases there dted. It is worthy of notice, also, that, in the opinion referred to, Judge Field quotes approvingly from the Pennsylvania case of Hill v. Epley, 31 Pa. 334, language which is practically, to all intents, an abandonment of the extreme position supposed to be maintained in the Brant Case. The language referred to is: "The primary ground of the doctrine is that it would be a fraud in a party to assert what his previous conduct had denied, when on the faith of that denial others have act- ed." The element of fraud is essential either in the intention of the party estopped, or in the effect of the evidence which he attempts to set up; so that at last the difficulty seems to be in the use of terms, rather than in the true principles controlling the doctrine under consideration. As to the second proposition for which the Brant Case is cited, it Is suffi- cient to say that it does not sustain the posi- tion that the mutuality of the mistake, or the possibility of having discovered it, pre- vents the application of the doctrine of es- toppel. It merely asserts the familiar rule that where the party setting up the estoppel knew the true condition of the titie, either in fact or in contemplation of law, the doc- trine will not avail him; the fact being in that case, as shown in the opinion, that "he knew he was obtaining only a life-estate by his purchase." This opinion is already too long to allow further elaboration on the question of estop- pel under the facts of this case. It will, however, not be out of place to add that I find nothing in the numerous reported cases in this state, from Patton v. McClure, Mart. & Y. 339, down to Allen v. Westbrook, 16 Lea, 251, that makes vrillful fraud on the part of the party sought to be estopped, in the act constituting the grounds of the es- toppel, essential to the application of the doctrine. We hold, therefore, that there is, in the case at bar, on the facts as found by the arbitrator, every element of an equitable estoppel, and complainants must be repelled. The disability of coverture Is not sufficient to defeat this result. Let the decree of the chancellor be affirmed, with costs. 122 EQUITABLE ESTOPPBL. STARRY r. KORAB. (21 N. W. eOO. 65 Iowa, 267.) Supreme Court of Iowa. Dec. 8, 1884. Appeal from superior court of Cedar Rap- Ids. This is an appeal from an order in a gar- nishment proceeding discharging the gar- nishee. Plaintiff obtained judgment against one Joseph Lustick, on which execution issu- ed, and appellee was garnished as a suppos- ed debtor of the defendant in execution. At the proper time he appeared, and answered that he was not indebted to said Lustick in any sum, and that he did not have any prop- erty in his possession belonging to him. Plaintiff filed a pleading controverting this answer, in which It is alleged that in a con- versation had between plaintiff and gar- nishee before the execution was issued, gar- nishee stated that he was indebted to Lustick in a certain sum, and that he would not pay the same to Lustick until plaintiff had an opportunity to procure the Issuance of an execution on said judgment and serve notice of garnishment on him thereunder; and that, relying on this representation, and believing it to be true, plaintiff, at great expense and trouble to himself, procured said execution to issue, and caused the garnishee to be serv- ed with notice of garnishment thereunder, and that the garnishee is now estopped by his representation and conduct from denying that he was indebted to Lustick at the time he was served with the notice. The garnishee demurred to this pleading on the ground that it did not show that he was in fact indebted to Lustick when the notice of garnishment was served, and the facts averred in the pleading did not create an estoppel. The de- murrer was sustained, and, plaintiff declin- ing to plead further, judgment was entered discharging the garnishee. Plaintiff appeals. Blake & Hormel, for appellant. Bowman & Swislier, for appellee. REED, J. The purpose of the pleader was undoubtedly to set up in the pleading con- troverting the answer of the garnishee what Is denominated an equitable estoppel. The effect of such estoppel is to preclude the party from asserting a strict legal right, on the ground that his assertion of such right, under the circumstances of the case, would be against equity and good conscience. The pleading assumes that at the time the notice of garnishment was served on the garnishee he was not in fact indebted to Lustick, and that on strict legal grounds he was entitled to be discharged. But the claim is that, hav- ing induced plaintiff, by the representation that he was Indebted to Lustick, to Institute the garnishment proceeding and incur the ex- pense and trouble incident thereto, it would be manifestly unjust and inequitable in him to assert his exemption from liability there- on. And the question presented by the rec- ord is whether, under the facts stated in the pleading, the garnishee Is estopped to deny that he Is indebted to Lustick. It will be observed that the representation on which plaintiff claims to have acted in Instituting the garnishment proceedings con- sisted (1) In the statement of a matter of fact, viz., that the garnishee was at that time in- debted to Lustick in a certain amount; and (2) in a promise or agreement as to his con- duct in the future, viz., that he would with- hold the amount and not pay it over to Lust- ick until plaintiff would have an opportunity to procure an execution to issue, and notice of garnishment to be served upon him. But it does not appear from the averments of the pleading that the statement as to the matter of fact was not true when It was made; that is, It is not averred that the garnishee was not indebted to Lustick at the time the rep- resentation was made. Some time elapsed between the making of the representation and the service of the garnishment notice, and for anything that appears In the pleading the garnishee may have been indebted to Lustick at the time of the representation, and have paid the amount to him before the notice was served upon him. If those are the facts, the injury and damages which would result to plaintiff In case of the gar- nishee's discharge would be occasioned, not by his denial of the truth of his statement that he was indebted to Lustick, but by his failure to perform the agreement to retain in his hands the amount of the Indebtedness until the notice of garnishment should he served upon him. But an estoppel does not arise from the mere failure of a party to per- form an executory agreement. The doctrine of estoppel is applied to pre- vent the injustice which would result if one who has once asserted the existence of a fact, and thereby induced another to act In the be- lief of the truth of that statement so as to change his previous position, were permitted afterwards to deny its truth. Under such circumstances, and as against the one wbo made the statement, the law is that it shall be conclusively presumed to be true. Plck- ard V. Sears, 6 Adol. & E. 469. But it is difficult to conceive a case in which one who is sued for the mere failure to perform an executory agreement would be precluded by the law from making any defense against the claims. It may be that plaintiff has a cause of action against the garnishee on the agree- ment; but If so he clearly cannot enforce it in this proceeding. His remedy in that case must be sought in an original action agauist the party as defendant. In this proceeding, if he can recover at all, he can do so only by showing either that the garnishee was Indebt- ed to the defendant In execution when the notice of garnishment was served on him, or that such a state of facts existed as that he Is estopped to deny that he was so indebt- ed. The pleading In question, in our opinion, does not show either of these states of fact. Affirmed. cP" PENN et al. v. GTJGGBNHEIMBR et al. (76 Va. 839.) Supreme Court of Appeals of Virginia. Oct. 16, 1882. Appeal from circuit court, Botetourt county. Bill by Max Guggenhelmer and others against William J. Penn, as administrator of Stuart B. Penn and in his own right, Ann S. Penn, and others, to ascertain the interest of William J. Penn in the estate of S. B. Penn, deceased, and to subject the same to judgments of plaintiff against said William J. Penn. Under the will of Charles B. Penn certain lands were given to his children. He owned a third interest in cer- tain land on James river, known as the "Home Place," the other two-thirds of which belonged to his wife by descent from her father. Under said will he expressed a wish that his wife should retain the "home place," and at her death it should be the property of her son Stuart B. Penn. Tl^p widow, in 1850, received the personal estate given to her under the will of her husband, and gave a receipt reciting that she received it "agree- ably to the provisions of his said last will and testament." At the same time the "home place" was put on the land book of the county and assessed for taxes in her name as tenant for life and devisee of her husband. She never renounced the will, nor had dower assigned, but she filed an answer in 1867 to the plaintiffs bill. In which an- swer she denied that she had done anything to divest herself of her two-thirds in the "home place." The circuit court entered a decree that the widow had elected to accept the provision in the will of her husband, and that the remainder of the "home place" passed on the death of the said Stuart B. Penn, childless, among others, to the said William J. Penn, who was entitled to an Interest of one-fourth, subject to his moth- er's life estate, which interest was liable to be subjected by his creditors to the satis- faction of their judgment liens. Prom this judgment Ann S. Penn appealed, and, pend- ing the appeal, died. Affirmed. Edmund Pendleton, for Mrs. Ann S. Penn. J. H. H. Figgatt and John J. Allen, for Max Guggenheimer. G. W. & L. C. Hansbrough, for George Skillen Penn and Mrs. Prances ti. Mayo. STAPLES, J. The main question in this case turns upon the construction to be giv- en to the will of Charles B. Penn which was admitted to probate at the September term of the county court of Botetourt, in the year 1849. The testator, at the time of his death, was possessed of a valuable real and person- al estate, which he devised and bequeathed to his wife, Mrs. Ann Penn, and to his four children. To his two sons George S. Penn and William Penn he gave severally a tract of land. To Mrs. Mayo, his married daugh- ter, he gave certain real estate and a sum of ELECTION. 123 $10,000 in bank stock. To his wife he be- queathed all his slaves, with the full confi- dence that she would make such disposition of them among his children as should be just and equitable, after retaining such of them as she might desire for her own use during her lifetime. His other personal es- tate he directed to be sold, and the balance remaining, after the payment of his debts, together with the proceeds of any real es- tate not specifically devised, he bequeathed to his wife, with the full confidence that she would divide it among his children as she might deem just and proper. The third clause of the will, which gives rise to this controversy, is as follows: "It is my will and desire that my wife shall retain the home place, and at her death it shall be the property of my son Stuart B. Penn, which I hereby give to him, his heirs, and assigns forever." The home place, thus mentioned by the testator, is a tract of about 820 acres, one- half of which, known as the "lower half," was the property of Mrs. Penn, devised to her by her father. She was also the owner of one-third of the upper half of the tract, derived by descent from her sisters. The testator was entitled to two undivided thirds acquired by purchase In the upper half of the tract. So that his Interest at the time of his death did not exceed one-third of the entire ti'act. The first question arising under the clause already quoted is whether the testator in- tended to dispose of the entire tract, or whether the will is to be construed as dis- posing merely of his undivided third. If the former interpretation be the true one, it is conceded that it was incumbent upon Mrs. Penn, the widow, to make her election, and that she cannot claim both her own estate and the provision made for her by the will. Before entering into a discussion of that question it will be proper briefly to advert to some of the principles of law governing in such cases. The doctrine of election is said to rest up- on the equitable ground that no man can be permitted to claim inconsistent rights with regard to the same subject, and that any one who asserts an interest under an instrument is bound to. give full effect, as far as he can, to that instrument. Or, as it is sometimes expressed, he who accepts a benefit under a deed or will must adopt the contents of the whole instrument, conform- ing to all its provisions, and relinquishing every right inconsistent with it. In the terse language of Lord Rosslyn In Wilson v. Lord Townsend, 2 Ves. Jr. 697: "You cannot act. You cannot come forth to a court of justice claiming In repugnant ' rights. When you claim under a deed, you, must claim under the whole deed together. You cannot take one clause, and advise the court to shut their eyes against the rest 124 ELECTION. Suppose, in a will, a legacy Is given to you by one clause; by another, an estate of which you are in the possession is given to another. AVhile you hold that, you shall not claim the legacy." 1 Pom. Eq. Jur. §§ 465, 466; 1 White & T. Lead. Gas. Eq. pt. 1, pp. 541, 547, 548; Kinnaird v. Williams, 8 Leigh, 400; Craig v. Walthall, 14 Grat. 518; Dixon V. McCue, Id. 540. In order, however, to raise a case of election, it is well settled the intention on the part of- the testator to give that which is not his own must be clear and unmistakable. It must appear from lan- guage which is unequivocal, which leaves no room for doubt as to the testator's design. The necessity for an election can never arise from an uncertain or dubious interpretation of the clause of donation. 1 Pom. Eq. Jur. § 472; 2 Story, Eq. Jur. § 10. It is not necessary, however, that this in- tention should be expressly declared. The dispositions of the instrument, fairly and reasonably interpreted, may of themselves show a clear design on the part of the testa- tor to bestow upon the devisee property which in fact belongs to another. As in other cases, the intention may be gathered from the whole and every part of the instrument. The difllculty of ascertain- ing the testator's intent. It Is said, Is al- ways much greater where he has a partial interest in the estate devised than where he undertakes to dispose of an estate in which he has no interest. In the former case, the presumption is that he Intended to dispose of that which he might properly dispose of, and nothing more; and this presumption will always prevail, unless the intention Is clearly manifested by demon- stration plain, or necessary implication on the part of the testator to dispose of the whole es- tate. Including the interest of third parties. Generally, when the testator has an undivided interest in certain property, and he employs general words in disposing of It, as "all my lands," or "all my estate," no case of election arises from it; for it does not plainly appear that he meant to dispose of anything but what was strictly his own. 2 Story, Eq. Jur. § 1087; 1 Pom. Eq. Jur. § 489. A case of election does arise, however, when the testator, having an undivided or partial interest in an estate, devises it specifically, thus Indicating a purpose to bestow it as an entirety. This rule on this subject is thus laid down in 1 Pom. Eq. Jur. § 489. Where the testator proposes to give the whole thing itself, using language which, by reasonable In- tention, must necessarily describe and define the whole corpus of the thing in which his particular interest exists as a distinct and identified piece of property, then an intention to bestow the whole, and not merely the tes- tator's individual share, must be inferred, and a case for an election arises. This rule is mentioned and commented on by Judge Chris- tian in delivering the opinion of this court in Gregory v. Gates, 30 Grat. 83, to which I refer as authority for other views here announced. Now, let us apply these principles to the case in hand. In the first place, there can be no doubt that the tract of land or estate in ques- tion was universally known and described as the "Home Place." It is so spoken of by all the witnesses, by the parties, and it was so de- nominated in all the pleadings. Mrs. Penn, in her answer, describes it as the "Home Place." She speaks of the "upper half of the home place" and the "lower half of the home place." It is scarcely to be supposed that the testator would term it differently from every other person; that he referred only to his partial interest of one-third when by universal consent, usage, and habit, the entire tract was known and recognized as the home place. His language is: "That my wife shall retain the home place, and at her death it [the home place] shall be the property of my son Stuart B. Penn, which I hereby give him, his heirs ■ and assigns, forever." What gives some sig- nificance, at least, to this language is that the mansion house, occupied by the testator and his family for many years, was located, not upon the half in which the testator had an interest of two-thirds, but upon that portion exclusively owned by Mrs. Penn. It was this portion upon which the family resided that might with some propriety be termed the "Home Place," and not the two undivided thirds of one-half, constltutiug merely a part of the tract. It was said In the argument before this court that the language of the clause now un- der consideration is different from the other clauses of the will. For example, that the testator, when disposing of his own property, invariably uses the words, "I give and be- queath," whereas In the present instance he merely expresses the wish that his wife shall retain the home place. This difference of phraseology grows out of the fact that the tes- tator was carefully defining and limiting an estate to be enjoyed by his wife during her life, and the language used by him was such as he supposed would accomplish the object He then proceeds to say that it Is his will and desire at her death it (the home place) "shall be the property of my son Stuart B. Penn, which I hereby give him, his heirs and as- signs, forever." It is Impossible by argument or illustration to add to the force and perspicu- ity of this language. Nothing can be plainer, more direct and comprehensive. The cases of Padbury v. Clark, 2 Macn. & G. 298; HoweUs V. Jenkins, 2 Johns. & H. 706; Grosvenor v. Durston, 25 Beav. 97; Grissell v. Swinhoe, L. R. 7 Eq. 291, 295,— in which It was held that the devisee was bound to elect,— are directly In point and conclusive of the question. The other dispositions made by the testator confirm thoroughly this view of his Intention. He gave to his son George S. Penn an estate worth about $11,000, to his son William Penn an estate of the value of $14,000, and to Mrs. Mayo property worth $12,000 or $15,000. The provision made for his wife was more ELECTION. 125 than sufficient for her support and mainte- nance during tier life in tlie most comfortable and abundant manner. If, however, he de- signed that his son Stuart B. Penn should take the one-third of the home place, subject to the incumbrance of the life estate, the provision for him was wholly inadequate, and dispro- portionate to the benefits conferred upon his other children. On the other hand, if the tes- tator intended that the entire home place should be the property of his son Stuart B. Penn, the period of his enjoyment would be postponed until the death of Mrs. Penn, and the value of the devise would be about equal to the provision for the other children. > I am therefore of opinion that by the plain terms of the will Mrs. Penn was put to her election, and that she could not and cannot choose both her own estate and the bequests \ made in her favor. ' The next Inquiry ia, whether Mrs. Penn did, in fact, elect to claim under the will. An election may be implied as well as ex- pressed. Whether there has been an election must be determined upon the circumstances of each particular case, rather than upon any general principles. 1 White & T. Lead. Gas. Bq. 539, 571, 572. It may be inferred from the conduct of the party, his acts, his omis- sions, and his mode of dealing with the prop- erty. Unequivocal acts of ownership, with knowledge of the right to elect, and not through a mistake with respect to the condi- tion and value of the estate, will generally be deemed an election to take under the will. 1 Pom. Eq. Jur. §§ 514, 515. Lapse of time, al- though not of itself conclusive, yet, when con- nected with circumstances of enjoyment, may be decisive upon the question of election. f In Adsit V. Adsit, 2 Johns. Ch. 448, 451, Chancellor Kent said: "Taking possession of 1 property under a will or other instrument, and '> exercising unequivocal acts of ownership over I it for a long period of time, will amount to a binding election." "Positive acts of acceptance or renuncia- [ tlon," says Mr. Justice Story, "may arise from ' long acquiescence, or from other circimistances of a stringent nature, and are not indispensa- ble." "Again," he says, "it may be necessary to consider whether he [the devisee] can restore other persons affected by his claim to the same situation as if the acts had not been perform- ed, or the acquiescence had not existed, and whether there has been such a lapse of time as ought to preclude the court from entering upon such inquiries upon its. general doctrine of not entertaining suits upon stale demands or after long delays." 2 Story, Bq. Jur. §§ 1097-1098. /-( Where the election Is once made by the party bound to elect, either expressly or im- pliedly, and with full knowledge of all the facts. It binds not only himself, but also all those parties who claim under him, his rep- resentatives and heirs. 1 Pom. Eq. Jur. 8 516. Let us apply these principles to the case be- fore us. Upon the death of the testator, in the year 1849, Mrs. Penn continued in the pos- session of the home place until the present time, a period of 30 years.. It does not appear that she ever expressed any dissatisfaction with the provisions of the will till the filing of her answer in the cause In the year 1867. In the year 1850 the entire tract was entered upon the commissioner's books of the county and assessed with taxes in her name, as ten- ant for life. Whether this was done by her direction or not, it does not appear. It can scarcely be supposed she was ignorant of a fact disclosed on every tax ticket paid by her. It has been already stated that by the will testator's slaves were given to Mrs. Penn, in full confidence that she would make such dis- position of them among his children as would be just and equitable, after retaining such proportion of them as she might desire for her own use during her life. The residue of the real and personal es- tate was also given to her In trust for the benefit of the children. In the year 1850,— not long after the testator's death,— the ex- ecutors turned over to her the entire person- al estate, including slaves, and took her re- ceipt, stating that this was done in coni formity with the provisions of the will. The executors must therefore have understood that Mrs. Penn had accepted the provision made for her benefit. Upon no other ground would they have been warranted in thus dealing with the assets. The terms of the receipt given by her show that she was per- fectly apprised of the contents of the will, that she knew the condition and value of the property, and that she had united with the executors in fulfilling the intentions and wishes of the testator. Had Mrs. Penn re- nounced the will, as she was bound to do, in order to claim her own estate, she would have been entitled only to one-third of the slaves for life, and one-third of the personal property absolutely. As it was, she received from the executors under the will 49 slaves, of the value of $18,370, and other property, worth between $5,000 and $6,000. The testi- mony shows that Mrs. Penn never made any formal division of the property; that she, however, distributed among her children about 12 of the slaves, retaining the residue in her own possession, for her own use and benefit, until their emancipation in 1865. It is of no sort of consequence that during his lifetime Stuart B. Penn resided at the home place, and managed and controlled all the operations of the estate. This was, of course, done by the authority of Mrs. Penn, and doubtless for the reason that it was more agreeable to her that one of her sons should relieve her of the trouble and re- sponsibility, to which, amid the infirmities of declining years, she was unequal. She certainly exercised a dominion and owner- ship of the property, to which she was en- 126 ELECTION. titled only under her husbflnd's will, and which she could never have assumed unless she intended to conform to its provisions. After this long lapse of time, after this long-continued enjoyment and possession of the estate, and unequivocal recognition of the provisions of the will by receiving the property from the executors, it is too late for Mrs. Penn, at this day, to disclaim the testator's bounty, and assert title to her own estate. The slaves have long since been emanci- pated, the personal property exhausted, and it is now impossible to place the children in the condition they would have occupied had Mrs. Penn in the outset declared her inten- tion to hold her own property. So far from it, it is very clear that she made her election to claim under the will, and that she did so with a deliberate and intelligent choice, and with a full knowledge of all the circumstances, and of her own I rights. No possible injury can accrue to any one from the conclusion thus reached, for Mrs. Penn lived and died in the enjoyment of the estate. She never attempted any other disposition of it. Stuart B. Penn, the devisee, is dead, with- out children, and the estate has passed in due course of law to Mrs. Penn's children. A contrary decision can result only in dis- turbing a condition of things settled and acquiesced in for many years by all' parties. I think, therefore, there is no error upon this branch of the case in the decision of the circuit court The learned counsel for the appellant, In his petition for an appeal, and in his argu- ment before this court, has taken the ground that the parties bringing this suit are neither heirs nor purchasers nor beneficiaries under the will of Charles Penn, but judgment cred- itors of William J. Penn, and, as such, in- truders and volunteers, seeking to set aside a family settlement, and to vest In William J. Penn an interest which he himself does not claim, and to which he never asserted any title. It will not he denied that com- plainants, by virtue of their judgments, have a Hen upon all the real estate of their debtor, and that under our statute they may enforce that lien in a court of equity. This right of the complainants, and, In- deed, of all judgment creditors, cannot be afEected by any omission of disclaimer on the part of the debtor. According to repeat- ed decisions of this court, when the free- hold has once vested, the owner cannot di- vest himself of the title by any mere parol disclaimer; but he can only do so by deed or some other act sufficient to pass an es- tate. Even had William J. Penn executed such deed, voluntarily relinquishing his title, his creditors would not be bound by it When the court has once settled that Stuart B. Penn is entitled to the home place under the will of his father, William J. Penn, as one of his heirs, has an absolute title to his just share or proportion of that estate, and his creditors may not only subject it to satisfaction of their debts, but they may re- sort to a court of equity for the purpose of ascertaining that Interest and of removing every obstacle In the way of the just en- forcement of their liens. William J. Penn can no more defeat the claims of his cred- itors by a disclaimer of title than he could do so by a voluntary deed, or gift or assign- ment. In Dold V. Geiger's Adm'r, 2 Grat 98, it was held that choses In action, to which the wife becomes entitled during coverture, are liable to the claims of the husband's cred- itors, and a voluntary relinquishment of the same by the husband, and a settlement upon the wife, before being reduced Into posses- sion, will not protect such choses In action from such creditors' claims. Judge Stanard, in answer to an objection similar to the one made here, said: '"I think it may safely be laid down as a just deduc- tion from the elementary principles of our law that the general rule is that the rights of property of a debtor, whether in posses- sion or In action, present or reversionary, in law or In equity, and of value adequate to pay his debts, and without which he is insolvent, and the payment of his dehts must be frustrated, cannot by the mere vo- lition of the debtor, In the form of assign- ment, surrender, or other modes of arrest, pass to volunteers without valuable consid- eration, and be thereby placed in the hands of such volunteers, beyond the reach and secure from the claims of such creditors." This opinion of Judge Stanard, and, indeed, the decision Itself, constitutes a complete answer to the points made by counsel, and render unnecessary any further discussion of the subject. The next question Is whether the circuit court erred in disallowing the account of William J. Penn against the estate of Stuart B. Penn, for money alleged to have been paid by the former as administrator of Stuart B. Penn. The latter died in the year 1857, considerably Indebted. William B. Penn qualified as his administrator, and re- moved to the home place, thereafter resid- ing with his mother, the life tenant. There is no doubt that the net income derived from the estate was appropriated by him to the payment of his brother's debts. The only question is whether this income was sufficient for that purpose, or whether any part of the indebtedness was discharged by William J. Penn out of his private means. William J. Penn, in one of his depositions, states that from 1857 to 1860 he realized from the home place an income of $6,196.15, all of which, by the direction of his mother, was applied to the payment of his brother's debts. He further states that Stuart B. Penn had a note in bank of $4,600, for which the witness, at the request of his mother, substituted his own note. The larger por- ELECTION. 127 tlon of this latter note was paid oft by him in February, 18G4, and the balance in 1865, In Confederate money. This, reduced to its actual value In sound money, amounts to a very insignificant sum. In the concluding part of William J. Penn's deposition he expresses the opinion that he has been fully reimbursed for all moneys ex- pended by him in the payment of his brother's debts. Unfortunately for the pat^ ties setting up this claim, William J. Penn is their witness, and their only witness. They cannot ask the court to discard their own testimony, and enter a decree in their favor upon a case unsupported by proof. I have no doubt, however, that William J. Penn has given an accurate and truthful ac- count of his transactions and dealings with the estate. The home place was regarded as one of the most valuable estates on James river, yielding a large income annually to its own- ers. A very small portion of its profits was required for the support of Mrs. Penn; the balance passed into the hands of William J. Penn, and I am satisfied that he was fully reimbursed for every dollar appropriated by him for the payment of his brother's debts. The complainants, after the fullest oppor- tunity, have been unable to adduce any tes- timony to the contrary. They are clearly not entitled to a reversal of the decree in the present state of the case, and it is most ap- parent that nothing is to be gained by fur- ther inquiry. Upon the whole, I think the decree of the circuit court should be affirmed. Decree affirmed. 128 ELECTION. nTZHUGH V. HUBBARD. (41 Ark. 64.) Supreme Court of Arkansas. May Term, 1883. Appeal from circuit court, Phillips county; J. N. Oypert, Judge. M. T. Sanders and Tappan & Homor, for appsllant. Thweatt & Quarles, for appellee. SMITH, J. William St John Hubbard died in the year 1878. Just before his death he made his will, which was afterwards duly proved, and which Is in the words following: "I bequeath and leave imto my brother, Edward L. Hubbard, the full amount of his indebtedness to me, and the remainder of my property, both personal and real, to my sister, Mrs. Sarah L. Fitzhugh, after paying all of my debts, and my sister to administer without bond." In point of fact Edward L. Hubbard was not then indebted to the testator. He had formerly owed the testator a debt of $4,221.- 61, which was evidenced by note and secur- ed by deed of trust upon real estate;' but this debt had been transferred, eight months before the execution of the will, to Mrs. Sarah L. Fitzhugh. The deed of trust con- tained the usual power of foreclosure ty advertisement and sale upon default in pay- ment; and, in case of the refusal of the trustee to act, the sheriff of Phillips county was empowered to execute it Cage, the trustee, who was also the drafts- man of the will, did refuse to sell the prop- erty, alleging as his reason that the debt had been satisfied by the provisions of the 'fviU, whereupon the services of the sheriff were called into requisition. After due notice he sold and conveyed the lands to Mrs. Fitz- hugh, who brought ejectment. The defend- ant set up as an equitable defense that the deed of trust imder which the plaintiff claim- ed title had been canceled, and the debt which it was intended to secure had been released to him by virtue of said will. The cause was transferred to equity. Testimony was taken on both sides, and at the hearing the court required Mrs. Fitzhugh to elect whether she would afiSrm the vfill and ac- cept the devise to her, or renounce the same and assert a right to the debt due by Ed- ward L. Hubbard. She elected to take un- der the will. The court thereupon dismissed her complaint set aside the trustee's sale and conveyance, and canceled Edward L. Hubbard's note and deed of trust Mrs. Fitzhugh has appealed, and the main ques- tion is whether this is a proper case for the application of the doctrine of election. \ "An election in equity ia a choice which a party Is compelled to make between the ac- ceptance of a benefit under an instrument and the retention of some property, already his own, which is attempted to be disposed of in favor of a third party by virtue of the | same instrument. The doctrine rests upon the principle that a person claiming under an instrument shall not interfere by title para- mount to prevent another part of the samer instrument from having effect according to its construction. He cannot accept and re- ject the same instrument. It is a doctrine which is principally exhibited in cases of wills. • * • "The most common instance which is put of a case of an election is where a testator gives money or lands to A., and by the same will gives something of A.'s to B. Here A. must elect. He must either give effect to the will by allowing B. to have the property which the testator intended should go to him', or, If he chooses to disregard the will and retain his own property, he must make good the value of the gift to the dis- appointed beneficiary." Bisp. Eq. § 295; see, also. Story, Eq. Jur. § 1076 et seq.; 1 White & T. Lead. Cas. Eq. 342. Here the testator has undertaken to dis- pose of a debt which belonged to Mrs. Mtz- hugh. But he has given her the whole of his own estate. Her conscience is therefore affected by the implied condition annexed to the testator's bounty that while availing her- self of the will in one direction, she shall not defeat its operation tn another. The ultimate question in all such cases is this: Did the testator Intend that the dev- isee, upon accepting the benefit conferred up- on him, should acquiesce in the donation of the devisee's own property to another? Hence it becomes Important to determine how far parol evidence is receivable to mani- fest such Intention. Cage and other wit- nesses were sworn to prove declarations of the testator that in using the language, "in- debtedness to me," he referred to the debt which had been assigned to Mrs. Fitzhugh. In Bobmson v. Bishop, 23 Ark. 378, this court expressed its preference to construe wills from their ovni terms, rather than to take the deposition of the scrivener as to what the testator meant by particular claus- es. Parol evidence Is admissible, in this class of causes, to the same extent as tn other cases, in aid of the construction of written Instruments, and no further. You may show the condition of the subject-matter and the surrounding circumstances, so as to place the court In the position of the testator; but his purpose to put the devisee to his election must appear from the will itself. 2 Redf. Wills, 745. But as It was In proof that Edward L. Hubbard owed the testator no other debt, the vrtll can have no reasonable construction without tnclnding Mrs. Fitzhugh's debt The decree below is afiSrmed. BLBOTION. 129 WILBANKS et al. v. WILBANKS. as lU. 17.) Supreme Court of Illinois. Nov. Term, 1856. Error to circuit court, Jefferson county. Tbe defendant in error filed Ms blU against the plaintiffs, to enjoin the plaintiffs from prosecuting an action of ejectment against Walter S. Akin and David Rotramel, for the recovery of forty acres of land which the defendant In error claims under the will of his father, Robert A. D. Wllbanks, de- ceased. The bill states that R. A. D. Wllbanks, the father, entered the forty acres in the name of his wife, Sarah U. Wllbanks; that she died leaving the plaintiffs in error her heirs at law by her said husband; that the forty acres In dispute were part of the homestead or farm upon which said Wllbanks, the fath- er, and wife resided. That Wllbanks, the father, married a sec- ond time and afterward died, leaving a son, the defendant in error, by his second wife, and made a will bequeathing to his said second wife, for Ufe, the homestead, and at her death willed it to the defendant in error, and that the forty acres were Included in the bequest That the plaintiffs In error were also pro- I Tided for, one of them CT. J. Wllbanks) hav- ing a specific bequest left to Mm, of real ' and personal estate, and that the others were also as to the balance of the real es- \ tate of the testator undisposed of, made ' residuary legatees. The defendant in error asks that the plain- tiffs be enjoined from prosecuting their ac- tion at law, for the reason that the intestate, by devising the said tract of land to the de- fendant. Intended to put the plaintiffs off with what be gave them under the will, and that the plaintiffs ought to elect whether they would refund the value of the land or, be perpetually enjoined from prosecuting their action at law. The plaintiffs demurred to the biU gener- ally and specially, and contend that the facts stated in the bill do not warrant the issu- ance of an injunction against the plaintiffs, because the defendants to the suit at law are not parties; that from the face of the bill they are manifestly proper parties to the proceedings, and for that cause the demur- rer ought to have been sustained to the bill; they also contend that the facts stated in the bill do not show a case of election In equity at all, because: 1st, they were residuary legatees; 2d, Wilbanlis, the Intestate, was tenant by the curtesy, and had an Interest In the land in question; 3d, because the tes- tator treated the land as Ms own property; and, 4th, the forty acres of land in dispute are not described in the wjll at all, and the court will not supply the defect by implica- tion, from the fact that it was witMn the boundaries of the land bequeathed to Ms sec- H.& B.Eq.(2(1 Ed.)— 9 ond wife and the defendant upon her de- cease. The demurrer was sustained. The plain- tiffs stood by their demurrer; but the court ruled them notwithstanding to answer over, which they refused to do. A decree pro con- fesso was entered at September term, 1855, of the Jefferson circuit court, and the plain- tiffs were perpetually and unconditionally en- Joined from prosecuting their suit at law. The plaintiffs assign for error, the ruling of the court below, on the demurrer, and contend that the demurrer ought to have been sustained to the bill, and that the over- ruling the demurrer and granting the In- junction was erroneous, and that the decree of the court was rendered without any eq- uity whatever to support it; and further, that if the Injunction ought to have been awarded at all, it ought to have been award- ed on condition of the plaintiff falling to elect. R. S. Nelson, for plaintiffs in error. D. Baugh, for defendant in error. SOATES, C. J. The testator in this case disposed of all his estate, Iwth real and per- sonal. The objects of his bounty were ex- clusively those upon whom the law would have cast the estate in case of Intestacy; but whether in the same proportions under the will as at law, does not appear. Whether the provisions of the will are as beneficial as those of the law, or not, the devisees may not therefore disturb or set aside its provi- sions, unless under circumstances wMch raise a right of election. The widow accepted the devise made to her, wMch barred her dower; and the heirs as such merely could not avoid the provi- sions of the will, wMch disposed of the whole estates, real and personal, so far as they belonged to the testator. The legal title to the tract in controversy was not in the testator, but the plaintiffs, his children by a former wife, as heirs to their mother, in whose name the land had been purchased of the United States. The testator devised tMs tract to his sec- ond wife for life, as a part of his homestead, with remainder to defendant in fee, his son by the second wife. The object of the bill by defendant is to enjoin the plaintiffs from proceeding in eject- ment, to recover the land as heirs at law of their mother, upon the ground that they have devises and bequests made to them by the same will, of wMch they have ac- cepted, and they cannot, therefore. In equity and conscience be permitted to claim under the will the benefit of the devises and be- quests to them, without giving fuU effect to it in every respect, so far as they are con- cerned. We think the circumstances clearly pre- sent a case for election (waiving any question of a resulting trust for the husband), and assuming the fact to be as is alleged, that 130 ELECTION. the provisions of the will have been accept- ed, the plaintiffs are estopped in equity and conscience from all claim to this tract of their own, which is given to the defendant. In the general language of the authorities, they may not, at the same time, take under the will and contrary to it. This was the doctrine of the civil law, from whence, doubtless, we derived the rule. But it seems to have been confined to cases of wills by the civil law, while the rule with us has been extended to deeds and other contracts; and it has been held to be the rule at law as well as* in equity. The intention of the author of the deed or will to dispose of property which is not his, must be manifest; it is difficult to ap- ply the doctrine of election when the testator has some present interest in the estate dis- posed of, though not entirely his own; for it might be that he intended to dispose only of his own interest. Yet it is a question of in- tention, which is to prevail, and will be gathered from the terms of the instrument. An absolute power in the testator to dis- pose of the subject, and an intention to ex- ercise that power, seems in general sufficient to make a case of election; a devise to the heir, although inoperative, compels him to elect between the estate devised, and claims adverse to the will. The estate descending to the heir under his election to claim against the will, descends subject to the implied con- dition. These priijciples are extracted from Mr. Swanston's note to Dillon v. Parker, 1 Swanst 394b. , The doctrine of election Is very fully and comprehensively laid down in that case and note, and in Gratton v. Haward, 1 Swanst. 413, and note c. See also, Noys v. Mordaunt, 2 Vern. 581; 2 Story, Bq. Jur. §§ 1075-1096; 2 WilUams, Ex'rs 1236, section 9 of Election (B) and notes; 1 Rop. Hush. & Wife, 566, note 1; (7 Law Lib. 334.) It has been suggested that the testator here was tenant by the curtesy of this tract of land, and it should therefore be intended and understood that he devised that interest which belonged to him, and not the fee, which was in his children by his first wife. This view of the devise cannot help or ex- plain away the plain and obvious meaning and intention upon the face of the instru- ment; and that was to pass the fee in all the lands disposed of in the will. Besides, this would make the will inoperative as to this tract; for the estate by curtesy termi- nated with the life of the testator, at which time the devise took effect. We cannot in- dulge in a construction that would defeat the Intention, make the provision inoperative, or render the will void. Nor can we indirect- ly do the same thing by supposing that the testator believed this tract to belong to him; and Intended only to dispose of so much as belonged to him. Where such appears to have been the clear Intention of the testator to dispose of so much, and no more than he might own, and the particular property was devised or bequeathed under the Impression that it belonged to the testator, then, it may be, that the question of repugnancy and elec- tion might not arise; but the devisee or legatee might take the interest given, with- out surrendering his claim to his own proper- ty. Still the foundation of the doctrine of election is the Intention of the testator. So that when be clearly intends to dispose of the property of another, real or personal, al- though the will or deed alone and of itself may be ineffectual. Inoperative, or void as a conveyance or sale, yet" it affords authentic evidence of the intention of the testator or grantor, and that intention shall be made effectual and prevail to transfer the property of one who accepts a benefit under such will or deed. 2 Story, Bq. .Tur. § 1077. Indeed, in section 1076, Mr. Justice Story illustrates this doctrine of election by putting a case precisely like that before us. If the testator should devise an estate belonging to his son, or heir at law, to a third person, and should in the same will bequeath to his son, or heir at law, a legacy of one hundred thousand dollars, etc., an Implied or constructive elec- tion is raised. The son or heir must rehn- quish his own estate or the bequest under the will. The party is entiiled to a full knowledge of the circumstances, and of the situation and value of the estates or provisions made; and an election made in actual ignorance of material facts will not preclude the party from exercising the right anew upon obtain- ing full information. This record does not show that the election here was without full knowledge of all material facts. But admitting that the plaintiffs may yet make a new election. If they claim, by de- scent and against the will, all the lands and personalty devised and bequeathed to them In the win, they will be liable to make com- pensation to the disappointed devisee to the extent of the value' of the devise intended for him. So that equity will lay hold of the devise or bequest renounced, and substitute compensation for the devise or bequest de- feated. See 2 Story, Eq. Jur. and 1 Swanst above. Whether by renunciation the party for- feits all Interest, as In case of estates upon express conditions, or is entitied to any sur- plus after full compensation, as seems to be warranted by the current of authorities, is Immaterial here, it seems to us. For its loss to defendant from the midst of his home- stead tract, would cost plaintiffs more hi compensation out of their devises than It could be worth to them thus situated and surrounded. And they cannot now assert their tiUe as heirs to their mother, without making compensation to defendant, out of the devises to them in the wilL Decree af- firmed. ELECTION. 131 ROGERS v. JONES. (3 Cb. DiT. 688.) High Court of Justice. Aug. 3, 1878. By a marriage settlement dated the 11th of November, 1833, certain messuages and hereditaments (including six cottages In Ehos street, Ruthin) were settled to the use of William Williams for life, with remain- der to the use of his wife, Jane Williams, for life, with remainder to the use of the first and other sons of W. Williams in tail, and for default of such issue to the use of his first and other daughters in tail, and for default of such issue to the use of the heirs of the survivor of them, the said W. Williams and Jane Williams. William Williams, by his will made in 1860, gave to his said wife, Jane Williams, all his real estate during her life, and after her decease he purported to devise "all those six cottages situate In Rhos street" (being part of the property included in the said set- tlement) to his nephew, Thomas Rogers, his heirs and assigns. The testator . died in 1S60 without issue, and his widow, Jane Williams, became abso- lutely entitled under the settlement to the property therein comprised. In 1864 Thomas Rogers, not being aware of the settlement, sold and conveyed to the plaintiff his supposed reversionary interest under the testator's will in the said cottages. In 1875 Jane Williams died, having ap- pointed the defendants, W. D. Jones and E. P. Davies, her executors. After the death of Jane Williams, the plaintiff first ascertained that shE^^had, in 1872, sold the six cottages in Rhos street to a purchaser for value without notice of the devise hi the testator's will. The plaintiff now brought his action against the executors of Jane WUliams, and submitted that he was entitled to be indem- nified out of her estate in respect of the loss sustained by him in consequence of the sale of the cottages by the defendant, or that such sale was an election by her to take the cottages against the will of the testator, and that, consequently, the plaintiff, as the per- son Injured by such election, was entitled to is wife. , yif^ of elec- Y is this, I receive compensation for such injury out of the other benefits derived by Jane Williams under the will of the testator, for the loss occasioned to the plaintiff by such election, and to have the amount of such benefits as- certained and paid out of her estate. C. C. Ellis & Co., for plaintiff. F. W. Adam's, for defendant. Chitty, Q. C, and Mr. Romer, for plaintiff. Cookson, Q. C, and Mr. Bradford, for de- fendant. JESSELi, M. R. The testator in this case gave his real estate to his wife for her life, with remainder as to six cottages, which did not belong to him, to his nephew Thomas Rogers. At the time of the devise the tes- tator's only interest in these cottages was a life estate under the settlement, with a con- tingent remainder If he survived his Under these circumstances a case tion arises. The doctrine of election is this that if a person whose property a testator affects to give away takes other benefits un- der the same will, and at the same time elects to keep his own property, he must make compensation to the person affected by his election to an extent not exceeding the benefits he receives. In this case the widow, having elected to take against the will, was bound to make compensation to the plaintiff to the extent of the benefits she received under the wiU. Therefore, in her lifetime, she might to this extent have been thus made liable. But it is said that the plaintiff's right to be indemnified is lost by the death of the widow. Why? I see no principle upon which her death should exonerate her es.- tate. The liability of her estate must now be ascertained, and there must be an in- quiry as to the amount of the benefits which the widow received in her lifetime under the will, and as to the compensation to which the plaintiff is entitled in respect of the loss he has sustained by not getting possession of the six cottages at the death of the widow, so far as such loss does not exceed her benefits under the wlU. The pleadings to be amended by making T. Rogers coplalntlff. 'X.^ ■t-.J-v C>aX^.. X- 132 ELECTION. I KONVALINKA v. SCHLEGEL et al. (9 N. E. 868, 104 N. X. 125.) Court of Appeals of New York. Jan. 18, 1887. Appeal from supreme court, general term, second department John W. Konvallnka, Henry McGlpskay, and W. E. Glover, for appellant, Konvallnka, Bx'r, etc. George Bliss, for respondents, Maria Schlegel and another. ANDREWS, J. The question Is whether the widow of the testator is put to her elec- tion between dower and the provision in the will. The estate of the testator consisted of both real and personal property. The will, after directing the payment of the testator's debts and funeral expenses, and after giving to his wife the bedroom furniture in his dwelling-house, and to his children the rest of the furniture therein, proceeds as follows: "All the rest, residue, and remainder of my estate, property, and effects of every nature, kind, and description I give, devise, and be- queath to my executors and executrix here- inafter named, and I authorize and direct them to sell and dispose of the same at such time, and on such terms, as to them shall seem best, and to divide the proceeds there- of equally among my wife and children, share and share alike." There can be no controversy as to the general principles gov- erning the question of election between dow- er and a provision for the widow in the will. DovyOTisfavore^, It is never excluded by a provisionTor a wife except by express words, or by necessary implication. Where there are no express words, there must be, upon the face of the will, a demonstration of the inten- tion of the testator that the widow shall not take both dower and the provision. The will furnishes this demonstration only when It clearly app^rs, without ambiguity or doubt, that to permit the widow to claim both dow- er and the provision wouid interfere with the other dispositions, and disturb the scheme of the testator as manifested by his will. The intention of the testator to put the widow to an election cannot be inferred from the extent of the provision, or because she is devisee under the will for life or in fee, or because it may seem to the court that to permit the widow to claim both the provision and dower would be unjust as a family arrangement; or even because it may be inferred or believed, In view of all the circumstances, that, if the attention of the testator had been drawn to the subject, he would have expressly excluded dower. We repeat, the only sufficient and adequate demonstration which, in the absence of ex- press words, vrill put the widow to her elec- tion, Is a clear Incompatibility arising on the face of the will between a claim of dower and a claim to the benefit given by the will. ' We cite a few of the cases in this state show- ing the general principle, and the wide range of application. Adsit v. Adslt, 2 Johns. Oh. 452; Sanford v. Jackson, 10 Paige, 266; Church v. Bull, 2 Denlo, 430; Lewis v. Smith, 9 N. Y. 502; Fuller v. Yates, 8 Paige, 325; Havens v. Havens, 1 Sandf. Ch. 331; Wood V. Wood, 5 Paige, 599. In view of these settled rules, we think i\ the widow in this case was not put to her \1 election. The devise to the executors was 'J void as a trust, but valid as a power in trust, for the sale of the lands and a divi- sion of the proceeds, and the lands descend- ed to the heirs of the testator subject to the execution of the power. 1 Rev. St. p. 729, § 56; Cooke v. Piatt, 98 N. Y. 35. It is strenuously urged that, the power of sale being peremptory. It worked an equita- ble conversion of the land into personalty, as of the time of the testator's death, and created a trust in the executors in the pro- ceeds for the purpose of distribution, which trust it Is alleged is inconsistent with a claim of dower. The doctrine of equitable conversion, as the phrase implies. Is a fiction of equity, which Is frequently applied to solve questions as to the validity of trusts; to determine the legal character of the inter- ests of beneficiaries; the devolution of prop- erty, as between real and personal represen- tatives; and for other purposes. It seems to be supposed that there Is a necessary repug- nancy between the existence of a trust In real property created .by a vrill and an out- standing dower Interest of a widow In the trust property. We perceive no foundation for this contention. If the purposes of a trust, as declared, require that the entire title, free from the dower Interest of the widow, should be vested in the trustees, In order to effectuate the purposes of the testa- tor In creating it, a clear case for an elec- tion Is presented. Vernon v. Vernon, 53 N. Y. 851. But the mere creation of a trust for the sale of real property, and its distri- bution. Is not Inconsistent with the exist- ence of a dower interest in the same prop- erty. There is no legal difficulty In the trus- tee executing the power of sale, but the sale will necessarily be subject to the widow's right of dower, as it would be subject to any outstanding interest In a third person para- mount to that of the trustee. In the cases of Savage v. Burnham, 17 N. Y. 577, and Tobias v. Ketchum, 32 N. Y. 327, the widow was put to her election, not because the vesting of the title in trustees was per se inconsistent with a claim for dower, but for the reason that the vnll made a disposition of the Income, and contained other provisions which would be In part de- feated If dower was Insisted upon. There is language in the latter case which, discon- nected from the context, may give color to the contention of the appellant But It is the principle upon which adjudged cases pro- ceed which Is mainly to be looked to, be- cause a correct principle is sometimes ml»- ELECTION. 133 applied. There Is, however, no ground for misapprehension of the meaning of the learned judge In that case, interpreting his language with reference to facts then under consideration. It has frequently been declared that pow- ers of or in trust for sale are not inconsistent with the widow's right of dower. Gibson V. Gibson, 17 Eng. Law & Eq. 349; Bending V. Bending, 3 Kay & J. 257; Adsit v. Adsit, supra; In re Frazer, 92 N. Y. 239. And It was held in Wood v. Wood, 5 Paige, 596, that the widow was not put to her election, where the testator devised all his property to trustees, with a peremptory power of sale, and directed the payment to the widow of an annuity out of the converted fund. The same conclusion was reached, under very similar circumstances, in Fuller v. Yates, 8 Paige, 325; and in Re Frazer, su- pra, the widow's dower was held not to be excluded by a provision hi the will, although as to a portion of the realty the power of sale given to the executors was peremptory. The general doctrine is very clearly stated by the vice-chancellor in Ellis v. Lewis, 3 Hare, 310: "I take the law to be clearly set- tled at this day that a devise of lands eo nomine upon trusts for sale, or a devise of lands eo nomine to a devisee beneficially, does not, per se, express an Intention to de- vise the lands otherwise than subject to Its legal incidents, dower included." This re- mark of the vice-chancellor also answers the claim that the testator, when he described as the subject of the dower, "all the rest, residue, and remainder of my estate," meant the entire title, or the estate as enjoyed by him. A similar argument was answered by Lord Thurlow in Foster v. Cook, 3 Brown, Ch. 347. "Because," he said, "the testator gives all his property to the trustees, I am to gather, from his having given all he has, that he has given that which he has not." The argument that the testator intended equality of division between his wife and children is also answered by the same con- sideration. The proceeds of the testator's es- tate were by the will to be equally distributed. It left untouched the dower of the widow, which he could not sell or authorize to be sold, and which was a legal right not derived from him, and paramount to all others. It may be conjectured, perhaps reasonably In- ferred, that the testator really Intended the provision for his wife to be exclusive of any other interest, but so It is not written in the will, and we are not permitted to yield any force to the suggestion. It Is a question of legal Interpretation, which has been settled. The judgment should therefore be affirm- ed. All concur. VO J . / -a 'T-i-'v/-' 134 ELECTION. EEED V. DICKEEMAN. (29 Pick. 146.) Supreme Judicial Court of Massachusetts. October Term, 1831. Writ of dower. The following facts were agreed to by the parties. EUjali Reed, the late husband of the de- mandant, died seised in fee of the land describ- ed la the writ On August 8, 1816, he made his last will, containing the following provi- sions: "I give and bequeath to my beloved wife, Lucy Reed, and Alice Reed, my daugh- ter, one-half of my dwelling house where I now live, the southerly part of said house, and the north buttery in said house, during my wife's natural Ufe. Also to my beloved wife I give and bequeath one-half of my in- door movables. I also give and bequeath to my beloved wife one cow, which I order my sons, Solomon and Elijah, to keep for her, or some other in the room of it, free from any expense to her during her natural Ufe. Also I give and bequeath to my wife and my daughter, Alice Reed, one heifer, a year old last spring, and hereby order my two sons, Solomon and EUjah, to be at one-half the ex- pense of keeping said heifer for their moth- er." The will was proved in September, 1816. Soon after the death of the testator, the demandant selected a cow from the stock on the farm, and that cow, or another in- stead of it, has ever since been kept on the farm for her by her sons, Solomon and Elijah, and she has had the use of it ever since, until within a year past, when she sold it. A heifer was provided for her and Alice by Solomon and Elijah, and was kept by them for their mother until it died, which happened soon after the probate of the will. The demandant has always, since the death of her husband, been in the possession of the indoor movables. She has always lived in that part of the house which was devised to her, and Alice has lived with her. It ap- peared by the records of the probate court that in March, 1829, the judge of probate ap- pointed a committee to set ofC by metes and bounds and define that part of the dwelling house of the testator unto his widow and Alice, which was devised to them for their use during their natural life, together with the cellar, privileges, and appurtenances; and In April, 1829, the committee made a return, showing their performance of the duty re- quired of them. The real estate of the tes- tator was appraised, soon after his death, at $10,529, and the personal at $647, his debts amounted to a sum between $3,000 and $3,- 600, the real estate given to Alice was worth $900, one-half of the indoor movables was worth $95, and the fee simple of the whole dwelling house was worth between $1,300 and $1,400. A demand was made upon-^the \ defendant, on July 5, 1830, to assign doyer to the demandant. On the foregoing facts, or such of them as would be admissible In evidence on a trial before a jury, and on such Inferences as may be legally made from them, the case was submitted to the court, and if, in the opinion of the court, the demandant was entitled to recover, the defendant was to be defaulted; but otherwise, the demandant was to become nonsuit Mr. Eddy, for demandant W. Baylies and Mr. Miller, for tenant MORTON, J. The demandant Is clearly entitled to recover her dower, unless she is barred by the provision made for her in the wiU of Elijah Reed. In that Is given to her a freehold estate in a part of the dwelling house of the deceased, and also certain per- sonal property. The will contains no declara- tion of the testator's intention, whether this was to be in lieu of, or in addition to, the dower of his widow. By St 1783, c. 24, § 8, "the widow, In all eases, may waive the provision made for her in the will of her deceased husband, and claim her dower, and have the same assigned her in the same maimer as though her hus- band had died Intestate, in which case she shall receive no benefit from such provision, unless it appears by the will plainly the tes- tator's intention to be in addition to her dower." This Is a material alteration of a rule of the common law applicable to this case. By that rule a devise or bequest to a widow is presumed to be in addition to her dower, imless it clearly appears that it was the intention of the testator that it should be in lieu of dower. The wife has a legal interest in her hus- band's estate, of which she cannot be de- vested without her own consent After his death she is legally entitled to dower, un- less by some act of her own during his life- time she has barred her right or after his decease voluntarily relinquished that right A bequest or devise Is deemed a bounty, and not the payment or satisfaction of a pre-ex- isting debt or obligation. A gratuity cannot extinguish a legal right; hence the common- law rule that a donation in a will does not operate as an extinguishment of the right of dower, but is presumed to be a gratuity hi addition to the existing legal right; but a donation may be made on a condition, and that condition may as well be the relinquish- ment of the right of dower as the perform- ance of any other act, and If a donation in a win be made on the express condition that dower shall not be claimed, or. If it clearly appear from the will that it was the inten- tion of the testator that the widow should not have both the donation and the dower, then the donation shall be taken to be in lieu of dower, and the widow cannot hold both. She^ may have her election. She cannot claim un- der the will and adversely to it; but she Is not thereby devested of her right of dower, but may have her election between her dower and the provision made for her in the will. By the clause of our statute Just quoted. ELECTION. 135 this presumption of law Is reversed, and the i proylslon.In the will Is deemed to be in lieu I of dower, unless it plainly appears that the testator intended it to be in addition to it. In this case there is no express declara- tion that the testamentary provision was in- tended to be in addition to dower, nor can any such intention be inferred from all the will taken together. The inadequacy of the provision alone will not justify such an in- ference. The plaintiff must therefore take the de- vise and bequests In the will, vmless she sea- sonably elected to waive them. The statute seems to presume an acceptance. There is some positive act to be done by the widow, indicating her election, before she can be en- titled to dower. The demand required to be made thirty days before an action can be commenced might be considered an election, where no election had previously been made. Withm what time shaU a widow be holden to waive the provision made for her in the will, or to be bound by it? In New York, the widow shall be deemed to have elected to take the testamentary provision, unless she enters upon or commences a suit for her -dower within one year after ber husband's i death. In Virginia, she is allowed nine ' months, and ill Vermont only sixty days, in which to make her election; and, on failure to do it, she is confined to her dower at com- mon law. Our statute has not fixed any pre- cise time for the election; but doubtless the widow would be holden to have accepted the testamentary provision, unless she waived it in a reasonable time, that the settlement of the estate might be closed and distribution made among the heirs. What shall be deem- ed a reasonable time, not being fixed by stat- ute, cannot be accurately defined by any gen- eral rule, and need not now be discussed. For we are all of opinion that, under the cir- cumstances of this case, the demandant is pre- cluded from waiving the provisions of the will and claiming dower. Fourteen years elapsed after the probate of the will before any demand of dower was made. During the whole of this time she oc- cupied the real estate which was devised to her. The personal property bequeathed to her was received by her, and some of it has been disposed of by her. The benefit of the other provision in the will in her favor had been enjoyed by her. A decree of the probate court has been made, assigning to her by definite bounds that part of the real estate which was devised to her; and the whole es- tate has passed out of the hands of the orig- inal devisees. We think, after all this, it is-, too late for the widow to waive the provision I made for her in the wiU and claim her K dower. It is true that in equity the widow may sometimes be relieved from an improvident election; but this can only be done where some deception or fraud was practiced upon her, or at least where she acted under an ignorance of the facts or a misappr^ension of her legal rights. But here is no evidence of any deception, or misapprehension, or even ignorance of the circumstances of the case. The plaintiff chose to regard and carry into effect the provisions and directions contained in her husband's vtIII. No desire to avoid it on her part was known to exist till many years after the death of her husband, and not until the estate had passed from her fam- ily into the hands of strangers. We are en- tirely clear that she cannot now change her determination, waive the provisions of the will, and claim her dower. r %->— t.X^>o 136 ELECTION. VAN DYKE'S APPEAIi. (60 Pa. 481.) (Supreme Court of Pennsylvania. May 11, 1869.) Appeal from the decree of the court at Nisi Prius: In Equity: In proceedings In which James 0. Van Dyke and others, in their own right, were defendants. The case was heard at Nisi Prius on bill and answer, which with the exhibits, present substantially the following facts: — Dr. Frederick A. Van Dyke, a citizen of Pennsylvania, residing and having his home in Philadelphia, died November ISth 1867, leaving a will, bearing date November 5th 1861, and codicils dated July 4th 1863 and May 20th 1866— which were proved in Phil- adelphia on the 25th of November 1867. Let- ters testamentary were granted to those of the executors named in the will who survived him. Dr. Van Dyke left to survive him his wid- ow,' Mrs. Elizabeth Van Dyke, and eight chil- dren, or issue. The decedent was owner of per- sonal estate amounting, accord- ing to inventory filed, to $11,100 70 Of real 'estate in Philadelphia val- ued at 38,000 00 And of real estate in New Jersey (since sold for) 70,000 00 $119,100 70 By his will he gave to his living daughters each $10,000, making $20,000 00 And to the Pease children (the is- sue of a daughter) 12,000 00 $32,000 00 The residue of the Philadelphia estate and the New Jersey estates he devised to the five sons (and the issue of such as were deceased) in equal shares. The will having no subscribing witnesses, could not pass real estate in New Jersey; and, as to the testator's real estate there, he died intestate, and his children take in equal shares. The interests of the testator's children, de- rived from the will and the intestacy, are as follows:— The personal estate is valued at. . . $11,100 70 The real estate in Philadelphia 38,000 00 $49,100 70 The gifts to hia daughters amount to 32,000 00 Leaving to he distributed among his five sons $17,100 70 Or $3,700 each. The daughters take under the will about $10,000 each. The latter take equally with the sons the estate in New Jersey. In addition to the dispositions above stat- ed, the testator ordered as follows: — "13th. I direct that no public inventory or sale of my household furniture shall be made; that it shall be taken charge of by my ex- ecutors, and kept by them until disposed of according to devises made. That so much as she may require shall remain in posses- sion of my wife, Elizabeth Van Dyke, for her use, the remainder to be divided among my children, the articles only excepted especially devised in this instrument, or designated in my accompanying letter, to which I refer my executors, as well as for directions for the disposal of my body. "14th. I direct and enjoin on my heirs that no exception be taken to this my will or any part thereof on any legal or technical ac- count, and that any property or possession which may have been overlooked or omitted to be mentioned, shall be disposed of by an equal, distribution among my children. "15th. In case either of my married daugh- ters should die without issue, or surviving children, then as to the share or shares of her or them, I direct that such share or shares devised by me in trust for her or them, shall be equally divided among my other children, and the surviving children of any one of them who may be deceased." The bill alleges that the testator meant to exclude all but his sons from his New Jer- sey property; and that he intended that his daughters should take no more than the leg- acies he had bequeathed to them. The prayer is that the daughters may be^ put to their election, either to give effect to the whole will, by relinquishing their claim upon, the New Jersey property, or from their legacies to compensate the sons for their loss in consequence of the daughters sharing with them the New Jersey property. Mr. Justice READ, at Nisi Prius, dismissed the bill. The plaintiffs appealed, and assigned the dismissal of the bill for error. Argued before THOMPSON, 0. J., and READ, AGNEW, SHARSWOOD, and WIL- LIAMS, JJ. E. C. Mitchell and E. Olmsted, for appel- lants. C. E. Morgan, Jr., and W. A. Porter, for appellees. SHARSWOOD, J. No question has been made by the parties as to the jurisdiction of a court of equity in this state to give the re- lief prayed for in this bill. It having been suggested that it would be an encroachment upon that, which, by the Acts of Assembly, is exclusively conferred upon the Orphans' Courts, the attention of the counsel was di- rected to this point when the cause was or- dered for reargument. The learned and able gentlemen retained for the defendant, have, however, frankly conceded it. Consent, indeed, cannot give jurisdiction, and it is therefore, deemed prop- er to say, that we entertain no doubt upon the subject. The Orphans' Court, by the Act of June 10th, 1836, § 19, Pamph. L. 792, has jurisdiction of proceedings for the recov- ery of legacies, of the settlement of the ac- counts of executors, the distribution of the estates of decedents, and in all cases wherein ELECTION. 137 executors may be possessed of, or in any way accountable for any real or personal estate of a decedent. It Is also the settled doc- trine that the jurisdiction of that court with- in its appointed orbit is exclusive: White- side V. Whiteside, 20 Pa. 473; Shollenberger's Appeal, 21 Pa. 337; Black v. Black, 34 Pa. 354; and no doubt a court of equity cannot interfere with a matter of which the Or- phans' Court has exclusive jurisdiction: Loomis V. Loomis, 27 Pa. 233; Bickley v. Biddle, 33 Pa. 276. But it is not in every case, which may in- cidentally bear upon the settlement of the estate of a decedent, that its jurisdiction is exclusive; otherwise, all remedies for the re- covery of claims against such estates would necessarily be drawn within its vortex. This has never been pretended: McLean's Exec- utors v. Wade, 53 Pa. 146; Sergeant's Ex- ecutors V. Ewing, 30 Pa. 75. This is not a proceeding to recover a legacy charged on land, nor to compel a settlenlent or distri- bution, but falls within jthe a dmitted s copfi- of the authority of a~ court of eq, uitv inj^ases- /of-trttStnDle legaf 'title being in the de- fendants, as heirs at law, that court, if it is a case of election, holds them bound as trus- tees to compensate the devisees disappointed of the bounty intended for them by the tes- tator. The jurisdiction in such case is expressly recognized as concurrent in Lewis v. Lewis, 18 Pa. 79, 53 Am. Dec. 443. The decree of this court will doubtless be conclusive as to the subject-matter upon the final settlement of the account of the executors, but so would a judgment against them in a court of law, if no fraud or collusion were shown. We pass, therefore, to the main question. It may certainly be considered as settled in England, that if a will, purporting to devise real estate, but ineffectually, because not attested according to the Statute of Frauds, gives a legacy to the heir at law, he cannot be put to his election: Hearle v. Greenbank, 3 Atk. 695; Thellusson v. Wood- ford, 13 Ves. 209; Breckinbridge v. Ingram, 2 Ves. Jr. 652; Sheddon v. Goodrich, 8 Id. 482. These cases have been recognized and followed in this country: Melchor v. Bur- ger, 21 N. C. 634; McElfresh v. Schley, 2 GUI, 181, 41 Am. Dec. 415; Jones v. Jones, 8 GiU, 197; Kearney v. Macomb, 16 N. J. Bq. 189. Tet it is equally well established, that if the testator annexes an express condition to the bequest of the personalty, the duty of election will be enforced: Boughton v.. Houghton, 2 Ves. Sr. 12; Whistle v. Webster, 2 Ves. Jr. 367; Kex v. Wauchop, 1 Bligh, 1; McElfresh v. Schley, 2 Gill, 181, 41 Am. Dec. 415. That this distinction rests upon no sufficient reason has been admitted by al- most every judge before whom the question has arisen. Why an express condition should prevail, and one, however clearly implied, should not, has never been and cannot be, satisfactorily explained. It is said, that a disposition absolutely void, is no disposition at all, and being incapable of effect as such,, it cannot be read to ascertain the intent of the testator. But an express condition an- nexed to the bequest of the personalty does not render the disposition of the realty valid; it would be a repeal of the Statute of Frauds so to hold. How then can it operate any more than an implied condition to open the eyes of the court so as to enable them to read tliose parts of the will which relate to , the realty, and without a knowledge of what they are, how can the condition be enforced? "As to the question of the election," said Lord Kenyon, while Master of the Rolls, "the cases which have been cited are cer- tainly great authorities, but I must confess I should have great difficulty in making the same distinctions, if they had come before me. They have said you shall not look into a will unattested so as to raise the condi- tion which would be implied from the devise if it had appeared; but if you give a legacy on condition that the legatee shall give the lands, then he must elect; however, I am bound by the force of authorities to take no notice whatever of the unattested will, as far as relates to the freehold estate:" Carey v. Askew, 1 Cox, 241. "I do not under- stand," said Sir William Grant, "why a will,, though not executed so as to pass real es- tate, should not be read for the purpose of discovering in it an implied condition, con- cerning real estate, annexed to a gift of per- sonal property, as it is admitted it must be read, when such condition is expressly an- nexed to such gift. For if by a sound con- struction such condition is rightly inferred from the whole instrument, the effect seems to be the same as if it was expressed in words:" Brodie v. Barry, 2 Ves. & Beames^ 127. So Lord Eldon declared, that "the dis- tinctions upon this head of the law appear to be rather unsubstantial," and that "there are, undoubtedly, these distinctions, and a judge, having to deal with them, finds a diffi- culty in stating to his own mind satisfac- tory principles on which they may be ground- ed:" Rex V. Wauchop, 1 Bligh, 1. And in another place: "The reason of that distinc- tion, if it was res Integra, is questionable." "With Lord Kenyon, I think the distinction such as the mind cannot well fasten upon:" Sheddon v. Goodrich, 8 Ves. Jr. 482. Mr. Justice Kennedy has expressed the same opin- ion: "When a condition is necessarily im- plied by a construction in regard to which there can be but one opinion, there can be no good reason why the result or decision of the court should not be the same as in the case of an express condition, and the donee bound to make an election in the one case as well as the other:" City of Philadelphia V. Davis, 1 Whart. 510. There is another class of cases in England wholly irreconcil- able with this shadowy distinction; for the heir at law of a copyhold was formerly put to his election, though there had been no 138 ELECTION. surrender to the use of the will. This was previous to 55 Geo. Ill, c. 192, 1 White & T. Lead. Cas. Eq. 239, note; yet, as Sir William Grant has remarked, "a will, how- ever executed, was as inoperative for the conveyance of copyhold as a will defectively executed is for the conveyance of freehold estates:" Brodie v. Barry, 2 Ves. & Beames, 130. The mind instinctively shrinks from the task of frustrating the clear intention of a testator, aiming too to make all his chil- dren equal, upon authorities establishing a distinction without any difference. The pre- cise point can never arise in this state, for happily our Statute of Wills of April 8th 1833, Pamph. L. 249, wisely provides that the forms and solemnities of execution and proof shall be the same in all wills, whether of realty or personalty. The case before us is of a will duly executed according to the laws of Pennsylvania, devising lands in New Jersey, where, however, it is invalid as to the realty by not having two subscribing wit- nesses. A court of New Jersey might hold themselves on these authorities bound to shut their eyes on the devise of the realty, and consider it as though it were not writ- ten, and so they have held Kearney v. Ma- comb, 16 N. J. Eq. 189. They might feel themselves compelled to say, with Ld. Al- vanley, however absurdly it sounds: "I can- not read the wUl without the word 'real' in it, but I can say, for the statute enables me, and I am bound to say, that if a man, by a will unattested, gives both real and personal estate, he never meant to give the real estate:" Buckerldge v. Ingram, 2 Ves. Jr. 652. But a statute of New Jersey has no such moral power over the conscience of a court of Pennsylvania to prevent it from reading the whole will upon the construc- tion of a bequest of personalty within its rightful jurisdiction. If a question could arise directly upon the title of the heirs at law to the New Jersey land, doubtless the court of any other state, upon the well set- tled principles of the comity of nations, must decide it according to" the lex rei sitae. We are dealing only with the bequests of person- alty, and the simple question is, whether the testator intended to annex to them a condi- tion. If, without making any disposition whatever of the New Jersey estates, dying intestate as to them, he had annexed an ex- press proviso to the legacies to his daughters that they should release to their brothers all their right and title as heirs at law to these lands, it is of course indubitable that such a condition would have been effectual. We are precluded by no statute, to which we owe obedience, from reading the whole will, and, if we see plainly that such was the inten- tion of the testator, from carrying it into ef- fect. Some cases have arisen in England upon wills disposing of English and Scotch es- tates, in which the judgments have not been harmonious, nor can any general principle be extracted from them bearing upon this question. In Brodie v. Barry, 2 Ves. & Beames, 127, an heir at law of heritable prop- erty in Scotland, being also a legatee under a will not conforming to the law in Scotland as to heritable property, was put to his elec- tion. By that law a previous conveyance by deed was necessary, accordhag to the proper feudal forms, upon which the uses declared by the will might operate. As by the law of Scotland the heir at law m such a case was put to his approbate or reprobate (the Scotch law term for election), apd it was very similar to a will of copyhold. Sir Wil- liam Grant considering the law of both coun- tries to be the same, felt himself relieved from the necessity of determining by which law the decision should be made. Dundas V. Dundas, 2 Dow & Clark, 349, was a. case in the House of Lords from Scotland. The will was formal according to the Scotch laws, but was invalid as to real estate in England imder the Statute of Frauds. Yet the deci- sion of the Court of Session putting the Eng- lish heir at law to his approbate or reprobate was affirmed. This case Is certainly in point, In favor of the position taken in this opinion. It is true, that in the judgment pronounced by Lord Chancellor Brougham, then but re- cently raised to the wool-sack, it is not put on that ground. He assumes, that in Eng- land, while a court of law would be preclud- ed by the statute from looking at the dis- position made of the realty, it was compe- tent for a court of equity to do so, and that the Court of Session in Scotland had only done what a chancellor in England had a right to do; a distinction, it must be al- lowed, not adverted to in any of the previous cases, which were all in courts of equity. In McCall v. McCall, Drury, 283, Lord Chan- cellor Sugden, held that an heir at law of heritable property in Scotland, who was also the devisee of real estate m Ireland, under a will duly executed as to the Irish, but inef- fectual as to the Scotch estate, was bound to make his election. In the later case of Maxwell v. Maxwell, 13 Bug. L. & Eq. 443, which arose in England, the heir at law In Scotland was not put to his election but dis- tinctly on the ground, that the will in the alleged disposition of the Scotch estate, had used only general words. "If the will had mentioned Scotland In terms," said Sir Knight Bruce, Lord Justice, "or the testator had not any real estate except real estate in Scotland, that might have been a ground for putting the heir to his election. The mat- ter, however, standing as it does, we are bound to hold that the will does not exhibit an Intention to give or affect any property which it is not adapted to pass," and Lord Cranworth concurred in this view. In this state of the authorities, we are clear in holding that we are not precluded by force of the New Jersey Statute of Frauds, from reading the whole will of the testator ELECTION. 139 in order to ascertain Ills intention in refer- ence to tlie bequest of personalty now in question. We are equally clear that it is a case of election. The intention of the tes- tat6r"Hbes'notT^^t merely upon the implica- tion arising from his careful division of his property, among his children, In different classes, but he has Indicated it in words by /•the clause: "I direct and enjoin on my heirs, f that no exception be taken to this will, or 1 any part thereof, on any legal or technical V account." It is true, that for want of a bequest over this provision would be regard- ed as in terrorem only, and would not induce a forfeiture: Chew's Appeal, 45 Pa. 228. But as has been often said, the equitable doctrine of election Is grounded upon the ascertained intention of the testator, and we can resort to every part of the wUl to ar- f' rive at It. "The intention of the donor or i testator ought doubtless to be the polar star :^ in such cases," says Mr. Justice Kennedy, "and wherever it appears from the instru- ment Itself conferring the benefit, with a cer- taiaty that will admit of no doubt, either by express declaration, or words that are sus- ceptible of no other meaning, that it was the intention of the donor or testator that the object of his bounty shcvild not participate in It without giving his assent to everything contained in the instrument, the donees ought not to be permitted to claim the gift unless they will abide by the intention and wishes of its author:" City of Philadelphia v. Da- vis, 1 Whart. 510. This, however, is not the only mode in which the equity of the case can be reached. The doctrine of equitable election rests up- on the principle of compensation, and not of forfeiture, which applies only to the non- performance of an express condition: 2 Madd. Ch. 49. Besides, no decree of this court could authorize the guardians of the minors to execute releases of their right and title to the New Jersey lands, which would be effectual In that state. The alternative decree prayed for In the bill is that which Is most appropriate to the case. Decree reversed, and now It is ordered, ad- judged and decreed, that the executors of the last will and testament of Frederick Au- gustus Van Dyke, deceased, shall pay to the defendants, Mary A. Van Dyke, Margaret P. Fernald, and Frederick A. Pease, Elizabeth Pease and Augusta Pease, such sum less than the amount of their respective legacies, as will compensate the said plaintiffs and the surviving sons of the testator for the value of the shares of the said legatees In the said real estate In New Jersey, and that it be referred to James Parsons, Esq., as master to settle and report such respective amounts. 140 SATISFACTION. STRONG T. WILLIAMS. (12 Mass. 391.) Sapreme Jndicial Court of Massachusetti. 1815. Debt on a bond by Mary Strong against John C. Williams, executor. On report. De- fendant defaulted. The plaintiff declared in debt upon a bond made to her by Woodbridge Little, Esq., the defendant's testator, dated the 18th of Au- gust, 1800, conditioned to pay her $200 with- in one month after her marriage, if such event should take place in the lifetime of the obligor, or that his heirs, executors, or ad- ministrators should pay her $333.33 within six months after his decease. The adtion was referred to the decision of the court up- on an agreed statement of facts to the fol- lowing effect: On the day of making the bond declared on the testator made a writ- ten promise to the plaintiff, then resident in his family, to pay her $20 annually, so long as she could continue in his family, and to provide for her, during the same time, all kinds of clothing, and all articles which she might need, both in health and sickness; the plaintiff at that time living in the tes- tator's family as a maid and housekeeper. Payment of the said annuity was regularly indorsed on said promise until the year 1806, and the plaintiff duly received the other ar- ticles therein stipulated, and continued to live in the testator's family until his de- cease. On the 20th of March, 1813, the said testator made his last will, which was ap- proved after his decease, and of which the defendant is executor; and on the 21st of June following the testator died, leaving neither wife nor issue. In the said will the said testator, in consideration of the long, faithful, friendly, and meritorious services of the plaintiff, both to himself and his then late beloved wife, bequeathed to her his household furniture, with sundry other val- uable chattels, $300 in cash, and also the use of his homestead- for six months, or half the rents thereof for the first twelve months aft- er his decease, at her election. The specific articles so bequeathed were of the value of $745.84, and the rent of the said homestead for six months was equal to $50; all of which the plaintiff had received, together with the said cash legacy. The amount of the testator's estate and credits was $3,- 346.66, and of the legacies, payable in mon- ey, $2,200. All the residue of his estate, aft- er payment of debts (which were of trifling amount) and legacies, he devised to the coi> poration of Williams College, under whose di- rection the defendant contended that the bond had been satisfied by the payment of the said legacies to the plaintiff. If, in the opinion of the court, the plaintiff was enti- tled to recover the sum due by the bond in addition to the said legacies, judgment was to be rendered In her favor upon the default of the defendant; otherwise the plaintiff was to become nonsuit. PUTNAM, J. delivered the opinion of the- court. The general rule anciently established in- chancery was, that when a testator being in. debted gave to his creditor a legacy equal to, or exceeding the amount of his debt, the leg- acy should be considered as a satisfaction f(ir the debt. The rule has been acknowledged in Inter cases, but with marks of disapproba> tion, and a disposition to restrain its opera- tion in all cases where, from circumstances' to be collected from the will, it might be in- ferred that the testator had a different inten- tion. Haynes v. Mico, 1 Bro. Cha. Ca. 131. Thus where the testator left a sufficient es- tate, it was determined that he was to be pre- sumed to have been kind as well as just. So if the legacy was of a less sum than the debt; or of a different nature; or upon conditions;, or not equally beneficial in some one particu- lar, although more so in another. All the cases agree that the intention of the/ testator ought to prevail; and that, primal facie at least, whatever is given in a will is to be intended as a bounty. But by later cases the courts have not been disposed to understand the testator as meaning to pay a debt, when he declares that he makes a gift; unless the circumstances of the case should lead to a different conclusion. Thus in the case cited for the plaintiff, Brown v. Dawson, 2 Vern. 498, where the wife joined in the sale of her jointure, and the husband gave her a note of 71. 10s. per annum for her life; and afterwards upon an- other such sale he gave her a bond for 62. 10s. per annum for her life; and he after- wards made his will, and gave her lAl. per annum for life: the legacy was adjudged to be a satisfaction for the note and bond. Here it will be perceived that the annuity given in the will amounted exactly to the sums se- cured by the bond and note: and the pre- sumption of satisfaction proceeded upon the similitude of the legacy to the debt. 2 Fonbl. 330, in notis. So in the case of Fowler v. Fowler,^ V.W\\\. 353, the general rule wa» applied. There the husband, being indebted to the wife for arrears due by the marriage settlement, gave her a larger legacy by the will: and it was held a satisfaction of tho debt. But it is to be observed that lord chan- cellor Talhot expressed great dissatisfaction with the rule: and it does npt-appear that any circumstances could be found, to take the case out of its general application. In that case the court refused parole evidence, to prove that the testator intended both should be paid. But cases of this nature must depend upon the circumstances: an4 there must be a strong presumption, to induce a beli^that the testator intended the legacj^as a payment, SATISFACTION. 141 «nd not as a bounty. 2 Fonbl. 332. Thui> where the testatrix had given her servant a bond for 202. free of taxes for her life, and afterwards made her will and gave the serv- ant 201. per annum payable half yearly, but said nothing about the taxes, the court held that both should be paid. Atkinson v. Webb, 2 Vern. 478. — Here the legacy, being not quite so beneficial as the debt, did not raise a presumption that it was intended as a pay- ment. So where the testator having sufficient as- sets, and having manifested great kindness for the legatee, gave a legacy of a greater amount than he owed, it was holden by lord chancellor Cowper, that the testator might be presumed to be kind as well as just: and he decreed the payment of the legacy as well as the debt. Cuthbert v. Peacock, X Salk. 155. It has been holden that a legacy for a less sum than the debt shall never be taken as satisfaction; 2 Salk. 508; and that specifla things devised are never to be considered as satisfaction of a debt, unless so expressed. 2 £q. Ca. Abr. title Devises pi. 21, cited Bac. Abr. Legacies D. So the circumstance, that the testator had devised "that all his debts and legacies should be paid," was holden sufficient to take the case out of the general rule: as where the tes- tator, indebted to his maid servant 1002., by bond for wages, afterwards gave her 6002. lord chancellor King decreed that both should be paid, as the testator had made provi- uon for the payment of his debts. 1 F. Will. 408, 409, vide note. So where it appeared that the legatee had lived with the testatrix as a servant for twen- ty or thirty years, and she had given her a bond for 2602. and in one month afterwards she made her will and gave her 5002. : and in another clause she gave the rest of her servants 52. apiece, but not to Jane Greese, the legatee; "because," said the testatrix, "I have done well for her before;" and she also made provision for her debts and legacies. Lord Hardwioke thought the circumstances above stated took the case out of the general rule, and decreed the legacy to be no satisfao- tion for the debt. Richardson v. Greese, 3 Atk. 65; Nicholls v. Jvdson, 8. P.. 2 Atk. 301; Clark v. -SeMe22, S. P., 3 Atk. 97. So where the testator was indebted for goods on an open account, a legacy for a larger sum was not held a satisfaction: because he might not know whether he was indebted or not; and therefore no presumption was to arise, that he intended merely to pay a debt. Powel's Case, 1 P. Will. 299; 10 Mod. Case No. 201, p. 398. In the case at bar, the consideration for the legacy appears from the will to have been for the services of the legatee. A presumption that the legacy was intended to be a satisfac- tion of the bond also, must rest on the fact that the bond was giveu for the same serv- ices: of which fact there is no evidence be- fore ns. It may have been for a different cause. We can only presume that it was for a lawful one. It appears also from the will, that the tes- tator intended his debts and legacies should be paid, before his residuary legatees should take any thing. The pecuniary legacy to the plaintiff also is not so much as the debt; and therefore cannot be considered as a payment of it. Neither is there any declaration of the testator, that the specific articles given should be considered as a satisfaction of the debt. It appears also that there are sufficient assets. From a consideration of the principles and decisions applicable to this case, we are there- fore all of opinion that the plaintiff ought to recover. Defendant defaulted. (r 1 1 142 SATISFACTION. > DEICHMAN V. AENDT. (22 Atl. 799, 49 N. J. Bq. 106.) Court of Chancery of New Jersey. Oct. 26, 1891. Action by Deichman against Arndt for the construction of a will. Charles jl. ITztcA.forcomplainant. Wm. M. Davis, for defendant. BIRD, "V. C. By the bill in this case the - complainant asks the aid of the court in \y determining the true construction of the . ; last will of Ann Arndt, deceased, and con- / sequently the rights of the legatees and * devisees under said will. At the time or her death and of the making of her will she was the owner of a lot of land with a dwelling thereon, in which she resided. Before the making of her will she gave a bond to William M. Davis, the guardian of Harry King Arndt, one of her infant children, conditioned tor the payment of $500, with Interest. To secure this bond she gave a mortgage upon said bouse and lot. By her willshedevises this house and lot to her son Harry in the following language : " I give to my son Harry King Arndt, absolutely, to be held in trust, however, by ray executor hereinafter named, the dwelling-house and lot where- in I now reside, situate on Main street, in Phillipsburg, N. J., until he arrives at the age of twenty-one (21) years; my executor to rent the same, collect the rent, pay all taxes, insurance, services, and repairs, and the balance remaining to be used for the support and maintenance of my son Har- ry King Arndt,' hereinbefore named." jTwo questions are presented in the bill vl for consideration, viz.: Is thedevisetobe *' 'regarded as a payment and discharge of I the bond, and is the gift to Harry an ' absolute fee? In this case the testatrix in * clear language directs that all of her debts be paid as soon as conveniently can be after her decease. She makes disposi- tion of herpersonal estate, including bank- stock, giving a portion thereof to her daughter, a portion to another son, and a portion to the said Harry. The divia- , ion of this personal property is not equal, but the extent of inequality Is not made iapparent. She first gives to her daugh- ;ter certain household furniture; and, in the second place, to her son Frank cer- tain household furniture; and, in the third place, makes the devise of the house and lot to Harry. She then provides for the protection of her cemetery lot, and gives \ the three children all of her silver-ware. ^Immediately after this she directs her ex- ecutor to sell "the balance of my house- hold effects," and to divide the proceeds thereof between her three children, direct- ing him, however, to hold the share of Harry until he arrives at the age of 21 years. Then she directs her executors to collect the dividends of her 19 shares of bank-stock, and to pay the same towards the support and maintenance of Harry until he arrives at the age of 21 years, at which last-mentioned date he is author- ized to sell the said stock and divide the proceeds between her three children. Not- withstanding this last provision, she au- thorizes her executor to sell all the said \ *r k \ V •V shares of bank-stock at such time or times as be shall think fit, and to invest the proceeds, and pay the interest thereof for the support and maintenance of her son Harry until he arrives at the age of 21 years. She then directs that the residue of her estate, "consisting principally of bonds and mortgages and notes, money and stock, should be divided equally be- tween my three children, share and share alike, my executor, however, retaining that portion falling to my son Harry King Arndt until he arrives at the age of twenty-one years. " From this It appears that the testatrix was indebted to the guardian of her son in the sum of $500: that she made her said sorf both devisee and legatee, imposing a condition upon the devise that the executor should re- ceive the rents and profits until the son arrives at the age of 21 years, for his sup- port and maintenance, and a like condi- tion upon the gilt of the legacy ; and that, as the matter stands, both the devise and the legacy are of uncertain value. Where there is nothing to show a contrary in- tention upon the part of the testator, and he directs the payment of his debts, the gift of a legacy is never presumed to have been given for the purpose of discharging a debt due from the testator to the lega- tee. Van Riper v. Van Riper, 2 N. J. Eq. 1 , Heisler v. Sharp, 44 N. J. Eq. 167, 14 Atl. Rep. 624; Rusling v. Rusling, 42 N. .1. Eq.594,8Atl.Rep. 534; Chancey'sCase,l P. Wms. 408, 410, 2 White & T. Lead. Gas. 7.'>2, notes, 820; Reynolds v. Robinson, 82N. Y. 103; Boughton v. Flint, 74 N. T. 477; In re Huish, 43 Ch. Div. 260. The courts so little favor the discharge of debts by legacies that they have uniformly laid hold of slight circumstances to overcome the presumption that payment was in- tended independently of the direction to pay debts. Hence, when the gift has been of land or of goods and chattels, or upon conditions unfavorable to the donee when compared with the present discharge of the debt, the payment of. both has been required. 2 White & T. Lead. Gas. S21. "Money and land being things of a differ- ent kind, the one, though of greater value, shall never be taken in satisfaction of the other, unless so expressed." ""Whateverr is given by will is prima facie to be In-I tended a benevolence." Eastwood v.| Vinke, 2 P. Wms. 613, 616. In this casethe court remarked : "But, though the court has gone so far, it never yet construed a devise of land to be a satisfaction for a debt of money." In Bryant v. Hunter, 3 Wash. C. 0. 48, Fed. Gas. No. 2,068,, Washington, J., says: "The generalf rule ia that a devise of land is not a| satisfaction or part performance of an| agreement to pay money." See, also,' Eaton V. Benton, 2 Hill, 676, 580. The bond in this case being for the payment of money, and the gift being land, the construction must necessnrily be con- trolled by the cases cited. It can make no difference that the payment of the bond was secured by mortgage on the land de- vised. It cannot be doubted but that the gifts of goods and chattels and proceeds of bank-stock and residue by the testa- trix to her son Harry ai-e alike subject to the same conditions that govern with SATISFACTION. 143 respect to the devise of land. According to all of the cases there Is no similitude whatever between those gifts and the ob. ligation which the testatrix had directed her executor to pay. I have not thought It necessary to put any stress upon the fact that both the bond and the mortgage were given to the guardian of the devisee and legatee. It has been suggested that if this bond he paid to the guardian of Harry, Harry's proportion of the estate of the testatrix will be much larger than the portion re- ceived by his brother and sister. This would be an important consideration if it were the duty of courts to construe wills so as to make an equal disposition of the estate disposed of thereby among legatees and devisees, irrespective of the directions of the will. There is nothing in this will to give any certain assurance ' to the court that the testatrix intended I to make an equal disposition of her es- ' tate among her children. If there beany inequality in the value of the gifts, the testatrix may have had very good reason therefor; but, whether she nad or not, she had a lawful right to make any dis- tinction she chose. This bond must be first _gaid out^of the personal estate, as '?t¥er de5ts,T)efore_the payment ofany of. 'I&e legacies. TThe next question presented for consid- eration Is whether or not the Interest de- vised to Harry be less than the fee-simple absolute. When the sentence making the devise to Harry Is read, if there be any doubt as to the extent of the interest de- vised, such doubt will be dissipated upon careful reflection. The testatrix first de- clares that she gives him the premises ab- solutely, but afterwards gives such direc- tions as at first view would seem to have been intended as a qualification to the ex- tent of limiting his interest to the rents and profits until he arrives at the age of 21 years. But when this sentence and this apparent qualification are read in connec- tion with the succeeding clauses in the will, by which gifts are made to Harry, the doubt is removed. She ordered the silver to be divided between her three children ; but Harry's interest in other personal property and in the bank -stock and iu the residue of the personal property is to be retained by the executor, and the in- terest and dividends paid to Harry, he arrives at the age of 21 years, when 1 is entitled to the possession of the prin- cipal. From the control given to the ex- ecutor over the interest of Harry until he arrive at the age of 21 years the testa- trix in all probability intended to provide against the necessity of appointing a guardian for him. In my judgment the fee-simple absolute vested in Hariy. he in- » until \ len he I . L ■( L 144 SATISFACTION. DBWITT T. YATES. (10 Johns. 156.) Supreme Court of New York. May, 1813. This was an action of debt for a legacy. The cause was tried at the Saratoga circuit in September, 1812. Peter Yates, by his last will, dated the 15th of August, 1807, be- queathed as follows: "Item, I give to my I daughter Maria's children, of her body, two \ hundred and fifty pounds; if any of the five I children should decease before my decease, \ t or after, the parts of the deceased shall ■ " \ come to the then living; each of them is to (have fifty poimds when they come of age, or when they or either of themi should mar- ;ry." In a subsequent part of the will, the tes- tator having devised the half of a farm, etc., to his son-in-law, Philip Vanderbergh, and his wife, and the other half to his wife, etc., , directs as follows: "In consideration of ! which, it is my will, and I do hereby order, J that the said Philip Vanderbergh, his heirs, t > ! etc., shall pay to the children of my said P i daughter Maria, to wit, Sarah (the wife of the plaintiff), John, Maria, Catalma, and Catharine, the sum of two hundred and fifty pounds, equal to 625 dollars, to be paid unto them and each of them. In simis of fifty pounds, as they respectively shall arrive at the age of 21 years, or on the day that they or either of them shall marry," and appoint- ed the defendant and three others his exec- utors. It was proved that Philip Vanderbergh, the devisee, in October, 1807, paid to the plaintiffs the 50 pounds given to Sarah, the wife of the plaintiff, and named In the sec- ond clause of the will. It was admitted that a year had elapsed since the death of the testator; that the plaintiffs had duly demanded payment of the legacy, mentioned in the first clause, of the defendant, previous to the commencement of the suit, and had tendered and filed a bond according to the directions of the statute; and that the defendant had ass.ets in his hands, after payment of all debts and otlier legacies, sufficient to pay the legacy in ques- tion. The defendant offered a witness to prove that, before and at the time the testator made his will, he expressed his intention to give one legacy to the children of his daugh- ter Maria, and that was the legacy directed to be paid by Philip Vanderbergh; but the evidence was objected to, and overruled by the Judge. A verdict was taken for the plaintiffs, sub- ject to the opinion of the coturt, on a case made. Mr. Huntington, for plaintiffs, ner, for defendant. Mr. Skin- KENT, C. J., delivered the opinion of the court. This Is the case of a simi of money given twice In the same instrument to the same legatee. The general rule on this sub- 1 ject, from a review of the numerous cases,/: appears evidently to be that where the smn'l i] is repeated In the same writing the legatee[l''''/-\/ can take only one of the sums bequeathedj The latter sum is held to be a substitution, and they are not taken cumulatively, unless there be some evident intention that they should be so considered, and it lays with the legatee to show that intention and rebut the contrary presumption; but where the two bequests are in different instruments, as by will in the one case and by a codicil in the other, the presumption is in favor of the legatee, and the burden of contesting that presumption is cast upon the executor. The presumption either way, whether against tht cumulation because the legacy is repeated in the same instrument, or whether in favor of it because the legacy is by different In- struments, is liable to be controlled and re- pelled by internal evidence, and the circum stances of the case. Godol. Leg. p. 3, c. 26, 1 46; Swinb. pt. 7, c. 21, § 13; Duke of St. Albans v. Beauclerk, 2 Atk. 636; Garth v. Meyrick, 1 Brown, Ch. 30; Ridges v. Mor- rison, td. 389; Hooley v. Hatton, Id. 390, note; "Wallop v. Hewett, 2 Oh. R. 37; New- port v. Klnaston, Id. 58; James v. Semmens, 2 H. Bl. 214; Allen v. OaUen, 3 Ves. Jun. 289; Barclay v. Walnwrlght, Id. 462; Os- borne V. Duke of Leeds, 5 Ves. 369. This question, which appears to have arisen so often and to have been so learnedly and ably discussed In the English courts, was equally familiar to the civil law. The same rule ex- isted there, and subject to the same control. Dig. 30, 1, 34; Dig. 22, 3, 12; and the notes of Gothofrede, Id.; Voet, Con. ad Pand. torn. 2,408, s. 34. And Chancellor D'Aguesseau, in his pleadings in the Case of the Heirs of Vaugermain (Oeuvres, tom. 2, 21), adopts and applies the same rule to a case arising under the French law. The civil law puts the case altogether upon the point of the testator's intention; but then, if the legacy was repeated in the same instrument, it re- quired the highest and strongest proof to accumulate it. Evidentissimis probatlonibus ostendatur testatorem multlplicasse legatuni volulsse. In the present case, what are the intrinsic circumstances to show a manifest intent of the testator to multiply the legacy? The only material variation in the two bequests is that, in the latter instance, the legacy was charged upon Philip Vanderbergh in respect of the real estate to him devised; but this affords no evidence of an intention to accumulate. The inference is the other way. It was only strengthening the security of the legacy by means of the charge. There was no specified object. There was no as- signed reason or cause, as respected the lega- tees, for repeating the bequest Courts have required some new or additional cause for enlarging the boimty before they have held SATISFACTION. 145 It accumulative, unless the words of the will clearly showed the Intent In a will, the testator gave double legacies to his daugh- ters, but he added, in those cases, that they were "in addition" to what he had before given; and the master of the roUs, In Bar- clay V. Walnwright, said that he laid con- siderable stress upon this, that where the testator meant addition he expressed it. The whole will denotes throughout a careful and studied apportionment of the testator's es- tate among his children, according to his opinion of their wants and ctrcumstances; and he imposed , several trusts and charges, probably with a view to greater accuracy in the partition of his estate. He appoints four sons executors, but he charges his funeral expenses upon three, and his debts upon two, of them. A small variation in the direction H.&B.EQ.(2dEd.)— 10 as to payment wljl not alter the construc- tion. In Halford v. Wood, 4 Ves. 76, the legacy was an annuity of £30 for life, and in the one instance it was declared to be payable quarterly, and In the other instance the will was silent as to the payment, and yet it was not held accumulative. So, also, in Greenwood v. Greenwood, 1 Brown, Ch. 31, note, the one legacy was simply to Mary Cook, but the other was to Mary CJoqk "for her own use and disposing, notwithstanding her coverture"; and yet Lord Bathurst de- creed that she was entitled to one legacy only. As, then, the substituted legacy In this ease has been paid by the devisee, on whom it was charged, the defendant is entitled to judgment. Judgment for the defendant. 146 SATISFACTION. EDWARDS et al. v. RAINIEK'S EX'RS. (17 Ohio St. 597.) Supreme Court of Ohio. Dec. Term, 1867. Error to court of common pleas, Pickaway county. Reserved in the district court. The original petition was filed by the ex- ecutors of Isaac Rainier, deceased, against J, his devisees and legatees, on the 3d day of June, 1864, In the court of common pleas of Pickaway county, to obtain a construction ' of the vnU of said deceased. The will Is dated September 8, 1860, to which a codicil is added, dated December 4, 1861. The testator died March 25, 1863, and his will was admitted to probate April 29, 1863, and is as follows: "(1) I will that all my just debts and fu- neral charges be paid. "(2) I give and bequeath to Mary Rainier, my much-esteemed wife, in lieu of her right of dower, thirty acres of land during her nat- ural life, and bounded as follows: * * • Out of the farm on which I now reside, sit- uated in Madison township, Pickaway coun- ty. And I also give to my wife all the household and kitchen furniture of every description, except what Is hereafter vrilled. And I also give to my wife five hundred dol- lars in cash; and I also give her my sorrel mare Fly, and my top buggy, with the har- ness belonging thereto. And my said wife is to have sufficient timber of any part of said quarter section, for the use and support of her said dower, together with fuel suffi- cient for fire. And the widow may select what books she may think proper for her own use, except those hereafter willed. / "(3) I give and bequeath to my daughter I Sarah A. Edwards, wife of Stephen S. Ed- I wards, aU notes I hold against Stephen S. /^ : Edwards, of every description whatever, up '^ , to the first day of November, 1852; and I also give to my daughter, Sarah A. Edwards, fifteen hundred dollars in cash. "(4) I give and bequeath to my son Isaac Rainier the use, occupation, and enjoyment of the northwest quarter of section eleven. In Violet township, Fairfield county, Ohio, to have and to hold during his natural life, and then to his heirs. "(5) I give and bequeath to my daughter Hester Ann Adell the use, occupation, and enjoyment of the northeast quarter of sec- tion number foiui;een, situate in Violet town- ship, Fairfield county, and state of Ohio, to have and to hold during her natural life, and then to her heirs, subject to the dower of ■- my wife, Mary Rainier. And the said Hes- ter Ann Adell, wife of George Adell, is to J pay to my daughter Sarah A, Edwards, wife < of Stephen S. Edwards, one thousand dol- J* lars in money, in the following payments, to /* wit, one hundred dollars per year. The first payment to be made one year after my death, and if the said Hester Ann Adell should fail to make the above payments as > required, and should it become necessary to sell any portion of the land. It is my will It shall be taken off the west side, not to ex- ceed thirty acres." (6) In this item the testatoj gives to his son John F. Rainier the northwest quarter of section number fourteen, in Madison town- ship, "subject to the widow's dower above written"; and he also gives him "the horse power wood saw, and all the reaping and mowing machines, and all wagons and farm- ing utensils of every description whatever, and aU the stock of every kind (except two cows, which I leave to the widow, she hav- ing choice); also Clerk's Commentaries on the Old and New Testament, six volumes, Webster's Unabridged Dictionary, and all the books belonging to me not taken by the widow; and I also give to my son John F. Rainier aU mechanic tools of every kind whatever, and one bedstead, bed, and bed- ding." (7) In this item he gives to his daughter Mary E. Pontius, wife of Franklin G. Pon- tius, the northwest half of the northeast quarter of section eleven, in Violet town- ship, and "five hundred dollars in money, in- cluding a dueblU" of $82 against said Frank- lin G. Pontius. "(8) I give and bequeath to my niece Al- mina Ebright one bedstead, bed, and bed- ding; and I also give to Almina Ebright one hundred dollars In money, provided she con- tinues to Uve with the family imtil she ar- rives at the age of eighteen years, if there should be that amount remaining after pay- ing ofE the other legatees as above given. "If the widow should see proper to marry again, she then shall forfeit her Interest in my real estate, and my daughter Hester Ann Adell and my son John F. Rainier shall pay, each of them, two hundred and fifty dollars in lieu thereof. "AU the above legacies to be paid in two years after my decease, or as soon after as can be collected." The testator appointed John P. Rainier and George Adell executors of his will. By the codicil, the testator gave the north- west quarter of section eleven, in Violet township, to John F. Rainier and George Adell in trust for Isaac Rainier for life, and then to his heirs, and revoked all right that Isaac had in the foregoing will except as expressed in the codlcU. He gives to John all the household furni- ture after the death of his wife, and adds the following clause: "And it is my will that each my several children shall have all the growing and matured crops that may he (on) the different tracts of land that I hf^ve willed to them ag above written." It was claimed by the executors that the sum of $1,000, mentioned In the fifth item of the will, was intended to be a part pay- ment of the sum of $1,500 bequeathed in the third item to Sarah A. Edwards; while the latter claimed that said sum of $1,000 was a legacy to her in addition to the sum »* SATISFACTION. 147 51,500. "Che executors aver that the person- alty Is .Qsrifficlent to pay said legacy unless said suiu of $1,000 be applied for that pur- pose; but Mrs. Edwards answers that the personalty was sufficient when the will was executed, ?nd that if there is not now enough It fs because It was expended in im- provemenvs on the real estate. This is not denied by /eply. The exexjutors claim the com in cribs, on the lands devised as aforesaid, at the time of the testator's decease; but the same is claimed by the respective devisees of the land on which the corn was grown and ma- tured, and wi which the cribs were several- ly located. The court «f common pleas decreed that the will be construed to give to Sarah A. Edwards a legacy of $1,500 only; that the sum of ?1,000 mentioned in the fifth clause Is a fund foi the part payment thereof, and not an additional legacy; that the corn in the cribs passed to the execdtors, and not to the devisees; and that the sum of $500 given to the widow is a debt In lieu of dow- er, and not h legacy. To reverse this decree a petition in error was filed in the district court, which was there reservwl for decision in this court The following are the assignments of er- ror: (1) There was error In finding that the legacy to Saaiah A. Edwards was a legacy of $1,500 only, and not a legacy or legacies of $2,500. (2) There was error in finding that the com named in the petition as being in the cribs on the land of Isaac is not embraced in the provisions of the will, but belongs to the executors. (3) TTiere was error In finding that the sum of $500 to the widow is a debt in lieu of dower, and not a legacy. (4) General assignment of errors. C. N. Olds, for plamtifEs. Henry F. Page, for defendants. DAY, 0. J. We are called upon, under this proceeding In error, to determine wheth- er the court of common pleas correctly con- strued the will of Isaac Rainier, deceased. No bill of exceptions was taken In that court embodying the evidence there given, and. so far as evidence was admissible to aid in the construction of the will, it may be presumed to have been before the court. At most, however, the evidence could only Inform the court of all the circumstances that sur- rounded the testator, to aid it in determin- ing the meaning the testator intended should be given to the words he used in the will. With this presumption In favor of the Judgment below, we are left to construe the will by the language used therein, aided only, on the principal question, by a fact conceded by the pleadings, that the testator, when he executed the will, had personal property sufficient to fill all the legacies upon the largest construction of the bequests. It is claimed by the executors that the sum of $1,000, to be paid by Mrs. Adell to Mrs. Edwards, is to be applied on the legacy to her of $1,500, and Is not to be regarded as a legacy in addition to that sum. Mrs. Edwards claims that it was the in- tention of the testator to give her both sums. Here arises the principal question pre- sented for our consideration: Was the $1,000 Intended by the testator to be an additional benefit or legacy to Mrs. Edwards? J The books afford us but little aid in the solution of this question; for, in the lan- guage of Chief Justice Hornblower In Jones V. Creveling's Ex'rs, 19 N. J. Law, 127: "After a careful examination of the cases cited on the argument and of many others, I am satisfied, notwithstanding all the nice distinctions that have been taken by courts of law and courts of equity upon the sub- ject of single or cumulative legacies, we must come down to the plain oommon-sense question of what was the intention of the testator." Chief Justice Kent, after much research, arrived at substantially the same result in De Witt v. Tates, 10 Johns. 156. Although he recognizes the general rule that, where the sum is repeated in the same writing, the presumption is against the legatee, and that where the two bequests are in different in- struments the presumption Is In his favor, he adds: "The presumption either way, whether against the cumulation, because the legacy is repeated in the same Instrument, or whether in favor of it, because the legacy is by different instruments, is liable to be controlled and repelled by internal evidence, and the circumstances of the case." The general rule is stated in an English treatise to be that, where two legacies are] given by the same testamentary instrument of equal amount, courts infer an intention in the testator to give but one legacy; and that, "where the legacies given by the same tes- tamentary instrument to the same person are of different amounts, the legacy shall be con- sidered accumulative." Rop. Leg. *996, *998. If the $1,000 was in the form of a direct bequest, these authorities might aid us in arriving at a conclusion; but the real ques- tion is whether that sum was intended to be In part payment of a legacy already ex- pressly given In the will; if not, the ques- tion is settled, for it is clear that the tes- tator intended Mrs. Edwards should have the money. If he did not intend that it should apply in part payment of the $1,500, It is equally clear that he intended it should be an additional legacy. The only question then is whether the tes- tator intended that Mrs. Edwards should re- ceive the sum of $1,000, to be paid to her as directed in the fifth Item of the will. In 148 SATISFACTION. part payment of the legacy he had given her In the third. The Intention of the testator in relation to this "is to be gathered from the phraseology of the will itself, and, to arrive at this in- tention, it is necessary to look into the en- tire instrument." Williams v. Veach, ,17 Ohio, 180; Beckwith v. Moore, 14 Ohio St 129; Brasher v. Marsh, 15 Ohio St. 103. Let us then look at the will. We search in vain for any expression of a purpose that the $1,000 should be applied in part satis- faction of the legacy bequeathed in the third item of the will. There is no language used in the instrument from which such an in- tention can fairly be implied. It would have been most natural, in b. matter of so much importance, to have indicated that the $1,000 was to be paid to Mrs. Edwards, to apply on the legacy before given to her, if such was the intention of the testator. If he intendted to make the mode of paying this legacy of $1,500 to differ so widely from that of pay- ing all the other legacies in his will, it is singular that he did not add to the gift of "fifteen hundred dollars in cash" some words indicating such a purpose, or else haye done so in connection with the direction that a $1,000 should be paid to the legatee of the $1,500. This strikes us with the more sur- prise, if such was his intention, since in other parts of his will. In matters of less im- portance, he is sufficiently explicit. Where he directs two of his legatees to pay money to his widow in the contingency of her mar- riage, he specifies that it shall be "in lieu" of her Interest In his real estate. In the sec- ond item he gives his wife all the house- hold and kitchen furniture, except what is "hereafter willed"; she is also to have such books as she may select, "except those here- after willed"; and in the sixth clause he de- vises land subject to the widow's dower "above written." While thus explicit in minor matters, if such was his purpose he would naturally have added to the legacy of $1,500, or to the requirement to pay the leg- atee of that amount the sum of $1,000, some words indicating a purpose to have the lat- ter sum applied on the former. Nor was it at all singular, as contended In argument, that the testator did not embrace in the third item all he Intended to give his daughter Mrs. Edwards, but left a part to be Inserted in the fifth. After providing for his wife in the second clause, it would seem that he makes a fur- ther provision for her in the fifth, in rela- tion to the real estate; clearly, in the sixth, he gives her some property in addition to that bequeathed to her in the second. More- over, there are obvious reasons, if he did Intend to give the $1,000 in addition to the $1,500, why he should insert that gift in the clause we find it, and no particular reason why both gifts should be Inserted in one item' of the will. One was a general legacy; the other was to be paid by a particular person, and at particular times, and is in a clause naming the person to pay it, and pro- viding the means of securing payment. It would have been more certain, doubtless, if the testator had added, in the fifth item, for what purpose he directed the sum of $1,000 to be paid to Mrs. Edwards, whether as pay- ment on the legacy already given to her, or in addition thereto. He did, however, take care to express a purpose that the money should be paid by Mrs. Adell to Mrs. Ed- wards; and there he leaves it in her hands, without any intimation but that he intended it should be fully and unconditionally her property; certainly there is no intimation that he intended it to diminish the amount of the legacy before given to her. Nor can the failure to express any pur- pose to have the $1,000 applied on the leg- acy of $1,500 be the result of haste, for the testator lived two years and a half after he made the will; neither was it the result of accident or oversight, for he carefully re- vised his will, more than a year after Its execution, as is shown by the codicil then added thereto. While, then, we fail to find in the will anything from which It can fairly be in- ferred that the testator intended the $1,000 should be applied in reduction of the legacy of $1,500, is it not clearly inferable from the will that he Intended it should be iu addition thereto? In Crevellng's Bx'rs v. Jones, 21 N. J. Law, 576, it is said: "Upon a question whether two legacies shall be construed to be cumulative or not, a fair and forcible argument In support of the increase may he drawn from the fact that they are for differ- ent sums; or the sums are stated in differ- ent sections of the will; or one in the will and another in a codicil; or the sums are made payable at different times, or out of different funds." We find in this vrHl nearly all these in- dices of cumulative legacies. But if we seek to find the intent of the testator, I think it may be clearly discovered if we give to the language he has used in the will its natural and ordinary meaning, and give to every part of the Instrument its just oper- ation and effect. 1 Bedf . WUls, 431. The testator concludes his will by direct- ing "aU the above legacies to be paid in two years" after his decease. This embraces the whole $1,500, as much as any part of it. It is "^a direction to his executors not to pay part of any legacy, but "all." This direc- tion applies only to the legacies to be paid by the executors, and not to the amount to be paid by one legatee to another. In such cases the testator not only specifies the amount to be paid, but the person to pay it, and in every instance it is to be paid in consideration of real estate devised. The executors have no more to do, for aught that appears in the will, with the amount to be paid by Mrs. AdeU to Mrs. Edwards, than SATISFACTION. 149 they have with the several amounts to be paid by other devisees to the widow In case of her marriage. The sum directed to be paid by Mrs. Adell to Mrs. Edwards is a matter that the testa- tor has left entirely between them, and not as a legacy that the executors are called up- on to settle out of the personalty; therefore they are directed to pay "all" the legacies in two years, and the sum to be paid by one daughter to the other is left upon a different security, and to be divided into payments that are to run for longer periods. Moreover, upon the other construction, the executors might not know for years, beyond the time limited for the payment of legacies, what amount to pay on the $1,500, for they could not know how much Mrs. Adell would pay, or, if she failed to pay, how much the land charge would sell for. If the clear and plain directions of the testator in his will be executed, there will be no difficulty; the executors will pay "all" the legacies in two years, and the annual payments due from Mrs. AdeU will be paid every year for ten years; then the intent of the testator, as expressed by the language he has used, will be fulfilled. The will cannot be construed to apply the $1,000 to the reduction of the legacy of $1,500, without adding to the instrument ma- terial words not written there by the testa- \ tor. We cannot think, in the absence of any intimation of the kind, that the testator in- tended to diminish his legacy of $1,500 "in cash," which he positively directs to be paid In two years, by directing that part of it be paid in ten years without interest. The plain reading of the will affords the only consistent construction that can be giv- en to it, and points out the only practical method of its execution. If we give to all the language the testator has used bearing upon the question its natural and ordinary import, and there stop to inquire for the meaning of the testator, his intention is clear f, and obvious. It is only when we begin to sti-ain or distort what the testator has said by constructions or presumptions that doubts of his intention arise. To adopt the con- struction claimed by one party, "we must expunge, transpose, or interpolate material words; to sustain that of the other, we leave the will as it is." Keading the will, then, as it is written, we think the testator clearly intended to give Mrs. Edwards a le'g- acy of $1,500 in cash, to be paid In two years by his executors, out of the estate that would come to their hands; and, in addition thereto, to give her $1,000, to be paid by a different person, out of a different fund, and at widely different times. In so holding we but leave the money where the testator willed to leave it, and so left it after a de- liberate revision of his will. The court of common pleas, therefore, err- ed in their construction of the vrill upon this point. As to the amount bequeathed to the wid- ow in lieu of dower, although error is as- signed upon this ruling of the common pleas, it is not now urged. "We do not feel called upon, therefore, to express an opinion on that point. Indeed, it is doubtful If the question can be made on this record. The reasons, however, for sustaining the holding of that court on this point are so strong, that we are content to aflflrm that part of the decree without further consideration. As to the corn in the cribs, we think the codicil may be fairly construed to mearl as held by the common pleas. We see no reason, therefore, why the de- cree of that court should not be affirmed in all respects, except as to the construction of the will relating to the bequests to Mrs. Ed- wards; as to that, it must be reversed; and, unless cause be shown to the contrary, a final decree will be entered here in favor of the plaintiffs in error. ■WHITE, WELCH, BRINKERHOFF, and SCOTT. J.I., concur. 150 SATISFACTION. ROQUET T. ELDRIDGE et al. (118 Ind. 147, 20 N. E. Rep. 733.) Supreme Court of Indiajia. April 2, 1889. Appeal from circuit court, Vigo county; Joshua Jump, Special Judge. Action by Hugh D. Roquet, administrator c. t. a., etc., of William B. Eldridge, de- ceased, against William G. Eldridge and others, heirs, devisees, and legatees of said decedent, to settle the estate. From a judg- ment declaring certain legacies adeemed, the legatees, William G, Eldridge and others, appeal. O. F. McNutt and Stimson & Stimson, for appellants. S. C. Davis and S. B. Davis, for appellee. MITCHELL, 3. After the issues were Joined in the court below, the judgment ap- pealed from was rendered upon an agreed statement of facts. The questions for deci- sion arise out of the facts agreed upon, which, so far as they are material, are as follows: In November, 1863, William B. Eldridge executed his last will and testa- ment, by the second clause of which he de- vised to his sons Hamilton Eldridge and Abram A. Eldridge his homestead farm, to be held by them jointly. To his daughters, Amanda and Cynthia, and to his sons Wil- liam G. and Robert B., he bequeathed $500 each, to be paid in cash, which sums were to be talien and considered as in full of each of their respective interests in the home- stead farm. The will contained a recital, the effect of which was that the devises and bequests thus made were to be considered as the disposition of the homestead farm among the testator's children, and were not to affect any other interest or estate. After- wards, and during the life-time of the testa- tor, his sons Hamilton and Abram A. El- dridge, devisees of the homestead farm, fur- nished their father $2,000 in money, out of which he paid to each of the four legatees above named the sum of $500, and received from each a receipt of the following tenor, viz.: "Received of William B. Eldridge, $500, in consideration of my interest in his homestead farm, corresponding with his last will." One of the daughters was a married woman at the time she received the money and executed the receipt therefor, as above. The testator died In February, 1881, having had but the six children named above. He had only about $500 in value of personal property, which, with the farm above men- tioned, valued at about $6,400, comprised his whole estate. On behalf of the administrator with the will annexed, it is Insisted that the sums paid to the several legatees by the testator In his life-time constituted a satisfaction or ademption of the legiacies provided by the will, while the legatees insist that the legar cies are specific or demonstrative In their character, and that since It does not appear that the money paid them was raised out of, or derived from, the land comprised in the homestead farm, the payment did not work an ademption of the sums bequeathed by the will. The legacies were, however, neither specific nor demonstrative. Speali- ing upon the subject of specific legacies, the lord chancellor in Fielding v. Preston, 1 De Gex & J. 438, said: "There have been at- tempts in various cases to determine the meaning of a specific legacy, and what is the test whereby such legacies may be dis- tinguished from general bequests. There are objections to most of the definitions, but 1 think we are quite safe In treating that as a specific bequest which the testator directs to be enjoyed in specie." A legacy is specif-\ ic when it can be satisfied only by the trans- \ fer or delivery of some particular portion of or article belonging to the estate, which the testator intended should be transferred to the legatee in specie. 2 Redf. Wills, 122; 2 Bap. & L. Law Diet, tit "Legacy." Lord Hardwicke said, in Ellis v. Walker, Amb. 309: "The court leans against considering legacies as specific." Unless, therefore, it appears that the money or thing to be trans- ferred is so clearly identified and Inherently described as that the legatee can say to the executor that all or a portion of the very fund or property In question was transfer- red by the will, the bequest will not be re- garded as specific, Sidebotham v. Watson, 11 Hare, 170. While it is true the doctrine of ademption does not apply to specific devises or legacies, as a general rule, (S wails v. S wails, 98 Ind. 511,) yet, even in case of a specific devise or bequest, if the very thing devised or be- queathed had been transferred to the dev- isee or legatee in the life-time of the testator, so that there would be nothing left for the will to operate upon, an effectual ademption would have taken place. Accepting the foregoing as the true cri- terion of a specific legacy. It becomes clear that the bequest of $500 In cash to each of the sons and daughters named, and the fur- ther direction that this was to be considered In full of their respective interests In the homestead" farm, and that the devises and bequests previously . made were not to af- fect any other Interest or estate, did not con- stitute a specific bequest of any portion of the testator's estate to be transferred in specie. Neither did the legacies belong to that intermediate class which are sometimes denominated "demonstrative," and which are peculiar, in that they are not ordinarily liable to be adeemed or abated by an ad- vancement made In a general way. "A demonstrative legacy Is a bequest of a sum of money payable out of a particular fund or thing. It Is a pecuniary legacy, 'given gen- erally, but with a demonstration of a par- ticular fund as the source of its payment' SATISFACTION. 151 It Is therefore eqnlvalent to, or In the nature of, a devise or bequest of so much or such a part of the fund or thing specified." Glass V. Dunn, 17 Ohio St. 413; 5 Amer. & Eng. Ene. Law, 541; 2 Redf. Wills, 140, 141. While it Is quite true the will plainly in- dicates that the sums bequeathed to the sons and daughters named were to be tak- en in full of their respective interests in the homestead farm, which was specifically de- vised to the two other sons named in the I will, there is no direction that the bequests are to be paid out of any particular fund, or that the fund out of which payment is to be made is to be derived from the rents, Issues, or profits of the land, or that the legatees are to have any interest, as such, in the land itself. The Implication is that the bequests were chargeable against the devisees of the land, or, at most, that they should be chargeable upon the farm. More- over, since it appears by the agreed state- ment of facts that the sons to whom the homestead farm was devised furnished the money with which the legacies were paid, it is not apparent why this should not be held to satisfy the bequests, even though it should be conceded that they were payable out of the land. If thus payable, it must have been contemplated that the amount should constitute a charge upon the farm, to be removed by the devisees at some time, by paying the several amounts to the lega- ' tees. We know of no authority which j would justify a holding that a general 1^- acy which is payable out of a particular \ fund, or in a specified manner, may not be satisfied, in case the legatee receives the amount thereof from the testator in his life- time, out of the very fund devoted to the payment of the bequest, provided it clearly appears that the amount was given and re- ceived with the intention that it should work Ian ademption of the legacy. If we assume that the homestead farm was to be the source from which the fund was to be de- rived, out of which the legacies were pay- able, the conclusion follows that the dev- isees of the farm were to take it subject to the burden of paying the legacies after the testator's death. Having furnished the money to the testator during his life-time with which to pay off the bequests, and the money having been paid to the legatees and received by them for that purpose, the lega- cies are effectually satisfied from the very source contemplated by the will. An ademp- tion results where a parent or other person standing in loco parentis, after having made a bequest, gives a portion to the child to whom the bequest is made, equal to or in excess of the amount bequeathed, the por- tion given and the legacy being ejusdem generis. Weston v. Johnson, 48 Ind. 1. Within the rule thus stated the l^acies were adeemed. Whether a legacy be specific or demonstra- tive, if it clearly appears that the particular thing or fund bequeathed has been irrevoca- bly delivered over to the legatee in the life- time of the testator, the legacy is adeemed because the testator's title to the thing or fund has been divested by the gift, and has become vested in the legatee during the life- time of the testator. Clayton v. Akin, 38 Ga. 320. The fact that one of the legatees was a married woman at the time she received the money from her father and signed the re- ceipt is of no consequence. The receipt of the money from the source contemplated by the wiU satisfied the legacy by operation of law, and not by force of any contract. Mon- ey paid to a married woman in ademption of a legacy produces the same legal result as if she were unmarried. There was no error. The judgment Is af- firmed, with costs. n . 152 SATISFACTION. EOGEKS et al. v. FRENCH. (19 Ga. 316.) Supreme Court of Georgia. Jan. Term, 1856. Error from superior court, Marion county; Worrill, Judge. In equity. Jolin French and Elizabetli, his wife, filed a bill against the executors of John Rushin, deceased, for the recovery of th« legacies left them under the will. The biU and an- swer are voluminous, as is also the evidence in the case. The following is sufficient to understand the questions made in this court: The defendants gave in evidence the fol- lowing receipt: "July 30, 1830. Received of John Rushin Five Hundred Dollars, which is considered and to be considered by all whom It may concern as that amount advanced by him, the said John Rushin, to me as legacy, that would ever be coming to me from him in his lifetime, or from his estate after his de- cease. "[Signed] John French." John Rushin's will was dated 26th June, 1855, and by that will he gave to Mrs. French a little negro worth not exceeding $200, and one equal share of all his prop- erty. Subsequent to the making of his will, he distributed some of his negroes to his children, among others, to Mrs. French. There was some evidence to show that the question of the ademption of this legacy of the little negro had been submitted to Judge Taylor. Defendants' solicitors requested the court to charge: "(1) That If they believed that after the making of the will, bequeath- ing to complainant a little negro worth $200, over and above her equal proportion of the property to be distributed under the wiU of John Rushin, the testator, in his lifetime, gave complainant a negro of equal or greater value than the one mentioned In the will, this Is prima facie an ademption of the leg- acy; and, to rebut this presumption of an ademption, the testimony must be clear and relevant, not presumptive merely, but a demonstration from the language and con- duct of the testator that he considered the gift by the will as a subsisting benefit." The court declined to charge the latter portion of this request, but charged "that, to rebut the presumption of an ademption, the jury might resort to presumptive evidence, but the presumption must be clear and sat- isfactory; that if they believed the testator gave complainant, after the making of the will, and at or about the same time he gave other property to each of his other children of equal value, they might infer from these facts that the legacy was not adeemed." Defendants' counsel farther requested the court to charge: (2) That in a court of eq- uity the presumption is against a double portion, and the receipt given by French in 1830, although it bears date prior to the vfill, Is, nevertheless, a charge against him, for which he is bound to account. This the court declined to charge: (3) As to effect of a responsive answer as evidence, and that an answer Is responsive where it has necessary connection with and grows out of the allegation, and is explanatory thereof. This the court gave, and added: He sup- posed the latter clause referred to that por- tion of defendants' answer which stated that Judge Taylor had determined that the legacy of the little negro was adeemed. The court charged that this was not responsive, there being no allegation In the bill on the subject To these charges as given, and refusals to charge, defendants excepted, and have as- signed error thereon. Miller & Hall, for plalntifiCs in error. Stubbs & Hill, for defendant in error. LUMPKIN, J. (1) Was the court right in refusing to give the first charge as request- ed, without the modification and explanation which accompanied it in the charge as giv- en? In Ex parte Pye, 18 Ves. 152, Loi;d Eldon observes "that where a father gives a legacy to a child the legacy, coming from the fa- ther to his child, must be understood as a portion, though it is not so described in the will, and afterwards advancing a portion to that child, though there may be slight cir- cumstances of difference between the ad- vance and the portion, and a difference in amount, yet the father will be intended to have the same purpose in each Instance; and the advance is, therefore, an ademption ot the legacy. But a stranger giving a legacy is understood as giving a bounty, not paying a debt. He must, therefore, be proved to mean it as a portion or provision, either on the face of the will, or if it may be, as it seems it may, by evidence applying directly to the gift proposed by the will." (See, also, Elkenhead's Case cited in 2 Vern. 257; Prece- dents in Chancery, 182, and Ambler, 325.) Thus, then, we have the rule clearly stat- ed and carrying this doctrine of ademption to its utmost limits. The English courts re- gret, as well they may, that it has been pushed so far. We see and feel the reason- ableness of the rule which requires the courts to lean against double portions, as it is called; and we can readily understand why a legacy in a will should be adeemed by a subse- quent advance having the same object In view as the legacy, notwithstanding any slight difference in value or amount between the legacy and the advance. A father, for Instance, directs by his will his executors to pay to a daughter $1,000 to purchase, upon her marriage, household furniture. The child, however, marries in the lifetime of the father, and he advances to her $1,000, or some sum approximating to that, for the same purpose specified in the will. This la, and manifestly should be, a case of ademp- SATISFACTION. 153 J L J - f" ^1 vHo i tion, and so should all others standing upon the same footing. But suppose the legacy be a little negro for a nurse, and th© subse- quent advance be of money to buy a car- riage, is there any propriety in construing this advance to be an ademption of the leg- acy? Listen to the reasoning of the chancellor in the case of Pye, just cited, in support of what he deduces from the books as the "unquestionable doctrine" of the courts up- on the subject: "By a sort of artificial rule, in the application of which legitimate chil- dren have been very harshly treated, upon an artificial notion that the father is paying a debt of nature, if the father afterwards advances a portion on the marriage of that child, though of less amount, it is a satis- faction of the whole or in part; and in some cases it has gone the length, consistent with the principle, but showing the fallacy of much of the reasoning, that IJie portion, though much less than the legacy, has been held a satisfaction, in some instances, upon this ground, that the father, owing what is called a debt of nature, is the judge of that provision by which he means to satisfy it; and though, at the time of making the will, he thought he could not discharge that debt with less than £10,000, yet, by a change of his circumstances and of his sentiments up- on that moral obligation, it may be satisfied by the advance of a portion of £5,000." — ^Is not such reasoning from the mouth of such a judge well calculated to inspire the hope that tlie day is ■ not distant when all precedents win be abolished, and every case be tried by an enlightened tribunal upon its own merits? To such a consummation the world must, from the necessity of the case, to say nothing of its policy, sooner or later come; for the world wiU not contain the law books that will be written, much less wUMaw2^S__ani4udg^j_mth,.their^syg^^ Jtacome, ,to-ahleto bBJ_th^^ Necessity will become the mother of justice in this case, as she is said to be generaUy of Invention. Would that some Caliph Omar would arise to apply the torch to all the repositories of legal learning throughout the globe! Prece- dent! Precedent! This Is the vampire that is forever draining the very life blood of jus- tice. Give the books of reports as fuel for baths. They will contribute much more to the health, happiness, and convenience of the people than as at present employed. But to return from this digression, and without elaborating the rule further, we re- mark that the presumed ademption may be destroyed or confirmed by the application of parol evidence of a different intention by the testator. 2 Atk. 48; 3 Atk. 77; 7 Ves. 708; Select Bq. Cas. 141. And this was the sub- stance of the charge as given. The judge instructed the jury that they might, in order to rebut the presumption that the advance made by the testator to French and w^fe, in bis lifetime, and subsequent to the making of the will, was an ademption, look to the fact of whether or not similar advancements were made to the other children; and this the court was authorized to do by the testi- mony of Mrs. Wilkes, the widow of John Rushin, who states that she lived with the testator from 1834, the year before he made his will, down to 1843, when he died, and that the advancements made to all the chil- dren during that period were equal, and that the testator tried to make them so. (2) Was the advance of $500 mad« in land by the testator to John French, the hus- band of his daughter, in 1830, five years be- fore he made his will, a charge against his share of the estate? The case of Upton v. Prince, Cases Tern. Talb. 71, is cited in sup- port of the proposition that an advance made prior to the making of a will may adeem a legacy. The testator, William Prince, had two sons,— William and Peter, Elizabeth, Sarah, Mary, and Anne. In his lifetime, and soon after the sons became of age, they desired their father to advance to each of them a sum of money toward setting them up in the world, and agreed that whatever he should advance should be part of what he should give them by vrill, whereupon the father, on the 11th of June, 1734, advanced £1500 to William Prince, who gave the fol- lowing Instrument for the same: "Received of my father the sum of £1500, which I do hereby acknowledge to be on account and in part of what he hath given or shall, in and by his last will, give unto me his son." And on the 31st March, 1727, the father ad- vanced £1500 to Peter Prince, who gave a similar instrument to that of his brother. On the 17th of August, 1730, William Prince, the father, executed hia will, which contains the following recital: "And whereas, I have heretofore paid to, given, or advanced with my children, William, Elizabeth and Sarah, the sum of £1500 apiece, now, I do hereby, in like manner, give and bequeath unto my three other children, Peter, Mary and Anne, the several sums of £1500 apiece." He then willed that the residue of his estate should be divided in sis equal parts, and gives the one-sixth to each of his children. He de- posited the two receipts given by William and Peter in a drawer vrith his will, and in- timated that the said drawer should not be opened after his death by either of his said sons unless bis other children, or one of his sons-in-law, were present. The question was whether Peter should have a new sum of £1500 upon the words of the will, or whether he should not be In the same case with WUUam; they both being equally advanced by the father, and this seeming only a mistake in the testator. The lord chancellor decreed the £1500 received by Peter in his father's lifetime to be a sat- isfaction for what the father gave him by his will, and that he should not have an- other £1500 upon the words of the vrtll. While we controvert the general doctrine 154 SATISFACTION. that a previous advance made to a child shall adeem an express gift by a subsequent Trill, wherein and whereby the testator un- dertakes to dispose of the property which he then has, still we are not prepared to deny the justice of this case. Here it was a ques- tion of Intention, as it should be in every case, and aU the facts go to show that Pe- ter's name was, by mistake, inserted with those of the unportioned part of the chil- dren. The whole will establishes that it was the intention of the testator that the two sums of £1500 paid to William and Peter should be deducted out of the legacies given to them; else why deposit their re- ceipts in a drawer with his will with direc- tions that the drawer should not be opened after his death by either of. his said sons unless his other children, or one of his sons- in-law, were present? Before dismissing this case, I would re- mark that the able counsel, Mr. Hall, who adduces it, concedes that it is the only direct authority he can find upon the point; and, if he has found none others, we may safely assume that none other exists. I will add that Upton v. Prince is only recognized by Mr. Williams on Executors, and other law writers in this way. They say, in referring to It, that if an advance previously made will adeem a legacy a fortiori will an ad- vance made subsequent to the execution of the will. In our judgment it is always a question of intention, in all cases, whether the advance be before or after the execution of the will, and that no arbitrary rule should control the matter. How, then, stands the present case? The testimony shows that in 1830, the date of the receipt given for $500 given by French to his father-in-law, old man Rushin ad- vanced $500 to each of his children. This fact is not disputed, but it is insisted that French got $500 extra of the rest; else it is asked, why should a receipt be required of him when the rest gave none? Perhaps they have been lost or destroyed. The de- fendants, and not French, have had the cus- tody of the testator's papers. Perhaps French lived at a distance and forwarded this receipt, not knowing but such an ac- knowledgment would be exacted of all. Be this as it may, there is one fact which, to our minds, is conclusive, that this $500 was not Intended by the testator to be a charge on the legacy of French and wife. In his will he mentions, In every other case, what sums are to be charged against his other children, or a portion of them; and there is not a word as to this extra advance, as it is pretended, to French. It was made five years only before the will was executed, and his attention was called to the subject by referring to the respective advances made to some of the other children. It is not likely that this would have been overlooked or for- gotten. He is silent as to the $500 advance made to each of the children in 1830, and from this we infer that the testator himself considered that all, at that time, were ad- vanced pari passu. But it is suggested that the defendants have sworn to the fact, and that their an- swer is not overcome by counteracting tes- timony. They only testify as to their infor- mation and belief, and the rule does not ap- ply to such answers. (3) Was pie court wrong In making the addition which it did to the third charge, as requested? It is not complained that the charge, as asked, was not given. The error assigned is that the judge selected that por- tion of the defendant's answer which set forth the award made by Judge Taylor, and stated that the same was not responsive to the bill, whereas, it is urged that the same was responsive, and that admitting it was not. Still, it was wrong to single out this particular portion of the answer and omit any reference to the rest In the first place, we concur with the eh:- cult court in holding that the reference to the award made by Judge Taylor was not responsive to any allegation, but matter purely in evidence; and, secondly, that the omission of the court to refer to the rest of the answer was favorable to the defendants. It left the jury to infer that the balance of the answer was responsive. It is finally contended that the advance- ments made to the different legatees, and to French and wife amongst the rest, should be brought into hotchpot; but no such neces- sity exists, provided the advancements were equal, for In that event each is entitled to an equal share under the will of what rematas. We see no error in this record, to make It proper to send back a case, like this, which has been pending so long, and occupied so much time of the country. There should be an end of litigation unless manifest injustice has been done. SATISFACTION. 155 CLARK V. JETTON. (5 Sneed, 229.) Supreme Court of Tennessee. December Term, 1857. This bill was filed in the chancery court at Murfreesboro, for the purposes fully stat- ed in the opinion. At the October Term, 1857, Chancellor Ridley gave a decree for the complainants, from which the defendants appealed. W. L. Martin, for complainants. Ruclser and B. A. Keeble, for defendants. CARUTHERS, J. On the 29th April, 1851, John L. Jetton made his will, disposing of all his property to his wife, children, and grandchildren. He gave to his wife one- third of his land for life, and one-tenth of ^'all his slaves and other' personal property," after the payment of debts and expenses. Item 3. "After the payment of debts and ex- penses aforesaid, and the talcing out one- tenth for my widow, the residue of said slaves, and other personal property, monies, etc.," "I direct to be divided into nine equal parts, one part of "which I give to my son TiCwis, one part to the children of Mary •Graham, one part to Jane Barr, one part to Charlotte Bryant;" and so on to each of his daughters, nine in number. He limits the estates of his daughters to their natural lives, to their separate use, and then to their <;hildren, in remainder. He died in 1854. His will was proven and recorded without <-ontest After the execution of this will, the testator made several deeds of gift to a part of his children and his widow, the de- fendant. On the 19th August, 1853, he made a deed of gift to his vrife for life, and then to all her children one negro woman and child; and, on the same day, he gave by deed to a trustee, for the benefit and sepa- rate use of his daughter Francis L. Burke, a negro man; and at the same time, and in the same way, a negro man was given to his daughter Jane Barr. On the 25th Au- gust, 1853, he gave a negro boy to his son Lewis; and, on the 29th, he gave to a trus- tee, for the use and benefit of his daughter Martha A. Sawer, a lot in Pulaski and a negro man, with the same limitations and restrictions. These deeds of gift were all regularly proven and recorded. This bill was filed September, 1856, by the children and lega- tees, not thus advanced, for the purpose of setting aside all said deeds of gift, upon the ground of the mental incapacity of the donor, and undue Influence on the part of his wife; and, if this cannot be done, they pray that the several gifts may be held to satisfy the legacies of defendants by way of ademption. Upon the first question we have no difficulty. The old man was very intemperate and aged, but had sufficient ca- l)acity to make a binding contract at the time these deeds were made. Such is the opinion of the witnesses to the deeds, al- though one of them, who was draftsman, was led to doubt upon that subject by some Interviews a month or more afterwards, yet at the time of the transaction he has no doubt. The proof falls short entirely of showing that degree of mental unsoundness or imbecility that would invalidate the gifts; but it is insisted that. If he were not of un- sound mind, yet his intellect was so en- feebled by long-continued inebriety that hfr was easily infiuenced by his wife, and that she, against his will, caused him to make these donations, by the exercise of an abso- lute dominion over his will. As an evidence \ of this, it is said that she procured, by her 1 dictation and .power over him, a remainder | interest to be vested in an illegitimate child I of hers, born before his marriage with her, I jointly with her children by him, in the two slaves given to her for life. He had taken this child with her, and raised it in his house with his other children; and it is not un- natural that he should freely yield to her" wishes in giving to it a small pittance of his estate. Whether this child will get anything under the deed is a question not now to be decided, and does not affect the argument. There is evidence that for several of the last years of his life, embracing the time of these gifts, she managed most of his business, and that he deferred to her in many things; but this was rendered necessary by his intem- perate habits, and was a prudent delegation of authority, rather than an evidence of either a want of sense or submission to un- due influence. He sometimes said he was in torment, etc., when he was drunk. It was very natural he should feel that way when under the dominion of liquor; and that she should "torment" him about his self-de- stroying habits was to be expected, in view of the destruction of health and happiness, which was the inevitable consequence of his ruinous course; but it iDy no means follows, as a necessary consequence, that the fact that she vexed or tormented him would aug- ment her influence. His remarks about not being able to do as he pleased, or at liberty to invite his friends to dinner, etc., are all attributable to the same cause, and have very llttie weight in establishing this point, for which they are adduced in evidence. In all this, we find nothing to authorize the con- clusion, or at least not sufficient for that purpose, that he was unduly Influenced by her to make the deeds of gift in question, or that there was any fraud practiced upon him by his wife, or anybody else. He deliber- ately made the arrangement with his attor- ney to write them, and gave every evidence of a free and settled purpose In doing what he did. The deeds of gift were, therefore, valid and binding, and vested good tities In the donees. 2. The second ground assumed by the com- 156 SATISFACTION. plainants Is that the gifts, if good, operated as an ademption of the legacies in the will to the extent, at least, of the value of the prop- erty, and that, in the division of the property under the will, the respective donees must be made to account for it. This is a more diffl- cult question, and must be decided by refer- [ ence to the authorities. The general rule on this subject is that where a parent, or one standing in loco parentis, gives a legacy to a child, and afterwards advances a portion to that child, it will be an ademption or satis- faction of the legacy to the extent of the val- ue of the portion, unless a contrary intent appears. 2 WlUiams, Ex'rs, 1143, and sub- sequent pages; 2 Story, Bq. Jur. § 1111. But the rule has several qualifications and excep- tions. It is founded on the presumption that a bequest by the father is intended as a por- tion to the child, and so of the after gift; and the presumption will be that a double portion was not intended, where nothing else appears, and therefore It will be taken that the gift was intended as a satisfaction of the legacy when it is of equal or greater value, and, if less, pro tanto. Rop. Leg. 370, 374; 2 Williams, Ex'rs, 1148. The word "ademp- tion," is synonymous with "satisfaction" when applied to specific legacies. In that case, the disposition of the thing given before the death of the testator is a complete ex- tinction of the legacy, and the intention of the testator in such cases is immaterial, be- cause there is nothing at the time the will tates effect for it to operate upon. Eop. leg. 829. But in respect to general legacies, the question is one of intention, and this inten- tion will be presumed, as we have said, in all cases of legacies and subsequent gifts by a parent, or one standing In, or occupying the place of, parent, unless that presumption is rebutted. Such is the general rule. But this presumption of ademption will not pre- vail, (1) where the testamentary portion and subsequent advancement are not of the same nature; (2) where the latter depends on a contingency, and the former is certain; (3) when either is in lieu of, or a compensation for, an interest to which the child is entitled: or (4) where the bequest is of a residue or part of a residue. Williams, Ex'rs, 1144, 1145. Rop. Leg. 877, states that another ex- ception to the general rule is where the be- quest is of an "uncertain amount." "It has, tiierefore, been determined more than once," he says, "that a devise of a residue, or of part of a residue, to a child, is not adeemed oy a subsequent gift upon the legatee's marriage." Though, Sir W. Grant intimated a doubt as to the correctness of this opinion, in 15 Ves. 518, as the author states, yet it is considered well setUed as the law, when not controlled by special circumstances. In Famham v. Philips, 2 Atk. 216, Lord Hardwlcke said, "There was no case where the devise had been of a residue that was uncertain, and that at the testator's death might be more or less, in which the gift of a subsequent por- tion had been held an ademption." Where a testator directed a debt of 100 pounds to be paid out of an estate, and the residue divid- ed between his wife and children, and after- wards gave one of his daughters a thousand pounds, it was held that this did not operate as an ademption of her testamentary share of the residue. This was the case of Parn- ham V. Philips, above cited. The application of this doctrine to the case before us pro- duces a result that we would rather avoid, if we could do so upon any principle settied by authority. It must result in giving the defendants the benefit of the will, as well as the deeds of gift. The provision for them un- der the will is that they are each to have one- ninth of the residue of his slaves and other personal property and money, after the pay- ment of debts, expenses, and the one-tenth to the widow. The testamentary portions or legacies must be fluctuating and uncertain, or, in the language of the books, they may "be more or less, something, or nothing" at the death of the testator and settlement of the estate. In answer to the seeming injus- tice of this doctrine, it may be said that it is the right of every man to give as a bounty to his children, or others, in such proportions as he chooses, to some more and others less. Where he intends or desires equality, or to make gifts in his lifetime operate in the ademption or satisfaction of general legacies, it is easy to express such purpose. Where he falls to do so, the rules of law must pre- vail vrithout regard to the consequences. This doctrine of ademption does not apply to real estate, nor to legacies and gifts to oth- ers than children, or those who stand in that relation, in cases of general legacies. This distinction rests upon artificial reasons, the justice and propriety of which are not very clear, nor the reasons on which it is founded approved; but that branch of the doctrine, having no application to the case before us, need not be discussed, but left for a case to which it applies. The decree will be revers- ed, and the bill dismissed as to this branch of the case, but remanded for further pro- ceedings as to other matters connected wltb the settlement of the estate. CONVERSION AND RECONVEKSION, 157 KEEP et al. v. MILLER et al. (6 Ati. 495, 42 N. J. Eq. 100.) Conrt of Chancery of New Jersey. Nov. 6, 1886. Bill for relief. On final hearing upon pleadings and proofs. Facts are given in the opinion. Alfred Mills, for complainants. S. D. Haines and S. B. Ransom, for defendant Faulks. RUNYON, Ch. The bill states that John B. Miller, deceased, late of Madison, in the county of Morris, made and entered into a valid contract in writing with Jehiel K. Hoyt upon the twenty-fifth of April, 1872, for the sale and conveyance by him to the latter, or to such company of individuals as might be named by him, (Hoyt,) certain land therein mentioned for the price of $800 an acre; and that on or about the tenth of June following he made another like agree- ment in writing with Hoyt for the convey- ance to him, his heirs and assigns, or to such person or persons as he might desig- nate, of the same property, on or before the first day of September then next, for the price of $39,392, to be paid, and which- Hoyt thereby stipulated to pay, as follows: $100 upon the execution of the agreement, and $4,900 on the delivery of the deed,— the bal- ance, $34,392, to be secured by the bond of the grantee or grantees, and his or their mortgage of the property; that the time for the delivery of the deed was, by another agreement in writing, made on the twentieth of August, 1872, between Miller and Hoyt, extended to the first day of October then next; that Miller died September 3, 1872, intestate, leaving a widow and a son, the defendant David L. MiUer, who was his only heir at law; that letters of administration of his estate were granted to Theodore lit- tle, October 1, 1872; that after the death of John B. Miller, and on or about the twenty- eighth of September, 1872, Hoyt notified Da- vid L. Miller that he would be ready to take the deed, and carry out the agreement on his part on the first of October then next, and requested Miller, as heir at law, to ae- liver at that date a deed for the property, in conformity with the contract, to Henry B. 1 Reddish and Henry 0. Ohlen, whom he des- ignated as grantees; that David L. Miller did not and never would convey the prop- erty, except upon condition that he should receive the purchase money for his own use; that the complainants are informed that Reddish and Ohlen, on or about the first of October, 1872, demanded of David L. Miller that he convey the property to them by war- ranty deed, free from any dower of his wife, and from the dower of the widow of his father, and from the lien of certain judg- ments which were of record against him, David L. Miller, and tendered the money and bond and mortgage, but he would not com- ply witty the request; that neither David L. Miller, nor Hoyt, Reddish, or Ohlen, ever requested the widow to release her dower to Reddish and Ohlen; that she never refused to release it to them, but was at all times ready to release it upon condition that the purchase money should be paid, and secured to be paid, to the administrator of John B. Miller, and that David L. Miller was aware of her readiness to release upon that condi- tion; that on or about the thirteenth of De- cember, 1872, the- widow wrote a letter to her late husband's administrator in which she said that she had expected to join with her husband In the conveyance to the pur- chaser, but he died before any conveyance was made; that she was still ready to do all that she could to perform the agreement, and was ready to release her dower on condi- tion that the purchase money should be paid, or secured to be paid, to the administrator, and she offered to release her dower upon those terms in case the administrator should take judicial proceedings to compel specific performance of the agreement; that he did bring suit to that end in this court in Decem- ber, 1872; that in January following the widow died, and the complainants in this suit were appointed administrators of her estate; that in the suit brought by the ad- ministrator of John B. Miller specific perform- ance was decreed, but the decree was, upon appeal, reversed, so far as Hoyt and Reddish and Ohlen, and the performance of the agree- ment by them, were conca:ned. By the decree of the court of errors and appeals the bill was dismissed as to those defendants, but was retained as to the others, in order that the legal representatives of the VTidow might have an opportunity of raising, by cross-bill, the question whether they have any remedy against David L. Miller. This suit is brought accordingly by the administra- tors of Mrs. Miller against David L. Miller and his wife, and his assignee in bankruptcy, (he filed his petition in bankruptcy after the decree for specific performance was entered,) the administrator of John B. Miller, (he re- fused to bring the suit, or to join in it, or to permit the complainants to bring it in his name,) and the administrators of a Judgment creditor of David L. Miller. The prayer of the bill is that the land may be decreed to be personal property, and may be sold under the order of this court; that the proceeds of the sale may go into the hands of the admin- istrator of John B. Miller as personal prop- erty, to be administered and distributed by him accordingly; that it may be decreed that the complainants, as the legal representatives of the widow, shall have her share thereof according to law; and that. If necessary, it may be decreed that David L. Miller's wife has no dower in the property, and that the judgment above mentioned is no lien upon the premises. None of the defendants have an- swered except the assignee in bankruptcy. 158 CONVERSION AND RECONVERSION, By the decree In the above-mentioned suit, brought by John B. Miller's administrator, (Miller's Adm'r v. Miller, 25 N. J. Eq. 355; S. C. on appeal, Reddish t. Miller's Adm'r, 27 N. J. Eq. 514,) in addition to decreeing specific performance. It was decreed that David L. Miller, at and ever since the death of his father, had been, and at the date of the decree was, seized of the property as a trustee to and for the use of Reddish and Ohlen, and not otherwise, and that David L. Miller's wife was not, and had not been, en- titled to any dower or right of dower in or to the land, and that the judgment creditors of David L. Miller were not entitled to any lien to or claim upon or against the property by virtue of their judgments, and also that the moneys decreed to be paid, and the bond and mortgage decreed to be given, on account of purchase money, were and should be per- sonal assets in the hands of the administrator of John B. Miller, and should be by him ad- ministered as personal property in due and legal course of administration, and that he should pay to the administrators of the widow her distributive share thereof. That decree (it was made over 10 years ago) was not ap- pealed from by David L. Miller. The only question presented for decision is whether, under the circumstances of the case, the contract of sale worked an equitable con- version of the land into money at the death of John B. Miller. That it would have done so had the contract been enforced against the (vendee is indisputable, and is not denied. But the answering defendant insists that the failure to compel specific performance pre- vents such result. That failure, however, was due, not to the invalidity of the con- tract, but to the fact that, because of the length of time which had elapsed between the time fixed by the contract (as extended) for the completion of the purchase and the making of the decree for specific perform- ance, it was inequitable to require the ven- dee to complete the purchase, seeing that he had tendered himself ready to comply with the requirements of the contract on his part at the time fixed, and that in the meantime the property had fallen in value. It may be remarked that the noncompliance upon the part of the heir was not due to the widow. She did not refuse to release. She was never asked to release. On the thirteenth of De- cember, 1872, she stated to her late husband's administrator, by letter, that she was willing to release in case he should take judicial pro- ceedings to compel specific performance of the contract. It is proved that on the very day on which, under the contract as extend- ed, the deed was to be delivered, her attorney stated to the attorney of Reddish and Ohlen that she was willing to release upon such a payment as would secure her rights, by W^hich was meant payment to her husband's administrator, and not to David L. Miller. A valid and binding contract of sale such as a court of equity wlU specifically enforce against an unwilling purchaser operates a^ a conversion. The cases in which the court has refused to decree that a contract for sale works equitable conversion are those In which the contract was such as equity would not enforce. The counsel for the answering defendant insists that the decision in the case of Ten- eick v. Flagg, 29 N. J. Law, 25, is decisive of the question under consideration, and is adverse to the claim of the complainants. But it is to be observed that that was an- action at law. Mrs. Attie Teneick had agreed to convey land to James Buckalew, and had received part of the purchase mon- ey. He refused to accept the deed because of the pendency of an action of ejectment brought against Mrs. Teneick by other par- ties to obtain possession «f the land. She delivered a deed for the property to her agent, to be delivered by him to Buckalew upon the favorable termination of the actioB of ejectment. She died before the termina- tion was reached. By her death the action of ejectment abated, and it was not renewed. After her death her heirs conveyed the prop- erty to Buckalew In pursuance of her agree- ment, and the purchase money was paid ta her administrators. The husband of one of the heirs brought suit against the adminis- trators to recover a share of the money. The court held that he was entitled to re- cover, on the ground that on the death of Mrs. Teneick the title descended to her heirs; the deed held in escrow passing no title, since the event on which it was to be delivered to Buckalew did not happen in the life-time of the grantor, and at her death the deed ceased to have any validity. In the decision of the case the difference be- tween the equitable rule and the legal rule was distinctly recognized by Justice Haines in his opinion. The cause was, of course, de- cided in the court of law upon the legal rule. Upon a full and careful consideration of the matter I reached the conclusion in the suit for specific performance that the con- tract worked a conversion. See Miller's Adm'r v. Miller, supra. The only new fea- ture now presented is the fact that the ap- pellate court has decided that specific per- formance ought not to have been decreed. The reason for that conclusion has already been stated. It was not the invalidity of the contract, nor any consideration which ren- dered the contract unenforceable in equity at the death of John B. Miller, or at the time fixed by the contract for completing the pur- chase. The contract was one which, at the time fixed by it for completing the purchase, could have been enforced against the pur- chaser in equity, and it would have been en- forced at that time on the application of the heir, with the consent of the vridow, and she was willing to johi him In enforcing it if he had been willing to secure to her her right in the purchase money. In equity he ought CONVERSION AND RECONVERSION. 159 to hare enforced It Equity regards that as done -which ought to have been done. The doctrine of conversion is a reasonable one. In this case, John B. Miller had made a sale of the property, -which, had he lived, he ■would have been able to enforce in equity, and which it is to be presumed he -would have enforced. He had sold the property at a high price. It should not be, and it is not, in the po-wer of the heir to defeat the right of the next of kin by his o-wn unwill- /mgness to carry out the contract By force j of the contract the vendor became in equity / trustee of the property for the vendee, and I the latter became trustee of the purchase V money for the former. It has been held that the equitable rights of the next of kin of the vendor are not defeated, -where the vendee, by his laches, after the death of the vendor, loses his right to specific performance, pro- vided the contract -was enforceable in equity at the death of the vendor. , Curre v. Bo-w- yer, reported in a note to Farrar v. Earl of Winterton, 5 Beav. 1. Where there is a con-' tract for the sale of an estate, the estate is in equity considered as converted into per- sonalty from the time of the contract, al- though the purchaser has an election to pur- chase or not as he shall see fit. La-wes v. Bennet 1 N. J. La-w, 167; Sugd. Vend. (8th Am. Ed.) 187, and cases cited. The sale in this case -worked an equitable conversion of the land Into money, and the -wldo-w -was entitled, accordingly, to a distrib- utive share of the purchase money as part of the personal property of her husband. 1 '^.-lA-^ 1^ -^ l~-f^-^ ---^'■-->- 'i 160 CONVERSION AND RECONVERSION. WHELESS V. WHELESS et al. (21 S. W. 595, 92 Tenn. 293.) Supreme Court of Tennessee. March 2, 1893. Appeal from chancery court, Davidson county ; J. A. Cartwright, Special Cban- cellor. Bill for partition by Joseph Wheless and others against H. H. Wheless. Judgment forcomplainants. Defendant appeals. Af- firmed. Dickenson & Frazer, Stokes & Stokes, and Frizzell & Zarecor, for appellant. Jo- seph Wheless, Jr., and N. D. Malone, for respondent G. A. Tillman, guardian ad litem. J. S. Pileher, for widow of J. F. Wheless. J. W. Byrnes, for petitioner Mc- Crosky. CA-LDWELL, J. Gen. John F. Wheless died intestate and without issue, leaving a widow, and numerouscollateralkindrtd. The bill in this cause was filed for a parti- tion of his lands, where that could be done, and for nale and division of proceeds, where partition in kind might not be prac- ticable. The widow, in her answer, , claimed that the undivided interest of her husband in what is known as tbe"Baxter Smith Tract" was not realty, but personal I property, under the doctrine of equitable i conversion, and that it therefore belonged to her, as distributee, and not to the heirs. : The chancellor decided this question against her, and she appealed. No doctrine is more firmly fized in Eng- lish and American jurisprudence than that of equitable conversion, by which, under certain circumstances, real estate is treated, in equity, as personal property, and personal estate as real property. /Througli this doctrine, courts of equity I treat as land money directed to be em- I ployed in the purchase of land, and, as ; money, l,and directed to be sold and con- Vverted into money; and the direction upon which the conversion arises may be made by will, or by deed, settlement, or other contract inter vivos. Adams, Eq. *185, 186; 1 PoraTEqmif: § 371; 2 Story, Eq. Jur. § 790; 4 Araer. & Bng. Enc. Law, 127; 6 Amer. & Eng. Enc. Law, 664, 665. It was early recognized in this state, (Stephenson V. Yandle, 3 Hay w. [Tenn.] 109,) and has since been applied in several cases upon the construction of wills. McCormick v Cantrell, 7 Yerg. 615; Williams v. Bradley, 7 Heisk. 58; Green v. Davidson, 4 Baxt. 448. The difficulty which sometimes arises in the application of the principle to a par- ticular instrument lies, not in the subtlety of the principle itself, but rather in ascer- taining the intention of the maker from the words employed. To operate as a con- version, ugh,in trust, as hereinafter men- tioned, the following tract of land • • • to haveand to hold, for himself and other beneflciaries hereinafter named, in trust for '. the following uses and purposes : That is to say, said tract of land has been j(>intly ' purchased by James C. Warner, Percy ( ^ arner, John P. White, John F. Wheless, B. F. Wilson, W. M. Grantland, Charles L. Ridley, Baxter Smith, and J. H. Yar- brough, Li. H. Davis, and G. A. Maddux,— the last three purchasing as a firm, under thefirm name and style of I'arbro ugh, Mad- dux and Davis,— each paying and to pay one tenth of the purchase money for said ' land, as hereafter set out, except John P. White, whopaystwotenths. • • • Said tract of land is conveyed to said J. H. Yarbrongh, as trustee for said named pur- chasers, with power and authority to hold, possess, and manage thesamein theirinter- Mt and behalf, and to sell and convey the same, by deed in fee simple, upon the writ- ten direction of a majority in value of the adult beneficial owners then living, upon Buch terms and conditions as they may direct, and to collect and divide the pro- ceeds of sale among said beneficiaries, their heirs, administrators, executors, and assit^ns, as their several interests may ap- pear. • • The aforesaid sura of $34,395.60 has been paid, and secured to be paid, as follows: • * To secure the payment of the promissory notes herein described, a lien is expressly retained upon the share or interest of the maker alone, and not against the tract as a vrhole. In case any of the beneficiaries herein named, in order to preserve his or their ow^n title, should have to pay and discharge for an- other any accruing taxes or other incum- brance or lien upon the whole property, then, in that event, he or they shall have a lieu upon the share or interest of the per- son who has failed to make such pay- ment. Should said J. H. Yarbrough de- sire to resign the trust herein given him, ' he may do so, by and with the consent and approval, in writing, of a majority in value of the adult beneficiaries, owners, named above, and appoint in liis room and stead a new trustee, and clothe him with like power and duties as those now conferred on him, by a suitable deed of conveyance in writing, to be recorded in the register's office of Davidson county, Tennessee." Such are the material portions of the instrument the court is called upon to con- strue in this case; and the inquiryis wheth- erthe land conveyed thereby is to be treat- ed, in equity, as realty, or as personalty. If as realty, the share of Gen. Wheless passed to his heirs, under the statute of descent; if as personalty, it went to his widow, as sole distributee, sut)ject in ei- ther case, of course, to his debts. A general view of the deed readily dis- closes a proposed speculation, entered into by several persons jointly, — a syndicate buying land to sell again. In furtherance of the scheme a trustee was appointed, and the land conveyed to him for the ben- efit of all the purchasers,— for each ofthpm according to his interest. The idea of a H.& B.EQ.(2d Ed.)— 11 resale, as the ultimate object of the enter- prise, runs through the whole instrument. It appears, from the nature of the transac- tion ; from the words conferring upon the trustee power and authority "to sell, * • • and collect and divide the pro- ceeds;" and from the provision for ap- pointment of a successor in case the trus- tee should resign. That a partition in kind should ever occur, or that the trust should cease before a sale of the land and division of its proceeds were fully accom- plished, was never contemplated. The land was bought to sell again, and a trus- tee was appointed as a part of the plan. All this is clear; but it is entirely consist- ent with the proposition that the trust w^as created merely as a cheaper and more convenient method of preserving and con- veying theland. More is required to make [ a case of equitable conversion. The fact ^ of a contemplated resale is present in ev- / ery purchase of land upon speculation ; / and land purchased with such view is not^ converted into personalty by the mere ap- pointment of a trustee to receive the title, and as the agency through which the re-j sale is to be accomplished for the owners.' It is manifest that the paramount object of the enterprise was a resale of the land through the trustee, as representative of. the beneficial owners, yet the deed does not contain any imperative direction that he shall sell; no absolute, unconditional duty to sell is placed upon him. "The equitable 'ought' " is not to be found in the deed, either as a matter expressed or to be necessarily implied. Not only does it contain no positive direction that he shall sell, but it, in reality, does not even permit him to sell, upon his own motion. His only power of sale is made to depend, expressl.y, upon the direction of others. He has no independent authority in that respect. The words of the deed on this point are; " With power and autliorit.y to bold, possess, and manage the same in their interest and behalf, and to sell and convey the same, by deed in fee sin. pie, up- on the written direction of a majority in value of the adult beneficial owners then living, upon such terms and conditions as they may direct." This language imposes upon the trustee no positive, unqualified obligation to sell the land at all events. At most, It but gives him authority to sell at such time, and upon such terms and conditions, as others may direct. In effect, it but makes hira the instrumentalit.y through which a majority of the beneficial owners living at any given time may make a sale. He has no right to sell with- out their written direction, and no au- thorit.v to demand or require such direc tion at one time or another. It cannot be that a conversion was wrought by creation ofa trust so passive as this on To meet the fact that the trustee has no power to sell unless directed by a majority of the adult beneficiaries to do so, it is suggested that the beneficiaries themselves are clothed with a trust, to the extent of being empowered to direct when and how the sale shall be made, and that they are bound to give such direction. Therecan be no doubt that it was contemplated that the beiipficiaries should at some time give the trustee the required direction to t be\ the\/ eis. / 162 CONVERSION AND RECONVERSION. sell the land, and that a duty was, to that extent, indirectly devolved upon them ; but that can hardly be said to have made trustees of them, or to have magnified the limited power of the real trustee into an imperative obligation to convert the land into money. The purchasers, though in- tending an ultimate sale, clearly had no thought that the terms of the deed changed the character of the property, and converted the real estate into person- lalty. That they intended the land to be jheld as realty until actually sold and (turned into money is manifest from the jgeneral frame and terms of the deed, and j especially from those parts of it retaining 'separate liens in favor of the grantor, and providing for a special lien in favor of such beneficiaries as might be compelled to pay taxes or discharge liens for others. In the portion of the deed last referred to, the interest of each of the several benefi- ciaries ia referred to as an interest in land, as such, and provisions are made with ref- erence thereto which would be inappro- priate as applied to personalty. We are of opinion that the deed shows upon its face when considered as a whole, that the land was conveyed to a trustee merely for convenience, and to save expense and trouble in the ultimate sale and convey- ance, and that no conversion took place. Gup attentfon has been called to the very instructive and soundly reasoned case of Orane v. Bolles, (N. J. Ch.) 24 Atl. Rep. 237, In which a conversion of land into money was held to have oc- curred under direction contained in a will. There are several points of similarity be- tween that case and this one, and perhaps as many important differences. The prin- ciples of law laid down in that case are the same recognized and applied by us in this one, the difference in result reached being due to differencein purport of instru- ments construed. Without stating the aspects in which the two instruments agree, or those in which they differ, we are content with simply saying that the court in that case said that the direction for sale was "imperative," and did not depend on the "request or consent" of the testator's children, while in this case there is no imperative direction to selU and the power to sell does depend on the direction of the beneficiaries. Affirm the decree. CONVERSION AND RECONVERSION. 1G3 PRENTICE v. JANSSEN. (79 N. Y. 478.) Court of Appeals of New York. 1879. C. Bainbridge Smith, for appellants. Josh- na M. Van Cott, for respondents. MILLER, J. The complaint in this action demands an equitable partition or sale of several pieces of land therein described, up- on a portion of which was erected a hotel, called the Pavilion Hotel, together with the personal property, consisting of furniture in said hotel, and that an account be taken of the disbursements and expenditures made by the plaintiff, Augustus Prentice, for the bene- fit of and as additions to said property, and that the share of the defendant, Mary Ann Janssen, be charged upon the same and de- ducted from her portion of the proceeds of the sale of the property. The land belonged to Francis Blancard at the time of his de- cease in 1868, and the title is derived under the provisions of his last will and testament. The plaintiff, Augustus Prentice, holds three- fourths, by conveyances from' the residuary legatees or their representatives, and the de- fendant, Mary Ann Janssen, the remaining one-fourth. The defendant last named has Joined with the plaintiff in making leases of the property since 1873; large sums have been expended in making improvements by the owners, and the rents have been re- ceived and applied in part, if not entirely, for that purposa The residuary clause in the will of Fran- cis Blancard devised and bequeathed his property to five of his children, among whom were Francis H. Blancard and the defend- ant, Mary Ann Janssen. It also authorized Francis H. Blancard to carry on the hotel I business in the Pavilion Hotel, for the term j of five years, if he so desired, and the ex- : ecutors were empowered and directed, after ', the testator's death, to sell and convert into ; money all the real and personal property of which he should be seized or possessed, in- cluding the hotel property, after the right ! of occupancy of his son had ceased, as they should deem advisable, and divide the pro- ' ceeds equally among the residuary legatees. The son, Francis H., died before the testa- tor, and no action was ever taken by the executors to sell the property, and it re- mained undisposed of, and was used and regarded by the ovniers as real estate to which they had titie. Only one of the ex- ecutors, the defendant, Gerhard Janssen, was living at the time of the commence- ment of this action, and he is made a party, as the husband of the defendant, Mary Ann Janssen, and does not by his answer claim any rights as executor or that he is a proper party as such. The answers admitted that plaintiff and the defendant, Mrs. Janssen, owned the property as tenants in common. We think that under the provisions cited from the testator's will, the executors who were donees of a power took no estate in the lands as trustees, but merely a power la trust to be executed for the purposes of dis- tribution, according to the will, which was liable to be defeated by a reconversion of the property, which was made personal by the will, into real estate. The testator by the authority and direc- tion to his executors to sell the real estate, constructively converted the same into per- sonal estate, and being thus converted, the residuary legatees were entitied to take the same as such and had a right at their elec- tion to reconvert into real estate. No dis- tinct and positive act is required for such a purpose, and the rule applicable to such a case is that "in the reconversion of real es- tate a slight expression of intention will likewise be considered sufficient to demon- strate an election on the part of those ab- solutely entitled." Lieigh & D. Conv. (5 Law Library), m. p. 168; Mutlow v. Bigg, L. R., 1 Ch. Div. 385; 1 Jarm. Wills, 523 et seq. The real estate was not disposed of by the executors under the provisions con- tained in the wiU, and as there was no lawful purpose for which a sale was abso- lutely required there was no obstacle to pre- vent a reconversion of the same by the par- ties in interest from personal into real es- tate. This they elected to do by positive and unequivocal acts. Three of the four residuary interests were conveyed to thej plaintiff, Augustus Prentice, and the defend- ant, Mary Ann Janssen, retained the other I one-fourth. The whole has since been en- ' joyed, possessed and treated the same as real estate. This was done by the acquiescence of the executors and all tie parties in inter- est, not only by possession, but by acts show- ing their Intention beyond any question. In Story, Eq. Jur. § 793, it is said that if land is directed to be converted into money mere- ly, the party entitied to the beneficial inter- est may if he elects so to do, prevent any conversion of the property and hold it as it is. This has been done by the residuary legatees here; and as the lands were not 1 sold and disposed of by the executors, audi no diversion made, the rule applies that the person entitled to the money, being of law- 1 ful age, can elect to take the land, if thai rights of others will not be affected by such 1 election. Hetzel v. Barber, 69 N. Y. 1, 11. No rights of other parties were Injured by the election to reconvert; and as three- fourths of the residuary interests had been sold and conveyed to the plaintiff by those who were entitied to the proceeds of a sale, if one had been made under the power, and the owner of the remaining one-fourth had assented to the reconversion, by exercising acts of ownership, and the purpose of the power had become unattainable, the power to sell became extinguished, and the plain- tiff and defendant already named became owners as tenants In common. Hetzel t. 164 CONVERSION AND RECONVERSION. Barber, supra; Garvey v. McDevitt, 72 N. T. 563. Neither the will itself nor the sur- rounding circumstances evince in any way that the testator intended not only to confer a power of sale, but that the exercise of such power would 'become absolutely necessary to enable the executors to make lie distribution required to the residuary legatees, within the principle laid down in Crittenden v. Fair- child, 41 N. Y. 289, 292, which is relied upon by the defendant's counsel. The facts here are far different from the case cited. The distribution was actually made and the pur- pose of the will fully accomplished by the reconversion of the personal estate into real estate by "the parties in interest, as is quite obvious, and each of the legatees had re- ceived their full share as directed; thus ren- dering the exercise of the power of no avail. It follows that the executors having only a power to sell for the purpose of distribution —which power never was exercised, and which became of no use by reason of the reconversion of the land into realty— Ger- hard Janssen, the surviving executor, had no right, title, interest, or lien upon the prop- erty, which rendered him a necessary party to the action as such executor. The provi- sion of 1 Rev. St. p. 735, § 107, which makes a power of sale a lien or charge upon the land, has no application when it had ceased to operate, and was of no practical use. As by the reconversion no interest remained in the executors, there could be no lien or charge upon the land. Equity would not in- terfere to compel the execution of the power under 1 Rev. St. p. 734, § 96, because the purpose had been accomplished vrithout its ■ exercise. Nor was it necessary that Gerhard Jans- sen, the surviving executor, should be a par- ty for any other reason. In regard to the payment of debts and legacies there was no evidence that any debt or legacy remained unpaid when this action was brought. Sev- en years had then elapsed, and as debts and legacies are primarily to be paid out of the personal estate, unless express directions or a clear intent to the contrary is found, or to be gathered from the will (Bevan v. Cooper, 72 N. Y. 317; Kinnier v. Rogers, 42 N. Y. 531j, the presumption is that they have been paid. The burden of proof was on the de- fendants to establish that they were not, if such was the fact. No such defense was set up in the answer or interposed upon the trial, and as the case stood the plaintiff was not required to show that the debts and leg- acies had been paid. The same remarks will apply to the point made, that there was no payment or accounting for the testamen- tary expenses. i Charles Blancard, a son of the testator, was not, we think, a necessary party de- fendant in this action. By the will he is bequeathed the sum of $5,000, and he is not named therein as a residuary legatee. It is claimed that he became entitled to an Inter- est in the residuary portion of the estate which was given by the testator to his broth- er Francis, who died before the testator, without leaving any child or descendant, and that the share bequeathed and devised to Francis lapsed and his share descended to the testator's heii'S at law; that Charles Blancard was one of them, and therefore a necessary party to th,e action. Without con- sidering the question whether the devise to Francis H. Blancard having lapsed it pass- ed, under the residuary clause, to the four children named who survived him, or wheth- er the papers produced upon the argument of this appeal, showing that Charles Blancard had sold and conveyed away all the interest which he may have had in the property, and therefore was not a proper and necessary party to the action, it is sufficient to say that the point does not arise upon the record be- fore us, and it is a complete answer to the objection that the admission made by the pleadings, that the plaintiff and the defend- ant are the sole owners of the real estate, dispensed with the production of evidence upon the trial to establish such fact and pre- clude the objection that Charles Blancard had an outstanding interest as an heir at law under the residuary clause in the will of Francis Blancard. No title was acquired by the deed from Wemple, as executor of Caroline Blancard, deceased, of the interest of the decedent in one of the lots of the Pavilion Hotel, to the defendant, Mary Ann Janssen. Nor Is there any valid reason why Mrs. Janssen should be subrogated in this action to his rights be- cause the real estate had been converted into personalty. By the will of Caroline Blan- card the executor was authorized and em- powered, during the minority of the nephews and nieces of the testatrix, to whom she had given one-half of the property, to sell or lease jointly with the ,other owners of the undivided shares therein. After one of the devisees became of age the executor con- veyed to Mrs. Janssen all the interest and estate vested in him as such. He had no estate in the premises and only a power in trust, which was to be executed while the devisees were in a minority in connection with the other owners. He had therefore no authority to execute the conveyance to Mrs. Janssen, and the deed was InvaUd and conferred upon her no title. Subsequently Mr. Wemple, as special guardian of one of the devisees, who was an infant, by order of the court conveyed all of her interest un- der the will of Caroline Blancard, including that which had been previously attempted to be conveyed to Mrs. Janssen, to the plaintiff, Augustus Prentice, and by other conveyan- ces the interest of the other devisees was acquired by him. As the executor had no authority to convey the premises, the right acquired by the deed of the special guard- CONVERSION AND RECONVERSION. 165 ian could not be affected by the knowledge of tlie purchaser of the conveyance to Mrs. Janssen. \ We think that the share of Mrs. Janssen ' was properly chargeable with Its proportion i of expenditures made by Augustus Prentice, : the plaintiff, for repairs and improvements I of the property. By the lease $5,000 was to j be applied for improvements and repairs. It ' was supposed that they would not exceed ! that amount; but the covenant to make re- ' pairs was properly construed by the referee to mean that the lessors were to make all repairs, whether they exceeded the sum nam- ed or not. It also appears from the referee's findings that Mrs. Janssen after she had knowledge that the repairs exceeded the sum specified, assented to the appropriation of additional sums due for, rents, to be used In making improvements; that she stood by and did not object to the erection of a new building, and she thus acquiesced in all the expenditures actually made. Under such cir- cumstances there certainly was an implied obligation that she should pay her share of the moneys expended for the benefit of the property in which she had a common inter- est, and they are a proper charge against the defendant's portion of the real estate sought to be partitioned or sold. In making the re- pairs the plaintiff, Augustus Prentice, did not occupy the position of a volunteer, with- out any authority of his co-tenant, but acted under the lease, which, as we have seen, covered the amount actually expended, and that this was done with the assent and ap- proval of the defendant. The case of Taylor V. Baldwin, 10 Barb. 582, 626, which is re- Ued upon by the defendant's counsel, is not adverse to the views expressed. f There is no valid objection to charging the defendant's share of the proceeds of the sale Vith the amounts expended, as found by the 1 referee. These expenses were incurred In reference to the property under special di^ cumstances which, we think, render it chargeable therewith, and the judgment properly provided for the payment of de- fendant's proportion out of her share of the avails realized upon a sale. Nor is any rea- son shown why she should not be charged with her share of the costs, as found by the referee. There was no error in the allowance of the architect's fees. Although there is some con- fusion in the referee's report in regard there- to, it nevertheless appears from the receipts introduced in evidence that the amounts charged in the account were actually paid to him. We think the court properly ordered that the sale of the real estate and the personal property should be made as one parcel. The real estate as the referee found was sd sit- uated that a sale of one portion would in- terfere materially with the value of the re- mainder, and the personal property, being purchased for the benefit of the hotel, was of such a character that it could be disposed of more advantageously by a sale with the real estate than by a separate sale. No rea- son therefore exists why the sale of the whole real and personal estate should not be made together in a single lot. We have ex- amined the authorities cited by the defend- ant's counsel upon the question last consid- ered, and none of them sustain the position that the court has not the power, in an equitable action, where the parties are ten- ants in common of real and personal prop- erty, to direct a sale of both in one parcel when their interest will be promoted by such a sale. There was no error, and the judgment should be affirmed. All concur. Judgment affirmed. ^..^ .^ct ../, 168 AOOIDBNT. KOPPBR V. DYER. i)YER V. KOPPER et al. (9 Att 4, 59 Vt. 477.) Supreme Court of Vermont April 30, 1887. Appeal from chancery, Addison county, December term, 1886; Taft, Chancellor. Bill in chancery seeking relief from a de- cree of foreclosure, which had become abso- lute, on the ground of accident Heard on pleadings and master's report. Decree that the orator is entitled to relief according to the prayer of his bill, and that the cross-bill of defendant. Dyer, be dismissed, with costs, from which defendant appealed. In August, 1880, defendant John M. Dyer, sold and conveyed to Frederick Kopper the premises in controversy, known as the "Lake Dunmore Hotel Property," together with a large amount of personal property used in connection therewith, for $13,500. Of said purchase money, $10,500 was secured by mortgages of said real estate and personal property, both executed by Kopper to Dyer, August 23, 1880, conditioned that Kopper pay Mary G. Goddard, according to their tenor, certain notes, amounting to $10,500, which Dyer had executed, and which were secured by mortgage on his other real estate; that Kopper pay all imassessed taxes on the Lake Dunmore property on the grand list of 1880; and that he keep the premises insured in the sum of $5,000 for Dyer's benefit The prem- ises have been continually occupied by Kop- per, with the exception stated below, and he is now In possession. The taxes were paid by Kopper to and including 1884. The con- dition respecting Insurance has not been complied with. In 1884, Dyer paid insur- ance premiums to the amount of $75. For default in payment, Mary C. Goddard fore- closed her mortgage against Dyer, and ob- tained a decree of foreclosure at the Septem- ber term, 1882, of the Franklin county court of chancery. January 19, 1883, Dyer, fear- ing that Kopper might not satisfy the God- dard decree, and for the purpose of being sure that his own property would not be sacrificed, procured the National Life Insur- ance Company to hold in readiness for him the amount required to pay that decree; and on May 23, 1883, obtained the same from the company, and paid it in satisfaction of that decree. Dyer was also compelled to pay the company the further sum of $193.85, in con- sideration of its having held said amount in readiness from January to May. Dyer also paid $32.86 costs of the Goddard foreclosure. Dyer made several attempts to foreclose his mortgage against Kopper, and finally it was decreed "that, unless the said Frederick Kop- per pay to the clerk of this court, for the benefit of the orator, the sum of $500 on or before January 1, 1885, and the STun.of $8,062.- 09 on or before the first day of June, 1885, he, (the said Frederick Kopper,) and all per- sons claiming under him, shall be foreclosed and forever barred from all equity of re- demption in said premises." Kopper did not pay the $500 as required by the decree, but sent his personal check under circumstances stated in the opinion. January 2, 18^, Dyer obtained of the clerk of the court a certified copy of the decree for record, and a writ of possession thereunder, and immediately took possession of the property, and has paid tax- es thereon since. Kopper at once brought the original bill In this cause, praying for such relief as shall give the orator the ben- efit of the payment already made, as much as he would have had if the currency had been paid into court, as ordered by the decree; that the decree be opened, and further order made on terms, meet to the court, to relieve the orator from the loss that must result to him should no relief be granted; and for an injunction restraining the defendant from any further proceedings under the writ of possession, and from exercising any use or control of the premises. The bill and in- junction were served, and Dyer withdrew 'from the premises. June 1, 1885, Kopper caused the sum of $8,600 to be tendered Dyer in payment of the installment Of Said decree falling due on that day. Dyer refused to receive it, claiming that Kopper did not owe him, and that the property was his. Kop- per afterwards filed his supplemental bill in this cause, setting up the tender, and claim- ing the benefit thereof, with said payment of $500 to the clerk as a compliance with the terms of the foreclosure decree. Dyer filed his answer to said bill, September 22, 1885, and an amendment thereto, February 20, 1886. May 29, 1885, Kopper conveyed the premises, together with the personal property thereon, which had been mortgaged to Dyer, to Wyman H. Merritt and Frank B. Briggs by warranty deed, which deed was given Merritt and Briggs as security to them for the loan of the money which was tendered to Dyer, June 1, 1885. April 14, 1886, Dyer filed his cross- bill against Kopper, Merritt, and Briggs, for a disclosure of the mortgaged personal prop- erty, for surrender of the premises, and an accounting for their use; or. If the decree is to be opened and further time given to re- deem, for a correction of the decree, and an accounting and foreclosure. Demurrers to the cross-bill having been overruled, the same was taken as confessed against Merritt and Briggs; and Kopper filed his answer thereto June 19, 1886. The other facts appear in the opinion. Stewart & Wilds, for Dyer. Ormsbee & Briggs, J. M. Slade, and Noble & Smith, for Kopper. ROWELL, J. Kopper seeks relief on the ground of accident. That chancery may grant relief on that ground, in cases of this kind, cannot be doubted; and the first ques- tion that arises is, has the orator made a case that calls for the interposition of the court in his behalf? AOCIDHNT^ 167 The term "accident," in its legal significa- tion, is difficult to define. Judge Story de- fines it as embracing, "not merely inevitable casualty, or the act of Providence, or what Is technically called vis major, or irresistible force, but such imforeseen events, misfor- tunes, losses, acts or omissions, as are not the result of any negligence or misconduct in the party" afCected thereby. 1 Story, BJq. Jut. § 78. Mr. Pomeroy justly criticises this definition as including what are not accidents at all, but mistakes, and as omitting the very central element of the equitable conception, and defines it thus: " 'Accident' is an un- foreseen and unexpected event, occurring ex- ternal to the party afCected by It, and of which his own agency is not tie proximate cause, whereby, contrary to his own inten- tion and wish, he loses some legal right, or becomes subjected to some legal liability, and another person acquires a corresponding le- gal right, which it would be a violation of good conscience for the latter person, under the circumstances, to retain." 2 Pom. Bq. Jut. S 823. And the chief point of the thing Is that, because of the unforeseen and unex- pected character of the occurrence by which the legal relation of the parties has been unintentionally changed, the party injurious- ly affected thereby is, in good conscience, en- titled to relief that will restore those rela- tions to their original character, and place him In his former position. Id. § 824. But, as a general rule, relief will not be granted unless it can be done with justice to the oth- er party; for, if he cannot be put in as good a situation as he would have been In had the other i>arty performed, the court will not interpose. Rose v. Rose, Amb. 331. Equity, in many instances, relieves against forfeitiu-es occasioned by the non-payment of money at a day certain; and this, although there is no accident, but negligence instead, on the ground that the condition and the for- feiture are regarded as merely security for the payment of the money. This is the ground on which tenants are relieved from forfeitures for the non-payment of rent as stipulated, and mortgagors are allowed to redeem after the law-day has passed. And although the agreement Is not wholly pe- cuniary, nor measured by pecuniary compen- sation, still, if the party bound by it has been prevented by accident, without his fault, from an exact fulfillment, so that a forfeiture is thereby incurred, equity will Interpose, and relieve him from the forfeiture, upon his making compensation, if necessary, or do- ing anything else In his power to satisfy the equitable rights of the other party. 2 Pom. Eq. Jur. i 833. In Cage v. Russel, 2 Vent. 352, It is laid down as a standing rule of equity that a for- feiture shall not bind when the thing can be done afterwards, or any compensation can be made for it Forfeitures are odious, and courts struggle against them, and relief is granted for the non-performance of diverse collateral acts whereby they af^e Incurred; as for not laying out a specific sum in repairs in a given time, (Sanders v. Pope, 12 Ves. 282,) for cutting down timber when cov- enanted against, (Northcote v. Duke, Amb. 511,) for not renewing a lease in time, (Raw- storne v. Bentley, 4 Brown Ch. *415,) and the like. Relief is also granted against forfeit- ures incurred by unintentional breaches of the condition of mortgages for support, on terms that the party in fault fully compen- sate and indemnify the other party for all he has lost by reason of the breach. Henry T. Tupper, 29 Vt. 358. In Adams v. Haskell, 10 Wis. 123, the de- fendants were prevented by accident from reaching the place of a foreclosure sale until after it was completed, and the court for that reason ordered a resale, but on terms. In Pierson v. Clayes, 15 Vt 93, the orator, by reason of pending negotiations of settle- ment, without negligence on his part, let the time of redemption expire; and he was re- lieved by opening the decree, and giving fur- ther time to redeem. The case of Bostwick v. Stiles, 35 Conn. 195, is confessedly much in point. That was a bill to open a decree of foreclosure, and ob- tain further time. The mortgage debt was about $4,000, and the value of the premises twice that sum. The time limited for pay- ment was August 5th. The petitioner intend- ed to redeem, but, not having sufficient means of his own, he applied to his uncle— a man of property— to help him, and he agreed to, and to furnish the money on August 3d, on which the petitioner relied; but, for some reason not explained, he did not furnish the money as agreed, and the petitioner delayed making other arrangements until the evening of August 5th, when he applied to Russell for assistance. Russell had no money, but plen- ty of government bonds, and agreed to make payment in them if defendant would take them; and accordingly went to defendant's house that evening, after defendant had gone to bed, and told his wife that he had come prepared to redeem the mortgage for the pe- titioner, but defendant did not get up, but sent word by his wife that he was sick, and Russell went away. On this state of facts, the court held that the petitioner's failure to pay on August 5th was occasioned by acci- dent, without fault or neglect on his part and that the accident lay in the fact of hia uncle's failure to furnish the money as agreed, and as the petitioner had reason to believe he would. The court says that there Is a degree of uncertainty in regard to all business expectations, and that no more ought to be required in respect of future obli- gations imposed by law than that such means shall be taken to fulfill them as will render it reasonably certain, as far as human sagaci- ty can foresee, that they will be i)erfonned. It Is common in England to enlarge the time of redemption on application before the day of payment; and, though the indulgence 168 ACCIDENT. Is not granted of course, It is said not to re- quire a very strong case to obtain It. And the time may be enlarged more than once. Thus, in Jones v. Creswlcke, 9 Sim. 304, aft- er the time had been enlarged, and after the order absolute had been made, though not drawn up, the time was again enlarged, on the ground that the man who had agreed to lend the defendant the money was pre- vented by illness from going up to London on the day it was due, and his wife, whom he had deputed to carry it up, was prevented from doing so because the Ivondon coach was full the day before. And see Edwards v. CunlifEe, 1 Madd. 287. And the decree may be opened after the order absolute has been made and enrolled. Thus, in Ford v. Wastell, 6 Hare, 229, not- withstanding the order absolute had been drawn up and enrolled, the decree was open- ed because all the plaintiff's property was involved in an administration suit that she was justified in believing would terminate in season to enable her to avail herself of her property with which to meet the pay- ment, but which had not yet terminated. See, also, Thornhill v. Manning, 1 Sim. (N. S.) 451, in whlfth the promptness of the mortgagor in applying was regarded as the great and important feature in the case to guide the court in deciding what it ought to do. Applying these principles, as shown and illustrated by the cases, it is quite out of the question to say that the defendant is entitled to keep this property, and that the orator has not made a case that calls for the interposition of the court in his behalf. The orator gave $13,500 for the property, and had paid $2,724 towards it, and expend- ed about $10,000 upon it in improvements and repairs; and on January 1, 1885, the time limited by the decree for paying the installment of $500, he believed the real es- tate fairly worth $5,000 or $6,000 more than he gave for it. He was exceedingly anxious to redeem the property, but had no available means of his own, and relied for means wherewith to pay his debts partly on Income assured to members of his family, and part- ly on the equity of redemption in the prop- erty, his ability to make which available at the value he put upon it being his only means of escape from absolute bankruptcy. It appears that his vrife and her sister. Miss Jenkins, owned property in New York City, as to which he was agent, and that before and on December 29, 1884, he }iad been in negotiation with one Martin of that city in respect to leasing it to him; and It was agreed that, on delivery of proper leases thereof, Martin should advance to him $650 towards performance on his part, and Hop- per relied on the use of that money to pay the $500 installment. Accordingly he went to New York on December 30th, with the lease executed, found Martin, and made an appointment with him for 11 o'clock the next day; and, on going to the place at the time appointed, found a message postponing the appointment to. the office of an attorney down town at 2 that afternoon; whereupon, being unable to commnmicate with Martin, he went to the office down town at 2, and found that Martin had been there, but had gone. He afterwards met Martin on the street, and, being exceedingly anxious to obtain the money, persuaded him to go back to the attorney's office; but, he being out, they went to another attorney's office, and he was out; and finally he persuaded Martin to give him his check for $650 be- fore the leases were approved by an attor ney. But this was after 3 o'clock, when all the banks in the city were closed. Said check was good, but, being drawn on a bank in the upper part of the city, and it being after banking horn's, It was impossi- ble for Kopper to draw the money on it that day. He had for several years kept a deposit account with the Second National Bank of that city, and had at this time a small balance standing to his credit there, and that bank was accustomed to place to his credit the amoimt of such checks as he de- posited there properly indorsed. He had previously carried checks to that bank after business hours for deposit, handing them in over the railing to be credited to him at the opening of the bank the next day. On this occasion he properly indorsed said check "for deposit," and sent it to said bank by a district messenger boy, but whether it reach- ed the bank or not that day does not appear. At the sarnie time he drew two checks on said bank to the order of the person who was then the clerk of the court in which the decree was obtained,— one for $575, (which he supposed to be the amount re- quired to pay said installment, but which was in fact more than was required;) and one for $25, for a sum otherwise payable to the clerk,— inclosed them in an envelope, with a letter to the clerk, went to the Grand Central Depot, and sent the package to Mid- dlebury by the porter of the sleeping-car, inclosing it in another envelope to the sta- tion-agent there, requesting him to deliver the package to the clerk Immediately, which he did on the morning of January 1st, which day was a legal holiday in New York; and the $650 check was passed to Kopper's credit by the Second National Bank on the next day, the first business day after it was re- ceived. Dyer refused to take Kopper's check of the clerk, and the clerk did not treat it as payment of the installment, nor regard it as available funds in his hands, until it was paid, and the avails credited to him by the collecting bank, which was on January 5th, on which day he was trusteed by some of Kopper's other creditors, and on the 6th this bill was brought. On these facts, and the others disclosed by the record, Kopper cannot justly be char- ged with negligence. The means he had tak- ACCIDEJNT. 169 en to obtain the money rendered It reasona- bly certain that he ■would succeed, and that he was anxious to obtain It abundantly ap- pears. That he did not meet Martin at 11 nor at 2 was an unforeseen and unexpected occurrence, external to himself, of which his agency was not the proximate, nor even the remote, cause, and thereby he was pre- vented ffom sending his money seasonably, in a form that would have been treated and regarded as payment, whereby, contrary to his own intention and wish, he lost his legal right to pay, and Dyer acquired a legal right not to have him pay; and in these circum- stances Kopper is entitled to relief that will reinstate him in his former position, on terms that he satisfy the equitable rights of the other party. But he cannot have relief imder his bill as drawn, for It is not adapted to his case. The original bill goes upon the ground that he is entitled to have his attempted payment of the first installment treated as an actual, seasonable payment; while the supplemental bill sets up a tender of the other install- ment, and asks that it be adjudged a pay- ment thereof, and that the defendant be decreed to accept and receive the same in full satisfaction and discharge of the decree. But his attempted payment was not pay- ment, and he is not entitled to have it treat- ed as such, because neither the money, nor its equivalent, seasonably came into the hands of the clerk, and Dyer was not bound to accept and receive his check as pajnnent, though he might have safely taken the mon- ey after the time expired. If he could have got it; for taking an installment after the time for paying it is expired does not open the decree as to installments for the payment of which the time has not expired. Smalley V. Hickok, 12 Vt. 153; Gilson v. Whitney, an unreported case in Windsor county a few years ago, ut audivi. Nor was the tender of the second installment effective; for, not having paid the first, he had no legal stand- ing for tendering the second. Redemption is the appropriate relief in this case. Indeed, it is said that whenever a mortgagor is driven to the necessity of fil- ing a bill against the mortgagee, it must be one to redeem, and that the court can relieve him only by allowing a redemption. Gold- smith V. Osborne, 1 Edw. Oh. 560; Cholmley v. Coimtess of Oxford, 2 Atk. 267; Lord Langdale in Dalton v. Hayter, 7 Beav. 313. But the bill lacks some of the essential ele- ments of a bill to redeem. It neither offers nor avers a willingness to pay, which is nec- essary by all the authorities. But, inas- much as the orator is entitled to relief, he should not be turned out of court, but al- lowed to amend his bill into a bill to re- deem. If he shall be so advised. Harrigan V. Bacon, 57 Vt. 644. There was no necessity for bringing the cross-bill. The chattel mortgage was not em- braced in the original bUl, and so could not be the subject of a decree; and discovery of property subject to it could not aid in de- fending the original bill. As to the execu- tion of the decree by giving possession, that can be done by summary process. K. L. §§ 766, 767; Kershaw v. Thompson, 4 Johns. Oh. 609; Ludlow v. Lansing, Hopk. Oh. 231; Valentine v. Teller, Id. 422; Yates v. Ham- bly, 2 Atk. 237. As to the use of the premises pending suit, the defendant would be entitled in respect thereof, if at all, only on failure of the original bill, in which event he could avail himself of his rights by way ot claim for injunction damages. And, as to the alterna- tive prayer for foreclosing any remaining equity, that would be the result of any de- cree on the original biU. Nor was there any necessity for bringing in Briggs and Merritt, for they purchased pendente lite, and so will be bound by any decree made. Besides, treating them as entitled to the benefit of their demurrer, as they were treat- ed at the bar, they are not proper parties to the cross-bill; for new parties cannot be made in that way. A cross-bill, by force of the term, is a bill by a defendant against the plaintiff or other defendants in the same suit, or both. If an orator desires to make new parties, he amends his bill, and makes them, although it be in respect of matters that have transpired since the filing of his bill; though until very recently, in respect of such matters, he would have brought a supplemental bill. If the Interest of the defendant requires the presence of new par- . ties, he takes his objection for want of them, and the orator is forced to bring them in, or have his bUl dismissed; and if, at the hearing, the court finds new parties Indis- pensable, it refuses to proceed. These rem- edies cover the whole subject, and a cross- bill to make new parties is not only irregu- lar and improper, but wholly unnecessary. Shields v. Barrow, 17 How. 130. But if they are not entitled to the benefit of their demurrer because the bill has been taken as confessed as to them, yet Kopper's defense avails for them; for, when the de- fendants are jointly interested, a decree pro coufesso as to some merely takes away their standing in court, and disentitles them' to appear or be heard on many questions cer- tainly without an order of court; but the success of the others avails for them, and the. bill will be dismissed as to all. 1 Hoff. Oh. Pr. 554; Clason v. Morris, 10 Johns. 524>, Frow V. De La Vega, 15 Wall. 552. As to the terms that will satisfy the eq- uitable rights of Dyer. As between the two, it belonged to Kopper to pay the Goddard mortgage, and Dyer stood as his surety in respect thereof. Field v. Hamilton, 45 Vt. 35; Wells v. Tucker, 57 Vt. 223; Comstock V. Drohan, 71 N. T. 9. Hence Dyer is en- titled to be reimbursed, not only the principal sum that he paid to redeem said mortgage, but his reasonable costs and expenses in that 170 AOCIDBNT. behalf In good faith Incurred. Hayden v. Cabot, 17 Mass. 168; Downer v. Baxter, 30 Vt. 467; Hulett v. SoiUlard, 26 Vt 295; Corn- stock V. Drohan, 71 N. T. 9. As to the costs of that foreclosure, It suf- ficiently appears that they were properly In- curred, and Dyer is Justly entitled to reim- bursement. But, as to the amount paid by him to the insurance company for holding tn readiness the monejf wherewith to re- deem, it does not sufficiently appear that that was such a prudent and necessary thing to do In the circumstances as to entitle him to reimbursement The mortgage of the prem- ises in question being conditioned to keep the property insured for Dyer's benefit, which Kopper neglected to do, he is chargea- ble with the insurance premium of $75 that Dyer was compelled to pay in 1884, and this was included in the decree. He is also chargeable with the $60.30 paid by Dyer for taxes, as shown by the nmster's report, as well as with all the other taxes that Dyer has since paid, or that he shall hereafter pay, or become liable to pay, on the pi'operty, As Kopper put his bill upon false ground, namely, that he had performed the decree when he had not, Dyer was Justified in de- fending it, and should recover his costs; and as Dyer had a right, after the decree became absolute, to deal with the property as his own, he is entitled to the costs of his writ of possession, and of the execution of it Cree V. Lord. 25 Vt 498. In Thomhill v. Man- ning, 1 Sim. (N. S.) 451, the costs of an ejectment were allowed In a similar case. The decree dismissing the cross-bill is af- firmed; but the decree for the orator in the original bUl is reversed, And the case re- manded, with mandate. ACCIDENT. 171 PATTON et bL v. CAMPBBLIi. (70 111. 73.) Bnpreme Court of Illinois. Sept. Term, 1878. Benfley, Swett & Quigg, for appellants. «(V^aite & Clarke, for appelleew CRAIG, J. This was a bill In chancery, filed in the superior court of Cook county, by George W. Campbdl, 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 & Wood. It appears from the record that on or about the 20th of October, 1870, Patton & Co., of New York, sold Duilham & Wood, of Chi- cago, a biU 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 bad 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 missed. The defendants answered the biU, 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 cotu^ 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 will 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 bad 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 wUl justlftr the interposilion of a Court of equity. The Jurisdiction wUl be taaintained 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 imder seal, equity takes jurisdiction, on the ground that, until a recent period, it was the settled doctrine that there was no remedy on a lost bond in a court of common law, because there could be no profert of the instrument, with- put which the declai-ation would be defect- ive. The jurisdiction having been assumed and exercised on this ground, it is stIU re- tained and upheld. 1 Story, Eq. Jur., § 81; Walmsley v. ChUd, 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 app^lants 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. Diu-ham remarked, he had bought and could buy of A. T. Stewart & Co., of New York, on four months' timoL On this statement. Hart sold the goods on four months' time. It turned out, on investigation, that Dur- ham & Wood had only bought two biUs of goods of Stewart & Co., and they were sold on thirty days' credit While it Is true the statement made by Diu-ham, 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 seU 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 sell the goods on three months' time; he neither asked nor required any representations from Durham, as to the standing or responsibility of the firm, to in- duce him to sell 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 riot 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, knovring 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, 172 ACCIDENT. but wJth the design to cbeat 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 rule. 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, sihow 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 court below was correct, and it will be af- firmed. ACCIDEDSTT. 173 BREWER V. HERBERT. (30 Md. 301.) Court of Appeals of Maryland. March 11, 1869. Appeal from circuit court, Washington county, as a court of equity. The bill in this case was filed by the ap- pellee for an Injunction to restrain proceed- ings at law and for the specific performance of a contract The appellee was the owner of a dwelling house and half lot of ground situate in Hagerstown, and sold the same to the appellant on the 9th of October, 1865, by their agreement in writing, as follows, to wit: "Articles of agreement made and concluded this 9th day of October, 1865, between F. Dorsey Herbert and John A. K. Brewer, both of Washington county and state of Maryland, wltnesseth: That in consideration of the sum of four thousand dollars, to be paid as here- inafter mentioned, the said Herbert has this day sold to the said Brewer his house and half lot of ground, situated on the corner of West Washington and Prospect streets, in Hagerstown; and the said John A. K. Brew- er on his part agrees to pay the said sum of four thousand dollars, as follows: Two thou- sand dollars on the 1st day of April, 1866; and one thousand dollars on the 1st day of April, 1867; and one thousand dollars on the 1st day of April, 18^,— with Interest from the 1st day of April, 1866; and the said Herbert doth further agree to give the said Brewer possession of the same on the 1st day of April, 1866, and on payment of the whole purchase money to make a good and sufficient deed for the same, clear of all incumbrances, to the said Brewer. In witness whereof the parties hereto have set their hands and seals on the day and year first above written. "[Signed] F. Dorsey Herbert. [Seal.] "J. A. K. Brewer. [Seal.]" Of the ?2,000 to be paid by the agreement on the 1st day of April, 1866, the appellant, at the request of the appellee, paid $1,000 on the 10th day of October, 1865. At the time of sale the said premises were tmder lease by Herbert to Dr. Berry, whose term expired, on the 1st day of April, 1866. The appellee held a policy of Insurance for $1,000 on the house at the time of sale, which was allowed by him to expire about the last of January, 1866. On the 5th day of February, 1866, the house was totally destroyed by fire, but without any fault on the part of the appellee or his tenant, Berry. On Monday, the 2d day of April, 1866, the 1st being Sunday, the appellee made a tender of the premises, then a vacant lot, to the appellant, which he refused to receive in its destroyed condition. The appellant hav- ing refused to receive the ground, and holding that the appellee was unable to perform his part of the contract, by reason of the destruc- tion of the house, brought suit on the law side of the courts to recover from the appel- lee the said $1,000, so as aforesaid paid to him. Whereupon the appellee filed the bill in this cause to enjoin said proceedings at law and for a specific execution of the agree- ment. The court below by its decree enjoin- ed said proceedings at law, and decreed a specific execution. From this decree the present appeal was taken. Before BARTOL, 0. J., and GRASON, MILIiEiR, and ROBINSON, JJ. Wm. T. Hamilton, for appellant A. K. Syester, for appellee. MILLER, J. After the execution of the written contract for the sale of the house and lot, and before the day fixed for delivery of possession and. payment of the first Install- ment of purchase money, the house was acci- dentally destroyed by fire, without fault of ei- ther party or of the tenant then in posses- sion of the same. The vendor had a fee simple title to the property, and at the proper time, under the contract, offered to deliver possession of the premises In the condition in which they then were. This the vendee re- fused to receive because of the destruction of the house by fire, and the main question in the case is, can he on this ground successfully resist this application in equity by the vendor for a specific performance of the contract? In contracts of this kind between private parties, the vendee Is In equity the owner of the estate from the time of the contract of sale, and must sustain the loss If the estate be destroyed between the agreement and the conveyance, and will be entitled to any bene- fit which may accrue to it in the Interim. This doctrine, notwithstanding the dictum In Stent V. Bailey, 2 P. Wms. 290, to the con- trary, was plainly announced and settled by the decision of Lord Bldon, In Paine v. Mel- ler, 6 Ves. 349, a case very similar In Its cir- cumstances to the present, where it was held that If there was no objection to the title of the vendor, or it had been accepted In fact by the vendee before the houses were burned, no solid objection to the bill for specific per- formance could be founded on the mere effect of the accident before conveyance, "for If the party," says the lord chancellor, "by the contract has become In equity the owner of the premises, they are his to all tatents and purposes. They are vendible as his, charge- able as his, capable of being Incumbered as his; they may be devised as his; they may be assets; and they would descend to his heir." This decision has always been regard- ed as fixing the true equitable rule in such cases. It was recognized by Sir Thomas Plumer In Harford v. Purrler, 1 Madd. Ch. 287, and In Rawlins v. Burgis, 2 Ves. & B. 387, and by Lord Chancellor Manners in Re- vell V. Hussey, 2 Ball & B. 287. From these and other authorities of equal weight an- nouncing the maxim that equity regards as done that which was agreed to be done is deduced as the established doctrine In equity that from the time the owner of an estate 174 ACCIDENT. enters into a binding agreement for Its sale he holds the same in trust for the purchaser, and the latter becomes a trustee of the pur- chase money for the vendor, and being thus in equity the owner the vendee must bear any loss -which may happen, and is entitled to any benefit which may accrue to the estate in the interim between the agreement and the con- veyance. 1 Sugd. Vend. 228, 388-391; 2 Pow- eU, Cont eS; Dart, Vend. 114-118; 2 Story, Eq. § 1212. The contract here is not for a sale at a future day; it does not use in this respect prospective or contingent terms. Its lang4iage is: The vendor "has this day sold to" the vendee his house and lot, which clear- ly imports a binding contract then executed and consummated. By such terms the title in equity passes from the date of the contract, and If there were nothing else In it there w«uld be no room for argument, for It would be Impossible to withdraw the case from the operation of the rule above stated. But It has been earnestly and strenuously urged by the appellant's counsel that as the contract contains an agreement by the vsi- dor ta deliver possession of the house and lot to the vendee on the 1st of April, 1866, the destruction of the house by fire before that period rendered performance by the vendor of this part of the contract impossi- ble, and he cannot, therefore, either in law or equity, ask the vendee to perform his part of it; and this circumstance, it Is m- slsted, distinguishes the case from those cit- ed, and prevents it from falling within the principle established by them. Let us test the soundness of this argument. The ven- dee knew before and at the time of the con- tract there was a tenant In possession whose term would not expire imtil the 1st of April, and the first installment of the pm-chase mon- ey is made payable on, and Interest on the deferred payments runs from, that day. The subject-matter of sale Is realty,— a lot of ground with a house upon it, described as a house and lot. The agreement as to deliv- ery is not like the usual covenant by a ten- ant In a lease, to deliver in as good condi- tion and repair as when the contract was made. There Is also no difficulty about de- livery, except that the premises were not, as to the buildings upon them. In the same condition as at the date of the contract The question then resolves Itself into this, does the fact of the insertion into a contract like the present for the sale of real estate, of an agreement to deliver possession at a future day, make any difference In the ap- plication of the rule? It is true it does not appear in the cases cited there were In the contracts any stipulations as to delivery of possession at a future day, nor Is this cir- cumstance alluded to, but they explicitly say It is the passing of the title in equity which throws the risk of loss upon the ven- . dee, and entitles him to accruing benefits. To this, as we have seen, a conveyance Is not necessary, nor is payment of the pur- chase money or any part of it; for in Hamp- son V. Bdelen, 2 Har. & J. 66, this court has decided that "a contract for land bona fide made for a valuable consideration vests the equitable interest in the vendee from the time of the execution of the contract, al- though the money Is not paid at that time." See, also, SIter's Appeal, 26 Pa. 180. Nei- ther can possession nor delivery of posses- sion be necessary, for, if the contract had been silent on this subject, the vendor would have had the right to retain possession at least until the 1st of April, when the first in- stallment of the purchase money was paya- ble, and if the vendee had obtained posses- sion before he would have been restrained in equity from exercising any acts of owner- ship prejudicial to the Inheritance (Crock- ford V. Alexander, 15 Ves. 138; Reed v. Lukens, 44 Pa. 202); and yet the equitable title would all the while have been in him, subject to his dlsiwsitlon by deed or wIU, and liable for his debts. If, then, in the ab- sence of. a stipulation to deliver at a future day, there Is an Implied right in the ven- dor to retain possession until that period, and this would make no difference as to the liability of the vendee for an intermediate loss, how can the insertion of such a stipula- tion have In equity any different effect? The whole foundation of this doctrine of equity is that the equitable title ^nd Interest passes by the contract of sale, and from the time of its execution, and it contemplates deliv- ery of possession as well as payment of pur- chase money, and a conveyance at a future period. Hence Sir Edward Sugden and Sir Thomas Plumer both cite, as in exact accord with the decision of Lord Eldon, the rule of the civil law, where the very case is put In the Institutes: "Cum autem emptio et ven- ditio contracta sit, periculum rei venditae statim ad emptorem pertinet, tametsl adhue ea res emptorl tradita non sit:- Itaque, si cedes totae vel allqua ex parte incendlo con- sumptae fuerint — emptoris danmuni est, cul necesse est, licet rem non fuerit nactus, pre- tium solvere." In sales of personal property delivery of the goods sold Is not necessary to pass the titie as between the parties, where the statute of frauds has been grati- fied by giving something In earnest, or pay- ment of the whole or part of the piu-chase money, or a sufficient note or memorandum in writing of the bargain, and in such case the property is at the buyer's risk before de- livery. Franklin v. Long, 7 Gill & J. 418. And even where the seller remaining in ac- tual possession agrees to deliver the prop- erty at a particular place, and it Is destroyed by fire before such delivery, the loss will fall on the purchaser. Terry v. Wheeler, 25 N. Y. 520. Where sales are made under authority of a court, the contract is not re- garded as consummated until it has recelvedi the court's sanction or ratification, and there- fore any loss happening before confirmation falls upon the vendor. Ex parte Minor, 11. ACCIDENT. 175 Ves. 559; Wagner v. Cohen, 6 Gill, 102. But where a loss occurs after confirmation, by which the contract is consummated, it falls upon the vendee, even though no pur- chase money has been paid, and the vendor remains in possession. This was expressly decided in Robertson v. Skelton, 12 Beav. 260, where Lord Langdale also said: "In equity the estate belongs to the purchaser from the date of the order to confirm the re- port, and the right of possession belongs to the vendor till the purchase money, for which it is security, has been paid." Again, If we look to the contract itself, and gather there- from the intent of the parties, it is clear from the language used their intention was that the equitable title and interest should pass from the day of its execution. Upon this point its terms are too positive and ex- plicit to admit of doubt. Delivery of pos- session and payment of purchase money were postponed to a future day for the convenience of each party respectively, and we cannot construe the agreement to deliver into a con- dition that the contract shall be void if there is any change in the state or value of the property on the day of delivery, nor in- terpolate any such words into the instru- ment. We are therefore constrained to hold the argument founded on this delivery clause to be unavailing to the appellant But it is said specific execution of con- tracts is in all cases not a matter of absolute right, but of sound discretion in the court, and as the vendor cannot now deliver the house which was the main inducement to the vendee to buy, and constituted the chief value of the property, it would be inequita- ble to enforce the contract as against him.- If this objection were sound, this doctrine of losses and benefits could never have been established. But, whilst it is conceded an application for specific performance is al- ways addressed to the sound discretion of the court, yet where a contract respecting real estate is in writing, and is in its nature and circumstances unobjectionable, it is as much a matter of course for a court of equi- ty to decree a specific performance of it as it is for a court of law to give damages for a breach of it. Smoot v. Rea, 19 Md. 405; 2 Story, Eq. Jur. § 751. "The fairness or hardship of a contract, like all its other qualities, must be judged of at the time it was entered into, not by subsequent events." If It was then certain, mutual, fair in all its parts, and for an adequate consideration, it la immaterial that by force of subsequent cir- cumstances it has become less beneficial to one party, unless such change is In some way the fault of the party seeking Its spe- cific execution. Revell v. Hussey, 2 Ball & B. 288; Lawder v. Blachford, Beat 526; Webb V. Railway Co., 9 Hare, 129; Low v. Treadwell, 3 Fairf. 541; Fry, Spec. Perf. 93, 88. Adherence to principle compels the courts to overlook the hardship of particular cases. But the doctrine upon which this de- cision rests is founded In strict justice and equity, for whilst the vendee may think it hard to be compelled to pay for that which he cannot have in the condition It was when he purchased, the vendor, with equal jus- tice, might think it hard to lose his money after a bona fide sale of his property, be- cause of an accident accruing to it without fault on his part It is to be remembered too that whilst the rule burthens the vendee with a loss it also entitles him to all benefits. Thus where a reversionary Interest is agreed to be purchased, and lives drop, or one agrees to purchase an estate in considera- tion of a life annuity to the vendor, and the cestui que vie dies, or where there is a sud- den rise in the value of the land from its be- ing required for a public purpose, before con- veyance, in all such cases the vendee reaps the benefit So in the case before us, if a valuable mine had been discovered on the premises the day after the contract or by any unforeseen or unexpected circumstances their value had been increased a hundred fold, the benefit would have resulted to the vendee, and the vendor could not have been released from his contract. We cannot, therefore, sustain this objection to the bill. It appears that at the. date of the contract the vendor held a policy of insurance upon the house, which by accident he allowed to expire without renewal before the fire, and of this the vendee received from him no no- tice. A similar state of facts existed in Paine v. Meller, and was held to constitute no objection to the vendor's bill. It is ad- mitted there was no understanding between the parties that the vendor should keep the policy alive. They did not contract on any such basis. After the contract the vendee had an insurable interest in the house, and, in the absence of all agreement on the sub- ject, the presumption is he intended to pro- tect himself by Insuring in his own name, or to take the risk of a failure to Insure. The vendor was not bound to keep up the insur- ance or give notice to the vendee of its hav- ing expired. If the policy had existed at the time of the loss, the vendor could have recovered from the insurance company, but, being trustee of the premises for the vendee, he would be bound in equity to account to the latter for the money so received (Reed v. Lukens, 44 Pa. 200); but his failure to re- new or to give notice cannot deprive him of his right to enforce the contract of sale. It also appears there was at the date of the contract a judgment against the vendor for $2,363.38, but he had at that time enter- ed an appeal from the judgment to the court of appeals, and given an appeal bond with security amply sufficient for that purpose to pay the amount of the judgment with costs, in case he should fail to prosecute his appeal with efCect The authorities are clear that equity will not compel a vendee to take an Imperfect or defective title, yet cases of high authority are to be found in which a pe- 176 ACCIDENT. cunlaiy charge against which adequate se- curity has been given has been held not to constitute a defect in title, and also where equity has enforced the agreement where a perfect title can be made at the time of the decree. But this judgment thus appealed from, with appeal bond given, does not, in the sense in which courts of equity use the terms, make this such an imperfect or de- fective or incumbered title as will prevent specific execution, and especially not where the decree itself, as that appealed from In fact does, can protect the vendee by pro- viding that the Judgment debt may be paid by him out of the purchase money due on the contract and in discharge thereof. We have bestowed upon the case our best oare and consideration. We find nothing in the authorities cited by the appellant's coun- sel sufficient to overthrow the doctrine upon which we have based our decision, and can discover no ground upon which, in justice and equity, the appellee can be denied the relief he seeks. The decree must be af- firmed. Decree affirmed. MISTAKE OF LAW. 177 HUNT V. ROUSMANIBR'S ADM'RS. (8 Wheat. 174.) Supreme Court of the United States. March 14, 1823. Appeal from circuit court of Rhode Island. The original bill, filed by the appellant. Hunt, stated, that Lewis Rousmanler, the in- testate of the defendants, applied to the plaintiff, in January, 1820, for the loan of $1,450, offering to give, in addition to his notes, a bill of sale, or a mortgage of his in- terest in the brig Nereus, then at sea, as collateral security for the repayment of the money. The sum requested was lent; and on the 11th of January the said Rousmanier executed two notes for the amount; and on the 15th of the same month, he executed a pover of attorney, authorizing the plaintiff to make and execute a bill of sale of three- fourths of the said vessel to himself, or to any other person; and in the event of the said vessel, or her freight, being lost, to col- lect the money which should become due on a policy by which the vessel and freight were insured. This instrument contained also, a proviso, reciting, that the power was given for collateral security for the payment of the notes already mentioned, and was to be void on their payment; on the failure to do which, the plaintiff was to pay the amount thereof, and all expenses, out of the proceeds of the said property, and to return the resi- due to the said Rousmanier. The bill fur- ther stated, that on the 21st of March, 1820, the plaintiff lent to the said Rousmanier the additional sum of $700, taJiing his note for payment, and a similar power to dispose of his interest in the schooner Industry, then also at sea. The bill then charged, that on the 6th of May, 1820, the said Rousmanier died insolvent, having paid only $200 on the said notes. The plaintiff gave notice of his claim; and on the return of the Nereus and Industry, tools possession of them, and offer- ed the intestate's interest in them, for sale. The defendants forbade the sale; and this bill was brought to compel them to join in it. The defendants demurred generally, and the court sustained the demurrer; but gave the plaintiff leave to amend his bUL Hunt v. Ennis, 2 Mason, 244, Fed. Cas, No. 6,889. The amended bUl stated, that it was ex- pressly agreed between the parties, that Rousmanier was to give specific security on the Nereus and Industry; and that he offer- ed to execute a mortgage on them. 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, because it was equally valid and effectual as a security, and would prevent the necessity of changing the papers of the vessels, or of taking pos- session of them on their arrival in port. The powers were, accordingly, executed, with the full belief that they would, and with the Intention that they should, give the plaintiff H.& B.EQ.(2d Ed.)— 12 as full and perfect security as would be given by a deed of mortgage. The bill pray- ed, that the defendants might be decreed to join in a sale of the interest of their intestate in the Nereus and Industry, or to sell the same themselves, and pay out of the pro- ceeds the debt due to the plaintiff. To this amended bill, also, the defendants demurred, and on argument, the demurrer was sustain- ed, and the bill dismissed. From this de- cree, the plaintiff appealed to this court. The cause was argued at the last term. Mr. Wheaton, for appellant Mr. Hunter, for respondents. MARSHALL, C. J., delivered the opinion of the court. The counsel for the appellant objects to the decree of the circuit court on two grounds. He contends, 1. That this power of attorney does, by its own opera- tion, entitle the plaintiff, for the satisfaction of his debt, to the interest of Rousmanier in the Nereus and the Industry. 2. Or, if this be not so, that a court of chancery will, the conveyance being defective, lend its aid to carry the contract into execution, according to the intention of the parties. 1. We will consider the effect of the power of attorney. This instrument contains no words of conveyance or of assignment, but is a simple power to sell and convey. As the power of one man to act for another, depends on the wiU and license of that other, the power ceases, when the will, or this per- mission, is withdrawn. The general rule, therefore. Is, that a letter of attorney may, at any time, be revoked by the party who makes it; and is revoked by his death. But this general rule, which results from the na- ture of the act, has sustained some modifi- cation. Where a letter of attorney forms a part of a contract, and is a security for money, or for the performance of any act which is deemed valuable, it is generally made irrevocable, in terms, or if not so, is deemed irrevocable In law. 2 Esp. 565. Al- though a letter of attorney depends, from its nature, on the will of the person making it, and may, m general, be recalled at his will; yet, if he binds himself, for a consideration. In terms, or by the nature of his contract, not to change his will, the law will not per- mit him to change it Rousmanier, there- fore, could not, during his life, by any act of his own, have revoked this letter of at- torney. But does it retain its efficacy after his death? We think, it does not. We think it well settled, that a power of attorney, I though irrevocable during the life of the par- 1 fty, becomes extinct by his death. / This principle is asserted in Littleton (sec- tion 66), by Lord Coke, in his commentary on that section (52b), and in Willes' Re- ports (105, note, and 565). The legal reason of the rule is a plain one. It seems founded on the presumption, that the substitute acta by virtue of the authority of his principal, existing at the time the act Is performed; 178 .ISTAKB OF LAW. ( and on the manner in which he must execute his authority, as stated in Combes' Case, 9 Coke, 766. In that case, it was resolved, that "when any has authority, as attorney, to do any act, he ought to do it in his name who gave the authority." The reason of this resolution is obvious. The title can, regular- ly, pass out of the person in whom it is vested, only by a conveyance In his own name; and this cannot be executed by an- other for him, when it could not. In law, be executed by himself. A conveyance in the name of a person, who was dead at the time, y would be a manifest absurdity. This general doctrine, that a power must ' be executed in the name of a person who gives it, a doctrine founded on the nature' of the transaction, is most usually engraft- ed in the power Itself. Its usual language Is, that the substitute shall do that which he is empowered to do. In the name of his prin- cipal. He is put in the place and stead of his principal, and is to act In his name. This accustomed form is observed in the instrument under consideration. Hunt is con- stituted the attorney, and is authorized to make, and execute, a regular bill of sale, in the name of Bousmanier. Now, as an authority must be pursued, in order to make the act of the substitute the act of the prin- cipal, it is necessary, that this bUl of sale should be In the name of Rousmanier; and it would be a gross absurdity, that a deed should purport to be executed by him, even by attorney, after his death; for, the attor- ney is in ttie place of the principal, capable of doing that alone which the principal might do. This general rule, that a power ceases with the life of the person giving it, admits of one exception. If a power be coupled with an "Interest," It survives the person giving it, and may be executed after his death. As this proposition is laid down too positively in the books to be controverted, it becomes necessary to inquire, what is meant by the expression, "a power coupled with an Inter- est?" Is It an interest in the subject on which the power is to be exercised? or is it an in- terest in that which Is produced by the ex- ercise of the power? We hold it to be clear, that the interest which can protect a power, after the death of a person who creates it, must be an interest in the thing Itself. In other words, the power must be engrafted on an estate in the thing. The words them- selves would seem to import this meaning. "A power coupled with an Interest," Is a power which accompanies, or is connected with, an interest The power and the inter- est are united in the same person. But if we are to understand by the word "interest," an interest in that which is to be produced by the exercise of the power, then they are never united. The power, to produce the Interest, must be exercised, and by its ex- ercise, is extinguished. The power ceases, when the Interest commences, and therefore, cannot, In accurate law language, be said to be "coupled" with It. But the substantial basis of the opinion of the court on this point, is found in the legal reason of the principle. The interest or title in the thing being vested in the person who gives the power, remains in him, unless it be conveyed with the power, and can pass out of him only by regular act In his own name. The act of the substitute, therefore, which, in such a case, is the act of the principal, to be legally effectual, must be In his name, must be such an act as the princi- pal himself would be capable of performing, and which would be valid, if performed by him. Such a power necessarily ceases with the life of the person maldng it But if the interest, or estate, passes with the power, and vests In the person by whom the power Is to be exercised, such person acts in his own name. The estate, being in him, passes from him, by a conveyance in his own name. He is no longer a substitute, acting in the place and name of another, but is a princi- pal, acting in his own name, in pursuance of powers which limit his estate. The legal reason which limits a power to the life of the person giving it, exists no longer, and the rule ceases with the reason on which it is founded. The intention of the instrument may be effected, without violating any legal principle. This idea may be In some degree Illustrated by examples of cases In which the law is clear, and which are incompatible with any other exposition of the term "power coupled with an Interest" If the word "Interest," thus used, indicated a title to the proceeds of the sale, and not a title to the thing to he sold, then a power to A., to sell for his own benefit would be a power coupled with an Interest; but a power to A., to sell for the benefit of B., would be a naked power, which could be executed only in the life of the per- son who gave it. Yet, for this distinction, no legal reason can be assigned. Nor is there any reason for it in justice; for, a power to A., to sell for the benefit of B., may be as much a part of the contract on which B. advances his money, as if the power had been made to himself. If this were the true exposition of the term, then a power to A., to sell for the use of B., inserted in a con- veyance to A., of the thing to be sold, would not be a power coupled with an Interest, and, consequently, could not be exercised, after the death of the person making it; while a power to A., to sell and pay a debt to himself, though not accompanied with any conveyance which might vest the title in him, would enable him to make the convey- ance, and to pass a title, not in him, even after the vivifying principle of the power had become extinct. But every day's ex- perience teaches us, that the law is not, as the first case put would suppose. We know, that a power to A., to sell for the benefit of B., engrafted on an estate conveyed to MISTAKE OF LAW. 179 A., may be exercised at any time, and Is not affected by the death of the person who created it It is, then, a power coupled with an interest, although the person to whom It Is given had no interest in its exercise. His power is coupled with an interest in the thing, which enables him to execute it in his own name, and is, therefore, not depend- ent on the life of the person who created it The general rule, that a power of attorney, though irrevocable by the party, during his life, is extinguished by his death, Is not af- fected by the circumstance, that testamenta- ry powers are executed after the death of the testator. The law. In allowing a testa- mentary disposition of property, not only permits a will to be considered as a con- veyance, but gives it an operation which Is not allowed to deeds which have their effect during the life of the person who executes them. An estate given by will may take ef- fect at a future time, or on a future contin- gency, and in the meantime descends to the heir. The power Is, necessarily, to be ex- ecuted after the death of the person who makes it, and cannot exist during his life. It is the intention, that it shall be executed after his death. The conveyance made by the person to whom It is given, takes effect by virtue of the will, and the purchaser holds his title under It Every case of a power given in a will, is considered In a court of chancery as a trust for the benefit of the person for whose use the power Is made, and as a devise or bequest to that person. .• It is, then, deemed perfectly clear, that thi power given m this case, is a naked power! not coupled with an interest which, though Irrevocable by Rousmanler himself, expired on his death. It remains to inquire, whether the appellant is entitled to the aid of this court, to give effect to the intention of the parties, to subject the interest of Rousmanler in the Nereus and Industry to the payment of the money advanced by the plaintiff, on the credit of those vessels, the Instrument taken for that purpose having totally failed to effect its object This is the point on which the plaintiff most relies, and is that on which the court has felt most doubt That the parties intended, the one to give, and the other to receive, an effective security on the two vessels men- tioned in the biU, is admitted; and the ques- tion is, whether the law of this court ■vvUl enable It to carry this intent into execution, when the instrument relied on by both par- ties has failed to accomplish Its object The respondents insist, that there is no defect in the instrument Itself; that It contains precisely what it was intended to contain, and is the instrument which was chosen by the parties, deliberately, on the advice of counsel, and intended to be the consumma- tion of their agreement That in sucn a case the written agreement cannot be varied by parol testimony. The counsel for the appel- lant contends, with great force, that the cases in which parol testimony has been rejected, are cases in which the agreement Itself has been committed to writing; and one of the parties has sought to contradict, explain or vary it by parol evidence. That in this case, the agreement is not reduced to writing. The power of attorney does not profess to be the agreement but is a collateral Instrument, to enable the party to have the benefit of It, leaving the agreement still In full force, In its original form. That this parol agreement, not being within the statute of frauds, would be enforced by this court, if the power of attorney had not been executed; and not being merged In the power, ought now to be executed. That the power being Incompetent to its object, the court will enforce the agreement against gen- eral creditors. This argument is entitled to, and has received, very deliberate considera- tion. The first Inquiry respects the fact Does this power of attorney purport to be the agreement? Is it an instrument collateral to the agreement? Or Is It an execution of the agreement itself. In the form Intended by both the parties? The bfil states an offer on the part of Rousmanler to give a mortgage on the vessels, either In the usual form, or in the form of an absolute bUl of sale, the vendor taking a defeasance; but does not state any agreement for that particular se- curity. The agreement stated in the bill Is, generally, that the plaintiff, in addition to the notes of Rousmanler, should have specific security on the vessel; and It alleges that the parties applied to counsel for advice re- specting the most desirable mode of taking this security. On a comparison of the ad- vantages and disadvantages of a mortgage, and an irrevocable power of attorney, counsel advised the latter instrument, and assigned reasons for his advice, the validity of which being admitted by the parties, the power of attorney was prepared and executed, and was received by the plaintiff as full security for his loans. This is the case made by the amended bUl; and it appears to the court, to be a case In which the notes and power of attorney are admitted to be a complete con- summation of the agreement. The thing stipulated was a collateral security, on the Nereus and Industry. On advice of counsel, this power of attorney was selected, and giv- en as that secxirity. We think It a complete execution of that part of the agreement; as complete, though not as safe an execution of It, as a mortgage would have been. It is contended, that the letter of attorney does not contain all the terms of the agree- ment Neither would a bill of sale, nor a deed of mortgage, contain them. Neither In- strument constitutes the agreement Itself, but is that for which the agi-eement stipulat- ed. The agreement consisted of a loan of money on the part of Hunt and of notes for its repayment, and of a collateral security on the Nereus and Industry, on the part of Rousmanler. The money was advanced, the 180 MISTAKE OP LAW. notes were given, and this letter of attorn^ was, on advice of counsel, executed and re- ceived as the collateral security which Hunt required. The letter of attorney Is as much an execution of that part of the agreement which stipulated a collateral security, as the notes are an execution of that part which stipulated that notes should be given. But this power, although a complete securi- ty, during the life of Rousmanier, has been rendered inoperative by his death. The le- gal character of the security was misunder- stood by the parties. They did not suppose, that the power would, in law, expire with Bousmanier. The question for the consid- eration of the court is this: If money be advanced on a general stipulation to give se- curily for its repayment on a specific article; and the parties deUberately, on advice of counsel, agree on a particular instrument, which is executed, but, from a legal quality inherent in its nature, that was unknown to the parties, becomes extinct by the death of one of them; can a court of equity direct a new security of a different character to be given? or direct that to be done which the parties supposed would have been effected by the instrument agreed on between them? This question has been very elaborately argued, and every case has been cited which could be supposed to bear upon it No one of these cases decides the very question now before the court It must depend on the principles to be collected from them. It is a general rule, that an agreement in writing, or an instrument carrying an agree- ment into execution, shall not be varied by parol testimony, stating conversations or cir- cumstances anterior to the written instru- ment. This rule is recognized in courts of equity as well as in courts of law; but courts of equity grant relief in cases of fraud and mistake, which cannot be obtained in courts of law. In such cases, a court of equity may carry the intention of the parties into execution, where the written agreement fails to express that intention. In this case, there is no ingredient of fraud. Mistake is the sole ground on which the plaintiff comes into court; and that mistake is in the law. The fact is, in aU respects, what it was sup- posed to be. The instrument taken, is the instrument intended to be taken. But it is, conti-ai-y to the expectation of the parties, ex- tinguished by an event not foreseen nor ad- verted to, and is, therefore, incapable of ef- fecting the object for which it was given. Does a court of equity, in such a case, sub- stitute a different instrument for that which has failed to effect its object? In general, the mistakes against which a court of equity relieves, are mistakes in fact The decisions on this subject, though not al- ways very distinctly stated, appear to be founded on some misconception of fact. Yet some of them bear a considerable analogy to that under consideration. Among these, is that class of cases In which a Joint obliga- tion has been set up in equitj- against the representatives of a deceased obligor, who were discharged at law. If the principle of these decisions be, that the bond was joint, from a mere mistake of the law, and that the court will relieve against this mistake, on the ground of the pre-existing equity, arising from the advance of the money, it must be admitted, that they have a strong bearing on the case at bar. But the judges in the courts of equity seem to have placed them on mistake in fact, arising from the Ig- norance of the draftsman. In Simpson v. Vaughan, 2 Atk. 33, the bond was drawn by the obligor himself, and under circumstances which induced the court to be of opinion, that it was intended to be joint and several. In Underbill v. Horwood, 10 Ves. 209, 22T, Lord Bldon, speaking of cases in which a joint bond has been set up against the repre- sentatives of a deceased obligor, says, "the court has inferred, from the nature of the condition, and the transaction, that it was made joint, by mistake. That Is, the instru- ment is not what the parties intended in fact They Intended a joint and several ob- ligation; the scrivener has, by mistake, pre- pared a joint obligation." All the cases in which the court has sus- tained a joint bond against the representa- tives of the deceased obligor, have turned up- on a supposed mistake in drawing the bond. It was not until the case of Sumner v. Pow- ell, 2 Mer. 36, that anything was said by the judge who determined the cause, from which it might be inferred, that reUef in these cases would be afforded on any other principle than mistaJ^e in fact In that case, the court refused its aid, because there was no equity antecedent to the obligation. In delivering his judgment, the master of the roUs (Sir W. Grant) indicated very clearly 'an opinion, that a prior equitable considera- tion, received by the deceased, was indis- pensable to the setting up of a joint obliga- tion against his representatives; and added, "so, where a joint bond has, ia equity, been considered as several, there has been a credit previously given to the different persons who have entered into the obligation." Had this case gone so far as to decide, that "the credit previously given" was the sole ground on which a com-t of equity would consider a joint bond as several, it would have gone far to show, that the equitable obligation re- mained, and might be enforced, after the legal obligation of the instrument had ex- pired. But the case does not go so far; it does not change the principle on which the court had uniformly proceeded, nor discard the idea, that relief is to be granted, because the obligation was made joint, by a mistake in point of fact. The case only decides, that this mistake, in point of fact, will not be presumed by the court, in a case where nc equity existed antecedent to the obligation, MISTAKE OF LAW. 181 where no advantage was received by, and no credit given to, the person against whose estate the instrument is to be set up. Yet, the course of the court seems to be uniform, to presume a mistake, in point of fact, in ev- ery case where a joint obligation has been given, and a benefit has been received by the deceased obligor. No proof of actual mis- take is required; the existence of an ante- cedent equity is suflcient. In cases attend- ed by precisely the same circumstances, so far as respects mistake, relief will be given against the representatives of a deceased obligor, who had received the benefit of the obligation, and refused aguinst the repre- sentatives of him who had not received it. Yet the legal obligation is as completely ex- tinguished in the one case as in the other; and the facts stated, in some of the cases in which these decisions have been made, would rather conduce to the opinion, that the bond was made joint, from ignorance of thi legal consequences of a joint obligation, fi'om any mistake in fact The case of Lansdown v. Lansdown, Mos. 364, if it be law, has no inconsiderable bear- ing on this cause. The right of the heir- at-law was contested by a younger member of the family, and the arbitrator to whom the subject was referred decided against him. He executed a deed in compliance with this award, and was afterwards relieved against it, on the principle that he was igno- rant of his title. The case does not sup- pose this fact, that he was the eldest son, to have been unknown to him; and if he was Ignorant of anything, it was of the law, which gave him, as eldest son, the estate he had conveyed to a younger brother. Yet he was relieved in chancery against this con- veyance. There are certainly strong objec- tions to this decision In other respects; but, as a case in which relief has been granted on a mistake in law, it cannot be entirely disregarded. Although we do not find the naked prin- ciple, that relief may be granted on account of ignorance of law, asserted in the books, we find uo case ih which it has been decided, that a plain and acknowledged mistake in law Is beyond the reach of equity. In the case of I/ord Imham v. Child, 1 Brown, Oh. 91, application was made to the chancellor to establish a clause, which had been, it was said, agreed upon, but which had been con- sidered by the parties, and excluded from the written Instrument, by consent It is true, they excluded the clause, from a mis- taken opinion that it would make the con- tract usurious, but they did not believe that the legal effect of the contract was precisely the same as if the clause had been inserted. They weighed the consequences of inserting and omitting the clause, and preferred the latter. That, too, was a case to which the statute applied. Most of the cases which have been cited were within the statute of frauds, and it is not easy to say, how much lias been the influence of that statute on them. The case cited by the respondent's counsel from Precedents in Chancery, is not of this description; but it does not appear from that case that the power of attorney was intend- ed, or believed, to be a lien. In this case, the fact of mistake is placed beyond any controversy. It is averred in the bill, and admitted by the demurrer, that "the powers of attorney were given by the said Rous- manier, and received by the said Hunt, un- der the belief that tjjey were, and with the Intention that they should create, a specifio^ lien and security on the said vessels." We ^.find no case which we think precisely in point; and are unwilling, where the effect of the instrument is acknowledged to have been entirely misunderstood by both parties, to say, that a court of equity is incapable of affording relief. The decree of the circuit couii: is reversed; but as this is a case in which creditors are concerned, the court, In- stead of giving a final decree on the demur- rer, in favor of the plaintiff, directs the cause to be remanded, that the circuit court may permit the defendants to withdraw their de- murrer, and to answer the bill. Decree: This cause came on to be heard, on the transcript of the record of the cir- cuit court of the United States for the dis- trict of Rhode Island, and was argued by counsel: on consideration whereof, this court is of opinion, that the said circuit court erred, in sustaining the demurrer of the defend- ants, and dismissing the bill of the complain- ant It is, therefore, decreed and ordered, that the decree of the said circuit court in this case be, and the same is hereby, re- versed and annulled. And it Is further or- dered, that the said cause be remanded to the said circuit court with directions to per- mit the defendants to withdraw their de- murrer, and to answer the bill of the com- plainants. 182 MISTAKE OF LAW. ' HUNT V. EOUSMANIERE'S ADM'RS. (1 Peters, 1.) Suprene Court of the United States. January Term, 1828. (See ante, 170.) Appeal from the circuit court of Rhode Is- land. The appellant filed a bill on the chan- cery side of the circuit court of the United States for the district of Rhode Island, set- ting forth that, in January, 1820, Louis Rousmaniere obtained from him two loans of money, amounting, together, to $2,150; and at the time the first loan was made, Rousmaniere offered to give, in addition to his notes, a bill of sale, or mortgage, of his interest in the brig Nereus, then at sea, as a collateral security for the repayment of the money. A few days after the delivery of the first note, dated 11th of January, 1820, he executed a power of attorney, authoriz- ing the plaintiff to mal^e and execute«a bill of sale, of three-fourths of the Nereus, to himself, or to any other person; and in the event of the loss of the vessel, to collect the money which should become due on a pol- icy, by which the vessel and freight were insured. In the power of attorney, it was recited that It was given as collateral secu- rity for the payment of the notes, and was to be void on their payment; on the fail- ure of which, the plaintiff was to pay the amount and all expenses, and to return the residue to Rousmaniere. On the 21st of March, 1821, an additional sum of $700 was loaned, for which a note was taken, and similar power of attorney given, to sell his interest in the schooner Industry; this ves- sel being also still at sea. On the 6th of May, 1820, Rousmaniere died intestate and insolvent, having paid $200 on account of the notes; and the plain- tiff gave notice of his claim' to the commis- sioners of insolvency, appointed under the authority of the insolvent law of Rhode Is- land. The plaintiff, in his bill, alleged, that, on the return of the Nereus and Industry, he tools possession of them, and offered the interest of the intestate in them, for sale; and the defendants having forbidden the sale, this bill was brought to compel them to join in it. To this bill, the defendants demurred; and; their demurrer was sustained in the circuit j court; but leave was given to the plaintiff^ to amend. An amended bill was then filed, \ in which it was stated, that it was express- ' ly. agreed between the parties, that Rous- maniere was to give specific security on the Nereus and Industry, and that he offered to execute a mortgage on them. Counsel was consulted on the subject, who advised that the power of attorney, which was actually executed, should be taken in preference to a mortgage, because It was equally valid and effectual as a security, and would pre- vent the necessity of changing the papers of the vessels, or of taking possession of them on their return to port. These securities were, it was alleged, executed, with a full belief that they would, and with intention that they should, give to the plaintiff, as full and perfect a security, as would be given by a mortgage. The defendants having also demurred to the amended bill, the circuit court decided in favor of the demurrer, and dismissed the bill; and an appeal was entered to this court. At the February session, 1823, this court considered that the appellant might be entitled to the relief prayed for in equity, but the respondents were permitted to with- draw their demurrer, and to file an answer in the court below. 8 Wheat. 174, 5 L. Bd. 589. The answer of the defendants admit- ted the loans of money, and the delivery of the promissory notes, and that but $200 were paid, before the death of the Intestate. \ MISTAKE OF LAW. 183 might attend the same; and that he had consulted with Mr. Hazard, upon the sub- ject, who told him, that he could or would draw an irrevocable power of attorney to sell, which would do as well, or words to that effect; and which wns accordingly done. The circuit court pronounce a decree, de- claring, that the appellant hkd no specific lien or security upon either of the vessels, and no equity to be relieved respecting them, and dismissing the bill, with costs; from which decree, an appeal was entered to this court. On the part of the appellant, it was con- tended, that the decree ought to be reversed, and a decree entered for the appellant. That the answers to the bill did not respond to the only material facts in the cause; it be- ing fully proved, that the powers of attor- ney were intended to have the effect of a specific lien, the appellant was entitled to the relief he sought, upon the principles laid down in the former decisions of this court. Kimball & Webster, for appellant Mr. Wirt, Atty. Gen., and Mr. Robbing, for ap- pellees. WASHINGTON, J. This case was before this court in the year 1823, and is reported in 8 Wheat. 174, 5 L. Ed. 589, and was then argued at great length, by the counsel con- cerned in it. After full consideration. It was decided, that the power of attorney given by Rousmaniere, the intestate, to the appellant. Hunt, authorizing him to mal^e and execute a bill of sale of three-fourths of the Nereus and of the Industry, to himself, or any other person, and in the event of their being lost, to collect the money which should become due under a policy upon them and their freight, was a naked power, not coupled with an interest, which, though irrevocable by Rousmaniere, in his lifetime, expired on bis death. That this species of security was agreed upon, and given under a misunderstanding by the parties, of its legal character, was conceded in the argument of the cause by the bar and bench; and the second question for the consideration of the court, was, whether a court of equity could afford re- lief in such a case, by directing a new secu- rity of a different character to be given? or by decreeing ihat to be done, which the parties supposed would have been effected by the instrument agreed upon? After an examination of the cases, applicable to the general question, it was stated by the chief justice, who delivered the opinion of the court, that none of them asserted the naied principle, that relief could be granted, on the ground of ignorance of law, or decided, that , a, plain and aclmowledged mistalie in law,' was beyond the reach of a court of equity. The conclusion, to which he came, is ex- pressed in the following terms: "We find no case which we think precisely In point; and are unwilling, where the effect of the instru- ment is acknowledged to have been entirelj misunderstood, by both parties, to say, that a court of equity is incapable of affording relief." The decree was, accordingly, re- r versed; but the case being one in which l creditors were concerned, the court, instead j \^ot giving a final decree on the demurrer. In favor of the plaintiff, directed the cause to be remanded, that the circuit court might permit the defendants to withdraw their de- murrer, and to answer the biU. After the cause was returned to that court, the demurrer was withdrawn, and an an- swer was filed. In which the defendants, after admitting the loans mentioned in the bills, by the plaintiff to their intestate, and the notes given for the same, by the latter, and their non-payment; assert their igno- rance of any agreement between the plaintiff and their intestate, that the former should have a specific security, other than the pow- ers of attorney, to sell vessels and to collect the proceeds, or, the amount of the policies, in case they should be lost; but express their belief, that the powers of attorney were se- lected by the plaintiff, in preference to the other securities, which were offered by the intestate. The answer further states, that the estate of Rousmaniere Is greatly Insol- vent, and had been so before his death; that the plaintiff had exhibited and proved his demand, as stated in his bill, before the commissioners of insolvency, duly appointed upon the estate of Rousmaniere; and that his dividend thereon declared, or to pe de- clared, the defendants were, and would be ready to pay according to law. The principal deposition, taken in the cause, is that of Benjamin Hazard, counsel- lor at law, who deposes, that he drew the powers of attorney, annexed to the original bill; that on the day the first power was executed. Hunt and Rousmaniere came to his office, when the latter stated, that the former had loaned, or agreed to loan, to him, a sum of money, upon security to be given by him, on his interest in the brig Nereus, and that he was desirous the security should be as ample and available to Hunt, as It could be made; that he wished and was ready, to give a bill of sale of the property, or a mortgage on it, or any other security, which Mr. Hunt might prefer. Both the parties declared, that they had called upon the witness, to request him to draw th« writings, and to obtain his opinion, as tn the kind of instrument which would give tbn most perfect security to the lender. Th8il the deponent then told the parties, that u bill of sale, or mortgage, would be goofl security, but that an Irrevocable power of attorney, such as was afterwards executed, would be as effectual and good security, as either of the others; and would prevent the necessity of changing the vessel's papers, and of Hunt's taking possession of the ves- sel, upon her arrival from sea. That the parties then requested him to draw such an instrument, as, in his opinion, would 184 MISTAKE OF LAW. most effectually and fully secure Mr. Hunt; and that the plaintiff frequently asked him, whilst he was drawing the power, and after he had finished, and read it to the parties, if he was quite certain, that the power would be as safe and available to him, as a bill of sale or mortgage, and that upon his assurances that It was, it was then executed. The witness then proceeds to express his opinion, from his knowledge of the parties, and from their declaration at the time, that Rousmaniere would readily have given an absolute bill of sale of the property or any other security which could have been asked; and that Hunt would not have accepted the one which was afterwards executed, if he had not considered it to be as extensive and perfect a security, in all respects, as an ab- solute bill of sale; and he adds, more posi- tively, that such was the understanding and agreement of both the parties. It appears, by the testimony of this witness, that he drew the power of attorney concerning the Industry, for securlrg the second loan made by the plaintiff to Rousmaniere, and that the circumstances attending that transaction, were essentially the same as those which have been stated, in respect to the first loan. We find another deposition in the record, which deserves to be noticed, as it consists of declarations, made by the plaintiff, after the powers of attorney were executed, and may serve, in some measure, to explain the more positive testimony given by Mr. Haz- ard. This witness, William Merchant, de- poses, that after the decease of Rousman- iere, the plaintiff stated to him, and to a Mr. Rhodes, that in consequence of his declining to engage in an enterprise in one of the ves- sels of Rousmaniere, to which he had at one time consented, and of the complaints of Rousmaniere, on that account, he was in- duced to offer to Rousmaniere a loan of money. That an agreement was accordingly made, by which he. Hunt, was to let Rous- maniere have a certain sum on loan, and Rousmaniere was to give him a bill of sale of a certain vessel; but that, afterwards, Hunt, reflecting, that If he took that secu- rity, he would have to take out papers at the custom-house, in his own name, be sub- ject to give bonds for the vessel, and per- haps, be made liable for breaches of law committed by others, he consulted with Mr. Hazard upon the subject; who told him, that he could, or would, draw an irrevoca- ble power of attorney to sell, which would do as well, and which was accordingly done. The cause coming on to be heard in the court below, and that court being of opin- ion, that the plaintiff had no lien or specific security upon these vessels, and no equity to have such lien or security created, against the general creditors of Rousmaniere, dis- missed the bill; from which decree, the cause has been brought, by appeal, to this court. It must be admitted, that the case, AS it is now presented to the court, is not materially variant from that which we for- merly had to consider; except in relation to the rights of the general creditors, against the insolvent estate of a deceased debtor, in opposition to the equity which a particular creditor seeks, by this bill, to set up. The allegations of the bills, filed in this cause, which were, on the former occasion admit- ted by the demurrer to be'true, are now fully proved, by the testimony taken in the cause. Before proceeding to ■ state the general question, to which the facts in this case give rise, or the principles of equity which apply to it, it will be necessary, distinctly, to as- certain, what was the real agreement con- cluded upon between the plaintiff and the Intestate, the performance of which, on the part of the latter, was Intended to be secured by the powers of attorney? Was It, that Rousmaniere should, in addition to his notes for the money agreed to be loaned to him by t-he plaintiff, give a specific and available security on the Nereu's and the Industry, or was the particular kind of security selected by the parties, and did It constitute a part of the agreement? It is most obvious, from the plaintiff's own statement, in his amended bill, as well as from the depositions appear- ing in the record, that the agreement was not closed, until the Interview between the parties to it, with Mr. Hazard, had talien place. The amended bill states, that the spe- cific security which Rousmaniere offered to ^give, was a mortgage of the two vessels, for ■-which irrevocable powers of attorney were substituted, by the advice of Mr.. Hazard, and for reasons, which it would seem, were approved of and acted upon by the plain- tiff. From the testimony of Mr. Merchant, It would appear, that the security proposed by Rousmaniere was a bill of sale of the vessels, which the plaintiff declined accept- ing, for reasons of his own, uninfluenced by any suggestions of Mr. Hazard, who merely proposed the powers of attorney as a sub- stitute for the other forms of security which had been offered by Rousmaniere. The dif- ference between these statements is not very material, since It is apparent, from both of them, that the proposed security, by irrev- ocable powers of attomeiy, was selected by the plaintiff, and incorporated Into the agree- ment, by the assent of both the parties. The powers of attorney do not contain, nor do they profess to contain, the agreement of the parties; but was a mere execution of that agreement, so far as It stipulated to give to the plaintiff, a specific security on the two vessels. In the mode selected and approved of by the parties; to which ex- tent. It was a complete consummation of the agreement. Such was the opinion of this court, upon a former discussion of this cause, in the year 1823, and such is Its pres- ent opinion. Upon this state of the case, the general question to be decided, is the same now that It formerly was, and Is that which has already been stated. There are certain principles of equify, ap- plicable to this question, which, as general MISTAKE OF LAW. 185 principles, we hold to be incontrovertible. The first is, that where an instrument is drawn and executed, which professes, or Is /intended, to carry Into execution an agree- ment, whether In writing or by parol, pre-\ viously entered into, but which, by mistake] of the draftsman, either as to fact or law,^ does not fulfil, or which violates, the mani- fest intention of the parties to the agree- ment, equity will correct the mistake, so as to produce a conformity of the instrument to the agreement. The reason is obvious: the execution of agreements, fairly and le- gally entered into, is one of the peculiar branches of equity jurisdiction; and If the instmment which is intended to execute the agreement, be, from any cause, insufficient for that purpose, the agreement remains as much unexecuted, as if one of the parties had refused, altogether, to comply with his engagement; and a court of equity will, in the exercise of its acknowledged jurisdiction, afford relief in the one case, as well as in the other, by compelling the delinquent party fully to perform his agreement, according to the terms of it, and to the manifest intention of the parties. So, if the mistake exist, not In the instrument, which is intended to give effect to the agreement, but in the agree- ment itself, and is clearly proved to have been the result of ignorance of some mate- rial fact, a court of equity will, in general, grant relief, according to the nature of the particular case in which it is sought. Wheth- er these principles, or either of them, apply to the present case, must, of course, de- pend upon the real character of the agree- ment under consideration. It it has been correctly stated, it follows, that the instru- ment, by means of which the specific secu- rity was to be given, was selected by the parties to the agreement, or rather by the plaintiff; Rousmanlere having proposed to give a mortgage or bill of sale of the vessels, which the plaintiff, after consideration, and advice of counsel, thought proper to reject, for reasons which were entirely satisfactory to himself. That the form of the instru- ment, so chosen by the plaintiff, and pre- pared by the person who drew It, conforms not, in every respect, to the one agreed upon, is not even asserted In the bill, or in the argument of counsel. The avowed object of the plaintiff was, to obtain a valid security, but in such a manner, as that the legal inter- est in the property should remain with Eous- maniere, so that the plaintiff might be under no necessity to take out papers at the cus- tom-house, in his own name, and might not be subject to give bonds, for the vessels, or to liabilities for breaches of law, committed by those who were Intirusted with the man- agement of them. That the general inten- tion of the parties was, to provide a security, as effectual as a mortgage of the vessels would be, can admit of no doubt; and if such had been their agreement, the insuffi- ciency of the instruments to effect that ob- ject, which were afterwards prepared, would have furnished a ground for the interposi- tion of a court" of equity, which the repre- sentatives of Rousmanlere could not easily have resisted. But the plaintiff was not sat- isfied to leave the kind of security which 'he was willing to receive, undetermined; hav- ing finally made up his mind, by the advice of his counsel, not to accept of a mortgage, or bill of sale, in nature of a mortgage. He thought it safest, therefore, to designate the instrument; and having deliberately done so, it met the view of both parties, and was as completely incorporated into their agree- ment, as were the notes of band for the sum intended to be secured. In coming to this determination, it is not pretended, that the plaintiff was misled by ignorance of any fact, connected with the agreement which he was about to conclude. If, then, the agreement was not founded in a rpistake of any material fact, and if it was executed in strict conformity with itself; we think it would be unprecedented, for a court of equity to decree another security to be given, not only different from that which had been agreed upon, but one which had been delib- erately considered and rejected by the party now asking for relief; or to treat the case, as if such other security had in fact been agreed upon and executed. Had Rousma- nlere after receiving the money agreed to be loaned to him, refused to give an irrevocable power of attorney, but offered to execute a mortgage of the vessels, no court of equity could have compelled the plaintiff to accept the -security so offered. Or, if he had totally refused to execute the agreement, and the plaintiff had filed his bill, praying that the defendant might be compelled to execute a mortgage, instead of an irrevocable power of attorney; could that court have granted the relief specifically asked for? We think not. Equity may compel parties to perform their agreements, when fairly entered Into, ac- cording to their terms; but it has no power to make agreements for parties, and then compel them to execute the same. The for- mer is a legitimate branch of its jurisdic- tion, and in its exercise, is highly beneficial to society; the latter is without its author- ity, and the exercise of it would be not only an usurpation of power, but would be high- ly mischievous in its consequences. If the court could not have compelled the plaintiff to accept, or Rousmaniere to exe- cute, any other instrument than the one which had been agreed upon between them, the case is in no respect altered, by the death of the latter, and the consequent In- efficiency of the particular security which had been selected; the objection to the re- lief asked for, being in both cases the same, namely, that the court can only enforce the performance of an agreement, according to its terms, and to the intention of the par- ties; and cannot force upon them a differ- ent agreement. That the intention of the parties to this agreement, was frustrated, by the happening of an event, not thought 186 MISTAKE OF LAW. »t, probably, by them, or by the counsel who tvas consulted upon the occasion, is mani- fest. The kind of security which was chosen, would have been equally effectual, for the purpose intended, with a mortgage, had RousiQaniere lived until the power had been executed; and it may, therefore, admit of some doubt, at least, whether the loss of the intended security is to be attributed to a want of foresight, in the parties, or to a mistake of the counsel. In respect to a mat- ter of law- The case will, however, be con- sidered in the latter point of view. The question, then, is, ought the court to grant the relief which is asked for, upon the ground of mistaJie arising from any igno- ( ranee 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 peculiar in their characters. / The strongest case which was cited ana relied upon by the appellant's counsel, was that of Lansdown v. Lansdown, reported in Mos. 364. Admitting, for the present, the au- thority of this case, it is most apparent, from the face of it, that the decision of the court might well be supported, upon a prin- ciple not involved in the question we are examining. The subject which the court had to decide, arose out of a dispute be- tween an heir-at-law, and a younger member of the family, who was entitled to an estate descended; and this question the parties agreed to submit to arbitration. The award being against the heir-at-law, he executed a deed in compliance with It, but was relieved against it, on the principle, that he was ignorant of his title. If the decision of the court proceeded upon the ground, that the plaintiff was ignorant of the fact that he was the eldest son, it was clearly a case proper for relief, upon a principle which has already been considered. If the mistake was. of his legal rights, as heir-at-law, it is not going too far, to presume, that the opin- ion of the court may have been founded upon the belief, that the heir-at-law was im- posed upon by some unfair representations of his better informed opponent; or that his ignorance of a legal principle, so universally understood by all, where the right of primo- geniture forms a part of the law of descents, demonstrated a degree of mental imbecility, which might well entitle him to relief. He acted, besides, under the pressure of an award, which was manifestly repugnant to law, and for aught that is stated in this case, this may have appeared upon the face of it. But if this case must be considered as an exception from the general rule which hasi been mentioned; the circumstances attend- ing it, do not entitle it, were it otherwise ob jectionable, to be respected as an authority, but in cases which it closely resembles, There is a class of cases which, it has been supposed, forms an exception from this \ general rule, but which vrlll be found, upon examination, to come within the one which was first stated. The cases alluded to, are those in which equity has afforded relief against the representatives of a deceased obligor, in a joint bond, given for money lent to both the obligors, although such lep- resentatives were discharged at law. The principle upon which these cases manifestly proceed, is, that the money being lent to both, tlie law raises a- promise in both to pay, and equity considers the security of the bond as being intended, by the parties, to be co-extensive with this implied contract by both to pay the debt. To effect this in- tention, the bond should have been made joint and several; and the mistake in the form, by which it is made joint, is not in the agreement of the parties, but in the execu- tion of it by the draftsman. The cases m which the general rule has been adhered to, are, many of them, of a character which strongly test the principle upon which the rule itself Is founded. Two or three only need be referred to. If the obligee. In a joint bond, by two or more, agree with one of the obligors, to relieve him from his obli- gation, and does accordingly execute a re- lease, by which all the obligors are dis- charged at law, equity will not afford relief against this legal consequence, although the release was given under a manifest misap- prehension of the legal effect of it, in rela- tion to the other obligors. So, in the case of Worrall v. Jacob, 3 Merv. 271, where a person having a power of appointment and revocation, and, under a mistaken supposi- tion, that a deed might be altered or re- voked, although no power of revocation had been reserved, executed the power of ap- pointment, without reserving a power of rev- ocation; the court refused to relieve against the mistake. The case of Lord Irnham v. Child, 1 Brown, Ch. 92, is a very strong one In support of- a general rule, and closely re- sembles the present, in most of the material circumstances attending it. The object of the suit was to set up a clarse containing a power of redemption, in a deed granting an annuity, which. It was said, had been agreed upon by the parties, but which, after delib- eration, was excluded by consent, from a mistaken opinion, that It would render the contract usurious. The court, notwithstand- ing the omission manifestly proceeded upon a misapprehension of the parties as to the law, refused to relieve, by establishing the rejected clause. It is not the intention of the court, in the case now under consideration, to lay it down, that there may not be case In which a court of equity will relieve against a plain mistate, arising from Ignorance of law. But we mean to say, that where me parties, upon deliberation and advice, reject one spe- cies of security, and agree to select another, under a misapprehension of the law as to the nature of the security so selected, a court of equity will not, on the ground' of "^ MISTAKE OF LAW. 187 fiucli misapprehension, and the Insufficiency •of such security, In consequence of a subse- quent event, not foreseen, perhaps, or thought of, direct a new security, of a dif- ferent character, to be given, or decree that to be done, which the parties supposed would iave been effected by the Instrument which was finally agreed upon. If the court would not Interfere in such a >case, generally, much less would it do so In favor of one creditor, against the general creditors of an insolvent estate, whose equity Is, at least, equal to that of the party seek- ing to obtain a preference, and who, in point of law, stand upon the same ground with himself. This is not a biU asking for a specific performance of an agreement to execute a valid deed for securing a debt; in which case, the party asking relief would be entitled to a specific lien; and the court would consider the debtor as a trustee for the creditor, of the property on which the security was agreed to be given. The agree- ment has been fully executed, and the only complaint is, that the agreement itself was founded upon a misapprehension of the law, and the prayer Is to be relieved against the consequences of such mistake. If all other difficulties were out of the way, the equity of the general creditors to be paid their debts equally with the plalntifC, would, we think, be sufficient to induce the court to leave the parties where the law has placed them. The decree is to be affirmed, with costs. Decree affirmed. 1 -Le- 188 MISTAKE OF LAW. JORDAN V. STEVENS. (51 Me. 78.) Supreme Judicial Court of Maine. 1863. Suit in equity submitted on bill, answers and proofs. Howard & Strout, for complainant. B. & F. Fox, for respondents. OAVIS, J. Jonathan Stevens, the father of the parties to this suit, died in NoTember, 1857, leaving personal property valued at about ?3,000, and real estate worth nearly $5,000. The plaintiff, being a widow, had worked In his family for many years, receiv- ing therefor one dollar a week. A short time before his death he gave her a life lease of his homestead in Portland, worth about $2,- 000, to take effect upon his decease. Wheth- er he did this for the reason that he thought that he had not paid her enough for her serv- ices, or because she needed a larger share of the property than the other heirs, does not appear, and is immaterial. He died intestate, leaving seven children, and the issue of an- other not living. The property leased to the plaintiff was de- scribed as situated "on Chestnut street." After the death of her father, the-plaintiff had the lease altered so as to read "Wilmot street." This was done at the suggestion of some of the defendants; and besides, as the property was otherwise sufBciently described, the mistake of the street did not affect the lease, and the alteration was immaterial. It is contended that the lease was void be- cause it was not to take effect until a future day; but, whatever may have been supposed to be the law in regard to the validity of deeds to take effect In futnro. It Is now well settled In this state that such deeds are not for that reason void. Wyman v. Brown, 50 Me. 139. But some of the defendants thought the lease to the plaintiff was Invalid, and so in- formed her. Taking their testimony as true, which we do not question, they did not Inten- tionally deceive her on this point. They ac- tually thought there was a defect of which they could take advantage. She was un- learned In every respect, not being able to write her own name. It Is evident that she put confidence in them, believing them to be better informed than herself; and supposing, from their representations, that her title to the homestead, by the lease, had failed, she was induced by them to relinquish all her interest in the whole estate of her father, in consideration of a new life lease from them of the same property embraced In her first lease. One-eighth of the estate, subject to her life Interest In the homestead, must have been worth nearly or quite eight hundred doUars. This she conveyed to them. Their new lease to her was of no value whatever; for the title was already in her. Can she ob- tain relief in equity? It is claimed that she has no remedy, be- cause there was no fraud; and the mistake was not one of fact, but of law. In this state jurisdiction In equity In cases of "mistake" is expressly conferred by stat- ute; nor is it, in terms, limited to mistakes of fact The legislature may be presumed to have used the word as generally under- stood in equity proceedings; and therefore we shall have to inquire whether courts of equity have been accustomed to grant relief ia cases like the one before us. This question has frequently arisen In this country and in England, and authorities are not wanting in both countries in support of the doctrine that no distinction should be made between mistakes of law and mistakes of fact. It is quite true, as Judge Redfield observes (1 Story, Eq. Jur. § 130, note), "that the dis- tinction between mistakes of law and mis- takes of fact, so far as equitable relief is con- cerned. Is one of policy rather than of prin- ciple"; and yet it may not be the less neces- sary to maintain and observe It. No govern- ment could be administered at all, under which Ignorance of the criminal law should be held a sufficient excuse for violating It; and the same principle is applicable to the civil law. This is not on the ground that every one Is presumed to know the law; for, though this is often repeated as an axiom, a presumption so variant from the truth can- not be recognized by the law. The ground on which the doctrine rests Is this, that it is Impossible to uphold the government, and so to maintain Its administration as to protect public and private rights, except on the prin- ciple that the rights and liabilities of every one shall be the same as It he knew the law. If aU contracts made In Ignorance of the law were to be held invalid, there would be no certainty in business and no security In titles. All rights of property would be en- dangered, and the most Important encourage- ments for industry and enterprise would be taken away. It is Indispensable, therefore, that the obligation of contracts should be maintained, unless there Is some stronger rea- son for annulling them than a mere mistake of the law. Champlin v. Laytin, 18 Wend. 407. This question is discussed at length by Judge Story, and nearly all the English and American authorities are referred to, and many of them examined. 1 Story, Eq. Jur. c. 5 (Eedf. Ed.). But while the weight of authority is clearly against granting relief merely on account of a mistake of the law, it seems to be conceded in nearly all the cases, and expressly decided In many of them, that there are exceptions to this rule. Hunt V. Rousmanler, 1 Pet 15; Bank v. Daniel, 12 Pet 32. Instead of saying that there are "excep- tions" to the rule, it would probably be more correct to say that while relief will never be granted merely on account of the mistake of the law, there are cases where there are MISTAKE OF LAW. 189 other elements, not In themselves sufficient to authorize the comt to interpose, but which, combined with such a mistalse, will entitle the party to relief. It is important therefore to inquire what it is that, with a mistake of the law, will justify the interposition of the coiurt, where there is no fraud, or accident, or mistake of fact. If a party, who himself knows the law, should deceive another, by misrepresenting the law to him, or, knowing him to be ig- norant of it, should therein take advantage of him, relief would be granted on the ground of fraud. So that such a case is within nei- ther the rule nor the exception. It has sometimes been said that when mon- •ey or other property has been obtained un- der a mistake of the law, which the defend- ant ought not in good conscience to retain, he should be compelled to restore it. Northrup V. Graves, 19 Conn. 548; Stedwell v. Ander- son, 21 Conn. 139. This is just as a princi- ple, but entirely indefinite "as a rule. It pro- poses nothing but the opinion of the court in «ach case, on a matter in regard to which there may be great differences of opinion. It overlooks the public interests involved in maintaining the obligation of contracts. Gen- ■erally, as between the parties, a mistake of law has as equitable a claim to relief as a mistake of fact. It is believed that In nearly all such cases, where relief has been granted, In addition to the intrinsic equity in favor of the plain- tiff, ^two facts have been found, (1) that ire has been a marked disparity in the po- sition and intelligence of the parties, so that they have not been on equal terms; and (2) that the party obtaining the property per- suaded or induced the other to part with it, so that there has been "undue influence" on the one side and "undue confidence" on the other. 1 Story's Eq. 120. When property has been obtained under such circumstances, and by such means, courts of equity have never hesitated to compel its restoration, though both the parties acted under a mis- take of the law; and there would be still stronger reasons for granting relief In such a ease, if the party from whom the property had been obtained had been led into his mis- take of the law by the other partry. Sparks V. White, 7 Humph. 86; Fitzgerald v. Peck, 4 Litt (Ky.) 127. Thus, in Pickering v. Pickering, 2 Beav. 31, Lord Langdale set aside certain agree- ments entered into under a mistake of the law, on the ground that "the parties were not on equal terms," and that the plaintiff acted under the influence of the defendant; and the same thing was done in Wheeler v. Smith, 9 How. 55, because the parties "did not stand on equal ground," and the plaintiff "did not act freely, and with a proper under- standing of his rights." This question has arisen more frequently In cases where parties have been mistaken In regard to their titles to real estate. Thus, in Bingham v. Bingham, 1 Ves. 126, the de- fendant sold to the plaintiff property which he already owned, and the court compelled a restoration of the purchase money. It may have been, as Bronson, J., suggests, in Champlin v. Laytin, 18 Wend. 407, on the ground that the defendant "misled" the plain- tiff in regard to his title; but the correctness of the decision is not questioned by Lord Cot- tenham, in Stewart v. Stewart, 6 Clark & F. 964. Judge Story suggests that such a case . "seems to involve, In some measure, a mis- take of fact,— that is, of the fact of owner- ship,— arising from a mistake of the law." 1 Story, Eq. Jur. §§ 122, 130. And, in King v. Doolittle, 1 Head, 77, the decision is put on that ground. But, if all the other facts are agreed and known to the parties, the ques- tion of "ownership" can be nothing but one of law; and in such cases, as in others, courts of equity should not Interfere, unless it appears that there was a difference in the condition of the parties, so that, instead of both acting voluntarily, one was misled or unduly Influenced by the other. Nor will the court then interpose. In the absence of fraud, unless the defendant, as well as the plain- tiff, can be restored substantially to the same situation as befbre. Crocier v. Acer, 7 Paige, 137. Nor where there is a real controversy be- tween parties, and the case is one of any doubt, will the court set aside a compromise fah-ly made by them, though it should after- wards appear that one has thereby received property to which he was not legally entitled. Steele v. White, 2 Paige, 478; Trigg v. Reed, 5 Humph. 529. On the contrary, comrts of equity encourage such compromises; but here, too, as in other cases, if the parties are not on equal terms, and one misleads the other, and obtains property thereby against right and equity, as well as against law, he will be compelled to restore It. "If a party, \ acting in ignorance of a plain and settled l principle of law," says the vice chancellor. Sir John Leach, "is induced to give up a por- tion of his indisputable property under the / name of a compromise, a court of equity will / relieve him from the consequences of his/ mistake." Naylor v. Winch, 1 Sim. & S. 564. And though this was a dictum, the princi- ple was fully applied by the supreme court of the United States In Wheeler v. Smith, previously cited. And the same doctrine has been recognized by this court in the case of Freeman v. Curtis, 51 Me. 140. And, in both of these cases, relief was granted, not on the ground that a mistake of the law alone entitles one to relief, but that, though there be no actual fraud, if one is unduly In- fluenced and misled by the other to do that which he would not have done but for such influence, and he has In consequence convey- ed to the other property without any con- sideration therefor, or purchased what was already legally his own, the court will, if It 190 MISTAKE OP LAW. can be done, restore both of the parties to the same condition as before. The case at bar Is one of this kind. The parties were not on equal terms. The plain- tiff was ignorant, in business affairs, as well as in other respects. Having confidence in the defendants, she relied upon what they told her. It does not appear that she doubt- ed the ralldity of her father's lease to her, until such doubts were communicated to her from them. The proposition for her to re- lease her interest in all the other property did not originate with her, but with them; and she was induced to accept it by the fear which they had impressed upon her that she otherwise would have to give up the home- stead. She acted under their influence. They believed that there was a defect in the first lease, and they meant to take advantage of it. As was said by the master of the rolls, afterwards Lord Kenyon, in Evans v. Llewel- lyn, 1 Coxe, 333, "though there was no fraud, there was something like fraud, for an undue advantage was taken of her situation. The party was not competent to protect herself, and therefore this court Is bound to afford her such protection." The bill Is sustained, with costs; and the defendants must be decreed to pay her a dis- tributive share of the personal estate, with Interest from the time of distribution, mak- ing her equal with them, and to release to her one-eighth of all the real estate, and ac- count to her for her share of the rents aud profits of the portion not occupied by her, APPLETON, O. J., and KE3NT, WALTON, and DICKERSON, JJ., concurred. MISTAKE OF LAW, 191 STAFFORD v. FETTERS. (8 N. W. 322, 55 Iowa, 484.) Supreme Court of Iowa. March 23, 1881. Appeal from circuit court, Warren coun- ty. Action at law against the indorser of a promissory note. Defendant set up an eq- uitable defense, and the relief prayed for therein was granted him by the decree of the circuit court. PlaintifC appeals. Seevers & Sampson, for appellant H. Mc- Neil, for appellee. BECK, J. 1. The defendant, being the payee of a negotiable promissory note, trans- ferred it to plaintiff by the following in- dorsement: "For value received, I assign the within note to James Stafford. [Signed] H. J. Fettei-s." The action was brought at law upon this indorsement. The defendant pleaded an equitable defense, wherein be sub- stantially alleged that, by the agreement under which the note was transferred, the plaintiff was to take the note without re- course upon defendant, and that the parties adopted the form of transfer as expressing such agreement, and neither of them at the time intended that it should have any other effect than to express the agreement between them, and neither knew that it did have the effect which the law gives to such Instru- ments. Defendant, upon this answer, as in a cross-blU, prays that the indorsement be reformed so as to express the true agree- ment made and Intended to be set out by the parties, and that other proper relief be grant- ed. A demurrer to this count of the answer was overruled, and the issues raised by this pleading were tried as an action in chan- cery. It is triable here de novo. 2. The evidence very satisfactorily estab- lishes the facts set up In the equitable de- fense. The defendant positively and ex- plicitiy testifies that the agreement requir- ed him to transfer the note without liabil- ity; that he had no Intention to express any different contract by the Indorsement, and was Ignorant of the legal effect of the In- strument; and that plaintiff expressly dis- claimed that he expected or desired defend- ant to become boimd for the payment of the note. Six witnesses positively and strongly corroborated defendant's testimony. They heard the conversation between the parties when defendant signed the indorsement The plaintiff. In his testimony, denies the statement of defendant. We must accept the facts of the case presented by the testi- mony of defendant and his witnesses. We are required to determine whether, upon these facts, equity will grant relief to defendant by reforming the indorsement upon the note 80 that it will express the real contract of the parties. 3. The agreement of the parties, the meet- ing of their minds upon the conditions and obligations touching the subject contemplat- ed by them, constitutes their contract The written Instrument is made the evidence of that contract If It fails to present their agreement the contract it expresses is not the agreement of the parties, and the true contract remains unexecuted. In such a case equity will reform the wiiting, causing it to express the intentions of the parties. This relief will be granted without regard to the cause of the failure of the instrument to express the true contract whether it be from fraud, mistake in the use of language, or any other thing which prevented the ex- pression of the intentions of the parties. 4. But there is another familiar rule of equity upon which plaintiff relies to defeat the application of these doctrines to this case, namely, relief will not be granted to correct mistakes at law. The rule has no application to mistakes in ' the language of a contract, or in the choice of the form of an instrument, whereby it has an effect different from the Intention of the parties. If parties, intending to sell and purchase lands, should, in ignorance of Its legal ett'ect, execute a lease, equity would i reform the instrument, though It was a mis- take of law which led them to adopt it. This mistake, it will be noticed, affects the very contract the parties intended. They In- tended a deed, but a lease was made. But where two are bound by a bond, and the- obligee releases one, mlstakingly believing that the other will remain bound, equity will not grant him relief, for the reason that the release Is just what he intended it to be; his mistake related to the effect of the con- tract in matters not contemplated therein. The mistakes of law against which equity will not relieve are those which pertain to the subject of the contract, and were In- ducements thereto, or considerations there- for. In such cases the parties intended to make the very contracts which they executed, but were induced to make them by a mis- take of law. Further Illustrations taken from the books make our expression of the rules plainer. A tenant for life purchased a reversion un- der the mistake of law that such purchase would cut off the remainder in tail and vest the fee in him. It was held that he could not have relief. A power of attorney was taken from a debtor as a security; but the debtor died before the power was executed. Equity would not grant relief. In each of these cases the very contracts entered into by the parties were embodied in the instru- ments. The mistakes were as to the results to be reached which were inducements to the contracts. In the first case the purchaser supposed that the acquisition of the reversion would vest in him the fee-simple title. This was the Inducement for the purchase. It was a mistake of law. In the second case it was the purpose of the parties to secure the payment of the debt They mistakenly chose a power of attorney to effect their 192 MISTAKE OF LAW. object. But their purpose was defeated by the law which provides that the death of the grantor revokes a power of attorney. In these cases, it will be observed, the instru- ments were of the character intended by the parties. The mistakes pertained to the effect of the instruments upon the rights of the parties not contemplated by the contracts or provided for therein. (But, on the 6ther hand, when parties en- ter into an agreement, which, through mis- take of law or fact, they reduce to writing,/ and the instrument fails to express their true ] agreement, or omits stipulations agreed up-j on, or contains terms contrary to the Inten-/ tion of the parties, equity will reform the! writing, making it conform to the agreement! entered into by the parties. The doctrines we have stated are familiar to the profession. They have ample support In the authorities. See Noulin v. Pyne, 47 Iowa, 293; Hunt v. Rosemanlers, 8 Wheat. V 174, 1 Pet 1; 1 Story, Bq. Jur. §§ 113, 116, et seq., and cases cited; Kerr, Fraud & M. (Am. Ed.) 396 et seq., and page 418 and cases cited; Reynolds v. Meellck, 17 Iowa, 585. In the case before us the parties agreed that plaintiff should take the note without recourse on defendant. They mistakenly supposed that the form of assignment of the note would have that effect, being Ignorant of the provisions of the law of commercial paper which makes the indorser liable In case of default of the maker of the note. This was a mistake of the law, but it per- tained to the instrument itself, and, by rea- son of it, the writing does not express the true agreement of the parties. Equity wUI reform it. Glenn v. Statlee, 42 Iowa, 107, and Moor- man V. Collier, 32 Iowa, 138, are not in con- flict with our conclusions just expressed. In each case the mistake was not in expressing the contract, but as to its legal effect. The parties executed an instrument expressing the very contract Intended, but the instru- ments had a legal effect unknown to, and not Intended by, the parties. These decisions are also distinguishable from the case at bar by the fact that in each of them the rights of persons other than the parties to the contracts are Involved. They were actions upon delivery bonds. Creditors not parties thereto were beneficia- ries. The law will, in such cases, rather im- pose hardship upon the parties who made a mistake than upon one chargeable with no fault We reach the conclusion that the circuit court correctly rendered a decree reforming the assignment indorsed upon the note, and dismissing plaintiff's petition. Affirmed. VJ" MISTAKE ©F LAW. 193 GREEN V. MORRIS & E. R. CO. (12 N. J. Eq. 165.) Conrt of Errors and Appeals. October Term, 1858. E W. Whelpley, for demurrer. Ii. A. Obandler and F. T. Frellnghuysen, oontra. THE CHANCELLOR. The following are the material facts stated In the bill: The complainant is the owner of a farm in the county of Morris. The defendants, in the construction of their railroad, made an ex- cavation through the complainant's farm of about five himdred feet in length, and vary- ing from five to twelve feet deep. Commis- sioners were called under the charter of the company, who assessed the complainant's damages at six hundred and eighty dollars. From this award the complainant appealed to the inferior court of common pleas of the county of Morris, in which court he was en- titled to review the award and to a trial by Jury. Before the time for hearing arrived, Samuel B. Halsey and Freeman Wood rep- resented to the complainant that they were acting for and on behalf of the railroad com- pany, and proposed to submit the matters in dlfEerence to three arbitrators, to be selected by the parties, to which the complainant as- sented. The arbitrators were selected, and the submission was reduced to writing. The same matters were submitted to the arbitra- tors as were before, and acted upon by the commissioners appointed under and by vir- tue of the charter. By the ninth section of the charter of the company, they are obliged to construct and keep in repair good and suf- ficient bridges or passages over or under the said railroad or roads, where any public or other road shall cross the same; and also, where the railroad shall intersect any farm or lands of any individual, to provide and keep in repair suitable wagonways over or under said road, so that he may pass the same; and if the company neglect to per- form the said duty, after giving twenty days* notice to the company, the owner of the land may do it himself, and recover the valuation by common process of law. The arbitrators, thus selected, proceeded to discharge the duties imposed upon them in the presence of the complainant, and of Halsey and Wood, who appeared and acted on behalf of the company. During their de- liberations, the complainant stated that he should require a suitable wagonway over the railroad, where It crossed his farm. This was assented to, but Halsey and Wood stat- ed that this was a matter with which the arbitrators had nothing to do, and was no part of the submission, but was an inde- pendent duty, imposed upon the company by their charter. This view was acquiesced in by the arbitrators and by all parties, and it is admitted to have been a correct view. The arbitrators awarded that the company should pay to the complainant eight hundred H.& B.EQ.(2d Ed.)— 13 dollars for his damages. In awarding this amount, they did not take into consideration the matter of bridges or crossings. Soon aft- er the award was completed, Halsey and Wood went to the complainant with eight hundred dollars, and with a deed, prepared and ready for execution, from the complain- ant and his wife to the company. The com- plainant objected to signing the deed on the ground that it did not, in express words, re- serve all his rights as to a crossing or bridges over the railroad. Halsey and Wood assured him that such rights were not at aU afPected by the deed. The deed was a spe- cial one in its character. Mr. Halsey was a lawyer by profession. The complainant knew this, and he relied upon his integrity, as well as his professional learning. Upon Mr. Halsey's reassurances that the deed was a proper one, and did not compromise the complainant's rights to proper crossings over the road, he received the money, and exe- cuted and delivered the deed to Halsey and Wood. They delivered it to the company, giving the officers full knowledge of all that had occm:red. The complainant gave notice to the company to construct a bridge over their railroad where it crosses his land, and upon the company's neglecting to do so the complainant himself constructed the bridge at an expense exceeding seven hundred dol- lars. He then instituted a suit in the su- preme court against the company, under the ninth section of their charter, to recover lie value of the work done. The company set up, as a plea in bar to the recovery, the deed given by the complainant to the company. This bill is brought to relieve the complain- ant from legal effect of that deed. The bill prays that the deed may be reformed, and that the defendants may be enjoined from setting up the deed in bar to the complain- ant's action at law. To this biU the defend- ants have filed a general demurrer. The principal ground urged in support of the demurrer is that the object of the bill is to correct a mistake of law, and that the maxim is that ignorance of law furnishes no excuse to a person either for a breach or for an omission of a duty, ignorantia legis neml- nem excusat, and that the same principle applies to agreements entered into in good faith, but under a mistake of the law. Such undoubtedly is the general rule. It has been adhered to with great strictness by some authorities, while by others exceptions have been made to the rule altogether irrec- oncilable with the principles and reasons up- on which it has been established. Some of these conflicting authorities are referred to and commented upon in 1 Story, Eq. Jur. § 113, etc. But that the rule has its proper exceptions is beyond all dispute. In 1 Story, Eq. Jur. §§ 113, 116, the rule is laid down that agreements made and acts done under a mistake of law are, if not oth- erwise objectionable, generally held valid and obligatory. The author says that he 194 MISTAKE OF LAW. lays down the doctrine in this guarded and qualified manner because there are authori- ties which are sxipposed to contradict it, or at least to form exceptions to it; and in the case of Hunt v. Rousmanier, 1 Pet. 17, 7 L. Ed. 27, a case much relied upon by the de- fendant's counsel, Mr. Justice Washington, in delivering the opinion of the court, says, "It is not the intention of the court, in the case now under consideration, to lay it down that there may not be cases in which a court of equity will relieve against a plain mistake arising from ignorance of law." There are several considerations which in- duce me to consider this case as very prop- erly embraced within the exceptions to the rule. The decision of the case does not rest exclusively upon the mere fact of a mistake in law upon the part of the complainant. This deed does not carry out the intention of the parties; and it is not necessary to resort to parol testimony to establish this fact It was executed for the sole purpose of carry- ing into effect the award of the arbitrators. By that award, the complainant's rights and privileges under the ninth section of the de- fendant's charter were not impaired, nor were they in any manner whatever affected by it The object of the deed was to give to the company the same rights and privileges in and upon the complainant's lands as the award gave them, and no more. All that is necessary to enable the court to reform this deed, and to make it comply with the inten- tion of the parties, is to have before It the award which It was the design of all parties, by this deed, to carry into execution. The mistake is a mistake of the draftsman, and he acting as the agent of the party who now seeks to take advantage of the mistake. Mr. Halsey prepared the deed, and took it to the complainant to be executed. It was his mis- apprehension of the law that led to the mis- take. It was not the carelessness or igno- rance of the complainant, but of the defend- ants' agent. Mr. Justice Story, In comment- ing upon the case already referred to in 1 Pet. 1, 13, 7 L. Ed. 27, 14 Story, Eq. Jur. § 115, remarks: If there had been any mis- take in the instrvmient itself, so that it did not contain what the parties had agreed on, that would have formed a very different case, for where an instrument is drawn and ex- ecuted which professes, or Is Intended, to carry Into execution an agreement 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 Instrument. Now we have before us an agreement in writing, the award of the arbitrators, to carry which Into execu- tion the deed was executed. By a misappre- hension of the law on the part of all parties, and more particularly of the defendants' agent, who drerw the deed, it releases valu- able legal rights of the complainant which are not affected by that award. All the bill asks is that the deed may be made to conform to the award. In the case of ChampUn v. Layton, 1 Edw. Oh. 467, It was decided that a contract en- tered into under a mutual misconception of legal rights, amounting to a mistake of law in the contracting parties, is as liable to be set aside or rescinded as a contract founded in mistake of matters of fact. In his opinion in that case the vice, chancellor says: So, if both parties should be ignorant of a matter ol law, and should enter into a contract for a particular object, the result whereof would, by law, be different from what they mutual- ly intended,— here, on account of the surprise or immediate result of the mistake of both,— there can be no good reason why the court should not interfere In order to prevent the enforcement of the contract, and relieve from the unexpected consequences of it. To refuse would be to permit one party to take an un- conscientious advantage of the other, and to derive a benefit from a contract which neither of them intended It should produce. In Stapylton v. Scott 13 Ves. 424, the lord chan- cellor says: I admit, where the contract has proceeded upon the mistake of both par- ties, that avoids the contract at law as well as here. In Willan v. Wlllan, 16 Ves. 72, an agreement was decreed to be given up upon the ground of surprise, neither party understanding the effect of it This excep- tion to the rule Is recognized in the case of Hunt V. Rousmanier, 8 Wheat 174, 5 L Ed. 589. The case before the court is entitled to much more favorable consideration than these cases, from the fact, before referred to, that the mutual mistake is to be attributed to the agent of the defendants. He prepared the deed, and he assured the complainant that it was correct. There was no want of ordinary prudence in the complainant's relying upon his judgment He was a lawyer by profes- sion, and it was natural and becoming that the complainant should have confided in him. There Is another consideration which very properly enters into the ease. It Is a deed procured from the complainant, by the solici- tation of the defendants or their agent, which conveys to them valuable rights and priv- ileges without any consideration. The award gives to the complainant eight hundred dol- lars as a remuneration for his damages; but the legal effect of the deed is not only a re- lease of the damages, for which the defendant was compensated, but a release of rights and privileges more valuable to the complainant than the pecuniary compensation awarded to him. The relative situation of the parties is a matter of some consideration In a court of equity. One was a plain man, the other a professional man, professing skill and ex- perience as to the matter in which he volun- teered to advise. I have no doubt, if this deed does not comport with the award, as to the propriety of the court's reforming it. But I am embarrassed with another view MISTAKE OF LAW. 195 of the case. In my Judgment, the deed in question does not operate as a release of any rights the complainant may have under the ninth section of the defendants' charter. In other words, it is no legal bar to the com- plainant's recovery In his suit at law. The bill assumes that it is a bar. The counsel for the defendants raised an objection that the fact of its being a bar to the complainant's recovery was not, with sufficient directness and distinctness, averred in the bill; but it is assumed throughout the bill to be, in connec- tion with the use the defendant is making of the deed, the foundation for the complainant's suit. A distinct averment as to the legal effect of the deed is not necessary. The con- struction of the deed by the court could not at all depend upon the complainant's opin- ion of it, nor would the complainant be bound here or elsewhere by such an averment. The deed recites that the company, by vir- tue of their act of incorporaQon, had surveyed their route from Morristown to Dover over and upon the lands of the complainant, giving a description of the land Dy metes and bounds, and then proceeds as follows: "Now be it known that the said Thomas Green and his wife, in consideration of the sum of eight hundred dollars, to them in hand well and truly paid by the said the Morris and Essex Railroad Company, the receipt whereof is hereby acknowledged, have and by these pres- ents to grant, bargain, sell, convey, and confirm to the said the Morris and Essex Railroad Company, and to their successors and assigns, forever, the right, liberty, and privilege of erecting upon the tract of land above described, by its officers, agents, engi- neers, superintendents, contractors, workmen, and other persons in their employ, and to take possession of, hold, have, use, occupy, and excavate the same, and to erect embank- ments, bridges, and all other works neces- sary to lay rails, and do all other things which shall be suitable or necessary for the completion or repair of said road or roads; to have and to hold the said tract of land and premises unto the said the Morris and Essex Railroad Company, and to its succes- sors and assigns forever, for the purposes above mentioned, and for all the other pur- poses mentioned in the said act of incorpora- tion and the several supplements thereto. In witness whereof," etc. The seventh section of the act provides the mode in which the company shall pro- ceed, If they cannot agree with the owner of the land, to acquire the same by assess- ment. Three commissioners are to be ap- pointed, who are to a.ssess the value of the land and the damages, upon payment of which the company have the right to enter upon and occupy the land for the purposes of the railroad. The provisions of the ninth section are wholly independent of those of the seventh section, and make It obligatory upon the company to construct and keep in repair bridges or passages over or under the railroad, where It crosses public or pri- vate roads, and where it intersects lands of individuals. It is very manifest that the assessment to be made by the commissioners does not include any compensation for such bridges or passages, and that, notwithstand- ing such assessment, the duty still remains upon the company to construct such bridges and passages over the road. If this is not so, then the ninth section is superfluous. The company cannot take possession of the land except under the provisions of the sev- "enth section; and, if the assessment pro- vided for in that section includes a re- muneration to the land owner for bridging, etc., there could be no propriety in imposing that duty by the ninth section. The deed in question conveys to the defendants noth- ing more than the liberty of erecting upon the land described the necessary superstruc- ture for their railroad, and the necessary embankments, bridges, etc. This is the same right, and neither more nor less than they would have acquired by an assessment un- der the seventh section of the act. I do ilot see how, with any propriety, a construction can be put upon this deed that will release the company from the duties imposed by the ninth section. An assessment by commis- sioners would not have released them, and, in my judgment, this . deed confers upon them no additional rights, and releases them from no other duties or obligations. The language used in the deed is the same lan- guage used in the sixth section of the act, which defines what rights the comR3ny ac- quire by assessment. The deed confines the company to the same use of the land as the act confines them under the assessment. The language in the deed is an exact copy of the language of the act. If, then, this construction of the deed is the correct one, there is no necessity of re- forming it; but the defendants contend for a different construction, and, upon their con- struction, insist that it is a bar to the com- plainant's recovery in his suit at law. If their construction is the correct one, then the complainant is entitled to the protec- tion of the court. Under such circumstan- ces he had a right, when the defendants, by a formal plea at law, contended for such a construction of his deed, to claim the pro~ tection of this court. It was not safe for him to risk his case at law. If the court at law should be against him, it would then be too late for him to ask relief in this court. Would it be right, notwithstandilig the construction this court has put upon the deed, to dismiss the complainant out of court? The court at law is not bound by the construction this court may put upon the deed. If the complainant's bill should be dismissed, and the court at law should differ from this court, the complainant will be without remedy. It may be asked, how can this court make a decree to reform the deed when it is of opinion that it needs no 196 MISTAKE OF LAW. reformation? But the court need not adopt any such inconsistency. It can afford to the complainant adequate relief without making a decree to reform the deed. A de- cree enjoining the defendants from setting up the deed as a bar to the complainant's recovery In the action at law will afford him all the protection that is necessary. I have no doubt that, under the circum- stances of this case as it is made by his bill, the complainant is entitled to relief. The demurrer is overruled, with costs. MISTAKE OP LAW. 197 GRISWOIiD v: HAZARD et al. (four cases). (Nos. 50-53.) (11 Sup. Gt. 972, 141 V. S. 260.) Supreme Court of the United States. May 25, 1891. In error to the circuit court of the United States for the district of Rhode Island. Appeals from the circuit court of the Unit- ed States for the district of Rhode Island. The first of the above suits was brought by Griswold, a citizen of New York, against the appellees, citizens of Rhode Island, to ob- tain a decree canceling or (if relief of that character could not be granted) reforming a certain bond, for the sum of $53,735, executed by Thomas 0.' Durant, as principal, and Gris- ■wold and S. D. Bradford, as his sureties. It was heard upon bill, answer, and proofs, and the bill was dismissed. The action at law. No. 53, was brought by the appellees against Griswold upon the above bond in one of the courts of Rhode Island, and was removed, upon his petition, to the circuit court of the United States for the district of Rhode Island, where a judg- ment was rendered against him for the sum of $66,470. The other two cases, Nos. 51 and 52, were suits in equity brought by Griswold, pending the action at law in the circuit court, to ob- tain an injunction against its further prose- cution. The relief asked, in each of those suits, was denied, and the bills were dis- missed. All of the cases have their origin in a suit In equity brought, August 22, 1868, in the su- preme court of Rhode Island, by Isaac P. Hazard, of that state, against Thomas C. Durant, Oliver Ames, Benjamin B. Bates, John Duff, Cornelius S. Bushnell, Sidney Dil- lon, Henry S. McComb, the Credit Mobilier of America, a Pennsylvania corporation, and the Union Pacific Railroad Company, a cor- poration created by acts of congress. Haz- ard sued on behalf of himself and all other stockholders in the first-named corporation who should become. parties to his bill. Du- rant, from an early date in 1864 until May 18, 1867, was president of the Credit Mobilier of America; having, It was alleged, to a great extent, the management of its affairs, and the confidence of its directors and trustees, as well as the control of its finances and dis- bursements, and of its treasurer, clerks, and servants. The theory of the bill was that he had acquired a large amount of the stock of the Credit Mobilier of America upon which dividends had been paid in money and in the stock and bonds of the Union Pacific Rail- road Company, the amount of such bonds ex- ceeding. It was alleged, $700,000, and the amount of such stock of the last-named cor- poration being nearly $2,000,000; and that the shares of stock, bonds, and moneys, so received by him, belonged equitably to the Credit Mobilier of America and its stockhold- ers. The bill alleged that Durant's pecuniary condition was precarious; that he was, and for a long time had been, largely engaged in hazardous speculations and financial opera- tions, sustaining thereby heavy losses, and li- able to sustain others; that any recovery against him, it was feared, could not be en- forced by execution or the ordinary process of law; that he was "about to depart out of the state, and out of the jurisdiction of this court;" and that the defendants, (the indi- vidual defendants being sued as trustees in a certain contract with the Union Pacific Railroad Company, the profits of which be- longed to the Credit Mobilier of America and its stockholders,) "though requested so to do," had wholly neglected and refused to take any steps to compel him to account for said mon- eys, stocks, and bonds, so received and im- properly appropriated. The principal relief asked was that Durant be required to pay over and deliver to the Credit Mobilier of America and the plaintiff Hazard such sums of money and shares of stock as should appear upon an accounting to be justly due or belonging to that corpora- tion and to Hazard, and to make such trans- fer of the stock and bonds as would fully pro- tect its and his rights in the premises; that the amounts ascertained to be due be ad- judged a lien upon the shares In the stock of . each of said corporations, owned or held by or standing in the name of Durant, as well as upon the above contract assigned to the de- fendant trustees and the dividends, earnings, stocks, and bonds received or to be received by virtue of that contract, to the extent of the shares to which Durant might be entitled under it; and that, on default in the pay- ment and delivery of the moneys, stocks, and bonds so found due, all such stocks and bonds be sold under the direction of the court, or otherwise transferred and apportion- ed equitably among the rightful owners and claimants thereof; and that such stock, bonds, moneys, interest, and rights, so pro- cured by Durant, be deemed and taken as the rightful property of the Credit Mobilier of America and its stockholders. The bill prayed that Durant be restrained from de- parting out of the state, and out lOf the juris- diction of the court, by writ of ne exeat, is- sued under its seal and by its order. A writ of ne exeat was ordered to be is- sued, August 22, 1868, for $53,735. It was in these words: "Whereas, it is represented to our supreme court, sitting in equity, on the part of Isaac P. Hazard and others, complainants, against Thomas C. Durant and others, defendants, that said Thomas C. Durant is greatly in- debted to the said complainant, and designs quickly to go into other parts beyond this state, (as by oath made in that behalf ap- pears,) which tends to the great prejudice and damage of the said complainants: There- fore, in order to prevent this Injustice, we hereby command you that you do, without 198 MISTAKE OF LAW. delay, cause the said Thomas 0. Durant to come before you and give sufficient bail or security, in the sum of fifty-three thousand seven hundred and thirty-five dollars, that he, said Thomas C. Durant, will not go, or at- tempt to go, into parts beyond this state with- out the leave of our said com't; and, in case the said Thomas C. Durant shall refuse to give such bail or security, then you are to commit him, the said Durant, to our county jail, in your precinct, there to be kept in safe custody until he shall do it of his own accord; and when you shall have taken such security you are forthwith to make and return a cer- tificate thereof to our said court, distinctly and plainly, under your hand, together with this writ." Durant was arrested under this writ on the night of August 22, 1868, and on the 24th he executed, with Griswold and Bradford, as his sureties, the following bond, drawn by one of Hazard's attorneys: "Know all men that we, Thomas C. Du- rant, as principal, and John N. A. Griswold and S. Dexter Bradford, as sureties, are firm- ly bound to Isaac P. Hazard, Rowland Haz- ard, Rowland G. Hazard, Elizabeth Hazard, Elizabeth Hazard, trustee, Anna Hazard, Mary P. Hazard, Lydla Torrey, Sophia Ver- non, and Anna Horner in the sum of fifty- three thousand seven hundred and thirty-five dollars, to be paid said obligees, their ex- ecutors, administrators, or assigns; to which payment we bind ourselves, our several and respective heirs, executors, and administra- tors, jointly and severally, hereby. "Sealed with our seals and dated this 24th day of August, A. D. 1868. "The condition of this obligation is that said Thomas C. Durant shall on his part abide and perform the orders and decrees of the supreme court of the state of Rhode Island in the suit in equity of Isaac P. Haz- ard and others against said Thomas C. Du- rant and others, now pending in said court within and for the county of Newport." This is the bond above referred to. Under the latter date, and presumably be- fore the execution of that bond, the attor- neys of Hazard and Durant signed the follow- ing agreement: "In the above entitled case it is agreed that said Thomas O. Durant shall file a bond, with surety in the penalty mark- ed in the writ of ne exeat therein, to abide and perform the orders and decrees of the court in said cause, and that thereupon the writ of ne exeat aforesaid shall be dischar- ged, and that the court may enter decree ac- cordingly." The court, under the same date, entered the following order: "Thomas O. Durant, one of the defendants in this suit, having executed and filed a bond, with sure- ties, to abide and perform the orders and decrees of the court made in this suit, it is now, by consent, ordered that the writ of ne exeat heretofore issued be discharged." For some reason not explained, the writ of ne exeat was not returned to the clerk's office and filed until October 21, 1868. The sheriff made this return on the writ: "Newport, Au- gust 24, 1868. I caused the vylthin-named Thomas C. Durant personally to come before me, as within commanded, on the 22d day of this month, and now the writ is discharged by order of court" On the 2d day ot December, 1882, more than 14 years after the commencement of Hazard's suit, it was ordered, adjudged, and decreed in that suit, among other things, as follows: "Second. That the defendant Thomas 0. Durant is accountable for and do, within 90 days from the date hereof, pay the sum of $16,071,659.&7, with interest from this date, the said sum, with interest thereon, to be deposited in the registry of this court, or be paid, in the first instance, to Rowland Haz- ard, of South Kingston, in said state, and Henry Martin, of Brooklyn, in the state of New York, who are hereby appointed special commissioners, with authority, jointly and severally, to collect and receive the same, and with power to take such steps to collect the same as may be necessary and according to law, and said fund, or so much thereof as may be collected by process or otherwise, is hereby directed to be paid and deposited in the registry of this court to the credit of this cause. "Third. Of the aforesaid total sum of $16,- 071,659.97, the defendant Thomas 0. Durant is hereby allowed and is decreed to be en- titled to pay and discharge $8,816,232.93, or any part thereof pro tanto, by transferring and delivering stock of the Union Pacific Railroad Company and first mortgage and sinking fund bonds of said company, as per Statement G, now exhibited to the court, and directed to be filed in this cause, with all dividends which may have been collected or received by said defendant or his assigns aft- er the date of this decree, together with in- terest on the same to the date of payment thereof by said defendant, the certificates of said stoct, with transfers thereof, and the said bonds to be delivered to the said Row- land Hazard and Henry Martin, who are hereby appointed special commissioners to re- ceive the same, and who are hereby author- ized and directed to sell the same, or such portions thereof as may be delivered to them from time to time as they are secured, at public auction, and receive the proceeds there- of, and, after deducting the costs and charges of such sales, deposit the same in the registry of this court to the credit of this cause: pro- vided, however, that the said privilege herein granted to the said defendant Thomas 0. Du- rant to transfer and deliver said stocks and bonds in partial discharge and payment of the sum hereinbefore decreed to be paid by him be exercised by him within thirty days from the date of the entering this decree; and that, in default of such transfer and delivery, or of the transfer and delivery of the entu-e amount of said stock and bonds within the MISTAKE OF LAW. 199 said thirty days, the obligation of the de- fendant Thomas C. Durant to pay the said proportion of the said sum or of the residue of the same, after deducting the amount of such stocks and bonds as may be delivered, as aforesaid, at their face value, shall be- come, and is hereby declared to be, absolute: and provided further, nevertheless, that the said option or privilege -of the said Thomas C. Durant shall not interfere in any manner with any order or decree in the cause touch- ing the transfer, delivery, sale, or other dispo- sition of said stock and bonds. "Fourth. The defendant Thomas 0. Du- rant is likewise ordered and directed to trans- fer and deliver, within thirty days from the date hereof, five thousand seven hundred and seven 45-100 (5,707 45-100) shares of the stock of the Credit Mobilier of America, (which stock has been found by the master to have been purchased with the funds of the Credit Mobilier, and which stock, with any divi- dends or profits accrued or to accrue on the same, is hereby declared to be the property of said corporation, subject to the decrees and orders in this cause,) with any interest, divi- dends, rights, benefits, and profits which may have accrued 'to the said Thomas C. Durant as the holder of the said 5,707 4o-l(X) shares of stock, or any part thereof, and not here- inbefore charged against him, said transfer and delivery to be made to the said Rowland Hazard and Henry Martin, or either of them, as special commissioners, with power, which is hereby granted to said commissioners, forthwith to take such measures, by suit or suits in their own names, or otherwise, as they may be advised is lavyful and necessary to enforce such transfer, collection, or de- livery, and said stocks to be held by said commissioners subject to the further order of the court In this cause. "Fifth. All interlocutory injunctions here- tofore made in this cause, so far as con- sistent with this decree, are declared to be and are hereby made perpetual, and the fur- ther consideration of the cause, and particu- larly as to allowances to the complainants for costs, expenses, and services, and as to the distribution of the funds that may be depos- ited in the registry of the court to the credit of the cause, and also the consideration of any order or decree which may be necessary in the premises against the defendant Thom- as C. Durant, by reason of any default which may be made by him touching any portion of this decree, and also the consideration of any other and further decree herein against or concerning the defendants other than the said Thomas C. Durant, be, and they hereby are, directed to stand over, with leave to any party in Interest, save parties in contempt or parties who may appear to be for any oth- er cause disqualified, to apply at any time for further orders and directions." The bill In case No. 50 was filed September 13, 1881. That suit proceeds upon these grounds: That the bond of August 24, 1868, whereby Griswold became bound, as one of the sureties of Durant, that the latter should "on his part abide and perform the orders and decrees of the supreme court of the state of Rhode Island in the suit in equity of Isaac P. Hazard and others against said Thomas C. Durant and others, now [then] pending in said court," was obtained by fraud, and by concealment from him of facts he was entitled to have communicated to lum before he assumed the obligations impos- ed by that instrument; that he intended to sign, and beUeved, at the time, that he sign- ed, a bond which simply bound him for the appearance of Durant, so that he should be personally amenable to the process and or- ders of the court in the suit brought by Haz- ard; that the execution of the bond In ques- tion was the result of mistake; that the agreement whereby, upon the execution by Durant of a bond, the writ of ne exeat was to be discharged, was made without his knowledge or consent, as was also the order of court in pursuance of such agreement, and was in derogation of his rights; that his pur- pose to become surety only for Durant's ap- pearance to answer the process of the court was well known at the time to the plaintiff and his attorneys, who prepared, and super- vised the execution of, the bond; and that the writ of ne exeat was sued out upon the ground that Durant was about to depart from the state, when, in fact, he only contem- plated coming to the state. Protesting that the legal effect of the bond was that he should be responsible only for the appearance of Durant, so as to be subject to the process of the court in the Hazard suit, and averring his willingness to execute a proper ne exeat bond, he prayed that the bond in question be set aside as having been obtained by fraud, imposition, and mistake, or reformed, as indicated, and that the de- fendants be restrained by injunction from enforcing it in its present shape. The answers of the defendants put in Issue the material allegations of the bill. The plaintiff filed a replication, and proofs being taken, and the cause heard, the bill, as al- ready stated, was dismissed. (C. O.) 26 Fed. 135. The action at law, being ease No. 53, was commenced March 3, 1883, in one of the courts of Rhode Island, and was removed, upon Griswold's application, to the circuit court of the United States. The declaration set out the bond of August 24, 1868, alleged that Bradford, one of the sureties thereon, was dead, and that Durant had not kept its condition, in that he had not performed the above decree of December 2, 1882, in the equity suit brought by Hazard; whereby the plaintiffs Rowland Hazard, Rowland G. Haz- ard, Anna Hazard, and Lydia Torrey were entitled to have and demand of him the amount of said bond, $53,735. A copy of that decree was made an exhibit In the dec- laration. The defendant Griswold filed ten 200 MISTAKE OP LAW. pleas, each of which was In bar of the ac- tion. One of the pleas made a copy of the proceedings in Hazard's suit a part of it. Demurrers and replications were filed to the pleas, those to the second, third, fourth, fifth, and seventh pleas being special demurrers. By an order entered July 1, 1884, the demur- rers were sustained to the second, third, fourth, fifth, and seventh pleas, the opinion of the court being delivered by Mr. Justice Gray. (C. C.) 21 Fed. 178. Pursuant to a stipulation of counsel, dated November 26, 1883, that the plaintifE might demur specially to the second, third, fourth, fifth, and seventh pleas, and, in case the de- murrers were overruled, reply to these pleas as If no demurrers had been filed, and that amended pleas, if desired, might be filed by the defendant, and In obedience to the order of court requiring the amended pleas to be filed on or before October 15, 1884, the de- fendant, on the 14th of October, 1884, filed amended third, fourth, fifth, and seventh pleas. The case was subsequently heard on a motion by plaintiff, made November 19, 1884, that the amended pleas be stricken out, and on the 30th of March, 1885, this order was' made: "Plaintiff's motion to strike amended pleas from the files is granted." Certain stipulations were made between counsel ; among others, one to the efEect "that the plaintiffs were able to prove under the decree of the supreme court of Rhode Island, in the equity suit brought by Hazard, an amount of damage in excess of the penal sum of the bond declared on in this suit." A jury having been waived In writing, the court gave judgment, as of February 12, 1887, against Griswold, for $66,470. The suit in equity No. 51 was brought June 12, 1885. The bill In that case, after refer- ring to the suit in equity brought by Isaac P. Hazard In 1868, showed that, on the 17th of November, 1875, Rowland G. Hazard com- menced a suit in equity in one of the courts of Pennsylvania, against the Credit Mobilier of America and others, which was subse- quently removed to the circuit court of the United States for the eastern district of Pennsylvania, that being the domicile of the corporation; that in such suit Oliver Ames was appointed receiver of all the goods, chat- tels, rights, and effects of the corporation, and was authorized by the court in Pennsyl- vania to deliver to Durant a deed of release from all actions, causes of action, suits, bills, bonds, writings obligatory, debts, dues, du- ties, reckonings, accounts, sums of money, judgments, executions, extents, quarrels, con- troversies, trespasses, damages, and demands whatever, both in law or equity, which the Credit Mobilier of America then had, or might at any time thereafter have, claim, allege, or demand, against said Durant, for or by reason or means of any matter, cause, or thing whatever; that afterwards, on the 27th day of October, 1881, Ames, under the said authority, and In consideration of the execution by Durant of a deed conveying the title to certain lands mentioned in the order of court authorizing the release, delivered to the latter a deed of release, of the kind above indicated, of all sums of money then due or owing to, or thereafter to become due to, said corporation; that the above equity suit in the supreme court of Rhode Island was, and had been, wholly controlled by Rowland G. Hazard; that, notwithstanding the deliv- ery of the above deed to Durant, the latter suit was proceeded with, and the supreme court of Rhode Island rendered a decree re- fusing to allow him to set It up as a bar to the entering of such decree, on the ground that he was in contempt of that court for violation of one of Its decrees rendered there- in; and that after the delivery of the deed of release to Durant the plaintiff requested the defendants to surrender the bond of Au- gust 24, 1868, and to abstain from suing him thereon, but they refused to comply with that request The relief asked was an injunction restraining the defendants from further pro- ceeding In the action at law. Upon a hearing before Judges Colt and Carpenter a demurrer to the biU was sustained, and the bill dis- missed, October 28, 1886, Judge -Carpenter de- livering the opinion of the court (0. 0.) 28 Fed. 597. The bill in case No. 52 was filed June 12, 1885. It assailed the jurisdiction of the su- preme court of Rhode Island over the sub- ject-matter of the suit In equity brought by Hazard, upon the ground that before bring- ing it neither the plaintiff therein, Isaac P. Hazard, nor any other stockholder of the Credit Mobilier of America, requested the managing committee of the board of direct- ors or the stockholders of that corporation to begin legal or equitable proceedings against Durant. The cause was heard upon demur- rer before Judges Colt and Carpenter. The demurrer was sustained, and the bill dismiss- ed, the opinion of the circuit court being de- livered by Judge Carpenter. (O. 0.) 28 Fed. 578. James O. Carter, for appellants and plain- tiffs in error. Ellas Merwin and Sam'l Mad- dox, for appellees and demandants in error. Mr. Justice HARI/AN, after stating the facts in the foregoing language, delivered the opinion of the court These four cases are so closely connected In their facts, as well as In the questions of law presented for determination, that It is convenient to dispose of them by one opinion. Our attention will be directed first to case No. 50, In which a decree is sought to cancel, or, in the alternative, to reform, the bond of August 24, 18G8, executed by Durant as principal, and by Griswold and Bradford as sureties, and to restrain the defendants from suing upon It In Its present form. The grant- ing or refusing of such a decree depends, of course, upon the inquiry whether the plain- tiff Griswold has, by evidence sufficiently MISTAKE OF LAW. 201 clear and conTlnclng, manifested bis right to the relief asked. While In respect to some matters there is a conflict among the witnesses, certain facts and circumstances are clearly established, and may be summarized as follows: Durant, in August, 1868, was a citizen and resident of New York. He went to Newport for a brief stay, and was there on the morning of Satur- day, August 22d. About noon of that day the suit in which the writ of ne exeat issued was commenced against him. He was then sailing, with several friends, in his yacht on the high seas. The yacht landed at the New- port wharf shortly before 11 o'clock at night. Upon his stepping ashore he was notified by two officers, who had kept continuous watch for him at the wharf during the afternoon, that they had a writ for his arrest, — meaning the above writ of ne exeat,— and that he must go to jail. He accompanied them to that place, one of the counsel of Hazard, Mr. Peckham, following on foot to the sheriff's office. Information of the arrest having been communicated to Mr. H. W. Gray, also a citi- zen of New York, temporarily at Newport, that gentleman went to Griswold, who was his imcle, and begged the latter to go to the jail and become bail for Durant's appear- ance. Griswold had only a slight acquaint- ance with Durant, never having met him un- til the spring of 1868, and held no personal or business relations of any kind with him. To oblige his nephew, who was Durant's friend, and merely as an act of kindness and courtesy to a stranger, (Griswold then resid- ed in Newport,) he acceded to the request to become baU for Duranf s appearance In court, and for that purpose only went to the jaU. Hazard learned, a little before 11 o'clock, that Durant had been arrested as he landed from his yacht, and that owing to the lateness of the hour the sheriff had taken him directly to jaU instead of his own office, "as had been previously arranged." He went immediately to. the lodgings of one of his attorneys, Mr. isradley, and caused him "to go and see what could be done to prevent Durant from remaining in Jail over Sunday;" authorizing his attorney to use his name "for the purpose of releasing said Durant from jail until Monday, It being regarded as very doubtful whether Durant In the short time then remaining before Sunday would be able to provide the necessary bonds." Shortly after Griswold, accompanied by Gray, reached the jail, the two counsel of Hazard, namely, Bradley and Peckham, ar- rived there, and a few moments later Gov. Van Zandt came in obedience to a message from Durant, conveyed by Bradford, to act as his counsel. Hazard, It seems, did not accompany his counsel to the jail. It was now nearly 12 o'clock. All who were at the Jail agree that they were there only because of the arrest of Durant under a writ com- manding the sheriff to take bail from him, in the sum of $53,735, that he would not go or attempt to go into parts beyond the state without the leave of the court, and, if such bail were not given, to commit him to and keep him in jail imtil he gave bail of his own accord; and, such security being taken, the officer was required by the writ to return a certificate thereof to tiie court. There is no claim that any one present was ignorant of the terms of the writ, or of the extent of the authority of the officer charged with Its exe- cution. It Is further agreed by all the wit- nesses that there was a conversation at the jail between the lawyers and Durant as to what could be done in order to effect the lat- ter's release. But In this discussion or con- versation Griswold took no part whatever. That much Is distinctly stated by Peckham, one of Hazard's attorneys who drew the bond, and supervised the execution of the writ of ne exeat, although he says that the sureties could not "help hearing, If they paid any attention." It is equally beyond dispute that the object of Griswold's presence at the jail was well known to Hazard's attorneys. Just here arises the difference among the witnesses as to what took place at the jail. Detailing what occurred according to his recollection at that place, Peckham says: "When I got to the jail I found there Judge Bradley, who had only preceded me there by a minute or two; Mr. Durant; Charles C. Van Zandt, his counsel; Mr. Griswold; Dex- ter Bradford; and a stranger, who was, I presume, Mr. Gray. Mr. Van Zandt and Judge Bradley were already talking about the release of Mr. Durant from custody. Judge Bradley said: 'That is a simple mat- ter. Let him give the bond called for by the writ' The nature of that bond was briefly explained. Mr. Dwant said that it was out of the question for him to give It; that he couldn't remain any longer in Rhode Island; that his presence was absolutely de- manded outside of the state, and forthwith; and that he must leave here Monday morn- ing. It was suggested that he might file his answer, and apply for the discharge of the writ Immediately; but he said, 'I know what proceedings in court are, and I can't re- main here at all.' It was then proposed that he should give a bond in the same amoimt marked in the two writs in the two cases, conditioned to abide and perform whatever decrees the court might make against him In those suits. The nature of these proposed bonds was freely discussed by Judge Brad- ley, Mr. Van Zandt, and Mr. Durant, and the fact that they were bonds which would hold the principal and sureties liable to pay money In case Durant should not perform any decree made by the court was comment- ed on by Mr. Van Zandt and Mr. Durant. During all this Interview Judge Bradley did all the talking for the complainants, and Mr. Van Zandt and Mr. Durant spoke about equally for their side." The same witness states: "Mr. Van Zandt having conferred with Mr. Durant, and those two having 202 MISTAKE OF LAW. f conferred with the sureties,— I mean Mr. Grlswold and Mr. Bradford,— Mr. Van Zandt then announced that they would give the bonds proposed. As It was then very late. It was further agreed that all should meet at my office on the following Monday morn- ing, soon after midnight, and execute the papers. Besides these honds, it was also agreed that the respective counsel should sign an agreement that upon the bonds be- ing executed the vrrits of ne exeat should be absolutely discharged. Just at the close of the interview Judge Bradley addressed him- self to all present, saying that he wished to make sure that all understood the arrange- ment alike, and he stated that Mr. Durant was to give bonds, with Mr. Griswold and Mr. Bradford as sureties, in the sums mark-'* ed in the writs, to abide and perform all the ' decrees of the court in the suit; that counsel should sign agreements for the discharge of- the writs; that all should meet at my office soon after midnight Monday morning , and sign the papers; that in the meantime Mr. Durant would go free from custody upon his word of honor, and he appealed to the sure- ties, saying: 'We rely upon you, gentlemen, to see that he attends.' We then separat- ed. I prepared the papers, and had them lying upon my table when we met, pursu- ant to the arrangement They were read. Mr. Griswold took an active part at this meeting, and, I think, read the papers for himself. The papers were signed without any objection or discussion at that time. Probably we were not together at my office more than ten minutes." Eeferring to the interview at the jail, Bradley testified that nothing was said, to the best of his recol- lection and belief, by any one, conveying the idea that the complainants were to obtain from the defendant only a bail-bond for his appearance; and that "the terms of the boud were expressed so as to exclude the idea that it was merely a bail for appearance, and to provide that it should be a bond to abide and perform the order of the court." He further said that the bond "was to be a security," and it was so announced. In all material respects his evidence was in accord with the recollection of Peckham. But there was other evidence which pre- cludes our accepting the version of the af- fair given by those gentlemen. Gray, Gris- wold, Durant, and Van Zandt, with more or less distinctness, but all emphatically, state that neither at the jail Saturday night, nor at the meeting before daylight on Monday morning, was there a hint, suggestion, or proposition, in any form, that Durant should give bond, with sureties, coi^ditioned that he would abide and perform the decrees that might be rendered in the Hazard suit, or that any bond was talked of except one that would make' the sureties responsible simply for his appearance in the state, so as to be subject to the orders and process of the court Gov. Van Zandt testifies, touching the meeting at the jail: "It was proposed by Judge Bradley that Dr. Durant should give bond, with two sureties, which should be substituted for the writ and the writ withdrawn. I then understood from the con- versation that the bond was in the nature of a bail-bond, and that when the sureties de- livered Dr. Durant into the custody of the court, to either perform its orders and de- crees personally, or to suffer such penalties personally as the court might impose, they would comply with the conditions of the bond. Nothing was said in my presence by any person inconsistent with these views." Again, referring to what took place at the time the bond was actually signed, the same witness says: "A bond, prepared by Messrs. Peckham and Bradley, was handed to me as counsel for Mr. Durant; there was some little discussion as to whether it should be made to the sheriff of Newport county, or to the complainants in the then suit. Judge Bradley preferred the latter, and it was so done. I told Mr. Durant that, in my opinion, it was a proper bond to secure his appear- ance in the suit, and the bond was then ex- ecuted. * » * I heard nothing said by Judge Bradley or Mr. Peckham, except what I have already stated; I myself told Mr. burant that, in my opinion, the instrument ^ /was, in effect, a bail-bond." Further: '"There was nothing said or intimated by ^ any person in my presence or hearing on that occasion to indicate thatffhe bond was a security instead of a suret^^ The state- ments of Gov. Van Zandt are fully sustained by the depositions of Gray, Griswold, and Durant. In view of this great preponderance of evidence upon the side of the plaintiff, as to what occurred at the jail before the sep- aration of the parties to meet Monday morn- ing for the consummation of the business, the court is not at liberty to accept the ac- count given by the defendants' attorneys of the interview of Saturday night. And we have a strong conviction that the recollection of Griswold, Gray, Durant, and Van Zandt as to that interview, is sustained by all th( inherent probabilities of the case. And iii saying this we would not be understood as reflecting upon the integrity of Hazard's at- torneys. The difference in the recollection of gentlemen, in respect to transactions in which they took part, often happens, with- out any reason to suspect that any of them would intentionally deviate from the line of absolute truth. Such differences existing, the court can only be guided by the weight of the evidence, where the witnesses are in- telligent, of equal credibility, and had equal opportunities to know what occurred. In the first place, it is not at all probable that Griswold would have executed the bond to question, as surety, if he had been informed, or believed, that it bound him absolutely, within the amount specffied In such bond, for the payment of any sum adjudged MISTAKE OF LAW. 203 against Durant,— almost an entire stranger to him. In the next place, we cannot sup- pose that the lounsel who went to the jail to represent the interests of Hazard, had any other purpose In going there except to see that that was, substantially, accomplished which the writ of ne exeat authorized, name- ly, the obtaining of bail that would prevent Durants departure from the state without the leave of the court, and thus have him, at all times, pending Hazard's suit, subject to its rightful power in respect to any decree to be rendered. That was evidently Brad- ley's pm-pose, for, according to Peckham's evidence, he suggested that Durant could effect his release by executing the bond speci- fied in the writ. But when the nature of such a bond was explained, and it appeared that the necessity for Durant' s being out of the state on Monday rendered that course entirely Impracticable, the latter was then informed — ^according to the evidence of Peck- ham— that he could file an answer and apply for the discharge of the writ immediately. What was meant by this suggestion? It could have meant but one thing, namely, that it was in the power of Durant to ob- tain, without objection. If not of right, a discharge of the writ, after answering, by executing a bond of some kind. A party ar- rested upon ne exeat may obtain the dis- charge of the writ, upon motion or petition, and after notice, and according to some au- thorities, "it is a matter of course to order the ne exeat to be discharged, upon the de- fendant's giving security to answer the com- plainant's bill, and to render himself amena- ble to the process of the court pending the litigation, and to such process as may be is- sued to compel a performance of the final decree. * » * Or, where the defendant cannot procure such security as will satisfy the sherifC, or if he wishes to leave the state before the termination of the suit, he may apply to the court to discharge the ne exeat upon his giving proper security to answer and be amenable to process; and upon such ap- plication the court will take such security as it may deem sufficient, and will discharge the sheriff from liability." 2 Barb. Ch. Prac. 655, 656; Mitchell v. Bunch, 2 Paige, 606, 821; Bray ton v. Smith, 6 Paige, 489, 491; McNamara v. Dwyer, 7 Paige, 239, 244. See, also, Jae. Law Diet, tit "Ne Exeat Regno;" Johnson v. Clendenin, 5 Gill & J. 463, 481. In Ee Griswold, 13 R. I. 126, determined September 20, 1880, Griswold, by petition, sought to be discharged from the bond in question on his principal's placing himself within the jurisdiction of the court, and subject to Its orders and decrees. He seems to have proceeded. In that case, up- on the ground that he was entitled, of right, to the order of discharge asked. But the supreme court of Rhode Island did not ac- cept that view, observing that it could not regard "a bond to abide and perform the de- cree as equivalent merely to a bond to abide the event of the suit." To do so, the court said, would be to ignore wholly the word "perform" contained in the bond, which, upon its face, appeared to be given by agree- ment of the parties. While it was there said, and properly, that the court may re- quire as a condition of the discharge of a writ of ne exeat that the respondent give security to perform the decree,— citing Rob- ertson V. Wilkle, Amb. 177, and Atkinson v. Leonard, 3 Brown, Ch. 218,— it was conceded that "courts will generally discharge a wi'it of ne exeat upon the respondents giving secii- rity to abide the decree on the hearing of the suit." If Durant had remained in New- port, and, upon filing his answer, had applied for the discharge of the writ of ne exeat up- on his giving bond with security simply to abide the decree, and place himself, when required, within the jurisdiction of the court, it is inconceivable that the state court would, under the circumstances, have denied his application. But It was further said in that case — and this is quite significant In its bear- ing upon another question to be presently adverted to— that, "even if the bond in ques- tion was to be considered as having no other effect than a bond to abide the decree made upon hearing the cause, the petition could not be granted in the present stage of the proceedings. No final decree In the cause has yet been reached." As, therefore, Durant could have filed his answer, and, conformably to the gen- eral rule, have obtained a discharge of the writ upon giving bond, with surety, that he would be amenable to the orders and process of the court; as he could not, con- sistently with his engagements, remain in Rhode Island long enough to have an an- swer prepared, and to move for the dis- charge of the writ, upon sufficient bond to be by him given; and as Hazard and his counsel expressed a desire that Durant should not be held in custody over Sun- day,— what more natural and equitable than that the parties should, by consent, bring about that which Durant must have under- stood from Bradley that he could accom- plish, through the orders of the court, name- ly, iave a bond executed with sm*ety com- pelling his presence in the state when re- quired by the orders of the court, or subject- ing his sureties to personal liability If he did not render himself amenable to Its process. If the suggestion that Durant could file his answer and apply to the court for the dis- charge of the writ (of course, upon bond securing his amenability to the process of the court) had been adopted, the plaintiff would not have obtained a bond njaking the surety absolutely responsible, within the penal sum named In the writ and bond, for a money decree against Durant. It is there- fore unreasonable to suppose that the parties separated Saturday night under an agree- ment that Hazard should have from Durant a bond that would subject his sureties to a 204 MISTAKE OP LAW. larger responsibility than was involved in the suggestion made that Durant could ob- tain an order of court for the discharge of the v^rit. On the contrary, it is more rea- sonable to suppose that the bond which, on Saturday night, was agreed to be executed on the next Monday morning, was one that would accomplish, by agreement of parties, precisely what Hazard's attorney suggested that Dm-ant might accomplish by an order of court. The agreement of the parties was thus made to take the place of an order of court, because Durant assured Hazard's attorneys that he could not remain in New- port long enough to make a formal applica- tion for the discharge of the writ upon a proper bond. We are of opinion that, although the con- dition of the bond in question was that Du- rant should "abide and perform the orders and decrees" of the court in suit in which it was given, all the parties, according to the decided preponderance of evidence, intended to, at the time, as an instrument binding the sureties for the appearance of the principal so as to be amenable to the process and de- crees of the court, upon default in which, and not before, were they to be liable to pay the penalty. If the bond means, in law, more than that,— and counsel in this court agree that it does,— the case is one of a mutual mistake, clearly established, as to the legal efCect of the instrument. There was no mistake as to the mere words of the bond; for it was drawn by one of Hazard's attorneys, and was read by Griswold before signing it But, according to the great weight of the evidence, there was a mistake, on both sides, as to the legal import of the terms employed to give effect to the mutual agreement. In short, the instrument does not express the thought and intention which the parties had at the time of its execution. And this mistake was attended by circum- stances that render it inequitable for the obligees In the bond to take advantage of it. The instrument was drawn by one of Haz- ard's attorneys, and was presented and ac- cepted as embodying tie agreement previ- ously reached. Griswold was unskilled in the law, and took the word "perform" as implying performance in the sense of Du- rant's becoming amenable to the process of the court. He had no reason— unless the recollection of Gray, Durant, Van Zandt, and himiself as to what occurred is wholly at fault— to doubt that the bond expressed the real agreement; especially if he heard Van Zandt's statement to Durant, when the latter was about to sign the bond, that it "was, in effect, a bail-bond." A court of equity ought not to allow that mistake, satisfactori- ly established and thus caused, to stand uncorrected, and thereby subject a surety to liability he did not intend to assume, and which, according to the decided preponder- ance of the evidence, there was at the time no purpose to impose upon him. While it is laid down that "a mere mistake of law, stripped of all other circumstances, consti- tutes no ground for the reformation of writ- ten contracts," yet "the rule that an admit- ted or clearly established misapprehension of the law does create a basis for the inter- ference of courts of equity, resting on dis- cretion and to be exercised only in the most unquestionable and flagrant cases, is cer- tainly more in consonance with the best-con- sidered and best-reasoned cases upon this point both English and American." Snell v. Insurance Co., 98 U. S. 85, 90, 92, 25 L. Ed. 52; 1 Story, Eq. Jur. (Kedf. Ed.) §§ 138e, 138f; Stockbridge Iron Co. v. Hudson Iron Co., 102 Mass. 45, 48; Underwood v. Brock- man, 4 Dana, 309, 316; Jones v. Clifford, 3 Oh. Div. 779, 791, 792; Canedy v. Marcy, 13 Gray, 373, 377; Green v. Railroad Co., 12 N. J. Eq. 165, 170; Beardsley v. Knight, 10 Vt. 185, 190; State v. Paup, 13 Ark. 129; 2 Lead. Cas. Eq. pt 1, 979-984; 2 Pom. Eq. Jur. §§ 843-847. The conclusion reached upon this branch of the case is the only one consistent with fair dealing towards those who were will- ing to become sureties for the appearance of Durant If it be not justified upon the ground of mistake as to the mutual agree- ment, superinduced by the conduct of the party seeking 'now to take advantage of it there could be no escape from the conclusion that the taking of a bond that made Gris- wold absolutely liable as surety, for any amount adjudged to be due from Durant ' and not greater than the penal sum named, was, under all the circumstances disclosed, a fraud in law upon him; If the attorneys of Hazard intended to obtain, by means of a bond, more than he was entitled to by such a bond as the writ of ne exeat called for, and more than the <;ourt would ordinarily have given them, upon Durant's application to discharge the writ; if they intended to secure a bond that would make Griswold personally liable, within the penal sum, for any money decree passed against Durant, then a fraud was perpetrated upon him, which entitles him to relief; for, according to the decided preponderance of the evi- dence it must be assumed that Hazard's at- torneys knew that he signed the bond in the belief that, pursuant to the previous imder- ^ 'standing, it was one to secure Durant's ap- 1 pearance, nothing more, and yet they failed to inform him, at the time, that it was ' drawn so as to impose upon him a much larger responsibility. Their silence upon that question was, under the circumstances, equivalent to a direct affirmation that the bond meant what Griswold supposed it did. In view of what passed at the jail on Sat- urday night their diity was, by sufficient explanation, to correct the misapprehension under which he evidently labored. Besides, there can be no doubt, under the evidence, that the agreement to discharge the writ was reached without consultation with Gris- MISTAKE OF LAW. 205 / wold. No one of the witnesses, states that he was consulted about that matter, or that he was informed as to the legal result of -SLu agreement or order to discharge the writ. He testifies that he knew nothing of any such agreement. So that while Hazard's at- torney, according to his evidence, was pre- paring a bond that would bind Griswold absolutely to pay any decree, not in excess ' of $53,735, that might be rendered against ^ one who was almost a stranger to him, and who, Hazard stated in his bUl, was then engaged in hazardous speculations, and was in a precarious condition pecuniarily, he was, as the representative of Hazard, under an agreement with Durant, of which Griswold had no knowledge, that the writ of ne exeat should be discharged; thus compelling the surety to risk the insolvency of the principal, and putting it out of his power, for his own protection, to surrender the principal, and obtain the cancellation of the bond, as. In that case, the surety might have done. If the bond had been, as he supposed it was, one simply for the appearance of Durant. The concealment of this agreement from Griswold was, under the circumstances, a wrong to him. "The contract of surety- ship," says Mr. Story, "imports entire good faith and confidence between the parties in regard to the whole transaction. Any con- cealment of material facts, or any express or implied misrepresentation of such facts, or any undue advantage taken of the surety by the creditor, either by surprise or by withholding proper information, vrill un- doubtedly furnish a sufQcient ground to in- validate the contract." Again: "If a party taking a guaranty from a surety conceals from him facts which go to increase his risk, and suffers him to enter into the contract under false impressions as to the real state of the facts, such a concealment will amoimt to a fraud, because the party is bound to make the disclosure." 1 Story, Bq. Jur. §| 324, 215. To the same effect are Bank v. Cooper, 36 Me. ISO, 196; Smith v. Bank, 1 Dow, 272, 292; Kailton v. Mathews, 10 Clark & F. 934, 943; Small v. Currie, 2 Drew. 102, 114; Phillips V. Foxall, L. R. 7 Q. B. 666, 672; Pidcock v. Bishop, 3 Barn. & O. 605; Adams' Eq. 179. But we do not rest our flecision upon any groimd of fraud in law or fraud in fact. We acquit the attorneys of Hazard of any desire or purpose to do Injustice to Griswold, or to commit a fraud upon him. But we are constrained, by the ■settled rules of evidence, to hold, as already ^, f Indicated, that their recollection of the cir- j cumstances under which the bond of Au- " gust 24th was executed is materially at fault, and that the alleged mistake is established^ by convincing proof. ^ '^ But it is said that Griswold was guilty of such laches in seeking the relief now ask- ed that he is not entitled to the aid of a court of equity. This position is based prin- cipally upon what Peckham says occurred between him and Griswold In the fall of the year after the execution of the bond. Peck- ham testifies: "About the last of October or the 1st of November, 1868, along that time, I met Mr. Griswold on Thames street, in Newport, near my office. He spoke of this bond as if it were a ball-bond. I said, 'No; it is a bond upon which you may be liable to pay money. If, for example, the com't should find a judgment against Durant for any sum of money, and he did not pay it, you could be held for the amoimt named In these bonds.' He said, 'Well, I guess you are right, but I must see Durant about, it. He must do something about it.' I asked him, 'Why, he is rich enough, isn't he?" and Mr. Griswold said, 'Yes; he is rich enough, but he Is reckless, and there Is no telling how long such a man may stay pch, and he must give me security.' I would like to add here that I mentioned this to Mr.- Honey last winter. Mr. Honey said that he was confi- dent, from conversations he had had vnth his client, Mr. Griswold, that Mr. Griswold had no recollection of any such conversation with me; and I replied that, if Mr. Griswold did not recollect it, I should hesitate abo'ut swearing to it, and that I did not think I would swear to it under those circumstan- ces, and that certainly I would not like to do so. Still I have felt bound to state it here, upon further refieqtion, with these explanations." If this be a correct state- ment of what passed between Peckham and Griswold, upon the occasion referred to, it is significant as showing that months after the bond was executed Griswold spoke of It as a bail-bond. His declaration, after Peck- ham's explanation of Its terms, "I guess you are right," naturally meant no more than a courteous acquiescence, without discussion, in the opinion expressed by one learned in the law. Griswold, while recalling the fact that he expressed to Peckham his belief that It was a bail-bond, denies explicitly that he, on that or any other occasion, ever admit- ted that it was other than a bail-bond. Besides, there was no absolute necessity for Griswold's moving in the matter until after some decree was passed against Du- rant, and until an attempt was made to hold him personally responsible for the amount of the bond. He made an effort in Ee Gris- wold, 13 R. I. 125, to be discharged from his bond upon the principal's placing himself within the jurisdiction of the court. But, as we have seen, the court, after declining to discharge the bond, said that, even if the bond In question was to be considered as having no other effect than a bond to abide the decree made upon hearing the cause, the petition for Its discharge would not be considered by it until a final decree was passed. The judgment in that case was passed September 30, 1880. Notwithstand- ing this announcement, and doubtless be- cause of the intimation that the bond meant more, in law, than he supposed, Griswold 206 MISTAKE OP LAW. commenced the present suit more than a year before the decree was rendered against" Du- rant, and before the action at law was brought on the bond. Under the peculiar circumstances of this case, we think the defense of laches Is without substantial merit. Whether laches is to be Imputed to a party seeking the aid of a court of equity depends upon the circumstances of the par- ticular case. There are no circumstances here that would justify a refusal to grant the relief asked because of Griswold's delay in instituting suit to have the bond canceled or reformed. In the view the court takes of this case, the proper decree to make, if Durant were living, would be one reforming the bond of August 24, 1868, so as to make Griswold liable for the penal sum' named only in the event that the principal failed to appear and become subject to the orders and de- crees of the court in the suit in which the writ of ne exeat was issued. But such a decree would not now be appropriate. Un- der the circvunstances, the only decree that will accomplish the ends of substantial jus- tice is one perpetually enjoining the prosecu- tion of any action, suit, or proceeding to make him liable in any sum on or by reason of said bond. We come now to the action at law No. 53, in which there was a judgment against Griswold on the bond of August 24, 1868, for the sum of $66,470. It is assigned for error that the court sustained the demurrers to the original second, third, fourth, and fifth pleas, ordered the amended third, fourth, and fifth pleas to be stricken from the files, and denied the defendant's mo- tions, at the trial, for judgment on his eighth and ninth pleas. It has been assum- ed in argument that the record in this case substantially presents, among other ques- tions, the following: (1) Whether the bond of August 24, 1868, was not obtained by such fraud and concealment as rendered it void as against Griswold. (2) Whether up- on the face of the record of the equity suit in which the order or decree of December 2, 1882, was rendered the court was not with- out jurisdiction of the subject-matter of that suit, the essential object of which, it Is ar- gued, was to administer the affairs, and dis- tribute the assets, of a Pennsylvania cor- poration, by means of decrees and orders of a court in Rhode Island. (3) Whether sim- ple duress operating only on the principal in the bond could be taken advantage of by the surety. (4) Whether the plaintiffs, not- withstanding the stipulation of Griswold's counsel, at the trial, that they were able to prove, under the decree of December 2, 1882, "an amount of damage in excess of the penal sum of the bond declared on," could main- tain an action on the bond for that or any other sum, until it was ascertained and ad- judged in Hazard's equity suit, what distinct part, if any, of the $16,071,659.97 for which Durant was adjudged by the supreme court of Rhode Island to be accountable to the Credit Mobilier of America, actually be- longed, or would be ultimately awarded, to the obligees In the bond. These questions have been argued by the counsel of the respective parties with signal ability, and their Importance is recognized. But, in view of the present condition of the record of this ease, it is not deemed best now to discuss them. The ground upon which the court below ordered the amended pleas to be stricken from the files does not appear. It may be that the motion was treated as a formal demurrer (Slocomb v. Powers, 10 R. I. 255), or was granted be- cause, in the judgment of the court, the amended pleas did not materially change the defense as presented in the pleas to which special demurrers were sustained, and were not, therefore, fairly embraced by the stip- ulation made by counsel for their being filed. But, in our judgment, the amended pleas were much broader, as well as mor^ spe- cific in their averments, than were the orig- inal pleas; and the questions arising upon them! could have been more appropriately raised by demurrer. Smith v. Carroll (R. I. July 19, 1890) 20 Atl. 227. We are the more willing to make this disposition of the case, because of the decision in case No. 50 in re- spect to Griswold's liability upon the bond sued on. In view of what has been there said, the discussion of the above questions would seem to be unnecessary. The demurrer to the bill in No. 51 was properly sustained. The error, if any, com- mitted by the supreme court of Rhode Island in not allowing the release, executed to Du- rant by the receiver in the Pennsylvania court of the Credit Mobilier of America, to be interposed as a defense in the suit brought by Hazard against Durant and oth- ers, could not be corrected by bill in equity, filed by a surety on the bond of August 24th; for the reason, if there were no other, that the release was delivered prior to the judg- ment in the state court constituting the basis of the action at law on the bond. The demurrer to the bill in case No. 52 was also properly sustained. In that case the validity of the proceedings la the su- preme court of Rhode Island, by Hazard against Durant and others, was assailed upon the ground that the bill in that suit did not sufficiently show that any effort had been made by Hazard, the plaintifC therein, and who sued as stockholder, to procure corporate action against Durant by the Cred- it Mobilier of America. It is only necessary to say that this ground presents only a ques- tion of mere error in the judgment of the state court, and does not affect its jurisdic- tion. The decree In suit No. 50 must be re- versed, with directions to enter a new de- cree perpetually enjoining the defendants therein, and each of them', from prosecut- MISTAKE OF LAW. 207 tng any suit, action, or proceeding against Griswold on the bond executed by him on the 24tb of August, 1868, as one of the sureties of Thomas O. Durant; the decrees in cases Nob. 51 and 52 must be affirmed; and the judgment in the action at law No. 53 must be reversed with directions for fur- ther proceedings not Inconsistent with this opinion. Griswold Is entitled to his costs in this court in cases 50 and 53, and the appellees in the other cases are entitled to their costs here as against Griswold. It is so ordered. BRADLEY and BREWER, JJ., did not participate in the decision of this case. 208 MISTAKE OF LAW. s- MARSHALL et al. v. WESTROPE. y (67 N. W. 257, 98 Iowa, 324.) •^Supreme Court of Iowa. May 18, 1896. , X Appeal from district court, Slielby county; > A. B. Tliornell, Judge. Suit in equity to reform a cootract of as- f signment of certain accounts made by de- V .} f endant to plaintiffs, and to recover on the VST contract so reformed the sum of $270, being the value of certain machinery delivered by plaintiffs to defendant in consideration of the assignment. The defendant admitted the re- ceipt of the machinery, the assignment of the accounts, and a certain modification of the contract of assignment, but denied each and every other claim of plaintiffs. He also pleaded an election of remedies on the part of plaintiffs, by which they confirmed and elected to stand on the original contract aa made. There was a trial to the court, and judgment and decree for plaintiffs. Defend- ant appeals. Reversed. Smith & Cullison, for appellant. Nasb, Phelps & Mosier, for appellees. »BBMER, J. In the year 1891, plaintiffs, a cf^artnership, were engaged in selling farm machinery at the town of Audubon. Defend- ant had for a number of years prior thereto been managing and conducting a farm in Audubon county for his father. On or about March lat, he moved onto a farm of his own, in Shelby county, intending to cultivate It for his own use and benefit. Desirous of pur- chasing s(Hne farm implements, he visited plaintiffs' plaice of business, with the avowed intention at securing the same. It appears that the defendant was the owner of a stal- lion, which was "stood" fmr the season oA 1890 In Montgomery or Cass counties, by an agent of def «idant, under an arrangement by which the parties who received the services of the stallion were to pay a certain amount therefor in the event the mares bred to him were got with foal; otherwise, nothing should be paid. The defendant was the own^r of certain claims for services resulting from the use of the stallion, which he prc^osed to transfer to plaintiffs for the farm machinery he de^red to purchase. No agreement was reached at the first interview, but it was ar- ranged that defendant should see if he could purchase the machinery of some other per- son at a lower price, and, if not, It was sup- posed that the negotiations would be renew- ed. About March 27th, the defendant wrote plaintiffs a letter of which the following is a copy: "Marshall & Sharp: I dan make the trade in Harlan, but tiiey are not so low In price as you are. Jones would not make the price he stated and furnish the goods he nasmed. Inclosed find assignment for same. Please sign and date, and keep one, and send me one, and let me know by re- turn mail, because I will want to know at once if the deal is closed. I would come I over, but my ' house '^fiSaed to tEe "grbuml last Saturday night, and I cannot leave. Very truly, O. D. Westrope." In this letter was inclosed a contract for the plaintiffs' sig- nature, the material parts of which are as follows: After stating that plaintiffs had sold certain machinery to defendant. It recites: "That, as payment therefor, the said O. D. Westrope enters into and does hereby assign and transfer to said Marshall & Sharp the following accounts for services of the stal- lion named General Duke, in the year 1890, to wit: [Here follows a list of the accounts, with the amounts of each set out, aggregat- ing the sum of $300.] The said Marshall & Sharp taking and accepting said accounts in full satisfaction of said claim; the said 0. D. Westrope hereby agreeing that all Jggjp not paid for by July 1st, 1891, that he will pay to said Marshall & Sharp such account remaining unpaid, and said account so paid by him to be reassigned to him. Marshall & Sharp. O. D. Westrope. Dated at Audu- bon, la., March 28, 1891." These contracts were signed by appellees as indicated, and one of th»n (there being two) was returned to appellant, and the other retained by ap- pellees. Afterwards one of the articles call- ed for by the contract was substituted by an- other, and all the goods with the substitute Bamed were shipped to the appellant. But three of the mares served to appellant's horse proved to be with foal, and appellees receiv- ed but $30 from the accounts so assigned. The other accounts never matured, because the mares did not prove to be with foaL Vaa appelant, being called upon to make pay- ment of the balance of the purchase price, refused, claiming that he had fully perform- ed his contract. The appellees thereupon In- stituted an action at law against the appe- lant, alleging (1) that appellant had ^x>ciir- ed Its signature to the contract by fraud and misrepresentation; (2) that there was an Im- plied warranty In the sale of 'Uie accounts, to the effect that they were snbt^sting and emforceaUe against the parties whose ac- counts they purported to be; and (3) that ap- pellant received the property without any consideration therefor having been paid 1^ him. The appellant made an issue of fact oa. the first claim, and demurred to the sec- ond and third. The demurrer was sustained as to the third, and overruled as to the sec- ond. Defendant theretrpon answered the sec- ond, pleading that, under the arrangements had with those who secured the services of his stallion, It was agreed that nothing should be paid unless the mares were got with foal; that plaintiffs knew of this arrange- ment when they accepted the assignment of the accounts. Thereupon plaintiffs amend- ed their petttion by adding another count, in which they claimed that, by mutual mistake, or Ijy mistake on their part and fraud on de- fendant's, the words "foals" was inserted in \ that i»art of the contract containing the guar- anty, instead of the word "aceoants"; SldsJ MISTAKE OF LAW. 209 they asked that the mistake be corrected, and the contract reformed. A moticm was then filed by defendant attacking the petition on the ground of misjoinder. This motion was sustained, but pUiintiS& were permitted to file this btst count as an independent action in equity. Certain pleadings were filed attack- ing this equitable pleading, which need not be referred to, and finally the defendant an- swered, admitting the receipt of the goods as alleged, but denying the fraud and mistake. He also pleaded that plaintiffs, by the institu- tion of the law action, had confirmed the con- tract, and elected to stand thereon, and that they could not now be allowed to repudiate it; and that the contract was merged in a judgment by which the rights of the parties were fuUy determined. Defendant also plead- ed that plaintiffs, with full knowledge of the contents of the written contract, and that the ^ word "foals" was used therein, confirmed the same, and elected to stand by the conditions thereof. The plaintiffs filed a' reply, denying this last claim of defendant, and also filed a demurrer to that part of the answer plead- ing an election and confirmation. This de- murrer was submitted with the case, and the df court, in rendering the decree, sustained the < if demurrer, reformed the contract as prayed,! I' and rendered judgment for plaintiffs. DeV ^\ fendant excepted to the rulings, and appeals. 1. The first point relied upon by appellant is that the court erred in -sustaining the de- murrer to that part of his answer pleading election and confirmation. It is said that plaintiffs, by reason of having commenced their suit at law, elected to rely upon the contract, and that they cannot now be al- lowed to change front, and seek to have it reformed. The question presented is not open for our consideration. The suit is an equitable one, triable de novo in this court, upon the issues of fact presented to the low- er court; and, while the appellant might also have the case considered on error, yet, to do so, he must assign the errors of which he complains. Powers v. O'Brien Co., 54 Iowa, 501, 6 N. W. 720; Patterson v. Jack, 59 Iowa, 632, 13 N. W. 724; Hodgln v. To- ler, 70 Iowa, 21, 30 N. W. 1. There is no as- signment of errors, and we cannot, therefore, review the action of the trial court in sus- taining appellees' detnurrer. It may not be inappropriate to say, however, that we do not think the facts as pleaded in defend- ant's answer constitute such an election of remedies, or such a claim of right, as pre- vents the appellees from asking for a refor- mation of the eshire. Hillsbor- ough. March 14, 18S0. Bill in equity for the rescission of a con- tract for the purchase of a farm and other property, and for the return of money paid as a part of the purchase money. Pacts found by the court: The defendant, Sophia A. ToUes, employed K., a real-estate agent in Nashua, to sell her farm. In May, 1886, Newton, seeking to buy a farm, applied to K., who informed him of the Tolles farm, told him it contained 200 acres, took him to see it, and there pointed out to him such of the courses and boundaries as he knew; but he did not know, or undertake to point out, all of them. Afterwards, E., as agent of Tolles, and Newton executed an agreement by which Tolles agreed to sell, and Newton to buy, the Tolles farm for $5,400, to be paid $200 on the execution of the agreement, $1,000 on the delivery, on or before June 1, 1886, of a bond for a deed, $1,000 on or be- fore July 10, 1886, and $3,200 on the deliv- ery, on or before October 20, 1886, of a good and sufficient deed, "said Newton to have all the stock, tools, hay, grain," etc. On the margin of the agreement, "farm contains about 200 acres" was written. Newton paid $200 May 15, Tolles executed and delivered to Newton a bond conditioned to convey to him "a certain lot or parcel of land situated in Nashua," and particularly described by metes and bounds, "meaning and intending to convey all the homestead farm, containing about two hundred acres, as by deed of heirs of Horace G. Tolles, to me, and all other land and right in said homestead farm," upon Newton's payment of $1,000 on the delivery of the bond, $1,000 on or before July 10, 1886, and $3,200 on the delivery, on or before October 20, 1886, of a good and suffi- cient deed. On the margin of the deed was writtfen: "It is agreed, for the above consid- eration, that said Newton is to have all the stock, tools, hay, grain, &o., and that said Tolles is to remove only household furniture and family stores from said premises. " Prior to 1879 the Tolles farm comprised about 203 acres, of which tliedefendant and her husband owned a part in common, and each a part in severalty. In that year the heirs of Horace C, then deceased, conveyed a parcel of about 25 acres to Xenophon Tolles. and all their in- terest in the rest of the farm to the defendant. In January, 1886, the defendant sold about 18 acres to C, who sold to Roby. A parcel of about 25 acres, called the "Salmon Brook Meadow,." was half a mile distant from, and had no connection with, the rest of the farm, except in its use as a part of it. These par- cels were not shown to Newton by R., and are not covered by the particular description given in the bond. Newton at the time of the bargain did not understand that they were included in his purchase, but be un- H.& B.EQ.(2d Ed.>-15 derstood that he'was buying the Tolles farm, and that it contained 200 acres. The defend- ant did not intend to convey, nor understand that she agreed to convey, the three parcels, or any- of them; but she understood and be- lieved that the farm, as described in the bond, contained about 200 acres. It in fact contains about 135 acres. In June, 1886, Newton discovered that Tolles owned the Salmon Brook meadow, and learned of its connection with the farm. He thereupon claimed possession of it, and that it was in- cluded in the bargain, but his claim was de- nied. He refused to pay the installment due July 10th and August 21st. Tolles' brought a suit at law to recover it, which is the rec- ord of the above-named actions. About the 1st of August, Newton found by a survey that the farm as described in the bond con- tains only 185 acres. October 20, 1886, Tolles tendered to Newton a warranty deed of the premises of which he is in possession, and demanded payment of the balance of the purchase money. Newton refused to accept the deed, and on the same day filed his bill, in which he offers to restore the real and per- sonal property to the defendant, and give up and cancel the bond, and to account for the rents and profits while he has been in pos- session. He has consumed the hay and grain, but has other hay and grain out of which he can return an equivalent. He sold four cows in August, but replaced them with four others of greater value. The farm has not deteriorated in value. Evidence to show that the property which Tolles by her bond was obliged to convey was of the value of $5,400 or more was excluded, subject to the defendant's exception. &. B. S. French and H. B. Cutter, for Newton. C. W. Hiott and E. 8. Cutter, for Tolles. Oahpentek, J. There was a mutual mis- take in the quantity of land. The defendant understood she was selling, and the plaintiff that he was buying, a farm of 200 acres. It in fact contains only 135 acres. The defend- ant, believing that the farm contained 200 acres, informed the plaintifE that it did con- tain that number. The plaintifE relied on her statement. Under the influence of the error common to both parties, the transaction was consummated. The mistake was one of fact in a material point affecting the value of the property. Boynton v. Hazelboom, 14 Allen, 107, 108. Its prejudicial consequences to the plaintiff are the same as if the defend- ant's statement had been designedly fraudu- lent. Spurr V. Benedict, 99 Mass. 463, 467. The deficiency is so great that it would "nat- urally raise the presumption of fraud, im- position, or mistake in the very essence of the contract," if the mistake were not affirma- tively found. Stebbins v. Eddy, 4 Mason, 414, 420. A material mistake in the quanti- ty does not, in its effect upon the equitable rights of the parties, differ from a like mis- take in the character, situation, or title of the 226 MISTAKE OF PACT. bargained property. Itls equivalent to a mis- take in the existence of a material part of the subject of the contract. The ease is as if be- fore the contract was executed, and without the knowledge of either party, a parcel con- taining 65 acres of the 200 contracted for had sunk in the sea. Allen v. Hammond, 11 Pet. 63, 71, 72; Hitchcock v. Giddings, 4 Price, 135 ; Story, Eq. Jur. §§ 141, 142. The error is as injurlofis to the plaintiff as if 200 acres were comprised in the state boundaries, and the defendant had no title to a parcel of 65 acres, or as if she had title to only 135-200 of the whole in common with a stranger. Hooper V. Smart, L. E. 18 Eq. 683. The defendant could not sustain a bill to compel a speciflo performance of the contract by the plaintiff, because it would be inequitable. Pickering V. Pickering, 38 N". H. 400, 407, 408; East- man Y. Plumer, 46 N. H. 464, 479. The party against whom a contract, made under a mut- ual mistake of material facts, will not be spe- cifically enforced, is in general entitled to rescind. Pom. Spec. Perf. § 250. If there are exceptions to the rule, this case does not fall within them. It is inequitable, in the highest degree, that the defendant, by rea- son of her negligent and erroneous, though not fraudulent, representation, should make a profit of the sum at which the parties valued 65 acres of land, and that the plaintiff, with- out fault on his part, should lose that sum. Equity will prevent such a result by rescind- ing the contract, or decreeing a specific per- formance with compensation in behalf of the injured party, at his election, or by refusing specific performance on the application of the other party. Hill v. Buckley. 17 Ves. 395; Price V. North, 2 Younge & C. 620; Dalby v. Pullen, 3 Sim. 29; Leslie v. Tompson, 9 Hare, 268; Barnes v. Wood, L. E. 8 Eq. 424; Whittemore v. Whittemore, Id. 603; Iron- Works v. Wickens, L. E. 4 Ch. 101; Denny V. Hancock, L. R. 6 Ch. 1; Torrance v. Bol- ton, L. R. 8 Ch. 118; In re Turner, 13 Ch. Div. 130; Belknap v. Sealey, 14 N. Y. 144; Paine v. Upton, 87 N. T. 327 ; Cous'e v. Boyles, 4 N. J. Eq. 212; Thomas v. Perry, 1 Pet. 0. C. 49; Daniel v. Mitchell, 1 Story, 172; Dog- gelt V. Emerson, 3 Story, 700; Smith v. Bab- cock, 2 Woodb. & M. 246; Quesnel v. Wood- lief, 2 Hen, & M. 173; Lawrence v. Staigg, 8 R. I. 256; Noble v. Googins. 99 Mass. 231. Neither of the parties understood that the contract to convey "about" 200 acres was performed by conveying 135 acres. Wilson V. Eandall, 67 N. Ye338, 341, 342, and cases above cited. No laches can be imputed to the plaintiff. He had a right to rely on the defendant's statement of the quantity. He could not dis- cover the mistake by examining the external boundaries. Paine v. Upton, 87 N. Y. 327, 337. When, by the defendant's tender of a deed and demand of payment, he ascertained that she would not voluntarily correct the mistake, he immediately filed his bill. . The personal property formed no substan- tial part of the consideration. It is not named in the body of the bond, but is men- tioned, apparently as an afterthought, on the margin. Upon the rescission, for any cause, by a vendee in possession of a sale of farm lands, there must in most cases, necessarily, be an accounting, in order to restore the par- ties to the situation they occupied prior to the contract. Upon such an accounting, all the property, the possession of which passed from the defendant to the plaintiff, or its full equivalent, together with the income derived from it, may be fully restored to her. It is no objection to a rescission, in a uase of this character, that such articles as are neces- sarily consumed in the proper and ordinary management of a farm cannot be restored in specie. It does not appear that the plaintiff, after his discovery of the mistake, took any action by which he intended to affirm the contract, (Montgomery v. Pickering, 116 Mass. 227,) or that he did anything with the property not reasonably necessary for its pres- ervation, or which equity would not require to be done. The plaintiff is to be relieved upon such terms as justice to both parties re- quires. Wiswall v. Harriman, 62 N. H. 671, 672;2Story,Eq. Jur. §707. The offered evi- dence of value was immaterial, and was prop- erly excluded. In the suit at law, there m ust be judgment for the defendant. The details of the decree will be settled at the trial term. Decree for the plaintiff. Allen, J., did not sit. The others con- curred. MISTAKE OP FACT. 227 DAMBMAN'N v. SOHULTING. (75 N. T. 55.) Oonrt of Appeals of New York. 1878. Action to set aside a release under seal, and to recover a balance for money lent de- fendant by the firm of C. F. Dambmann & Co., of which firm plaintiff was a partner, and to whose rights lie succeeded. The facts are set forth In the opinion. Judgment for plaintiff. 0. Bainbridge Smith, for appellant Wil- liam "Watson, for respondent EARL, J. Prior to 1866, the defendant had for many years been a merchant extensively engaged In business in the city of New Tork. In February of that year he had become financially embarrassed, and contemplated an assignment for the benefit of his creditors. He was finally dissuaded from making an assignment by the promise of his creditors to loan him the sum of ?100,0(X> to aid him in meeting his obligations. There was evi- dence tending to show that the sums thus to be loaned were to be repaid when he became able; but he testified that it was to be op- tional for him to repay them. In case he paid the debts, which he then owed, in full. The court at special term found that the ar- rangement was that he was to repay these sums when he became able. In pursuance of this arrangement the firm to which plain- tiff belonged, and to whose rights he had succeeded, loaned defendant $10,000. On the 7th day of March, 1867, defendant had paid in full all the debts he owed when the mon- ey was loaned to him, and then, at his re- quest all the creditors who made the loans executed and delivered to him an instrument, of which the following is a copy, to- wit: "We the undersigned agree, In consideration of one dollar paid to us, to discharge H. Schulting from the legal payment of the mon- ey loaned to him February 1, 1866, said Schulting giving his moral obligations to re- fund the said money, in part or whole, as his means will allow in future." This was not a sealed instrument and was executed upon the request of the defendant, upon the claim by him that he had done as he had agreed when the money was advanced to him. It was the clear intention of the parties, by this Instrument to discharge the defendant from all legal obligation to pay the money ad- vanced, leaving an obligation simply binding upon his conscience, but not enforceable at law, to pay when he became able, in whole or in part. If this instrument had been un- der seal or based upon a sufficient consider- ation, no proceedings in law or equity could have been thereafter taken to enforce pay- ment against the defendant But according to the finding of the special term, before the execution of this instrument the defendant was legally liable to pay when he became able, and this liability was not discharged by this instrument for the simple reason that it was not based upon any con- sideration. It was not in the nature of a composition of a debtor with his creditors, and cannot be sustained upon the principles applicable to composition agreements. It does not even appear that each creditor sign- ed it upon the consideration that other cred- itors would also sign It. It was a mere agree- ment to discharge debts without payment, and such an agreement cannot be upheld. Down to this period of time there is no claim that there was any fraud or mistake which influenced the conduct of the plaintiff and the other creditors, and the position of the plaintiff and the defendant was as fol- lows: While the plaintiff could legally en- force the payment of the $10,000 (the defend- ant being able to pay), he was under a moral obligation not to do so; and the defendant Intending not to be legally bound to pay, was yet under both a legal and moral obliga- tion to pay. The defendant continued in business until August, 1868, when on account of failing health and despondency, he sold out his whole stock of goods to the firm of H. & A. Strousburgh & Co. for the sum of $225,000, they agreeing to pay the most of that sum upon certain of his debts, and also to pay him one-third of what the goods should sell for above the sum of $275,000. The value of the goods was not known to the defend- ant or his vendees, and there is no claim that this sale was not made In good faith. Soon after this sale the plaintiff, having heard thereof, called upon the defendant, and was duly informed of the sale and the terms thereof, and of the amount of his property at that time aside from his interest in the one- third of the surplus. As to that one-third, the defendant informed him that that was not worth much, and that he had offered to sell it for $18,000 or $20,000. There is no evi- dence or claim that in this conversation the defendant made any intentional mis-state- ment. He had offered to several parties to sell his one-third interest for the sum named, and there is no evidence that he then believ- ed it to be worth more. He actually made an arrangement to sell it for $20,000 to one Von Keller. A few days after however he repudiated this arrangement but Von Keller claimed it was valid. Defendant's vendees went on and sold the goods, and they brought $576,981; and his one-third interest amounted to about $100,- 000. The defendant knew as early as the 8th day of October, 1868, that goods to the amount of $400,000 had been sold, and that some yet remained to be sold. On the last- named day he went to the plaintiff and said to him that he understood that the previous paper signed by him— the discharge above set out— was not a legal release, because he had not paid any thing on account of the $10,000, and he wanted to know If the plaintiff would sign a legal release upon payment of $5,000. 228 MISTAKE OF FACT. The plaintiff said he would. Nothing more was said, and defendant paid him $5,000; and then the plaintiff executed to him, undar seal, a full and absolute discharge from all liabil- ity. This action was brought to set aside this release, and to recover the balance of the $10,000. The plaintiff seeks to imi)each this release on account of fraud, and the court at special term decided in plaintiff's favor that the re- lease was inoperative, as obtained by misrep- resentation and concealment of material facts. The court did not find that there was any fraudulent misrepresentation, and there was none in fact So far as I can discover, there was no misrepresentation of any kind. . Neither did the court find that there was any fraudulent concealment of any facts; and there was no evidence to justify such a find- ing. The plaintiff had executed a discharge of his claim, which was illegal, and the de- fendant went to him and informed him of this fact, and stated that he wanted a legal release, and that he would pay him $5,000 if he would give it; and he gave it. He stated to the plaintiff that he was not discharged, that he wanted to be, and the plaintiff dis- charged him. He made no statement and used no artifice to throw him off from his guard or to entrap or mislead him. There was no reluctance on the part of the plaintiff, and the defendant had no reason to suppose there would be, as the plaintiff had already agreed in writing to discharge him. The pri- or instrument shows that it was the under- standing of the parties that the defendant should, so far as concerned any legal liabil- ity, have just such a discharge. The claim, under these circumstances. Is that the defendant was bound to disclose to the plaintiff the change in his pecuniary cir- cumstances since the prior conversation in August, above alluded to, and that he had no right to leave him under the erroneous im- pression occasioned by that conversation. It must be borne in mind that the declarations made by the defendant in that conversation were made in entire good faith, and that they were not made in any business transaction with the plaintiff, and that they had no ref- erence to or connection with the release. The plaintiff,. In executing the release, had no right to rely upon them. The general rule is, that a party engaged in a business transaction with another can commit a legal fraud only by fraudulent mis- representations of facts, or by such conduct or such artifice for a fraudulent purpose as will mislead the other party or throw him off from his guard, and thus cause him to omit inquiry or examination which he would oth- erwise make. A party buying or selling property, or executing instruments, must by inquiry or examination gain all the knowl- edge he desires. He cannot proceed blindly, omitting all inquiry and examination, and then complain that the other party did not volunteer all the information he had. Such is the general rule. But there are exceptions to this rule. Where there is such a rela- tion of trust and confidence between the par- ties that the one is under some legal or equi- table obligation to give full information to the other party— information which the other party has a right, not merely In foro con- scientiae, but juris et de jure, to have, then the withholding of such information purpose- ly may be a fraud. Story, Eq. Jur. § 207 et seq.; Hadley v. Importing Co., 13 Ohio St 502, 82 Am. Dec. 454; Bench v. Sheldon, 14 Barb. 66; Paul v. Hadley, 23 Barb. 521. It is not always easy to define when this relation of trust and confidence exists; and no general rule can be formulated by which its existence can be known. It is sufiicient for this case to say that it did not exist here. The defendant had no reason to make the disclosure which it is claimed he should have made, and the plaintiff had no right to expect it The defendant had no reason to suppose that the plaintiff would be imder the infiuence of the casual conversation which was had some two months before. And further, if the defendant thought upon the subject, he had no reason to suppose that if he stated all the facts within his knowledge, it would prevent the plaintiff from giving a discharge which he had agreed to give. While he would have stated that unexpected- ly his share In the proceeds of the goods was much larger than $20,000, yet he would also have stated that he had contracted to sell the share for $20,000, and that the vendee claimed to hold him to the contract That the claim was a serious one is shown by the fact that la January, 1869, Von Keller sued him, and in April, 1870, after a trial before a referee, sustained the contract and recov- ered a judgment for upward of $100,000, which defendant was able to defeat finally only after a litigation of several years and a decision by this court. Von Keller v. Schult- Ing, 50 N. Y. 108. In October, 1868, the de- fendant could have informed the plaintlfC what his interest In the proceeds of the goods was, subject to the chances of a litigation, but what it was actually worth no one could then have told. Without therefore questioning the facts found by the court at special term, we are of opinion that there was error In the legal con- clusion that plaintiff was entitled to any re- lief on account of fraud. It is further claimed that the plaintiff ought to be entitled to relief on account of mistake. He testified that he would not have executed the release if he had known the de- fendant's financial condition. But as already shown, the defendant was in no way respon- sible for his ignorance, and was under no legal or equitable obligation to disclose the facts as to his pecuniary circimistances. The plain- tiff could have learned the facts by inquiry of the defendant or his vendees. There was no mistake as to any fact intrinsic to the release. Plaintiff knew that the defendant MISTAKE OF FACT. 229 had not been legally discharged from his lia- Wlity, and that for the $5,000 he was to give him an absolute release; and he gave him just such a release as he intended to. There was no mistake of any intrinsic fact essential to the contract or involved therein. The de- fendant's financial condition was an extrinsic fact, which might have Influenced the plain- tiffs action if he had known it But ignor- ance of or mistake as to such a fact is not ground for aflSrmative equitable relief. The following illustrations of mistakes as to in- trinsic facts essential to contracts, against which courts of equity will relieve, are found in the books. A. buys an estate of B. to which the latter is supposed to have an un- questionable title. It turns out, upon due in- vestigation of the facts, that B. has no title; in such a case equity wiU relieve the purchas- er and rescind the contract Bingham v. Bingham, 1 Ves. Sr. 126. If a horse should be purchased, which is by both parties be- lieved to be alive, but is, at the time, in fact dead, the purchaser would, upon the same ground, be released by rescinding the con- tract. Allen T. Hammond, 11 Pet. 71. If a person should execute a release to another party upon the supposition, founded on a mis- take, that a certain debt or annuity had been discharged, although both parties were inno- cent, the release would be set aside. Hore V. Becher, 12 Sim. 465. If one should. execute a release so broad in its terms as to release his rights in property, of which he was whol- ly ignorant, and which was not In contempla- tion of the parties at the time the bargain for the release was made, a court of equity might either cancel the release or restrain its application as intended. Cholmondeley y. Clinton, 2 Mer. 352; Dungers v. Angove, 2 Ves. Jr. 304. On the other hand, if the ven- dee is In possession of facts which will ma- terially enhance the price of the commodity and of which he knows the vendor to be ig- norant, he Is not bound to communicate those facts to the vendor, and the contract will be held valid. Laidlaw v. Organ, 2 Wheat 178. In such a case the facts unknown to the vendor are extrinsic to the contract and are not of Its substance; and hence there is no ground for the interference of a court of equity. It is clear from these and other Illustra- tions which might be given, that a court of equity will not give relief in all cases of mistake. There are many extrinsic facts sur- rounding every business transaction which have an important bearing and influence up- on its results. Some of them are generally unknown to one or both of the parties, and if known, might have prevented the transac- tion. In such cases, if a court of equity could Intervene and grant relief, because a party was mistaken as to such a fact which would have prevented him from entering into the transaction if he had known the truth, there would be such uncertainty and instability in contracts as to lead to much embarrass- ment. As to all such facts, a party must rely upon his own circumspection, examination and inquiry; and if not imposed upon or de- frauded, he must be held to his contracts. In such cases, equity will not stretch out its arm to protect those who sufCer for the want of vigilance. Judge Story lays it down as a general rule "that mistake or ignorance of facts in parties is a proper subject of relief only when it constitutes a material ingredient in the con- tract of the parties, and disappoints their in- tention by a mutual error; or where it Is inconsistent with good faith, and proceeds from a violation of the obligations which are imposed by law upon the conscience of either party. But where each party is equally In- nocent, and there is no concealment of facts which the other party has a right to know, and no surprise or imposition exists, the mis- take or ignorance, whether mutual or unilat- eral, is treated as laying no foundation for equitable Interference." Story, Bq. Jur. § 151. We are therefore of opinion that ujwn the facts disclosed in the record before us, tlie plaintifC was not entitled to any relief, and the judgment must be reversed and a new tri- al granted, costs to abide event. All concur except MIDL.EB, J., not voting. Judgment reversed. MISTAKE OF FACT. CONNER T. WEIiCH et al. (8 N. W. 200, 51 Wis. 431.) Supreme Court of Wisconsin. March 2, 1881. Appeal from circuit court, Dane county. The case established by the pleadings and evidence is correctly stated in the brief of counsel for the plaintiff, as follows: "This action was brought to foreclose four certain mortgages made by Martin Osborne and wife upon 80 acres of land In Dane county, three of which mortgages had been satisfied of record before the commencement of the ac- tion. The facts are that on November 11, 1871, Martin Osborne was seized in fee of the W. V2 of N. W. % of section 25, town 8, range 9, Dane county. November 11, 1871, Osborne and wife gave a mortgage thereon to John W, Allen for $800 and interest. This is still in force as a first mortgage on the property, and is not one of the four mort- gages for the foreclosure of which the ac- tion was brought It confers a right of property prior to the rights of all parties hereto, and further reference to It in the case is unnecessary. November 23, 1871, Os- borne and wife gave a mortgage thereon to Patrick Duffy for $200 and interest. This mortgage bears date prior to the Allen mort- gage, but was executed later, and in terms made subject thereto. October 1, 1875, Os- borne and wife gave another mortgage there- on to Patrick DufiCy for $250 and Interest December 2, 1876, Osborne and wife gave a mortgage thereon to Elizabeth Duffy for $135 and Interest. February 21, 1878, Osborne and wife gave a mortgage thereon to Michael C. Conner, the plaintiff, for $229 and interest, which mortgage has never been satisfied of record. March 1, 1878, the defendant Christ- Ian K. Stein caused judgment to be entered against Martin Osborne in the circuit court for Dane county upon a judgment note, with warrant of attorney, by his attorneys, Welch & Botkin, a law firm of which the defendant William Welch was a member. March 2, 1878, the defendant Stein assigned said judg- ment to said William Welch. March 4, 1878, the said mortgages, numbers two, three, and four, for $200, $250, and $135, were assigned to the defendant Stein. March 5, 1878, the ■defendant Stein, by his attorneys, the said Welch & Botkin, brought suit to foreclose the said mortgages, numbers two and three, for $200 and $250, making parties defendant thereto Osborne and wife, the mortgagors, and Conner, the plaintiff herein, holding the subsequent mortgage, number five, above mentioned, but not making a party defend- ant the said Welch, holding by assignment the said judgment number six, March 8, 1878, Osborne and vrtfe, by deed of quit- claim, conveyed said premises to the plain- tiff, Conner, who, at the time, had an actual knowledge of the Stein judgment and its as- signment to Welch. April 9, 1878, at the office of Welch & Botkin, in the presence of Botkin, the plaintiff, Conner, paid to the de- fendant Stein the amount, principal and In- terest, of the mortgages in suit, (Nos. 2 and 3,) together with about $115, costs of suit At the time of payment he was still without knowledge of the Stein judgment Neither Stein nor Botkin spoke of it Botkin, when asked if he had told Conner of the existence of the Stein judgment, testified: 1 do not think I did. He (Conner) paid the money, and then said that he wanted the mortgages satisfied, and asked Mr. Stein to come right up with him and satisfy the mortgages, at the register of deeds' office, and get done with it; and he and Mr. Stein went out of the office for that purpose. It was at Con- ner's request Not a word was said by me or Stein in regard to satisfying. There was not a syllable or whisper in regard to it' The two mortgages were then satisfied by Stein. April 29, 1878, the plaintiff, Conner, paid Stein the amount, principal and inter- est, of the mortgage for $135, number four, which, with the accompanying note, was delivered to him. Thereupon, at plaintiff's instance and request, Stein went to the reg- ister's office, accompanied by plaintiff, and satisfied the mortgage; Stein knowing, and the plaintiff not knowing, of the judgment About December, 1878, the plaintiff first learned of the existence of the judgment from the officer having an execution thereon against this property." The complaint prays that the discharges of the three Duffy mort- gages be cancelled, and for the usual judg- ment of foreclosure and sale in respect to those mortgages, and the mortgage for $229 to the plaintiff, dated February 21, 1878. It is claimed In the complaint that 40 acres of the mortgaged land was the homestead of Osborne, and an Injunction was prayed against the sale of such 40 acres, on execu- tion Issued upon Stein's judgment As to the agreement between the plaintiff and Os- borne, pursuant to which the latter conveyed to the plaintiff the land mortgaged, the plain- tiff testified as follows: "I bought the place of Osborne. I was to pay the mortgages. I did not give him any money besides the mortgages. * • • 1 gave him an account I held against him, more or less. * » • He had no money, and I paid for the making out of these papers. Forget how much that was. That is all I paid for his deed to me, except that I released him from his liability on the note of $229. Think it was agreed that I should let Osborne have his note and mortgage. Have no further claim on him or his land for that" The witness testified la- ter that he understood he took the property in satisfaction of his claims, but that it was no part of the consideration of the deed; and, further, to the question, "Didn't you re- gard the giving to you by Osborne of the quitclaim deed as, between you and Osborne, a settlement of your note and mortgage against him for $229?" the plaintiff answer- ed: "I presume so, but that was omitted in putting the amount in the deed." This Is MISTAKE OF FACT. 231 the substance of all the evidence on the sub- ject. The court found— "First, that all the facts stated in the complaint are true, except that no part of the mortgaged premises was the homestead of Osborne when Stein recovered his judgment, and that Stein is not the own- er of such judgment; second, that the de- fendant Welch purchased said judgment from the defendant Stein, and took the as- signment thereof absolutely, for full value, and without notice, fraud, or collusion, and that he paid therefor by crediting the said Stein on the account of the firm of Welch & Botkln, of which the defendant Welch was then and still is a member, with the face amount thereof, towards the payment for le- gal services theretofore rendered by the said Welch & Botkin for the said Stein, and that, as between the said Welch and the said Botkin, it was agreed that the amount of said judgment should be received by the said Welch on his individual account; third, that Mr. Botkin, the law partner of the said defendant Welch, transacted the business in the foreclosure suits set out in said com- plaint, and that said Welch had no knowl- edge of the details of said foreclosure, and of the satisfaction of the mortgages as set out in said complaint; fourth, that the can- cellation of the mortgages as set out in said complaint was founded upon a mistake upon the part of the plaintiff. That mistake was the supposition that the several mortgages of record, including his own, to the amount In all of the full value of the premises, were the only liens prior to his deed from said Os- borne." As conclusions of law, the court found that the mortgage for $229, executed by Os- borne to the plaintiff, is a valid subsisting lien on the land; that the discharge of the three Duffy mortgages should be cancelled, and those mortgages adjudged to be valid and subsisting liens; and that the plaintiff is entitled to a judgment of foreclosure in respect to all four mortgages, and to a sale of the land mortgagedj but not to a personEil judgment against either defendant. The de- fendants have appealed from the judgment entered pursuant to such findings. S. W. Botkin, for appellants. Sloan, Ste- vens & Morris, for respondent. LYON, J. As we understand the testi- mony of the plaintiff he accepted the quit- claim deed of the mortgaged premises from Osborne pursuant to an express agreement between them that the note and mortgage of February 21, 1878, for ?229, was thereby sat- isfied and discharged. His testimony seems to admit of no other construction. By this agreement the $229 mortgage was dischar- ged, and the satisfactions of the Duffy mort- gages by Stein, in the proper records of the county, at the request of the plaintiff, dis- charged those mortgages. Hence, by the acts and procurement of the plaintiff, the four mortgages in controversy were cancelled and cease to be liens upon the land covered by them. Were these subsisting mortgages, we might not find it very difficult to hold, under the authorities dted, that the interest represented by the $229 mortgage was not merged in the legal title conveyed to the plaintiff by Osborne, and that the plaintiff should be subrogated to the rights of the mortgagees in the Duffy mortgages, so that all of these mortgages could be made avail- able to protect the plaintiff against the lien of the Stein judgment, which is junior there- to. But before the questions of merger and subrogation can be raised at all, the mort- gages now cancelled and discharged must be restored and vitalized. This can only be done by cancelling and holding for naught the satisfactions of the Duffy mortgages, which the plaintiff caused to be entered of record, and his express agreement with Os- borne to accept the conveyance of the legal title in full satisfaction and discharge of the $229 mortgage. The precise question Is, therefore, wheth.. er, under the circumstances of the case, the plaintiff is entitled to be relieved of those satisfactions and of such agreement. Has he shown himself entitled to have them set aside, cancelled, and held for naught? The circuit com-t found (no doubt correctly) that there was no fraud or collusion on the part of thie defendant Welch, the owner of the Stein judgment, and granted the relief pray- ed on the sole ground that plaintiff acted In ignorance of the existence of that judgment, In the matter of thie satisfaction and dis- " charge of the mortgages. Undoubtedly the plaintiff knew nothing of the judgment, and, presumably, (although he has not so testi- fied,) had he known of its existence he would not have had the mortgages discharged, or made the contract he did with Osborne for the conveyance. But that alone Is not suflB- clent to entitle him to have the discharged mortgages reinstated as valid liens upon the land. He must also have exercised reason- able diligence to ascertain whether subse- quent liens had been put upon the property. A court of equity never relieves a man from the consequences of his own culpable negli- gence. Discussing the rules upon which courts of equity proceed In relieving, or re- fusing to relieve, against contracts made or acts done through mistake, or in ignorance of material facts. Judge Story says that "where an unconscionable advantage has been gained by mere mistake or misappre- hension, and there was no gross negligence on the part of the plaintiff in falling into the error, or in not sooner claiming redress, and no intervening rights have accrued, and the parties may still be placed in statu quo, equi- ty will interfere, in its discretion, in order to prevent intolerable Injustice." 1 Story, Eq. Jur. § 1381. In section 146 the learned au- thor says: "It is not, however, sufficient in all cases to give the party relief, that the 232 MISTAKE OF FACT. fact Is material; but it must be sucb as he could not by reasonable diligence get knowl- edge of when he was put upon inquiry. For if, by such reasonable diligence, he could ob- tain knowledge of the fact, equity will not relieve him, since that would be to encourage culpable negligence." In a note to the sec- tion last cited is the following: "If a court of equity is asked to give relief in a case not fully remediable at law, or not remedia- ble at all at law, then it gi-ants it upon its own terms and according to its own doc- trines. It gives relief only to the vigilant and not to the negligent; to those who have not been put upon their diligence to make inquiry, and not to those who, being put up- on inquiry, have chosen to omit all inquiry, which would have enabled them at once to correct the mistake, or to obviate all ill ef- fects therefrom. In short, it refuses all its aid to those who, by their own negligence, and by that alone, have incurred the loss, or may suffer the inconvenience." In Mamlock v. Fairbanks, 46 Wis. 415, 1 N. W. 167, this court made an application of the rule above stated. That was an action to rescind a contract of sale of a certain ilote and mortgage by the defendant to the plain- tlfC, and to recover the money paid therefor. The ground upon which relief was claimed, was that the defendant misrepresented the identity of the debtors, which misrepresenta- tion affected the value of the securities. It was held that if, by the exercise of reason- able diligence, the plaintiff had the present means of ascertaining the Identity of the debtors, and was not prevented from doing so by any artifice of the vendor, there could be no recovery. The opinion contains some of the authorities for the rule, not specially cited herein, and the case is a very strong one against the plaintiff. Levy V. Martin, 48 Wis. 198, 4 N. W. 35, is not In point. There the mortgage sought to be reviV(Bd was discharged without the consent of the plaintiff, and against an ex- press agreement between him and the per- sonal representatives of the deceased mort- gagor that It should be assigned to him. Under these circmnstances we found no dif- ficulty in cancelling the satisfaction, and subrogating the plaintiff to the rights of the original mortgagor. There was no question of diligence in the case. We have examined the cases cited by the learned counsel for the plaintiff on the sub- ject of the rescission of contracts or instru- ments for Ignorance or mistake of material facts, but in none of th'ein, so far as we have perceived. Is the question of diligence raised or passed upon. We are now to consider the question whether the present plaintiff used proper diligence to ascertain the condition of the ti- tle when he made his agreement with Os- borne, and when he paid and procured the discharge of the Duffy mortgages. The plaintiff is a man of some wealth, and Is apparently familiar with the usual modes of transacting ordinary business. He evidently knew that a judgmient against Os- borne would be a lien upon the mortgaged premises, and also the effect upon the title of a discharge of the mortgages. He knew also that Osborne was utterly insolvent and thriftless. The number and amount of mort- gages which the latter had put upon his land during the preceding seven years, ab- sorbing its whole value, was sufficient no- tice to him of Osborne's pecuniary condition. The known insolvency of Osborne would nat- urally make an ordinarily prudent man more cautious when dealing with the title to his land. Then, again, the mortgage of Allen represented nearly or quite one-half of the value of the land, and was paramount to all the others. Stein Is a merchant in Madison, and plaintiff knew him well. It does not ap- pear that he is a dealer in real estate to any considerable extent. The very fact that he had purchased the Duffy mortgages, which were junior to the Allen mortgage, would seem to suggest to a reasonable mind that he must have had some special reason for doing so, and that such reason might well be that he became Interested in some way In the land. But these ch:cumstances, sug- gestive as they were, failed to open the lips of the plaintiff. He made no inquiry con- cerning the title either of Stein or Botkin or Osborne. Had he done so, and been told that no encumbrance had been placed upon the land subsequent to his mortgage for $229, he might stand in a very different. po- sition In this action. But this is not all. A month after he took the conveyance from Osborne, he went witli Stein to the office of the register of deeds to have the latter discharge the tfwo oldest Duf- fy mortgages, and some weeks later went again to the same office to have the other Duffy mortgages discharged. Of course, he was in close proximity to the office of the clerk of the circuit court, and could easily have gone there and ascertained whether any judgments had been entered against Os- borne. It seems to us that common pru- dence required him to do so, or else to Inter- rogate Stein or Osborne or Botkin as to the condition of the title. Yet he made the agreement, and took the conveyance from Osborne, and procured Stein to discharge the Duffy mortgages, without doing either. He suffered the matter to rest In statu quo un- til an execution was issued on the judgment and, so far as it appears, first asserted the rights claimed in this action on the day the land was sold by the sheriff under the exe- cution, which was about 10 months after the last Duffy mortgage was discharged* Our minds are impelled to the conclusion that, under these circumstances, the plaintiff vras guilty of most culpable negligence In failing to inform himself of the existence of the Stein judgment, and hence that he has no standing in a court of equity to obtain the MISTAKE OP FACT. 233 relief he seeks. If there Is any case in the boolis which grants such relief, where the act sought to be relieved against was the result of negligence so gross and inexcusable, we hare failed to find it Certainly, no such case is cited by counsel. The application of this rule may work hardship In some cases; perhaps it does in this case. But the rule requires nothing unreasonable and is a most salutary one. It is infinitely better that men should be held to the consequences of their own culpable carelessness, than that courts of equity should und'ertake to relieve there- from. The rule requires reasonable caution and prudence in the transaction of business, and is deeply imbedded in our jurisprudence. It is within the principle and, reason of cave- at emptor. Mamlock v. Fairbanks, supra. The abrogation of the rule would tend to encourage negligence, and to introduce un- certainty and confusion in all business trans- actions. The judgment of the circuit court must be reversed, and the cause remanded, with di- rections to that court to dismiss the com- Dlalut 234 MISTAKE OF FACT. PARK BROS. & CO., Limited, v. BLOD- GETT & CLAPP CO. (29 Atl. 133, 64 Conn. 28.) Sapreme Court of Errors of Connecticut. Feb. 8, 1894. ' Appeal from court of common pleas, Hart- ford counly; Taintor, Judge. Action by Park Bros. & Co., Limited, against the Blodgett & Clapp Company for damages for breach of contract Judgment for defendant Plaintiff appeals. Aflarmed. Albert H. Walker, for appellant Edward S. White, for appellee. TORRANCE, J. This Is an action brought to recover damages for the breach of a writ- ten contract, dated December 14, 1888. The contract is set out in full in the amended complaint. It Is in the form of a written proposal, addressed by the plaintiff to the defendant, and Is accepted by the defend- ant in writing upon the face of the con- tract Such parts of the contract as appear to be material are here given: "We propose to supply you with fifteen net tons of tool steel, of good and suitable quality, to be furnished prior to January 1, 1890, at" prices set forth in the contract for the qualities of steel named therein. "Deliveries to be made i. o. b. Pittsburgh, and New York freight al- lowed to Hartford. To be specified for as your wants may require." The contract was made at Hartford, by the plaintiff through its agent A. H. Church, and by the defendant through Its agent J. B. Clapp. After filing a demurrer and an answer, which may now be laid out of the case, the defendant filed an "answer, with demand for reformation of contract," in the first paragraph of which it admitted the execu- tion of said written contract. The second, third, and fourth paragraphs of the answer are as follows: "The defendant avers that bn or about December , 1888, it was agreed by and between the plaintiff and de- fendant, the plaintiff acting by its said agent, A. H. Church, that the plaintiff should supply the defendant prior to January 1, 1890, with such an amount of tool steel, not exceeding fifteen tons, as the defendant's wants during that time might require, and of the kinds and upon the terms stated in said contract, and that the defendant would purchase the same of the plaintiff on said terms. (3) That by the mistake of the plaintiff and defendant or the fraud of the plaintiff, said written contract did not em- body the actual agreement made as afore- said by the parties. (4) That the defendant accepted the proposal made to It by the plaintiff, and contained In said written con- tract relying upon the representations of the plaintiff's said agent, then made to it, that by accepting the same the defendant would only be bound for the purchase of such an amount of tool steel of the kinds named therein as Its wants prior to Janu- ary 1, 1890, mlgbt require, and flie de- fendant then believed that suoh proposal embodied the terms of the actual agreement made as aforesaid by and between the plain- tiff and defendant" The fifth and last paragraph of the answer Is not now mate- rial. The answer claimed, by way of equi- . table relief, a reformation of the written contract In reply the plaintiff denied the three paragraphs above quoted; denied spe- cifically that the written contract did not embody the actual agreement made by the parties; and denied the existence of any joint mistake . or fraud. Thereupon the court below, sitting as a coiu't of equity.i heard the parties upon the Issues thus formed, foimd them in favor of the defendant and adjudged that the written contract be re- formed to correspond with the contract as set out In paragraph 2 of the answer. At a subsequent term of the court final Judg- ment in the suit was rendered In favor of the defendant The present appeal is based upon what occurred during the trial with reference to the reformation of the con- tract Upon that hearing the agent of the defendant was a witness, on behalf of the defendant and was t.^ked to state "what conversation occurred between him and A. H. Church in making the contract of De- cember 14, 1888, at and before the execution thereof, and relevant thereto." The plain- tiff "objected to the reception of any parol testimony, on the ground that the same was inadmissible to vary or contradict the terms of a written instrument or to show any oth- er or different contract than that specified In the instrument, or to show anything rele- vant to the defendant's prayer for its refor- mation." The court overruled the objection, and admitted the testimony, and upon such testimony found and adjudged as hereinbe- fore stated. The case thus presents a single question, - -whether the evidence objected to was ad- missible under the circumstances; and this depends upon the further question, which wUl be first considered, whether the mis- take was one which, under the circumstan- oes disclosed by the record, a court of equity will correct The finding of the court be- low is as follows: "The actual agreement between the defendant and the plaintiff was that the plaintiff should supply the defend- ant, prior to January 1, 1890, with such an amount of tool steel, not exceeding fifteen tons, as the defendant's wants during that time might require, and of the kinds and upon the terms stated in said contract and that the defendant would purchase the same of the plaintiff on said terms. But by the mutual mistake of said Chunch and said Clapp, acting for the plaintiff and defendant respectively, concerning the legal construc- tion of the written contract of December 14, 1888, that contract failed to express the actual agreement of the parties; and that said Church and said Clapp both Intended to MISTAKE OF FACT. 235 hare the said written contract express the actual agreement made by them, and at the time of its execution believed that It did." No fraud is properly charged, and certainly none is found, and whatevOT claim to relief the defendant may have must rest wholly on the ground of mistake. The plaintiff claims that the mistalie in question is one of law, and is of such a nature that It cannot be corrected in a court of equity. That a court of equity, under certain circumstances, may reform a written Instrument founded on a mistalie of fact is not disputed; but the plaintiff strenuously insists that it cannot, or will not, reform an instrument founded upon a mistake Uke the one here in question, which is alleged to be a mistake of law. The distinction between mistakes of law and mis- takes of fact is certainly recognized in the text-books and decisions, and to a certain extent is a valid distinction; but it is not practically so important as it is often rep- resented to be. Upon this point Mr. Mark- by, In his "Elements of Law" (sec>tions 268 and 269), well says: "There is also a pecu- liar class of cases in which courts of equity have endeavored to undo what has been ' done imder the influence of error and to re- store parties to their former position. The courts deal with such cases in a vgry free manner, and I doubt whether it is possible to bring their action under any fixed rules. But here again, as far as I can judge by what I find in the text-books and in the cases referred to, the distinction between errors of law and errors of fact, though very em- phaticaUy announced, has had very little practical effeot upon the decisions of the courts. The distinction is not ignored, and it may have had some influence, but it is always mixed up with other considerations, which not unfrequentiy outweigh it The distinction between errors of law and errors of fact is therefore probably of much less importance than is commonly supposed. There is some satisfaction In this, because the grounds upon which the distinction is made have never been clearly stated." The distinction in question can therefore afford little or no aid in determining the question under consideration. Under certain circum- stances a court of equily "will, and imder others it will not, reform a writing founded on a mistake of fact;- under certain circum- stances it win, and under others it will not, reform an instrument founded upon a mis- take of law. It is no longer true, if it ever was, that a mistake of law is no ground for relief in any case, as will be seen by the cases hereinafter cited. Whether, then, the mistake now in question be regarded as one of law or one of fact is not of muoh con- sequence; the more important question is whether it is such a mistake as a court of equity wiU correct; and this perhaps can only, or at least can best, be determined by seeing whether it falls within any of the well-recognized classes of cases in which «uch relief is furnished. At the same time the fundamental equitable principle which was specially applied in the case of North- rop V. Graves, 19 Conn. 54.8, may also, per- haps, afford some aid in coming to a right conclusion. Stated briefly and generally, and without any attempt at strict accuracy, that principle is that in legal transactions no one shall be allowed to enrich himself unjustly at the expense of another through or by reason of an innocent mistake of law or fact, entertained without negligence by the loser, or by both. If we apply this prin- ciple to the present case, we may see that, by means of a mutual mistake in reducing the oral agreement to writing, the plaintiff, with- out either party Intending it, gained a de- cided advantage over lie defendant, to which it is in no way justiy entitied, or at least ought not to be entitied, in a court of equity. The written agreement certainly fails to express the real agreement of the parties in a material point; it fails to do so by rea- son of a mutual mistake, made, as we must assume, innocenfly, and without any such negligence on the part of the defendant as would debar him from the aid of a coin:t of equity. The rights of no third parties have intervened. The instrument, if corrected, will place both parties just where they In- tended to place themselves in their relations to each other; and, if not corrected, it gives the plaintiff an inequitable advantage over the defendant. It is said that if, by mistake, words are insKfted in a written contract which the parties did not intend to insert, or omitted which they did not intend to omit, this is a mistake of fact which a court of equity will correct in a proper case. Sibert V. McAvoy, 15 lU. 106. If, then, the oral agreement In the case at bar had been for the sale and piu:chase of 5 tons of steel, and, in reducing the contract to writing, the par- ties had, by an unnoticed mistake, inserted "15 tons" instead of "5 tons," this would have been a mistake of fact entitling the de- fendant to the aid of a court of equity. In the case at bar the parties actually agreed upon what may, for brevity, be called a con- ditional purchase and sale, and upon that only. In reducing the contract to writing, they, by an innocent mistake, omitted words which would have expressed the true agree- ment, and used words which express an agreement differing materially from the only one they made. There is perhaps a distinc- tion between the supposed case and the actu- al case, but it is quite shadowy. They dif- fer not at all in their unjust consequences. In both, by an innocent mistake mutually entertained, the vendor obtains an uncoa scionable advantage over the vendee, a r*- suit which was not intended by either. There exists no good, substantial reason, as it seems to us, why relief should be given in the one case and refused in the other, other things being equal. It Is hardly nec- essary to say that, in cases like the one at bar, courts of equity ought to move with 236 MISTAKE OF FACT. great caution. Before an instrument is re- formed, under such circumstances, the proof of the mistake, and that it really gives an un- just advantage to one party over the other, ought to be of the most convincing character. "Of course the presumption in favor of the written over the spoken agreement is almost resistless; and the court has wearied Itself In declaring that such prayers (for relief of this kind) must be supported by overwhelm- ing evidence, or be denied." Palmer v. In- surance Co., 54 Conn. 501, 9 Atl. 248. We are not concerned here, however, with the amount or sufficiency of the proofs upon which the court below acted, nor with the sufficiency of the pleadings; we must, upon this record, assume that the pleadings are sufficient, and that the proofs came fuDy up to the highest standard requirements In such oases. Upon principle, then, we think a court of equity may correct a mistake of law in a case like the one at bar, and we also think the very great weight of modem authority is in favor of that conclusion. The case clearly falls within that class of cases where there is an antecedent agreement, and, in re- ducing it to writing, the Instrument executed, by reason of the common mistake of the par- ties as to the legal effect of the words used, fails, as to one or more material points, to express their actual agreement. It Is per- haps not essential In all cases that there should be an antecedent agreement, as ap- pears to be held in Benson t. Markoe, 37 Minn. 30, 33 N. W. 38; but we have no oo- casion to consider that question in the case at bar. The authorities in favor of the con- elusion that a court of equity in suchi cases will correct a mistake, even If it be one of law, are very numerous, and the citation of a few of the more important must suffice. In Hunt V. Rousmanier's Adm'rs, 1 Pet 1, decided in 1828, it Is said: "Where an In- strument is drawn and executed which pro- fesses, or Is intended, to carry into execu- tion an agreement, whether in writing or by parol, previously entered into, but which by mistalie of the draftsman, either as to fact or law, does not fulfill, or which violates, the manifest intention of the parties to- the agreement, equity wlU correct the mistake so as to produce a conformity of the instru- ment to the agreement" It was said in the argument before us that this was a mere obiter dictum, but that is hardly correct It Is true the case was held not to fall within the principle, but the principle was said to be "incontrovertible" (page 13), and was ap- plied to the extent at least of determining that the case then before the court did not come within It In Snell v. Insurance Co., 98 U. S. 85, the court applied the principle so clearly stated in the case last cited, and re- formed a policy of insurance, though the mistake was clearly one as to the legal ef- fect of the language of the policy. In nu- merous other decisions of that court the same principle has been cautiously but re- peatedly applied, but it is not necessary to cite them. On the general question, wheth- er a court of equity will relieve against a mistake as to the legal effect of the language of a writing, the case of Griswold v. Hazard, 141 U. S. 260, 11 Sup. Ct 972, 999, is a strong case, though perhaps hardly an authority upon the precise question in this case. Can- edy V. Marcy, 13 Gray, 373, was a case where the oral contract was for the sale of two-thirds of certain premises, but the deed, hf mistake of the scrivener, conveyed the en- tire premises. The words used were ones intended to be used in one sense, the error being that all concerned supposed those words would carry out the oral agreement This was clearly a mistake "concerning the legal construction, of the written contract," but the coiurt, by Chief Justice Shaw, said: "We are of the opinion that courts of equi- ty in such cases are not limited to affording relief only In cases of mistake of fact, and that a mistake in the legal effect of a de- scription in a deed, or in the use of technical language, may be relieved against upon prop- er proof." In Goode v. Riley, 153 Mass. 585, 28 N. B. 228, decided in 1891, the court says: "The only question argued Is raised by the defendant's exception to the refusal of a rul- ing that, if both parties intended that the description should be written as it was writ- ten, the plaintiff was not entitled to a refor- mation. It would be a sufficient answer that the contrary Is settled in this common- wealth,"— citing a number of cases. In Ken- nard t. George, 44 N. H. 440, the parties, by mistake as to Its legal effect, supposed a mortgage deed to be valid when It was not The court relieved against the mistake, and said: "It seems to us to be a clear case of mutual mistake, where the instrument givea and received was not in fact what all the parties to it supposed It was and intended it should be; and in such a case equity will interfere and reform the deed, and make it what the parties at the time of its execu- tion intended to make it; and in this re- spect It makes no difference whether the defect In the instrument be in a statutory or common-law requisite, or whether the par- ties failed to make the instrument in the form they Intended, or misapprehended its legal effect" In iEastman v. Association, 65 N. H. 176, 18 Atl. 745, decided in 1889, the mistake was as ta the legal effect of an in- surance certificate, but the court granted re- lief by way of reformation. The comrt sayst "Both parties intended to make the benefit payable to Gigar's administrator. That it waa not made payable to him was due to theit mutual misapprehension of the legal effect of the language used in the certificate. • • • Equity requires an amendment of the writing that wHl malice the contract what the parties supposed it was, and Intended It should be, although th^ mistake is one of law, ajid not of fact" In TrusdeU y. Lehman, 47 N. J. Eq. 218, 20 Ati. 391, the marginal note is as follows: "Where it clearly appears that a deed drawn professedly to carry out the MISTAKE OF FACT. agreement of the parties, previously entered into, Is executed under the misapprehension that it really embodies the agreement, ■where- as, by mistake of the draughtsman either as to fact or law, It fails to fulfill that purpose, equity will correct the mistake by reforming the instrument in accordance with the con- tract" In a general way, the same rule is recognized and applied with more or less strictness In the following cases: Clayton t. Freet, 10 Ohio St. 544; Bush v. Hicks, 60 N. T. 298; Andrews v. Andrews, 81 Me. 337, 17 AtL 166; May y. Adams, 58 Vt 74, 3 Aa 187;, Grifath v. Townley, 69 Mo. 13; Benson V. Markoe, 37 Minn. 30, 33 N. W. 38; Gump's Appeal, 65 Pa. St 476; Cooper t. Phibbs, L. R. 2 H. L. 170. See, also, 2 Pom. Eq. Jut. § 845, and Bisp. Eq. §§ 184r-191. And, whatever the law may be elsewhere, this is certainly the law of our own state. Cham- berlain V. Thompson, 10 Conn. 243; Stedwell V. Anderson, 21 Conn. 144; Woodbury Sav- ings Bank v. Charter Oak Ins. Co., 31 Conn. 518; Palmer v. Insurance Co., 64 Conn. 488, 9 Atl 248; and Haussman t. Burn- ham, 59 Conn. 117, 22 AtL 1065. Indeed, since the time of Northrop t. Graves, supra, it is difficult to see how our law could have been otherwise. We conclude then that by our own law, and by the decided weight of authority elsewhere, the defendant was en- titled to the relief sought If tliis is so, then clearly he was entitled to the parol evidence which the plaintiff objected to; for in no other way, ordinarily, can the mistake be shown. "In such cases parol evidence is admissible to show that the party is entitled to the relief sought" Wheaton v. Wheaton, 9 Conn. 96. "It is settled, at least In equity, that this particular kind of evidence, that Is to say, of mutual mistake as to the meaning of words used, is admissible for the negative purpose we have mentioned. And this prin- ciple is entirely consistent with the mle that you cannot set np prior or contemporaneous oral dealings to modify or override what you knew was the effect of your writing." Goode T. RUey, 153 Mass. 585, 28 Atl. 228; Eeyn. Theory Ev. § 69; 1 GreenL Ev. (15th Ed.) i 269a; Steph. Dig. Ev. ! 90. The view we have taken of this case ren- ders it unnecessary to notice at any length the cases cited by connsd for the plaintiff In his able argument before us. Upon tila brief, he cites five from lUinois, two froip Indiana, and one from Arkansas. After an examination of them, we can only say that most of them seem to support the claims of the plaintiff. If so, we think they are op- posed to the very decided weight of authori- ty, and do not state the law as it is held in this state. Before closing, however, we ought to no- tice the case of Wheaton v. Wheaton, Supra, upon which the plaintiff's counsel seems to place great reliance. The case is a some- what peculiar one. Even in that case, how- ever, the court seems to recognize the princi- ple governing the class of cases within which we decide the case at bar falls, for it says: "It is not alleged that the writings were not so drawn as to effectuate the intention of the parties, through the mistake of the scriv- ener. On the contrary it is alleged that the scrivener was not even Informed what the agreement between the parties was." From the statement of the case In the record and In the opinion. It clearly appears that the mistake was not mutual; indeed. It does not even appear that at the time when the note was executed the other party even knew that there was any mistake at all on he part of anybody. Upon the facts stated, the plaintiff in this case did not bring it within the class of cases we have heesn. considering. The case was correctly decided, not on the ground that the mistake was one of law, but on the ground that the mistake of law was one which, under the circumstances al- leged, a court of equity would not correct The court, however, in the opinion, seems to base its decision upon the distinction be- tween mistakes of law and mistakes of fact; holding in general and unqualified terms, as was once quite customary, that the latter could be corrected and the form^ eould not The court probably did not mean to lay the law down In this broad and unqualified way; but if it did, it is sufficient to say that it Is not a correct statement of our law, at least since the decision of Northrop v. Graves, supra. On the whole, this case of Wheaton v. Wheaton can hardly be regarded as sup- porting the plaintiff's contention. There Is no error apparent upon the record. In this opinion the other judges concurred. 238 f MISTAKE-PAROL EVIDENCE TO CORRECT. / WAIiDHN y. SKINNER. (li)l U. S. 577.) Supreme Court of the United States. October, 1879. Appeal from the Circuit Court of the Unit- ed States for the Southern District of Geor- gia. Benjamin H. Hill, for appellant A- B. Lawton, for appellee. MR. JUSTICE ClilPFORD delivered the opinion of the court • Trusts are either express or implied, the former being such as are raised or created by the act of the parties, and the latter be- ing such as are raised or created by pre- sumption or construction of law. Cook t. Fountain, 3 Swanst 585, 592. Implied trusts may also be divided into two general classes: First those that rest upon the presumed intention of the parties. Secondly, those which are independent of any such express intentions, and are forced upon the conscience of the party by opera- tion of law. 2 Story, Eq. Jur. § 1195. Sufficient appears to show that Sarah S. Walden, the complainant on the sixth day of May, 1874, filed her bill of complaint in the court below against the respondents, to K wit, Darius S. Skinner and John N. Lewis and Charles S. Hardee, executors of Charles L S. Henry, deceased, who in his lifetime was ' the trustee of Penelope W. TefCt and her three children. Preliminary to the charging part of her complaint she alleges and states that on the 28th of October, 1847, she inter- married with William P. TefCt who on the 9th of August,' five years later, departed this life Intestate and without children, leaving the complainant as his sole heir and legal representative; that on the 4th of June, six years subsequent to the death of her first husband, she Intermarried with Charles O. ^Walden, who, on the eighth day of Decem- ber of the nest year, departed this life tes- tate, leaving no children by the complainant and that he by his will bequeathed to her all the property and rights owned and pos- sessed by her at the date of their marriage; and that the father of her first husband died intestate on the 30th of June, 1862, but that no administration was ever had upon his estate, and that his widow, the mother of her first husband, departed this life testate on the 11th of September eleven years later; that her first husband had two brothers at the date of her marriage neither of whom ever married and both of whom died without children; that at the death of the elder of the two he had a life policy of insurance for $5,000, which his administrator collected and paid to his two living brothers. Allegations then follow in the bill of com- plaint which relate more Immediately to the BUbject-matter of the controversy, from which It appears that Ellas Fort June 28, i 1831, conveyed a certain tract of land to Charles S. Henry and Stephen C. Greene, as trustees and in trust for Penelope W. Tefft and her three sons, William P. Tefft Henry D. Tefft, and Charles E. Tefft and it Is therein declared that the said property is for the use of the mother during her life- time and the three sons, and that after the death of the mother It shall be for the use of the three sons alone as tenants in com- mon, and that in case of sale "the proceeds to be reinvested upon the same uses and trusts as aforesaid, and if not sold, then the property, after the death of the mother, was to be distributed by said trustees to each of the said sons as shall survive and attain the age of twenty-one years." Greene, one of the trustees, subsequently died, leaving Charles S. Henry the sole sur- viving trustee tmder the trust-deed, and she charges that on the 19th of July, 1848, the mayor and aldermen of the city of Savannah conveyed to him as such trustee a certain lot of land numbered five, Monterey Ward, in said city, the lot being then subject to cer- tain annual ground-rents, as specified in the conveyance, and the complainant avers that the conveyance is informal and incomplete. Inasmuch as the trustee never signed It as it was intended, and that it falls to set forth and express the trust interests of the three children as It should do. Wherefore she al- leges that it should be reformed and be made to conform to the purposes of the trust as created and set forth in the original trust- deed. Persuasive and convincing reasons in sup- port of that request are alleged which will hereafter be reproduced when the merits of the controversy are considered. Relief specific and general Is prayed, as is more fully set forth in the transcript Pro- cess was served and the respondents appear- ■ed, and after certain Interlocutory proceed- ings filed separate answers. All of the defenses to the merits are set up in the answer of the first-named respond- ent, who admits all of the preliminary mat- ters alleged in the bill of complaint He also admits that there was in existence at the time of the first marriage of the com- plainant the trust estate held by the surviv- ing trustee arising under the conveyance from Ellas Fort to the said two trustees, which, as he alleges, was held for the sole and separate use of the mother during her life, and remainder at her death to her three sons as tenants In common. Prior to that transaction there is no con- troversy between the parties as to the facts, and he also admits that the authorities of the city conveyed the lot called Monterey Ward to the surviving trustee, but he alleges that by the terms of the conveyance the legal title to the lot vested in the trustee in trust for the sole and separate use of the mother, the trust being executory only so long and. for such time as the cestui que trust should. MISTAKE— PAROL BVIDBNOE TO CORRECT. 23» remain a feme covert; and he denies that the conveyance is informal and incomplete in any particular, or that It was ever expected or Intended hy any one that the trustee should sign the same, and he avers that it ■was accepted by the trustee for the pur- poses therein set forth. Attempt is also made to enforce that view by a specific denial of most of the reasons assigned in the bill of complaint in support of the request that the conveyance to the trustee of the lot called Monterey Ward may be reformed so as to conform to the trusts created and expressed in the antecedent trust- deed. Both of the other respondents allege that they are citizens of the state where the suit is brought, and deny that the circuit court had any jurisdiction to make or execute any order, judgment, or decree against them in the premises. Proofs were taken, the parties heard, and the circuit court entered a decree in favor of the respondents, dismissing the bill of complaint. Prompt appeal was taken by the complainant to this comt, and since the ap- peal was brought up she has filed the as- signment of errors set forth in the brief of her counsel. They are ten in number, all of which will be sufficiently considered in the course of the opinion, without giving each a separate examination. Before examining the questions presented in respect to the second deed, it becomes nec- essary to ascertain the true construction and meaning of the original trust-deed so far as respects the second trust therein created and defined. Eight hundred dollars consti- tuted the consideration of the conveyance, and it was made upon the trust that if, dur- ing the lifetime of the mother of the three sons, it should be deemed advisable by her to sell and convey the premises, then upon this further trust that the trustees as afore- said, or the survivor of them, upon her ap- plication and with her consent, signified by her being a party to the conveyance, will sell and convey the lot and Improvements for the best price which can be obtained for the same, to any person or persons whatsoever, without applying to a court of law or equity for that purpose to authorize the same, and the proceeds thereof upon the same trusts as aforesaid to Invest in such otha: property or manner as the mother of the sons shall direct and request for the same use, benefit, and behalf. Explicit and ■unambiguous as that provi- sion is, it requires no discussion to ascer- tain its meaning; nor is it necessary to en- ter into any examination of the third trust specified in the conveyance, as it Is conceded that the trust property was sold by the sur- viving trustee for reinvestment during the lifetime of the mother at her request, she Joining in the conveyance as required by the terms of the Instrument creating the trust. Twenty-four hundred dollars were receiv- ed for the conveyance of the trust property, and all of that sum, except $600 turned over to the mother, was invested in buildings then being erected upon lot numbered five, called the Monterey Ward. Purchase of that lot had previously been made by the surviving trustee named m the original trust- deed, and it appears that the parties under- stood that it was to be upon the same uses and trusts as were contained in the trust- deed by which the title to the lot sold was acquired. Proof that the new lot numbered five, called Monterey Ward, was purchased by. the father and the three sons during the life- time of the father seems to be entirely sat- isfactory, and it is equally well established that each contributed one-fourth part of the sum of $240 paid for the purchase-money of the lot. Satisfactory proof is also exhibited that Henry D. Tefft, one of the three broth- ers, died Aug. 13, 1849, unmarried and intes- tate, and that he had a valid subsisting insurance upon his life in the sum of $5,000, which his administrator collected and paid to his surviving brothers. Eighteen hundred dollars of the proceeds arising from the sale of the property ac- quired by virtue of the first trust-deed were appropriated towards erecting buildings on the new lot purchased by tlie father and lihe three sons while in full Ufe, and when the one whose life was insured deceased, the two survivors appropriated each his proportion of the money received to the same purpose, with the understanding that the property was subject to the same uses and trusts as the property previously acquired and sold. Competent proofs of a convincing charac- ter are also exhibited in the transcript that the first husband of the complainant con- tributed other sums towards completing the buildings, leaving no doubt that he paid his full proportion for the improvements as well as for the lot purchased of the city authoPr Ities. Enough appears to show that the buildings were completed more than two years before the first husband of the complainant died In- testate and without children, when it is obvious that she became the sole heir to all the Interest he possessed in the said estate, whatever it might be. Two years elapsed after the buildings were completed before the father of the three sons died, and the proofs show that during that period the complain- ant resided with the parents of her husband, and that her rights as his heir-at-law were uniformly recognized by the family; that she continued to reside there with her moth- er-in-law after the death of the senior Tefft until the decease of his widow, and that throughout that period she paid one-half of all repairs, taxes, insurance, and other ex- penses of the property as if she were equally interested in the same with her mother-in- law, and was liable to bear an equal propor- tion of all such expenses. 240 MISTAKE— PAROL EVIDENCE TO CORRBOT. Opposed to that is the proof that the moth- er-in-law, one year before her death, when in a low and depressed frame of mind, be- queathed the whole of the lot in question t» the first-named respondent, who is her neph- ew, and on the same day executed a deed to him of the entire property, to take effect in possession after her death. Sole title to the premises in fee-simple is claimed by the respondent under those instruments, and he brought ejectment against the complainant to dispossess her of the premises, and it ap- pears that she was at great disadvantage in attempting to defend the suit, because the trustee had omitted to see that the title was conveyed in trust for the benefit of the ces- tuis que trust as in the prior trust deed, as he should have done, to carry into effect the understanding of all the parties to the sale of the prior trust premises and the purchase of the lot in question. What she alleges is that the purchase of the new lot' was made for the same cestuis que trust as those de- scribed in the deed of the old lot, and that the understanding of all was that the deed of the new lot should contain and declare the same uses and trusts in favor of the same persons, and the proofs to that effect are full and entirely satisfactory. Support to that view is also derived from the fact that the surviving trustee in the old deed is the grantee in the new deed, and that he is therein more than once described as trustee, and in tlie Introductory part of the instrument is denominated trustee of Mrs. Penelope W. TefEt, wife of Israel K. Tefft, of the city and state previously mentioned In the same instrument. Ten years before the suit was instituted the trustee in the new deed departed this Ufe, and the other two respondents were ap- pointed and qualified as his executors. Un- able to obtain complete redress at law, the complainant prays that the deed of convey- ance from the city of the lot and improve- ments in question may be reformed and be made to conform to the true intent and pur- pose for which the lot was purchased, and to that end that it may be made to Include the same uses and trusts raised, created, and declared in the prior deed from Ellas Fort, according to the understanding and agreement of all the parties. Besides that she also prays that her equi- ties In and to the property, including the improvements, may be set forth, decreed, and allowed by the court, including such as are In her favor from the payment of taxes, insurance, and repairs upon the property dur- ing the lifetime and since the death of her mother-in-law, and that tie first-named re- spondent may be enjoined from further pro- ceeding in his ejectment suit to recover pos- session cif the premises. Courts of eqiiity afford relief In case of mistake of facts, and allow parol evidence to vary aad reform written contracts and in- struments, when the defect or error arises from accident or misconception, as properly forming an exception to the general rule which excludes parol testimony offered to vary or contradict written instruments. Where the mistake is admitted by the other party, relief, as all agree, will be granted, and if it be fully proved by other evidence. Judge Story says, the reasons for granting relief seem to be equally satisfactory. 1 Story, Bq. Jur. § 156. Decisions of undoubted authority hold that where an instrument is drawn and executed that professes or is intended to carry into execution an agreement, which is in writing or by parol, previously made between the pairties, but which by mistake of the drafts- man, either as to fact or law, does not fulfill or which violates the manifest intention of the parties to the agreement, equity will cor- rect the mistake so as to produce a conform- ity of the instrument to the agreement, the reason of the rule being that the execution of agreements fairly and legally made is one of the peculiar branches of equity Juris- diction, and if the instrument intended to execute the agreement be from any cause insufficient for that purpose, the agreement remains as much unexecuted as if the party had refused altogether to comply with his engagement, and a court of equity will, In the exercise of its acknowledged jurisdiction, afford relief in the one case as well as in the other, by compelling the delinquent par- ty to perform his undertaking according to the terms of it and the manifest intention of the parties. Hunt v. Rousmaniere's Adm'rs, 1 Pet. 1, 13; Id., 8 Wheat. 174, 211. Even a judgment when confessed. If the agreement was made under a clear mistake, will be set aside if application be made, and the mistake shown while the judgment is vrithin the power of the court. Such an agreement, even when made a rule of court, will not ,be enforced if made under a mis- take, if seasonable application be made to set it aside, and if the judgment be no long- er in the power of the court, relief, says Mr. Chief Justice Marshall, may be obtained in a court of chancery. The Hiram, 1 Wheat 440, 444. Equitable rules of the kind are applicaWe to sealed instruments, as well as to ordinary vrritten agreements, the rule being that if by mistake a deed be drawn plainly different from the agreement of the parties, a court of equity will grant relief by considering the deed as if it had conformed to the antecedent agreement. So If a deed be ambiguously expressed In such a manner that it is diffi- cult to give it a construction, the agreement may be referred to as an aid in expounding such an ambiguity; but if the deed is so expressed that a reasonable construction may be given to it, and when so given it does not plainly appear to be at variance with the agreement, then the latter is not to be re- MISTAKE— PAROL EVIDENCE TO CORRECT. 241 garded In the construction of the former. Hogan V. Insurance Co., 1 Wash. C. O. 419, 422, Fed. Cas. No. 6,582. Rules of decision in suits for specific per- formance are necessarily affected by consid- erations peculiar to the nature of the right sought to be enforced and the remedy em- ployed to accomplish the object. Where no question of fraud or mistake is involved, the rule with respect to the admission of parol evidence to vary a ■written contract is the same in courts of equity as in those of com- nion law, the rule in both being that when an agreement is reduced to writing by the act and consent of the parties, the intent and meaning of the same must be sought in the instrument which they have chosen as the repository and evidence of their purpose, and not in extrinsic facts and allegations. Proof of fraud or mistake, however, may be ad- mitted in equity to show that the terms of the instrument employed in the preparation of the same were varied or made different by addition or. subtraction from what they were intended and believed, to be when the same was executed. Evidence of fraud or mistake is seldom found In the Instrument itself, from which it follows that unless parol evidence may be admitted for that purpose the aggrieved par- ty would have as little hope of redress in a court of equity as in a court of law. Even at law, all that pertains to the execution of a written instrument or to the proof that the instrument was adopted or ratified by the parties as their act or contract, is necessarily left to extrinsic evidence, and witnesses may consequentiy be called for the purpose of im- peaching the execution of a deed or other writing under seal, and showing that its seal- ing or delivery was procured by fraudulentiy substituting one instrument for another, or by any other species of fraud by which the com- plaiolng i>arty was misled and Induced to put his name to that which was substantially dif- ferent from the actual agreement Thorough- good's Case, 4 Coke, 4. When the deed or other written instrument is duly executed and delivered, the courts of law hold that it contains the true agreement of the parties, and that the writing fm-nishes better evidence of the sense of the parties than any thai can be supplied by parol; but courts of equity, says Chancellor Kent, have a broader jurisdiction and will open the writ- ten contract to let in an equity arising from facts perfeetiy distinct from the sense and construction of the instrument itself. Pursu- ant to that rule, he held It to be established that relief can be had against any deed or contract in writing founded on mistake or fraud, and that mistake may be shown by parol proof and the relief granted to the in- jured party whether he sets up the mistake affirmatively by bUl or as a defense. Gilles- pie V. Moon, 2 Johns. Ch. 585, 596. Parol proof, said the same learned magis- trate. Is admissible in equity to correct a H.& B.E(j.C2d Ed.)— 16 mistake in a written contract In favor of the complainant seeking a specific perform- ance, especially where the contract in the first instance is Imperfect without referring to extrinsic facts. Keisselbrack v. liviag- Bton, 4 Johns. Ch. 144; Cathcart v. Robinson, 5 Pet. 264. Many cases support that proposition with- out qualification, and all or nearly all agree that it is correct where it is invoked as de- fence to a suit to enforce specific perform- ance, little or no disagreement is found In the adjudged cases to that extent, but there are many others where it is held that the rule is unsound when applied in behalf of a com- plainant seeking to enforce a specific perform- ance of a contract with variations from the virritten instrument. Difficulty, it must be admitted, would arise in any attempt to reconcile the decided cases In that regard, but it is not necessary to enter that field of contest and conflict in the case before the coifft for several reasons: 1. Because by comparing the original trust deed with the deed of the lot in question, in view of tha , attendant circumstances, the inference is very I cogent that the second was designed and I intended as a complete substitute for the first. 1 2. Because the proof shows to a demonstra- |tion that the consideration for the purchase lof the second lot was paid in equal propor- ftions by the father and each of the three I sons. 3. Because it appears that the expen- sive improvements made upon the lot la ques- tion were made from the moneys of each of the three sons, advanced at the request of the father. 4. Because it appears that the family and every member of. it understood from the first and throughout that the trustee ■held the property in trust for the mother and the three sons. 5. Because the father, from the date of the deed to the time of his death, recognized the premises as acquired and held for the benefit of his wife and their three sons. 6. Because the mother of the three sons, after the decease of the first husband of complainant, recognized her as interested in the property, and continued to do so at all times throughout her life until about the time I she conveyed the lot in question to the re- 1 spondent. Both the deed and her will bear date Sept. 28, 1872, and the proofs show that she was at the time In a low, depressed state of mind, and that she departed this life within one year subsequent to the execution of those in- struments. Prior to that, and throughout the whole period subsequent to the death of her husband, the proofs show that she uniformly recognized the complainant as the owner of a moiety of the lot and the improvements, I and always required her to pay one-half of all / repairs, taxes, insurance, and other expenses of the property. By the terms of the original deed the prop- erty was conveyed to the trustees, subject to the payment of taxes, assessments, and ground-rent, to and for the sole and separate 242 MISTAKE— PAROL EVIDBNOE TO CORRECT. use, benefit, and behoof of the mother and her three sons during her lifetime, and after her death to the three sons as tenants in com- mon in equal parts, with the provision that if the mother during her lifetime should deem it advisable she might sell and convey the preni- isee, and that in that event the further trust was raised and created that the trustees or the survivor of them, upon her application and with her consent signified by becoming a party to the conveyance, might sell and con- vey the lot and improvements (or the best price which could be obtained for the same, without any application to a court of law or equity for that purpose, and to Invest the proceeds thereof upon the same trusts in such other property or manner as the mother should direct, and for the same use, benefit, and behalf. Provision was also made that if no such sale and re-investment was made during the lifetime of the mother, then the trustees were to sell the same for the sole use and benefit of the three sons or the survivor or survivors of them, share anni share alike, until the youngest should arrive at the age of twenty- one years, when the trustees might sell and convey the same at the request of such sur- vivor or survivors, and divide the proceeds to the survivor or survivors, share and share alike. / Taken as a whole the proofs show to the I entire satisfaction of the court that the lot in .'question was purchased and conveyed to the I surviving trustee upon the same trusts as / those raised and created in the first deed, and ,' that the trustee, through mistake, failed to have those trusts properly declared in the deed of trust to him as he should have done, and that the prayer of the bill of complain- ant, that the deed of the lot and Improve- ments in question ought to be reformed and the rights of the complainant be ascertained and adjudged as If the deed in question con- tained the same trusts as those raised and created in the original trust deed is reasonable and proper and should be granted. Courts of equity, beyond all doubt, possess the power to grant such relief, and the proofs, in the judgment of the court, are such as to entitle the complainant to such a decree, un- less the remaining defence set up by the re- spondent must prevail. Cooper v. Phibbs, Li. R. 2 Oh. App. 149, 186; Cochrane v. Willis, 34 Beav. 359, 366. Such a decree, of course, cannot now be made against the trustee, as he is not living; but the executors, as con- tended by the complainant, are competent to perform that duty, and she prays that the decree may be adapted to the present state of the parties. Suppose all that is true, still it is contended by the principal respondent that the decree below Is correct, because the claim Is barred. Much discussion of that defence will not be necessary, beyond what is required to ascer- tain the facts. When the father died, the complainant was living on the premises, and she continued to reside there most or all the time during the widowhood of the mother of her first hus- band, except while she lived with her second husband, ai^d when he died she returned to live with her mother-in-law. During all that time the proofs show that she was constantly recognized as the lawful heir to the estate of her deceased husband, until about a year be- fore the decease of the mother, who also re- sided on the premises. Prior to that, the rights of the complainant were unmistakably recognized, and nothing of consequence had occurred to indicate any intent to call her just right in question. Soon after that, how- ever, the respondent commenced an action of ejectment against her to recover posses- sion of the entire lot and improvements, she still being in possession, and doubtless hoping and expecting that her rights would yet be acknowledged without the necessity of expen- sive litigation. Expectations of the kind not being realized, she filed the present bill of complaint. Laches are imputed to her; but the court, in view o£ the circumstances and of the embarrassments growing out of the obvious defects in the conveyance intended to secure her rights, is of the opinion that the evidence of laches is not sufficient to bar her right to recover in the present suit With- out more, these remarks are sufficient to show that the defence cannot be sustained, and it is accordingly overruled. Two or three remarks will be sufficient to show that the objection that the circuit court has no Jurisdiction to enter the required de- cree against the executors of the deceased trustee cannot be sustained. Jurisdiction as between the complainant and respondent Is unquestionable; and. If so, it is clear that the fact that the trustee if living was a citizen of the same state with the complainant would not defeat the jurisdiction in a case where he is a mere nominal party, and is merely joined to perform the mlQisterlal act of conveying the title if adjudged to the complainant. Where that Is so, the executor, in case of the de- cease of the trustee, if authorized by the law of the state to execute such a conveyance, may also be joined in the suit under like cir- cumstances merely to accomplish the like pur- pose. Where the real and only controversy is between citizens of different states, or an alien and a citizen, and the plaintiff is by some positive rule of law compelled to use the name of another to perform merely a min- isterial act, who has not nor ever had any interest in or control over it, the courts of the United States will not consider any others as parties to the suit than the persons between whom the litigation before them exists. Mc- Nutt V. Bland, 2 How. 9, 15; Browne v. Strode, 5 Cranch, 303; Coal Company v. Blatchford, 11 Wall. 172, 177. Cases arise in the federal courts In which nominal or even immaterial parties are joined, on the one side or the other, with those who have the requisite citizenship to give th« i^rr* MISTAKE— PAROL EVIDENCE TO CORRECT. 243 Jurisdiction in tbe case; and where that is so, tte rule is settled that the mere fact that one or more of such parties reside in the same state with one of the actual parties to the controversy will not defeat the jurisdic- tion of the court. Decisive authority for that proposition Is found in a recent ruling of Mr. Justice Miller, in which he states to the ef- fect that mere formal parties do not oust the jurisdiction of the court, even if they are without the requisite citizenship, where it ap- pears that the real controversy is between citizens at different States. Arapahoe Oo. v. Kansas Pac. Ry. Co., 4 Dill. 277, 283, Fed. Cas. No. 502. Nothing Is claimed of the executors in this case except that they shall perform the min- isterial act of conveying the title. In case the power to do so is vested in them by the law of the state, and the court shall enter a de- cree against the principal respondent to that effect From all which it follows that the complainant is entitled as between herself and the principal respondent to the relief prayed in the bill of complaint; but the court, in view of all the circumstances, wUl not pro- ceed to determine either the proportion of tfie trust property which belongs to the complain- ant or the amount she is entitled to recover of the said respondent Instead of that, those matters are left to be ascertained and determined by the circuit court, with au- thority. If need be, to refer the cause to a master to report the facts, with his opinion thereon, subject to the confirmation of the circuit court. Executors of the trustee. In such a case as the complainant alleges, are under the law of the state the successors of the deceased trus- tee, and that as such they may execute what- ever remains executory in the trust at the time of his decease; from which It would fol- low, if that be so, that it wUl be the duty of the executors of the deceased trustee In this case, when the rights of the complainant are fully ascertained, to make the necessary conveyance to perfect her title to the same extent as the trustee might do if in full Ufe. Express authority is reserved to the circuit court to ascertain the rights of the complain- ant as if the trust-deed was reformed, and to make the necessary decree to perfect her title in such mode and form as the law of the state and the practice of the state courts authorize and provide. Crafton v. Beal, 1 Ga. 322; Brown v. Tucker, 47 Ga. 485. Costs In this coOTt wiU be taxed to the principal respondent in favor of the complain- ant but no costs will be allowed against the other two respondents. Decree will be reversed and the cause re- manded for further proceedinge in conformiiy with the opinion of the court. So ordered 214 V jl/ MISTAKTC-PAROL EVIDBNOB TO CORRECT. METROPOLITAN LUMBER CO. v. LAKH SUPERIOR SHIP-CANAL, RAIL- WAY & IRON CO. et al. (60 N. W. 278, 101 Mich. 577.) Supreme Coort of Michigan. Sept 25, 1894:. Appeal from circuit court, Iron county, iB chancery; John W. Stone, Judge. Bill by the Metropolitan Lumber Company against the Lake Superior Ship-Canal, Rail- way & Iron Company and others. From a decree for complainant, defendants appeal. Affirmed. Ball & Ball, for appellants. Mead & Jen- nings (E. E. Osbom, of counsel), for appel- lee. HOOKER, 3. Complainant's bill Is filed to correct a contract for the purchase of tim- ber, by adding to It the description of cer- tain lands which Is claimed to have been omitted by mistake. The negotiations took place in Chicago, between the presidents of the corporations, complainant and defend- ant. The contract conveying the timber was subsequently prepared by defendants' coun- sel in Michigan, and was afterwards signed by the respective parties. Upon discover- ing the omission, which discovery was made some time after the contract was signed by complainant's president, defendants were asked to correct the mistake, but declined to do so without suit. Some time afterwards this suit was instituted. The learned cir- cuit judge who heard the cause filed a writ- ten opinion, in which he quotes the testi- mony at length, which, we think, is as fair a review of the case as could be made. We agree with him that the evidence shows that the parties who negotiated the deal, both understood that the "Perch Lake Group" of lands was Included in the purchase. It ap- pears to have been omitted because defend- ants' president, Mr. Davis, did not specific- ally mentiou it In his telegram of instruc- tions,— if it can be called such,— which he sent to Mr. Longyear, who was agent for the defendants at Marquette, from whom the attorney received the information upon which he prepared the contract. The tele- gram read as follows, viz.: "Chicago, June 6th, 188—. J. M. Longyear: Have sold to Atkinson all groups under refusal to him; also the Felch group. [Signed] Theo. M. Davis." It appears that complainant had written options on all the land covered by the negotiations, except the Felch group and the Perch lake group. The latter, not being mentioned in the telegram, was omitted. All of the witnesses who were present at the Chicago Interview agree that this group was talked about, and specifically mentioned as one of the tracts to be included. Davis him- self concedes this, but claims that he was figuring upon the basis of the amount of timber upon the groups, for which the com- plainant had written options, and that he supposed the Perch lake group was one of these. He admitted, however, that he con- sented to take $500,000 for the timber, ex- clusive of the Perch Ijike group, and that he asked $250,000 for that As these sums ag- gregate $750,000,— the exact amount paid,— there seems little doubt of the justice of, complainant's claim. We are satisfied that the complainant is justly entitled to relief. It remains to inquire whether there is any legal obstacle to granting it It is opposed upon several grounds, viz.: (1) The mistake was not mutual. (2) The mistake on part of complainant was committed through gross negligence, and equity will not relieve in such cases. (3) Delay in attempting to en- force complainant's claim, and going on to carry out the contract after refusal by the defendants to correct the contract, until it was impossible to put the parties in statu quo, constitutes a waiver of complainant's claim. (4) The addition of more land to the description, upon evidence of a parol con- tract, is contrary to the statute of frauds. We are satisfied that the omission was the result of the mistake of defendant's presi- dent in sending the telegram, supposing It to be full enough to cover the Perch lake group. There is no reason to believe thai be intentionally caused this omission. We cannot accede to the proposition that com- plainant's president was so negligent in ex- ecuting the contract without discovering the omission as to deprive the complainant of property worth $250,000. He had no reason to anticipate an attempt to cheat his com- pany, and therefore had no occasion to be more than ordinarily careful. He was deal- ing with a concern whose business was me- thodically conducted, and he knew that it was in possession of accurate descriptions. The contract was drawn by a reputable and able lawyer. To hold that he was negligent would be to say that acceptance of a deed or writing without a comparison and verifica- tion of descriptions is such negligence as to preclude relief against mistake, no matter how serious the consequences. Atkinson died before these proceedings were com- menced, and we have not the llglit tnat Uis testimony might throw upon the question of caution. From the testimony of Mr. Bar- rett, one of the defendants' witnesses, it would seem that he took the trouble to bring the contract to defendants' office, to make a. comparison of the descriptions, which was done, and he went away satisfied. During this time he was ill, with a malady from which he died soon aft«'. The claim that a mistake had been made was asserted as soon as it was discovered, and was insisted on at all times afterwards. It is true that suit was not immediately commenced, but com- plainant never gave the defendants reason to suppose that it had abandoned or intend- ed to waive its claim. No injury resulted to the defendants from the delay, and the com- plainant was Justified in exhausting persoft* MISTAKBl-OPAROL BVIDBNOB TO CORRECT. 215 slon, before resorting to litigation, especial- ly in view of Davis' repeated admission that he understood the Perch lake land a part of that contract It Is strenuously urged that the statutes of frauds preclude the relief sought by complainant, the negotiations having been oral. There ia conflict in the liooks upon the question of the effect of the statute of frauds upon the jurisdiction of courts of equity to reform instruments made in pursuance of oraJ agreements, where the correction sought is the addition of lands to those described. We are cited to the case of Macomber v. Peckham, 16 R. I. 485, 19 Ati. 910, as a recent adjudication upon the sub- ject, and to Climer v. Hovey, 15 Mich. 18, in support of defendants' contention. In the former case the court was careful to withhold an opinion beyond what was re- quired by the facts before ft. In stating the facts, Durfee, C. J., says: "Nor is it a case in which it is claimed that the contract is taken out of the operation of the statute of frauds by part performance on the part of the complainant. It presents the naked question whether oral testimony will be re- ceived in equity for the purpose of reform- ing a written contract for the sale of real estate on the ground of mutual mistake, and of enforcing it specifically when reformed." Opposed to this case is that of Hitchins v. Pettingill, 58 N. H. 386, decided 11 years earlier by the supreme court of the state of New Hampshire, which was not noticed by the Rhode Island court. It was there held that "when reformation is sought of a deed which, through fraud or mistake, conveys less land than was orally bought, and paid for, the case does not staid as if there were no deed; and the error may be corrected without proof of such part performance as is necessary for a decree of specific perform- ance compelling a conveyance of the whole land when no part of it has been conveyed." Many cases are cited in the opinion as sup- porting this preposition. This subject is al- so thoroughly considered in the notes to Woollam V. Heam, 2 White & T. Lead. Cas. Eq. 1008 et seq. The case of Climer v. Ho- vey, 15 Mich. 18, like the Rhode Island case, was one where the parties had not acted un- der the contract In the language of Camp- bell, J.: "No payments are alleged, and no acts of part performance. We are therefore brought down to the simple inquiry whether mere mistake, when neither party has parted with or done anything beyond signing an executory contract for one description of land, can authorize a court of chancery to enforce a parol contract by applying the terms written concerning one estate to an- other not referred to in writing." The bill was dismissed, Mr. Justice Campbell basing his opinion upon the fact that nothing had been done imder the contract, and that it was therefore within the operation of the Statute of frauds. Chief Justice Martin con- curred in the result Mr. Justice Cooley re- served his opinion as to the power of the court to correct a mistake in a suit to en- force it concurring upon other grounds, and with him Mr. Justice ChrisUancy concurred. But, whatever may be the rule where noth- ing has been done under the oral contract, we think that in this country , the over- whelming weight of authority supports the jurisdiction where part performance Is shown sufficient to warrant a specific per- formance under an oral contract In this case a payment was made, and the purchas- er proceeded to lumber the tracts not in dis- pute, before the omission was discovered, as was the case in Hitchins v. Pettingill, above cited. The case of Toll v. Davenport, T4 Mich. 397, 42 N. W. 63, appears to recog- nize the jurisdiction of chancery In such cases, when a parcel- was omitted from a mortgage, relief being denied, for the reason that the rights of a bona fide purchaser in- tervened. In the later case of Kimble v. Harrington, 91 Mich. 281, 51 N. W. 936, a mortgage was reformed by the insertion of the description of a 40-acre parcel a mile dis- tant which was omitted by mistake. The decree of the circuit court will be affirmed, with costs. The other justices concurred. 246 MISTAKE— PAROL EVIDENOIfl TO CORRECT. HITCHINS T. PBTTINGILI* (58 N. H. 386.) Supreme Court of New Hampshire. August, 187& Suit by one Hitcliins and another against one Pettingill and another for the reforma- tion of a deed. Decree ordered for plaintiffs. The court found the following facts: The plaintiffs, by oral agreement, bought a farm of the defendants for $2,500, paid the price, and took the deed of which they seek refor- mation. A part of the farm containing ten acres, included in the bargain and paid for, was, by the fraud of the defendants, omitted in the deed. After receiving the deed, the plaintiffs moved into the farm buildings which were on the land described in the deed, occupied that land, and made valuable Im- provements upon it, but made no improve- ments upon, and did not take possession of, the ten acres. The defendants continued in possession of that lot, and paid the taxes on it. Wlggin & Femald and Mr. Hobbs, for plaintiffs. Mr. Bartlett, for defendants. FOSTER, J. When reformation is sought of a deed which, through fraud or mistake, conveyed less land than was orally bought and paid for, the case does not stand as If there were no deed; and the error may be corrected without proof of such part perform- ance as is necessary for a decree of specific performance compelling a conveyance of the whole land when no part of It has been con- veyed. 1 Story, Eq. Jur. §§ 15^-161; Adams, Eq. 169, 171; 3 Greenl. Ev. §§ 360, 363; Bloomer v. Spittle, Fisher, Ann. Dig. (1872) 131; Tilton v. Tilton, 9 N. H. 385, 392; Pur- cell V. Miner, 4 Wall. 513; Prescott v. Haw- kins, 12 N. H. 19, 28, 16 N. H. 122; Way v. Cutting, 17 N. H. 450, 451; Bellows v. Stone, 14 N. H. 175, 201; Smith v. Greeley, 14 N. H. 378; Craig v. Klttredge, 23 N. H. 231, 236; Busby v. Littlefield, 31 N. H. 193, 199, 33 N. H. 76; Webster v. Webster, 33 N. H. 18, 22, 23, 26; Doe v. Doe, 37 N. H. 268, 285; Herbert v. Odlin, 40 N. H. 267; Brown v. Gllnes, 42 N. H. 160; Kennard v. George, 44 N. H. 440; Leach v. Noyes, 45 N. H. 364; Peterson v. Grover, 20 Me. 363; Farley v. Bryant, 32 Me. 475; Tucker v. Madden, 44 Me. 206; Adams v. Stevens, 49 Me. 362; Burr V. Hutchinson, 61 Me. 514; Beardsley v. Knight, 10 Vt 185, 190; Griswold t. Smith, 10 Vt 452; Goodell t. Field, 15 Vt 448; Blodgett T. Hobart, 18 Vt 414; Brown v. Lamphear, 35 Vt 252; Shattuck v. Gay, 45 Vt 87; Allen v. Brown, 6 R. I. 386; Holabird T. Burr, 17 Conn. 556; Wooden v. Haviland, 18 Conn. 101; Stedwell v. Anderson, 21 Conn. 139; Knapp T. White, 23 Conn. 529; Blakeman v. Blakeman, 39 Conn. 320; GUlesple v. Moon, 2 Johns. Oh. 585; Wlswall v. Hall, 3 Paige, 313j Johnson v. Taber, 10 N. Y. 319; De Peyster V. Hasbrouck, 11 N. Y. 582; Rider v. PoweU, 28 N. y. 310; WeUes v. Yates, 44 N. T. 525; Bush V. Hicks, 60 N. Y. 298; Ginschlo v. Ley, 1 Phlla. 383; Barile v. Vosbury, 3 Grant, Cas. 277; Wyche v. Greene, 16 Ga. 49; Du- rant v. Bacot 13 N. J. Eq. 201; Weller y. Kolason, 17 N. 3. Eq. 13; Ehleringer v. Morl- arty, 10 Iowa, 78; Barber v. Lyon, 15 Iowa, 37; Canedy v. Marcy, 13 Gray, 373; Metcalf V. Putnam, 9 Allen, 97, 100. In the last of these cases, Bigelow, J., de- livering the opinion, says: "Upon elemen- tary principles, the plaintiff Is entitled to have his deed reformed so that It may truly set forth the whole contract. • • • xjpon proof of fraud in the omission of material stipulations In a written contract, a court of equity will admit -parol evidence to establish the agreement as It was understood and con- cluded between the parties." The defend- ants rely upon Glass v. Hulbert 102 Mass. 24, where the doctrine of reformation of vrritten contracts was subjected to a limitation at variance with the settled law of this state. A court cannot disregard a valid statute, nor regard it with favor or disfavor, nor take out of its operation a case that is within it, nor grant relief, at law or in equity, against it The judicial question Is, What purpose of the legislature appears in its acts, upon the established rules of construction? "No ac- tion shall be maintained upon a contract for the sale of land, unless the agreement upon which it is brought or some memorandum thereof, Is in writing." Gen. St c. 201, § 12. "The supreme court shall have the powers of a court of equity in cases cognizable in such court and may hear and determine, ac- cording to the course of equity, In case of charitable uses, trusts, fraud, accident or mistake; • • * of specific performance ot contracts; • • • and in all other cases where there Is not a plain, adequate, and com- plete remedy at law." Gen. St c. 190, § 1. These provisions, though printed in different chapters, are consistent parts of one law. We are not to give either of them a strained construction, liberal or strict for the special purpose of justice m a particular case, or for the general purpose of making the law what In our judgment It ought to be. The mean- ing of one act may be shown by other acts. There may be several acts, neither of which can be properly administered in a particular case, except as part of one law comprising them all. It may be necessary to consider one statute on any subject a part of the whole law, statutory and common, on that subject, as it is necessary to consider one sec- tion or word of a statute a part of that stat- ute. The stitute of frauds, severed from all other law, written and unwritten, and taken In Its literal sense, would deny these plain- tiffs the relief of specific performance, even If they had taken possession of the ten-acre MISTAKE— PAROL EVIDENCE TO CORRECT. 247 lot and made valiiable Improvements upon It, and would leave people remediless In a great number of cases of fraud, accident, or mis- take, for wbich ample remedies are provided by the statute of equity jurisdiction; and the latter statute, torn from the general body of the law, takHi literally, and administered aa if there were no other law, would deprive the community of safeguards which the statute of frauds and the common law w«re designed to afford, and which the statute of equity was not designed to take away. The well-known general objects of these statutes are the -pria- cipal guides for their construction. The stat- ute of equity authorizes this court to admin- ister the legal principles of the general sys- tem of equity, which, as a great branch of the law of their native country, was brought over by the colonists, and has always existed as a part of the common law, in Its broadest sense, In New Hampshire. Wells t. Pierce, 27 N. H. 503, 512; Walker v. Cheever, 85 N. H. 339, 349. The statute of frauds prevents wrong being done In certain cases by the tes- timony of witnesses. If, without vyritten evidence of a contract for the sale of land, the vendee pays for the land, and, with the knowledge and consent of the vendor, takes possession of It, and makes valuable improvements upon It, he Is entitled to the relief of specific performance. Upon the literal construction of the statute of frauds there could not be a decree for spe- cific performance in such a case, and there could not be, by parol evidence, a reforma- tion of a deed enlarging Its operation; but the statute, rightly construed, does not destroy either of these remedies, as the statute of limitations does not destroy the remedy in cases of fraudulent concealment of the cause of action (Bank v. Fairbanks, 49 N. H. 131, 141), as the registry laws do not destroy the effect of actual notice of an imrecorded deed (Gooding v. Riley, 50 N. H. 400), and as the statute of frauds does not disturb a boundary fixed by parol agreement and possession (Kellogg V. Smith, 7 Gush. 375; Knowles v. Toothaker, 58 Me. 172). The plaintiffs are entitled to a decree for a conveyance of the ten-acre lot Case discharged. STANLEiY, J., ad not sit 248 MISTAKE— PAROL EVIDENCE TO CORRECT. HUNTER V. BIIiTETT et aL (30 111. 228.) Supreme Court of Illinois. Jan. Term, 1863. W. H. Herndon, and S. P. Moore, for ap- pellant J. & D. Gillespie, for appeUees. BREESB, J. John B. Hunter, as admin- istrator of Samuel W. Hunter, deceased, brought his action in the circuit court of Bond county, against Wesley A. and Finis Bilyeu, on a note executed by them to the intestate, dated March 30, 1850, and due March 30, 1855. Pending the action the de- fendants obtained an injunction on their bill of complaint, to which the administra- tor, and the heirs-at-law of the intestate, who were minors, and their guardian, to- gether with Joseph Smith, were made de- fendants. The bill alleges, that the note sued upon, to- gether with others which were paid, was one and the last of a number of notes they had executed to the intestate, for certain lands lying in Bond county, for which a bond for a deed was executed and delivered to them by the Intestate. That they were put into possession of the lands, and made lasting and valuable improvements on some of the tracts, but have discovered that one or more tracts, which they supposed they had bought, were not included in the bond. One of those tracts is described as "the old field tract" lying south-east of Shoal creek, and being part of the west half of the north- west quarter of secticm twenty-three, in town five north, range four west, containing forty and nineteen-himdredths acres; and the other, the "Gillespie tract," being the east half of the north-west quarter of the north- east quarter of the same section, township and range, containing twenty acres; the un- divided half of both which tracts, the com- plainants allege, was purchased by them of the intestate, and was to have been included in the title bond, but by mistake was leift out, and these tracts subsequently sold by the intestate to Joseph Smith. The bill also alleges, that some time an- terior to the commencement of this suit on the note, the administrator had filed a peti- tion in the circuit court, at the September term, 1855, praying the court for an order to authorize him to make a deed to complain- ants for the land described in the bond; that this petition contained the same errors and mistakes as are now complained of, with another error superadded In describing the lands as being in section "twenty-five." The complainants admit they were made defend- ants, and had due notice of the pending of the petition, but they did not appear to de- fend, supposing the lands were described as in the bond, and their being made defend- ants was a mere ceremony, and the proceed- ings consistent with their rights. That these errors and mistakes were carried into the Aecree rendered on this petition, and in the deed which the administrator tendered to them, and by them refused. No exhibit is made of these proceedings or of this deed. The title bond is alleged to have been writ- ten by the intestate, and delivered to the complainants and accepted by them without any objection, on the 30th of March, 1850. In the following year, 1851, the intestate left the state, and in 1852 died, leaving these in- fant defendants his only heirs at law. The prayer of the bill Is. that the court would order and direct the defendants to convey to complainants all of the land agreed to be conveyed to them by the Intestate, and to annul and hold for naught the order of the circuit court in behalf of. the administra- tor, or to amend and correct the decree so as to comport with justice and good conscience, and perpetually enjoin the collection of the note sued on, until they are able to comply with the understanding of Samuel W. ' Hun- ter, the intestate. The bond is made an exhibit, and describes the lands sold, and to be conveyed on pay- ment of the purchase money. They are: "The undivided half of a certain lot, begin- ning at the south corner of the south-west quarter of section 14, town 5 north, of range 4 west of the third principal meridian; thence running north fifty poles; thence west to the middle of the channel of Shoal creek; thence down the channel of Shoal creek, to the sec- tion line; thence east to the beginning cor- ner, containing thirty-eight a by an error in the description of the land, convey- ed the whole lot, or two hundred and fif^ acres, instead of two hundred acres, parcel of the same. The mistake Is positively denied in the an- swer, and the point was, is parol proof of this mistake admissible, in opposition to the plain language of the deed, and especially in opposition to the defendant's answer? It will be seen the statute of frauds and perjuries was not set up in the case. Aiter entering minutely into the parol proof of the fact of the mistake. Chancellor Kent says: "The rule in courts of law is, that the written instrument does. In con- templation of law, contain the true agree- ment of the parties, and that the writing fur- nishes better evidence of the sense of the parties, than any that . can be supplied by\ I parol. But equity has a broader jurisdic-\ tlon, and wiU open the written contract to \ let in an equity arising from facts perfectly 1 distinct from the sense and construction of I the instrument itself. I have looked into ] most. If not all the cases on this branch of ^ equity jurisdiction, and it appears to me to be established on great and essential grounds of justice, that relief can be had against any deed or contract in writing, founded in mis- take or fraud. The mistake may be shown by parol proof, and the relief granted to the Injured party, whether he sets up the mis- take affirmatively by bill, or as a defensa" After reviewing many of the decisions on this question, the chancellor decides that parol proof was admissible, and that it estab- lished the mistake as charged in the bill. It will be observed, the contract in this case was an executed contract, a deed of conveyance having been made; there was no prayer for a specific performance of a contract, but to correct a mistake in the deed. The chancellor remarks: "Whether such proof be admissible on the part of a plaintiff, who seeks a specific performance of an agreement in writing, and at the same time seeks to vary it by parol proof, has been made a question. Lord Hardwicke, lo MISTAKE— PAROL EVIDENCE TO CORRECT. 251 Jacques v. Statham, 3 Atk. 388, seemed to think it might be done, but such proof was rejected in Woollam v. Hearn, 7 Ves. 211 (which we have cited at length); and in Hig- ginson v. Clowes, 15, Ves. 516; and when Lord Redesdale said, in Clinan v. Cooke, 1 Schoales & L. 39, that he could find no deci- sion in wliich a plaintiff had been permitted to show an omission in a written agreement, by mistake or fraud, he must be understood to refer to the cases of bUls for a specific per^ formance of an agreement, which was the •case then before him." This case would seem to decide nothing more than this: that In a bill to correct a mis- take In an executed contract, parol proof of the mistake is admissible, and that such proof is as available for one party, or for one purpose, as for another,— as available for the plaintiff in setting -up a claim, as for tKe defendant in resisting it. It is nowhere said, that a bill to reform an executory contract, and then decree a specific performance when reformed, against a denial, in Ihe answer, of any mistake, and the plea of the statute of frauds and perjuries, can be sustained by- parol evidence. This decision, so far as It goes, has been followed by the courts of many other states. The cases are referred to by Hare & Wallace, on pages 539, 540, but in none of them was the denial in the answer accompanied by a plea of-i:he statute of frauds and perjuries. Nor do these cases go farther than to assert the general principle, that independent of this statute, where It is not set up as a de- fense, parol evidence will be received to cor- rect an alleged mistake in a written executed contract, when asserted by a plaintiff, and is as available for him, as for defendant. ;.' The cases go to the extent of declaring, ' that parol evidence shall be admissible to % correct a writing as well for a plaintiff as against him, thus establishing mutuality and equality in the operation of the doctrine. In 1 Story, Eq. Jur. § 161, In commenting on the" distinction set up, the learned author says, in a note, that It is of a very artificial character, and difficult to be reconciled with the general principles of courts of equity. He says: "The ground is very clear, that a court of equity ought not to enforce a con- tract, when there Is a mistake, against the defendant insisting upon and establishing the mistake; for it would be Inequitable and unconscientious. And If the mistake is vital to the contract, there is a like clear ground, why equity should Interfere at the instance of the party as plaintiff, and cancel it; and if the mistake is partial only, why, at his In- stance, it should reform It. In these cases, the remedial practice is equal; and the parol evidence to establish it. Is equally open to both parties to use as proof. Why should not the party aggrieved by a mistake in an agreement, have relief in all cases when he is plaintiff, as well as when he is defendant? If the doctrine be founded upon the impro- priety of admitting parol evidence to con- tradict a written agreement, that rule is not more broken In upon by the admission of It for the plaintiff than it Is by the admission of it for the defendant. If the doctrine had been confined to cases arising under the stat- ute of frauds, it would, if not more Intelligi- ble, at least have been less inconvenient in practice." In a subsequent case,— Keisselbrack v. Liv- ingston, 4 Johns. Ch. 145,— which was a bill for the specific performance of an agreement In writing to execute a lease for lives "con- taining the usual clauses, restrictions and reservations contained in the leases given by defendant," the bill stated that a lease was offered, containing a provision that upon ev- ery sale of the demised premises, one-fifth of the purchase or consideration money should be taken by the defendant to his own use, which complainant refused to receive, alleg- ing, that at the time of the execution of the writing, It was agreed no such quarter or fifth sales should be demanded or paid. The defendant did not. In direct and clear terms, deny any such agreement, but denied ■.any other or different contract than the one set forth made in writing, and as to the va- lidity of the supposed verbal agreement, he pleaded the statute of frauds. The point in the case was, whether this verbal agreement could be established by pa- roL The learned chancellor says, It did not appear to him, that the statute of frauds had any bearing on the case. "The agree- ment for the three life lease Is in writing, and it has been partly performed, by possession taken and transferred, and rent paid. The right of the plaintiff rests upon the contract In writing, and the only inquiry is, whether there Is not a mistake in the generality of the expression, that the lease was to contain the "usual clause,' etc., and whether the par- ties did not Intend an exception in respect to the quarter sales. There Is no doubt of their declared Intention to make such an ex- ception at the time the agreement was drawn; and I am inclined to think that the writing Is, and ought to be, susceptible of amend- ment and correction In that particular." The proof was admitted, and the mistake corrected, partly upon the ground, that the writing Itself let In parol proof, to show which were "the usual clauses," etc., and such proof being let In by the contract itself. It might, on the principle of the agreement it- self, be applied to correct any mistake mani- festly shown to exist, in the general and un- qualified terms of that part of the written agreement which depended for Its explana- tion upon external proof. This court has held, as a general proposi- tion, that the terms of a written agreement cannot be changed by parol. Baker v. White- side, Breese, 132; Penny t. Graves, 12 111. 298. And so It is held by all courts. At the same time, we have said, that whatever cov- enants an absolute deed may contain, parol 252 MISTAKE— PAROL EVIDENCE TO CORRECT. evidence may be admitted to show that It was intended as a mortgage, or mere security for the' payment of the debt, and the gran- tor can have relief in equity, and this, where mistalse la not alleged. Purviance v. Holt, 3 Gilman, 405; Ferguson v. Sutphen, Id. 547. And it is also held, In Harlow v. Boswell, 15 111. 57, where parties commit their contracts to writing, this forms the only evidence of Its terms. In Scott V. Bennet, ? Gilman, 254, this court said, it Is a familiar principle that you may give evidence to explain, but not to vary, add to, or alter a written contract. Courts cannot make a new contract for the parties. But If there is doubt and uncertainty, not about what the substance of the contract is, but as to Its particular application, It may be explained, and properly directed. As a general principle, where a contract Is reduced to writing, the writing affords the only evidence of the terms and conditions of the contract; aU antecedent and contempora- neous verbal agreements are merged in the written contract There is an apparent contradiction In these several opinions, but we think a few familiar considerations will serve to reconcile them, or show that it is not real. The subjects pecul- iarly proper for the jurisdiction of courts of equity, are well understood to be, fraud, I trusts, accident and mistake, and these courts I are vested with the power to afford relief In all cases, wherein, by reason of the universal- ity and rigor of the rules of the common law, a remedy cannot otherwise be had. The power to correct a mistake In a writing. Is as much within the scope of this jurisdiction as any other mistake. The whole realm of mistake is laid open to the court, and Its pow- ers are limitless to correct, on a proper case made. That it should be dormant, when in- voked to correct a mistake in a written con- tract, would be strange indeed. It is no an- swer to say, that within the rigid rule of law, the power may be exercised, but not outside of It, as that would destroy the rule. In our judgment. It has no such effect. The juris- diction of a court of chancery to correct mistakes, is no less important to the due ad- ministration of justice, and the safety of the dtlzen, than the rule of the common law, that parol evidence cannot be received to add to, or vary a written contract, and In a court of equity, it must be determined, on the circum- stances of each case, which shall prevail, the exercise of an unquestioned power of the court, or the rule of the common law. The doctrine is undisputed and Incontesta- ble, that a deed, absolute on Its face, may be shown, by parol, to have been Intended by the parties to It, as conditional, merely, and a court of equity, on proper proof, will so hold. This contract is explained by parol evidence, and If it Is made to speak a language Its words do not Import, who will deny that it is within the competency of that court to as- certain the real contract of the parties, and then enforce It, according to the Intention of the parties? If a court of equity has not the power to correct mistakes In a deed, or other writing, on convincing proof of the existence of the alleged mistake, great injustice would be perpetrated with impunity. A man sells a vacant lot adjoining the lot on which he has a costly residence, but by the mistake of the scrivener, the deed describes the lot of his residence. An ejectment Is brought— the purchaser claiming under his deed— and If no power exists In a court of equity to cor- rect the mistake, he must surrender that which he never sold, and the purchaser re- cover a property he never bought A court of chancery should not hesitate to receive pa- rol evidence of this mistake, and on suflacient proof, correct it, else the most flagrant Injus- tice would be perpetrated, and an undoubted power of that court be rendered ineffectual and worthless. There can be no danger in exercising this power, since the court has before it all the facts, and If they are not con- vincing, the stern rule of law will prevail. The court has, in many cases, acknowl- edged and exercised this power, and we do not know that it has been questioned by the bar here or elsewhere. The doctrine is fully recognized In the case ' of Broadwell v. Broadwell, 1 Gilman, 599, that a court of chancery will always correct any mistakes of fact which have occurred in drawing up a paper, when a proper case is presented and clearly proved, and then carry / into effect the instrument when thus correct- ed. And herein is found the safeguard for those so litigating, a proper case must be presented and clearly proved. If it be clear- ly proved, who shall say that a court of eq- uity transcends Its powers, or violates the rule of law, in declaring the contract to be as the parties have made it? We cannot think the statute of frauds and perjuries has any application to such cases. Here the bill is filed to reform this contract, by Inserting in It several tracts of land, al- leged to have been omitted from It by mis- take, and parol evidence is relied on for such purpose; and when reformed, then the prayer is, to decree a specific performance of the con- tract This proof makes the contract dif- ferent from what its words Import, and adds to It, and varies It very materially. It, In fact, makes a new and different contract; yet if the mistake is clearly established, which should give way, that rigid rule of the common law, or that power residing In a court of equity, to correct mistakes? The strongest and most convincing evidence will be required, before the common law rule is postponed, and the power of the court exer- cised. Now, what Is the testimony in this case? It consists. In great part, of loose conversa- tions held by one Gillespie and others, with the intestate, In which he said, there was a mistake In the bond; that the tract lying south-east of Shoal creek, being part of thi^ MISTAKE— PAROL EVIDENCE TO CORRECT. 253 west half of the north-west [quarter] of [section] twenty-three was not in the bond, or not in right, and the Bilyeus had found it out This witness states nothing in positlye terms, but "thinks" the facts were so and so," as he details them. He "thinks" all the lands claimed by complainants were Included in the bond, except the Gillespie tract, and thinks that intestate told him some of the numbers were wrong, and some of the land was not named in the bond. He spoke of the west half of the north-west [quarter of sec- tion] twenty-three lying south-east of Shoal creek, as not included in the bond, and that he would not rectify the mistake because they could not agree upon a division of the lands according to his understanding of the con- tract. This witness says that he can neither read nor write, and details only such parts of the conversation, as he "thInJis" was had with the intestate. He does not say in pos- itive terms, that the intestate admitted to him he had sold this tract to complainants, or that it was left out of the bond by mis- take. No testimony could be more unsatis- factory than his, taking the whole of it to- gether. Fenton says he "thinks" Hunter told him he drew the bond himself and that there was a mistake in it, but does not recol- lect what the mistake was. He says It was his understanding a bond was given by Hunt- er to complainants, and notes given for the payment of the money — does not say he ever saw the bond or notes — says the complainants never took possession of the Gillespie tract— on the tract south-east of the creek; they cut some timber off, put a blacksmith shop upon, and pastured the field on it while they and Hunter were In partnership; there was some money paid on the general contract, but don't know how much. Paine states that Hunter told him com- plainants were to have half of this tract, when he. Hunter, sold or left, according to the contract as made with complainants, in the sale of the mill, which was In 1850. He had this conversation in the winter after the sale of the mlU property; that complainants have cut and hauled saw logs, and Hunter and complainants buUt a blacksmith shop on this land; and "thinks" complainants re- paired the fences some, but is not certain, and they used It as a pasture in connection with Hunter. Hunter also said he had sold the' GUlespIe tract to them, and that David Hunter was to make a deed to It. Don't know that complainants ever exercised any acts of ownership over this tract. Hunter said there was a mistake in the bond, and if his health would permit, he was coming to town to get it fixed; "thinks" the mistake ap- plied to the tract south-east of Shoal creek, on which there was an old field. Does not know of complainants exercising any acts of ownership over this "old field tract," since they and Hunter dissolved partnefship; don't know the numbers of the land. The testimony of Clouse, and of lb G. Bil- yeu, does not differ, substantially, from thai of other witnesses. Smith says, Hunter told him, that all the lands the complainants were to get, were in- cluded in the bonds; that half ot the timber on the tract lying on the south-east side of Shoal creek, on which there was an old field, was included in the contract with complain- ants, and that they had got their share off, and that he had not sold the land to them. Wesley Bilyeu had stated to witness that he had an Interest In this tract, and Hunter then told him as above stated. Hunter had pos- session of this tract when witness bought It, and had com standing In the field on It George Smith stated that Hunter told him that complainants had no right to the tract lying south-east of Shoal creek, but as soon as he could buy a piece from John Clouse, he would make it right, but they were to have It when he sold or left; understood this same tract was included in the original contract This is the substance of the evidence to prove the mistake In the bond, and part per- formance, which, it Is very clear, Is wholly insufficient for either purpose. It would be relaxing too much those salutary rules of ev- idence, which require a contract to be clearly proved, before a specific performance of- it wUl be decreed. It Is discretionary with the court, in all such cases, to decree or not a specific performance of a contract, and that discretion will not be exercised except in a verv clear case. This contract was made in March, 1850, and the intestate remained In the state until 1851, during a part of which time he was in partnership with complainants, in using the mill property. They paid their notes as they became due, and not a word of complaint is heard of any mistake. They were implead- ed, by the administrator of the Intestate, in a petition in chancery, for the purixise of ob- taining an order of court, authorizing him to make a deed to them In performance of the covenant; in which suit, it was fully compe- tent for the complainants to have litigated all these matters, but which they neglected to do. Though these proceedings are not pleaded, or set up In bar by the defendants, they might have been, successfully, and the case thus disposed of, rendering unnecessary the examination we have been compelled to give it on the issues made. We are satisfied nothing has been shown to establish a mistake, its nature, or extent, so clearly, as to leave no doubt on the mind of the actual existence of the alleged mistake. The decree, as to the old field tract, being a part of the west half of the north-west quar- ter of section twenty-three, lying north-east of Shoal creek, and as to the Gillespie tract, Is reversed, and the decree so modified as to exempt those tracts from Its operation. The Injunction will be dissolved, and the adminis- trator, the appellant here, will be allowed to proceed with his action at law. Decree modified. "yMISTAKE- GLASS T. HUIiBERT. (102 Mass. 24.) Siipreme Judicial Court of Massachusetts. Sept. Term, 1869. Bill in equity for the reformation of a con- veyance of lands, and for further relief. The case was reserved by the chief justice "for the consideration and decision of the full court upon the question whether, upon the allegations of the bill, the plaintiff is entitled to relief in equity, and whether the plaintifC has not a full, adequate, and complete rem- edy at law; the defendant also relying in his answer upon the statute of frauds." W. H. Swift and S. W. Bowerman, for plaintiff. M. Wilcox and W. T. Filley, for defendant. WPit/LS, J. The plaintiff purchased cer- tain lots of land of the defendant, received a deed, and paid the whole amount of the pur- chase money. This suit is brought for relief or redress in several particulars, dissimilar In character, but all connected with the al- leged oral contract of purchase. He com- plains: First That a proviso was Inserted In his deed, imposing upon him the burden of supporting the whole fence upon the south line of the land conveyed; and that he was induced to assent to Its Insertion upon the consideration, and false representation of the defendant, that the whole fence upon the east side of said land was to be maintained by the adjoining proprietor, PatricK McDaniels, by virtue of a written obligation to that ef- fect, and that the plaintiff would be relieved from all liability to maintain any fence upon that side; as well as by certain other false representations of the defendant in relation thereto. Second. That he delivered to the defendant, in part payment of said purchase money, three bonds of the United States of 51,000 each, upon the agreement of the de- fendant that he would allow the full market value of the same, including premium and ac- crued interest at the time of the transfer thereof; and that the defendant refuses to allow and pay him the value of such pre- mium and interest, amounting together to the sum of $315; that sum being in excess of the whole purchase money due to the de- fendant Third. That during the negotiations for the sale and purchase of said lands the defendant pointed out the southeast corner of the premises proposed for sale, and repre- sented that the land of the adjoining propri- etor, McDaniels, extended to that point, and that the southerly line of the land sold would extend from the same corner to a point on the highway near a bridge; that the deed was accordingly written and accepted, de- scribing the land as bounded on the south by a line running from the southwest corner of land of said McDaniels, at right angles to the westerly line of said McDaniels, to the highway, the defendant representing said line PAROL EVIDENCE TO CORRECT. to be the same line previously pointed out by him to the plaintiff, and that it would strike the highway within one rod of said bridge; whereas in fact the land of said McDaniels did not extend so far as to the southeast cor- ner of the defendant's land as pointed out by him, and the south line, running at right angles therefrom to the highway, did not strike the same within one rod of said bridge; and the deed so written and accepted did not include a considerable part of the land so offered and represented to be sold, and in- tended and understood by the plaintiff to have been purchased by him; the part so excluded consisting of about 17 acres of land, comprising the greater part of the meq,dow land In the tract as pointed out by the defendant. The plaintiff, by his bill, does not seek to rescind the contract and conveyance, and does not offer to reconvey or release to the defendant the land conveyed, nor pray that he may be allowed to do so, and recover back the purchase money paid and bonds delivered In payment The relief prayed for is that the defendant may be required to convey to the plaintiff the portion of the tract which was so by fraud or mistake omitted from the conveyance already made to release the plain- tiff from the proviso In his deed in regard to the fence, and to pay to the plaintiff the aforesaid amount of premium and interest upon said bonds. . The argument of the plaintiff is addressed mainly to the question of the equity jurisdic- tion of this court in cases of fraud or mistake like that alleged in the present suit There can be no doubt upon that point There is no ground upon which jurisdiction In equity is so readily entertained and freely exercised, It Is given to this court without restriction. If the parties have not a plain, adequate, and complete remedy at law. Gen. St c. 113, § 2. Having jurisdiction, the question is as to the appropriate remedy. Jurisdiction in equity is often maintained, even when there Is a remedy at law, for the sake of the great- er facility it affords for adapting the proper relief to the peculiar necessities of each case. If the party suing is entitled to no relief oth- er than that wbich may be had in an action at la^, he is remitted to his remedy in that form. Even In a proper case for an appeal to equity the remedy must be sought in ref- erence to certain recognized rules and princi- ples of chancery jurisprudence, and is often restricted by provisions of positive law. It Is not administered arbitrarily. It must flow out of and accord with the agreements and obligations of the parties, and be adapted to the condition of facts to which it Is to be applied. In the present case, the principal ground of action Is the fraud or mistake by which an Important part of the subject-matter of the alleged contract of sale and purchase was omitted from the deed of conveyance. If ths allegations of the bill should be sustained by MISTAKE— PAROL EVIDENCE TO CORRECT. 255 the proofs, they would show a clear right to have a rescission of the contract; and, upon reconveyance of the land covered by the deed, to have restoration of the bonds and money that were delivered in payment But this re- lief the plaintitP does not seek; and his bill contains no offer to reconvey, without which he cannot have such relief. The prayer of the bill, and its sole purpose in this particu- lar, is that the defendant may be compelled to convey to the plaintiff the 17 acres of land which he alleges were included in the oral contract of sale, or represented by the defend- ant to be so included, but omitted from the deed. If the case stood merely upon the oral con- tract of sale, with a conveyance of part and a neglect or refusal to convey another part of the land which was the subject of the al- leged conti-act, we do not think it would be contended that the plaintiff could compel a conveyance of the other land, against a party denying the contract and setting up the stat- ute of frauds. Courts are bound to regard that statute in equity as well as at law. The only remedy in equity, in such case, would be by a rescission of the entire contract, In which the aid of the court could be obtained. If necessary, upon proper grounds. There has been no part performance here, such as, according to the general practice in courts of equity, would be held to take the case out of the statute of frauds. 1. Payment of the whole consideration is not sufficient for that purpose. Hughes v. Mor- ris, 2 De Gex, M. & G. 356; Thompson v. Gould, 20 Pick. 134, 138; Browne, St Frauds, ! 461; Fry, Spec. Perf. § 403; Dale v. Hamil- ton, 5 Hare, 369; Clinan v. Cooke, 1 Schoales & li. 22, 41; Allen's Estate, 1 Watts & S. 383; Purcell v. Minei;, 4 Wall. 513. 2. Possession by the purchaser, under such a deed as was given to the plaintiff, is pos- session according to the title thereby con- veyed; and is not such a possession as to afford ground for enforcing an alleged oral agreement to convey other land, claimed to have been embraced in the same oral agree- ment with that conveyed. Moale v. Buchan- an, 11 Gill & J. 314. The plaintiff does not appear to have been let Into actual posses- sion of the 17 acres, nor to have been in- duced to do any acts thereon, as owner, un- der his supposed rights as purchaser. 3. The conveyance of a portion of the land Is neither a part performance, nor is It a recognition of the alleged oral contract, so far as it relates to the remaining land not in- cluded in the deed. On the contrary, it Is In distinct disregard and Implied disavowal of such a contract The deed was given and ac- cepted In execution of the entire contract of sale. Its terms are In literal conformity with the agreement as made. The plaintiff con- cedes that the southern boundary was stipu- lated to be described as It Is written in the deed, to wit, running from the southwesterly corner of land of McDaniels, and at right angles with his westerly line, to the high- way. But the plaintiff claims that he In fact pur- chased the whole of a certain tract of land which included the 17 acres now in dispute; that the description of the boundaries, as agreed upon and inserted in the deed, was so agreed on and inserted upon the representa- tion of the defendant and the belief of the plaintiff that it did Include said 17 acres; and that the failure of the deed to embrace and convey that part of the land, was oc- casioned either by the mutual mistake of the parties as to the position of the southwest corner of land of McDaniels, or else by the misrepresentation, deceit, and fraud of the defendant In relation thereto. In either al- ternative, the plaintiff contends that he Is entitled to a reformation of the deed, to make It conform to the sale actually con- tracted by the parties. Such a reformation not only requires a de- scription of the subject-matter of the sale, different from the express terms of the oral contract, but would enlarge the effect and operation of the deed as a conveyance. It Involves the transfer of the legal title to land not covered by the deed already given. It requires a new deed to be executed and de- livered by the defendant to the plaintiff. Whether that deed shall embrace the entire subject of the alleged contract of purchase, with a corrected description to make it con- form to facts and abuttals as they were rep- resented to be, or merely convey the 17 acres omitted from the deed already given, the or- der for its execution will enforce the specific performance of a contract for the sale of lands, for which there exists no memoran- dum, note, or other evidence In writing sign- ed by the party to be charged therewith. As to the 17 acres In dispute, the obligation to convey them rests solely In the oral con- tract. The defendant denies any contract which Includes them. The plaintiff seeks to establish such a contract by parol evidence, and enforce it The deed itself furnishes no means of making the correction sought for, and no evidence of the contract relied on for this purpose; nor Is it in any sense an ac- knowledgment of the substance of the al- leged oral agreement The power to rectify deeds and other writ- ten instruments undoubtedly exists in this court, under the clauses of the statute giving equity jurisdiction In cases of fraud, acci- dent, and mistake, or the clause giving It gen- erally where there Is no adequate remedy at law. It has been exercised in several cases. Canedy v. Marcy, 13 Gray, 373; Metcalf v. Putman, 9 Allen, 97. But the power will be exercised In subordination to other fixed prin- ciples of law, and especially to statute pro- visions. If the rules, restricting the admin- istration- of judicial remedies, which are pre- scribed by the statute of frauds, were to be disregarded In this branch of equity pro- cedure, it would open the door to all the 256 MISTAKE— PAROL EVIDENCE TO CORRECT. forms of fraud which that statute was In- tended to prevent The statute is not a mere rule of evidence, but a limitation of Judicial authority to afford a remedy. It requires that contracts for the sale of lands. In order to be enforced by judicial proceedings, must be substantiated by some writing. This pro- vision of law cannot be dispensed with mere- ly for the reason that the want of such writing was occasioned by accident, mistake, or fraudulent representations, unless some other ingredient enters into the case to give rise to equities stronger than those which stand upon the oral contract alone, which estop the other party from setting up the statute. It makes no difference whether the want of a writing was accidental or Intentional, by way of refusal or by reason of mutual mis- take; nor that there were false representa- tions, and a pretence of conveying the land, but a fraudulent evasion, by means whereof there was no Conveyance in fact, and no proper written evidence of the agreement to convey. From the oral agreement there can be derived no legal right, either to have per- formance of its stipulations or written evi- dence of its terms. So long, therefore, as the effect of the fraud or mistake extends no fur- ther than to prevent the execution, or with- hold from the other party written evidence of the agreement, it does not fmrnish suflS- cient ground for the court to disregard the statute of frauds, and enter into the investi- gation of the oral agreement for the pur- pose of aiforcing it. And we do not see that the present case stands otherwise in this re- spect than it would if there had been no con- veyance of any part of the land. As al- ready shown, that conveyance was not in ex- ecution or recognition of the contract which the plaintiff seeks, by this bill, to enforce; and does not furnish any reason for taking the case out of the statute, on the ground of part performance. Indeed, the rule seems to be tliat no part performance by the party sought to be charged will take an agreement out of the statute of frauds, except in those cases where the statute itself provides for such effect. It is part performance by the party seeking to enforce, and not by the oth- er party, to which courts of equity look, in giving relief from the statute. Caton v. Caton, 1 Gh. App. 137, L. R. 2 H. L. 127; Mundy v. JoUiffe, 5 Mylne & O. 167; Buck- master V. Harrop, 7 Ves. 369; Browne, St. Frauds, § 453. When the proposed reformation of an In- strument involves the specific enforcement of an oral agreement within the statute of frauds, or when the term sought to be added would so modify the instrument as to make It operate to convey an interest or secure a right which can only be conveyed or secured through an instrument in writing, and for which no writing has ever existed, the stat- ute of frauds is a sufficient answer to such a proceeding, unless the plea of the statute can be met by some ground of estoppel to de- prive the party of the right to set up that defence. Jordan v. Sawkins, 1 "Ves. Jr. 402; Osbom V. Phelps, 19 Conn. 63; Clinan v. Cooke, 1 Schoales & L. 22. The fact that the omission or defect In the writing, by reason of which It failed to con- vey the land or express the obligation which it is sought to make it convey or express, was occasioned by mistake, or by deceit and fraud, will not alone constitute such an es- toppeL There must concur, also, some change In the condition or position of the party seeking relief, by reason of being In- duced to enter upon the execution of the agreement, or to do acts upon the faith of It as If It were executed, with the knowledge and acquiescence of the other party, either express or Implied, for which he would be left without redress If the agreement were to be defeated. Upon a somewhat extended examination of the decisions Id regard to the effect of the statute of frauds upon the right to have eq- uitable relief where the writing Is defective, although many of them, where relief has been granted, hardly come within this defi- nition in the apparent character of the par- ticular facts upon which they were decided, yet we are satisfied that this principle of dis- crimination is the only one which can give consistency to the great mass of authorities upon this subject The case of Smith v. XJnderdundc, 1 Sandf. Oh. 579, Is nearly like the present in its facts; and the opinion of the assistant vice-chan- ceUor would seem to sustain the right of the plaintiff here. There was no fraud in the preparation of the deed. The judgment was based mainly upon the ground of part per- formance. It was held to be sufficient to take the case out of the statute that the plaintiff had been let into possession as pur- chaser; and the opinion indicates that pos- session under and In accordance with a deed of part would be a sufficient possession of the whole for the purpose of requiring a deed of the remainder. But the decision rests up- on the fact of possession by the plaintiff of the entire premises, including the part for which the biU was brought. The case arose upon demurrer to the bill, which of course admitted the contract, and the alleged pos- session of the whole tract. The question of the statute of frauds did not arise therefore. That the purchaser has been let into pos- session in pursuance of a parol agreement has been very generally recognized as suffi- cient to take It out of the statute. The rea- soning by which this result was reached Is far from satisfactory; and even where the rule prevails there are frequent intimations that it is regarded as trenching too closely upon the spirit as well as the letter of the statute. If it were now open to settle the rule anew, we cannot doubt that it would be limited to possession accompanied with or followed by such change of position of the MISTAKE— PAROL EVIDENCE TO CORRECT. 257 purchaser as would subject him to loss for which he could not otherwise have adequate compensation or other redress; and that mere change of possession would not be held to take a case out of the statute. However it may be elsewhere, we are disposed to hold the rule to be so in Massachusetts. Previously to the Statutes of 1855, e. 194, and 1856, c. 38 (Gen. St c. 113, § 2), the power of the court to direct specific per- formance was confined to written contracts. Rev. St c. 74, § 8. That power was held to be strictly limited to contracts in which the whole obligation to be enforced was ex- pressed in the writing. Dwight v. Pomeroy, 17 Mass. 303; Brooks v. Wheelock, 11 Pick. 439; Leach v. Leach, 18 Pick. 68; Buck v. Dowley, 16 Gray, 555; Park v. Johnson, 4 Allen, 259. The provision conferring that power specifically in case of written con- tracts is still retained in the Gen. St. c. 113, § 2. If the subsequent clauses, conferring jurisdiction generally, are to be construed, as we think they are, to extend the power of the court so as to give relief by way of specific performance, either of contracts wholly unwritten, or of stipulations proved by parol and incorporated into a contract by judicial rectification of a written instrument, as in Metcalf v. Putman, 9 Allen, 97, still that power ought to be exercised with con- stant reference and in subordination to the condition that "the party asking relief has not a plain, adequate, and complete remedy at common law," which accompanied each enlargement of the equity power of the court, and which prefaces and closes the enumeration of those powers in the General Statutes. The force of this consideration is not lessened when applied to agreements within the statute of frauds. Mere possession of land does not expose the party to loss or danger of loss without redress at law. The parol agreement of sale and purchase, with permission to enter, though not to be enforced as a valid contract of sale, will constitute such a license as will protect the party from liability for acts done before the license is revoked, and for all acts necessary to enable him to remove himself and hia property from the premises after such revocation. If possession be taken without such permission, express or Implied, it is no foundation for relief in equity, ac- cording to any of the authorities. The argu- ment, for the admission of parol evidence to prove an agreement within the statute of frauds in order to enforce it in equity, drawn from the admissibility of such evidence to maintain a defence, either at law or in eq- uity, seems to be based upon a misconcep- tion of the purport and force of the statute, which reaches no farther than to deny the right of action to enforce such agreements. In this commonwealth, the possession of land by a purchaser is not even notice to a third party of an unrecorded deed. The whole spirit of our laws in respect to real es- H.& B.EQ.(2d Ed.)— 17 tate Is against the policy of enabling parties to acquire or confer title, either legal or eq- uitable, by mere parol and delivery of pos- session. The possession of the plaintiff, therefore, even if it extended to the tract in dispute, is not sufl3cient to entitle him to re- lief against the statute. The principle, on which courts of equity rectify an instrument, so as to enlarge its operation, or to convey or enforce rights not found in the writing Itself, and make it con- form to the agreement as proved by parol evidence, on the ground of an omission, by mutual mistake, in the reduction of the agreement to writing, is, as we understand it that in equity the previous oral agree- ment is held to subsist as a binding contract, notwithstanding the attempt to put it in writing; and upon clear proof of its terms the courts compel the Incorporation of the omitted clause, or the modification of that which is Inserted, so that the whoW agree- ment as actually intended to be made, shall be truly expressed and executed. Hunt v. Rousmaniere, 1 Pet. 1; Oliver v. Mutual Commercial Marine Ins. Co., 2 Curt 277, Fed. Cas. No. 10,498. But when the omitted term or obligation is within the statute of frauds, there is no valid agreement which the court is authorized to enforce, outside of the writing. In such case, relief may be had against the enforcement of the contract as written, or the assertion of rights acquired under it contrary to the terms and intent of the real agreement of the parties. Such re- lief may be given as well upon the suit of a plaintiff seeking to have a written contract, or some of its terms, set aside, annulled, or restricted, as to a defendant resisting its specific performance. Canedy v. Marcy, 13 Gray, 373; Gillespie v. Moon, 2 Johns. Ch. 085; Kelsselbrack v. Livingston, 4 Johns. Ch. 148. Relief In this form, although procured by parol evidence of an agreement differing from the written contract, with proof that the difference was the result of accident or mistake, does not conflict with the provi- sions of the statute of frauds. That statute forbids the enforcement of certain kinds of agreement without writing; but it does not forbid the defeat or restriction of written contracts; nor the use of parol evidence for the purpose of establishing the equitable grounds therefor. The parol evidence is in- troduced, not to establish an oral agreement independently of the writing, but to show that the written Instrument contained some- thing contrary to or in excess of the real agreement of the parties, or does not prop- erly express that agreement. Higginson v. Clowes, 15 Ves. 516; Clowes v. Higginson, 1 Ves. & B. 524; Squler v. Campbell, 1 Mylne & C. 459, 480. But rectification by making the contract Include obligations or subject-matter to which its written terms will not apply is a direct enforcement of the oral agreement, as 258 MISTAKE— PAROL EVIDENCE TO CORRECT. much In conflict with tlie statute of frauds as if there were no writing at all. Moale v. Buchanan, 11 Gill & J. 314; Osborn v. Phelps, 19 Conn. 63; Elder v. Elder, 10 Me. 80. In Parkhurst v. Van Cortland, 14 Johns. 15, 32, it is said that, "where it is necessary to make out a contract in writing, no parol evi- dence can be admitted to supply any defects in the writing." Per Thompson, C. J. Such rectification, when the enlarged operation in- cludes that which is within the statute of frauds, must be accomplished. If at all, under the other head of equity jurisdiction, namely, fraud. Imham v. Child, 1 Brown, Ch. 92; 1 Story, Eq. Jur. § 770a; Davies v. Fltton, 2 Dru. & War. 225; Wilson v. Wilson, 5 H. t,. Cas. 40, 65; Manser v. Back, 6 Hare, 443; Clarke v. Grant, 14 Ves. 519; Cllnan v. Cook, 1 Schoales & L. 22. The fraud most commonly treated as tak- ing an agreement out of the statute of frauds is that which consists in setting up the stat- ute against its performance, after the other party has been induced to make expendi- tures, or a change of situation in regard to the subject-matter of the agreement, or up- on the supposition that it was to be carried into execution, g.nd the assumption of rights thereby to be acquired; so that the refusal to complete the execution of the agreement is not merely a denial of rights which It was intended to confer, but the infliction of an unjust and unconscientious injury and loss. In such case, the party is held, by force of his acts or silent acquiescence, which have misled the other to his harm, to be estopped from setting up the statute of frauds. Hawkins v. Holmes, 1 P. Wms. 770; Parkhurst v. Van Cortlandt, 1 Johns. Ch. 274, 14 Johns. 15; Browne, St. Frauds, § 437 et seq.; Fry, Spec. Perf. §§ 384r-388; Caton v. Caton, 1 Ch. App. 137, 147, L. R. 2 H. L. 127. In the last named case it is said that "the right to relief in such cases rests not mere- ly on the contract, but on what has been done In pursuance of the contract" Per Lord Chancellor Cranworth. See, also, 1 Story, Bq. Jur. § 759. But the present case, as we have already seen, does not come within the principle of this ground of equi- table relief. Fraud, which relates only to the prepara- tion, form, and execution of the writing, is su£Blcient to vitiate the instrument so made. It may be set aside either in equity or at law. If It is made to include land not the subject of the actual sale, it is inoperative as to such land; and the fraud may be shown, for the purpose of defeating its re- covery, in an action at law. Walker v. Swasey, 2 Allen, 312, 4 Allen, 527; Bartlett, V. Drake, 100 Mass. 174. It has been ques- tioned whether any other effect can be given to such fraud than to defeat the operation of the instrument altogether; and whether a court of equity can reform by giving it a narrower operation, as modified by parol proof, tn a case within the statute of frauds. Attorney General v. Sltwell, 1 Younge & C. Eich. 559. The difficulty Is that, if the fraud vitiates and defeats the instrument, then the modified agreement to be enforced must be that which is proved by parol evi- dence; and this seems to violate the stat- ute. But the instrument. In such case, is not void. It is voidable only; and that not at the election of the party who committed the fraud. He is not entitled to control the extent of the effect that shall be given to his fraudulent conduct; and it is not for him to object that the fraud is availed of only to defeat the rights, which he has se- cured by fraud, beyond what he is fairly en- titled to by the terms of the real agreement between the parties. When those are sep- arable, and the nature of the case wUl ad- mit of it, the court may enforce the written contract in accordance with Its terms, giving relief against the fraudulent excess, or the clause improperly inserted. Parol testimony, used to defeat a title or limit an Interest ac- quired under a written instrument, or to con- vert it into a trust, does not necessarily con- flict with the statute of frauds. It has been held that an absolute deed may, in this mode, be converted. In equity, into a mort- gage. Washburn v. Merrill, 1 Day, 140; Taylor v. Luther, 2 Sumn. 228, Fed. Cas. No. 13,796; Jenkins v. Eldredge, 3 Stoiy, 181, 293, Fed Cas. No. 7,266; Morris v. Nix- on, 1 How. 118; 4 Kent, Comm. (6th Ed.) 143.' vrheiner this can be done in Massachu- setts has not yet been decided. Newton v. Fay, 10 Allen, 505. But If it were to be so held, it would not be upon the ground of en- forcing a parol agreement to reconvey; but upon the ground that such an agreement, to- gether with proof that the deed was given and accepted only as security for a debt, made out a case of fraud, or trust, which would warrant a decree vacating the title of the grantee, as far as be attempted to hold contrary to the purposes of the conveyance. In such cases the court acts upon the estate or rights acquired under the written instru- ment; and within the power over that in- strument which is derived from the fraud or other ground of jurisdiction. But when it is sought to extend that power to Interests In land not Included in the Instrument, an^ In relation to which there is no agreemen* in writing, the case stands differently- Fraud may vitiate the writing which ia tainted by It, but It does not supply that which the statute requires. It may destroy a title or right acquired by Its means; but It has no creative force. It will not confer title. In the absence of a legal contract by the agreement of the parties. It will not es- tablish one, nor authorize the court to de- clare one, bjr Its decree. This distinction is Illustrated by the anal- ogous rule in regard to implied trusts. Gen. St. c. 100, § 19. Parol evidence may charge the grantee of lands conveyed with a result- ing or Implied trust, which equity will en- MISTAKE— PAROL EVIDENCE TO CORRECT. 259 force. But such evidence will not create a trust in lands already held by an absolute title. A fraudulent misrepresentation, although sufficient to sustain an action for damages, cannot be converted into a contract to be enforced as such. Neither will it furnish the measure by which a written contract may be reformed. In this discussion we have as- sumed that there was a clear agreement be- tween the parties, which the deed fails to carry out, and to which it might properly be made to conform, but for the obstacle in the statute of frauds. It has been often asserted that where one by deceit or fraudulent contrivance prevents an agreement intended to be put in writing from being properly written or executed, he shall not avail himself of the omission, and shall not be permitted to set up the statute of fraud against the proof and enforcement of the parol agreement, or of the parol stipu- lation improperly omitted. But in our opin- ion this doctrine would practically annul the statute. The tendency of the human mind, when fraud and injustice are manifest, is to strain every point to compass its defeat; and to render full redress to the party upon whom it has been practiced. Mundy v. Jol- liffe, 5 Mylne & C. 167; Taylor v. Luther, 2 Sumn. 233, Fed. Cas. No. 13,796. This In- fluence has led to decisions in which the facts of the particular case were regarded more than the general considerations, of public pol- icy upon which the statute Is founded and entitled to be maintained. Courts have some- times regarded it as a matter of judicial mer- it to wrest from under the statute aU cases in which the lineaments of fraud in any form were discernible. But the impulse of moral reprobation of deceit and fraud, how- ever commendable in itself, is liable to mis- lead, if taken as the guide to judicial de- crees. We apprehend that in most instances where fraud occasioning a failure of written evi- dence of an agreement or particular stipula- tion has been held to tal£e the case out of the statute of frauds, there was some fact of prejudice to the party, or change of situa- tion consequent upon the fraud, which was regarded as sufficient to make up the ele- ments of an equitable estoppel. In such case, the argument Is transferred to the simple question of the sufficiency of the additional circumstance for that purpose. The cases most frequently referred to are those arising out of agreements for marriage settlements. In such cases the marriage, although not re- garded as a part performance of the agree- ment for a marriage settlement, is such an irretrievable change of situation, that, if pro- cured by artifice, upon the faith that the set- tlement had been, or the assurance that it would be, executed, the other party is held to make good the agreement, and not permit- ted to defeat it by pleading the statute. Max- well V. Mountacute, Prec. Oh. 526; Browne, St. Frauds, §§ 441-445. Another class of cases are those where a party acquires property by conveyance or de- vise secured to himself under assurances that he will transfer the property to, or hold and appropriate it for the use and benefit of, an- other. A trust for the benefit of such other person Is charged upon the property, not by reason merely of the oral promise, but be- cause of the fact that by means of such promise he had induced the transfer of the property to himself. Brown v. Lynch, ] Paige, 147; Thynn v. Thynn, 1 Vem. 296; Oldham v. Litchfield, 2 Vem. 506; Devenish V. Baines, Prec. Ch. 3; 1 Story, Eq. Jur. § 768. When these cases are cited in support of the doctrine that artifice or fraud in evading or preventing the execution of the writing is alone sufficient to Induce a court of equity to disregard the statute and enforce the oral agreement, the subsequent change of situa- tion or transfer of property, without which the deceit would be innocuous, seems to be overlooked, because it Is not strictly in part performance of the agreement sought to be enforced. It must be manifest, however, that ' without such consequent act there would be no standing for the case in a court of equity. That which moves the court to a decree to enforce the agreement is not the artifice by which the execution of the writing has been evaded, but what the other party has been induced to do upon the faith of the agree- ment for such a writing. It is not that de- ceit, misrepresentation, or fraud, of Itself, en- titles a party to an equitable remedy; but that equity will interfere to prevent the ac- complishment of the fraud which would re- sult from the enforcement of legal rights con- trary to the real agreement of the parties. Indeed, the fraud which alone justifies this exercise of equity powers by relief against the statute of frauds consists in the attempt to take advantage of that which has been done in performance or upon the faith of an agreement, while repudiating its obligations under cover of the statute. When a writing has been executed, the courts allow the fraud or mistake by which an omission or defect in i the instrument has been occasioned to defeat l the conclusiveness of the writing, and open* the door for proof of the real agreement/ jf But the obstacle of the statute of frauds to ' the enforcement of obligations, or the security of rights not expressed in the instrument re- mains to be removed in the same manner as if there were no writing. Phyfe v. Wardell, 2 Edw. Ch. 47; Moale v. Buchanan, 11 Gill & J. 314. The power to reform the instrument is not an independent power or branch of eq- uity jurisdiction, but only a means of exercis- ing the power of the court under Its general jurisdiction in cases of fraud, accident, ^.nd mistake. We are aware that the limitation which we 2C0 MISTAKE— PAROL EVIDENCE TO COBREOT. have undertaken to define has not been nnl- formly observed or recognized. In Wiswall v. Hall, 3 Paige, 313, Chancel- lor Walworth granted a perpetual injunction, and ordered a deed of release of title to land omitted from a deed by fraud and secret con- trivance. There was no discussion of the au- thorities, nor of the principles upon which the case was decided; and no reference to the statute of frauds; and the statute does not appear, by the report, to have been set up against the prayer for relief. In De Peyster v. Hasbrouck, 11 N. Y. 591, a similar decision was made in the court of appeals in New Yorli. Here again there is no reference to the statute of frauds, no dis- cussion of the principles involved In the deci- sion, and no authority or precedent cited ex- cept that of Wiswall v. Hall. The mortgagor whose deed was reformed put In no answer whatever. The defence was made by parties claiming under him, and the statute of frauds does not appear to have been pleaded. De- nio, C. J., in giving the opinion, proceeds to say: "It is unnecessary to refer to cases to establish the familiar doctrine that when through mistake or fraud a contract or, con- veyance fails to express the actual agreement of the parties, it will be reformed by a court of equity, so as to correspond with such ac- tual agreement. The English cases have been ably digested by Chancellor Kent, and the principle has been stated with his accus- tomed care and accuracy. In Gillespie v. Moon, 2 Johns. Ch. 585." / But in Gillespie v. Moon the relief sought and granted was by way of restricting, and not by enlarging, the operation of the deed. Such relief would not, as already shown, con- flict with the statute of frauds; and neither the discussion In that case nor the citation of authorities had reference to the bearing of the statute of frauds upon the question of af- fording relief upon contracts relating to land. Indeed, the English ca^ea furnish but little aid upon that point, for the reason that the courts there have generally, without refer- ence to the statute of frauds, refused to en- force written contracts with a modification or variation set up by parol proof. WooUam V. Heam, 7 Ves. 211, and notes on the same In 2 Lead. Cas. Eq. 404; Nurse v. Seymour, 13 Beav. 254. The principle which was maintained by Chancellor Kent, and upon which the Eng- lish authorities were cited by him la Gilles- pie V. Moon, was that relief in equity against the operation of a written instrument, on the ground that by fraud or mistake it did not express the true contract of the parties, might be afforded to a plaintiff seelmig a modification of the contract, as well as to a defendant resisting Its enforcement That proposition must be considered as fully es- tablished. 1 Story, Eq. Jur. § 161. It is quite another proposition, to enlarge the sub- ject-matter of the contract, or to add a new term to the writing, by parol evidence, and enforce it. No such proposition was present- ed by the case of GlUespie v. Moon, and it does not sustain the right to such relief against the statute of frauds. That Chancellor Walworth, In Wiswall v. Hall, did not Intend to decide that the stat- ute of frauds could be disregarded if properly set up against such an enlargement of the operation of the written contract Is apparent from the remarks of the same learned judge in the subsequent case of Cowles v. Bowne, 10 Paige, 535. He says: "Whether a party can come into this court for the specific per- formance of a mere executory agreement for the sale of lands, which in its terms is ma- terially variant from the written agreement between the parties that has been executed according to the statute, where there lias been no part performance or other equitable circumstance sufficient to take the case out of the statute of frauds, as a mere parol con- tract between the parties, is a question which it wiU not be necessary for me to con- sider in this case." In Gouvemeur v. Titus, 1 Edw. Oh. 480, there was a deed of land described as being in the northwest comer of a township by mis- take for the northeast comer. The grantor admitted the real contract, and had corrected the mistake by deed. The only question was whether equity would enforce the corrected deed against tibe lien of a judgment creditor, who had notice of the mistake. In the opinion it is said: "It Is a case in which this court would interfere, as between the immediate par- ties, to correct the mistake." The judgment was clearly right The dictum we are dis- posed to question, unless the deed itself coif tained some other description by means of which the land might be identified and tlie mistake corrected. In Newson v. Bufferlow, 1 Dev. Eq. 379, a deed was reformed, which was made, by fraud, to include land not sold; and the fraud- ulent grantee was required to execute a recon- veyance of the excess. The opinion contains a remark of the court that this power may be exercised as well by Inserting what was omit- ted as by striking out what was wrong- fully included. But this remark Is clearly obiter dictum, and is not sustained by the authority cited, namely, Gillespie v. Moon. In Blodgett v. Hobart, 18 Vem. 414, a mortgage was reformed by including other lands omitted by mistake. The statute of frauds was not set up in the answer nor re- ferred to in the opinion of the court and the answer was considered by the coiu:t to be evasive in regard to the alleged agreement for security upon such other lands. In Tllton V. Tllton, 9 N. H. 385, the court controvert the doctrine of such a limitation, as declared in Elder v. Elder, 10 Me. 80; but the decision did not Involve the question so discussed. The case arose from an attempted partition between tenants in common of real estate. There was a written agreement for partition according to the award of certain MISTAKE— PAROL EVIDENCE TO CORRECT. 261 arbitrators named, and the only question was as to tlie effect of a substitution of other ar- bitrators by parol. Deeds had been executed, and the plaintifE had fuUy performed his part of the agreement It was a case of part per- formance sufficient to take the case out of the statute of frauds, and was decided upon that ground. Besides, a partition of lauds, though effected by mutual deeds of release, is not a contract for the sale of land. Craig V. Kittridge, 3 Fost. (N. H.) 231, arose upon a partition, and was decided upon the authority of Tilton v. Tilton. Smith t. Greeley, 14 N. H. 378, was a decree upon de- fault, without argument or opinion, against the executors and heirs of a party whose deed, by mutual mistake, failed to include certain land sold. It does not appear whether there was written evidence of the agreement, nor whether there was possession or acts of performance. It was sufficient, perhaps, that the statute was not pleaded, and the default Tadmltted the agreement. , Caldwell v. Carrington, 9 Pet. 86, was an i agreement for exchange of lands, and stands entirely upon the ground of part performance. ' Notwithstanding contrary decisions and dic- ; ta, we are satisfied that upon principle the conveyance of land cannot be decreed in eq- uity by reason merely of an oral agreement therefor against a party denying the alleged agreement and relying upon the statute of frauds, in the absence of evidence of change •' of situation or part performance creating an ) estoppel against the plea of the statute. This ( rule applies as well to the enforcement of such an agreement by way of rectifying a deed as to a direct suit for Its specific per- formance. We are satisfied also that this Is the rule to be derived from a great prepon- derance of the authorities. Whitchurch v. Bevls, 2 Brown, Ch. 559; Woollam v. Hearn, 7 Ves. 211; 2 Lead. Cas. Bq. (3d Am. Ed.) notes, ['414], Am. Notes, 691; Townshend V. Stangroom, 6 Ves. 328; Beaumont v. Bram- ley, Turn. & B. 41. See, also, Moale v. Bu- chanan, 11 Gill & J. 314; Osbom v. Phelps, 19 Conn. 63; and Elder v. Elder, 10 Mei. 80, already cited above; Adams, Eq. 171, 172; Churchill v. Rogers, 3 T. B. Mon. 81; Purcell V. Miner, 4 Wall. 513. The prayer in regard to the fence stands differently. If that stipulation had been fraudulently inserted in the deed, the agree- ment being otherwise, the deed might be re- formed by striking out that provision, or re- quiring a release of it, so as to make the writ- ing correspond with the actual agreement. But upon the allegations of the bill there is no other agreement by which to reform the deed, and to which to make it conform. The plaintiff admits that the stipulation in the deed is precisely In accordance with the ac- tual agreement The fraud which he alleges relates only to the consideration or induce- ment upon which he was led to make that agrpement; not to the form of the agreement itself. If that stipulation were to be stricken out, the writing would then not express the agreement actually made by the parties. The court cannot rectify an instrument otherwise than in accordance with the actual agree- ment. It cannot make an agreement for the parties. Hunt v. Rousmaniere, 1 Pet. 1, 14; Brooks v. Stolley, 3 McLean, 523, Fed. Cas. No. 1,962. If the subject-matter of this stipulation were of sufficient materiality, the fraud alleged might have the effect to defeat the whole instrument. But this effect Is not sought. The plaintiff's remedy, there- fore, is at law. In damages for the deceit and false representation. The alleged agreement in regard to the pre- mium and accrued interest upon the bonds transferred In payment for the land will not sustain a bill in equity. If such an agreement was made and broken, we see no reason why an action of assumpsit will not lie upon the agreement or for the overpayment of the agreed price of the purchase. The remedy at law is as effectual as it can be in equity. The entry must therefore be, bUl dismissed. \ 262 MISTAKE— PAROL EVIDENCE TO CORRECT. Q4 %lxOM«^i:a jl DAVIS V. ELY et al. (10 S. E. 138, 104 N. C. 16.) Supreme Court of North 1889. Carolina. Oct. 28, This was a civil action tried before Bot- •s,-_ KIN, J., and a jury at spring term ol the su- ■^ perior court of Pasquotank county. The complaint was as follows: (1) That on the 22d day of April, 1884, the plaintiff and defendants entered Into a contract with re- gard to the sale and division of the Great Park estate; that a paper writing, pur- porting to contain the terms of said con- tract, was executed by Timothy Ely and wife, Hannah, by their duly-authorized i agent, Harvey Terry, and by the plaintiff, ■ V , through hie agent, William J. Griffin, A ^ copy of this writing is hereto attached, marked " Exhibit A," and is made a part of this complaint. (2) That the recitals and agreements set forth in said contract, down fto Section numbered 40, are all true. (3) That the agreement which was intended to be embodied in the contract, of which the exhibit hereto attached is a copy, was ^ made by Francis Davis, Esq., father of the J said John F. Davie, and Harvey Terry, J agent of Timothy Ely, and wife, Hannah. ^ .A (4) That, before the contract could be re- J duced to writing, the said Francis Davis left 1 ■e Elizabeth City for his home in Ohio, and di- O Y rected oneW. J. Qrlffln, an attorney at law, \3 £ to draft said contract, and have the same ' ) '*^>X executed and recorded. (5) That the said Y'draughtsman was compelled to rely upon ^^— ^ statements of the said Terry, and, by false .^ \ and fraudulent representations by said ^ Terry, the said contract, or that portion set forth in the paragraph numbered 40 of )the exhibit, hereto attached, does not set ) forth the true terms agreed on. (6) That the Great Park estate was incumbered by a mortgage which had been purchased by Timothy Ely, and the equity of redemption w^as held by a firm known as Conrow, vBush & Lipplncott; that the said John F. ^A Davis had entered into a contract with ,^ the said Conrow, Bush & Lippincott for the ' \ purchase of their Interest in the Great Park ■ estate, except a portion known as the o, " Hall Tract," and the said Davis bound ^-Mmself to pay off and discharge the mort- ^ gage, which was then held by the plaintiff Ely, and thereby leave the Hall tract to Conrow, Bush & Lippincott, unincumbered. V^^This contract of Davis with Conrow, Bush 7 & Lippincott was well known to Harvey *" Terry, the agent of the defendant Ely. ~ (7) That the said Terry, as agent of the ■•■V said TitQothy Ely, had obtained a judg- t,menc of foreclosure on his mortgage, and i the sale of the Great Park estate was ad- ^vertised to take place April 22, 1884 ; that, - after the advertisement had been posted, .„ the said John F. Davis applied for and ob- , tained a restraining order, commanding ,>,the commissioners to desist from the sale <'of the Great Park estate until a certain ytime mentioned in said restraining order. (8) That thesaid Francis Davis and Timo- OthyEly and Harvey Terry met in Elizabeth J City on the 21st day of April, 1884, and on "^ that day verbally made a contract which was intended to be embodied In the con- tract hereinbefore set out. It was only i i when the said Davis and Terry had thus come to terms that ttie said Davis con- sented to the sale mentioned in said con- tract. (9) Thesaid Francis Davis, as agent for his son, John F. Davis, refused to treat with the said Terry upon any basis except that the Hall tract should be given or set apart to his son, John F. Davis, In order that the said John F.Davis might perform bis contract with the said Conrow, Bush & Lippincott. (10) That, after much talking, it was finally agreed that the said Hall tract should be excepted, and the balance of the Great Park estate should be divided Into two parts, equal in area, by a line run- ning north and south, and the western hall thereof should be given or allotted to John F. Davis and the eastern half to Timothy Ely, and. In addition to the western half, the said Davis should have the portion known as the "Hall Tract." (11) That the said Terry, represented unto the said Davis that thesaid Hall tract contained butl,300 acres, which the said Terry well knew to be false. In truth and In fact this com- plainant has been informed that the said Hall tract contains 3,000 acres. (12) That, having confidence In the Integrity of said Terry, and having urgent business engage- ments In Ohio, the said Francis Davis left Eliza bethaty on the 22d day of April, 1884, and this plaintiff did not learn of the error in the agreement for some time thereafter, and instituted suit as soon as he heard thereof. Wherefore plaintiff prays— i^Vrst, that the said contract may be reformed so as to speak the true agreement of the par- ties as herein set out ; second, that the de- fendants be decreed to pay all costs of this proceeding ; and third, for such other and furtherrellef as to thecourt may seemmeet. The answer fully denied all the allegations Imputing fraud, and the following issues were submitted without objection to the jury. (1) Does the written contract dated April 22, 1884, contain the true agreement entered Into between the parties ? (2) Was It the agreement between the parties that John F. Davis should have the Hall tract and one-half of the balance of the Great Parker estate, and the defendants the other half of the Great Parker estate? (3) Was the reservation of the Hall tract to J. F. Davis omitted from the written contract by reason of false and fraudulent represen- tations made to the draughtsman by the defendants, or either of them ? The issues show the true contention of the parties. The plaintiff offered evidence tending to show the fraud set out In the complaint, and all the other allegations of the com- plaint, for the purpose of reforming the contract. The defendants objected to the testimony, unless it was Introduced lor the purpose of rescinding the contract, where- upon the counsel for the plaintiff stated that the purpose of the testimony offered was to reform the contract, and not to re- scindlt. Thecourt excluded thetestimony, holding that it was not admissible for the purpose of reforming the contract, but that it was admissible for the purpose of rescinding the contract. Upon this Intima- tion the plaintiff submitted to a nonsuit, and appealed. • C. W. Gruudy, for appellant. Terry, for appellees. Harvey jlISTAKE— PAROL EVIDENCE TO COEEECT. 263 Shepherd, J., (after stating the facts as above.) There is a hopeless conflict of au- thority upon the question whether a court of equity will correct an executory contract on the ground of fraud or mistake, and en- forceitwith the variation. InEngland and several of the American states such relief is denied, although a defendant, for the pur- pose of resisting specific performance, may show that by fraud or mistake the written contract does not express the real terms of the agreement. In other states this dis- tinction is repudiated, and thecontract will be corrected and enforced in proper cases at the instance of either party. Where such executory contracts, within the statute of frauds, are corrected and enforced, there is a further diversity, some courts holding thatthey will only exercise the powerwhere the object is to restrict the subject-matter of the contract, while others hold that the contreict will be corrected, although its sub- ject is enlarged. Of this latter opinion is Mr. Pomeroy (2 Pom. Eq. Jur. § 862 et seq.) and other writers of great respectability. Opposed to this view we have the English authorities, (Woollam v. Heam, 2 White & T. Lead. Gas. Eq. 920,) and Bisp. Eq. § 383; Whart. Ev. § 1024, and many decisions in the United States, of which the leading case is Glass V. Hulbert, 102 Mass. 24. In this case the court says that " when the pro- posed reformation of an instrument in- volves the specific enforcement of an oral agreement within the statute of frauds, or when the terms sought to be added would so modify the instrument as to make it operate to convey an interest or secure a right which can only be conveyed or se- cured through an instrument in writing, and for which no writing has ever existed, the statute of frauds is a suflicient answer to such a proceeding, unless the plea of the statute canbemetbysomeground of estop- pel to deprive the party of the right to set up that defense. Jordan v. Sawkins,lVes. Jr. 402; Osbom v. Phelps, 19 Conn. 63; Cli- nan v. Cooke, 1 Schoales & L. 22. The fact that the omission or defect in the writing by reason of which it failed to convey the land or express the obligation which it is sought to make it convey or express was occasioned by mistake, or by deceit and fraud, will not alone constitute such an estoppel. * • • Rectification, by mak- ing the contract include obligations or sub- ject-matter to which its written terms will not apply, is a direct enforcement of the oral agreement, as much in conflict with the statute of frauds as if there were no writing at all." This decision, in so far as it holds thatthe subject-matter of thecontract may Qot be enlarged, is supported by abundant Authority. Story's Equity Jurisprudence is often cited to sustain the other view, but the argument there seems to be directed against the distinction between parties seeking and parties resisting specific per- formance. It refers to the decisions of Chan- cellor Kent in Gillespie v. Moon, 2 Johns. Ch. 585, and Keiselbrack v. Livingston, 4 Johns. Ch. 144. In neither of th^se cases was the subject-matter enlarged. In Gil- lespie's Case (so often cited) the correction m«dp was the strikingout of 50 acrew from a written agreement which included 250. Bisp. Eq. 445, says that "in cases which fall within the statute it is obvious that to carry the rule in Gillespie's Case to the ex- tent of holding that an agreement (for ex- ample) to convey fifty acres may, for the sake of justice and equity be construed to mean a contract to convey one hundred, would beto repeal the statute of frauds and to give effect to a simple verbal agreement to sell land. Where, however, the conten- tion of the complainant is that something which is actually embraced in the writing was not intended to be included therein, to suffer him to show this is not to enforce a parol contract in relation to land. It is simply to prove that a written contract did not embrace all that, on its face, it ap- peared to include. Such was the actual state of the case in Gillespie v. Moon." It maybe remarked that inmost of thestates where such relief is granted the doctrine of "part performance" is recognized, and the proof required is but little short of that which is necessary to enforce a contract upon that ground. In North Carolina, so far from correcting such executory con- tracts within the statute so as to enlarge their terms, the tendency of our decisions is to confine such corrective relief to executed contracts alone. Wehave been able to find no decision inpoint,butthewordsof Hali., J., in Newsom v. Bufferlow, 1 Dev. Eq. 379, strongly show the disinclination of the court to depart from the statute, except upon the most imperative demands of jus- tice and equity. Thejearned judge says: " It is altogether unnecessary to inquire in this casehowfarcourts of equity have gone in carrying into effect written executory contracts or varying them by parol evi- dence. Sufiice it tosay that the reason why they have declined giving relief in m any such cases is that the plaintiff had a remedy at law. Thatreason is not applicable to exe- cuted contracts. In thesecases the plaintiff has no remedy at law, and, unless a court of equity will give relief, he can have no re- dress." This distinction between executed and executory contracts is clearly put by Adams, Eq. 171 : " Where land is thesubject of the erroneous instrument, the reforma- tion of an executed conveyance on parol evidence is not precluded by the statute of frauds, for otherwise it would be impossible to give relief. * * * But it does not ap- pear that, where the defendant has insisted on the benefit of the statute, the court has ever reformed such an executory agreement on parol evidence and specifically enforced it." Land is regarded as such a high species of property that exceptional safeguards have been devised for the preservation and se- curity of its title, and these should not be departed from unless such departure is ab- solutely necessary to subserve the ends of justice. Under the former system the equi- table relief we have mentioned was admin- istered by the trained minds of learned judges, sitting as chancellors, who appre- ciated the grave evils which the statutewas designed to prevent, and who gave full ef- fect to the rule which required the clearest and most cogent testimony. Even then the relief in this state was confined, it seems, to executed contracts, and surely there is nothing in the new method of trying equi- table issues which encourages us to leave the MISTABIE— PAROL EVIDENCE TO CORRECT. old moorings and venture upon a sea of trouble, confusion, and insecurity. On the ground of necessity we correct conveyances by adding clauses of defeasance and words of inheritance. We also restrict or enlarge the subject-matter, but we decline to do this in the case of executory contracts, where there can necessarily be no other object ithan, as in the case before us, to have it .specifically enforced. Itis believed that no .great hardship can result from such ruling, tas the court will, upon rescission, endeavor |to place the parties in statu quo, and dam- ages maybe given for the fraud and deceit. The court is liberal in the adjustment of ^equities arising in such cases ; but, even if occasional instances of hardship occur, it is far better that these sliould be endured than that every title in the state should be ex- posed to the assaults of false and fraudu- lent oral testimony. What we have said has no reference to the correction of ordi- nary executory contracts in aid of actions tor damages at law, such as the correction of the terms of a bond and the like. Equity will always make the correction, and the party can sue upon the corrected contract at law. The two jurisdictions being now blended, such relief will be granted in a single action. It may be that in cases of personal property, where there is a,pretium affectlonis, the contract may be corrected and specifically enforced, but it is unneces- sary to pass upon that question here. The relief sought In this action Is to cor- rect the contract so as to include the " Hall tract." It seems from the complaint that the alleged fraud consisted.in certain false representations as to the number of acres made to the plaintiff when the parol agree- mentwasmade. Falserepresentations are also alleged to have been made to Mr. Grif- fin, the draughtsman; but these are not specified, so we must assume that they were the same as those made to his princi- pal, Davis. However this maybe, we have here a plain case where it is proposed to correct an -executory contract for the sale of land by making it include a larger quan- tity than is stated in the writing. The plaintiff does not wish to rescind, and offers the parol testimony solely for the purpose of reformation. We think that to admit the testimony in such cases would be, ai has been said, virtually repealing the sta ute of frauds, and opening the door to flood of evils, the extent of which it wouli be Impossible to estimate. The plaintil may enforce the contract in its present form or he may rescind it, and ask for an adjusi ment of any equities which may have gro wi out of the transaction. We think that tto testimony was properly rejected, and that' there is no error. FRAUD— JURISDICTION OF EQUITY. 265 MILLER et al. v. SOAMMON. (52 N. H. 609.) Supreme Judicial Court of New Hampshire. June, 1873. In equity. The bill by Frank W. Miller and George W. Marston against Stephen Scammon alleged that the plaintiffs were the publishers ot a daily newspaper, that the defendant, fraudulently intending to deceive and injure the plaintiffs, and to expose them to loss and to a prosecution for libel, per- suaded, and procured them to insert in their newspaper an advertisement over the signa- ture of the defendant, and which he said was true, and which he alleged was neces- sary and designed to protect him against being compelled to pay certain notes therein described, which he then and there solemnly declared had been wrongfully obtained, and purporting to have been for a valuable con- sideration, and to have been signed by the defendant, and which he then and there pre- tended and asserted he never signed, and up- on which he might be sued, or which might be set up in a suit against him. The bin then avers that the allegations of the advertisement were false, and the pres- ent plaintiffs, as well as the defendant, were indicted and convicted for publishing a false and malicious libel in said advertisement, and the present plaintiffs were fined $150, which they have paid, with costs taxed at $21.63, together with other costs for coimsel' fees and other expenses amounting to $50, amounting in the whole to $221.63. The plaintiffs pray that the court will as- certain the amount which they have had to pay and the damages they have suffered by reason of the fraud and deceit of the defend- ant, and that he may be ordered and decreed to pay the same to the plaintiffs, with inter- est, and for such other relief as may be just. To this bill there was a general demurrer, and the questions of law thus raised were reserved. W. H. Y. Hackett, for plaintiffs. Mr. Wig- gin, for defendant FOSTER, J. As a declaration in case, to recover damages for the deceit and fraud of the defendant, the plaintiffs' biU does not seem wanting in the essential and ordinary forms of pleading. The prayer of the bill is that the court may ascertain what the plaintiffs "have had to pay, and the damages they have suffered by reason of the fraud and deceit" of the defendant, and that he may be ordered and decreed to pay the same; but the damages are specifically enumerated in doUars and cents In the bill, and no aid In equity is required for their ascertainment. No reason is suggested In the bill why the plamtiffs have chosen to proceed in equity rather than by the usual course of the law, which is ample in its form and power for the redress of such grievances as the plaintiffs complain of, provided they are entitled to re- lief or satisfaction. If the plaintiffs' remedy at law is not as plain, full, complete, and adequate as it is by proceedings in equity, neither the fact nor the reasons why are suggested In this biU, which, if it may be adopted for the disposition of such a case as the present, may just as well serve here- after as a precedent, mutatis mutandis, for a bill to recover damages tot deceit, in any case in which such damages are now sought by means of an action of tort. It is quite true that, not only by force of our statutes, but upon general principles, courts of equity exercise a general jurisdic- tion in cases of fraud, sometimes concurrent with, and sometimes exclusive of, the com- mon-law courts. Gen. St. c. 190, § 1; Snell, Eq. 359. And it is said that in some cases of fraud, for which the common law affords complete and adequate relief, chancery may have concurrent jurisdiction. Snell, Eq. 359. This general proposition, however, is too broad when applied to our practice, under the rules of evidence which permit or require parties to testify. In the English practice, and perhaps in some American states, equity may entertain this concurrent jurisdiction, because, although the remedy at law may be said to be adequate, the means of obtaining the truth, where discovery by the oath of the party is essential, may be wanting or deficient In the courts of common law. f'The jurisdiction of the courts of equity for the enforcement of dvil rights, as distinguished from the jurisdiction of the courts of com- mon law, derives much of its utility from the power of the great seal to compel the defendant, in a suit, to discover and set forth, upon oath, every fact and circum- stance within his knowledge, information, and belief material to the plaintiff's case." Adam, Eq. 1. But to a very great extent the right to enforce discovery, and to search the conscience of the party, which was formerly only to be had In chancery, is afforded in the practice and by the statutes of our law courts as fully and effectually as by a court of equity. "Perhaps the most general, if not the most precise, description of a court of equity, in the English and American sense," says Judge • Story, "is that It has jurisdiction in cases of rights recognized and protected by the municipal jurisprudence, where a plain, ade- quate, and complete rem'edy cannot be had in the courts of common law. The remedy must be plain, for. If It be doubtful and ob- scure at law, equity will assert a jurisdic- tion. It must be adequate, for. If at law it falls short of what the party Is entitled to, that foimds a jurisdiction in equity; and It must be complete, that Is, it must attara the full end and justice of the case. • • » The jurisdiction of a court of equity Is, therefore, sometimes concurrent with ttie jurisdiction of a cpurt of law. It is some- times exclusive of it, and it Is sometimes auxiliary to It" 1 Story, Bq. Jur. i 33. 266 FRAUD^JUHISDICTION OF EQUITY. In the matter of actual fraud, Blackstone has said that "courts of equity are estab- lished to detect latent frauds and conceal- ments which the process of the courts of law- is not adapted to reach." 3 Bl. Comm. 431. And although It may still be that courts of liberal equity powers may entertain concur- rent jurisdiction with the courts of law, even in those cases of fraud which are ef- fectually remediable in the latter, such juris- diction is . very seldom exercised anywhere, as we believe, and never, to our knowledge, in this state. Its ordinary application is restricted to cases in which a decree is re- quired compelling the wrongdoer, specifically, to make good his default; "and therefore," says Mr. Adams, "if the wrong require spe- cific redress, and such specific redress is not attainable at law, there is a prerogative jurisdiction in equity to relieve." Adams' Eq., Introduction *xxxv. Sometimes, also, where the remedy at law would seem to be effectual, equity will entertain jurisdiction for the sake of avoiding circuity of action or multiplicity of suits. Smith, Man. Eq. § 1. Indeed, as we regard it, the correct prin- ciple is laid down by Judge Story in his Equity Pleadings (section 473), where he says, "In general, courts of equity will not assume jurisdiction where the powers of the ordinary courts are sufficient for the purposes of justice, and therefore it may be stated as a general rule, subject to few exceptions, that where the plaintiff can have as effectual and complete a remedy in a court of law as in a court of equity, and that remedy is direct, certain, and adequate, a demurrer, which is In truth a demurrer to the jurisdic- tion of the court, will hold; but where there is a clear right, and yet there is no remedy in a court of law, or the remedy is not plain, adequate, and complete, and adapted to the particular exigency, then, and in such cases, com'ts of equity will maintain jurisdiction." And see 1 Daniell, Ch. Prac. 610. Although the plaintiffs have not told us, in their complaint, wherein their remedy is deficient at law, they have suggested it in argument They say, "It is a recognized rule that equity will give relief against fyaud upon less direct proof than would induce a court of law to afford the same relief." But the only difference in the quality of proof seems to be with regard to the matter of presumptions; and although it Is said, in support of the plaintiffs' general proposition, that courts of equity will grant relief upon the ground of fraud, established by such presumptive evidence as courts of law would not always deem sufficient proof to justify a verdict (1 Story, Eq. Jur. § 190), it seems quite manifest from the charge of the plain- tiffs' bill that they cannot support or de- rive aid to their claim from any presump- tions other than those which could as well be deduced In a court of law as in equity, from the circumstances which may be dis- closed and developed before a jury. Again, the plaintiffs say, "In equity the plaintiffs are entitled to search the con- science of the defendant, and to have the benefit of his answer under oath, or of his refusal so to make it; and it is not quite certain that the defendant could be com- pelled to state facts as a witness which, while they would make out the plaintiffs' case, woiUd expose him to another indict- ment." But our statute, permitting and com- pelling the testimony of parties in civil ac- tions, seems to afford all the advantages claim'ed for chancery jurisdiction in this re- spect; and an answer to a question, search- ing the defendant's conscience to its lowest depths, could not, after his conviction for the libel which he uttered and the plain- tiffs published, be now avoided on the ground of its tendency to expose him to a criminal prosecution, that prosecution and its consequences having once been suffered and expiated. And, finally, they submit that "the remedy may be neither plain nor adequate, which depends upon the unwilling testimony of a convicted llbeler." But a remedy will not be regarded as inadequate simply because it may be said that the evidence required to enforce it is that of an tmwilling, or perhaps an untruthful, witness; and, moreover, it is not very apparent that equity is more ef- fectual than the law to extract truth from the lips of an unwilling "convicted liheler." In the one tribunal, as in the other, the pro- cess is the same; in the one tribunal, as in the other, both parties may testify, and both be cross-examined. In short, we are unable to discover any sufficient grounds for entertaining equitable jurisdiction of the plaintiffs' case. If the plaintiffs are entitled to relief, their remedy Is plain, and not doubtful or obscure. It is by an action on the case for deceit. It is adequate, and does not fall short of what the party is entitled to, that Is, It entitles him to a verdict for full and ample damages, and a judgment and execution thereon, with costs, to be levied upon his goods or estate, and, for want thereof, upon his body. And In this particular It is complete, attaining the full end and justice of the case, which requires no other decree than such a judg- ment and execution. In all these particu- lars, the definition of the terms "plain, ade- quate, and c;mplete," as furnished by the books, is fully satisfied. 1 Story, Eq. Jur. § 33. It is unnecessary to entertain the question whether the plaintiffs, upon the statements contained in their bill, might have a remedy at law. It would seem that everything al- leged In the bill might, upon the indictment against them, have been shown in evidence. Whether, if proven by credible testimony. It would constitute a legal defense, we need not now inquire. It is said that, before a person gives general notoriety to oral calum- ny by circulating it in print, he must be FRAUD-JURISDICTION OF EQUITY. 267 prepared to prove Its truth to the letter. An editor gives publicity to a private slander at his ovyn -risk, for he has no more right to take away the character of a man, with- out being able to prove the charge that he has made against him, than he has to take his property, without being able to justify the act by which he possessed himself of it. Add. Torts, 775, 776. And even the truth of the thing charged is in many jurisdictions inadmissible as a justlflcation, and, If ad- mitted at all, can only be received to rebut or refute the proof or inference of malice. which is said to constitute the essence of the offense. Whart. Cr. Law, 850. It would seem that if the plaintiffs might have shown the facts which they now allege in defense of the indictment upon which they have been convicted, or if the prof- fered testimony was Inadmissible, because affording no justification, the conviction must be regarded as putting all the partis to this bill in pari delicto, and that the plaintiffs can therefore have no claim, either in law or equity, for relief. BUI dismissed. 268 FRADD-JURISDICTION OF EQUITY. BUZARD et al. v. HOUSTON. (7 Sup. Gt. 249, 119 U. S. 347.) Supreme Court of the United States. Dec. 13, 1886. Appeal from the Circuit Court of the Unit- ed States for the Western District of Texas. This was a bill In equity, filed November 23, 1881, by Buzard and Hillard, jcitizens of Missouri, against Houston, a citizen of Texas, the material allegations of -which were as follows: That the plaintiffs were partners in the business of pasturing and breeding cattle upon a tract of land owned by them In the state of Texas, and on October 14, 1881, ne- gotiated a purchase from the defendants of 1,500 cows and 50 bulls, to be delivered at Lampasas, in that state, in May, 1882, at the price of $15.50 a head, one-half payable upon the signing of the contract, and the other half upon dehvery of the cattle; that the terms of their agreement were stated in a memorandum of that date, signed by the parties, and intended as the basis of a more formal contract to be afterwards executed; and that the plaintiffs at once paid to the defendant $500 in part performance. That on October 31, 1881, the parties resumed ne- gotiations, and met to complete the con- tract; that the defendant then proposed that, in lieu of the contract with him for the cat- tle mentioned in the memorandum, the plain- tiffs should take from him an assignment of a similar contract in writing, dated August 13, 1881, and set forth in the bill, by which one Mosty agreed to deliver to the defendant an equal number of similar cattle, at the same time and place, at the price of $14 a bead; that the defendant then stated that he had paid the sum of $15,000 on the con- tract with Mosty; and asked that, In case of his assigning that contract to the plaintiffs, they should pay him that sum, and also the difference of $1.30 a head In the prices men- tioned in the two contracts, but finally pro- posed to deduct from this 25 cents a head; that, as an inducement to the plaintiffs to make the exchange of contracts, the defend- ant represented to them that Mosty was good and solvent, and able to perform his con- tract; that he was better than the defend- ant, and then had on his ranch 1,200 head of the cattle; and that there was no doubt of the performance of this contract, because one McAnulty was a partner with Mosty In its performance; of all which the plaintiffs knew nothing, except that they knew that McAnulty was a man of wealth, and fully able as well as willing to perform his con- tracts. That on November 1, 1881, the plaintiffs, believing and relying on the defendant's rep- resentations aforesaid, accepted his proposi- tion, and paid the sum of $14,500, making, with the sum of $500 already paid, the amount of $15,000, which he alleged he had paid to Mosty on his contract, and executed and delivered to the defendant their obliga- tion to pay him, on the performance by Mosty of that contract, an additional sum of $1,837.50, being the profit on the contract with Mosty in the sale to the plaintiffs, less the deduction of 25 cents a head; and re- turned to him his original contract with them, and in lieu thereof received from him liis contract with Mosty, and his assignment thereof to the plaintiffs indorsed thereon, and set out in the bill, containing a provision that he should not be responsible in case of any failure of performance by Mosty; that the aforesaid representations of the defendant were absolutely untrue, deceitful, and fraud- ulent, and were known by the defendant to be false, and the plaintiffs did not know and had no means of knowing that they were untrue; that those representations were in- tended by the defendant to deceive the plain- tiffs, and did deceive them, to their great injury, to-wit, to the extent of the amount of $15,000 paid by them to him, and to the fur- ther extent of $10,000 for the expenses neces- sary to obtain other cattle, and for the loss of the Increase of such cattle for the next year by reason of the impossibility of ob- taining them In the exhausted condition of the market; and that Mosty, at the time of the assignment, was absolutely insolvent, and had no property subject to be taken by his creditors, and his contract was utterly worth- less, as the defendant then knew. The bill then stated that the plaintiffs brought into court the contract between the defendant and Mosty, that it might be deliv- ered up to the defendant; and also the as- signment thereof by the defendant to the plaintiffs, that It might be canceled.- The bill prayed for a discovery; for a rescission and cancellation of the assignment of the contract -with Mosty, and also of the plain- tiffs' obligation to pay to the defendant the sum of $1,837.50; for the repayment to the plaintiffs of the excess of money received by the defendant from them beyond the amount which they were to pay him under the origi- nal contract; for a reinstatement and con- firmation of that contract, and its enforce- ment upon such terms as the court might deem just and proper; or. If that could not be done, that the defendant be compelled to restore to the plaintiffs the sums of $500 and $14,500 received from them, and also to pay them the sum of $10,000 for damages which they had sustained by reason of the defend- ant's fraudulently obtaining the surrender of the original contract, and by reason of the other Injuries resulting to them therefrom; and for further relief. The defendant demurred to the bill, assign- ing as a cause of demurrer that the hill showed that the plaintiffs' only cause of ac- tion. If any, was for the sums of money paid by them on the contract, and for damages for breach of the contract, for which they had an adequate and complete remedy at FRAUD— JURISDICTION OP EQUITY. 269 law. The circuit court overruled the demur- rer. Tlie defendant then answered fully un- der oath, denying that he made any of the representations alleged, and repeating the de- fense taken by demiu-rer; the plaintiffs filed a general replication; conflicting testimony was taken; at a hearing upon pleadings and proofs the bill was dismissed, with costs; and the plaintiffs appealed to this court. j H. E. Barnard, for appellants Buzard and! another. Jas. P. Miller, for appellee Hous-\ ton. Mr. Justice GRAY, after stating the case as above reported, delivered the opinion of the court. In the judiciary act of 1789, by which the first congress established the judicial courts of the United States, and defined their juris- diction, it Is enacted that "suits in equity shall not be sustained in either of the courts of the United States, in any case where plain, adequate, and complete remedy may be had. at law." Act of September 24, 1789, c. 20, § 16 (1 Stat. 82; Rev. St. § 723.) Five days later, on September 29, 1789, the same con- gress proposed to the legislatures of the sev- eral states the article afterwards ratified as the seventh amendment of the constitution, which declares that "in suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved." 1 Stat. 21, 98. The effect of the provision of the judiciary act, as often stated by this court, is that "whenever a court of law Is competent to take cognizance of a right, and has power to proceed to a judgment which affords a plain, adequate, and complete remedy, without the aid of a court of equity, the plaintiff must proceed at law, because the defendant has a constitutional right to a trial by jury." Hipp V. Babin, 19 How. 271, 278; Insurance Co. T. Bailey, 13 Wall. 616, 621; Grand Chute v. Winegar, 15 Wall. 373, 375; Lewis v. Cocks, 23 Wall. 466, 470; Root v. Railway Co., 105 U. S. 189, 212; Killian v. Ebbinghaus, 110 U. S. 568, 573, 4 Sup. Ct 232. In a very re- cent case the court said: "This enactment certainly means something; and, If only de- claratory of what was always the law. It must, at least, have been intended to empha- size the rule, and to Impress it upon the at- tention of the courts." New York Guaranty Co. V. Memphis Water Co., 107 U. S. 205, 214, 2 Sup. Ct. 279. Accordingly a suit In equity to enforce a legal right can be brought only when the court can give more complete and effectual relief. In kind or in degree, on the equity side, than on the common-law side; as for in- stance, by compelling a specific performance, or the removal of a cloud on the title to real estate; or preventing an Injury for which damages are not recoverable at law, as in Watson V. Sutherland, 5 Wall. 74; or where an agreement procured by fraud is of a con- tinuing nature, and its rescission will prevent a multiplicity of suits, as in Boyce v. Grundy, 3 Pet. 210, 215, and In Jones v. Bolles, 9 Wall. 364, 369. In cases of fraud or mistake, as under any other head of chancery juris- diction, a court of the United States will not sustain a bill in equity to obtain only a de- cree for the payment of money by way of damages, when the like amount can be re- covered at law in an action sounding in tort or for money had and received. Parkersburg ^ V. Brown, 106 U. S. 487, 500, 1 Sup. a. 442; Ambler v. Choteail, 107 U. S. 586, 1 Sup. Ot 556; Litchfield v. Ballou, 114 U. S. 190, 5 Sup. Ct 820. In England, Indeed, the court of chancery. In cases of fraud, has sometimes maintained bills in equity to recover the same damages which might be recovered In an action for money had and received. But the reason for this, as clearly brought out by Lords Justices Knight Bruce and Turner, in Slim v. Oroucli- er, 1 De Gex, P. & J. 518, 527, 528, was that such cases were within the ancient and orig- inal jurisdiction In chancery before any court of law had acquired jurisdiction of them, and that the assumption of jurisdiction by the courts of law, by gradually extending their powers, did not displace the earlier juris- diction of the court of chancery. Upon any other ground, such bills could not be main- tained. Clifford V. Brooke, 13 Ves. 131; Thompson v. Barclay, 9 Law J. Ch. 215, 218. And we have not been referred to any In- stance In which an English court of equity' has maintained a bill In such a case as that now before us. In Newham v. May, 13 Price, 749, Chief Baron Alexander said: "It is not in every case of fraud that relief is to be administered by a court of equity. In the case, for instance, of a fraudulent warranty on the sale of a horse, or any fraud upon the sale of a chattel, no one, I apprehend, ever thought of filing a bill In equity." r The present bill states a case for which an action of deceit could be maintained at law, and would afford full, adequate, and com- plete remedy. The original agreement for the sale of a number of cattle, and not of any cattle in particular, does not belong to the class of contracts of which equity would de- cree specific performance. If the plaintiffs should be ordered to be reinstated In all their rights under that agreement, and permit- ted now to tender performance thereof on their part, the only relief which they could have in this suit would be a decree for dam- ages, to be assessed by the same rules as in an action at law. The similar contract with Mcsty, and the assignment thereof to the plaintiffs, are in the plaintiffs' own posses- sion, and no judicial rescission of the assign- ment is needed. If the exchange of the con- tr.act was procured by the fraud alleged, it would be no more binding upon the plaintiffs at law than in equity; and In an action of deceit the plaintiffs might treat the assign- ment of the contract with Mosty as void. 270 FRAUD— JURISDICTION OF EQUITY. and, upon delivering up that contract to the defendant, recover full damages for the non- performance of the original agreement. No relief is sought against Mosty, and he is not made a party to the bill. The obligation ex- ecuted by the plaintiffs to the defendant is not negotiable, so that there is no need of an injunction. A Judgment for pecuniary dam- ages would adjust and determine all the rights of the parties, and is the only redress to vrhich the plaintiffs, if they prove their alle- gations, are entitled. There is therefore no ground upon which the bill can be maintain- ed. Insurance Co. v. Baiiey, 13 Wall. 616^ and other cases above cited. The comparative weight due to conflicting testimony such as was introduced in this case can be much better determined by see- ing and hearing the witnesses than upon written depositions or a printed record. This case does not require us to enter upon a consideration of the question under what circumstances a bill showing no ground for equitable relief, and praying for discovery as incidental only to the relief sought, is open to a demurrer to the whole bill, or may, if discof ery is obtained, be retained for the pur- poses of granting full relief, within the rule often stated in the books, but as to the proper limits of which the authorities are conflict- ing. It is enough to say that the case clearly falls within the statement of Chief Justice Marshall: "But this rule cannot be abused by being employed as a mere .pretext for bringing causes, proper for a court of law, in- to a court of equity. If the answer of the defendant discloses nothing, and the plain- tiff supports his claim by evidence in his own possession, imaided by the confessions of the defendant, the established rules, limiting the jurisdiction of courts, require that he should be dismissed from the court of chan- cery, and permitted to assert his rights in a court of law." Russell v. Clark, 7 Cranch, 69, 89. See, also, Horsburg v. Baker, 1 Pet. 232, 236; Brown v. Swann, 10 Pet. 497, 503. The decree of the circuit coiu-t, dismissing the bill generally, might be considered a bar to an action at law, and it Is therefore, in accordance with the precedents in Rogers v. Durant, 106 U. S. 644, 1 Sup. Ot 623, and the cases there cited, ordered that the decree be reversed, and the cause remanded, with di- rections to enter a decree dismissing the bill for want of jurisdiction, and without preju- dice to an action at law. BRADIiEY, J. (dissenting.) I dissent from le judgment in this case so far as it directs le bill to be dismissed by the court below fir want of equitable jurisdiction. The com- pjainant had been induced to give up a con- ,ct for cattle made to him by the defend- nt, and to accept in lieu of it an assignment from the defendant of a contract which he had from a third person who was insolvent, and whose insolvency was not known by the complainant, but was known by the defend- ant, though he asserted that the third person was entirely responsible. The bill seeks to abrogate and set aside the assignment, and to restore to complainant his original con- tract, on account of the fraud and misrep- resentation practiced upon him. Having been induced to pay $15,000 in the transac- tion, and suffered a large amount of dam- ages, he adds to the relief sought a prayer to have his damages assessed and decreed. This is the case made by the bill. I think it is clearly within the scope of equity jurisdic- tion, both on account of the fraud, and from the nature of the relief asked by the com- plainant; namely, the cancellation of an agreement, and the reinstatement of a con- tract which he had been fraudulently indu- ced to cancel. If the bill had prayed nothing else, it seems to me clear that it would have presented a case for equity. A court of law could not give adequate relief. The exist- ence of the assignment, and the cancella- tion of the first agreement, would embarrass the plaintiff in an action at law. It is differ- ent from the case of a lost note or bond. Fraud is charged, and documents exist which in equity ought not to exist. I think the crmplainant Is entitled to have the fraudu- lent transaciion wiped out, and to be restored to his original status. FRAUD-JURISDICTION OF EQUITY. 271 TBFT V. STEWART et al. (31 Mich. 367.) Supreme Court of Michigan. Jan. Term, 1875. Appeal from circuit court, Berrien county; In chancery. Edward Bacon, for complainant. George S. Clapp and D. Darwin Hughes, for defend- ants. GRAVES, O. J. The real grievance alleged by complainant is, that defendants combin- ed to defraud him, and the substance of the transaction, and its incidents, which he re- lates at much length, may be stated from the bill as follows: The defendant Stewart resided In St. Jo- seph, Berrien county, and owned a stock of goods, including a quantity of boots and shoes. This property was at Bangor, Van Buren county, and was yalued by Stewart at some fourteen thousand dollars, and he wish- ed to sell it. One Sherwin, residing in Illi- nois, owned a tract of about two hundred acres of land in Berrien county, which he de- sired to dispose of. Complainant was an acquaintance of Sherwin, and after some ne- gotiations, it was agreed between the differ- ent parties, that Stewart should transfer to complainant the boots and shoes and one- half of the remainder of the stock, and that complainant, in consideration thereof, should procure Sherwin, upon certain terms agreed on between Sherwin and complainant, to convey the land to Stewart, but subject to an existing mortgage on it of one thousand dollars; that Carroll should buy the remain- ing half of the stock of Stewart at two thou- sand five hundred dollars; that complainant in a few days received from Sherwin the deed going to Stewart, and called on the lat- ter to deliver it, and get possession of the boots and shoes and his share of the other goods; whereupon Stewart stated that com- plainant would have no trouble about the goods, as Carroll was at Bangor, in charge of them and making an inventory; that com- plainant expressed himself as unwilling to deliver the deed unless Stewart would give him some writing which would assure to him his portion, as he had nothing to do with Carroll; that Stewart then stated his readi- ness to give such a paper, and one Devoe, a brother-in-law of complainant, being present, it was arranged that the writing should run to Devoe instead of complainant; although, as was understood, complainant was solely interested; that Stewart then made a bill of sale to Devoe of the boots and shoes, und half of the rest of the stock, and added an order to Carroll to make delivery; that com- plaumnt then gave up the deed to Stewart, who subsequently put it on record, and De- voe received the bill of sale and order, and proceeded to Bangor for the property; that complainant and Devoe then called on Carroll for it, when Tie refused to deliver any of it, or to allow any of it to be taken, and claimed the whole in virtue of a purchase by himself of Stewart; that complainant succeeded in getting a part of the boots and shoes, but was precluded by Carroll from getting any- thing more; that complainant discovered, aft- er this claim by Carroll, that subsequent to the conclusion of the termg of the bargain as before mentioned, but before the delivery of Sherwin's deed to Stewart, and the mak- ing of the bUl of sale and order by Stewart to Devoe, Carroll and Stewart had fraudu- lently, and without complainant's knowledge, and with intent to cheat him, made an ar- rangement by which Stewart had given a bill of sale of the whole property to Carroll, ard had taken back a mortgage on it for two thousand" five hundred dollars; that com- plainant had neither knowledge nor notice of this transaction when the deed was delivered to Stewart, and the bill of sale and order re- ceived from him, and first became aware of it when CarroU refused to allow anything to be taken; that Stewart and Carroll refused to recognize any right of complainant in or' to the property, and refused to allow him to have any of it; that Stewart and Carroll, or one of them, have converted a portion of it and appropriated the proceeds, and mixed with the rest of the old stock other goods since procured; that Devoe has assigned to complainant, but that Stewart and Carroll wholly deny his right. The bill waived answer on oath, and asked no preliminary or final relief by injunction. Neither did it seek to get rid of the deed made to Stewart, or to obtain the land con- veyed by Stewart to complainant. The defendants answered separately, and denied the fraud charged, and most of the ma- terial matter tending to show the grievance alleged in the bill. Their account of the transaction was in substance, that complain- ant was not known to Stewart in the trans- action as vendee, or as a party in any way to the trade concerning the goods, and that Car- roll was sole vendee. They further explicitly claimed that the bill did not make a case of equitable cogni- zance, and insisted that his remedy, if any, was at law. Proofs having been taken, the court on final hearing decreed that the defendants, within forty days after the 11th of August, 1874, should pay to complainant, or his solicitor, two thousand nine hundred and fifty dollars, with interest from that date at seven per cent., together with complainant's costs, and that he should have execution therefor. The defendant Stewart thereupon appealed, whilst the defendant Carroll acquiesced in the de- cree. It appears to me quite Impossible, in the face of the objection taken and insisted on, to sustain this decree without sanctioning the right to come into equity in all cases to recover damages where the grievance assert- ed is a fraud committed by one upon an- other in a dealing in personal property. 272 FEAUD-^URISDIOTION OF EQUITY. If the right contended for and carried out by the decree can be maintained, no reason Is perceived why, upon the same principle, a party claiming to have been cheated in a horse trade, or in a purchase of any chattels where the amount is sufficient, may not at his election proceed to sue in chancery for damages, and preclude an investigation be- fore a jury. The principles and course of practice of the court are, however, not in harmony with any such procedure. It is admitted that the books commonly say that equity has jurisdiction in all cases of fraud, but every one knows that the propo- sition is not to be accepted literally. It must always be understood in connection with the general and specific remedial powers of the court. These, confine it absolutely to civil suits. They also confine it, when the point is seasonably and properly made and insisted on, to transactions where, in consequence of the Indicated state of facts, there appears to be ground for employing some mode of ac- tion, or some kind of aid or relief not prac- ticable In a court of law, but allowable In equity. In the present case no injunction was call- ed for, and there was no ground for discov- ery, and no discovery was sought, as the bill f waived an answer on oath. No claim was set up to have the deed from Sherwin to Stewart set aside, or to have the land conveyed to complainant, and no case la made to warrant such a claim, since the bill contains nothing to show that third persons may not have acquired interests on the faith of Stewart's title. Indeed, no circumstances are set forth to call specially for equitable intervention or for any assistance or mode of redress peculiar to chancery procedure. /" The facts as given, and the case as shaped, f point to just the action and relief peculiar to a court of law. They look to a single judg- ment for damages, and nothing else. The case, then, was really of legal, and not v^ln strict propriety of equitable cognizance. The objection was timely made and urged. and complainant was bound to regard It; and unless it is to be maintained that in all cases standing on the same principle, a complain- ing party is to be allowed by his election to try in chancery, and prevent an investigation by juiy, the point made by appellant must be sustained, and In my judgment it should be. Story, Eq. Jur. §§ 72-74; 1 Spence, Bq. Jur. 691-700; Adams, Eq. Introduction, pp. 57, 58; Shepard v. Sanford, 3 Barb. Oh. 127; Bradley v. Bosley, 1 Barb. Oh. 125; Monk v. Harper, 3 Edw. Oh. 109; Pierpont v. Fowls, 2 Woodb. & M. 23, Fed. Gas. No. 11,152; Vose T. Philbrook, 3 Story, 335, Fed. Cas. No. 17,- 010; Insurance Co. v. Bailey, 13 Wall. 616; Hipp V. Babin, 19 How. 271; Parker v. Man- ufacturing Co., 2 Black, 545; Jones v. New- hall. 115 Mass. 244; Suter v. Matthews, Id. 253; Foley v. Hill, 2 H. li. Oas. 28; Cramp- ton V. Varna K. Co., 7 Oh. App. 562, 3 Eng. R. 509; Hoare v. Bremridge, L. H. 14 Bq. 522, 3 Eng. B. 824, cited by Lord Hatherly with approbation in Ochsenbein v. Papelier, 8 Oh. App. 695, 6 Eng. B. 576; Kemp v. Tucker, 8 Oh. App. 369, 5 Eng. R. 596; Warne V. Banking Co., 5 N. J. Eq. 410; Haythom v. Margerem, 7 N. J. Eq. 324. There would be more reason than there is for wishing to escape from the objection no- ticed, if complainant's version of the afCair was placed by the proofs beyond fair contro- versy; but it is not. The evidence is ex- tremely conflicting in regard to the true na- ture of the transaction, and there is room for arguing in favor of the theory advanced on each side. The case is, then, specifically suited for investigation by jury, where the witnesses can be seen and their trustworthi- ness be better understood. I think that, so far as the defendant Stew- art is concerned, who alone has appealed, the decree should be reversed, and the bill dismissed, with his costs of both courts, but that the dismissal should be without preju- dice to any proceedings at law against him the complainant may think proper to take. OAMPBBtili and COOLEX, JJ., concurred. CHRISTIANOY, J., did not sit in this case. ACTUAL FRAUD. 273 HICKS V. STEVEN'S. ai N. E. 241, 121 111. 186.) Supreme Court of Illinois. March 22, 1887. Error to appellate court, First district Stevens, the plaintiff, was introduced to . Hicks, the defendant, by Jones, who had the option for purchasing the rights in tube-closer, an invention of Hicks, for the state of New York. Stevens talked with Hicks about in- vesting In it. Hicks asked $50,000 for each of several states, including Pennsylvania and Ohio, and that the rights for each of these states were worth that sum, as were also the rights for the state of New York. After sev- eral interviews, Stevens told Jones he should have to give it up, as Hicks' prices were too high. Jones then asked him to take half of New York with him, and that they go in as partners on an option he had to pur- chase that state for $20,000. Negotiations were had, and a number of interviews took place, at which representations were made by Hicks as to the capabilities and merits of his invention, and Hicks gave Stevens a circular containing a description of such capabilities. May 30, 1883, an agreement of purchase was executed by the parties, wherein Hicks sold to Jones and Stevens the territorial rights for the state of New York to make and sell the Hicks Tube-eloser. Stevens executed his three notes for $2,500 each, and delivered them to Hicks, and shortly thereafter paid him $2,500 In cash. Jones did the same. Stevens paid Jones $250, half of the amount he paid Hicks for the option. This sum Hicks gave Stevens credit for on one of his notes. Being unable to sell the tube-closer, October 16, 1883, Stevens and Jones gave Hicks a reassignment of their rights, and de- manded their money and notes, which Hicks refused to give up. October 23d, Stevens notified Hicks in writing that he rescinded the contract, and demanded a return of the consideration. November 5th he filed his bill to rescind the contract, and recover the money and- notes. The judge found that the patent was worthless; that Hicks' representa- tions were material and false; and decreed that the contract be rescinded, and that the $2,500 paid and the notes be returned, but did not decree the repayment of the $250 paid by Stevens to Jones, and indorsed by Hicks on one of Stevens' notes. On appeal the appellate court affirmed the decree, except that it added the $250 paid by Stevens to Jones to the money decree. H. W. Wolseley, for plaintiff in error. Utl- man Strong and Edward A. Dicker, for de- fendant in error. SHOPS, J. There is no disputing as to the making of the contract of Sale in this ease, or as to its terms; the principal controversy being whether Hicks, before the sale, made material representations as to the utility and value of the invention sold, which were re- lied on by Stevens, and which were false. H.&B.Eq.(2c1E(1.)-18 The evidence satisfies us that, prior to the consummation of the sale, the parties had fre- quent interviews, in which Hicks represented to Stevens and Jones that the Hicks Tube- closer was a new and valuable Invention, and would save both steam and fuel; that It was a good and profl'bable thing to sell, and would bring great profits. Hicks also gave Stevens a printed circular setting forth therein Its capabilities and merits, which, among other things, stated that "the use of the tube-closer demonstrates to a positive certainty its abil- ity to show by the steam-guage, in the morn- ing, before firing up, the same steam pressure that Is felt at night after the day's work. It will even hold steam in the boiler from Sat- urday night until Monday morning. It is guarantied to save fully 15 per cent, of fuel, or whatever fuel is usually required to raise steam in the morning. The Hicks tube-closer will do it. It will save its cost every month." Hicks also assured Stevens, in some of the interviews, that the right to make and sell the tube-closer In either of the states of Ohio or Pennsylvania was worth $50,000; that the right to the state of New York was worth the same sum; and that ^the appliances could be manufactured for five dollars apiece, and would sell for $30 each, and that there was not less than 2,000 boilers in each of the states named. Most of these representations, especially those in the circulars, are not de- nied. Hicks, by his answer and testimony, claims that all the representations he in fact made were true, but, whether true or false, they were not relied on by Stevens In making the purchase. It is claimed there was an error in admit- ting in evidence the verbal statements made by Hicks, in regard to the tube-closer, prior to the written agreement for Its sale. Such statements were not admitted for the purpose ' of changing the terms of the written contract, but to show that Its execution was procured through fraudulent misrepresentations on the part of the vendor, and for that purpose It was certainly proper. But It is said there is no charge of fraud in the bill, and hence there was no foundation in the pleadings to justify the admission of the evidence. This is a misapprehension. Good pleading requires fraud t!0 be charged specifically, and not in general terms. The facts relied on as con- stituting fraud should be set forth so as to apprise the opposite party what he is called on to meet. Elston v. Blanchard, 2 Scam. 420; Davis v. Pickett, 72 pi. 483. The bill sets forth the specific representations made by Hfeks which Induced the complainant to make the purchase, and then charges "that the rep- resentations In the circular given b^ Hlcks to the complainant and Jones, and the represen- tation that by Hicks' experience, by the use of said Invention, great saving of steam and fuel could tie made, and other representa- tions of like effect, whereby complainant and Jones were Induced to purchase said rights, are and were utterly false, and said inven- 274 ACTUAIi FRAUD. tlon Is worthless, and by Its use no saving of any practical value can be made," and were known by Hicks to be worthless and of no value. The facts alleged in the bill. If true, constitute a fraud. If it were otherwise, Hicks should have interposed a demurrer or motion to dismiss for want of equity. It is urged that Stevens did not rely on any of the representations made by Hacks, but acted upon his own judgment; and that, if he did rely upon them, he was guilty of such negligence, in falling to properly investigate, as to deprive him of any equitable relief. To entitle a party to relief, either legal or equitable, on the ground of a fraudulent mis- representation, he must have relied upon the representation as true; for unless the rep- resentations are believed to be true, and acted upon, it can cause no legal Injury. It is necessary that he Should trust the representa- tion, but it is not essential that the false representations should be the sole inducement to his entering into the contract. 2 Pom. Eq. Jur. § 890; 2 Pars. Cont. (5th Ed.) 773. The party acting upon a representation must, un- der the circumstances of the ease, have been justified in relying upon it, in order to en- title him to relief. As stated in Pom. Eq. Jut. § 891: "It may be laid down as a gen- eral proposition that where the statements are of the first kind, [relating to substantial matters of fact, and not mere opinion,] and especially when they are concerning matters which, from their nature or situation, may be assumed to be within the knowledge or un- der the power of the party making the repre- sentation, the party to whom it is made has a right to rely on them; and, in the absence of any knowledge of his own, or of any facts which should arouse suspicion and east doubt upon the truth of the statements, he is not bound to make inquiries and examination for himself. It does not, nnder such circum- stances, lie In the mouth of the person as- serting the fact to object or complain be- cause the other took him at his word. If he claims that the other party was not misled, he is bound to show clearly that such party did know the real facts; the burden is on him of removing the presumption that such party relied and acted upon his statements." And In, section 8^ the same author says: "When a representation Is made of facts which are, or may be assumed to be, within the knowledge of the party making it, the knowledge of the receiving party concerning the real facts, which shall prevent his relying on and being misled by it, must be clearly and conclusively established by the evidence." When a party, ignorant of the real facts, and having no ready means of information, makes a purchase, or enters into a transac- tion as to the subject-matter of which rep- resentations have been made which are ma- terial, the law will presume, as a matter of fact, that he relied on them. Redgrave v. Hurd, 20 Ch. Div. 1; Nlcols' Case, 3 De Gex & J. 387; Fishback t. Miller, 15 Nev. 428; Benj. Sales (4th Am. Ed.) 465, note b. If false representations are made as to matters of fact, and the means of knowledge are at hand, and equally available to both parties, and the purchaser, instead of resort- ing to them, trusts the vendor, the law, as a general rule, will not relieve him from his own want of ordinary prudence. Cooley, Torts, 487. This Is the case where the prop- erty is tangible and Is at hand, and subject to Inspection, but a different rule obtains when the property is at a remote distance, or where the property right is intangible, and the falsity of the representations cannot be detected by inspection. In Smith v. Rich- ards, 13 Pet. 26, it is held that when a sale is made of property, but at a remote dis- tance, which the purchaser knows that the seller has never seen, but which he buys upon the representation of the seller, relying on Its truth, such representation in effect must be deemed to amount to a warranty, or at least that the seller is bound to make it good. Cooley, Torts, 488; Maggart v. Free- man, 27 Ind. 531; Lester v. Hahan, 25 Ala. 445. In the case at bar the pmrchaser was wholly unacquainted with the use, opera- tion, and management of steam-boilers, and of the utility and value of the Invention, and it is doubtful whether its capabilities, use- fulness, and practical value could then have been determined, even by experts, without very considerable use and long experiment At the date of this contract, the patent, though allowed, bad not been issued, and but few of the tube-closers had been used or tested by others than the inventor. Stevens testifies that he had not seen the tube-closer In use or operation before he signed the con- tract; that he inquired of several to whom he was referred by Hicks, but could learn noth- ing as to their merits, except from one party, who said they had tried it, but had thrown it away. When Hicks was informed of this, he said he had met a similar case, and had fixed It up so that it worked all right, and that be would do the same with this one. Hicks was the inventor,, and claimed to have made thorough tests of his Invention, and presumably had a greater knowledge of its use, capabilities, utility, and value than any other person. From these facts, and his profession of friendship to Jones, and of his desire to put him Into a good paying busi- faess, we think Stevens and Jones not only plied upon the representations, but had a right to rely on them in making their pur- chase. Allin v. Millison, 72 lU. 201. ^ It Is true that Hicks told Stevens and Jones not to take his word, but to satisfy themselves as to the merit of his invention before buying, but this cannot relieve him from liability for his misrepresentation made for the purpose of Inducing the purchase. He must have known that but little, if any, information could be obtained by inquiry, from the fact the tube-closer had not been Actual fraud. 275 brought Into general use. The inquiries made proved fruitless, as he must have known they would. In 2 Pom. Eq. Jur. § 896, it is said: /"It, therefore, the party accompanies or fol- / lows his misrepresentations by words of gen- / eral caution, or by advice to the other that j he consult his friends or professional ad- 1 visers before concluding the agreement, he 1 does not thereby counteract any effect ujwn \ the transaction which his untrue statement V would otherwise produce;" citing Reynel v. Sprye, 1 De Gex, M & G. 709; Smith v. Richards, 13 Pet. 26. In Eaton v. Winnie, 20 Mich. 156, the court say: "When one as- sumes to have knowledge upon a subject of which another may well be ignorant, and knowingly makes false statements regarding it, upon which the other relies, to his injury, we do not think it lies with him to say that the party who took his word, and relied upon it, was guilty of negligence in so doing, so as to be precluded from recovering compensation for the injury which was inflicted upon him under cover of the falsehood;" citing Rail- road Co. V. Ogier, 35 Pa. 72; Gordon v. Railroad Co., 40 Barb. 550; Ernst v. Rail- road Co., 35 N. Y. 28. See, also, Walsh v. Hall, 66 N. C. 233; Oswald v. McGehee, 28 Miss. 340; McClellan v. Scott, 24 Wis. 81; Starkweather v. Benjamin, 32 Mich. 305; Kendall v. Wilson, 41 Vt. 567; Pierce v. Wil- son, 34 Ala. 603. To maintain an action at law "for fraud and deceit arising from false representations of a material matter connected with a trans- action, it is necessary to show that the party making it knew it to be false, or occupied ly such a position as that the law would im- i pute to him a knowledge of the fact A per- !,' son cannot, it is believed, be free from fraud I in a court of equity when he makes a positive ^ representation of a material fact which he does not know to be true, or has good reason ? to believe is true, and which in point of fact ■j Is false. In Allen v. Hart, 72 111. 104, it is held that it Is not indispensable to a right to rescind a contract that the party making the representation linew it to be false, provided It is material, and the other party had a right to rely upon it, and did so, and was deceived; and this is believed to be sustained by the weight of authority. In this ease, Hicks' facilities were superior to those of any one else for knowing whether the representations made by him were true. If he did not in fact know them to be true, he should not have so asserted to Stevens, whom he knew had no means at hand by which to detect their falsity. There was no error in admitting in evi- dence the printed circular of Hicks, showing the valuable qualities of his Invention. The proof shows that he gave Stevens one of them during their negotiations, containing mateiial and important representations of what his inventinn would accomplish as a meaiis of saving steam and fuel; that it would save Its cost in a month; while the proof showed that practically It was of no value In the respect mentioned in the circu- lar. These circulars were printed and dis- tributed for the purpose of inducing others to purchase rights of him, and the state- ments therein may be regarded as of a more deliberate character than if made in a con- versation. They were properly admitted. See 2 Pom. Bq. Jur. § 881, and also Cooley, Torts, 477. As a general rule, representations as to the value of property sold, though exaggerated, do not constitute fraud, but it has some ex- ceptions. As said in Cooley, Torts (page. 484:) "There are some cases, however, in which even a false assertion of an opinion will amount to a fraud; the reason beilig that under the circumstances the other party has a right to rely upon it without bringing^ his own judgment to bear. Such is the case when one is purchasing goods, the value of which can only be known to experts, and is relying upon the vendor, who is a dealer in such goods, to give him accurate information coueerning them. The same rule has been applied when a dealer in patent-rights sold certain territory to one who was ignorant of its value, representing it to be very valua- ble, when he knew it was not." See Allen V. Hart, 72 111. 104. The value of a patent- right for the purpose of sales depends large- ly upon the usefulness of the invention, and the demand for the article patented. Objection is made to the admissibility of some other evidence. In chancery it will be presumed that the court considered and act- ed only upon such as may be proper. As the other evidence in the case is sufficient to sus- tain the decree of the superior court. It will I not be necessary to consider the objection. \ It is also claimed that the appellate com-t erred in directing that the $250 paid by Stevens be added to the money decree. Be- fore Stevens was introduced to Hicks, the latter made sale to Jones of an option to pur- chase the right to the state of New York at $20,000, and Jones had paid him $500 there- for. Jones was not bound to take the right for the state of New York, but, if he did not, he could not recover back the money he had paid for the option. Stevens bought of Jones a half interest in the option, for which he paid Jones $250. To this trans- action Hicks was not a party. If Jones and Stevens together failed to purchase the state right, Stevens could not have called on Hicks to refund to him the money he had paid to Jones; and, when the contract for the pur- chase of the right for the state of New York was rescinded, it was the same, in substance, as if it had never been made. Hicks was again placed where he was before his sale, and Jones and Stevens having failed to exer- cise their option, could not compel Hicks to return the price paid for it. The bill did not seek to set aside and rescind Jones' con- tract for the purchase of the option; nor did Hicks refuse to let either Jones, or Jones 276 ACTTTAL FRAUD. and Stevens, purchase tbe right for the state of New York, Imt on the contrary, -was anx- ioiis to haye them take It This ruling of the appellate court is, we think, clearly er- roneous. The judgment of the appellate court will be reversed as to so much of its Judgment as adds to the decree the said sum of $250, and the decree of the superior court Is affirmed. Reversed in part, and affirmed in part AOTITAIi FRAUD. «77 STIMSON ▼. HELPS et al. 0.0 Tar. Rep. 290, 9 Colo. 33.) Suprpme Court of Colorado. Feb. 26, 1886. Appeal from county court, Boulder county. The complaint sets out that on the sixth day of October, 1881, William Stlmson 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 aljout April 10, 1882, they were notified to quit mining on said ground by the Marshall Coal 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 lines 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 damage(l them, in the sum of $2,000. Issue joined, and trial to the court. 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 & Griffln, for appellant G. Berk- ley, for appellees. ELBERT, J. The law holds a contracting party liable as for fraud on his express rep- resentations concerning facts material to the treaty, the truth of which he assumes to know, and the truth of which Is not known to the other contracting party, where the representations were false, and the other party, relying upon them, has been misled to his Injury. Upon such representations so made the contracting 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 party boimd to know the truth of his representations. Big- elow, Fi-aud, 57, 60, 63, 67, 68, 87; Kerr, Fraud & M. 54 et seq.; 3 Wait, Act. & Def. 436. This is the law of this case, and, on the evidence, warranted the judgment of the court 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 knew 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 ^^presentation should know it to be false. He who maJces 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 acta to his own knowledge falsely, and the law imputes a fraudulent intent. Kerr, Fraud & M. 54 et seq., and cases cited; Bigelow, Fraud, 63, 84, 453; 3 Wait, Act. & Def. 488 et seq.; 2 Estee, Pr. 394 et seq. "Fraud" is a term which the law applies to certain facts, and where, upon the facte, the law adjudges fraud, it is not essential that the complaint should, in terms, allege it It is sufficient if the facte stated amount to a case of fraud. Kerr, Fraud & M. 366 et seq., and cases cited; 2 Bstee, 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 coiu-t below is af- firmed. [Note from 10 Pac. Rep. 292.] A contract secured by false and fraudulent representations 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- 278 ACTUAL FRAUD. 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 they, or either of them, were mistaken as to 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- eusly 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. 361. 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, 12 Fed. Rep. 487. See Chandler v. Childs, 42 Mich. 128, 3 N. W. Rep. 297; Cavender v. Roberson, 33 Kan. 626, 7 Pac. Rep. 152. When no damage, present or prospective, can 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. 230. A person is not at liberty to make positive assertions about facts material to a transaction unless he knows then) to be true; and if a 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 upon such assertion. Lynch v. Mercantile Trust Co., 18 Fed. Rep. 486. 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 was 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. Rep. 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. Heinemau v. Std- . ger, 54 Mich. 232, 19 N. W. Rep. 965. Where the vendor honestly expresses an in- correct opinion as to the amount, quality, and 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 an 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 diligence, does not amount to misrepresentation. Reynolds v. Palmer, 21 Fed. Rep. 433. False statements made at the time of the 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 give an exorbitant and unjust price therefor, will 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- ly made, within the settled rule. Cooper v. Schlesinger, 111 U. S. 148, 4 Sup. Ct. Rep. 860. 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 parties. 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. Dowling V. Lawrence, 58 Wis. 282, 16 N. W. Rep. 552. Evidence of fraudulent representations must be 'Clear and convincing. Wickham 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 of Indiana, in the case of Cook v. Churchman, 104 Ind. 141, 3 N. B. 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, a1 though the party making the representations may have entered into a conspiracy vrith such person with the expectation of obtaining some incidental benefit for himself. ACTUAL FRAUD. 279 MITCHELL et al. v. McDOUGALL. (62 111. 498.) Supreme Court of Illinois. Jan. Term, 1872. Appeal from circuit court, McLean county; Thomas F. Tipton, Judge. Bill in chancery by Abner Mitchell and wife to rescind a conveyance of real estate against Archibald McDougall. Prom a de- cree dismissing the bill, plaintiffs appeal. Reversed. The conveyance was made by plaintiffs to defendant in exchange for property in Mis- souri. At the time of the exchange there was a mortgage on plaintiff's property, which defendant assumed, also giving to plaintiff his note for the difference in the exchange. A-fter the exchange he added to the buildings and tooli out insurance on the property. Pending the bill the buildings exchanged to defendant were destroyed by fire. Plaintiff offered his wife as a witness to prove misrepresentations of defendant as to the value of the Missouri property. The co'Tt refused to permit her to testify. R. E. Williams, for appellants. Benjamin & Weldon, for appellee. BRBESB, J. In Lockridge v. Foster, 4 icam. 569, which was a bill in chancery pray- ing, in the alternative, for the rescission of an executed contract for the sale of land, on the ground of fraudulent representations by the vendor, this court said, on the principles of equity and justice, a contract, to be ob- ligatory, must be justly and fairly made. The contracting parties are bound to deal honestly, and act In good faith -with each oth- er. There should be a reciprocity of candor and fairness. Both should have equal knowl- edge concerning the subject-matter of the contract; especially ought aU the facts and circumstances which are likely to influence their action to be made known. If they have not mutually this knowledge, nor the same means of obtaining it, it is then a duty in- cumbent on the one having the superior in- J formation to disclose it to the other. In mak-j ing the disclosure, he is bound to act in goodi faith and with a strict regard to truth. If Le makes false representations respecting material facts, or Intentionally conceals or suppresses them, he acts fraudulently, and renders himself responsible for the conse- quences which may result. Fraud may con-. sist as well in a suppressio veri as in a sug-l gestlo falsi, for. In either case, it may operate! to the injury of the innocent party. A falsef representation by the vendor, which in- . fluences the conduct of the other party, and Induces him to make the purchase, will vitiate and avoid the contract. And In making the representation. It is Immaterial whether he knows It to be false or not, for the conse- quences are the same to the vendee. If he re- lies on the truth of the declaration, he Is equally Imposed on and Injured, and ought to have redress from the one who has been the cause of the injury. So a suppression or concealment by the vendor of facts, which, if known to the vendee, would have the ef- fect to prevent him from making the pur- chase, will, In equity, equally vitiate the con- ! tract. A court of equity will not enforce and \ carry Into effect contracts thus unfairly and \ fraudulently made; and when the Injured / party Invokes its aid in proper time, and the circumstances of the case will permit it to be done, the contract will be rescinded and the parties restored to their original rights. The court refers to 1 Story, Bq! Jur. §§ 191- 197, 204r-207, and 2 Kent, Comm. 482, 490. Sections 191-197, inclusive, treat of false suggestions, and fully support the doctrine of the case cited, on that point. Sections 204 to 207, Inclusive, treat of the doctrine of suppressio veri, a doctrine which, though true in morals. Is not the doctrine recognized by courts of equity, except under certain cir- cumstances. The extreme doctrine of some courts is, that undue concealment of a fact resting in the knowledge of one contracting party, which, if known to the other, would have prevented the contract, will vitiate the contract. The true definition Is found in section 207, supra, where it Is said undue concealmeni which amounts to a fraud in the sense of a court of equity, and for which it will grant relief, Is the non-disclosure of those facts add circumstances which one party Is under some legal or equitable obligation to communicate to the other, and which the latter has a right, not merely in foro conscientiae, but juris et de jure, to know. Under such circumstances, the concealment of an important fact would be Improper and unjust; it would be an undue concealment on account of the fiduciary relation existing; but where two parties, in the absence of any such relation, are treating for an estate, and the purchaser knows, from surface indica- tions, or otherwise, by actual boring, there Is a valuable mine upon the land, the pur- chaser is not bound to disclose that fact to the owner, for the means of information on the subject were as accessible to the owner of the land as to the purchaser. The rule stated by Chancellor Kent, at page , 482, referred to in the opinion in 4 Scam., su- ', pra, is that each party is bound to communi- , I cate to the other his knowledge of the ma- ( 1 terial facts, provided he knows the other to j I be ignorant of them, and they be not open/ land naked, or equally within the reach of his' observation. » This, we admit. Is a rule of moral obligation, || but not enforced in the courts. It Is by, them ' qualified, as we fiave stated above, that the party in possession of the facts must be un- der some special obligation, by confidence re- posed, or otherwise, to communicate them truly and fairly, and this is the doctrine of this court in the cases of Fish y. Cleland, 33 111. 243, and Cleland v. Fish, 43 111. 282, re- ferred to by appellee's counsel. 280 ACTUAL FKAUD. It Is qualified by Beach v. Sheldon, 14 Barb. 72; Laidlaw v. Organ, 2 Whart 178; Knltzlng V. McElrath, 5 Pa. St 467. In Fox V. Mackeath, 2 Brown, Ch. 400, Thurlow, Lord Chancellor, in delivering the opinion in the case where undue concealment of an important fact was charged, said: "The doubt I have is, whether this case af- fords facts from which principles arise to set aside this transaction, which will not, by nec- essary application, draw other cases into haz- ard. And, without insisting upon technical morality, I don't agree with those who say, that where an advantage has 6een taken in a contract, which a man of delicacy would not have taken, it must be set aside. Sup- pose, for Instance, that A, knowing there to be a mine in the estate of B, of which he knew B was ignorant, should enter into a contract to purchase the estate of B for the price of the estate without considering the mine, could the court set it aside? Why not, since B was not apprized of the mine and A was? Because B, as the buyer, was not obliged, from the na- , ture of the contract, to make the discovery. ) It is, therefore, essentially necessary, in order j I to set aside the transaction, not only that a |' I great advantage should be taken, but it must j j, arise from some obligation in the party to J ; make the discovery." Not, as Justice Story/! i says (1 Story, Bq. Jur. § 148), from an obli-M j gation in point of morals only, but of legalf \ duty. In such a case he says, a court of equity will not correct the contract merely because a man of nice morals and honor would not have entered into it. Lord Eldon, in Turner v. Har- vey, Jac. 178, approved the doctrine of Lord Thurlow and the illustration of the mine, and BO does Justice Story in 1 Eq. Jur. § 207. But we are dealing in this case with the doctrine of suggestio falsi and not of suppres- sio veri, as the charge in the bill is, false rep- resentations made by appellee of the value of the land and lots in Missouri. There is much testimony in the record, from which we derive the knowledge that appellee represented to appellant, who had never been In Missouri (appellee having resided there be- fore coming to Bloomington), that the land was good land, and was the land occupied by one Judge Smith, before the Rebellion, and im- proved by him. This land was the south part of section eighteen and the north part of sec- tion twenty -four, in all one hundred and sixty acres, and was worth, probably, fifteen dollars per acre. The land conveyed was in section fifteen, stony, poorly timbered, and compara- tively worthless. The house in Montevallo, Instead of being a desirable residence, and worth one thousand dollars, as represented by appellee, proved to be a mere shell, one story high, occupied by hogs and goats, bring- ing not eight dollars a month rent "right along," as represented, but unfit for human abode, and worth, with the "lot and a half," not over two hundred and fifty dollars, and, as we should judge, not at all saleable. So soon as appellant, by personal inspection on a visit to the locality, discovered the facts, he came to the conclusion appellee had imposed upon him, and at once, on his return to Bloomington, demanded a rescission of the contract and a reconveyance of the Blooming- ton property, and tendering deeds for the Mis- souri property, together with appellee's note for three hundred dollars, part of the pur- chase money. This being refused by appellee, this bill was filed by appellants, and pending the bill the house was consumed by fire, on which, however, appellee had effected an In- surance of three thousand dollars. The court dismissed the bill and complain- ants appealed.' There is no question of law made except the one we have discussed, and there is Home confiict in the testimony, but a careful exami- nation of it, as we find it in the record, satis- fies us appellant has not received from appel- lee what he contracted for, and which con- tract he made wholly on the representations of appellee, which have proved to be untrue. It is said by appellee, there was a mistake in conveying the land as in section fifteen— that he supposed the "Smith farm" was on that section, but is willing and ofCers to con- vey the land in fact occupied by Smith in sec- tions eighteen and twenty-four, and he in- sists, that a mistake being made Is no ground for the rescission of the contract, as the court can and will correct the mistake. But this consideration should not prevail in this case, because appellee represented the land he was selling to be worth twenty dollars per acre, which he had purchased but a short time pre- viously for four dollars per acre, and he as- serted to appellant that such land was selling for twenty dollars an acre in that neighbor- hood. This he based upon a letter said to have been received by him from one Selsor, a land agent in that county. Selsor in his depo- sition says, the lands he referred to in that letter were among the best improved farms in that portion of Cedar and Verrlon counties; he says he had no idea of fixing the price of raw lands by these figures, and did not sup- pose any one would be so foolish as to at- tempt it. That letter, which appellee says was burnt up in the building when it was destroyed, was to this efCect: "We have sold within the last two weeks ten thousand dollars worth of land, from fifteen to twenty-five dollars an acre." This was so construed by appellee to appellant as to Induce the latter to believe they were lands in the neighborhood of those he was about to purchase. The town property was of small value Now, under such circumstances, It would not be just to allow appellee to correct the mis- take In the land and claim the contract as made, but it would be just, as a mistake was made by appellee in the deed, to permit the Injured party to avail of it, and, through that, repudiate the entire contract. In a case where false representations have been -made, it Is the province of a court of equity. If applied to ACTrAL FRAUD. 281 for that pvirpose, to rescind the contract, put- ting the parties in statu quo. It is claimed by appellee that the Blooming- ton property was taken at a vay high ralua- tlon, and that he ought to be permitted to show that appellant has received from him its full value. This we do not consider as the question be- fore us. The question is, did appellant get what he bargained for? That he did not we think the evidence satisfactorily shows. Appellant's right to the insurance money will liardly be questioned, as the building up- on the lot when sold, is now represented by that money, and after deducting the premium paid by appellee and the cost of the addition to the building which he erected, and was covered by the insurance, we are of opinion the company should pay the balance to appel- lant. On the point that Mrs. Mitchell, appellant's wife, was improperly rejected as a witness, we think the court ruled correctly; the case was In no correct legal sense bo' own case. The views here expressed reverse the de- cree of the circuit court dismissing the bill. The cause is remanded for further proceedings consistent with this opinion. Decree reversed. SCOTT, J., did not hear the argument in this case, and ga^e no opinion. 282 _ v\ AOTTJAIi FRAUD. SOUTHERN DEVEILOPMBNT 00. OF NEVADA V. SILVA. (8 Sup. Ct. 881, 125 U. S. 247.) Supreme Court of the UniteS States. March 19, 1888. Appeal from the circuit court of the Unit- ed States for the Northern Distiiet of Cali- fornia. 'Wm. U. Stewart, A. T. Brltton, and A. B. Browne, for appellant. J. P. Langhorne and John H. Miller, for appellee. LAMAR, J. This Is a bill in equity to rescind a contract of purchase of a silver mine on the ground of fraudulent representar tions, and to recover the consideration paid. The suit was commenced originally in the superior court of Inyo county. Gal., on the Sth of May, 1884; but on account of the di- vei-se citizenship of the parties, the plaintiff being a corporation organized under the laws ' of Nevada, and the defendant a citizen of California, it was removed into the United States circuit court. Demurrers to the origi- nal bill and to an amended bill having been sustained, the present "second amended" bill of complaint was filed. Answer was filed by defendant, replication by complainant, and issue was joined. Testimony was fallen, and the case was heard, resulting in a decree dismissing the bill on the 14th of March, 1887. It appears from the record that on the 15th of March, 1884, the appellant (who was the complainant below) purchased from the defendant a mining claim, linovro as ' the "Sterling Mine," together with other mining property, all situated in Inyo coun- ty, Gal., paying him therefor the sum of $10,000. On the Sth of May, 1884, the origi- nal bill of complaint was filed, charging, in substance, that complainant was induced to purchase said mine and mining property solely upon the representations made by Sil- va as to its condition, extent, and value; that such representations were made to H. M. Yerington, the president of said complain- ant company, and to one Forman, a mining expert In his employ, in January, 1884, when an examination of said mine was made by them; that said representations were false and fraudulent, and were well known to the defendant at the time to be such; and that said representations vrere, in substance and in a somewhat different order, as follows: (1) That there were 2,000 tons of ore in the mine; (2) that the bottom of what is called the "Ore Chamber" was solid ore, as good as the ore exposed on the sides of the cham- ber; (3) that there were not less than 500 tons of ore in and about the said ore cham- ber; (4) that the mine was worth $15,000; and (5) that, after going through the mine, the defendant represented to said Yerington and Forman that he had shown them all the work which had been done in or about the mine that would throw any light upon the quantity of ore therein. The answer of the defendant is direct pos- itive, and unequivocal in its denials of the allegations of the bill; and, as an answer on oath is not waived, unless these denials are disproved by evidence of greater weight than the testimony of one witness, or by that of one witness with corroborating cn-- cumstances, the complainant will not be en- titled to a decree; and this effect of the de- fendant's answer is not weakened by the fact that the equity of the complainant's bill is the allegation of fraud. Vigel v. Hopp, 104 U. S. 441; 2 Story, Eq. Jur. § 1528; 1 Daniell, Ch. Prac. 844. The burden of proof is on the complainant; and unless he brings evidence sufficient to overcome the natural presumption of fair dealing and honesty, a court of equity will not be justified in setting aside a contract on the ground of fraudulent representations. In order to establish a charge of this character the complainant must show, by clear and decisive proof- First, that the defendant has made a repre- / sentation in regard to a material fact; sec- X ondly, that such representation is false; thirdly, that such representation was not ac- J tually believed by the defendant, on reason- able grounds, to be true; fourthly, that it i was made with intent that it should be acted on; fifthly, that it was acted on by com- J plainant to his damage; and, sixthly, that in ( so acting on it the complainant was ignorant of its falsity, and reasonably believed it to be true. The first of the foregoing requi- sites excludes such statements as consist merely in an expression of opinion or judg- ment, honestly entertained; and, again, (ex- cepting in peculiar cases,) it excludes state- ments by the owner and vendor of property in respect to its value. The evidence in the case shows that in the development of this mine a tunnel, called the "Sterling Tunnel," had first been dug. At a distance of about 140 feet along the line of this tunnel, from its mouth, there are branches running easterly and westerly. About eo feet from the main tunnel, in the eastern branch, winze No. 1 starts down. About 38 feet below the level of the tunnel, a level, known as th« "38-feet level," starts off from this winze, and at the bottom of the winze, a distance of about 82 feet vertical below the main tunnel, therei is another level, known as "82-feet level." In the easterly branch of the tunnel, about 30 feet from winze No. 1, there is another winze starting downward, Inclining to the southeast as it goes down. This winze is numbered 2, and is connected with the 38-feet and the 82-feet levels. Intermediate between these levels is another level, known as the "55-feet level," which opens out to the eastward of winze No. 2 into a chamber about 15 feet long and about 8 feet wide. In the south-east comer of this chamber was a little hole or shaft, ACTUAL FRAUD. 283 extending downward a few feet only. In sinking winze No. 2, Silva struck an ore body at a point opposite the 38-feet level. It was irregular In shape, dipping at an angle of about 45 degrees. Commencing at a point, comparatively speaking, it increased gradually as it descended, and was in form somewhat like a pyramid. At Its base it measured 4 or 5 feet across, and it was about nine feet long. The surface of this inclined pyramid formed the floor or bottom of the chamber. There was, however, a" small space between the base and opposite foot- wall, which is called the "bottom" of the chamber by complainant's witnesses, and it is the "bottom" spoken of in the bill. The ore comprising this pyramid was carbonate, and, being friable, had slacked down over the face of the pyramid to the bottom, partially covering it, and partially filling up the lit- tle hole or shaft in the south-east comer. As to the first alleged representation, as classified above,— viz., that there were 2,000 tons of ore in sight in the mine, and that Terington relied upon such statement when he made the purchase, — the proof utterly fails to establish either that Silva made the statement, as a statement of fact, or that Yerington relied upon such statement, even had it been made. SUva, both in his answer and in his testimony, denies ever having made the statement, and the testimony of Terington himself is to the effect that Su- va's statement was qualified by the phrase "in his judgment" This, then, is shown to have been nothing more than an expression of opinion on the part of Silva as to the quantity of ore in sight In the mine. But, even if Silva had made the statement imput- ed to him in the bUl, there is abundant evi- dence to show that Yerington did not rely upon it in the purchase of the mine. Yer- ington's own evidence, on this point, is against him. He testifies that he did not believe that there were more than 1,000 tons of ore in the mine, and that Forman agreed with him on that point. And he further tes- tifies that, valuing this ore at 32 ounces of ore and 45 per cent, of lead per ton, (which it appears was its approximate value, as deter- mined by several assays,) and calculating that there would be 1,000 tons of ore there, the mine would be worth $10,000,— the sum he actually gave for it This lacks much of coming up to the rule that the complainant must have been deceived, and deceived by the person of whom he complains. Atwood V. Small, 6 aark & F. 232; Pasley v. Free- man, 3 Term R. 57. Besides, the quantity of ore "in sight" in a mine, as that term is un- derstood among the miners, is at best a mere matter of opinion. It cannot be calculated with mathematical, or even with approxi- mate, certainty. The opinions of expert min- ers, on a question of this kind, might reason- ably differ quite materially. In the case of Tuck V. Downing, 76 111. 71, 94, the court say: "No man, however scientific he may be. could certainly state how a mine, with tht most flattering outcrop or blow-out, will finally turn out. It is to be fuUy tested and worked by men of skill and judgment IMines'are not pm-chased and sold on a war- ranty, but on the prospect. 'The sight' de- termines the purchase. If very fiattering, a party is willing to pay largely for the chance. There Is no other sensible or known mode of Celling this kind of property. It is, in the nature of the thing, utterly speculative, and every one knows the business is of the most fiuctuating and hazardous character. How many mines have not sustained the hopes created by their outcrop!" We approve the position of the court below, that "Yerington and his expert, Forman, were as competent to judge how much ore there was 'in sight' as Silva was. They were novices in matters of that kind. This misrepresentation, if such it be, does not contain either the first, fourth, or fifth element stated by Pomeroy as essential elements in a fraudulent misrep- resentation." As stated above, the substance of the al- legation of the bill is that Silva represented that the bottom of this ore chamber, which was covered with loose ore slacked down from the pyramid, was composed of ore as good as that exposed on the sides of the chamber. Silva, in his answer, expressly denies ever having made such statement. Forman testifies that with a little prospect- ing pick he had with him he raked through the dirt and loose ore that had slacked down, to see if it would reach the bottom of the ore chamber, but that it would not. He further says: "I asked Silva how the bot- tom was; if he had sunk below there. He said, 'No.' I said, 'How is the bottom. You, as a miner, know It Is a suspicious thing to see a bottom covered up, or anything of that kind.' He said the bottom was as good or better than any ore which we saw in the chamber." Yerington at first testifies that Silva, in reply to a question by Forman, stated that this floor was solid ore; but he says that he does not think any comparison was made between that ore and the ore in the sides of the chamber, as narrated by Forman. On the next day, however, Yer- ington having, as he says, refreshed his mem- ory,— "and I [he] had the means of doing it," — was positive that the conversation between Silva and Forman at that time was as For- man afterwards stated it Silva, In addition to Ills positive denial in his answer, testifies that "there never was a word said about that. They asked me this: 'What I thought of the ore body?' and I said 'I thought it would be extensive.' I thourht so at the time, and I think so yet" The witness Bd- dy, who was present all the time in the ore chamber, except when he went to the 38-feet level to get a pick, does not know anything about a conversation such as Yerington and Forman narrate. On this point, then, the testimony of Silva is directly to the contrary 284 ACTUAL FRAUD. ef that of Yerington and Forman. Certain other material facts in the case seem to indi- cate that there is just as strong probability that Silva's statements in this matter are true as that those of Yerington and Forman are true. In the bill Yerington alleged, un- der oath, that Sllva had discovered the fact that the bottom of the ore chamber was not composed of ore, and had afterwards cov- ered the bottom with ore, vein-rock, and mat- ter,— in other words, had "salted" the mine. There is no evidence in the record to prove this, or tending to prove it; on the contrary, the evidence of Yerington himself, and of the other witnesses who were examined on that point, is all to the effect that the ore cover- ing the floor of the chamber had slacked down from natural causes In fine particles like wheat. Nor is there such evidence to show that Sllva knew the character of this floor, or of the extent of the ore vein, or de- posit, (as it afterwards turned out to be,) as would justify the interposition of a court of equity to set aside the contract on the ground of fraudulent representations. He had come onto the ore in excavating from the top. The sides of the ore chamber contained some ore of a good quality, and he had never dem- onstrated the extent and amount of ore in the pyramidal wedge in the side of the cham- ber. It Is shown by the evidence of Yer- ington himself that, in the side of a drift running westerly from the ore chamber, there was ore which appeared to be continu- ous with the body of ore in the chamber; so that the statement Silva said he made,— viz., that he thought the ore body would be extensive,— at least, appears reasonable. Up- on all the facts and circumstances apparent of record, he might have made the state- ment he says he made, and believed he was telling the truth. For there is also some evidence to the effect that Silva had com- menced to run a drift from the bottom of winze No. 1, for the purpose of striking and cutting the supposed downward extension of the ore body in the chamber; and this, be- fore the examination of the mine by Yering- ton and Forman. After the sale of the mine, Coffin, the superintendejit for the complain- ant company, when he commenced work in the mine, started in where Silva had left off in this drift, and carried it immediately be- neath the ore chamber, entering the chamber by an up-ralse. Then it was that the dis- covery was made that the ore body, instead of being a continuous ledge or lead, was merely a deposit. Furthermore, the testi- mony of Yerington and Forman, as regards the little hole or shaft in the south-east cor- ner of the chamber, is directly opposed by the testimony of Silva and Eddy. Both Yering- ton and Forman testify that this little shaft was completely filled up with dirt arid loose ore; while Sllva and Eddy both testify that it was not so filled up, but that both Yer- ington and Forman stood in that shaft, and took samples of ore from it It Is thus seen that the evidence on this material point does not clearly establish the fraudulent represen- tations of Silva as claimed by tlie complain- ant; but that, on the contrary, the material facts and circumstances as disclosed by the record are entirely compatible with the the- ory that Silva did not make the representa^ tions charged against him, or, at most, that he merely gave expression to an opinion as to the extent of the ore body, erroneous though it proved to be. This would not con- stitute fraud. In the language of the court below: "This testimony was taken in June, 1866, about two and a half years after the conversations took place. They were pres- ent at the time, examining the mine, and en- gaged In conversation for an hour or more. These discrepancies in matters of detail dur- ing a long conversation, related by different parties, viewing the subject from different stand-points after the lapse of so long a pe- riod of time, are no more than might rea- sonably be expected, even in honest wit- nesses. There is no occasion to impute any intention to testify falsely to either. • * * Parties are extremely liable to misundeiv stand each other, and, in looking back upon the transaction in the light of subsequent developments, are prone to take the view most advantageous to themselves." As to the third alleged representation,— to- wit, that there were not less than 500 tons of ore in and about that ore chamber,— Silva, both in his answer and in his testimony, de- nies that he ever told Yerington and For- man, or anybody else, that there were 500 tons of ore there, or that there was any amount fixed or agreed upon by them as to the quantity of ore there; while the testi- mony of both Yerington and Forman is to the effect that Sllva said, in his opinion, or in his judgment, there were 500 tons of ore in I the chamber. So that, taking the strongest testimony produced on the part of complain- ant upon this point, it simply amounts to an expression of opinion on the part of Silva as to the amount of the ore in the chamber, n and not a statement of fact. It therefore does not constitute fraud. It is equally true that any statem;ents that may have been made by Silva with reference to the value of the mine, cannot, under the circumstances of this case, be considered an act of fraud on his part sufficient to warrant a court of equity in setting aside the contract herein. Yerington testifies that Silva said he had been asking $15,000 for the mine, but that he would take $12,500; while Forman says he does not recollect that Sllva made any statement as to the value of the mine, but that he heard Silva say he thought it was worth $15,000. Such statements are not fraudulent in law, but are considered merely as trade talk, and mere matters of opinion, which Is allowable. Gordon v. Butler, 105 U. S. 553; Mooney v. Miller, 102 Mass. 217. Moreover, It is clear, beyond question, that Yerington did not purchase the mine upon ACTUAL FRAUD. 285 a i Silva's representations as to Its valne, as we shall hereafter see. This disposes of all the alleged fraudulent representations, as arranged above, except the last, adversely to the complainant; and it is to this one that attention will now be direct- ed. This charge is, substantially, that Silva represented to Terlngton and Forman, when they visited the mine in January, 1884, and had gone through it, that he had shown them all the work which had been done In and about the mine that would throw any light on the quantity of ore therein. This repre- sentation is alleged to have been false and fraudulent, and well known by Silva to be such, because at a cut a short distance from the mouth of the main tunnel, at a point known as the "point of location," a little hole or shaft had been simk which had been filled up, and was not observable at the time of the examination of the mine in January, 1884, and also because there had been a number of drill-holes made in the sides of the ore cham- ber, and afterwards filled up before the ex- amination in January, 1884, so that they were not observable at that time; which holes • clearly developed the fact that the ore about the chamber was nothing more than a sheU, instead of a continuous body, as it appeared io the observer. The existence of the plug-] ged-up drUl-boles in the sides of the ore cham- ber is the worst feature of the case againstj f Silva. They could not have been made by former proprietor of the mine, as is slightly claimed in his behalf; for, as has been al- ready shown in this opinion, Silva himself, or at least persons in his employ, had excavated that chamber after he had purchased it from one Edwards, in 1876. And certain it is that the drill-holes were found plugged up within a short time after he had sold the mine to the complainant company, March 15, 1884. The question is, did Silva know of their existence at the time he sold the mine, and, having such knowledge, did he falsely represent to the complainant that he knew nothing of them, thereby inducing complainant to act upon such representations? Upon this ques- tion the evidence is somewhat conflicting. Yerington testifies that after going through the mine, he asked Silva if he had shown him the whole of the mine, and he replied that he had. And Forman testifies that Silva, in re- ply to a question from him, said that he had shown him aU the work that had been done in and about the mine that would throw any light upon the quantity of ore in the mine, or the extent of the ledge or deposit. Silva ad- mits that, in reply to a question by Yerington, he told him that he had shown him all the work that had been done In and about the mine, either by himself or under his direc- tion. So that the question is narrowed down to simply this: Were said drill-holes in ex- istence at the time Silva made such state- ment? If so, had they been made by him, or under his direction, or did he know of their existence? In his sworn answer Silva ex- pressly "denies that he drilled any such hole or holes through the ore into the country rock or otherwise, or thereby or at all discovered the extent of said ore, or that he filled up said drill-holes, or concealed them from view, or kept them secret from complainant," etc.; and in his testimony he also denies having any knowledge of their existence. He says that he drilled no holes in the mine except what he had to do as a miner, and that he concealed nothing from Yerington when he showed him the mine. And again he says: "I showed Mr. Yerington all the work that was done in the mine that I knew anything of." There is no direct evidence going to show who drilled the holes; and there is noth- ing in the entire record to connect Silva with them, except the fact that he was the -owner of the mine, and was in possession of it at a time when it is most likely they were drilled. But this circmnstance alone should not out- weigh the positive denial of Silva in his an- swer, and also in his equally positive denial in his testimony, of his knowledge of the ex- istence of said drilled holes. The law raises no presumption of knowledge of falsity from the single fact per se that the representation was false. There must be something fur- ther to establish the defendant's knowledge. Bamett v. Stanton, 2 Ala. 181; McDonald v. Trafton, 15 Me. 225. This rule is fortified by the consideration that, had he known of the limited quantity of ore in and about the "ore chamber," Silva would hardly have gone to the expense and labor of starting a drift from the bottom of winze No. 1, and constructing it for a certain distance, before the sale of the mine, for the purpose of reaching the sup- posed downward extension of the ore in and about that chamber. Knowing that the ore body terminated within a few inches of the surface of the chamber, and then, in the face of that knowledge, actually constructing a drift on the 82-feet level, at enormous ex- pense, for the purpose of getting under that limited quantity of ore, would not appear a reasonable thing to do by any one, especially by such an experienced and practical miner as Silva is admitted to have been. The testi- mony, therefore, and all the other facts and circumstances of record, do not substantiate complainant's theory of the case on this point; in other words, there is not a satisfac- tory case of fraudulent representations on this point made out,— not such a case as would justify the interposition of a court of equity to set aside the contract under con- sideration on the ground of fraudulent repre- sentations. As regards the little hole or shaft that had been sunk at the "point of location," and afterwards filled up, so that it was not observable at the time of Yerington's visit in January, 1884, there is absolutely no testi- mony at all to show that Silva knew any- thing about its existence. He had done no work at that place, or very little at most, and was using the cut there as a sort of kitchen. The sides of the cut indicated that there was 286 ACTUAL FRAUD. a ledge of ore there. It Is admitted that For- man asked SUva why he did not "go down" on that ore, and that he replied that he con- sidered the tunnel the best place to mine. Silva denies, both In his answer and in his testimony that he ever knew that a shaft had been sunk at the point of location, and no one is found who can testify that he did know anything about it; on the contrary, the for- mer owner of the mine, one Edwards, testi- fies that he himself dug that shaft, and filled it up, prior to the time Silva purchased it, and that to his knowledge SilTa did not know anything about that shaft It is essential that the defendant's repre- sentations should have been acted on by com- plainant, to his injury. Where the purchaser undertakes to make investigations of his own, and the vendor does nothing to prevent his investigation from being as full as he chooses to make it, the purchaser cannot afterwards allege that the vendor made misrepresenta- tions. Atwood V. Small, supra; Jennings ▼. Broughton, 5 De Gex, M. & G. 126; Tuck v. Downing, supra. The evidence abundantly shows that Yerington had been willing to give $10,000 for the mine prior to the time he visited It, and made his exammation. In January, 1884. He had made Inquiries of various persons f' V" ACTUAL FRAUD. 289 HADCOCK V. OSMER. (47 N. E. 923, 153 N. Y. 604.) C!ourt of Appeals of New York. Oct 5, 18&7. Appeal from supreme court, appellate divi- sion, Fourth department. Action by Charles E. Hadcoeli, as executor; against Luman Osmer, for deceit. From a judgment of the appellate division (38 N. Y. Supp. 618) affirming a judgment entered on a verdict for plaintiff, defendant appeals. Af- firmed. Watson M. Rogers, for appellant. Henry Purcell, for respondent. VANN, J. Prior to the 15th of Septem- ber, 1888, Deloss Brown, as principal, and Jo- seph Brown, as surety, were indebted to the defendant on a past-due note for over $300, and payment thereof had repeatedly been de- manded. After trying in vain to borrow ant that he did not know where they could get it, and asked if "he must have it. The de- fendant said "yes," and, upon being further asked by Deloss where the money could be had, recommended him to call on one Benja- min Hadcock. He did so, and was told by Benjamin that he could not lend the money, but that his brother, Emmanuel, who was stopping with him, could let him have it De- loss reported to the defendant that he thought he could get the money of "the Hadcocks," and that they would let him have it "some time in October." When the time came around, the Messrs. Brown started to see if they could get the money of Emmanuel Had- eocfe, but first went to the defendant, and asked him to go along. He said that he could not, when Deloss declared there was no use of their going alone, and thereupon the de- fendant wrote and delivOTed to the Browns a ^aper, of which the following Is a copy: "Mr /Hadcock: The Browns are good for what I money you let them have. [Signed] L. Os- *mer." The Hadcocks did not know the Browns, but, as they knew the defendant, on the strength of this paper Emmanuel Hadcock lent them $400, taking their note therefor, and on the same day they used the most of the money to pay their debt to the defendant Both of the Browns were insolvent at this time, and, while the defendant may have be- lieved they were good, he did not know wheth- er they were good or not, and did not try to find out Upon the trial of this action, which was brought to recover damages for false rep- resentations by means of said paper, there was but slight dispute as to the representa- tions, their falsity, or the injury resulting therefrom; but the defendant insisted that, as he did not know that his rep'resentations were false, there could be no recovery against him. Through his counsel, he asked the trial court to charge the jury "that there can be no recovery In an action of deceit unless it ap- pears tliat the defendant made the represen- H.& B.Eq.(2d Ed.)— 19 tations knowing them to be false, with Intent to deceive, and that the plaintiff suffered damages in consequence thereof." The court refused to so charge, except with the modifi- cation: "That, if he made the statement that they were good as a fact, not as an opinion, without knowing whether it was true or not, then it was false in the sense that he made a statement of fact as though he knew it to be true, which he did not know to be true. That, together with what I have already said in my charge in regard to it, will enable the jury to imderstand what I mean." Excep- tion was taiien to the refusal to charge as re- quested and to the charge as made. In the body of the charge, the court, after instruct- ing the jury as to the difference between the assertion of a fact and the expression of an opinion, told them, in substa^r^^, Jlia.t if thp._ d efendant madfe th^ representatio n, either Knowmg It t6 be "untrue, (j r ^ w J I Aw nt Knowing money to pay the note, Deloss tojd the defend^ an existing fact, intending that it should be I taken and acted upon as such, they might in- fer an intent to defraud; "because," as the court continued, "a man has no right to state a thing as a fact, which misleads the other party to his damage, unless he knows wheth- er it is true or untrue; and if he states it, Isnowing and understanding that he does not know whether it is true or not, he just as much misleads the other man as though he stated it with the knowledge that it was un- true." An action to recover damages for deceit cannot be maintained without proof of fraud as well as injury. Actionable deceit cannot be practiced without an actual intention to deceive, resulting in actual deception, and consequent loss. But, while there must be a furtive intent, it may exist when one asserts a thing to be true wliich he does not know to be true, as it is a fraud to affirm positive knowledge of that which one does not posi- tively know. Where a party represents a material fact to be true to his personal knowledge, as distinguished from belief or opinion, when he does not know whether it is true or not, and it is actually untrue, he is guilty of falsehood, even if he believes it to be true; and if the statement is thus made with the intention that it shall be acted upon by another, who does so act upon it, to his injury, the result is actionable fraud. Kountze V. Kennedy, 147 N. Y. 124, 130, 41 N. E. 414; Rothschild v. Mack, 115 N. Y. 1, 7, 21 N. E. 726; Marsh v. Falker, 40 N. Y. 562, 573; Bennett v. Judson, 21 N. Y. 238; Add. Torts, 1007; 1 Bigelow, Fraud, 514. Such seems to be the case now before us, as the facts are presumed to have been found by the jury. The plaintiff's testator did not ask for infor- mation in regard to the solvency of those who wished to borrow money of him, but the defendant volunteered to give It. He was In- terested in the result of the loan, for the bulk of the proceeds was for his benefit On be- ing told that the loan would not be made ) \ 290 ACTUAL FRAUD. without his presence, he armed the proposed borrowers with a written statement over his own signature, containing a positive asser- tion of a material fact, with the intention that It should be acted upon, and should in- duce the loan of the money. Yet he did not know the assertion thus positively made for such an important purpose to be true, and he did not investigate or sedi to discover wheth- er It was true or not, although he had dealt some with the Browns, and had some infor- mation as to their circumstances. He intend- ed, as the jury has found upon sufficient ev- idence, that the lender should understand him as communicating his actual knowledge, and not as expressing his opinion, judgment, or belief. Knowing that he did not know what he said he did, and what he intended to cause another to believe he did, he took the responsibility of its truth; and honesty of belief in the supposed fact, under such cir- cumstances, cannot relieve him from the im- putation of falsehood and fraud. As was said by Judge Peckham In Rothschild v. Mack, supra: "He either knew or he did not know of the financial condition of the mak- ers of the note. If he did know it, then he knew that the note, as to both makers and indorsers, was without value. If he did not know its condition, he yet assumed to have actual knowledge of the truth of his state- ment • • * He certainly meant to con- vey the impression of actual knowledge of the truth of the representations he made as to the value of the note, and he either knew such representations were false, or else he was conscious that he had no actual knowl- edge while assuming to have It, and Intending to convey such impression. If damage en- sue, this makes an actionable fraudulent rep- resentation." The language of Chief Judge Andrews, in Kountze v. Kennedy, supra, is equally applicable: "One who falsely asserts a material fact, susceptible of accurate knowledge, to be true of his own knowledge, and thereby induces another to act upon the fact represented to his prejudice, commits a fraud which will sustain an action for de- ceit. This is not an fexception to, but an ap- plication of, the principle that actual fraud must be shown to sustain such an action. The purpose of the party asserting his per- sonal knowledge is to induce belief in the fact represented; and if he has no knowl- edge, and the fact is one upon which special knowledge can be predicated', the inference of fraudulent intent, in the absence of ex- planation, naturally results." The rule is the same In other states and in England. Thus, In Furnace Co. t. Moffatt, 147 Mass. 403, 18 N. E. 108, the court said: "The charge of fraudulent intent, in an action for deceit, may be maintained by proof of a statement made as of the party's own knowledge, which Is false, proviued the thing stated is not merely matter of opinion, estimate, or judgment, but is susceptible of actual knowledge; and in such case It Is not necessary to make any fur- ther proof of an actual Intent to deceive. The fraud consists In stating that the party knows the thing to exist, when he does not know it to exist; and if he does not know it to exist he must ordinarily be deemed to know that he does not. Forgetfulness of its existence after a former knowledge, or a inere belief of its existence, will not warrant or excuse a statement of actual knowledge." See, also, Bullitt v. Farrar, 42 Minn. 8, 43 N. W. 506; Hexter v. Bast, 125 Pa, St. 52, 17 Atl. 252; Wells y. McGeoch, 71 Wis. 196, 35 N. W. 769; Swayze v. Waldo, 73 Iowa, 749, 33 N. W. 78; Craig v. Ward, 1 Abb. Dec. 454; Evans v. Edmonds, 13 C. B. 777. The charge of the learned trial judge was within these rules, and the exceptions under consid- eration furnish no ground for a reversal of the judgment. The court was further asked to charge that "there can be no recovery in this case, in any event, unless it be proven or be found that there was an actual purpose or intent on the part of the defendant, on the 15th day of September, 1888, to defraud Emmanuel Hadcock of his property." The court so charged, but added: "Of course, that Is In connection with what I have already char- ged, that it was not necessary It should have been determined, when he made the paper, before they got the money, as to which of the Hadcocks it was to go, but there must have been an intention to cheat and defraud the lierson to whom this paper should be de- livered, the one or the other." The defend- ant excepted to the modification, and now ar- gues that it was reversible error. In the course of his charge the trial judge had said: "If it was understood by the defendant that there was a proposition to borrow of one or more Hadcocks, and he sent out a general paper addressed to Mr. Hadcock, why, then you can say whether it was not fairly Intend- ed to be delivered to such person of the fam- ily as would loan the money; and, if that Is true, it is not essential that it should appear to you that it had been determined, at tb» time the paper was drawn, that the loan should be from one or the other. If j«on find that fairly the meaning, intention, and design of the parties was that whoever loaned the money should have this paper presented to him, then it may be fah-ly said that the rep- resentation was made to whoever did loan the money to those persons." While the "Se- fendant had at first suggested that the mon- ey might be borrowed of Benjamin Hadcock, he was finally told that "the Hadcocks" would probably make the loan. Since *he brothers Hadcock lived together as members oif the same family, and the paper was ad- dressed generally to "Mr. Hadcock," it wes properly left to the Jury to find whether It was not the intention of the defendant that the paper should be delivered to such mem- ber of the Hadcock family as would ma{»e the loan, which was the primary object of giving the writing. As a general recommei<^ ACTUAL FRAUD. 291 dation of credit, knowingly given to an In- EolTent person, 'will support an action for de- celt In favor of any one acting thereon to his Injury, so, as we think, a letter addressed simply to "Mr. Hadcock" would Justify any man of that name In acting upon It, at least when It was delivered to him with the ap- parent authority of the writer, and there was no direction from the latter as to which one of the HadcockB It should he given. More- over, the evidence warranted the Inference that the Browns had implied authority from the defendant to deliver the letter to either one of the Hadcocks, and hence to the plain- tiff's testator. We agree ■>vith the conclusion reached by the learned apppUate division, and think that their Judgment should he affirmed, with costs. All concur, except O'BRIEN, J., who takes no part, and GRAY, J., absent Judgment affirmed. 292 ACTUAL PRATJD, BORDBKS V. BCATTLEMAN. (31 N. E. 19, 142 lU. 96.) Supreme Court of Illinois. May 9, 1892. Appeal from appellate court, Fourtli dis- trict. Bill by H. A. Kattleman against Wil- liam R. Borders to set aside a sale for fraud. Complainant obtained a decree, which was affirmed by the appellate court. Defendant appeals. AfBrmed. Koerner & Koerner, for appellant. H. Clay Horner, for appellee. SHOPE, J. This was a bill In chancery by appellee against appellant, Borders, to set aside and rescind a sale of property on the ground of fraud practiced by appellant upon appellee, whereby the latter was in- duced to part with his property in exchange for a comparatively worthless note and mort- gage of a third party. About the 1st of July, 1884, appellee deposited In the banking house of Borders & Boyle $2,000, taking a certifi- cate of deposit therefor, payable in six months after date, at 5 per cent, interest per annum. A few months thereafter the firm became embarrassed, and was dissolved by the re- tirement of Boyle. A new firm was formed, composed of James J. Borders and appel- lant, who, for a valuable consideration, agreed to indemnify Boyle against all debts and liabilities of the late banking firm. Shortly after the maturity of the certificate of deposit appellee applied to appellant at the bank for payment of said certificate, who then, as the weight of proof tends to show, stated to him that he (.appellant) had a tract of land In Randolph county worth $2,800, which he had just sold and conveyed to Crozier at that price; that Crozier had paid $700 In cash, and given his promissory note to him (appellant) for $2,142, secured by mortgage on the land. It Is also shown that he represented to appellee that the land was well worth $2,800; was ample security for the note, which would be promptly paid at Its maturity. He advised appellee, as appellee testified, to go and see Crozier, who he represented was well jwsted in respect of the land. The proofs leave but little, if any, doubt that the sale of the land to Cro- zier was not a sale in good faith. It appears, also, from the testimony that appellee did call on Crozier for information, and was as- sured by him' that he (Crozier) had in fact bought the land for $2,800, and given a mort- gage on the same to appellant to secure a note of $2,142. Appellant also. It seems, represented their tract of land had 40 acres cleared and under cultivation. Proof shows there were only 8 or 9 acres cleared on the tract. Appellant also represented to appel- lee, as the chancellor found from the evi- dence, that the firm of Borders & Boyle was so embarrassed financially as to endanger the loss of his money deposited with that firm; that he told appellee that he did not want to see him lose anything, and advised him to take the Crozier note and mortgage In exchange for his certificate of deposit, as the only sure means of protecting himself from loss. It is only just to say that appel- lant denies most of these alleged representa- tions, or that he was guilty of deceiving ap- pellee in respect of the value or nature of the land. Appellant knew that James J. Borders, one of the partners in the firm of Borders & Boyle, was perfectly solvent, and that the new firm of which appellant was a member had obligated themselves to Boyle, the outgoing partner of the firm of Borders & Boyle, to protect him from all the liabili- ties of the late firm, which, of course, in- cluded appellee's certificate. Appellee not closing with the terms offered at once, ap- pellant wrote him, urging speedy and prompt action in the matter. He wrote: "We are settling very fast with out depositors. In this way, delay is dangerous. • * » i could have used the note offered you, [Cro- zier note,] and can do so yet. If you want It on the terms offered, to wit, trade my note, for you to give me an order on Crozier for difference, which order, if not paid, shall not bind you, and you to become owner of full face of note and interest, which terms, if sat- isfactory, put your name on It, without re- course, and send same to me, and I will send you note and mortgage indorsed in same way; mortgages duly recorded. Answer by return mail. * * * I will take pleasure In showing you the land at any convenient time. I am too busy now. Besides, the ground Is covered with snow, and you could not judge of the quality of the soil. I can- not put this matter off. Time Is very precious with me now." It is shown by the witness Stout that ap- pellant told him he was about to sell this land to a man named Kattleman, and that if he cornered witness, and asked anything about the value of the land, for the witness to put the price up. After Borders had sold the notes to appellee, this same witness ask- ed him (appellant) how he came to sell the land for the price he did, and appellant replied, as Is testified, that he "had got hold of a man that had more money than brains;" and also said, in reply to a remark by the witness, that Crozier would never pay the notes,— "Of cofirse, that Is the calculation." Most of the material representations shown by the evidence to have been made by appel- lant to appellee, to induce the purchase of the Crozier note and mortgage, are shown to have been untrue. Some of them, at least, if the evidence is to be credited, appear to have been made under circumstances strong- ly tending to charge appellant with knowl- edge of their untruthfulness, or, at least, he occupied such a position as to lead to the presumption of his knowledge of their falsi- ty. He admits that he knew that J. J. Bor- ders, one of the firm of Borders & Boyle, ACTTJAL FRAUD. 293 was perfectly solvent at the time It is sliown he was endeavoring to Induce appellee to be- lieve that the firm was Insolvent, and that he was in danger of losing his money. He had owned the land in question some time before the pretended sale to Crozier, profess- ed to be familiar with it, and must be held to have had notice of its value. The point is made that, if the means were at hand by which appellee might have satis- fied himself as to the truth or falsity of the representations, he was bound to do so, and, failing to avail himself of such means, he is not entitled to the relief sought If appel- lant could make a defense based upon ap- pellee's credulity and faith In appellant's rep- resentations, it could not prevail here. It appears that appellee did try to see the land before concluding his purchase from appel- lant. But, it being covered with snow, it could not, as stated by appellant in his let- ter, be properly examined; and, moreover, appellee was assured by appellant and Cro- zier, to whom the land had been conveyed, that the land was of the value of $2,800, and that practically one third of it was clear- ed and Improved. Appellant says in his let- ter, as has been seen, that he will take pleasure in showing appellee the land at any convenient time; that he was too busy then; and that no proper judgment could be formed by his personal inspection of it at that time. TSTule willing to show the land at some convenient time in the future, he was unwilling to delay concluding the transaction with appellee. He wrote: "I cannot put this matter ofiE. If you do not want the note, say so, and I will place it elsewhere." He wanted an answer by re- turn mail. Time was exceedingly precious to appellant then. Under such circumstan- ces. It would be in the highest degree un- conscionable to permit appellant to take ad- vantage of the fact that appellee gave cre- dence to his word, and relied upon his state- ments as true. In such case, the party will not be relieved from the consequence of his false representations, because the party thereby injured trusted him, and parted with his property upon false representation of fact, which he assumed to know to be true. Where the sale Is of property at a distance, so that the purchaser has not the means at hand of ascertaining the truthfulness of the vendor's representations, the vendee may re- ly upon their truth, and have redress If they are shown to have been materially false. Smith V. Richards, 13 Pet. 26; Maggart v. Freeman, 27 Ind. 531; Harris v. McMurray, 23 Ind. 9; Ladd v. Pigott, 114 111. 647, 2 N. E. 503; Savage v. Stearns, 126 Mass. 207. Here, as It appears, appellee did not have the ability to make any proper examination of the land without further time. Appel- lant, it would seem, was Imperious In his demand that the transaction be closed at once, having first induced appellee to be- lieve, as before stated is shown by the evi- dence, that he was in danger of losing his money unless he took the Crozier notes and mortgage. Nor is it important that It should be aiflrmatively found that the untrue rep- resentation should have in fact been known to appellant to be false. It is well settled that It is immaterial whether a party mis- representing a material fact knows it to be false, or makes the assertion of the fact without knowing It to be true; for the af- firmation of what one does not know to be true is unjustifiable, and. If another act up- on the faith of It, he who Induced the action must suffer, and not the other. Story, Eq. Jut. § 193; 2 Pom. Eq. Jur. § 877; Bigelow, Frauds, p. 410 et seq.; Cooley, Torts (2d Ed.) 582; Thompson v. Lee, 31 Ala. 292; Railroad Co. v. Tyng, 63 N. Y. 653; Allen V. Hart, 72 111. 104; Pauntleroy v. Wilcox, 80 111. 477; Hicks v. Stevens, 121 111. 186- 197, 11 N. E. 241. So it has been held that, V where the representations relate to facts \ which must be supposed to be within the defendant's knowledge, proof of their falsity is a sufficient showing of his knowledge that they were false. Cooley, Torts, 583; Morse V. Dearborn, 109 Mass. 593; Morgan v. Skld- dy, 62 N. Y. 319. And so a party selling property is presumed to know whether the representations he aflarmatively makes In re- spect of it are true or false. It he know them to be false, it is a positive fraud; and if he m ak e them withou t knowing ^j^^™ jp f e frueT fbf"uie"^rpo'se of "inducing another TO act upon tnifem, It in ^guitvamj^ots to 'traiM. " Minerv; Medbm-y, 6 Wlsn^SrS miffi "t'^'"fi3chards, supra; McFerran v. Taylor, 3 Cranch, 270; Glasscock v. Minor, 11 Mo. 655. Taking the evidence on the part of appellee, supported by the letters of appel- lant and proof of extrinsic facts, we are un- able to say that the chancellor was not justi- fied in finding that appellee was induced to part with his certificate of deposit by the statements and representations of appellant of matters materially affecting the transac- tion, and which are shown to be untrue. All fraud and untrue statement, and that he made any' untrue representations, is denied by appellant, and his version of the trans- action Is consistent with his honesty and good faith; but in the confiict we think the preponderance of the evidence is with ap- pellee, and sustains the material allegations of the bill. The decree of the circuit court will accordingly be affirmed. /V f, loss has as yet been sustained, nor has any attempt been made to show that the com- plainant must Inevitably or will probably suffer loss. All that has been shown is that the defendant has Invested the complainant's money in a second mortgage. I know of no authority which goes to the length of dedar- tng that a trustee shall be liable, whether loss is sustained or not, simply because he has in- vested the funds in his hands in a second mortgage. He is bound to make safe invest- ments, such as will yield a reasonable income and a return of the principal when required. If he does that, though the secmity he takes may not be the most desirable, he incurs no personal liability. He should not, as a gen- eral rule. Invest in second mortgages; if he does, he takes the risk of bemg personally an- swerable in case loss ensues, but he is not liable, as I understand the rule, simply be- cause he has made such an investment, If no loss has been sustained, and In the absence of evidence that any will be sustained. The next claim made by the complainant Is uncontested. Among the property which the complainant received under the will of her husband were ten shares of the stock of a corporation known by the name of the Pe- ters Manufacturing Company. Dividends, in both cash and stock or bonds, were declaired on this stock in 1873, 1874, and 1875. Those of 1873 were 30 per cent, ta cash, and 40 per cent. In stock; In 1874, 40 per cent, in cash, 25 per cent, in stock, and 35 per cent, in bonds; and In 1875, 30 per cent m cash, and 20 per cent, in bonds. The defendant collect- ed all these dividends. He paid the cash dividends to the complainant, but had the stock and bond dividends issued to himself as trustee. His explanation or justification of his conduct in this matter is this: he says when the first stock dividend was declared, he inquired of the complainant what he should do with it, and that she replied he might do with it what he liked, or what he had a mind to, and that he understood her by this form of expression to say to him that she meant that he should take it as a gift Wh the subsequent dividends were declared, he says he supposed that she entertained the- same intention with respect to them, and he procured them also to be Issued to himself, though he made no further inquiry of her re- specting her purpose, and she made no fur- ther declaration of her Intention. The de- fendant sold the stock and bonds thus obtata- ed, in January, 1877, for $1,300. But before making the sale, he had received on the stock so obtained by him dividends in cash to the amount of $561. The defendant, by his an- swer, admits that he Is liable for the value of the stock and the amount that he has re- ceived thereon in dividends, and says that he is willing to account to the complainant for the same, if she insists that he shall do- so. She does so insist This claim Is one of the foundations of her bill. The defendant in the accounting, must be charged with what he received on the sale of the stock and' ) ACTUAL FRAUD. 301 "bonds, and also ■with whatever he has receiv- ed thereon as dividends. 1 shall dispose of the other questions at is- sue between the parties by simply stating my conclusions, without attempting to review the evidence or stating the argument upon which they rest 1. The complainant Is not entitled to a de- <;ree setting aside the deed made by her to the defendant's daughter as compensation for the defendant's services. 2. The defendant, in the accounting, is en- titled to a credit of $50 for money paid to the complainant In December, 1879. 3. The defendant, in the accounting, must be charged with the dividends received by him for the complainant on her stock in the American Insurance Company, for the years 1876, 1877 and 1878; also with three sums, of $17.50 each, for unpaid interest on the Graf bonds and mortgages, due February 1, 1873, August 1, 1873, and February 1, 1874; and also with $6.20 which, in his account, he has erroneously charged against the com- plainant The account between the parties will be stated and settled by the vice chancpJlor. Ei- ther party may brlnj: on the hearing on the accounting on ten days' notice to the other. The complainant is entitled to costs 302 AOTUAI. FRAUD, VIBGINIA LAND OO. v. HAUPT. (19 S. E. 168, 90 Va. 533.) Supreme Court of Api)eals of Virginia. March & 1894. Error to circuit court of city of Roanolre. Action by the Virginia Land Company against one Haupt. Judgment for defendant, and plaintiff brings error. Affirmed. Watts, Robertson & Robertson, for plain- tiff in error. Griffin & Glasgow, for defend- ant in error. LEWIS, P. The defendant In error was sned by the Virginia Land Company to recover cer- tain unpaid assessments on the stock of the company aggregating $2,800. The principal grounds of defense were (1) frand In pro- curing the contract of subscription; and (2) a material variance between the prospec- tus and the charter of the company. The jury found for the defendant, and the court refused to disturb the verdict. The defend- ant subscribed for the stocli at the Instance of one O'Leary, who was a real estate agent at Roanolie, and one of the promoters of the company. It was proposed in the prospectus "to organize a company for the purchase of a certain tract of land, lying near the said city, containing about 550 acres, and to lay it out in residence lots, and to develop Its natural attractions." By the charter sub- sequently obtained the company was author- ized to buy land, not exceeding 5,000 acres, also personal property, and to issue mort- gage bonds; to loan money to develop lands; to construct street railways, and to use cars Impelled by any kind of motive power; to erect and operate motor, gas, and electric works, etc. O'Leary was known to the de- fendant as a successful business man, and his name headed the subscription list. When he solicited the defendant to subscribe he informed him, in answer to a specific inquiry, that the land proposed to be purchased be- longed to Gates, Moorman & Moorman. In 'point of fact, O'Leary and one Christian, another subscriber to the stock and a pro- moter of the company, held options on the land, which fact was not mentioned to the defendant. O'Leary recommended the stock to the defendant as a. desirable investment, and upon his advice the defendant agreed to take 100 shares. After the organization of the company the land was transferred to the company, and in consequence O'Leary and Christian realized a very large profit rhe company was chartered early In March, 1890, and on the 19th of the same month the first stockholders' meeting was held, at which meeting O'Leary represented the defendant as his proxy. At the same meeting an as- sessment of 10 per cent, of the capital stock was ordered, notice of which was afterwards sent to the defendant; and on the 23d of the ensuing August another assessment of 5 per cent, was ordered. Upon receipt of notice of this last assessment the defendant wrote the secretary of tlio company as fol- lows: "Dear Sir: I have your notice of September 1st, calling for an assessment of $500.00,— five per cent, on one hundred shares of your stock. If you will please refer to my letter of AprU the 28th, addressed to your treasurer, you will notice that I am not a stockholder in your company. Although I have never received a reply to this letter, I take it, In the absence of such acknowledg- ment, my stock was, as a matter of course, canceled. So that there may be no further misunderstanding la the matter, however, I beg to advise that I am not a stocliholder in the Virginia Land Company, having paid no assessment whatever on the subscriptton." In the notice of the 10 per cent assessment of March 19, 1890, it was said: "This amount must be paid promptly, or the stock wUl be declared forfeited;" and in response to this the defendant's letter of the 28th of April, above referred to, was vyritten, which is as follows: "Dear Sir: I have your favor of the 24th lust, calling attention to ten per cent, assessment of the Virginia Land Com- pany's stock, and in reply beg to say that recent financial arrangements In another di- rection, that I am suddenly called upon to provide for, vriU make It impossible for me to i>ay this assessment now; and to prevent delays, as well as to avoid being a hindrance In any way to the success of the company, I wlH be glad if you will consider my stock forfeited, as provided for in notice of assess- ment. * • • I vyiU be glad, therefore, if you vrtll dispose of my stodi to other parties. I have been Informed that the stock is selling at a premium, so I presume there vsoll be no difficulty in doing this. Having paid nothing on the stock, I am, of course, not entitled to anything from It" At the trial the defend- ant testified that when he made the contract of suljscription he had no other information respecting the proposed enterprise than such as he obtained from the prospectus and wliat was told him by O'Leary; that he was in- duced to subscribe by the urgent solicitation of O'Leary, in whose judgment and integrity he had confidence, and who earnestly recom- mended the scheme as a good investment He also testified that he had no idea that O'Leaiy was interested in the land which it was proposed to buy otherwise than as a stockholder, and that, so far from the fact being disclosed to him, O'Leary, when ques- tioned on the subject, represented that It be- longed to Gates, Moorman & Moorman. He testified further that he would not have con- sented to subscribe had he known of the promoter's interest in the land, and that he had no intimation of any such thing as a "promoter's fund" until several weeks after he had subscribed. The court, among other things. Instructed the jury that If they believed from the evi- dence that O'Leary and Christian held op- tions on the land, and that O'Leary induced the defendant to subscribe In Ignorance of ACTUAIi FKAUD. 303 that fact, relying on his (O'Leary's) supposed disinterested and superior judgment, and that he, the defendant, was thereby misled, to his Injury, into making a contract that he other- wise would not have made, then the sub- scription was voidable, at his option. This construction propounds the law correctly. The authorities are abimdant in support of the general rule tliat one who is fraudulentiy . Induced by an agent of a corporation— and a promoter is an agent of the proposed cor- poration—to subscribe to its capital stocl: may, at his option, repudiate the contract; and that a fraud may consist as well in the suppression of what Is true as in the rep- resentation of what IS false. Indeed, the law is that, where the person solicited to subscribe has no other information on the subject than that the agent chooses to convey, the statement of the agent ought to be char- acterized by the utmost candor and honesty. Gooii, Stock, Stockh. & Corp. Law (3d Ed.) § 147; Crump v. Mining Co., 7 Grat 352; Bosher v. Land Co., 89 Va. 455, 16 S. E. 360; 0u-ectors, etc., v. Kisch, L. R. 2 H. L. 99. It is contended, however, that the defendant has by his conduct waived the right to annul the contract in question. But there can be no waiver in a case «f this sort without full knowledge of the facts, and such knowl- edge of the facts and such knowledge on the part of the defendant has not been shown. He says he had an intimation a few weeks after the organization of the com- pany that the re was* large promoters' f und, but as to wh- stantial conformity with the views expressed in this opinion, and that the judgment must be affirmed. 304 ACTUAL FRAUD. ZAHN et al. v. McMILLIN et aL (36 Atl. 188, 179 Pa. 146.) Supreme Court of Pennsylvania. Jan. 4, 1897. Appeal from court of common pleas, Law- rence county; William D. Wallace and S. H. Miller, Judges. Action by William A. Zahn and others against B. A. McMillln and others. From a Judgment for defendants, plaintiffs appeal. Reversed. S. W. Dana, S. D. Long, A. Leo. Well, and C. M. Thorp, for appellants. J. Norman Mar- tin, D. B. Kurtz, and L. T. Kurtz, for appel- lees. DEAN, J. On April 22, 1891, through ne- gotiations conducted by E. A. McMillin, he and William Smith took by assignment from Thomas A. Book 19 oil and gas leases in Lawre>nce county. The written assignment was to Smith, he to hold the same in trust as follows: One-eleventh of three-fourths for McMillin, and ten-elevenths of three-fourths for such persons as should contribute to- wards the common enterprise and the cost of drilling two wells for the development of the common property for oil. Smith resided In Pittsburg, and McMillin in Newcastle; the last named, not far from the territory to be developed. It was alleged by plaintiffs that McMillin got his brother, J. M. McMillin, of Newcastle, to join in' the project. Smith Induced a number of his friends in Pitts- burg to join as contributors, they to share In the profits in proportion to their contribu- tions. From the money, two wells were drill- ed, which developed as good gas producers, but no oil was struck. At the time he made the assignment to Smith, Book had reserved one-fourth the oil or gas to be developed, which was afterwards purchased by E. A. McMillin, plaintiffs alleged, for himself and brother. As to the three-fourths in name of Smith, he made a written declaration that he held the same in trust for himself, the McMillins, and the other contributors. The production of the wells indicated that the property was valuable for gas purposes, and efforts were made by the parties to sell it at a profit. A committee, of which B. A. Mc- Millin was one, was appointed to bring the property to notice of purchasers and conduct negotiations for a sale. Meetings were hejd in Pittsburg; two of them, at least, attended by both the McMillins, and others by B. A. McMillin alone. In January, 1893, both the brothers opened negotiations with O. 0. Red- ick for the purpose of selling the property to him. They discovered from him, in their conversations, that the salt water which was obstructing production in one of the wells could be shut off at a small expense, and this would add largelyto the value of the property. Full examination of the property by Redick resulted in an offer from him to take the gas, pipe it at his own expense to Newcastle, sell it, and pay to the owners one-half the gross proceeds of sales. Immediately after secur- ing this offer, B. A. McMillin, on January 17, 1893, wrote to W. A. Zahn, one of his co- owners and one of these plaintiffs, at Pitts- burg, asking him if he could get the consent of the contributors to take one-fourth the net earnings, and pay one-fourth the cost of drilling new wells. In this letter he con- cealed from his co-owner, Zahn, Redick's of- fer of one-half the gross proceeds of sales. Zahn replied that he thought he could get such consent. B. A. McMillin then went to Pittsburg with a contract drawn, naming the Pittsburg parties as the assignors, and the two McMillins as the assignees. In this agreement it was set forth that all the par- ties were associated together as owners of the property, and it was stipulated that the McMillins were to take the gas, pipe it to Newcastle, and pay one-fourth the net pro- ceeds to all the owners, including themselves; they to retain three-fourths. The Pittsburg parties were urged to immediately execute the contract, but, as one or more of them de- sired to consult counsel, its execution vras de- ferred. They finally prepared another draft of a contract, embodying substantially the same terms, with the names of the purchas- ers left blank. This was executed January 31, 1893. As to this contract, it is not dis- puted that J. M. McMillin solicited plaintiffs to aflBx their signatures. No disclosure of the Redick offer was made to the Pittsburg parties when they signed. After signature, lue McMillins filled in the blank with their names as purchasers, and the same day con- tracted with Redick according to the terms of his proposition already noticed. He piped • the gas to Newcastle, and paid to the McMil- lins one-half the gross proceeds of sales. About a year afterwards plaintiffs discovered the facts, and filed this bill against both the McMillins for an account; averring them to be Joint owners or tenants in common witB them of the leaseholds, and that a fraud had been practiced upon them in obtaining the contract of 31st January, 1893. The defend- ants made answer, denying all the material averments of plaintiffs' bill. J. M. McMillin especially denied having any interest in com- mon with plaintiffs and his brother prior to the execution of the contract of 31st January, 1893. The court below, after full hearing, dismissed the bill, and from that decree we have this appeal by plaintiffs. The princi- pal errors alleged are the finding of fact that J. M. McMillin was not interested in the orig- inal project, and the conclusion of the court that he was not liable to account, on the facts, even if his interest commenced at the date of the second purchase. The court does not seem to question that on the evidence the bill could have been main- tained if filed against B. A. McMillin alone, but being against the brothers jointly, and not sustained as to J. M. McMillin, it must he dismissed. The learned court below> in its ACTUAL FRAUD. 305 opinion, ^)eaks as follows: "There are two main questions of fact upon which plaintifCs" claim for relief must ultimately rest: First, that J. H. McMUlin had an interest in the leases mentioned in plaintlfite' bill, and was a tenant in contmon with plaintiffs In said leases on January SI, 1893; second, fraud, actual or constructive, on the part of the defendants in procuring from plaintiffs the contract Exhibit A. If either of these grounds fall, the case must fall. • • * An examination of the whole evidence fails to show the relationship of tenant in common between the plaintiffs and J. M. McMlUln. We would hesitate to find such a relationship from the evidence of the plaintiffs, if it was not contradicted. Botb J. M. McMUlin and E. A. McMiUln, however, pos- itively deny such relationship in their answer, and also upon the stand as witnesses, and their cross-examination by plaintiffs' counsel does not in the least weaken their evidence. The plaintiffs also contend that, even if J. M. Mo Milhn was not a co-tenant, he ogcupied such a fiduciary relation towards them which required him to disclose the offer which Redick had made prior to January 31, 1893, and which offer was concluded in the contract of February 1, 1893. They urge that he had so conducted himself as to lead the plaintiffs to believe he was act- ing with them and for them. They also urge that he misrepresented the facts, by stating that the terms of the contract he was obtaining ft-om them were the best that could be ob- tained for the property. We have already found that J. M. McMillin was not a co-tenant with the plaintiffs and E. A. McMillin. We find nothing in the evidence which should have induced the plaintiffs to believe that he was a co-tenant, or that he was acting in any fiduci- ary capacity for them or with them. It is true that he was present at two meetings of the parties in Pittsburg, but there was no evidence to show that he took any part in the proceed- ings, or acted other than as a spectator. The value of the property was purely speculative, and the plaintiffs had the same opportunity to form an opinion, as to its prospective value as J. M. McMillin. It is true, Redick had proposed to him to lease the premises on more favorable terms than what the plaintiffs were to get by their contract, but there was no such fiduciary relation subsisting between J. M. McMUlin and them as required him to disclose Redlck's of- fer." Whether a tenant In common, or merely a partner in a project for gain. El. A. McMillin, on the undisputed facts, by reason of his con- fidential relation with his co-contributors to the common enterprise, perpetrated upon them, a palpable fraud,— not a constructive fraud mere- ly, but an actual fraud. If the brother aided and abetted him in consummating this fraud, that they two might reap the fruits of it, and they have succeeded, they are jointly bound to make restitution. On sufficient evidence, the court below has found that J. M. McMillin had no interest in the purchase from Book, April 22, 1891. There was much evidence ts the H.& B.BQ.(2d Ed.)— 20 contrary, but the error Is not so clearly mani- fest in the finding as to move us to disturb It. Therefore we assume as a fact that his proper- ty Interest dated from the contract of 31st Jan- uary, 1893. It Is not denied— nor could It be, in the face of the evidence— that by that contract J. M. shares In the fruits of the fraud to which E. A. was an active party, and for which he is answerable in an account. But did J. M., by i his declarations and conduct, aid his brother in | procuring the fraudulent contract, so as to ren- der him accountable In equity to these plain- tiffs? The learned court below thinks not, be- cause he was not one of the contributors to the first enterprise, and therefore must be treated as a stranger dealing at arm's length with the co-partners or co-tenants of his brother. This Is a mistake, for that one fact warrants no such conclusion. If he had been a member of the first association, and had imtruthfuUy rep- resented a material fact to his associates, to in- duce them to part with their interests, that would have been conclusive against him, be- cause of the legal presumption of a confidential relation; but, if there was not presumptively a confidential relation, still was there one in fact, or such relation as warranted them In relying on the truthfulness of his staterhents? The principle controUing such cases, and deducible from aU the authorities, is well stated by Per- ry on Trusts (volume 1, p. 179): "There are cases where a party must not be silent upon a material fact within his knowledge, although he stands in no relation of trust and confidence. ♦ • * If a party knows that another is re- lying upon Ills judgment and knowledge in con- tracting with him, although no confidential re- lation exists, and he does not state material facts within his knowledge, the contract will be avoided; for knowingly to permit another to act as though the action was confidential, and yet not state material facts, is fraudulent. It is said that a party in such circumstances is bound to destroy the confidence reposed in him, or to state all the facts that such confidence demands." The court's twelfth finding of fact is that, at the time the contract was entered into, J. M. McMillin represented to the Pittsburg parties that the terms, one-fourth the net proceeds of the oil, embodied in the contract he was soliciting them to sign, were the best that could be got. This representation was . jin11fii"r -^"^sp He admits that Redick- had made an offer of double that price, which had been accepted by him and his brother, on which a contract had been framed, which he had in his pocket, ready to be signed as soon as the Pittsburg parties signed the con- tract for one-fourth. In whose interest was he acting when this falsehood was uttered? It is argued, his own expectant interest in the contract with the Pittsburg parties. But he was also dealing as the agent of his broth- er. They two were the purchasers, parties of the second part to the contract which in- ured to the benefit of both. He was there to conduct the negotiations and close the con- 306 ACTTJAIi FRAUD. tract In pursuance of his brother's letter to Zahn of 10 days prerlous, which did not hint at Bediclz's offer. There can be no severance of the falsehood by Imputing one half of it to E. A., who held a legal, confi- dential relation, and the other half to J. M., who, if representing himself alone, did not I hold the same relation. By taking his broth- er's place and representing him, he spoke for both, and put himself in a position where the brother's co-tenants were justified in re- lying on this false statement of a most ma- Uterial fact. This gave him a vantage ground which naturally invited confidence in his statements, and he must be held to the same rule of conduct as B. A. would have been held to had he, on the same representation, personally solicited the assent of his co-part- ners to a sale at half price. "It is naught, it is naught, saith the buyer; but when he is gone his way he boasteth himself." This is the attitude of a stranger towards the seller whose wares he depreciates, and the one the court below finds J. M. to have held. It Is not the one the facts put him in. To hold J. M. answerable, it Is not essential that an- other case exactly like this on the facts should have been decided fraudulent. This, clearly. Is within the scope of established principles, where in equity a party dare not falsely represent a material fact. "Courts have never laid down as a general proposi- tion what [facts] shall constitute fraud, or any rule beyond which they will not go, lest other means of avoiding equity will be found" (2 Pars. Cont. 769), and certainly have never held that, where a party aiding in a fraud has not theretofore acquired a fractional interest In the property which Is the subject of the fraudulent bargain, he cannot be called to an accounting. But, if he had no direct interest of his own, the mis- representation went still further than as a representative of his brother, for the very agreement he had asked them to sign says: "Whereas, the said parties of the first part and of the second part are associated to- gether as owners of leases for oil and gas purposes on one thousand acres of land In Shenango and Slippery Eock township, Law- rence county, ♦ • * the said first parties owning one hundred and twenty shares and the said second parties owning fifty-six shares; and whereas, two wells have been drilled at the joint expense of all of said owners; • • • and whereas, all of said owners are desirous of having said gas used * * • so as to realize a profit. * * *" True, tnis was not tne agreement signed tnree days thereafter, but It was one B. A. Mc- MlUIn had, acting for both, asked them to sign. E. A. was then acting for J. M. In efforts to secure a contract in which both con- curred, and which was framed with a view to accepting the Redick proposition, and was therefore a false representation by both. It was not signed only because the Pittsburg parties desired their own counsel to frame it. The one adopted by the two brotners, ana first exhibited to the Pittsburg parties, con- tained a deliberate declaration in writing that J. M. McMillin was then a co-partner. This was a direct Invitation to the co-partners to deal with them in securing the best price. The conduct of J. M. for months before, and during all the negotiations, seems to us, on this printed testimony, reconcilable only with the theory that he was interested in the leases at the date of the contract with the Pitts- burg parties. Assuming, however, that, when he said on the witness stand he was not in- terested, he told the truth, he did not tell the truth to the confidants and partners of hia brother when he contracted for himself and his brother at half price for their interests. The law cannot undertake to draw a line be- tween his misrepresentation as agent for E. A. and his misrepresentation In his own in- terest as a stranger to the original associa- tion. And If his declarations and conduct misled, as they plainly did, the Pittsburg par- ties, and induced them to believe him inter- ested with' them in a common enterprise, he Is estopped now from denying the truth of the representations. On both grounds the bill "J Is sustained as against him, and both should account to plaintiffs as prayed for In the bill. Aa to the lemark of the court that when the contract was made the value of the property was purely speculative, and all parties had the same opportunity for forming an opin- ion, it is certainly an error. The court must have overlooked the fact that J. M. McMil-' lin had in his pocket, at the very time fi&wag ' solicItlDg the signatures of the plaintiffs, the draft of the proposed agreement with Red- ick, which was to be signed as soon as the Pittsburg parties had executed their contract, and which was afterwards, on the same day, actually executed by Redick. As concerned the McMIUins, there was nothing speculative In their estimate of value. They knew exact- ly the worth of the property, by knowing what they were to get for it. Their profit depended only on how low they could heat down the price by methods which some deal- ers call only shrewd, but which the law pro- nounces fraudulent, and holds the parties to a strict accountability. It is ordered that the decree of the common pleas be reversed and plaintiffs' bill be rein- stated, and further: (1) That the said B. A. McMillin and J. M. McMillin were trustees ex malefido for all the owners of said lease- holds In making said contract with Oliver 0. Redick, and that said contract, and all the rights of the first parties thereunder, arc the property of all the present owners of said leaseholds, to whom, through their treasurer, all payments under the same should be made. (2) That the said E. A. McMillin and J. M. McMillin account to the orators for, and pay over to the said treasurer, all moneys re- craved by them under said contract with OUver C. Redick. (3) That an injunction is- sue, restraining the said E. A. and 3. M. Mo- ACTUAL FRAUD. 307 Millin from selling, assigning'. Incumbering, or in any manner ^spostng of said last-men- tioned contract (4) Tliat an injunction Issue, restraining the Big Meadow Gas Company from paying any further sum or sums of money to the said B. A. and J. M. McMlllin under said last-mentioned contract It is fur- ther ordered that defendants pay the costs. 308 \ (X)NSTBUCTIVB FKAUD. PHILLIPS V. PULLEN. (le Atl. 9, 45 N. J. Eg. 5.) J Court of Cihancery of New Jersey. Not. 13, \>,vr 1888. ¥ On order to show cause, wby. an injunction Bhall not issue to restrain the defendant from taking proceedings to enforce a judgment at law. Bill for injunction by George E. Phillips against Ralph L. Pullen to restrain proceed- ings to enforce a judgment Wm. X. Johnston and John P. Stockton, Atty. Gen., for complainant. Geo. O. Van- derbilt, C. H. Beasley, and W. D. Holt, for defendant McGILL, Gh. The judgment In question was recovered in a suit upon an agreement by the complainant to pay $7,500 in settlement of an action that had been commenced against him by the defendant for damages for debauching the defendant's wife, enticing her away, and harboring her. Upon a writ of error to Mercer circuit court, where the cause in which the judgment was recovered was tried, the court of errors and appeals affirm- ed the judgment of the court below, and thereby confirmed tHe decision of many of the questions sought to be again raised by the bill In this case. That decision determin- ed that the complainant's attorney had au- thority to make the agreement sued upon; that the agreement did not lack considera- tion; that the consideration of the agreement ■was not executory; that there was no aban- donment or rescission of the agreement by the defendant, Pullen; and that proof of the fraud, which is here alleged, was admissible in defense in that suit, but that the evidence of it there offered and admitted, was inade- quate to establish it. Phillips v. Pullen, 50 N. J. Law, 439, 14 Atl. 222. All those matters must now be considered as settled between the parties to this suit. The doctrine is well settled that this court will not, on the anpli- Cation of the defendant in a judgment at law, who has had a fair opportunity to be liear upon a defense, over which the court pp nouncing the judgment had full jurisdlctio: enjoin the enforcement of the judgment sim- ply on the ground that it is unjust. A court of equity limits its interference with the en- forcement of a judgment at law to cases where that appears which clearly shows it to be against conscience to execute the judg- ment, and of which the injured party could not have availed himself in the court of law; or of which he might have availed himself at law, but was prevented by fraud or accident, unmixed with any fault or negligence in him- self or his agents. Insurance Co. v. Hodg- son, 7 Cranch, 332; Hendrickson v. Hinckley, 17 How. 443; Powers' Ex'is v. Butler's Adm'r, 4 N. J. Eq. 405; Vaughn v. Johnson, 9 N. J. Eq. 173; Moore v. Gamble, Id. 246; Beeves v. Cooper, 12 N. J. Eq. 223; Holmes V. Steele, 28 N. J. Eq. 173; Bank v. Manu- facturing Co., 33 N. J. Eq. 486, 35 N. J. Eq. 344; Simpson v. Hart, 1 Johns. Ch. 91; 3 Pom. Eq. Jur. § 1361, and note. It Is Insisted for the complainant that the contract upon which the judgment in question is based, was so grossly unconscionable that this court will here interfere, and stay the enforcement of the judgment. The action of the court must depend upon the questions whether the de- fendant is too late in his application, whether the gross unconsclonableness of the contract is a distinct principle of equity which could not be urged in defense of the suit at law, and whether in fact the contract was grossly unconscionable. I will consider these ques- tions in the order In which I have stated them. The complainant makes his application by supplemental bill, in which he alleges that by his original bill he sought to avoid the agree- ment for fraud, and because it was grossly unconscionable; and that he was denied an injunction to restrain the suit at law, be- cause the grounds upon which the equity of bis bill rested were good defenses to the ac- tion, at law. The defendant, by his answer to the supplemental bill, claims that the de- cision of the chancellor (Runyon) was based upon the defendant's denial of the facts upon which the equity of the complainant's bill was founded. No reasons for the chancel- lor's decision were given. It appears to me to be better that I shall assume that the mer- its of the last two questions under considera- tion were not passed upon, and that the orig- inal application for Injunction affords an ex- cuse for the apparent laches of the complain- ant in asking the aid of this court. It is es- tablished that for mere inadequacy of consid- eration, unconnected with fraud, a court of equity will not set aside a contract. Willis v. Jernegan, 2 Atk. 251; Griffith v. Spratley, 1 Cox, 383; Gibson v. Jeyes, 6 Ves. 266; Low V. Barchard, 8 Ves. 133; Osgood v. Franklin, 2 Johns. Ch. 1; Crane v. Conklin, 1 N. J. Eq. 346; Wintermute's Ex'rs v. Snyder's Ex'rs, 3 N. J. Eq. 489; Weber v. Weitling, 18 N. J. Eq. 441; 1 Story, Eq. Jur. 251; 2 Pom. Eq. Jur. § 925. The cases of expectant heirs or reversioners, who have bound themselves la unconscionable bargains with respect to their expectancies, have been regarded In many cases as an exception to this rule. Bemy v. Pitt, 2 Vern. 14; Nott v. Hill, Id. 27; Wise- man V. Beake, Id. 121; Twisleton v. Griffith, 1 P. Wms. 310; Curwyn v. Milner, note c, 3 P. Wms. 292; Barnardlston v. Lingood, 2 Atk. 133; Gwynne v. Heaton, 1 Brown, Ch. 9; Coles V. Treeothlck, 9 Ves. 246; Evans v. Pea- cock, 16 Ves. 512. Where, however, such In- 1 adequacy of price is so gross that it shocks the conscience, courts of equity will interfere, not upon distinct principle, but upon, the C»NSTRUOTIVB FRAUD, 309 ground that such Inadequacy amounts to con- clusive evidence of fraud. In Osgood v. Franklin, 2 Johns. Ch. 18, Ohancellor Kent said: "The doctrine is settled that in setting aside contracts on account of inadequate con- sideration, the ground Is fraud arising from gross inequality." In Gopis v. Middleton, 2 Madd. 410, the vice-chancellor said: "Mere inadequacy of price, to invalidate a contract, must, per se, be so excessive as to be demon- strative of fraud." In Wintermute's Bx'rs V. Snyder's Ex'rs, 3 N. J. Eq. 489, 496', Chan- cellor Vroom said: "Still there may be such unconscionableness, such palpable and exces- sive Inequality in a bargain, as to induce /'equitable interference. But in all such cases I the court goes on the ground of fraud, being I satisfied that gross imposition or undue in- V^uence must have been practiced. If the in- adequacy be such as to shock conscience, it will amount to evidence of fraud, and will be so considered." In GifEord v. Thorn, 9 N. J. Eq. 7CS, 740, in the court of errors and ap- peals. Justice Potts uses this language: "Un- doubtedly, if this transaction is to be consid- ered as a matter of bargain and sale, here is a gross inadequacy of consideration; such an inadequacy as raises a violent presumption of fraud, deception, Ignorance or imbecility." In Weber v. Weitling, 18 N. J. Eq. 441, Chan- ►cellor Zabriskie said: "For mere inadequacy of consideration equity does not set aside a deed, unless accompanied by fraud, or unless the inadequacy is so gross as to Imply fraud." Judge Story, In his work on Equity Juris- prudence (volume 1, p. 256,) after saying that inadequacy of consideration is not of itself a distinct principle of relief in equity, adds: "Still, however, there may be such an uncon- scionableness or Inadequacy in a bargain as ta demonstrate some gross Imposition or some undue influence, and in such cases courts of equity ought to interfere upon the satisfac- tory ground of fraud. But then such uncon- scionableness, or such inadequacy, should be made out as would (to use an expressive phrase) shock the conscience, and amount in itself to conclusive and decisive evidence of fraud." Professor Pomeroy, in his work on Equity .Jurisprudence (section 927) says: "Al- though the actual cases in which a contract or conveyance has been canceled on account of gross inadequacy merely, without other equitable incidents, are very few; yet the doctrine is settled by a consensus of decisions and dicta, that, even in the absence of all other circumstances, when the inadequacy of the price is so gross that it shocks the con- science, and furnishes satisfactory and de- cisive evidence of fraud, it will be a sufficient ground for canceling a conveyance or con- tract, whether executed or executory. Even then fraud, and not inadequacy of price, is the true and only cause for the Interposition of equity, and the granting of relief." At this point we are again confronted with the adjudication already had between the par- ties to this cause. Equity can interfere only, iTnn n thg yrnnnf| nf fraud : and the question bi il'aud In the agreement, as I have stated, has been heard by a court having fuU juris- diction over that question, and decided. Jhs- tice Magie, who wrote the opinion of the court of errors and appeals in the case there between the parties to this suit, disposed of the suggestion that the price Phillips agreed to pay is evidence of fraud, in the concluding sentences of that opinion, as follows: "In an action on an undertaking to pay a specific sum, the rule for measuring damages is com- pensation, which can only be afforded by a verdict for that sum, with interest. No rea- son why this case should be taken out of that rule is suggested, but that the agreement was unreasonable or unconscionable. But, if it might have been avoided in equity upon that ground, nothing short of fraud will affect it at law: and fraud would not be ground for reducing damages, but for defeating recov- ery. There is nothing in the stipulated sum to justify an inference of fraud. The orig- inal suit sought to recover damages Incapable of accurate determination. Had it proceeded to trial, the quantum of damages must have been determined by a jury upon the circum- stances. Where the parties, knowing the clr-K cmnstances, liquidated the damages by an| agreement not brought about by deceit or im- J position, it cannot be said that such damages/ are unconscionable." If gross unconscion- ableness of a bargain were a distinct prin- ciple upon which equity would relieve, it would be impossible for me to say that the bargain, in this instance, was of that char- acter. Lord Thurlow, in Gwynne v. Heaton, 1 Brown, Ch. 8, said of such bargains: "There must be an inequality so strong, gross, and manifest that it must be Impos- sible to state it to a man of common sense, without producing an exclamation at the in- equality of it" If there is nothing in the sum agreed to be paid that will justify an in- ference of fraud in the law courts, it can hardly be that there is so much in it here as to shock the conscience of this court The reasoning of Justice Magie, in which I con- curred in the court of errors and appeals, sat- isfies me that t here is nothing in the stinu - lated suni tfi ""■^'<<'psti f^"« s ineq uaUty. Nor is there anything in the condition of the par- ties to make such gross inequality apparent. Both are farmers. Pullen has property val- ued at $1,000 or $1,500, and Phillips admits that he is worth $12,000, while the answer puts his estate at $40,000. I will discharge the order to show cause, with cosfs. OOXSTBUCTIVE FRAUD. EAKESTRAW ▼. lyANIBR. (30 S. B. 735, 104 Ga. 188.) Supreme Court of Georgia. April 13, 1898. Error from superior court, Screven coun- ty; R. L. Gamble, Judge. Action by A. B. Lanier against Chauncey Eakestraw. Decree for plaintiff. Defend- ant brings error. Reversed. The following Is the official report: On August 10, 1895, Lanier and Rake- straw, physicians residing in the town of Oliver, formed a partnership for the prac- tice of medicine, surgery, and obstetrics. The articles of co-partnership contained, among other stipulations, the following: "In consideration of the advantages and benefits that will flow to said Rakestraw by reason of the formation of said firm and partnership business, he hereby agrees that in the event said firm shall at any time hereafter be dissolved, that he will not lo- cate or engage In the practice of medicine, surgery, or obstetrics at said town of Oli- ver, or at any place within fifteen miles radius from the drug store of said Lanier, unless he shall first have obtained the writ- ten consent of said Lanier. And, in the event the said Rakestraw shall violate the terms of this article, the said Lanier shall be entitled to sup and recover, as his dam- ages, the sum of one thousand dollars an- nually from said Rakestraw so long as he shall violate the terms of this article; said sum of $1,000 being agreed now between the parties hereto as damages, and not as a penalty. This partnership shall continue for the space and term of twelve months from the date when signed by the parties hereto, unless sooner dissolved. This partnership may be dissolved by either member giving to the other. In writing, a notice of his in- tention to withdraw from the partnership; and, at the expiration of thirty days from the service of such notice by either member on the other, said firm shall be dissolved." On June 3, 1896, Lanier wrote to Rakestraw as follows: "Under the provisions of our contract, a thirty-days notice is required to dissolve the same; and you are hereby no- tified that, on the third day of July next, you may consider the contract between us In the practice of medicine ended. This will enable you to make all collections of your one-third interest In all accounts now on our books, or what may become due within thir- ty days, at which time I shall expect a part- ner in the practice here. If you desire, you can fully withdraw from all office practice and drug-store duties from date. I shall ex- pect to abide by the contract In the letter and In the spirit In which it was written." The partnership was accordingly dissolved. After the dissolution, Rakestraw continued to reside In the town of Oliver, and to prac- tice medicine, surgery, and obstetrics there- in, and within the radius of 15 miles re- ferred to In the contract. On September 18, 1897, Lanier wrote to Rakestraw, at Oliver,' as follows: "Under our contract, yon are now due me $1,000, which you will pay at once, or discontinue practice in this place." Rakestraw refused to comply with this de- mand; and on October 26, 1897, Lanier brought to the superior court his petition, setting out the foregoing facts, and alleg- ing that Rakestraw was still engaged in the practice of medicine, surgery, and obstetrics in the locality mentioned, contrary to hig contract, in violation of equity and good con- science, and In fraud and damage of peti- tioner; that by reason of this breach of the contract, and under the express terms there- of, defendant became Indebted to him in the sum of $1,000 at the expiration of the year from the date of the dissolution, and is still so indebted; that defendaxit Is hopelessly Insolvent; that petitioner has no adequate remedy at law; and that the injury com- plained of is continuing In Its nature, and will necessitate a suit at the expiration of each year, and by reason of the bad faith of the defendant, and the nature of petitioner's business, his age, and his circumstances, the Injury Is Irreparable In damages. Waiving discovery, he prayed a Judgment against de- fendant for $1,000, a perpetual Injunction, and, until the final hearing, a temporary In- junction, restraining the defendant from en- gaging in the practice of medicine, surgery, or obstetrics at the town of Oliver, or any place within a radius of fifteen miles from the drug store of petitioner, unless he shall have first obtained the written consent of petitioner. The defendant demurred and an- swered, and, at the hearing of the applica- tion for temporary injunction, urged that the petition set forth no ground for Injunc- tion or other relief against him; that the stipulation in the contract upon which the petition was based Is against public policy and Illegal, and is not valid or enforceable against the defendant; that It Is not a rea- sonable or proper stipulation, vrithin the meaning of the requirements of the law, and Is unjust, unfair, and against good con- science; that It is without sufficient consid- eration to support It, and is lacking In mu- tuality, and does not put the plaintiff un- der such obligation as would make the agree- ment of the defendant valid and binding; and, further, that, under the facts, the plain- tiff was not entitled to the Injunction or oth- er relief. Defendant denied that he had act- ed in bad faith, or was Infilctlng any legal Injury upon the plaintiff. He denied that he was hopelessly insolvent, but admitted that his assets, which consisted of personal property only, would not, If sold at public outcry, net more than enough to pay what he owed. He alleged: Before signing the agreement, plaintiff called his attention to the stipulation in question, and said that it had been put In by the lawyer as a matter of form, and that he (plalntlfl) doubted its OOXSTRUOTIVB FRAUD. 311 legality, and gave defendant to understand that he need not apprehend Its enforcement. Before the agreement was entered into, cer- tain residents of the town of Oliver had ad- vertised in the newspaper that a physician was needed in the town, and plaintiff, under- standing that defendant might locate in Oli- ver, induced him to sign the contract, with the purpose of thereby getting rid of de- fendant's competition. This purpose was fraudulent, and vitiated the contract. If oth- erwise legal. During the continuance of the partnership, and before any notice of dis- solution was given, plaintiff so conducted himself with reference to the defendant as to deprive him of the possibility of gaining any advantage from the association, and made the partnership the means of injur- ing and damaging defendant, and of efforts to blast his good name and prospects. Plaintiff, before the notice, circulatea re- ports which were untrue and unfounded, re- flecting grossly upon the character and life of defendant, and which are set out In the an- swer. Plaintiff did not comply with his ob- ligations under the contract. He declined upon different occasions to practice with de- fendant, declined to recognize notes address- ed to the firm in the firm name, and an- nounced that he would not notice any re- quest for a visit that was not addressed to him personally. While the co-partnership continued, plaintiff announced that he in- tended to ruin defendant, and would drive him out of the country. As to these alle- gations the evidence at the hearing was con- flicting. The court, after hearing the evi- dence, ordered that a temporary Injunction as prayed for be granted, unless a bond with security, conditioned to pay the eventual condemnation money, should be given by the defendant within 45 days from the date of the order. Defendant excepted. Denmark, Adams & Freeman, for plaintiff in error. Giquilliat & Stubbs and Oliver & Overstreet, for defendant in error. LITTLE, J. Counsel for plaintiff In error, both by his argument and brief, rests his case on the proposition that the petition on which the judge below granted an injunction in default of bond sets forth no cause for re- lief, because the contract sought to be en- forced is not a legal and binding instrument Hence this court is called upon to determine the question whether the contract which is set out in the foregoing report is void, as con- trary to public policy, or whether the same is valid, and therefore to be enforced. This question is to be settled by the rules of law governing contracts made In restraint of trade, and, in seel^ing to make application of such rules, we find ourselves furnished with precedents which seem to be authority for all phases of the question, and rulings distress- ingly in conflict. The plaintiff In error sub- mits that the terms of the contract render It invalid, because It is harsh and unreasonable; It Is against public policy; it Is not a reasona- ble or proper contract, within the meaning or the requirements of the law; that it is with- out consideration to support it. If either one of these contentions is established, then, as we understand the law applicable to contracts of this character, the courts must refuse to enforce the contract relied upon, because agreements which are unlawful, without re- gard to the manner of execution, never In law become contracts, although frequently denom- inated and dealt with under the name of illegal contracts. We cannot, within reasona- ble limits, undertake to reconcile conflicting opinions in treating of contracts in restraint of trade, nor cite the authorities which bear upon the different constituent elements which render such contracts valid, or the want of which make them void, for the reason that the first are irreconcilable, and the latter in- harmonious. It must sufiSce that we shall in this case present the rales which we consider established by the most satisfactorily reason- ed cases of other jurisdictions, arid the ad- judications of our own court, Mr. Clark, In his work on Contracts, says, on authority, that at one time in England it was considered that a contract was contrary to public policy If it placed any restraint at all on a man's right to exercise his trade or calling, but that, gradually, exceptions were recognized, until at last the court, in a lead- ing case (Mitchel v. Reynolds, 1 P. Wms. 181), established the rule that a contract in restraint of trade, upon consideration, which shows it was reasonable for the parties to en- ter into It, is good; "that whenever a con- sideration appears to make it a proper and useful contract, and such as cannot be set aside without injury to a fair contractor. It ought to De maintained," etc. By reference to that case, we find the conclusion of the court to be that "in all restraints of trade, where nothing more appears, the law pre- sumes them bad; but, if the circumstances are set forth, that presumption is excluded, and the court Is to judge of those circumstan- ces, and determine accordingly, and if, upon them. It appears to be a just and honest con- tract, it ought to be maintained." Some question has arisen as to the proper construc- tion of our Code, which declares that "con- tracts in general in restraint of trade are void" (Civ. Code, § 3668), and as to whether the proper interpretation 'of these words would have the effect to declare that contracts in general restraint of trade are void, or that contracts generally in restraint of trade are void. Speaking for myself, I Interpret the language to mean that contracts generally in restraint of trade are void. The words of this section were not codified from any act of the general assembly, but the same lan- guage appeared in our first Code (1863), and ran without change through successive edi- tions and revisions up to and Including the Civil Code of 1896, from which I Infer that, If the words were not intended to be accepted 312 OONSTEUCTIVB FRAUD. as -written, subsequent codlflers, If not sub- sequent legislatures, would, by change or amendment, more clearly have expressed a different meaning. But I take It that the words "contracts In general in restraint of trade are void" (meaning that, generally, con- tracts in restraint of trade are void) were in- corporated Into the codification of laws In force in this state as expressing a recognized legal, principle sanctioned by the highest au- thority. In Ross V. Sadgbeer, 21 Wend. 168, Mr. Justice Bronson says: "The law starts out with the presumption that a contract In restraint of trade !s void." The same rule Is stated in Pol. Cont. side page 311; is recog- nized in the leading case from 1 P. Wms., supra; and the principle laid down in Clark, Cont. p. 447. Besides, such a construction seems to be in harmony with the policy of the law in this state. To one class of persons at least— corporations— contracts of this char- acter are forbidden when they tend to lessen competition in their respective business (Const. 1877; Civ. Code, § 5800); and various acts of the legislature seem to indicate such a policy to exist. However this may be, it is certain that contracts In imreasonable re- straint of trade are contrary to public policy, and void, because they tend to' Injure the parties making them; diminish their means of procuring livelihoods and a competency for their families; tempt improvident persons, for the sake of present gain, to deprive them- selves of the power to make future acquisi- tions, and expose them to imposition and op- pression; tend to deprive the public of ths services of men in the employments and ca- pacities in which they may be most usefUl^to the community as well as to themselves; dis- courage industry and enterprise, and diminish the products of Ingenuity and skill; prevent competition, and enhance prices, and expose the public to all the evils of monopoly. Clark, Cont. p. 446. Against evils like these, wise laws protect Individuals and the public by declaring all such contracts void. Alger v. Thacher, 19 Pick. (Mass.) 51. Since the early legislative history both of England and this country, statutes have been of force looking to the prevention of monopoly, and the inter- diction of restraints upon the exercise of business, trades, or professions; and in no in- stance has a contract which Imposed an un- reasonable restraint upon the same, in the eye of the Judiciary, been upheld; and the ques- tion of the reasonableness of the restriction is one of law for the court. 1 Whart. Cont. i 433; Blsh. Cont § 517; Benj. Sales, § 527; 2 Pom. Eq. Jur. § 934; MaUan v. May, U Mees. & W. 653; Wiley v. Baumgardner, 97 Ind. 66. In determining whether such re- striction is reasonable, the court will look alone to the time when the contract was en- tered into. Bannie v. Irvine, 7 Man. & G. 1969; Cook v. Johnson, 47 Conn. 175. It Is, however, satisfactorily established that,'^ a matter of law, such a contract Is to be up- held if the restraint imposed is not unreasona- | ble, is founded on a raluable consideration, 1 and Is reasonably necessary to protect the in- I terest of the party In whose favor it is im- fl posed, and does not unduly prejudice the In- V terests of the public. Clark, Cont. p. 446. In ^ some jurisdictions it Is held that a. contract in restraint of trade which is unlimited as to space is void on its face, and will not be en- forced. Id. p. 450, and authorities cited. On the other hand, It has been held that a contract restraining the exercise of a trade or business throughout the kingdom or state may be reasonable, and therefore valid. Eou- sillon V. Kousillon, 14 Ch. DIv. 351; Beal v. Chase, 31 Mich. 490; Match Co. t. Eoeber, 35 Hun, 421. In determining, however, whether such a contract Is reasonable, the court wiU consider the nature and extent of the trade or business, the situation of the parties, and all the other circumstances; and even if the presumption to which we have be- fore referred does not exist against the valid- ity of such contracts, so as to require persons seeking to enforce them to show that they were made upon a sufficient consideration, and that the restrictions they impose are rea- sonable (Angler v. Webber, 92 Am. Dec!, note on page 753), yet. In law, all such contracts are void, if considered only in the abstract, and without reference to the situation or ob- jects of the parties, or other circumstances under or with reference to which they were made; and this, though the pecuniary con- sideration paid may have been sufficient to support the contract in any other aspect, or any ordinary contract for a legal purpose, or even though it may be sufficient in value to compensate the restraint imposed. But if, considered with reference to the situation, business, and objects of the parties, and in the light of all the surrounding circumstances with reference to which the contract was made, the restraint contracted for appears to have been for a just and honest purpose, for the protection of the legitimate interests of the party in whose favor it is imposed, rea- sonable as between them, and not specially Injurious to the public, the restraint wiU be held valid. The true test, therefore, of the validity of such a contract, is whether It supported by a sufficient consideration, am whether the restraint is reasonable. The plaintiff in error contends that the con- tract imder review is without sufficient con- sideration to support It, and that for this rea- son it is void. That there must be an actual valuable consideration to support such a con- tract, and such consideration should be shown on the face of the declaration or com plaint, although the contract be under Beaij_ are propositions well established. Bish. Cont. f 126; Mete. Cont. p. 233; 1 Whart. Cont § 434; Mitchel v. Reynolds, 1 P. Wms. 181; Davis V. Mason, 5 Term R. 118; Hutton v. Parker, 7 Dowl. 739; Pierce v. Fuller, 8 Mass. 223; Weller v. Hersee, 10 Hun, 431. That the consideration must thus be shown Ja generally said to be the only exception to be i CONSTRUCTIVE FRATJD. 333 tbe rule that a contract nnder seal Imports a consideration which the party will not be permitted to deny. Mete. Gont g 233. And in earlier times It was held that the consid- eration must be adequate. Mitchel v. Rey- nolds, supra; Gale v. Reed, 8 East, 80; Young T. Timmins, 1 Tyrw. 226. The courts, how- ever, long since departed from this doctrine; and it may now be taken as settled that, if there is a legal consideration, it will not be inquired whether or not it is adequate, or, in other words, equal in value to the restraint agreed upon. See authorities cited in note to case of Angier v. Webber, 92 Am. Dec. 754. As was said by Tindal, O. J., in the case of Hitchcock v. Coker, 6 Adol. & E. 438: "It is enough that there Is actually a consideration for the bargain, and that such consideration is a legal consideration, and of some value." Accordingly, in the case of Pierce v. Fuller, 8 Mass. 223, one doUar was held to be a sufficient consideration for a covenant not to run a stagecoach between given points, in opposition to the plaintiff. The consideration upon which the defendant Entered into the contr aST-nnaer review as expressed was the advantages ang~15enefltg" that woul d flow to'liim by reason of th e "for- ftiatft'ii' "Of "siid 'lifffl an'g partnerstjlp^ti^y "ne ss." TMs7 under the authorities cited, is • ^sufficient legal c onside ration, in__so_iar as~ '*'sucA TOntfacts are depmdent on a cgnsidera- fl ^" fo T e 'susjEaineST The" exact value of t he " "c'onsicleratibn r^e'''c5u"rt ought noti"aiid,"' i n "the nature of t hing s, ca nn ot, undert eike to measure. There is nothing in the record of the case which shows such gross inadequacy of consideration as to shock the conscience, and amount in itself to evidence of fraud. See Mete. Cont. p. 271. The remaining objections urged against the validity of the contract may all be passed upon in considering the other question upon which the validity of the contract depends, namely. Is the restraint which it imposes rea- sonable? While public policy forbids any agreemMit which unreasonably restrains a person from exercising his trade or business, it is equally true that public policy also re- quires that the freedom of persons to enter into contracts shall not be lightly interfered with. Clark, Cont. p. 447. The contract un- der consideration imposed a restraint un- limited as to time, but limited as to space. We are aware that it has been repeatedly held that, where the restraint is otherwise reasonable, the circumstances that it is in- definite as to time will not affect its validity (1 Whart. Cont § 432; Mete. Cont. p. 232; BenJ. Sales, i 525; Hitchcock v. Coker, 6 Adol. & B. 438; Pemberton v. Vaughan, 10 Q. B. 87; Catt v. Tourle, 4 Ch. App. 654; Cook v. Johnson, 47 Conn. 175; Bowser v. Bliss, 7 Blackf. 344); and that our court, In more than one case, which will be presently refer- red to, held the same doctrine. Nevertheless, if the test of the validity of the contract is, as we have shown It to be, that It must be founded on a yaluable consideration, and that the restraint Imposed must be reasonable, and such as la reasonably necessary to protect the interest of the party In whose favor It is imposed, and at the same time not unduly prejudice the interest of the public, it seems to us that the question of time in the re- striction imposed cannot be arbitrarily said to have no effect on the validity of a contract which, being reasonable in all other respects except in point of time, is, from the circum- stances, unreasonable and oppressive as to the latter. See Mandeville v. Harman (N. J. Ch.) 7 Atl. 37; Keeler v. Taylor, 53 Pa. St. 469. In the case of Hitchcock v. Coker, supra, Lord Denman, construing a contract which imposed a restraint on one who, hav- ing entered the service of the plaintiff (who was a druggist), agreed that he would not at any time after leaving such service engage in the business of a druggist In that town, said: "It is not limited to such time as the plaintiff should carry on business in Taunton, nor to any given number of years, nor even to the life of the plaintiff; but it attaches to the defendant as long as he lives, although the plaintiff may have left Taunton, or parted with his business, or be dead;" and he ac- cordingly held the restraint to be unreason- able and oppressive. That case was re- versed on writ of error, but the point of reversal was that a restriction so extensive in point of time was necessary for the pro- tection of the promisee in the enjoyment of the good will of his trade; and, as we under- stand the principle ruled in that case, a restric- tion so extensive is reasonable, and not op- pressive, when it prevents the destruction of a property right or interest or the good will of a trade or business. See review of the case in Clark, Cont. pp. 455, 456. The con- trary of this doctrine, however, is directly held in French v. Parker, 16 R. L 219, 14 Atl. 870. With conflicting authorities as to the ap- plication of the rules for testing the validity of contracts in partial restraint of trade, up- on which all agree, we think a clear distinc- tion must be taken between the class of cases binding one who has sold out a mer- cantile or other kind of business, and the good will therewith connected, not to again engage in that business within a given ter- ritory, and that class of cases binding one to desist from the practice of a learned pro- fession. I can readily perceive that a suc- cessor of a merchant, broker, or shopkeeper might reasonably expect to retain the former patronage of the place of business, but fully concur with the views expressed by the court In the case of Mandeville v. Harman, supra, that professional skill, experience, and reputation are things which cannot be bought or sold. They constitute part of the Individuality of the particular person, and die with him. In that case the court said: "There can be no doubt, I think, that If the complainant was the most distinguished phy- 314 CONSTRUCTIVE FRATJD. sldan of the city of Newark, and had by far the most lucrative practice in that city, and he should be so unfortunate as to die next month or next year, it would be impossible for his personal representative to sell his good will or practice, as a thing of property distinct from the office which he had occu- pied prior to his death, for any prjce; and I think it is equally obvious that, if it were sold in connection with his office, the only possible value which could be ascribed to it would be the slight possibility that some of the persons who had been his patients might, when they needed the services of a physi- cian, go or send there for the next occupant of the office. The practice of a physician is a thing so purely personal, depending so absolutely on the confidence reposed In his personal skill and ability, that, when he ceases to exist, it necessarily ceases also, and after his death can have neither an in- trinsic nor a market value. And, if the com- plainant should make sale of his practice in his lifetime, it is manifest all the purchaser could possibly get would be Immunity from competition with him, and, perhaps, his im- plied approval that the purchaser was fit to be his successor; but it would be impossible for him to transfer his professional skill and ability to his successor, or to induce anybody to believe that he had." So far as we have been able to examine, the cases which have ruled that, if the re- straint is reasonably limited as to space, the fact that it is unlimited as to time will not render the agreement void, were cases in which some business or property, or prop- erty right, either of goods or good will, had been sold, and the restriction as to unlimited time was not considered unreasonable, be- cause it afCected property rights. Our own court has considered a number of cases in- volving contracts in restraint of trade, and in some of them held that restraints unlim- ited in point of time did not render the con- ^tracts voi d; but in ever y one o f such cases, aa_f ar as''Wti''li S.vejfigasiB I37^'lS^5ff5ri!rJ fl- tgresF^as tnval^e drThe" first la tliat of tkolmes V. Ma,rtin, 10 Ga. 503. In that case Holmes conveyed to Martin a house and lot in the town of Lawrenceville, with this re- striction in the deed: "That said house and lot shall not be occupied by the said Martin or his assignees as a public tavern or hotel, which right is reserved In said property by Holmes." In that case the court held this contract to be good, and that contracts in partial restraint of trade only may be sup- ported, provided the restraint be reasonable, and the contract founded on a consideration. In the case of Mell v. Mooney, 30 Ga. 413, no question arose which called for a ruling of the validity of contracts in restraint of trade, the points in the case relating alone to pleading. In the case of Jenkins v. Tem- ples, 39 Ga. 655, it appeared that Jenkins had bought of Temples an entire stock of groceries and confectioneries at very high prices, and Temples had agreed that he would use all of his influence for Jenkins with his former customers, and bound him- self not to deal in any of said articles at Spring Place until January, 1869. Temples violated the agreement. The court below held the contract to be void, and this court ruled, reversing the judge below, that a party might legally bind himself for a valu- able consideration not to conduct a partic- ular trade or business in a particular place for a reasonable and definite period of time. '-m the case of Spier v. LamDam, 45 Ui."!iiy,' Lambdin sold to Spier an unexpired lease of the Barnesville Academy, with the con- sent of the trustees, for the consideration of $475, representing that he wished to aban- don school teaching, and would use his in- fluence for Spier's benefit. The contract v^a held to be good and enforceable. In the case of EUis v. Jones, 56 Ga. 504, Ellis & Palmer had purchased a stock of merchan- dise, consisting of dry goods, groceries, etc., from Jones & Co., and the store house con- taining the same, together with their cus- tom and good will. Jones & Co. having re- commenced business in the same place, Ellis & Palmer filed a bill to enjoin such action. The injunction was refused. It does not satisfactorily appear In the case that Jones & Co. covenanted not to engage in the same business. In the case of Goodman v. Hen- derson, 58 Ga. 567, the suit was upon a writ ten agreement, whereby Goodman, in con- sideration of $100 a month for two years, and a further money consideration, agreed to retire from the business of purchasing green hides, sheep skins, etc., in the Savan- nah market forever, and that he would use his influence in favor of the purchaser, and sold to him the good will of the business. This court held in that case that the limit as to time made no difference if the con- tract was limited as to space. In the case of Brewer v. Lamar, 69 Ga. 656, there was an agreement to sell a certain proprietary medicine, and the seller agreed never to use or permit his name to be used on any prep- aration for the same class of complaints for which this medicine was made, and agreed also to surrender his trade-mark, and give to the purchasers the exclusive right to sell and manufacture the same under the old name. The consideration of the pur- chase was $275. The court held that the contract was in partial restraint of trade, and could be enforced. In the case of New- man V. Wolfson, 69 Ga. 764, Newman sold to Wolfson a stock of goods, etc., together with the good will of the business, for $1,466, and covenanted not to engage in a like busi- ness In that city for a period of five years. The court in this case held that the contract was not unreasonable. In the case of Swan- son V. Kirby, 98 Ga. 586, 26 S. B. 71, this court held that where one has sold out a given business, and contracted not to again carry on the same In a particular locality, CONSTEUCTIVE FRAUD. 315 though unlimited as to time, such a contract, heing reasonable and proper when limited as to place, and In other respects, was valid. In this case the consideration paid was $1,500, and the property purchased was a membership In the American Ticliet Brok- ers' Association, a burglar-proof safe, desli, typewriter, and other office fixtures. The covenant was not to open a ticket office in the city of Atlanta without the consent of Kirby. In that case the court held that while contrac ts in total restraint of faa de. wefrSI SrwEere tSeres traint was^Eg^tiaL- Jfeaion^S..anafoim3e3~tip^-«'^odcon; lion, the conSacf wduld~tJ6~e5rofced. 'it has never been decided In this state that ' -a covenant between professional men (where no property rights were involved in the con- tract which imposed the restriction) so ex- tensive in duration as that under consider- ation In the present case is valid. As was said by the court in the case of Mandeville V. Harman, supra: "It is one of the natural rights of every citizen of this state to use his skJU and labor in any useful employ- ment, not only to get food, raiment, and shelter, but to acquire property; and I think it may be regarded as very certain that the courts will never deprive any one of this right, or even abridge it, except in obedience to the sternest demands of jus- tice." We test this contract by the rules before referred to, and find it supported by a legal consideration. Being limited as to space, although unlimited as to time, we find that it may properly be classed among contracts in partial restraint of trade. When we seek its terms to ascertain whether It is reason- able, made to protect the promisee, and not ■oppressive on the promisor, we find that no money was paid by the promisee, a,nd no property sold by the promisor. We find that the promisor, by the nature of the con- tract, must have rendered service for all the benefits he received. We find that, un- der the terms of this contract, if the prom- isee, the defendant in error, should remove from the town of Oliver, from the state of Georgia; If he should become permanently Incai>acitated, by disease, from continuing the practice of medicine; If he should die,— the promisor, in any event, would not be at liberty to practice his profession In Oliver, nor within 15 miles radius of that town. No matter what the changed conditions might be. It was so nominated In the bond that he should not exercise his calling within the territory prescribed. It must be clear, there- fore, that the restrictions imposed upon the promisor In this contract were larger than were necessary for the protection of the promisee. Full protection would have been afforded to the latter if the time in which the restraint should apply had been limited to the life of the defendant in error, or to the time In which he was engaged In the practice of his profession in the county of Screven. Had this contract been so limited. It Is obvious from the view which we take of the law that it should be upheld and would be enforced. But, when the term^ of the contract prohibit one party from at any time in the future practicing his pro- fession at a given place, without regard to the fact that the other party should not be engaged in the competitive business, without regard to the fact that he may have removed from the county and state In which such territory was located, without regard to the fact of the inability of the party, from age or physical infirmity, to continue his prac- tice, it would seem to be unreasonable,— Jt not necessary for the protection of the party In whose favor the restraint was imposed, oppressive to the party restrained, and op- posed to the Interests of the public; and, such being the case, the contract cannot be enforced. If it be said that It would be the right of the plaintiff In error, under any of the circumstances we have mention- ed, to pray for a modification or rescission of such contract, the reply is that we are not dealing with such question. We are to con- strue it as It Is written, and, so construing It, we hold it to be void a nd of no binding fnr^A an/l W pct f lie .lud^meni: of the Vourl TelowmustBe reversed. All the justices concurring, except COBB, J., absent for providential cause. k M OONSTBUCTIVB FHAUD. COWBB T. COENELL. (75 N. T. 91.) Court of Appeals of New York. Not. 12, 1878. Appeal from order of the general term of the supreme court in the Third judicial de- partment, reversing a judgment entered upon the report of a referee. Plaintiff made a claim against the estate of Latham Cornell, of whose will defendants were the executors, for interest upon a prom- issory note executed by the deceased. This claim was rejected, and was referred by stip- ulation. The facts, as stated by the referee, are in substance as follows: Latham Cornell, the deceased, was the grandfather of Latham C. Strong. He was possessed of large property, consisting of real estate and of personal property Invested in stocks, bonds and other securities. He died in 1876 at Uie age of ninety-five. For four years prior to his death he was partially blind. From July, 1871, until the time of his death, his grandson at his request at- tended to his affairs, writing his letters, look- ing after his banking business and his rents, making out his bills, cutting off his coupons, reading to him, and on occasions going away from home to transact other business. In July, 1871, Cornell gave to Strong a deed of two adjoining houses in the city of Troy, valued at about $32,000, in one of which houses the grandfather lived until the time of his death. The grandson moved into the adjoining house in the spring of 1872, and resided there until after his grandfather's death. During the time that the two thus lived in adjoining residences, they were in daily conference upon business matters of the old gentleman, in the house occupied by the grandson. The grandson with his family consisting of five persons, during all this time lived at the sole expense of the grandfather, and claims to have received, in addition to the note in suit, as gifts from his grand- father, $30,000 in government bonds and the assignment of a mortgage for about $1,700. At what particular time it is claimed these gifts were made Is not in evidence. Mr. Cor- nell made his will in 1871, providing a legacy of $15,000 for Mr. Strong. In the fall of 1872, Mr. Strong expressed a desire to go in- to business for himself and to be independent of his grandfather, and actually was In ne- gotiation with different persons in Troy and New York with a view of forming business associations. Mr. Cornell became uneasy at the prospect of losing the services of his grandson and caused him to be written for to come home. Mr. Strong came back to Troy, and bis grandfather said to him then, as he had previously said, that he wanted him to give up his ideas of leaving and to devote his whole time to the business of his grandfather. Mr. Cornell further said that be had no one else to look after his business, and frequently said that there was money enough for all of them. Mr. Strong Imme- diately abandoned his business projects and devoted his whole time and attention to his grandfather's business, until the death of the latter. After this Mr. Cornell sent for his legal advisers and proposed to alter his will so as to make provision to compensate bis grandson for having devoted himself to his business. What provision was intended is not disclosed by the evidence. The lawyers advised that his will be left unaltered, and that he take some other way of compen- sating his grandson. Mr. Cornell gave to Mr. Strong the note in question. It is as follows: "$20,000. Troy, April 1, 1873. Five years after date I promise to pay Latham L. C. Strong, or order, $20,000, for value received, with interest yearly. L. Cornell." The note was on a printed form, the name of the payee being printed "Latham Cornell" The note was filled up in the handwriting of the maker, but in striking out with his pen the name of the payee he left the word "Latham" and afterwards interlined the full name, "L. C. Strong." Annexed to the note was a stub with some printed forms, on which Mr. Cornell wrote: "Troy, April 1st, 1873, L. C. Strong, $20,000 at five years, to make the amount the same as Chas. W. Cornell." The stub was on the note when it was delivered to the payee, but was torn off by him before it was transferred to the plain- tiff; and there is no evidence that the plain- tiff ever knew of the existence of the stub. The stub and note were taken from a blank book which belonged to decedent. No pay- ment of interest was made upon the note during the lifetime of the maker. The ref- eree found that the note was given for a valuable consideration. Mr. Strong sold the note to the plaintiff for $19,000, taking his note, payable in one year after date. What that date was has not been disclosed. Mr. Strong testified at the trial that he still held the note. Mr. Strong was one of the execu- tors. Further facts are stated In the opinion. Irving Browne, for appellant John Thomp- son, for respondents. HAND, J. The counsel for respondents suggested at the close of his argument be- fore us that there was no evidence of a de- livery of the note to Strong, the payee, and the finding of delivery by the referee was entirely unsupported. He does not however make this a point in his printed brief, and did not present it strenuously or with any emphasis in his oral remarks. It Is true that the evidence In this respect was not very satisfactory. Ordinarily the possession and production of the note by the payee will raise a presumption of delivery to him. But this presumption must be very much weakened when the possession is shown not to precede the possession of all the maker's papers and effects by the payee CXDXSTRUCTIVB EfiAUp. 317 I as executor, when the note appears to have heen all in the handwriting of the maker and to have been taken with a stub attached, also in his handwriting, from a bank book belonging to him, and when installments of interest falling due in the maker's life-time were not paid and although years elapsed after they so became due before his death there is no proof of any demand of them by the payee or recognition of liability by the deceased. I am not prepared to say however that these circumstances absolutely destroy the presumption from possession and produc- tion of the instrument. While some evidence on the part of the plaintiff, showing that the note had been delivered to Strong in his grandfather's life-time, or at least negativ- ing the idea that Strong found it in the bank- book or among the papers of the deceased when he took possession of them as executor, could probably have been easily produced if consistent with the fact, yet we cannot hold its absence conclusive against the plaintiff upon this point, upon the record as it stands. No motion for judgment or to dismiss was made on this ground by the respondents al- though the trial was in other respects treated by the counsel on both sides as one before a referee appointed in the ordinary way to hear and determine and direct judgment as in an action, and we cannot say but that if the plaintiff had been notified of such an ob- jection, the evidence would have been sup- plied. The finding of the delivery by the referee was not even excepted to, although there were exceptions to the finding of con- sideration. Under these circumstances we must, I think, assume an acquiescence in the truth of the finding by the respondents for reasons known to them, and which if dis- closed would probably be entirely satisfac- tory. The majority of the general term put their reversal of the judgment upon the ground that it conclusively appeared from the stub attached tliat the note was intended as a gift and was without consideration. In this I am unable to concur. The referee's finding that the note was de- livered not as a gift but for a valuable con- sideration has some evidence to support it, in the proof of the services rendered by Strong to the deceased, and his abandonment of a profession at the request of the deceased, in the intention- expressed by the latter to make some compensation for those services, and the conversation had with his counsel not very long before the date of this note, in which he was dissuaded from making this compensation by will and advised to do it whUe alive, to which he assented. What ap- pears upon the stub is not in my opinion conclusive against this result. There is perhaps difficulty in giving any entirely satisfactory construction to this memorandum made by the deceased; but the interpretation of the general term seems to ■my mind inconsistent with the known facts of the case. Strong certainly had had and the deceased knew that he had had property of the value of $32,000 given him before the date of this note, and perhaps $30,000 more In bonds. The $20,000 note could not have been therefore as the general term supposes, a gift to make him equal in gifts with his cousin Charles, to whom only $20,000 had been given in all. But not only do the circumstances show that the memorandum could not mean that this gift of the $20,000 to Strong would make him equal in gifts to Charles, but the memorandum itself does not say so. Its language is "to make the amount the same as Chas. W. Cornell." While, as has al- ready been said, there is probably insuper- able difficulty in discovering precisely all that the deceased meant by this expression, its intrinsic sense is merely that the amount of this note, $20,000, is so fixed to make it the same as an amount possessed in some way by Charles, and this is consistent with both amounts being gifts, or the one being fixed upon in the testator's mind as a fair com- pensation for Strong's services and at the same time equal to an amount he had given or intended to give to Charles. On the whole I think this memorandum was a piece of evidence to be submitted with the other evi- dence to be considered by the referee on the question of fact. His decision upon all this evidence cannot be disturbed by this court. The same may be said of the proof of large gifts to Strong either all before, or some before and some after the date of the note. The reversal by the general term Is not stated to be upon the facts, and on the argu- ment it was conceded by the counsel for the respondents to be upon the law merely. It may be that a finding upon aU the evidence that the note was without consideration and a gift would not be disturbed, and would be held by us as not unauthorized by the evi- dence. On the other hand, we cannot accede to the proposition that a finding to the con- trary, such as has been made by the referee here, must by reason of the contents of this stub or other testimony be reversed as er- roneous in law. It follows that except as bearing upon un- due influence, and the relations of parties hereafter considered, the inadequacy of the services or the extravagance of the compen- sation are not material. That was a matter purely of agreement between Strong and the deceased, and with which the court will not Interfere under ordinary circumstances. \ Earl V. Peck, 64 N. Y. 597; Worth v. Case, 42 N. Y. 362; Johnson v. Titus, 2 Hill, 606. Although the consideration of a promissory note is always open to investigation between the original parties (and we agree with the court below that the plaintiff here has no better position than Strong himself), yet as pointed out by the chief judge in Earl v. Pock, supra, mere inadequacy in value of the 31» 00XSTRUCTIVE3 FRAUD. I thing bought or paid for is never Intended by the legal expression, "want or failure of consideration." This only covers either total worthlessness to all parties, or subsequent destruction, partial or complete. Assuming then, as I think vsre must, that there was no error as matter of law in the finding of the referee that this note wa s sfiven for a valuable co nsi deration, and that the adequacy of that ctmsiaeraiion is some- thing with which we have no concern If the parties dealt on equal terms, the only point remaining to consider Is the relations exist- ing between the deceased and Strong at the date of the note. It Is Insisted strenuously by the learned counsel for the respendents that these were such as to call for the application of the doc- trine of constructive fraud, and threw upon the plaintiff the burden of proving not only that the deceased fully understood the act, but that he was not induced to it by any un- due influence of Strong, and that the latter took no unfair advantage of his superior In- fluence or knowledge. The court below were hardly correct In the suggestion that the plaintiff conceded this burden to be upon himself, and for that rea- son, instead of resting upon the statement of consideration in the note, gave evidence in opening his case of an actual consideration; for this may have been done to show In the first instance that the note was not a gift and hence void under the law applicable to gifts. Indeed It appears from the findings and refusals to find, and the opinion of the referee, that such was not the theory upon which the action was tried or decided. We return then to the question whether this case was one of constructive fraud. It may be stated as universally true that fraud vitiates all contracts, but ^h a fr^nprai thim It Is not presum e d but muat~~b e ""the party seekmg t6 r elieve him self frnni ^.ti (flg^atlogTTnr-tMsrtrpSSii^- WhSSvef, how- ever, the relaHorfe" between the contracting \ parties appear to be of such a character as J to render it certain that they do not deal on f terms of equality, but that either on the one side from superior knowledge of the matter' ! derived from a fiduciary relation, or from I overmastering influence, or on the other from weakness, dependence or trust justifiably re- posed, unfair advantage in a transaction is rendered probable, there the burden Is shift- ed. the transactio n is presujiedTg'*^ and It is incumbent upoiii tWstronger party to show affirmatively that no deception was practiced, no undue inflaence was used, and that all was fair, open, voluntary and well under- stood. This doctrine is well settled. Hunt, J., Nesbit V. Lockman, 34 N. Y. 167; Story, Bq. Jur. § 311; Sears v. Shafer, 6 N. Y. 268; Huguenln v. Basely, 13 Ves. 105, 14 Ves. 273, and 15 Ves. 180; Wright v. Proud, 13 Ves. 138; Harris v. Tremenheere, 15 Ves. 40; Edwards v. Myrick, 2 Hare, 60; Hunter v. Atkins, 3 Mylne & K. 113. And this is I *^i^ think the extent to which the well-consider- ed cases go, and is the scope of "constructive fraud." The principle referred to. It must be re- membered, is distinct from that absolutely forbidding a purchase by a trustee or agent for his own benefit of the subject of a trust, and charging it when so purchased with the trust. That amounts to an incapacity in the fiduciary to purchase of himself. He cannot act for himself at all, however fairly or inno- cently, in any dealing as to which he has duties as trustee or agent The reason of this rule Is subjective. It removes from the trustee, with the power, all temptation to commit any breach of trust for his own bene- fit. But the principle with which we are now concerned does not absolutely forbid the dealing, but It presumes It unfair and fraud- ulent unless the contrary is affirmatively shown. This doctrine, as has been said, is well settled, but there is often great difficulty in applying It to particular cases. The law presumes In the case of guardian and ward, trustee and cestui que trust, at- torney and client, and perhaps physician and patient, from the relation of the parties itself, that their situation is unequal and of the character I have defined; and that rela- tion appearing itself throws the burden upon the trustee, guardian or attorney of showing the fairness of his dealings. But while the doctrine is without doubt to be extended to many other relations of trust, confidence or inequality, the trust and con- fidence, or the superiority on one side and weakness on the other, must be proved in each of these cases; the law does not pre- sume them from the fact for Instance that one party is a grandfather and old, and the other a grandson and young, or that one is an employer and the other an employe. The question as to parties so situated is a question of fact dependent upon the circum- stances In each case. There is no presump- tion of Inequality either way from these rela- tions merely. In the present case It cannot be said that the fact that the deceased employed Strong as his clerk to read and answer his letters and cut off his coupons, and make out his bills, or as his bailiff to collect his rents, or that at this time he was old and of defective vision, or that Strong lived near htm and was his grandson, taken separately or to- gether raise a conclusive presumption of law that their situation was unequal, and that dealings between them as to compensation for these services were between a stronger and a weaker party, a fiduciary In hac re and the party reposing confidence. These relations as a matter of fact may have led to or been consistent with controlling Influ- ence on the part of the grandson, or childish weakness and confidence on the part of the grandfather, but this was to be shown, and Is not necessarily derivable or presumable OOXSTKUCTIVE FRAUD. 519 ftom the relations themselves, as In the case of trustee, attorney or guardian. Prom these relations and the large gifts shown from the deceased to Strong, and from the extravagant amoimt of the com- pensation In the note, it is very possible the referee might have found as a fact the ex- istence of weakness on the one side, or un- due strength on the other, which rendered applicable the doctrine of constructive fraud, and threw upon the plaintiff the burden of disproving such fraud. These circumstances may have well been of a character, If not sufScient to shift the presumption, at least to authorize a setting aside of a contract without any decisive proof of fraud, but up- on the slightest proof that advantage was taken of the relation, or of the use of "any arts or stratagems or any undue means or the least speck of imposition." Whelan v. Whelan, 3 Cow. 538, Liord Eldon, L. C; Har- ris V. Tremenheere, 15 Ves. 40, Lord Brough- am; Hunter v. Atkins, 3 Mylne & K. 135. But the referee not only has' not found as fact any inequality in the situation of the deceased and Strong, but refused to find as a matter of law its existence, and there Is really no evidence whatever of any arts or stratagems or "speck of Imposition" on the part of Strong as to this note. We are not permitted to supply these find- ings even if we thought them proper for the referee to make, nor can we sustain a re- versal of the original Judgment upon facts not found and not necessarily inferable from uncontradicted evidence in the case, the gen- eral t«rm not having in any way interfered with the findings of the referee. On the whole therefore we reach the con- clusion that there was no good reason for disturbing the judgment of the referee. This large claim upon the estate of the de- ceased Is not so clearly justified and explain- ed in the evidence as we could have wished, and the circumstances are such as to compgl this court to look upon the case. If not with suspicion, certainly with anxiety, yet after careful examination we can find no material error in the original decision. The order granting a new trial must be reversed and judgment for plaintiff affirmed, with costs. All concur, except MILLBR and EARL, JJ., absent Judgment accordingly. ;') ^, 320 OOXSTKUCTIVB FRAUD. ALLORE V. JEWELL. (94 U. S. 506.) Sapreme Conrt of the United States. Oct., 1876. Appeal from the circuit court of the United States for the Eastern district of Michigan. Xbe facts are stated in the opinion of the court ' Alfied Bussell, for appellant. A. B. May- nard, contra. Mr. Justice FIELD dell-vered the opinion of the court. This is a suit brought by the heir at law of *Marie Genevieve Thibault, late of Detroit, Mich., to cancel a conveyance of land alleged to have been obtained from her a few weeks before her death, when, from her condition, she was incapable of understanding the na^ ture and effect of the transaction. The deceased died at Detroit on the 4th of February, 1S64, intestate, leaving the com- plainant her sole surviving heir at law. For many years previous to her death, and until the execution of the conveyance to the de- fendant, she was seised in fee of the land in controversy, situated in that city, which she occupied as a homestead. In November, 1863, the defendant obtained from her a con- veyance of this property. A copy of the con- veyance is set forth in the bill. It contains covenants of seisin and warranty by this gran- tor, and immediately following them an agreement by the defendant to pay her $250 upon the delivery of the instrument; an an- nuity of $500; all her physician's bills during her life; the taxes on the property for that year, and all subsequent taxes during her life; also, that she should have the use and occupation of the house until the spring of 1864, or that he would pay the rent of such other house as she might occupy until then. The property was then worth, according to the testimony in the case, between $6,000 and $8,000. The deceased was at that time between sixty and seventy years of age, and was confined to her house by sickness, fi'om which she never recovered. She lived alone, in a state of great degradation, and was with- out regular attendance In her sickness. There were no persons present with her at the exe- cution of the conveyance, except the defend- ant, his agent, and his attorney. The $250 stipulated were paid, but no other payment was ever made to her; she died a few weeks afterwards. As grounds for cancelling this conveyance, the complainant alleges that the deceased, during the last few years of her life, was afUicted with lunacy or chronic insanity, and was so infirm as to be incapable of transact- ing any business of importance; that her last sickness aggravated her insanity, greatly weakened her mental faculties, and still more disqualified her for business; that the de- fendant and his agent knew of her inflrmity, and that there was no reasonable prospect of her recovery from her sickness, or of her long surviving, when the conveyance was taken; that she did not understand the nature of the Instrument; and that it was obtained for an insignificant consideration, and in a clandes- tine manner, without her having any inde- pendent advice. These allegations the defendant controverts, and avers that the conveyance was taken upon a proposition of the deceased; that at the date of its execution she was in the full possession of her mental faculties, appreci- ated the value of the property, and was capa- ble of contracting with reference to it, and of selling or otherwise dealing with it; that since her death he has occupied the premises, and made permanent improvements to the value of $7,000; and that the complainant never gave him notice of any claim to the property until the commencement of this suit The court below dismissed the bUl, where- upon the complainant appealed here. The| ^ question presented for determination is, < whether the deceased, at the time she execut- ( ed the conveyance in question, possessed suf- ficient intelligence to understand fully the na- ture and effect of the transaction; and. If so, whether the conveyance was executed und^ such circumstances as that it ought to be up- held, or as would justify the interference of equity for Its cancellation. Numerous witnesses were examined in the case, and a large amount of testimony was taken. This testimony has been carefully an- alyzed by the defendant's counsel; and it must be admitted that the facts detailed by any one witness with reference to the condi- tion of the deceased previous to her last ill- ness, considered separately and apart from the statements of the others, do not show in- capacity to transact business on her part, nor establish insanity, either continued or tempo- rary. And yet, when all the facts stated by the different witnesses are taken together, one is led irresistibly by their combined effect to the conclusion, Uiat, If the deceased was not afflicted with insanity for some years be- fore her death, her mind wandered so near the line which divides, sanity from insanity as to render any important business trajisac- tlon with her of doubtful propriety, and to justify a careful scrutiny into Its fairness. Thus, some of the witnesses speak of the deceased as having low and filthy habits; of her being so Imperfectly dad as at times to expose immodestly' portions of her person; of her eating with her fingers, and having vermin on her body. Some of them testify to her believing in dreams, and her imagining she could see ghosts and spirits around her room, and her claiming to talk with tBwja; to her being incoherent in her conve^sation^^ passing suddenly and without cause from one subject to another; to her using vulgar and profane language; to her making Immodest gestures; to her talking strangely, and mak- ing singular motions and gestures In her neighbors' houses and in the streets. Other CXDXSTRUCTIVB FRAUD. 321 witnesses testify to further peculiarities of life, manner, and conduct; but none of the peculiarities mentioned, considered singly, show a want of capacity to transact business. Instances wlU readily occur to every one where some of them have been exhibited by persons possessing good judgment in the management and disposition of property. But when all the peculiarities mentioned, of life, conduct, and language, are found In the same person, they create a strong impression that his mind is not entirely sound; and all transactions relating to tils property will be narrowly scanned by a court of equity, when- ever brought under its cognizance. The condition of the deceased was not Im- proved during her last sickness. The testi- mony of her attending physician leads to the conclusion that her mental infirmities were aggravated by it. He states that he had stud- led her disease, and for many years had con- sidered her partially Insane, and that in his opinion she was not competent in November, 1863, during her last sickness, to understand a document like the instrument executed. The physician also testifies that during this month he informed one Dolsen, who had in- quired of the condition and health of the de- ceased, and had stated that efforts had been made to purchase her property, that in his opinion she could not survive her sickness, and that she was not in a condition to make any sale of the property "in a right way." This Dolsen had at one time owned and managed a tannery adjoining the home of the deceased, which he sold to the defendant. After the sale, he carried on the business,^*- capable of executing a valid deed. It is suf-" the defendan t's agent . Through him the trans- 'action~T(5FTBe°purchase of the property was conducted. The deceased understood English Imperfectly, and Dolsen undertook to explain to her, in French, the contents of the paper she executed. Some attempt is made to show that he acted as her agent; but this Is evi- dently an afterthought. He was in the em- ployment of the defendant, had charge of his business, and had often talked with him about securing the property; and in his in- terest he acted throughout. If the deceased was not In a condition to dispose of the prop- erty, she was not in a condition to appoint an agent for that purpose. The defendant himself states that be had seen the deceased for years, and knew that she was eccentric, queer, and penurious. It Is hardly credible that, during those years, I -Tnatirfl Story, in deciding th e case, carrying on business within a few yards of''-- -■■ — -* «-«.«<.o.o,.,t T^,.o. her house, he had not heard that her mind was unsettled; or, at least, had not inferred that Buch was the fact, from what he saw of her conduct. Be that as It ma v- Dnlijpn's. knowledgg_was hl3_] ^owledg e; and, when he "TilSvelHntedToTISy" the^ annuity, some inquiry must have been had as to the probable dura- tion of the payments. Such covenants are not often made without inquiries of that na- ture; and to Dolsen he must have looked for Information, for he states that he conversed H.&B.EQ.(2dBd.)— 21 with no one else about the purchase. With him and with his attorney he went to the house of the deceased, and there witnessed the miserable condition in which she lived, and he states that he wondered how anybody could live in such a place, and that he told Dolsen to get her a bed and some clothing. Dolsen had previously Informed him that she would not sell the property; yet he took a conveyance from her at a consideration which, imder the circumstances, with a cer- tainty almost of her speedy decease, was an insignificant one compared with the value of the property. In view of the circumstances stated, we are\ not satisfied that the deceased was, at the time she executed the conveyance, capable of comprehending fully the nature and effect of the transaction. She was in a state of phys- ical prostration; and from that cause, and her previous infirmities, aggravated by her sickness, her intellect was greatly enfeebled; and, if not disqualified, she was unfitted to attend to business of such "importance as the disposition of her entire property, and the securing of an annuity for life. Certain it is, that, in negotiating for the disposition of the property, she stood, in her sickness and in- firmities, on no terms of equality with the de- fendant, who, with his attorney and agent, met her alone in her hovel to obtain the con- veyance. It is not necessary, in order to secure the aid of equity, to prove that the deceased was at the time insane, or in such a state of mental imbecility as to render her entirely in- flcient to show that, from her sickness and in- firmities, she was at the time in a condition of great mental weakness, and that there was ] gross Inadequacy of consideration for the con- veyance. From these circumstances, imposl- ' tion or undue Influence wUl be inferred. In the case of Harding v. Wheaton, 2 Mason, 378, Fed. Cas. No. 6,051, a conveyance executed by one to his son-in-law, for a nominal consid- eration, and upon a verbal arrangement that it should be considered as a trust for the main- tenance of the grantor, and after his death for the benefit of his heirs, was, after his death, set aside, except as security for actual advances and charges, upon application of his heirs, on the ground that It was obtained from him when his mind was enfeebled by age and other causes. "TjiYtrpm e weakng will raise an almost ne cessary presumption of imposi- tion. eveh'''w5Sirtr'gt6ps"^flgh of legal inca- paoity; and though a contract, in the ordinary course of things, reasonably made with such a person, might be admitted to stand, yet if it should appear to be of such a nature as that such a person could not be capable of measur- ing its extent or Importance, its reasonable- ness or Its value, fully and fairly, it cannot be that the law is so much at variance with com- mon sense as to uphold it." The case subse- quently came before this court; and, in de- 322 C»NSTRUGTIVB FRAUD. elding It, Mr. Chief Justice Marshall, speak- ing of this, and. It would seem, of other deeds executed by the deceased, said: "If these deeds were obtained by the exercise of undue Influence over a man whose mind had ceased to be the safe guide of his actions, it is against conscience for him who has obtained them to derive any advantage from them. It Is the peculiar province of a court of conscience to set them aside. That a court of equity will interpose in such a case is among Its best- settled principles." Harding v. Handy, 11 Wheat. 125. The same doctrine is announced in adjudged cases, almost without number; and it may be stated as settled law, that w hene v er there is. g reat wealine ss of mind'Tn^"iS^rson'"ex'e cut!ng^ "g'feoavevMee ui: ikm,'TiTimg'rimr^^sr^i^ ''^^?i^iM!mm S^-J:?^^ '^^°^ amoiib^^ "■■~W'MsoIme^^'quaIIS^'Botf,'"9BH^ffie con- aSct rd~Bet:"the CM ivpjpiff^a'fti'p'"'°"X"Tifl fhet tifpa- li case comes directly witfiln this principle. In the recent case of Kempson v. Ashbee, 10 Ch. Gas. 15, decided in the court of appeal in chancery in England, two bonds executed by a young woman, living at the time with her mother and step-father,— one, at the age of twenty-one, as surety for her step-father's debt, and the other, at the age of twenty-nine, to secure the amount of a judgment recovered on the first bond,— were set aside as against her, on the ground that she had acted in th* transaction without independent advice; one of the justices observing that the court had endeavored to prevent persons subject to In- fluence from being induced to enter into trans- actions without advice of that kind. The prin- ciple upon which the court acts in suh cases, of protecting the weak and dependent, may al- ways be invoked on behalf of persons in the situation of the deceased spinster in this case, of doubtful sanity, living entirely by herself, without friends to take care of her, and con- fined to her house by sickness. As well on this ground as on the ground of weakness of mind and gross inadequacy of consideration, we think the case a proper one for the inter- ference of equity, and that a cancellation of the deed should be decreed. Ji The objection of the lapse of time— six years I —before bringing the suit cannot avail the de- \ fendant. If during this time, from the death of witnesses or other causes, a full presenta- tion of the facts of the case had become InA possible, there might be force In the objectioa\ But as there has been no change In this re-| spect to the Injury of the defendant, it does I not lie In his mouth, after having, in the man- ner stated, obtained the property of the de- ceased, to complain that her heir did not soon- er brln^ suit against him to compel its sur- render. There is no statutory bar in the case. The Improvements made have not cost more than the amount which a reasonable rent of the property would have produced, and the complainant, as we understand, does not ob- ject to allow the defendant credit for them. And as to the small amount paid on the ex- ecution of the conveyance, it Is sufficient to observe, that the complainant received from the administrator of the deceased's estate only $113.42; and there is no .evidence that he ever knew that this sum constituted any portion of the money obtained from the defendant. A decree must, therefore, be entered for a can- cellation of the deed of the deceased and a surrender of the property to the complainant, but without any accounting for back rents, the improvements being taken as an equiva- lent for them. Decree reversed, and cause remanded with directions to enter a decree as thus stated. Mr. Chief Justice WAITE and Mr. Justice STRONG, concur. Mr. Justice BRADLEY (dissenting). I can- not concur In the judgment given in this case. Were there no other reason for my dissent, it would be enough that the complainant has been guilty of inexcusable laches. He knew every thing of which he now complains, in February, 1864, when the grantor of the de- fendant died, and when his rights as her heir vested; and yet he waited until six years and nine months thereafter before he brought this suit, and before he made any complaint of the sale she had made. Meanwhile, he accepted the money the defendant had paid on account of the purchase, and he stood silently by, as- serting no claim, while the defendant was making valuable Improvements upon the lot, at a cost of $6,000 or $7,000, a sum about equal to the value of the property at the time of the purchase. To permit him now to as- sert that the sale was invalid, because the vendor was of weak mind, is to allow him to reap a profit from his own unconscionable si- lence and delay. I cannot think a court of equity should lend itself to such a wrong. CX3NSTEUCTIVE FRAUD. 323 GREENE et aL ▼. ROWORTH et al. (21 N. E. 165, 113 N. Y. 462.) Court of Appeals of New York. April 23, 1889. Appeal from common pleas of New York city and county, general term. Action originally brought by William Koworth, to vacate transfers of certain prop- erty made by liim to his sons, Joseph G. and John W. Koworth. Pending the decision, William Roworth died, and the action was revived in favor of the present plaintiffs, Emma T. Greene and others. A judgment for plaintiffs was reversed in part and affirmed in part on appeal to the general term of the supreme court, and defendants now appeal to this court. Thomas Darlington, {Samuel Jones, of counsel.) for appellants. /. M, & A. H. Van Cott, for respondents. Etjgee, 0. J. The reversal by the general term of so much of the judgment of the spe- cial term as awarded relief to the plaintiffs in respect to the conveyance of personal property, eliminated from the case all ques- tions predicated upon rulings in relation thereto. This determination left the issues in respect to the validity of the conveyances of two parcels of real estate as the only sub- jects of controversy on the appeal to this court. The evidence of the exercise of fraud and undue influence by the defendants Joseph and John Roworth, in obtaining from their fath- er, William Koworth, deeds of such property, was quite sufficient to sustain the findings of the trial court respecting the same. The ev- idence tended to show that for many years prior to January, 1877, William Koworth and his son Samuel carried on the business of manufacturing confectionery at 354 Pearl street in the city of New York, under the firm name of Samuel W. Koworth &Co., and had established a prosperous business Will- iam Roworth was then the owner of a one- half interest in the assets of said firm; of a three-quarters interest in the lot and build- ing in which the business was carried on ; of a house and Jot in Devoe street, Brooklyn, and another in Fifth street in the same city; a mortgage on property in Detroit for ^2,000 y and deposits in bank of about $500. In Jan- uary, Samuel W. Koworth died, devising his interest in the assets of said firm equally to the defendants, his two brothers, John and Joseph, and to his two sisters. Between the time of Samuel's death, in January, 1877, and March, 1880, the defendants John and Joseph had obtained from William Koworth, without consideration except a promise to pay him a small sum weekly from the part- ' nerahip business, all of the property possessed by him. This was effected by transfers and conveyances of such property, or its proceeds, made successively at different times by Will- iam Roworth to one or both of said defend- ants, between the dates aforesaid. At the time of the death of Samuel the two defend- ants were each upwards of 45 years of age, and had been unsuccessful in the business operations theretofore carried on by them re- spectively, and were not then possessed of any property. They were supporting them- selves as workmen, upon a small salary, in the employ of Samuel W. Roworth & Co. In ■ 1877, William Koworth was 76 years of age, and had become quite infirm in health. His memory had greatly failed, and he was prac- tically incapable of taking an active and re- sponsible part in the management of his bus- iness, although he continued for some time thereafter to attend at the store and factory, and make entries in the books, draw up bills, and render other small services which he had been theretofore accustomed to perform. He had become very nervous and susceptible, being frequently overcome by emotion, and easily affected to tears, and subject to the in- fluence of those surrounding him. He had an aged wife, who survived him, and was dependent upon him for support. The flnd^ ings of fact made by the trial court as the basis of its judgment with respect to the two deeds which remain as the subject of con- troversy on this appeal are substantially the same, and that one relating to the transfer of No. 354 Pearl street. New York, reads as follows: That "the said William Roworth, at the time of the execution and acknowledg- ment of said instrument, did not know or ! comprehend the legal effect of the said in- ; strument," and that its "execution, acknowl- i edgment, and delivery * * * were procured I by fraud and undue influence, exercised upon I said William Roworth by the said defendants, : Joseph G. Roworth and John W. Roworth, ; and by their taking advantage of his age and I infirmities, and his confidence and trust in i them, and his dependence and reliance upon I them; and the signing and delivery of the I same by William Roworth was reckless and ; improvident, was done without proper advice ' I of counsel, ana upon a grossly inadequate I consideration, and while he was acting nn- 1 der the influence of said defendants, unduly I exercised upon him." The evidence, as vre have said, fully supports this finding, and< indeed, we are of the opinion that the proof would not have justified the contrary conclu- sion. In the consideration of this case the court cannot shut its eyes to the significant fact that William Koworth has been substan- tially stripped of all of his property by some one; and however or to whomever it passed originally, either the property or its proceeds found their way to a common end, viz., to the benefit and possession of the defendants. Whatever the defendants advanced, if any- thing, towards the acquisition of any part of the property, has been for their own advan- tage, and substantially from funds which they bad received from their father. The only material question in this case arises over an aUeged inconsistency between the findings made by the trial court as the basis of its judgment, and a single one also found by the court out of 105 special requests R24 CONSTRUCTIVE FRAUD. to And on questions of fact submitted by the defendants at the close of the trial. It is un- doubtedly an established rule of this court, where findings of fact, mad!e by the court or referee, which are inateriiil to the deter- mination of the case, are irreconcilably con- flicting, that we will be governed by that finding which is most favorable to the party appealing; but this rule presupposes such a difference in the findings. So, far, therefore, as these findings areconfiicting, it is the duty of the court to endeavor to reconcile them, and give to each some office to perform. It is only when this cannot, by a reasonable construction, be accomplished, that the court are bound to accept that finding most favor- able to the app 'llant. Bennett v. Bates, 94 N. T. 354; Redtteld v. Eedfield, 110 K. Y. 671, 18 N. E. Bep. 373. It was said in the latter case that " we have held that, where the special findings of a judge or referee differ from the findings formally made as the basis of the judgment, the appellant has the right to rely upon such findings as are most favor- able to him. Those decisions were made at a time when the practice authorized the sub- mission of proposed findings * * * after the decision of the case was rendered; and under that practice such findings were passed upon, generally weeks, and frequently months, after the formal findings had been made. And we held that where such find- ings differed from the prior findings, and con- tradicted them, that the appellant had the right to rely upon them if most favorable to him. Tompkins v. Lee, 59 N. Y. 662; Sch winger v. Raymond, 83 N. Y. 192; Bon- nell V. Griswold, 89 N. Y. 122. Since those decisions, the practice has been changed, and now the proposed findings must be presented at the submission of the case, and the pre- sumption is that those findings are passed upon when the case is decided and the formal findings made. Hence, for the purpose of 'construing the findings, we must look at all of them, both the general and special find- ings, and if they are in confiict we must at- tempt to reconcile them." In accord with 1 the rule thus stated, we must look at the find- ings in question, to see how far they are in- consistent. Theformal finding will be found much broader than the one alleged to be in- consistent therewith, as it especially finds that the deed was fraudulently procured, in igno- rance of its effect by the grantor, and these facts' are not negatived by any subsequent finding. There is undoubtedly an apparent inconsistency between the additional and some parts of the formal findings, but upon examination we think it does not necessarily nullify the effect of the formal finding. The additional finding is as follows: "That the said Joseph Gr. and John W. Roworth did not, about said month of April, or at any time, persuade or influence said William Roworth to sign said alleged paper, or make any repre- sentations in respect thereto." "We infer that this finding relates to the deed in ques- tion. In the same connection the court re- ■fus.ed to find that the said William Roworth was not "by reason of bodily infirmities un- able and incapacitated from participating in or taking part in the management and con- trol of his business, property, and affairs," or that "Joseph G. and John W. Roworth were not intrusted by William Roworth * * * with tha exclusive and entire management and control of his property and business," or that "he was not dependent upon the said Joseph G. and John W. Roworth for the proper management and control of his prop- erty and business, and was not solely reliant upon their advice in regard thereto," or that he was cognizant of "the real purpose and effect of his deed to Joseph G. and John W. Roworth. " It seems quite evident, by these refusals to find, that the court did not intend, by its informal finding, to nullify the general force and effect of the formal findings. The court had, in its original findings, on seven distinct and separate occasions applying to as many different transfers of property, reiter- ated in substance the findings of franri and undu e influence on the part oiJJifls e dofond - SntlTlllUbtjiuiugumih transfers. The several findings were presumptively passed upon at the same time, and it is quite improbable that the court intentionally determined to leave two findings in the case radically inconsistent with each other, or to nullify and contradict its repeated findings, often expressed and con- firmed in its previous statement of facts. We are of the opinion that the court, by the additional finding, intended only to say that there was no direct or positive evidence of any special influence or persuasion with reference to the procurement of the deed in question, but left the judgment to stand upon the legal presumption of fraud aris- ing upon the facts and circumstances of the case. The informal finding was substan- tially a finding as to the inferences to be drawn from the evidence, and not upon an existing and independent fact itself, and in that respect was rather a finding upon a question of law than one of fact. In that view it may be said to be erroneous, and as not affecting the judgments rendered. The leading facts of the 'case have been found, and are not impaired by any contradictory finding. They were, substantially, that the deed was secured by parties who had already obtained tlie larger portion of the grantor's property, without any adequate consideration therefor; that this conveyance left him com- paratively destitute of property, and was made without consideration, in the absence of any legal adviser, by an aged man, whose mental and physical condition was much en- feebled, and in ign^j-ance of its legal effect, to persons occupying a confidential relation towards him, and who had the management and control of his property and business af- fairs, and upon whose advice and counsel he was accustomed to rely. That these facts afford sufficient g r ound to Support a hP^'"g . ■6f fraud ahd Uhdue mliuence, eveu"Wn^' positive or direct proof of persuasion or in- CONSTRUCTIVE FRAUD. 325 fluence, cannot be questioned. Tliey pre- sent a situation from whicli fnuid is legally imputable to those benefited, and requiring an explanation from them, which was not furnished by the defendants. As was said by Judge Hand in Co wee v. Cornell. 75 N. Y. 99: "We return, then, to the question whether this case was one of constructive fraud. It may be stated as uni- versally true that fraud vitiates all noTitranta. but as a gen-ferai thing itis not presumed , but must be proved by tB5~p5rty seeking to relieVfl' fiimsell Irorn an obligation on that ground. Whenever, however, the relations betvfeen the contracting parties appear to be of such a character as to render it certain that they do not deal on terras of equality, but that, either on the one side from superior knowledge of the matter derived from a fidu- ciary relation, or from overmastering influ- ence, or, on the other, from weakness, de- pendence, or trust justifiably repqsed, unfair advantage in a transaction is rendered prob- able, there the burden is shifted, the trans- action is presumed void, and it is incumbent upon the stronger party to show affirmative- ly that no deception was practiced, no undue influence was used, and that all was fair, open, voluntary, and well understood. " The remarks of Judge Andrews in Be Will of Smith, 95 N. T. 516, are so pertinent to the question that we repeat them here: "jjnr'"'' influence, whi ch is a species of fraud, wheg. transaction inter iipon to annul atransaction inter vari tes, or a testamen ta ry aispo sinnn, "tuatr ^ pfoVOd, ahJ~cdI lflot be pre sumed, iiut the i-Blation lu Which Ihe ptlrll«li"lO a Transaction stand to each other is often a material cir- cumstance, and may of itself, in some cases. be sufficient to raise a presumption of its existence. * * * and, when the situa- tion is shown, then there is cast upon the party claiming the benefit or advantage the burden of relieving himself from the suspi- cion thus engendered, and of showing, either by direct proof or by circumstances, that tlie transaction was free from f rassd or undue in- fluence, and that the other party acted with- out restraint and under no coercion, or any pressure, direct or indirect, o*' the party ben- efited. This rule does not proceed upon a presumption of the invalidity of the particu- lar transiiction, without proof. The proof is made in the first instance when the relation and the personal intervention of the party claiming the benefit is shown." The gen- eral rule is stated in 1 Story, Eq. Jur. § 238: "The doctrine, therefore, may be laid dow as generally true that the acts and contracts of persons who are of weak understandings, and who are therefore liable to imposition, will be held void in courts of equity if the nature of the act or contract justify the con- clusion that the party has not exercised a de- liberate judgment, but that he has been im posed upon, circumvented, or overcome by cunning or artifice or undue influence." If, therefore, we should give fuU effect to the special finding, and come to the conclusion that the giving of the deed in question was the voluntary, unrestricted act of the gran- tor, it would not, under the circumstances of this case, justify the retention by the gran- tee of the property conveyed, or furnish a reason for refusing relief to the improvident grantor. We are therefore of the opinion that the judgment should be affirmed. All concur. ^__^ ^..K^ M< A-^^ ^f--S t-^ 326 V / CONSTRUCTIVE FRAUD. P BROWN V. PIBRC®. (7 Wall. 205.) Dec., Supreme Court of the United States. 1S68. Error to the supreme court, Nebraska ter- ritory. Brown filed his bill in September, 1860, in the court below against three persons, Pierce, Morton, and Weston, alleging that in the spring of 1857, he settled upon and improved a tract of land near Omaha; that he erected a house on the tract and continued to occupy it until August 10th, 1857, when he entered the tract under the pre-emption laws of the United States; that Pierce claimed the land by virtue of the laws of an organization known as the Omaha Claim Club; that this organization, consisting of very numerous armed men, sought to, and did to a great ex- tent, control the disposition of the public lands in the vicinity of Omaha in 1857, in de- fiance of the laws of the United States; that it freqixently resorted to personal violence in enforcing its decrees; that the fact was no- torious in Omaha, and that he, Brown, was fully advised in the premises; that as soon as he had acquired title to the land. Pierce, together with several other members of the club, came to his house and demanded of him a deeU of the land, threatening to take his life by hanging him, or putting him in the Missouri river, if he did not comply with the demand; that the club had posted hand- bills calling the members together to take action against him; and that knowing all this, and in great fear of his life, he did, on the 10th of August, 1857, convey the land by deed to Pierce; that he. Brown, received no consideration whatever for the conveyance; that from the date of his settlement upon said land, until the time of filing the bill, he had continued to keep possession either ac- tually or constructively; that Morton claimed an interest in the premises by virtue of a judgment lien, and that Weston also made some claim. The prayer was, that the deed might be declared void, and Pierce be decreed to re- convey, and for general relief. The bill was taken pro confesso as to all the ' defendants, except Morton, who an- swered. Tills answer, stating that he, Morton, was not a resident of the territory, and had no knowledge or Information about the facts al- leged in the bill, but on the contrary was an utter stranger to them, and therefore could not answer as to any belief concerning them, —set forth that on the 28th August, 1857, Pierce was "the owner and in possession of, and otherwise well seized and entitled to, as of a good and indefeasible estate of inher- itance in fee simple," the tract in contro- versy; that being so, and representing him- self to be so, and having need of money in business, he applied to him, Morton, to bor- row the same, and that he, Morton, being in- duced by reason ot the representation, and also by the possession, and believing that he. Pierce, was the owner, he was thereby in- duced to lend, and did lend to him $6,000, on the personal security of him. Pierce; that before the filing of this bill by Brown, he, Morton, had obtained judgment against Pierce for $3,400, part of the loan yet un- paid; that this judgment was a lien on the lands; and that as he, Morton, was informed and believed, if he could not obtain his money from this land, he would be wholly defrauded out of it. The answer further stated that the defend- ant was informed and believed that Brown, the complainant, entered upon the lands as the tenant of Pierce, and that the suit by the complainant was being prosecuted in viola- tion of the just rights of Pierce, as well as of him, Morton. There was no replication. Proofs were taken by the complainant, and they showed to the entire satisfaction of the court that all the matters alleged in the bill and not denied by the answers, were true. See 7 Wall. 213. There thus seemed no doubt as to the truth of all the facts set out in the bill. The court l>elow declared Brown's deed void, and decreed a reconveyance from Pierce to him, and that neither Morton nor Weston had any lien on the premises. Morton now brought the case here for review. Carlisle & Woolworth, for appellant Red- ick & Briggs, contra. Mr. Justice CLIFFORD delivered the opin- ion of the court. Representations of the complainant were, that on the tenth of August, 1857, he ac- quired a complete title to the premises de- scribed in the bill of complaint, under the pre-emption laws of the United States, and that thereafter, on the same day, he was compelled, through threats of personal vio- lence and fear of his life, to convey the same, without any consideration, to the principal respondent Framed on that theory, the bill of complamt alleged that the first-named re- spondent was at that time a member of an unlawful association in that territory, called the- Omaha Claim Club, and that he, accom- panied by three or four other persons be- longing to that association, came to his house a few days before he perfected his right of pre-emption to the land in question, and told the complainant that if he entered the land under his pre-emption claim, he must agree to deed the same to him, and added, that un- less he did so, he, the said respondent and his associates, would take his life; and the complainant further alleged, that the same respondent accompanied, as before^ by cer- tain other members of that association, came again to his house on the day he perfected his pre-emption claim, and repeated those threats of personal violence, and did other acts to intimidate him, and Induce him to be- lieve that they would carry out their threats CONSTRUCTIVE FRAUD. 327 If lie refused to execute the deed as required. Based upon those allegations, the charge is that the complainant was put in duress by those threats and acts of intimidation, and that he signed and executed the deed, and conveyed the land by means of those threats and certain acts of Intimidation, and through fear of his life, and without any consider- ation; and he prayed the court that the con- veyance might be decreed to be inoperative and void, and that the grantee might be re- quired to reconvey the same to the com- plainant Two other persons were made respondents, as claiming some interest in the land in con- troversy. Pierce, the principal respondent, and Weston, one of the other respondents, were non-residents, and were served by pub- lication pursuant to the rules of the court and the law of the jurisdiction. They never appeared, and failing to plead, answer, or demur, and due proof of publication in the manner prescribed by law havftig been filed in court, a decree was rendered as to them, that the bill of complaint be taken as con- fessed. Nations v. Johnson, 24 How. 201. Morton, the other respondent, appeared and filed an answer, in which he alleged that the principal respondent, on the twenty-eighth of August, 1857, and for a long time before, was the owner in fee of the premises; that he was informied, and believed, that the com- plainant entered upon the land as the tenant of the principal respondent, and that he was prosecuting this suit in violation of the just rights of all the respondents; that the prin- cipal respondent wanting to borrow money, he, the respondent before the court, loaned him a large sum, and accepted bills of ex- change for the payment of the same, drawn to the order of the borrower of the money, and which were indorsed by the drawer; that the bills of exchange not having been paid when they became due, he brought suit against the drawer and indorser, and recov- ered judgment against him for three thou- sand one hundred dollars; that the judg- ment so recovered is in full force and unsat- isfied, and that the same is a lien on the premises described in the bill of complaint. No answer, from any knowledge possessed by the respondent, is made to the allegation that the complainant acquired a complete title to the land under the pre-emption laws of the United States, nor to the charge con- tained hi the bill of complaint, that the deed was procured by threats of personal violence amounting to actual duress. On the contrary, the answer alleged that the respondent before the court was an utter stranger to all those matters and things, and that he could not answer concerning the same, because he had no information or belief upon the subject. Authorities are not wanting to, the effect, that all matters well alleged in the bill of complaint, which the answer neither denies nor avoids, are admitted; but the better opin- ion is the other way, as the sixty-first rule adopted by this court provides that if no ex- ception thereto shall be filed within the period therein prescribed, the answer shall be deem- ed and taken to be sufficient. Young v. Grundy, 6 Cranch, 51; Brooks v. Byam, 1 Story, 297, Fed. Cas. No. 1,947. Material allegations in the bill of com- plaint ought to be answered and admitted, or denied, if the facts are within the knowl- edge of the respondent; and if not, he ought to state what his belief is upon the subject, if he has any, and if he has none, and cannot form any, he ought to say so, and call on the complainant for proof of the alleged facts, or waive that branch of the controversy; but the clear weight of authority Is, that a mere statement by the respondent In his answer, as in this case, that he has no knowledge that the fact is as stated, without any an- swer as to his belief concerning it, is not such an admission as is to be received as full evidence of the fact Warfleld v. Gambrlll, 1 Gill & J. 503. Such an answer does not make It neces- sary for the complainant to Introduce more than one witness to overcome the defence, and the w^-known omissions and defects of such an answer may have some tendency to prove the allegations of the bill of com- plaint, but they are not such an admission of the same as will constitute a sufficient foundation for a decree upon the merits. Young V. Grundy, 6 Cranch, 51; Parkman v. Welch, 19 Pick. 234. 'Proper remedy for a complainant, in such a case, is to except to the answer for insuffi- ciency within the period prescribed by the sixty-first rule; but if he does not avail him- self of that right, the answer is deemed suffi- cient to prevent the bill from being taken pro confesso, as it may be if no answer Is filed. Hardeman v. Harris, 7 How. 726; Stockton V. Ford, 11 How. 232; 1 Daniell, Ch. Prac. 736; Langdon v. Goddard, 3 Story, 13, Fed. Cas. No. 8,061. Attention is called to the fact, that no rep- lication was filed to the answer; but the sug- gestion comes too late, as the respondent pro- ceeded to final hearing In the court below without interposing any such objection. Mere formal defects in the proceedings, not objected to in the court of original jurisdic- tion, cannot be assigned in an appellate tri- bunal as error to reverse either a judgment at law or decree in equity. Legal effect of a replication Is, that It puts in issue all the matters well alleged in the answer, and the rule is, that if none be filed, the answer will be taken as true, and no evi- dence can be given by the complainant to contradict anything which is therein well al- leged. 1 Barb. Ch. Prac. 249; Mills v. Pit- man, 1 Paige, Oh. 490; Peirce v. West, 1 Pet 0. C. 351, Fed. Cas. No. 10,909; Story, Eq. PI. 878; Cooper, Eq. PI. 329. Undenied as the answer is by any replica- tion, it must have Its fair scope as an ad- mission; but the court is not authorized to 328 CONSTRUCTIVE FRAUD. supply anything not expressed in it, beyond what is reasonably implied from the lan- guage employed. Proofs were taken by the complainant, and they show, to the entire satisfaction of the court, that all the matters alleged in the bill of complaint, and not de- nied tn the answer, are true, and the conclu- sion of the court below was, that the com- plainant acquired a complete title to the land under his pre-emption claim, and that the deed from him to the principal respondent was procured in the manner and by the means alleged in the bill of complaint. Nothing is exhibited in the record to sup- port any different conclusion, or to warrant any different decree, unless it be found in one or the other of the first two defences set up in the answer. First defence Is, that the principal respond- ent, on the twenty-eighth of August, 1857, and long before that time, was the owner in fee of the premises; but neither that part of the answer, nor any other, denied that the complainant acquired a complete title to the land, as alleged in the bill of complaint, nor set up any defence in avoidance of those alle- j gations, nor made any attempt to present any defence against the direct charge, that the deed under which, the respondent claimed title was procured from the complainant through threats of personal violence and by means of duress. Indefinite as the allegation of title is, the answer must be construed as referring to the title under the deed in controversy, as it is not pretended that the respondent ever had any other, and, if viewed in that light, it is in no respect inconsistent with the con- clusion adopted by the supreme court of the territory. Such an indefinite allegation cannot be con- sidered as presenting any sufficient answer, either to the alleged title of the complainant or to the charge made in the bill of com- plaint. Briefly stated, the second defence set up in the answer is, that the respondent was in- formed and believed that the complainant en- tered upon the land as a tenant, but the time when the supposed entry was made is not alleged, nor are the circumstances attending the entry set forth, nor is any reason assign- ed why the allegations were not made more definite, nor is there any fact or circum- stance alleged which shows or tends to show that there was any prior owner to the land, except the United States, nor that the re- spondent ever pretended to have any other title to the same than that derived from the complainant. Viewed in any light, those allegations must be regarded as evasive and insufficient; and they are not helped by the omission of the complainant to file the general replication. Those parts of the answer being laid out of the case as insufficient to constitute a de- fence, the conclusion Is inevitable that the title to the land was In the complainant as alleged, and that he parted with it through threats of personal violence and by duress, and without any consideration. Argument to show that a deed or other written obligation or contract, procured by means of duress, is inoperative and void, is hardly required, as the proposition is not de- Inled by the respondent. Actual violence is mot necessary to constitute duress, even at /common law, as understood in the parent 'country, because consent is the very essence of a contract, and, if there be compulsion, there is no actual consent, and moral compul- sion, such as that produced by threats to take life or to inflict great bodily barm, as well as that produced by imprisonment, is every- where regarded as sufficient, in law, to de- stroy free agency, without which there can \be no contract, because. In tl^at state of the yjase, there is no consent. Duress, in Its more extended sense, means (that degree of constraint or danger, either actually inflicted or threatened and impend- ing, which is sufficient, in severity or in ap- prehension, to overcome the mind and will of a person of ordinary firmness. Chit Cent 217; 2 Greenl. Bv. 283. Text-writers usually divide the subject in- to two classes, namely, duress per mina a and dure ss of imprisonna ent, and tBat classifica- tion was uniformly adopted in the early his- tory of the common- law, and is generally preserved in the decisions of the English courts to the present time. 2 Inst. 482; 2 Eolle, Abr. 124. Where there is an arrest for an improper purpose, without just cause, or where there is an arrest for a just cause, but without lawful authority, or for a just cause, but for an unlawful purpose, even though under proper process, it may be construed as duress of imprisonment; an d if the person arre sted execute a contrathough a deed be made to a child at his so- ^ licitation, and because of partiality Induced Iby affection for him, it will not be undue in- jfluence" If it is not such as to deprive the grantor of his free agency. Burt v. Quisen- berry, supra. The testimony shows that the complainants and their husbands received from their fa- ther from time to time about $2,000 apiece, paid in land and money and in the discharge of security debts. They had married many years before their father's death, and had left home, and reared families, and acquired property of their own. The husband of one of the complainants was a witness to the execution of the deeds made on May 27, 1873. They knew of those deeds soon after their execution, and two of them received X money from their father a short time there- after. The fact that they did not receive as much as the defendants is no ground for in- validating the deeds to the latter. Inequali- ty in the distribution of the property is not of Itself conclusive evidence of undue in- fluence, although It may be considered as a circumstance tending to establish imdue in- fluence. The grantor or testator may give one child more than another without invali- dating the conveyance or will. Salisbury v. Aldrich, 118 111. 199, 8 N. E.' Rep. 777; Schneider v. Manning, 121 lU. 376, 12 N. E. Rep. 267; Burt v. Quisenberry, supra; Pool- er V. Cristman, supra. Nearly all the testimony introduced by the complainants in this case for the purpose of showing the exercise of undue influence con- sists of proof of declarations made by Solo- mon Wilkinson after his execution of the deeds herein attacked. Those declarations were to the effect— First, that he had been persuaded by his sons; second, that he put the tltie out of himself in order to keep the property from being lost through suits brought against him on account of his sign- ing notes for his son-in-law. Cox. But it Is well setUed that the declaration of a grantw: when the grantee is not present cannot be admitted for the purpose of Invali- dating the deed. Parties making deeds or wills cannot invalidate them by thar own parol declarations, made previously or subse- quently. Dickie V. Carter, 42 HI. 376; Ben- nett v. Stout, 98 HI. 47; Bentley v. O'Bryan, 111 m. 53; GuUd v. Hull, 127 HI. 523, 20 N. E. Rep. 665; Burt v. Quisenberry, supra. There was also some evidence of declarations made by one or more of the sons of Solomon Wilkinson, to the effect that he made the conveyances to them in order to keep the property from being swept away by the debts Incurred as security for Cox. If such declarations made by the father and sons were properly admissible, the fraud upon creditors which they tended to show could In no way operate to the benefit of these complainants, wlio sue as heirs of the fraud- ulent grantor. The general rule is that vol- untary conveyances, although void as to cred- itors, are valid as to the parties, and can- not be set aside by the grantor or his heirs. 1 Story, Eq. Jur. § 371; MUler v. Marckle, 21 HI. 152; Harmon v. Harmon, 63 HI. 512; Rawson v. Fox, 65 HI. 200; Campbell v. Whitson, 68 HI. 240; McBlroy v. Hiner, 133 HI. 156, 24 N. E. Rep. 435. The decree of the elrcuit court is affirmed. '/'-''-"-U' ( COXSTRUCTIVB FRAUD. 'V«^ -J, '■■ — 335 ROSS V. CONWAY et al. (No. 13,341.) (28 Pac. 785, 92 Gal. 632.) Supreme Court of California. Jan. 6, 1892. Department 2. Appeal from superior court, Sonoma county; S. K. Dougherty, Judge. Suit by James B. Ross against John M. Conway et al. to annul, on the ground of undue influence, a trust-deed made by his mother, Elizabeth G. Ross, for the benefit of defendants. Plaintiff had judg- ment, and defendants appeal. Affirmed. George D. Collins and Genrffe A. Jobn^ son, (D. M. Delmas, of counsel,) for ap- pellants. John A. Wright, for respondent. HARRISON, J. The plaintiff, as the solo heir of his mother, Elizabeth G. Ross, brought this action to cancel and annal two certain deeds of trust conveying cer- tain real estate in Santa Rosa, executed by his mother, August 11, 1888, and Au- gust 18, 1888, respectively, alleging that at the time of their exerution his mother was weak in body, and that her mind was impaired, and that the defendant Con- way, who was the pastor of the Roman Catholic church of Santa Rosa, of which she had been for many years a member, and who was also her spiritual adviser, had thereby acquired great influence over her, and, talking advantage of such in- fluence and of her mental weakness, had caused her to execute the said deeds of trust for the benefit of himself and of the church of which he was the pastor. The defendants denied these allegations, and the cause was tried by the court, a jury having been called in as advisory to the court upon certain issues. The verdict of the jury and the findings of the court were in support of the allegations of the complaint, and judgment was rendered in favor of the plaintiff. A motion for a new trial having been made and denied, an appeal has been taken from both the judg- ment and the order denying a new trial. The two deeds of trust a re substantially the same, the last onehaving beenexecuted merely for the purpose of correcting an erroneous description in the first. Under the trust created by the deeds the trus- tees are directed to sell one of the parcels of land "as soon as practicable," and out of the proceeds thereof apply $8,000 in the improvement of the other parcel, and pay the remainder of the proceeds to the de- fendant Conway. Out of the income to be derived from the parcel to beimproved, f75 per month was to be paid to the plain- tiff, and the remainder monthly "to the pastor of the Roman Catholic church in Santa Rosa, to be disbursed by him in such manner as he may deem charitable. " Other provisions contingent upon the death or change in circumstances of the plaintiff are unnecessary to be repeated here. The issues before the court were, in substance, whether Mrs. Ross was, at the respective dates on which the deeds of trust were executed, of weak mind, or able to comprehend the provisions of the Instruments; and whether the defendant Conway used the influence which he had acquired over her, by virtue of being her spintuai adviser, for the purpose of pro- curing her to make such disposition of her property. Upon these issues there was much conflicting evidence before the court, both in the testimony of the witnesses who were examined, as well aa in the cir- cumstances under which the instruments were executed, and the purposes held by Mrs. Ross with reference to her son and to the church. Upon the evidence before it the court found in favor of the plain- tiff. This finding was in accordance with the verdict of the jury, and upon a mo- tion for a new trial, in which the evidence was again brought before the court tor consideration, it adhered to its former conclusion. Under these circumstances we cannot disregard Its finding. Inas- much, however, as counsel have elabo- rately argued the facts, we have examined the record, and are of the opinion that the evidence fully justifies the findings of the court. The court finds that at the dates of the execution of the deeds of trust Mrs. Ross was of weak .mind, and in a dying condi- tion, and that she died on the 20th of Au- gust; that the defendant Conway was, and had for a long time previously been, the pastor of the Roman Catholic church at Santa Rosa, and the spiritual adviser of Mrs. Ross; that a confidence was re- posed in him by her, and that there ex- isted on his part an influence and appar- ent authority over her arising out of his relation to her as her spiritual adviser, and that he took an unfair advantage of this Influence, and used this confidence and authority for the purpose of procur- ing her to execute the two deeds of trust. The court also finds that Mrs. Ross had in December, 1887, executed a will of all her estate, with the exception of some minor legacies, in favor of the plaintiff herein, and that the provision in the deeds of trust for the defendants, other than the defendant Conway, were without any consideration from them, but were made solely through the influence of Conway. The rule is inflexible that no one who^ holds a confidential relation towards anothwr shall take advantage of that re- lation in favor of himself, or deal with the other upon terms of his own making; that in every such transaction between persons standing in that relation the law will presume that he who held an influence over the other exercised it unduly to his own advantage; or, in the words of Lord Langdale in Casborne v. Barsham, 2 Beav. 78, the inequality between the trans- acting parties is so great "that, without proof of the exercise of power beyond that which may be inferred from the nat- ure of the transaction itself, this court will impute an exercise of undue influ- ence;" that the transaction will not he upheld unless it shall be shown that such other had independent advice, and that his act was not only the result of his own volition, but that he both understood the act he was doing and comprehended its result and effect. This rule finds its application with peculiar force in a case where the effect of the transaction is to divert an Estate from those who, by the ties of nature, would belts natural recip- ients, to the person through whose influ- 336 CXDNSTRUCTIVB FRAUD. ence the diversion Is made, whether such divbi'sion be for his own personal advan- tage, or for the advantage of some inter- eat of which he is the representative. It has l)een more frequently applied to trans- actions between attorney and client or guardian and ward than to any other relation between the parties, but the rule itself has its source in principles which underlie and govern all confidential rela- tions, and is to be applied to all transac- tions arising out of any relation In which the principle is applicable. It is termed by Lord Ei.don " that great rule of the court that he who bargains in any matter of advantage with a person placing con- fidence in him is bound to show that a reasonable use has been made of that con- fidence. " Gibson v. Jeyes, 6 Ves. 278. It was said by Sir Samuel. Eomii^ly in his argument In Huguenin v. Baseley, 14 Ves. 300, that " the relief stands upon a general principle applying to all the variety of relations in which dominion may be exer- cised by one person over another," — a principle which was afterwards affirmei) by liord Cottekham in Dsnt v. Bennett, 4 Mylne & C. 277, saying that he had re- ceived so much pleasure from hearing it uttered in that argument that the recol- lection of it had not been diminished by the lapse of more than 30 years. That the influence which the spiritual adviser of one who is about to die has over such person is one of the most pow- ^erful that can be exercised upon the hu- man mind, especially if such mind is im paired by physical weakness, is so conso- nant with human experience as to need no more than its statement; and in any transaction between them, wherein the adviser receives any advantage, a court of , <;q|uit.v will not enter into an investiga- /^tion of the extent to which such influence Has been exercised. Any dealing between j/hem, under such circumstances, will be set a-side as contrary to all principles of /equity, whether the benefit accrue to the /adviser, or to some other recipient who, / through such influence, may have been made the beneficiary of the transaction. These principles have been so invariably announced whenever the question has arisen that a mere reference to the author- ities will sufiice. Norton v. Eelly, 2 Eden, 286; Huguenin v. Baseley, 14 Ves. 273; Thompson v. Heffernan, 4 Dru. & War. 291; Dent v. Bennett, 4 Mylne & C. 269; In re Welsh, 1 Kedf. Sur. 246; Richmond's Appeal, B9 Conn. 226, 22 Atl. Rep. 82; Ford V. Hennessy , 70 Mo. 580 ; Pironi v. Corrigan , 47 N. J. Eq. 135, 20 Atl. Rep. 218; Connor V. Stanley, 72 Cal. 556, 14 Pac. Rep. 306; 1 BigPlow, Fraud, 352; Story, Eq. Jur. § 311. The finding of the court that Mrs. Ross did not have any independent adviceupon the subject of making the deeds of trust Is fully sustained by the evidence. It ap- pears from the record that the attorney who prepared the instruments was intro- duced to her by Conway, and that the on- ly persons with whom she had any inter- view, or from whom she could receive any advice respecting the same, were this at- torney and the defendant Conway. On the 9th of August she bad exprpssed to Conway a desire to make a testamentary disposition ot her property, and, upon his suggestion that Mr. Collins was a suita- ble person, she requested that he would send him to her at the hospital where tihe was lying. He thereupon sought Collins, and, telling him the wish of Mrs. Boss, accompanied him to the hospital. On their way be told Collins of the mode in which she proposed to dispose of her property, and, after their arrival, re- mained in the room with tbera while she was giving directions about the will, go- ing out, however, occasionally, for short intervals to visit other people in the hos- pital, and leaving the building before tb» will was formally executed. Two days later he visited Collins at his office, and, after hearing the will read, he made to Collins a suggestion of some changes, and whether a deed of trust would not be preferable to a will. An appointment was then made between him and Collins to meet that afternoon in theroomof Mrs. Ross at the hospital. After their arrival at the hospital, Conway made a sugges- tion to her that she execute a deed of trust instead of a will, and also other sug- gestions in reference to her disposition of the property. Only himself and Collins were in the room during this consultation, he, however, leaving It temporarily a few times during the period over which the interview extended, but remaining un- til Collins had received all the directions that she gave. Assuming that, by virtue of his relation to her, he had acquired an influence over her, it must be held that in the transaction under investigation there was an undue exercise of such influence; that by not insisting that she should have independent adYice, and by continu- ing to remain in her presence during the interview with the only other person whom he permitted to see her, .he exer- cised an influence over her actions which, though unseen and inaudible, was none the less effective in its results. "The ques- tion is, " said Lord Ei.don in Huguenin v. Baseley, 14 Ves. 300, "not whether she knew what she was doing, had done, or proposed to do, but how the intention was produced ; whether all that care and providence was placed round her, as against tbose who advised her, which from their situation and relation with re- spect to her they were bound to exert on her behalf." While the contract of purchase made between the defendant Conway and the trustees under the in- struments sought to be annulled was ir- relevant to any material issue before the court, and would have been properly ex- cluded from evidence, we are unable to see that its admission could in any way have been prejudicial to the rights ot the appellants. The judgment and order de- nying a new trial are affirmed. We concur: DE HAVEN, J.: McFAR- LAND, J. Hearing in bank denied. Vn ,--» f4 . C»NSTRUCTIVB FRAUD. 337 TATE T. WILLIAMSON. (2 Ch. App. 55.) Court of Appeals in Chancery. Dec. IT, 1866. This was an appeal by the defendant, Robert Williamson, from a decree of Vice Chancellor Wood^ setting aside a sale, on the ground that the purchaser stood in a fiduciary relation to the vendor, and did not make a full disclosure to him of all material facts within his knowledge relating to the value of the property. The facts of the case fully appear in the report of the case before the vice chancellor (L. R. 1 Eq. 528) and the judgment of the lord chancellor. Mr. W. M. James, Q. C, and Mr. Little, In support of the decree. Attorney General (Sir J. Rolt), and Mr. Brlstowe, for the ap- pellant. Solicitors for the plaintiff: Messrs. N. C. & C. Milne. Solicitors for the appellant; Messrs. Clowes & Hickley. LORD CHELMSFORD, L. C. In this case the vice chancellor has made a decree that an agreement for the sale by the intestate, William Clowes Tate, to the defendant, Rob- ert Williamson, of the undivided moiety of an estate called the "Whitfield Estate," in the county of Stafford, consisting of mes- suages, lands, and coal mines, ought to be set aside, upon the ground of the defendant not having communicated to the intestate all the information which he had acquired with reference to the value of the property, and, in particular, of his not having communicat- ed an estimate of the value of the mines which was obtained by the defendant pend- ing the agreement The question raised by the appeal is whether any such relation existed between the defendant and the intestate as to render It the duty of the defendant to make the communication. The jurisdiction exercised by courts of equity over the dealings of persons standing in certain fiduciary relations has always been regarded as one of a most salutary descrip- tion. The principles applicable to the more familiar relations of this character have been • long settled by many well-known decisions, but the courts have always .been careful not to fetter this useful jurisdiction by defining the exact limits of its exercise. Wherever ; two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which nat- ; urally grows out of that confidence is pos- I sessed by the other, and this confidence is I abused, or the influence is exerted to obtain \ an advantage at the expense of the confid- \ ing party, the person so availing himself of J his position will not be permitted to retain / the advantage, although the transaction could not have been impeached if no such confidential relation had existed. H.& B.Eq.(2d Ed.j-22 Did, then, the defendant, R. Williamson, when he put himself in communication with the intestate, clothe himself with a char- acter which brought him within the range of the principle? In considering this question, it will be nec- essary to bear in mind the situation of both the parties at the time when the agreement for the sale of the property was entered into. The intestate, when he was quite an infant, had become possessed of the property in question independently of his father. He contracted habits of extravagance at the uni- versity, and in consequence of some dis- pleasure which he had occasioned to his father on the subject of his debts, the fa- ther's doors were closed against him. He was thus thrown upon the world at an early age without any one to control him, and with scarcely a friend to counsel him, and towards the close of his life he became addicted to drinking and died prematurely at the age of twenty-four. The defendant is the nephew of Mr. Hugh Henshaw Williamson, the great uncle by marriage of the intestate, who had been the trustee and manager of the property, and the receiver of the rents, which latter duty the defendant had for some short time been deputed to perform for him. It does not appear that the defendant by his employment acquired any particular in- formation respecting the property, but as he states in his answer that he had "pre- viously" (to his first interview with the in- testate) "some idea of endeavoring to be the purchaser of the estate, in case the same should come into the market," it is reason- able to suppose that he was not altogether ignorant of its character, and must have formed some idea of its value. I think no stress can be laid upon the cir- cumstance of Mr. H. H. Williamson having been the trustee of the property. The trus- teeship, as to the intestate's moietyi, had come to an end upon his (attaining his ma- jority, in July, 1857. The accounts had been settled, and Mr. Williamson, in surrendering ^ his trust, had behaved generously to the in- testate. Though he continued after this pe- riod to receive the rents and manage the property, yet there appears to have been nothing in the office which he undertook after his trusteeship expired which would have prevented his dealing with the intes- tate upon the same terms as a mere stran- ger. Much less could the mere receipt of the rents for his uncle have placed Robert Williamson in a different position from that of any ordinary purchaser. But a new and peculiar relation arose out of the circum- stances which afterwards occurred. In the year 1859 the debts which the intestate owed at the university were causing him consid- erable embarrassment He had been pressed by Mr. Holloway, acting for his Oxford cred- itors, for payment of an amount of £1,000. He was unable, in consequence of the unfor- 338 OONSTKUCTIVB FRAUD. tunate quarrel with his father, to apply to him for advice, and, having before expe- rienced the kindness of Mr. H. H. William- son, he turned to him again in his difficul- ties. The letter by which the intestate made his situation known to Mr. Williamson is not forthcoming. The defendant, in his an- swer, says that he was informed by Mr. H. H. Williamson that it stated he was again Involved, and either asked for assistance, or for advice as to the mode of procuring assistance. I should have been glad if we could have seen the terms of this letter, as it might have explained the exact nature of the office which Mr. Williamson was asked to undertake. In the answer to this letter, dated the 30th of July, 1859, which is set out in the bill, in paragraph 52, Mr. Wil- liamson invited the intestate to his house, and desired him to bring with him "a cor- rect account of his debts, omitting nothing, and he would see what could be done." The intestate did not accept the invitation, and nothing more was heard of the matter until about the 26th of August following, when Mr. H. H. Williamson received a list of the intestate's debts due to Oxford cred- itors, amounting, as already mentioned, to £1,000. The defendant, in his answer, says "that the list was given to him by Mr. H. H. Williamson, and that he, after perusing the same, remarked that the charges were excessive, and that the bills might probably be settled for half the amount; that Mr. H. H. Williamson thereupon requested him to see the intestate, and ascertain upon what terms he could be relieved from his debts, and, if this could be done for £500 or a little more, he authoiized the defenda,nt to advance the intestate that amount on fur- ther security of the property." The defend- ant accordingly wrote to the intestate on the 26th of August, 1859, the letter, which Is set out in paragraph 58 of the bill, in which he states that his uncle is not suffi- ciently well to attend to business; that the list of debts owing forms a very heavy amount, which Mr. HoUoway expects to have paid immediately; and adds, "I will meet you in the course of a few days In London, upon having a couple of days' notice, and, after hearing your views on the subject, will talk over the matter, and see in what way it can be arranged." The counsel for the defendant say that his office was merely to see whether a compromise of the debts could be effected, and that, at the time of the purchase, his mission was at an end. One can hardly believe that his advice and assistance could have been understood to be of this limited character. He knew that Mr. HoUoway was pressing for immediate payment to the Oxford creditors, and that If he refused to reduce the amount the whole must be paid. It does not appear that, if Mr. HoUoway had insisted on a payment In full, Mr. H. H. Williamson would not have been disposed to advance a larger sum than that which he had mentioned, as the prop- erty would have been an ample security for any amount required to cover the whole of the debts. And the defendant must have been perfectly aware that the intestate's property in Staffordshire was the only fund out of which the debts could be discharged. The account of the defendant's Interview with the intestate we have from the answer alone. He states that he offered to negotiate with the intestate's creditors for an abate- ment of their claims, telling him "that he was authorized by his uncle to advance £500 or more if required" (I suppose he must have added "upon the security of the property"), "but that the intestate positively refused to allow him to ask for any deduction from his debts, saying that any such application would injure his character." The answer then pro- ceeds: "But he at the same time stated that he was desirous to sell his share of the Whit- field estate." Mr. Bristowe, for the defend- ant, said the instant the intestate refused to allow any attempt to compromise his debts, the defendant's office of adviser came to an end, and from that moment the parties, to use the familiar expression, were dealing "at arms' length." I cannot accept this view of the defendant's position. I think that bis visit to London was not solely for the compromise, but generally for the arrangement of the in- testate's debts; that he came with authority which involved a dealing with the property of the intestate, as he was to advance his uncle's money on the security of this property. And it may be observed that he had his attention particularly directed to the mode of satisfying the debts by a mortgage. He knew, too, that if the payment of the debts In fuU was in- sisted upon, and his uncle refused to advance a larger sum than "£500 or a little more," a sufficient amount to discharge all the debts could easily be raised upon the security of the property, which was subject only to a mort- gage for £1,000. It seems to me that the de- fendant had placed himself in a position which rendered it incumbent upon him to give the best advice to the intestate how to relieve himself from his debts, and ho one can doubt that if his judgment had been unbiased that he would have recommended a mortgage, and not a sale. But it appears, from the defend- ant's own statement, that he had a reason for not giving his a,dvice. As already stated, he had previously thought of purchasing the estate in case it should come into the market for sale, "an event," he says, "he thought was not unlikely to happen." I asked the defend- ant's counsel what he understood by these words, and was answered that the defendant's expectation was founded upon the hiconven- ient nature of property consisting of an undi- vided moiety. This may have first led the defendant to expect that he might have an opportunity of purchasing the property at no distant period, but his belief in the proba- bUity of a sale must have been considerably strengthened at the time of his interview with (XJXSTKUCTIVH FRAUD. 339 the intestate, from the knowledge he had of his embarrassments. Whether the conversa- tion between the defendant and the intestate turned so abruptly from the intestate's refusal to compromise his debts, to the expression of his desire to sell his share of the Whitfield estate, as represented by the defendant or not, it is quite clear to my mind that the confi- dential relation between the parties had not terminated when the negotiation for the pur- chase of the property by the defendant com- menced, and that he did not then, or at any rime afterwards, stand in the situation of an ordinary purchaser. This being so, the defendant, pending the agreement, was bound to communicate all the information he acquired which it was material for the intestate to know in order to enable him to judge of the value of Ms property. It was admitted that the valuation of Mr. Cope was in the hands of the defendant at the time he wrote his letter of the 10th September, 1859. The defendant Is charged 'With making un- true representations in that letter. If he had done so, it would of course strengthen the case against him, but I find nothing in the letter which amounts to a misrepresentation, nor anything more than a flisparagement of the property, not uncommon with a purchaser when he desires to stimulate the owner of the property to close with his offer. Having stated my opinion with regard to the duty cast upon the defendant to communi- cate Cope's valuation to the 'ntestate. It seems unnecessary to pursue the case further. The fair dealing, In other respects, of the defend- ant during the negotiation, and before the agreement was signed, becomes almost irrel- evant. The refusal of the solicitors to pro- ceed with the agreement unless the young man had some legal assistance, the recommen- dation of the defendant that the intestate should apply to his father for advice, the op- portunity afforded him pending the negotia- tion of consulting any friends who were capable of advising him, the reference to Mr. Payne whether merely for the purpose of completing the agreement, or to afford the in- testate an opportunity of obtaining his opinion as to the value, all these considerations are of no consequence, when once it Is established that there was a concealment of a material fact, which, the defendant was bound to dis- close. Nor, after this, is it of any importance to ascertain the real value of the property. Even if the defendant could have shewn that the price which he gave was a fair one, this would not alter the case against him. The plaintiff, who seeks to set aside the sale, would have a right to say, "You had the means of forming a judgment of the value of the property in your possession, you were bound, by your duty to the person with whom you were dealing, to afford him the same op- portunity 'which you had obtained of determin- ing the sufficiency of the price which you offered; you have failed in that duty, and the sale cannot stand." But, in truth, there are strong grounds for thinking that the price agreed to be paid by the defendant is quite inadequate to the value of the property. There is no occasion to weigh the opposite opinion of the engineers and surveyors, and to form a conclusion from them. It is sufficient to take the valuation of the mines by Cope, amounting to £20,000, and the valuation of the surface by the defendant's own witnesses, ranging from £10,000 to £11,290, and making every allowance for a reduction of the value of the intestate's share, In consequence of its being an undivided moiety, it will appear that the value, by the defendant's own shew- ing, must have been at the least £14,000. For this property the defendant agreed to pay £7,000 apparently about half the value, and that not at once, but £1,500 was to be ad- vanced to the intestate, which was to bear interest till the day for the completion of the purchase, which advance must have been in- tended to enable the Intestate to pay off his debts immediately; £2,000 was to be paid on the 25th March, 1860, and the residue by year- ly instalments in the four following years. It appears to me, upon a careful review of ^ the whol,e case, that it would be contrary to the principles upon which equity proceeds, in judging of the dealings of persons in a fiduci- ary relation, to allow the purchase by the de- fendant, Robert Williamson, to stand. I am satisfied that the defendant had placed himself in such a relation of confidence, by his undertaking the office of arranging the In testate's debts by means of a mortgage of his property, as prevented him from becoming a purchaser of that property without the fullest communication of all material information which he had obtained as to its value; that j this openness and fair dealing were the more necessary when he was negotiating with an extravagant and necessitous young man, de- prived at the time of all other advice, eager to raise money, and apparently careless in what manner it was obtained; and the de- fendant having, by concealment of a valua- tion which he had privately obtained, prn cured a considerable advantage In the pnce which the seller was induced to take, and which even the defendant's witnesses prove to be grossly inadequate, he cannot be per- mitted so to turn the confidence reposed in him to his own profit, and the sale ought to be set aside. Decree affirmed. Petition of appeal dismissed, with costs. 340 V OONSTRUCTIVB FRAUD. PRICfB V. THOMPSON et al. (1 S. W. 408, 84 Ky. 219.) Court of Appeals of Kentucky. Sept. 14, 1886. Appeal from circuit court. Barren county. This Is an action by appellant for a new trial In the case of Buford W. Thompson, etc., against George R. Price, Administrator of Joseph Price, Deceased. The court below refused to grant a new trial. From that judgment George R. Price prosecuted this appeal. Buford W. Thompson, etc., against George R. Price, Administrator of Joseph Price, was an action to settle the accounts of said administrator, and sell lands of his decedent to pay debts. By the commission- er's report in said action the administrator was found to be indebted to the estate in the sum of $295.50. This report was con- firmed, and an order entered directing the administrator to pay said sum to commis- sioner, in default of which execution issued, and land belonging to administrator was levied on and sold. The equity of reaemp- tion was afterwards levied on, but, before the sale, this action was brought. W. P. D. Bush, Finlay Bush, and Bales, Nuckols & Gorin, for appellant, George R. Price, Adm'r, etc. W. L. Porter, for ap- pellees, B. W. Thompson and others. BENNETT, J. The appellee filed his peti- tion in the Barren circuit court against the iippellees, Buford W. Thompson, and T. M. Dickey, the master commissioner of the Bar- ren circuit court, and others; In his petition ie alleges that appellee Thompson filed his petition in the Barren circuit court against him, as the administrator of Joseph Price, deceased, for the purpose of having the de- cedent's estate settled, and the sale of land to pay debts, etc.; that appellee T. M. Dick- ey, to whom the case was referred as the master commissioner of the court, reported that appellant was indebted to said estate, as administrator, in the sum of $295.59; that said report was confirmed without objection, and appellant was ordered to pay said sum to the commissioner, and In default of which execution was ordered to issue; no payment having been made, execution issued in the name of the commissioner, and by his direc- tion, against appellant, which was levied on a tract of land containing 99 acres, belong- ing to appellant; that said land was sold at execution sale for the sum of $250, which was less than two-thirds of its appraised value. The appellee Dickey purchased it. Afterwards a second execution was issued, and levied on the equity of redemption In said land. He alleged that he had paid off and discharged various just claims and de- mands against the estate of his decedent, exceeding in amount the sum of $296.56; that he gave the receipts and vouchers evi- dencing these payments to his attorney, to file with the commissioner; that said receipts and vouchers had been lost, either by his at- torney or by the commissioner, after they had been so given him; that he was not present when the commissioner's report was made, or when it was confirmed, or when the order was made directing him to pay said sum to the commissioner, nor did he know that such orders were made, or that his re- ceipts and vouchers were lost, until after execution had issued against him. He pray- ed the court to set aside the report of the commissioner, the order and judgment di- recting him to pay said sum to the commis- sioner, the sale of his land, and grant him a new trial, etc. The court granted him an injunction until further orders, but, on final trial, dissolved the injunction, and dismissed his petition. From that judgment he appeals to this court. The appellee Dickey made a joint answer with the other defendants. They do not deny that appellant did not know that the cor.imIssioner had reported an indebtedness against him of $295.56, and that the court had confirmed the report, and ordered him to pay the money to the commissioner, etc., or that his receipts and vouchers had been lost, until after execution had been issued against him. Besides, he swears in his dep- osition to the same thing. The evidence, therefore, as to that matter is conclusive. The allegation of the petition is that the receipts and vouchers were placed in the hands of the attorney "to file with the com- missioner in making ssiid settlement, and they were either lost by said Bales (the at- torney) or by said commissioner after they were given to him." The answer in refer- ence to that allegation Is: "They have no 1 knowledge or information sufficient to form a belief as to whether they were placed In the hands of said Bales to be filed with the commissioner." So the answer does not deny that said receipts and vouchers were filed with the commissioner, or that "they had been lost by the commissioner after they had been given to him." The commissioner certainly knew whether such was the fact or not, and his silence is conclusive against • him. Besides, the attorney. Bales, swears: "I placed them, as I now believe, and aften the judgment in the cause was rendered then believed, in the hands of T. M. Dickey, master commissioner of the Barren circuit court If I did not so place them, I lost them; but they were all put together in a paper, and handed to Dickey, and I find a part of them allowed, and the others not, and, as they were not disallowed or rejected, I took it Mr. Dickey mislaid them." Appel- lant swears that he did pay said claims against the estate, which were properly prov- ed, etc. Mr. Bales also swears that said claims were properly proved, etc. No wit- ness contradicts them, nor did appellees offer any evidence at all. So it may be regarded as conclusively proven (1) that appellant had paid and discharged said debt; (2) that l\e CXDNSTRUCTIVB FRAUD. 341 had placed the receipts and vouchers evi- dencing the payment in the hands of his at- torney, to be filed with the commissioner; (3) that they were placed in the hands of the commissioner, and were lost or mislaid, so that they were not allowed by him in his settlement, and, by reason thereof, judgment was obtained against appellant on a demand which he had already paid. We understand the general rules of law governing applications for new trials to be: (1) When for newly-discovered evidence, "the names of the witnesses who have been discovered;" (2) that the applicant has been vigilant In preparing his case for trial; (3) that the new facts were discovered after the trial, and would be inrportant; (4) that the evidence discovered will tend to prove facts which were not directly in issue on the trial, or were not then linown, nor investigated by the proof; (5) that the new evidence is not merely cumulative, etc,. Here the evidence was not newly discov- ered, but was known to appellant before the .trial, and had been prepared by him to be used on the trial; and, judging from the rec- ord, had it been used on the trial, the issue would certainly have been decided for the ap- pellant. So the question now is, was the appellant vigilant in preparing his case for trial? Ordinarily, we would say not. Had the trial of the case been before a jury, or before the court by depositions, it would have been his duty to see that his witnesses were duly subpoenaed to attend court to testify, or that their depositions were duly taken. Nor would it be reckoned proper vigUance to leave these matters in the hands of his attorney to attend to; for the attorney is but his agent, and his want of proper vi^lance is also that of the principal. But a different case is pre- sented here. The commissioner is the oflBcer of the court,— "the hand of the court,"— whose duty it is in such cases to receive all vouchers presented to him, and preserve them, and, if properly proven, to allow and report them to court. This being his official duty, and the presumption being that he will discharge his duty, it cannot be said that after a person has filed his vouchers with him, properly proven, that it is his duty to keep a watch over him, as in the case of a private person, to see that he discharges that duty by report- ing the claim to be allowed by the court. Had appellant's attorney, with whom he in- trusted these vouchers to be delivered to the commissioner, failed to deliver them, then it could be' truly said that he was wanting in proper vigilance; for Id that case his attor- ney's negligence would be his negligence. But his attorney having delivered the vouch- ers to the officer of the court,— the hand of the court, in such matters,- properly proven as vouchers, that was all that was necessary, under the circumstances. That officer having lost them, and appellant not being apprised of it until after judgment and execution had been obtained against him, he should have had a new trial, and the injunction sustained, and the report of the commissioner charging him with $295.56 set aside, and the order di- recting the payment of it to the commissioner set aside. Appellant also asks that the sale of his land under said execution be set aside. It is contended that this should not be done, for the reason that the reversal of an erroneous, not void, judgment does not and cannot set aside the sale of property made thereunder. That is, no doubt, the general rule. But in this case the return of the officer who made the sale shows that the appellee T. M. Dick- ey, the master commissioner, to whom the case was referred, was the purchaser of the property at the execution sale. It is also alleged in the petition that he was the pur- chaser at that sale. The answer says that the return of the officer in that regard was a mistake; that he was not the purchaser, but he offers no proof as to that matter, and, the return of the officer being presumptively correct, the commissioner' must be regarded as the purchaser. So the question arises, was his purchase valid? Had_he, been^^ree from_ a fiducial character, "ffiere can be no doubt that" his purchase would , have been valid;. . tmf^ standing in a fiducial relation to dece- dent's estate^quity devolved upon him the duty to protect the interest of that estate. ^n such eases "the fiduciary cannot avail him- self of the influence which his position gives, for th e purposes of his own gain^.nr_.heneflt, ■[tojie _5reju(il£e,.Qr. Tnlury of those Interests which it ishis duty to protect. It is a rule \ of equity "that no man'can acquire an interest \ where he has a duty to perform inconsistent J with that interest. The rule which prevents/ a person, standing in a fiducial relation, from acquiring an interest which is inconsistent with those fiducial duties, stands mainly upon motives of general pubUc policy; nor can a. man, standing in such relation with respect \ to property, be allowed to purchase the prop- \ erty at a judicial or execution sale, unless \ the entire responsibility of obtaining the high- I est price has been removed or taken out of his / hands. If he continues under the duty of ' seeing the property bring its highest price, y he is incapacitated from purchasing. These principles apply, not only to trustees proper, but to all persons invested with fidu- cial power; such as executors, administra- tors, assignees of a bankrupt, commissioners of bankrupts, sheriffs, and judicial officers in general. See Kerr, Frauds, 150, 160. See, also, Stapp V. Toler, 3 Bibb, 450. While the same general principle governs aU persons occupying a fiducial character, yet there are two classes controlled by "different special rules." The first class includes all those instances in which the fiduciary and those with whom he stands in that relation consciously and intentionally deal with each other, each knowingly taking a part in the transaction from which results a contract or conveyance. Here the contract is not neces- 342 OONSTRUCTIVH FRAUD. sarlly voidable,— It may be valid; but a pre- sumption of Its invalidity arises, and that so strong that nothing short of clear evidence of good faith, of full knowledge, of adequate consideration, and of independent thought, consent, and action, can overcome it. The second class is where the fiduciary, acting with reference to his trust, deals with him- self in his private or individual character; as where an agent to sell, sells the property to himself, or a sheriff buys the property at his own sale. Such transactions are always voidable at the suit of the party concerned. They are not merely presumptively invalid, as in the first class, where good faith, full knowledge, adequate consideration, independ- ent thought, consent, and action, may be prov- ed; because the sale or purchase, If made privately. Is not known, or, if made publicly, by coercive authority, cannot be controlled. Therefore the good faith, full knowledge, etc., do not control. For these reasons the pre- sumption of invalidity in the first class is re- buttable, and the presumption of invalidity in the second clasb is conclusive. 3 Pom. Eq. Jur. i§ 956, 957. These rules being soimd, and so well sustained by authority, this cburt does not hesitate to adopt them for the gov- ernment of all persons occupying a fiduciary character, whether of a private or a public natiire. Officers whose powers are not merely per-1 suasive, but coercive, ex parte, and arbitrary, i should be held to strict impartiality, fidelity, and integrity in the discharge of their trusts. All temptation to make private gain, to take vmfair advantage, directly or indirectly, should be removed. The most effective way to do so is to declare all such transactions conclusively invalid. The master commission- er, Dickey, was still acting as commissioner in the case at the time he purchased the land at execution sale. It was to the Interest of the estate that the land should bring its full value. It was his duty to encourage its bring- ing its fuU value. Therefore, for him to be- come a bidder for it at the sale antagonized his private interest with his fiducial duty. This he had no right to do. For these rea- sons the injunction should have been sustain- ed, a new trial granted, the report of the commissioner allowing the $295.56, and the order of court directing its payment, set aside, and the sale of said land set aside, and ap- pellant allowed credit for any sums proved to have been paid by him for said estate, not otherwise allowed. Wherefore the judgment of the lower court Is reversed, and cause re- manded for further proceedings consistent with this opinion. LEWIS, J., not sitthig. OOXSTRUCTIVB FRAiUD. 343 ' BliMORB V. JOHNSON et ux. (32 N. EJ. 413, 143 111. 513.) Supreme Court of Illinois. Oct. 31, 1892. Appeal from superior court, Cook county; Kirk Hawes, Judge. Bill by Susie K. Elmore against Frank A. Johnson and Annie C. Jolinson to set aside a deed. The bill was dismissed for want of equity, and complainant appeals. Affirm- ed. The other facts fully appear in the fol- lowing statement by Magruder, J.: This is a bill filed in the superior court of Cook county on December 11, 1890, by the appellant against the appellee and his wifu for the purpose of setting aside a deed made by the appellant to the appellee on January 17, 1884, conveying to him the W. % of lots 6, 9, 20, and 23, in the subdivision of S. % of S. W. % of N. W. Vi of section 22, town- ship 39 N., range 13 E., etc., in Cook coun- ty; said west half consisting of 16 of the 32 sublets into which said lots 6, 9, 20, and 23 were subdivided. Also for the purpose of requiring Annie O. Johnson, the wife of appellee, to convey to appellant the title held by her to said west half; and also for the purpose of taking an account of moneys paid out by appellee for appellant, and of moneys received by him for her, and of services by her to him and by him to her, and of losses alleged to have been caused by want of diligence and skill and by al- leged misconduct, etc. The defendants an- swered the bill. Replications were filed to the answers. Proofs were taken, and, the cause coming on to be heard in May, 1891, the bill was dismissed for want of equity, etc. The present appeal is prosecuted from such decree of dismissal. The deed was executed by appellant to appellee in payment for his services to her as her solicitor and attorney in the matter hereinafter mentioned. The bill charges that the defendant Johnson was negligent and unskillful in the conduct of the complain- ant's business; that his services were worth less than the value of the 16 sublets con- veyed to him; that the complainant was without means, and when defendant began to insist upon pay for his services she agreed to pay him $400 if he would obtain title for her to the 4 lots or 32 sublots; that, after a decision had been rendered in her favor, and before the execution of the mas- ter's deed to her, the defendant induced her, by fraudulent representations and false promises, to convey to him the west half of said lots; that she supposed the deed made by her to be a deed of an undivided one-half part of the lots when she signed it; that between the summer of 1883 and November, 1888, she did certain typewriting work for the defendant in his office, for which he had not paid her; that an execu- tion Issued in the attachment suit herein- after mentioned was returned no part satis- fied; that the executions issued upon the decree for alimony hereinafter mentioned could have been collected or secured; that a mortgage suit against the property was allowed to go by default; that the lots had been sold for taxes; that complainant did not know any of the facts in regard to said executions, or the abandonment of the mort- gage suit, or the value of defendant's serv- ices in the chancery case until the day be- fore filing her bill; that she first retained the defendant to collect her alimony, and obtain title to the lots "for a reasonable fee and reward;" that she did not learn of the tax sales until "somewhat over a year" be- fore filing her bill; that she fijst discovered the facts as to defendant's negligence and misconduct, etc., within a few days before filing the bill. The answer of the defendant denies all the allegations of the bill as to fraud, neg- lect, or misconduct, and as to the agreement to take $400 for services, and sets forth a history of his professional relations with the complainant, and gives his explanation of the various matters referred to in the bill, and charges laches, etc. On September 24, 1879, the complainant, who was then about 33 years old, and had been divorced from' a former husband named Elmore, delivered to one Collins Pratt, an attorney in Chicago, government bonds, own- ed by her, to the amount of $600, to be by him converted into money, and loaned out upon real-estate security. Pratt used this money to purchase said lots 6, 9, 20, and 23, and obtained a deed of the same to himself on September 24, 1879. He then executed his own note, dated October 4, 1879, for $600, paj-able in two years, to the order of com- plainant, with interest at 8 per cent., and also a trust deed to secure the same, upon said lots, to one Paul Mackenhaupt, as trus- tee, and delivered said note and trust deed, to the complainant. On March 8, 1880,1 Pratt, who was at that time engaged to be I married to the complainant, obtained the/ note and trust deed from her upon some representation that it would be necessary to ' change the securities in view of their ap- proaching marriage, and applied to Macken- haupt for a release of the trust deed, which was executed and delivered to Pratt on said 8th day of March, 1880. On March 24, 1880, the complainant and Pratt were married, and lived together until about May 1, 1880, when he abandoned her. During said mar- riage, and on April 13, 1880, Pratt borrowed $500 of one Elmers, and executed his note of that date for that amount, payable in two years, to the order of Eimers, and to secure said note he and appellant conveyed said lots 6, 9, 20, and 23 to Charles Thornton, trustee, by trust deed of same date. On the same day, April 13, 1880, there was filed for record a warranty deed, executed by Pratt, and purporting to have been also executed 344 CWNSTRUCTIVB FRAUD. by complainant as his wife, conveying said lots 6, 9, 20, and 23 to one Addie Pratt, a reputed sister of Collins Pratt, in whose name subdivision was made of the 4 lots into the 32 sublets above referred to. On April 80, 1880, the defendant executed his unsecured note to the complainant for $600, payable two years after date, with 8 per cent, interest. This latter note complainant claims to have known nothing about until long afterwards, when she was trying to collect the $600 from Pratt, and he stated that he had given his note therefor. She says that she then examined her trunk and papers, and found the note for the first time. - On November 1, 1881, complainant ob- tained a decree of divorce from Collins Pratt upon the ground of adultery, which decree required him to pay her $40 every month as alimony, and changed her name to Susie K. Elmore. Mr. John W. Waughop was her solicitor in the divorce suit. Soon after the separation between complainant and Pratt, she employed Mr. Leonard Swett to collect the $600 from Pratt, and Mr. Swett suc- ceeded in obtaining $250 of that amount for her. About the time of the decree of di- vorce, or soon thereafter, Mr. Waughop had made an agreement for her with Pratt, by the terms of which Pratt was to pay $500 in full discharge of alimony and of the bal- ance due upon the claim for $600, said sum of $500 to be paid at the rate of $5 per week. She was paid $5 per week up to and until February 18, 1882. It would ap- pear that Mr. Swett received $50 for his services, and Mr. Waughop nothing. By deed dated January 7, 1879, one Arnold and his wife sold and conveyed to Collins Pratt and Edgar M. Wilson lots 2, 13, 16, and 27 in said subdivision for an expressed con- sideration of $600; and ta secure their note for $500, payable in three years, to order of William Fitzgerald, with 10 per cent, inter- est, Pratt and Wilson executed a trust deed, dated January 21, 1879, conveying said last- naijied lots to O. T. Hartlgan, trustee. Such being the condition of affairs, the complainant, about the middle of February, 1882, applied to the defendant Johnson to act as her attorney and solicitor in recover- ing what might be due to her in money or property from her former husband, Collins Pratt. Accordingly, on February 23, 1882, the defendant filed a bill for the complain- ant, as her solicitor, in the circuit court of Cook county, against the said Collins Pratt, Addie Pratt, Elmers, and Thornton. This bill was sworn to by Mrs. Elmore. It sets up the facts hereinbefore stated. It charges that the note of April 30th was never de- livered to her or accepted by her; that Pratt obtained the $600 to use for himself, and deceived her in respect thereto, and attempt- ed to defraud her out of the money; that Either her signature to the deed to Addie Pratt was forged, or obtained from her by fraud and misrepresentation, and without consideration; that lots 2, 13, 16, and 27 are of the value of $1,000, and are the only property owned by Pratt; that said $600 was not loaned to Pratt, but intrusted to him for conversion into real-estate securities drawing 8 per cent; that the note and Mackenhaupt trust deed were obtained from her in order to cheat and defraud her, and get a release of the trust deed; that the Elmers note and Thornton trust deed were without consideration, or accepted with no- tice of her rights, and with the intent to cheat and defraud her. The bill offers to return and cancel the note of April 30th. It contains the following averment: "Your oratrix believes, and on belief avers the fact to be, that said defendant purchased said real estate (lots 6, 9, 20, and 23) with the money so intrusted to him as aforesaid, to be invested by him in good real-estate se- curities." The bill prays that the release deed made by Mackenhaupt may be set aside and canceled, and that the trust deed to him may be declared to be in full force, and a valid lien upon said lots for the bal- ance of the $600 due from said Collins; and for such other relief as the nature of the case may require and -inay seem' meet. On March 18, 1882, the bill was amended by averring that Pratt was then the owner of said lots 6, 9, 20, and 23, and held an un- recorded deed, dated February 9, 1882, from Addle Pratt to himself. On March 10, 1883, the prayer of the bill was amended as fol- lows: "Or that Pratt may be declared to hold the title * * * in trust, * * * and may be required to convey the same to your oratrix, and that the said deed * * * to said Addie Pratt may be de- clared null and void, and may be set aside," etc. At the April term, 1882, Collins Pratt answered the bill, alleging that complain- ant loaned her money upon his note secured by the trust deed to Mackenhaupt, after in- vestigation and advising with others; that said trust deed was released in order tc bor- ,row $500 to buy household fvu:niture in riew of the approaching marriage; that complain- ant has some of the goods bought with the money borrowed of Elmers; that she ac- cepted the note of April 30th; that he has paid $290, instead of $250; that she fully understood the contents of the deed to Addie Pratt. The answer admits the purchase of lots 6, 9, 20, and 23, and the ownership of an undivided half of lots 2, 13, 16, and 27, and denies all charges of deception and fraud or forgery or misrepresentation, and also de- nies that he now owns lots 6, 9, 20, and 23, or holds an unrecorded deed of tiie same from Addie Pratt. Addie Pratt also filed an answer to the bill, denying that the deed to her was without consideration, or obtain- ed by fraud, or that complainant's signature thereto was forged, or that defendant had made a deed to Collins Pratt; and averring that said deed to defendant was executed for a good consideration, and was under- OONSTRUCTIVB FRAUD. 345 stood by complainant when she signed it. April 13, 1882, replications were filed to the answers. March 17, 1883, the bill was dis- missed as to Elmers and Thornton, and the cause placed upon the trial calendar. The hearing took place on November 23 and 27, 1883, the defendants being represented by counsel. The decision was in favor of the complainant, and a decree in accordance with the decision was entered on December 8, 1883. The decree found that Pratt pur- chased lots 6, 9, 20, and 23 with complain- ant's money; that the note to Elmers and trust deed to Thornton were valid, but that the $500 borrowed of Elmers was used by Pratt, and exceeded the amount which had been paid by him to complainant; that a resulting trust had therefore arisen in favor of complainant, and she was entitled to have the title acquired by Pratt in said lots con- veyed to her; that the deed to Addle Pratt had been procured by fraud; that the lots had been sold under decree ui favor of El- mers; that the unsecured note of April 30th had been surrendered on the hearing; the decree set aside the deed made by Collins Pratt to Addie Pratt, and ordered said Col- lins to execute a deed of the lots to com- plainant, subject to the right of the pur- chasee under the foreclosure decree of El- mers, within 30 days, and upon his failing to do so that the master execute said deed. On January 16, 1884, the master executed to the complainant a deed of lots 6, 9, 20, and 23, and on the next day, January 17, 1884, complainant executed and delivered to the defendant the deed of the west half of said lots above referred to. The deed from the master to her was not recorded until January 17, 1884. Some time in June, 1882, Elmers filed a bill to foreclose the trust deed secur- ing his note upon lots 6, 9, 20, and 23. Ap- pellee entered the appearance of appellant in said foreclosure suit, but a decree of sale was entered therein, and said lots were sold under said decree on September 3, 1883, to Elmers, for $676.23. The certificate of sale was purchased by appellee and appellant from Elmers on August 23, 1884, for $731; one half— $365.50— having been paid by ap- pellee, and the other $365.50 by appellant. The certificate was assigned to Mrs. John- son. As soon as the time for redemption expired, wbich was on December 3, 1884, the master took up the certificate, and made a deed conveying the whole of the four lots to Mrs. Johnson. Thereupon, on December 8, 1884, Mrs. Johnson and appellee, her hus- band, united in a deed conveying all their Interest in the east half of the lots to the appellant. In addition to the chancery suit, appellee took other proceedings. On March 1, 1882, he began an attachment suit to recover $388.38 sworn by the complainant to be the balance of the $600 then due to her, charging that the debt had been fraudulently con- tracted. The attachment writ was levied upon lots 6, 9, 20, and 23, and also upon lots 2, 13, 16, and 27. Judgment was rendered therein on April 5, 1882, and general and special execution issued on November 15, 1882. No levy, however, was made under the execution, but it was returned unsatis- fied. Proceedings were also commenced to enforce the decree for alimony, and to set aside the agreement to settle for $500, pay- able at the rate of $5 per week. On March 6, 1882, appellee filed in the divorce suit an aflRdavit sworn to by complainant on March 2, 1882, setting up the decree for alimony, the receipt of $5 per week up to February 18, 1882, the delivery to Pratt of the $600, the release of the trust deed, etc., and al- leging that there was due to her $388.38; that the settlement for $500 had been made upon representations as to Pratt's poverty, and had never been fully approved of by her; that she had given notice of her inten- tion not to accept the $500; that Pratt had purchased lots 6, 9, 20, and 23 on September 29, 1879, for $600, "and affiant is informed that they are now worth about $3,000, and are incumbered to the extent of $540 only;" that Pratt owns lots 2, 13, 16, and 27, hi- cumbered for $600; that he refuses to pay $75 due to her for alimony. A rule was en- tered by the court after a contest and after reading other affidavits, requiring Pratt to pay the $75 within a certain time. Upon his failm-e to do so, an attachment was issued, and he was arrested for contempt of court, and entered into a recognizance to appear in May, 1882, to answer the charge of con- tempt. He did not appear, however, but fled from the state, and went to Dakota, where he has remained ever since. During the pe- riod from April 8, 1882, to August 21, 1883, appellee caused six executions to be issued upon the decree for alimony for the amounts thereof accruing from time to time, but real- ized nothing. On May 6, 1882, Hartigan sold lots 2, 13, 16, and 27 under the trust deed to him for default in the payment of the principal of the note secured thereby, and Interest thereon, and executed a trustee's deed to the purchasers, Edgar M. Wilson and Edward B. Holmes. All the lots were so sold for $682.43. Alex. S. Bradley, for appellant. James E Munroe and F. A. Johnson, for appellees. V MAGRUDBR, J., (after stating the facts.> Appellee testifies that the deed made to him by appellant, conveying to him the west half of the lots in controversy, was executed by her in pursuance of a previous contract which she had made with him in reference to payment for his legal services. He swears that by the terms of this contract she was to pay all tne costs, and he was to have a contingent fee of one-half of what should be recovered both in the suit for alimony, and in the chancery suit in regard to the lots. The evidence shows that this contract was 346 OOXSTRUCTIVB FRAUD. made during the pendency of the legal pro- ceedings which the appellee was conducting for the appellant It was not entered into before or at the time of his original employ- ment, which took place on February 15, 1882, nor did it exist when he filed the bill on February 23, 1882. His answer states that "early in the spring or summer of 1882 * • * it was * * • mutually agreed that this defendant should have and receive as a contingent fee for his services one- half." He testifies that he cannot fix the date of the agreement, but that, to the best of his recollection, "it was in March or April, possibly in May, after I discovered I had a pretty good-sized job on hand, and a good deal of work to do, and had done a good deal of work. * * * She claimed to have no money early in the proceedings, and could not pay my fees in money, and that was why I subsequently made a different arrangement with her." Appellant swears that she never made an agreement with the appellee to give him one-half of the money or of the land to be recovered. The deed to appellee was also executed while the relation of attorney and client existed between himself and the appellant. That deed was made on January 17, 1884, and he concedes that he did not cease to be appellant's solicitor until some time thereafter. In England "it is a settled doctrine of equity that an attorney cannot, while the business is unfinished in which he had been employed, receive any gift from his client, or bind his client in any mode to make him greater compensation for his services than he would have a right to demand if no contract should be made during the relation." Weeks, Attys. at Law (2d Ed.) § 364. More ^than 50 years ago the English doctrine was adopted by the supreme court of Alabama in an able opinion in the case of Lecatt v. Sallee, 3 Port. 115, where it was held that > ' "an agreement made by a client with his counsel, after the latter has been employed in a particular business, by which the orig- inal contract is varied, and greater compen- sation is secured to the counsel than may have been agreed upon when he was first re- vtained. Is invalid, and cannot be enforced." The reason for the doctrine is to be found in the nature of the relation which exists be- tween attorney and client. That relation is one of confidence, and gives the attorney great influence over the actions and interests of the client In view of this confidential relation, transactions between attorney and client are often declared to be voidable which would be held to be unobjectionable between other parties. The law is thus strict, "not so much on account of hardship In the par- ticular case as for the sake of preventing what might otherwise become a public mis- chief." Lewis V. J. A., 4 Edw. Oh. marg. p. 599, top p. 622. "No single circumstance has done more to debase the practice of the law in the popiQar estimation, and even to lower the lofty standard of professional eth- ics and self-respect among members of the legal profession itself in large portions of our country, than the nature of the transactions, often in the highest degree champertous, be- tween attorney and client, which are per- mitted, and which have received judicial sanction. It sometimes would seem that the fiduciary relation and the opportunity for un- due infiuence, instead of being the grounds for Invalidating such agreements, are prac- tically regarded rather as their excuse and justification." 3 Pom. Eq. Jur. § 960, note 1. Before the attorney imdertakes the busi- ness of the client, he may contract with ref- erence to his services, because no confiden- tial relation then exists, and the parties deal with each other at arm's length. The same is true In regard to dealings which take place after the relation has been dissolved. 1 Story, Eq. Jur. (13th Ed.) §§ 310-313. But the law watches with unusual jealousy over all transactions between the parties which occur while the relation exists. In the case at bar it does not appear that any definite contract in regard to fees existed between appellant and appellee prior to the spring of 1882; but. Inasmuch as he undertook to man- age her legal interest before that time, there was an implied contract, created by opera- tion of law, which entitled him to receive such reasonable compensation as his services might be worth. "If the amoimt of com-^ pensation be not fixed by the terms of the contract by which an attorney or- solicitor was employed, he would be entitled to be paid such reasonable fees as have been usu- ally paid to others for similar sei^ices^ Lecatt v. Sallee, supra. The question, then, arises, what was a reasonable compensation for the services ren- dered by the appellee to the appellant? He has introduced no Independent evidence upon this subject His only witness is an ofBce companion, who says that, in his opinion, appellee's legal services were worth $30 per day, but does not claim to have fuU knowl- edge of the services rendered in the matter herein Involved. Appellee is unable to state, except approximately, the time spent by him in attending to appellant's matter, but he says: "I believe that In the whole matter * • • I spent at least forty days." Forty days' services at $30 per day would be $1,- 200. We do not think, however, that the proof establishes $1,200 as the value of the services. Mr. W. J. Culver swears that the customary and usual charge for all the work done by appellee In the divorce attachment and "resulting trust" case would be $250 in money. Mr. B. F. KIcholson, the attorney for Pratt, swore that appellee's services In the chancery or "trust" suit In regard to the land were reasonably worth from $300 to $350, and he made the following statement: "If the fee was contingent upon services, I think he would be justified in charging somewhat more. I hardly think double that, because I think the success was so reason- ^ ^ OONSTRUCTIVB FRAUD. 347 ably assured there was not very much doubt." What was the value of the lots of which appellee was to have one-half? In the affidavit filed by appellant in the divorce proceeding on March 6, 1882, she swore that she had been informed that the lots were then worth $3,000, and were incumbered for $540, only: This affidavit was drawn by ap- pellee, and was presented to the court upon an application to set aside the agreement of settlement for $500. We cannot suppose that the value of the lots was exaggerated in order to induce the court to believe that Pratt was not too poor to pay more than $500. Taking $3,000 as the estimated value of the lots on March 6, 1882, then, by ap- pellee's agreement for fees, he was to get property worth $1,500, less $270 of incum- brance, amounting to $1,230. This amount exceeded the reasonable compensation to which appellee would have been entitled im- der the implied contract imder which he began his services for appellee. We! have recently held in Morrison v. Smith, 130 111. J304, 23 N. B. 241, that a sale by a client to Ian attorney will be sustained if it is fair and honest, and in no manner tainted with fraud, I undue influence, or corruption, and that the I law does not go so far as to hold such a %ale voidable at the election of the client. In that case the subject-matter of the pur- chase by the attorney from the client was a judgment obtained by the former for the lat- ter. The judgment debtor was Insolvent, except as to his ownership of an undivided interest In land which was subject to a life estate. The doctrine of that case Is the law of this court as applied to such a purchase by an attorney from a client as Is there de- scribed. The litigation had reached the point where judgment had been obtained. The judgment was a lien upon a reversionary interest in land. Its value could, therefore, be easily ascertained by ascertaining the value of the interest In the land subject to the life estate. But there is a manifest dis- tinction between a purchase by an attorney from a client and a contract made during the pendency of a litigation for the convey- ance or transfer by the client to the attorney of a part of the property involved in the liti- gation as a compensation for his legal serv- ices therein. Where a purchase ia proposed, the seller Is always, to a certain extent, put on his guard. He knows that it is for the interest of the buyer to get the property as cheaply as possible. He has every motive to inquire into and learn the value of the thing to be- sold. But, In case of the con- tract above indicated, the client is at a great disadvantage. The value of the property in litigation depends upon the result of the liti- gation, and, being unable to understand the legal aspects of the case, he Is unable to foresee what such result will be. He must rely, not upon his own judgment, but upon the Judgment and statements of his attorney. Moreover, he Is unable to judge as to the value of his attorney's services, because he cannot know what legal steps are necessary to be takrai In the conduct of the case. The advantage Is overwhelmingly on the side of the attorney where such a contract Is made. Whatever may be the rule as to a purchase by an attorney from a client, we think that, where the title to property is so Involved in litigation that the value of the property de- pends upon the decision as to such title, a contract made during the pendency of the litigation to compensate the attorney for his legal services with a part of the property involved therein should be held to be void- able at the election of the clien t irresp gc- tive o f the fa l rnegs or iin fai ^jj^ fjsa o f the nnn- tract, provicleS. such election is exercised within a reasonable time. Such a rule as this Is demanded by public policy, and in the interests of a wholesome administration of justice. The distinction here noted is\ pointed out in Berrien v. McLane, 1 Hoff.\ Ch. 420, where it is said: "A voluntary gift, \ made while the connection of attorney and | client subsists, is absolutely void, and the property transferred by it can only be held / as security for those charges which the at-' tomey can legally make. Next,, • • • a transfer of property, made upon an osten- sibly valuaole consideration, such as a lease or sale, is presumptively void. The client has the advantage of driving the attorney to produce evidence to prove its fairness, and to show that the price or terms were as beneficial as could have been obtained from a stranger. And, lastly, • • • a trans- fer of a part of the property actually In liti- gation, or a contract to transfer a part, • * * is void,— illegal,— because of the ex- isting relation of the parties. • • • Such a contract will not be enforced on the appli- cation of the attorney; and, if the client applies, will be canceled on equitable terms." The above passage from the Berrien Case is quoted for the purpose of showing that a distinction is recognized between a sale and a transfer of a part of the property in liti- gation in payment of fees or a contract to transfer the same; but we do not go so far as to hold with the learned vice chancellor in that case that such a contract or transfer Is absolutely void, but that It is voidable at the option of the client. The view here ex- pressed is supported by the following au- thorities: Rogers v. Marshall, 3 McCrary, 76, 9 Fed. 721, and note to the first opinion, and cases cited in note; 4 Kent, Comm. (12th Ed.) p. 449, note b; WaUis v. Loubat, 2 Denlo, 607; Lecatt v. Bailee, supra; Pear- son V. Benson, 28 Beav. 598; Newman v. Payne, 2 Yes. Jr. 199; Wood v. Downes, 18 Ves. 119; Lewis v. J. A., supra; Starr v. Vanderheyden, 9 Johns. 253; West v. Ray- mond, 21 Ind. 305; Simpson v. Lamb, 40 Eng. Law & Eq. 59; Hall v. Hallet, 1 Cox, 134; Hawley v. Cramer, 4 Cow. 717; Weeks, Attys. at Law, (2d Ed.) § 273; Armstrong T. Huston's Heirs, 8 Ohio, 552; Gray v. Em- 3i8 CX3XSTRUCTIVB FRAUD. mons, 7 Mich. 533; Merritt v. Lambert, 10 Paige, 352; Bolton v. Daiiy, 48 Iowa, 348; 1 Perry, Trusts (3d Ed.) § 202. But even if tlie rule which applies to a ptir- cbase by an attorney from bis client should be held to be applicable in the present case, he contract and the deed made in pursuance thereof must be subject to a rigid test. In case of such a purchase, the transaction is presumptively fraudulent, and the burden is on the attorney to show "fairness, adequacy, and equity." Lewis v. J. A., supra. He must remove the presumption against the validity of the transaction "by showing affirmatively the most perfect good faith, the absence of undue influence, a fair price, knowledge, in- tention and freedom of action by the client, and also that he gave his client full informa- tion and disinterested advice." 2 Pom. Bq. Jur. § 960. In order to sustain the deed made to appellee on January 17, 1884, it must appear that the consideration received by ap- pellant was "adequate," and that the appellee paid "a fair price." This involves the deter- mination of the question whether the services rendered to appellant were worth what the property was worth on the day of the deliv- ery of the deed. Counsel on both sides have presented this as one of the material issues in the case, and have introduced testimony to show the value of the lots in January, 1884. Of appellant's witnesses three swore that the lots were then worth $3,200, two that they were worth $4,000, and two that they were worth $4,800. Of appellee's witnesses two placed the value of the lots at that time at about $900, one at from $1,000 to $1,400, one at $1,200, and one at from $1,950 to $2,400. It is claimed by counsel for appellee that the valuations of his witnesses are based upon actual sales, while the valuations proved by appellant are matters of opinion, formed from a general knowledge of values. It has been well said that "there is no more important factor in determining the value of particular property than the sale of similar property in the same neighborhood at about the time in question." Lewis, Em. Dom. § 448.- We have held that "actual sales of property in the vicinity and near the time are competent evidence, as far as they go." Culbertson & Blair Packing & Provision Co. v. City of Chi- cago, 111 111. 651. But, while such sales may be the most satisfactory evidence of value, yet they are only one of the modes of proving value, and not the only mode. Railroad Co. V. Haller, 82 111. 208. It is true that the wit- nesses of appellant do not testify to actual knowledge of sales made in the neighbor- hood where these lots are located in the year 1884, or about that time, and that some of the witnesses of appellee do refer to sales. Pur- chases made in 1879 are not an exact criterion of values in 1884. Nor are forced sales un- der trust deeds and foreclosure decrees al- ways a correct indication of value. After making allowance for the difference thus in- dicated between the testimony produced by appellee and that produced by appellant, we are tmable to reach the conclusion that the value of the services rendered to the appel- lant was equal to the value of the lots convey- ed to appellee in January, 1884. We cannot say, however, after a careful re- view of the evidence, that the contract for compensation, and the deed made in pursu- ance thereof, are liable to any other objec* tions than these two: First, they were exe- cuted during the existence of the relation of attorney and client; second, they secured a larger compensation for legal services than those services were really worth. We see no evidence of any undue influence exercised by the appellee over the appellant, except, per- haps, in the matter of obtaining from her a renewal of the contract. In the fall of 1882 appellee seemed to fear that appellant would make a settlement with Pratt without con- sulting him, or upon a basis not approved by him; and on November 24, 1882, he wrote her a letter, In which, after referring to her previously expressed desire that he should conduct her business "upon a contingent fee of 50 per cent, of the amount recovered," he said, "A definite understanding is therefore necessary before any further action is taken." He says that after this date she renewed the contract for one-half of what should be re- covered; and thereafter, in March, 1883, as the record shows, he amended the bill by praying that Pratt be declared a trustee, etc. It was said in Bolton v. Daily, supra: "We think that where an attorney sets up an ex- press agreement to pay more than an ordi- nary fee, exacted of a client where the work was two-thirds done, under a threat of with- drawing from the case if the agreement was not made, nothing but the best of reasons would be sufficient to uphold the agreement." Here, however, the implied threat to take no further action without a definite understand- ing had reference to reaffirming a contract already made, rather than to the making of a contract for the first time. Appellee had perhaps good reasons for asking for a defi- nite understanding. The appellant had thrown out intimations of a settlement for her litigation. She had shown herself to be changeable in her humor, and had already employed two attorneys besides appellee in her lawsuit. She had repudiated the agree ment of settlement entered into with her sec- ond husband. She had made some incorrect statements to her counsel; for example, she had charged that the note to Eimers and the trust deed to Thornton had been obtained by fraud, when the evidence overwhelmingly es- tablished the fact that those securities repre- sented a bona fide loan, and that she herself had voluntarily united in the execution of the trust deed. Aside from the haste with which appellee secured his deed on January 17, 1884, we are satisfied that the action of ap- pellant in the execution of that deed was free and voluntary. She admits that she was pleased with the result reached In getting a OONSTRUOTIVB FRAUD. 349 decree for the lots. The proof does not sus- tain her in the claim which she now makes, —that she thought she was conveying to ap- pellee an undivided one-half of the lots, so that as cotenant she would have the benefit of his services in the ftu:ther management of the property. On the contrary, the proof shows that the deed was fully explained to her, and that she well imderstood it to be a conveyance of the west half of the lots, and that she chose the east half in preference to the west half upon being given her choice. We think the proof also shows that appellant was fully advised of all the steps taken in the suit. She was acfjuainted with the value of the lots, and received information in relation thereto from the beginning of her troubles, having accepted a trust deed thereon in 1879, and having executed a trust deed thereon in 1880. In 1882 she had made an affidavit as to the value of the lots. Afterwards she is shown to have talked with a number of per- sons in regard to the future' outcome of the property. She was a shrewd, capable, busi- ness woman; had been engaged in business before she married Pratt; and, though with- out much ready money, owned a house and two lots in a suburb called Melrose. * If appellant had filed her bill within a rea- sonable time, we are of the opinion that she would have been entitled to have the deed to appellee set aside, either upon the ground ^ that both the deed and the contract which preceded it were obtained from her while the relation of client and attorney existed be- tween herself and appellee, or upon the i ground that the property agreed to be given and subsequently conveyed to appellee as «^ compensation for his legal services was ^^ worth more than the reasonable and custom- lary value of those services. But, inasmuch *Sls the contract, which appellee could not have enforced, was fully completed and ex- ecuted by the conveyance to him of one-half the property, the question arises whether or not appellant has not been guilty of laches in not sooner filing her bill to have the deed set aside. From January, 1884, when the deed was made, to December, 1890, when the present bill was filed, a period of almost seven years elapsed. In connection with the ques- tion of laches it is a fa'ir subject of inquiry, under the facts of this case, whether the con- duct of the appellant does not show acqui- escence, if not confirmation, on her part Where bills are filed to set aside contracts or deeds between parties standing in a confi- dential relation to each other, the defense of laches is not usually regarded vnth favor. It has been said that "length of time weighs less in such a case than in any other," and that it is "extremely difficult for a confiden- tial agent to set up an available defense grounded on the laches of his employer." Wood V. Downes, 18 Ves. 120, note 1. But even in cases where it has been held that such contracts and sales, without reference to their fairness or honesty, will be set aside ''■**("'''' «' upon the application of the party in interest, <^^ it has at the same time been held that such j , application must be made within a reason- 9-/ able time, to be judged of by the court un- der all the circumstances of the case. Haw-^ ley V. Cramer, 4 Cow. 717; Smith v. Thomp- son's Heirs, 7 B. Mon. 310; Fox v. Mack- reth, 1 White & T. Lead. Cas. Eq. pt. 1 (4th Am. Ed.) p. 188, § 113; Id., p. 257; McCor- mick V. Malln, 5 Blackf. 509; Williams v. Reed, 3 Mason, 405, Fed. Cas. No. 17,733. What is a "reasonable time" cannot well be defined, but must be left, in large measure, to the determination of the court in view of k ., the facts presented. Equity does not always | .4-1 follow the period of limitation fixed by stat-lvJf , ute and enforced in courts of law. Parties'^, will be required to assert their rights with- in a shorter time in states where the val- ues of real estate Increase rapidly, and greater temptations are thereby afforded for speculative litigation. Burr v. Borden, 61 111. 389. But the party who is entitled to set the transaction aside cannot be charged with de- lay, or with acquiescence or confirmation, unless there has been knowledge of all the facts, and perfect freedom of action. Acts which might appear to be acts of acquies- cence will not be held to be such if the client or cestui que trust is ignorant of the circum- stances, or under the control of the original Influence, or otherwise so situated as not to be free to enforce his rights. Rogers v. Mar- shall, supra; Hawley v. Cramer, supra. Confirmation may be evidenced by long ac- quiescence, "as by standing by and allowing the purchaser to lay out money in the firm belief that her title would not be contested." Pearson v. Benson, 28 Beav. 598. Let us see how the appellant stood related to the two objections theretofore pointed out on January 17, 1884, and for nearly seven years thereafter. She must be held to have known that the property which she conveyed to appellee was worth more than' his serv- ices. She alleges in her bill in this case that she agreed to pay him $400, and, while that allegation is not sustained by the proof, she must be held to be bound by it. In her tes- timony, after stating that appellee intro- duced the subject of his fees after Pratfs arrest, she says: "I asked him * * • what would be his fees for attending to all my business, and making everything per- fectly clear and straight for me. » * * He said there was a great deal of work about the case, and would probably be a great deal more, and he would have to have $400." She swears that she thus knew the value of his services as fixed by himself. On January 17, 1884, with knowledge, ac- cording to her own evidence, that his serv- ices were estimated by himself to be worth only $400, she conveyed to him one-half of property which she had sworn to be worth $3,000 In March, 1882, and which was of greater value in 1884. With admitted knowl- edge as to the disparity between the value 350 CX3NSTRUCTIVB FRAUD. of the land and the value of the services, she permitted the appellee to deal with the west half of the land as his own, and recog- nized him as the owner thereof, for 6 years and 11 months, without giving any intima- tion that she intended to disturb his title. In December, 1884, he paid ofC one half of the incumbrance held by Elmers, and she not only permitted him thus to spend his own money on the property, but furnished him with the money to pay off the other half of the incumbrance for herself. From June 30, 1884, down to the time of filing the present bill, she paid taxes on the east half of the property, and suffered him to pay taxes on the west half; sometimes taking the money over to the treasurer's olEce for him, and paying his taxes for him on the west half. A little more than a month before filing the biU she paid $83.35 for an outstanding tax title against the east half, and he at the same time, with her consent, paid the same amount for a tax deed to himself of the same outstanding title against the west half, li 1888 and 1889 she made efCorts not only to sell her own lots in the east half, but also to sell for him the lots in the west half which she had conveyed to him. She went out to the property in 1885, and employed a man to plant trees for her on the east half, telling him that appellee owned the west half. In 1886 she had some negotiation with one Whittemore about selling one of her lots in the east half to him, and spoke of Johnson as the owner of the west half by deed from herself for services. At another time she was present when appellee offered to sell his lots in the west half for $75 a lot, and talked to the same party about buying her own lots in the east half. In 18S7 she occupied a part of the otfice of a real-estate agent named Hdpson, and proposed to him that he should seU her lots, referring to appellee as the own- er of the adjoining lots, and as being willing to sell them. The evidence shows that be- tween January, 1884, and December, 1890, a belt line railroad was built to the west of these lots, and the Wisconsin Railroad Com- pany laid its tracks in the neighborhood, and certain locomotive works were located in that vicinity. On accoimt of these improvements, the lots, which had been bought for $600 in 1879, had become worth $16,000 in 1890. It appears from the evidence that the de- fendant went into the office of the appellee as a typewriter in 1883, and did the busmess of a typewriter for several years. The ap- pellee and two other attorneys had each a private room, and a large reception or wait- ing room. The appellant was permitted to use a typewriter belonging to appellee, oc- cupying the reception room for that purpose. She was allowed the use of the room and of the typevrriter without charge, and, in con- sideration thereof, she did for appellee such typewriting as he required. We cannot see that the appellee owed her anything for work done under this arrangement. While she was in his office she seems to h^ve done a profit- able business as a typewriter for outside par- ties. When she procured a typewriter of her own, and took another oflJce in the same building, he paid her for the services which she rendered. Upon the ground of laches and acquiescence we think that the court he- low properly dismissed the bill. The decree of the superior court of Cook county is af- firmed. \l^ n^^t'-^ ^iu_- \ '^1-4.— / , / H\. Ui^.x.^x ^-.-,,.;-U. 0^ sola L^JU^^^ ->y^ CONSTRUCTI SOLINGER V. BARIiB. ^ (82 N. Y. 393.) Ccnrt of Appeals of New York. Not. 9, 1880. Appeal from judgment entered upon an or- der reversing a judgment for plaintifE upon an order overruling a demurrer to the com- plaint. The judgment of the general term sustained the demurrer and dismissed the complaint The facts appear in the opinion. Abram Kling, for appellant. William M. Ivens, for respondents. ANDREWS, J. The complaint alleges in substance that the plaintifE, to induce the de- fendants to unite with the other creditors of Newman & Bernhard in a composition of the debts of that firm, made a secret bargain with them to give them his negotiable note for a portion of their debt beyond the amount to be paid by the composition agree- ment He gave his note pursuant to the bar- gain, and thereupon the defendants signed the composition. The defendants transferred the note before due to a bona flde holder, and the plaintiff liaving been compelled to pay it, brings this action to recover the mon- ey paid. The complaint also alleges that the plaintifT was the toother-tn-law oL Neyman, and entertained for him a natural love and affection, and was solicitous to aid him in effecting the compromise, and that the de- fendants knowing the facts, and taking an unfair advantage of their position, extorted the giving of the note as a condition of their becoming parties to the composition. f We tliink this action cannot be maintained. The agreement between the plaintiff and the defendants to secure to the latter payment of a part of their debt in excess of the ratable proportion payable under the composition wa a a fraud upon the other _c reditQES. The fact that the agreement to pay such excess was not made by the debtor, but by a third , person, does not divest the transaction of its ^ fraudulent character. A composition agreement Is an agreement as well between the creditors themselves as between the creditors and their debtor. Each creditor agrees to receive the sum fixed by the agreement In full of his debt The sign- ing of the agreement by one creditor is often an inducement to the others to unite in it. If the composition provides for a pro rata, payment to all the creditors, a secret agree- ment, by which a friend of the debtor under- takes to pay to one of the creditors more than his pro rata share, to induce him to unite In the composition, is as much a j jaaiL. upon the other cr editorsasi f the agreerng gt "was_direeUy_betw^|jfle_,debtor_aad^ _Jgredi^^ lfvioiatesTheprinaple~oFequity, and the mutual confidence as between cred- itors, upon which the agreement Is based, and diminishes the motive of the creditor 1. ..LC^ '.l> y/t 1 351 who is a party^to the secret agreement, to ac? In view of the common interest in making the composition. Fair dealing and common honesty condemn such a transaction. If the defendants here were plaintiffs seeking to en- force the note, It is clear that they could not recover. Cockshott v. Bennett, "2 Term R. 763; Leicester v. Rose, 4 East, 372. The Ille- gality of the consideration upon well-settled principles would be a good defense. The plaintiff, although he was cognizant of the fraud, and an active participator in It, would nevertheless be allowed to allege the fraud to defeat the action, not it is true, out of any tenderness for him, but because courts do not sit to give relief by way of enforcing illegal contracts, on the application of a party to the illegality. But if he had voluntarily paid the note, he could not according to the gen- eral principle applicable to executed contracts void for illegality, have maintained an action to recover back the money paid. The same rule which would protect him in an action to enforce the note, protects the defendants in resisting an action to recover back the money paid upon it. Nellls v. Clark, 4 Hill, 429. \. It is claimed that the general rule that a party to an illegal contract cannot recover back money paid upon it does not apply to the case of money paid by a debtor, or in his behalf, in pursuance of a secret agreement, exacted by a creditor In fraud of the compo- sition, and the cases of Smith v. Bromley, 2 Doug. 696, note; Smith v. Cuff, 6 Maule & S. 160; and Atkinson v. Denby, 7 Hurl. & N. 934,— are reUed upon to sustain this claim. In Smith v. Bromley the defendant, being the chief creditor of a bankrupt, took out a com- mission against him, but afterward findiu.^ no dividend likely to be made, refused to sign the certificate unless he was paid part of his debt, and the plaintiff, who was the bank- rupt's sister, having paid the sum exacted, brought her action to recover back the money paid, and the action was sustained. Lord Mansfield in his judgment referred to the statute 5 Geo. II. c. 30, § 11, which avoids all contracts, made to induce a creditor to sign the certificate of the bankrupt, and said: "The present is a case of a transgression of a law made to prevent oppression, either on the bankrupt or his family, and the plaintiff is m the case of a person oppr«>ssed, from whom money has been extorted and advan- tage taken of her situation and concern for her brother." And again: "If any near rela-i tion is induced to pay the money for the\ bankrupt, it is taking an unfair advantage] and torturing the compassion of his family." / In Howson v. Hancock, 8 Term R. 575, Lord Kenyon said that Smith v. Bromley was de- cided on the ground that the money had been paid by a species of duress and oppression, and the parties were not In pari delicto, and this remark is fully sustained by reference to Lord Mansfield's judgment. Smith v. Cuff was an action brought to recover money paid by the plaintiff to take up his note given to •><' 352 CONSTRUCTIVE FRAUD. the defendant, for the balance of 'a debt owing by the plaintiff, which was exacted by the latter as a condition of his signing with the other creditors a composition. The de- fendant negotiated the note and the plaintiff was compelled to pay it. The plaintiff recov- ered. Lord Ellenborough said: "This is not a case of par delictum; it is oppression on the one side and submission on the other; it never can be predicated as par delictum where one holds the rod and the other bows to it." Atkinson v. Denby was the case of money paid directly by the debtor to the creditor. The action was sustained on the authority of Smith v. Bromley and Smith v. Cuff. It is somewhat difHcult to understand how a debtor who simply pays his debt in full can be considered the victim of oppression or extortion because such payment is exacted by the creditor as a condition of his signing a compromise, or to see how both the debtor and creditor are not in pari delicto. See re- mark of Parke, B., in Higgins v. Pitt, 4 Bxch. 312. But the cases referred to go no further than to hold that the debtor himself, or a near relative who out of compassion for him pays money upon the exaction of the creditor, as a condition of his signing a composition, may be regarded as having paid under duress and as not equally criminal with the creditor. These decisions cannot be upheld on the ground simply that such payment is against public policy. Doubtless the rule declared in these cases tends to discourage fraudulent transactions of this kind, but this is no legal ground for allowing one wrongdoer to recov- er back money paid to another in pursuance of an agreement, illegal as against public policy. It was conceded by Lord Mansfield in Smith v. Bromley, that when both parties are equally criminal against the general laws of public policy, the rule is "potior est con- ditio defendentis," and Lord Kenyon in How- son V. Hancock, said that there is no case where money has been actually paid by one of two parties to the other upon an illegal contract, both being particeps criminis, an ac- tion has been maintained to recover it back. It is laid down in Cro. Jac. 187, that "a man shall not avoid his deed by duress of a stran- ger, for it hath been held that none shall avoid his own bond for the imprisonment or danger of any one than himself only." And In Robinson v. Gould, 11 Cush.'57, the rule was applied where a surety sought to plead his own coercion as growing out of the fact that his principal was suffering illegal Im- prisonment as a defense to an action brought upon the obligation of the surety given to se- cure his principal's release. But the rule in Cro. Jac. has been modified so as to allow a father to plead the duress of a child, or a husband the duress of his wife, or a child the duress of the parent. Wayne v. Sands, 1 Freem. 351; Baylie v. Clare, 2 Brownl. & G. 276; 1 Rolle, Abr. 687; Jacob, Law Diet "Duress." We see no ground upon which it can be held that the plaintiff in this case was not in par delictum in the transaction with the de- fendants. So far as the complaint shows he was a volunteer in entering Into the fraudu- lent agreement. It is not even alleged that he acted at the request of the debtor. And in respect to the claim of duress, upon which Smith V. Bromley was decided, we are of opinion that the doctrine of that and the sub- sequent cases referred to can only be asserted in behalf of the debtor himself, or of a wife or husband, or near relative of the blood of the debtor, who intervenes in his behalf, and that a person in the situation of the plaintiff, remotely related by marriage, with a debtor who pays money to a creditor to Induce him to sign a composition, cannot be deemed to have paid under duress by reason simply of that relationship, or of the interest which he might naturally take in his relative's affairs. The plaintiff cannot complain because the defendants negotiated the note, so as to shut out the defense, which he woxild have had to it in the hands of the defendants. The nego- tiation of the note was contemplated when it was given, as the words of negotiability show. It is possible that the plaintiff while the note was held by the defendants, might have maintained an action to restrain the transfer, and to compel Its cancellation. Jackman v. Mitchell, 13 Ves. 581. But it is unnecessary to determine that question in this case. The plaintiff having paid the notejkf although under the coercion resulting from l\ the transfer, the law leaves him where the )' transaction has left blm. The judgment should be affirmed. All concur. Judgment affirmed. -►^ >^ «XJI wi ^ *. ■ .^ f -.(« 1, CXDNSTBUOTIVB FRAUD. ( k- u 353 f i V i HANOVER NAT. BANK OP OITX OF NEW YORK V. BLAKE. (37 N. B. 519, 142 N. Y. 404.) Court of Appeals of New York. June 5, 1894. Appeal from supreme court, general term, first department Action by the Hanover National Bank of the City of New York against Sarah F. Blake. From a judgment of the general term (20 N. Y. Supp. 780) affirming a judg- ment for defendant rendered at special term plaintiff appeals. Reversed. r The action Is brought by the payee of a \^ promissory note against the indorser. The facts were not in dispute, and were stated by the general term as follows: Frederick D. Blake and Charles Waterman were part- ners engaged in the dry-goods business un- der the firm name of F. D. Blake & Co. They were indebted to various creditors, including the plaintiff, and, becoming in- solvent, executed a general assignment of all their property to James H. Thorp on the 24tli day of April, 1888. On the 4th of June, 1888, the creditors of F. D. Blake & Co. signed a composition agreement by which they agreed to take 40 per cent, of their respective claims, to be paid by four notes, made by the members of the firm, each for 10 per cent of the claim; two payable in 6 and 12 months, and two in 18 and 24 months,— the latter' two Indorsed by Sarah !F. Blake. The Hanover Bank, desiring to have the security of Mrs. Blake upon all the notes, asked that she indorse the first two ; as well as the last two, which she did. This was not known to the other creditors, and / was a security additional to that provided by ' the terms of the composition agreement The note in suit is the third of the series, payable In 18 months, and properly indorsed by Mrs. Blake, In accordance with the com- position agreement At the trial both par- ties moved for judgment, which the court directed for the defendant At the general term that judgment was affirmed, and the plaintifC has again appealed to this eourt Thos. S. Moore, for appellant 0. Bain- bridge Smith, for respondent. GRAY, J. (after stating the facts). In the general term opinion the question of law was stated thus: "Did the secret agree- ment, by which Mrs. Blake Indorsed the first two notes, invalidate the whole com- position agreement, so that notes given in pursuance of its terms are not enforceable by the plaintiff?" The learned jtKtices, finding no controlling authority in this state, determined the question adversely to the plaintiff, and upon the ground, in substance, that, as the agreement was fraudulent, the fraud permeated and vitiated the whole composition agreement, and disabled the creditor from recovering anything under It In this view we are not able to agree with H.& B.EQ.(2d Ed.)— 23 them. It may Be true that there was rto decision, in the courts of this state, in its features so precisely in point as to compel adherence to its authority, and it is true that the view of the general term has support in decisions of English courts. I think, however, that in our state there are expres- sions of opinion by eminent judges of this court, and by a former very distinguished judge of the superior court of the city of New York, which rather commit us to a contrary view, and which should commend themselves to us, as furnishing a wise and more politic rule in these cases of composi- tion by an insolvent debtor with his cred- itors. The general principle has been long settled in England and here that a secret agreement which induces a creditor to agree to a composition by the promise of a pref- erence, or of some undue advantage, over the other creditors, is utterly repugnant to the composition agreement, and, from Its fraudulent nature, is avoided by the law. The very essence of a composition agre&- ment is that all creditors come In upon terms of equality, and that equality would be destroyed If the secret agreement were given effect. In Leicester v. Rose, 4 East,i^ 372, at page 381, Lord Ellenborough ob- served that the principle of all the cases was "that where the creditors, in general, have bargained for an equality of benefit and mutuality of seciu^ty. It shall not be competent for one of them to secure any partial benefit or secm-ity to himself." In ' Russell T. Rogers, 10 Wend. 474-479, Jus- tice (afterwards chief justice) Nelson said:s "So scrupulous are courts In compelling creditors to the observance of good faith towards one another in ca,ses of this kind, that any security taken for an amount be- yond the composition agreed upon, or even for that sum, better than that which is common to all, it unknown to the othar cred- itors, is void and inoperative." It is In the" extent of the operation of the principle, which was thus early asserted, that we wiU find the divergence of judicial opinions be- tween English judges and those of this state. It Is curious to observe that, though Leicester T. Rose was relied upon as the basis of au- thority for their conclusions, the applica- tion of the doctrine of that case has been different In each country. Leicester v. xtose was decided in 1803. Its facts were that several creditors of the insolvent refused to sign unless collateral security, which was to be given for the first two installments of the composition payment, should also be given for the last two. The defendant agreed to procure this additional security, and, not having done so, the action was brought to enforce his agreement Lord Ellenborough stated the question to be whether any legal effect could be given to such an agreement, which gave to some creditors a better security than to others; and he held that it could not, as it was a 354 CXDXSTRUGTIVB FRAUD. fraud upon the rest of the creditors. The ease of Howden v. Haigh, 11 Adol. & B. 1033, was decided in 1840, and was a suit upon composition notes. By a secret agree- ment between the plaintitC and defendant that the latter should indorse to him a bill accepted by a third party, in order to give him a preference beyond the other credit- ors, the former had been Induced to sign the composition deed. It was held that he could not recover. Lord Denman, relying upon Leicester v. Rose and Knight v. Hunt, 5 Bing. 432, held that every part of the transaction was avoided by reason of the deceit upon the other creditors. Littledale, J., while agreeing with him that the fraud extended over the whole, remarked, rather significantly, "It is possible that the plaintiff may be entitled to sue for the original debt" The case of Knight v. Hunt, 5 Bing. 432, re- ferred to by Lord Denman, if we are to re gard the language of the opinion, did not expressly decide that the whole transaction was avoided. In that case the plaintiff had refused to accede to a composition of 10 shillings in the pound until a brother of the debtor agreed to supply him with coals to an amount in value equal to half the debt. The coals were furnished; but the notes re- mained unpaid, and the plaintiff brought this suit upon them. Best, 0. J., stated the principle that the judgment of the creditors is influenced by the supposition that all are to suffer in the same proportion, and briefly concluded with the remark: "Here the plaintiff has had his ten shiUtngs in the ' pound in coal, and he cannot have it again in money." In Mallalieu v. Hodgson, 16 Adol. & B. (N. S.) 689 (decided in 1851), Erie, J., held that "where any creditor, in fraud of the agreement to accept the compo- sition, stipulates for a preference to himself, his stipulation is altogether void. Not only can he take no advantage from it, but he is also to lose the benefit of the composition." In this ruling he railed upon Leicester v. Rose and Howden v. Haigh. The plaintiff there was seeking to recover for the balance of his original debt, after allowing for the amount of the composition and the value of a preference. It was his claim that the composition deed had not released the debt to him, because he had been induced to be- lieve that he alone was preferred, whereas some other creditors had also been secretly preferred. It will be observed that, in Mal- lalieu V. Hodgson, it was unnecessary to de- cide whether the plaintiff had lost the ben- efit of the composition. The question was whether the plaintiff could defeat the effect of the composition agreemjnt by the plea that he had been deceived into supposing that he was the only creditor secretly preferred. As an expression of judicial opinion, it must, however, be accorded its weight as eviden- cing the continuance of the authority of Ho.w- den V. Haigh. That case furnishes the sole basis of authority on which subsequent de- cisions and text writers have rested the doc- trine that the fraud in the secret agreement with the creditors so vitiates the whole ti'ans- action of composition as to disable him from recovering even the amount of the composi- tion. Leake, Cont. 768; Chit Cent C94; "Wald's Pol. Cont 239. I say the sole au- thority, because Leicester v. Rose did not go so far as that, and Howden v. Haigh was an extension of the principle which was sup- posed to be justified by Lord BUenborough's decision in the former case. The doctrine of Howden v. Haigh, it may hi observed, did not go whoUy unquestioned in England, as may be inferred from the remarks of Lit- tledale, J., in that case, which I have quoted, and of Baron Alderson in Davidson v. Mc- Gregor, 8 Mees. & W., at page 768; who said he was "alarmed at the extent to which that decision goes." In this state, with the case of Leicester v. Rose before him. Judge Duer, In Breck v. Cole, 4 Sandf. 79, formed quite a different conclusion as to the extent of the effect of a secret agreement which attempts to secure to a creditor an advantage over the other credit- ors. Breck v. Cole was an action upon a promissory note secretly given to the plain- tiff, in addition to the composition notes, as an inducement to him to agree to the com- position. Judge Duer, in his opinion, com- ments upon the fraudulent nature of the agreement in its effect upon the other credit- ors; observing that "it is, in all cases, the concealment of a fact which It was material for them to know, and the knowledge of which might have prevented them from as- senting to the composition. * • • Every composition deed is. In Its spirit if not m its terms, an agi'eement between the creditors themselves, as well as between them and the debtor. It is an agreement that each shall re- ceive the sum or the security which the deed stipulates to be paid and given, and nothing more, and that upon this consideration the debtor shall be wholly discharged from all the debts then owing to the creditors who sign the deed." The learned judge then ad- verts to the violation of the equality among creditors worked by secretly giving additional security, and states this conclusion: "Hence, either the composition deed itself, ♦ • • or the private agreement, which seeks to evade— and, if valid, would defeat— it, must be set aside; and sound policy and the prin- ciples of good faith require that the latter course should be followed. It Is perfectly just that every creditor who signs a compoa- tion deed should be estopped from setting up any private agreement repugnant to its terms, lor inconsistent with Its intention and spirit '^d * * ♦ every private agreement * • • lis of this character, and consequently ♦ • • [every security which ia the fruit of such an agreement is illegal and void." He reviews the early decisions in the courts of England and of this state, and concludes that "it is the clear and inevitable result of the decisions CXDXSTRUCnVH FRAUD. 355 that, where a composition is made with cred- itors, every security given to a particular creditor, not provided for in Uie terms of the deed, and not disclosed, iaj5Qi4i.j:Sa fraild upon the creditors from whom it IS~T!5S^ cealed." The importance of this expression of judicial opinion shotild not, in my judg- ment, be underestimated. It was delivered by one of the most eminent judges in this state, and was concurred in by his associates, Judges Mason and Campbell. It does not ap- pear from the opinion that Howden v. Haigh was before him, although it had been decided 10 years before. But, whether his attention was called to it or not, the learned judge's opinion was formed after considering the same early English cases as were considered by Lord Denman in Howden v. Haigh and by Justice Brie in Mallalieu v. Hodgson. Judge Duer limited the effect of the fraudulent se- cret agreement to the nullification of any rights or advantages attempted to oe gained under it, and regarded it as^ something quite separable from the composition agreement itself. From all tlie early cases In England and in this state, the inference from the de- cisions is, not that the composition agree- ment is avoided, but, as Justice Nelson stated it in Russell v. Rogers, "the security taken for an amount beyond the composition agreed upon, or even for that sum, better than that which is common to all, * • • is void and inoperative." So in Fellows v. Stevens, 24 "Wend. 294, Justice Cowen held that the law would set aside "all secret terms made by the creditors with the debtor, more favorable to the former than is allowed to the other cred-. itors." It is the secret agreement itself | which is fraudulent and void. Bliss v. Mat-^ teson, 45 N. Y. 22; Harloe v. Foster, 53 N. Y. 385. And that is all that I think Leicester v. Rose decided. White v. Kuntz, 107 N. Y. 518, 14 N. B. 423, is one of the latest cases in which this court has considered the effect of composition agreements. In that case the plaintiff had signed a composition agreement by which he agreed with other creditors of the debtors to accept one-third of the Indebt- edness due them in four notes, to be indorsed by the father of the debtors. To induce the plaintiff to sign this agreement, Kuntz, the father of the debtors, secretly agreed to pur- chase of him the composition notes within a specified time, and to pay $10,000; the com- position notes aggregating only about $6,000. This secret agreement Kuntz refused to per- form, alleging that it was null and void. Thereupon, plaintiff brought an action, al- leging these facts in his complaint, and also that several other creditors had been induced to sign by a secret agreement to pay them a larger percentage than the one-third provided for in the composition agreement, and, upon the ground that that agreement was void as to him, demanded its cancellation, and that of the notes delivered under it, and a judg- ment against the debtors for the amount of the original indebtedness. Demurrer to the complaint was sustained below, and in this court the judgment was sustained. It was held that the agreement between plaintiff and Kuntz, the debtors' father, was fraudu- lent, and could not be enforced, and that the composition agreement, as to all the innocent parties, was avoided. As the' plaintiff was not an Innocent party, but had himself taken a fraudulent advantage, he could not set up the fraud of the creditors. The opinion dis- cusses what were his rights. It was said that he had not forfeited all claims upon his debtors; that "he must have either the com- position notes, or his original notes;" that he could not avoid the composition agreement as to himself, and enforce his original notes for their full amount, as that would unjustly re- sult in an advantage over the other creditors, and "he should be held to the composition." "His only remedy," it was said, "against the defendants, is upon the composition notes." Judge Earl, in delivering the opinion in White V. Kuntz, cited the English case of Mallalieu v. Hodgson, supra, as an authority in point; but that he did not adopt the opin- ion, in all its expressions, is evident, for he held that there was "no ground upon which he [the creditor in the case before him] can be deprived of all remedy." It is very plain, ^ from the opinion in White v. Kuntz, that it Is the secret agreement, by which the creditor J receives an undue advantage, which is deem-' ed to be avoided. It was so considered, again, by Judge Andrews, in Meyer v. Blair, 109 N. Y. 600, 17 N. E. 228, who, referring to White V. Kuntz as authority for the state- ment that a collateral agreement is void in composition cases, which secures to one cred- itor an advantage over others, said, "The\ court refuses to enforce the secret bargain, | and confines the creditor, who is a party to I / the fraud, to a remedy to recover the sum / which, by the terms of the composition, he^ agreed to accept." In Solinger v. Earle, 82 N. Y. 393, the facts were that a third party had given his note for a portion of the in- solvent's debt to the defendants, to induce them to agree to the composition. Having paid the note to a transferee thereof, he brought an action to recover back from the defendants the money so paid. It was held that the action could not be maintained, for, though the transaction was a fraud upon the other creditors, the parties were in pari de- licto. Judge Andrews, remarking that fair dealing condemned such a transaction, said: "If the defendants here were plaintiffs seek- ing to enforce the note, it is clea'r that they could not recover." Inasmuch as the note sued upon was for an additional amount be- yond the amount of the composition agree- ment, the remark of the learned judge was in line with aU the authorities. He held the se- cret agreement was void, and could not have been enforced. The case is in no wise in conflict with White v. Kuntz or Meyer v. Blahr. If we should say that the fraud of the se- cret agreement made by the creditor operat- ed to avoid the whole transaction of compo- 356 CXDXSTRUCTIVB FRAUD. sitlon, the result would be to leave him with the original Indebtedness unreleased. If the composition agreement, by which the debt was compromised, is to be deemed nullified by the fraudulent transaction, I do not see why the creditor would not be at liberty to pm-sue the original debt; a view which Lit- tledale, J., regarded as possible in Howden V. Haigh, It would certainly seem to be the logical outcome of the proposition asserted below that, if the composition agi-eement has been avoided, it has become inoperative as an agreement for any purpose. We assert a wholesome rule, and one which works a just result, if we hold that the secret and fraudu- lent agreement itself is illegal, and is inop- erative to confer any rights or advantages upon the creditor. Perfect equality is to be maintained among the creditors. It was thought below that the secret agreement and the composition agreement constituted but a single and indivisible transaction or agree- ment I am not prepared to accede to that proposition, though it has support in some of the English cases referred to. It seems to me the case falls easily within the rule which permits a severance of the illegal from the legal part of the covenant Pickering v. Railway Co., L. R. 3 O. P. 235, 250; U. S. V. Bradley, 10 Pet 343-360. In Mallam v. May, 11 Mees. & W. 653, the plaintifCs, who were surgeon dentists, agreed to take the de- fendant as an assistant, and to instruct him for a term of yeai's, and he agreed, at the expiration of that term, not to practice his profession "in London, or any of the towns in, or places in, England or Scotland, where the plaintiffs might have been practicing." It was held that the covenant as to not prac- ticing in London was valid, and that not to practice elsewhere was illegal, but that the valid part was not affected by the illegality of the other part. Here, the agreement with other creditors for a composition was lawful and valid, imless they should elect to rescind it upon the discovery of the secret agree- ment—an element not present. But the agreement for, and the giving of, additional security, was unlawful and void. Is there any reason why the bad may not be rejected, and the good retained? If the alternative Is, as it presents itself to my mind, that the composition agreement shall stand as a re- lease of the plaintifC's original demand, or that it shall fall, and leave the plaintiff at liberty to recover the original debt, I am for upholding it, and I fail to see why the legal part of the transaction had with it cannot be severed from the illegal part We should be careful, in our desire to punish the harsh and imscrupulous creditor, who presses his debtor, and bargains for an advantage over other creditors, by deprivation of legal rights and remedies, that we do not go too far, and lay down a rule which may result unjustly in other ways. It ought not to be possible that through his fraud he may be reinstated in his original position as a creditor for the whole sum due. The operation of a secret agreement is such that the other Innocent creditors may, because of the fraud of their debtor, elect to refuse to be bound by their agreement of composition with him. If the secret agreement is executory, they may not so elect, and may rely that the creditor se- cretly seeking to obtain some promise of ad- vantage over them will be prevented from enforcing 'it, and from gaining anything by his fraud. Its illegality is a perfect defense in the hands of the promisor. The composi- '\ tion agreement is one thing, as an agreement ', , between all the creditors to release some ' part of the insolvent's indebtedness to them, upon terms equal as to each; and the secret fraudulent agreement with one or more of them- is a stipulation which, from its incep- ' tion, was unlawful, and which the law an- ; nuls. Bliss V. Matteson, 45 N. T. 22. It was also suggested in the opinion below, In support of the rule there asserted, that if it did not obtain there would be an induce- ment to an imscrupulous creditor to commit a fraud, for his only risk would be to lose his additional security, while assured of the amount of his composition. To a certain ex- tent, that may be true; but, on the other hand, it may be suggested that if it were the rule the insolvent debtor would have the inducement to ensnare his creditors into some secret arrangement, and thus, by tridi and device, to leave them wholly remediless,— disabled to recover the amount of the com- position, and disabled from pursuing the orig- inal debt which the composition agreement released. It seems wiser simply to regard the secret agreement as one which the law avoids for its fraud. The creditor makes it with the risk of its worthlessness. if repudl; ated, and the debtor makes it with the peril that its discovery will furnish cause for his other creditors to avoid the composition agreement. The conclusion reached is the re- sult of a careful examination of- the authori- ties, and the doctrine they teach, and it is in accord with a wiser policy. It must not be forgotten that the defendant's contract of in- dorsement is within the terms of the com- position agreement with respect to the note In suit We know nothing of the fate of the earlier notes, the indorsement upon which by defendant was secretly and fraudulently procured to be added. She had a perfect de- fense to the enforcement of her contract We are only concerned now with the question of whether the plaintiff shall have the amount of the composition, notwithstanding it may have been agreed secretly that It should have some better secmrity for the pay- ment of some of the composition install- ments. This question, for the reasons stat- ed, should be answered In the affirmative; and therefore the Judgments below should be be reversed, and a new trial ordered, with costs to abide the event All concm*, except ANDREWS, 0. J., and PECKHAM, J., dis- senting. Judgments reversed. / ,v^ir COxNSTKUCTIVB FRAUD. 357 CHANDLER, et al. ▼. HOLLINGSWORTH et al. (3 Del. Gh. 99.) Court of Chancery of Delaware. Sept. Term, 1867. Bill to set aside a conveyance made in fraud of marriage by Elizabeth Chandler and another by next friend against Mary Ann HoUingsworth and others. Decree for complainant. E. G. Bradford and Mr. Higgins, for com- plainants. Mr. McCauUey, for defendants. BATES, Ch. The case presented for relief is this: William Chandler, three days before his marriage with the complainant Elizabeth Chandler, while under an engagement of mar- riage with her, made a voluntary conveyance of all his estate, real and personal, thereby, if it be allowed to operate, defeating the right of dower which otherwise would have accrued from the marriage, ■ and also with- drawing from his own control the means he then had, whereby provision mght be made for his intended wife and the issue of the marriage, either through a will or by law in case of his dying intestate. This conveyance was made without notice to her, and, as we must take it, without her knowledge derived in any way whatever before the marriage. Yet no misrepresentation as to his means ap- . pears; nor any positive deception as to what was done beyond simple nondisclosure. Nor are we to consider it as an element in the case that Mrs. Chandler, before the engagement, knew that Chandler had held this property or that she had formed any expectations with regard to it. We may now take the legal question pre- sented by such a case. Will a court of equity relieve against a voluntary conveyance by the husband of all his estate, made pending an engagement; or, as the English cases term it, pending a treaty of marriage made without any disclosure to the intended wife or knowl- edge on her part, though without any express misrepresentation or deception practiced by the husband? This is the general question; but it is to be considered in two forms: (1) Will equity relieve, at least so far as to save to the wife her dower in the real estate, even though the conveyance must stand as it affects the personal estate and also the real estate, except as this may be subject to dower? (2) Will equity go further, and set aside the deed wholly, thereby admitting to take ef- fect the same consequences which would have followed if no such deed had been ex- ecuted, so that, as Chandler in fact died in- testate, the whole property shall descend or be distributed as in ordinary cases of intes- tacy? Either form of relief will give Mrs. Chand- ler her dower. On the latter depends her claim to a share of the personal estate, and the claim on behalf of the Infant complainant as heir at law and distributee. 1. Let us consider the first question. The English court of chancery has from the ear- liest times protected the marital rights of the husband against a fraudulent settlement by the wife pending a treaty of marriage. It Is considered that he becomes a purchaser of the wife's property, in consideration of the charge he assumes of her maintenance and the payment of her debts; that this is a right upon which fraud may be committed, and which ought to be protected. Lord Thurlow, in Countess of Strathmore v. Bowes, 1 Ves. Jr. 27. This view has commanded universal consent from the beginning. But until a re- cent date the doubt has been as to what cir- cumstances should be held to render the set- tlement fraudulent,— whether there must have been some misrepresentation or decep- tion practiced upon the husband, such as amounts to actual fraud, or whether mere nondisclosure was sufficient as a fraud in law to invalidate the settlement; especially, whether mere nondisclosure should be fatal where the husband was at the time of the marriage ignorant as well of his wife's hav- ing held the property as of its having been disposed of away from him. The first full examination of this subject was in Countess of Strathmore v. Bowes (de- cided in 1789) supra. That was a bill filed by Bowes, the husband, to set aside a settle- ment made before marriage by his wife, the Countess of Strathmore. There was also a cross bill filed by the wife to set aside a deed revoking the settlement, on the ground of duress by the husband in obtaining it from her. First, upon an issue directed to Inquire whether the deed of revocation was obtained by the duress, and, a verdict so finding, that deed was set aside. 2 Brown. Oh. 345. Then the cause came to be heard upon the bill to set aside the settlement, before Justice Bul- ler, sitting for the lord chancellor. He de- creed in favor of Lady Strathmore. Upon a rehearing before Lord Chancellor Thurlow, the decree was affirmed; and, finally, it was affirmed again on appeal to the house of lords. The argument before Justice Buller and his opinion are reported in 2 Cox, Ch. 28. The rehearing before the lord chancellor, with his opinion, are reported both in Cox, Ch. and in 1 Ves. Jr. 22. Upon the rehearing the arguments are best reported in Ves. Jr., but the opinion of Lord Thurlow, in Cox, Ch. As a decision the case is of no importance upon the question before us, since the settlement made by Lady Strathmore was not a fraud upon the marital rights of her husband under any— the most liberal— construction of fraud. It was made before she knew Bowes, her future husband, even pending a treaty of mar- riage with another man, and with his con- sent; and her marriage to Bowes was itself obtained by a gross fraud on his part But the case is valuable as containing a full re- view of all the prior decisions. Justice Bul- ler considered that the decisions had gone only so far as to relieve the husband in cases of some actual fraud practiced upon him, and he so lays down the rule. The re- 358 OOXSTRUCTIVB FRAUD. suit, lie says, is "that, if tlie wife is guilty of | any fraud, and holds out to the husband that there Is nothing to Interfere with his rights, then any deed executed by her in prejudice of such representation shall be void." Bari Bare- concealmeint he he ld not to be sufficieni_ '^ox,tSfl5Tr''LordTliurlow, though it did not affect the result of that case, seems to have held to the more liberal construction of frauds, which includes concealment as, well as positive misrepresentation. In his opinion (1 Ves. Jr. 28) he says: "If a woman, during the course of a treaty of marriage with her, makes, without notice to the intended hus- band, a conveyance of any part of her prop- erty, I should set it aside, though good primaj facie, because affected with that fraud." It is true, according to Justice Buller's view, that the early decisions were upon cases of actual misrepresentation or deception, but it is also true that the distinct question whether bare concealment was itself fraud had never before been raised; and thei-efore the cases prior to that of Strathmore v. Bowes are to be considered rather as presenting examples of fraud as they occurred in fact, than as de- ciding in what fraud on marital rights must consist so as to limit the construction of it Lord Thurlow must so have regarded them in laying down his view of fraud in terms more comprehensive than Justice Buller had done, embracing in his definition mere concealment, which Justice Buller had expressly excluded. The later decisions in England and America have sanctioned the view of Lord Thurlow. The first of these is Goddard v. Snow, 1 Buss. 485, decided by Lord GifCord, master of the rolls, in 1826. In that case, the wife, ten months before her marriage, settled to her separate use for her life, and subject to her appointment after her deatjh, two sums of money, £900 in all, being not the whole of her estate. Her intended husband was ignorant both of her possession of the funds and of the settlement made of them, and so continued until after her death, when he filed his bill to set aside the settlement as one made in fraud of his marital rights. No actual misrepresentation was alleged, nor deception other than was implied in the concealment. Here the precise question was presented whether bare concealment was in itself a fraud. In the argument and deci- sion of this case. Countess of Strathmore v. Bowes was fully reviewed, and the opinions of Justice Buller and Lord Thurlow consid- Lered. Concealment alone was held to be a V fraud, and the settlement was set aside. Next is a case in which the subject is con- sidered by Lord Brougham, though the deci- sion went upon other grounds. St. George V. Walie, 1 Mylne & K. 610. Lord Brough- am raises the question, and upon a review of the cases says that in none, except God- dard V. Snow, had there been a positive de- cision avoiding a settlement by the wife on the mere ground of want- of linowledge by the husband. "Yet," he proceeds to say, "it is certain that all the cases in which the subject is approached treat the principle a^ one of undoubted acceptance in this court; and it must be held to be the rule of the court, to be gathered from a uniform cur- rent of dicta, though resting upon a very slender foundation of actual decision touch- ing the simple point." This was in 1833. In England v. Downs (1840) 2 Beav. 522, in which the question concerned the validity of a settlement made by a widow upon chil- dren of a former marriage before a second marriage, the master of the rolls, Lord Lang- dale, considered it not suflaciently proved that the settlemen-f was made pending a treaty of marriage; or, if so, that it was concealed up to the time of the marriage; and on these grounds he sustained the set- tlement. But he states the law quite fully on the point before us, and clearly in ac- cordance with Goddard v. Snow, that mere * concealment is sufficient to avoid an ante- 1\ nuptial settlement by the wife. He adds a qualification, not necessary to be here con- sidered, viz. that the concealment is evi- dence of fraud, rather than fraud per se, and therefore is open to explanation; so that cases may occur in which noncommuni- cation would not be held fraudulent. Next is Taylor v. Pugh (1842) 1 Hare, 608. In this case, a settlement made before mar- riage, to the exclusion of the husband, was sustained* on the special ground that the husband had previously seduced the wo- man, thus putting her in a situation in which she must submit to a marriage with- out being able to stipulate for a settlement out of her own property. In his opinion, the vice chancellor, Sir James Wigram, no- tices, with strong disapproval, the argument, that to avoid such an antenuptial settlement by a wife, without the intended husband's linowledge, actual fraud or deception must be proved; and he cites as the true rule a state- ment from 2 Ropers, Husb. & Wife, 162, that "deception will be inferred if, after the com- mencement of the treaty for marriage, the wife should attempt to make any disposi- tion of her property without her intended husband's knowledge or concurrence." It is true that the cases cited subsequent to that of Goddard v. Snow give only the dicta of judges in support of the rule of that case; but they show at least a concmrrent judicial opinion, from that case down, in favor of the rule which holds mere con- cealment to be at least evidence of fraud. jThe real doubt has been whether the con- cealment should, in all cases, per se avoid the settlement, or whether a settlement not disclosed to the husband might, neverthe- less, be sustained upon such equitable con- siderations as the meritorious character of the objects provided for, such as children of a former marriage (Hunt v. Matthews, 1 Vern. 408; King v. Cotton, 2 P. Wms. 675); so the poverty of the husband and his in- ability to make any settlement upon his wife (King v. Cotton, supra; St. George v. Wake, 1 Mylne & K. 610); so the fact that OOXSTRUCTIVE FILVUD. 359 the settlement Is of part only of the wife's property, which was the ground in De Man- neville v. Crompton, 1 Veas. & B. 354. The only equitable consideration relied up- on in the pending case was that Mrs. Chand- ler, as we must assume, had no knowledge that William Chandler had held the prop- erty in controversy; and hence the expecta- tion of it could not have been an induce- ment to the marriage. But this circum- stance is certainly immaterial. The true ground of relief is not the disappointment of an expectation, but fraud upon a legal right; that is, the right to a marriage with- out any secret alteration of the circum- stances of the parties as they stood at the time of the engagement The husband's ignorance of the property settled, though urged in Goddard v. Snow and Taylor v. Pugh as a ground for sustaining the settle- ment, was expressly overruled and was dis- approved in England v. Downs. In the lat- ter case Lord Langdale says: "If both the property and the mode of Its conveyance pending the marriage treaty were concealed from the intended husband, as was the case in Goddard v. Snow, there is still a fraud practiced on the husband. The nonacquisi- tion of property of which he had no notice is no disappointment; but still his legal right to property actually existing is defeat- ed, and the vesting and continuance of a separate power in his wife over property which ought to have been his, and which is, without his consent, made independent of his control, is a surprise upon him, and might, if previously known, have induced him to abstain from the marriage." In Tay- lor v. Pugh the same consideration was re- jected by the vice chancellor; and he rea- soned with great force that no equitable considerations arising out of the circum- stances of the particular case, such as those before referred to, shall excuse a conceal- ment from the husband, or sustain a settle- ment made without his knowledge. ., In this country the ignorance of the hus- / band of a settlement by the wife pending a 1 treaty of marriage has of itself been uni- formly held fatal to the settlement, though no actual misrepresentation or deceit might appear. The cases are collected in 1 White ' & T. Lead. Cas. Eq. 317. See, especially, Lin- ker V. Smith, 4 Wash. C. C. 224, Fed. Cas. No. 8,373; Tucker v. Andrews, 13 Me. 124; Logan V. Simmons, 3 Ired. Eq. 487; Spencer V. Spencer, 3 Jones, Eq. 404, 409; Poston v. Gillespie, 5 Jones, Eq. 258; Kamsay v. Joyce, 1 McMul. Eq. 236 (in which latter case an issue was directed to the single question whether the husband had knowledge of the settlement); and Manes v. Durant, 2 Rich. Eq. 404. In North and South Carolina the whole subject of fraud on marital rights has been examined in a series of cases con- temporaneous with the later English deci- sions, and without reference to them, but reaching the same conclusion, viz. that no antenuptial settlement by the wife can be valid if made without the husband's knowl- edge; it matters not how meritorious may be the objects provided for by the wife, or what may be the circumstances of the hus- band. He is considered as having rights springing out of the treaty of marriage, not to be controlled by any equitable considera- tions between the wife and third person. And in North Carolina the result reached by frequent Investigations of the subject has been to establish a rule requiring, in order to sustain a settlement by the wife, not only that the husband have general knowledge of her intention to make one, or that she has done so, but requiring his consent to the very act or instrument by which the settle- ment is made. Spencer v. Spencer, 3 Jones, Eq. 409; Poston v. Gillespie, 5 Jones, Eq. 262. We see, then, both in England and in this country, since the decision of Countess of Sti'athmore v. Bowes, and the cases prior to it, the course of judicial opinion has tended more and more to strengthen the protection of marital rights against -settlements made to their prejudice (1) by enlarging the ground of invalidity. This originally was only actual fraud, evidenced by positive mis- representation or deceit, but now it includes also constructive fraud, such as arises from mere nondisclosure; and (2) by excluding all the exceptions founded on equitable consid- erations in the particular case, which were originally allowed to support such settle- ment; thus making in all cases the hus- band's knowledge, at least, and in some courts his positive assent, essential to the validity of a conveyance or settlement made after an engagement to marry. Now, wishing to lay down a rule only for the case presented, it is enough to say that this court will protect a husband against a voluntary conveyance or settlement by the wife of all her estate, to the exclusion of her husband, made pending an engagement of marriage, without his knowledge, prior to the marriage, even in the absence of express misrepresentation or deceit, and whether the husband knew of the existence of the property ■oi:,, not,. 'The concealment _ of what._it Js the right of the husband to knoWj_and_Hiiat_it, is tIrfi"Tluty of thE -a afe to discl ose, is itself frajidLinJaw. it is a doctnne of equity, not so fully developed at the date of Strathmore V. Bowes as now, that the concealment, to the prejudice of another party with whom one is dealing, of facts which, if known to him, might affect his decision, and which there is an obligation arising out of the transaction to disclose, is a fraud. It is so treated in equity without respect to the motive of the party In the concealment, being what is term- ed a "constructive fraud." But whether a conveyance or settlement made under the cir- cumstances I have stated is always void, or whether it may be sustained upon sucn equi- table considerations as were admitted in the 360 CXDNSTRTJOTIVE FRAUB. earlier English cases, and in St George v. Wade, 1 Mylne & K. 610, such as the reason- ableness of its provisions as being made for children of a former marriage, or its embra- cing only a part of the wife's estate, or such as the husband's inability to make a settle- ment upon the wife, I leave as questions open in this state until they arise judicially. We now reach a question which was dis- cussed with much earnestness and ability on both sides: Will equity extend to the wife the like protection against an antenuptial conveyance by her husband which we have ^een it afEords to the husband against her? / After a patient examination of the argu- .' ment and authorities, I find no just ground / of discrimination against the wife. First, f dower is a right of property, and, as such, a proper subject of protection; indeed, a right ! above all other rights of property favored. l Again, dower is a marital right, as well as is the husband's interest in the wife's prop- \grty. Protection, maintenance, and dower are the rights inuring to her from the marriage; and, though her dower is inchoate only until the husband's death, it is none the less, in his lifetime, a legal right, vested and in- defeasible, except by her own act. This is so far recognized that a release of it by the wife is held a sufficient consideration to support a postnuptial settlement upon her, and to make It available, If bona fide, against the husband's creditors. Ath. Mar. Sett. (27 Law Lib.) 162; BuUard v. Briggs, 7 Pick. 533. Again, the wife is a purchaser of her marital rights, as much so as is the husband. She takes them for^a consideration, rendered by her in the marriage,— a consideration not, indeed, the same m kind as that rendered by the hus- band for his marital rights, but, considering all the. consequences involved in marriage, what the wife surrenders is In value or meas- ure more, certainly not less, than what she receives. She surrenders her person, her services, her self-control, her means of self- support; ^nd, as to property, far more than the interest she acquires. However, it should be said that whether the wife's dower, as well as the husband's interest in her estate, is to be protected against fraud, depends not at all upon such considerations as the compara- tive value of the consideration rendered by each, or the value of their respective rights, buT solely upon the fact that there exists a marital right, which, in common with all legal rights, is a proper subject of legal pro- tection, whether it be itself of more or less value, or whether it spring from a larger or less consideration rendered. If there could be any ground, in addition to the mere ex- istence of a right defrauded, to evoke a swifter interposition for one sex rather than the other, it would be the consideration that the wife, being of the weaker sex, the more needs legal protection. It was argued by the defendant's counsel that in England dower is not protected as a marital right against a conveyance by the husband before the marriage, even though made on the eve of marriage and expressly to exclude the wife, that under the English de- cisions, the husband and wife, in this respect, stand on a different footing. There is no decision upon the precise question, but the weight of opinion is in favor of the position taken. Prior to the statute of uses, estates were largely held in trust; and it was, from the beginning, considered that dower did not attach to a use, even when it was one reserved to the husband under a conveyance made by himself. Whether a conveyance with a use reserved to himself by the husband, made on the eve of marriage, and with the express purpose of barring dower, was, at that period, held to be effectual, does not appear by any decided case. The case Ex parte Bell, 1 Glyn & J. 282, cited in 1 Roper, Husb. & Wife (32 Law Lib.) 354n, that a voluntary settlement made by the husband, though set aside as fraudulent against creditors, prevents his wife's right of dower, cannot be taken as a decision upon the question, since it does not appear whether the settlement was made pending a marriage treaty. The dicta on this point are conflicting. Lord Chief Baron Gilbert is reported to have said that such a conveyance would be fraudulent as to the wife. 4 Cruise, Dig. 416; 1 Roper, Husb. & Wife (32 Law Lib.) 354n. In 1 Crusie, 411, . and in 4 Cruise, 416, it is laid down that a I secret conveyance by the husband, in trust i before marriage, to defeat dower, is void; ' and the whole doctrine as to antenuptial set- tlements by the wife is expressly applied to conveyances by the husband made under like circumstances. On the other hand. Lord Hardwicke, in Swannock v. Lyford, Co. Litt. 208a, note 1, also reported fully In Park, Dow- er, 382, treats it as admitted "that if a man, before marriage, conveys his estate privately, without the knowledge of his wife, to trustees in trust for himself and his heirs in fee, that will prevent dower." Upon this authority. Park, Dower, 236, so lays down the rule. So, also, does 1 Washb. Real Prop. 161. After the statute of uses, which converted all uses into legal estates, and so admitted dower to attach to them, another mode of avoiding the inconveniences of dower was resorted to by the practice of settling jointures in lieu of dower. By a statute of Henry VIII., which was passed to remedy the inconvenient effect of the statute of uses as to dower, the hus- band was authorized to settle upon his in- tended wife, before the marriage, a jointure, which, if reasonable, was held effectual as an equivalent for dower, and barred it, even though made without the wife's privity, the courts of equity reserving the power to re- lieve the wife against a jointure unfair or merely illusory. Such, after much contro- versy was the construction finally given to this statute In Earl of Buckingham v. Drury, 3 Brown, Pari. Cas. 492, cited in 1 Roper, Husb. & Wife, 477. The effect was that dower, under the English system, became a (X)XSTKUCTIVE FRAUD. 361 precarious, and, In the case of large estates, an infrequent mode of provision for the wife; and hence its value as a marital right, and the importance of protecting it, was the less ap- preciated. Marriage was not presumed to have been contracted in expectation of it, unless upon representations to the wife that she would become entitled to it. This may ac- count for what otherwise must appear as an unjust discrimination made by the English courts of equity in withholding from the wife such protection as is given to the husband ^ against secret antenuptial settlements. Such " '^ a reason is suggested in the note to 1 Roper, ~i Husb. & Wife, 354. But in this country, clearly the same reasons do not apply. Her ~ dower is the only provision made by law for ^> the wife out of the husband's real estate. Practically it is a most important resource, ^ and the only form of provision out of real \ estate enjoyed by her, except under wills. >^~^ It does, in fact, to a large extent, enter into I the wife's expectations in cpntracting mar- Vriage, and properly so. It, therefore, ought to receive all the protection accorded to any marital right. To refuse it would, in this -i countiy, where jointures are unknown, ren- der the right of dower precarious, if not wholly illusory. ' r ^^ none of the American cases has this ^ /subject been thoroughly examined; but so t I far as they have gone they treat the wife's ^ I marital rights and their claim to protection » as being on the same footing with those of i \ the husband. In Swaine v. Ferine, 5 Johns. J t-Ch. 482, a conveyance was made by a hus- band before marriage, with a view to defeat the wife's dower. The deed was to his daughter, was kept concealed for many years, and possession did not go with it. ,; After the husband's death the widow filed f her bill for dower, and it was decreed to I her; the deed being adjudged fraudulent as against her. It is true, that In a previous suit, the deed had been held void as against a mortgagee claiming under a mortgage sub- sequent in date to the deed; but the widow was admitted to her dower not at all In con- sequence of the decree previously made, that the deed was void as against the mort- gagee. It was expressly declared to be fraudulent as against her also; and she would have been relieved quite as certainly, had there been no previous controversy be- tween the husband's representatives and an- other party touching the deed. It is also true that this was treated by the chancellor as a case of fraud in fact. It is, then, an authority for the relief of the wife against an antenuptial conveyance by the husband, fraudulent In fact; but whether she should be relieved against a conveyance on the ground of mere nondisclosure is a question not decided in Swaine v. Ferine. To the same extent precisely is the ruling of Petty V. Petty, 4 B. Mon. 215. In that case a settlement by the husband, on the eve of marriage, of all his property, upon his children by a former marriage, was declared void so far as it affected the wife's dow- er in the real estate. It was a case of fraud in fact, very gross In its circumstances, be- ing in violation of express representations m^ade to the wife before marriage, in order to induce her consent This case, like Swaine v. Ferine, decides nothing as to the effect of mere concealment. It is, however, In one oi its features, a valuable recognition of the meritorious character of dower as a marital right, and of its claim to legal pro- tection; for the wife was relieved upon a bill filed In her husband's lifetime, while her dower was inchoate only, the deed being ad- judged void, lest it should, through delay, become an Impediment to her right of dow- er in the event of her surviving the husband. Now, although, in Swaine v. Ferine and Petty V. Petty, relief was given against fraud in fact, yet in weighing the effect of these decisions upon the case before us this is to be considered. They recognize the wife's dower to be a marital right, and as such a proper subject of protection In equity against a fraudulent antenuptial convey- ance, placing it upon an equal footing In this respect with the husband's marital rights. Then, with respect to the sort of fraud against which she should be relieved; whether It must be only what is termed fraud "in fact," or whether she should be protected against "constructive fraud," such as bare concealment, the same rule must ap- ply In her favor which we have already seen has become settled for the husband's protection, viz. that constructive, as well and also that, "being executed secretly, for the pur- pose of cutting off the wife's dower, it was a fraud in law upon her rights accrued di- rectly from the marriage." The other case of this class is Smith v. Smith, 6 N. J. Eq. 515. A husband, on the day of the mar- riage, but before it, without the wife's knowledge, settled property upon himself and a daughter by a former marriage, with j intent to defeat dower. Actual misrepresen- tation was alleged by the bill, but denied by the answer. No proof to that effect ap- pears, and the decision does not rest upon any such feature; but the chancellor as- sumes the broad ground that "a voluntary conveyance by a man on the eve of mar- riage, unknown to the Intended wife, and made for the purpose of defeating the in- K- 362 CONSTRUCTIVE FRAUD. > > \ M terest which she would acquire by the mar- riage in his estate, is fraudulent as against her. I see no sound distinction," he adds, "between this case and the like conveyance by a woman under the like circumstances." In 1 Scrib. "^ower, 561, there are cited, to the same point, Littleton v. Littleton, ' 1 Dev. & B. 327, and Rowland v. Rowland, 2 Sneed, 543; but these cases I have not seen. Scribner refers to the American decisions as "not being entirely uniform"; and in 1 Washb. Real Prop. 175, it is said that "the cases are singularly conflicting." On ex- amination of the cases, I find no conflict whatever as to the power of a court of equi- ty to relieve the wife. It is only in courts of law, where a legal seisin is essential to dower, that the claim. to it against the hus- band's conveyance prior to marriage has been denied; as in Baker v. Chase, 6 Hill, 482. The other case cited in Washburn as against the doctrine of Swaine v. Ferine is Jenny v. Jenny, 24 Vt. 324. I have exam- ined this case, and think It not relevant to the question, though, not having it by me, I cannot state Its circumstances. The rule to be derived from the equity decisions Is that the wife's dower will be protected against a voluntary conveyance of the husband, made pending a marriage engagement, under pre- cisely the same circumstances In which the husband Is relieved against an antenuptial settlement by the wife. I am therefore of opinion that Mrs. Chand- ler is entitled to dower out of the real es- tate described In the deed of trust, notwith- standing the execution of the deed before her marriage, together with one-third of the rents and proflts accrued since her hus- band's death. It appears from the answer that part of the real estate— a lot in Wil- mington—has been sold by the trustees for $400, Its value. Assuming, as it Is proper to do, that the purchaser was a bona flde pur- chaser, without notice, the court will not follow this lot into his hands; but the widow Is nevertheless entitled, as against the defendants, to an assignment of such a share of the remaining real estate as she would have taken if the lot had remained In their hands; and therefore, in assigning the dower, although it will be assigned only out of the remaining real estate, yet in esti- mating her share of that, the whole real es- tate, including the lot sold, will be consid- ered. 2. It now remains to consider briefly the claim of the complainants to relief beyond the allowance of dower to the widow. The prayer is that the trust deed be declared wholly void, so that the real estate may de- scend under the Intestate law, and the per- sonal estate be distributed precisely as if no deed had been executed. This relief the court cannot decree. A court of equity will not interffere to set aside a voluntary conveyance, because the conveyance disappoints hopes or expecta- tions, however just and reasonable; not i even because it violates obligations, If they \} are only natural or moral ones. Courts of M '^ equity, as well as of law, protect only legal |\ ' rights, and enforce legal obligations; legal, |' I mean, as distinguished from such as are {\C/^ merely natural or moral. For example, a " ' promise, however solemnly made and bind- ing in morals, If without a consideration, is not enforced In equity any more than at law; nor is the obligation of a parent to provide for children after his death. So a conveyance will be set aside on the ground of fraud only when It is in fraud of some legal right, and one existing at the time it Is made. Now, In this case, we may waive the fact that, as to the infant complainant, he was not in esse at the execution of the trust deed. It Is a consideration decisive of the whole of this branch of the case that, even had William Chandler not conveyed his es- tate, his marriage would have vested no rights in it, nor have restricted his absolute , control of it beyond the wife's dower in the real estate. He could, after marriage, have ' effectually disposed of his whole personal;^ estate and of the inheritance of his real es- tate by just such a trust deed as this. It follows that his control of the property could not be less absolute before the mar-l( rlage than after It; for, otherwise, an en-' gagement to marry would be of more force than marriage Itself. Besides, as any dis- posal of property before marriage, which he could as freely have made after marriage, defeated no right, but removed only a bare chance that the complainants might succeed to It If Chandler should continue to hold it and die intestate, the loss of such a chance cannot be treated as the disappointment of a just and reasonable expectation in mar- riage, nor as so altering the circumstances of the husband as to have Influenced the decision of the Intended wife. Again, it is clear that this deed would have stood against any attempt by Chandler to dis- pose of the personal estate and the inher- itance of the real estate by another deed or by will. That he made no such attempt, but died intestate, so that, as It happened, these complainants would have succeeded to the whole property but for this deed, , ] cannot affect the deed. A conveyance can / be set aside only for causes affecting it / when it is made, as for fraud then com- | mitted, or for the protection of rights then ( existing. Its validity cannot be held In sus- pense, to be determined by future contin- gencies. This would subject titles to a dis- tressing uncertainty. But it was argued for the complainants that the deed, being fraudulent In respect to dower, is, therefore, wholly void, passing no title whatever; so that the heir at law may succeed to the real estate, and the dis- tributees to the personal estate, as a conse- quence of the fraud on the right of dower, though they themselves might have no equl- CfONSXRUCTIVE FRAUD. 3G3 ty to set the deed aside. Such would be the effect if the deed -were illegal; as where it violates the provisions of a statute which avoids the deed itself. It is then a nullity, and stands in the way of no claim which otherwise would be valid. And so, where a conveyance is tainted with fraud in fact, in which the parties claiming under it are im- plicated, such a conveyance is wholly void; for no effect whatever can be given to an instrument actually fraudulent; and there- fore it is that, although a conveyance which is merely voluntary, and not fraudulent ■ in fact, is invalid only against existing credit- ors, and not against subsequent creditors. Yet, if the conveyance is tainted with actual ^ fraud, it is void altogether, and subsequent creditors are let in. But such is not the ef- fect of cgnstructive fraud. The object of the doctrine of constructive fraud is to pro- tect some right or interest which, in equity, , ought to be preserved, against the efCect of La conveyance which is in. other respects Ikvalid; and therefore equity does not avoid the deed altogether, but saves against it the rights or interests which are to be protected. A deed containing some provisions or hav- ing some operation forbidden by statute or public policy, or contrary, as in this case, to some equity, is held invalid only so far as the statute or policy or equity requires, up- on the principle "ut res magis valeat quam pereat." Bredon's Case, 1 Coke, 76; Shep. Touch. 68; Doe v. Pitcher, 6 Taunt. 359; Darling v. Rogers, 22 Wend. 483. Thus a voluntary conveyance, if not fraudulent in fact, passes the title to the grantor, but sub- ject to the rights of existing creditors, ■v^fhich are preserved by raising an implied trust in the grantor. See 1 Story, Eq. Jur. § 371. So in this case the trust deed is effectual between the parties, but equity preserves the right of dower against the real estate in the hands of the grantees. Precisely as at law, dower follows real es- tate conveyed by the husband after the man'iage, though the conveyance is other- wise good. It does not seem accurate to say that a deed is void for constructive fraud. The deed is valid; title under it passes, but subject in equity to those rights which are affected by the fraud. Decree for complainant, Mrs. Chandler, in accordance with the foregoing opinion. 364 EXPRESS TRUSTS. \ HUTOHINS T. VAN VECHTEN. "-- (35 N. B. 446, 140 N. Y. 115.) Court of Appeals of New Xork. Nov. 28, 1893. Appeal ftom supreme court, jeneiral term, first depaitmeat. Action by Elizabeth B. Hutchlns, as execu- trix," etc., "^^nst AbraJiaBn^^Vag^^JVecMmi^to Iiave adjudged that de f endant held cerSiin fearppoper^=raSCife5^''.°***^* axising..tCMi ffi§"p6ssession thereof, in trust for the Joint and equal benefll'of "iUmself aSid plaintifC's. testator. From a judgment of the general term (20 N. Y. Supp. 751) affirming a judg- ment for plaintifC, defendant appeala Af- firmed. Matthew Hale, for appellant Augustas S. Hutchins and Charles N. Morgan, for re- spondent. O'BRIEN, J. Tlie judgment In favor of the plaintiff In the courts below adjudges that the defendant, under a deed of convey- ance fo Mm by Reuben E.JE'€into.onJ3ie.23d_ day of Decem ber, ISIQ^-olLxeia aitn lands In &e county of Chautauqua, Jhen became and "was," and"~ever since has been, seised and possessed^ thereof, and^of the proceeds, rents, lisuS, and profits, in tnist for Waldo HuJ^- S^r'ffie"pTaihafC;s_testatorj2.fS'a^ ?¥!§?*. o? an equalundivld^ one-ha]f,par|t,.tI]iej'.e^aa "tenants .iif" common. 1 It appea ring that the defendant, before the commencemenr ofthe acHonTEacTsoId tEe*lana, the"title '£o which Kr^held'tff hi's'own'namerW' accdimffng^n- ceming th"e proceeSs'anS' the rents Mff^ci- its was_^irected.hefflre a referee ■"designated fn^eludgment. There Is little. If any, dis- 'im?e with "ref eirence to the facts, and practi- cally the only question presented by the ap- peal is whether the trust impressed by force of the judgment upon tiie defendant's title wassuffic iently or lega JIy estahiisiied. T^de ^ fendant relies upon the provMons of J^gjtat- ute, of frauds concerning tniste of this char- acter, and it therefore becomes necessary to determine whether the plaintiff's proofs are such as that statute requires. The English statute on this subject, (29 Car. n. c. 3,) in Its essential features, was enacted in this state by the act of February 26, 1787, the twelfth section of which provides that "all declara- tions or creations of truste^of any langs^shall 6e mamfested' and 'proved by some writigg signed by tKe party entitled by law tod^ Bare the trust."" Thus the law stood for about 40 years, until the geneiial revision of the statutes, when it was changed, and made to read as follows: **'!(7o"es&te'OT"lnterest in lands, other 'than' leases for a term not to exceed one year, nor any trust or power oyer or concerning lands, or ln_ any manngr re- lating thereto, shall hereafter be created, "granted, assigned, surrendered" of ~ declared, uialess "by act or operation of law, or Jby_a '3eed or conveyance In writing subscribed by the party creatingi^ grantingj_as,^|ging^sur- rendering or^declaring the .j?aBiev.,Sr^_hS_ lawful agent thereuntoi autharizeg^ bx^.writ^ Ing." 2 Rev. St. p. 135, § 6. After the re- vision a trust of the diar acter claimed l )y thg pl aintiff~in ttiia case could not be creat ed or establis hed except by a deed or oonvsyance "In "wffHng^ But by chapter 322 tSTEe'TSws ^■"1860~the legislature restored the law to Its original condition by an amendment to ■ae seventh section su'^tantlally providing that adedarati^of tr ust in lands might b e fTfoved by any w riting subscribed by tSg" traTly"deeiat1h g " ffie'same . It Is not ne ces- ~ "safy~hbw '1J o~p"roduce a deefa or a formal writin g g rtended for the pi ^pose in order to prove ffie trust. butlettCT^or miormai mem^ oraMSTHpiedTiyThe partyl" and ev en admis- slonsin arpleading In anothwacHon'Sitween" SfheF'parti es, If signed by the party with ]aiowledg«"^"ns contents, wiU. satisfy the re- " qmrSnients of the statute,' If lEey^^OTtain" enough to"^h"oiw" the nature, character, i^ extent of the trust Interest Forster v. Hale, crVesnS96r~Fisher V. Fields, 10 Johns. 494; Wright v. Douglass, 7 N. Y. 564; Cook v. Barr, 44 N. Y. 156; Loring v. Palmer, 118 U. S. 321, 6 Sup. Ot 1073; 2 Story, Eq. Jur. § 972; McArthur t. Gordon, 126 N. Y. 597, 27 N. E. 1033; TJrann v. Coates, 109 Mass. 581. The evidence produced In beha lf of th9_ plaKtffi~wargufflcifint wi^ SjB^ rule, to" ^tablisE'an interest la. tbglffl ads by her tes- Stor at tiie tim g of hja death, which occurred ■^ihe 9th '^y'irf February. 1891. The con- "veyance to'the defendant was shown by the production of the deed, which appeared to have been recorded in the proper clerk's of- fice December 3, 1875. T he pM aQg-jgOL duced andputjn_eviden£eJixfiaj»aiieca-fouili. ueratT'envelope m ffie safe of M r. Hutchins Mer^mr'deatErinajwhi.(aL3reTe--shown to MveT)earin~Eis"p^ession_dunBS..^S-lif^ (1) Ajgojverof attorney" UBdSc^ the hand and" seal of the defenda'nt to Jolin ja5,.P.latt wj* was at the time of Its execu tion "the law partner of the deceased, bMunng d ate ■I'ui e" 5, 1873, acknowledged befwe a nogg^^^^^ in the citj^ of New Yorkj_who alsp becamea subscribing witness thereto. T his tnstrument authorized and "conferred fuU power upon _ Piatt to sell the land fOT^i g8.000.._ paym_ent to be made In the "niaimer_ aiid as spedfled tJiereln. (2) A letter^ the defen dant's hand- wrTEGig, and bearing his signatiu'e. of the same dkte as the power of atto rney, ad^^ cCfegsed " to Piatt, in whi^ aiter„ Efifemug to the p'OW'er of attorney, and giving i nstmc- Sons permitting Mm to take certa,in_ notes ■for the purchase price of tiigJIaadj-fiie.Je- iendairt says: "Whatever Is_realizedi_xo'^ -^m^'underetand that it belra^ tOt . JEaJdO Hutchins and myself, j[olntiy_an4. eqijaUy; and any further instructions Mr. Hutchins ffiay give you, you may co mply withJ '" (3) Another paper, unsigned, but wholly in the d'fefOiaant's hand-writifigTileScribing ffie liaE3~ EXPRESS TRUSTS. 365 conv eyed to him by Fent on. It begins with tHg"Sta.tement that ttie "dggd fogmJFenton to m-e is a warranty deei..i— . . ■'■Sg;s""'succee2e3r~'The writings by whlcH^ It jiT^ls^g^Lifeat^ttils tni^ ia. de- clared are Jujly^ set forth, ajid it la alleged that under the tKUSj..saies have been made of mo?ft,jtJ[an enough to pa j Jffl demands and charges, leaving a surplus, to wMeh the plain- tiff is ep]tl±le.d,„ The def eiLdan% file a plea denying that Benjamm"in his lifetime held the land upon any" such trust, of that any trust was" de- volved upon them, asTiis r^resentatiyes, by Ms death. The puri)ose,"no"3dui6T,"Ts to ob- tain first the decision of the court upon the question whether, upon the facts disclosed, any trust is raised which can be enforced; for, if no trust shall be found to exist, then the investigation of long and detailed ac- counts will be avoided. This is the point which was argued at thebar, and we proceed to Its consideration without regard to sui)- posed irregularities in the pleadings. The la nd in ques tion was afiBplOT g' qmic Taip^ deed, dated on the 15th, ■But"3Jllvered on the 21st day of July, 1865, to Benjamin, who then heldJ.arge,_demMds agaaiist'IsaacTP; TRand, seciareOoCeMffltgake (ffi the same premises. The evidence suffi- ~ciently proves that Benjamin oraUy^^greed, at and before the time of the deliveryoFthe deed of the equity, and as part of the transac- tion, that any surplus over auad^^^iove_^s claim that rnight remain of the estateor its ^oceeds should befong to fsaac P. No writ- ten memorandum' of "ffie agreement was made before the delivery of the deed, but It_was suggested at the time that B enjamin should pSt It in the shape of a memorandum, safely Mpositea^n^case"ahytiHng' sBoffld'Eappen to HifrT "TrTfi Benjamin "afterwards Informed Isaac P. that soon after the transaction he made a memorandum of the agreement. No such paper was ever delivered to, or came Into'the'possession" of, T^ac P., but after tne- death of Benjamin a wtltingjDfJhatdracrig- Hon w"asr?^nS~safely depasited'inTils bank_ truh"E_^ By the terms2gf~"t his~wfTtmg, Eie " a^eed to pay over any balance of the estate remaElng, substahtiaily^TnaccOTuance with the "oral agreement. It was si^ed by^^ffla- fnin, and dated July 2r, ISesT'iiadjjnfe- neath the first signature was an additional Statement, also signed, in these^words: "This memorandum is made by me for the. use of my exMutor or ad ministrator only, Nojj^pr Isaac P^ Rand, ""''J^!""" "^"'TllT'ff ""'^'*'' ^i'"', Save anyl egaior equitable claim against m e oF 'E^'"^tater but u pon the payment of my debtriBterest; and all charge s! as abo ye"men- timiedT- any "balance^shall pnnre to ^jie hene- fit'of'Tsaac" P. KanTandl^Se claiming un- d^mffl:" '~~ — ■^le are of opinion that this writing Is suf - jaclent asja, declara tfin "of trust, within the jneani"ngliijO>J ir statute. It is much more formal and particular in Its statement than declarations of this description by letter, by answer in chancery, affidavit, recital In bond or deed, or in pamphlet, which have all been held sufficient, and with reference to which it is held to- be no objection that they were drawn up for another purpose and not ad- dressed to, nor intended for the use of, the cestui que trust See cases cited in Browne, St. Frauds, §§ 98, 99. IJJg^not essential that the m emorandum re- lied o n should have beende Uvered "to a5 r_ ongjiaa declaration or tfBE' It is a question of fact, in ail cases, whether the trust bad been perfectly created; and upon that ques- tion the delivery or nondelivery of the Instru- ment is a significant fact, of greater or less weight according to the circumstances. If the alleged trust arises from mere gift, de- livery of the writing by which it is declared is not always required as proof that the gift was perfected, for the court will consider all the facts bearing upon the question of inten- tion, and it has been held that If a party ex- ecute a voluntary settlement, and the deed EXPRESS TRUSTS. 367 recites that It Is sealed and delivered. It will be binding on the settlor, even If he never parts with It and keeps it in his possession until his death. Bunn v. Winthrop, 1 Johns. Ch. 329; Perry, Trusts, § 103, and cases cited. It must always, however, appear that the fiduciary relation is completely established, and not left as a matter of executory agree- ment only, regard being had to the situation of the property, the relations of the parties, and the purposes and objects had in view. In this case the verbal agreeme nt in which the trust orlgtnatgC was_made_injegnsid,sai tibn of tBeroCveyaiice by Isaac P. of his In- terest^InPEEe" reaT estate, "ajad"'the'Trust is" founded on a" good consideration: — Th ti fafTB or weight jn aiding the co urTto carry' out the iStaitions of the parties; and the want of a delivery or the memorandum becomes of less ^nlflcance l "The law as thus laid down is to be found mainly in decisions under the words of the English statute, which requires that all dec- larations and creations of trust shall be man- ifested or proved in writing. These were the words of our earlier law (St 1783, c. 37, § 3), and they remained until the first general re- vision of the statutes; the requirement of the present statute being that thgjmst-shall-be creat ed or deg kgefl-m-JgJitlng. Gen. St c. iTOTl 19l Tlie same change has been made in other states; and in those in which the question has been incidentally before the courts the tendency is to rule that this ab- breviation in the words does not change the law, and that "created or declared" are equivalent to "manTfestied" or proved." 'JrHste may be crea teiTTn the first instan^ceja. writ- ing! They mpife commonly originate in the oral agreements and transactlonsj)f^ttejar- ties, a nd "Me subsequently declared Jn writ- lngr~Dijr^sHute' "embraces both descriptions. tt^ad been^ettlga"]57^^^t ed' decisions" un-^ der the oig statute, wnen mis cnange was made, that an expresslSust" was sufficiently declareaTTsEown by "any proper written evl- aracediseiDSlng-faetsw^lilch created a fidu- ciary relation. Undei- this construction, the 'isnaarttoha vTords of the old statute, seemed immaterial, and are omitted. And we are of opinion that no change in the meaning or ef- fect of it was Intended or made. Perry, Trusts, § 81, and cases dted. In view of the law thus stated, the fact that there was no delivery of the memoran- dum in this case is not of controlling im- portance. It Is Impossible to account for its existence and safe preservation, unless there was an intention that it should be used, if necessary, to prove a trust. The statement that it is made for the use of the executor or administrator of the trustee implies this. The. c^tuI^j£e_taist_wasIflJ^ja£i,of its. existence; andl^byjts terms-A-perfect , trust is declared. It is, indeed^ declared that neither Isaac P., nor those claiming under him,' have any legal of equitable claiSr against "the m_a,ker or his "estate. But this "statement, if such was its Intention^ caniwt J control the effect of the memorandum m establishing the trust. That fesults," as matter of law, from the proof. We are Inclined to think that its intention was not to defeat an equitable claim to the proceeds of the estate conveyed, but only to protect the maker against personal responsi- bility beyond the actual receipts In adminis- tering the trusts. Decree for the plaintiff. 368 EXPRESS TRUSTS. BATES et al. t. HURD. (65 Me. 180.) Supreme Judicial Court of Maine. Franlilin. May 2, 1876. Bill In equity to declare a trust and for an accou nt ■ ~ P. H. Stubbs, for plaintiff, comb, for defendants. H. L. Whlt- BARROWS, J. I n 1847 one Kennedy g ave to Nicholas Bates and his br other Thomas, the piaintifC, a bond conditiong rTiSTtBe 'con- veyance or certain p^rc fels ot jLand_.(g§flBMtte3 ^at about two_M5gfeg andflfty acresjugon payment of the obligee's noles!^ rnl.851, be - iMfelE ematuH^of alt the "rOtes, a n adjust- ment was maSe, by wh ich, fiTiatisfactian of the boflflrtiglmgasT'oaVeyances of the bonded land in t\TO "sepafgre"^|[TSeIs,^^n'e 'to'Wm7W'. Bates, sTMrarvmaierrsxKftES'Wier to Nlch- olas, wh6~XwTEBr~WmrW. aSGtEe"'pla,intffiJ suFscfrBe3iiSi3~3eIivered to Kennedy a re- 5i!]^ln3wSea~^OTr^^ bond,"siSt!ng' foHh that lie'imd recaved the deed of'Bis'portioii, "for himself and In"~ti'a:sr2for;ilS."lB'iJtoCT Thomas Bates, "acc6f3mg to what_ttie_jald Thomas Has oV may 5ay~towards the same 're aT"eBtafeli'w BlSBTmounfa~at" present losev- Mily-five"aonHBK^ T]K[^JHce~onEg"parcd fS^' conveyed to Nicholas was "$450, and jSTicTiollas "seems tb"'Eave a'dtnittea^a' r'esulfing; trus| in favor of th'eiaamgg to the alBsmt oTone-sixth bi fEepurcbase, which was bind- Tng" upon" hiiri ' and fill claiming under" Mm wifh hofica "TSdeed the writing snba cribjeAJbK. Nicholas Bates seems to be Ja^temount,Jfi.,a _4eclara- Eion of ajTeS^^ trusC so as to Gati£fj[ Rev. St c. 73. § 11. The words_"created jnd declared" In that statute seem to be construed" by the courts to be synonjmous jwith "manifested, and prove d" as they "stood In tTielOT^glnai sev- ^tb section of the statute of frauds,— 29 Car. n. a 3. Forster v. Hale, 3 Ves. 707, 5 Ves. 308; Unitarian Society v. Woodbury, 14 Me. 281; Barrel! v. Joy, 16 Mass. 221; Pinnock V. Clough, 17 Vt 508. From the_ cases lust _ie!ted, and numerous others we see that a letter, memorandum, or recital subscribed "by IHe^xustee, whether ad- ffi:«BB6d-terorl3S|)osile"3"with' the cestui que frust ofh6t,"oFwBStll^THIende37whenm fo be evidence of "tfie trust'or'nK; 'wliribe sgf;! £3Srf6"^ffiSnsO]E"tr^L5S^S^^§5u§Jert, tfes and th'ejr. relations to It janjL.each other, appear with reasonable certainty. ""~"-'~ ' The existence"'©?^ trUgttir favor of the rtaintifC, which h,e, may enforce agaihsrMcb- olas Bates and his represratalWgS; "aiia HI miming under "him with ndtlce'bf the trust may be regarded as established^' "TJU-holas Bates mortgaged jEe property to Kenned y to secure a balanced the purchase money, ajn d su bs equently . made two ot her 'morEgage3"Hereon to Philip M. ijtubba. ttte BcrlYener 'winrdrie w'"the cojnveyances from ^'iinedy and wrote the indorsement upon tha "bond containing the' declar ation o f .the trust feoth' 'of these Jast-named mortgfa ges were ^^me3rW 'PHiicp^'l^om pson, who had no ^novHeSge of the trust, and has given notice of forWosure, but has nev er been in posses- ^lon bf t^e propfr^. ~" "T^ic SoIaF'ffi^es died in January, 1866, leav- ing a Widow, Keziah M. Bates, now Keziah "Ja. aura, who is one of the respondents. and_ who to ok out letters of administration on h is •estateTThventoried the la nd as subject to th^ "" ^morrgage~to'^nrice" 'TS^"pson, ^'and being alsb'Tield^as'a InM "estate for Thomas Bates WTSraBTo i mt-or^TOUI !|»140:" This sum I§ appareirnyn;]ife" aiH6ttht of aie~$Vb originally rtne: •tooneyrwitinmgg^r UI> lu the tlme"cKnEe 'E^ETng of TE e~InYentory. The widow con- "'^^^^^^"^irT^^s wsion of Ihe land, recel^gg' flSe rents and pr o fits untu Novemoer, IMhC when she made sale t hereof by license from tflg" proraWcSnit; "Witholit maKing menno'H oTTEeTirufErTo Dapier pgynriHnngrt^ g: IFb'acS'to'BSirfor part oTthe purchase m on^ anff" took'posgeggiBHr^Thg^JWi dow pgfflea 5egi'gi§"'E ^gr'1EEe''other respondent, and on " beptembeF 9, 1870, took a quitclaim Bee f From Day, and since then the two defendants Eave^ccupied or had the exclusive u se, in- come, and proritof the premises. "^ 'TrEi^ptaI nflff''gSey'nbt claim any jc lghts a s agains£_^^|]m^^^eSr~TBe"Eeiraof~Mcli- o!as"ffi!tes "'are''"n'o' longer interested, as the sale by the administratrix; devested them of all right and title in the premises. ^£g.-Jaft5^Mgatr.fe.Ja her jBTQWtQry. aj- mTOed_ the plaintl fC's righ ts, and Is fully c!BgrgeaEle withlipfiee of ^^em . " TOe 'ISthg Respondent, her husband, seems to have~6c- tMpsgtmiy uneerh^rnBiiraJbiai ec^t^ 'By^fiemj.ial.iM.jmt s and^oflts i s admitte3 tn "ffiieagreed statemSnt'''' He is "there tore f g" sgdnsible to' the jplalntiff on Tihis 8c br*"wRh ,^^"~The testimony' estabTishes the ScFtEat the plaintiff made a claim upon the adminis- tra^rirTBrTnrTHfeTem;'l[na'TEST Ebre"or"lessTiegHfati^ h yri-^^- ' 370 EXPRESS TRUSTS. V'^ McVAT V. McVAT. (10 Atl. 178, 43 N. J. Eq. 4T.) Court of Chancery of New Jersey. July 12, 1887. On final hearing on bill, answer, and proofs taken before a master. C. F. Axtell and B. A. Quayle, for com- plainant Theodore Little, for defendant. VAN FLEET, V. C. This suit is brought ^to enforce an express tru'sL""ifirwr" to April 2, "ISTS," the compla inant "wa s the owner of a lot of land InMprristown. ' OiTIEat day iie "coni feye'd'Yf 10 E T s^sgtt " JCSa, wBg* ontgg Same aSy* conveyed h ^ to tE e™complairi anFs]^^wfe. ]Both deeds w ere Yoiuntarr! Thejc^piajn- ant's wife continu ed to hold tE e title' u nRI SovemDer iatt, ISSITwhen "sEe and complain^ a!ht conveyed it to their 'aaii^HteF' Cellg^.'lhe a^SScEffiT in "ffii£ suit. ' Celia, on the sa^e flay^lindTa s part,, of fee; trangACtion by wliifih she became invested with title, made a deed W the complainant.". Th e object of 'T£ e two "conveya nces was to cE ange t he jEiSe'^^Tgroi t'Ee'vriTe'" to tJie husSMd ." liTo jras pitld tor'STOSP.' " CelTa, at' transaction, was a minor, bein^ onl^„ 19 ^ars^Cage ~Her deed, therefore, while a't void; was Toiga.|ji^ No acts, in confirmation of her deed, performed smcesne attained full age^are either alleged or proved. Since at - taining full "age," she "has. refused to execu te a deed in coniirmatlon of the one she made while a minor, but now insis't's"tli'at that defed, jay reason ''of,._heFjBmol'it;y, ' rs___of "no^eBrectj _and 'ffiat~the title to the land^jtill remains jb TSef,' and 'tHttt"sEe is under no duty to convey ^rto"Tlir"t !cnapfa3lLailt . ' "Th e -coai t)lainant7"on BH^^ubJecF'to a 'trusV,''T5e"'trusT beingj9S.t ffl|"JB(nfla"^6ntey'thelanajKTiim, andjay- Ing thiuF far failed to e xecute it eSeet uajly . '^ro*n^W''fSfa's^g'tydo'' so,''''ffiie'''co^^ compel herTo execute it. " Thefe"caE'"Be'no douSFabout the fact. The circumstances attending the transfer of the title to the defendant render it conspicuously clear that the purpose of aUjBSESaaS-CfllifiSEa- ed in the ^nsactioru was_^to change, , tfte_U tle i^ffiI3?'Ci^'!!l^!.'ISi'.'?i§]3aB^- S.,ia oMpua _ls clear, therefore, that the de fendant tooF title"~su'bject "to a trust, an d th at the trusT - was an"_ express one, The"onIy question which the case presents is, is the trust man- ifested in such manner _ttatj|SnHI!^2;;^^ eognizffil'ce'of';W''ana"enforceJt? The ejclst- ence of such a trust can be prqy^d.Jt'yii PP th- mg short of _writign,.fijidence. The direction Cft the statute .of .frauds upo n this subject "I s j^era;tive. It declares that^l declarations and creations oftrnBtyflgnag"§Hgll"ba' HUla- ffested and proved by some wBtitig gl'glied By'the party enabled "to 'dec lare"the trust, or aie they shall be utterly "volTI and of no eTffect. ilevision, 445, § 3. TEisstaHile'mire^ ly prescribes a rule of evidence. Ij. declares that the adstence of an express trust of j ands shall be proved by nothing but vyrittSi evl- aence and rigorougJY Mfi'"'^f'' "" other pvi> dence a s"a means of establishing the fact of the existence of such a trust, but I t does no t Inhibit the creation of a trust of this kind by arol. It nas accordmgiy been held that a valid express trust of land may De created" py p arol, provided it is subsequently declared aiTd manifesteTIn the manner directed by the statute^ In Smith v. Howell, 11 N. J. Eq. 349, the trust sought to be enforced was not declared by writing until more than 16 years after its creation, and yet the court decreed its exe- cution. Chancellor AVilliamson in that case said the st atute does not require that the trust Shan 6e created by writing, but that it shall hft_manifested and proved by writing . '"SnSTEe also held that where the integrity of a trust not put in writing at the time of its creation, but subsequently declared by writ- ing, was assailed, parol evidence was com- petent to show whether or not it had in fact been created at the time the conveyance was made. On this point he said: "A question of fraud— that is, whether the trust was real- ly created at the time of the execution of the instrument or deed to which the manifesta- tion of the trust refers — is always an open question. Suppose a judgment or' some other lien has attached to the property in the in- terval between the execution of the deed and the declaration of the trust, it would be necessary, in order to defeat such lien, to show that the trust was bona fide created at the time of the execution of the deed. This may, however, be done by parol evidence, be- cause the statute does not require that the trust shaU be created, but only manifested by writing." The doctrine of this case was fully approved by the court of errors and ap- peals in Jamison v. Miller, 27 N. J. Eq. 586. Parol eviden ce was a dmitted in this case to estabilsii tne lac't that a trust bad been cr » atea b y parol coiitetnpoifaneougiy with m ^ execution of the deed by which the title was made jto the trusteei T he trust was declar- ed; some time s ubs equenF to it s cr eation, Py severai_writings^ one of which was the de- "Tehdant's answer. The court said: "The "Wfitingg [meaning the declaration of trust] are but evidence; the trust is anterior and independent; and the rights which the court regards are those that spring from the cre- ation, not the mere proof of the trust" JTh" rule must be consider e d settled that a val id parol trusT or la nd may be created by par ol, but the existence of the j;rust c a nnot be prov- ea~ except by "wntteh evidenced The written gyiaence, h owever, "may ~be made long subse- quenFtoTHe creatw^^oflSSrusE TEe "'onlTFvw'ltten evidenc e or manifes tagon of *IEe trust wSich the cnrnplaJTu^n f ^na nfFer- ed in this case js that which is.containg^in the pleadrngi^ The blTl allegea th^, t the land I In question was dbnveyed by ^e compl ajn- EXPRESS TRUSTS. 371 ant and liis wJfe to the defendant for the sole purpose~aga with the express understanding thgrthe'detendant should, imm ediately afte r acquiring tmerTSHVeyTrnrnTe <:omplamant . The defendant wife l^equirea to answei^ under oath, and has done so. Ry her answer she . says that she , has no reason to doubt ^^ "^ t^lith r^ f^" ti^n ve allegation of the bill. Does this constitute steh evidence of tli<> tjust as to ren der it proper for the court t o decreeTtS fexfecution ? The toroof of the trust. in my judgment, is complete . T he declara- tion is in writing; it is signed by the trustee; it was made after she became competent to declare a trust; it is verified by her oat h; and its terms ar e plainly stated , ' rne pr in- ciple_ js settled that an answer to aTbilll n' e quity Sy be sufficient, as a de claration o f a'trust , to j ustify the cour j: in decreei ng its Execution. Uhanceubr" Vroom, In Uutcmnson V. Tindall, 3 N. J. Eq. 357, held that where a complainant flies a bill, alleging that a treed made to l!tie_de t'endaiit is subject to a trust in "his favor, and praying IhUl It lllSiy Be~ so 'decfeefl, ""anH the~d6f endaUt TtflSWgps, admitting"tEe~tPtts^ -the defendants answer will constitute~sufficient evidence of the trust t o w arrant the court in •d eerettf iig" r t S ' (i!t6(.'t i- tion. And TBe'"same efficacy "was given by the court of errors and appeals to an answer in chancery, even in case where the declara- tion was volunteered, or rather was not made in response to the bUl. Jamison v. Miller, 27 X. J. Bq. 586. It is wholly uni mporta nt on what part of the 'SeaarattOirgf trust"i|iejfrus-" tee signs his' nam eM He m ay sign it at^the Dottom, at the top, at the sia^, or iriTEe'mid- ^- ^gJSS^sigtt' bxl^MfaTjaiftMng Ms initials. 'W jiereyer or in wha tever form h is signature may be mag^it_ wil[ be sijfficie nt wjthmjhejneanliig o|.JJia.staJtl!itei. if jjbaLbe jfoes is done for the purpose of giving^jithga- jicity t'o'^t he ingteument.^ Smith v. Howell, ll jJ. X ^. 349. Th ^ ^ ^ defendant i n ..this case sigped the affi- dav'it to h^ ans-w^ er , not only for ttie_purxjose or authenticating. tn £aiiaiy!e£ but ijgs. for the purpose of verifmng its ^gontents. I t must therefore be held that a valid trust in ttLg land in qu esHTO' itiTat iSt of T3Ie" complainant nas peeiT prbved by evidence of the kind re- quired by the statute. TMs being so, the ciMpiMMiit now'stan da invested~wi_th a full and complete estate in equity injthe^landjn^ ^estion. The ianflT in equity, belongs to the compTaiha nt, "and" the defenda3FsimpjjTol3s the dr y, "n a'Ked "legal " title "intinist for the complainaht. In_giis condition of affairs, the aerM[aant^gaji,p,9J|; defeat jffie com^aihant's ngEt to a conveyance by showing that~lhe land "was conveyed to her, or to her grantor, Tff fraud Ton agaitors: '-€hvnes v. Ownes, 23 STT. Eq. 60, is decisive against the validity of such a defense. Chancellor Zabriskie in that case said: "I know of no case in which a court of equity has refused to enforce a trust, actually declared and vested, on ac- count of fraud in the conveyance to the trus- tee who declared the trust." The fraud here charged is against the conveyance by which title was put in the wife. The defendant says that the complainant put the title to the land in controversy in his wife to defraud his creditors. The proof in support of this charge is of the most meager character. But suggosejt be admitted that that conveyance wagjfraudulent 'SS'totllg' complainant's cred- itors ^flhere can be no doubt that itwaa.aia5 ^gffisT him, nor that"lt'"garr to ]Ki£3vife~as ifull_^a complet&^;!ffi!fflg(|gg;C)ver;,Jl^land, against everybody except his creditors, as an _ honest™ coliii-syairee' would "liave'j^nT As' against ev erybody~except" "creditors' her title was unimpeachable, "and she congfifljiently plight, 'as against aU the world except^ tbfi creditors of her Jiusbandj, make a~ valid. £onr, veyance of it jn trust,orj3tthffiBdse. The complainant is entitled to a decree. 372 EXPKESS TRUSTS. DANSER V. WARWICK. (33 N. J. Eq. 133.) Court of Chancery of New Jersey. Oct. Term, 1880. George O. Beekman, for complainant Joel Parker, for defendant. VAN FLEET, V. C. The complainant^ the wi dow of DftjiiLiL !Danserr_^Iie gg^s toHiave a pg,rol,. trust. es(tS.h4iSfiSSL^-fi?.-^" forced'^.gainst ]thp,, defe ndant. She allege s test 'fie Fhusband. some. man tbSL. Bfilom J&ia death'," 'assi gned th e b ond and mortgage in <»iifro>eifty"^_jtlie'''3[efendant, upon ja,_ parqi tfust or understanBTnl'lHaOie wouldfoi^- ■WffiTor'by a'"s!^|'day, teansfer them to her. 'Jhe "transfer to^the_defe.Bflaa.t-.wasr iateaflfid tg"De merelL.Y a'gtiijB_T.egJting iifi£. witli title . TSe" assignment to the defendant bears date #eBruary 1, 187§^^ap4'_Danpe?- digjT onj^g l^th day of the following^ Septemljg.^jrh£ bond and mortgage were in Danser^s posses- 'sion at the time of his3,^& and "har^ since fBSsnrgen eorisianiiy 'inJhTpossesiion of j^e c'SmpIaina5f."!rEe~def en^n t has neye rasl^ - edTor "{Eefn, nq^iitt6MptScl t^' get ^poascs.- sJoeToI ttem. "Timohth or s'ixjreeks ^rior IcTDanser's'Seafli, the'Se^uEnt directed an assignment to"be dr awn t o the com plainant. itffiHBg'^to the person t o whom he gave t he direction fhafBeTSusF^raw it for Danser^ who would pay hiin. He, at the same^tlffi'^i said if was'r^H tMt tlfeoia^^— ^gfgjying to the comptainant-jih^id have the ^onjl and" fflSHi^^ger Bans'erj'^a.t this time, was 5W§tra"tedTBy"the disease which shortly aft- erwards catised his death. The defendant did not remain to execute the as?ignme2f; BuT^aid he w6uI3""return"soon and do so. He did"BStr6ttU-B-that day. He wassiife seguently informed,' on two.or .tijreeJJggjSBt occasions, while Danser wasJlYing, that .the assignment had been drawn and was ready fOT"executiori! ~Ou each occasion he said he iiaJ forgotten of n^lected jD^executejt,j3ut would call soon and do so. ISenCTer ful- filled his pr6^^S"""Two'oFSireeweelEs a"ftgr DanseTs'^eathT ^e calle d for the assignment Danser had made to him, and which "Eelidd left when he gave direction for the draft of the one to the complainant, amd stated that he meant to do. what was ngtit'abdfft'tlie matter, but he would not execufe'tfie^lSsigir- meut'to"t'Ke'complalnant"unQl~fKiBg;^]WOTe fixed up; Danser owed hti BaT' He took both papefi, ' and iias never executed the assign- fljjmfWllin (;ompla3iMmfe — This narrative comprises only those facts which are not disputed by either party. The defendant denies^ that the mortgage was "transferred to him^^ubjecf to a tru s t , feut says, oil the contrary, "lEiFthe'assign- "ment'was made to satisfy a promissory note "Ke held against Danser; upon which there ■"was due $2,000 of principal "and" a_yearjmd. six or seven months' interest flis explana- tion of the preparation, by his direction, of an assignment to the complainant, is this: He says, some time after the executlM of the assignment to Tiin^- 1ib ascert ai ned t Hat tne person who m ade the mortgage h adTio ■ffffe on record for the mortgaged premise^ that htS wenr-at ouets to Uans'er, ana-tcrtd- fiim Le~Ea;a "gwit rmggTBtfflTgS gTBarirBe'aia not take the mortgage back"Se wou ld maEe Mm. " He says tli ainDans er replied that the "imortga gor's title was all right, b ut If he w as 3is"satisfied he would pay him his dept, or give him another securltyTandTie^ could then i?eas^gn"the mortgag e. Melurther says that H was'ultimateiy arranged tha t Uans'ef should have two mortgages, which "w ere then Itemrtl srTns" lands, canceled, and execute "a hiortgage thereon to him,' and Jie was fEeS" iC5 a^lgU'tgFitoortga ge'lircontroversy to the ctnnplamant. He say s it w as after this SCh'yuielrajfl'' been agreea upon that he orfleF" • S O tliu aKS lgntnent to the com piaman T to be < irawn „_ These sta tements p resent the question of facT to D'e^eg iagar''Tne counsel of the a^ f endant, however, insists "tfiat, as a matter " of law, the bill in this"Ta§S riTust b e dismis s- ea, regardless of~what th6 eviaence demon - strates the tr uth to be in respect to the tniat alleged, "^s contention being thatj;iie..to!§t seT "up by the complainant ts"one which can- not "jbe established except by wriSSlesk aen^j„ . The trust, it wUl be obse rved, affects personal property, ana not~ gnds. Tlie sub- ject of i Ug_a.^.bt. That part "of the statute"' pi fraudsw hich'enactsthat alOeclaraTioM" and crea£ioHS"of"trusf shall be taanifested b'y~WMtffig'ahd slgHedTBy the party creating the-ggme , or else- shall -be void and xif~no ekect, applies only to trusts of lands, and Hhs no application to trusts of personal prop- J^r--:£ valid trust of perso Salty may be created ve rbally, ^and^proyed by parol evi*- ciencg, A trust of Pj'rsonat' nr operty. aln^os t precisely^ike ihie "one under consideration, aaa wMcff Had been "created by m«reji90kan words, "and " was su^piSHga"l5yTsnly-parol evidence, was upheld by ChancellS?"WlMiaai- gon In Hooper v. Holmes, 11 N. J. Eq. 122; also Kimball v. Morton, 5 N. J. Eq. 26; Sayre V. Fredericks, 16 N. J. Eq. 205; Baton v. Cook, 25 N. J. Eq. 55; 2 Story, Eq. Jur. §972; 1 Perry, Trusts, § 86. A valid trust of a mortgage debt may be createETby patQli for, tlioug h a trust thus created cannot em - firace the la nd h eld in pledge, yet It is good as to the dibt, ana win entitle tfleT ^ui que trust to"~suffleT ^t of the proce"eds of sale, wBeh the landls 'ronverted into mone yj^ to pay the debt Sayre" v. Fredericks, supra; BenboW V. Tftwnsend, 1 Mylne & K. 506; CMlds V. Jordan, 106 Mass. 321. It must be held, th en, that the, tru st al- leged iiT this "case is valid, and if iFTias been sufficiently "pfove'c Tj" the complainant i s mtRIea" to Fave it est^lis hed and enforced. Tjtie question "then Is, lia sTt been prove d y~I high degree of eviffeirce should be required. EXPRESS TRUSTS. 373 Before_the court I ngrafts a trust upon a written instrument, ~aDsoiute "oh its tSX^, it Such should requu:e the most cogfeg _ ___. proof. T t hink, has b een furh"isEe5 in this ' mSeT '^^r undisputed '?ac"tB~mali:e~a" strong" case against the defendant. He attempts to explain and moderate the force of the one having the greatest weight. I refer, of course, to the fact that he had an assignment drawn to the complainant, and that when he gave the order he said it was right that she should have the bond and mortgage. H^. attempted explanatio n has, howeveri.resi! ilted in a series of__ct)ntra7TTpi;ujnj_w hich utterly destroy h is testlmon.Y^ By his answer, which is under oath, he says that after h e. seet ,Sig_a^ignmentto Ocean_£ajiiit3j. foe record, Jie w as informed that the mortgag or had no' titl e on' record f or the mortgaged p remises, ancTThat ne went at once to see iJanser, and thalran: 'ai i aiig u- ' ment was~tEen made by which Oanser'was either to itay his deht"6r substitute another securityi' arid he was then to reasslgti "the mortgag e. His assignmeht was not IbagSd for record u ntil October~23r' 1875. Daiiser had tuen 'B55ii~di6ara' mofe'lMaii a month, bo ihat the~ ^TMgement7 at "tie' time^TtaiFSd, ^a s unqu estionably 'a'fabrica'tron'. "When the defendanf came to testifyTEe swore that, be- fore he lodged his assignment for record.Jje had_ heard . from one George P . Conoy er, tliat t he mortgag o£_^aji.,n9 Jitle^ and he went at on ce to s ee Danser. But it is perfecQy cKSr; from the evidence, tharX3onover~couia' hot have"glveH' tBis"information.,untirTo' BgTtfter DahsePs death; for he_did_not have'it hlm- seIir~C!S5over obtained his information from the mortgagSSi; and the mortgagor swears that^ he first obtained it from a search made in Decem ber, "IStC. The defendant was sub- Sequently recalled and re-examined, against the complainant's objection, and without an order for that purpose, and t hen swore th at one Edward P. Jacobus first {nformea ni m that the mortgagor had no title , and tha t tEHlnfo Matlon was giv en t6""Eim" vftry """" after the assignment was made to him, gjit, np5H'~the examlna tioh of Jaco bus, it was ghOWh that the ij63jch from whicff'Be' oESin^ e"cl his inf Ormationwas not maSeTinHl after Danser had' been" dead more th an "a month. So irTB-pSFfectry cleai: that the information which the defendant says led to his inter- view with Danser did not come to him rftitil after Danser was dead, and the conclusion Is therefore unavoidable that no such inter- view as he describes took place, The ter- giversation of the defendant upon this point renders his testimony unworthy of credit. I find it impossible to believe him. "It must also be remarked that the (d efend- ant's conduc t iiuxelatioja. to JJg.cftgJody ot 3MJt!md..-and-JlflIlgaS£>. as porga^^^ by himself, shows verv-cle ajly that ^, Jidjaot belieye^jthey _ were Jds^ proggjjty. He says the bond and mortgage werejleliyered to him, with theassignment, on the .^^;__^^jhe date of tEe assignment, and thaT^M^Jcpk tSem^to .a. h otel, in "which he and Danser were Jointly Inter ested, and which was un- " 9er the ma nagem ent "of Danser,^ and threw thga-in a deslLin ihe bar-ropm. He retain- edJheassigflKient. He ga ve them no furthe r care or attention, but'carried' the a^gnment ^tSTiis TTouS^ahd "placed Tf in ^s safer"2[g^ does not know when or how Danser got BBS- Session j)f the bond and' mortgage. So far as appears) he lias never tried to find out. Dan- ser did not live in the hotel, but occupied a dwelling in the village where the hotel was located. The defendant says, that while Danser was sick, on the occasion of his last visit to him, Danser told the complainant to get the bond and mortgage and give them to him, but that she refused to do so, and, to repeat his own words, "she was just as cross to me as she could be." He did not ask Danser why he had taken them from the desk, nor did he insist upon their be- ing at once surrendered. He never a sked *f pr oTssfrfi" unless ine_ .aaiz:i sfis of the w ill "hg gn rt^nn^- nant to t he clai m of dower, that the .Y-caniiot stand togel EiEl! Lewis v. Smith, 9 N. Y. 502; Church" V. Bull, 2 Denio, 430; Jackson v. Churchill, 7 Cow. 287; Savage v. Burn- liam, 17 N. Y. 562. This rule is a familiar nne, and needs no further citation of author- ity. In this case the provisions made by the will and codicil for the widow are as fol- lows: 1. The will gives her all the hous e- hold fur niture an d je welry' oJ every kind_ln oTeS rOn^aSFa' "y-fflg-net Income of all t he real ^ esfate )belonefing to the testator. a' lter''payment of all taxes, assessments and interiest due, thereon, to commence to be paud tg ,.' »e t Ri ^ u moa i M - ffflia the testa i ox . 'fi .ja fe eease^ and to be paid to her every six month s Qiereafier. during her iird ' i'he codicil adds . "a suitaPJe provision m money." "to bft na.i(i to ner^ d nrlng the flrst six months, till the payment of her provisions under the will snail commen ce," aiid the u se-jiluring her nkturai me. o r the apartments In the house t?o. 6 15 Fourth-Street. -New York, as occu- pied by her and he rjiji ^ , band. as a y fisidence at llie date "of'Tihe cod icil,^ with the election jEc TEaYe siiclS ^CT"sui^ble "residence in any ot her . house ..he^^B ng to him at i:he' time of his, decease that she*m ll6f prefer. " ^Xfter making these provisions the will dis - poses of all the "rest, residue and remainder Of the estate," b y directing in substance th at it be d ivided equally among his surviving children ana txi'e childr en of~ETs~geceased Children, tf any there shouTT b e," gl::^' mpnths ■ after the death of h is widow. ~'^" The will thennomihat^ executors, and clothes them "with full power an d authority • to carry out all the p rovisions 61! tlie Will,"" and it they deeih it nect^isary lit gW^fei' to" a fail aivlHlou~t!fllU; property among the'par- ties entitled therefo, to~giell~elther at-jj^lltr OTTTrtr aitg-^alg-tlig-TiersoBar and realjestete, or any portion thereof, and execute deeds tTiereof, and to divide the proceeds ag Tlhere - j^elofe directed; but no sale to bejoaae till six months subsequeat to the death of the Testator and his wife. It also clothes the "e xecutors, "t he "survivbr or survivors of them, with full power and authority to rent lease, repair and Insure any portion of the estate during anv nerlod of time the mmf. • faay rem ain unsoLd-jor nndivided." In Savage v. Burnham, 17 N. Y. 561, the testator devised and bequeathed all of his estate, real and personal, to trustees; the real estate upon trust to sell after the death of his wife. The will provided that during her life, the widow should "receive and take to her own use one-third part of the clear yearly rents and profits of the real estate, and that the residue of the clear yearly rents and profits should be deemed a part of the personal estate, and subject to the disposi- tions of the will concerning the personal es- tate." The entire estate, with all its income, ex- cept the one-third of the rents and profits of the land, was given (through the trusts) to the testator's children and the children of his daughters. It was held that a claim of dower could not stand consistently with these provisions, and that the widow was put to her election. Upon the authority of that case. If the ■nrii] In /|iioBHn|^ nr qa,tes a trust and veata tha entire legal estate in the trustees, the pro- vision made for the widow is inconsistent " ^th the right of dower, an d'she w as bound to eiect, i n that case ner claim or dower, ' if allowed! would inevitably defeat BEe scheme o mut Will, fur It would urevti nrtBe ' trustees from holding the_ le gal title of the" whole estate, and receivin|r the entire r ents ana pronts for the purpose of paying jtssessments, interest, repairs and inanmTipp^ net income, of which one-third 'is" to 'Itje paid to the widow, and the resiaurtntmrgreiy ,to.,the o ther benehciaries. The first question then ia. aj-p tho p ypcu- ^ torSjjindCT this vdU, made trustees of an ex- press trust ? The'~worT~''trust^' or "trustee"' Is not used in the will, but that is only a circumstance to be noted in considering the question. "It is by no m eans necessary tha t the donee sflOPld be^expressly directed to noig tne ' property; to cert ain uses or iii U 'UHl, or as a trus tee. • • * It is one of the fix- ed rules of equitable construction, that there is no magic in particular words; and any ex- pressions that show unequivocally +^ft jnton- jion of the parties to create a trust will hav e that eiteot it was said by Lord Eldon, that ffie"w'fffa 'trusl^ not being made use of, is a circumstance to be alluded to, but nothing more; and if the whole frame of the will creates a trust, the law is the same though the word 'trusf is not used." Hill, Trustees (3d Am. Ed.) 99; (Grig. Ed. 65) and cases there dted. We are in this case to determine the ques- tion by the authority conferred and the du- ties Imposed. The executor s are ci"thp<1 "with fun power and authority to ren^, leaseT jepair and insure" the estate "diuring any ^period o f the time it shall rema^ unsold atlU limlTv ided. " That period is, at all EXPRESS TRUSTS. 375 ^ evOTja^^ to Ja st until six months after the ^deceas e of the widow, ^ hey are also In general language clotBed "with full power and authST l ty to egrr y out ai l tflfe lE)roTision 8 "of tnis wuL" 11 iS-a.DDax6ht tiia,tJihiRj^net income of all the real ^tate" is to be a&reviou8 years oiily $250; t£at af terwa.rds.i_d'uiing that yea'r,^ In order toobtaln" means for Hs si^porT, 'he sold for ^00 jjis'revaKioh of aoine Itmd belongin g[_ to his mot.he£a..fistote.;^.Jh8J;_tt ege_.two sums , '^agetterwithjbis. ga}ary, jn^pfl alLJIjJa. mean^ of support^ except such provision a s are wholly inadeqiiate thereto; thai he stood ^"heed"o3f' such sup port as he hadT been ac- customed to receivelSnmTn-OttBf^rti miffl^ 'XridTESOEe respondent, though wej"aware tBSSresrr^nd'offen'Trequested therefor, refus- and"Tliy liUMU WttS I'eseTvea ^ CEapinaBrJ., fd rthe considerattMnrfB e fulTcourE: G^"(jr'S?fiafflck and J. B. Thayer, for com- plainant. E. D. Sohier and C. A. Welch, for respondent. BIGELOW, O. J. We see no sufficient ground for calling in question the wisdom or policy of the rule of construction uni- formly applied to wills In the courts in Eng- land and in most of the United States, that words of entreat; ^ , recom me ndation or wish, t^^>""^Tir"makeMm,,jjJEjjgtee]^?2^ji^S ^^persQns3i" wJSose favor such... expxessiaaa. are used, pro vidgfl„the-tes.ta.teft.rbaB~poini;ed ouF with "cleaim ^s and ce r t aint y , the, objecta ^theJcus^^^dffiesubject-mattCT^^ It islo attach oFftw m which it is to arise andlSe'a'dmini^efearT'^nSe criticisms which liave"Beeh sometimes applied to this rule by textwi-iters and In Judicial opinions vrlU be found to rest mainly on its applications in particular cases, and not to involve a doubt 378 EXPRESS TRUSTS— PRECATORY WORDS. of the correctness of the rule Itself as a sound principle of construction. Indeed, we cannot understand the force or validity of the objections urged against it, if care Is taken to keep it in subordination to the pri- mary and cardinal rule that gie intent. of the testator Is to govern, and to apply it only 'wKSfe'the creation of a trust will clearly subserve that intent. It may sometimes be difficult to gather that intent, and there is always a tendency to construe words as obligatory in furtherance of a result which accords with a plain moral duty on the part of a devisee or legatee, and with what it may be supposed the testator would do if he could control his action. But difficulties of this nature, which are inherent in the sub- ject-matter, can always be readily overcome by bearing in mind and rigidly applying In all such cases the test, that |o create a trust it, must clearly appear that the testatorTF* landed to govern ana controlTffiS^SSSsS ^^ ftt8-^n^--t5~wiiom'TOrT asguagrorthrwii i iTajTOfeggearsflr'ma'iSor^s^Trasan^- pSfgggtp'or Indication of thafWBlca:;ffi r|es- tator thougHt woulh be a reasonable esCT; cise^oF ydisCTeHSn whic hTie in tende.d..to je- pose in the le g atee ^or deyiage.'l iy objects at tbe siip^^ed jrugL. a^^e -GerStSrand-^eiF- Inite; iftlie^proper^Mtowhich it is to attach is'^fe'SHr ■^tilCtecToufrirtlie' felaSons jad ^ ft wanbff ' gf •tH rtegtatgr"t[gg^ge •"suropsed eStuis flue U'UBLyiTt" are "sucn j^t9_^gl|caTe a"itraaf"rfiterest'atia'"ffio!ivron ttepart of tfieteSmSTTii -ffiSEnrffiem^af^SCTF of fils btmmyrTilir'atSSfr'air "ir th'e'recbmmenda- toryToTj^i'e'cataty clause I s 86 '»'fteg Ma_as to wa^anf "ffie^lnfeferice' th at it was^esiffled to''Be pei'empfory on tlie dbiiee.^^Rie 'just and TegsonawrTHterpfeffftttm-i-s," thar^atriKt-is c rgafe y which is oBliga|or£' and3ia, be' en- forcecnft" equity" "SI" against the trustee Jjy those in'whose befialf the beneficial ^fi^ of tfie"gift was Intended." T Jarm. Wills, 333; T'ftedf. Wills, § IT, els. 11-13; Id. § 43; 2 Story, Eq. Jur. §§ 1068-1070; Malim v. Keighley, 2 Ves. Jr. 383, 529; Bernard v. MinshuU, Johns. Eng. Ch. 287; Williams v. Williams, 1 Sim. (N. S.) 358; Bonser v. Kin- near, 2 GifC. 195; Knight v. Boughton, 11 Clark & F. 513, 551; Harrison v. Harrison's Adm'x, 2 Grat. 1; Coate's Appeal, 2 Pa. 129; McKonkey's Appeal, 13 Pa. 253; Erickson v. Willard, 1 N. H. 217; Van Amee v. Jackson, 35 Vt. 173. The doctrine was recognized as an established rule of construction by this court in Whipple v. Adams, 1 Mete. 444, and Homer v. Shelton, 2 Mete. 194, 206. Jurning now to the clause of the will •v^ich islhe subject of the present eontM^er- sy, it seems to us that it does not leave ^iie s'lSpport of the children of the testatrix to th« discretion Of the- responaentrt(r be afforded or withheld at his pleasure,'1)ut "thatjthe de- vise to him was made on the trust th^ he Jtould fuMlsh sticli support so long as _he lived and received the mcome of her property, ISe objects of the trust are distinctly named. The nature and extaat of the trust .ISl clearly stated and defined . It was such a siim~nf money as might be necessary to the comfort and support of each one of the children of -tne testat rix. JNor Is the amount nf thp ^na. ficlal hiterest_lgfjL.tedelTiTlitP ,nr withnnt a. Standard by .jeM-ciJijcan he .iaeasui£iL_lLi§ to_ b^. such_comfort.jai. sunn ort "^fi thev m either of them may stand ih n eed of." The gglgPtjog. such-a-Denenciai.. mt(ir6St canTe ascertained and enf orced by suitable pro - teeamm'^&mef^ans:^: 01 m e quity. , Thorp yr"Owen, 2 "Hare, 607, 610;. Sanderson's Trust, 3 Kay & J. 497-507; Parwell v. Ja- cobs, 4 Mass. 634. In the last case. It was held by this court that an action at law would lie against an executor who was di- rected by the testator to furnish support to a person in whose behalf the suit was brought. But In the present case t he. . phrase "comfort and support'' Is made moreSeflnite " and certain by an express reference In the terms of the g ift to thfi._ c.oiitinuance of a previou sly existing state of t hings in the fam - Hy of' W't'ggiatMx-gaa'h tft lusTBand. Sn whi^ii • ttteTcEildren of 'TEe'lormer had resided and received support iinrinp; ^^r life. Nor is it to be overlooked tliat the iaT^f>ngp; e acaressea t o the respondent in the clause of the vrill under consideration is no t coniine (? tn w/iri^T expressive or a wisn or. recomm endation, o nly. hut the property i s given to tiie r espondent "jTi thp"iull confidence" that he" vrill affo rd to the child ren of the testatrix„ , acL^q u fite sun- jg^J~STffiougE~these words would not nec- essarily create a trust in a case where a dif- ferent Intent is clearly indicated, t hey are nevertheless strong and significant to snow *" that'suct' was 'the i)urposrt(f-tK|1gsSffl2r wtfs!rtaKg nJ n;''^nfleetCT "wiy^ffier "tacts ' and circumstances whicfihave a like tend- ency.— WnpT v.' I'tkins, IT-TEST 255, 258, St)l! Meredith v. Heneage, 1 Sim. 542, 556. We think it also worthy of remark In that connection that it is not left to the respond- ent to determine the amount or extent of the support which he was to afford to the chil- dren. The^gif t to him is n ot in the confi - dence that he will P'ivp'thpm s^i;ipj:\ xi TOPOrt as hg m ay think proper, or as in his ludgment tSey n iay need.'but' to such an extent as the y BBainr"raar-''StaHaTn Jne e^^^ I t was tn be meas ur ed, n ot by tEe ^xercise,jof his discre- tion in the inafierTtrtft'" by Ine actual wants or^ESTcEIffien. "-^ The view which we have taken of the c on- stru'ction of the clause of the vyil fby which tK| properly of the testaSSlg givra tojffie respondent for his life' Is' greatly 'fGri SSthene d w'Eien7W'£ 'take Into con siderat ion the relation s of all the parties toward eJch other, the na - ture^anyconditlon 'of TJie l^operty which was tfie"~subjecf "of tiie'gff^ and the ultim ate dis^ positloir" WBTCh was- made "SOr^nffie^nr after the death of the respondent TTje ob- jectiS" for whose comfort and 'sujjini-t tlip tes- tatnx was aiifl!^ to^pr'&'vige ^ere her__ own childiin," tiSf ee of jienS* by "sTforme^ husBSid, EXPRESS TRUSTS— PRECATORY WORDS. 379 and one by the rt^ ^ joTifiPTit. T hev had al - w ays lived in the family of the testatri x and her nusband, and received all needfuT sup- port as members the reof: — TW^~fSSa. no pr op- erty of their ownr"an"3. If taey were dfejU 'lV- ed after her death during tne me of the r e- spondent of all b enefit o f the estate of thei r mother, trom whien me s upport of the fami lr ha d been chiefly drawn dWmg her life, th ey woiild not only lose the support wmcn tnfe y h ad previonslv enioy ed, hut would be In dan- ger of being left without aaequate U liuailii of support, and without habits or abilities Wlil(!h ' would enable mem to optain a livel ihood. So thpsp ^iigren she gives the entire benefici al interest in her whole estate after tne deat h nf her h uahaTid. Is it reasonable to supp cwe that under snoh oironnistances sne mtM Wfed thaf; thps(> ''1iii'^™ji,js]ia,js^j ^_so^clearly t he cljjef objects of her bounty, should be left dirn ng'^e'TttgH mr^"^ 'husbMd'~wahout a^~gich'^'nggrt(r t me rV Mt In -her-estate as would~"&iable "'"tBem^to ' enforce a claim for supptiWto-'the event tfia^ 'fr oni"aIien"atio n of f ^llue,-MnT)iil 'iTiTy'"or"miiid^ oF any other lili:e cause, the resporigm't sJ&oISSl-15'e^TmwiIIin g or unable to comply with hec wish o r to exerc ise a ais cretion m~tliefr"b"^att^ """" It is gnffffpgfifi^^ that li^ other clanqfi f } of th p will, in which she creates a trust in favor of h er daughters for their-Efispectisfe. shares of her- estate. of which they areJaJtofiJ&s en- tl re income after the d^th of her_hiKiband, she" does not use words of entreaty, request anff1recoiD5mS53alion,_jKF apt and technical w^s by which to estsibliSbua jKiM-.m ..their bej^lf. But w e think this sugg estion .i§_not entitled to muchlat fiialatl ^Ee migJitweU ex- press herself in a different language when addressing her husband from that which she would use toward strangers, and at the same time intend a similar result. Words of con- fidence, entreaty and recomm end ation were natural and appropriate when "used to express tEe'will o f'a testatni wBrintg Mea-term'rect alia C'0'ilt r01"tll'fe conduct otECT "husb and In a tBSttCT"m whi ch the right to give directions ^g" tjo cohti'br "belonged 4o~Jber. lii such^a case, the wnri^iji iised. by. r are applic at to another who is independent of him, there is nothing imperative; but if he recommends that to be done by a person whom he has a right to order to do it, the mode is only civil- ity." Malim v. Keighley, ubi supra. After a careful consideration of the case, i n favor of the coni , p)^ fi,ina gt^ , yhich it la our d^ty, siton g as a court of equity, to enforce. TPHUrHti klicordirigiy,"' ■"""■"■ ^~**- ^^ 380 EXPRESS TRUSTS— PRECATORY WORDS. is HESS et al. v. SINGLER et al. (114 Mass. 56.) Supreme Judicial Court of Massachusetts; Nov.. 1873. Bill in equity by Charles Hess and A u- S.Ut.' r M er .:: att;(!u toTs-t3f" tiig'wgroi: ueorgel A.. KrameTi^to whicli j^U lie persons_mterested in the '^estate were'^m^jgSESiLdgEfiHdant, iSE"the'aife|p:^ court. !j:pff tijjl alleged ttiat.Matthlas Kramer, fhe fat,bec^fl£'George A., diedJ}asiB&4gsi§ai«fi?s property Ij)^. a, yuih 4S£..J6atSiSL.ESSt§_ of "All the r^t, residue and remainder_^all my" eslate'and^peftyiTSairfSm and mtxedQncM^^ll^of_.t^:X^^^^ seised, and"Xo"^®cE I may be entiHe d at th e £!."iLiam ^T: , To haye ana'To"'Boia'''tIf6 lanig to him, n is heirs and assigns forever, _to his ■"a^tiieir ownHSeTbut'subject'Tiowe^^^Jo t SeToII5Wn !lgighan ^eB^~namelyr To 'pa^ and tor the u se^ supyor£ ana rnainte'nance ofjny ^Ife, Follx. J^Jb^^"^ ^dS during ^eF nat- ural life, at themtejjf fifteen dollars a week: Genevieve Sineler. fo r and dm-lng h er , nat 1,1 iiH.i. p iitfii^ II i iiiiii m I " ■ J" ural life, half a montfl , "iher eby augiorize the executor or ex- ecS m'^ acnn'g-'ffl3grthis''vf^ or my^said sdn, S'purcjjase annur flg§|^for'*t'ge'''SBo'v°MQentioned payments at tlie'Mas'sac;luS'aW''H8S||iVLair lilf mufance''U'oiWpagy , Oi;;'|r?5ffle~oTSarp-gBre office, in "f avof W my saiJ'wIfiJan^d my said Ulster, at any nm'fe'tif 'times. andlSy^and n ^n •such pur chases t h e saiqjinarges u pon ihe es- tate and property given to my said son shall cease and ''Be dTscharg ed. *' ""'--"- ' '*' "It is my will, "anil I hereby direct the ex- ecutor or executors actmg unae r '{Ms will to expend, In a ddittonjtg^ ^liiclL Hl?X, ^?^_necess2£Us-JWffl«£^ tfB'out the^J)roper nursing and iaking care of f^T ivlffi In ii'^T ,M"i^"°°p or sic]£nesses"wr* eyTCT1meaKa~'atteHaaH'eg^''medicines., nursip^ oFother. jLecassaCT., QC-Pr oper attentions to her or for ^ftj:. TO.TUf P'^ ^" sickness; It belnp mv . __iiitention jo provide for t he sultable_a fld-£flm- fortable support, care and' fnain tenMice of my vWie '^wEo is subject to mental (ierang^aQl) during '^Jier natural iifeT "an3" fE"e _ provision which I have . thus made fo r her is Intende d by me'to be in lieu of and in fu ll and in t he stead of any"'lowCT~or "HgHCElo a'6Wei:~or fi H r as ^ ft ErEgfesCrTffTHy-mMe^ j ir ui i S f Eyr' •"T-nffTSliv gigni'l^y fn my "aa^ ann mv d(V sire and hpp.a^^aL"!® ''^iU ?° provide, by will or oUierwlse, that in caiSTie' shall die Tga;^^ no lawful issue living, the^property whldi he wiUT take under this yyill" shall go Tn"'e '( jua l sE^s,-^to"'t£e chUdreh oT my lata brotlSer ofmy said sister, Genevieve S iflgler, includ- ig any she may have after the date of this ^ . . ^. -v - t™...^ wlll, one share; to my coup jItI iTftllB .. Kramer , '^T3verDool, In the state of Ohio, one share: to' my cousin Matthiita KramOT. .nf"1S^^<' t7t- M^oof nna" Sharp; arifl f/n my ccmSJJ^ Crescfiim Kramer, of said Boston, one ^har e." '~ ?rh'e'''b"M ' then 'alleged that the greater por - tion 'or r.ne Bs rq, ^e devise fll ^Y (^"nrirn \^ Kramer, (i f whose will thev wora PTivntnra ra cony of the will ^^pj"" spt fnr.»h\ waa tT^^^ JSJIS'^ ^" ^'""^ "^t*?? ':^-?^'^'Ja'^ devisee under the win of his father, flnd that the chllfii-i>n bT Genevie ve Sineler. the surviving children CT^gg^liin- TrramoT-, anrl .Jf^fjn T^rf^mpr, iyra|. th ias K r amer and Crescenz Kramer, mentioii - ea'TiTtte^U of MattJilas Kramer, conffii^. ea that DT-the. tru e construcHon of. tJiat wilT TKey jvCTajBatJilfiiJft. a Simi^XJff.WPA\mM ^^P '^'fMfi tfta" ^"•^ ^^i^P" dftviHRd tn fhPm hv me will q ,f George A. Kraiq er. and denied" the plaintigs'~authority to sell the real estate ac- cording to the authority given ^1T th^ win" Br Geo rge A. Kram er. The answer of those claiming tmder the will of Matthi as .Kramer jUJe^ecLjnat^g^ge A'. Kramer died leaving"no~ia wful issu e llv- iSa-JSijliJ.^W-fiat . they,' were _ejiJH,flid Jo the "residue^ and remaindeE -a£^ the estate Jjf Mjatth ias Krame r, the son,.^S2Eg£- ■*•• Kra- " "' """ ~ * jhal Lout lawful issue mer having taken It sub.iect to IJ ie: in the event afhiCdyrrig wTl "It s hould^o to them respeq tnTHT <" ^'"' shares provided in the will. ' The other aeienaants admitted the allega- tions of the bill. The case was heard and reserved by Ames, ^., on the bill and answers. B. H. Atobot & Ij. A. Jones, for those claim- ing under the will of Matthias Kramer. D. Foster and G. W. Baldwin & J. P. Colby, for those claiming under the wiU of George A. Kramer. GRAY, O. J. It Is a settled doctrine of courts of chancery that a devise or bequest to, one pe r son. accompanied b y words ex- pr essing* a wi^h, entreaty or MUUiu m ^datio fl- that he will apply it to the henent or oESe rs, mfyTSail ^^nEoCTeate aLfcu st. Jf the subjec t a nd the ctbjects are sufflciently^ ggetajn. Some . oFtnle eaiflier iimgiish decisions had a tend- ency to give to this doctrine the weight of an arbitrary rule of construction. But by the later cases, In this, as tn aU other questions of the interpretation of wUls, the intention of the testator, as gathered from the whole wUT, controls the court; In order to create a trust , It must appear tnat t ne wo rdsjaterajntrnded SyThe'testator to" belm pCTa5ve; and wh en ^^ergjis given •ffB soIutely and without "re - "^^IfflBU-a trust Is'noE to be lightly imposed; upon mere words of recommendation. iuid_con- fl Sence . "^"Warner v. Bates, ^ Mass. 274, 277; Spooner v. Lovejoy, 108 Mass. 529; In re Pennoek's Estate, 20 Pa. 268; Van Duyne v. Van Duyne, 14 N. J. Eq. 397; Knight v. Knight, 3 Beav. 148, 172, s. c. nom. Knight T. Boughton, 11 Clark & F. 513; Lantbe v. BXPRBSS TRUSTS— PRBXJATORY WORDS. 381 Eames, L. R. 10 Eq. 267, s. c. L. R. 6 Oh. SdT; 1 Spence, Bq. Jur. 439, 499; 2 Spence, Eq. Jur. Gir-70. In_the_case at ba^the testator d^Tisea an d be queaths the "resldne 'of his estate to his ^^n^_ _^'to have and to hold the same to him . hiahei ra and assi ggsjorev er, to his and their gwn use, but subject hgyfever to the follo w-" ing charges :""' These diarggs.jsa:gA§£JMJQag- n^ ent of"specifle(fsum3 yearly to the testator' s \ ^e and sis ter for their respecave lives, nn- l e"ss""3ificharged b y the purc nase .oF a nniutjes in tneir favor fey the" e xecutors (of w hom the soiris~M'eT"nn^^ffiy al^j^jl^ ppLliy e^y &o. them b y th e will; "secondj t he further paym ent, pffiThra tn rnai^^^^^^^'- ^ ^ t the wife's expenses in case of sicimeasBia.flfiiuiLfefiLi!i^Li2_3.ower (rf^ffi^^^^ja^JJa—egJatP- Subject to these agrges during the liv es of th e " IfeSt g tOyB' Wife tiSa'^sfCT; tlie sori'Ti J giveit, by Ulti lUlle st, df tiai-tair aH U° moii f W r iiiai""wata s, ah ftpsaiut e estate in tee. " ' "~ ■" ■ By the further clause of the will, the_tes- ta for me r e ly Blgmfle ar'Br"Bi8~B(mTgjs '"desire' a nd hope " That he wnTso provide, by will or otherwSe^jmat35r3;ggr^ shall die leaving no'lawful issiie livi ng, the property which _he will takg under~S5"s wiflT shall go in equal shares" t o lJertaln^^pS ewii^ nieces, ah3"cous- ins 0^ the , testator. /fhisclSiuse, if construed as_ mea]^!g.,ft ttust, leavesTno thing to the " cjiicretlon o f the son, ibut ai^ounts to an ex- ecutory devise over, in case of Ms death leaving no ijssue, to the persons »aime^, in definite amounts. Tg^jjve it.,Biit;,,(EDnstnic-! Son wo uld be inconsistent with tiie^principal intention of the testatOTiasnreviously mani- r es tea,^t o^ye the son an^absolnte title, as weU as "w ith the dSc3ption of tte estate in this veyclause as '"t^e projp^er& wh^^;h h e Will tak e unAer this wtH^*' "" It rSH^wT'tSSt'tb e" son had f uU Eower to dispose or tne estiit'^ 'py wii lj hnlettered by tWsupposed trust!, and t£at: tDere must 'Be a dec r e e ' 16rtllS a' m '" r i aBV li i (i Ha . - 382 EXPRESS TRUSTS— PRECATORY WORDS. VvA A ©lAX et al. v. WOOD et al. \^ ' (4T N. B. 274, 153 N. T- 134.) Court of Appeals of New Tork. June 8, 1897. Appeal from supreme court, general tenn, First department. Action by G eo rge S. Clay and others agains t Lncretia M.- T Wooa and other s for partition , and in'cidentally to construe tne will of T^_- nam _W.. Clay, dece ased. A judgment cUs- missinig- Jtbfi. csfflpIalSLja ftp jcffeiislwiiuaf- firmed by the general term (36 N..X».SaBP- 317), and ^jajnfijgCs. appealTAffirmed. T his a,ct ion was brought fior the partition of real' prppertyj" andn 't 'jP^^ptSaT the 2^M&c- non ofihe will of William W. Clay, deceased. By that"will tfie 't'esTa|Q£,.,a,ff^r dirggtjngjEbe 5^^^]]of__his debtf^aai. funeral^exgeDses, a nd partici3 ari!y"an indebtedness secured by mdrtgaige upon nis Bouse' a^^L lot, in tBe^s^^^ dSus€rgave~toTiis wife, Lu cretla, "and to^ her h_Sls-and assigns,' forever," the house and-Jot i^tiraed;„.andjjJgaJjisJuffl§d!flliL-gaoda. and hold the said house and lot to her, iny-said WlfeTXticre^TSir'Claj^and to her , h , eirs an g ^signsr lorever, and to have and to hold„ the ,s7TO~BmreTim'd-g tTOgr etc.,~un'£oTi"er^ my said WiTeTEucreHaTS' Clay, and to her heirs-exee- iiT igsrga fflTBigtya»B!SZ-and..aa§igna..JM^ firBso^gave^to he£jii;.SBjn-ij£JS2fl,fl00. In ( ^ third and^four th clauses„h e gave )pgacies tpBS~15rp!KersrTo^.a.,§jster, to nephews, and to an adopted daughter, provlSng^at thesame^ time jffiat none_ ofJho§g. regacies^bojild be a ^ Earg e upon the house and lot and household goodsT etc., which he had gi ven' to "Ws wite. Vf~m:mtE'c lS^rTi^~^l^iT^ resida£of " his estate to ffl s ynfft and"^to her h eirs, exec- mOTs',' ' ' adminisEraEorsT "and "assigns,,^ forever," SnS^ en sf^t eF^ , follows : "^nd it is_my_de- ^JF^.ft"'^ request .that my ,'s3i§Jwjte'^^^^ p S' oy l d e for ^ and educate Lucretia M. Wood, tlffe' jfaugtife r o^ my safd^a&opfeS daughter, Josephine "MTWxmd: And lt"ls""ffiy furthef"de:_ ^re^andj^eqa^Ohftt my wife do make the Sai3' Lucretia M. Wood, Jo^g'ffi^ M. Wobdl gnd^'tdy^riephews aSg'niec es^The 'children "of ^brothers, (Jaieb^ S.jClaj^^Jnd, George Clay, jotnTTieirs after 'her death In the said estate wMch by ijiis will I have bequeathed to m y said wife;" The question in this case arises Bpon the efeecP^tU bfe glVeii lo Iharcoucraffiag sentenc'e™orjEErffij£. paragraph. Ipje pJain- tfffs, who are the nephews anJL nieces referred tSTbereEJ clajLmJjyji^ complaint that a trust was Thereby created in JavOT, of ttie persons i^med, all u that LucretialjrClay, the widow o'f the testator, having^died, "ttibse persons ^ad Kcome tenants" in common of the pr^erty, or entitled tEefefo' under tiie tr^t allefed. It appears that MipsT Cfiiy" died, leaving a will T ^Tereby shfe' gave th e prdiierergqTOlly'tcrJBS e- p6ineT3rr~Wood and Lu cretia M. W ood. "" John' F. Dillon, lor appeUanta. James L. Bishop, for respondents. GRAY, J. (after stating the facts). 'Dpon reading this will, we can Infer some conflict in the mind of the testator with respect to the ultimate disposition which he should make of his property. It was as to how he might bene- fit the persons named in the fifth clause, after his widow's death. He could have created, Ie terms, a life estate in his wife, with a re mainder over in their favor, in which case there would be a certainty with respect to their Interest; or he could have created a pow- er of appointment in their favor, with a like certainty; or he could take the course which he did, namely, of desiring that his wife should make them "her heirs." The mental conflict was not serious respecting the superior claims of his wife, as we seem clearly to see from the careful and elaborate provisions of his will; but it appears when we read his expres- sions of desire and of request, addressed to his wife, respecting a disposition of the estate which he had given to her, and which she might well have heeded. What wag_tlie dom- inant intention of Mr. Clay ^' m akinghis'wlll S 7 "To "Hicbver ffia I nto consideration tne whole sch eme of the will, and weigh the expressiuiis WllHiH llti Ms'' iflade use' of when deitimilg Tflg"ittt6t6St of hiT' wlfe^ .^W lSether the will in question was^" Srawn with the aid of a lawyer, or by a lay hand, we are not Informed. Th e lan gu a ge is somewhat inartificial, and yet It is so plain Ml III nil Tl •''- IMI.rii ^^^" J MIlll l ll II M ill " " ' and emphatic as to leave nttle room for doubt in^the^mind as to what was_.tt©-P™isitoI^B^ pose of^the tesiktor. His general scheme waii to„g'vff.fiveryth]nfr t;^ Tiia wifo upon hia.'iipath, except the legacies which he g ave by the thir d afar~fOin13r~elailses7'Thal wa s th^ sjmp ^e pI5n"wEicBTie' evidently BSSTin mind, and the question Js^^_ whether, the d^"osition wBKff^ mSde regjjltg4 in vesting i n her the fullTrene" J,^2. interest In, and in a bsolute .right of ais- p osal^^gf,_to e pr ojiertv. or w1-^p,|J]g];, sa„the an- rellants claim, ^ trjgj, '^a s c r eate d with rg - s^e^^TEgfe. property, xaLa power of trustlm - pera;dvg4ftjtgi3a±Hre. It is veCT_ eaTnestly an d ablv arpied in behalf oTtheappellants that to f orce of tM last -clansfi m the fifth para - legal estate in fep. It was subject, as to th e realaad. personaLpropert yf to a trust, or to a power in trust, in favor ofthepersoiis and the classes of persons named t Wein; and t hey "raSe the "argume d[jaP°° ^^ "?"f'?fi'UiP"r h'"^- s gCBHany^ that 'the provision Is couched In su ch premtory words as to tuMl'i all the condiOons ri^eff^ the anthnriti^ S ps rpniiisite to cre- ate'lT'trust, in that the w or ds used exclude anf option or' di^fgtlo n'Tn the wife, and tE e ■SBBJect of the request and th e objects of t he totin^^3re^9^^^j^Sted_out. Thty argue, t&6,' that the relations sustained by the per- sons named to the testator are such, and are shown by other parts of the will to be such, as to indicate a strong Interest on his part to make the gift. If, however, th e conc lusion must be reached tSat'the .'jjestetor lntended an '*bsel«te'girf"'ES"his wife of. iis_5^. and " pw- EXPRESS TRUSTS— PREX3AT0RY WORDS. 383 sonal pro BP'^Ti ''arr ylng with It an absolute tight of disposal, then it will become unaeces- sary for us to consider questions of trust or of power in trus t; fo r the existence of an aBso - Intfi and beneficial estate i n fee in the widow would b e pqi^^ll^r des^ctlve of the claim ot""U tT2i;tj_jaL£!f ttift '^^''''?^ ■'0f-3Ji imperatiye trust jKjBefc- — The testator, it must be admitted, was very emphatic in the use of language when defin- ing the nature of the holding by his wife of the estate devised and bequeathed, ^hen he gave to her the house and lot where he resid- ' eS. he MaeOSrw ofg§r'''aHd--tg'lia- Beirg' and assigns? ^qr^ver." "I n the same "paragr aph \ there he had so give n her tlie house ancfiotr- and 'Sso"lLiroriir ioqMi(na''igwar'aga: ef- f^S", E'e reiCfffettfe that §lle'"WS§- "to *!we"anti-to E Sld ttHi said bouiae and lot to hor» a —*-^ » g[nd to her heirs and assigns, foreve r" ^ and bg-states with reference to 13ie personal I F" iects that she was to have and to hold th em "untQ her._ " * * and to her neirs, exe c- qtors. administrators." 'and assigns, forever ." This repetition of language, indicating co m- pleteness and perpetuity of ovynershjp, arres ts l ;he attent ion, it will De opservea. too ^that t here was discrimination i^ the empljoym etft o^ langu a ge defin uig„iJlj|f, r. „ Holding._iq , ^epse o f words w hich would be appropriate In spea k- ing" of ' ^e_s nc(;g^^ioi\ to either class of pr op- sriy'. 'Be had been particular, in the nrs t debts the mortgagejp on jjj.^ h°Sf.^„ ^^^ "*** should b e disciiarg£d7^aijriiF'wal™equS^ ticulajtjn jhe jrom6tion"5jtlig ^tCTegtgfbf Jis ■frife, in directog^^Jn^^^Jourtli'ciaus^' that tEiTegaclS given should noF Be" aTcHS!^' up- on e"ither"ffie"Tioi5Be and" lot,' of 'lE^^ pergonal e"tteMjiea^gd.~'" ^e° h e aisposes^f Jls residuary estate, in the_fi"fff'*c,laus"C. wfe,e Js a] pin emphai j c '"in "Befinin g^ the estatej ;^Lich bis wife shallTate&erelhrb y glroignttofi^ - "and to Wf'heirs, execufofs radministrator s, atra-TEsi^dmSis^' '3Lgai1 a.''in "pypressmg aisposltionto "l iis desire and request as be made by his 'wife in that clause, he refe rs t o "i£e said est ate wJleh by tnis will X ha v e h''pqnpafheiil""tn rnv sinywife." l t_is "hardl y , j 5nceiYameTHrW-ntfen!Ton of a testato r ^hat his wife should' have the absolute title fi7^inrtl re-TCTpgtggr riglTt--n1"fli'snnsa1 of. the giitatd ijU'fen f a horn manure irierc fiant. and whi ch was he ld un- j.^ 3er a Tease^dated the 24t£"^^or'j une. lfi6?. That i8n ttejjh ;of ;Mareh, 1813, John Del- brid ge ^dor sed upon ttie lease and signed • tBe"Rnoy^ni" mernorandiisa;^, " 7th March . Jg73.' TEis 'ning ' KaBatrt6~EItgab&tS''25n'Ri^>' «rfig, tho piaiyi- tifl's mother, who was still iff nnssessinn thereo f. Thai John Delbridge died In April, 1873," haying executed several testamentai^ instruments whicn aia not rerer spermpji llv Tn the said mill and premises, but, he gave his turnitur e and effects , after his wife's death. "Wi^jw^ niyifipf^\flrnmig^_hfH fa'^^^^^ X ^ rt ^^ testator's widow . Eliza beth R ichards, took out a dministration "TS" His „egtataZlgS&rffie testamentary paperi a nnexed. Th o Ml 1 , w*^ ' '''' was" filed "against "{h e 1^^^ Elizabeth Delbridge, Elizabeth Ann J{,iph a rHa, anrl the testator's two sons[ who claimed under the said testamentary instruments, prayed a dec- TaratlOh tBat ~tB5Tnd orsemen t upon the le gge by Johil Delbridge and "t ne ' dfe'liVery or the Tea^g to "Efflza Path Ann'" Rjc Kards ' 'c^edt^ff^a valiar trust in fayOT"of &e p la i ntiff of th e TeaselaSa' of Ihe "es!afe°and interest" 9 f .Tnhn Delbridge in the property therei n com^risedT and in~ffie good will of the business carri^ oB."tEefo,'°and""in TEe "implements and^^ck- in-tnide Belonging 'fo' the business, _ Thg..4e- tggaghts'demurred^o the "Sill for wa nt of Pry, Q. C, and Mr. Phear, In support of the demurrer. W. R. Fisher (Mr. Southgate, Q. C, with him), and T. D. Bolton, for plain- tiff. Gregory, Rowcliffes & Rawle, for de- fendants. JESSEIi, M. R. This bill is warranted by the decisions in Rif hardson v- Rifharrlannr L. R. S Jteq. 686, and Morgan v. Malleson, L. R. 10 Eq. 475, but, on the other hand, we have the case of MUroy y. Lord, 4 De Gex, P. & J. 264, before the court of appeals, and the more recent case of Warriner y. Rogers, L. R. 16 Eq. 340, 348, In which Vice Chancellor Bacon said: "The rule of law H.& B.BQ.(2d Ed.)^25 upon this subject I take to be very clear, and, with the exception of two cases which have been referred to (Richardson y. Rich- ardson and Morgan y. Malleson), the deci- sions are all perfectly consistent with that rule. The one thing neaessary Jto. give .yalld; ity to a declaration of trust— the Jtodiapfiib., sable thing— I take to h s^JiiaXJ^&j^SBSiS^Qt. ■antnr nr what.eyer ^^ may be_CaUed.. Should ha . ve absolutely p arted wi th that in- terest " whic'E~h"a'd~B6e"n "Ss up to the time the declaratio^'sEould have effectually cEahged liis rlghL!iiBrf5aFrespect,ra^ put the prope rty ^ut^ of his EowCT;^„a]LiSSlL J^^ lie way JC^ecesi?''™"' le two first mentioned cases are wholly opposed to the two last That being so^ I am not at liberty to decide the case other- wise than in accordance with the decision of the court of appeal. It Is true the judges appear to have taken different views of the construction of certain expressions, but I am not bound by another judge's view of the construction of particular words; and there is no case in which a different prin- ciple is stated from that laid down by the court of appeal Moreover, if It were my duty to decide the matter for the first time, I should lay down the law In the same way. The principle is a very simple one. A man_ may transf er his nrogf rtv. withnnt vainfl,bi<=» consideration, in one of tw o ways: he may 'either do such acts ki ATSSSSSt Jji law to, a conveyance or assis;nment cft^ i]he nypp^rty. ana tnu s^omgietely_jE[jxest^ hia3L§elfc of JJs legaTawnershijp, jBCsSi£S,=,case _the_ person yho by those acts acquires the property ""tages It Denencially, or on trust, as the case i nfty be; or the legal owner of the property" m ay, py one or q tner oi the, modesjrecgg^ IlMd as amounting" to a valid declaration o^ trust, constitute himseit a trustee, and, witho ut an actual transfer of the legal titieT' ^^IcTdea T witB"imgT>wi()er ty' as-tty'Ttepn^ ffiinself of its beneficiaJ awnersgipT ahd°%- clare that he wUl hold It from that time forward on trust for the other person, 'Is true he need not use the words, "I declare myself a trustee." but he m ust do som&- thing wtiich is equivalent to'it'"a"nd"'iise°e^ T)re ss.lflB §L!-!E,bIcir ^^XS^ that meaningj _Jgf, "Eowever anxious "ffie^court^ may be^to carry '' SSFa''mam^""'in"teniFion,'"r t''*is not at Tibgrty to construe woras ottierwlse than "according TEoTEeir ^grbgCT meaning. "TSe cases in wHicE tEe question has arisen are nearly all cases in which a man, by doc- uments uisufiicient to pass a legal interest has said: "I give or grant certain property to A. B." Thus, in Morgan v. Malleson, L. R. 10 Eq. 475, the words were: "I hereby give and make over to Dr. Morris an India bond"; and in Richardson v. Richardson, L. R. 3 Bq. 686, the words were, "grant convey, and assign." In both cases the judges held that the words were effectual 386 EXPRESS TRUSTS— VOLUNTARY TRUSTS. declarations of trust. In the lormer case, Lord Romllly considered that the words were the same as these: "I undertake to hold the bond for you," which would undoubtedly have amounted to a declaration of trust. The true distinction appears to me to be plain, and beyond dispute; for ma" t" mni^o himself a trustee <'''?rf} """ gt be an expres - sion ot intention_tp become a trustee, where - as words of present gift shew an i ntention to give over property to another, and not re- tain it'Tif ffiF^aSnoVs' own hanas~'fgr, any ptrrpOSSTBguciaJ ^"^ dt herwfser' " •TnTJilfoFv. Lord, 4 De Gex, F. & J. 264, 274, Lord Justice Turner, after referring to the two modes of making a voluntary settle- ment valid and effectual, adds these words: "The cases, I think, go further, to this ex- tent: That if the settlement is intended to be efCectuatea py one or tne moaes to whig h I have referred, the court will not give effec t ^o it-bs_ aitnmng. anothe r of those modes . If it is intended to take effect_bj, transfer, t he co urt will not"?old the intended ^aflp- f er to' oper ate' as" " aTaeclaratibnr of trust,_JOf tlien every imperfect Instrument would be ma de efCectual by being fonvertivil i-ntn a r)6rlft . and"ln fa ct usin g it as__ a pia.ce of dep osit tor his v^^Pjje^ papers. That William' JJ . ioung ' also' kept jaJeersTn nie~^me safe, "but rarely went to it . hJnigelfr tbe deceasedjB^^^hothe habit jofdegositing tEefem' for him such things as he d eslfeH. and' reraoving them fgr Mm at his requMrt. i nto jSs&OfefiSfifi-^^^^^ECTe j 5iie._deceased usu- ^~keprhisIm Bera.aiad wayBj£ilii.'habit, up to"ffieJi^7of tii^ transaction now in ques- tTaa^ oi keying the„,J^on3s'Th controversy. TBI loweiL' pgH- "f ttl f i. safe was divided Into lar ger open co mpartments^ one o f which had deen appriSpriatSl' a's'the irec^tacle of fhe 0lpgrs"of wipMp;.^::3:oungT " " •• aHCT*'a'ffiiing to tlffl two PnviPlnTWH in which the bonds were contained, the memo- r anda, sho wing... thje .^sppsltiyns in favor of fiTs sons^.S3ffiam. H., Xoni^R. and" J^n N. Ifoungj^^and^ a fter exhibiting., these memo- r aSSa to jS e..ig§p.gett£fi. wives, of ^ the ..doaegSj. t he deceased renlac pd the two packasRa of bonds in this safe, and after his death t hey wer e found, not in the pigeon-hole wher e tfffey had for merly been kept, but in the c oiniiai'tmeni wh ere William' H. Young's pa- pMs_wgjfi_kept. After the memor anda bad been~made, the bondg Wtjl'fe generaij,y gept i n ' thatTRmpartmentj but the deceased had been ^H Evr-l giJiiam H. to put ItfejDa_;iR the BiiSon-h^es.,aB4..take thegD.,put wjth^ttsJn-^ oorsements ^on^^^ """On tEe occasion of exhibiting the packages of bonds and the indorsements to Mrs. Wil- liam H. Young, the deceased asked her to take them in her hands and see what he had written on them. But this was not In- tended as a delivery to her, for she asked him whether he wanted her to take them and put them up, and he said, "No." After having thus exhibited them he took them back and placed them In the safe. The mem- ora.nda were made o n the 14th M arch, 1874 .' The tesSTo r (HS.r >rKyprnKgy-T9r-Tg?R fn t he meantim e installments of interest on the bb nds be came due, 'me deceased cut off t Be coupo ns. anS on som£gc casions W illiam" 5. Young ass isted hirn'ln so doing, but Wil- uam"'ll. testiffed that lie" nevS^alsefJed" any OWnersl?in over thn |innflR as agalnot ]^ fattOT^ And the testimony shows that they were at all times under the control of the deceased, although William H. Young and his son, James C. Young, also had access to the safe. Those three however were the only ^ergo ns "S aving access to the safe, and it does noT appear tnat John N. Young, the "other 3on ee nam ed in the memoranda, e ver Sad any contr ol over theTionds or acc"^ ijiereto. Jt was also shown that after the ^leged gift, when solicited for a loan, the dec eased aaifl j cn at he supposed ne might with the boys' consent take some of tfl eiT bonds T"" Also that he called the attention"o? his grandson, James C. Young, to the memo- randa and said, "you see what I have done with them." That he declared to a witness, Benjamin Grant, that what he had left he had given to William and Newton. That in September, 1875, he took from one of the envelopes a bond of $1,000, bemg one of those stated In the memorandum Indorsed to belong to John N. Young, and gave it to a third party, but It also appeared that he had, before making the memorandum, presented John N. Young with $1,000. This is the substance of all the testimony by which a delivery to the donee is sought to be established. Tf sh^wa that ^^ajip-^ si on or. .cnn^rni rvf t?)Q hfiniia, _but merel y confirm s. the tntemaftn-py nrp ssp^ 1^ thp TllgU- granda. T he change of the position of th e bofid^' m tEe~Ba f«> Vhera thpv ■^prpkpfit. from the pigeon- hole to the c ompartment, b een the onl y Jpne e., and hadthe Tniynded gjit _beejgL un ac copipani pd, by -JWX j-eseiTa- "BonT ^ But und er the existing circumstan ces it cannot De cdSstrued into a delivery ot the bonds. In the first place, part of the b'onds were stated in the memoranda to be givai to William H., and part to John N. Young. The inte ntion of the donor toward each of jis smM ^as the same . Yet no attempt ap- pears to have been made tqf^'51fget-an T"8ort ,2315^ Moreover, the form of theTofended gift shows that no immedi- ate delivery could have been contemplated by the deceased. The memorandimi on each envelope says that the interest to become due on the bonds is "owned and reserved" by the donor. This interest, up to the dates of the maturity of the bonds respectively, was represented by coupons attached to the bonds. It clearly could not have been in- tended to deliver them, for so many of them as might become due during the life of the donor were reserved from the gift, as the interest was expressly declared to be "owned" by the donor, and not paited with. The possession of these coupons was neces- sary to enable him to collect the interest, and he availed himself of it for that pur- pose from time to time. No intention was manifested to deliver up these vouchers and look to the donees for the interest No divi^ EXPRESS TRUSTS— VOLUNTARY TRUSTS. 389 Blon of the cou pons c onld b e madg ; f or th e p' erioir~afl'ffi e la^opB fife" was uncertain ; Imd furthCT, If a ll the couponB"wer e retained ^"the donor,~8i^ '^"S[^t' not "represent the e2tITeJht^.§si^rgs^ye^Jb^ him." TEeTJBHas matured in 1887 and 1888," and some were redeemable earlier; and if he had lived un- til the maturity of the bonds, or until the United States bonds were caUed In by the government, as they were liable to be, the donees would not then have been entitled to the possession of the bonds or their pro- ceeds. The reservation accompanying the gift would entitle the donor to possession of the fund. The Intention of the donor, as deducible from the memoranda and the evi- dence, was, not to part with his title to the accruing in^ierest, but to keep the bonds and collect the interest for his own "«» t'li i'" should ..di g;..jmil_tbiatJten, and not_ bfit^e. Sis SODS should have, p flgp^sion of th^m and TEem ffisolutSy, Tliat althoiugh he in own "them ab^Iutely. Tliat a lthough meant" lEat their right to this remam d oi* '' C i hm i' W ''Dti VSBted and Irrevocable from the time oT tlte"S1g)'^osea"gift. yet tha t SttEoT]^ fe durinTlislJI'g, dJc i' th donees have excid^ive poss'^slonofthe fiondsor'STe le- gal rlgiit to such possession. I'te declarations of the donor that he had given the bonds to his sons must be under- stood as referring to the qualified gift which he intended to make. T here is nothing to indicate that he ever reffiiquiShed his 'right to the Tntcrestrand a!n'^Tie'circumstaaces't>f tTi'e c as6"Shtfw"tKat he' could not .^^ In- te ndeg"To" admit ~thath e^had . made an. ab - solut e gijfir~f ree feom the qualification ex- pressed i n t^g ^nifiPiQrahaa. "~'The cases'^of urangiac v. Arden, 10 Jolms. 295; Davis v. Davis, 8 Nott & McC. 226, and kindred cases, consequently have no application. The prin- ciple of those cases was applied In the late case of Trow v. Shannon, 78 N. Y. 446, but in that case the gift was intended to be ab- solute. No qualification was attached to it, and the bonds were placed where they were accessible to the donee, and he had himself collected the interest for his own use. There was nothing Inconsistent with a full delivery, but there was no direct evidence of such de- livery, and the admissions of the donor that she had given the bonds and they belonged to the donee, were received, and weight given to them, as some evidence from which the jury might infer that the gift had been com- pleted by an absolute delivery. It is impoRgi ^le to sustain this as an exe- ^taa gift, w ithout abrogati ng the rule that delivery is esggiinai to gitts or chaiteis mter ■ vlvog;^ It Is an " eltimaiilill'y f Ule lliiit guch a , j;ift can n'St be mafle 1:6 take efRjCfttrpossHB'- .^on jn fiatu'ry~SucF"ar f rgJ'sactiQo'amoM^ only to a pfomlse"to ma2e"a"glft, whlch'ls 'nu"3iim~p acturnr~Prttg rr Mangumv 2 Batley, 588. ThgFe mu st be a de li very of poseesslon with a'viewTo" pass a present rlt;t | t nf pro p- erty. •'Any gift" oT cEattels which expressly reserves tBe"use of the propSty to' the "donor for a certain jperlod, or (as commonly appears flPEEe cases wSchT the'coiirts Mv'e had oc- caston "to^BJss upon ) as ToWg as the donor sEall live, [n i"'>ff°"?ii°l ^' '^ Sjfhnnlnr, V^fk Prop. p. 118, and cases cited; Vass v. Hicks, 3 Murph. (N. C.) 494. This rule has been ap- plied even where the gift was made by a written instrument or deed purporting to transfer the title, but containing the reserva<- tion. Sutton's Ex'r v. Hallowell, 2 Dev. 186; Lance v. Lance, 5 Jones Law, 413. The only question remaining thereforeJ ia \yhether a J jaUd declarat ion of SMaUa^JBafte The trust contended f or, Jf put tatjjjsi^Kds, wouia " be " that ' t he " donor should hgld_ tiie bon ds and their_^bceeas' for hisjownr bene- nt'during his life anff to thejase^ thadasges r£omjftgjimfi of JjjguSwii.iteaih. Of course np tru st was ,£rea|:g^,,of the_lnter- est for thg.^npr 's own lif e,„for ^g, was the legal " owner of "t he inc ome of the bonds, an d never parte'iratr 'tlirnght^diflC-.cciiiiaJia.'bfi. i8i.th e.sajn&JJ,mfttcustee.ajidL cestui, que trust. The trust then would be to hold to the use o f fee donees an estate in remainder ;n the bonds, which should vf>st in ppfiggPfJiOTH i" thp d onees, at the time of his death ! The difficulty in establishing such a trust is that the donor did not undertake or at- tempt to create it, but to vest the remainder directly in the donees. Assuming, for the purposes of the argument, that he might have created such a trust in himself, for the bene- fit of his sons, and, further, that he might have done so by simply signing a paper to that effect and retaining It in his own posses- sion, without ever having delivered It to the donees, or any one for them, yet he did not do so. He simply signed a paper certifying that the bonds belonged to his sons. He did not declare that he held them in trust for the donees, but that they owned them subject to the reservation, and were at his death to have them absolutely. If this instrument had been founded upon a valuable consideration," equity mignt have infertered' and effect'iiSfeS TtrTfflstrrT5yTOTHpei»ngr' the -executlBtr of a ggSaraHon "of ' S-iifst.' of by ch"argiiig' the bonds, while In his handspwith' a^-trustHa favor oflEe'eauLtamrownfir. Day'vT'Soffi, IS N. Y. 448. But it is well settied that eq- uity wlU not interpose to perfect a defective gift or voluntary settlement made without consideration. If legally made. It will be up- held, but it must stand as made or not at all. When therefore it is found that the gift which the deceased attemx)ted to make fail- ed to take efCect for want of delivery, or a sufficient transfer, and it is -sought to supply this defect and carry out the intent of the donor by declaring a trust which he did not himself declare, we are encountered by the rule above referred to. Story, Eq. Jur. 706, 787, 793b-793d; Antrobus v. Smith, 12 Ves. 39, 43; Edwards v. Jones, 1 Mylne & 0. 226; 7 Sim. 325; Price v. Price, 8 Eng. Law & Eq. 281; Hughes v. Stubbs. 1 Hare, 476. It 390 EXPRESS TRUSTS— VOLUNTARY TRUSTS. Is established as -unquestionable law that a court of equity cannot by its__authority rengMjffiat gift perfect which the donor has lefrifaperfect,'and cannot convert an' iitiper- J^fglfflhto a declaration 61 triistT merely on acconnt of tha,t imperfectioii." "Heara^yv. NiSiSson, fi'L. J. Ch. 279. It has in some cases been attempted to establish an excep- tion In favor of a wife and children on the ground that the moral obligation of the donor to provide for them constituted what was called a meritorious consideration for the gift, but Judge Story (2 Eq. Jur. § 987, and 1 Eq. Jur. § 433) says that that doctrine seems now to be overthrown, and that the general principle is established that in no case what- ever will courts of equity interfere in favor of mere volunteers, whether it be upon a voluntary contract, or a covenant, or a set- tlement, however meritorious may be the con- sideration, and although the beneficiaries stand in the relation of a wife or child. Hol- loway V. Headington, 8 Sim. 325; Jeffreys v. Jeffreys, 1 Oraig & P. 138, 141. These positions are sustained by many au- thorities. To create a trust, the acts or words relied upon must be unequivocal. Implying that the person holds the property as trustee for another. Martin v. Punk, 75 N. X, 134, per Church, O. J. Though it is not necessary that the declaration of trust be in terms ex- plicit, the donor must have evinced by acts which admit of no other Interpretation, that such legal right as he retains is held by him as trustee for the donee. Heartley v. Nich- olson, 44 L. J. Ch. 277, per Bacon, V. C. The settler must transfer the property to a trustee, or declare that he holds it himself in trust Milroy v. Lord, 4 De Gex, F. & J. 264, per Lord Knight Bruce. In cases of volun- tary settlements or gifts, the court will not Impute a trust where a trust was not in fact the thing contemplated. The distinction be- tween words importing a gift and words cre- ating a trust is pointed out by Sir Geo. Jessel in Richards v. Delbridge, L. R. 18 Eq. Cas. 11, as follows: "The making a man trustee involves an intention to become a trustee, whereas words of gift show an intention to give over property to another, and not to re- tain it In the donor's hands for any purpose, fiduciary or otherwise." The words of the donorta the present case are that the bonds are owned bjr.thejdonees, "But ffialftEelnlCTesf " fo accrue thereon is owned and reserved by the donor for so long as he shall live, and at his death they belong absolutely to the donees. ^No intention is here _^2Ee§sed to hold any le^fal title to ffle bon,da, ~^^^usijcfr the donees. Whatever Interest "was inteadgjito beVested inthgaj!?asj^nS- f erred to them directly ^^ sublg;t jfej^ the reser- vation In JaxQE, of the. dfla&r_ during his life, and free from that reservation at his death. Nothing was reserved to the donor, to be held In trust or otherwise, except his right to the accruing interest which should become pay- able during his life. It could only be by re- forming or supplementing the language used, that a trust could be created, and this, as has been shown, will not be done In case of a voluntary settlement without consideration. There are two English cases where indeed the circumstances were much stronger in favor of the donees than In the present case, which tend to sustain the position that a set- tlement of this description may be enforced In equity by constituting the donor trustee for the donee. They are Morgan v. Malleson, L. R. 10 Eq. Cas. 475, and Richardson v. Richardson, L. E. 3 Eq. Cas. 686. In the first of these cases, Morgan v. Malleson, L. R. 10 Eq. Cas. 475, the intestate signed and deliv- ered to Dr. Morris a memorandum In writing: "I hereby give and make over to Dr. Morris one India bond," but did not deliver the bond. Sir John Romllly sustained this gift as a declaration of trust. The case is refer- red to by Church, C. J., In Martin v. Punk as an extreme case. In Richardson v. Richard- son, an instrument purporting to be an as- signment, unsupported by a valuable consid- eration, was upheld as a declaration of trust In speaking of these cases in Richards v. Delbridge, L. R. 18 Eq. Cas. 11, Sir Geo. Jes- sel, M. R., says: "If the decisions of Lord Romil^y (In Morgan v. MaUeson), and of Wood, v. C. (in Richardson v. Richardson) were right, there neva- could be a case where the expression of a present gift woxild not amount to an effectual declaration of trust." And it may be added that there never could be a case where an intended gift, defective for want of delivery, could not, if expressed In writing, be sustained as a declaration of trust. Both of the cases cited are now placed among overruled cases. Fisher, Ann. Dig. (1873 and 1874) 24, 25. In Moore v. Moore, 43 L. J. Ch. 623, Hall, V. C, says: "I think It very important Indeed to keep a clear and definite distinction between these cases of Imperfect gifts and cases of declarations of trust; and that we should not extend beyond what the authorities have already establish- ed, the doctrine of declarations of trust, so as to supplement what would otherwise be mere imperfect gifts." If the settl^igBtig Jntmd- ed t 9 ..Iifi . , Rffec tBajBd.-tey" glf t . the e oi at-glll not give effe ct to It bv constr m'ng' |<- flfl a trust I t It Is Intended to take effect b y ir ansrerthe court will not hold the in ^p^ j? *^ '■B^gasrer to oaeiate as:, a:.gqpr.tiQi fiiQt tha latter should be informed of the trust. In MUroy v. Lord, 4 De Gex, F. & J. 264, Lord Chief Justice Turner, who adopted the most rigid construction of trusts. In delivering an opinion against the validity of the trust in that case, laid down the general principles as accurately perhaps as is practicable. He said: "I take the law of this court to be ^ well settled, that In order to render a volun- tary settlement valid and -effectual the set- tler must have done every thing which ac- cording to the nature of the property com- prised in the settlement was necessary to be done in order to transfer the property, and render the settlement binding upon him. He may of course do this by actually trans- ferring the property to the persons for whom he Intended to provide, and the provision will then be effectual, and it will be equally ef- fectual if he transfer the property to a trus- tee for the purpose of the settlement, or de- clare that he himself holds it in trust for those purposes, and if the, p roppity Tr\Q poi;. .sonal, the trust may I apprehend b e declared ^ either in wyit l ng or by par oL" The contention of the defendant is th at the transaction did not transfer the p;rop- erti,_ and th at there was no sufflcien fdec: !faratic m "of trust ' and t"Ear*by " retainin g th e pass-books the Jnt ^gtS" neVer parted with tne controj L pt the" jprgBgrty. if what she gid was sufficient to constitute herselt a trustee, it must "follow that whatever co n- trol she retained would be ex ercised as tru s- " tee," and ^e right ^to'exercise it would not be nece ssarily Inconsistent with th e_-Com- plete" ness_ of t he trust.. The question involv- ing substantially the same facts has been several times before different courts of the state, and in every instance the transaction has been sustained as a good gift. The Case of Wetzel before Surrogate, Brad- ford, and MUlspaugh v. Putnam, 16 Ab b. feac. a »u. wCTg_deposits_in the same form. ajid in t he former th e cestui _fl .ue_trust lad no "n^^||]or~fSe^"^ gS5oslt, and ip bo th ^seajme giff~w3S.Jbsi&,SSssiilgi- In Smith V. Lee, 2 TTiomp. & C. 591, money was de- posited with the defendant, and "a no te ta ken pg yablB to Ihn dBpniJltort earan other pera bn. a&nt-war liiBld 'tBaLf'the^lLep psitor con stl- tWedllfmself a trustee. The case of Kelly vT 'Hanhattan Inst, for Savings (not report- ed) was a special term decision of the New York common pleas before Robinson, J., where precisely such a deposit was made as in this, and it was upheld as an absolute gift. These decisions although not control- ling upon this court are entitled to respect, and they show the tendency of the judicial mind to give these transactions the effect which on their face they import So in Minor v. Rogers, 40 Conn. 512, a similar de- posit was upheld as a declaration of trust Park, J., noticed the point urged there as here of the retention of the pass-book, and said: "She retained possession therefore be- 394 EXPRESS TRUSTS— VOLUNTARY TRUSTS. cause the deposit was made in her name as trustee, and not because she had not given the beneficial interest of the deposit to the plaintife," and in that case the depositor had drawn out the deposit, and the action was sustained against her administrator. So In Ray V. Simmons, 11 K- I. 266; the facts were precisely like the case at bar, except that the cestui que trust was informed of the gift, and the court held the trust valid. But the supreme court of Massachusetts in two cases (Brabrook v. Boston Five Cent Sav. Bank, 104 Mass. 228, and Clark v. Clark, 108 Mass. 522) seem to hold a differ- ent doctrine. In the first case the circum- stances were deemed controlling, adverse to an intent to create a trust, and in the last, which was similar in its facts to this, the court express the opinion that the trust was not complete, but without giving any rea- sons for the opinion. The last decision, al- though entitled to great respect, is excep- tional to the general current of authority in this country. In the English courts I do not find any case where these precise facts appeared, but the cases are numerous where the general principles have been elaborately discussed and applied to particular facts. It is only deemed necessary to refer to a few of them. In Richardson v. RichardsoUj L. R. 3 Eq. Cas. 684, it was held that an instrument executed as a present and complete assign- ment (not being a mere contract to assign at a future day) is equivalent to a declara- tion of trust. Morgan v. MaUeson, L. R. 10 Eq. Oas. 475, was decided upon this prin- ciple, and is an extreme case in support of a declaration trust. It appeared that the testator gave to his medical attendant the following memorandum: "I hereby give and make over to Dr. Morris, an Indian bond No. D 506, value £1,000, as some token for all his very kind attention to me during my illness." This was held to constitute the testator a trustee for Dr. Morris of the bond which was retained by him. These cases are commented upon, and the latter some- what criticised in Warriner v. Rogers, L. R. 16 Eq. 340, but Sir James Bacon, in deliver- ing the opinion, substantially adheres to the general rule before stated. He requires on- ly "that the donor or grantor, or whatever he may be called, should have absolutely parted with that Interest which had been his up to the time of the declaration— should have effectually changed his right in that respect, and put the property out of his pow- er, at least in the way of interest." This case was decided against the validity of the trust, mainly upon the ground that the memoranda produced were upon their face testamentary in character. In Pye's Case, 18 Ves. 140, money was transmitted to an agent In France to purchase an annuity for a lady. Owing to circumstances which the agent supposed prevented its purchase in ner name, he purchased it in the name of the princijpal. When the latter learned this fact, he executed and transmitted to the agent a power of attorney to transfer the annuity, but before its arrival the principal died. Lord Eldon held that a declaration of trust was established. Wheatley v. Purr, 1 Keen, 551, is quitu analogous to the case at bar. A testatrix directed her brokers to place £2,000, in thfe joint name of the plaintiffs, and herself as a trustee for the plaintiffs. The sum was placed to the account of the testatrix alone, as trustee of the plaintiffs, and a promis- sory note was given by them to her as such trustee. The note remained in her posses- sion until her death, when her executor re- ceived the money. It was held that the transaction amounted to a complete declara- tion of trust. Mr. Hill, in his work on Trustees, after saying "that it is extremely diflScult, in the present state of authorities, to define with accuracy the law affecting this very intri- cate subject," lays down the following as the result: "When the author of the vol- untary trust is possessed of the legal inter- est in the property, a clear declaration of trust contained in or accompanying a deed or act which passes the legal estate will cre- ate a perfect executed trust, and so a dec- laration or direction by a party that the property shall be held in trust for the object of his bounty, though unaccompanied by a deed or other act divesting himself of the legal estate, is an executed trust." Hill, Trustees, 130. If there is a valid declaration of trust, that is sufficient of itself, I apprehend, to transfer the title, but the difficulty is In de- termining what constitutes such a declara- tion, and whether a mere formal transfer ot the property, as In the case of the medical attendant, Is sufficient, is a question upon which there Is some difference of opinion. No particular form of words is necessary to constitute a trust, while the act or words relied upon must be unequivocal, implying that the person holds the property as trustee for another. Let us now consider the case In hand. Ja. ^form at least th p titip t n thf» mnTjpy wa s changed from the intestat " titlp. T he retention of the pass- book was not necessarily inconsistent with fhiS- construction . S he must be deemed to have retained it as trustee , l ^he booK was not the property, but only th^Toucner tor tB6 yi'Utial'ty, whicn aiter the deposit con - sisxea ot t he dept a^amst tne pa ng. " ""TEere"are many cases where the instru- ment creating the trust has been retained by the author of it until his death, especially when he made himself the trustee, and yet the trust sustained. Exton v. Scott, 6 Sim. 31; Fletcher v. Fletcher, 4 Hare, 67; Souver^ bye V. Arden, 1 Johns. Chi 240; Bunn v. Wlnthrop, Id., 329. This circumstance, among others, has been considered upon the question of Intent, but is never deemed de- cisive against the validity of the trust Id. See, Hill, Trustees, supra. Some confusion has been created by judicial expression, that the author of such a trust must do all in his power to carry out his Intention, that the nature of the property will admit of. This general proposition requires some qualifica- tion. Tn this case t.ha Intestate might have notified the obiecta of her bountv. but this is, not regarded as Indispensable by any of the authorities, and she might have mada the deposits m tneir name, and aeiivereaTo them the dooks. or delivered to them Se mnnqv. The mie dnea not rennirft that thfl gifl:' shall be made In any particular way, it only requires that enough shall be done to transfer the title to the property, and one of the modes of doing this is by an unequivocal declaration of trust In Richardson v. Rich- ardson, supra, the court, in noticing this point, said: "Reliance is often placed on the circumstance that the assignor has done all he can, and that there is nothing remaining for him to do, and it is contended that he must In that case only be taken to have made a complete and effectual assignment. But that is not the sound doctrine on which the case rests; for if there be an actual declara- tion of trust, although the assignor has not done all that he could do, for example, al- though he has not given notice to the as- signee, yet the interest is held to have ef- fectually passed as between the donor and donee. The difference must be rested sim- ply on this: aye or no, has he constituted himself a trustee." 3lS notice to the cestui que trust was not necessary, and as the retention of the pass- books was not inconsistent with the com- pleteness of the act, the case is peculiarly one to be determined by this test: ^^',0 tho — intestate constitu te he rself a trustee ? After a careful considfifilTlAh of the case In con- nection with the established rules applicable to the subject, and the authorities, I think this question must t ^o J^nswoi-Pfl in thP af- tiT^Mf^Ye. It was not done In express for- mal terms, but such Is the fair Ipgal irnnn rt of the transaction. I have considered the c ase thus far up on what appe ars from the See of the transactimr"wHEonF evidence a li- unde, bearing up yd t^° mtaat. T t. ia not necessary to decide tha t ""^'•"'inrliiig gir cumstances may not be shown to vary or ay . jiam tne apparent cnaracter of the acts, and fjne Intent with wnicn they were done. The facts developed may not be so unequivocal as to be regarded as conclusive. It la anf- ficient to say that there is no finding of an intent contrary to the creation of a trust. and the facts found tjp not qata]ijjgh_RiTPh HTi adverse intent But looking at the evidence It is fairly inferable that the Intestate de- signed that the plamt ia and her SlStfer should^ have the benent oi tnese deposits, and there are some circumstances ffom~wEich ah in-^' ference may be drawn tnat sne regaj dedJie _gLrfs ais ' fix ed and complete . The circum- stance tfiaF'she did not intend ttiat the o b- jeqta of her bounty should know of her gift until afte r_he r death Is not mconslstent with Tt," and t h £most ttiat can~5e~said i s that she may have" believed that the dep^te_,mlgjit Ke' wiffidifawn"during"her'TiIei"'and the loon- ey converte3^to hgy own T^gr-TfTsnot clear that she entertained such a 'beliet. but l£~she did._.it would not change t he legal effecLjQf- J^SE-acts. _«™ The judgment must be affirmed. All concur except MILLER and EARL, JJ., absent at argument Judgment affirmed. 396 EXPRESS TRUSTS— VOLUNTARY TRUSTS. BEAVER V. BEAVER et al.i (22 N. B. 940, 117 N. Y. 421.) Court of Appeals of New York. Nov. 26, 1888. Appeal from supreme court, general term, third department. The action was comme nced by the plainti ff, as exBCTtmrprasisrTr. jjea^af, dgarnsTtiie _ ,-™™---»~ Tne administra- to Fs of John 6." SeaTyer claiming the money jgfendant3Ja .jdafiej^tihfl l)anK.i<'ihfl mopoy ' Eavnig'^jeen broue;lit into court. The ques- I'lon litigated was whether the money repre- i<;ifftaaiTariitfiT»Tmis»!iiTi»jiiTi»!WHniiiiiRi m, Bad b een vested in Asiel (j-. Heaver.^ , a gi ft iJ'Olll J 6hll U. ii&Mei . Thn ai^rnnrif. y jt.h the hank, c onsisted oTtwo deposits, — one July 5. • Sf^lE>T96^mak ing in the agg regate Sl.OQO . aSffTlieir^u'iimUiaLmuiJ lliHlWB'. LI IS undis - putea that the deposit ot' !l6»&4.04~was mad e in person ny .lohi^ {}. 'Reaver, and that tli e money deposited belonff fifl lf(f liim. 'I'(ip nn}j e vidence to sustain the clairp that it; yyjfg pri van by him to As iel G. Beaver is ImsMaJhS-i^- l ations between them and th e njrniinn jitq,np,^ ^a attending the deposi t. Asiel ,G'. Beaver was the son of John U. Beaver, and m it 17 yuafi) or age, and resided witli pia fathp.r . as one ot a fmWf nf 1K nhilrlrpn. (-John C)^ leaver made the deposit of July 5, lij.^tj. in the name oi' Asiei. x ne rules of the tiank re - quired that on inaking th ft ^rs^. riapnsil: tho depositor should subsiriDe a declaration of ^is a Si^Bnt f,^ ttiBhy^awHof.t.hfl pHtitiitinn. and his promise to abide by tbem . wJohn O. jjeaver, at the date or the first deposit. signe dT m his""9yp n ame .a declaration presented to Kim b y thf'''t^-^aiirer o f the bank, commenc- ing with the words ; " I, Asiel G. Bea veTiOf Esopus, Ulste r co u i}t' ) ;,„, hereby request uie otticers ot the leister County bavings institu- t!On~tO" recei ve tr om me . jpV.ii,^; ,.§Ba. open aiT " account wiHi rneT'*' 'etc. At the same time the savin gs pang enterea on its books an ac- gOnpt""BegililllH|^. 'i>r.. Ulster County iSav - ilngs bank, in account witti" Asiel Beaver. " mu crediting said Aaip.l with the deposit of sUbi. unaer the name of Asiel Beaver mer e originally ^ fltlBU ' LhH ' ■ \V t)rnsr"'t^ayable ti 2 tyai tlie to J!oK^^n'PrBeaver r^''~ THe bafflTSfao at the same time issued and delivered to John U. Beaver a pass-book, with a similar entry as Utt th e account on the doo ks of the bank, co ntai.ni'ng aTso, as oriiI5IIIgwJltte a,_the words, "Paya-. DlBToJohn^ Oi.gfias;ei'. " These words in tt ie ^ou^'and in the pass-'EoblS! Wefe int he hanawriting otT EeTireaamrei: ot th6 bank."an d vFi^"wrrtlen at lEe sa me time and by t he same"hand as the other part ot the 6Wmies. j SuTBef ore t he deliYefy'ortE r''paaH-BooR"T Be ^raa'l'P ^able' to::^En U.B eaver " WCTT erased therefrom, and tlie~same^erasure was ' Reversing ft N. Y. Supp. 588. madB in thP|appr>nnt.f^p the hank-hnnkij. Hoy the interli neation name to he m ade in thBTTrST^ ins tance does not appear, nor does it appear atWEosesugge stioii or under what circ'im- stancesTBeerasures were made. Subsequent - l y: m Oef otyg-ariSbfi. another'"clennaif.~f gl4b.96 W as ma'fle to the account, and cred- itea on tne pass-book. There are no facts, except as above stated, tending to show a gift of the money deposited to Asiel. On the other hand, many circum- stances were shown which are claimed to be inconsistent with a gift by the father to tho son of the money deposited. The son mar - ripd a. fp.w -vpi^j;!} after the deposit was made . and died in 1886. 20 years after the date~of the depo sits, being then of the age otij/ years, leaving a wife, bin no chi ii;i,ryi- aiii-viving'~ John O. Beaver, the father, died in 1888. The fathe r retain ed possession ot the pass- bwk at all tlHrea Ulitll his death , i n April" 1867, he drew $27.29 from thiTaccount. and signed a receipt therefor in the pass-book in~ jhis p>yn naiap. jfo othe r sum was ever drawn from the account. paver pres ented the pass-Dook to ■m ;ne tlvF^Banj E to bayp the ii^terest credited, and th'e"'li)an'k ofiicera had no dealings with any other person in ^-ps pent to the accoun t. There 18 no evidence that Asiel G. Beaver ever had t^lR pasR- Jbook in his posse aai"", f- knBW n^ the deposi ts. In May, 1870, Asielopened a n ^nrliviflnal aoonUnt. 'Al, IJiH lia nK in PIS oTm name, which continued until March, l esb. ~ when ne grew out jHjl.HJB.St). in full ot tne ac- counL- It appears that John U. jjeaver naa ' eight or nine passTbook s in the bank, repre- senting deposits made in the names of other , j left a t his death real estat(> O t ■Ya]aa..flLMa,iJ 0iJ_tO Blh'Mii, and more than $20.000 in personal property. U ne 61 1118" Fules of the bank provides that "dratts may be made personally, or by the order in writ- ing of the depositor, (if tlie institution nave the signature of the party.) or bv letters of gtt orneyy duly authenticatedr but no person .shall have the right to demand any part of his principal or interest without prndmijng " the originarpooK . that such pa yment may be ' !a t' entereJ thereon," "gBTl anothe r declares that , "altfough" tTJeT^trtut i o n "will endeavorl:o j)reventlra ^!Miu3 uoalEGS hStjet all pay mentg to persoiispresenting the pass-books issued by it stiait'WWlid p ayments to discharge the Ui^mtm"''^TBeT me°3 were printed onj Uie pasS;tegkg.£iJtSe:SanE~ A. T. Cleaitoater, for appellants. F. L. Westbrook, for respondent. Andrews, J., {after stating the facts as above.) It is found that the money with which John 0. Beaver made t hq deposit of $8 54.04, July 5, 1866, b elonged to him. The interenc^ that the deposit of !m4.'iHK. rn3!t»— October S. 1»66, was also made bv him, from his own mea ns, does not admit of reasonable guestionr Th epass-b flck jiaa at all times nr ^is possession .' Concurrently with the laSt^ deposit the amount was entered therein. It EXPRESS TRUSTS— VOLUNTARY TRUSTS. 397 ia afflrnm^;ivfilY shown that. Asjel. who WaS [Teii a minor, lived with his father, and had go money ot nis own, an d the circumstances are quite satisiactory to show that he never at any time during his life knew of tfae DanK "TEe account . The question in the case turns upon tEe legal effect of the deposit, made in connection with the attendant and subse- quent circumstances. If they 'established either a trust in favor of Asiel as to the 6854.04, deposited July 5, 1866, or a gift of the fund deposited, then, clearly, the subse- quent deposit would, in the absence of ex- planation, be impressed with the same char- acter, and be governed by tlie same rules. On the other hand, if the first deposit was not affected with any trust, and was not a gift, neither is the last one. Both were the property of John O . Bea vei-, or both the e rty ot the son, either by a .ilLut. The trial court seen rop - beneticial or legal seem to nave susiainea the transaction as a gift, but at the same time refused to find that there was no trust. .There is no warrant, under the dpcisiona of this cnnrr. r,n nnhnlri t,h(} deposit of Ju'V 5 . t>fti^, aa !^^.rl1g^ Thp r.MSRnf Mart.in v. Funic. 75 N. T. 134, established a trust in favor of the claimant in that case, in respect to a fund deposited by anotlier ill a savings bank to his own credit, in trust for the former; the lat- ter taking from the bank at the time a pass- book in which the account was entered in the same way. The court applied the doctrine that the owner of a fund may, by an un- equivocal declaration of trust, impress it With a trust character, and thereby convert his absolute legal title into a title as trustee for the person in whose favor the trust is de- clared. There wa" "" fift^i'jraf'"" "^ trnatii^ this case, in terms, when the deposit of Jul y 5. 1866. was ma fle, nor at. any t.ima after- Wards, and none can be implied from a mere deposi t by one person in the na me ot an- mw.r. Toconsmhte at ru^E th&K IHUal be either an" explicit d^giafailUU 01 Lflist, or cir^ cumstances wnicn snow oeyona reasonable doubt tha,t a trust' was" Inte^ ^dert to be cre- atM. It would introduce a aangerous insta- biiity of titles if anything less was required, or if a voluntary trust inter vivos could be established in the absence of express words, by circumstances capable of another construc- tion, or consistent with a different intention. See Young v. Young, 80 N. Y. 438, and cases cited. The plaintiff's title to the fund must de- pend, therefore, upon the question of gift. The elements necessary to constitute a valid gift are well understood, and are not the sub- ject of dispute.)*. There must be on the part^ of the donor an intent to give, and a delivery of the thing given, to or for the donee, in pursuance of such intent, and on the part of the donee acceptance. The subject of the gift may be chattels, choses in action, or any form of personal property, and what consti- tutes a delivery may depend on the nature and situation of the thing given. The de- livery may be symbolical or actual, by act- ually transferring the manual custody of the chattel to the donee, or giving to him the symbol which represents possession. In case of bonds, notes, or choses in action, the de- livery of the instrument which represents the debt is a gift of the debt, if that is the intention; and so, also, where tlie debt is that of the donee, it may be given, as has been held, by the delivery of a receipt ac- knowledging payment. Westerlo v. De Witt, 36 N. Y. 340; Gray v. Barton, 55 ST. Y. 72; 2 Schouler, Pers. Prop. § 66 et seq. The ac- ceptance also may be implied whete the gift, otherwise complete, is beneficial to the donee. But delivery liy the donor, either actual or constructive, operating to divest the donor of possession of and dominion over the thing, is a constant and essential factor in every transaction which takes effect as a complete gift. Anything short of this strips it of the quality of completeness which distinguishes an intention to give, which alone amounts to nothing, from the consummated act, which changes the title. The intention to give is often established by most satisfactory evi- dence, although the gift tails. Instruments may be even so formally executed by the donor, purporting to transfer title to the donee, or there may be the most explicit dec- laration of an intention to give, or of an act- ual present gift, yet, unless there is delivery, the intention is defeated. Several cases of this kind have been recently considered by this court. Young v. Young, supra; Jack- son V. Eailway Co., 88 N. Y. 520; In re Crawford. 113 N. Y. 560, 21 N. E. Eep. 692. We are of opinion that there is lacking. i n this case two ot tne essentia l ele ments to constitute a ^ift Dyjonn u. j^eay 'fer ro his so n of th emone.YdeTOsiied Jui^ ftj^ TO ^ " Itn intent tiTgivel an^' a deliver y of the sub; ject of the al l eged'^jf t. "The only evidence relied upon to establish an intent on the part of the father to make a gift to his son is the transaction at the bank on the day the de- posit was made, in connection with the rela- tion between the parties. There is no proof of any oral statement made by the father on that occasion disclosing an intention to make a gift, and not a scintilla of evidence that afterwards, during the 20 years whfch elapsed before the son's death, the father made any declaration or in any way recognized that the money belonged to the son, or had been given to him. Evidence offered on the part of the defendant of declarations of John 0. Beaver, made on the day of the deposit and after- wards, inconsistent with the theory of an in- tent to give the money to Asiel, were ex- cluded, on the objection of the plaintiff. The acts of John O. Beaver af ter tlie account wag" ^gsga~leud aliroiiglji liJ"lTegatiYe~the fclaim |bat the m oney was aepo sited with intBnt: t.n " . ^ive It to lilt) Mui i. TlJB Ttrawing out of the jnterest by John O. fieayer on' one occasion ; ijis retBirttoff'of the jiass-T6oF^ir22"year3, and^bcuringj2To16e wTitteHTip" f foiri "{Tine Itrttnrarrtheiact that t Tie'sbn, so far as'ap- pears, never was mt6rmg(l~'of-1?hr''e3:tgtetree- 398 EXPRESS TRUSTS— VOLUNTARY TRUSTS. of the account, — are strong indications that J oEnD . iJe aver did not make the depo sit in t'be son's name, with intent WTnake a'pre s- -gar^r oQhe monev:' ~!rEe f allier "dea Tt with the accouriFas fiis own^^ and, if thecon- tfol lie exercised over it during -tlre'MTfroWty o f Asiel could be reasonably expiainecro n the t heory that he act M.8aJMaiatoal..eu3Fdian Q£the-sQa^na.auc h expla nation is possihkas lo the 16 yea rs of the life of uie son after he jl'paplip.fl hia nilT^ioritv. ~ The' trial court iiaving found that there was a consummated gift, which, of course, includes a finding of an intent to give, this court is concluded from reviewing the find- ing, if there was any competent and suflS- cient evidence to support it. The form of the account is the essential fact upon which the plaintiff relies. It may be justly said that a deposit in a savings bank by one per- son, of his own money to the credit of an- other, is consistent with an intent on the part of the depositor to give the money to the other. But it does not, we think, of it- self, without more, authorize an affirmative finding that the deposit was made with that intent, when the deposit was to a new ac- count, unaccompanied by any declaration of intention, and th^ depositor received at the time a pass-book, the possession and presen- tation of which, by the rules of the bank, known to the depositor, is made the evidence of the right to draw the deposit. JTe cannot close our eyes to the well-known practice o r persons depositing in savings b an ks money to the credit of real o r fict itious perso ns^itn jyinTgnTKyrTof diveshTTigr thflmaRlves"ot own- ershipi. It is attributable to various re asons, —reasons" connected with taxation, rules of t hp ba |pjs:„li mitinpf the amount which any one individual may keep on^posit, thedesire to o fetaTn~h'i g h T'aiBg'Of'fflra PgSt'Tytrgfe'th'ere is a discriminaTioh based OH the' SlSo'ii nt^of de- posTts, and JthA dBSira 0rl.JtI[e3art_WrQany persons to veil or conceal from others knowl- cases wTiere a deposit ornffiis^character is made as a gift, tliere are contemporaneous facts or subsequent declarations by which the Intention can be established, independently of the form of the deposit. We are inclined to think that to infer a gift from the form of the deposit alone would, in the great majority of cases, and especially where the deposit was of any considerable amount, impute an intention which never existed, and defeat the real purpose of the depositor. The relation of lather and son does not in this case, we think, strengthen the plaintiff's case. It may be true that, as between parent and child, a presumption of a gift may be raised from circumstances where it would not be implied between strangers. Ridgway v. En- glish, 22 ]SI. J. Law, 409. But wherte a de- posit is made in the name of another, with- out any intention on the part of the depositor to part with his title, he would be quite like- ly to select, a member of his own family to represent the account, and in this case this is the natural explanation of the transaction. The circumstances of the erasure in the declaration signed by John O. Beaver, and also in the account on the books of the bank, of the words, "Payable to John O. Beaver," throw no light upon the actual intention. If they were originally inserted at the sug- gestion of John 0. Beaver, it would seem to imply that when he came to make the de- posit he did not intend to part with the con- trol of the money, and it is scarcely presum- able that he changed his intention at the very time of making the deposit. If the words were inserted by the treasurer without au- thority, he may have erased them so as to leave no evidence of an intent to evade the law or the rules of the bank in respect to de- posits, or he may have done it for some other unexplained reason. Again, it is possible that John O. Beaver desired that the fund should be placed so that it could be drawn on presentation of the pass-book, without the necessity of a written order, and the erasure was made for this reason. In short, the rea- son for the insertion of the words, and the subsequent erasure, is matter of speculation merely, and does not aid in the interpreta- tion of the main transaction. There was not only a failure to prove an intent on the part of John O. Beaver to make a gift, but the case is, we think, equally defective on the proof of delivery. The declaration and re- quest drawn by the treasurer ran in the name of Asiel, as did the promise recited to abide by the rules of the bank. But it was signed by John O. Beaver in his own name, and not as agent for Asiel, and in law was his request and his promise. John O. Beaver took and retained possession of the pass- ■ book on which the rules were printed. The " rules prescribed the undertaking of the bank, / and the conditions to be observed by depos- itors in requiring payment. Under these rules, John O. Beaver had the exclusive do- minion over the account, and the exclusive right to draw upon it so long as he retained the pass-book. It was his signature that the bank had, and not that of Asiel, and the rule authorizing drafts by the depositor only ap- plies when the bank has his signature. But the rule also prescribed that "no person shall have the right to demand any part of his principal or interest without producing the original book, that such payments may he entered thereon," and also that "all pay- ments to persons producing the pass-books shall be valid payments to discharge the in- stitution." Under these rules, Asiel was never in a situation to control the account, while John O. Beaver had complete author- , ity over the fund at all times. If John 0. Beaver had delivered the pass-book to Asiel with intent to give him the deposit, there would have been a constructive delivery of the subject of the gift. In re Crawfordi supra. But he never did this, orany equivar lent act. We think, for the reasons stated, that t he plaintiff failed to establish a gift, or to' justily EXPRESS TRUSTS— VOLUNTARY TRUSTS. 399 The question of gifts, in. connection with deposits in sayings banks, Ws of J '^tfl Yfara hapr) -^^i- eo uentlv Considere d by the courts in various states. The pre- ponderance ot authority seems to be in favor of the views we have expressed. See Robin- son V. Ring, 72 Me. 140; Burton v. Bank, 52 Conn. 398; Marcy v. Amazeen, 61 N. H. 131; Scliick V. Grote, 42 N. J. Eq. 352, 7 Atl. Sep. 852; Scott v. Bank, 140 Mass. 157, 2 N. E. Rep. 925 ; 8 Amer. & Eng. Cyclop. Law, tit. "Gifts," and notes. The cases of Howard v. Bank, 40 Vt. 597; Blasdel v. Locke, 52 N. H. 238; Gardner v. Merritt, 32 Md. 78,— go the furthest towards sustaining transac- tions, similar to the one in question, as gifts, of any we have noticed, but they are distinguishable in material respects from this. Our conclusion is that the cause of ac- tion in this case was not made out, and the judgment should therefore be reversed, and a new trial ordered. All concur, except Danfokth, J., dissenting, and FmoH, J., not voting. 400 EXPRESS TRUSTS— VOLUNTARY TRUSTS. BATH SAV. INST. v. HATHORN et al. (33 A- 836, 88 Me. 122.) Supreme Judicial Court of Maine. June 7, 1895. Report from supreme judicial court, Saga- dahoc county. This was a bill of interpleader bro ught by the ijat n savrngTlnsn'tunoB" agains t tne d e- fendant Hathnm— aa.. aamig lstratOT ofjthe estate of Henry Walker, deceased, _ and ■SgaTnst Alice B. Fi les, toTdetermiae the title W g ' CeHam d6^6S l t in 'that Tnstitu aon:"' " " The course of procedure adopted by agree- ment between all parties was this: Each defendant filed an answer, and thenj__by agreement, a ae'crefftirffi'fefpleader was filed, and 'by'Tu xffief agre §geffl~it was'sH^ that" the~ answ ers sho uld" be taken as_J;6e plea^Sings' infBe case, anBTlEe'cause set down for"Eearrrig on "bill, answ erirand jBSiSC. and that Miss Files be regarde d as plaintiff in the_contInuaMeI2I3tTje , suit. " It thus be- came^ ^actically, a suit in e2uit2_bj_Alice B. Files against~tE e' administrator o f Henry , Walker s^state. The facts in the casewere" practically undisputed. It_aEp.ears IfeatSgBry Walker died ^0,ctober 2, 1891, leaving neither wife no r_ childre n, his wife iravlng'_die3^earljj[ix years Jbefore. Tbelr_hoine was in Woolwich, opposite. Bath, and Ml^' Bjne^who^ was a second cousin of MrsTWalker, frequeMly visited there, And "Mr. and" Mrs. Walker often visited the Files family in Winslow, th^'two famittes^belng in . iving, or the _last survivor of them, to sell his real estate and distribu te 'tBg^proEfeEds among the testator's "next of ki^'as per- ^dYiai estate, according "to~the laws of the -State" of "New Tori"," for the disttibuflon of ~^^^lns~--^^rstmsl^e^'te.''_^Tbe " execu tors named " were the testator's wiie,Ziua_ son James, and his friend Tighe Dave y; all of whom'are dead. ~ JamfC died .without ha v- ing had lawful issue. At testator's death his nex t of ki n were his^sdSTam^four nieces, ■and"a nephew, who is the p resent plaintifC. 'rne rotLl- nieces died during 'tlie lifeti me of James, but leaving childr en who are defend- ants here"' and c laim aifinterest'm the pro- ceeds of the real esta tgi, or in the" real estate TEsel f. At_ the d ateofthe death o?~James " the plaintiff was th e sole nexFoFETof the testator, and claiming the entire proceeds of the real estate, br ough t an a.ctio h for a" con- Struction' of the wilTliiid the a ppointment TJf a tl^tiStee to" cafry^^nts unexeculgd "pro- visions. 'TSe triar court' ^termined that it " EaH" j urisdicfion" to* appoint a trustee," and maKii sncl^ flpp^fntrnpnt. and that. the plain- tiff was entitled t o the entire proceeds of th e real estate a fter'payment of the liens.Jhgr?- on. Tha Qudgment was affirmed, and. the child ren of two of _ae nieces bring Jhis^ap- peaT. " i-Tis contended in their beha lf that the de- viseTo"james, before marriage and The birth of Tssue, was but a life estate; that tfie re- malind er in.fee vesteg~af"tEe""deatB' of testa- tor in his heirs at l aw; that the four nieces and plaintiff took svich remainder in fee as !Kaiif8~ln"'common, siibject'to "be 'divested "by "the marriage of James and. birth of law- ful issue; that this co ntingency not havin g occurred fETe f ee was hot" divested"; and that IfcaM6t'"be~divested~by a sale" of the"T'eal estate And dlBpositlOH CTthg gTOgSear as_£er- sonalty because the power' jofjag^ven to TEe~executors was a mwe naked power, not coupled with any Interest; died with the do- "l ^Bgto whom it w as given; jmd^ cannot be ^ecute'd' Dy a'^^irfjttE-eauity. 'It mlgEEprove to be the better opinion that James took a base, or determinable fee, subject to be dTvested upon his death with- ouf ''H aviHg"had- la-wful issire,- so that -during his lirig"tB^e ^as no fragment of fhie estate 408 POWERS IN TRUST. _to_descena_upon.^hls ,belra. at law,, but Ihe character of_hls interest need not be particu- "laMy discussed if the power _otf_ salg. Jur vWed / the de ath of^the-gsecutors, and the re al-es- jateJsJa-be-dfet*ib«ted_aa_DgESfiaalty- .That is the vital po int in th e cas^ . and the appel- lant's view of it Is sought to be sustained by a reference to the rule at common law, which, it is said, the Revised Statutes have not seriously changed, but have omitted any provision, express or implied, which gives the court authority to appoint a trustee to execute a naked power. The argument turn s in the end upon the single inquiry whe"ffier tiie authority gi ven to the executors to sell is_a jnere naked poyVSl^tft & gWeV IBTfruSt asijts^gxecution imperative. T^e statutory pro YJ^ions must "" control and determine the Jesuit, and render unnecessary ' any "aiscus- sion or examination of the cases previously decided, which were not always harmonious and in some instances not easily reconciled. They were very ably and patiently examined in Dominick v. Sayre, 3 Sandf. 555, resulting in a general conclusion that the statutory re- vision substantially followed and adopted the rules of the common law, departing from them only to remove doubts and secure great- er accuracy and precision. But in any event the statutes must furnish the rule by which we are to be guided to a conclusion, for they begin with a comprehensive provision abol- ishing all powers as then existing by law, and making their creation, construction and execution to be governed by the' succeeding enactments. 1 Bev. St. pt. 2, c. 1, tit. 2, art. 3, § 73. A power ip there de fined to be "an author!- iTTT* : rii • n*7a rj ! rrtTW 771 to d6 B( or the creation of estates therein, or of cha r- ges thereon, which the owner granting orre - serying su£lLJiQB:er.-icughtJii.mself .JaffifuUy perform." Section 74. The authority here given to~the executors of John Walsh to sell tSe lands and distribute the proceeds In th e event of the death of James" without having Bga'"lBgPe~wag -g gffriy ' a "p6^eT WTthin""tfie sjatu torr defljiiflm^ general and not a s pecial power, for the former ex- l8ts"w£efe the authority permits the aliena- fibii 'm ;Tgr T) y ffieasr'ot a cofl^^1tmr 6,~will w'c ha.rge'of the' I an5s' e mbraced in the powe r to toy alien ee wnatever tsection Tt), gpd the latter whe nth e anenatlon" m us t be to desig - natedjjrsonSL.OT.of_aij£Ss_estate or interest |SSa__a_Jee. Section 78. A ' cnitlnction is then drawn 'between cases In which no per^ son other than the grantee of the power has any Interest In Its execution, in which case the power, whether general or special, Is de- nominated beneficial (section 79), and cases in which the grantee has no interest In its execution, but holds it for the benefit of oth- ers. A_ generaL p ower is. in tmfit "yhon any person'' or class of persons, other man the ' grante e of such power^ is desigBafed as en- fitled'to'tbe proceeds,' or any portion oTtEe proceeds, or other benefits tsLresuUfrgmThe alienation of the lands according^to the pow- JEJ! WIt Mn this definition the general pow- er conferred upon the exec utors to se ll the lands and distribute the" proceeds to tf^^f^. tor's nexf or¥iii was a po wer in trust, In the 'execution -Qf-wttlgHtKggrantees had no in^r r- est, for, although Jame s was one of them, the power, by its terms, w as to De exercis ed upoh"ms~asatgra5g"Tn~an event which TeR film witEoul any interest in its executionT TBese" statutory definrtTons seem to us entire- ly accurate and clear and scarcely need, at least for present purposes, the "authoritative exposition" invoked. A power to be exer- cised by the grantee, not at an tor his o wn beneflt b u t wholly and entirely for th e bene-" jt^ some other person or class of perscms, ^necessa rily e xCTcise a by such granteeuf a jifust capacity. "TfEe element or trust mheres In its' substance and is its essential and vital characteristic. The statutes then provide that every trust power shall be Imperative, and Impose a duty upon the grantee, the performance of which may be compelled in equity, unless in a case where its execution or non-execution Is made expressly to dep^d upon the will of the grantee, and does not cease to be such even though he may have the right to select some and exclude others from among the objects of the trust Sec- tions 96, 97. So far, it is determined for iib. that the authority granted to the executom of John Walsh is a general power In trust, and imperativ e. Being such, a further pf6-~ Vision, reachihgjih'e'em'^ency ~gf~t p'e dtia Ui B!r[^e_ grantees,, bec omes appiicap ie. it" is enacted (section 162) that the provisions of sections 66 to 71 of article 2, relating to ex- press trusts, shall apply to powers In trust, and section 68 of that article confers up on the coH rt. ..upon thejSJ^ST^^^e surviving trustee, his power s and duties^ a nd" permit s them t Wf ^""r """""'• with the' lpnrnpfl ony^TiRpl /for the heirs at law that If this trust could not be executed according to the intention \ of the testator without tending to excite serv- ile insurrections in other states of the Union, It would have been unlawful; and that a trust which looked solely to political agitation and to attempts to alter existing laws could not be recognized by this court as charitable. But such does not appear to us to be the necessary or the reasonable in- terpretation of this bequest. T he manne r s tated of nutting an end to slavery is not by legislation or political a ction, but J^y,, cre- ating a public sentiment, which rather point s ■n mpriji JTiflppnce and voluntary manumis- I wflB. TTie _arg_ usual means of pnblTc instruction, bv books and hews paper s. speeches an d lectures. Other meitUB ire I6tt TO lllli UiScretlon of "the trus - tee a but th ere la nothing to Indicate tha t they are .not designed to be of a kinSrg d nature. » ivingT(rthd! Bg?atlg§t"tiiat tav^^l e "c bBS'ffuc tidn to which all charitable gifts are H.& B.BQ.(2d Ed.)— 27 entit led, the Just In ference ls_ that ...laatBi means only are'to"15e"sele^g3t^ nd JfeSLlfefiX.. are to be' 'usecr^],ajajsJjit.jaaimeK>. ii was further obiecte^ that "to crea te a public sentiment" was too vague andTn'defi- nite an object to be sustained as a charita- ble use. But "a public sentiment" on a moral question Is but another name for pub- / lie opinion, or a harmony of thought— idem [ sentire.6 The only case cited for the heirs af^ law in support of this objection was Browne V. Yeall, 7 Ves. 50, note, in which Lord Thur- low held void a perpetual trust for the pur- chase and distribution in Great Britain and its dominions of such books as might have a tendency to promote the interests of virtue and religion and the happiness of mankind. But the correctness of that decision was doubted by Sir William Grant and Lord Eldon In Morice v. Bishop of Durham, 9 Ves. 406, 10 Ves. 534, 539; and it is incon- sistent with the more recent authorities, here and In England. The bequest now be- fore us is quite as definite as one "for the increase and improvement of Christian knowledge and promoting religion," and tne purchase from time to time of such bibles and other religious books, pamphlets and tracts as the trustees should think fit for that purpose, which was upheld by Lord Eldon in Attorney General v. Stepney, 10 Ves. 22; or "to the cause of Christ, for the benefit and promotion of true evangelical piety and religion," through the agency of trustees, to be by them "appropriated to the cause of religion as above stated, to be dis- tributed in such divisions and to such so- cieties and religious charitable purposes as they may think fit and proper," which was sustained by this court in Going v. Emery, 16 Pick. 107; or "for the promotion of such religious and charitable enterprises as shall be designated by a majority of the pastors composing the Middlesex Union Association," as in Brown v. Kelsey, 2 Cush. 243; or to be distributed, at the discretion of trustees, "in aid of objects and purposes of benevolence or charity, public or private," as in Salton- stall V. Sanders, 11 Allen, 446; or "for the cause of peace," to be expended by an unin- corporated society, whose object, as defined in its constitution, was "to Illustrate the In- consistency of war with Christianity, to show its baleful influence on all the great interests of mankind, and to devise means for insuring universal and permanent peace," as In Tappan v. Deblols, 45 Me. 122; or to found "an establishment for the increase and diffusion of knowledge among men;" or "for the benefit and advancement and propaga- tion of education and learning in every part of the world, as far as circumstances will permit;" as In Whicker v. Hume, 7 H. L. Cas. 124, 155, and President of U. S. v. Drummond, there cited. See, also, McDon- ough v. Murdoch, 15 How. 405, 414. The bequest itself manifests its Immediate 418 TRUST— PUBLIC OR CHARITABLE. purpose to be to educate the whole people upon the sin of a man'.a. ■holding.-tuaJCellow- man in bondage; and its u ltimate object, to piit an end to negrp"].^very JaJtheTTnited Sta^nn^'either aspect, a lawfid charity, "it is universally aBmitteS" that trusts for the promotion of religion and education are charities. Gifts for the inst THptinn f^f tho public In the cure of the di seases of quad- fape'af or bifarOB efttl toman; ormr tnepr& - ^ entrdmrof cr u elty "to amrifais (either by pu b- iFshing newspapers on the subject. fl£ jby groviding 'tT'Ssta'Sliih'ments ' where^killing ttTem for the market '"£3SgBF~'"be ''attended with as little suffering as possible), have BSen* held charitable' in England. London tfniversity i'. iRlTUW, 26 ByaT.~T.59, 1 De Gex & J. 72; Marsh v. Means, 3 Jur. (N. S.) 790; Tatham v. Drummond, 11 L. T. (N. S.) 325. To deliver men from a bondage whic h the law regards as cohtrafytonaturai right , fflgiaHp ^fl Sttetraira^s'otM policy^ IS aure ly noTTess cEantaBte thanlo^Iessen thft, sil^^''''- peaceable redemption or manuinlsslon of sTaves in an y manner not prohibited by law Is a cnantapie object. It falls indeed within the spirit, and almost within the letter, of many clauses In the statute of Elizabeth. It would be an anomaly in a system of law , wiiich r eco gnized as cnaritable u ses the re- lief of the" poor, tne educaiAon ahd ureitjr- ment of orphans, marriages of poor maids, the a ssi stan<;e of , vaun^ . tradesmen, handi- ^raft smen and pe raon s decayed, the relief of prisoners a nff"tEe fede inpiJon of captiveB, to' e xclude tne aeiiverance or an tndeilnlte num~ er of human beings from a condition in hich ^ hey were so poor as not even to own themselves, in which their children could Tint be e ducated, in which marriages had no sanc- ^lon'of law or security of duration. In which ' all th eirleamig gs belonged to another, and piey were subject^ against the law of naturi L ^nd witnout any crime oi their own, to Hiir-h ah arbitrary dominion as the modem usages of na,tI"ons will not countenance over cap- tives taken from the most barbarous enemy. III. The next question arises upon the be^ slaves ■ wfro might fr om time to time escape f rom tfie slavehordm g s tates ot the bmoa~ iThe validity of"^ is bequ est must be de^ termined according t 6 the mw aa It stood at the time when the IBTgrarTHtiU Uhd iivmr which as ^wltlJfiakr^ectr i t is no part of tT5e"3uty of this court to maintain the con-~ gtrtiitionality. t he justice, or the policy of edT^But the jeonstilaiti on . o £ — the — Iliiijsd " States, at the time o f the testator's death, de- clared_jfiatjio person held to service or labor tn'one'state' lSon id be discharged therefrom_ By escaping; into another. I t may safel y Be "assumed th at, under s uch jL-C onstitution. ir _ 'Eequeat t o^assist fugitive slaves to^ j^ggje from those to whom their service was thus recognized to be~dj5e~ could not have ings of an imals. The constitution of Mas- sachiisett'^^Eicfi" declares that all men a ra _^^___________^ bom free and equal, and have the naturalw guest &l' "ti'U«t fO F""the benefit of fugitive essential and unalienable rights of enjoying and defending their lives and liberties, of ac- quiring, possessing and protecting property, of seeking and obtaining their safety and happiness; also declares that a frequent re- currence to the fundamental principles of the constitution, and a constant adherence to those of piety and justice, are absolutely necessary to preserve the advantages of lib- erty and to maintain a free government; that '•the encouragement of arts and sciences, and all good literature, tends to the honor of God, the advantage of the Christian religion, and the great benefit of this and the other United States of America;" and that "wis- dom and knowledge, as well as virtue, dif- fused generally among the body of the peo- ple, being necessary for the preservation of their rights and liberties, and as these de- pend on spreading the opportunities and ad- vantages of education in the various parts of the country, and among the different or- ders of the people, it shall be the duty of leg- islatures and magistrates, in all future pe- riods of this commonwealth," besides cher- ishing the interests of literature and the sciences, "to countenance and inculcate the principles of humanity and general benevo- lence, public and private charity," "and all social affections and generous sentiments among the people." Declaration of Rights, arts. 1, 18; Const. Mass. c. 5. This bequest directly tends to carry out the principles thus declared in the fundamental law of the commonwealth. And certainly no kind of education could better accord with the re- ligion of Him who came to preach deliver- ance to the captives, and taught that you should love your neighbor as yourself and do unto others as you would that they should do unto you. The authorities already cited show that the iTTiiheld ^and ppforced as a lawful chariiy. The epithets with which the testator accom- panied this bequest show that he set his own ideas of moral duty above his allegiance to his state or his country; and warrant the conjecture that he would have been well pleased to have the fund applied in a man- ner inconsistent with the constitution and laws of the United States. But he has used no words to limit its use to illegal methods, and has left his trustees untrammelled as to the mode of its application. " ^hether this begn^st is or la not valid . Is to be ascertained from affair constmcu ffirof !t§~Iaiiguagti, m lUg-«gHf bTthe ma^ma^ of jnterpretatlon statea in tne earner part ot tEta ^pninn -hv wliiph tVip miirt iff hnnnn to carry intoeffect any chflrHfl,hip hpgueat in which Tian be "See n a g eneral intention conaiateHf" J^ith— the" law, even Jf the particular mode Zriointed out .ia lTlegal; and there is no author- ' ity to construe it to be void if it can be ap- plied in a lawful manner consiatently with the Intention of the testator as manlfeated is TRTJST-PTTBLIC OR CHARITABLE. 419 the words by which It is expressed. One Il- lustration of these maxims may be added in this connection. In Isaac v. Gompertz, Amb. (2d Ed.) 228, note, the will contained one bequest for the support and maintenance of a Jews' syna- gogue; and another bequest of an annuity "to the gabas of the said synagogue," who were fotmd, upon inquiry by a master, to be treasurers of the synagogue, whose office it was to collect and receive the annual sub- scriptions for the support of poor Jews be- longing to the synagogue, and to apply the same to the expenses of supporting the syna- gogue and to the maintenance of such poor Jews. This last bequest was upheld, and re- ferred to a master to report a scheme, al- though the support of the synagogue was ad- Judged to be an unlawful use; and thus a bequest manifestly Intended for the benefit of persons professing a religion not tolerated by law, and which might, according to its terms, be applied either in an unlawful or a lawful manner, was sustained as charita- ble, and its application confined to the lawful mode. A bequest for the benefit of fugitlTe slaves is not necessarily unlawful . The words "re - lief or redemption of prisoners and captives " have always been held in England to include those in prison under condemnation for crime, as well as persons confined for debt; and to supiwrt gifts for distributing bread and meat among them annually, or for enabling poor imprisoned debtors to comjwund with their creditors. Duke, Char. Uses, 131, 156; Attorney General v. Ironmongers' Co., Coop. Prac. Cas. 285, 290; Attorney General v. Painterstainers' Co., 2 Cox, Ch. 51; Attorney General v. Drapers' Co., Tudor, Char. Trusts, 591, 592, 4 Beav. 67; 36th Report of Charity Commissioners to Parliament, pt. 6, pp. 856- 868. It would be hardly consistent with char- ity or justice to favor the relief of those un- dergoing punishment for crimes of their own committing, or imprisonment for not paying debts of their own contracting; and yet pro- hibit a like relief to those who were in equal need, because they had withdrawn them- selves from a service imposed upon them by local laws without their fault or consent It was indeed held In Thrupp v. Collett, 26 Beav. 125, that a bequest to be applied to pur- chasing and procuring the discharge of per- sons committed to prison for non-payment of fines under the game laws was not a law- ful charity. But such persons were convict- ed offenders against the law of England, who would by such discharge be wholly released from punishment A fugitive slasa^w as not_ a criminal by the lawSoFthis commonwealth 'o f 'ort h e unifeoassi: " TTo sup ply sick or destitute fugitiv e slaves with food ami L'liMliUig, ' medicme or shelter, or to extingtllSfl By pufc'Ea5e~IEe"cIaIms of those asgei-tJ-tLgyT^ gErTo'tlrelr -servi ce -and labor , would m no~wise^a"ve'^temlWl td "Im- pair the claim oinEhe"Iatter of the "dperation 9f the constitntinn an d laws Of the U nited,, states; and would clearly have been with in, the terms of this bequest, if. lot example, 'the trustees named in the will had received this fund from the executor without question, and had seen fit to apply it for the benefit of fugitive slaves In such a manner, they could not have been held liable as for a breach of trust. T}^}" tlfin'MSt. thftBofnrq, flfl yrell as ^ft^ Pre- vious one, beln^ ca paMp of being applied ac- cording to Its tprmg In a lawful manner at-the time of the testator's death, must, upon the settiea principles of construction. De held a valid charity. it Is hardly necessary to remark that tllF - direction of the testator that his trustees 'sBall"n'ot"Bg"j[ec'gfliBaBle~fa> any one Is simpl y voia. j>io testator can obtain for his bequests that support and permanence which the law gives to pubUc charities only, and at the same time deprive the beneficiaries and the public of the safeguards which the law provides for their due and lawful administration. . -^ As the trustees named in the will are not a corporation estaolished by law, and these two! bequests are unlimited in duration, and by their terms might cover an illegal as well as a legal appropriation, it Is the duty of the court, before ordering the funds to be paid to the trustees, to refer the case to a master to settle a scheme for their application In a lawful manner. Isaac v. Gompertz, Amb. 228, note; Attorney General v. Stepney, 10 Ves. 22; Boyle, Char. 100, 217. Trust to be expended "to secure the passage 3 of laws,, granting womep. yhether mar ried of unmarried, the right to vote, to hold office, to h oiQ, manaCT and devjse j>rojpel[ty, and ^pT" 'Stiier civil r'lgHts enjoyed by me n, '_^;naS Be susta!in'ec{"a's"a cnanty7 """" '" " rvo precedent has been cited in Its support. This bequest differs from the ot hers in aim- Ing directly and exclusively 16 'c E5 n^ 'jE e" iaws: i^d its object cannot be accomplished! without changing the constitution ,,also. wiietiier such an alteration of the existing laws and frame of government would be wise and desirable is a question upon which we cannot, sitting in a judicial capacity, proper- ly express any opinion. Our duty is limited to expounding the laws as they stand. And those laws do not recognize the purpose of overthrowing or changing them, in whole or in part, as a charitable use. This bequest therefore, not being for a charitaBrg'trnWiSSfe. ' nor for t he bene fit or any particul a r persons. ana oeing unrestfictea in point of time, is T38J!§raHte-Taiid- void-.- — — — — — — — For tEe-gamrfeasSn. the gift to thq sam e 'o^ect; o f one third of the resid ue of the tes- Stof's esSEe afEeFtHe^eSth .a£JUa.dausbter THrs. Eddy and he ^-'fignf^^tfu. atj^i — »t— n la also Invaiia, ana wi u go to his heirs at law "as a r esuTOBg iTusfr" " ™~™-'- It is proper to add" that the conclusion of the court upon this point, as well as upon the 420 TRUST— PUBLIC OR OHARITABLB. gift to create a public sentiment which would put an end to negro slavery In the United States, had the concurrence of the late Mr. Justice Dewey, whose judicial experience and large acquaintance with the law. of charitable uses give great weight to his opinion, and whose lamented death, while this case has been under advisement, has deprived us of his assistance in determining the other ques- tions in controversy. Jk V. The validity of the other residuaiy be- guesfe and_ devise s depends u pon thelaw^ "TT^pelultiei as applied to private trusts. The " principles of this branch of the law haVe been so fully considered by the court in recent cases as to require no extended statement The general rule is that if any est^ tp, jBgal. or equit abl e, is given by deed or will to any Derson'i n ffie first instance, 'an3~E£ en over'lb 'l.naffier j)er sfln,_^r even to _ a pjiblic charity , \ipon'to e happ^lng of a co ntingency wTiich. ito'Sy by possibiixty no't''Tagr;p jaa&jd^^ life trr'lives in hoinpTfrpatin'^ a ^j^jlrl -in..i±a:^ "Tmmterywomyaji utrssTn^ pnri Twpntv-nTie years afterwarda. the ^ft over is void, as lenaing to create a perpetui^:y bv ipa^ins^ the estate malienable; for the title of those tak- !Sg T15F'pg?rogrTHteresfe' would not be per- feetr"5hd until the happening of the corF" MlTO g r ty^OMa-mrB ^i^ceminea] ^^ ^f^rl^; Odell V. Odell, 10 Allen, 5, 7. If therefore the gift over is limited upon a single event which may or may not happen within the prescribed period, it is void, and cannot be made good by the actual happening of the event within that period. But if the testator distinctly makes his gift over to depend upon what is sometimes call- ed an alternative contingency, or upon either of two contingencies, one of which may be too remote and the other cannot be, its valid- ity depends upon the event; or, in other words, if he gives the estate over on one contingency which must happen, if at all, within the limit of the rule, and that con- tingency does happen, the validity of the dis- tinct gift over in that event will not be af- fected by the consideration that upon a dif- ferent contingency, which might or might not happen within the lawful limit, he makes a disposition of his estate, which would be void for remoteness. The authorities upon this, point are conclusive. Longhead v. Phelps, 2 W. Bl. 704; Sugden and Preston, arguendo, in Beard v. Westcott, 5 Barn. & Aid. 809, 813, 814; Minter v. Wraith, 13 Sim. 52; Evers v. Challis, 7 H. Li Gas. 531; Arm- strong V. Armstrong, 14 B. Mon. 333; 1 Jarm. Wills, 244; Lewis, Perp. c. 21; 2 Spence, Bq. Jur. 125, 126. ^Bythe ninth and tenth articles of the will, .t^gmcome of one thir d of the residue "f fbg '""rlTi r "" "^""^ """'iTlTl f T i the principal o f "E^or her share sha ll be nni d and convRvPil 'to tne boar d of trustees named In thp f^TiAV^ ' Article, to pe expennefi for the intent and pii]-. p656 the rfti^ dJrgp^M' As the first tenant for "Xife in each bequest is living at the deagoT [the testator, the event of such tenant's dyrng T le aving no c MJd then living, must happen ' within the "per iod of a life in b eing, ir at all; "•jmri; ff ft "ffnea ^?ip pen, the gift over to the charity will be va M— M£ittiar_J a.mes Jack - son nor Mrs. Palmer therefore is entidedTo 'a'p'feient 'gci'mtablg' ggtatr-m" TftmBsrtfiotifH' rw unmameaTTnay marry and have children who survive him, and as Mrs. Palmer's children may survive her, in either of which cases half of the income of the share would by the will go to such chil- dren during their lives and the bequest over to the charity be too remote, the validity and effect of that bequest over cannot be now de- termined. If the contingency upon which it is valid should hereafter occur, namely, the death of the testator's son or daughter, re- spectively, leaving no children surviving, the whole remainder of the share will then go to the charity established by the fourth ar- ticle, and be paid, after the settlement of a scheme for its lawful application, to the trus- tees therein named. JkVI. By the thirteenth amendment of the constitution of the United States, adopted since the earlier arguments of this case, it is declared that "neither slav ery nor involun- tary servitude, ggcepf as a punishment for < mme whereof the party shall have been duly convicted. testator's estate, real and personal, is to be " paid to his son James and to his gai igEter' J^TS. Palmer, respectrvely73uffigTff£|^^"ach" of these artic les. j;.Qntains..A distinct direcHon thatjjn case, such son or daughter sh^Jjaie_ J3tates or a nxj tion." Tffie.eggct of this amendment up on the charitable bequests of Francis Jackson ia the '"rernaming~ qugtl8 g~tg~b(i dglgriuliili J ," and. .thtC requires' a consideration, of the nF " 6ire and proper limit s of the doctrine of c y It is contended for the heirs at law, that the power of the English chancellor, when a charitable trust cannot be administered ac- cording to its terms, to execute it so as to carry out the donor's intention as nearly as possible— cy pres— is derived from the royal prerogative or St 43 Eliz. and is not an ex- ercise of judicial authority; that, whether this power is prerogative or judicial, it can- not, or, if it can, should not, be exercised by this court; and that the doctrine of cy pres, even as administered in the English chan- cery, would not sustain these charitable be- quests since slavery has been abolished. Much confusion of ideas has arisen from the use of the term "cy pres" in the books to describe two distinct powers exercised by the English chancellor In charity cases, the one under the sign manual of the crown, the other under the general jurisdiction in equity; as well as to designate the rule of construc- tion which has sometimes been applied to executory devises or powers of appointment to Individuals, in order to avoid the objec- TRUST— PUBLIC OR CHARITABLE. 421 tlon of remoteness. It was of this last, and not of any doctrine peculiar to cliarities, that Lord Kenyon said, "The doctrine of cy pres goes to the utmost verge of the law, and we must take care tliat it does not run wild;" and Lord Eldon, "It is not proper to go one step farther." Brudenell v. Elwes, 1 Bast, 451, 7 Ves. 390; 1 Jarm. Wills, 261-263; Sugd. Powers, c. 9, § 9; Coster v. Lorillard, 14 Wend. 309, 348. The principal, if not the only, cases in which the disposition of a charity is held to be in the crown by sign manual, are of two classes; the first, of bequests to particular uses charitable in their nature, but illegal, as for a form of religion not tolerated by law; and the second, of gifts of property to char- ity generally, without any trust interposed, and in which either no appointment is pro- vided for, or the power of appointment is delegated to persons who die without exer- cising it It is by the sign manual and in cases of the first class, that the arbitrary dispositions have been made, which were so justly con- demned by Lord Thurlow in Moggridge v. ThackweU, 1 Ves. Jr. 469, and Sir William Grant in Gary v. Abbot, 7 Ves. 494, 495; and which, through want of due discrimination, have brought so much discredit upon the whole doctrine of cy pres. Such was the case of Attorney General v. Baxter, in which a bequest to Mr. Baxter to be distributed by him among sixty pious ejected ministers, (not, as the testator declared, for the sake of their nonconformity, but because he knew many of them to be pious and good men and in great want,) was held to be void, and given under the sign manual to Chelsea CoU^e; but the decree was afterwards reversed, upon the ground that this was really a legacy to sixty individuals to be named. 1 Vern. 248; 2 Vem. 105; 1 Bq. Cas. Abr. 96; 7 Ves. 76. Such also was the case of Da Costa v. De Pas, in which a gift for establishing a jesuba or assembly for reading the Jewish law was applied to the support of a Christian chapel at a foundling hospital. Amb. 228; 2 Swanst. 489, note; 1 Dickens, 258; 7 Ves. 76, 81. This power of disposal by the sign manual of the crown In direct opposition to the de- clared intention of the testator, whether it is to be deemed to have belonged to the king as head of the church as well as of the state, "intrusted and empowered to see that noth- ing be done to the disherison of the crown or the propagation of a false religion" (Rex v. Portington, 1 Salk. 162, 1 Eq. Cas. Abr. 96); or to have been derived from the power exer- cised by the Roman emperor, who was sov- ereign legislator as well as supreme interpre- ter of the laws (Dig. 33, 2, 17; 50, 8, 4; Code, Mb. 1, tit 2, a 19; Id., tit 14, c. 12); Is dear- ly a prerogative and not a Judicial power, and could not be exercised by this court; and it is difficult to see how it could be held to ex- ist at all in a republic, in which charitable bequests have never been forfeited to the use or submitted to the disposition of the gov- ernment, because superstitious or illegal. 4 Dane, Abr. 239; Gass v. Wilhite, 2 Dana, 176; Methodist Church v. Remington, 1 Watts, 226. The second class of bequests which are dis- posed of by the king's sign manual is of gifts to charity generally, with no uses specified, no trust interposed, and either no provision made for an appointment, or the power of appointment delegated to particular persons who die without exercising it. Boyle, Char. 238, 239; Attorney General v. Syderfen, 1 Vern. 224, 1 Eq. Cas. Abr. 96; Attorney Gen- eral V. Fletcher, 5 Law J. Ch. (N. S.) 75. This too is not a judicial iwwer of expound- ing and carrying out the testator's Intention, but a prerogative power of ordaining what the testator has failed to express. No in- stance is reported, or has been discovered in the thorough investigations of the subject, of an exercise of this power In England be- fore the reign of Charles n. Moggridge v. Thackwell, 7 Ves. 69-81; Dwlght's Argument in the Rose Will Case, 272. It has never, so far as we know, been introduced into the practice of any court in this country; and, if it exists anywhere here, it is in the legisla- ture of the commonwealth as succeeding to the powers of the king as parens patriae. 4 Kent, Comm. 508, note; Fontaln v. Ravenel, 17 How. 369, 384; Moore v. Moore, 4 Dana, 365, 366; Witman v. Lex, 17 Serg. & R. 93; Attorney General v. Jolly, 1 Rich. Eq. 108; Dickson v. Montgomery, 1 Swan, 348; Le- page V. Macnamara, 5 Iowa, 146; Bartlet v. King, 12 Mass. 545; Sohier v. Massachusetts General Hospital, 3 Cush. 496, 497. It cer- tainly cannot be exercised by the judiciary of a state whose constitution declares that "the judicial department shall never exercise the legislative and executive powers, or either of them: to the end it may be a government of laws and not of men." Declaration of Rights, art. 30. The jurisdiction of the court of chancery to superintend the administration and decree the performance of gifts to trustees for chari- table uses of a kind stated in the gift stands upon different grounds; and is part of Its equity jurisdiction over trusts, which is shown by abundant evidence to have existed before the passage of the statute of charita- ble uses. Sir Francis Moore records a case In which a man sold land to another upon confidence to perform a charitable use, which the grantor declared by his last will that the grantee should perform; "the bargain was never enrolled, and yet the lord chancellor decreed that the heir should sell the land to be disposed according to the limitation of the use; and this decree was made the 24th of Queen Elizabeth, before the statute of chari- table uses, and this decree was made upon ordinary and judicial equity in chancery." Symon's Case, Duke, Char. Uses, 163. About the same time the court of chancery enter- tained a suit between two parties, each claim- 422 TRUST— PUBLIC OR CHARITABLE. Ing to be. trustee, to determine how bequests tor the weekly relief of the poor of certain towns, for the yearly preferment of poor chil- dren to be apprentices, and for the curing of divers diseased people lying by the high- way's side, should be "employed and bestow- ed according to the said will." Reade v. Sllles (27 Eliz.) Act Can. 559. A decree in 16 Eliz., confirming a report of the master of the rolls and others to whom a suit for en- forcing a charitable trust founded by will had been referred, is cited in 1 Spence, Eq. Jur. 588, note. For years before St 43 Eliz., or the similar act of 39 Eliz., suits in equity by some in behalf of all of the inhabitants of a parish were maintained to establish and enforce bequests for schools, alms or oth&r charitable purposes for the benefit of the par- ish, which would hare been too indefinite to be enforced as priyate trusts. Parker v. Browne (12 Eliz.) 1 Cal. Pro. Oh. 81, 1 Mylne & K. 389, 390; Dwight Char. Oas. 33, 34; in which the devise was in trust to a corpora- tion incapable at law of taking. Parrot v. Pawlet (21 Eliz.) Cary, 47; Elmer v. Scot (24 Eliz.) Cho. Cas. Ch. 155; Matthew v. Marow (32-34 Eliz.); and Hensman v. Hackney (88 Eliz.) Dwight Char. Cas. 65, 77; in which the decrees approved schemes settled by masters in chancery. Many other examples are col- lected in the able and learned arguments, as separately printed in full, of Mr. Blnney in the Case of Girard's Will, and of Mr. Dwight in the Rose Will Case. And the existence of such a jurisdiction anterior to and independ- ent of the statute is now generally admitted. Vidal V. Girard, 2 How. 194^-196, and cases cited; Perin T. Carey, 24 How. 501; MagUl V. Brown, Brightly, N. P. 346; 2 Kent, Comm. 286-288, and note; Burbank v. Whitney, 24 Pick. 152, 153; Preachers' Aid Soc. v. Rich, 45 Me. 559; Derby v. Derby, 4 R. L 436; Urmey v. Wooden, 1 Ohio St. 160; Chambers V. St. Louis, 29 Mo. 543; 1 Spence, Eq. Jur. 588; Tudor, Char. Trusts, 102, 103. ^ The theory that St. 43 Eliz. enlarged the discretion of the chancellor to depart from the expressed intention of the founder of a charity is refuted by the words of the stat- ute itself. After reciting that many gifts and appointments for the charitable purposes therein named "have not been employed ac- cording to the charitable intent of the givers and founders thereof, by reason of frauds, breaches of trust, and negligence in those that should pay, deliver and employ the same;" It then, for redress and remedy there- of, authorizes the lord chancellor or lord keeper to make such decrees that the prop- erty "may be duly and faithfully employed to and for such of the charitable uses and In- tents before rehearsed respectively for which they were given, limited, assigned or appoint- ed by the donors and founders thereof;" which decrees, "not being contrary or repug- nant to the orders, statutes or decrees of the donors or founders," shall "stand firm and good, according to the tenor and purpos.e thereof, and shall be executed accordingly," until altered by the lord chancellor or lord keeper upon complaint by any party aggriev- ed; and upon such complaint the chancellor or keeper may "by such course as to their wisdoms shall seem meetest the circumstan- ces of the case considered, proceed to the ex- amination, hearing and determining thereof; and upon hearing thereof shall and may an- nul, diminish, alter or enlarge" the decrees of the commissioners as "shall be thought to stand with equity and good conscience, ac- cording to the true intent and meaning of the donors and founders thereof." These last qualifications are specially marked by Lord Coke, who was attorney general at the passage of the statute and for some time be- fore and after, and who adds, by way of note to the final clause, "This is the lapis ductitius, whereby the commissioners and chancellors must institute their course." 2 Inst 712. See, also, Duke, Char. Uses, 11, 156, 169, 372, 619. In cases of bequests to trustees for char- ilable uses, the nature of which Is described in the will, the chancellor acts In his equity jurisdiction over trusts; and the prerogative of the king finds its appropriate exercise through his attorney general in bringing the case before the court of chancery for a judi- cial determination. This has been well ex- plained by Lord Eldon. "It is the duty of a court of equity, a main part, originally almost the whole, of its jurisdiction, to ad- minister trusts; to protect not the visible owner, who alone can proceed at law, but the Individual equitably, though not legally, en- titled. From this principle has arisen the practice of administering the trust of a pub- lic charity: persons possessed of funds ap- propriated to such purposes are within the general rule; but, no one being entitled to an Immediate and peculiar Interest to prefer a complaint who is to compel the perform- ance of these obligations, and to enforce their responsibility? It is the duty of the king, as parens patriae, to protect property devoted to charitable uses; and that duty is executed by the officer who represents the crown for all forensic purposes. On this foundation rests the right of the attorney general 'in such cases to obtain by informa- tion the interposition of a court of equity." Attorney General v. Brown, 1 Swanst. 291, 1 Wils. 354. To the like effect are the opin- ions of Lord Redesdale in Attorney General V. Mayor, etc., of Dublin, 1 BUgh (N. S.) 347, 348, and Coriwration of Ludlow v. Green- house, Id. 48, 62; of Lord Keeper Bridgman in Attorney General v. Newman, 1 Ch. Cas. 158; of Su- Joseph Jekyll in Eyre v. Shafts- bury, 2 P. Wms. 119; and of Lord Hard- wlcke in Attorney General v. Middleton, 2 Ves. Sr. 328; which also state that the juris- diction of the court of chancery over chari- ties was exercised on such informations be- fore St 43 Eliz. See, also. Attorney Gen- eral v. Carroll, Act Can. 729; Dwight's Ar- TRUST— PUBLIC OR CHARITABLE, 423 gument in the Rose Will Case, 259-268. This duty of maintaining the rights of the public, and of a number of persons too indefinite to vindicate their own, has vested in the commonwealth, and is exercised here, as In England, through the attorney general. Go- ing V. Emery, 16 Pick. 119; County Attor- ney V. May, 5 Cush. 338-340; Gen. St. c. 14, § 20. It is upon this ground that, in a suit instituted by the trustees of a charity to ob- tain the instructions of the court, the attor- ney general should be made a party defend- ant, as he has been by order of the court in this case. Harvard College v. Society for Promoting Theological Education, 3 Gray, 280; Tudor, Char. Trusts, 161, 162. The power of the king or commonwealth, thus exercised, is simply to present the question to a court of justice, not to control or direct its judicial action. A charity, being a trust in the support and execution of which the whole public is con- cerned, and which is therefore allowed by the law to be perpetual, deserves and often requires the exercise of a larger discretion by the court of chancery than a mere pri- vate trust; for without a large discretionary power, in carrying out the general intent of the donor, to vary the details of administra- tion, and even the mode of application, many charities would fail by change of circumstan- ces and the happening of contingencies which no human foresight could provide against; and the probabilities of such fail- ure would increase with the lapse of time and the remoteness of the heirs from the original donor who had In a clear and lawful manner manifested his will to divert his es- tate from his heirs for the benefit of public charities. It is accordingly well settled by decisions of the highest authority, that when a gift is made to trustees for a charitable purpose, the general nature of which is pointed out, and which is lawful and valid at the time of the death of the testator, and no intention is expressed to limit It to a particular insti- tution or mode of application, and after- wards, either by diange of circumstances the scheme of the testator becomes imprac- ticable, or by change of law becomes Illegal, the fund, having once vested m the charity, . does not go to the heirs at law as a resulting trust, but is to be applied by the court . of chancery, in the exercise of its jurisdiction in equity, as near the testator's particular directions as possible, to carry out his gen- eral charitable intent. In all the cases of charities which have been administered in the English courts of chancery without the aid of the sign manual, the prerogative of the king acting through the chancellor has not been alluded to, except for the purpose of distinguishing it from the power exer- cised by the court in its inherent equitable jurisdiction with the assistance of its mas- ters in chancery. At the time of the settlement of the Mass- achusetts Colony, this power was most free- ly exercised by the court of chancery, either on information by the attorney general, or on proceedings by commission under the statute of charitable uses. Attorney Gen- eral V. Warwick (1615, 1638) Dwight, Char. Cas. 140, 141, West, Ch. 60, 62; Bloomfield V. Stowemarket (1619) Duke, Char. Uses, 644. In the last case, lands had been given before the Reformation to be sold, and the proceeds applied, one half to the making of a highway from the town in which the lands were, one fourth to the repair of a church in that town, and the other fourth to the priest of the church to say prayers for the souls of the donor and others; and Lord Bacon decreed the establishment of the uses for making the highway and repairing the church, and directed the remaining fourth (which could not, by reason of the change in religion, be applied as directed by the donor) to be divided between the poor of the same town, and the poor of the town where the donor inhabited. In the Case of Baliol College, this doctrine was enforced by successive decrees of the greatest English chancellors between the English Revolution and our own, which have been recently confirmed by the unanimous decision of the house of lords. Attorney Gen- eral V. Guise, 2 Vern. 166; Attorney Gen- eral V. Baliol College, 9 Mod. 407; Attorney General v. Glasgow College, 2 Colly. 665, 1 H. L. Cas. 800. The case is of such im- portance and reported at different stages in so many books and at such length, that it may be well to state it. John Snell, an Episcopalian, who made his last will and died in 1679, while the form of religion es- tablished by law in Scotland as well as in England was Episcopal, gave lands in trust to apply the Income for the maintenance and education at the university of Oxford of Scotchmen to be designated by the vice chan- cellor of that university and the heads of certain colleges therein, and who should, up- on their admission, give security to enter into holy orders and to be sent into Scotland and there remain. After the Revolution of 1688, Presbyterianism was reestablished in Scotland by act of parliament; and in 1690 an information was filed by the attorney gen- eral, at the relation of the vice chancellor and heads of colleges named in the will, against the testator's heiress at law, suggest- ing a pretence by her that as Episcopacy and Prelacy had been abolished In Scotland, and the Presbyterian form of worship established Instead, the testator's intentions could not be carried into effect, the devise became void, and the property reverted to her. But the lords commissioners of the great seal, by a decree passed in 1692, established the devise against her, ordered an account, and reserv- ed all directions for the establishment of the charity. 2 Vern. 267, note; 2 Colly. 665-670, 1 H. L. Cas. 802-804, 820, 822. In 1693 the cause came on for further directions before 424 TRUST— PUBLIC OR CHARITABLE. Lord Keeper Somers, who, acting upon the doctrine that it was within the province of a court of equity to administer the trust up- on the principle of cy pres, ordered the es- tate to be conveyed to the six senior fellows of Baliol College, one of the colleges named in the will, to maintain a certain number of Scotch scholars at that college, and, in con- sideration of the privileges enjoyed by such .scholars, to apply the surplus income to its library; and this decree was made subject to such alteration and disposition as the court should from time to time make, upon the ap- plication of any person concerned, for the better and more effectual execution of the trust, as near as could be to the testator's will and intentions. 2 Vem. 267, note; 2 OoUy. 670, 671, 1 H. L. Oas. 804, 805, 824. In 1744 Lord Hardwicke, in the execution of the directions in the decree of Lord Somers, referred the cause to a master to approve of a scheme "for the better establishment and regulation of the charity, and carrying the same into effect for the future as near to the will and Intention of the testator as the al- teration of circumstances since the making of the will would admit;" and upon his re- port, and against the exceptions of the heads of colleges in Oxford, confirmed a scheme which did not impose any condition of the scholars taking holy orders— thus carrying out the general intention of the trust so far as to educate Scotch scholars at Oxford, al- though the testator's ultimate object that they should be educated In the Episcopal form of church government to take part in the established religion in Scotland could not, by reason of the change of law since his death, be effected. 9 Mod. 407; 1 H. L. Cas. 805, 806, 825-827. In 1759 Lord Keeper Henley (afterward Lord Northington) varied the scheme in other particulars, but declined to vary It In this; and further orders were aft- erwards made in chancery as the revenues increased. 2 CoUy. 672-674, 1 H. L. Cas. 806, 807, 825, 826; 3 Ves. 650, note. Upon a new information filed at the relation of some Scotch Episcopalians, the house of lords In 1848, reversing an order of Vice Chancellor Knight Bruce, held that the charity must continue to be administered according to the earlier decrees. 1 H. L. Cas. 800. In another case. Queen Elizabeth, by let- ters patent, established a hospital for forty lepers, and made the inmates a corporation. After leprosy had become almost extinct In England, and the members of the corporation reduced to three, an Information was filed, alleging that the corporation was dissolved, and praying for a new application of the revenues agreeably to the letters patent and the donor's intention, or as near thereto as circumstances would permit and the court should direct. Lord Eldon held that neither the donor's heirs at law nor the crown took the land discharged of the charity; referred the case to a master to report a scheme; and confirmed the 1:eport of the master, approv- ing a scheme for the application of the rev- enues to a general infirmary, reserving a preference to all lepers who might offer themselves. Attorney General v. Hicks, Highm. Mortm. 336-354, 3 Brown, Ch. 166, note. Sir John Romllly, M. R., afterwards made a like decision, holding that a gift made in 1687 of land (for which In 1774 other land had been substituted by leave of parliament) in trust out of the Income to keep it ready for a hospital and burial place for patients sick of the plague, was a present gift for charitable purposes, and valid, although the plague had not reappeared in England for more than one hundred and eighty years; and, after alluding to a class of cases, cited for the heirs at law in that case, as they have been in this, in which the charitable be- quest could never have taken effect, added, "But who can say, when this deed was exe- cuted or the act passed, that this was not a charitable trust, capable of being perform- ed;" "and if it were ever wholly devoted to charity, those cases do not apply." Attorney General v. Craven, 21 Beav. 392, 408. The principle that a bequest to trustees for charitable purposes indicated in the will, which are lawful and capable of being car- ried out at the time of the testator's death, will not be allowed to fail and result to the heirs at law upon a change of circumstances, but will be applied by the court according tn a scheme approved by a master to carry out the intent of the testator as nearly as pos- sible, has been affirmed and acted 0]\ in many other English cases. Attorney Gen- eral V. Pyle, 1 Atk. 435; Attorney General v. Green, 2 Brown, Ch. 492; Attorney Genera! v. Bishop of London, 3 Brown, Ch. 171; Mogg- ridge v. Thackwell, Id. 517, 1 Ves. Jr. 464; Attorney General v. Glyn, 12 Sim. 84; At- torney General v. Lawes, 8 Hare, 32; At- torney General v. Vint, 3 De Gex & S. 705. The dicta of Lord Alvanley, upon which the heirs at law much rely, do not, In the con- nection in which they were uttered, substan- tially differ from the general current of au- thority. Attorney General v. Boultbee, 2 Ves. Jr. 387, 388; Attorney General v. Whit- church, 3 Ves. 143, 144; Attorney General v. Minshull, 4 Ves. 14. By the opinion of Lord Eldon, formed after great doubt and hesitation, the principle has been held to extend to the case of a bequest of property to a person named. In trust for such charitable purposes, not otherwise de- scribed, as he should appoint. Moggridge v. Thackwell, 7 Ves. 96, 13 Ves. 416; Paice v. Archbishop of Canterbury, 14 Ves. 364; Mills V. Farmer, 19 Ves. 483, 1 Mer. 55. Such a trust has been held valid in this common- wealth, so far as to vest a title in the trustee as against the next of kin. Wells v. Doane, 8 Gray, 201. Whether, In case of his death, it could properly be administered by a court of chancery, without the aid of the preroga- tive power, need not be considered in this TRUST— PUBLIC OR CHARITABLE. 425 case. See Fontain v. Ravenel, 17 How. 387, 388; Moore v. Moore, 4 Dana, 366.1 In most of the cases cited at the argument, In which the heirs at law were held to be en- titled to the property, the charitable gift nev- er took effect at all; either because it could not be carried out as directed, without vio- lating the mortmain act of 9 Geo. II., as in Jones T. WUllams, Amb. 651; Attorney Gen- eral V. Whitchurch, 3 Ves. 141, and Smith v. Oliver, 11 Beav. 481; or because the testator had in terms limited it to a special object which could not be accomplished at the time of his death; as in the case of a bequest to build a church in Wheatley, which could not be done without the consent of the bishop, and he refused (Attorney General v. Bishop of Oxford, 1 Brown, Oh. 444, note; Id., cited 2 Cox, Ch. 365; 2 Ves. Jr. 388; and 4 Ves. 431, 432); or of a direction to contract with the governors of a hospital for the purchase of a presentation of a boy to that charity, if the residuary assets should prove sufficient for that purpose, and they proved to be in- sufficient (Cherry v. Mott, 1 Mylne & O. 123). In Marsh v. Means, 3 Jur. (N. S.) 790, the testator gave a legacy, after the death oif his wife, "for continuing the periodical publish- ed under the title of 'The Voice of Human- ity,' according to the objects and principles which are set forth in the prospectus con- tained in the third number of that publica- tion." "The Voice of Humanity" had been published quarterly by an association for the protection of animals, but no number had appeared for nearly a year before the date of the will. Upon the death of the widow twenty years later, Vice Chancellor Wood held that the gift was not to support the principles of the publication, but only the publication itself, and, the publication hav- ing ceased and the association perished, that the legacy lapsed. But he added, "It would, I think, have faUen within the description of charity, if this periodical had been subsisting at the date of the will, and afterwards ceas- ed. That would be simply a case where, the particular intention having failed, the general Intention must be carried out." Two striking cases upon this subject have arisen in England under charities for the re- demption of captives. In the Case of Betton's Charity, Thomas Betton in 1723 bequeathed the residue of his estate to the Ironmongers' Company, in trust, "positively forbidf'ing them to diminish the capital sum by giving away any part, or that the Interest and profit arising be applied to any other use or uses than hereinafter mentioned and directed," namely, one half of the income yearly unto the redemption of British slaves In Turkey or Barbary, one fourth imto charity schools In the city and suburbs of London where the education Is according to the church of England, and one 1 See, also, Lorings v. Marsh, 6 Wall. 337. fourth "unto necessitated decayed freemen of the company, their widows and children." The first half of the income of the fund greatly accumulated, few such slaves having been found for a century. Lord Brougham, reversing the decree of Sir John Leach, M. R., held that the court had jurisdiction to apply the surplus income of this moiety and its accumulations as near as might be to the intentions of the testator; having regard to the bequest touching Biitish captives, and also to the other charitable bequests in the will; and that the case should be referred back to the master to approve a proper scheme for such application. Attorney Gen- eral V. Ironmongers' Co., 2 Mylne & K. 576. Sir Christopher Pepys, M. R. (afterwards Lord Cottenham,) accordingly ordered it to be so referred. On the return of the master's report, Lord Langdale, M. R., approved a scheme to apply the whole fund to the sec- ond and third purposes declared In the will. 2 Beav. 313. Lord Chancellor Cottenham on appeal reversed this decree; and upon the ground that the testator had not limited the first charity, like the others, to persons in London, ordered the first moiety to be ap- plied to supporting and assisting charity schools in England and Wales, and referred it back to the master to settle a scheme for that purpose. Craig & P. 208. And this de- cree was affirmed In the house of lords with the concurrence of Lord Chancellor Lynd- hurst, and Lords Brougham, Cottenham and Campbell. 10 Clark & F. 908. In that case, though there were differences of opinion as to the details of the scheme, the jurisdiction of the court of chancery to frame one in such a case was thus affirmed by the deliberate judgments of five law lords; and all agreed that, for the purpose of ascertaining what was cy pres to the particular object which had failed, the court might look at all the charitable bequests in the will; applying in this respect the principle upon which Lord Bacon had acted more than two centuries before in the case of Bloomfield v. Stowe- market, above cited. But the case most like that now before us Is that of Lady Mice's Charity, Lady Mico, by her will made in 1670, gave a thousand pounds "to redeem poor slaves In what man- ner the executors should think most con- venient." This charity was established by decree In chancery in 1686. Upon an in- formation filed In 1827, after the fund had accumulated a hundred fold, it was referred to a master to approve of a scheme for the application of the income according to the will of the testatrix, or, if he should find that it could not be executed according to her will, then as near the intent of the will as could be, regard being had to the existing circum- stances and to the amount of the fund. The master, by his general report in 1835, stated that the relators had laid before him a scheme for applying the fund to the enfran- chisement of slaves In the British Colonies 426 TRUST— PUBLIC OR CHARITABLE. who were too poor to purchase their own freedom; which application, in consequence of St. 3 & 4 Wm. IV. c. 73, abolishing slavery (which took effect in 1834), had become im- practicable; that he was of opinion that the testatrix by her will contemplated the re- demption of poor slaves In the Barbary States, but that intention could not be car- ried into effect; and he approved a scheme to apply the capital and income in purchasing and building school-houses for the education of the emancipated apprentices and their is- sue, qualifying teachers, paying the salaries of masters and other expenses, and to apply the surplus rents to the support of any other schools, and generally in promoting educa- tion in the British Colonies. Sir Christopher Pepys, M. R., confirmed this scheme by a de- cree; and, after he had become lord chan- cellor, stated the reasons to have been that "in this there was no restriction as to the description of slaves, or the countries in which the slaves were tQ be looked for;" that upon the reference to the master "it appeared that there were not within any part of the British dominions any poor slaves to be re- deemed, but that there were in the colonies many thousands of human beings from whom the odious appellation of slaves had been removed, but whose state was very far short of that of freemen, from whose bodies the chains of slavery had been struck, but whose minds and morals were still in that state of degradation which Is inseparable from the unfortunate situation from which they had recently been in part rescued; it was proposed to the master to apply, and he approved of a scheme for the completion of that holy work, by assisting In tiie education of those poor beings. If, before the slavery abolition act, these funds could properly have been applied to procuring the redemption of slaves in the colonies, the proposed applica- tion for the benefit of the apprentices was doubtless cy pres to the Intention of the donor." And his reason for not applying Betton's Charity In the same manner was that it was in terms limited to slaves in Tur- key or Barbary. Attorney General v. Gibson, 2 Beav. 817, note; Attorney General v. Iron- mongers' Co., Craig & P. 226, 227. There is no adjudication of this question by the supreme court of the United States. The dicta of Chief Justice Marshall in Bap- tist Ass'n V. Hart's Bx'rs, 4 Wheat 1, were based upon an Imperfect survey of the au- thorities, were not required by the decision, and are bardly reconcilable with the more recent judgments of the same court; and that case, as well as Wheeler v. Smith, 9 How. 79, arose under the law of Virginia. VIdal v. Ghrard's Ex'rs, 2 How. 192; Perin v. Carey, 24 How. 501; Bartlett v. Nye, 4 Mete. (Mass.) 380; American Academy of Arts & Sciences V. President, etc., of Harvard College, 12 his express directions, this court, like the court of chancery in England, is not at lib- erty to modify it upon considerations of pol- icy or convenience. Harvard College v. So- ciety for Promoting Theological Education, 3 Gray, 280; Baker v. Smith, 13 Mete. (Mass.) 34; Trustees of Smith Charities v. Inhabitants of Northampton, 10 Allen, 498. But there are several cases, where the charitable trust could not be executed as directed in the will, In which the testator's scheme has been var- ied by this court in such a way and to such an extent as could not be done in the case of a private trust Thus bequests to a par- ticular bible society by name, whether a cor- poration established by law or a voluntary association, which had ceased to exist before the death of the testator, have been sustain- ed, and applied to the distribution of bibles through a trustee appointed by the court for the purposa Winslow v. Cummings, 3 Cush. 358; Bliss v. American Bible Soc, 2 Allen, 334. At a time when the general chancery jurisdiction of this court over trusts was limited to those arising under deeds and wills, the legislature by a special statute authoriz- ed it to hear and determine in equity any 428 TETJST— PUBLIC OR OHAEITABLH, and all matters relating to a certain gift to a scientific corporation, to be Invested in a cer- tain manner, and paid in premiums for dis- coveries or improvements on heat or light published in America within two years be- fore each award. Upon a bill being filed, and it appearing that it had become impracticablo to carry out the intent of the donor in the mode prescribed, Chief Justice Shaw author- ized a different investment of the fund; and. In accordance with a scheme reported by a master, authorized the corporation to apply the surplus income, after paying such pre- miums, to purchasing books, papers and phil- osophical apparatus, and malting such pub- lications or rrocuring such lectures, experi- ments or investigations as should facilitate and encourage the making of such discoveries and improvements; and said: "Whenever it appears that a general object of charity is intended, and the purpose is not unlawful and void, the right of the heir at law is di- vested." "It is now a settled rule in equity that a liberal construction Is to be givMi to charitable donations, with a view to promote and accomplish the general charitable intent of the donor, and that such intent ought to be observed, and when this cannot be strictly and literally done, this court will cause It to be fulfilled as nearly in conformity with the intent of the donor as practicable Where the property thus given is given to trustees capable of taking, but the property cannot be applied precisely In the mode directed, the court of chancery interferes, and regu- lates the disposition of such property under Its general Jurisdiction on the subject of trusts, and not as administering a branch of the prerogative of the king as parens pa- triae." "What is the nearest method of car- rying Into effect the general intent of the donor must of course depend upon the sub- ject matter, the expressed intent, and the other circumstances of each particular case, upon all of which the court is to exercise its discretion." American Academy v. Harvard College, 12 Gray, 582. The same principle was also recognized or assumed In 4 Dane, Abr. 242, 243, In Sanderson v. White, 18 Pick. 333, and other cases already cited. Baker t. Smith, 1j3 Mete. (Mass.) 41; Harvard College V. Society for Promoting Theological Educa- tion, 3 Gray, 282, 298; Trustees of Smith Charities v. Inhabitants of Northampton, 10 Allen, 501, 502. By, Gen. St. c. 113, § 2, this court may hear and determine in equity all suits and proceedings for enforcing and regulating the execution of trusts, whether the trusts relate to real or personal estate, "and shall have fuU equity jurisdiction, according to the us- age and practice of courts of equity, in all other cases, where there is not a plain, ad- equate and complete remedy at law." The powers usually exercised by the court of chan- cery In the course of its jurisdiction In equity have thus been expressly conferred upon this court by the legislature. The authority of ad- ministering a charitable trust according to the expressed intention of the donor, and, when that cannot be exactly followed, then as nearly as possible, is a part of .this juris- diction, which the court is not at liberty to decline. The only question is, whether the facts of the case show a proper occasion for its exercise according to the settled practice in chancery. In all the cases cited at the argument, in which a charitable bequest, which might have been lawfully carried out under the circum- stances existing at the death of the testator, has been held, upon a change of circumstan-- ces, to result to the heirs at law or residuary legatees, the gift was distinctly limited to particular persons or establishments. Such was Russell v. Kellett, 3 Smale & G. 264, In which the gift was of five pounds out- right to each poor person of a particular de- scription in certain parishes, and Vice Chan- cellor Stuart held that the shares of those who died before receiving them went to the residuary legate.is. Such, also, was Clark v. Taylor, 1 Drew. 642, in which it was held that a legacy to a certain orphan school by name, which ceased to exist after the death of the testator, failed and fell into the resi- due of the estate; and which can hardly be reconciled with the decisions in Incorporated Soc. V. Price, 1 Jones & L. 498, 7 Ir. Eq. 260; In re Clergy Society, 2 Kay & J. 615; Marsh v. Attorney General, 2 Johns. & H. 61; Winslow v. Cummings, 3 Cush. 358, and Bliss V. American Bible Soc., 2 Allen, 384. So in Easterbrooks v. Tillinghast, 5 Gray, 17, the trust was expressly limited, not only in object, but in duration, to the maintenance of the pastor of a certain church of a speci- fied faith and practice in a particular town, "so long as they or their successors shall maintain the visibility of a church in said faith and order;" and could not have been' held to have terminated, had it not been so limited. Attorney General v. Columbine, Boyle, Char. '204, 205; Potter v. Thurston,- 7 R. I. 25; Dexter v. Gardner, 7 Allen, 243. The charitable bequests of Francis Jackson cannot, in the ojjinion of the court, be re- garded as so restricted In their objects, or so limited in point of time, as to have been terminated and destroyed by the abolition of slavery in the United States. They are to a board of trustees for whose continuance care- ful provision is made In the will, and which the testator expresses a wish may become a permanent organization and may receive the services and sympathy, the donations and be- quests, of the friends of the slave. Their duration is not in terms limited, like that of the trust sought to be established In the sixth article of the will, by the accomplish- ment of the end specified. They take effect from the time of the testator's death, and might then have been lawfully applied in exact conformity with his expressed Inten- tions. The retaining of the funds In the cus- tody of the court while this case baa beem TRUST— PUBLIC OR CHARITABLE. 429 under advisement cannot affect the question. The gifts being lawful and charitable, and having once vested, the subsequent change of circumstances before the funds have been actually paid over is of no more vreight than if they had been paid to the trustees and been administered by them for a century be- fore slavery was extinguished. Neither the Immediate purpose of the tes- tator—the moral education of the people; nor his ultimate object— to better the condition of the African race In this country; has been fuUy accomplished by the abolition of slav- ery. Negro slavery was recognized by our law as an infraction of the rights inseparable from human nature; and tended to promote idle- ness, selfishness and tyranny in one part of the community, a destruction of the domestic relations and utter debasement in the other part. The sentiment which would put an end to it is the sentiment of justice, humanity and charity, based upon moral duty, inspired by the most familiar precepts of the Chris- tian religion, and approved by the constitu- tion of the commonwealth. The teaching and diffusion of such a sentiment are not of tem- porary benefit or necessity, but of perpetual obligation. Slavery may be abolished; but to strengthen and confirm the sentiment which opposed it wiU continue to be useful and desirable so long as selfishness, cruelty, the lust of dominion, and indifference to the rights of the weak, the poor and the ignorant, ha^e a place in the hearts of men. Looking at the trust established by the fourth article of this will as one for the moral education of the people only, the case Is within the principle of those, already cited, in which charities for the relief of leprosy and the plague were held not to end with the disap- pearance of those diseases; and is not es- sentially different from that of Attorney Gen- eral v. Baliol College, ia which a trust for the education at Oxford of Scotch youths, to be sent into Scotland to preach Episcopalianism in the established church there, was applied by Lords Somers and Hardwicke and their successors to educate such youths, although, by the change of faith and practice of the Church of Scotland, the donor's ultimate ob- ject could no longer be accomplished. The intention of Francis Jackson to benefit the negro race appears not only in the lead- ing clause of the fourth article, and in his expression of a hope that his trustees might receive the aid and the gifts of the friends of the slave, but in the trust for the benefit of fugitive slaves In the fifth article of the will, to which, according to the principle es- tablished by the house of lords In the Case of Betton's Charity, resort may be had to ascer- tain his Intent and the fittest mode of carry- ing it out The negroes, although emancipat- ed, still stand in great need of assistance and education. Charities for the relief of the poor have been often held to be well appliei! to •educate them and their children. Bishop of Hereford v. Adams, 7 Ves. 324; Wilkinson V. Malin, 2 Cromp. & J. 636, 2 Tyrw. 544; Anderson v. Wrights of Glasgow, 12 Li T. (N. S.) 807. The Case of Mico Charity is directly to the point that a gift for the re- demption of poor slaves may be appropriated, after they have been emancipated by law, to educate them; and the reasons given by Lord Cottenham for that decision apply with no less force to those set free by the recent amendment of the constitution in the United States, than to those who were emancipated by act of parliament in the West Indies. The mode in which the funds bequeathed by the fourtn and fifth articles of the will may be best applied to carry out in a lawful manner the charitable intents and purposes of the testator as nearly as possible must be settled by a scheme to be framed by a master and confirmed by the court before the funds are paid over to the trustees. In doing this, the court does not take the charity out of the hands of the trustees, but only declares the law which must be their guide in its administration. Shelf. Mortm. 651-654; Boyle, Char. 214-218. The case is therefore to be referred to a master, with liberty to the attorney general and the trustees to sub- mit schemes for his approval; and all further directions are reserved until the coming in of his report. Case referred to a master. The case was then referred to John Cod- man, Esquire, a master in chancery for this county, who, after notice to the trustees and the attorney general, and hearing the parties, made his report, the results of which were approved by the attorney genetal; and upon exceptions to which the case was argued by W. Phillips for himself and other excepting trustees, and by J. A. Andrew in support of the master's report, before Gray, J., with the agreement that he should consult the whole court before entering a final decree. No account was asked by any party of sums already expended by the trustees. As to the bequest in the fifth article, the master reported that the unexpended balance (amounting to $1049.90) was so small that it was reasonable that it should be confined to a limited territory; and that it should there- fore be applied by the trustees, in accordance with their unanimous recommendation, to the use of necessitous persons of African descent in the city of Boston and its vichiity. This scheme was approved and confirmed by the court, with this addition: "Preference being given to such as have escaped from slavery." As to the sum bequeathed in the fourth arti- cle of the will, the master reported that a portion had been expended by the trustees before any question arose as to its validity; and that but two schemes had been suggest- ed to him for the appropriation of the residue, namely, first, (which was approved by four of the seven trustees who had accepted the trust,) in part to the support of the Anti- 430 TRUST— PUBLIC OR CHARITABLE. Slavery Standard, and In part to the New England Branch of the American Preedmen's Union Commission; or, second, (which was approved by the remaining trustees,) that the whole should be applied to the last named ob- ject. The master disapproved of the first of these schemes; and reported that the Anti- Slavery Standard was a weekly newspaper published In the city of New York with a circulation of not more than three thousand copies, which was established nearly thirty years ago for the purpose of acting upon public opinion In tavor of the abolition of slavery; that in his opinion, since the abolition of slavery, and the passage of the reconstruction acts of con- gress, "the support of a paper of such limit- ed circulation as hardly to be self-sustaining would do very little for the benefit of the col- ored people in their present status, and its direct influence would be almost impercepti- ble on the welfare of that class most nearly corresponding to those whom the testator had In view in making this bequest;" and that the argument, that it was evidently the intention of the testator to accomplish the object Indi- cated in the fourth article of his will by means of which a newspaper like this might be considered an example, was answered by the fact that the object for which these means were to be used had been already accom- plished without them. The master returned with his report a few numbers of the Anti- Slavery Standard, (taken without selection as they were given to him by the chairman of the trustees,) by which it appeared that it was In large part devoted to urging the passage of laws securing to the freedmen equal political rights with the whites, the keeping of the southern states under military government, the impeachment of the president, and other political measures. The master reported that he was unable to devise any better plan than the second scheme suggested; that this mode of appro- priation was in his opinion most in accord- T v/-e with the intention of the testator as ex- pressed In the fourth article of the will, he- cause the intention nearest to that of eman- cipating the slaves was by educating the emancipated slaves to render them capable of self-government; and this could best be done by an organized society, expressly intended and exactly fitted for this function, and which, if the whole or any part of this fund was to be applied to the direct education and sup- port of the freedmen, was admitted at the hearing before him to be the fittest channel for the appropriation. The master returned with his report printed documents by which it appeared that the object of the American Freedmen's Union Commission, as stated In its constitution, was "the relief, education and elevation of the freedmen of the United States, and to aid and coSperate with the peo- ple of the South, without distinction of race or color, in the improvement of their condi- tion, upon the basis of Industry, education, freedom and Christian morality;" and that the New England and other branches of the commission were now maintaining large num- bers of teachers and schools for this purpose throughout the southern states. The master accordingly reported that what remained of the fund bequeathed by the fourth article of the will should be "ordered to be paid over to the New England Branch of the Freedmen's Union Commission, to be employed and expended by them in promoting the education, support and interests generally of the freedmen (late Slaves) in the states of this Union recently in rebellion." And this scheme was by the opinion of the whole court accepted and confirmed, modified only by di- recting the executor to pay the fund to the trustees, to be by them paid over at such times and in such sums as they in their dis- cretion might think fit to the treasurer of the branch commission; and by substituting for the words "recently in rebellion" the words "in which slavery has been abolished, either by the proclamation of the late President Lin- coln or the amendment of the constitution." Final decree accordingly. &'' V V TRUSTS— PUBLIC OR CHARITABLE. 431 ALLETN et al. ▼. STEVENS et al. (55 N. E. 568, 161 N. T. 122.) Court of Appeala of New York. Dec. 5, 1899. Appeal from supreme court, appellate di- Tision, Fourth department. Action by Benjamin G. Allen and others against Charles E. Stevens and others, as executors and trustees under the will of Nathan F. Graves, deceased, to obtain a con- struction of the will. From an order of the appellate division (54 N. Y. Supp. 8) revers- ing a judgment in favor of defendants (49 N. Y. Supp. 431), they appeal. Reversed. This action was brought for the purpose of obtaining a construction of the will of Nathan F. Graves, deceased, and particular- ly the tenth clause thereof, devising and bequeathing the residuary real and personal estate in trust for the purpose of founding, erecting, and maintaining Graves Home for the Aged, to the effect that the said provi- sions of the tenth clause be adjudged void and invalid, and also that It be adjudged and determined that the said will is void and in- valid so far as it devised and bequeathed more than one-half of the real and personal property of the testator to benevolent, chari- table, literary, scientific, religious, and mis- sionary societies, associations, or corpora- tions, in trust or otherwise, and that the sur- plus of such one-half part be distributed and conveyed to the plaintiffs, who are next of kin of the testator. The special term decid- ed that the will was in all respects valid, and rendered judgment accordingly. The api)el- late division, by a divided court, held that the tenth clause was invalid, and reversed the judgment. From the order and judg- ment entered thereon, appeals have been taken to this court. The will read as follows: "I Nathan F. Graves, of the city of Syra- cuse, in the state of New York, being of sound mind and memory, do make, ordain, publish, and declare this to be my last will and testament; that is to say: "First. After all my lawful debts are paid and discharged, I give, devise, and be- queath unto Catharine H. Graves, my wife, all of the furniture, beds, and bedding of every kind. Including paintings, pictures, vases, and statuary of every kind, with all kitchen utensils, in the dwelling house where we now live, the horses, harnesses, carriages, wagons, sleighs, sleds, cows, chickens, and everything appertaining thereto and con- nected therewith. Including feed of every kind, to have and to hold the same to her heirs and assigns, forever. I also give and bequeath to the said Catharine H. Graves the rents, issues, and profits of all of my houses, tenements, and stores south of James street. In Syracuse, to be paid to her month- ly, subject only to the necessary repairs and taxes for and during her natural life. I also trlve and bequeath to the said Cathar- ine H. Graves all dividends that may be de- clared by the New York State Banking Com- pany on all the stock standing in my name, to be paid to her when declared and due, payable to her Immediately, for and during her natural life. "Second. I give and bequeath to the Onei- da Cemetery Association, called 'Glenwood Cemetery,' situate In the town of Lenox, near the village of Oneida, in Madison coun- ty, in the state of New York, the sum of five hundred dollars, to be received and held In trust by the trustees thereof, or other representatives of said Cemetery Associa- tion, to be Invested on first bond and mort- gage or mortgages, the Interest, or so much thereof or so much of the same as may be necessary, be expended in keeping the fami- ly burial lot In good order, grading, mow- ing, enriching, and all other things that may be needed. The lot is known as lot num- ber one In section S in said cemetery, the title of which is In Nathan F. Graves and Catharine H. Graves, his wife. The said money may be deposited in any savings bank In Madison or Onondaga county when not Invested In bond and mortgage. Any part of the Interest or principal may be used to ■ repair any injury to the monument or headstones caused by any casualty or by lapse of time. "Third. I give and bequeath to the Gen- eral Synod of the Reformed Church In Amer- ica, also known as the General Synod of Church In America, the sum of ten thousand dollars, for the specific purpose of founding and maintaining an annual course of lec- tures on missions (the choice of the lecturer and the details of the lectureship to be un- der the direction of the professors in the seminary at New Brunswick, New Jersey, and the corresponding secretary of the board of foreign missions of the Reformed Church of America, or his successor), payable after the death of my wife, Catharine H. Graves; but the sum of five hundred dollars a year Is to be paid by my executors, at such times as the same may be needed to sustain the lecture course, during the life of my wife. "Fourth. I give and bequeath to the Syra- cuse University, situated in the city of Syra- cuse, in the state of New York, ten thousand dollars, for the specific purpose of founding and maintaining an annual course of lectures on missions (the choice of the lecturer and the details of the lectureship to be under the direction of the chancellor of the Universi- ty); payable after the death of my wife, Catharine H. Graves; but the sum of five hundred dollars a year Is to be paid by my executors, at such times as the same may be needed to sustain the lecture course, during the life of my wife. "Fifth. I give and bequeath to Hope Col- lege, situated at Holland, In the state of Michigan, ten thousand dollars for the spe- cific purpose of erecting a fireproof building, to be used as a library. The sums that I 432 TRUSTS— PUBLIC OB OHAHITABLB. have advanced or may hereafter advance during my life will be deducted from the above amount. I also give and bequeath to said Hope College my ■ miscellaneous li- brary in the dwelling house in Syracuse where I now reside. The library will not be delivered to said Hope College during the life of Catharine H. Graves, my wife, unless she consents to the removal in writing. "Sixth. I give and bequeath to the Syra- cuse Home Association, situate at the corner of Townsend and Hawley streets, in Syra- cuse, to the Onondaga County Orphan Asy- lum, in Syracuse, and the St. Joseph's Hospi- tal, situate on Prospect avenue, corner Un- ion street, in Syracuse, each one thousand dollars, payable after the death of Cath- arine H. Graves, my wife. "Seventh. I give and bequeath unto the con- sistory of the Reformed Church, situated on James street, in Syracuse, in the state of New York, the sum of two thousand dollars in trust for the specific purpose hereinafter named, which sum may be invested in first mortgage or mortgages; the interest to be used in the payment of the rent of a pew in said church, and the balance of interest, if any, to be given to the board of foreign mis- sions of said church. The pew designated -by the consistory may be used by the pastor of the church and his family when needed for that purpose, and, when not so needed, to be used as the consistory shall from time to time determine. "Eighth. I give and bequeath to my execu- tors the sum of fifteen hundred dollars, but in trust to be used for the purpose of placing In the Reformed Church in Syracuse a memo- rial window for wife, Catharine H. Graves, and myself. The sum may be used for that purpose, or so much thereof as may be nec- essary. The memorial window may be omit- ted, and a memorial tablet be placed on the wall inside of the church. In either case the consent and approval of the consistory must first be obtained. "Ninth. I give and bequeath to Francis H. Loomis, the son of my sister Achsah H. Loomis, one thousand dollars. I give and bequeath to Helen A. Graves, the daughter of my brother Benjamin S. Graves, one thou- sand dollars. I give and bequeath to Benja- min 6. Allen, the son of my sister Maiy A. Allen, one thousand dollars. I give and be- queath to Helen M. Hiclss, Charles Sterling Graves, William Shaw Graves, Nathan Fran- cis Graves and Mary Elizabeth Graves, the children of my brother Sterling P. Graves, each one thousand dollars. I give and be- queath to Abial S. Graves, my brother, one thousand dollars; to Mary B. Strong, Eliza- beth and Benjamin S. Graves, his children, one thousand dollars each. 1 give and be- queath to Helen Breese Graves, daughter of Maurice A. Graves, one thousand dollars. I give and bequeath to Nathan B. Graves ten thousand dollars. I give and bequeath to Augustus G. Stevens, son of Charles B. Ste- vens, my law library and my mahogany book and paper case. I give and bequeath to Maurice A. Graves my three black-walnut book cases, now in my library room where I now reside; also, my library table. I give and bequeath to my brother the portrait of myself, painted by Blliatt; unto Sterling P. Graves. I give and bequeath unto Nathan Francis Graves my watch and chains. "Tenth. I give, bequeath, and devise all the rest and residue of my property of every kind, personal and real, wherever situate, to my trustees hereinafter named, for the pur- pose of founding, erecting, and maintaining Graves Home for the Aged, to be located in the city of Syracuse, in the state of New York. It Is Intended as a home for those who by misfortune have become incapable of providing for themselves, and those who have slender means of support The institution to be known as the Graves Home for the Aged. I hereby appoint Charles E. Stevens, Easselas A. Bonta, and Maurice A, Graves for the trustees to execute the above trust I hereby authorize and empower my executors, or the survivor of them, to rent or sell any part or all of my real estate that I may own at the time of my death. They are author- ized to employ a person or persons to have charge of the real estate, to collect rents and make repairs, and to pay such sums for compensation as they may deem reasonable and proper. After my executors have exe- cuted their trust and paid all the legatees provided for in this will, they are authorized and directed to convey to the said trustees above named the balance and remainder of my property of every kind, to be applied for the purposes above provided; and the said trustees, or the survivor, are authorized to rent or sell all or any part of my real or per- sonal property, and to employ such agents aa they may deem proper to take charge of the same, and pay them such compensation as they deem best "Eleventh. My executors or my trustees are authorized to retain my stock and shares in the New York State Banking Company, and continue the business of banldng for a term of years, at their discretion, but may sell the same or any part thereof at any time; but the same is not to be continued, nor any portion of my property held, longer than the lives of Catharine Graves Roby, daughter of Sidney B. Roby, of Rochester, and Helen Breese Graves, daughter of Maurice A. Graves, of Syracuse. Likewise, I make, con- stitute, and appoint Charles E. Stevens, Ras- selas A. Bonta, and Maurice A. Graves to be executors of this, my last will and testament hereby revoking all former wills by me made. "In witness whereof, I have hereunto sub- scribed my name and affixed my seal the fif- teenth day of September, In the year of our Lord one thousand eight hundred and ninety- three. Nathan F. Graves. [Seal.]" Augustus O. Stevens, for appellant execu- tor. Charles 0. Cook, for appellant Syracuse Home Ass'n. Frank Hlscock, for appellant TRUSTS— PtTBLIO OR CHARITABLE. 433 attorney generaL 0. E. Steyens, for appellant First Reformed Churcti. Joseph "W. Sutphen, for appellant General Synod. William G. Tra- cy, for respondents Allen and others. O. Cars- kadden, for respondent Breese. PARKER, 0. J. (after stating the facts). Under the law of this state, prior to the en- actment of chapter 701 of the Laws of 1893, the tenth clause of the will in question would have been void upon two grounds: First, be- cause of the indefiniteness of the beneficiaries (Bascom v. Albertson, 34 N. T. 580; Tilden v. Green, 130 N. Y. 29, 28 N. B. 880, 14 L. R. A. 33); and, second, because, although intending to found a permanent charity, the testator did not direct the formation of a corporation within two lives in being to take over the trust property. Burrill v. Boardman, 43 N. Y. 254; Cruikshank v. Home for the Friend- less, 113 N. Y. 337, 21 N. E. 64, 4 L. R. A. 140; People v. Simonson, 126 N. Y. 299, 27 N. E. 380. The question now presented is whether the act of 1893 has so far amended the law relating to the subject of charitable bequests as to make it possible for the charitable in- tentions of this testator to be executed. Be- fore examining the statute, which was con- cededly intended to affect in some wise the law upon the general subject, it will not be out of place to have in mind the situation of such law. No one disputes that it was the intention of the legislature to change in sub- stantial respects the law as it had been set- tled by the courts of this state. The contro- versy is as to the extent of the changes in- tended by the legislature, and upon the ques- tion of intent some light will be thrown by a very brief reference to the early state of the law in this state upon the subject of char- itable uses, and the changes from time to time which finally resulted in its overthrow. This subject was exhaustively considered in an opinion written by Judge Denio in the case of WiUiams v. Williams, 8 N. Y. 525. In that case the opinion declared that according to the law of England as it existed at the time of the American Revolution, and as it still exists, devises and bequests in support of charity and religion, although defective for want of such grantee or donee as the rules of law require in other cases, would nevertheless be supported in the courts of chancery; that such parts of the common law had become Incorporated into our system of jurisprudence prior to the adoption of the constitution, by force of the provisions, of which it became a part, of the common law of this state. In answer to the claim that the law of charitable uses was created by the statute 43 Eliz. e. 4, and hence was abrogated by the repeal in this state of the statute of Elizabeth (Laws 1788, c. 46, § 37), the court asserted that the doc- trine of charitable uses was a creation of chancery, and had been regarded as an Im- portant part of its jurisdiction long prior to the enactment of the statute of Elizabeth, and such system having become ingrafted upon the common law, and the practice thereof H.& B.E<}.(2d Ed.)— 28 navmg Deen undertaken and carried on by the court of chancery in this state, that it was not affected by the repeal of the statute of Elizabeth; that the provisions of the Re- vised Statutes did not aSect property given in perpetuity for religious or charitable pur- poses; and hence that the bequest of $6,000 to Zophar V. Oakley an^ other Individual trustees, with power to perpetuate their suc- cessors, as a perpetual fund for the education of children of the poor who should be educat- ed in the academy in the village of Himting- ton, with directions to accumulate the fund up to a certain point, and apply the Income to the education of children whose parents' names were not upon the tax list, was valid. If that case had continued to be the law of this state, there would have been no oppor- tunity for questioning the validity of the tenth clause of this testator's will. That de- cision, it would seem, should have settled the question in this state, but the struggle be- tween the advocates of a liberal policy to- wards charities and the opponents of such a policy did not stop with that decision. In Levy V. Levy, 33 N. Y. 97, Judge Wright chal- lenged the position taken by the court in the Williams Case, and discussed anew the ques- tion whether the English doctrine of trusts for charitable uses was the law of this state. The discussion was continued in Bascom v. Albertson and Burrill v. Boardman, supra; and In Holmes v. Mead, 52 N. Y. 332, it was finally decided that tlie system of charitable uses, as recognized in England prior to the Revolution, has no existence in this state, and that such uses are not exempt from the pro- visions of the statute abolishing all uses and trusts except such as are authorized thereby. Efforts in the interest of upholding important charitable bequests have from time to time been made to persuade the courts to reopen the subject to a limited extent, without other result than an approval of the case of Holmes V. Mead, as in Holland v. Alcock, 108 N. Y. 312, 16 N. E. 305, where the court felt called upon to point out that "charity, as a great interest of civilization and Christianity, has suffered no loss or diminution in the change which has been made. The law has been simplified, and that is all." So the fact seem- ed to be at the time of such writing, and so it may have been, except as to that class of charities which, for convenience, we may call original charities, as where a person desires to found an institution to carry on a charity that will bear his name and be a monument to his memory, or wishes to benefit a class of unfortunate persons in his own community, in whom he may be interested. Many a testa- tor has attempted to provide by his last will and testament for such a charity, but, so far as the decisions show, nearly every such at- tempt has come to naught, because the courts, in applying the rules resulting from the final overthrow of the Williams Case, have been obliged to hold that the language employed by the testator was either Indefinite as to bene- ficiaries, or in violation of the law against 434 TRUSTS— PUBLIC OR CHARITABLE. perpetuIUes. Holmes V. Mead, 52 N. Y. 332; Prichard v. Thompson, 95 N. Y. 76; Cottmaa V. Grace, 112 N. Y. 299, 19 N. E. 839, 3 L. R. A. 145; Read v. Williams, 125 N. Y. 560, 26 N. B. 730; Fosdick v. Town of Hempstead, 125 N. Y. 581, 26 N. B. 801, 11 L. R. A. 715; Tilden v. Green, 130 N. Y. 29, 28 N. E. 880, 14 L. R. A. 33; Booth v. Church, 126 N. Y, 215, 28 N. B. 238. Our attention has not been called to, nor have we discovered, any case in the books, since the decision of Holmes v. Mead, where an attempt to create an original charity has survived the test of an application by the courts of the rules of law to the language employed by the testator. Among the last, if not the very last, of the successful attempts in that direction, was in respect to the will of James H. Roosevelt, de- ceased, which was before the court in Burrill V. Boardman, 43 N. Y. 254. In that case the court declined to decide the question whether the peculiar system of charitable uses as it existed in England has ever had foothold in this state. The decision of this court, hold- ing that will to be valid, made Roosevelt Hospital a possibility. As these statements seem to make their own comment, we pass to the position of the legislature in 1893, which had its attention shgrply drawn to the sub- ject by a comparatively recent decision of this court, the effect of which was to deprive the public of a great charity, in which Samuel' J. Tilden sought to employ the bulk of his fortune, aggregating millions. Iiooking back over the 20 years that had elapsed since the decision of the court in Holmes v. Mead, the legislature could discover nothing but wrecks of original charities,— charities that were dear to the hearts of their would-be founders, and the execution of which would have been of mesttmaDie value to the public. Further back of that period, however, it found that in Wil- liams V. Williams, supra, the court had de- clared It to be the law of this state that char- itable devises and bequests were not subject to the statute against perpetuities, nor subject to strangulation by the rule against indefinite beneficiaries; for the court, having equitable jurisdiction, claimed the right to administer the law of charitable uses. Our legislature not only saw that a great wrong had been and was being done to the public by the loss of many devises and bequests for the purpose of founding original charities, but it further saw that the remedy could alone be furnished by It It perceived that its repeal of the statute of Elizabeth furnished the foundation for the decisions of the courts, and did away with the law of England upon that subject, as well as with the practice in this country in that regard which had been founded upon such law, so it set about making a change in the law; and the statute which it enacted, to- gether with the title, reads as follows: "An act to regulate gjfts for charitable pur- poses. "Section 1. No gift, grant, bequest or de- vise to religious, educational, charitable, or benevolent uses, which shall, in other respects be valid under the laws of this state, shall or be deemed invalid by reason of the indefinite- ness or uncertainty of the persons designated as the beneficiaries thereunder in the Instru- ment creating the same. If in the instrument creating such a gift, grant, bequest or devise there is a trustee named to execute the same, the legal title to the lands or property given, granted, devised or bequeathed for such pur- poses shall vest in such trustee. If no per- son be named as trustee then the title to such lands or property shall vest in the supreme court. "Sec. 2. The supreme court shall have con- trol over gifts, grants, bequests and devises in all cases provided for by section one of this act. The attorney-general shall represent the beneficiaries in all such cases and it shall be his duty to enforce such trusts by proper pro- ceedings in the court." Laws 1893, c. 701. Reading^ the statute in the light of the events to which reference has been made, it seems to me very clear that the legislature in- tended to restore the law of charitable trusts as declared in the Williams Case; that hav- ing discovered that legislative enactment had operated to take away the power of the courts of equity to administer trusts that were in- definite as to beneficiaries, and had declared a permanent charity void unless the devise in trust was to a corporation already formed, or to one to be created, it sought to restore that which had been taken away through an- other enactment. This is markedly indicated, not only by the absence of details in the stat- ute, which is broadly entitled "An act to reg- ulate gifts for charitable purposes," but also in the brevity of the statute, which confers all power over such trusts and trustees on the supreme court, and directs the attorney general to represent the beneficiaries in cases within the purview of the statute, as was the practice in England. Practical effect can be given to the provision that no devise or be- quest shall be deemed invalid by reason of the indefiniteness or uncertainty of the persons designated as beneficiaries only by treating it as a part of a general scheme to restore to the courts of equity the power formerly exer- cised by chancery in the regulation of gifts for charitable purposes; for, in order to as- certain the class of persons who were en- titled to the benefits of the trust, the rule for- merly in force must necessarily be invoked, by which the court ascertained as nearly as pos- sible the intention of the testator, by decree adjudged who were intended to be the bene- ficiaries of the trust, and directed its admin- istration accordingly. Fowler, in his work on Charitable Uses, in speaking of the act of 1893, says: "It must be very obvious that the act of 1893 has se- riously affected those decisions of the courts of New York which require great certainty or a vested interest in the beneficiaries of a charitable trust. The act, in this respect only, is designed to restore the ancient law touching charitable uses for uncertain per- sons, and to this extent to relieve charitable TRUSTS— PUBLIC OR CHARITABLE. 435 tmsts from the narrow boundaries prescribed by the Revised Statutes for private uses in lands." While that learned author expresses the opinion that the act does not relieve char- itable or public uses from the application of the rules relating to perpetuities, which, he says, "have no reference to public trusts," he asserts that, had that been done, the ancient law would have been almost revived by the legislature. That he is right in saying that the legisla- ture "designed to restore the ancient law touching charitable uses for uncertain per- sons" seems unquestionable, and it appears to be reasonably clear, from a reading of the entire act, that the legislature designed to re- store the law governing the administration of such trusts as well. And, if such was the design of the legislature, then effect must be given to it, though such a construction seems contrary to the letter of the statute. Smith V. People, 47 N. Y. 330. As this statute is remedial in its character. It should be lib- erally construed with a view to the beneficial end proposed. Hudler v. Golden, 36 N. Y. 446. The statute provides that, if there is a trustee named to execute the trust, the legal title to the property shall vest in such trustee, and, further, that, if no person be named as trustee, the title shall vest in the supreme court That there might be no opportunity for questioning the authority of the supreme court in such matters, the second section pro- vides that the supreme court shall have con- trol over all gifts, grants, bequests, and de- vises In all cases provided by section 1 of this act. Under the provisions of the act a testator may name a corporation as trustee, or provide that a corporation to be founded shall act as trustee, ot the trustee named may he an individual; but, if he name none of these, the statute provides, in effect, that the trust shall not faU, but the title to the property devised or bequeathed in trust shall vest in the supreme court, which shall have control over gifts, grants, bequests, and devises pro- vided for by the act. If the contention be well founded that It was not the intention of the legislature to revive the ancient law as to the administration of such trusts by the supreme court, and to do away with the rule requiring the formation of a corporation for such purpose, then no permanent charity can be administered by the supreme court, not- withstanding the title to the trust property is by the command of the statute vested In the supreme court when no trustee is named by the testator. It is Insisted that it cannot be, because the trust term is not measured by lives. Neither is a corporation, which may, as a trustee, execute a permanent trust for charity. But, it is answered, the law has created an exception to the general rule in fa- vor of corporations. True, and the lawmak- ing power had the right to create other ex- ceptions, or change the law altogether; and it has changed the law as to all cases within the scope of the act, "to regulate gifts for charitable purposes," so that now the su- preme court must execute such a trust, if the title to the trust property vests In It under the statute, and shall have control over the administration, if a trustee be named by the testator. A construction of this statute al- lowing the supreme court to execute a per- manent charity when the title to the real estate Is vested in it, and at the same time declar- ing that, where such property is devised to a trustee named, the devise is void, would be absurd. The learned counsel for the respondent points out that It is not all gifts and devises to religious, educational, charitable, or benev- olent uses that shall not be deemed invalid by reason of Indefiniteness as to beneficiaries, but only such as "shall in other respects be valid under the laws of this state," and, with signal ability, seeks to persuade us that, in order to give these words effect, it must be held that a trust is not within the protection of the statute If it contravenes the law against perpetuities, -and, as a necessary se- quence, that if the devise in trust he not to a corporation, or provision be not made for the formation of a corporation, within a pe- riod measured by two lives in being, to take over the trust estate, then the devise or be- quest is invalid, and this statute is vvithout effect in such case. It will be observed that, if this contention be well grounded, the au- thority attempted to be conferred upon the supreme court to take title and execute a trust of a permanent character when no trus- tee is named is practically of no effect, and . the statute itself is limited in its application to a ease of the type of Prichard v. Thomp- son, 95 N. Y. 76, which is the single case brought to our attention where the only ob- jection to the validity of the trust was that the beneficiaries were indefinite. In the light of the destruction of so many original chari- ties, as shown by the decisions, the thought cannot for a moment be indulged In that the legislature had in view this case only, and sought to furnish a remedy for just such cas- es In the future, and for none other. We are thus led to inquire whether this clause In the statute may not have been in- tended to serve some other purpose than to require the continuance of the practice of the formation of corporations for the adminis- tration of permanent, charitable trusts, — a re- sult apparently in conflict with the other pro- visions of the statute providing for the exe- cution of trusts by trustees or by the supreme court. In the attempt to ascertain the In- tention of the legislature. It Is a just rule, always to be observed, that the court shall assume that every provision of the statute was intended to serve some useful purpose; and, in obedience to that rule, we now in- quire whether this clause of the statute does not have a useful place therein, and yet is not in conflict with the letter and spirit of the rest of the statute. It Is so obvious that it has, that we need cite but one Instance for the need of such a provision, and that la suggested by one of the contentions made in this case. A., having a substantial estate. 436 TRUSTS— PUBLIC OR CHARITABLB. and desiring to provide suitably for the sup- port of his wife and two brothers during their lifetime, for which he deemed the income amply sufficient, devised his estate In trust to a trustee during the lifetime of his wife and brothers, directing that the income be apportioned between the cestuis que trustent during their lives, and that after the death of the last survivor of them the property be vested In the supreme court as a permanent trust, the income to be used towards the sup- port and maintenance of the Syracuse Hos- pital. Such a trust would, of course, be in direct violation of the statute of perpetuities and void; for by It the testator would de- sign to do what the statute aims to prevent from being done, namely, to tie up the estate for the benefit of his family for a period long- er than two lives In being (I. e. three lives in being), before the trust for charitable pur- poses could go Into operation. This clause therefore seems to constitute a very useful feature. Indeed, of the statute; and, because this Is BO, all excuse Is taken away for an ar- gument that It was Intended to serve as such an obstruction to a practical operation of the statute as would render It of no substantial value to the public, and it eliminates all oi>- portunlty for questioning that It was the In- tention of the legislature to restore the an- cient law as to gifts for charitable purposes, because experience has shown that, as to orig- inal charities, far better results were obtain- ed under It, from the public point of view, and with a more decent regard for the wishes of testators, who do not always love their distant relatives, — occasionally, perhaps, with justification. We are thus conducted to an examination of the tenth clause of the will. It reads as follows: 'Tenth. I give, bequeath, and de- vise all the rest and residue of my property, of every kind, personal and real, wherever situate, to my trustees hereinafter named, for the purpose of founding, erecting, and maintaining Graves Home for the Aged, to be located In the city of Syracuse, In the state of New York. It Is Intended for a home for those who by misfortune have become Inca- pable of providing for themselves, and those who have slender means of support. The in- stitution to be known as the Graves Home for the Aged. I hereby appoint Charles C. Stevens, Rasselas A. Bonta, and Maurice A. Graves for the trustees to execute the above trust. I hereby authorize and empower my executors, or the survivor of them, to rent or sell any part or all of my real estate that I may own at the time of my death. They are authorized to employ a person or persons to have charge of the real estate, to collect rents and to make repairs, and to pay such sum for compensation as they may deem reason- able and proper. After my executors have executed their trust, and paid all the legatees provided for In this will, they are authorized and directed to convey to the said trustees above named the balance and remainder of my property, of every kind, to be applied for the purposes above provided; and the said trustees, or the survivor, are authorized to rent or sell all or any part of my real or per- sonal property, and to employ such agents as they may deem proper to take charge of the same, and pay them such compensation as they deem best" While the place where "Graves Home for the Aged" is to be located Is stated, and the general object of the charity Is clearly given, namely, to provide a home for the aged who by misfortune have become In- capable of providing for themselves, it Is still indefinite as to the territory from which such aged people may be accepted at the home. But for the statute that we have been considering, this trust would fail be- cause of the indeflnlteness of the benefl- clarles; but the practice that It revives makes It necessary for the supreme court, when properly moved by the attorney gen- eral, representing the beneficiaries, to ascer- tain, as nearly as may be, the Intention of the testator as to the method of selecting those aged persons who are to be the bene- ficiaries of the home, and to make such in- tention efficacious by decree. It seems to have been the opinion of the appellate divi- sion that the power of alienation of the bank shares and the real estate south of James street was, under the terms of the will, suspended during three 'lives In being after the death of the testator, but to us It seems that this Is not so. It Is true that by the first clause of the will the trustees were directed to pay to testator's wife, dur- ing life, the dividends on the bank stocks, when declared, and the net income from the real estate, after making payments for nec- essary repairs and taxes, while by the elev- enth provision of the will the testator au- thorized his executors and trustees to re- tain his shares in the New York State Bank- ing Company for a term of years, at their discretion, "but may sell the same, or any part thereof, at any time; but the same is not to be continued, nor any portion of my property held, longer than the lives of Cath- arine Graves Roby, daughter of Sidney B. Roby, of Rochester, and Helen Breese Graves, daughter of Maurice A. Graves, of Sjrracuse." It will be observed, therefore, that the will operated to vest the title of the estate in the trustees, in trust for the purposes outlined by the testator, as of the date of the latter's death; and they were directed to pay to the widow certain rents and dividends for life, unless she survived two persons upon whose lives the trust es- tate was expressly limited^ The next question Is whether this trust Is to be executed by the trustees named in the win, or by the supreme court. It Is the next question because we have already reached the conclusion that a corporation Is not necessary for the execution of such a trust, since the adoption of the statute, but that the supreme court, in a proper case, must take upon itself such execution, over TRUSTS— PUBLIC OR CHARITABIyB. 437 which it shall have control where a trustee Is not named for the purpose. In this case trustees were named, and, as the eleventh clause of the will expressly prohibits the trustees from holding any portion of the testator's property longer than the lives of the two persons in being therein named. It must be held that the trustees are charged with the management and conduct of the trust until the expiration of a period meas- ured by the two lives in being, at which time the title to the trust property will vest in the supreme court under the statute. The plaintiffs claim that the tenth provi- sion of the will is void as to one-half of the remainder of the testator's estate under sec- tion 1, c. 360, of the Laws of 1860, which reads as follows: "Section 1. No person having a husband, vdfe, child or parent, shall, by his or her last will and testament, devise or bequeath to any benevolent, chari- table, literary, scientific, religious or mis- sionary society, association or corporation, in trust or otherwise, more than one-half part of his or her estate, after the payment of his or her debts (and such devises or bequests shall be valid to the extent of one- half and no more)." The testator gives about $25,000 or less than one-seventh of his estate, to organizations that are within the description of the statute, and in addi- tion to that the residuary devises and be- quests are charitable, and therefore with- in the general description of the statute; but as such devises and bequests are not to a "society, association or corporation in trust or otherwise," but, instead, to trustees, they are not within its prohibition. The maxim, "Expressio unius est exclusio alteri- us,'~ Is applicable; for it is a man's general right, In this state, to do as he wishes with his own. He may now, as in the past, dis- inherit his relatives for the benefit of stran- gers; and this statute was not designed to af- fect that right, except indirectly. It was rec- ognized, perhaps, that, in the fear of death, men who have never exhibited a charitable Impulse suddenly awaken to the fact that behind them are lost opportunities for use- fulness that in some way ought to be made good; and In order to balance the account they look about for an opportunity to do good with their money, and find at once a man Interested In promoting the fortunes of some religious or charitable Institution, who, without hesitation, begins to play, and with a skill acquired by long experience, upon their fears and hopes. Given such a man and such a situation, it was readily conceived that, in his thought of self, the just de- mands of wife or child or parent might be temporarily lost sight of, and his all de- voted to religious or charitable purposes, through some of the many societies, asso- ciations, and corporations which are to be found on every hand. Hence the design of the framers of the statute was to place a limitation upon the power of a person thus moved, to dispose of more than one-half of his property by will to such organizations, to the end that he should have an opportuni- ty to measure the claims of his kindred upon him as to the remaining half, unembarrassed by the importunities of those whose business it is to get money for the societies, asso- ciations, or corporations they represent; and this it was thought would be substantially accomplished by an act prohibiting him from giving more than one-half of his property to the societies, associations, and corporations most likely to be considered. But, except as thus restrained by the statute, he may still disinherit his kindred by disposing of his property in such manner and for such pur- pose as he may desire; and so this testator, in devising his property to trustees in trust for the uses and purposes described in the will, was not within the prohibition of the statute. The result thus reached In this ease in no way thwarts the general pur- pose of the legislature, for the only person who stood In such relation to the testator as to benefit by the statute In any case was the testator's wife, who was over 80 years of age at the time of his death, was amply provided for by the will, and has since died. The amount of costs awarded seems to be out of all proportion to the work done, and so large that it is not at all surprising that sev- eral lawyers have appealed from nearly all jillowances except their own; but the su- preme court had the power In this suit. Drought as it was on the equity side of the court, to award costs to each of the parties; and the question of amount, also, was in the discretion of that court, and not subject to review here, so long as the allowances did not exceed the limitations provided by statute, and this they did not do. The judgment of the api)ellate division should be reversed, and that of the special term affirmed, with costs to the appellant trustees and to the attorney general. GRAY, J., dissents. ;438 TRUSTS-PUBLIC OR OHABITABLH. HUNT, Atty. Gen., et aJ. v. FOWLiER et al. (12 N. E. 331, 17 N. E. 491, 121 111. 269.) Supreme Court of Illinois. June 17, 1887. Appeal from circuit court. La Salle coun- ty. Geo. Hunt, Atty. Gen., and Mayo & Wid- mer, for appellants. Duncan, O'Connor & Gilbert, for appellees Vineria Fowler and others. SHELDON, J. This was a bill in chan - cery filed by the heirs, at lag at. Esther S. \2ha£majQt_flfiegiififli_^gai]ist__tlifi_ attorney general of the state and the executors of J jie will of the. decectent.Ja-have-a- certain por- tion^f the ^estate, left by her_declared tobe_ intestate^ and to belongjtoJhecomplaJMgfs, ^_heirs_at law o|jEe„ decedent. The. will, executed March io, 1883, after making sun- 315^' beqiiests' to" various perso ns ^offierTEan the_com£lalnants, concludef^wiffiTEisTi^ ^siduary clause^ ~" All the residue of my^S;- r SleTdevlse and bequeaffi 'unto lEe legatees TSer^before naiaed.^ in equal jpr^iorjjflfig, excepting said Oakwood seminary and said iBylVester MT Chapman." SiihseniiR ntfy, on ^pril S^"jE8§Sr" the test a^s ex.ecuted_ a codicil \yhi(i,.£jHiialned-this residuajsjslaHap: "^ •'the rest and residue of my _estate,_inclujjlng that whlcE'may'Tapse for any cause,. I direct to be mvested or loaned upon ;^e best terms pos.sihlejir.siL^aji_Ja.pifldu£eJhOlllllDS' Come, and saidLiafi&iii§-_tp_Jbe _;totribute(i amon£TEe~worthj[_joor of the j:ity^ of La ^alie, in such'miannerjLs'fffcourf of ehancerx. s, may_ "fflrect." Executors _^_the will , w.ejg ^Efliatfid. T he''lec edejit Jeit^both real aa^ £.ei:sonaL estate. The bill alleges that the city of La Salle is situated in the town of La Salle, and In- cludes but a small portion of the territory of the town; and that there is not now, nor has there ever been, in said city, any organ- ization or association, voluntary or otherwise, for the distribution of charity to the poor of the city; and that the municipal authorities have no duties imposed upon them to pro- vide for the poor; and claims thajLtke, rg: siduary elause_of_the codicil Tsln.cagable_of_ eiecmHoSItoL-reason" of the "imcertainty oF the beneficiaries Int ended by the testator , aM~Yoia 7~ggrtBat, m consequence^all tSe rest an3 rem3ue~^ff^Ee estate._bothj:e al and personal, after the paym"ent~of the general and specific legacies, was intestate estate. A demurrer' to the bill wasTnterposeS'by ithe attorney general and the executors, which was overruled by the court, whereupon the executors answered, denying the invalidity of the residuary clause of the codicil, or that It was incapable of execution, and setting up that, even if such were the case, the rest and residue of the estate must be distributed In accordance with ttie residuary clause of the will. Thereupon the bill was amended by making the residuary legatees specified in the will additional parties defendant Sub- sequently a hearing was had upon pleadings and proofs, and a decree was entered find- ing that the residuary clause of the codicil was Ineffectual to dispose of the property, but that it nevertheless revoked the residu- ary clause of the will, and declaring that the real estate of which the testatrix died seised belonged to the complainants as her heirs at law, and directing that the rest and residue of the personal estate should be dis- tributed to the complaiQants as Intestate es- tate. From this decree the attorney gen- eral, the executors, and a portion of the lega- tees specified in the residuary clause of the will have prosecuted this appeal. There is in American courts much diversi- ty of decision upon the subject of charitable trusts. In express private trusts there is not only a certain trustee who holds the le- gal estate, but there is a certain specifled cestui que trust clearly Identified, or made capable of Identification, by the terms of the instrument erecting the trust I£j§_,aa_es;_ sentlal f eatureof_gubll£^ or charitable trusts that tne ofil^Hciaries are uncer tain,— a cla ss ^rj'6rs'0Hg'"flescHbea m ^me^jgneraljan:^ guage, often fluctuaflng, changing in_their individuaTnumbers, 'andpaHaldng_pf a guasi' public character. 2 Pom. Eq."Jur. § 1018. In some of the states the equitable system of distinctively charitable trusts is not rec- ognized, and the courts apply only the rules applicable to express private trusts. In oth- er states the "statute of charitable uses" of 43 Eliz. c. 14, has been adopted or repealed, and thereby decisions have been influenced. And in other cases local legislation, or sup- posed local policy, to more or less extent enters into adjudications. In ano ther, and , as beUevedj_ the largerj poriaSn of the sla ^ the system oF charitable trus ts as adminis - Jered in theTEnglish .?.ourt of chancery,., in the exercise _of_Jts^ ordinary judicial power, ^^^^ilsf with variation in "regaf ff'toT'Se' "iTement of certainty in tEe'ffusEee anSTtte ^ject'of the ch' arlty.—a-glassIflcagcS fflfSie" aecIsIons~in the several states will be foimd in 2 Perry, Trusts, § 748, in note, and 2 Pom. Bq. Jut. § 1029, and note. The prerogative power of the crown, exercised through the lord chancellor as the representative of the king, as where there is a gift to charity generally, without appointment of a trustee, and the bounty is devoted to some particular charity, or where there is a gift to a par- ticular charitable purpose which cannot be effectuated, and it is applied to some other charitable use, cy-pres the original purpose, Is regarded not as a judicial, but a minis- terial, prerogative function. This preroga- tive power courts in this country do not as- sume to exercise. Were this subject of charitable trusts a new question vnth us, there would be opened up a wide and interesting field of discussion, in order for the establishment of the proper rule in this regard. But we are saved labor TRUSTS— PUBLIC OR CHARITABLE. 439 In this respect, from the ground having here- tofore been gone over by this court, and the rule applicable to charitable trusts haying" been establlshed'tot Te'that ' wET^TTs" a Jmln- l itered in the courF ofchancery'in 'England, in the exercise of "Hs^rdmary" jurisdiction as a_ _cour t ■ of eqin ty" This" 'waS' done ■WTBe case of Heuser v. Harris, 42 111. 425, and where it was recognized that the statute of 43 Bliz. c. 4, had been adopted in this state. The entire contention in this case arise s jiD on the construction, validity, and enlect CT~ this^ ^esiduary clause of the codicil. It is jnsisted this clau se is void for uncertainty" as to the b en eficianes." ~"" This is^^iE^ a bequest to charity generally, or to the poor ge nerall y, but to the worthy joor of the city of La ijal le" TheLeLalsSL-filfire "Ts definite,— the worthy ^or of the city of 1/a Salle,— bul J2iaJMllidLaa,ls.^L.H££!ags"lip whom th e bounty is to be distr i buted are uncertain. There is always this uncertainty' as to individuals, in the case, of public char- ities, and it is this feature of uncertainty which distinguishes public charities from private charities; charitable trusts from private trusts; and to hold charitable gifts to be void because of such uncertainty is to reject this whole distinctive doctrine of char- itable trusts. 2 Redf. Wills, 544, (66.) In the case of a charitable ,.h(MniP..st it Js immaterial how vagu e, indefinite, and uncer- tein the objects of the testatoFs"T3 0unty may Ee, provided there is~a discretionary power vested in some on e over its" application to fnose objects. luomesHc & F.'M." Soc.'s !Ap- peal, ao Fa. 425; Peny, Trusts, § 732. It is denied that there is any such discretion- ary power here given, and White v. Fisk, 22 Conn. 31, is cited in support of such denial. The bequest In that case was: "Any surplus income that may remain, to the extent of $1,000 per annum, I direct to be expended by my said trustees for the support of indi- gent, pious young men preparing for the ministry in New Haven." The decision was that the gift was void, as the objects of the benefaction were indefinite, and that no pow- er was conferred on the trustees to make them definite by selection. This case, though meeting with seeming approval In Grimes' Ex'rs V. Harmon, 35 Ind. 198, has been dis- approved by other high authorities. See Perry, Trusts, §§ 713, 720, 748, note 1; 2 Redf. Wills (2d Ed.) p. 541, note; Hesketh v. Murphy, 36 N. J. Eq. 304. The latter case especially speaks of White v. Fisk as a case not likely to be followed. In Hesketh v. Murphy the testator's will empowered and directed the trustees to em- ploy the annual Income of the fund "for the relief of the most deserving poor of the city of Paterson aforesaid, forever, without re- gard to color or sex; but no person who is known to be intemperate, lazy, immoral, or undeserving, to receive any benefit from the said fund." It was objected that the gift could not be applied to its objects and was void, because the will did not confer upon any one the power of ascertainment of the individuals who should receive the benefit of the bequest. But the court held that the power given the trustees by the -will to dis- tribute the fund carried with it, by neces- sary implication, the power to select the beneficiaries from the designated class, and upheld the bequest. We entirely agree with the criticism there made by Chief Justice Beasley upon the case of White v. Fisk, that there was a mistaken assumption on the part of the court in that case that there was no power to select the objects of the charity lodged by the testator in the trustee; that when a power is conferred on the trustees to distribute the fund to members of a class, such members having certain qualifications which can be ascertained only by the exer- cise of judgment and discretion, as the act of distribution cannot be performed except after such ascertainment of the particular beneficiaries, the principal power to distrib- ute the moneys carries with it the incidental and necessary power of selection; and this, upon the ordinary doctrine that, when one act is authorized to be done by a trustee or other agent, every authority requisite to the doing of such act is, by intendment of law, comprised in such grant of power. See Pickering v. Shotwell, 10 Pa. St. 23, that the power in the trustee to act at its discretion need not be expressly given, if it can be im- plied from the nature of the trust. In the later case of Erskine v. Whitehead, 84 Ind. 357, the decision in Grimes v. Harmon does not seem to be approved in its full extent-. In Heuser v. Harris, supra, thfe bequest of money was "to the poor of Madison coun- ty," the interest only to be used, with no appointment of a trustee. As the county court of Madison county was charged by law with the support of the paupers in the county, it was held in that particular case that the poor of the county were its paupers, and that the fund should be held by the county court to be applied for the latter's support. It is not to be the inference from that case that a charitable bequest to the poor necessarily means to paupers, and that the trust is only to be executed by some- body charged by law with the support of paupers. "A bequest in trust for the poor inhabitants of a particular place, parish, or town is a charitable trust for the poor not receiving parochial or municipal aid and re- lief as paupers, on the ground that the char- ity is for the poor, and not for the rich, and, if it was applied to the maintenance of those supported by the parish, town, or county, It would relieve wealthy tax-payers from their taxes, and not materially aid the poor." Perry, Trusts, § 698. It is said in Redf. Wills (2d Ed.) 805, that some of the American cases have gone great lengths in carrying into effect the Intention of the testator when there was great in- definitenesa in the objects of the trust; "that 440 TRUSTS— PUBLIC OB CHABITABLH. the want of a trustee in such cases is never any obstacle in the way of a court of equity carrying into effect any trust, and more es- pecially one of a charitable character." Mr. Pomeroy, in speaking of the distinguishing features between charitable and private trusts, says that, in case of the former, "not only may the beneficiaries be uncertain, but that even when the gift is made to no cer- tain trustee, so that the trust, if private, would wholly fail, a court of equity will carry the trust into effect either by appoint- ing a trustee, or by acting itself in place of a trustee. 2 Pom. Eq. Jur. §§ 1025, 1026. And see Brown v. Kelsey, 2 Cush. 243; Washburn v. Sewall, 9 Mete. 280. There can be no question of t llft ffptiprai rule! But "it is said it does not apply iSLJ a. case where there is such ind^.a3ieBfiss-^ts-to "beneficiaries as here. Numerous are the in- "stances which "miSht be cited where there _ec'iitpd^t.hB trust in ci^^es of ^auarinaegnite- "ness as here as to the objects of the trust, — SK -itr-M-ceOTd-r.-TmhiltreeT 8" Blackf . ' 15, where the legacy was for the education of the pious indigent youths; in Bull v. Bull, 8 Conn. 47, where the executors were to dis- pose of the residue of the estate "among our brothers and sisters and their children as they shall judge shall be most in need of the same,— this to be done according to their best discretion,— and the executors died never having exercised the power, nor executed the trust; in Williams v. Pearson, 38 Ala. 299, where the beneficiaries named were "all the paupers and poor children of two designated 'beats,' whosie parents were not able to sup- port them;" in Howard v. American Peace Soc, 49 Me. 288, where the gift was to the suffering poor of the town of Auburn. Where a legacy is given to trustees to dis- tribute in charity, and they all die in the life-time of the testator, yet the legacy will be enforced in equity. 2 Story, Eq. Jur. § 1166. An extended collection of cases on the general subject may be found in note to Heslieth v. Murphy, 35 N. J. Eq. 23, and in 1 JaiTn, Wills, 403, in note. Mr. Perry sums up, as the rfesult of the principles and authorities, that "a bequest for charity generally, * • • or to the poor generally, or to charity generally, with no trustees appointed, will not be carried into effect by the courts in this country." Perry, Trusts, § 729. That "if a testator makes a general and indefinite bequest to charity, or to the poor, or to religion, and appoints no trustee, but plainly refers such appointment to the court, there would seem to be no impropriety in the court appointing a trustee according to the plain intent of the donor, leaving such trustee to find his power in the will of the donor. But if a testator makes a vague and indefinite gift to charity, and names no trustee, and gives no power to the court to appoint one, there is no pow- er in the American courts to administer such an inchoate and imperfect gift" Id. S 731. That "it is immaterial how uncertain the beneficiaries or objects are, if the court, by a true construction of the instrument, has power to appoint trustees to exercise the dis- cretion or power of making the beneficiaries as certain as the. nature of the trust requires them to be." Id. § 732. See, also, 2 Story, Eq. Jur. § 1169. jn^the present case the te statrix appoints no trustee to distribute_the_fraidL but ex- jpressly refers "its "distribution t : p"a~ i^^iiii^ nf chancery. The power of distributionjjn our ^pihionj^ carries with ff'Tfie power to select the indlviduais to "whom distribution shall be ■^mage. The trustee appoMftgd' by the court to make the distribution will have the inci- dent al power to selec t , t he beneficiarieSj^ so that the cas6_stands_the same as if the tes- ' fafrTxISerself had app'om£ga"a" »ttgtgetcraiS- fabute the fund . The trustee to Ee appoinT " pd by the court wilC in "eSect, oe a trustee of hCTlippoIHmenF'mad'e through ffie court chancefj Courts incline strongly in favor of charita- ble gifts, and take special care to enforce them. As observed by Mr. Perry (section 687), charitable bequests are said to come within that department of human affairs where the maxim ut res magis vaKat quam pereat has been, and should be, applied; and, . further (section 690), that untU the statute of distributions (22 Car. II. c. 13) was enacted, the ordinary was obliged to apply a portion of every intestate estate to charity, on the ground that there was a general principle of piety and charity in every man. This shows the favor in which charity is held in the law. There is to be the most liberal con- struction of the donor's intention in support of a charitable donation. Charities have al- ways received a more liberal construction than the law wiU allow in gifts to individu- als. 2 Story, Eq. Jur. § 1165. inite. but . quite- apnmfi<',— tp the worthy poo r of the city of T.a Salle. Tndividuala nf the jclass named., will ever be readily found to jjrtiom the .fvmd,- may. be distributed. _Slie Jrust is not di fficult of execution according to the intention~of the testatrix .. I nstead or ^ herself n aming, a trustee to make th e jUSzl, Wbiitiaii-x)Uier_.bequfiat,._tlie Jta§.tatoix_ jire^ ?erred ttiat the_ distribution should be^ mad e "by ai coufToF chancery, whose peciifl^prov- jSce i t is to effect tix e administration of t rusts, and especially charitable trusts. i%ere can" be no doubt that the execution of the trust by such court would be to effectu- ate the donor's intention, the aim which is always sought to be accomplished. Under the principles and the strong cur- rent of authoriiies which are properly appU- cable, we qre fully satir.3ed that the bequest i n question is a valid charitable gi!i"and thai it should be far-rloH \ntn offoft hV A court of cha.];>c^3x. as tbe-toatatrix-BTprpssly wlile'd that it should be. The residuary TRUSTS— PUBLIC OK CHAEITABLB. 441 clause of t ^" pnittM^ hoipp; held valid, it fol- ws tli at the complain ants take nothing as eirs at la wJ and ar e llUl tjllUlltia t O mail i - jnin qi qjr hi ll. T he decree of the circuT T Pt^nrt will he reversed, and the cause re- manded to that court with directions to dis- miss the bill, liecree reversed. SCHOLFIELD, J. (dissenting). I do not concur in this opinion. I hold that courts of equity in this state exercise no prerogative powers, but, as contradistinguished there- from, only judicial powers; that, not exer- cising prerogative powers, the court could not, by the act of the individual, be, and here is not, invested with a power not ju- dicial, namely, that of selecting or designat- ing the "worthy poor" to be the recipients of the testatrix's bounty; and that, since it has not been and could not be invested with such power, it cannot appoint and invest a trus- tee with such power. I concede the testatrix might have invested a trustee with such power, leaving and directing the court to ap- point the trustee; but that is a very differ- ent case. ,442 RESULTING TRUSTS. SKELLENGER'S BX'RS v. GEIR'S EX'R. SKELLEN- (32 N. J. Eq. 659.) Court of Chancery of New Jersey. May Term, 1880. ilfred Mills, for complainants. George T. Wert and George W. Forsyth, for next of kin. Edward 0. Lyon, for executor of Han- nab Skellenger, deceased. THE VICE CHANCE2LL0R. This is a bill tor directio n. T he complainants, as the ex- . eeutors oF* Daniel Skellenger, deceased, ask 3irecti'6n as to what they shall do with cer- tain money s belonging to their testator, .n .ot dispose d of by his will, his est^e con s i sted ~ entirely " oTpersonatt y. By' nis jwlll, he first . ^Ve'allTiis es tet&-tQ— Ifls ,, >ylfe , . except -Jiii' moneys and securities for the payment^-O f money, and then gave all the r(^siflnf> fvf hi?; ' estate to hi.«i fty fftint"''P- " to ha.Te and to hold upon and subject to the "f dllo wing , trustsT .^ wit: upon trust to invest th^ samp at jr^- / t erest,~on good security. aji )^,l;}ie, jnf;(?rest ajifl income thCTiii9?lr ^^tf y^yment of taxesand ^ ^d. "within SIX months after h er ,d ea.th. to X ^pay f rom.jjid_Qnt„g^.1jie residu e so_ directed io ^belpSsted .unffl^jist... sejyeral pecqnia^ fpganiPH fit; ftxpfl aTnnimtH T>^ ptTior nr f^^iv ^ t her dispo sit ion of .the residue is made, ^lig tes'tators widow surviv^'Kii fi'.'" i^ ney never h ad a.£b ild. The wicJow is now Jead .' She eft a w ill. The complainants^' a'tter paying all the legacies directed to be paid, have gflU. m"hand QV6sr„ ,p..X0Q. She will makes no dis - position of the beneficial interest in this sum . _ _ _ Hi e lepal title to it w.aS -gMeB-tia-ttifcrecmB. ^f^j|^^"^?'"''°,^^";tSl"r'''-1^'i" ^" exactly the platnants to enable them to veif,mm.r<^rt,n}}}, sa"iP condition that it jeshM If t)s had Ifift jtr usts, bu t, J:h e trusts having been f i,illy_,p.er-, fflm^Jwithbut it, the q uestion arises, v v hat shall be done with it, 6r wno is ent JHegjteLil^ ■^ThCTe are uiree difterent claimants: first, the executors, who claim the whole to the exclusion of all others; second, the next of kin of the testator, who also claim the whole in exclusion of the executors, and likewise to the exclusion of the representative of the widow, and, third, the representative of the widow, who claims a moiety of the fund. At common law, an executor, by yirtuejj f his appointment is entitled to the whole, of the p ersoSar'S BtateraiHnfr^ter the payment olj debts a:nd 'fee;gnS^r"any"giCTlus~reimai ns. It vests in him benefi cially. 2 Wms. Ex'rs, 1475, marg. note. iJut tBia-Hl Ie has ne vCT prevailed in the United ^tate sTon the~conh" trary, it has uniformly oeen held in this coun- try that, if any part of the personal estat e .happens to tie~undl^osed_6f' by th e; wi ll, tte jgecutor takes'^T^~aT~&' ustee roi' ffiose who " .are entitled" un dCTth e'galute of distributicmt t Perry, Trusts, §"155; Stdi-y, Eq. Jur.'J 1208. No doctrine of equity jurisprudence is more firmly established than that where personal estate is given by will to a trustee, upon certain trusts, and the purposes of the trust do not exhaust the whole estate, or the trusts fail, either in whole or in part, by lapse or otherwise, the trustee shall not take the sur- plus for his own benefit, unless such appears to have been the intention of the testator, but a trust results in favor of those who are entitled under the statute of distribution as the next of kin of the testator. Hill, Trus- tees, 113, marg. note; 1 Perry, Trusts, § 152; 2 Wms. Ex'rs, 1475, marg. note. Where the gift is made to the donee as trustee, or in trust, without any words indicating an inten- tion to confer a beneficial interest upon him, the form of the gift will be considered con- clusive against his right to take for his own benefit. Hill, Trustees, 114, marg. note; 1 Perry, Trusts, § 158. These authorities di». pose of the claim of the complainants. Technically, the testator did not die intes - tate as to any part of his estate. Hp s-hvp ■the legal title of the whole to his executors. They would have taken it anyhow, in virtue of their office, if the wiU had contained no express gift to them. Rut, he did die intqjjfatj i ^s tn the benefinial interest in this fund. Nfl. disposition was made of that Thlsjnt^tet is an equitable estate, and, tied, in "equi ty, to be considered, to all in- tent's and purpose s, as a legal estate. Such" ggfajEsT in" equity, are subject to the same Incidents, properties and consequences that similar legal estates are at law, and are trans- missible in the same manner. Gushing v. Blake, 30 N. J. Eq. 6»5. Tho Inprnnp nf thjs fund passed by the will, but no beneficial in- T:erest in the corpus , itsel f. Ag to ^iat the ^iltlssi^t and inope rative, an A it therefore" s?oo3r' ' hcTwitr r As to" a matter ot'""l a^. iat_ it must be declared, as lat he had no will. This being so, it wou ld seem to follow, a s a necessary sequence, tHat t he widow was enjHtig" jir^;gHc ipate m its aistrib'ti'ti on. as_ 'a^enerai'riiie, the right of the dis6ibutees vests immediately on the, death of the intes-~" tate. was But It is contended mrmma~To that our statute _______ regulate distribution onl y MgaseFpf total fattestacy , and has n o anpU- cationi to a~case of partial intestacy. This ffrgumeri'fr however, proves too much, for, if sound, it will exclude the next of kin quite as effectually as the widow. The right ot distribution is not a common4aw right but depends upon statute. Originally the ordi- nary took the whole surplus for pious useS. To cure this wrong, parliament took away the right of the ordinary, and gave it by statute, to the widow and next of kin. They hold under the same grant and one cannot take unless the other does also. In the words of Chief Justice Shaw, uttered in a case identical In all material points with the one under consideration, "the same provision in the statute of distribution which gives prop- erty not disposed of by will, where there is EESULTIKG TRUSTS. 443 a win, to the next of kin, gives a distributive share to the vridow." Nickerson v. Bowly, 8 Meta (Mass.) 430. It is also insisted that the widow should not be permitted to take any part of this fund, because it Is apparent, upon the face of the will, that the testator intended she should not This Intention, it is said, must be inferred from the fact that he gave her the use of the whole during her life, ajid he could not, therefore, have intended that she should take a part absolutely. In other words, having given her a part by express words, it must necessarily be inferred that he did not intend she should have any more. This argument it vrUl be observed, proceeds upon the assumption that the right of dis- tribution is to be regulated by the intention of the testator. But this, I think, is a mis- take. The Intention of the testator is to govern only so far as he has declared it by his will. With regard to that part of his property which his will did not pass, it must be declared he had no will, and therefore the court cannot know his intention concern- ing it The_ next of kin cannot take until intestacy is found, and then they take, not in pursuance of the testator's intention, but bv force of law, regardless of what his in- tentions were . Upon this point. Chief Jus- tice Shaw, in the case already cited, says: "If it were thought important to hiquire into the intent of the deceased, when he has made a will, but left property undisposed of, either in terms or by implication, as every man is presumed to know the law, it may reason- ably be inferred as his intention that the residue should be disposed of according to law." The rule upon this subject is settled. JL. has recently been adjudged by this court that where a testator dies intest ate is to par'f of ' hla.,^tate,,Jn..e.Q4S,efluencfi sii the l apsing of a legacy, his widow is ent itled "to a dis- tributive share of it, tfiough sEe had ac- cepted the provision made ior her I n lieu of jower, py tne will. J ianqy "yTTSKrcy, '^H N. J. Eq. 59. The offier pertinent authorities are Davers v. Dewes, 3 P. Wms. 40; Dicks V. Lambert 4 Ves. 725; Oldham v. Carleton, 2 Cox, 399; Ex parte Kempton, 23 Pick. 163; Dale V. Johnson, 3 Allen, 364. The decree will direct_tt[e co mplainants to pa y one m oiety of the fund to the representa - tive oflt liie. wiflow^ ,a^ fee othe r to the next of kin of the testator ..■■■444 EBSULTINGf TRUSTS. ^ \ ^ ^ 4 BOND et aL v. MOORE et al. (90 N. C. 239.) Supreme Court of North Carolina. Feb. Term, 1884. Civil action tried at fall term, 1883, of superior court, Chowan county; Avery, Judge. John M. Joneg. owning the lot of lan d la the town of lEdenton d escrib ed in the com- plaint, anffffie recovery of possession of which "S" the'oliject of this action, on February 9, ^6^ conveyed. Jt(fi,„garoeJtoX."dieed executed by himself of the first.,Ba.nt,- Thomas. W. Sudgins^oflEe second, and Mart ha A. Jones, fil's wif fejof^ the ttiirdjartito the said ^gm- fcs WrHudgins in fee upon the following de- elargd jgusts: ^^ 'TT'That the said trustee shall at any time convey the said lot and improvements to such person as the said party of the third part shall direct in writing attested by one vsrlt- ness. 2. That he wiU convey said lot and Im- provements to such person as the said party of the third part shall give or devise the same to, by last will an;d testament, or by an appointment in the nature of one, which power to make a will or appointment in the nature of one is expressly conferred upon the said party of the third part, notwithstanding her coverture. 3. Upon the death of the party of the first part, he will convey the said lot and im- provements to the said party of the third part. 4. Upon the death of the party of the third part without having made a last will and testament or appointment in the natiure of one, he will convey the said lot and Improve- ments to the party or parties entitled by the laws of North Carolina. 5. The party of the first part shall occupy or rent out the lot and improvements for his own use during the joint lives of himself and the party of the third part, unless the same shall be sooner sold by her order. These declara'tions of the trusts upon whicdi the trustee was to hold are preceded by recitals In the deed, which in substance state that the said Martha A. had thereto- fore united with her said husband, in the sale and conveyance of certain lots owned by her previous to her marriage, the pur- chase money whereof he had received, un- der an arrangement by which he agreed to convey the lot herein described "to a trus- tee for the use of the party of the third part and upon the trusts hereinafter declared." The said Martha died before her husband , without heirs, having made no dlsBggrtton-of Che estat e" under'BSe" forms "conferred in ^thg ?§sCSr<3eea; wpr or .oifiefwTiting. "' John M. Jones, her survivor, diedf In_1879, leaving a ^^gjjl, ..^erein_the^aintiff_JBond. js named " Secu tor and the_ other plalutifiB are ffiiriTevisees. '"'*"' •'"""--'— ■ The trustee d ied In 1872, Intestate, and the defendan gljffler th"" th a flpf snd ant M oorer who is in poasession of the lot are his hpjrfT' at law. Tha ^off^Tirtant Miwrp plalma the lot by ^''•- tnp nf H -fiidgmpnt iJp;ainH^; 1;pa nnlTftrpp-y^ an execution Issued thereon, n s ale and a ahev. The relief demanded la a recovery of the possessio n^ ang aamages for detention against Moore, ang'a ':|udf;merit agamst the other de^ fendants rendantfl rennirlng a conveyance of the lpf>n1 titl e. The defendants demur to the complaint, and the demurrer being overruled and judg- ment rendered for the plaintiSs they appeaL Fruden & Bunch, for plaintiffs. Moore, for defendants. W. A. SMITH, O. J. (after stating the case). The qu estion to be decided arises from the con- ~ s truction of the,, . deed, a nd is . whether an " equitable estate in remainder vests In the ~ plaintijjEs_ett Otlin"g them to demand a cqn -"^ ^ggpg of -the-Legal qsjtate . and thprp being none, fo the university substituted in their place im- 4gmie law fffpybpal '" "" " — — in our opinion, the w ords do not and were nofjleHaca~ttrpoint out any .p articular "pct ^ so ns~"to teke the inheritance remaining , but / 1Eo~leave it to pass under the law a s imdis - posed of propert2;__They sliow sucE estate, aepeSding on a contingencypto iiaTe be«i-in- Ihe'mind of the g rantor .as capa5Ig"am3[b- alsting beyond the life of the wife an d of his own, and to place jtjander the controrof the JawT This being the proper construction of the ■clause upon well established principles, Jbfi" undispo sed of remainder .was freed from the I nterY^gg'T B?e^stjtt&JjnLlthe jvgi£E_J}ficame uni^rSlffilifegJthen expiring life^ estate of "the h usband, and he bec ame the^equitable ytrne F^ the entlr o ^■n^hm■'ypnffo withont consideration a tru st results to the gran ' toi? WaB ' UUhflMyfl' ia ~eB!gffioQ"'law convey- ances, and does not apply to modern convey - ances in common form, with reci tills of con^ X sideration, to the use of the grantee and his heirs. Suc h deeds tn a stranger, a^f^ ^ fnr. .Hdrl when the purpose of the grant is to con- Jvey to a wife, exciuae any resulting trust to " The distinction between such a conveyance and a conveyance to a third party where an- other furnishes the money to whom a trust results, he not being estopped by the recitals and covenants of the deed, is too well estab- lished by our authorities to require illustra- tion. Walker v. Loc'ke, 5 Gush. 90; Whltten v.Whltten,.3 Gush. 191; BarUett v. BarUett, 14 Gray, 277; Tltcomb v. Morrill, 10 Allen, 15; Blodgett V. Hildreth, 103 Mass. 484; Cairns v. Colbum, 104 Mass. 274; Peirce v. Golcord, 113 Mass. 372; Perry, Trusts, 81 161, 162, and cases cited. The subsequent asreeme q t, "»• att ompt hy the wife to convey, does no f aff ect the giif a- tlon, as a trust mu st rpgnu-, if nf gii, tho in- stant the deed passes. Barnard v. Jewett, 97 Mass. 87. The wife therefore held the estate. suhlM t to no trust for th e use and-h enefit of "fHe plai ntiff, .and the reanondenta cannnt h ^ call- ed upon tn r^li>a,ae and asBlpn to him any titl e they may have therein, as her heirs at law . The statute Is peremptory that no convey- ance of real estate b.v a m arried w pman shall be valid vplthout the assent of her husband In writing, o r his jolnin|E; with her In the con- .revance. TraTRt. o. 108, <; 3. ^ tha plain." tiff's wife made the deed tp Wilev wttliout such assent or joinder no tit lff, paaaed. . Demurrer sustained; bill dismissed. x-. RESULTING TRUSTS. 447 BOTSFORD y. BURR. (2 Johns. Ch. 405.) Court of Chancery of New York. 1817. The MU , filed March the 9th, 1815, stated, that the plaintiff, on tho first ivf Mht. 1S1.S. applied to the defendan t frvr the loan of 900 dollars, to which thp flpfpnrlant ngrPPfl. nrn. jided he was permitted to purchase in a 'fa rm ol the Plaintiff, bought hv him of S. 'Siddmore. snhippt to a mortgage given by Skl dmore to J. Bogardus, and which was ad- vertised for sale imder that mortgage, aa secu rity for the payment of the loan. That tEe ~iCtefen3aht accordingly purchased the lamT ^hat the plaintiff had made an agree- " ment to purchase of Peter ' Elmendorf , lot No. 3. lying opposite to th e farm of the plain- ""tiff, for^ SbO UU dollars; iSat jthede fenaant consentei assume this contra ct, and pe ^ come responsible to Elmendo ff ~?or the pur - cnasa money, ' rnat tnis lot was according ly con veyed to the defendant, who executed a mnr^-frnpro tn TClTno ^dOTf. tn SeCUTe the PU T- phas p mnnpy.- T hat Part Of the Purchase money, being 500 dollars, was to be pai d down. ke UP whic h anm. t^e nlaintiff a dvanced to the defendant 90 dollars; tha t he also endorsed to the defen dant a note "of Edmund Bruyn, dated 10t h of March. 1809. fbr 1,150 dollar s, as security for the plain - ti tt's advances' and responsibilitie s; an(^ tTip amount of whicn note the defendant after- •trards recovered . That the aetenaant ha s since sold the property for 7,000 dollar s. The bill prayed for an account and that the defendant mi^ht be decreed to pay oyer to ^^;;2-^1iP Tralf ""°j qftoT rtcrn^^^Qpp; ma^flvaTi- ces, &c. an d that he assign over totoeplain- tlff the secu ritlBS-taS^eiir^er ~?Ffr~gflfeTi ^antr in his a'nswpr n dmitted t hat the plaintiff applied to him for a loan ol apout »uo douars to pay ol^ the rnSPgage on his farm, then 'adyerti &6 fl tOr s'a 'lel "TSa defendant refused to lend the money, bu t ottered to piu-chase tae rarm, and that if the plaintiff repaid the money and interest, and the costs and charges, m one month there- after, tae defendant "woma reconvey to n im the farm", put on no other condition w"Sat - fj^ri T''"^- "° thp i^ifvth nf i\|fay, 1 813. he pur- cliased the propert y (tl^^. goga rdus farm) at lauction, bein^ the highest bidde r, for 930 dollars. wHich hp pairl to the mnrtgaggg^ aiid received _his deed. He admitted the verbal ^agreement between the plaintiff and Elmen ^ dorf, bu t the pl aintiff being embarrassed , ElF menrtorf npiinpfi f n thp defe ndant to purchase^ ^>ip inf- Tfn ^, nnd-he accordingly nia5e~th e pPTghase, for S.eoo dollars, with a view t o secure t o himself certain advantages for pine fiinber attar g~iBlIl d am, src. essential to tne Bogardiia farm, and for no other object or benefit, nnd ^yithont any understanding, ex^ press or Implied, with the plaintiff . The deed was dated 1st of May, isi;^. but ^ e^ cuted the 28th of June; that to make up 4*> dollars to be paid to Elmendorf. tbe de- fer^dant hnrrnwpH nf the Plaintiff 90 dollars, which was not understood to be any par t or the. purchase money, or to give the'plaEtiff any Interest -in th e purchase, which was made solely for tKe'TlE FSgaaffrs~treneflt,- and without any truit, expressed" or implied, whatever. For the residue" of the purchase money, Ee executed a mortgage" to Blmen- dorf , w nicE~ had been, paid off. TMF"thf plaintiff was insolvent, and had coiriTnitted waste on the premises; that in the fall of 1813, the plaintiff being desirous to have gome par t of the" prnperrv. tiieJTlereTinfliTf- t old him,"iFhe would pa y ISi y'doilars mo nth' ly, ne would convey to h'ETsome part of IE? ~ Bogardu's farm, in propo rt ion to the.m Qn.e;i paid; but that if the plai n tiff ]^ailed. the de- fenaant would enter on the prem^eg. That on the 3Uth of Decemberri8T3. thp nlaintift, Tormaiiy assigned to the_defendant, , th£,n,gte "ot iii."Bruyn, as anlndem T^ity for thp wasjtt committed, and for boards of the def end^( sold b y the pl ai ntiff, and agreed to pay 10( "dollars a monHi, and if he failed to do so. , there w a s to be an end of the busine ss, ^t ■ defendant recovered the amount of the note Put tne plai nt iff never p aid a single_sum^a^- gorging to ffie agreement ^Tffe assignment "of Ste note expressed tEe co nsiderati.oitjj£.6e the am ount,. of the note paiff 1^ "the defend- ant t o the plaintiff. That on the 31st of January. 1814, h e contracTed 'to~gsll~tlre — ■ whol e property, on bot h farms, for 7,000 dol^ lars. Put no"~eon.veyjniee naa Deen executed; and hfe 'SSId ltTnTiis~crvTO 7igHr and3oE^Ss — . own use, without any reference to the plain- tiff, or any agreement with him^ The material parts of the evidence are stated in the judgment of the court R. Tillotson, for plaintiff, respondent. Mr. Sudam, for THE CHANCELLOR. The bill proceed a.. gn the assumed fact that the defe ndant pur- ine Bogardus farm, and the Elmen- the Plaintiff, and took chased dorf lo t, as trustee .^_ . _ _ the deeds in his own najme, by agreement Mgv|en„"themj^Jpr JUs, bette"'r ..geeimte-«Tid indeM.ityj_as he wasjDWiged to_ advance, or_ bec^e bojgSBTTojjaearly tEe whole of _jffie consiideratipn money. The de fendant™ Ts, "called on. therefore, called on, as truste e, to account fov the proceeds^f the subsequent sale of "Oie lands, ..s3ttg.r.Jbei ng cred ited for the ad- vances which he has been obliged to make, together w ltii^ a~reasoSaHg_allowapce for hia— services as' the .plaintitC a. agent '""But' as the defend a nt purcha s ed, at public ^! auction .. . jvhat is~c5IIeg"Tn e^Belfl f(lus t^x ^^T^ and took the deed Kn his ownnaTnarand paid his own money, and as he purchased, at private sale, the lijimenaorr mf. and pfli^ \ yf part of the purchase money, principally with ' his own funds, and'gave his bond and m ort- gage" for the resid ue; and aS both these pur- ghases were" ma^[e~wItB~fae "tno'wledge and assent'of the plalnti^, it will be somewhat 1 448 RESULTING TRUSTS. difficul t to raise a t rust to favo ur of th e plaintiff T^tntlioar violating the stat u te of TrauSsT^cEgliiaHte.' (session Tfit,-mi. gP ^is accountT™ This 'would be. to overturn tJUfi. fJtaihnte nffrariffs. an3 so it^was ryrted by Lord Keeper Henley, in the "case of Bartlett V. Pickersgill, 4 East, 577, note; Hughes v. Moore, 7 Cranch, 176. y The plaintifE does not jajetOTg^JS, this case, '^to have_^ p aid anj^ part of . tt ie c onsider ation. I for the purchase by the defendant, at auctio n. .of the Bogi^rdus farm ." The-3Sendan.Pnnr». _c hased th at fa rm for 930 dQ llara_and-paid the ■ money Mmself.— without any advance from t he plaitt tiff.. Ther e is then iio p retext for jet- ting up a r esulting trust here, "a nd aU parol N^Q3^IJ^E-S^i£-£^^SS£JlJSaSmksMe. The conveyance by Bogardus, the mortgagee, and the payment of the purchase money by the defendant, completed the contract; and no parol proof of parol declarations, inconsistent with the deed, can be received. To admit it, would be repealing the statute -of frauds, and would endanger the security of real property resting on title by deed. Nor would a subse- quent advance of money to the purchaser, after the purchase is thus complete and end- ed, alter the case. It might be evidence of a new loan, or be the ground of some new agreement, but it would not attach, by rela- tion, a trust to the original purchase; for the "trust arises out of the circumstance that the moneys of the real, and not of the nominal purchaser, formed, at the time, the considera- tion of that purchase, and became converted Into the land. Tbe-onl y. money t^ aJt-tbe^plaintiff all eges he advanSeTwas gD-doiiarsr-at-the-thile of tE5" purcha se of the "Elmgndprf-lqtr"and~t Ss7 says^'was pafrof fEeTSHT dpRars-^ir^thj delraSaht onreceiving the con veyance. It is. not pretended, that any further payment was inaae oy tne piamoff at the time of the' of the'tt m'-^ . some flm? — - cEase. thougn it is alleged, that some tlnig afterwards, he assip;ned over to the dpf^ nfli^pi t he not e of Edmund Bruyn, In f^ rtl^ ^;r«Tipf. Bruyn. c^ the same object A doubt has been suggested In the hnnT/ ^ g ^ whether a resulting trust can hp tn ia{ainprt, w here only a part ...of the consideration wa a pa id by the party claiming to be cestuv niw ~ b^t. Lord Hardwicke held that It could not; according to the case of Crop v. Norton, 2 Atk. 74, 9 Mod. 233. He there said, that where the purchase money was paid by one, and the conveyance taken In the name of an- other, there was a resulting trust for the per- son who paid the money, but that this was where "the whole purchase money" was paid by one person, and that he never knew it to be so, where the consideration moved from several persons. He, accordingly, held, that as only part of the consideration, in that case, moved from N., there was no resulting trust in him. I doubt whether this case is to be understood to apply; and it cannot be re- ceived as correct, where only a single indi- vidual claims the benefit of the trust; for the cases recognize the trust where the money of A. formed only a part of the consideration of the land purchased in the name of B. The land, In such case, is to be charged pro tanto. This seems to be the langiJage of the case of Ryal V. Ryal, 1 Atk. 59, Amb. 413, and of Bartlett .v. Pickersgill, already referred to. So, also, in Lane v. Dighton, Amb. 409, only part of the consideration of the purchase arose from trust moneys, and yet the decree followed the money into the land. This is the most reasonable application of the rule; and, in the late case of "Wray v. Steele,- 2 Ves. & B. 388, the vice chancellor held, that there might be a resulting trust by a joint advance, by two or more, upon a purchase In the name of one, and that there was no reason for con- fining the advance to a single Individual, to constitute a resulting trust. He did not be- lieve that Lord Hardwicke, ever used the dic- tum imputed to him in Crop v. Norton, 2 Atk. 74, 9 Mod. 233. "We will now examine the proof of the pay- ments charged to have been made by the plaintiff. The defendant, in his answer, admits the loan of the 90 dollars, to make up the nrsi payment , of the 500 i^ 'jfflars \ff Tn imendofl^. He "says, it was simrty " i?ap, anil "fl^ '"^" vanced as a p ay ment by the plaintiff of any part of the consideration. JI 1 The plaintiff's witnesses, Hixson and I Couch, say, that these 80 dollars, or 90 dol- llars, were advanced by the plaintiff, on ae- Jcoimt of the purchase under the mortgage /sale; one of them says, he was present at (the sale under the mortgage, and that the I defendant then told him that the plaintiff bad. Ion that day, advanced him the 80 dollars on [account of the purchase. It will be recollect- \ed, that this sale, under the mortgage of tbi* RESULTING TRUSTS. 449 BogarduB (arm, was on the 12th of May, and the purchase from Elmendorf, on the 2Sth of June, and that the plaintiff charges, and the defendant admits, that the advance of the 80 dollars, or 90 dollars, was at the latter pur- , chase. None is pretended to have been made at the former purchase, and yet these wlt- I nesses fix, with so much precision, the ad- vance at that time. This is a remar kahle In- stance of the inaccura cy andTallacy of parol I jestimoH'^^gd"^ht>' t^^iat gnrino-. ! ing_^ut of the purchase , of either farm by I the "dSendant. because such a trust arises i Mily from the payment, originally, of tE e • Purchase money jor, at leasi, a part or it) ! by theL-PaEtv— aettiag-uD-the-tmsj:. The as L Signmep t nf t^is nntP y^s an after thnng]^t jind tra nsaction; and, according to the latter i^asaS" mentioned in the D in, it was malTB tot tne purpose of procu ring a reconveyance, a matter entirely disti ngrtfOHr'th e trostire S le c o uaid eiiug. — ' Hie answer of the defsnfl; ant puts tne assignment of the note, on ot^ py groun d. If^was made "as an I ndemnity for th e waste committed on the property'^ TEEe" ijiai ntilt, an dfor the boards t)elongm£ _to tT ie aerenaaifr "(whi"cE"~^gri5eerLraa[5!3£lihB pl aintiff), and in order JtcuindiicethQ def qpd - antto give t o the plain tiff the only oppor- tunity fe'requ'ired OI'maEiSg'"somgTTt [?iTi"SfiT^ so as to induce the defendant voluntarily to gpnvey to him some part of the tract nnr - c hased under the mortgage sale." The Plaintiff's witnesses wEb speak , of this Upte, give a „ dlfferent reason for the asaism - ment and one not exactl y conaistpnt with 450 RESULTING TRUSTS. the allegati ons of either party. Hixson says, it was assigned "on account of moneys ad- vanced by the defendant for the plaintiff, on the purchase of both the farms." It does not appear how the witness came to the knowledge of this fact; and considering his great inaccuracy on another point, as I have already shown, we cannot place much re- liance upon the correctness of this assertion, unaccompanied with any reason or authority for making it. But assuming the fact as stated (and we may do it with the more safety, since Upham, another witness, tes- tifles to the same fact, as coming to him from the repeated acknowledgments of the defendant) the assignment of the note, even for such a purpose, cannot raise a trust out of either of the conveyances to the defend- ant. The trust must have been coeval with the deeds, or it cannSf exist at ajl. Atfer a" partyTiaOaggg a purcnase vyit'n M ajxwr" even r eimbursement, may be evidence of some o^her contract, or the ground for some other reiiet. Put it cannot, by any retro^ spective ettect. produce the trust of whi^ ,we are saeaJdng. There never was an in- stance of such a trust so created, and there never ought to be, for it would destroy all the certainty and security of conveyances of real estate. The resulting; trust, not within the statute oF~f rands, and which may be shown without writing, is when the purT chase is made vfrith the proper moneys of ffie" cestuy que trust, and tiie deed not taken in* his name . The trust results from the original transaction, at the time it takes place, and at no other time; and it is found- ed on the actual payment of money, and on no other ground. It cannot be mingled or confounded with any subsequent dealings whatever. They are to be governed by dif- ferent principles, and the doctrine of a re- sulting trust would be mischievous and dan- gerous, if we once departed from the sim'- plicity of this rule. It is a very questionable doctrine, in the view of policy, even under this limitation; and it has been admitted with great caution, as is manifest from the cases which were reviewed in Boyd v. Mc- Lean, 1 Johns. Ch. 582. But there is an obiectinn tn thp, nnrnl proof, in respect to the assignment of the B5|e. "Li was. assi^nea_to the defendant-to^ 2_-I5rZ-larfflSiI^^S^Iunfler ^jgaL. and, as th e Inst rument stated, "in consideration ^'^^^^e'said "^siun of money now_dja,fi.4}B-..salfl note, arid" to" him""!n" banfl paid by the de- fendant."" TO'e~pa'rties"werR pnTif1nflpr| hy t^^eed f rom setting up a different con - g ideratjonr* except upon the allegation of fraud^istake. or surpris e, i Johns. Ch. p. *^- On no other ground can a deed be con- ,tradicted_bj_parol proof. "We must take the ^'°°™^^^^ i°5,J£lg£ly ^3.t iTis statedT 5~be In the ass ignment, except so far "as greyer Jgnflant.hasl.admitted, injiis answegja'differ- ejt consid eration; and thaF admisslonnii this case, pven if wp inin win^ H the ad . mission of the plaintiff , is of no iisp^atn the charge of a resulting trus t ~~ We are, then, brought to this conclusion, that ^ defendant was not, in any respect. a trustee to the plaintiff in the purchase 6} tne Bogardus farm; and that he was not a" trustee in tne purcnase or tne !kimendorf lot, unless in a very small dep-ee, or in the ratio that 9 dollars bear to 3,600. If t^ ip payment of part of the consideration raises a trust. it. ,,.C^rtimiLv. PaHTlnj- raisq it hpynn,1 the proportif m_flf. the, money paid. It can only be a charge, as one of the cases ex- presses it ^ pro tanto; and in t^ja n^sp | -ho Sust, even if admi t te d, is to so inconsider- able an amountTas not to he worth contend - ing for . The difference between the flO (Tnl- lars with interest, considered as a loan, ani^ a rateab le prop ortion of the price fnr whinij thoJRIlTnPTirlnrf 1n|; wag gnlH hy tho '^"fpTlfj _ ant, is ve r y immateria l. But if the plain- tiff IS entitled to pursue tliaFmmTnto '^ '-'■*-^* '-^'-- *^-'" t- *^ fj \J. t. t3 \ji\j \.tJ.tJI,lr a\J.LLl AJ±l,\J l,"V land, the smallness 'ojfttte_ demand will not be an obstacl fe. The proof of the paymen t of the 90 dollars by the plaintiff, as a par t or the purcnase money, is not, however, sat- isjaciorv: ana if it was, there is ev idence t ha,t ttie plalnttff^,§,|j;ei; y i .rda-dis ,fi ^^ the trust. T^TS^weli'spttlPfl th a t-Parol evidence is admissible to rebut a resulting trust . If t he plaintiff, by his bill, sets up an equ ity founaea on parol proof, it may pe rebutted, put aowni'or discii arged. hv narnl prnn" Walker v. Walker, 2 Atk. 98; Lake v. Lake, Amb. 126; Roe v. Popham, Doiig. 24. There may be a parol waiver even of a written agreement. Price v. Dyer, 17 Ves. 356. Now, in this, case. It is in proof that after the sale of the Elm e ndorf lot by the defend- ant, the plaintm aisc iaimecl any right or title to "ft Wp'T ^prTS^i'^rr tn MiTm Trompor, " that the"defenda "<- ^afi "n^fl thP l^nfl Ja Hendrickson and others, ^pd ms\ ^ fi sntne- thm g py it. Tbat the whole was the de^ fga'dawg' and &e~ad nothing to do with. , That h e had failed in every one of his contra'cEs witJi the defendant; and thjj| he Had no interest in either of the said tracts .of lan d. T hat the defendant did with it as he pleased," ana tna.t he had no claim on" the defendant. "Tin Ipsa the defendant chose t o give him something." I am, accordingly, of opinion, that the jilaintiff has failed in charging the defend- afli m k tniRtpp. <" <-'T' rvfTinfif "^' pithpr of the tracts of lapd m^n ^npfifi in tll° ''"' Th(» defendapt is. therefore, boimd to ac- count for the 90 dollars, with interest and tor the amou nt of tB6 n ote assigned to him. ' gRETlffCiBr^ tr" I'Ms i^"WK'at he ottered to ^o by bls^answer . But he claims likewis e the benefi t of the c onsideration, for which Ifee admlts"th"iS~T nrtti 16 have ^ipp" i^saigned. antrWES ir'ffiaajEffl r waste committed on the ' nrnds be t ween th e time of t^fi pnrpyif go hv jJl''_1,1li!CT'^^"t -a nd the aj ^alp ^TiTnent ^f the iiote. and for boards nf' the defendant's RESULTING TRUSTS. 451 which the plaintiff sold. It appears, also, by the testimony of two of the witnesses (Hixson and Upham), that after the pur- phBRP nf tho TBirftPTKirirf int t)y the defen d- ant, and before the sale by him, the plain - tiff had made bene ficial Improvements upo n it ; and as ii appears tnat the plaintiff w as ^ffered to contmue in possession, under sn me Indistinct encouragement; held out by tSedef endant. tha t he might eventually be- come interested in" the lands, if la_eguitabie, u nder al l the pircumstances of this m^?, t^a*' tKejlaintJ^ sjhonld hay^ a reasonableaUow- an ce made him, for such beneficial and pe r- manent improvements as be may have made on the lands, between the time of"&e pur - chase and sale of the defendant, as stated I shall, accordingly, direct a reference to a master, to take and state an account be- tween the parties upon the following prin- ciples^j giz. That he compute the amoun t of the loan of 90 dollars, and of the note as- signed, witn intere st: t nat h6 ascertiim. by' liroof, the damages . If any, arising from waste, commTtted~Ty the plainQffl, or by 'h is JIrecti611, o n any n af Toftb eJands, Jietssceen Ihe time of the pur chase s and the sale there- of by the defenda nt; also the a fflaHBt.. o? boards belonging to the defendant upon the said lands, and sold, or otherwise conv CTted by the plaintiff ; a nd tha tJlfi-j&iMSliieKr tain the value of the ben eficial a nd lasting improvements, if any, mad e by the plaintiff on eith er of the tracts of fand , during th e period a fnrpsaifl; a lso, what would be a reasonable allowance to the defendant for flie use and oc cupation pt-tk&.aa.td..1aTirlR by ' {he platntiff,~during the sa me perio d. C ^U -^ RESULTING TRUSTS. DYER V. DYER. 2 Cox, Ch. 92. Court of Chancery. Nov. 27, 1788. In 1737 certain copyhold nramisfi^ holdeq, oi the mg-Por of Hey tesbur ^ , 0? Wi[lis,"w"ere' granted by the lord, accor d- ing to the custom of that man "v, tn SwftJ i>yer (tne pxaintig's father)^ flnd }iaiv. his wife, and the defendant William (his other son), to take in succession for their liTes^ and to the l ongest lly er of t hem. The pur- cnase m oney was paid by Si mon'Pyer, the father. ~He~siurYiveyiniSr"Wlf6, and lived un^ til 1785. and t hen„„diea , navinsy maae nlF 2viUi.aBd_thereby deyised all his intere st in these copyhold premises (amongst^j!i@rgJJo t£s3i?^M^rr®,y«ingeFj^ The present hill stat ed these circumstan ces , and inaiatpfl that the whole purchas e mon ey being paid by the f ather^ although, py the form of th e gantjjthB_ wife an d tEe defendant had The ]egS3Sfirest.in the ,2remjseg.for.thelr^Iives In succession, yet I n a court of equity they" were but trn'stees rciTtHg father ,""an3~the"Bil) ^h^^^^^^O^ZIE&^lii^nniC^Siud^lsi^ of the father, might be ^uie1;^d .iB.-t^te_J>OB^ sessioTi of thp nrpmispT^yrmngtlie lif e.i}|Llbe defendant TTit> ilpfpnilant insistpd that the Insertion of his name in the grant operated as an ad- vkncement to him from his father to the ex- tjie name of others w ithout that of the pur- ch'aserr ~whether"" Tn~one name or sevj -rai; whether 3o iPtly or successive,— results to the m an who advances the purchase money. • ^his is X^eneral proposition, supported by '^11 the cases, and there is notiiing to con-~ tratllct It: and it go.ea-on.4t-J8tiact.anaiogy" l^ip jl, And this was the whole question In JjlP panso This pggg was vpry fnlly arpfnpri by Mr. Solicitor General and Alnge for plain- tiff, and by Burton & Morris, for defend- ant The following cases were cited, and very particularly commented on: Smith v. Baker, 1 Atk. 385; Taylor v. Taylor, Id. 386; Mumma v. Mumma, 2 Vern. 19; Howe v. Howe, 1 Vern. 415; Anon., IFreem. Ch. 123; Benger v. Drew, 1 P. Wms. 781; Dickinson V. Shaw, before the lords commissioners in 1770; Bedwell v. Froome, before Sir T. Sewell, on the 10th May, 1778; Bow v. Bow- den before Sir L. -Kenyon, siting for the lord chancellor; Crisp v. Pratt, Cro. Car. 549; Scroope v. Scroope, 1 Ch. Cas. 27; Elliot v. Elliot, 2 Ch. Cas. 231; Ebrand v. Dancer, Jd. 26; Klngdon v. Bridges, 2 Vern. 67; Back V. Andrew, Id. 120; Rundle v. Bundle, Id. 264; Lamplugh v. Lamplugh, 1 P. Wms. Ill; Stileman v. Ashdown, 2 Atk. 480; Pole v. Pole, 1 Ves. Sr. 76. LORD CHIEF BARON, after directing the cause to stand over for a few days, delivered :he judgment of the court. The_guestio n between the partigs_ ln. this muse is whether the de f e nda ntlsto be considered .as a trustee for his f atEer rn_ re- spect of his succession to the legal_intigreS of the~ ^pp"y hold premises" In qu estion, ang w hether t he pTamtifC, as.., rep,resehta.tlx.e„af ffie fatiler, is now entltled_tpjthe.Jteafiflt.Of jftiaf trust. I Ihtiinfited my opinion of the qneSQiJn on the hearing of the cause, and I then Indeed entertained very little doubt upon the rule of a court of equity, as ap- plied to this subject; but as so many cases have been cited, some of which are not hi print, we thought It convenient to take an ipportunity of looking more fully Into them, In order that the ground of our decision may be put In as clear a light as possible, espe- cially In a case in which so great a differ- ence of opinion seems to have prevailed at the bar. And I have met with a case in ad- dition to those cited, which is that of Rum- boll V. RumboU, 2 Eden, 15, on the 20th April, 1761. The clear result of all the cases, without a single exception, is that the trust of a legal estate. v y^p|hp][ frpphnii^, g opynoid , "; br leasenold: whether ^^fe^n '"" *^? nampa" of-^. pu rchasers and others jointly, or in ,insil Charles ir'tttM^'g: nBorffptta, Patrick: htkI oth ers, to eSTatl* lieh tit1^;|-" nt.^•^Hin raalaiirl pprKonfll jtwrpr HTtv- i;om»lainantB bring error. Smith & Helmer and Prentiss & BaiJy, for plaintiffs in error. TannicliB <& Tanni- cliff and C. ^. WTieat, for defendants in er- ror. Baker, J. In 1820. a ronns; man, whq was known in the crnniriiinitv aa^viniaf^ L! Irjtev ^WCfti. Was livin g and keeping ho- liTaTa place called UaWMI Il u ' HVi l lH. Ir rt tm ' He Bubscquentl.y re- Tj"tfiH "'^r" "\"i^P piLy.MhlA.-ta-,hiitiHo1f, nnfl nth(^rH. hv his HnppJHl flirpptij>n-.marif> pay! Stile to Georgetta Patrick ; an d many of xnese latter notes w^^-p, applT^rl hxcmAr^l § ages on real estate, and the mo rtga ges. yhis dtrection.'maflP to Raid ftpm^pTty: y.'^r^.enotesandjnortgagesw^^^ r to saiQ Stevenson, andretained in his poB- jession. ang lie conectea all tlie accrued Tn teres tt hereon w h ich was paid prior'To mOfiaJOo^ Said Stevenson dica intestate at Colc heBtefon April (i, iS&, being some ^ o r w yeai ' ij uf a^. - aua lE STjngsuTvrv^ — moved to Lexingtc mo ved to X.exington , in tnaL sLaLr^Tf^ X/tiar les Patrick was appointed a dminis- Tral..!' HI l iiij bit.la tl £r4%e-tkedti t cT Bara- " a.rlpH Patrii-I^ anfl tO Martha (J. PaLTtCfe- aenlaj id G e o r f^etta Patrick were placed upon record by them, and they tnereupon severaily claimea tlTe absol'iatte' loss esslon ot the same, and collecte d anoT appiUDl'lated th< ? renta, n.nH maf le HalBB' " Ifl I and conve.yancesto other persons of ^'lie pres ent bill in chancery was ex hibit- eg m ine mcijuunugu rin; im, Ki frfrr. ny the plainti ns in error. Hannah 1 1 r.nnu fljid others, against (iiiarles P a^ riek and-hia Two Sisters and the purchaser^ of real estate fromjnem. iLi a. claimea in the bill imo nly called WTflYa S liester on the fith fiay r»f April ISj;;], nraa in trutn and in fact on e William L . Stin- ha m.Tn'the state of MaJneZ and'^T^Eir^ C piatrrpTtg in errfls.) are thaiiaLEa.atIa5rot thB saig WilTiam Li[^Sfansoji,..deceaaed. Jt is'a'Sa Tiaimed "in the bill that the deeds~" ^ o t he PAUlcKfe were h6t atillvernd^ Jx c=. lIiBiu lu lUti hl'6- lime fit thfe iflteBtStgTand fliatTire-l'a-t+e23jnen_hedied^as ihe real_ eam m^aS; and 'thatjOS e no tes and ~in or t- py the intestate "rem ainedln p osgession._an^oiitCoUlJiixma^Jii£.lifer ^me. an d were his p.roperty at thetim£,of his ueatfiT' TW^rayer "m the'TOiirrsne!'- ' MnctiXgtat^SjtlEJfipttte^ real estatfe" anti personal^^property in (Ji]^s]tenTe*3eciree(l to be thtj property ol 'tHeplaiBLtiflsriglefc.. rt» .- that an_£Qnveyances^,made.iiy Jjia.. ^PatricEiT'of ,BaAdj:eallE!siate.he ..Bet,asida;.J and"'that the Patricks account for. all JlroiTeyB"_ColJgc.l^ from joutea, -bonds, ac- troa'B^s. and Bales, of flal(£.prrfperJ:y. An- swers were .'jSJed jauj. issues formed, and ' n^iW the hearing,j2l_tha. caus&Jtbe_couft TOTHtrd" tKaf the nrnmiHHfjry "OtfiB, WhV^ trmrtmfl^n^v^Wp iq-wrTT^t^:?^^^ flPliPA nntlriunn hTi -H airt StgyCTPon in hfa nte-time to Geor getta Pa trick so. jaa-taia-. vest ner with Ifie title tcrTBSm "or the pro- Ceear Wefeorrana-^at sald-Georgetta TJOTTjnder cltrimcOCcwnerghipr and since ffig-^eath of said Stevenson, cqllected $^^LAl Qn saia notes : and that said !B6407 ^ and the unpaid notes which f"" h f fl P 4!«tie pay able TO saia ateve nson, belonged "BSTT — tlr-traF' ^rdereff~imd~(Tp (irpp^ Said G eofgStta pay_.Jaia 456 RESULTING TRUSTS. by her, and deliver the residue of the notes RO paya.hle tn Stevenson. _____^— ^— witnin tA)^ days'to the aaroinistrato r. and t hat the "aaiBiniStr^tnr account to the es tate for Ra id^monev and notes. The CQar.t fnrFmTT mpnd Hint plH'"""° '"'"'•rnr •^'"'° ""^^ ""- titled to any other or furt her relief in the premises than that above mentioned, and jil to all other and turtiier matters me " i'laintiffs in error are dissatisfied with the limited measure of relief that was de- creed to them upon their bill of complaint, and brins the record to this court. We deem it unnecessary to consider in detail the various ' assignments of error. There are several matters in controversy which may be disposed of quite briefly. We are inclined to think that the evidence suffi- ciently shows the identity of the ma: commonly called William L. who died at Colchester, in. this state, in 1R81 , with the William L. Stinson of Bo- denbam, in the state of Maine, who left that state early in the present century for the purpose of avoiding the vengeance of the brother of a girl whom he had wronged. We will also assume for the purposes of the decision that the allega- tions of the bill and the proofs introduced at the hearing make it manifest that plaintiffs in error are heirs at law of said William L. Stinson, deceased. ,^t is claimed that by plaintiffs in error Waij no such deIiver.Y ot the aeecl^ gT5TftSErnl"rae3~tIierlTn as'wo'urd THem tug tme a to "nie laTidB. ' ii wHui g-t seem tnatj in oroer to dLve^jt the severn.l ) e;raiat or51ji'Bp(i deeoFof tlieir titles, it is essentiaT" to tKe'claimlm^ e'bv said plam- feeds should be re - garded as pro^erl jjel ivered." "i^nt, waiv- ffig""EEis, and waiviffg~miy"Consideration of the testimony tending to show an actual delivery of the conveyance by Stevenson, Rljas Stinson, to Georgetta Patrick for said grantees, ^'p •'•'''"'' •'•*'nt p fanfflpient. -- ^eliverv nf the deeds ap fl ^r'^eptnnpe nf tEL same by the several P-ranteear^arnerl Hiery- i n appeay g trtirn tllfi "•^i'^^""" Stevenson . '** "'TIrlinPi *'''° pnrpVinBoa anrl talringr the with all domi nion over them when they ^gnVerea tneUi Co Stevenson, al ias STttn-— .- son, ana, as tne laLier waTnot a g raii^:^--^ m an.y ori Bs HeefU it wa.» r,^t ■^g^pTni— rn^ he Should de^j y^^r theTn ^£S. talhfi-g-rfi'" *"pps, nrtha Dea^j^elivery of the gTElsTife-time . " T' ' t ug" g'eecils to~ Stevenson, and the accen iT anee oi tnem D.y mm. a na tne snBBp-- ^KntnatIfi^catioff= b.v 'ihu tlj HiadrtTOTrff'tliFnam^'or fe resnective grantees to wh om the par - \\l\nr M "'•*'•"••* "^ _landJiaaji£Sfl..^ea- __^__ He also collected and used, as he ' sawfltHBe interest m ^B' eyatiU'img^ia tlgTTn th.3 notes and mortgages , i de eSpreBgl .y directed the aeeds to be made as they were gade. He n-tuseg to accept conveyan ceg madeto h lmselt a ^ grantefe, dilld iJUiJlslje ct' that the deeds shouldnameone or another {If- en, or the Patrick girls ; Me ot ten spoke, , the propert.Y as Mactie's, Charley's^ or _Jeorge's. He irequenti.y s poke of having ncHltflU t)roi7erL.y, dfl U Of having Lause d Bi e -' deaag lU UH maUB m toid Children: arid safd that when he got tnrougii w itii tB a pfUtl ril' t y TKarlerSn a-the girl^ sHailTt r HUve lt'.""TH!S^iten""said that he intended. >erty should go to the Patrick chii-| dren ; that Charley and the girls should/ have it ; that no one else had any right to| it, or should touch it; that be had it fixed J — had it all arranged; and that no one else could do anything with it, From these facts, and from numerous other cir- cumstances that appear in the record. |^ is evident that when w^]iinm j.^ stin jon;— • imL-Hliifl'Bli'Tti ynri'^T" 458 RESULTING TRUSTS. flppil'i in tha TiHTTiB nf nnp nr a nother ot th e defendants in err oi*! ^gr ^P wel} as the sev- eral venjfa Ea.JuilIy35ifiMed.-tp ves t in saia " §everal defendant s in error the'legai titles To Burli "feg;,e^a3B: Bma mat wnen ne' " Karie d money and too .^ _. notes 5^',mi3j£Aame orTSfeorgetta yat'ricrk ^^ffljenled to vest i o-ber the legal title to said money and mortgages; ana mac n^ ' fflaO"t tt1 T . V f i rumJe tr™ t o WH&^-v'e and ret^m to his o wn Hs e a lire- f Btato ia the BUUll-ii bl e irt^-a^oc» "It^ goi;!" rpaH^v n rtttjli). auU Tirorl y gages, and to give to dCTenoarits in error , reBPfetUveiy, and to vest in them, several- ly, tho romain^loi. f^j^^ >a^i.1.,^ ^f tl^p ^^„^ table interest, estate, and titls in hhi.^ fo.i fgtaxe,uafll eB. and laortgageR. rear rjsa JS-, Such was the manifeat TrrF5nHf.ri ^ the inteatatfl. There la no rule of la wqr " nf pniiitv ttiat wi ff operate to prevent Biit^ iptHnHriTi jmmg eing carried into effect.' .TLe means that "we re adopHiU by tWeiir- testaTe"lQr^tTir:Du1yoseqr-s:Egg MDlishin^ tflig.^ gho thoi-pnftpr hpiri the title as trusteo for plaintifC; that she received said trust, and agreed to sateiy hoia saia iann ^nr n|ainr.itt a ^efitl'lJia t at the purchase the land was un- faaproved: mat plainti ff imnrnved it. apd ha'a ever sin ce co ntrolled itj that Mrs. Hagan died, intestatii, WlUiout issue, October 10. 1894. leaving the flftfenr lant ^p hpr nnlv gnrvivincr parent ;" that defendant cl3 |iTnR ap undivided one-half "<* '^fllr' '"""^ '^t '"hpritfl""*^ through said Mary B. Hasan, but that in truth and in fact, said Mary E. Hasan did hot own said land at the time of her dea th, hut held it aa . trustee, as aforesaid . Plaintiff prays that he m ay be decreed X ^)\>^ tha nwr^pr in ree simpR MTirl that hP t^P hnlPtwI-in m said premises. tiuieted In hiH title as ap;qipat- the flaims nf thp i\^fpn(\. ant. The defendant a.nswp.re fl. admitting thai) the title was in Mary E. Hagan, but denying that the plaintiff paid for the la ^fi with hia jwn money or property, ana denying that Mr s. Kagan held the same in tr^iat for t ]ip piointifp^ or ever recognized such trust; admits the death of Mrs. Hagan, and that he is her only surviving parent. He avers that Mary E. Hagan had o wned and pontrollp d aali^ land .since ue^ '^T^pr ''"'^^ nnil ^'"'^ ^""^ r'"°°"°'ji')T'__ ahd cl aim of ownership -lyprp f^vpfse to the paim or ine plaintiff, and tTf°^ ^^"^ "'"'"i "* ^the "plamtirr is barred. He prays for decree awarding him the ow nership of an undivided one-hall Ihltii'yKL lil aaiU land. I'h e action was BffSUglit lii Adair county; Where the land is situated, but, by stipulation of parties, was transferred to and heard in the district court of Union county, by which a decree was en- tered in favor of the plaintiff as prayed, from which the defendant apjiealed. Affirmed. D. W. Higbee, for appellant MaxweU & Winter, for appellee. GIVEN, J. 1. A consideration of the ques- tions involved renders it necessary that we first determine the facts. There is no dispute 1;haithp_p1aintifr pii|i-nhggprl thp lanr^ iti cop- ttoVfersy In 1S73. It being then unimproved ; that he caused the title to De conveyed to his Vjfe-.wim, continued to hold the same unti l ffe-r dPflt h nrt"'^" """i ""SiH - when she died . intestat e,, aBdr- ^llli OT i t Issue, leaving the dfr fendant her~'mly sumving parent, jjuring Tnp.gp yMrg~tTip| p iaintin' and his wife T PStf'e^' upon an adjacent farm in union co initVr and the plainti ff iTnnrnvP( i. controlled, and usedlh e J^nd In quest ion as his own. "" Plai ntiff, being l^ggwnai flUdlc'ted io the usd 'grsgong drmEl and not always prudent in the managem ent of his nnan cla^ affai rs, cau sed the deed for jTii'a lapil tn Tip-maflP^fn hi.*! wife, without" her kn^-ygipdj;e. intending; that sh e should hold It in trust for him: and thereafter wh£n.:informed yf thp fa ct. Mrs. Hainan acqmesced fax it, an d repeatedly a nd unifor m ly felirougSgut said :^ars ac£nbwled^d'"tEa't fee^ iand"'was' the I Toperty o f ^ he r is contentioii'as follows husband. Appellant states '^The matters neces- sary to be proven In order to create the result- ing trust claimed by appellee (neither fraud nor mistalie being claimed) are: (1) Payment^ by appellee with his own money; (2) inten- tion on the part of appellee at time of convey- ance to create a trust; (3) conveyance to de- , ceased; (4) Imowledge on the part of deceased i''^ of appellee's intention to create a trust, and assent or failure to dissent after that knowl- edge." The claim of the plaintiff that he paid for said land with his own money is denied. and the detendant contends that after the con- tract of purchase from Shaw, and prior to the execution of the deed or payment of the pur- chase price, appellant promised appellee that, in consideration of a promise on the part of the appellee that he would place the title in the name of Mrs. Hagan, appellant would fur- nish him help in various ways, to the amount of the cost of the land, and that appellant did so furnish such help by contributing horses and other property at various times. Upon this issue of fact, we think, the appellant has failed to support his contention. H is true, he did fur nish tn thp plaintiff. a.ndh)g_wjfe ^ibrses and other nrapiertyat various times, but iLwas mostly before thi s land was contracted for, and without y^ferpnc^ thereto . It fairly appears that in every instance that money or property was received from appellant it, Is ac- counted for as having been a gift without con- dition, or as being settled for otherwise than on account of the purchase of this land. That appellee paid for the land, and caused the con- veyance to be made to deceased, with the intention to thereby create a trust, and that, after knowledge of these facts, deceased as- sented thereto, we think. Is abundantiy prov- en. 2. It Is contended on behalf of the defendant -' that much of the evidence from which these facts are foimd Is Incompetent, because It re- lates to communications between husband and wife, and communications and transac- tions with the deceased Mrs. Hagan. In Dy- sart V. Furrow, 90 Iowa, 59, 57 N. W. 644, it Is said: "If the transaction or communication was personal, it must be known alike to both, and therefore either may deny. * • • Per- sonal transactions and communications, as contemplated by the statute, are communica- tions between the parties of which both must have had personal knowledge." This rule is approved in the later cases of Cole v. Marsh, 92 Iowa, 379, 60 N. W. 659, and Martin v. Shannon, 92 Iowa, 375, 60 N. W. 645. The purchase, payment, and conveyance of the land were exclusively transactions between ^ 460 RESULTING TRUSTS. tue piaintiit and tne yenttor, Mr. snaw. it was not until after the transaction was com- pleted by the making of the conveyance that Mrs. Hagan learned that the conveyance was to her, and assented thereto, as shown by a number of witnesses other than appellee. The only evidence appearing in the record that comes within the objection is the statement of the plaintiff, as follows: "I then told her I had deeded to her, to take care of it for me, and she said, 'I can do it.' " This statem«it Is clearly incompetent, and must therefore be disregarded. 3. We now inquire whether, under the facts as we tind' them, tiie Jaw raises a resulting. or, as it Is sometimes called, a pregHUHpPVer frust in favor or appeuee . in Cotton v. Wood, 2E) " Iowa, 44, the fainifiar rule is thus an- nounced: " Where, upon the purchase of prop- erty, the con sifler aiton is paid tif OHg.' a iffl'the l ^^"trtfe con vgTOd to aaoth er, a resulting bTist,la_:^gpgbj;^raised^^|^& tie .pe£.8?ir named In the deed will hold the property as t rustee of the party pavin j a f th^ j;ppsid ,fira,ti(}fV" 1° f^^- ry on Trusts (siection 124) It is said: "The general foundation of this kind of trusts is the natural equity that arises when parties do certain things. Thus, If one pays the pur- chase money of an estate, and takes the title deed in the. name of another, In the absence of all evidence of intention the law presumes a trust from the natural equity that he who pays the money for property ought to enjoy the beneficial interest." The parties to this trans- action being husband and wife, another rule requires consideration. In Cotton v. Wood ii is further said: "But if ths nprs^n t» ■o.h^^ the convevance is tnade be nnc fnr party paying the c ffn°^'i«-°tifi^ i° t.^^.^, "Ml" , gatlon, natural or moral, to provide, thp tranfj . acnon will be regfarded prima facie as an kA- Vancement, arid the burden will rest on the o ne"' Who seefc -g fa pnti|f^ffg» -nif* tt'ist ffif ^^? tirnrT^^ gt of the payg ejs£_the mnsillfirnlinn tojiver- -Wima thft-JSmanninMnn In favnr nf f^p ],.gpi j;)tlP hy miffininat itvMiesce." In the absence of the obligation to provide, It could not be questioned that the law would raise a trust In favor of appellee from the facts established. We think appellee haa- <^'"r flTPrrnmr tlm presumptio n of adva n cement, by his own fn^-_ '3ence"'as "to his intention, by evidence of re- jieatefl arlmissirniH of Mrs. Hagan that tt e land was his, and his continued occup atinn "and ^^ imtiipoT uiiniul ol~^ . This being a tru st raised bv operation oflaw. and not by TeaSdfT et any declaration or creation of the parties, section i»S5 or tne (jode of 1873 does not ap- ply. The facts In this case are In many re- spects the same as those alleged In Cotton v. Wood, supra, and the rulings In that case support our conclusion In this. We think the decree of tbe district court Is correct Af- firmed. /\ OONSTEUCTIVB TRUSTS. 461 FERRIS T. VAN VEOHTEN. (73 N. Y.. 113.) Court of Appeals of New York. 187a Ac tion by Eliff Ferris against Jo hn Van Vecnten. JBTom a judgment of tne Ueilfel'ai ' Term afflfming a judgment for plaintiff, de- fendant appeals. Reversed, T he substantial allegations of the com- plaint are that plaintiff, during the lifetime of Eliza Elmendorf, commenced an actio n against h er which was pending at ner neatn; tnat sne nied ii^ 1S.5S. leaving a will, by which defendant . V an Vechten and one Brod- head were appointed executors; that by the will a~power of sale was given to the exec^ nt ors tn s(^ll sufficient of her real estate fo pay her debts, reserving. If possible, the homestead farm; all of her real estate wa's devised to said executors in tr us t to receive the rents and profits and apply them for pur - poses specified, during the lives of two per- sons namea, ana upon tn^: deat^ the samS. to go to the grandchiid ren of the testator; Xh&t plaintllt's action was continued after the y testator's death against said executors, a: plaintiff recovered a juggmeni ior .lii.t^-ii.? aritt ML thai; snips of rpfi j estate were made by the executors under the power contained In the will m ore t han sufficient to pay a ll of the testators aebi^sl that upon tne faflkl "ac^ counting of de feud aiit Van Vecnten. as ex- ecutor, he file d.- an account by which it ap- geared that ^aI^e sales of real estate were made by th e execu tors, fi^^ lar p ;e sums real-. Ized therefrom, which were used and ap- plied i n kee ping In repair the homestead farm meutioTnecrm the will, and for principal and interest on a mortgage, and for taxes on s aid farm, am nuntinp; in all to ii;B..548.93. which said sum '''°" YflJiJltPftntiliffij/'"'^ '^'"I Sf! ^^ with; that the surrogate disallowed these credits as against c reditors ,^ ^nd adjudged and decr^pd lSarthe re"iemained-ln. theli^ds of the .ex^ ecntors the sum of $5,523.02 properly ap- / plicable, among o t her things, to the paymen t ^ of piaintm's lu dgmeiiLL-jMid . directing pa y- ment oi the same; . that executions were is- sued upon said judgment and returned unsat- isfied, and that said Van Vechten wa s insol- vent; that pe n ding the proceedings before ~ the surrogatesaid Brodhead died, ana tB& proceedings thereafter we r e continued in the name of Tan * Vechten.' The other defend- ants "were tlie cestuis que trustent and the remaindermen. Jjie nrayer was that the amount of the judgment with costs be ad - judged to be_ a lien a,ffit11,„charge upon th e •homestearl farm, and for judffl i ent accord - " ■ine;ly . The facts were found substantlafly as alleged. Also that the executors had ex- pended for repairs, taxes, and interest on the homestead $1,784.47, and within ten years they had expended $3,258.23 of the $5,123.07 received by them. The judgment of the sur- rogate and proceedings before him were of- fered in evidence for plaintiff under objec- tion by defendant. The lower court made the following conclusion of law: "That the application of the proceeds of the real es- tate sold by the executors to the payment of taxes and repairs upon said homestead farm, and of the principal and interest upon the ■said mortgage, was in violation of the rights of the plaintiff as a creditor, and that said proceeds were the primary fund out of which ■the executors should have paid the plaintiff; that her lien thereon is superior to any right of the defendants Elmendorf, or either of them, to retain the same; that to the ex- tent necessary to pay the debt due the plain- tiff, together with the costs awarded to his counsel by the Surrogate's Court and the General Term of this court, the plaintiff has the right to resort to the said homestead farm, and have the same, or so much thereof as may be necessary, sold, and out of the proceeds of such sale to be paid, with the costs and expenses of said sale." Charles A. Fowler, for appellants. J. New- ton Fiero, for respondent. ALLEN, J. This is, I think, a case of the first impression, but it is sought to be brought within the principle of equity by which, at the instance of a cestui que tcust, trust funds which have been misapptopriated by the trustee may be followed and reclaimed, so long as they can be traced and identified, and any property or choses in action into which they have been converted impressed with the same trusts as those upon which the original funds were held. The claim of the plaintiff briefiy stated is, that moneys realized from real estate sold under a power of sale for the payment of debts, and held by Van Vechten, the sur- viving executor, in trust for the plaintiff, a creditor, have been wrongfully and in viola- tion of the trust applied to the payment of charges and incumbrances upon the lands of the testator described in the complaint, and which were devised to the executors in trust, to receive the rents, issues and profits" thereof, and pay the same to the wife of a son of the testator, to be applied by her to the siipport of the fajnily of such son, and upon her death to convey the same to the children of said son. The relief demanded by the plaintiff is in substance, although not so stated, that she be subrogated to the rights of the creditors and Uenors, whose incum- brances have been pro tanto discharged as against the lands to the amount paid thereon from the trust funds. The funds can hardly be said to have been invested in the lands, or in the mortgages, or other charges paid by the executor. There was no purchase of either, but the incumbrances were partially satisfied. The lands were relieved from cer- tain, charges by the diversion to that purpose of funds held in trust for creditors, as al- leged, and it is sought to revive the liens by subrogating the plaintiff to the rights of the 462 CONSTRUCTIVE TRUSTS. original creditors. Whether a cestui que trust can be subrogated to the claims of cred- itors, to the payment of whose debts the trust fund has been misapplied, need not be determined. See Winder v. Diffenderffer, 2 Bland, 198. Regarding the payments by Van Vechten as investments in the lands, in relief of which they were made, the primary ques- tion is "whether in that view a case was made upon the evidence for the relief de- manded. It must be conceded that trust moneys may be followed into lands to the purchase of whiph they have been applied, and the cestui que trust may elect whether to hold the unfaithful trustee personally re- sponsible, or claim the lands, the fruits of the misappropriation of the funds, or cause the lands to be sold for his indemnity, and look to the trustee for any deficiency. Lane V. Dighton, 1 Amb. 409, per Lord EUenbor- ough; Taylor v. Plumer, 3 Maule & S. 562; Thornton v. Stokill, 19 Jur. 751; Oliver v. Piatt, 3 How. 383, per Story, J.; Story, Eq. Jur. § 1258 et seq.; Shepherd v. McEvers, 4 Johns. Ch. 136, 8 Am. Dec. 561; Dodge v. Manning, 1 N. Y. 298. To follow money into lands, and impress the latter with the trust, the money must be distinctly traced and clearly proved to have been invested in the lands. WhUe money, as such, has no ear-mark by which, when once mingled in mass, it can be traced, it is, nevertheless, capable under some circumstan- ces of being followed to, and identified with, the property into which it has been converted; but the conversion of the trust money spe- cifically, as distinguished from other money of the trustee into the property sought to be subjected to the trust, must be clearly shown. It does not suffice to show the possession of the trust funds by the trustee, and the pur- chase by him of property— that is, payment for property generally by the trustee does not authorize the presumption that the pur- chase was made with trust funds. The pro- duct of, or substitute for, the original trust fund follows the nature of the fund as long as it can be ascertained to be such; and if a trustee purchase lands with trust money. fTcourt of equity will charge them vrith a re- , suKing ffiist 'fbElSe-PeJS on b, enefl cially Inter- ■Sited. But it mus t .be . p le ar that the Iflfl^^ ^ave been .paid fo,r_o ut of the trust money. This is illustrated by Perry v. I'Jiiiips, 4 Ves. 108. There a trustee for the purchase of land died without personal assets, but having purchased lands, the estates purchased were held not liable to the trust, the circumstan- ces afCording no presumption that they were purchased in execution of the trust. If the purchase of land with the trust moneys could not be presumed when such purchase would be in execution of the trust, a fortiori it should not be presumed when it would be a violation of the trust ^he rightof following the trust proprerty, in t he idew form which~£as been given"tolt,~or in the propert y substitutofl for it npaaoc, ,,|,iy yrhea the means of ascertainmftn^ f^ij r "which of course is the case when the suV ject-matter is turned into money and mixed and confounded in a general mass of prop- erty of the same description." 2 Story, Eq. Jur. § 1259, and note 4. When the purchase- money, paid by a trustee for lands pur- chased, corresponds very nearly with that of the trust fund to be invested, that with other circumstances, as the coincidence of the time of the receipt and disbursement, may suffice to show that the property was actu- ally purchased with trust funds. Lowden v. Lowden, 2 Browne, Ch. 583; Price v. Blake- more, 6 Beav. 507. The money paid by the trustee for lands or omer property, or for choses in action sought to be subjected to" the original frusCTnust be identified as trust monejs; and this is clearly recognized in all the cases, and in very many of them this has been the difficult question of fact upon which they have hinged, and the principle to be de- duced from them is, that when the trust fund has consisted of money, and been min- gled with other moneys of the trustee in one mass, undivided and undistinguishable, and the trustee has made investments generally from moneys in his possession, the cestui que trust cannot claim a specific lien upon the property or funds constituting the invest- ments. Hill, Trustees, m. p. 522. This is consistent with the cases cited and relied upon by the counsel for the plaintiff, and the doctrine is recognized and appUed in each case, and as the facts were proved to exist in them respectively. In Moses v. Murga- troyd, 1 Johns. Ch. 119, 7 Am. Dec. 478, the property held in trust was readily and cer- tainly traced. In Kip v. Bank, 10 Johns. 63, the money, the subject-matter of the trust, was kept separate and distinct, and deposited as such. The court say the only check to the operation of the rule now under consid- eration is when the property is converted into cash, and has been absorbed in the gen- eral mass of the estate so that it cannot he followed or distinguished. It is the diffi- culty of tracing the trust money, which has no ear-mark, that prevents the application of the rule. See, also, Hutchinson v. Reed, Hoff. 316, and cases by Asst. V. Ch., 2 Kent Comm. 623, 624; Trecothick v. Austin, 4 Mason, 29, Fed. Cas. No. 14,164. "" / There can be no presumption as against the defendants whose property is sought to be affected by the trust, which attached to the moneys realized by Van Vechten from the sale of lands imder the power. So far as appears they are innocent of all wrong- doing, and have not colluded or combined with the executors to violate the trust, and it is not found that they assented to or had any knowledge of any misappropriation of the fund, and if made trustees in virtue of I thelr ownership' ot the lands they are maae BO. no t- by reason of an y apt of theirs, but aaT" |he_ legal result of the fact that trust mone;^ C0NSTRUCTIVB3 TRUSTS. 463 have been misapplied by a trustee ot- tha. fimd to relleye ot a burden their lands, held in trust frfr another nurpnap by the same jp jstee. The fact, Should be cleayly. at le^st satisfactorily proved. This ^n^al_fact, upon which t he right of the tf IamHg"to''any relief in this action aepena s, is "oSSf alleged argumentatlvely In the complaint by the statement that it appeared in the account of the executors filed with the surrogate that large gale s of real estate of the testator had £gf;L-I^ACbL2!X- *P "^ .f^ftf.mt.nrs. _ on ! accoun t of which they had realiz ed large sums of money, "and thaFtt^aTso appeared that large 5mOtmtmg"Bi8n^'gfrmag~t haeIFom ~were ISSjlfefl aud tippllHJ in KeeplH fThe ho mestead farm in repair7^nd_ l arge_sums were paid out f or_ J p'^fgt_aj?J". ^^^P^ on^^ld farmi '!rhere wTs'no^proof "that one dollar of~Sie moneys received ^or lands, and whi c h con- ^^^itll ^^^ ^^''^ ^""""^ ^"^^ naid or appli ed to any of the purposes mentioned, nor isffie fact of s uch misapp ropriatidn of the tiH?'^^ mon eys rovmd. nor was" any Tact proved or tound irom wniph such d1y(? j a i pn and n^ ^ appropriat ioH~o£-SPecific trust moneys^can^be legitimately inferred. The only proof given upon tnis branch of the case consisted of the proceedings before and the decree of the sur- rogate lipon the settlement of the accounts of the executor. If these proceedings were competent evidence for any purpose, or to establish any fact as against the defendants, the present appellants, they were only com- petent in respect of the matters then in is- sue, and which were determined by the sur- rogate. The questions before that tribunal related solely to the accounts of the execu- tors and their liability to the creditors, and those entitled under the will of the testator. The executors were charged with the amount of the inventory of the personal estate of the deceased, together with the amounts received upon the sale of real estate, yho rppngyq TeaHzeA'-^oni the sale of lands were |.he nri- 7a^^' fun d "fOT~ ffie payment of debts, and "credltorsTiad th"e nrst claim to be paid from tB0S e"'moheyg;"afid't5FlLrst"r^irf^ of the ^^ gffEOTg" in' respect of sucn monefg"WgS"T3 'cfe fljtorSf Such liabilit y was discharged by proof, of paymen.t.taja:eiiitaia_^whether made ftom the identical moneys received by the executors, or from other moneys of their own, or subject to their control. The moneys real- ized from lands sold in excess of the debts of the testator belonged to the present ap- pellants, as devisees of the land subject to the power of sale, and the liability of the executors to them was discharged by like proof of payment to them or for their use, from any moneys of the executors, whether received for lands sold under the power or from other sources. Upon proof of the plaint if fs debt she w as of~cgu^e~SHHed to a decree for its pay- m'ent on .j^^ggmissjon b y the execuFors in ffieir^^filed account of the moneys received by them properly applicaBTe~f3"TO "payment Proof of payment to or for the use of the devisees of the lands was no discharge of the liability to the plaintiff, and the fact that payments to or for the devisees were set up In discharge of the plaintifTs claim was wholly unimportant. It was unimportant upon that accounting whether Van Vechten, the siurviving executor, had the money In his own pocket, or had disposed of It to some third person. His liability to the plaintiff upon that accounting was the same, and the decree was necessarily the same in either event. _In no aspe ct o f the case was the sur- ^rogate called u^611 tt) trace and Identify th e^ money yMfelVgtr Py the ffdcottiTH^ executor Ml the Sij,iE^of"!ands: The ggarges ag'g'iBgrgie jSecutoi^ yconslsteg' of Ihe gross receipts," and" the cfi'sciJarges" of "the grosT' amount or~tne severaT^^nigfi'ts" and" disbursements 'as' al- loweg By'"th6'surftifg ate, arid the decree was for the p ayment,pf.a gross* amonntr arid' was _a general judgment a gainst a surviving" ex- _ecutor rqr a general balance^due. __hot 'f or a s urrender or 'paying over of spec ific moneys _(ir securiti'es, and as betw een the plainBH," a ^creditor, and the appetlanfi^evrsee s it "19^ "adjud ged that pSL'ym'ent claimed to have been inade'liy'lSe' executor'To or fo r tti'eTatterdid riot disch arge the obligation" to TEe"former, aSS5S.Baynieiitsjv.gs^&eK.dlSaJ10"Vred as S^'^IJ'iR.i.C^aJi^'ed Ij;^ Ijhe executOT. It was riot ' found upon the trial of the present action by the court, as a fact, that the specific moneys received by the executors for lands sold, and which were trust moneys for the payment of debts, were in any way paid to or applied for the use of the devisees in payment of the incumbrances upon the homestead farm, al- though the general forms of expression, to a limited extent, seem to imply the fact. The learned judge did not Intend to so find and does not seem to have regarded it as impor- tant. He merely speaks of the moneys which the executor used as, or in place of, the trust moneys and in discharge of his ob- ligation, as trust moneys; but that does not make them the specific trust funds received. It is found in general terms that moneys to an amount stated w ere received f rom the sale of real estate u nder the power^ and tjiff _prlncipa !_and interest upon mort gages up on _ "a ngTrepaira of th e-farm ,f:9 fhe am punt it) thg " agg£gg.at&jtated,^l,thg„ifflftfis aniLammiaJa. of the various rece ipts, or of the several pay- 'meriti^, ftt-e not tamifl, iior is II tound that tlie* payment s were made'''&om. the^"money3 re- ceive d, or "that the mone ys were misap plied to these "p^^n tg. ' "if "reference is had to the accounteand schedules filed by the ex- ecutors with the surrogate as the basis of the accounting, which is the only evidence of the dates and amounts of the several receipts and disbursements, there is nothing by which the moneys received for lands sold can be traced and identified as the moneys paid for the Improvement of the homestead farm, or in discharge of Incumbrances upon it There 464 CONSTRUCTIVE TRUSTS. Is neither coincidence in the times or amount of the receipts and disbursements of moneys upon the account, and for the purposes men- tioned, to connect the one with the other. and lead to a presumption that the money re- ceived from the one source was the same money that was paid out. The inference would rather he that the moneys, when re- ceived, were mingled with other moneys of the executors and used as occasion required, either for purposes connected with the ad- ministration of the estate or the Individual purposes of the executor. Whatever pre- sumptions might be indulged in favor of the equities of the plaintiff as a creditor against the defaulting trustee or his representatives, were he or they the holders smd claimants of the property sought to be xeaJized, none can be Indulged as against the present appellanta who are Innocent of any participation In the wrongful acts of the executor. If, upon the statement of the accounts by and before the surrogate, the evidence in this case and the findings of fact by the judge, the principle contended for by the plaintiff could be so far extended as to authorize a lien upon the lands in aid and relief of which payments were made by the executor for the benefit of the plaintiff as a cestui que trust, there would be no difficulty in giving every cestui que trust, as creditor having a debt of a fiduciary character, a preference in respect to the gen- eral assets and creditors at large of the trus- tee or debtor, a lien upon property which the trustee or debtor might have purchased dur- jUpoii another trial It may be shown by com- /petent evidence that the moneys received lupon the sale of lands were kept separate Ifrom all other moneys, and specifically ap- /plled to the payment of the charges and In- Icumbrances upon the homestead farm, and If ISO the difficulty which the plaintiff now en- fcounters will be obviated. The eaultlee ar a clearly with the plaintiff, b n^ thi>y fBn^py override the legal rutes of evJlPTifp, nr [^ gp- rorcea_by an unauthorlzeamlarp:ement and extension of the equitable doctrme wiiicti liaj^ at tke..loundatiOTi of the action . There la i^^_ truth no competent proof as against the ap- pellants nthpr ^^]Hn Vnn Vechten^ that the payments claimed to h a yg^ en made bv hi m m relief of, JJiie- homestea d were ever madgL ' The proofconsists of the accounts unverified filed with the surrogate by the executors; in which they credit themselves with these payments, and the decree of the surrogate disallowing them, and adjudghig an amount stated to be due the estate from the said executors, and in their hands properly ap- plicable to the payment of the plaintiff's claim, which was less than one-half in amount of the sum decreed to be in the hands of the executors. The surrogate mere- ly held and decided that if the payments had been made as claimed, they could not be al- lowed to the executors upon that accounting. This is the extent of the decree. ..-^t is possible, although we do not intend I to intimate an opinion upon the subject for Ithe reason that iiarties have not been heard, and the question is not before us, that the plaintiff may have relief In the presjgnt ac- , ^on without tracin g and idfjatifying the trtst favor of one class of creditors, but would be V moneys as now being invested in the home- an unauthorized extension of the equitable stead farm, and by treating this complaint doctrine invoked by the plaintiff, which de- mands for Its application that the trust fund or money shall be traced and identified as existing in the new form into which It has been converted. In no other way can the equitable title of a cestui que trust to spe- cific property be established. This question, which is decisive- of this ap- peal, is fairly raised by the exception to the admission, as evidence generally in the case, of the proceedings before the siu-rogate over the objection of the appellants that they were immaterial and incompetent, and also by the exceptions to the conclusions of law and the judgment of the court upon the trial. It Is proper to say that in passing only upon this one question we do not Intend to Intimate an opinion upon any of the other questions made and ably argued by the learned counsel for the respective parties. The case bristles with interesting and difficult questions, but as the one considered is decisive of this appeal, and the other questions may not re-appear or be obviated by evidence upon another trial, we do not deem It necessary to consider them. as a creditor's bill, filed upon the return of an execution against Van Vechten unsatis- fied. Upon proof that Van Vechten had made the payments alleged, under circum- stances which would give him as a trustee a lien upon the trust estate for the benefit of which they were made, it may be that the court vould deem It a proper case to enforce the lien for the benefit of the plaintiff— that is, apply a debt due the judgment debtor to the satisfaction of the judgment. Such a claim In favor of a judgment debtor would not be beyond the reach of a creditor's bill. As Van Vechten's account as trustee of the homestead farm has not been settled, there would arise none of the questions made upon the last trial as to the effect of the statute of limitations as affecting the claim of the plaintiff, upon the theory upon which the case was tried. But without considering this suggestion farther, the judgment must for reasons stated be reversed, and a new trial had. All concur. Judgment reversed. iw CONSTRUCTIVE TRUSTS. 465i UTTLE et al. v. CHADWICK et al. (23 N. B. 1005, 151 Mass. 109.) Supreme Judicial Court of Massachusetts. Sufieolk. Feb. 26, 1890. jirpose of raising the annuities. ajcaae. 'JjiTf""assume tRft — it wa'S, TBb trust would Inequity. ficlijtthe Sm wiclj^tfie RoxbHrylnstitutiop'torSavingH. and othe*®^ ^ George. E. Smith, for defendants. Hor^ ace G. Alien and Wm. B. Bowlaad, for Roxbury Institution for Savings. 0. Allen, J. The executor and trustee nnder the will ofivirH. winmrns. fi^.v|Tio-^ Bignea nis properhT in trnat tnr fflg h^na^^^ m His cre li^f'-fir^h'^ iinnjnt.gr.+a ^.-nflp^ tl ^a t, STiil seeK CO esTaplish a trust in tha.t nrnr e rty, ana -to oDtain a decr ee tnat asin.onn Be set aiiart ■ Py me assignees, and approT liTHiikiRtitiStVMaaiasnM charpfed with anysuch trust. aq,d thi mg appears to De the only one tha t the ranrrthe h^ ariiTg- .yso f.nnvfiVPrl yfaa is find- eVlueffl'TB WOUlU Wgffa'Htr-Ther^'ishSthin g to Hno-w-mMT: mer e was ev^er any d isfrmnr Trnat fnnrl in thp bands ot W llhamHrttlg' executor and trustee, whicn was represent- ed bv-arLv amecific property , ae was also 'the resid uary leg g Srthe a^ets or t "ffe^estflte f-imsistPfl nf a d.ePt an e froTTi himseii . The rest waschiefl; no tes secured by mnj ;'t, ^ a, ^ 4Br _ no real estate. 'Jjie moneys received by T gilliams from -theestate were mixed with his OYm . J d^t^Aid the d6btS fand other leg- acies, and rendered an ftfiftbunt, caliea ^Inal . " i ! r wmiih he uhkl ' U ' Hd lilmHtiir wU rr "j^alanceot this aficount retaiuea to nay a nnuity of S6Q0 r.er annum to Charles Riiy - — "TSlO.OOO. " J t was his duty to set apa-rt his sum', and to keep it separa tely mvegT ed". but he did not do BO. I' M settlement of the account merely an d we J in at ne was T|ai(^ rpgpnuaihio t.^ y'that'amtrr;ahd, it be Tia.ri a^tlLap art, as be ou ght to ha ve done, " the trust w ouigTraveattacBBa lu throi>. ^ rty thus 'BB l auaTt T But, since tnis was neye nSCTJgZ!£Ee.triist w as never impresseg" jipqa 'aTiyMer-ifig property or money neia hy wiiiTaTnc^ There was merely an indebt- edness or liability on his part to account for that sum. This indebtedness or liabil- ity might itself be the subject of a trust, just as if it has been the indebtedness of another person. The trust, however, in such case, attaches merely to the indebted- ness, and to whatever may be realized from it, and not to anyparticnlarpropertyheld by the debtor. The view most favorable to the ann ultantg;;:$a 3.t c ^pi ild he ta^enia " Jnigr^TTnamB'"IiaiLSesttm.of !Bi.».uOu in money in El hande. whicb waa retainea assume then attacn _____ TO It- a ntfiiiras the monCTTymHtr-Bg-raMtraM- Of 'traced , 'but no longer. When! trust thon^TTW:: comes BO mixed up with th e trustee's indi- " vidual funds tnat it isimpPSBtbiB to tra ce -Shd identify ii a B"entefiBt~nrCS-BOTH 6"Bire- MHc iaQa£Ety.tffrtraBt"ceaigeB:"-Th^-eTTg!-ti will go as far as it can in tb'ui'Tracing ang following trust money; but when, as a matter of fact, it cannot be traced, the eql- uitable right of the cestui qne trustto follt low it falls. Under such circumstances, if' the trustee has become bankrupt, ' tbe court cannot say that the trust money is to be found somewhere in the general es- tate of the trustee that still remains. He may have lost it with property of his own. And in such case the cestui que trust can only come in and share with the general creditors. The Attorney General v. Brig- ' ham, 142 Mass. 248,7 N. E.Rep. 831; How- ard V. Fay, 138 Mass. 104; White v. Cha- pin, 134 Mass. 230; Bresnihan v. Sheehan, 125 Mass. 11; Harlow v. Dehon, 111 Mass. 195, 198, 199; Andrews v. Bank, 3 Allen, 313; LeBretony.Peirce,2Allen,8,13; John- "son v. Ames, 11 Pick. 173, 181, 182; Tre- cothick V. Austin, 4 Mason, 16, 29;' Ferris V. Van Vechten, 73 N. Y. 113; Frith v. Cart- land, 2 Hem. & M. 417; Holland v. Hol- land, L. R. 4 Ch. 449 ; Isaacson v. Harwood, L. R.3Ch..225; Perry, Trusts, §§ 345,836- 842; Story, Eq. Jur. §§ 1258, 1259; Lewin, Trusts, (8th Ed.) 241, 857, 892. Thereis noth- ing to the contrary in Bank v. Insurance Co., 104 U. S. 54, 66-71, and In re Hallett's Estate, 13 Ch. Div. 696, 708-721, which are chiefly relied on by the annuitants^ In Wisconsin a majori ty ot the court ha s^flft'^- ciared tJia"tTns"not'necessary to trace the truBt-fiindrlitmy-any epeclfirprai^m'tyin or- TliBr to enforce the trust, and that, if it can "be traced into the estate of the^faultlng sent ortrustee,'ffiisissufflcientr "WTsT'lOir 409, THoCeod W. Rep. ■ETaOT7^~Wis. 401, 409, 28 N 173, 214. But this seems to us to be stated J[n the pre sen t case, there is no such thing as tracing the jiO.OOO into any p a rticular pieces ot property covered bTTfffi' aSSifeft- i n6fat by w ilnams t o i' lUB Uuiren i- wf - Ii tg c reditors. Tbe inoBt~T;hat can pg'TOW-^s " tnac n e*^ad this money, and aisp _._otner •^AHevB-Uf BlH.fl.wTi''."ann nflen"aITTEemon' ^^B together, as his own, for several years, and that, riMiinjiir!aiiiiiMritiiTB«»>imi«:[ailw7. on one Lem EiTto-llie-Bank- o f Washburn for collection: tliat Jun e 2. i 1893, the draft Ti^ ^presmted to_Lemke. and paid by his check''on"t he"Baiik of W ash b urn on the same day; _t hat June~3,"l893, the Bank ofWashburn lssuedr" its '''a?atr'o 5Pffie Union National Bank, ite (Dhicago corre- spondent, for the proper amotat, ' a'nd"'f 6r^ ^ardedf he" same to the "plaintiffj ^hat" t he pla.i ntitf~ fligi5orTeceif'e the dfafTjaSSISBS j, 1^93^ and depoiited the same immediately In th e Fir st National Bank of Chicago; thai "tliat bank presented the draft to the Union ^ationaTBafflr-jmrng. 1893. but payinrnt 13i,er ppf,.was-xgCliaed ; that the Union Nation- al Bank then hacl~o money to the credit of t&e Bank o'f''Wasb jbu Tn, but did have' coltat^ eirals. lei:t mere expressly t'o protecf'oyer- ^afts. more than enough to protect the draft in question, as well as all other drafts issuea upon that bd-lik Oy the Batik at WashbttrnT jnat June 7. 189^J'ttie l^anF^r washburn closed it SLdOflrs, Probert having faile d; that June 26. 1893. Probert perfected an assign- ment for the benefit of h is creditors, and on Ihat day the defen dant, ~Eis assignee, XSo S T>ossessi , ^m 'H' M:ii rlfis . proper ty, including tfie Bank of Washburn and its effects"; that Proh- feert's assets atjhe time of "such assignment amoun ted to $261,716.31, and "his^liabilities ^o$^^^2;3rj;^at-;Bu^aggetS consisted of comm ercial paper, secu red and unsecured^ stocks, real estate, etc.; that ^^ money what- ^ver^^ SZlnto'the hands of said assigneg, jxcept a few pennies and a $2_.50' gold piece; " that a ll money'in' the Bank of" W ashburn on and affer June 1, ISSST was useJ in, paying chet y| prp^j.p. claimin g his own property intrusted to Pro- faert's oSn k, nor the ^vailg or the nroceeda stroys a tr ust f und by dissipating it^alto- gether, tEererr^ajns nothing to be"lhe"suV ject of the trusT Buti_§9jSSg" as. the trust . property~can be traced and followed into ^ ^thfe^'-p i■6pefty^nto" whictCit 1M§I£S?° ^°^' verted, that rem ains subjec t to the trust" "id. p. "71^. That case 'is as"&v6raDie"to"t'he claim of the plaintiff as any In the English courts; and yet It nowhere sanctions the proposition t hat tne ow ner of the pro^er^ or money Jntrusted 13 entitled to a prefer-" ence over other crecKIors of "anTpsolTeht e s- tate out of prop erty or assets to "which no part of the trust fund. Q rJ:hejpr5 egggrtBere- is traceable. ■W, thereof , but is here claiming « nrpfcy^ncp oYCT othar creditors out of other assets and j ^TOperty of i:'robert received by the defend- ant by Yirtue of such assignmen t. Cartainly, there Is no statute in this state giTlng a^" such preterence, nor any authorizing an in - soivSt debtor, by war of a voluntary assign- ment, to give such preference. Laws 1S83. c. 349; liaws 1885, c. 48; sections 1693a, 1693c, Sanb. & B. Ann. St. It follows that, if the plaintiff Is entitled to such preference at all, it must be by virtue of some established principle of equity or the common law. The early English cases only went to the extent of holding, in effect, that the owner of property Intrusted to an agent, factor, bailee, or other trustee could follow and retake his property from the possession of such trus- tee, or others in privity with him, and not a bona fide purchaser for value, whether such property remained in its original form, or in some different or substituted form, so long as it could be ascertained to be the same property, or the product or proceeds thereof, but that such right ceased when the means of ascertainment failed, as when the subject of the trust was money, or had been con- verted into money, and then mixed and con- founded in a general mass of money of the same description, so as to be no longer di- visible or distinguishable. This is apparent from the opinion of Lord EUenborough, C. J., written nearly 80 years ago, reviewing the adjudications prior to that date. Taylor V. Plumer, 3 Maule & S. 575. But the more recent rule in England as to following trust moneys is broader, and goes to the extent of holding, in effect, that "If money held by a person in a fiduciary character, though not as trustee, has been paid by him to his ac- count at his banker's, the person for whom he held the money can follow it, and has a charge on the balance in the i inker's hands;" that "if a person who holds money as a trustee, or in a fiduciary character, pays It to his account at his banker's, and mixes it with his own money, and after- wards draws out sums by checks in the ordi- nary manner, * * * the drawer must be taken to have drawn out his own money, in preference to the trust money." In re Hallett's Estate (Knatchbull v. Hallett), 13 Ch. Div. 696, overruling some former En- gli^ cases. In that case there was no dis- pute but what the money received by the trustee 'for ttie property wrongfully con- verted was deposited with his bankers to the credit of his account, and that the same "remained at his banker's, mixed with his own money, at the time of his death." But in the leading opinion, by Jessel, M. R., In tggaSJLCayiPgjts indebtedness, bejfore Tna,k- " that case, and by way of quoting Mr. Justice j JSSJt^ assignment,"^? not authorize a pref-" Fry approvingly, it is said: "The guiding i-«rence to^the plaiHttff,_^^oVeifrProber"PFofer principle is that a trustee cannot assert a ^©•editors, out" of his other^jrpperty and as- All such (SsesTiirn "upon the question of fact whether the trust prop- erty or fund, or the proceeds thereof, are traceable into any specific property or fund. Ex parte Hardcastle (In Re Mawson), 44 Law T. 524. Thus, in Re Cavin v. Gleason, 105 N. Y. 256, 11 N. E. 504, it was held that, "to entitle the trust creditor to such a pref- erence, it must, at least, be made to appear that the fund or property of the insolvent, remaining for distribution, includes proceeds of the trust estate." To the same effect, At- kinson v. Printing Co., 114 N. Y. 168, 21 N. E. 178; Holmes v. Oilman, 138 N. Y. 376, 34 N. E. 205. In Little v. Chadwick, 151 Mass. 110, 23 N. E. 1005, the court said: "When trust money becomes so mixed up with the trustee's individual funds that it is impos- sible to trace and identify it as entering into some specific property, the trust ceases. The court will go as far as it can in thus tracing and following trust money; but when, as a matter of fact, it cannot be traced, the equi- table right of the cestui que trust to follow it fails." To the same effect are Goodell v. Buck, 67 Me. 514; Steamboat Co. v. Locke, 73 Me. 370; Englar v. Offutt, 70 Md. 78, 16 Atl. 497; Thompson's Appeal, 22 Pa. St 16; Columbian Bank's Estate, 147 Pa. St 440, 23 Atl. 625, 626, 628; Appeal of Hopkins (Pa.) 9 Atl. 867; Bank v. Goetz, 138 lU. 127. 27 N. E. 907; Neely v. Rood, 54 Mich. 134. 19 N. W. 920; Sherwood v. Bank, 94 Mich. 78, 53 N. W. 923; Elevator Co. v. Clark (N. D.) 53 N. W. 175; National Bank v. Insur- anc€ Co., 104 U. S. 54, 68; Peters v. Baio* 133 IT. S. 670, 693, 10 Sup. Ct. 354; 2 Story, Eq. Jur. §§ 1258, 1259; 2 Pom. Eq. Jur. § 1058; 1 Lewin, Trusts (1st Am. Ed.) 241. In speaking of followins trust moneys in- to other property, it is stated in one of the New York cases cited that "the right has its basis in the right of property." It never was based upon the theory of preference by reason of an unlawful conversion. This is made clear by a recent and well-considered opinion by the supreme court of Rhode Island. Slater v. Oriental Mills (R. I.) 27 Atl. 443. It f oUows that th e mere fact that Proberfs bank used the plaintiff's money_ 470 CONSTRUCTIVE TRUSTS. , sets. This is made plaia by an illustration having judicial sanction In the case last cited: "Suppose that an Insolvent debtor, D., has only $1,000 of property, but is indebted to the amoimt of $2,000, one-half of which Is due to A., and the other half to B. In this condition of things, D.'s property can only pay fifty per cent of his debts. By such distribution, A. and B. would each be equi- tably entitled to $500. Now, suppose T>., while in that condition, collects $1,000 for P., but instead of remitting the money, as he should, he uses it in paying his debt in full to A. By so doing, D. has not increased his assets a penny, nor diminished his aggregate indebtedness a penny. The only difference is that he now owes $1,000 each to B. and F., whereas he previously owed $1,000 each to A. and B. Now, if F. Is to have prefer- ■ence over B., then his claim will absorb the entire amount of D.'s property, leaving noth- .ing whatever for B. In other words, the $500 to which B. was equitably entitled from his insolvent debtor, upon a fair distribution of the estate, has, without any, fault of his, been paid to another, merely in consequence of the wrongful act of the debtor." Id., and dissenting opinion in 69 Wis. 123. See, also, McClure v. Board (Colo. Sup.) 34 Pac. 763. We must hold that the plaintiff hjjp nn igp-ai nght__to .a , pref ereniie.JM: £r. Probert's oth er cfSaitors 111' the distoibution o f hia estate i n ffieTSanSs of .the defendant, -a&-aasigaS£uiS^ inio' "^^h.np partjot the^'laintifflg.jnoney 'fia's tieen traced._ *~TBir IS iaot~a mere question of practice, nor the construction of a lociil statute long acquiesced in, but is a" question of general equity Jurisprudence; and It Is very Im- portant to the people of the state that this coint Bhoijld, at least on such questions, ad- here to the principles of the common law so weU established as to become elementary. It is especially essential that the state and federal courts, on such questions, should be in harmony. In so far as McLeod v. Evans 66 Wis. 401, 28 N. W. 173, 214; Francis v.' Evans, 69 Wis. 115, 33 N. W. 93; and Bow- ers V. Evans, 71 Wis. 133, 36 N. W. 629,— are in conflict with the rules above indicated, they must be regarded as overruled. The order of the circuit court is reversed, and the cause -is remanded for further proceedings in accordance with this opinion. ORTON, O. J . (dissenting). This case is ruled by McLeo"* ypnprai term (30 N. Y. Supp 4ftav rAToi-ginP' a indp-- ment for ylaintiff. nlaintif f Mpj^^gla Ro- versea. Charles E. Hughes, for appellant. James B. Dill, for respondent ANDREWS, 0. J. This case presents a question of considei'able practical importance. It relates to the equitaoie junsaiction oi the court, un der special circumstances, to toiio w prumjtjdij of personal property in the hand s df a fraudulent vendee or his^ general a~s- signee r^y tne penent or creditors at the suit of a de frauded vendor, who by false pr fr tenses w ag map cea to part with the proper^ upon_ CTedti, t he proc eeds sought to be "f 6aeJlie3"bemg tiie sums'ttne irom subvendeed' > rRWi535Ti(ffRnCBiin39 sales by bim made before the d iscovery by ' the plamtifC of the fraud. The LMIS UUUh which the question arises are substantially conceded and are free from complication. Between the 20th dav of Septemb);^, isaa and the 20th day of October following, th« plaintiff sold and deliver ed t, i} the mercantile' Arm of C. Burkhalter & Qn.. doing business in the city of New York, sugars of vario"^ qualities on credit f< ; fs Ig not a purchaser for value, and stands in no othe r or better positaon than his assignor as re - ^sgCg-a-i^g gfTO Ireack tiie proceeds of the samrtrrBu rkhalter & On- OnodwiTi y. Wert- iieimer, »a N. Y. 149, 1 N. E. 404; Barnard V. CampbeU, 58 N. Y. 76; Ratcliffe v. Sang- ton, 18 Md. 383; Bussing v. Rice, 2 Gush. 48. It is claimed that the general creditors of the firm will be prejudiced if the plaintiff is allowed to prevail, and that he will thereby acquire a preference over the other cred- itors of the insolvent firm. Ttiit g"""'^^ nra^. jtors ha X£ J0 eqn iyy n'; Hg-Vit tn y,a-^a gpprri. ~PHated~Jort ne pavment nf thpjr rip.hts t hA C^rtv of the plaintiff, or propertv to which IS equita .hiv~e ntitled as between it and ijurkfialter & Co^ They, ■S(5TraFas appears, advanced nothing, and gave no credit on the faith of the firm's possession of the sugars, assuming that that element would have had any bearing on the case. If the sugars had existed In specie in the hands of the assignee, it cannot be doubted that the plaintiff on rescinding the sale would have been entitled to retake them, and the -general creditors are in no worse position, if the plaintiff is awarded the pro- ceeds, than they would haye been if the sugars had remained unsold. Much was said on the argument upon the difference be- tween a trespasser taking and disposing of the property of another and the case of a sale of personal property to a vendee induced by fraud. It is the law of this state, as in England, that title passes on such a sale to the fraudulent vendee, notwithstanding that the crime of false pretenses is included in the statute definition of a felony, but which was not such at common law. Barnard T. Campbell, supra; Wise v. Grant, 140 N. T. 593, 35 N. E. 1078; BenJ. Sales (6th Ed.) § 433; Fassett v. Smith, 23 N. Y. 252; Ben- edict V. Williams, 48 Hun, 124. But a pur- chase procured by fraud is In no sense, as between the vendor and vendee, rightful. It was wrongful, and, while a transfer so In- duced vests a right of property in the. vendee until the sale is rescinded, the means and act by which it was procured was a violatiou of an elemental principle of justice. But tha rule is that a sale of personal property In- duced by fraud is not void, but is only void- able on the part of the party defrauded. "This does not mean that the contract is void until ratified; it means that the contract is valid until rescinded." When a contract of sale infected by fraud of the vendee is consummated, and the property delivered, the vendor on discovering the fraud may pur- sue one of several courses. He may affirm the contract, and an omission to disaffirm within a reasonable time after notice of the fraud will be deemed a ratification. He may - elect to rescind it, and thereby his title to the property is reinstated as against the pur- - chaser and all persons deriving title from him, not being bona fide purchasers for value, and a purchaser is not such who takes the property for an antecedent debt, or who pur- chased the property on credit, and has not paid the purchase money or been placed in a position where payment to a transferee of the claim cannot be resisted. Barnard v. Campbell, supra; Dows v. Kidder, 84 N. Y. 121; Matson v. Melchor, 42 Mich. 477, 4 N. W. 200; 1 Benj. Sales, p. 570, note. Upon rescission the vendor may follow and retake the property wherever he can find It, except in the case mentioned, or he may sUe for conversion. When these legal rem- edies are available and adequate, clearly there is no ground for going to a court of equity. The legal remedies in such case are and ought to be held exclusive. But in a case like the, present, sfegre there is na_ad- equate legal remedy, either on the contract oT sale or for the recovery of the property In specie, or by an action of tort, is the power of a court of equity so fettered that where it is shown that the property has been con- verted by the vendee, and the proceeds, in the form of notes or credits, are identified beyond question in his hands, or in posses- sion of his volimtary assignee, it cannot im- pound such proceeds for the benefit of the defrauded vendor? The only reason urged in denial of this power which to our minds has any force is based on the assumption that it would be contrary to public policy to admit such an equita ble principle into com - mercial transactions, kut with the two Itations adverted to, and which ought strictly to be observed, (1) that it must appear that the plaintiff has no adequate remedy at law, either in consequence of Insolvency, the dis- persion of the property, or other cause, and (2) that nothing will be adjudged as pro- ceeds except what can be specifically Identl- 474 CONSTRUCTIVE TRUSTS. fled as suchj_ftssliiess-lateMSl3 .saiLftavB ad- equateTJTO^ctioo. Indeed, the disturbance I would be much less than is now permitted In foltowing the property from hand to hand until a bona fide purchaser Is found. The case of Small v. Attwood, Younge, 507, is a, \&ry instructive case, which iuTolTod a large amount, was argued by eminent coun- sel, and received great consideration. It sup- poi-ts, we think, the equitable jurisdiction invoked in the present case. It was an ac- tion by the purchaser to rescind a contract for the sale of mines and mining property induced by fraudulent representations, and • to recover the purchase money paid to the amount of about £200,000. , The court found the fraud and rescinded the contract, and made a decree for an accounting. On a sup- plemental bill being filed, showing that the purchase money paid had been invested by the seller in public securities in his name, which he afterwards caused to be put in the name of his mother, and that the purchaser had no other means adequate to repay the pur- chase money, the chancellor, on an application for an Injunction restraining the transfer of the securities, held that the money paid could be followed Into the stock purchased, and granted the Injunction. The case of Cavin V. Gleason, 105 N. Y. 256, 11 N. B. 504, wag an attempt to fasten upon the estate of an insolvent a. preferential lien for money put into his hands by the plaintiff for the pur- chase of a mortgage for her, and which he applied, without authority, to the payment of his debts before the assignment, with the exception of a small sum ($30), which went Into the hands of the assignee. The court held that the money, which the Insolvent had used to pay debts prior to the assignment, was not a perferred debt, but susta,ined her right to be paid the small sum which the assignee received belonging to the trust This case points the distinction. - The char- acter of the debt gave it no priority. The fund had been dissipated, and could not he traced among the assigned assets. There was no equitable ground of preference ex- cept for the small sum mentioned. Upon the whole case, we are of the opinion that the judgment on the report of the referee was correct, and the order granting a new trial should the.'«fore be reversed, and the judgment on the report of the referee affirm- ed, with costs. Judgment accordingly. All concxir. CONSTRUCTIVE TRUSTS. 475 GAVIN V. GLEASON.i ai N. B. 504, 105 N. Y. 256.) Court of Appeals of New York. April 19, 1887. J. B. Gleason, for appellant. W. H. John- 8on, for respondents. ANDREWS, J. It m ay properly be conced- ed that_tte_SSi2QSO^SlSIHl20£EIS5H! the petitioners on the third day of January, !883, for Investment in the Gould fa61'tgffge. constituted in his hands a quasi tru st rung, Vhich White was bound to use tor me sp'g cific purpose contemplated, and which lie coma 'not divMt to UllV UlliUi uuu nilhuut Lummlf ting a breach of trust. The securities wmcff formed the greater part Of the lund were im' 'mediately (iuiivbriiuiu lulu moiiey, &&a att^ fUnrit y m Wttlte to mage feilcih T6Bt'fet'sion was impliedf but only as a means of realizing the money with which to make ine mortgage loan. The securities, while in thO hailUB 'Of ^hite, remained the property ot tlie pellU ta- ;B^s; alta, wiien CJiiYertfea B^ bM, tlieir tlTle •a ttaciiea to tne proceeds ot tiie conYengT property. White collected the securities actu- a lly or (jonstructiveiy. ae couectfefl t he notes ngfliiiRt thiril persons, and drew the monc "? artB omitted. formed their duty with the aid of rules for the exercise of their discretion, which were the utterance of equity and good conscience, intelligible to their understanding, and available for their information; otherwise, trusts heretofore existing have been traps and pitfalls to catch the faithful, prudent and diligent trustee, without the power to avoid them. But It is not true that there is no under- lying principle or rule of conduct in the ad- ministration of a trust, which calls for obe- dience. Whether it has been declared by the courts or not, whether it has been en- acted in statutes or not, whether it is in familiar recognition in the affairs of life, there appertains to the relation of trustee and cestui que trust, a duty to be faithful, to be diligent, to be prudent in an adminis- tration intrpsted to the former, in confi- dence in his fidelity, diligence and prudence. To this general statement of the duty of trustees, there is no want of promulgation or sanction, nor want of sources of informa- tion for their guidance. In the whole his- tory of trusts, in decisions of courts for a century in England, in all the utterances of the courts of this and the other states of this country, and not less in the conscious good sense of all intelligent minds, its recog- nition is uniform.. The real inquiry therefore is, in my judg- ment, in the case before us, and in all like cases: Has the administration of the trust, created by the will of Charles W. King, for the benefit of the plaintiff, been governed by fidelity, diligence and prudence? If it has, the defendants are not liable for losses which nevertheless have happened. This however aids but little in the exam- ination of the defendants' conduct, unless the terms of definition are made more pre- cise. What are fidelity, diligence and dis- cretion? and what is the measure thereof, which trustees are bound to possess and ex- ercise? It is hardly necessary to say that fidelity imports sincere and single intention to ad- minister the trust for the best interest of the parties beneficially interested, and according to the duty which the trust imposes. And this is but a paraphrase of "good faith." The meaning and measure of the required prudence and diligence has been repeatedly discussed, and with a difference of opinion. In extreme rigor, it has sometimes been said that they must be such and as great as that possessed and exercised by the court of chancery itself. And again, it has been said that they are to be such as the trustee exercises in the conduct of his own affairs, of like nature, and between these is the dec- laration that they are to be the highest pru- dence and vigilance, or they will not exon- erate. My own judgment, after an examination of the subject, and bearing In mind the na- ture of the office, its importance and the 512 DUTIES AND LIABILITIES OF TRUSTEES. considerations which alone induce men of suitable experience, capacity and responsi- bility to accept its usually thankless burden, is that the just and true rule is that the trustee is bound to employ such diligence and such prudence in the care and manage- ment as in general prudent men of discre- tion and intelligence in such matters employ in their own like afCairs. This necessarily excludes all speculation, all investments for an uncertain and doubt- ful rise in the market, and of course every thing that does not take into view the na- ture and object of the trust, and the conse- quences of a mistake in the selection of the investment to be made. It therefore does not follow that because prudent men may, and often do, conducv their own aSairs with the hope of growing rich, and therein take the hazard of adven- tures which they deem hopeful, trustees may do the same; the preservation of the fund and the procurement of a just income therefrom are primary objects of the crea- tion of the trust itself, and are to be pri- marily regarded. If it be said that trustees are selected by the testator or donor of the trust, from his own knowledge of their capacity, and with- out any expectation that they will do more than, in good faith, exercise the discretion and judgment they possess, the answer is: First, the rule properly assumes the capac- ity of trustees to exercise the prudence and diligence of prudent men in general; and second, it imposes the duty to observe and know or learn what such prudence dictates in the matter in hand. And once more the terms of the trust, and its particular object and purpose, are in no case to be lost sight of in its administration. Lewin, in his treatise on the law of Trusts, etc., (page 332), states, as the result of the several cases, and as the true rule, that "a trustee is bound to exert precisely the same care and solicitude in behalf of his cestui que trust as he would do for himself; but greater measure than this a court of equity will not exact." In general this is true; but If it imports that if he do what men of ordi- nary prudence would not do, in their own affairs, of a like nature, he will be excused, on showing that he dealt with his own prop- erty with like want of discretion, it cannot be sustained as a safe or just rule toward ces- tuis que trust; nor is it required by reason- able indulgence to the trustee; it would be laying the duty to be prudent out of view entirely, and I cannot think the writer in- tended it should be so understood. The Massachusetts cases (Harvard College v. Amory, 9 Pick. 446; Lovell v. Minot, 20 Pick. 116) cited by the counsel for the de- fendants, are in better conformity with the rule as I have stated it To apply these general views to the case before us, and with the deductions which necessarily flow from their recognition: The testator gave to each of his children $15,000, the interest on the same, so far as required, to be applied to their maintenance and edu- cation, and the principal, with any accumu- lations thereon, to be paid to them severally on their majority; appointed the defendant, Talbot, and his partner, Mr. Olyphant, ex- ecutors, "intrusting to their discretion the settlement of my affairs and the investment of my estate for the benefit of my heirs." If X am correct in my views of the duty of trustees, this last clause neither added to, nor in any wise affected the duty or respon- sibility of these executors; without it they were clothed with discretion; with it their discretion was to be exercised with all the care and prudence belonging to their trust relation to the beneficiaries. Such is the distinct doctrine of the cases very largely cited by the counsel for the parties, and is, I think, the necessary conclusion from the just rule of duty I have stated. What then was the office of the trustees, as indicated by the terms and nature of the trust? If its literal reading be followed, it directed that "$15,000" in money be placed at "interest." The nature of the trust, ac- cording to the manifest intent of the testa- tor, required that in order to the mainte- nance and support of infant children, whose need, in that regard, would be constant and unremitting, that interest should flow in with regularity and without exposure to the uncertainties or fluctuations of adventures of any kind. And then the fund should con- tinue, with any excess of such interest ac- cumulated for their benefit, so as to be deliv- ered at the expiration of their minority. Palpably then the first and obvious duty was to place that $15,000 in a state of se- curity; second, to see to it that it was pro- ductive of interest; and third, so to keep the fund that it should always be subject to future recall for the benefit of the cestui que trust. I do not attach controlling importance to the word "interest" used by the testator, but I do regard it as some guide to the trustees, as an expression of the testator, that he did hot contemplate any adventure with the fund, with a view to profits as such. But apart from the inference from the use of that word, I think it should be said, that whenever money is held upon a trust of this description, it is not according to its nature, nor within any just idea of prudence to place the principal of the fund in a condition in which it is necessarily exposed to the hazard of loss or gain, according to the success or failure of the enterprise in which it is em- barked, and in which by the very terms of the investment, the principal is not to be returned at all. It is not denied that the employment of the fund, as capital in trade, would be a clear departure from the duty of trustees. If it cannot be so employed under the man- agement of a copartnership, I see no reason DUTIES AND LIABILITIES OF TRUSTEES. 513 for saying that the Incorporation of the part- ners tends, In any degree, to justify it The moment the fund is inTested in bank, or Insurance, or railroad stock, it has left the control of the trustees; its safety and the hazard, or risk of loss, is no longer de~ pendent upon their skill, care or discretion in its custody or management, and the terms of the investment do not contemplate that it ever vyill be returned to the trustees. If it be said that at any time the trustees may sell the stock (which is but another name for their interest in the property and business of the corporation), and so re-pos- sess themselves of the original capital, I reply tliat is necessarily contingent and un- certain; and BO the fund has been volunta- rily placed in a condition of uncertainty, de- pendent upon two contingencies: First, the practicability of making the business profit- able; and, second, the judgment, skill and fidelity of those who have the management of it for that purpose. If it be said that men of the highest pru- dence do in fact invest their funds in such stocks, becoming subscribers and contribu- tors thereto in the very formation thereof, and before the business is developed, and in the exercise of their judgment on the probability of its safety and productiveness, the answer is, so do just such men, looking to the hope of profitable returns, invest money in trade and adventures of various kinds. In their private affairs they do, and they lawfully may put their principal funds at hazard; in the affairs of a trust they may not. The very nature of their relation to it forbids it. If it be said that this reasoning assumes that it is certainly practicable so to keep the fund that it shall be productive, and yet safe against any contingency of loss; whereas in fact if loaned upon bond and mortgage, or upon securities of any description, losses from Insolvency and depreciation may and often do happen, nothwithstanding due and proper care and caution is observed in their selection. Not at all. It assumes and in- sists that the trustees shall not place the fund where its safety and due return to their hands will depend upon the success of the business in which it is adventured, or the skill and honesty of other parties intrusted with its conduct; and it is In the selection of the securities for its safety and actual re- turn that there is scope for discretion and prudence, which if exercised in good faith, constitute due performance of the duty of the trustees. My conclusion is therefore that the defend- ants were not at liberty to invest the fund bequeathed to the plaintiff in stock of the Delaware and Hudson Canal Company; of the New York and Harlem Railroad Com- pany; of the New York and New Haven Railroad Company; of the Bank of Com- merce; or of the Saratoga and Washington Railroad Company; and that the plaintiff H.& B.EQ.(2d Ed.)— 33 was not bound to accept these stocks as and for his legacy, or the investment thereof. In regard to the bonds of the Hudson River Railroad Company and of the Dela- ware and Hudson Canal Company, it ap- pears by schedule B, given in evidence, that the former were mortgage bonds; but what was the extent or suflBciency of the security afforded by such mortgage, or what prop- erty was embraced in it does not appear, nor does it appear whether there was any security whatever for the payment of the canal company's bond. It is not necessary for the decision of this case; and I am not prepared to say that an investment in the bonds of a railroad or other corporation, the payment whereof Is secured by a mortgage upon real estate, is not suitable and proper under any circum- stances. If the real estate is ample to insure the payment of the bonds, I do not at present perceive that it is necessarily to be regarded as inferior to the bond of an individual se- cured by mortgage; it would of course be open to all the inquiries which prudence would suggest if the bond and mortgage were that of an individual. The nature, the location and the sufficiency of the se- curity and the terms of the mortgage, and its availability for the protection and ulti- mate realization of the fund, must of course enter into the consideration. But it is not necessary to pursue that sub- ject The plaintiff in his complaint rejects the entire investment. The court below held that it was equitable that the plaintiff should be held to receive the whole or none of the stocks and bonds, and to that ruling neither the plaintiff nor the defendant have excepted; and therefore the question wheth- er the judgment below was correct in that respect is not before us. It is proper however to say that I do not clearly apprehend the propriety of that rul- ing, unless it be on the ground that the plaintiff in his complaint did so elect The rule is perfectly well settled that a cestui que trust is at liberty to elect to ap- prove an unauthorized investment and en- joy its profits, or to reject it at his option; and I perceive no reason for saying that where the trustee has divided the fund into parts and made separate investments, the cestui que trust is not at liberty, on equita- ble as well as legal grounds, to approve and adopt such as he thinks it for his interest to approve. The money invested is his money; and in respect to each and every dollar, it seems to me he has an unqualified right to follow it, and claim the fruits of its investment and that the trustee cannot deny it. The fact that the trustee has made other investments of other parts of the fund, which the cestui que trust is not bound to approve, and disaffirms, cannot, I think, affect the power. For example, suppose in the present case the cestui que trust, on de- 514: DUTIES AND LIABILITIES OF TRUSTEES. livery to him of all the securities and bonds in -which his legacy had appeared invested, had declared: Although these inyestments are Improperly made, not In accordance with the Intent of the testator, nor in the due per- formance of your duty, I waive all objection on that account, except as to the stock of the Saratoga and Washington Railroad Com. pany. That I reject and return to you. Ig It doubtful that his position must be sus- tained? The result Is, that the main features of the Judgment herein must be affirmed. • •••••••a DUTIES AND LIABILITIES OF TRUSTE^ES. 515 LAMAR ▼. MICOU. (5 Sup. Ot. 221, 112 U. S. 452.) Supreme Court of the United States. Dec. 1, 1884. Appeal from the circuit court of the Unit- ed States for the Southern district of New York. B. N. Dickerson, for appellant S. P. Nash and Geo. C. Holt, tor appellee. GRAY, J. This is an appeal by the ex- ecutor of a guardian from a decree against him upon a bill in equity filed by the admin- istratrix of his ward. The original bUl, filed on July 1, 1875, by Ann C. Sims, a citizen of Alabama, as administratrix of Martha M. Sims, in the supreme court of the state of New York, alleged that on December 11, 1855, the defendant's testator, Gazaway B. Lamar, was duly appointed, by the surro- gate of the county of Richmond, in that state, guardian of the person and estate of Martha M. Sims, an infant of six years of age, then a resident of that county, and gave bond as such, and took into his possession and control all her property, being more than $5,000; that on October 5, 1874, he died in New York, and on November 10, 1874, Ms wUl was there admitted to probate, and the defendant, a citizen of New York, was appointed his executor; and that he and his executor had neglected to render any account of his guardianship to the surrogate of Richmond county, or to any court having cognizance thereof, or to the ward or her administratrix; and prayed for an account, and for judgment for the amount found to be due. The defendant removed the case into the circuit court of the United States for the Southern district of New York, and there filed an answer, averring that in 1855, when Lamar was appointed guardian of Martha M. Sims, he was a citizen of Georgia, and she was a citizen of Alabama, having a tem^- porary residence in the city of New York; that in the spring of 1861 the states of Georgia and Alabama declared themselves to have seceded from the United States, and to constitute members of the so-called Con- federate states of America, whereupon a state of war arose between the United States and the Confederate states, which contin- ued to be flagrant for more than four years after; that Lamar and Martha M. Sims were In the spring of 1861 citizens and resi- dents of the states of Georgia and Ala- bama, respectively, and citizens of the Con- federate states, and were engaged in aiding and abetting the state of Georgia and the so-called Confederate states in their rebel- lion against the United States, and she con- tinued to aid and abet until the time of her death, and he continued to aid and abet till January, 1865; that the United States, by various public acts, declared all his and her property, of any kind, to be liable to seizure and confiscation by the United States, and they both were, by the various acts of congress of the United States, outlawed and debarred of any access to any court of the United States, whereby it was Impossible for Lamar to appear in the surrogate's court of Richmond county to settle and close his accounts there, and to be discharged from his liability as guardian, in consequence whereof the relation of guardian and ward, so far as it depended upon the orders of that court, ceased and determined; that, for the purpose of saving the ward's property from seizure and confiscation by the United States, Lamar, at the request of the ward and of her natural guardians, all citizens of the state of Alabama, withdrew the funds belonging to her from the city of New York, and invested them for her benefit and ac- count in such securities as by the laws of the states of Alabama and Georgia and of the Confederate states he might lawfully do; that in 1864, upon the death of Martha M. Sims, all her property vested in her sis- ter, Ann C. Sims, as her next of kin, and any accounting of Lamar for that property was to be made to her; that on March 15, 1867, at the written request of Ann C. Sims and of her natural guardians, Benjamin H. Micou was appointed her legal guardian by the probate court of Montgomery county, in the state of Alabama, which was at that time her residence, and Lamar thereupon account- ed for and paid over all property with which he was chargeable as guardian of Martha M. Sims, to Micou as her guardian, and re- ceived from him a full release therefor; and that Ann C. Sims, when she became of age, ratified and confirmed the same. To that answer the plaintiff filed a general replica- tion. The case was set down for hearing In the circuit court upon the bill, answer and rep- lication, and a statement of facts agreed by the parties. In substance as follows: On November 23, 1850, WiUIam W. Sims, a cit- izen of Georgia, died at Savannah, In that state, leaving a widow, who was appointed his administratrix, and two Infant daugh- ters, Martha M. Sims, born at Savannah on September 8, 1849, and Ann C. Sims, born in Florida on June 1, 1851. In 1853 the widow married the Rev. Richard M. Aber- crombie, of Clifton, in the county of Rich- mond and state of New York. On December 11, 1855, on the petition of Mrs. Abercrom- bie, Gazaway B. Lamar, an uncle of Mr. Sims, and then residing at Brooklyn, in the state of New York, was appointed by the surrogate of Richmond county guardian of the person and estate of each child "until she shall arrive at the age of fourteen years, and until another guardian shall be appoint- ed;" and gave bond to her, vrith sureties, "to faithfully In all things discharge the 516 DUTIES AND LIABILITIES OP TRUSTEES. duty of a guardian to the said minor ac- cording to law, and render a true and just account of all moneys and other property received by him, and of the application there- of, and of his guardianship in all respects, to any court having cognizance thereof;" and he immediately received from Mrs. Aber- cromble in money $5,166.89 belonging to each ward, and invested part of it, in Jan- uary and April, 1856, in stock of the Bank of the Republic, at New York, and part of it, in March and July, 1857, in stock of the Bank of Commerce, at Savannah, each of which was then paying, and continued to pay until April, 1861, good dividends an- nually, the one of 10 and the other of 8 per cent. In 1856, several months after Lamar's ap- pointment as guardian, Mr. and Mrs. Aber- cromble removed from Clifton, in the state of New York, to Hartford, In the state of Connecticut, and there resided till her death, In the spring of 1859. The children lived with Mr. and Mrs. Abercrombie, Lamar as guardian paying Mr. Abercrombie for their board, at Clifton and at Hartford, from the marriage until her death; and were then removed to Augusta, in the state of Georgia, and there lived with their paternal grand- mother and her unmarried daughter and only living child, their aunt; Lamar as guardian continuing to pay their board. After 1856 neither of the children ever resided In the state of New York. On January 18, 1860, their aunt was married to Benjamin H. MIcou, of Montgomery, in the state of Alabama, and the children and their grandmother there- after lived with Mr. and Mrs. MIcou at Montgomery, and the children were edu- cated and supported at Mr. Micou's expense. From 1855 to 1859 Lamar resided partly In Georgia and partly in New York. In the spring of 1861 he had a temporary residence in the city of New York, and upon the break- ing out of the war of the rebellion, and after removing all his own property, left New York, and passed through the lines to Savan- nah, and there resided, sympathizing with the rebellion, and doing what he could to accomplish Its success, until January, 1865, and continued to have his residence In Savan- nah until 1872 or 1873, when he went to New York again, and afterwards lived there. Mr. and Mrs. MIcou also sympathized with the rebellion and desired Its success, and each of' them, as well as Lamar, failed dur- ing the rebellion to bear true allegiance to the United States. At the time of Lamar's appointment as guardian, 10 shares in the stock of the Mechanics' Bank of Augusta, in the state of Georgia, which had belonged to William W. Sims in his life-time, stood on the books of the bank in the name of Mrs. Abercrombie as his administratrix, of which one-third be- longed to her as his widow, and one-third to each of the infants. In January, 1856, the bank refused a request of Lamar to transfer one-third of that stock to him as guardian of each infant, but afterwards paid to him as guardian, from time to time, two- thirds of the dividends during the life of Mrs. Abercrombie, and all the dividends aft- er her death until 1865. During the period last named, he also received as guardian the dividends on some other bank stock in Sa- vannah, which Mrs. Abercrombie owned, and to which, on her death, her husband became entitled. Certain facts, relied on as showing that he, immediately after his wife's death, made a surrender of her interest in the bank shares to Lamar, as guardian of her children, are not material to the understanding of the decision of this court, but are recapitulated In the opinion of the circuit court. 7 Fed. 180-185. In the winter of 1861-62, Lamar, fearing that the stock in the Bank of the Republic at New York, held by him as guard- ian, would be confiscated by the United States, had it sold by a friend in New York; the proceeds of the sale, which were about 20 per cent, less than the par value of the stock. Invested at New York in guarantied bonds of the cities of New Orleans, Memphis, and Mobile, and of the East Tennessee & Georgia Railroad Company; and those bonds deposited in a bank in Canada. Lamar from time to time invested the property of his wards, that was within the so-called Con- federate states, in whatever seemed to him to be the most secure and safe— some in Con- federate state bonds, some in the bonds of the individual states which composed the confederacy, and some In bonds of cities, and of railroad corporations, and stock of banks within those states. On the money of his wards, accruing from dividends on hank stock, and remaining in his hands, he char- ged himself with Interest until the summer of 1862, when, with the advice and aid of Mr. MIcou, he Invested $7,000 of such money in bonds of the Confederate states and of the state of Alabama; and in 1863, with the like advice and aid, sold the Alabama bonds for more than he had paid for them, and invested the proceeds also In Confederate states bonds; charged his wards with the money paid, and credited them with the bonds; and placed the bonds in the hands of their grandmother, who gave him a re- ceipt for them and held them till the end of the rebellion, when they, as well as the stock in the banks at Savannah, became worthless. Martha M. Sims died on November 2, 1864, at the age of 15 years, unmarried and Intes- tate, leaving her sister Ann C. Sims her next of kin. On January 12, 1867, Lamar, in an- swer to letters of inquiry from Mr. and Mrs. MIcou, wrote to Mrs. MIcou that he had saved from the wreck of the property of his niece, Ann O. Sims, surviving her sister, three bonds of the city of Memphis, indorsed by the state of Tennessee, one bond of the DUTIES AND LIABILITIES OF TRUSTEES. 517 city of Mobile, and one bond of the East Tennessee & Georgia Railroad Company, each for $1,000, and with some coupons past due and uncollected; and suggested that by reason of his age and failing health, and of the embarrassed state of his own affairs, ilr. Micou should be appointed in Alabama guard- ian in his stead. Upon the receipt of this letter, Mrs. Micou wrote to Lamar, thanking him for the explicit statement of the niece's affairs, and for the care and trouble he had had with her property; and Ann C. Sims, then nearly 16 years old, signed a request, attested by her grandmother and by Mrs. Micou, that her guardianship might be trans- ferred to Mr. Micou, and that he might be ap- pointed her guardian. And on March 15, 1867, he was appointed guardian of her prop- erty by the probate court of the county of Montgomery and state of Alabama, accord- ing to the laws of that state, and gave bond as such. On May 14, 1867, Lamar sent to Micou complete and correct statements of his guardianship account with each of his wards, as well as all the securities remain- ing in his hands as guardian of either, and a check payable to Micou as guardian of Ann 0. Sims for a balance in money due her; and Micou, as such guardian, signed and sent to Lamar a schedule of and receipt for the property, describing it specifically, by which it appeared that the bonds of the cities of New Orleans and Memphis, and of the East Tennessee & Georgia Railroad Company, were issued, and the Memphis bonds, as w^I as the railroad bonds, were indorsed by the state of Tennessee, some years before the breaking out of the rebellion. Micou thence- forth continued to act in all respects as the only guardian of Ann C. Sims until she be- came of age on June 1, 1872. No objection or complaint was ever made by either of the wards or their relatives against Lamar's transactions or investments as guardian until July 28, 1874, when Micou wrote to Lamar informing him that Ann C. Sims desired a settlement of his accounts, and that he had been advised that no credits could be allowed for the investments in Con- federate states bonds, and that Lamar was responsible for the security of the invest- ments in other bonds and bank stock. La- mar was then sick in New York, and died there on October 5, 1874, without having an- swered the letter. Before the case was heard in the circuit court, Ann C. Sims died, on May 7, 1878, and on June 20, 1878, Mrs. Micou was appointed, in New York, adminis- tratrix de bonis non of Martha M. Sims, and as such filed a biU of revivor In this suit. On October 3, 1878, the defendant filed a cross-bill, repeating the allegations of his an- swer to the original bill, and further aver- ring that Ann C. Sims left a will which had been admitted to probate in Montgomery county. In the state of Alabama, and after- wards In the county and state of New York, by which she gave all her property to Mrs. Micou, who was her next of kin, and that Mrs. Micou was entitled to receive for her own benefit whatever might be recovered in the principal suit, and was estopped to deny the lawfulness or propriety of Lamar's acts, because whatever was done by him as guard- ian of Martha M. Sims in her life-time, or as guardian of the Interests of Ann C. Sims as her next of kin, was authorized and approved by Mrs. Micou and her mother and husband as the natural guardians of both children. Mrs. Micou, as plaintiff in the bill of revivor, answered the cross-bill, alleging that Ann succeeded to Martha's property as her ad- ministratrix, and not as her next of kin, ad- mitting Ann's will and the probate thereof, denying that Mrs. Micou was a natural guardian of the children, and denying that she approved or ratified Lamar's acts as guardian. A general replication was filed to that answer. Upon a hearing on the pleadings and the agreed statement of facts, the circuit court dismissed the cross-bill, held all Lamar's in- vestments to have been breaches of trust, and entered a decree referring the case to a master to state an account. The case was afterwards heard on exceptions to the mas- ter's report, and a final decree entered for the plaintiff for $18,705.19, including the val- ue before 1861 of those bank stocks in Geor- gia of which Lamar had never had posses- sion. The opinion delivered upon the first hearing is reported in 17 Blatchf. 378, and in 1 Fed. 14, and the opinion upon the second hearing in 7 Fed. 180. The defendant ap- pealed to this court. The authority of the surrogate's court of the county of Richmond and state of New York to appoint Lamar guardian of the per- sons and property of infants at the time within that county, and the authority of the supreme court of the state of New York, In which this suit was originally brought, being a court of general equity jurisdiction, to take cognizance thereof, are not disputed; and, up- on the facts agreed, it is quite clear that none of the defenses set up in the answer afford any ground for dismissing the bill. The war of the rebellion, and the residence of both ward and guardian within the terri- tory controlled by the Insurgents, did not discharge the guardian from his responsi- bility to account, after the war, for property of the wards which had at any time come into his hands, or which he might, by the exercise of due care, have obtained posses- sion of. A state of war does not put an end to pre-existing obligations, or transfer the property of wards to their guardians, or re- lease the latter from the duty to keep It safe- ly, but suspends until the return of peace the right of any one residing in the enemy's country to sue in our courts. Ward v. Smith, 7 Wall. 447; Montgomery v. U. S., 15 Wall. 395, 400; Insurance Co. v. Davis, 95 U. S. 518 DUTIES AND LIABILITIES OF TRUSTEES, 425, 430; Kershaw v. Kelsey, 100 Mass. 561, 563, 564, 570; 3 Phillim. Int. Law (2d Ed.) § 589. The appointment of Micou in 1867 by a court of Alabama to be guardian of the surviving ward, then residing in that state, did not terminate Lamar's liability for prop- erty of his wards which he previously had or ought to have taken possession of. The re- ceipt given by Micou was only for the securi- ties and money actually handed over to him by Lamar; and if Micou had any authority to discharge Lamar from liability for past mismanagement of either ward's property, he never assumed to do so. The suggestion in the answer, that the surviving ward, upon coming of age, ratified and approved the acts of Lamar as guardian, finds no support in the facts of the case. The further grounds of defense, set up in the cross-bill, that Mi- cou participated in Lamar's investments, and that Mrs. Micou approved them, are equally unavailing. The acts of Micou, before his own appointment as guardian, could not bind the ward. And admissions in private letters from Mrs. Micou to Lamar could not. affect the rights of the ward, or Mrs. Micou's au- thority, upon being afterwards appointed ad- ministratrix of the ward, to maintain this bill as such against Lamar's representative, even if the amount recovered will inure to her own benefit as the ward's next of kin. 1 Greenl. Bv. § 179. The extent of Lamar's liability presents more difficult questions of law, now for the first time brought before this court. The general rule is everywhere recognized, that a guardian or trustee, when investing property in his hands, is bound to act honestly and faithfully, and to exercise a sound discretion, such as men of ordinary prudence and Intelligence use in their own affairs. In some jurisdictions no attempt has been made to establish a more definite rule; in others, the discretion has been confined, by the legislature or the courts, within strict limits. The court of chancery, before the Declara- tion of Independence, appears to have allowed some latitude to trustees in making Invest- ments. The best evidence of this is to be found in the judgments of Lord Hardwicke. He held, indeed, in accordance with the clear weight of authority before and since, that money lent on a mere personal obligation, like a promissory note, without security, was at the risk of the trustee. Ryder v. Bicker- ton, 3 Swanst. 80, note, 1 Eden, 149, note; Barney v. Saunders, 16 How. 535, 545; Perry, Ti-usts, § 453. But, in so holding, he said: "For It should have been on some such se- curity as binds land, or something to be an- swerable for it." 3 Swanst. 81, note. Al- though In one case he held that a trustee, directed by the terms of his trust to invest the trust money in government funds or other good securities, was responsible for a loss caused by his investing it in South Sea stock, and observed that neither South Sea stock nor bank stock was considered a good security because it depended upon the management of the governor and directors, and the capital might be wholly lost (Trafford v. Boehm, 3 Atk. 440, 444); yet, in another case, he de- clined to charge a trustee for a loss on South Sea stock, which had fallen in value since the trustee received it, and said that "to com- pel trustees to make up a deficiency, not ow- ing to their willful default, is the harshest demand that can be made in a court of equity." Jackson v. Jackson, 1 Atk. 513, 514, West, Ch. 31, 34. In a later case he said: "Suppose a trustee, having in his hands a considerable sum of money, places it out in the funds, which afterwards sink in their value, or on a security at the time apparently good, which afterwards turns out not to be so, for the benefit of the cestui que trust; was there ever an instance of the trustee's being made to answer the actual sum so placed out? I answer, 'No.' If there is no mala fides, nothing willful In the conduct of the trustee, the court will always favor him; for, as a trust is an office necessary in the concerns between man and man, and which, if faithfully discharged, is attended with no small degree of trouble and anxiety. It is an act of great kindness in any one to accept it. To add hazard or risk to that trouble, and subject a trustee to losses which he could not foresee, and, consequently, not prevent, would be a manifest hardship, and would be deterring every one from accepting so necessary an ofiice." That this opinion was not based upon the fact that in England trustees usually receive no compensation is clearly shown by the chancellor's adding that the same doctrine held good in the case of a receiver, an officer of the court, and paid for his trouble; and the point decided was that a receiver, who paid the amount of rents of estates in his charge to a Bristol trades- man of good credit, taking his bills therefor on Iiondon, was not responsible for the loss of the money by his becoming bankrupt. Knight V. Plymouth, 1 Dick. 120, 126, 127, 3 Atk. 480. And the decision was afterwards cited by Lord Hardwicke himself as showing that when trustees act by other hands, ac- cording to the usage of business, they are not answerable for losses. Ex parte Belchier, 1 Amb. 218, 219, 1 Kenyon, 38, 47. In later times, as the amount and variety of English government securities increased, the court of chancery limited trust invest- ments to the public funds, disapproved invest- ments either In bank stock or in mortgages of real estate, and prescribed so strict a rule that parliament Interposed; and by the stat- utes of 22 & 23 Vict. c. 35, and 23 & 24 Vict. c. 38, and by general orders In chancery, pursuant to those statutes, trustees have been authorized to Invest in stock of the bank of England or of Ireland, or upon mortgage of freehold or copyhold estates, as well as in the public funds. Lewln, Trusts (7th Ed.) DUTIES AND LIABILITIES OF TRUSTEES. 519 282, 283, 287. In a very recent case the covirt of appeal and the house of lords, following the decisions of Lord Hardwiclie in Knight V. Plymouth and Ex parte BeleMer, a'bove cited, held that a trustee investing trust funds, who employed a broker to procure se- curities authorized by the trust, and paid the purchase money to the brolier, if such was the usual and regular course of business of persons acting with reasonable care and pru- dence on their own account, was not liable for the loss of the money by fraud of the broker. Sir George Jessel, M. R., Lord Jus- tice Bowen, and Lord Blackburn affirmed the general rule that a trustee is only bound to conduct the business of his trust in the same manner that an ordinarily prudent man of business would conduct his own; Lord Blackburn adding the qualification that "a trustee must not choose investments other than those which the terms of his trust per- mit." Speight V. Gaunt, 22 Ch. Div. 727, 739, 762, 9 App. Cas. 1, 19. In this country there has been a diversity in the laws and usages of the several states upon the subject of trust investments. In New York^ under Chancellor Kent, the rule seems to have been quite undefined. See Smith V. Smith, 4 Johns. Ch. 281, 285; Thomp- son v. Brown, Id. 619, 628, 629, where the chancellor quoted the passage above cited from Lord Hardwicke's opinion In Knight v. Plymouth. And In Brown v. Campbell, Hopk. Ch. 283, where an executor In good faith made an investment, considered at the time to be advantageous, of the amount of two promis- sory notes, due to his testator from one manu- facturing corporation, in the stock of another manufacturing corporation, which afterwards became insolvent. Chancellor Sanford held that there was no reason to charge him with the loss. But by the later decisions in that state investments in bank or railroad stock have been held to be at the risk of the trus- tee, and It has been intimated that the only investments that a trustee can safely make without an express order of court are In gov- ernment or real estate securities. King v. Talbot, 40 N. Y. 76, affirming 50 Barb. 453; Ackerman v. Bmott, 4 Barb. 626; Mills v. Hoffman, 26 Hun, 594; 2 Kent, Comm. 416, note b. So the decisions in New Jersey and Pennsylvania tend to disallow investments in the stock of banks or other business corpora- tions, or otherwise than in the public funds or in mortgages of real estate. Gray v. Fox, 1 N. J. Eq. 259, 268; Halsted v. Meeker's Ex'rs, 18 N. J. Eq. 136; Lathrop v. Smalley's Ex'rs, 23 N. J. Eq. 192; Worrell's Appeal, 9 Pa. 508, and 23 Pa. 44; Hemphill's Appeal, 18 Pa. 303; Ihmsen's Appeal, 43 Pa. 431. And the New York and Pennsylvania courts have shown a strong disinclination to permit in- vestments in real estate or securities out of their Jurisdiction. Ormiston v. Olcott, 84 N. Y. 339; Rush's Estate, 12 Pa. 375, 378. In New England, and in the southern states. the rule has been less strict In Massachu- setts, by a usage of more than half a century, approved by a uniform course of Judicial de- cision, It has come to be regarded as too firm- ly settled to be changed, except by the legis- lature, that all that can be required of a trustee to invest is that he shall conduct him- self faithfully and exercise a sound discretion, such as men of prudence and Intelligence ex- ercise in the permanent disposition of their own funds, having regard, not only to the probable income, but also to the probable safety, of the capital; and that a guardian or trustee is not precluded from investing in the stock of banking, insurance, manufacturing, or railroad corporations within or without the state. Harvard College v. Amory, 9 Pick. 446, 461; Lovell v. Minot, 20 Pick. 116, 119; Kinmonth v. Brigham, 5 Allen, 270, 277; Clark V. Garfield, 8 Allen, 427; Brown v. French, 125 Mass. 410; Bowker v. Pierce, 130 Mass. 262. In New Hampshire and in Vermont, in- vestments, honestly and prudently made, In securities of any kind that produce income, appear to be allowed. Knowlton v. Bradley, 17 N. H. 458; Kimball v. Reding, 11 Ftost. 352, 374; French v. Currier, 47 N. H. 88, 99; Bar- ney V. Parsons, 54 Vt. 623. In Maryland, good bank stock, as well as government securities and mortgages on real estate, has always been considered a proper investment Hammond v. Hammond, 2 Bland, 306, 413; Gray v. Lynch, 8 Gill, 403; Murray v. Feinour, 2 Md. Ch. 418. So, in Mississippi, investment in bank stock is al- lowed. Smyth V. Bums, 25 Miss. 422. In South Carolina, before the war, no more definite rule appears to have been laid down than that guardians and trustees must man- age the funds in their hands as prudent men manage their own affairs. Boggs v. Adger, 4 Rich. Eq. 408, 411; Spear v. Spear, 9 Rich. Eq. 184, 201; Snelling v. McCreary, 14 Rich. Eq. 291, 300. In Georgia the English rule was never adopted; a statute of 1845, which authorized executors, administrators, guardians, and trustees, holding any trust funds, to invest them in securities of the state, was not con- sidered compulsory; and before January 1, 1863 (when that statute was amended by adding a provision that any other investment of trust funds must be made under a Judi- cial order, or else be at the risk of the trus- tee,) those who lent the fund at interest on what was at the time considered by prudent men to be good security, were not held lia- ble for a loss without their faidt Cobb, Dig. 333; Code 1861, § 2308; Brown v. Wright 39 Ga. 96; Moses v. Moses, 50 Ga. 9, 33. In Alabama the supreme court In Bryant V. Craig, 12 Ala. 354, 359, having intimated that a guardian could not safely invest upon either real or personal security without an order of court the legislature, from 1852, authorized guardians and trustees to invest 520 DUTIES AND LIABILITIES OF TRUSTEES. on boud and mortgage, or on good personal security, with no other limit than fidelity ana prudence might require. Code 1852, § 2024; Code 1867, § 2426; Foscue v. Lyon, 65 Ala. 440, 452. The rules of Investment varying so much in the different states, it becomes necessary to consider by -what law the management and investment of the ward's property should be governed. • As a general rule (with some ex- ceptions not material to the consideration of this case) the law of the domicile governs the status of a person, and the disposition and management of his movable property. The domicile of an infant is universally held to be the fittest place for the appointment of a guardian of his person and estate; although, for the protection of either, a guardian may be appointed In any state where the person or any property of an infant may be found. On the continent of Europe, the guardian appointed in the state of the domicile of the ward Is generally recognized as entitled to the control and dominion of the ward and his movable property everywhere, and guard- ians specially appointed in other states are responsible to the principal guardian. By the law of England and of this country, a guardian appointed by the courts of one state has no authority over the ward's person or property in another state, except so far as allowed by the comity of that state, as ex- pressed through its legislature or its courts; but the tendency of modem statutes and de- cisions is to defer to the law of the domicile, and to support the authority of the guardian appointed there. Hoyt v. Sprague, 103 U. S. 613, 631, and authorities cited; Morrell V. Dickey, 1 Johns. Ch. 153; Woodworth v. Spring, 4 Allen, 321; Milliken v. Pratt, 125 Mass. 374, 377, 378; Leonard v. Putnam, 51 N. H. 247; Com. v. Ehoads, 37 Pa. 60; Sims V. Renwlck, 25 Ga. 58; Dicey, Dom. 172-176; Westl. Int. Law (2d. Ed.) 48-50; Whart. Confl. Laws (2d Ed.) §§ 259-268. An infant cannot change his own domicile. As infants have the domicile of their father, he may change their domicile by changing his own; and after his death the mother, while she remains a widow, may likewise, by changing her domicile, change the domi- cile of the infants; the domicile of the chil- dren, in either case, following the independ- ent domicile of their parent Kennedy v. By all, 67 N. Y. 379; Potinger v. Wightman, 3 Mer. 67; Dedham v. Natick, 16 Mass. 135; Dicey, Dom. 97-99. But when the widow, by marrying again, acquires the domicile of a second husband, she does not, by taking lier children by the • first husband to live with her there, make the domicile which she derives from the second husband their domi- cile; and they retain the domicile which they had, before her second marriage, ac- quired from her or from their father. Oum- ner v. Milton, 3 Salk. 259, Holt, 578; Free- town V. Taunton, 16 Mass. 52; School Direc- tors V. James, 2 Watts & S. 568; Johnson v. Copeland, 35 Ala. 521; Brown v. Lynch. 2 Bradf. 214; Mears v. Sinclair, 1 W. Va. 185; Pot Introduction Generale aux Coutumesi No. 19; 1 Burge, Col. Law, 39; 4 Phillim' Int Law (2d Ed.) § 97. The preference due to the law of the ward's domicile, and the importance of a imiform administration of his whole estate, require that, as a general rule, the manage- ment and investment of his projwrty should be governed by the law of the state of his domicile, especially when he actually resides there, rather than by the law of any state In which a guardian may have been appoint- ed or may have received some property of the ward. If the duties of the guardian were to be exclusively regulated by the law of the state of his appointment, it would follow that in any case in which the tem- porary residence of the ward was changed from state to state, from considerations of health, education, pleasure, or convenience, and guardians were appointed in each state, the guardians appointed in the different states, even if the same persons, might be held to diverse rules of accounting for dif- ferent pares of tne ward's property. The form of accounting, so far as concerns the remedy only, must indeed, be according to the law of the coint in which relief is sought; but the general rule by which the guardian is to be held responsible for the investment of the ward's property is the law of the place of the domicile of the ward. Bar, Int Law, § 106 (Gillespie's translation) p. 438; Whart Confl. Laws, § 259. It may be sug- gested that this would enable the guardian, by changing the domicile of his ward, to choose for himself the law by which he should account Not so. The father, and after his death the widowed mother, being the natural guardian, and the person from whom the ward derives his domicile, may change that domicile. But the ward does not derive a domicile from any other than a natural guardian. A testamentary guardian nominated by the father may have the same control of the ward's domicile that the father had. Wood v. Wood, 5 Paige, 596, 605. And any guardian, appointed in the state of the domicile of the ward, has been generally held to have the power of changing the ward's domicile from one county to another within the same state and under the same law. Cutts V. Haskins, 9 Mass. 543; Hol- yoke V. Haskins, 5 Pick. 20; Kirkland v. Whately, 4 Allen, 462; Anderson v. Ander- son, 42 Vt 350; Ex parte Bartiett, 4 Bradf. 221; Reg. v. Whitby, L. R. 5 Q. B. 325, 331. But it is very doubtful, to say the least whether even a guardian appointed In the state of the domicile of the ward (not be- ing the natural guardian or a testamentary guardian) can remove the ward's domicile beyond the limits of the state in which the guardian is appointed, and to which his legal DUTIES AND LIABILITIES OF TRUSTEES. 521 autbority is confined. Douglas y. Douglas, h. K. 12 Bq. 617, 625; Daniel v. Hill, 52 Ala. 430; Story, Confl. Laws, § 506, note; Dicey, Dom. 100, 132. And it is quite clear tliat a guardian appointed in a state in which the ward is temporarily residing, cannot change the ward's permanent domicile from one state to another. The case of such a guardian differs from that of an executor of, or a trustee under, a will. In the one case, the title in the property is In the executor or the trustee; in the other, the title in the property is in the ward, and the guardian has only the custody and management of it, with power to change its investment The executor or trustee is appointed at the domi- cile of the testator; the guardian is most fitly appointed at the domicile of the ward, and may be appointed in any state in which the person or any property of the ward is found. The general rule which governs the adminis- tration of the property in the one case may be the law of the domicile of the testator; in the other case, it Is the law of the dom- icile of the ward. As the law of the domicile of the ward has no extraterritorial effect, except by the comity of the state where the property is situated, or where the guardian is appointed, it cannot, of course, prevail against a statute of the state in which the question is presented for adjudication, expresfely applicable to the es- tate of a ward domiciled elsewhere. Hoyt V. Spragiie, 103 U. S. 613. Cases may also arise with facts so peculiar or so complicated as to modify the degree of influence that the com't in which the guardian is called to ac- count may allow to the law of the domicile of the ward, consistently with doing justice to the parties before it. And a guardian, who had in good faith conformed to the law of the state in which he was appointed, might, perhaps, be excused for not having complied with stricter rules prevailing at the domicile of the ward. But in a case in which the domicile of the ward has always been in a state whose law leaves much to the discre- tion of the guardian in the matter of invest- ments, and he has faithfully and prudently exercised that discretion with a view to the pecuniary interests of the ward, it would be Inconsistent with the principles of equity to charge him with the amount of the moneys invested, merely because he has not complied with the more rigid rules adopted by the courts of the state in which he was appointed. The domicile of William W. Sims, during his life and at the time of his death in 1850, was hi Georgia. This domicile continued to be the domicile of his widow and of their infant children until they acquired new ones. In 1853 the widow, by marrying the Rev. Mr. Ambercrombie, acquired his domicile. But she did not, by taking the infants to the home, at first In New Tork and afterwards in Conneetieut, of her new husband, who was of no kin to the children, was under no legal obligation to support them, and was, in fact, paid for their board out of their property, make his domicile, or the domicile derived by her from him, the domicile of the children of the first husband. Immediately upon her death in Connecticut, In 1859, these children, both under 10 years of age, were taken back to Georgia to the house of their father's mother and unmarried sister, their own near- est surviving relatives; and they continued to live with their grandmother and aunt in Georgia until the marriage of the aunt in January, 1860, to Mr. Micou, a citizen of Ala- bama, after which the grandmother and the children resided with Mr. and Mrs. Micou at their domicile in that state. Ui)on these facts, the domicile of the chil- dren was always in Georgia from their birth until January, 1860, and thenceforth was ei- ther in Georgia or in Alabama. As the rules of investment prevailing before 1863 in Geor- gia and in Alabama did not substantially dif- fer, the question in which of those two states their domicile was is immaterial to the de- cision of this case; and it is therefore un- necessary to consider whether their grand- mother was their natural guardian, and as such had the power to change their domicile from one state to another. See Hargrave's note 66 to Co. Litt. 88b; Eeeve, Dom. Eel. 315; 2 Kent, Comm. 219; Code Ga. 1861, §§ 1754, 2452; Darden v. Wyatt, 15 Ga. 414. Whether the domicile of Lamar in December, 1855, when he was appointed in New York guardian of the infants, was in New York or In Georgia, does not distinctly appear, and is not material; because, for the reasons al- ready stated, wherever his domicile was, his duties as guardian in the management and investment of the property of his wards were to be regulated by the law of their domicile. It remains to apply the test of that law to Lamar's acts or omissions with regard to the various kinds of securities in which the prop- erty of the wards was invested. 1. The sum which Lamar received in New York in money from Mrs. Abercrombie he in- vested to, 1856 and 1857 in stock of the Bank of the Republic at New York, and of the Bank of Commerce at Savannah, both of which were then, and continued till the break- ing out of the war, in sound condition, paying good dividends. There is nothing to raise a suspicion that Lamar, in making these in- vestments, did not use the highest degree of prudence; and they were such as by the law of Georgia or of Alabama he might properly make. Nor is there any evidence that he was guilty of neglect in not withdrawing the investment in the stock of the Bank of Com- merce at Savannah before it became worth- less. He should not, therefore, be charged with the loss of that stock. The investment in the stock of the Bank of the Republic of New York betag a proper investment by the law Of the domicile of the wards, and there being no evidence that the sale of that stock 522 DUTIES AND LIABILITIES OF TRUSTEES. by Lamar's order In New York, in 1862, was not judicious, or was for less than its fair market price, lie was not responsible for the decrease in its value between the times of its purchase and of its sale. He had the au- thority, as guardian, without any order of court, to sell personal property of his ward in his own possession, and to reinvest the proceeds. Field v. SchiefEelin, 7 Johns. Oh. 150; Ellis V. Essex Merrimack Bridge, 2 Pick. 243. That his motive in selling it was to avoid its being confiscated by the United States, does not appear to us to have any bearing on the rights of these parties. And no statute under which it could have been confiscated has been brought to our notice. The act of July 17, 1862, c. 195, § 6, cited by the appellant, is limited to property of per- sons engaged in or abetting armed rebellion, which could hardly be predicated of two girls under 13 years of age. 12 St 591. What- ever liability, criminal or civil, Lamar may have incurred or avoided as towards the Unit- ed States, there was nothing in his selling this stock, and turning it into money, of which his wards had any right to complain. As to the sum received from the sale of the stock in the Bank of the Republic, we find nothing in the facts agreed by the parties, upon which the case was heard, to support the argument that Lamar, under color of pro- tecting his wards' interests, allowed the funds to be lent to cities and other corpora- tions which were aiding in the rebellion. On the contrary, it is agreed that that sum was applied to the purchase in New York of guar- antied bonds of the cities of New Orleans, Memphis, and Mobile, and of the East Ten- nessee & Georgia Railroad Company; and the description of those bonds, in the receipt aft- erwards given by Micou to Lamar, shows that the bonds of that railroad company, and of the cities of New Orleans and Memphis, at least, were issued some years before the breaking out of the rebellion, and that the bonds of the city of Memphis and of the rail- road company were, at the time of their is- sue, indorsed by the state of Tennessee. The company had its charter from that state, and its road was partly in Tennessee and partly in Georgia. Tenn. St 1848, c. 169. Under the discretion allowed to a guardian or trus- tee by the law of Georgia and of Alabama, he was not precluded from investing the funds in his hands in bonds of a railroad corpora- tion, indorsed by the state by which it was chartered, or in bonds of a city. As lamar, in making these investments, appears to have used due care and prudence, having regard to the best pecuniary interests of his wards, the sum so invested should be credited to him in this case, unless, as suggested at the ar- gument, the requisite allowance has already been made in the final decree of the circuit court in the suit brought by the representa- tive of the other ward, an appeal from which was dismissed by this court for want of juris- diction in 104 U. S. 465. 2. Other moneys of the wards in Lamar's hands, arising either from dividends which he had received on their behalf, or from in- terest with which he charged himself upon sums not invested, were used in the purchase of bonds of the Confederate states, and of the state of Alabama. The investment in bonds of the Confederate states was clearly unlaw- ful, and no legislative act or judicial decree or decision of any state could justify it The so-called Confederate government was in no sense a lawful government, but was a mere government of force, having its origin and foundation in rebellion against the United States. The notes and bonds issued in its name and for its support had no legal value as money or property, except by agreement or acceptance of parties capable of contract- ing with each other, and can never be re- garded by a court sitting tmder the authority of the United States as securities in which trust funds might be lawfully Invested. Thorington v. Smith, 8 Wall. 1; Head v. Starke, Chase, 312, Fed. Cas. No. 6,293; Horn V. Lockhart, 17 Wall. 570; Confederate Note Case, 10 Wall. 548; Sprott v. U. S., 20 Wall. 459; Fretz v. Stover, 22 Wall. 198; Alexan- der V. Bryan, 110 U. S. 414, 4 Sup. Ct 107. An infant has no capacity, by contract with his guardian, or by assent to his unlawful acts, to affect his own rights. The case is governed in this particular by the decision in Horn V. Lockhart, in which it was held that an executor was not discharged from his lia- bility to legatees by having invested funds, pursuant to a statute of the state, and with the approval of the probate court by which lie had been appointed, in bonds of the Con- federate states, which became worthless in his hands. Neither the date nor the purpose of the issue of the bonds of the state of Ala- bama is shown, and it is unnecessary to con- sider the lawfulness of the investment in those bonds, because Lamar appears to have sold them for as much as he had paid for them, and to have invested the proceeds in additional Confederate states bonds, and for the amount thereby lost to the estate he was accountable. 3. The stock in the Mechanics' Bank of Georgia, which had belonged to William W. Sims in his life-time, and stood on the hooks of the bank in the name of his administratrix, and of which one-third belonged to her, as his widow, and one-third to each of the in- fants, never came into Lamar's possession; and upon a request made by him, the very next month after his appointment, the bank refused to transfer to him any part of it He did receive and account for the dividends; and he could not, under the law of Georgia concerning foreign guardians, have obtained possession of property of his wards within that state without the consent of the ordi- nary. Code 18C1, §S 1834-1839. The at- DUTIES AND LIABILITIES OP TRUSTEES. 523 tempt to charge Mm for the value of the principal of the stock must fail for two rea- sons: First. This very stock had not only be- longed to the father of the -wards in his life- time, hut it was such stock as a guardian or trustee might properly invest in by the law of Georgia. Second. No reason is shown why this stock, being in Georgia, the domicile of the wards, should have been transferred to a guardian who had been appointed In New Tork during their temporary residence there. The same reasons are conclusive against charging him with the value of the bank stock In Georgia, which was owned by Mrs. Abercrombie in her own right, and to which Mr. Abercrombie became entitled upon her death. It is therefore unnecessary to con- sider whether there is suflScient evidence of an Immediate surrender by him of her in- terest to her children. The result is that both the decrees of the circuit court in this case must be reversed, and the case remanded for further proceed- ings in conformity with this opinion. 524 DUTIES AND LIABILITIES OF TEUSTEES. SIMMONS T. OLIVER et al. (43 N. W. 561, 74 Wis. 633.) Supreme Conrt of Wisconsin. Nov. 5, 1889. Appeal from circuit court, Fond du Lac county; N. S. Gilson, Judge. Accounting and petition to be discharged by M. W. Simmons, trustee of the estate of William Oliver, deceased. Elizabeth Oliver and otheis, beneficiaries, objected to the ac- count, and opposed the petition. From a judgment holding the trustee liable for cer- tain losses, he appeals. Knowles & Phelps, for appellant. N. O. Biffin, for respondents. Cole, C. J. M. W. Simmons, as trustee, received the funds mentioned in his account from the former trustee, Smith, to invest and to keep invested for the benefit of the beneficiaries named. The income was to be paid to the widow during her life, and $1,000 was to be paid the children in equal portions when the youngest should arrive at age. No directions were given in the order appointing Simmons as to how the trust funds should be invested. It appears that in 1883 the trustee loaned to the McDonald Manufacturing Com- pany a portion of the fund, taking its in- dorsed note, which note was taken up in February, 1884, by a new note for the amount of the loan unpaid, such note running one year, which was indorsed by the president and secretary of the company. The company at this time was in good financial standing, and the indorsers w6re reputed to be perfect- ly responsible, and men of ample means. In a few months, however, the company failed, and turned over its property to a trustee, and the piesident, who was supposed to have the most property of either of the indorsers, be- came unable to pay his debts. The claims against the manufacturing company were finally compromised at 50 cents on the dollar, in cash and notes, and 50 cents in mining stock at $5 a share. Simmons at first de- clined to take the mining stock, not con- sidering it of any value, but after a few months, thinking it might turn out to be worth something, decided to take it and pay an assessment of $50 upon it, for which it was advertised for sale. The testimony clear- ly shows that the compromise made by the creditors of the manufacturing company was the best that could be realized at the time; and that the mining stock, which proved to. be worthless, was considered of some value. The trustee, in his account filed, wishes to be credited and allowed for the mining stock at its face value and interest thereon since June 22, 1888, and the amount paid upon it as an assessment, together with another small item of $11. The beneficiaries object to the allowance of these items, and the court below decided that the estate of the trustee must make good the loss resulting to the trust-estate by reason of the loan to the manu- facturing company. We think the circuit court was clearly right in holding the trustee liable for the loss of the trust funds under the circumstances. He made a loan to a manufacturing company upon its note and the personal security of two indorsers. It is true, when the note for the amount of the loan unpaid was given in February, 1884, in addition to the security of the indorsers, the company had assigned to the trustee as collateral for the payment of the note a bond, which was supposed to be a lien upon real estate, but which was aft- erwards held by this court to be invalid, and not a lien upon its property. So it eventual- ly turned out that the loan was made to a pri- vate business corporation upon personal se- curity alone. While there is no evidence that the trustee did not act in good faith in making the loan, doubtless deeming it en- tirely safe, and amply secured, yet he cannot be protected against the loss. We are dis- posed, on this subject, to follow the English rule which has been adopted in some of our sister states, and hold that the trustee can- not invest trust funds in personal securities, and that it is not an exercise of sound discre- tion to so invest them. Says Parker, V. C, in Ackerman v. Emott, 4 Barb. 626-636: "It is a well-settled rule of the English court of chancery that the trustee can only protect himself against risk by investing the trnst fund in real estate, or governmental secu- rities. He must either take security on veal estate, or invest in a fund approved by the court; and no other fund is there approved by the courts except the public funds. " The learned counsel on behalf of the trustee can- didly admits that it is the rule of the earlier decisions, and the one which is laid down in some of our elementary works on this sub- ject, which say that the trustee is personally liable in case of any loss from investments in personal securities, no matter how safe they may, al the time, seem to be. The conces- sion is according to the fact, as an examina- tion of the authorities will show. But he insists that this well-established rule shall be changed to meet the conditions and needs of present business and methods of investment. Investments, he says, in personal securities, are deemed quite as safe and reliable, by good business men, as loans upon real estate, which is subject to great changes in value froni one cause or another. This remark may be true when applied to new towns or cities where there is more or less speculation in real estate; but as a general rule the com- mercial world regards loans made upon ad- equate real estate security as more safe and desirable than upon personal security. Of course it is not practicable for a trustee al- ways to find government securities in which to invest, but he can usually find oppor- tunities to make loans upon safe and ade- quate real estate securities, and, in view of the hazards of other investments, of which this case furnishes a good illustration, we are disposed to hold that the trustee should not be protected against loss in investing trust funds unless he loans on real estate DUTIES AND LIABILITIES OF TRUSTEES. 525 security, or invests in some other secur- ity approved by the court to which he is ac- countable for tlie manner he executes his trust. If this rule shall be found inconven- ient, or on the whole not best adapted to the new condition of things, or to the necessities of present business arrangements, the legisla- ture can change it by authorizing the invest- ment of trust funds in shares or stocks, or on the credit of business corporations, or on the personal security of individuals. "VVe prefer to adhere to the well-established rule in relation to the investment of trust funds, and if a change is to be made let the legisla- ture make it. "We do not enter upon a dis- cussion of the doctrine which makes an in- vestment on private or personal security at the risk of the trustee, because the law is ele- mentary. The prevailing rule in the United States and in England is to prefer either pub- lic securities or real estate securities to per- sonal security, and this, we think, is a wise and salutary rule to follow. Hill, Trustees, 368 et seq., and cases referred to in the notes; 1 Perry, Trusts, § 453 etseq.; 2 Pom. Eq. Jur. § 1074; Clark v. Garfield, 8 Allen, 427. n. follows from these views that the judg- ment of the circuit court must be afSrmed. 526 DUTIES AND LIABILITIES OF TRUSTEES. HARVARD COLLEGE et al. v. AMORT. (9 Pick. 446.) Supreme Judicial Court of Massachusetts. Jan. 10, 1831. S. Hubbard, for appellants. Sullivan & Shaw, for appellee. PUTNAM, J. The confidence which the testator reposed in his executors, whom he also constituted his trustees, was unbound- ed. He directed that they, as trustees, should not be required to give any other security than their own bond, without sure- ties, and that each of them should be ac- countable "simply for his own acts, doings and defaults as such trustee." The general question is, whether the trus- tees have abused the trust. The testator made provision for the sup- port of his wife mainly from the proceeds of the trust fund. He speaks of the profits, income, dividends, which were to come from it through their hands, 'xhey were to loan the 50,000 dollars upon ample and sufficient security, or invest the same in safe and pro- ductive stock, either in the public funds, bank shares or other stock, according to their best judgment and discretion. It is very clear that the testator did not intend to limit the income to the simple in- terest of the fund; for if he had so intended, he would not have spoken of dividends and profits, but would have given an annuity of three thousand dollars a year. It has been argued that the testator gave the sum of fifty thousand dollars as the trust fund, and that the trustees could only have demanded that sum of the executors. But we think that no important Inference can be drawn from that fact It would not follow from thence, that there should have been a sale of the personal property or stocks of the testator and a reinvestment. The trustees and the executors were the same persons, and instead of going through the useless for- mality of a sale and investment, it was clear- ly competent for them to select from the am- ple funds of the estate, those stocks which should form the capital of the trust fund. And in making that selection, it is very clear to us, that they should have preferred that stock which would probably give her the most profit, and at the same time preserve the value of the capital sum. It would not for example have been the exercise of a sound discretion, to have appropriated the trust fund in the stock of an incorporated company which gave great dividends for the time being, but whidi would, according to the terms of its charter, expire as soon as the death of the wife could be calculated to happen. In such a case nothing would be left of the capital for those in remainder. On the other hand, if the investment of the trust fund were in stock which made large dividends, and which had acquired its value by the prudent management of Its proprie- tors, and might be reasonably calculated up- on as a safe and permanent capital, such an investment would seem to be according to the manifest intent of the testator. It is somewhat remarkable that the testa- tor did not himself appropriate the stock of which the trust fund should consist, but that he should have left the selection to his trus- tees. But as it would have been necessary to empower them to change, sell out and reinvest, perhaps it was wise in the testator to leave the whole matter, the selection a» well as the management, to them. Be that as it may, he has given them that authority. But It has happened that the value of the capital stock in which the trust fund was invested, has fallen, and those in remainder call upon the trustees to make up the defi- ciency. It was said by i^rd Hardwicke in Jack- son V. Jackson, 1 Aik. 514, that "to compel trustees to make up a aeficiency not owing to their wilful default, is the harshest de- mand that can be made in a court of equi- ty." The statute Of Geo. I, for the Indemnity of guardians and trustees, provides that if there be a diminution of tiie principal, witb- out the default of the trustees, they shall not be liable. If that were otherwise, who would undertake such hazardous responsibility? It is argued for the appellants, that the trustees have not loaned the money on good security. The answer is found in the au- thority which the testator gave to them. They were to loan, or to invest the fund in stocks. They preferred the latter. But it is argued, that they did not invest in the public funds, bank shares or other stock, within the true intent and meaning of the authority, out in trading companies, and so exposed the capital to great loss. And we are referred to TrafCord v. Boehm, 3 Atk. 444, to prove the position, that such an In- vestment will not have the support of a court of chancery. The chancellor seems to sup- pose that funds or other good securities, must be such as have the engagement of the government to pay off their capital. Bank stock, as well as South-Sea stock, which were in the management of directors, &c. were not considered by that court as good secu- rity. But no such rule has ever been rec- ognized here. In point of fact, there has been as great fluctuation in the value of the stock which was secured by the promise and faith of the government, as of the stock of banks. And besides, the testator himself considers that bank shares might be a safe object of Investment— "safe and productive stock." And yet bank shares may be sub- ject to losses which may sweep away their whole value. Lord Hardvricke considers that South-Sea annuities and bank annuities stand upon different footing, because the di- rectors have nothing to do with the prin- cipal, and are only to pay the interest, until the govenmaent pay off the capital, and there- DUTIES AND LIABILITIES OF TRUSTEES. 527 fore that they only are properly good secu- rities. This reasoning has very little or no appli- cation here; for, in the first place, the stocks depending upon the promise of the govern- ment, or, as they are called, the public funds, are exceedingly limited in amount, compared with the amount of trust funds to be invest- ed; and, in the second place, it may well be doubted, if more confidence should be reposed in the engagements of the public, than in the promises and conduct of private corpora- tions which are managed by substantial and prudent directors. There is one considera- tion much in favour of investing in the stock of private corporations. They are amenable to the law. The holder may pursue his legal remedy and compel them or their officers to do justice. But the government can only be supplicated. It has been argued, that manufacturing and insurance stocks are not safe, because the principal is at hazard. But this objec- tion applies to bank shares, as well as to shares in Incorporated manufacturing and in- surance companies. To a certain extent, each may be considered as concerned or in- terested in trade. The bank deals in bills of exchange and notes, and the value of its cap- ital depends upon the solvency of its debt- ors. It may, for example, very properly dis- count upon the responsibility of merchants of good credit at the time, but who, before the maturity of their notes, become bank- rupts from unavoidable and unforeseen mer- cantile hazards. In this way a bank be- comes indirectly interested in navigation, trade and merchandise, to an extent very little, If any, short of the trade in which manufacturing companies engage. The cap- ital in both cases may be lost by the conduct of those who direct their affairs, notwith- standing the exercise of reasonable prudence and discretion. In regard to insurance companies or incor- porations, the capital seems, at first view, to be exposed to greater risk, but It Is believed that there has not been much If any more fluctuation of the capital In those Investments, than In incorporated companies for banking or manufacturing purposes. If the insurance be so general as to embrace a fair proportion of all the property at risk, it wiU generally yield a reasonable profit, and preserve the capital entire. It wiU not do to reject those stocks as un- safe, which are In the management of direct- ors, whose well or lU directed measures may involve a total loss. Do what you will, the capital Is at hazard. If the public funds are resorted to, what becomes of the capital when the credit of the government shall be so much impaired as It was at the close of the last war? Investments on mortgage of real estate are not always safe. Its value fluctuates more, perhaps, than the capital of Insurance stock. Again, the title to real estate, after the most careful investigation, may be Involved, ant« ultimately fail, and so the capital, which was originally supposed to be as firm as the earth Itself, wiU be dissolved. All that can be required of a trustee to In- vest, is, that he shall conduct himself faith- fully and exercise a sound discretion. He is to observe how men of prudence, discretion and Intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, consid- ering the. probable income, as well as the prob- able safety of the capital to be Invested. But In the case at bar, the testator referred the management of this trust especially to the judgment and discretion of the trustees whom he appointed; one of whom Is the brother, and the other was the cousin of his wife, for whose support this provision was made. These trustees are not to be made chargeable but for gross neglect and wilful mismanagement. The testator expressly authorized the trus- tees to invest in "other stock" than bank shares or the public funds; so they might as well select other stock as that which the tes- tator named. There can be no doubt but that shares in manufacturing and insuring incorporations! are and were commonly called and known by the name of stock. The investment would therefore be clearly within the letter of the authority. It has been argued, "that the trustees should have Invested In safe and productive stock, at their own and a sound discretion, without being governed by the known opin- ions of the testator;" "that he was at liberty to speculate, but the trustees were not." If these positions should be granted, the desired Inference would not follow. If the testator, for example, had been In the habit of dealing largely in lotteries and games of hazard, it would undoubtedly not have justified the trus- tees In making such investments, notwith- standing the testator had been the favourite of fortune. But If the testator had Invested his funds to remain permanently In any stock, that circumstance might well be taken into consideration by the trustees when called to exercise their own best skill and discretion. They might reasonably and properly inquire and consider what their testator would do in the circumstances in which they were placed. Would he recommend an Investment that should give simple Interest on a loan, or In stock that would probably give much more, and- yet have the principal sum reasonably safe? The circumstance of the trustees' reposing confidence where the testator had. Is one which Is always to be considered as tending properly to their discharge. Thompson v. Brown, 4 Johns. Ch. 628. The case of Rowth V. Howell, 3 Ves. 565, has a strong bearing upon this part of the case. There the testator, having great confidence in his banker, recom- mended It to his executors not to be In a hur- 528 DUTIES AND LIABILITIES OF TRUSTEES. ry to withdraw the funds from him. But after the death of the testator, the banker misapplied them, and probably stung by re- morse on account of his fraud, he committed suicida It was urged against the executors, that they might have withdrawn the securities from the banker; and they had time enough to do so; but it was considered that the loss arose from the confidence originally reposed in the banker by the testator, and the execu- tors were not subjected to the loss. In the case at bar, the testator was a man of extraordinary forecast and discretion, in regard to the management of his property. His vast accumulation could not be ascribed to accidental causes, but to calculation and reflection. The fact that he had within three or four years invested nearly half his property in manufacturing stock, was entitled to great consideration and respect, and would, with- out any change of circumstances, have a strong tendency to justify the selection of the manufacturing stock as part of the trust fund. We cannot think with the counsel for the appellants, that the dividend of fourteen per cent arising from the recovery of the claim against the Spanish government, can be con- sidered as part of the capital. It was re- ceived in the nature of salvage; which is al- ways divided as profits, and not treated as part of the capital stock. And we do not think that the negotiations between the Boston Manufacturing Company and the Men-imaek Manufacturing Company, in relation to making a large quantity of ma- chinery, and the sale of patents and of pat- terns for castings, by the Boston Manufactur- ing Company to the Merrimack Manufacturing Company, should be considered as part of the capital stock. We have seen no evidence that they were ever treated as such by the pro- prietors. We think the sums arising from those causes were properly considered as the fruits of their Industry, and placed to the ac- count of profit and loss of the Boston Manu- facturing Company. It is proved or admitted, that the stock which the trustees selected to constitute the trust fund of 50,000 dollars, was of that value when it was taken by them. We are of opinion that they had a right to select the stock which they did for that pur- pose, and that they acted in the premises ac- cording to their best skill and discretion. And we have not seen any evidence which would satisfy us, that under all the circumstances of the case, they did not act with a sound dis- cretion in making the selection and invest- ment. But if we were less clear than we are upon that point, we are of opinion that this whole matter has been settled in the court of pro- bate, where the appellants had notice to at- tend, and where all objections were raised and considered. The judge thereupon made a decree, from which there has not been any appeal. We say the whole matter, because the ex- ecutors and the trustees are the same persons. On February 9, 1824, the executors, after due notice to all persons interested, presented tbeir account with the estate, and appropriated the stock which should constitute the fund of 50,000 dollars selected by them as trustees for Mrs. McLean. The Massachusetts Gen- eral Hospital was heard in fact, and (as has been said and not denied) the objections were made by the same able and learned counsel who now appears in their behalf. And upon the hearing, the judge of probate allowed the accoimt There was no appeal from that set- tlement. By the legal operation of that set- tlement, the trustees became chargeable with that selected trust fund, and it is not now competent for the appellants to contend that those stocks were not legally appropriated by the executors and received by the trustees, as the fund of 50,000 dollars given by the tes- tator. If the college had any objections, they should have made them. Probably every ob- jection to the account which could have been made by the college was in fact made by thp hospital. It has been argued that the account which was settled and acquiesced in, was rendered by the executors and not by the trustees, and ought not to bar this process, which is against the surviving trustee. But It was a settlement of the very root and substance of this contro- versy. The executors announced their selec- tion and appropriation of the stock for the fund. The trustees (being the same persons) became Instantly chargeable with the man- agement of it. It is the original mis-appro- priation and selection, which is the subject of complaint. Suppose the trustees had not been the executors, and that the college and the hospital had requested the executors to deliver to the other persons as trustees the particular stock to constitute the trust fund; could those institutions object against the trus- tees, that those stocks did not constitute a proper fund? It would seem clear that the trustees might justify. They would say to the two institutions, "You acquiesced in the ap- propriation by the executors, and we also thought it advisable, safe and expedient" We think that that matter having been set- tled by a court of competent jurisdiction, without appeal, the decree is final and conclu- sive. The college and the hospital were especially put upon their guard; for the executors, in their letter of December 27, 1823, Informed their committee, that they should be duly no- tified when these accounts should be present- ed for allowance at the probate office, that they might object to any arrangements which the executors might have made for the capital of the 50,000 dollars. As no appeal was made from the decree of the probate court, all par- ties in interest must be presumed to have ac- quiesced In the arrangements which were then made for the capital of the trust fund of 50,000 dollars. If there had been an appeal, It would probably have been heard and de- DUTIES AND LIABILITIES OP TRUSTEES. 529 termlned before there was any depreciation upon the whole Investment. Indeed It appears from the CTldenee, that the stock of the Mer- rimack Manufacturing Company advanced twenty per cent from the time when the stock was selected in February, 1824, to December 1, 1825. The claim now made upon the trustees, to make up the subsequent depreciation, would seem to be justtQed only on the ground of gross abuse of their trust, even if It were not barred by the decree in the probate court from which no appeal was made. But upon examinhig all the documents and evidence, it seeijis to us that there is no reason whereon to ground that imputation. Trustees are justly and uniformly consider- ed favourably, and it is of great importance H.& B.EQ.(2d Ed.)— 34 to bereaved families and orphans, that they should not be held to make good, losses in the depreciation of stocks or the failure of the capital itself, which they held in trust, pro- vided they conduct themselves honestly and discreetly and carefully, according to the ex- isting circumstances, in the discharge of their trusts. If this were held otherwise, no pru- dent man would run the hazard of losses which might happen without any neglect or breach of good faith. The judgment of this court is, that the de- cree of the probate court, from which the appellants appealed, be, and it is hereby af- firmed; and that the record be remitted to that court for further proceedings according to law to be there had; and that the appel- lee recover his costs. 530 DUTIES AND LIABILITIES OF TRUSTEES. BBNTLEX V. CRAVEN. (18 Beav. 75.) Court of Chancery. Noy. 15, 16, 1853. The plaintiff Bentley carried on business in partnership with the defendants Craven, Prest and Younge, as sugar refiners, at Southamp- ton. Craven was the managing partner, and generally resided in London, where he did the agency business of the firm, made all the purchases of sugar and kept the London books, visiting Southampton once a week for the purpose of superintending the affairs there. He was, however, at liberty to carry on, and did carry on, an independent busi- ness as a sugar dealer, in which be had great skill and knowledge, and was able to buy to great advantage. Accordingly, in 1851, he bought a quantity of sugar, and afterwards sold it to the firm at a profit, but at the fair market price of the day. Bentley having complained of this, on the ground that they were sugar refiners and not speculators in sugar, Craven took offense and canceled the transaction, but he, nevertheless, continued to speculate in sugars, and, vrithout acquainting his partners with the fact, sold various quan- tities of his own sugars at various times to the firm, at the market prices of the day, but at a considerable profit in each case, the sums so gained by him amounting in the whole to about £853 17s. 3d. R. Palmer and W. D. Lewis, for plaintiff. Mr. Amphlett, for Prest. Mr. Cole, for Tounge. Mr. RoupeU and Mr. Selwyn, for Craven. THE MASTER OF THE ROLLS. This appears to me to be founded on the first principles of equity, and that it would be a violation of them to allow this gentleman to retain the profit which he has made upon these sugars. Two principles with relation to the doctrine of principal and agent have been recognized from the earliest times. One Is, that an agent employed to purchase cannot legally buy his own goods for his principal; neither can an agent employed to sell, himself pur- chase the goods of his principal. If he should do so, and thereby make a profit, his principal may either repudiate the transaction alto- gether or, adopting It, may claim for himself the benefit made by his agent. The same principle is applicable to a great many other relations, as to that of trustee and cestui que trust and others. The court has repeatedly applied this rule where the transaction was perfectly bona fide; It Is founded on this prin- ciple, that an agent will not be allowed to place himself in a situation which, under or- dinary circumstances, would tempt a man to do that which Is not the best for his prin- cipal, and it is the plain duty of every agent to do the best he can for his principal. I have no doubt that many persons act In ig- norance of this riile of equity; for otherwise these cases would not come so frequently into court. I have never seen a case which il- lustrated the principle more clearly than this. The case is this: Four partners establish a partnership for refining sugar; one of them is a wholesale grocer, and, from his business, is peculiarly cognizant with the variations in the sugar market, and has great skUl In buying sugar at a right and proper time for the business. Accordingly, the business of selecting and purchasing the sugar for the sugar refinery is intrusted to him. He being the person to buy. It is his duty and business to employ his skill in buying for the sugar refinery at the time he thinks most beneficial. Having, according to his skill and knowl- edge, bought sugar at a time when he thought it likely to rise, and it having risen, and the firm being in want of some, be sells his own sugars to the firm, without letting the partners know that It was his sugar that was sold, for that is expressly and clearly stated in his own affidavit. In fact, he himself says, not only that he did not tell his copartners, but that he avoided it. The only way in which a sale of that sort could be made valid and effectual would he by communication of the fact The agent should say to his principal "I have certain sugars of my own which I do not choose to sell to you, unless you give a particular price for them; you have the option to do it or not, as you think fit." If he had said that, the relation of principal and agent between them would, so far as this transaction was con- cerned, have been determined. If, after re- ceiving this statement, his partners had con- sented to his terms, the transaction might have stood good; but, in the absence of such a statement, the purchase by an agent of his own goods for his principal cannot be sus- tained in this court, even though the sale may have been made at the fair market price, and at such a price as that at which he might have sold to any other person; and if, by such a transaction, he makes a profit, the principal Is entitled to take that profit to •ilmself. This accordingly puts an end to the questions as to whether the partners are bound to adopt or to repudiate the transac- tion; or if they adopt it, as to the price at which the sugar should be charged and the like. This gentleman has made a profit of £853 in the course of one year, by sales to himself as agent of the firm, and in my opin- ion the firm is entitled to that benefit and profit He is agent for the firm for buying sugars; he has sold his own sugars to the firm and made that profit and the firm are entitled to it accordingly. DUTIES AND LIABILITIES OF TRUSTEES. 531 MUNSON et al. v. SYRACUSE, G. & C. RY. 00. et al. (8 N. E. 355, 103 N. Y. 58.) Court of Appeals of New York. Oct 5, 1886. Appeal by plaintiffs from a judgment upon a decision of the general term of the Fifth department of the supreme court, affirming a judgment entered upon the report of a ref- eree in favor of defendant. The action was to enforce specific performance of a contract to deliver certain bonds of the Syracuse, Ge- neva & Coming Railway Company. The is- sues were referred to J. L. Angle, of Roch- ester, who reported in favor of plaintiff, Au- gust 20, 1880, and judgment was entered di- recting specific performance of the contract, from which judgment defendants appealed to the general term. Fourth department, on which appeal said judgment was reversed, on the ground that the contract sought to be enforced was against public policy. The case was again tried before A. J. Northrup, as referee, who reported in favor of defend- ants, upon which report judgment was en- tered dismissing the complaint, from which judgment plaintiffs appealed to the general term, when the last-named judgment was affirmed. Plaintiff thereupon appealed to the court of appeals. Samuel Hand and B. W. Huntington, for appellants, Edgar Munson and others. Geo. F. Comstock, for respondents, Syracuse, G. & C. Ry. Co. and another. ANDREWS, J. We think it would be diffi- cult to affirm the judgment of the court be- low dismissing the complaint, if, in order to do so, it was necessary to uphold the prop- osition that the original contract of August 13, 1875, between the plaintiffs and Magee, was invalid either because Munson, one of the plaintiffs, was, at the time of entering into the contract, a director of the Sodus Bay & Coming Railroad Company, or for the reason that the contract violated the rule which prohibits combinations to prevent com- petition at a judicial or other public sale. The situation was briefly this: The Sodus Bay & Corning Railroad Com- pany was organized in 1871 to construct and operate a railroad from Corning, in the coun- ty of Steuben, to Sodus Bay, in the county of Wayne, a distance of about 86 miles, pass- ing through the counties of Schuyler, Yates, and Ontario, by way of Savona, Penn Yann, and Geneva. Of this road the plaintiff Mun- son was president and a director. In 1872 the corporation created a mortgage on Its projected road, its franchises and property, for $1,500,000, to secure a contemplated issue of bonds to that amoimt, to be used in the constroction of the road. It proceeded to secure rights of way over a portion of its line, graded about 30 miles of its track, be- tween Savona and Geneva, and expended in the aggregate, in securing titles and in the prosecution of the work, the sum of $250,000. It issued bonds under the mortgage to the amount of $257,000, from the proceeds of which the expenditures were made. At the date of the contract between the plaintiffs and Magee, August 13, 1875, the plaintiffs held and controlled, of the bonds, $241,000 in amount; the remaining $16,000 being in the hands of a former treasurer of the com- pany, whose title thereto seems to have been disputed, but who subsequently received a dividend thereon from the proceeds of the mortgage sale. The title of the plaintiffs to the $241,000 of bonds was not questioned, and there is no suggestion that they were not bona flde holders for value, or that the bonds did not represent a valid debt against the company for their full amount. In January, 1874, the company became in- solvent. It defaulted in the payment of the interest on its bonds at that date, and in the spring of 1875 all operations on the road were suspended, and the further prosecution of the enterprise was practically abandoned. In short, when the contract of August 13, 1875, was made, the company was hopelessly bank- rupt, the work had stopped, the interest on its bonds had been unpaid for 18 months, and practically its whole property consisted of disconnected rights of way over a portion of its route, and a road-bed partially graded between Savona and Geneva; and whatever property it had of any value was acquired through the means furnished by the holders of the bonds. Under these circumstances the parties en- tered into the contract of August 13, 1875. It recites that the plaintiffs own and repre- sent $241,000 of the bonds of the Sodus Bay & Corning Railroad Company, and that Ma- gee, the other party to the contract, repre- sents the persons and interests proposing to organize another railroad company for the construction of a railroad from the vicinity of Corning to Geneva. The parties of the first part (the plaintiffs) agree to proceed at once to secure the foreclosure of the mort- gage, and purchase, on the foreclosure sale, the property, rights of way, franchises, and interests covered thereby, and convey the same to Magee, or to the railroad company proposed to be organized. Magee, the other party to the contract, agrees to deliver, or cause to be delivered, to Munson and his associates, in payment for the said property, rights of way, and franchises— First, mort- gage bonds of the proposed railway company to the amount of 50 per cent, of the principal and interest of the bonds of the Sodus Bay & Corning Railroad Company held by them. The contract contains other stipulations not now necessary to mention. In the view we take of another question In the ease, we deem it unnecessary to deter- mine whether the contract of August 13, 1875, was valid as between the original par- ties thereto; that is, whether the plaintiff Munson, in entering into the contract, vio- 532 DUTIES AND LIABILITIES OF TRUSTEES. lated any duty owing by him to the corpora/- tion of which he was a director, or whether the contract as a whole was, on the part of Munson and his associates, anything more than a legitimate arrangement to protect their interests as bondholders, and to malse the mortgage security available for the pay- ment of a part of the mortgage debt. The contract was not by or with the Sodus Bay & Corning Railroad Company; and, assum- ing that the question as to the validity of the original contract can be raised in this action, we are not prepared, without further consideration, to condemn the transaction on either of the grounds suggested. Duncomb V. Railroad Co., 84 N. Y. 190; Marie v. Gar- rison, 83 N. Y. 14; Harpending v. Munson, 91 N. Y. 650. But this action is not brought to enforce the contract of August 13, 1875, against the defendant Magee. It is an ao- tion to compel the specific performance, by the defendant corporation, of the undertak- ing of Magee in that contract to deliver the bonds of the new company as therein pro- vided, founded upon the assumption by the new company of that obligation, by resolu- tion of its board of directors passed August 13, 1875, and also upon the subsequent con- tract of September 14, 1875, made between the company and the plaintiffs, which in its primary provision substituted the Company to the iklace of Magee as the party of the second part in the contract of August 13, 1875. The action in its entire scope is framed to enforce the obligation of the defendant corporation under its contract of assumption. It was tried upon this theory. The excep- tions point to this as the ground of the ac- tion, and Magee is joined as defendant, and In the demand of relief, as the custodian of bonds of the company which the plaintiffs claimed he should be adjudged to deliver to them by the judgment in the action. Throughout the trial the action was treated as an action against the defendant corpora- tion upon its contract, and in no respect as an action against Magee to enforce a liabil- ity against him under the contract of Au- gust 13, 1875. The plaintiffs, therefore, are compelled to meet the question whether, up- on principles of equity, they are entitled to the aid of the court to enforce an executpry contract between themselves on the one side, and the defendant coiT)oration on the other, for the sale of the property of the former, in a case where one of the plaintiffs, at the time the contract was made, was a director of the purchasing corporation, and took part in making the contract upon which the ac- tion is brought. For a proper imderstandlng of the situa- tion a few additional facts need to be stated. On the twenty-sixth of August, 1875, Magee and his associates organized a railroad com- pany to construct a railroad from Coming to Geneva, as contemplated by the contract ot August 13, 1875. The plaintiff Munson was one of the promoters, and became a director and stockholder, and was the first president of the corporation. On the thirty-first of August, 1875, Magee executed a written as- signment to the new corporation, the Syra- cuse, Geneva & Coming Railway Company, of his rights under the contract with the plaintiffs of August 13, 1875; and the board of directors, at a meeting on the same day, in which the plaintiff Munson participated, passed a resolution assuming the contract on the part of Magee, and agreeing to per- form it, except in one particular not now material to be mentioned. On the fourteenth of September, 1875, the contract before re- ferred to of that date was entered into be- tween the plaintiffs and the new corpora- tion, and was executed individually by each of the plaintiffs, and on the part of the cor- poration by the plaintiff Munson as president. The proceedings of the board of directors in- dicate that when the resolution of August 13, 1875, was passed, and for two or three months thereafter, the company contemplat- ed building its road to Geneva on the same line substantlallv as that of the Sodus Bay & Corning Railroad Company, but in December, 1875, it located an entirely new line, not co- incident in any part with the line originally contemplated, upon which new line its road was subsequently built It is found, and the evidence supports the finding, that the best interests of the company were promoted by adopting its present route. The plaintiffs procured a foreclosure of the mortgage, and purchased the property, as they had agreed, and subsequently, In 1877, .tendered a deed thereof to the defendant corporation, and demanded the delivery of the bonds, which was refused. In determining the legal question present- ed, It is proper to say that there is no evi- dence of any actual fraud or collusion on the part of any of the parties to the original con- tract of August 13, 1875, or that the contract of assumption was Induced by any improper appliances or motives whatever. It is plain that Magee and his associates, when they entered into the original contract, contemplat- ed building the proposed road on the line of the Sodus Bay & Coming Railroad Com- pany, and that the contract was made with a view of acquiring for the new road the rights of way and other property of that corporation. It is equally plain that the con- tract of assumption was entered into by the new corporation with the same expectation, and for the same purpose. If the contract was otherwise tmobjectlon- ajle, it could not, we think, be assailed on the gi-ound that it was a contract outside of the power of the defendant corporation. The statute authorizes a railroad corpora- tion to acquire land for its track and other necessary purposes, by voluntary purchase or by condemnation (Laws 1850, c. 140, |§ 14, 15); and an agreement, made on the purchase of rights of way, to pay therefor in bonds DUTIES AND LIABILITIES OF TRUSTEES. 533 of the purchasing corporation, secured by a mortgage on its property, is clearly, we think, within the implied, if not within the express, powers of a railroad corporation. Section 28, subd. 10. The contract made between the defendant corporation and the plaintiffs was in substance a contract to purchase rights of way; and although the defendant's line was not formally located on the line pro- posed to be purchased, and was in fact sub- sequently located on a different line, this change of purpose does not, we think, affect the question of corporate power. But we are of opinion that the contract of September 14, 1875, is repugnant to the great rule of law which invalidates all contracts made by a trustee or fiduciary, in which he is personally interested, at the election of the party he represents. There is no con- troversy as to the facts bringing the case as to Munson within the operation of the rule. He and his associates were dealing with a corporation in which Munson was a di- rector, in a matter where the Interests of the contracting parties were or might be in conflict The contract bound the corpora- tion to piu-chase, and Munson, as one of the directors, participated in the action of the corporation in assuming the obligation, and in binding itself to pay the price primarily agreed upon between the plaintiffs and Ma- gee. He stood in the attitude of selling as owner, and purchasing as trustee. The law permits no one to act in such inconsistent relations. It does not stop to inquire wheth- er the contract or transaction was fair or unfair. It stops the inquiry when the rela- tion is disclosed, and sets aside the transac- tion, or refuses to enforce it, at the instance of the party whom the fiduciary undertook to represent, without undertaking to deal with the question of abstract justice in the particular case. It prevents frauds by mak- ing them, as far as may be, impossible, know- ing that real motives often elude the most searching inquiry; and it leaves neither to judge nor jury the right to determine, upon a consideration of its advantages or disad- vantages, whether a contract made under such circumstances shall stand or fall. It can make no difference in the applica- tion of the rule in this case that Munson's associates were not themselves disabled from contracting with the corporation, or that Munson was only one of ten directors who voted in favor of the contract. The contract on its face notified Munson's associates of his relation to the corporation, and that the contract was subject to be defeated on that ground; and, on the other hand, a corpora- tion, in order to defeat a contract entered into by directors, in which one or more of them had a private interest, is not bound to show that the influence of the director or di- rectors having the private interest determin- ed the action of the board. The law cannot accurately measure the influence of a trustee with his associates, nor will it enter into the inquiry, in an action by the trustee in his private capacity to enforce the contract, in the making of which he participated. The value of the rule of equity to which we have ad- verted, lies, to a great extent, in its stub- bornness and inflexibility. Its rigidity gives it one of its chief uses as a preventive or discouraging influence, because it weakens the temptation to dishonesty or unfair deal- ing on the part of the trustees, vitiating, without attempt at discrimination, all trans- actions in which they assume the dual char- acters of principal and representative. The rule has been declared and enforced in a great variety of cases; but in none, per- haps, with more vigor and completeness, both upon principle and authority, than in the leading case of Davoue v. Panning, 2 Johns. Ch. 252. But the case of Railway Co. v. Blakle, 1 Macq. 461, decided by the house of lords, is in many of its features similar to the present one. In that case it appeared that the plaintiffs were a manufacturing firm, and that one of them was also a manager of the Aberdeen Railway Company, the defendant, and the chairman of the board. At a meet- ing of the managers, they by resolution author- ized their engineer to contract for iron chairs needed by the company. The agent contract- ed with the plaintiffs' flrm. It did not appear that the member of the firm, who was also a manage:* and the chairman of the company. In- termeddled with the dealing on either side, further than that it may be assumed he was at the meeting which authorized the engineer to procure a supply of chairs. The plaintiffs brought their suit to enforce specifically the performance of the contract, or, in the alter- native, to recover damages for its non-per- formance. After a decision In their favor in the lower court, the company appealed to the house of lords, where the ruling was unani- mously reversed, on the ground that the con- tract was condemned by the rules of equity as having been made between the company of which one of the plaintiffs was a manager, and a private flrm of which he was a member. The opinions of Lord Chancellor Cranworth, and of Lord Brougham, vindicate, upon im- pregnable grounds, the general rule, and its application to the particular case. We have designedly omitted, up to this time, special reference to a circumstance which it is claimed takes the case out of the operation of the general equitable rule; that is, that the contract with the defendant cor- poration was not, on the part of the plaintiffs, a fresh dealing in respect to the sale of their interest In the property of the Sodus Bay & Corning Railroad Company, but was simpljj a substitution, in the place of Magee, of the corporation organized by him and his asso- ciates for the purpose of carrying out the original arrangement. But the promoters of the corporation are not the corporation. The legal body is distinct from the individuals who compose it. The statute confers no authority upon the promoters of a corporation to enter 534 DUTIES AND LIABILITIES OP TRUSTEES. Into preliminary contracts binding the corpo- ration when it shall come into existence. Such contracts may bind the individuals who make them. If adopted by the corporation, and they are within the corporate powers, and are not otherwise subject to objection, they may become the contract of the corporation, and enforceable as such. In respect to contracts of promoters. Judge Redfield says: "The promoters are in no sense identical with the corporation, nor do they represent it in any relation of agency; and their contracts could, of coursg, only bind the company so far as they should be subse- quently adopted by it as their successors." 1 Redf. Rys. 9. But the corporation is at liberty to refuse to sanction them; and, if its sanction is ob' tained by the act or co-operation of directors who have a private interest, we perceive no reason why, under the general rule, the cor- poration may not resist an action for specific performance; at least, in a case where it has not accepted the consideration and taken the benefit. It is claimed that the general policy of the law In this state sanctions the contract in question, and we are referred to chapter 710, Laws 1873, which authorizes the purchaser, or the grantee of the purchaser, of the real es- tate, tracks, and fixtures of a railroad corpo- ration gold under a mortgage or decree, to as- sociate with him other persons, and form a new corporation to maintain and oi)erate the road. But the transaction in question was not in any proper sense an arrangement for the reorganization of an existing railroad. It was contemplated that the new corporation should operate or maintain the road of the old corporation. The line of the new corpora- tion, by its articles, extended only from Com- ing to Geneva; whereas the route of the old corporation was from Corning to Sodus Bay. When the contract was made, the enterprise of building the Sodus Bay & Corning road had been commenced, but the road had not been built. Its route had only in part been located, and the great burden and expense of the un- dertaking was yet to be incurred. The case Is not in terms within the act of 1873; nor, as we think, within its spirit and intent. These views lead to an affirmance of the judgment. All concur, except BAPALLO and FINCH, JJ., not voting. DUTIES AND LIABILITIES OF TRUSTEES. 535 EICH T. BLACK et al. (33 Aa. 880, 173 Pa. 92.) Supreme Court of Pennsylvania. Jan. 6, 1896. Appeal from court of common pleas, Alle- gheny county; Thomas Ewing, Judge. Bill by Martha K. Rich against Black & Baird, Daniel H. Barr, and others, to have said Barr declared trustee for plaintiff as to certain land, and to obtain an accounting by defendants. From a decree for plaintiff, de- fendants appeal. Affirmed. J. S. & E. G. Ferguson, for appellants. M. A. Woodward, for appellee. STEERBTT, O. J. The rule of public pol- icy which avoids, at the instance of the ces- tui que trust, purchases made by agents for sale, is practically absolute in its character. Courts of equity view such transactions with jealous eye; and It is only under special cir- cumstances, amounting to a dissolution of the trust relation, when the parties have dealt at arm's length, that their validity is recognized. Davoue v. Fanning, 2 Johns. Oh. 254. And the reasons are obvious. On the one hand, the relation which such agents bear is con- fidential, and disarms the vigilance of their principals. It affords peculiar facilities for obtaining exclusive information in respect of the property intrusted to them for sale. Their employment Implies that they have superior advantages for making sales, and that they will use every effort and means to obtain the highest price for the benefit of their principals. On the other hand, their individual Interest is to purchase at the lowest price, and places them tn a position which is inconsistent with the faithful and proper discharge of the du- ties of the trust. The opportunity will nat- urally lead to temptation, to abuse, and, as was aptly said by Mr. Chancellor Kent in Da- voue V. Fanning, supra, be poisonous in its consequences. The cestui que trust is not bound to prove, nor is the court bound to judge, that the trustee has made a bargain advantageous to himself. The fact may be so, and yet the party not have It In his power distinctly and clearly to show it. "There may be fraud," as Lord Hardwicke observed, "and the party not able to prove it." Thus an agent, by virtue of his trust relation, may discover valuable minerals in the land, and, locking the knowledge in his breast, take ad- vantage of it in making a contract with his cestui que trust If he deny It, how can the court find the fact? "The probability is that a trustee who has once conceived such a pur- pose will never disclose It, and the cestui que trust will be eflectuaUy defrauded." Ex par- te Lacey, 6 Ves. 627. So he may take advan- tage of his superior knowledge of the market and skill In manipulation to obtain results beneficial to himself. "It is to guard against this uncertainty and hazard of abuse, and to remove the trustee from temptation, that the rule does and will permit the cestui que trust to come, at his own option, and without show- ing actual injury, and insist upon having the experiment of another sale" (Davoue v. Fan- ning, supra) ; or, as was held in our own case of Swisshelm's Appeal, 56 Pa. St. 475, treat the purchase as inoperative in respect of the land unsold by the trustee, and compel an ac- count of the proceeds of sale made by him to innocent purchasers for value. "This is a remedy that goes deep, and touches the very root of the matter." Davoue v. Fanning, su- pra; Leisenring v. Black, 5 Watts, 303; Par- shall's Appeal, 65 Pa. St. 224; Bice v. Davis, 136 Pa. St. 439, 20 Atl. 513; Murphy v. O'Shea, 2 Jones & Lp T. 422. The cestui que trust must, it is true, move within a rea- sonable time; but what shall amount to a reasonable time will depend on circumstances, and lies in the discretion of the com:t. In the absence of special circumstances which may lengthen or shorten the time, the analogy of the law is followed. Marshall's Estate, 138 Pa. St 285, 22 Atl. 90. These appellants mis- apprehend the rationale of this rule. They in- sist that because, as they Claim, the sale was satisfactory to Mrs. Rich, the rule has no ap- plication. Conceding that in the first instance It was satisfactory, that fact would not take away her option to rescind; for these appel- lants then and for a long time afterwards os- tensibly maintained towards her the charac- ter of agents for sale, and willfully concealed the fact of their own Interest. They maintain their characters of inconsistency even now by claiming not only title as purchasers, but com- missions as agents for sale. RoU, whom they first reported as the purchaser, confessedly knew nothing of it The alleged Interest of Gillespie and ' Neeb is more than doubtful, and, if.it ever existed, was soon parted with. To all practical Intents and purposes, these agents were the real purchasers, without the knowledge of their cestui que trust Rosen- berger's Appeal, 26 Pa. St 67. However Mrs. Rich may have felt In the first instance in regard to the sale. It Is not likely that It would have been satisfactory had she been fully informed of the facts. When she gave her agents a minimum price, it was manifest- ly intended as a guide to them in negotiating sale, and Implied a just expectation on her part and an engagement on theirs that they would make an honest endeavor to obtain a higher price. If Roll, Gillespie, and Neeb were really intending purchasers, the obvious course was that these agents for sale should take competitive bids. They did not occupy the position of middlemen with equal duty to both. Their primary duty was to Mrs. Rich. But so far as appears, no bona fide effort was made by them to perform this duty. In- stead, Mrs. Rich was asked to take less, and, when this was refused, they hastened to avail themselves of the minimum price in their own interest, and had already made large profits before Mrs. Rich's discovery of the facts. If they could realize profits for them- selves, they could and should have done so 536 DUTIES AND LIABILITIES OF TRUSTEES. for their cestui qne trust. That was their employment, and that their undertaking; and equity -will treat that as done which ought to have been done. To sustain the purchase made In these circumstances would work "ac- tual injury" to Mrs. Rich, tend to encourage breaches of trust, and violate a wise rule of public policy. Having taken action In time, the plaintife was entitled to the relief which the decree of the court below Is intended to secure. Decree affirmed, and appeal dismiss- ed, with costs to be paid by appellants; and it is ordered that the record be remitted to the court below for further proceedings. DUTIES AND LIABILITIES OF TRUSTEES. 537 BBOSTT V. PRIEST. (86 Mo. 475.) Supreme Ciourt of Missouri. Oct. Term, 1885. A. J. P. Garesche and J. M. Holmes, for appellant T. L. 6ant and J. M. Glover, for respondent BLACK, J. In 1873, the superintendent of Insurance began proceedings to wind up the St Louis Mutual Insurance Company, which was not then in a satisfactory condi- tion. Most of the directors regarded a re- insurance as the best way out of the diffi- culty. Efforts were made to that end, in- cluding negotiations with the Mound City Life Insurance Company. Charles H. Peck, who was a large stockholder in the St. Louis Mutual, but not a director or officer, made proposals to some of the officers of the Mound City to bring about such an arrange- ment, the result of which was a contract between Peck and the president of that com- pany, dated the 27th of November, 1873, by which, after reciting the desire of that com- pany to effect the reinsurance, and the deem- ed necessity of Peck's services to accom- plish that object, the company agreed to pay him $155,000 within sixty days, for which sum Peck was to "devote his services for the procurement of such reinsurance and effect- ing a contract between said companies." Peck thereupon approached the defendant, a director of the St Louis Mutual, who at first did not take much interest in the mat- ter. Peck, then, in substance, stated that he was largely interested in having the rein- surance effected; that it was worth ten or fifteen thousand dollars to the stockholders of the St. Louis Mutual, and that he meant business. Priest and Wyman were partners in the real estate business, and upon Peck's sug- gestion that his business was legitimately within the partnership business. Priest re- ferred Peck to Wyman, who was at a desk in the same room or office. The result of the negotiation between Peck and Wyman was that the former placed bonds of the Leavenworth, Atchison & Northwestern Rail- road Company of the par value of fifteen thousand dollars in the hands of Mullikin to be handed to Wyman, if the reinsurance was effected, otherwise they were to be returned to Peck. This agreement was in writing, but was subsequently destroyed. The evidence, including a letter from Peck, shows that he agreed within thirty days to substitute money, or bonds of the Vulcan Iron Company, or St. Louis Gaslight Oora- pany, for these railroad bonds, the latter, it is said, then being worth but sixty cents on the dollar. As the Moimd City Insurance Company then stood, the superintendent of insurance did not regard it strong enough to make the reinsurance, and It was required to add a half million dollars to its capital stock. In December, 1873, a contract of reinsurance was made by the St. Louis Mutual with the Mound City, the latter also stipulating that for a transfer of all of the assets of the St. Louis Mutual it would assume all the lia- bilities of that company, increase its own stock a half a million dollars, and out of this increased stock exchange its own stock for that of the St Louis Mutual. Of the twenty directors of the St. Louis Mutual, seventeen, including the defendant, voted for the measure. The Moimd City increased its stock as agreed, the reinsurance was ap- proved by the superintendent of insurance and by the court in which the proceedings against the St. Louis Mutual were pending, and those proceedings were dismissed. By the 17th of January, 1874, the whole con- tract was substantially completed. Peck received his agreed compensation from the Mound City Insurance Company in secured notes which that company acquired by, the assignment from the St. Louis Mutual. Peck would not at least did not, substitute money or bonds of the iron company, or gas com- pany, as he had agreed, for the railroad bonds in the hands of Mullikin, and Wyman, unable to do better, took those bonds. In August, 1874, Priest and Wyman dissolved their partnership, at which time Wyman handed over to Priest the one-half of the railroad bonds. The conclusion from all the evidence is irresistible that defendant agreed to and did advocate and vote for the assignment and reinsurance, in consideration of the arrange- ment between Peck and Wyman. At all events the bonds were given to secure de- fendant's active inlluence in favor of the measure, though without this he might not have been hostile to the transaction. In 1877 the superintendent of insurance commenced new proceedings against the St. Louis Mutual Life Insurance Company, and plaintiff was appointed receiver. By this suit he seeks to charge the defendant as a trustee of all the railroad bonds. The cir- cuit court so held and decreed as to the one- half received by the defendant, and on his refusal to produce the same, entered a mon- ey judgment for the estimated value. From this judgment the defendant appealed. Plaintiff took a writ of error. In like man- ner both parties come to this court from the court of appeals, where the judgment of the circuit court was affirmed. 1. An agent or trustee cannot unite in himself the opposite character of buyer and seller, and if he does the profits may be charged with a trust for the benefit of the principal, unless the latter confirm the trans- action with full knowledge of all the facts. So, too, if the agent make gains from the use of the trust funds or property he must account therefor. We need not cite author- ities from this and other courts to support these plain propositions. Again, if the agent 538 DUTIES AND LIABILITIES OP TRUSTEES. accept any benefits In conducting the busi- ness of his principal he will hold them in trust for the principal. Story, Agency (8th Ed.) § 211; Perry, Trusts, § 206; Jacobus v. Munn, 37 N. J. Eq. 48. The directors of a eorporatiori occupy a fiduciary position. They are trustees and agents of the corporation and stockholders. In general they are governed by the same rules as are applied to trustees and agents. Parker v. Nlckerson, 112 Mass. 195; Railway Co. V. Poor, 59 Me. 277; Railway Co. v. Hud- son, 19 Eng. Law & Eq. 365. In Perry on Trusts, at section 207, It is said: "And so all advantages, all purchases, all sales, and all sums of money received by directors in dealing with the property of the corporation are made and received by them as trustees of the corporation, and they must account for all such moneys or advantages, received by them by reason of their position as trustees." Defendant does not seriously controvert these general principles of equity jurisprudence, but he insists they have no rightful application to this case, because the bonds were never made a part of the assets of the St. Louis Mutual, did not constitute a part of the consideration, avowed or concealed, paid by the Mound City, and were not made by him in the legiti- mate business of the corporation. He relies with full confidence upon Tyrrell v. Bank, 10 H. L. Oas. 26. The substantial facts of that case were these: The bank had been recently organized, and TjTrell was its solicitor. Mrs. Campbell owned certain property,' upon a part of which was situated a building known as the Hall of Commerce. Read had a "contract with her for the purchase of the whole prop- erty at £49,200. TyrreU and Read formed a combination to sfell the property to the bank at an advanced price, and Tyrrell, for his in- fluence, was to have a one-half interest In the contract, which Read had with Mrs. Campbell. Tyrrell kept the agreement secret from the bank, at the same time urged the bank to purchase, professing to act for it as solicitor. Eventually the bank purchased the Hall of Commerce part of the property at £65,000. Out of this Mrs. Campbell was paid, some litigated claims were settled, and the balance was paid to Read, who divided the profits with Tyrrell, each making some £6,000, and had left also the unsold portion of the property, alleged to be of the value of £8,000. The suit was brought by the bank against Tyrrell and Read. The master of the rolls dismissed the bill as to Read, and decreed Tyrrell a trustee for the bank of all interest acquired in the property, accounts were di- rected to be taken, and Tyrrell was ordered to convey to the bank his share in the prop- erty not sold to the bank. On appeal, prose- cuted by Tyrrell, the decree was modified In form. The Lords considered that Tyrrell could not be decreed a trustee of the unsold portion of the property, and should not have been directed to convey that to the bank, be- cause, as was said, the limit of the agency of Tyrrell, the extent of his obligation, and the relation of solicitor and client, were to be as- certained by the extent of the property sold by Tyrrell to the bank. The lord chancellor very clearly states that Tyrrell could only be a trustee as to that portion of the property sold to the bank, and as to that he should make no gain. He proceeds to say the object which the master of the rolls has in view is to be accomplished in another way: "Tyr- rell must receive from his clients, in his char- acter of vendor to his clients, only that sum of money which, as between him and Read, Tyrrell must be taken to have paid for the property conveyed to his clients, but that sum of money must be ascertained in the follow- ing way: by deducting from it the value of the unsold property Included in the contract between Read and Tyrrell, but not included in the contract of sale to the clients." The bank among other things contended that, assuming Tyrrell's agency as to the bank was confined to the Hall of Commerce part of the property, still the circumstances showed that he received the share in the rest as a bribe, and for that reason the bank was entitled to a conveyance of it. As to this contention. Lord Chelmsford said: "No au- thority has been adduced in support of such a proposition, and I do not think it can be maintained. In order to simplify the ques- tion, let it be supposed that Tyrrell had ac- quired no interest in the property, but that Read had offered him £5,000 to induce the respondent to purchase, and that they had been persuaded by TyrreU to buy at an ex- cessive price. Of course, they might have rescinded the conti-act, but could they in any manner have obtained the £5,000 on the ground that it belonged to them? If, by reason of the agreement between Read and TyrreU, the respondent had been prevailed upon to give too large a sum for the prop- erty, they might have maintained an action on the case against both the parties to the imposition upon them, and have recovered damages; or they might have sued their agent, TyrreU, for damages arising from the breach of duty, and they would probably have received an amount equal to the sum which he had improperly received as a fair measiu-e of the injury which they had sus- tained. But the £5,000 itself, as a specific demand, they could in no manner have re- covered. The unsold part of the property in the same manner cannot be directly reach- ed by any proceeding of the respondent" These remarks of Lord Chelmsford, if de- tached from the facts of that case and the decree actually made, appear to give some support to the defendant's position here. The solicitor could be regarded as the agent of the bank only so far as the bank became the purchaser; beyond that he had a right to deal for himself; yet the decree as modified did not allow him to make any gain out of the transaction taken as a whole. He was aUowed to keep the unsold DUTIES AND LIABILITIES OF TRUSTEES. 539 portion, but Its value was deducted from the amount which he was allowed to receive from the clients in the statement of the ac- count. Practically, there was little, if any, difference between the decree as made by the master of the rolls and as modified, in its effect upon the parties, and this seems to have been conceded in terms by Lord Cranworth. The facts there in judgment and the decree even as modified do not fur- nish a precedent in defendant's favor. Where a trustee retired from his office in consideration that his successor paid him a sum of money, it was held that the money so paid should be treated as a part of the trust estate, and be accounted for as such by the retiring trustee, on the ground that he could malse no profit directly or indirectly from the trust property, or from his oflice of trustee. Sugden v. Crossland, 3 Smale & G. 192. In Gasliell v. Chamhers, 26 Beav. 360, it appears the Eagle Insurance Com- pany desired to buy out the business of the London Mutual Insurance Company, and agreed to and did pay a specific considera- tion therefor, and, by a secret agreement with the directors, agreed to and did pay to them the further sum of four thousand pounds as a compensation for the loss of their oflacers. These directors were held to be trustees for the corporation, and it was also ruled that they received that sum by reason of their position as trustees, and must account therefor. These cases are all quite clear to the effect that the trustee will not be allowed to make gain to himself, beyond his allowed compen- sation, by reason of his office and influence as such trustee. By accepting the office the di- rector undertalses to .give his judgment and influence to the interests of the corporation in all matters in which he represents or pro- fesses to represent it. That judgment and in- fluence, if right, belongs to the corporation, and so does that which it produces, and the bonds received by the director are its proper- ty, as between it and the defendant. The cir- cumstance that they came from Peck, and not directly from the Mound City Insurance Com- pany, is wholly immaterial. They came from the agent of that company, and the extrava- gant amount paid Peck impresses one vnth the notion that more than fair commissions was included in the $155,000. However that may be, what the director makes in his office as such belongs to the corporation. It will not do to clog these principles of law applied to priucipal and agent, trustee and cestui que trust, with exceptions and modifications. They must not be whittled away. Whatever may be the practice in such cases, the agreement by which the bonds were acquired was an il- legal contract, as well as a plain breach of duty. No court, it is true, would aid the de- fendant or the receiver, or the corporation of which he Is the receiver, in recovering the bonds from Peek, for that would be to execute the illegal contract Neither would a court assist Peck In recovering them back after the transaction was completed. So, too, an agent may resist an accounting on the ground that the subject of the agency was illegal, or against public policy. Story, Agency, § 235. But when the subject of the agency is entire- ly legal, and that was the case here, and prof- its are made by a violation of duty, it would be obviously unjust to allow the agent to reap the fruits of his own misconduct. Id. § 207. An agent is accountable to his principal for moneys that come into his hands as such, even if such amount be composed of usurious Interest, and not collectible by the principal himself. Chirm v. Chinn, 22 La. Ann. 599. One party cannot hold back proceeds from another, of whom he was representative, on the ground that there was illegality in the way of getting the money. Whart. Cont. § 354. The defendant acquired the bonds while act- ing and prefessing to act in his capacity of director, and must be held to have received them in that capacity. The plaintiff's case is made out by the proof of these facts, and we are not concerned in the execution of the ille- gal agreement. 2. As to the writ of error prosecuted by the receiver we do not see that he has any right to the bonds which never came to the defend- ant. Wyman, who acquired them, is no party to this suit, and held no fiduciary relation to the plaintiffs corporation. The receiver has elected to take the course here pursued and must be content with such property hs it will reach. 3. This suit was begun February 19, 1879, five years and ten to fifteen days after Wy- man received the bonds for himself and de- fendant The agreement by which the bonds were acquired and the receipt of the same are facts which were kept secret from all persons save those directly connected therewith, un- til 1878, when rumors were afioat pointing to these facts. They were then brought to the attention of the court and soon thereafter this suit was begun. Defendant pleaded the five- year statute of limitations, and plaintiff re- plied that the fraud was not discovered until within five years next before the commence- ment of the suit Section 3230, Rev. St., spec- ifies five different classes of civil actions (oth- er than those for the recovery of real estate) which can only be commenced within five years after the cause of action shall have ac- crued. The fifth is: "An action for relief on the ground of fraud, the cause of action in such case to be deemed not to have accrued until the discovery by the aggrieved party, at any time within ten years, of the facts con- stituting the fraud." Our statute of limitations applies to equi- table, as well as legal, causes of action, and we agree with counsel for the defendant that this clause under consideration should be con- sidered in the light of the former equity rules, the place of which, in many respects, at least It was designed to take. Beyond doubt the statute does not now and never did run 540 DUTIES AND LIABILITIES OF TRUSTEES. against an express continuing trust .in favor ot tiie trustee, certainly not until he openly re- pudiates the trust. Johnson v. Smith, 27 Mo. 591; Smith v. Ricords, 52 Mo. 581, 56 Mo. 553. Conceded it must he that by the equity rules, the statute was not applied by way of analogy, in cases of actual fraud, until the discovery of the fraud. But is it true, as is contended here, that by those rules the statute was applied without regard to the time of dis- covery in case of constructive frauds and trusts? It was said by Scott, J., in Keeton's Heirs v. Keeton's Adm'r, 20 Mo. 541: "In cases of resulting, implied and constructive trusts, where a party is to be constituted a trustee by a decree Of a court of equity found- ed on fraud, it is well settled as a rule of eq- uity, that the statute of limitations, and pre- sumptions from lapse of time, will operate. With regard to the statute of limitations, it will run from the time that the facts are brought home to the knowledge of the party." See, also. Perry, Trusts, §§ 228, 230; 1 Daniell, Ch. PI. 669; Hunter v. Hunter, 50 Mo. 445; Ang. Lim. § 470. In the case last cited the defend- ants were the uncles and agents of the plain- tiffs for the management and sale of the lands; they purchased the lands, with the val- ue of which plaintiffs were not familiar, at an under value; they then sold the same at an advanced price. It was a suit to establish a constructive trust for the profits arising from the re-sale. It was there said: "If a party is in possession of, or has notice of, the main facts constituting the fraud, the statute will commence running from that time." The dif- ference of opinion expressed in that case and the subsequent one of Rogers v. Brown, 61 Mo. 187, is not pertinent to any inquiry here, for this case in no way concerns real estate. ' Many authorities do hold that, in cases of constructive trusts and frauds, the statute will begin to run without regard to the time of the discovery. This appears to be due to the fact that often In such cases the facts are open and the law frequently draws its conclusion without regard to the motives, because of the confldeatial relation of the parties. Much, we think, depends upon the fact whether the fraud is a secret or open one. If the substantial facts constituting the fraud, in cases like the one under con- sideration, were open, it is believed, under the equity rules, the statute of limitations would have been applied at once, but if these facts were in their nature secret and were unknown, it is believed the statute would not begin to run until they were discovered, there being no want of diligence on the part of the complainant. Here the fraud consists in professing to act for and in the interest of the corporation, as was defendant's duty, when, in reality, he was acting for himself and for his private gain. The agreement uo- der which this was done was in its very nature a secret one, one which the corpora- tion would not naturally suspect, and one which would not be revealed by any act openly done. Of course, here, simple knowl- edge of the existence of the agreement and acquisition of the bonds thereunder, brought home to the plaintiff, or the corporation of which he is receiver, would start the statute and from that thne it would continue to run notwithstanding the subsequent appohitment of the receiver. This knowledge was not a inson, * • • the executors of this, my last will and testament, hereinafter nomi- nated and appointed, in trust for the use and benefit of my brothers and sisters, to wit, [naming them] to have and hold, man- age and control, the same for such purpose, for and during the term of twenty one years from and after the date of my decease, and during the continuance of said trust estate, as aforesaid, to receive, collect, and pay over to my said brothers and sisters above named the net income and profits thereof, in equal portions to each, annually, the child or chil- dren of a deceased brother or sister to take the same portion the father or mother would have taken if living; and, at the expiration of said twenty one years after my decease, I give, devise, and bequeath to my said brothers and sisters, their heirs and assigns, forever, the said rest, residue, and remainder of my estate, both real and personal, to be equally divided between them, share and share alike, the child or children of any de- ceased brother or sister to take the same share the father or mother would have taken if living, and, in case of the death of any of my said brothers or sisters leaving no issue, the share of such brother or sister would have taken if living to be equally divided among my surviving brothers and sisters." The testator died July 19, 1883, and on the 24th of the same month said will was duly admitted to probate in the county court of De Kalb county, whereupon said Alden and Robinson were qualified, and took upon themselves the duties of executors and trus- tees, as in and by the will provided. The estate was very large, being inventoried at about $531,000, consisting of farm lands and other real estate to the value of $127,512.70, and the balance In cash, notes and accounts, stocks, etc. The widow declined to take un- der the will, and, her husband having left no child or children, or descendants of such, one half of the entire estate, real and per- sonal, was partitioned and set oflE to her, as provided by the statute in such case. The administration was still pending and unde- termined in said county court at the filing of this bill. Said Alden and Robinson had re- duced a part of the trust property to pos- session, and made a partial distribution of the proceeds thereof to the beneficiaries, when on the 9th of June, 1887, Robert W. and Charles Waterman, surviving brothers of the testator, and certain children of de- ceased brothers and sisters, claiming under said residuary clause, began this action in the circuit court of said De • Kalb county against Alden and Robinson, to compel them to render an account of their trusteeship, to charge them with certain losses to the trust estate by reason of their negligent and wrongful conduct in and about the manage- ment of the same, and to have them remov- ed as such trustees, and others appointed in their stead. After protracted litigation a fi- nal decree was rendered in the cause by the circuit court of Lee county, to which it had been removed. The complainants carried the record to the appellate court of the second district by appeal. There both parties as- signed errors, and an extended statement of the case, with a very carefully prepared opin- ion by Cartwright, J., was filed (42 111. App. 294), affirming the decree of the circuit court in all respects. This appeal is from that judgment of affirmance. The record is un- usually voluminous, and the argument of counsel on behalf of appellants has taken an almost unlimited range. It would be impos- sible to even casually notice all the points made, without extending this opinion to an unreasonable length. For a full statement of the facts of the case we refer to the opin- ion of the appellate court. We also concur in the conclusions reached by that court, as set forth in said opinion, except as herein- after indicated. The points more particularly pressed upon our attention are— First, the circuit court erred in refusing to remove appellees as trus- tees; second, the circuit court erred in re- fusing to hold said trustees personally liable for the loss of the "Marsh indebtedness;" third, the circuit court erred in its division of the costs and expenses of the litigation. The parts of the final decree relating to these 550 DUTIES AND LIABILITIES OF TRUSTEES. assignments of error are as follows: "It is further ordered, adjudged, and decreed that the motion of complainants, filed herein on the 17th of July, 1890, for the removal of Alden and Robinson as trustees, be overrul- ed." "And it is further ordered, adjudged, and decreed that this court has no jmisdic- tion to investigate the charge against said Alden and Robinson or either, on account of any alleged loss growing out of the failure of the Sycamore Marsh Harvester Man'fg Co., the Marsh Binder Man'fg Co., C. W. Marsh, and W. W. Marsh, or either, or two or more, of them, or the alleged neglect of the said Alden and Robinson to collect or secure the payment of obligations owing by them, or some of them, to the estate of James S. Waterman, dec'd." "It is further ordered, adjudged, and decreed that the expenses of this litigation be paid up to October 15, 1889, as found by said master's report, to wit: $3,868.71, and the attorneys' fees and attor- neys' expenses in this cause paid or incur- red since October 15, 1889, as enumerated, and shown by the testimony of D. J. Carnes and William Lathrup, heard in open court, up to July 19, 1890, to wit: $1,348.27 to be allowed said trustees in their accounts when they shall have actually paid the same, and shall be charged to the principal fund, less one-fourth part of the gross attorneys' fees therein included, which one-fourth part is found by the court to be $988.62, and which one-fourth part said trustees are ordered to bear personally, leaving $4,229.36 to be char- ged to the principal fund. This decree shall not be construed as allowing or disallowing any other expense of this litigation paid or incurred by said trustees since October 15, 1889. And it is further ordered and decreed that the costs of this proceeding be taxed as follows,— that is to say, that two thirds there- of be paid by the trustees, as such, out of the principal fund in their hands, and one third of said costs out of the distributable income going to the complainants, and that in taxing the costs the clerk allow $500 paid by stipulation on file herein to Mason B. Loomis, and $360 paid by said trustees to Sherwood Dixon, as special masters; also payment by them of $15.40 for witness fees, and $312.80 for depositions; which sums, so far as paid by them, except that paid Master Dixon, are shown by his report to have been paid, and are embraced in the items of $3,- 869.71 costs of this litigation. The clerk wiU also tax, as part of the complainant's costs herein, the sum of $392.86, paid by complain- ant for taking depositions; also $47.40 for certified copies of record, $2.50 for service of subpoenas, $8 witness fees paid by complain- ants' solicitor. The clerk will also tax the usual taxable costs incurred by either par- ty." We will consider the foregoing ques- tions in the order named, referring to the facts appearing in the record especially ap- plicable thereto. There is no difficulty in finding the legal measure of care and diligence required at the hands of trustees in the management of a trust estate. Cases may be found holding that, inasmuch as no compensation can be allowed them when not expressly provided for, they can only be held liable for losses which result from their gross negligence or willful misconduct; but the rule undoubt- edly is that they must discharge the duties of their trust to the best of their skill and ability, "with such care and diligence as men fit to be Intrusted with such matters may fairly be expected to put forth in their own business of equal importance." 2 Story, Eq. Jur. § 1268b; 2 Pom. Eq. Jur. 1 1070. The evidence in this case clearly shows, and in fact it is admitted, that appellees were, prior to the filing of this bill, guilty of some neg- ligence in and about the management of the trust property. First, they wholly failed to keep proper "accounts of the trust funds, and of their dealings with the same, as will more fully appear hereafter. In the second place, Robinson gave little or no attention to the business, being much of the time absent from the state. It will not do to say, as is attempted, that his personal attention was not necessary to the proper management of the business, in view of the fact that numer- ous letters were written him by Alden, com- plaining of his continued absence, and de- manding his presence and attention to the estate. Finally, general negligence was shown in failing to promptly collect or se- cure claims due the estate, especially owing by the Marsh Manufacturing Companies. It does not follow necessarily that, because of these acts of negligence, a court of chancery should remove them. Courts of equity have a very broad jurisdiction over trust estates and trustees, and will remove the latter for a failure, through neglect or from willful- ness, to perform then: duties, or will compel them to carry out the trust which they have been appointed to and have accepted, as shall appear, under all the circumstances of a giv- en case, for the best interest of the estate and all parties Interested in the same. In 2 Story, Bq. Jur. § 1289, it is said: "It is not, indeed, every mistake or neglect of duty or inaccuracy of conduct of trustees which will induce courts of equity to adopt such a course, [remove the trustees,] but the act or omission must be such as to endanger the trust property, or to show a want of hon- esty, or a want of proper capacity to execute the duties, or want of reasonable fidelity." The dereliction of duty on the part of these trustees seems to have resulted from mere negligence rather than willfulness, and we are of the opinion that the chancellor was justified, on the whole record. In refusing to remove them. Whether or not the trustees should he held personally liable for losses sustained by the complainants on the Marsh indebt- edness is attended with much more diffi- culty. It is alleged in the bill that among DUTIES AND LIABILITIES OF TRUSTEES. 551 the assets which came into their bands were three judgment notes payable to said James W. Waterman,— one for $5,000, dated April 27, 1883, due in 90 days, signed by the Syca- more Marsh Harvester Company and C. W. and W. W. Marsh; one for the sum of $3,000, dated June 13, 1883, due in 90 days, by the same parties; and one for $5,350.40, dated January 1, 1878, by G. W. and W. W. Marsh alone. It is there alleged that after said notes came into their hands, and were due and payable to them, they knew the mak- ers were embarrassed financially, and likely to fail, but took no steps to collect or secure the same until June 30, 1884; that said Al- den, being cashier, one of the directors, and a large stockholder in the Sycamore National Bank, on October, 1883, the said Alden know- ing the financial embarrassment of the said makers of said notes, said bank loaned them about $25,000; that thereafter said Alden pressed said parties for security for said bank indebtedness, which was given, but that he made no effort whatever to obtain security for said indebtedness due the estate, al- though security therefor could have been ob- tained; that on said June 30, 1884, Alden caused the notes due the estate to be put in judgments In the circuit court of Lee coun- ty, although the circuit court of De Kalb county was at the time in session, the mak- ers of said notes having property in the last- named county subject to lien and levy of judgments on said notes; that he employed the same attorney who represented said bank, and he at the same time took judg- ment in its favor for said $25,000 Indebted- ness; that, through the wrongful and negli- gent conduct of said trusteej said property In De Kalb county was allowed to be levied upon and taken on executions in favor of said bank and others, to the exclusion of those In favor of the estate; that, through the negligence of the trustees, property attempted to be levied upon In said county on execu- tions in favor of the estate was wrongly de- scribed, and thereby priority of lien In favor of said estate lost; that by reason of such neglect and misftianagement on the part of appellees the greater part of the said In- debtedness was wholly lost to said estate. The first special master to whom the case was referred foimd against the complainants on these allegations as to negligence and omissions of duty on the part of the trustees, and reported that they should not be held liable for the loss; but the chancellor be- fore whom the case was pending took a dif- ferent view of the evidence, and on excep- tions to the master's report found "that said trustees, Alden and Robinson, should have known that said Marsh Harvester Manufac- turing Company and the Marshes were in- solvent, and in failing condition, from the time of the death of the said James S. Wa- terman until their actual failure, about July, 1884, and that said trustees did not exercise due and proper diligence to collect or have secured said undisputed indebtedness to said estate; and it appearing, had said trustees diligently pressed said undisputed indebted- ness to said estate for payment or secm-Ity, that security might have been obtained there- for, so it is ordered that trustees, Alden and Robinson, be charged with the payment of said undisputed indebtedness to said estate." This order only includes the two notes signed by the manufacturing companies and the Marshes, the other note being disputed, as hereafter shown. On a re-reference of the case the master was directed to report the amount of loss on said two notes, which he did, finding the amount to be $1,365.51; but the circuit court of Lee county, as ap- pears from the foregoing extract from its decree, refused to allow the claim for want of jurisdiction. That a loss to the com- plainants has been sustained by reason of the failure of appellees to collect the whole amount of those notes is not denied. That they might have been collected by the use of ordinary business management and dili- gence, or secured; is clearly established by the evidence. We think it is equally clear that the trustees knew that said parties were heavily indebted, and liable to fail, long before any effort was made by them to secure or collect said indebtedness. The only finding of the court below on the facts is to that effect While Special Master Loomis by his report excuses the conduct of the trustees, he does not do so on the ground that they were not negligent, but rather up- on the theory that, from the relations ex- isting between the testator and the Marshes, it is fair to presume that he, if living, would have used no more care and diligence in en- forcing those claims than did appellees. It need scarcely be suggested that no such test can 'properly be applied to the conduct of trustees. There may be abundant reason for believing that Mr. Waterman, though a care- ful business man, would much rather have lose the Indebtedness than to have pressed the collection of it, but that furnishes no excuse for these trustees to neglect or fail to use all reasonable diligence in the matter. Mr. Waterman might do with his own as he pleased, but the duties of these appellees are fixed by law, and if they have violated those duties they are personally liable. The question, then, as to whether or not the circuit court erred in refusing to hold appellees liable to make good said loss, must be decided upon the admission that, upon the facts proved and found by that court in a proper tribunal, they can be so held; the only question now being, did said court prop- erly hold that it had no jurisdiction to ad- judicate upon the matter? That courts of chancery have jurisdiction generally, on the application of beneficiaries of a trust fund, to charge trustees with losses occurring through their negligence or mismanagement is too clear to call for the citation of au- thorities. The decree of the circuit court 562 DUTIES AND LIABILITIES OF TEUSTEES. seems to have proceeded upon the theory that, inasmuch as the trustees were also executors of the will of James S. Water- man, a court of chancery could not compel them to make good the loss sustained by complainants without interfering with the jurisdiction of the county court before which the administration of the estate was pend- ing. This, we think, Is a misapprehension. The negligence in failing to secure or collect these claims, it is said, was the negligence of the executors, over whom, in the admin- istration of the estate, the county court has exclusive jurisdiction. The relief sought by this bill is against the trustees, and not the executors; and, if the relief prayed cannot be granted by a coiu^ of chancery. It must be because complainants have failed to prove such dereliction of duty on the part of ap- pellees, in their capacity as trustees, as should make them liable, and not because their bill seeks to remove any part of the administration of the estate from the coun- ty court It does not foUow, because Al- den and Robinson were guilty of negligence in not collecting said indebtedness as ex- ecutors, they are not also guilty of neglect of duty in that regard as trustees. Suppose other persons had been executors, and they had been guilty of the conduct charged in this bill, causing the loss here complained of, and these trustees, with full knowledge of that misconduct, had not only consented, but themselves contributed, thereto, would there have been any doubt as to the power of a court of chancery to charge the trustees, re- gardless of the liability of the executors in their settlement of the estate In the county court? The executors and trustees being the same persons, it is impossible that there should be an act of fraud or breach of duty by the executors which is not consented to and acquiesced in by the trusteea The question is not in which capacity appellees are liable, and hence cases cited by counsel on either side, discussing the question as to whether funds were held in the one capacity or another, have no application. On the al- legations of the bUl, and the finding of the facts by the circuit court, the debts in ques- tion have been absolutely lost to the estate, and to that extent the complainants have been injured; and the only question which can now or hereafter arise between these parties is, have these trustees, by their neg- ligent conduct, become liable for that loss? Nothing which may be hereafter done in the settlement of the estate in the county comrt: can affect this question, and we are unable to see why these complainants should be sent to that court for the settlement of their rights. We are therefore of the opinion that the circuit court erred in refusing to take jurisdiction of the question of the liability of appellees for said loss, and that it should have decreed that they make good the same to the trust fund in their hands. As to the note signed by the Marshes alone, the first master reported that the makers claimed to have a defense against it, and, when the case was again referred, the master was directed to ascertain whether or not a valid defense did exist to said note, and report the same. He reported that a de- fense was insisted upon, and that on the testimony of said C. W. and W. W. Marsh it was established, the only question being as to the competency of those parties as witnesses to prove the defense; and on that question he found that in their favor. We think his conclusion as to their competency was correct Moreover, it does not appear that appellees could have secured or collected that note, however prompt and diligent they might have been. The Marshes denied that they owed it and do not say they would have paid or secured it if applied to for that purpose; whereas they admit that the other two notes were undisputed, and could have been secured if security had been asked for. Appellees shoidd not therefore, be held lia- ble on said personal note. Both parties object to the apportionment of the costs and expenses of the suit made by the circuit court We think the order in that regard is quite as favorable to appellees as the facts of the cas^ would justify. They are responsible for the most expensive por- tion of this litigation, in falling to keep prop- er accounts of their trusteeship. In the first special master's report is the significant find- ing that they "made out and exhibited an entirely new book of accounts as executors, also one as trustees, since the filing of the bill;" and that fact the master well says "amounts to an admission that prior books were not what they ought to be." There is no claim on their part that they attempt- ed to keep accurate separate accounts of the trust estate. The only apology for failing to do so is that they did not know how to classify the two kinds of property. But they were entitled to counsel, at the expense of the trust estate, to assist them, and, if nec- essary, to the directions of a court of equity in that regard. They certainly had no right to omit a plain legal duty because they may have been in doubt as to how It should be performed. On that theory they might have neglected that duty during the entire period of their trusteeship. At all events, on the report of the first master the court found it necessary to again refer the case to a sec- ond master to make a complete statement of the account and this of necessity greatly Increased the costs and expenses of the suit Appellees cannot therefore justly complahi that they were required to pay a considera- ble part of the whole expense. On the oth- er hand, owing to the large amount and variety of assets belonging to the estate. It was a matter of some diflaculty at least as the result of this litigation shows, to deter- mine just what property belonged to prin- cipal and what to Income. As before said, appellees were entitled to the advice of coun- DUTIES AND LIABILITIES OF TRUSTEES. 553 sel, and, If necessary, the aid of the court, to properly settle that question. The state- ment of the account approved by the court below Is therefore for the benefit of all par- ties Interested in the trust estate,— those who take the income, and those who shall finally take the principal; and it cannot be said that either should be entirely exempt from liability for costs and expenses in making it. It is conceded that taxing costs in a chan- cery proceeding is always within the sound legal discretion of the chancellor, and that his decree in that regard will only be review- ed where It is shown that there has been an abuse of that discretion. We see no rea- son for interfering in the present case on that ground. It is Insisted with great eam- estaess that the account stated by the last special master, and approved by the court, is erroneous, in that It falls to charge the trustees with interest on the small amounts which had been charged wrongfully by Alden for railroad fare and commissions on insur- ance. It is perhaps true that the account is Inaccurate in that respect, but the matter is of so little importance that no court ought to entertain the objection as reversible error. We have examined the account, and com- pared it with the proofs in the case, and are satisfied that it is substantially correct, and does justice between the parties, except in the matter of the Marsh indebtedness, as above stated. For that error the decree of the circuit court will be reversed, and the cause will be remanded to the circuit court, with directions to enter a decree in con- formity with the views herein expressed. Reversed and remanded. 554 DUTIES AND LIABILITIES OF TRUSTEES. In re BARKER'S TRUSTS. (1 Ch. Div. 43.) Chancery Division. Nov. 6, 1875. This was a petition under the trustee act, 1850, and the bankruptcy act, 1869, asking for the removal of the sole trustee of a vyill (who had also a beneficial interest under it), on the ground that he had been adjudicated bankrupt, and for the appointment of a new trustee in his place, and for a vesting or- der. Part of the property subject to the trusts of the will consisted of bonds transferable by delivery with coupons. The trusts were to receive the income, and pay it to one of the petitioners during life. Mr. Chitty, Q. 0., and Mr. Bush, in support of petition. Chapman Barber, for trustee. Solicitors: Tatham, Procter & Co.; Walter, Moojen & Co. Mr. Chester, for other par- ties. JESSEL, M. R. In my view. It is the duty of the court to remove a bankrupt trustee who has trust money to receive or deal with, so that he can misappropriate it There may, be exceptions, under special circumstances, to that general rule; and it may also be that, where a trustee has no money to receive, he ought not to be removed merely because he has become bankrupt; but I consider the gen- eral rule to be as I have stated. The reason is obvious. A necessitous man is more likely to be tempted to misappropriate trust funds than one who Is wealthy; and besides, a man who has not shewn prudence in managing his own affairs is not likely to be successful in managing those of other people. However, If special circumstances are re- quired for the removal of a bankrupt trustee, I should in the present case find them in the nature of the trust property. Part of the property consists of bonds with coupons, which could very easily be made away with. The trustee must be removed, and I make an or- der accordingly. MORTGAGES. 555 CHICK et al. v. WILLBTTS. (2 Kan. 384.) Supreme Court of Kansas. Jan. Term, 1864. Error from district court, Shawnee county. Nathan P. Case, for plaintiffs in error. J. & D. Brockway, for defendant in error. CROZIER, C. J. Two questions are pre- sented by the record: First, which law, the twentieth section of the Code, or the sec- ond section of the "amendatory act," pre- scribes the limitation; and, second, when an action upon a promissory note, secured by a mortgage on real estate, is barred by the statute of limitations, has the mortgagee any remedy upon the mortgage? These are the facts: On the sixth day of April, 1858, at Kansas City, in the state of Missouri, the defendant executed to the plaintiffs his promissory note, payable one day after date. Afterwards, and on the 12th day of August of that year, the defendant, to se- cure the payment of the note, executed, in this state, a mortgage Upon some lots in To- peka, which mortgage contained a stipula- tion that if default was made in the pay- ment of the note for two years from the date of the mortgage, that instrument might be foreclosed, etc. On August 13, 1863, a suit was Instituted upon the note and mortgage, and the facts, as above stated, being admit- ted, judgment was rendered for the defend- ant To reverse that judgment this proceed- ing is instituted. The note having been made In Missouri, would, under the act of February 10, 1859, have been barred in two years from the passage of that act, if there were nothing else to be considered. By a stipulation in the mortgage, the time of payment was de- ferred two years from August 12, 1858. The mortgage having been made in this state, was the arrangement, with reference to our statute of limitations, a Kansas or Missouri contract? Although no change was made upon the face of the note, yet the clause of the mortgage referred to was ef- fective to change its terms as if written across Its face. The time of its payment, with reference to the land, was extended two years. Its payment, as against the land, could not be enforced before that time; nor would the limitation laws begin to run against it until the expiration of that time. These changes in the original contract were effected by the paper which was executed in this state. The contract evidenced by the mortgage is essentially different from that set out in the note, and'must control it. Therefore, the contract, as It stood, after the making of the mortgage, was a Kansas contract, and would not be barred in two years. The statutes of limitation of this state are wholly unlike the English statute, and dif- fer materially from the limitation laws of those states which have adhered to the com- mon law forms of action and modes of procedure. Those statutes apply, in terms, to the forms of the action at law and contain no provisions concerning an equitable pro- ceeding. If a party had concurrent reme- dies, one at law, the other in equity, courts of equity applied the limitation prescribed for the action at law. But in all other cases they were said to act merely in analogy to the statutes, and not in obedience to them. In this state, the case is entirely different. The distinction between actions at law and suits in equity is abolished; and the stat- utes of limitation apply equally to both class- es of cases. They were made to apply to the subject matter, and not to the form of the ac- tion. In England and the states referred to, a limitation different from that prescribed for simple contracts in writing, was pre- scribed for specialties. Here, "an action up- on a specialty, or any agreement, contract or promise in writing," must be brought within three years; and it matters not what the relief demanded may be, whether such as could formerly be obtained only in a court of law, or such as might have been afforded by a court of equity exclusively. Mortgages here differ essentially from .mortgages at common law, and in the states referred to. At common law, a mort- gage was a conveyance with a defeasance, and gave the mortgagee a present right of possession. Upon It, even before the condi- tions were broken, he might enter peaceably or bring ejectment. If the condition was broken, the conveyance became absolute. If the money was paid when due, the estate reverted to the mortgagor; if not so paid, the estate was gone from him forever. After a time, the law of mortgage was so modified that the legal title was not considered as having passed until the condition was Lio- ken. At a later day, another still more im- portant innovation was made. While it was considered that, upon the condition broken, the mortgagee became invested with the le- gal title, and was entitled to possession, yet, in that condition of things, his title was subject to a defeasance. The rents and prof- its operated as cancellation, pro tanto, of his conveyance; and when they reached a sum sufficient to reimburse his original in- vestment, with such use as the law allowed, the legal title reverted to the mortgagor, and he would be entitled to the possession; and he had a right to facilitate this operation by payment of the money, and upon appli- cation to a court of equity, his title would be disencumbered of the cloud the mortgage cast upon It. This right of the mortgagor was called "the equity of redemption," and, considering the then prevalent theory of mortgages, the phrase was peculiarly appro- priate and expressive. The title had passed, but he had a right to redeem; and It Is among the highest glories of equitable juris- prudence, that at so early a day the means of enfqfcing this right were supplied. Some 556 MORTGAGES. *f the states still adhere to the common law view, more or less modified by the real na- ture of the transaction; but In most of them, practically, all that remains of the old theo'ry Is their nomenclature. In this state, a clean sweep has been made by statute. The com- mon law attributes of mortgages have been wholly set aside; the ancient theories have been demolished; and if we could consign to oblivion the terms and phrases— without meaning except in reference to those theories —with which our reflections are still embar- rassed, the legal profession on the bench and at the bar would more readily understand and fully realize the new condition of things. The statute gives the mortgagor the right to the possession, even after the money is due, and confines the remedy of the mortgagee to an ordinary action and sale of the mortgaged premises; thus negativing any idea of title in the mortgagee. It is a mere security, al- though in the form of a conditional convey- ance; creating a lien upon the property, but vesting no estate whatever, either before or after condition broken. It gives no right of possession, and does not limit the mortga- gor's right to control it— except that the se- curity shall not be impaired. He may sell It, and the title would pass by his convey- ance—subject, of course, to the Hen of the- mortgagee. If we are right in these views as to our statute of limitations, and the operation of a mortgage under our law, the English cases and cases in New York and Ohio, cited by counsel for plaintiffs, have no application to the case at bar. The statutes of limitation- under which they were made, make distinc- tions between notes and mortgages which do not exist here; and the operations of notes and mortgages there and here are to- tally different. The decisions are not author- ities in this case, for the reason that they are not applicable, and cannot be made sc. If our limitation law omitted mortgages, and our law of conveyances gave the right of pos- session to the mortgagee, some of them would be in point; but as neither of these conditions exist here, they throw no light upon the questions under consideration lu the case at bar. Our conclusions are, that the twentieth section of the Code prescribes the limitation to an action on the note or mortgage, and as the three years expired on the 12th day of August, 1863, a suit commenced on the 13tk was too late. Judgment affirmed. All the justices concurring. MORTGAGES. 557 BARRETT et al. v. HINCKLEY. a4 N. E. 863, 124 lU. 32.) Supreme Court of Illinois. Jan. 19, 1888. Appeal from superior court, Cook county; J. B. Gary, Judge. Watson S. Hinckley, plaintiff, sued George D. Barrett, Adalina S. Barrett, and Wil- liam H. Whitehead, impleaded with others, defendants, in ejectment Judgment for plaintiff, and the above-mentioned defend- ants appealed. Whitehead & Packard, for appellants. Wilson & Moore, for appellee. MULKEY, J. Watson S. Hinckley, claim- ing to be the owner in fee of the land in con- troversy, on the twenty-sixth day of Febru- ary, 1885, brought an action of ejectment in the superior court of Cook county against the appellants, George D. Barrett, Adalina S. Barrett, William H. Whitehead, and others, to recover the possession thereof. There was a trial of the cause before the court without a jury, resulting in a finding and Judgment for the plaintiff, and the defend- ants appealed. The evidence tends to show the following state of facts: In 1870, Thom- as Kearns was in possession of the land, claiming to own it in fee-simple. On Au- gust 3d of that year he sold and conveyed it to William H. W. Cushman for the sum of $80,000. Cushman gave his four notes to Kearns for the balance of the purchase mon- ey,— one for $12,500, maturing in 30 days; three for $16,875 each, maturing, respective- ly, in two, three, and four years after date, — and aU secured by a mortgage on the prem- ises. The notes seem to have all been paid but the last one. In 1878, Kearns died, and his widow, Alice Kearns, administered on his estate. Previous to his death, however, he had hypothecated the mortgage and last note to secure a loan from Greenebaum. Subsequently, and before the commencement of the present suit, Greenebaum, in his own right, and Mrs. Kearns, as administratrix of her husband, for value, sold and assigned by a separate instrument in writing the mortgage and note to the appellee, Watson S. Hinckley. This is in substance the case made by plaintiff. The defendants showed no title in themselves or any one elsa The conclusion to be reached, therefore, depends upon whether the case made by the plaintiff warranted the court below in rendering the judgment it did. It is claimed by appellants, in the first place, that much of the evidence relied on by appellee to sustain the Judgment below was improperly admitted by the court, and various errors have been assigned upon the record questioning the correctness of the rulings of the court in this respect They, however, go further, and insist that, even conceding the facts to be as claimed by ap- pellee himself, -they are not sufficient in law to sustain the action. As the judgment be- low will have to be reversed on the ground last suggested, it will not be necessary to consider the other errors assigned. We pro- pose to state as briefly as may be some of the reasons which have led us to the conclu- sion reached. In doing so, it is perhaps proper to call attention at the outset to some considerations that should be steadily kept in mind as we proceed, and to which we at- tach not a little importance. It is first to be specially noted that this is a suit at law, as contradistinguished from a suit in equity. It is brought to enforce a naked legal right, as distinguished from an equitable right. The plaintiff seeks to re- cover certain lands, the title whereof he claims in fee-simple. To do this he is bound to show in himself a fee-simple title at law, as contradistinguished from an equitable fee. Fischer v. Bslaman, 68 111. 78; Wales v. Bogue, 31 111. 464; Fleming v. Carter, 70 111. 286; Dawson v. Hayden, 67 111. 52. Has he done this? He attempts to derive title remotely through the mortgage from Cush- man to Kearns, but upon what legal theory is not very readily perceived. His imme- diate source of title, however, seems to be Mrs. Kearns, as administratrix of her hus- band, and Greenebaum, as pledgee of the note and mortgage. The Instrument through which he claims is lost or destroyed, and aZX we know concerning its character is what the plaintiff himself says about it. As to its contents, he does not pretend to state a single sentence or word In it, but character- izes it as an assignment, and gives the con- clusions which he draws from it in general terms only. After stating his purchase of the note and mortgage in January, 1880, he says: "The assignment was from Mrs. Kearns, the administratrix of Thomas Kearns' estate, and Ellas Greenebaum, the banker. At the time of the purchase, a sep- arate writing was given to me,— a full as- signment. • * * It was a very explicit &a^ signment, or full assignment, of the note and mortgage, and the land, the property, and all the right and title to the land." It will be observed, the instrument is through- out characterized as an assignment only, which does not, like the term "deed" or specialty, signify an instrument under seal. A mere written assignment, founded upon a valuable consideration, is just as available for the purpose of passing to the assignee the equitable title to land as an instrument un- der seal. Such being the case, we would clearly not be warranted in inferring that the assignment was under seal, from the simple fact that the witness gives It as his opinion that the instrument was "a full as- signment" of the land, which Is nothing more than the witness' opinion upon a ques- tion of law. There not being sufficient evi- dence in the record to show that the assign- ment was under seal, it follows that, even conceding the legal title to the property to have been in Mrs. Kearns and Greenebaum, 558 MORTGAGES. or either of them, it could not have passed to the appellee by that instrument, and, if not by it, not at all, because that Is the only muniment of title relied on for that purpose. This conclusion is of course based upon the fundamental principle that an instrument inter partes, in order to pass the legal title to real property, must be under seal. But this is not all. Even conceding the sufficiency of the assignment to pass the legal title, the record, in our opinion, fails to show that the assignors, or either of them, had such title; hence there was nothing for the assignment to operate upon, so far as the legal estate in the land is concerned. Having no such title, they could not convey it. "Nemo plus juris ad alienum transferre potest, quam ipse ha- v^ bet." That the legal estate in this property was not either in Greenebaum or Mrs. Kearns at the time of the assignment to plaintifC is demonstrable by the plainest prin- ciple of law. Let us see. Thomas Kearns was the owner of this property in fee. He conveyed it in fee to Gushman. The latter, as a part of the same transaction, recon- veyed it by way of mortgage to Kearns. By reason of this last conveyance, Kearns became mortgagee of the property, and Gushman mortgagor. According to the Eng- lish doctrine, and that of some of the states of the Union, including our own, Kearns, at least as between the parties, took the legal ^_, estate, and Gushman the equitable. Accord- ing to other authorities, Kearns, by virtue of Cushman's mortgage to him, took merely a lien upon the property to secure the mortgage^ Indebtedness, and the legal title remained in Gushman. For the purposes of the pres- ent inquiry, it is not important to consider just now. If at all, which is the better or true theory. It is manifest, and must be conceded, that the legal estate in the land, after the execution of the mortgage, was either in the mortgagee or mortgagor, or in both combined. Such being the case, it is equally clear appellee, to succeed, must have deduced title through one or both of these parties. This could only have been done by showing that the legal title had, by means of some of the legally recognized modes of conveying real property, passed from one or both of them to himself. This he did not do, or attempt to do; indeed, he does not claim through them, nor either of them. Not only so; neither Mrs. Kearns nor Greene- baum, through whom appellee does claim, derives title through any deed or convey- ance executed by either the mortgagor or mortgagee; nor does either of them claim as heir or devisee of the mortgagor or mort- gagee. As the assignment of the note and mort- gage to appellee did not, as we hold, trans- fer or otherwise affect the legal title to the land, it may be asked, what effect, then, did it have? This^'question, like most others pertaining to the law of mortgages, admits of two answers, depending upon whether the rules and principles which prevail In courts of equity or of law are to be applied. If the latter, we would say none; because, as to the note, that could not be assigned by a separate instrument, as was done in this case, so as to pass the legal title. Ryan v. May, 14 111. 49; Portier v. Darst, 31 HI. 213; Chickering v. Raymond, 15 HI. 362. As to the mortgage, it is well settled that could not be assigned like negotiable paper, so as to pass the legal title in the instrument, or clothe the assignee with the immunity of an innocent holder, except under certain circum- stances which do not apply here. Railway Co. V. Loewenthal, 93 lU. 433; Hamilton v. Lubukee, 51 111. 415; Olds v. Oummlngs, 31 111. 188; Mclntire v. Yates, 104 111. 491; For- tier V. Darst, 31 HI. 212. But that the mort- gagee, or any one succeeding to his title, might, by deed in the form of an assign- ment, pass to the assignee the legal as well as the equitable interest of the mortgagee, we have no doubt, though there is some con- flict on this subject. 2 Washb. Real Prop. 115, and authorities there cited. Yet the as- signors, in the case in hand, not having the legal title, as we have just seen, could not, by any form of instrument, transmit it to another. If, however, the rules and princi- ples which obtain in courts of equity are to be applied, we would say that, by virtue of the assignment, the appellee became the equitable owner of the note and mortgage, and that it gave him such an interest or equity respecting the land as entitled him to have it sold in satisfaction of the debt. There Is perhaps no species of ownership known to the law which is more complex, or which has given rise to more diversity of opinion, and even conflict in decisions, than that which has sprung from the mortgage of real property. By the common law, if the mortgagor paid the money at the time speci- fled in the mortgage, the estate of the mortga- gee, by reason of the performance of the con- dition therein, at once determined, and was forever gone, and the mortgagor, by mere op- eration of law, was remitted to his former es- tate. On the other hand, if the mortgagor failed to pay on the day named, the title of the mortgagee became absolute, and the mortgagor ceased to have any Interest what- ever in the mortgaged premises. By the ex- ecution of the mortgage, the entire legal es- tate passed to the mortgagee, and, unless it was expressly provided that the mortgagor should retain possession tiU default in pay- ment, the mortgagee might maintain eject- ment as well before as after default This is the view taken by the common-law courts of England, and which has obtained, with cer- tain limitations, in most of the states of the Union, including our own, in which the com- mon-law system prevails. In Carroll v. Bal- lance, 26 111. 9, which was ejectment by the mortgagee against the assignee of the mortga- gor, to recover the mortgaged premises, this court thus states the English rule on the MORTGAGES. 559 subject: "In England, and In many of the American states, it is understood that the or- dinary mortgage deed conveys the fee in the land to the mortgagee, and under it he may oust the mortgagor immediately on the execu- tion and delivery of the mortgage, without waiting for the period fixed for the perform- ance of the condition, [citing Coote Mortg. 339; Blaney v. Bearce, 2 Greenl. 132; Brown V. Cram, 1 N. H. 169; Hobart v. Sanborn, 13 N. H. 226; Paper-Mills v. Ames, 8 Mete. (Mass.) 1]. And this right is fully recognized by courts of equity, although liable to be de- feated at any moment in those courts by the payment of the debt." Again, in Nelson v. Pinegar, 30 111. 481, which was a bill by mortgagee to restrain waste, it is said: "The complainant, as mortgagee of the laud, was the owner in fee, as against the mortgagor and all claiming under him. He had the jus in re, as well as ad rem, and being so is enti- tled to all the rights and remedies which the law gives to such an owner." So, in Oldham V. Pflegar, 84 111. 102, which was ejectment by the heirs of the mortgagor against the grantee of the mortgagor, this court, in hold- ing the action could not be maintained, said: "Under the rulings of this court, the mortga- gee is held, as in England, in law the owner of the fee, having the jus in re, as well as the jus ad rem." In Finlon v. Clark, 118 111. 32, 7 N. E. 475, the same doctrine is an- nounced, and the cases above cited are re- ferred to with approval. Taylor v. Adams, 115 111. 570, 4 N. E. 837. Courts of equity, however, from a very early i)eriod, took a widely different view of the matter. Th^y looked upon the forfeiture of the estate at law, because of non-payment on the very day fixed by the mortgage, as in the nature of a penalty, and, as in other cases of penalties, gave relief accordingly. This was done by allowing the mortgagor to redeem the land on equitable terms at any time before the right to do so was barred by foreclosure. The right to thus redeem after the estate had become absolute at law in the mortgagee was called the "equity of redemption," and has continued to be so called to the present time. These courts, looking at the substance of the transaction, rather than its form, and with a view of giving effect to the real intentions of the parties, held that the mortgage was a mere security for the payment of the debt; that the mortgagor was the real beneficial owner of the land, subject to the incumbrance of the mortgage; that the Interest of the mort- gagee was simply a lien and incumbrance up- on the land, rather than an estate in It. In short, the positions of mortgagor and mort- gagee were substantially reversed in the view taken by courts of equi^. These two systems grew up side by side, and were maintained for centuries without conflict or even friction between the law and equity tribunals by which they were respec- tively administered. The equity courts did not attempt to control the law courts, or even question the legal doctrines which they an- ■ nounced. On the contrary, their force and validity were often recognized in the relief granted. Thus, equity courts, in allowing a redemption after a forfeiture of the legal es- tate, uniformly required the mortgagee to re- convey to the mortgagor, which was of course necessary to make his title available in a court of law. In maintaining these two sys- tems and theories in England, there was none of that confusion and conflict which we en- counter in the decisions of the courts of this country; resulting, chiefly, from a failure to keep in mind the distinction between courts of law and of equity, and the rules and prin- ciples applicable to them respectively. The courts there, by observing these things, kept the two systems intact, and in this condition they were transplanted to this country, and became a part of our own system of law. But other causes have contributed to destroy that certainty and uniformity which formerly prevailed with us. Chiefly among these causes may be mentioned the statutory chan- ges in the law in many of the states, and the failure of the courts aud authors to note those changes in their expositions of the law of such states. Perhaps another fruitful source of confusion on this subject is the fact that in many of the states the common-law forms of action have been abolished by statute, and Instead of them a single statutory form of ac- tion has been adopted, in which legal and equitable rights are administered at the same time, and by the same tribimal. Yet the dis- tinction between legal and equitable rights is still preserved, so that, although the action in theory is one at law, it is nevertheless subject to be defeated by a purely equitable defense. Under the influence of these statutory enact- ments and radical changes in legal procedure, by which legal and equitable rights are given effect and enforced in the same suit, the equitable theory of a mortgage has in many of these states entirely superseded the legal one. Thus, in New York it is said, in the case of Trustees, etc., v. Wheeler, 61 N. Y. 88, "that a mortgage is a mere chose in action. It gives no legal estate in the land, but is simply a lien thereon; the mortgagor remain- ing both the legal and equitable owner of the ' fee." Following this doctrine to its logical results, it is held by the courts of that state that ejectment under the Code will not lie at the suit of the mortgagee against the owner -^ of the equity of redemption. Murray v. Wal- ker, 31 N. Y. 399. In strict conformity with the theory that the mortgagee has no estate in the land, but a mere lien as security for his debt, the courts of New York, and others tak- ing the same view, hold that a conveyance by the mortgagee before foreclosure, without an assignment of the debt, is in law a nullity. *9^ Jackson t. Curtis, 19 Johns. 325; Wilson v. Troup, 2 Cow. 231; Jackson v. Willard, 4 Johns. 41. And this court seems to have rec- ognized the same rule as obtaining In this state, in Delano v. Bennett, 80 IlL 633. 560 MORTGAGES. The New York cases just cited, and all oth- ers taking the same view, are clearly incon- sistent with the whole current of our decisions on the subject, as is abundantly shown by the authorities already cited. The doctrine would seem to be fundamental that if one sui juris, having the legal title to land, intention- ally delivers to another a deed therefor, con- taining apt words of conveyance, the title at law, at least, will pass to the grantee; but for what purposes or uses the grantee wiU hold It, or to what extent he will be able to enforce It, will depend upon circumstances. (If the mortgagee conveys the land without assigning the debt to the grantee, the latter would hold the legal title as trustee for the holder of the mortgage debt. Sanger v. Ban- \croft, 12 Gray, 367; Barnard v. Eaton, 2 Gush. 304; Jackson v. Willard, 4 Johns. 40. It is true, the Interest which passes is of no appreciable value to the grantee. Thus, In the case last cited, Chancellor Kent, in speak- ing of it, says: "The mortgage interest, as distinct from the debt, is not a fit subject of assignment. It has no determinate value. If it should be assigned, the assignee must hold the interest at the will and disposal of the creditor who holds the bond." In Wait's Ac- tions and Defenses (volume 4, p. 565) the rule Is thus stated: "By the common law, a mort- gagee In fee of land is considered as absolute- ly entitled to the estate, which he may devise or transmit by descent to his heirs." In con- formity with this view, Pomeroy, in his work • on Equity Jurisprudence, (volume 3, p. 150,) in treating of this subject, says: "In law, the mortgagee may convey the land itself by deed, or devise it by will, and on his death In- testate It WiU descend to his heirs. In equity, his interest is a mere thing In action, assigna- ble as such, and a deed by him would operate merely as an assignment of the mortgage; and in administering the estate of a deceased mortgagee a court of equity treats the mort- gage as personal assets, to be dealt with by the executor or administrator." We have al- ready seen that under the decisions of this court, and by the general cmrrent of authori- ty, a mortgage Is not assignable at law by mere indorsement, as in the case of commer- cial paper. But, on the other hand, the estate and interest of the mortgagee may be con- veyed to the holder of the Indebtedness, or even of a third party, by deed with apt words of conveyance; and the fact that It is m form an assignment will make no difference. 2 Washb. ReaJ Prop. 115, 116. Such an as- signee, if owner of the mortgage Indebted- ness, might, no doubt,, maintain ejectment In his own name for Ms own use. Or the action might be brought In his name for the use of a third party owning the Indebtedness. Kil- gour V. Gockley, 83 HI. 109. So, in this case, if the action had been brought In the name of Keams' heirs for the use of Hinckley, no rea- son is perceived why the action might not be maintained. It must not be concluded, from what we have said, that the dual system respecting mortgages, as above explained, exists in this state precisely as It did In England prior to Its adoption In this country, for such is not the case. It is a conceded fact that the equi- table theory of a mortgage has, in process of time, made la this state, as in others, material encroachments upon the legal theory w^ich is now fully recognized Jn courts of law. Thus, it is now the settled law that the mort- \ gagor or his assignee is the legal owner of \ the mortgaged estate, as against all persons j except the mortgagee or his assigns, ^all y.~/ Lance, 25 111. 250, 277; Emory v. Keighan, 88 111. 482. As a result of this doctrine, it follows that, in ejectment by the mortgagor against a third party, the defendant cannot defeat the action by showing an outstandhig title in the mortgagee. Hall v. Lance, supra. So, too, courts of law now regard the title of a mortgagee in fee In the nature of a base or determinable fee. The term of its exist- »j ence is measured by that of the mortgage / debt. When the latter Is paid off, or becomes 1| barred by the statute of limitations, the mort-y gagee's title is extinguished by operation of law. Pollock V. Maison, 41 111. 516; Harris V. Mills, 28 III. 44; Gibson v. Rees, 50 111. 383. Hence the rule is as well established \ at law, as it is in equity, that the debt is the J principal thing, and the mortgage an incident.^ So, also, while it Is indispensable in all cases to a recovery in ejectment that the plaintifC show In himself the legal title to the property as set forth in the declaration, except where the defendant is estopped from denying it, yet it does not follow that because one has such title he may under all circumstances maintain the action; and this is particularly so in respect to a mortgage title. Such title exists for the benefit of the holder of the mort- gage indebtedness, and it can only be en- forced by an action in furtherance of his in- terests; that is, as a means of coercing pay- ment. If the mortgagee, therefore, should, for a valuable consideration, assign the mort- gage Indebtedness to a third party, and the latter, after default in payment, should take possession of the mortgaged premises, eject- ment would not lie against him at the suit of the mortgagee, although the legal title would be in the latter, for the reason it would not be in the interest of the owner of the indebtedness. In short, it Is a well-settled "^ principle that one having a mere naked legal title to land in which he has no beneficial in- terest, and in respect to which he has no | duty to perform, cannot maintain ejectment y against the equitable owner, or any one hav-^ ing an equitable interest therein, with a pres- ent right of possession. This case, with a slight change of the circumstances, would af- ford an excellent Illustration of the principla Suppose the present plaintiff had obtained possession under his equitable title to the note and mortgage, and the heirs of Keams, who hold the legal title, had brought ejectment against him, the action clearly could not have MORTGAGES. 561 been maintained, for the reasons we liave just stated. But it does not follow, because such an action would not lie against him,^ that he could, upon a mere equitable title, malntahi - For the reasons stated, the judgment of the the action against others. Cottrell v. Adams, 2 Biss. 351-353, Fed. Gas. No. 3,272; 9 Myers, Fed. Dec. 240. The question in that case was almost identical' with the question in this, "H.* B.BQ.(2d Ed.)— 36 and the court reached the same conclusion we have. See, also, Speer y. Hadduck, 31 IlL 439. court below is reversed, and the cause re- manded for further proceedings not Inconsist- ent with this opinion. Judgment reversed. ^- ^' 562 MORTGAGES. LADUB V. DETROIT & M. R. CO. (13 Mich. 380.) Supreme Court of Michigan. July Term, 1865. Appeal In chancery from Wayne circuit. The facts, so far as they are necessary to an understanding of the legal questions In- volved in the case, will be found stated in the opinion. G. V. N. Lothrop, for complainant. H. H. Emihons and A. Pond, for defendants. CHRISTIANCfT, J. The mortgage, which the bill in this case seeks to foreclose, was executed by John Ladue to the complainant and Francis E. Eldred, composing the firm of Ladue & Eldred, on the 4th day of Aur gust, 1852, to secure and indemnify the firm against any indorsements which might be made, or liabilities to be Incurred, by them as sureties for John Ladue, as well as for any moneys they might advance for him, ac- cording to the condition of a bond to which the mortgage was collateral, and which was of like effect There was nothing in the pa- pers or in the arrangement between the par- ties which bound Ladue & Eldred to make an.y advances or to Indorse any paper for John Ladue, or to incur any liability for him, nor was the latter bound to accept any such accommodation. .The effect of the arrange- ment was that such advances and liabilities. If made or incurred, would be purely optional on the part of the mortgagees. This mort- gage was duly recorded on the day of its date. On the 9th day of May, 1853, John Ladue, the mortgagor, sold and conveyed the mortgaged premises to Charles Howard (through whom the railroad company derive their title), by warranty deed, which was duly recorded on the 9th day of July, 1853. John Ladue, however, remained in posses- sion, using the premises as before, until his death, December 4, 1854. No claim is made for any advances made by Ladue & Eldred to John Ladue, but the whole claim under the mortgage is based upon indorsements made for him by the mortgagees, which have been paid by An- drew Ladue, one of the complainants, and all these indorsements, as shown by the proofs, were made some time after the sale to Howard and the recorduig of his deed. Whatever indorsements were made prior to that time seem to have been taken up by John Ladue; and it does not satisfactorily appear by the evidence that any of these in- dorsements, made since the recording of Howard's deed, were made in renewal of paper indorsed by them previous to that time. No indorsements made prior to the re- cording of Howard's deed are in any way in- volved, and the case may therefore be con- sidered in all respects in the same light as if no such previous indorsements had ever been made, especially as it does not appear that at the time of the sale to Howard, or the recording of his deed, there was any ex- isting unsatisfled indorsement, or any sub- sisting liability, inchoate or otherwise, hi- curred 1^ the mortgagees for the mortgagor. The mortgagees, ^t the time of the indorse^ ments in question, had no notice of the deed to Howard, unless the record of that deed is to be considered such notice, the deed hav- ing been some months previously recorded. The validity of the mortgage, as between the parties, for any amount of advances which might be made, or liabilities incurred under it, after they should have been thus made or incurred, is not questioned by the defend- ants; nor is it denied that the record of it would be sufficient notice to subsequent pur- chasers and incumbrancers, of the amount which the mortgagees might actually have advanced or indorsed for the mortgagor; or, in other words, the amount for which it had become an actual and subsisting security, at the time when the question of notice of the mortgage became material, which, for the purposes of this case, is admitted to cover the period from the purchase by Howard down to the time of the recording of his deed, the record of which is claimed to be notice to the n;iortgagees as regards any ad- vances made to, or liabilities incurred by, them for the mortgagor after the recording of the deed. Nor is it denied, that if the mortgagees, by the contracts or arrange- ments between them and the mortgagor (to secure which, on the part of the latter, was the object of the mortgage), had been bound to make advances or to indorse for the mort- gagor, the record of the mortgage would have been full notice to Howard, and the mortgage would have been good against him, though the advances were not in fact made or the paper indorsed until after the deed to him and actual notice of that deed to the mortgagees. The defendants also admit that the result would be the same under this mortgage, as to any advances made or paper indorsed by the mortgagees for the mortga- gor, before they had actual or constructive notice of the sale and deed to Howard. But they insist that, as there was not at the time of Howard's purchase or the recording of his deed any Cebt of the mortgagor, or any lia- bility incurred for him by the mortgagees, absolute or inchoate, nor any obligation on their part to incur such liability, the mort- gage was not then an incumbrance in fact or in legal effect; that it could only become such from the time when the advances or in- dorsements were actually made; and It be- ing optional with the mortgagees whether they would make any such advances or In- dorsements, and the indorsements being made subsequent to the recording of How- ard's deed, the mortgage is, in legal effect, subsequent to the deed, and the record of the deed was notice to the mortgagees of Howard's rights. The first question, therefore, for our de- termination Is, what was the legal effect of the mortgage (if any) upon the land, at •) 7 MORTGAGES. 563 the time of the recording of the mortgagor's deed to Howard? That a mortgage in this state, both at law and in equity, even when given to secure a debt actually subsisting at its date, con- veys no title of the land to the mortgagee (especially since the statute of 1843, taking away ejectment by the mortgagee); that the title remains in the mortgagor until fore- closure and sale, and that the mortgage is but a security, in the nature of a specific lien, for the debt, has been already settled by the decisions of this court Dougherty V. Randall, 3 Mich. 581; Oaruthers v. Humph- rey, 12 Mich. 270; and Ciippen v. Morri- son, to be reported in 13 Mich, ^his Is in accordance with the well-settled law of the state of New York, from which our system of law in regard to mortgages has been, in a great measure, derived. Jackson v. Wil- lard, 4 Johns. 41; CoUins v. Torrey, 7 Johns. 277; Runyan v. Messerean, 11 Johns. 534; Gardner v. Heartt, 3 Denio, 232; Eld wards v. Insurance Co., 21 Wend. 4G7; Waring v. Smyth, 2 Barb. Oh. 119; Bryan v. Butts, 27 Barb. 504; Bank v. Tallman, 31 Barb. 201; Cortrlght v. Cady, 21 N. Y. 342. This view of a mortgage is also sustained by several of the English decisions, and sub- stantially this is the more generally received American doctrine, as will sufficiently appear by reference to the decisions, most of which have been carefully collected in the elaborate brief of the defendant's counsel, but which are too numerous to be cited here. There are exceptions and peculiarities in particular states, in some of which, as in some of the New England states and Kentucky, the old idea of an estate upon a condition continues to rankle in the law of mortgages, like a foreign substance in the living organism, but is rapidly being eliminated and thrown off by the healthy action of the courts imder a more vigorous application of plain common sense. But few of the incidents of this an- tiquated doctrine are now recognized in most of the states of this Union; the title, for nearly all practical purposes, being now rec- ognized, both at law and in equity, as con- tinuing in the mortgagor, and the mortgage as a mere lien for the security of the debt But wherever any vestige of this now near- ly exploded Idea continues to prevail, iii con- nection with the more liberal doctrines of modern times which the courts have been compelled; from time to time, to adopt, it seems . only to confuse and deform the law of mortgages by various anomalies and in- consistencies, making it a chaos of arbitrafy and discordant rules, resting upon no broad or just principle; while, by recognizing the mortgage as a mere lien for the security of the debt, at law as well as in equity, and thus giving it effect according to the real understanding and intention of the parties, the law of mortgages becomes at once a system' of homogeneous principles, easily understood and applied, and just in their operation. A mortgage, then, being a mere security for the debt or liability secured by it, it necessarily results: (1) That the debt or liability secured is the principal, and the mortgage but an in- cident or accessory. See cases above cited; also, Richards v. Synes, Barnad. Oh. 90; Roath V. Smith, 5 Conn. 133; Lucas v. Har- ris, 20 111. 165; Vansant v. AUman, 23 111. 31; Ord v. McKee, 5 Gal. 615; Ellison v. Daniels, 11 N. H. 274; Hughes v. Edwards, 9 Wheat 489; Green v. Hart 1 Johns. 580; McGan v. Marshall, 7 Humph. 121; 4 Kent Comm. 193; McMillan v. Richards, 9 Oal. 365. (2) That anything which transfers the debt (though by parol or mere delivery), trans- fers the mortgage with it See cases above cited, especially Vansant v. Allman, 23 111. 31; Ord v. McKee, 5 Cal. 615; Ellison v. Daniels, 11 N. H. 274. See, also, Martin v. Mowlin, 2 Burr. 978; Clark v. Beach, 6 Conn. 164; Southern v. Mendane, 5 N. H. 420; Wilson V. Kimball, 27 N. H. 300, 36 N. H. 39; Growl v. Vance, 4 Iowa, 434; 1 Blackf. 137; 5 Cow. 202; 9 Wend. 410; 1 Johns. 580. (3) That an assignment of the mortgage without the debt is a mere nullity. Ellison V. Daniels, 11 N. H. 274; Jackson v. Bron- son, 19 Johns. 325; Wilson v. Throop, 2 Cow. 195; Weeks v. Eaton, 15 N. H. 145; Peters v. Jam'estown Bridge Co., 5 Cal. 324; Webb V. Flanders, 32 Me. 175; 4 Kent Gomm., ubi supra; Thayer v. Campbell, 9 Mo. 277. (4) That payment release, or anything which extinguishes the debt, ipso facto ex- tinguishes the mortgage. Lane v. Shears, 1 Wend. 433; Sherman v. Sherman, 3 Ind. 337; Ryan v. Dunlap, 17 111. 40; Armitage V. Wicklifee, 12 B. Mon. 496; Paxon v. Paul, 3 Har. & McH. 399; Perkins v. Dib- ble, 10 Ohio, 433; Buckenridge v. Ormsby, 1 Marsh. 257; Cameron v. Irwin, 5 Hill, 272. It will be seen from these authorities that some, if not all, of these incidents or char- acteristics of a mortgage are recognized by some of the courts which still hold the mortgage to be a conveyance of the estate,— an idea, however, with which they are ut- terly inconsistent, as such incidents can only logically flow from the doctrine that the estate still remains in the mortgagor, and that the mortgage is but a lien for se- curity of a debt. These propositions being established, the necessary result is that the mortgage in- 1 strument, without any debt, liability, or obli- \ gation secured by it can have no present legal effect as a mortgage or an incumbrance upon the land. It is but a shadow without a substance,— an incident without a prin- cipal,— and it can make no difference In the result whether there has once been a debt or liability which has been satisfied, or whether the debt or liability to be secused has not yet been created, and it requires, as in this case, some future agreement of the parties to give it existence. At most. 564 MORTGAGES. the difference Is only between the nonentity which follows annihilation and that which precedes existence. The instrument can only take effect as a mortgage or incumibrance from the time r.trir>:; of subrogation is derived from the civil law, and "it is said to be a legal flo- tlon, by force of which an obligation extin- guished by a payment made by a third per- son is treated as still subsisting for the bene- fit of this third person, so that by means of It one creditor is substituted to the rights, remedies, and securities of another. • • • It takes place for the benefit of a person who, being himself a creditor, pays another creditor whose debt is preferred to his by reason of privileges or mortgages, being obliged to make the payment, either as standing In the situation of a surety, or that he may remove a prior incumbrance from the property on which he relies to secure his payment Subrogation, as a matter of rlght,\ independently of agreement, takes place only \ for the benefit of insurers; or of one who, \ being himself a creditor, has satisfied the j lien of a prior creditor; or for the benefit of [ a purchaser who has extinguished an In- \ cumbrance upon the estate which he has pur- ', chased; or of a co-obligor or surety who has paid the debt which ought, In whole or In part, to have been met by another." Sheld. Subr. §§ 2, 3. In section 240 it Is said: "The/| doctrine of subrogation is not applied for the mere stranger or volunteer who has paid the debt of another without any assignment or agreement for subrogation, without being under any legal obligation to make the pay- ment, and without being compelled to do so for the preservation of any rights or prop- erty of his own." This is sustained by a reference to the cases of Shinn v. Budd, 14 N. J. Eq. 234; Sandford v. McLean, 3 Paige, 117; Hoover v. Bpler, 52 Pa. St. 522. In Gadsden v. Brown, Speer, Eq. 37, 41, Chancellor Johnson says: "The doctrine of subrogation is a pure, unmixed equity, hav- ing its foundation in the principles of natu- ral justice, and from its very nature never could have been intended for the relief of those who were in any condition in which they were at liberty to elect whether they would or would not be bound; and, so far as I have been able to learn its history, it has never been so applied. If one with a perfect knowledge of the facts will part with his money, or bind himself by his con- tract in a sufficient consideration, any rule of law which would restore him his money or absolve him from his contract would sub- vert the rules of social order. It has been directed in its application exclusively to the relief of those that were already bound, who could not but choose to abide the penalty." This is perhaps as clear a statement of the doctrine on this subject as is to be found anywhere. Chancellor Walworth, in the case of Sand- ford V. McLean, 3 Paig«j, 122, said: "It is only in cases where the person advancing money to pay the debt of a third party stands In the situation of a surety, or is compelled to pay it to protect his own rights, that a court of equity substitutes him in the place of the creditor, as a matter of 572 BtTBROGATION. course, without any agreement to that effect. In other cases the demand of a creditor, which Is paid with the money of a third per- son, and without any agreement that the se- curity shall be assigned or kept on foot for the benefit of such third person, is abso- lutely extinguished." In Railroad Co. v. Dow, 120 U. S. 287, 7 Sup. Ct. 482, this court said: "The right of subrogation is not founded on contract. It is a creation of equity; Is enforced solely for the purpose of accomplishing the ends of substantial justice, and is independent of any contractual relations between the par- ties." In the case of Shlnn v. Budd, 14 N. J. Bq. 234, the New Jersey chancellor said (pages 236, 237): "Subrogation as a matter of right, as it exists In the civil law, from I which the term has been borrowed and ,A adopted in our own, is never applied in ■^ laid of a mere volunteer. Legal substitu- tion into the rights of a creditor, for the benefit of a third person, takes place only for his benefit who, being himself a cred- itor, satisfies the lien of a prior creditor, or for the benefit of a purchaser who extin- guishes the incumbrances upon his estate, or of a co-obligor or surety who discharges the debt, or of an heir who pays the debts of the succession. Code Nap. bk. 8, tit. 3, art. 1251; Civil Code La. art. 2157; 1 Poth. Obi. pt. 3, c. 1, art. 6, § 2. 'We are ignorant,' say the supreme court of Louisiana, 'of any law which gives to the party who furnishes money for the payment of a debt the rights of the creditor who is thus paid. The legal claim alone belongs, not to all who pay a debt, but only to him who, being bound for it, discharges it' Nolte & Co. v. Their Cred- itors, 9 Mart (La.) 602; Curtis t. Kitchen, 8 Mart. (La.) 706; Cox v. Baldwin, 1 Miller, (La.) 147. The principle of legal substitution. as adopted and applied In our system of equity, has, it Is believed, been rigidly re- strained within these limits." The cases here referred to as having been decided in the supreme court of Louisiana are especially applicable, as the Code of that state is In the main founded on the civil law from which this right of subrogation has been adopted by the chancery courts of this country. The latest case upon this subject is one from the appellate court of the state of Illinois,— Suppiger v. Garrels, 20 Bradw. 625,— the sub- stance of which Is thus stated in the sylla- , bus: "Subrogation in equity la confined to) the relation of principal and surety and! guarantors; to cases where a person, to pro-/ tect his own junior lien, is compelled to re- move one which is superior; and to cases ol insurance. * • • Any one who is undei no legal obligation or liability to pay the debt is a stranger, and, if he pays the debt a mere volunteer." No case to the contrarjK has been shown by the researches of plain- j tifC In error, nor have we been able to find J anything contravening these principles In our own investigation of the subject. They are conclusive against the claim of the com- plainant here, who In this instance is a mere volunteer, who paid nobody's debt, who bought negotiable bonds in open mar- ket without anybody's Indorsement, and as a matter of business. The complainant company has therefore no right to the sub- rogation which it sets up in the present ac- tion. Without considering the other questions, which Is unnecessary, the 'decree of the cir- cuit court is affirmed. These principles require, also, the affirm- ance of the decrees in the cases of the same appellant against the town of Belmont (No. 1,135,) and the town of Mllford, (No. 1436;) and so it is order^ SPECIFIC PERFOKMANCB OF CONTEACTS. 573 PUSEY V. PUSBY. (1 Vera. 273.) Michaelmas Term. Nov. 20, 1684. Bill was that a horn, which, time out of mind, had gone along with the plaintiff's estate, and was delivered to his ancestors In ancient time to hold their land by, might be delivered to him; upon which horn was this inscription, viz. "Pecote this horn to hold huy thy land." The defendant answered as to part, and demurred as to the other part, and the de- murrer was that the plaintiff did not by his bill pretend to be entitled to this horn, either as executor or devisee; nor had he in his bill charged it to be an helr-loome. The demurrer was overruled, because the defendant had not fully answered all the particular charges in the bill, and was or- dered to pay costs. And the lord keeper was of opinion that if the land was held by the tenure of a horn or cornage, the heir would be well entitled to the horn at law. Vide 1 Inst 107a, ' 574 SPECIFIC FERFOKMANCE OF CONTRACTS. Mollixieux V Cafe, (Latch, 172.) ITB p|om(ft Rutland MoUineux fur Cencneratfonlrej&c; *-*iie fete amitattceBe cettam tette, le quel le aflitmo? um Be mt. R. M. fua lup en le Coutt ne Eequett^ , nuc mt \z p?ottitft petfoim* et ptttasjei;ttn IPjotiibititin, \\ mmvz Beui; Cattfe0, l^lfmferement , €luia an un adtton fiit le CaK al common tep* a (II ftrtt Btt,en.c rtrecoDetafojssr^namaffejs j ^eisicp lefutt ett fo?0(i? pur asjec aOUrance oel mefme m% put fafe quel eft nul Mitm al common le^ €t ttel cotitft eft 02tima« tp en un Court Be Cquftp* Jones uncoje ne ferra Mtt In Court ue Eequea0, commentrR m if^iitt ftmt enleGban. eery. ^ecotttiment, appietttfensi le '5Bili, tg le Plaintiff r»m» eflun Eecufant Contiictjquel pet le Staotte He eft ^cotpmutticate petlbn, $ pur 5 ne puft liter* Doderidg^ r& ^onti, que le DefenBaht laaB aumtt le plaintiff aftle* ctftilt tefponlialtt?,$o?eqttelUop(Blerra Decree^pers Jup* (Hint ftp pur remeop, pur c (g Defentant Blent ftp pur EemeBp trope tarBe* le Court ne Boet granter pasfjlBltlont Ct Do. dcridge Juftice Bit, (file Court Boit fair 31ttllice al tccufettt ConBict* Mollineux's Case. (Latch, 172.) One promised Rutland Mollineux that In consideration of &c. he would make assurance of certain lands, which he refused to do. And Mollineux sued him In the court of requests for a special performance. In order to obtain a prohibition he alledged. 1. That the plaintiff has an action on the case at common law. To which it was answered that in it, he would only recover damages, but here the suit is for a specific performance, to obtain which there is no action at common law. And this is the ordinary course in Courts of Chancery. JONES, J. Yet we will not suffer the Court of Requests to go on, though the Chancery may. 2. It appears by the bill that the plaintiff is a recusant convict, who by the statute, is an excommunicated person, and therefore cannot sue. DODERIDGE, J. The defendant has admitted the plaintiff to be able to sue. The court refused the prohibition. DODERIDGE, J. The court will do justice to a recusant convict. SPECIFIO PERBX)RMANCB OF OONTRACTS. 575 / HALL V. WARREN. (9 Ves. 605.) Chancery. July 4, 1804. The bill was filed to obtain a specific per- formance of an agreement, executed by the defendant, for the sale of an advowson and estate to the plaintifC, Hall, in trust, for the other plaintifC, Hanson, at such price as the advowson should be valued at by Mr. Morgan, and the other premises by per- sons to be nominated. The agreement was dated the 9th of March, 1802. On the 8th of May following, under a commission of lunacy, the defendant was found a lunatic from the 1st of May, 1792, with lucid inter- vals. Two grounds of defence were taken by the answer of the lunatic, by his committee: 1st, that he was insane at the time of the ' execution of the contract: 2dly, that the plaintiffs knew his situation, and took ad- vantage of it, to induce him to sell to Hall; concealing the circumstance, that Hanson was the real purchaser; being aware, that from a former quarrel the defendant would not sell to hira. A great deal of evidence was gone into, on both sides, as to his state of mind. Mr. Romilly, Mr. Stanley, and Sir Thomas Turton, for plaintiffs, pressed for an Issue; insisting upon their right to a decree, upon the ground, either that the defendant was ^ not a lunatic, when he entered into the con- tract; or, that it was executed in a lucid Interval. They had not traversed the Inqui- ' sitlon. Mr. Plggott, Mr. Fonblanque,. and Mr. Cooke, for defendant.— The rule, as laid down by Lord Thurlow, in Attorney General V. Pamther, 3 Brown, Ch. 441, 443, is, that where a person seeks to avoid his own act, by alleging incompetence at the time, the proof is incumbent upon him. But where It has been previously found, that the party to be affected by the -transaction, was not com- petent at a previous date, those who seek to bind him, must show his competence at the time. It is difficult to determine the degree of capacity necessary to character- ize a lucid interval. Lord Thurlow seems to think It sufflcleht, that any man would sup- pose him capable of transacting for himself. This plaintifC has had the opportunity of traversing the Inquisition. In Owen v. Da- vies, 1 Ves. Sr. 82, Lord Hardwicke takes the distinction between the case of an estate vested in trustees, and In the lunatic him- self; observing, that in the latter case that circumstance may prevent the remedy In equity, and leave It at law. But, independent of the question of sanity, at the date of this transaction, to obtain a performance under such circumstances, the terms of the contract ought to be clearly proved, fair, reasonable, and certain. In this Instance, the value of the advowson was to be ascertained by the actuary of an Insur- ance office, who was namied; and the value of the other premises by other persons, to be nominated. It does not appear, that these valuers ever were named; and that cannot be supplied by the court; who cannot give the arbitrator the Information, which the party could have given. How can this court supply the want of judgment as to the value of the timber? In Emery v. Wase, 5 Ves. 846, 8 Ves. 505, Lord Alvanley considered an agreement to sell according to the valuation of another person, not such as the court would be desirous to enforce. Praying an issue, and undertaking to show a lucid In- terval at the date of the agreement, they must also show, that the plaintifC was bound at that time. An Issue Is granted only in aid of a legal right, as that of an heir at law: not where the object. is the specific per- formance of an agreement. In that case the course required, that the plaintifC should have previously ascertained his right at law; that he should show, he had sustained dam- age, which was not repaired by the verdict; and that the very essence of the relief was, that he should have the thing In specie. Mr. Romllly, In reply.— An agreement to sell at the valuation of another person is not unusual. The chance is perfectly equal. In Emery v. Wase the decision was not upon that groimd. If the party refuses to name a valuer, the court refers it to the master. A plaintifC clearly has a right to a specific performiance; even though a jury would give twice the amount in damages. Upon the question of lunacy. It Is clear, a lunatic Is bound by an act done in a lucid Interval; and till the act of Geo. II (St. 15 Geo. II, p. 607, c. 30), even marriage, contracted in a lucid Interval, was good. The person who has a contract with the lunatic. Is perniltted to traverse; as he may show, that the party with whom he contracted never was a luna- tic. But the question, whether the defend- ant was a lunatic at the date of the agree- ment, could not have been tried in a trav- erse. In Ex parte Feme, 5 Ves. 450, 832, Lord Rosslyn's opinion was, that the jury could not find as to any Intervening period. But certainly the question, whether he was In a lucid interval, coidd not have been tried: the Inquiry In such a proceeding as to that, being, whether the party Is liable to lucid Intervals; not as to the particular time. It seems to be supposed, that. If the defendant Is now a lunatic, the contract cannot be executed; by analogy to criminal cases, In which a man who becomes a lunatic, at any time before execution, is not punished. But te that objection holds in civil cases. It will apply equally to prevent a decree for a spe- cific performance against the representatives; for they cannot tell what the lunatic might have said. In Owen v. Davies there hap- pened to be trustees: but this party does not object; but chooses to take the title with the defect 576 SPECIFIC PERFORMANCE OF CONTRACTS. THE MASTER OF THE ROLLS. The ob- ject of this bill is to obtain the specific per- formance of an agreement. Supposing the contract to have been entered into by a com- petent party, and to be in the nature and circumstances of It unobjectionable, it Is as much of course in this court to decree a specific performance, as it is to give damages at law. See White v. Damon, 7 Ves. 30. The contract is produced and proved. Upon the face of it nothing appears to prevent execution. There is nothing imreasonable, as between the parties, upon the face of it. It fixes no value upon the estate: but it provides a mode, in which the value is to be ascertained, that is perfectly fair and equal between them. It must be supposed, that if competent, they had taken the proper' means of getting at the real value, by em-' ploying persons of skill to value the advow- son and the farms. The first objection against carrying this agreement into execu- tion is, that in consequence of some dispute with Hanson, the defendant had an objec- tion to dealing with him. But the evidence does not bring it up to that; showing, not that he made any declaration to that effect, but only, that some quarrel had taken place, totally unconnected with the subject of the contract. The circumstance, therefore, that Hall is a nominal contractor, is immaterial; for it happens in a vast proportion of cases, that the contract Is entered into in the name of a trustee. But the principal objection to the perform- ance is, that the defendant was not compe- tent, having been insane at the time the con- tract bears date. That is matter of fact. In support of that fact alleged, the inquisi- tion is produced; by which the defendant is found a lunatic from a period long antece- dent, biit with lucid intervals. That inquisi- tion, having been taken in the absence of the plalntifE, Is not conclusive upon him. But It is evidence prima facie of the lunacy. It is however competent to third parties to dispute the fact; and to maiatain, that not- withstanding the inquisition, the object of it was of soimd mind at any period of the time which it covers. An opportunity, it is said, has been already afforded of traversing the inquisition; and undoubtedly, if it would have answered the plaintiff's purpose mere- ly to have traversed and contradicted the finding, by showing that the defendant was not a lunatic, he ought to have embraced that opportunity; and it was unnecessary to come here In the first instance. But if, as it is said, he may have been a lunatic, with reference to the general state and habit of his mind, during a considerable space of time, but with lucid intervals, and the con- tract was executed during one of those lucid intervals, I doubt very much whether that could have been got at by a traverse; wheth- er, upon that proceeding, it could have been ascertained, that upon a given day he had a lucid interval; which might come to be a material inquiry with reference to the execu- tion of this contract; for though the plain- tiff wishes for an issue upon both points, he seems from the general tenour of his state- ment to confide more in establishing a lucid Interval than in negativing the fact, that the "J defendant ever was deranged. It was not therefore improper for the plaintiff, under these circumstances, to waive the opportunity of traversing, and to come here for an issue; upon the supposition, that the contract was entered into, either by a person who was not a lunatic; or in a lucid interval. In the latter case it would be equally binding; for the law upon this subject is, that all acta done durijjg a lucid interval are to be con- sidered done""by a person perrectly capable" "pf contra cting, manag mg, and disposing of, ;^lg_affaj ra, at that pfefiod^ xms has more frequently occurred upon" wills. A multi- tude of questions has been raised upon the execution of a will during a lucid interval; and, that being proved, the will has been held valid and effectual, to all Intents and purposes, for the conveyance of real and personal es- tate, aa if the testator had never been de- ranged. It must be the same as to con- tract, or any disposition of property. If he had made an absolute conveyance It would have been good, if made in a lucid interval. The question, therefore, being reduced to the fact, there is no circumstance t o prevent th e execution of the contract; supposmg the 5arty to have been competent; and the fact of his competence ought to be put in a course of Inquiry. I should certainly refuse, upon the evidence before me, to determine that he was not a lunatic; and as to a lucid In- terval, upon this evidence, I should hesitate considerably; not being suflBciently apprized of all the circumstances of his life at that particular period. The history of the con- tract itself is not brought forward. The ci^ cumstances of the negotiation do not appear. Something material to the competence might arise or result from the very mode in which the negotiation was conducted. In one case, I remember, the manner, in which the will was written and executed, went a great way towards showing, it was In a lucid interval: the mode of the act being part of the evi- dence of the testator's sanity. See Temple v. Temple, 1 Hen. & M. 476. There is some general evidence with reference to his situa- tion for some considerable time previous to the contract; and very littie negative evi- dence: none applying exactly, or approaching nearly, to the period, except the servant's; and that not of a nature to be conclusive; supposing the evidence strong about the pe- riod. But it Is for a jury to determine, what was the degree of efficiency and competence of his mind at the time. All the difficulties suggested by the defendant, the plaintiffs will have to struggle with; for, if general limacy is established, they will be under the necessity of showing, according to Attorney General v. Parnther, that there was, not SPEJCIFIO PERFORMANCE OF CONTRACTS. 577 merely a cessation of the violent symptoms of the disorder, but a restorati on fl f—tlie. Tac uities of tn e mind,^uill crent to enablg jjia. ^" pg^ soundly "lolndge of the act. That is ■im. inquiry much more fit for examination viva voce bef(«e a jury, than upon ■written depositions. There is notlung, therefore, to prevent my sending it to that inquiry. DiflBiculties in- deed are suggested, supposing even that it should be found that the contract was made in a lucid interval, as to the mode In which it is te be carried Into execution; for it is said, as to that, th^e are provisions in it, which cannot now be executed. I do not see those difficulties so strong as to be con- vinced, that it is impossible to execute it; that the previous Inquiry is not to be made, and would be nugatory; for If th ere was a valid and bindi ng contract, the superv ening '-! hcapac^'"or"M[e party cannot dep rive " the o tEer o r the Deneat" rets to , en5eneflt7_ ^ NotEmg~appear9 m the one, so purely personal, that they cannot be supplied without the intervention of the mind and the act of the party; for they are to be done with reference to a given mode; and with regard to ascertaining the H.& B.EQ.(2d Ed.)-37 value, a mode equivalent, and as effectual and fair, may be found. So, as to the ob- jection from the difficulty of making the conveyance, the difficulty that struck Lord Hardwicke, in Owen v. Davies, was avoided there; as there were trustees. But it does not appear to me, that, if the plaintiff is sat- isfied with that which is in truth no title, but only an enjoyment under this court, be ought not to have all the court can give him. It is disadvantage to him, of which the other cannot complain, that he cannot get a good title; but must rest an indefinite period, without a title, having only the en- joyment. These difficulties are not so strong as to preclude the previous inquiry, before we can ascertain the precise mode, in which the subsequent parts are to be carried Into execution. Therefore take an issue. The issue directed was the same as in a former case of Clerk v. Clerk, 2 Vern. 412, whether the defendant was a lunatic at the time of the execution of the contract; and if so, whether he had lucid intervals; and whether the contract was executed during a lucid interval. Niell .v. Morley, 9 Ves. 47a 578 SPECIFIC PERFORMANCE OF CONTRACTS. RINDGB v. BAKER. (57 N. Y. 209.) Commission of Appeals Cases. 1874. Action to recover one-half the expense of A party-wall in Norwich, Chenango county. The parties agreed by parol, in April, 1869, to construct a basement or cellar-wall of stone eight feet high, one-half of the width of which should stand upon the plaintiff's land and the other half upon the defendant's land, and to buUd upon the stone wall a par- tition of wood between their respective ad- joining buildings. This agreement as the plaintiff testified, was before the commence- ment of the construction of the stone wall so far modified that the partition above the stone wall was to be constructed of brick instead of wood. In pursuance of this agree- ment each party at his own expense built one-half of the basement wall, and laid upon this wall, thus constructed, sleepers upon which to rest the first floor of their respec- tive buildings. The plaintifC so constructed the cellar or basement wall of his building as to correspond to the basement stone wall erected by the parties, and procured his building timber to be cut the proper length for use in the brick wall. In the construction of which the defendant had agreed to join him. The defendant then refused to join the plaintiff in the construction of the brick wall, whereupon the plaintiff gave him notice to join In its construction, and that in case of his failure to do so, he should proceed and construct it and compel him to pay one-half of the expense of its construction. The de- fendant again refused to join the plaintiff in its construction, and forbade him from constructing it on the defendant's premises. The plaintiff then proceeded and constructed the wall and brought this action to recover one-half of the necessary expenses of its construction. Judgment for plaintiff. Charles Mason, for appellant. E. H. Prfai- dle, for respondent GRAY, C. The contract, under which the parties commenced and proceeded in the con- struction of the party-wall, was for an inter- est in land, an easement which could not have been acquired by parol; and the de- fendant's failure to perform it, however In- jurious that failure, may have been to the plaintiff, would not, had the contract remain- ed wholly unexecuted, have afforded him a cause of action. But the defendant having proceeded with the plaintiff in its execution, so far as to lead the plaintiff to believe that the contract was made not only in good faith but that it would be fully executed on the part of the defendant. Insomuch, that fhe plaintiff had contributed his share to the con- struction of that part of the wall which by the contract was to be made of stone; had, at the same time, constructed the cellar or basement walls in his own apartment to con- form to the party-wall thus constructed by the equal contribution of the parties; and had also procured his timber for use in the construction of the residue of his building, to be cut of the length requisite for use In the brick wall, which by their agreement, the defendant was, after the completion of the stone waU, to join in constructing upon It His failure, at this stage of the performance of the contract, by refusing to join in that part of the party-wall which was to consist of a brick wall above and to rest upon the stone wall, operated under the circumstan- ces, as a fraud upon the plaintiff; and hence in an action for specific performance an equi- table estoppel upon the defendant would have been established, and with the right of the plaintiff to a decree against the defend- ant for a specific performance of the con- tract; or, in other words, that he jom the plaintiff in construeting the brick wall, as the jury in answer not only to the Interroga- tory submitted to. them, but in substance, by their general verdict found he had agreed to do. 2 Story, Eq. Jur., § 750; Will. Eq. Jur. 283; Malins v. Brown, 4 N. Y. 403, 407, 411. But because the plaintiff had, and might have pursued this remedy, it by no means proves that he had no other remedy equita- ble in its character, which would produce the same result in less time and at less ex- pense, and under the circumstances, better adapted to the ends of justice in a case like the one under consideration. The time which would necessarily have been consum- ed in the prosecution of an action for spedflc performance, and the consequent delay in the erection of the wall would, under the exigency of the case in hand, and with all needful arrangements by the plaintifC for completing his half of the wall, and using it in the construction of other parts of his building, result in damages to him nearly as great if not greater, than the expense in- curred in constructing the defendant's half. Such a remedy was therefore so inexpedient as to amount to a denial of justice, and if the plaintiff has no other equitable remedy, or Is not permitted to avail himself of one, he must bear with conceded Injustice and blame the law. Such a state of things ought not to be tolerated, and need not be, where established equitable principles prevail. If the wall had been constructed at the johit expense of both parties, as in good con- science it should have been, and repairs up- on it had become necessary, each party would have been obliged to contribute to them, and If either party, after notice by the other to do so, had declined, the party giving the notice (as the plaintiff did In this case), might have proceeded, made the repairs, and maintained his action for the amount of one- half of the expense incurred in making them, upon the ground that the benefit was equal, and that even-handed justice would compel SPECIFIC PERFORMANCE OF CONTRACTS. 579 each party to bear his share of the burden. Campbell v. Mesier, 4 Johns. Ch. 334, 338, 339, 8 Am. Dec. 570. A decree for specific performance is noth- ing more or less than a means of compelling a party to do precisely what he ought to have done without being coerced by a court. Such a decree might well go further, and pro- vide that in case of delay by the defendant beyond some reasonable time, to be fixed by the court after notice of' the decree, the plaintiff might proceed and erect the wall, one-half of the necessary expense of which should be paid by the defendant And now that the plaintiff has, after due notice, borne the defendant's share of the burden, and done exactly what would necessarily by a decree for specific performance have been adjudged that the defendant ought to have done without suit, no good reason can be ' assigned why, when the exigency of the case has rendered the remedy by action for spe- cific performance wholly inadequate to ac- complish the ends of justice, the defendant should not be held responsible for his share of the burden when it is shown that in equi- ty he ought to do so, upon the same principle that a party who ought in equity to contrib- ute one-half of the necessary expense of re- pairing a wall is bound, after notice and re- fusal, to pay the adjoining owner who has repaired it one-half of the necessary ex- pen.ses of the repairs; and notwithstanding the facts which establish the equitable obli- gation to build may be widely different from such as would establish an equitable obliga- tion to repair, yet the principle upon which contribution is enforced is the same in each case. Contribution was at one time enforced only in a court of equity, and it was said by Baron Parke (6 Mees. & W. 168) that Lord Eldon regretted, not without reason, that courts of law had ever assumed jurisdiction of the subject; they have nevertheless done so, and as Justice Bronson said in. Norton v. Coons, 3 Denio, 130, 132, "borrowed their ju- risdiction on this subject from courts of equi- ty, and along with it, taken the maxim that equality is equity." And Story, in his work upon Contracts (second volume, | 885), re- ferring to contribution by co-sureties or co- guarantors, says, it was formerly questioned whether at law contribution could be en- forced without some positive agreement to that effect; but it is now well established that it may be enforced both in law and equi- ty. The right to maintain such an action at law has not, in this state, been questioned in modem times, and especially where the remedy can be as conveniently administered In an action at law as in equity, since both are administered by the same judge. The judgment should be aflBrmed. DWIGHT, C. This Is an action brought to recover the one-half of the amount of the expense incurred by the plaintiff in building a party-wall between the premises of the plaintiff and the defendant. The plaintiff bases his right of action on a parol agree- ment between him and the defendant. It ■appeared at the trial, according to the testi- mony of both pai'ties, that there had been such an agreement to build a stone wall, which was suitable as a foundation for a partition-wall to rest upon, and that was ac- tually carried out by their mutual consent and acts. Whether there was an agreement to go further, and to build a pai-ty-wall was contested. The plaintiff's claim was, that there was an agreement to build at joint ex- pense, a wooden partition between buildings to be erected on the respective lots of the parties, and that this was afterward so modi- fied as to substitute a brick partition-wall in its place. The question was submitted to the jury in the following form: "Did the defendant, E. D. Baker, agree with the plaintiff, H. A. Rindge, that he would join with said Rindge in the building of the brick wall in question?" The jury found in the affirmative. The form in which the case is presented for the consideration of this court is, assum- ing the existence of the pal-ol agreement, and that the foundation-wall was actually built by both parties, and that the defendant now refuses to go on and complete the brick por- tion of the wall, can the plaintiff, upon due notice, complete that portion of the wall at his own expense, and recover from the de- fendant his proportion of the outlay? It is to be observed that this is not the ordinary case of an easement created by parol, but that it is a more special inquiry, whether a parol agreement to build a wall is enforce- able in a court of justice, and if so, whether it can be substantially enforced under the facts of the present case by an action to re- cover the amount necessarily expended in construction. It will be proper to consider at the outset whether a written agreement to build a wall is capable of enforcement hi equity. If not, it would of coiu:se foUow that a parol agreement partly executed can- not be. On the general question of enforcing a covenant to build or to repair, there has been great diversity of opinion, and the de- cisions are conflicting. The leading authori- ties in England are Mosely v. Virgin, 3 Ves. Jr. 185; Wilkinson v. Clements, L. R. 8 Ch. App. 96. Other cases are collated in Story, Eq. Jur. §§ 725, 729 (11th Ed.). In Wilkin- son v. Clements, supra, one of the latest de- cisions by the appellate court, it is said to be the settled rule in England that the court will not in general enforce a covenant to build houses. The principal reason seems to be that damages supply an adequate com- pensation. Where, on the other hand, dam- ages will not answer, the usual rule prevails, and a remedy will be granted in equity, on account of the Inadequacy of the relief at law. This was the result in that case; and a 580 SPECIFIC PERFORMANCE OP CONTRACTS. party having performed his part of the con- ti-act, had his remedy in equity, against the other party. The point in Mosely v. Virgin was, that an agreement to build may be en- forced if sufficiently certain and specific. This Is the view of Mr. Justice Story. The cases earlier than Wilkinson v. Clements are collected in Becl£ v. Allison, 4 Daly, 421, in which case the conclusion Is maintained. In an elaborate opinion, that in a proper case, the jui'isdictlon to decree specific perform- ance of a covenant to repair exists, the case being placed on the same general ground as that of a covenant to build. The present case falls within the rule established by these authorities. It was not a general and indefinite covenant. The place on which the wall was to be erected was fixed by the con- tract; its length, height and thickness were prescribed, as well as the materials of which It was to be constructed. This Is the test given in Mosely v. Virgin, supra, and in Sto- ry, Eq. § 727. The plaintiff could have had no adequate remedy in damages, as he need- ed to have the wall stand on the defendant's land, in order to carry out his building as it was planned. The result is that if the agree- ment had been in writing it would have been enforced by a court of equity. The next Inquiry is, whether the act of building the stone foundation-wall was such a part performance as to take the case out of the statute of frauds. This is not an In- stance of a mere parol license, executed in part; it Is rather that of an agreement, from which the defendant was to receive the same benefit as the plaintiff. The inducement on the defendant's part to allow the plaintiff's wall to stand on his land, and to aid in con- structing it, was the fact that he was to re- ceive a benefit from having the same sup- port to his own part of the wall, from the plaintiff's land and a corresponding service and expenditure. If, then, the com-t will not entertain an action for specific performance in the present case, it will be because there are some parol agreements which have been partly carried out that do not fall within the general rule that part performance takes the case out of the statute of frauds. No reason can be given why an ordinary contract to purchase land In fee shall be withdrawn from the statute by part performance, which will not apply to the present case. Mr. Frye states the rules as follows: (1) The act of parol performance must be referable to the alleged agreement and no other. (2) They must be such as render it a fraud on the de- fendant, to take advantage of the contract not being in writing. (3) The agreement to which they refer must be such as in Its own nature is enforceable by the court (4) There must be proper evidence of the parol agree- ment. Pry, Spec. Perf. (Am. Ed.) 251. All of these exist in the present case. In com- menting upon the third, he remarks that the agreement must be of such a nature that the court would have had jurisdiction in respect to it in case it had been in writing. It has already been shown that the court would have enforced the contract between the plaintiff and defendant had it been written. The next inquiry is, whether the plaintiff was bound to resort to the remedy of specific performance? It would seem not Specific performance is merely a remedy for an ex- isting right; each of the parties, by force of the contract, became a trustee for the other; there was an equality of burdens as well as of rights growing out of the contract rela- tions of the parties. Specific performance is but a single mode of enforcing the equi- table duties growing out of these relations. The parties have voluntarily subjected them- selves to the rule that "equality is equity;" each of them having thus become equitably bound to pay his share of the amount nec- essary to construct the wall, is liable in equi- ty to an action for contribution. This has been applied to cases of contribution between co-contractors. Story, Eq. Jur. § 64, f; 1 Pars. Cont. 31. The whole doctrine rests upon principles of natural justice and equi- ty. The plaintiff had his choice of remedies. He might demand specific performance; in which case he would pay only one-half of the expense, and insist upon the defendant's rendering the other half; or, after demand and refusal, he might build the entire wall and bring his action for contribution. He has elected to take the latter course. It is claimed that the present action is not an equitable one. The fact that it ia brought for money is not decisive upon that point. The real test in such an action is this: if It be brought for damages for breach of contract It Is a case at law; If It be brought for money, by way of performance of the contract it is a case in equity. Thus where a vendor, in a contract for the sale of land, sues for the price, his action is equita- ble. The mutuality of the contract gives each of the parties the same remedy; and yet the recovery by the vendor is simply In money. If this theory did not prevail in respect to contracts partly performed, the vendor would be utterly without remedy, since it is well settled that there is no ac- tion at law on a parol contract in part per- formed. That the yendor can have an equi- table action for money is established in Crary v. Smith, 2 N. Y. 60; Brown v. Hafl!, 5 Paige, 240; Will. Eq. Jur. 290. The ac- tion in the present case was brought for re- lief, and the facts disclose an equitable cause of action. The fact that It was tried by jury, with consent of parties, is imma- terial, as the court might, of its own mo- tion, have submitted the questions to a jury; and any informality in the mode of proce- dure was waived by mutual consent No preliminary settlement of the issues is requi- site. Colman v. Dixon, 50 N. Y. 572. This view Of the case is strengthened by SPECIFIC PERFORMANCE OF CONTRACTS. 581 the fact that the common-law courts hold that If a tenant In common, or joint ten- ant, or other person who Is under a duty to repair, fails to contribute after a demand by a co-tenant or co-obligor, the latter, on incurring the necessary expense, may bring an action on the case to recover the propor- tionate share of the defaulting party. Lor- ing T. Bacon, 4 Mass. 575; Mumford v. Brown, 6 Cow. 475, 16 Am. Dec. 440; Doane Y. Badger, 12 Mass. 65. This action is based on a failure to discharge the equitable duty imposed on the defendant which is derived from the principle of natural justice lying at the root of the doctrine of contribution. It is however urged that the defendant does not, by this action, obtain an easement of perma- nent value to himself. The answer is that if he does not he sufEers only by his own neg- lect The correct view however is that the judgment will establish his right and act as an estoppel against the plaintiff and all claim- . ing under him, as the existence of the ease- ment is the very proposition which it is nec- essary to establish in order to recover. A final suggestion is that the parol contract having been partly executed, the parties to it are estopped from denying the existence of the easement The authorities are quite distinct to this effect, and the proposition is fully justified by the rules of estoppel as ap- plied to the case of expenditures made upon land on the faith of the representations of an owner. Brown v. Bowen, 30 N. Y. 541, 86 Am. Dec. 406; 3 Washb. Real Prop. 68, and cases cited. In Campbell v. McCoy, 31 Pa. 263, a parol executed agreement to erect a dam was held to be irrevocable in equity, and that it created a permanent right vrhich would survive the erection itself. Rerick v. Kern, 14 Serg. & B. 267, 16 Am. Dec. 497. The same rule was applied to the laying down of water-pipes in Le Fevre v. Le Fevre,,4 Serg. & R. 241, 8 Am. Dec. 696. In McKellip V. Mcllhenny, 4 Watts, 317, 28 Am. Dec. 711, the doctrine was applied to a li- cense to flood land, on which money and la- bor had been expended, on the faith of the license. Beatty v. Gregory, 17 Iowa, 114, 85 Am. Dec. 546, is a case of a wall partly built on a licensee's land. There is, in some of the authorities, a con- fusion growing out of a want of accurate discrimination between cases arising in law and equity. At law a parol license, owing to the statute of frauds, is revocable at the pleasure of the licenser, notwithstanding the expenditure of money on his land by the 11- . censee. The cases on this subject are so nu- merous and so imiform that it would be a waste of time to refer to them. In equity the rule is quite different. As a court of equity will take a parol contract for the sale of lands out of the statute of frauds, when it is partly performed, it will, on the same principle, treat an executed parol contract for an easement as equivalent to a grant under seal, where the parties cannot be re- stored to their original position. Under this doctrine the acts of the parties in the pres- ent case have created a permanent easement upon the land, of which all who may pur- chase of them are bound to take notice. The judgment for the plaintiff, in the present case, simply recognizes the existence of that ease- ment, and the added duty or obligation of mutual contribution for its erection and maintenance. The judgment of the court below should be affirmed. REYNOLDS, 0. It appears to be conced- ed that the agreement to erect the party- wall created, or was intended to create an easement in land, and that to make it valid, It should have been in writing. It was by parol, and was doubtless void under the stat- ute of frauds. The parties however proceed- ed under it, so far, as that it is also agreed, that in consequence of part performance the plaintiff might, after the repudiation by the defendant, have appealed to a court of equi- ty to compel him to specifically perform; and yet it is conceded that a resort to this rem- edy would have been, if successful, inade- quate to redress the injury to the plaintiff. In the earlier days of the law, a party hav- ing some claim to equitable relief was obli- ged to resort to a tribunal exercising that sort of jurisdiction, invented, it is said, in some of the old books, to do justice in cases wherein the courts of common law were defi- cient, and of the common law it has been said that by reason of its flexibility it was capable of affording an adequate remedy in most cases of wrong. It however did hap- pen that separate courts of common law and equity jurisdiction did exist for a long time, and until within a comparatively recent pe- riod, existed in this state; and it may not be denied that under this system, by reason of the ignorance of counsel or the learning of judges and chancellors, it occasionally hap- pened that suitors were found in the wrong forum and turned away without relief on payment of costs. Of whatever magnitude such an evil may have been it seems very clear to me, that it was attempted to be remedied by our constitution of 1846 and the Code of 1848, with its multitude of modifica- tions. It is suggested that the present action is one at common law and cannot be main- tained upon a void contract. This general rule no judge or lawyer will dispute. It is further said, the plaintiff's remedy was in equity, where he should have succeeded, but success would have been of no practical value; in other words, the remedy would have been worse than the disease. He came into a court having general jurisdiction both in law and equity, and stated the facts of his case in his complaint, as he was author- ized by law to do, and in the most essential 582 SPECIFIC PERPORilANCE OP CONTRACTS. particular proved their truth, as is fouud by the verdict of the jury, and had judgment. If he may not have properly had judgment, it being agreed that he was entitled to re- lief, where else should he go to obtain it? The court to which he applied had the au- thority to do him justice In some form, and it could turn him over to none other; for no other court existed to which he could apply for the remedy he was in some form entitled to. Since the radical changes to which ref- erence has been made, it has sometimes been very difficult to distinguish by any thing that appears in a pleading, between an action at law or a suit in equity. Before the change in practice, the distinction between a common-law declaration and a bill in chan- cery was very well understood. Now both jurisdictions are blended, and a party is per- mitted to state his case upon its facts, in his own form, and to take such relief as he ought to have, if he be entitled to any, and if he makes any mistake in his allegations the court may, in its discretion, conform the al- legations to the facts proved, and give the appropriate judgment which either law or equity demands. General jurisdiction, both in law and equity, having been united in the same court, with a form of procedure common to all cases, it is difficult by the mere inspection of a pleading, to determine whether a given case is to be governed by legal or equitable rules; and I am of the opinion, that the inevitable result of such a system will be the abolition of all substan- tial distinctions between law and equity. If different and distinct forms of pleading and proceeding were preserved, the two separate jurisdictions might be longer continued, even when the same court took cognizance of both. It is said that this is a pure and simple ac- tion at law, to recover damages for the breach of a void conti-act. It must be con- fessed that the complaint bears some of the marks of an old-fashioned common-law dec- laration, omitting its prolixity. But, as I understand, it also states in a concise form all the facts upon which the plaintiff relies for relief, and these facts have, at least sub- stantially, been found by the jury to be true. Why may not this, under the present sys- tem, be called a bill in equity? It is quite true that there is no prayer for specific per- formance of the partially performed con- tract, but that is not of the slightest conse- quence, as has been often held. Marquat v. Marquat, 12 N. Y. 336; Emery v. Pease, 20 N. Y. 62. In the latter case, what was from the prayer of the complaint, regarded by the whole supreme court as an action- at law, to recover money due upon an account stat- ed, and the plaintiff nonsuited because he had not appealed to the equity ear of that court was, in the court of appeals, disap- proved, because the facts stated entitled the plaintiff to an accounting as in the case of a partnership, and the case thereafter proceed- ed upon that theory. That case, in princi- ple, does not appear to me to be unlike this, so far as the form of proceeding and forum is concerned. It seems to be clear that the defendant ought to have done as he verbally agreed to do. He had got the plaintiff into more or less difficulty, for the reason that his promises had been not only relied upon, but his fidelity evinced by acts tending to the consummation of the common purpose. He then repudiates, and the plaintiff must suffer great injury if he stops the improve- ment contemplated, and incur extra cost and expense if he perform the work and furnish the material which the defendant agreed to do and ought to have done. It is quite true that the defendant forbade the plaintiff from proceeding to complete the party-wall according to the mutual parol agreement, but if the matter had gone so far as that equity would compel him to complete it, his order to stop could be of no more force or effect than that of an ancient monarch who ordered the waves of the ocean to be stayed. It is further urged that even if the defend- ant pay the judgment against him, he has no grant of an easement to continue the party- wall on the land of the plaintiff. This in one sense may be entirely true, but the same law that, in effect, compels him to perform his agreement with the plaintiff by paying damages, will protect him in the enjoyment of every right of property which he could have had if he had not made it necessary to appeal to the courts. It does not appear that he ever requested the plaintiff to grant him any easement whatever; and we are not to assume that if he had, and offered to fulfill the conditions of his part of the agree- ment, it would have been refused. Indeed, if it appeared in his answer in this case that he had offered to pay (which was at least equal to performance) upon the condi- tion that the plaintiff granted an easement equal to what the contract demanded, I think the court ought to and would have so oi^ dered, but the defendant put his right upon an entirely different contingency and must abide the result Another objection is made against the pro- priety of the judgment of the supreme court in this case that there is no precedent for it, and that it is the very first of the kind known to the law. While I do not quite agree to the fact as alleged, I am yet will- ing to assume that there is no case reported in the boolis which affords an exact prece- dent for the judgment I am prepared to give. Where precedents are reasonable they fur- nish a safe guide to follow; and where they are unreasonable, as is not uncommon, a delicate and difficult question is often pre- sented. But where there are no precedents that appear to be binding upon the con- science of a court, the demands of Justice re- SPECIFIC PERFORJIANCE OF CONTRACTS. 583 quire that, In a proper case, one should be made.. In the present case we all agree that the plaintiff has sustained an injury for which he should have redress, and there is no complaint that the judgment below has awarded him more damages than he was fairly entitled to recover. It is possible that a ease precisely like this has never before arisen, but if any shall hereafter arise, ,it may as well be understood that a party thus injured is not without an adequate remedy in the courts. The Judgment of the supreme court should be afiSrmed, with costs. 584 V' SPECIFIC PERFORMANCE OF CONTRACTS. y,' ADDERLET v. DIXON, V ■ a Sim. & S. 607.) V . Chancery. The plaintiffs having purchased and taken ^assignments of certain debts which had been Mproved under two commissions of bankrupt, J agreed to sell them to the defendant for 2s. ' 6d. in the pound. C The defendant's solicitor, accordingly, gave notice of the sale to the assignees, and pre- pared sin assignment of the debts, and the plaintiffs, notwithstanding the purchase mon- ey had not teen paid, executed it, and signed the receipt for the consideration money, and left It in the solicitor's hands. The bill was filed to compel the defendant specifically to perform the agreement, and to pay the pur- chase money to the plaintiffs. The defendant, by his answer, submitted that the matter of the agreement was not the proper subject of a bill In equity for a specific performance; and claimed the same benefit as if he had demurred to the bill. Mr. Sugden and Mr. Garratt, for plaintiffs. Mr. Hart and Mr. Treslove, for defendant THE VICE-CHANCELLOR. Courts of eq- uity decree the specific performance of con- tracts, not upon any distinction between real- ty and personalty, but because damages at'law may not. In the particular case, afford a com- plete remedy. Thus a court of equity decrees performance of a contract for land, not be- cause of the real nature of the land, but be- cause damages at law, which must be calcu- lated upon the general money-value of the land, may not be a complete remedy to the purchaser, to whom the land may have a pe- culiar and special value. So a court of eq- uity will not, generally, decree performance of a contract for the sale of stock or goods, not because of their personal nature, but because damages at law, calculated upon the market- price of the stock or goods, are as complete aT remedy to the purchaser as the delivery of the stock or goods contracted for; inasmuch as, with the damages, he may purchase the same quantity of the like stock or goods. In Taylor v. Neville, cited in Buxton v. Lister, 3 Atk. 383, specific performance was decreed of a contract for the sale of 800 tons of iron, to be delivered and paid for in a cer- tain number of years and by instalments; and the reason given by Lord Hardwicke, is that such sort of contracts differ from those that are Immediately to be executed. And they do differ in this respect, that the profit upon the contract being to depend upon future events, cannot be correctly estimated in damages where the calculation must proceed upon con- jecture. In such a case to compel a party to accept damages for the non-performance of his conti'act, is to compel him to seU the actual profit which may arise from it, at a conject- ural price. In Ball v. Ooggs, 1 Brown, Pare Cas. 140, specific performance was decreed in the house of lords of a contract to pay the plaintiff a certain annual sum for his life, and also a certain other sum for every hundred weight of brass wire manufactured by the de- fendant during the life of the plaintiff. The same principle is to be applied to this case. Damages might be no complete remedy, being to be calculated merely by conjecture; and to compel the plaintiff in such a case to take damages would be to compel him to sell the annual provision during his life for which he had contracted, at a conjectural price. In Buxton V. Lister, Lord Hardwicke puts the case of a ship carpenter purchasing timber which was peculiarly convenient to him by reason of its vicinity; and also the case of an owner of land covered with timber contract- ing to sell his timber In order to clear his land; and assumes that as, in both those cas- es, damages would not, by reason of the spe- cial circumstances be a complete remedy, eq- uity would decree a specific performance. The present case being a contract for the sale of the uncertain dividends which may be- come payable from the estates of the two bankrupts, it appears to me that, upon the principle established by the cases of Ball v. Coggs, and~Taylor v. Neville, a court of equity will decree specific perfoi'mance, becailSe dam-" ag es at lAw caBHgfag curately represeiir the' -value o t lhelBta re dlYldendsfSia to compel tins pufehas er "foT:ake'Buch"aamages would be "to compel nimTa sell fh^ecffvlderids at a con- "^turalTfrice: It Ifftrue that the present bill is not filed by the purchaser, but by the vendor, who seeks, not the uncertain dividends, but the certain sum to be paid tot them. It has, however. been settled, by repeated decisinna that fSe T6fflei3yr i n equity must belnutual; and that when 'a"BiirwlU lie for the purchaser, it will also lie for the vendor. Vide Withy v. Cot- tle, 1 Sim. & S. 174. Hamblhi v. Dhmeford, 2 Bdw. 531. SPECIFIC PERFORMANCE OF CONTRACTS. 585 HODGES V. ROWING et ux. (18 Atl. 979, 58 Conn. 12.) Supreme Court of Errors of Connecticut. April 15, 1889. Appeal from superior court, Fairfield coun- ty; Fenn, Judge. Suit by P. H. Hodges against B. W. Kow- Ing and wife for specific performance of a contract for sale of land. Judgment for plaintiff, and defendants appeal. D. B. Lockwood and E. W. Seymour, for appellants. T. W. Wheeler and H. J. Curtis, for appellee. BHARDSLEY, J. On the 17th day of Au- gust, 1887, the defendants entered into the following contract with the plaintiff: "Strat- ford, August 17th, 1887. We agree to pur- chase of P. H. Hodges his place in Stratford, Conn., containing tiiteen acres, more or less, for the sum of nine thousand five hundred dollars; to pay six thousand cash, and three thousand five hundred on bond and mortgage for one year; to take title immediately, and possession on the first of January, 1888, and have paid him one hundred dollars on ac- count. Edwin W. Kowinq. Eliza Kow- ING." No writing relating to the contract was signed by the plaintiff. The court be- low, upon the petition of the plaintiff, de- creed that the defendants should specifically perform the contract, from which decree they appeal to this court. They claim that under the statute of frauds the plaintiff was not bound by the contract, not having signed any memorandum of it, and hence that it should not, in equity at least, be enforced against them, and make this claim the ground of one of their reasons of appeal. The statute re- quires only that the written agreement shall be "signed by the party to be charged there- with." The defendants rely upon certain cases as authority for their claim, and among others upon the cases of Benedict v. Lynch, IJohns. Ch. 370, and Lawrenson v. Butler, 1 Schoales & L. 13. Both of these cases are in accord with the claim of the defendants; but the former case is opposed to the numer- ous decisions in the state of New York on the same suSject, and the latter case to nearly all the English decisions. In the case of Clason V. Bailey, 14 Johns. 484, Chancellor Kent, after reviewing the New York decisions, says that "it is sufficient if the agreement be signed by the party to becliarged." In the same opinion he reviews the English decis- ions up to that time, and adds: " There is nothing to disturb this strong and united current of authority but the observation of Lord Redesdale In Lawrenson v. Butler, 1 Schoales & L. 13, who thought that the con- tract ought to be mutuali^and that if one party could not enforce it the other ought not. " The authority of Lawrenson v. Butler seems not to liave been recognized in Eng- land. Tlie more recent decisions in that country are referred to in 1 Benj. Sales, §§ 254, 255. There is still some conflict in the de- cisions in this country, but the weight of au- thority is that the statute of frauds is satis- fled by the signature to the contract of the party souglit to be charged only, whether the suit to enforce it be at law or in equity, and whether it relates to the sale of real or per- sonal estate. ClMson v. Bailey, 14 Jolins. 484; McCrea Purmort, 16 Wend. 460; Richards v. Gr^en, 28 N. J. Eq. 536; Railroad Corp. V. Evans, 6 Gray, 33; Sutherland v. Briggs, 1 Hare, 34. We think that there is not sufiicient ground for this reason of appeal. Another reason of appeal is "that the spe- cific execution of the contiact should not have been decreed, because it is too uncertain to be enforced, inasmuch as it could not be un- derstood from the writing itself without the necessity of resorting to parol proof. " No objection seems to have been made to the con- tract when it was ofEered in evidence, and therefore the objection now made, that it is void upon its face, comes too late to be en- titled to consideration. But the claim, if seasonably made, would have been unfounded. The defendants do not specify in tlieir reasons of appeal, or in their brief, the particulars in which they claim that the contract is defi- cient in certainty. We suppose their claim to be that the statement of the location of the land is too indefinite to satisfy the require- ment of the statute of frauds. If the only description of the land had been "fifteen acres, more or less, in the town of Stratford, " there would have been force in this claim, though according to the decisions of courts of high authoritysuch adescription might have been applied to the land intended by it by ex- trinsic evidence. In the case of Hurley v. Brown, 98 Mass. 545, the only description in the contract of the property agreed to be con- veyed was "a house and lot on Amity stteet. " The court admitted evidence that there was only one house and lot on Amity street which the defendant had a right to convey, and that the parties had been in treaty for the pur- chase and sale of it, and that the subject- matter of the contract might be thus identi- fied. See, also. Mead v. Parker, 115 Mass. 413; Robeson v. Hornbaker, 3 N. J. Eq. 60. In the present case the court finds that tlie plaintiff owned no other real estate in Strat- ford, and that the same was occupied by him as a homestead and residence. But we think that the description of the land in this con- tract is so definite as not to require a resort to extrinsic evidence to identify it, other than such as is always necessary to apply a description of real estate to the premises de- scribed. The language of the contract is: "We agree to purchase of P. H. Hodges his place at Stratford, containing fifteen acres, more or less." The import of the word "place" in this connection is reasonably cer- tain. Its popular and correct meaning, as thus used, is the place where one resides; his homestead. Webst. Diet., in verbum. The court finds that the plaintiff told the defend- ants, before they signed the contract, that the place contained about 15 acres, and that this statement was made in good faith. The 586 SPECIFIC PERFORMANCE OF CONTRACTS. defendants assign as a reason of appeal that "there was not about fifteen acres of land." It Is enough to say that the court does not find that there were not 15 acres in the place, but evidently declined to makesuch a finding. The defendants introduced the recitals in two deeds as evidence of the quantity of land in tlie place. One was the deed to the plaintiff of the land, in which was added to the de- scription of the quantity of land the words "more or less," and the other was a convey- ance of a small strip of the land to a railroad company, specifying the quantity eonveyed. Except for the words "more or less" in the deed to tlie plaintiff, it would have appeared that there was a fraction of an acre less than 15 acres in the piece. The court, referring to this evidence, says: "There was no evi- dence as to tlie exact quantity of land except the recital in said deeds." It properly re- garded those recitals as inconclusive evi- dence. The remaining reason of appeal is that the plaintiff had adequate remedy at law. Tlie defendants clai m that the equitable juris- dicliun of the courts in this state was re- stricted by the provision in the old statute last found in Revision 1875, p. 413, § 5. that courts of equity shall "take cognizance only of matters in which adequate relief cannot be had in the ordinary course of law," and that that provision is still in force. It is unneces- sary to inquire whether that provision has not, as the plaintiff claims, been since repealed by the practice act passed in 1879, because, in our view, it did not have the restrictive ef- fect claimed for it. A similar claim was made by the defendant in the case of Munson v, Munson, 30 Conn. 425, and the court say the provision referred to "is simply an afiflrra- ance of a well-settled rule of equity. " The rule of equity is thus stated by Judge Swift: r "It is a leading principle that equity will not interpose where there is an adequate remedy at law. It is not sufiadent that there is a remedy, but it must be as complete and bene- ficial as the relief in equity." 2 Swift, Dig. c. 1, § 1. In the action at law for the breach of the contract the plaintifiE could only re- cover the excess, if any, of the sum agreed to be paid for the land above its market value when the contract was to be performed. Such a remedy is manifestly inadequate, and courts of equity, therefore, hold, as a general rule, that when a contract for the sale of real es- tate has been fairly entered into, the party contracting to sell, as well as the party con- tracting to buy, is entitled to have it specif- ically performed. The cases on this ques- tion are all one way. It is true courts of equity liave, in the exercise of their discre- tion, refused to apply the rule in certain cases where it would be productive of hard- ship or inconvenience. The court did so in the case of Whitney v. City of New Haven, 23 Conn. 624. In that case the city had con- tracted to purchase from the plaintiff land and water-rightsforthe purpose of providing a water supply, and afterwards voted to aban- don the project contemplated by the pur- chase. The court dismissed the bill for a specific performance, but remark as follows in their opinion: "As a general rule, where the purchaser of real estate can come into a court of equity, to obtain a deed of it, the vendor can come there to get his money, which WHS agreed to be paid; but the rule is not universally true, and it should not be ap- plied, we think, where it will do unnecessary mischief to one of the parties." In the pres- ent case the contract appears to have been fairly made, and is subject to the general rule of equity. There is no error in the judg- ment complained of. The other judges con- curred. SPECIFIC PERFORMANCE OF CONTRACTS. 587 POltTBR T. FRENCHMAN'S BAY & MT. D. LAND & WATER CO. (24 Atl. 814, 84 Me. 195.) Supreme Judicial Court of Mame. Jan. 15, 1892. Report from supreme judicial court, Han- cock county. BUI In equity by Margaretta B. Porter against Frenchman's Bay & Mt. Desert Land & Water Company, to which respondent de- murred. On report Demurrer sustained, and bill dismissed. Deasy & Higglns, for plaintiff. Hitle & Hamlin, for defendant. LIBBBY, J. BUI in equity, praying for decree for a specific performance of a con- tract In -writing, made by the defendant with the plaintiff, for the purchase of a lot of land in the village of Sorrento. It comes before this court on a demm-rer to the bill by the defendant, and the ques- tion to be determined is whether, upon the allegations in the bill, this court has juris- diction in equity to decree a specific perform- ance. We think it clear that in a proper case the court has jurisdiction to decree specific performance or a contract in writing for the conveyance of land, in a bill brought by the vendor cr by the vendee. Rev. St § 6, c. 77, cJ. 3. But the court in this state d9es not take jurisdiction in equity when the plaintiff has a plain, adequate, and complete remedy Id an action at law. Milliken v. Dockray, 80 Me. 82, 13 Atl. 127; Bachelder v. Bean, 76 Me. 370; Alley v. Chase, 83 Me. 537, 22 Atl. 393. And we think it must appear by the alle- gations in the bill, where an action at law may be mamtained, that the remedy by it is not plain, adequate, and complete; for it is a well-established rule of equity plead- ing that the bill must contain allegations showing that the court has equity jurisdic- tion. Story, Eq. ei. §§ 10, 34; Jones v. Newhall, 115 Mass. 244, 252, 253. In this case, we think it perfectly clear that the plaintiff has a right to maintain an action at law for a breach of the contract. That being so, to show jurisdiction in equity, there should be some allegations in the blll-\ showing that the remedy at law would not } be adequate and complete. There Is nothing j of the kind in this bill. After setting out ' the contract, It alleges that the plaintiff was in possession of the land, and has continued to be in irossession of the land, to the time of the filing of the bill; no allegation that her action in regard to the land was in any way changed by the making of the contract; no allegation that anything had been done by either party, in consequence of the making of the contract, which could not be taken into consideration In the assessment of the plaintiff's damages. Demurrer sustained. Bill dismissed, with costs. PETERS, C. J., and WALTON, VIRGIN, EMERY, and WHITEHOUSE, JJ., concur- red. 588 y- SPEX3IFI0 PBEJPORMANOE OF CONTRACTS. BtMGAKDNEJR et aL v. LEAVITT et al. (13 S. E. 67, 35 W. Va. 194.) Supreme Court of Appeals of West Virginia. March 31, 1891. Appeal and supersedeas from circuit court, Wood county. Loomis & Tavener, for appellants. Barna Powell and Okey Johnson, for appellees. LUCAS, P. This suit originated by the tiling of a bill In chancery by H. E. Bum- gardner, a married woman, and H. F. Bum- gardner, her husband, against C. P. Leavitt and others, in the circuit court of Wood coun- ty. The female plaintiff alleges that the de- fendant Leavitt induced her to invest $1,000 in the steam-boat General Dawes, the propos- ed cost of which was $7,500. It was under- stood that the boat was to be put in a joint- stock company, in which the plaintiff H. E. Bumgardner was to have shares in propor- tion to the money she had advanced, as afore- said. The plaintiff exhibits with her bill an agreement as follows: "This article of agree- ment, made and entered into this the 14th day of July, 1884, between 0. P. Leavitt, county of Wood, and state of West Virginia, and H. E. Bumgardner of Hockingport, Athens Co., Ohio, witnesseth, that the said O. P. Leavitt, in case of misunderstanding, or not being able to agree, or in case of death of Herman Bum- gardner, agent, said Lea vitt agrees to ta ke the said stock ofTtilf s. ijjjtn^arctii^ at not 'ex"-" '^x^eeding- cost.-Tsr, if iroat' de preciates in~va luer a Oalr-e'asn vama'B on7"""the said Mrs. H. "E. Btmgardner agreesTo'give said C. P. Leavitt the refusal over any other purchaser. The said stock referred to above is stock in the steamer General Dawes. [Signed] C. P. Leav- itt." And there is further exhibited the fol- lowing notice: "To Chas. P. Leavitt— Sir: 1 propose to sell you my stock in the Farmer's Trans. Co. in accordance with your contract of July 14, 1884, at cost, or, if the boat has depreciated in value, at its fair cash valuation. Your early attention is called to this matter, the contingency having arisen under which you bound yourself to take said stock. [Sign- ed] H. B. Bumgardner, by H. F. Bumgard- ner, Ag't. March 31, 1887." The bUI supple- ments the above-written agreement signed by C. P. Leavitt, by stating that it was a part of the consideration that the husband, H. F. Bumgardner, was to have regular employ- ment on said steam-boat, of which said C. P. Leavitt was to be master. It is further alleg- ed that all of the interests, including the stock owned by Leavitt, (which was a large major- ity of it,) as well as that ovsmed by H. B. Bumgardner, was capitalized into a corpora- tion known as the Farmer's Transportation Company, or conveyed to said company. The steamer was valued at $7,600 at that time, and 760 shares of capital stock of the par val- ue of $10 per share were Issued, of which 100 shares were given to said H. E. Bumgardner, and 1% shares to her husband, In order that he might be represented in the company, it is further alleged that C. P. Leavitt took charge af master, and pursuant to the agree- ment gave H. F. Bumgardner employment, but that they soon disagreed, and said H. P. Bumgardner was discharged. Plaintiffs pro- ceed to aver that since such disagreement they have at all times been ready to give said Leav- itt the preference of purchasing said stock, and have urged him to buy said stock accord- ing to his agreement, but he has steadily and persistently refused to do so, until the 81st day of March, 1887, when the above notice was written and served. They charge that there has been no depreciation in the value of the boat, but that it has been increased in size and capacity at a large expense, and its value enhanced in consequence. It is further alleged that one E. W. Petty, who is made a defendant, had attached the 101% shares of stock in the circuit court of Wood county in an action at law against H. F. Bumgardner. It is further alleged that the plaintiffs were largely indebted to J. W. Arnold and L. H. Ar- nold, both of whom were made defendants, and that the female plaintiff executed a lien upon the said 100 shares of stock to secure said indebtedness. By an agreement and com- promise between the plaintiffs and said E. W. Petty his debt is reduced to $422, which it is agreed shall be paid him out of the proceeds arising from the sale of said 101% shares of stock; and by like agreement with J. W. and L. H. Arnold, they are to receive the residue of the proceeds of said sale as a compromise, and in full settlement of the indebtedness due them from the plaintiffs. Plaintiff H. B. Bumgardner, it is alleged, has always been ready, and has offered, and now offers, to spe- cifically perform the said agreement on her part, by assigning and transferring said 101% shares of the stock free and unincumbered, as of the 31st day of March, 1887. The prayer of the bill is that the court will declare the plaintiff to be entitled to a specific perform- ance and execution of the said agreement, with interest on the said amount from March 31, 1887; second, that the court will decree that the amount ascertained to be due said H. B. Bumgardner from said C. P. Leavitt may be paid over to said E. W. Petty "and said J. W. and L. H. Arnold, as above set out; and, thirdly, for all proper accounts and general relief. The bill was demurred to by Leavitt, but the demurrer was overruled, whereupon C. P. Leavitt filed his answer, in which he ad- mits the agreement as set out in the bill, so far as it goes, but he denies it was ever un- derstood or contemplated that the said H. F. Bumgardner should have the right, at any time he might thereafter see fit, to require respondent to buy the stock of said H. Bl Bumgardner, and to require respondent to pay therefor the original cost, but in truth it was| intended to give respondent rdusal and right to buy said stock at any time, provided he' paid therefor as much as any other bidder, SPECIFIC PERFORMANCE OF, CONTRACTS. 589 and provided, furtliermore, that respondent so desired. He alleges that the boat Is not worth more than $2,500, about one-third of what she cost at the time said stocli was issued; and that the present value of said 101% shares in the bill mentioned is not worth more than ?333.33% at the outside. He denies that the stock has ever been tendered him, or that ei- ther of the plaintiffs have ever proffered the same at anything like a fair cash valuation. He admits tiat on or about the day of July, 1887, he offered them $850 for the stock, although he linew that they had immtJiately before that offered it to another party at $800. He alleges that it had been assigned by H. E. Bumgardner to Mrs. J. W. Arnold, to secure payment of a debt, and the certificate was then held by one L. N. Tavener, as attorney for said Arnold, who had notified the secre- tary of the corporation, and requested a trans- fer on the boolis. Respondent sets out also that the certificate was incumbered by a lien of said E. W. Petty, and he pleads that the plaintiffs had not title to said stock, and so could not carry out the agreement. Respond- ent further alleges that his said offer of $850 was made in good faith, and he was ever ready from the time he offered in 1887 to buy said stock to take the same, but his offer was not accepted, nor was there ever tendered to respondent the said stock at any time, nor could it be, since they had parted with the title. He denies that he ought in equity to be compelled to pay for the stock, which cannot be delivered, and is incumbered to the full amount of its value. J. W. Arnold and L. H. Arnold filed their joint arid separate answer, in which they admit all that is said in the bill about the mortgage or pledge of the stock to them, and admit that they have agreed that out of the proceeds arising from the sale E. W. Petty should be first paid, and that they would accept the residue of the proceeds In full satisfaction of their lien, and that they have accordingly authorized L. N. Tavener, Esq., their attorney, to execute their release, in order that said H. E. Bumgardner may ex- ecute to said defendant 0. P. Leavitt an unin- cumbered transfer of said 100 shares of stock In fulfillment of said H. B. Bumgardner's con- tract on her part, as set out In Exhibit No. 1 of the bill. E. W. Petty likewise answers, and admits all the averments of the bill as to his lien upon the stock by attachment, and also the agreement with reference to his payment out of the proceeds of sale. A vast amount of testimony was taken, very little of which had anything to do with the case, the bulk of it seeming to be predicated upon some extraneous controver- sies as to the earnings of the boat, and Leavitt's settlement vrtth the corporation and stockholders. On the 10th of Decem- ber, 1888, the case came on to be finally heard, and the court decreed that H. E. Bumgardner was entitled to specific execu- tion of the contract; that demand was made by her on the 31st day of March, 1887; and that the 101% shares of stock were then worth 5!866.60; and the said C. P. Leavltt is decreed to pay that amount, with interest from 81st day of March, 1887, aggregat- ing the sum of $954.76, which he is to pay, with interest thereon from the date of de- cree. The money is to be distributed to the Arnolds and Petty in accordance with their respective liens, and agreements with refer- ence to the same. The decree then proceeds to direct "that L. N. Tavener, who Is au- thorized in a writing filed in the papers In this cause to release the Hen of said J. W. Arnold and L. H. Arnold upon 100 shares of the stock aforesaid, to execute said re- lease of said lien, and, in case said L. N. Tavener shall fail or refuse to execute said release within ten days from this date, then Barna Powell, who Is hereby appointed a special commissioner for the purpose, Is au- thorized and directed to execute a release of the lien of said J. W. Arnold and L. H. Arnold, as aforesaid, upon the 100 shares of stock held In the name of H. E. Bum- gardner and filed with the papers in this cause, which certificate of 100 shares, as well as the certificate of 101% shares now also in the file in this cause, are to be de- livered to said O. P. Leavltt upon payment by him, or some one for him, to the defend- ants Petty and Arnolds and plaintiffs, the sum hereinbefore decreed by him to be paid." Leave was given the plaintiffs to sue out execution. From this decree the defendant Leavltt has appealed to this court. The first and pivotal question to be de- cided In this case Is whether the court of chancery had jurisdiction to decree specific performance. If not, the bill should have been dismissed on demurrer. In the first place, regarding the defendant Leavltt, as having for a consideration obtained the re- fusal of, or, as we may call It, the option on, this stock, could he have maintained a bin for specific performance against Mrs. H. E. Bumgardner in case she had refused to let him have the stock, and had Insisted on selling it to some one else? This is an im- portant question, because, H sucE~relIef could be granted to the purchaser were he to apply, the seller, who has given the purchaser such preference or option. Is enti- tled to like relief by reason of the operation of the principle of mutuality of right and remedy. The general doctrine upon this sub- ject Is thus stated by Mr. Pomeroy: "It is not then sufficient In general that a valid and binding agreement exists, and that an action at law for damages will lie In favor of ei- ther party for a breach by the other; the peculiarly distinctive feature of the equita- ble doctrine Is that the remedial right to a specific performance must be mutual." See Moore v. Fitz Randolph, 6 Leigh, 175. This is a general rule, namely, that the right to a specific execution of a contract, so far as the question of mutuality is concerned, depends upon whether the agreement itself Is obli- * i 590 SPECIFIC PERFORMANCE OF CONTRACTS. gatory on both parties, so that upon the ap- plication of either against the other the court would grant a specific performance. Duvall V. Myers, 2 Md. Ch. 401. Says Mr. Pomeroy: "It is a familiar doctrine that if the right to the specific performance of a contract exists at all, it must, be mutual. The remedy must be alike attainable by both parties to the agreement." Pom. Spec. Perf. § 165. In the present case it appears that the defendant Leavitt, being the owner of about three-fourths of the stock in a steam- boat, entered into an agreement with a mar- ried woman with reference to $1,000 of the same stock. It is true that the contract was signed by him alone. The circumstance that it was signed by him alone is not material, since it is admitted by both parties that she entered into the contract, and was to be bound by it. Wat Spec. Perf. §§ 268, 270. Neither is the fact that she was a married Woman material in this state, since, by our married woman's act, which went into op- eration in 1869, (see Code, c. 66,) a married woman may not only take and hold per- sonal property, such as stocks, but, being such a stockholder, she may vote the same in any organized company; consequently she had the right of disposition and the power to sell or contract to sell. It is also true that, according to her statement, personal services entered into a part of the considera- tion of the contract, and it is a rule almost universal that a contract for personal serv- ices cannot be enforced against the partj' promising such services, and hence for the want of the requisite mutuality specific ex- ecution will not be enforced against the op- posite party, -unless the services have been actually performed, and the contract to that extent been executed, as was the case here. Pom. Spec. Perf. § 310. These obstacles being disposed of, we may inquire, had Mrs. Bumgardner persisted in selling this stock to a third party, contrary to her agreement, could Leavitt have asked the court of chancery to interfere by injunc- tion, and to compel her to transfer the stock to him upon payment of the price stipulated in the agreement? The question of specific performance of contracts for the delivery of stock is frequently treated by the text-writ- ers in an empirical and unsatisfactory man- ner, as If there were something peculiar In this character of personal property, which rendered It Impossible to classify it under any general rule. Mr. Fry, for example, does not hesitate to say positively that a contract for the sale of stock will not be specifically enforced, although he afterwards admits that railway shares form an excep- tion. Fry, Spec. Perf. §§ 24, 27. Mr. Pom- eroy's treatment of the subject Is equally unsatisfactory. See Pom. Spec. Perf. §§ 17- p9. The true principle would seem to be (that, as a general rule, courts of equity will I not enforce specific performance of contracts for the delivery of shares of stock, but when a purchaser has bargained for such shares, ^ or taken an option upon them, because they ; have for him a unique and special value, the loss of which could not be adequately com- | pensated by damages at law, the chancellor, in the exercise of a sound discretion, may decree specific execution. This principle we find laid down and Insisted upon in the more recent work of Mr. Waterman, (1881.) "The same principles," he says, "govern in con- ti'acts for the sale of stock as in the sale of other property,— that Is, If a breach can be fully compensated in damages, equity will not interfere; while it will do so when, notwithstanding the payment of the money value of the stock, the plaintifE will still lose a substantial benefit, and thereby remain uncompensated. If a contract to convey stock is clear and definite,) and the uncertain value of the stock renders it difficult to do justice by an award of damages, specific performance will be decreed." Wat Spec. Perf. § 19. Among the many other cases cited in support of this proposition is the leading case of Ooloret v. Rothschild, de- cided by Sir John Leach, vice-chancellor, in 1824, 1 Sim. & S. 590, in which It Is said that a bill will lie for the specific performance of a contract for the purchase of govern- ment stock, where It prays for the delivery of certificates which give the legal title to the stock. There are many other cases, however, both in England and America, which sustain the correct principle as laid down above, but which it is unnecessary to cite. In the present case the purchaser of the refusal of or option upon the stock In the steamboat was dealing for an article which he could not go upon the market and buy, and which no one could deliver to him but the holder, with whom he bargained. The shares of stock evidently had for him a peculiar value, which could not be com- pensated by mere damages, such as would be recovered at law. Their possession would enable him to control the company, and to retain his position as master of the vessel. For the same reason, therefore, that a con- tract for railway shares will frequently be specifically performed, viz., whenever such shares are being purchased for the purposes of organization and control, I think a court of equity would have interfered in this case In favor of O. P. Leavitt, had he filed a bill praying for its intervention. It follows, therefore, upon the ground of mutuality of remedy and reciprocity of obligation, that such a bill could be maintained by Mrs. Bumgardner. There Is another ground quite as apparent as that stated above, and that is that the legal title to this stock had passed into the hands of a third party, who is prop- erly made a co-defendant In the case cited above of Doloret v. Rothschild, 1 Sim. & S. 590, the vice-chancellor remarks: "I con- sider also that the plaintiff, not being the original holder of the scrip, but merely the bearer, may not be able to maintain anj" SPECIFIC PEEFORMANCE OF CONTRACTS. 591 action at law upon the contract, and that, if he has any title, it must be in equity." \ So in the present case the plaintiffs are In a i situation in which a court of equity sees its I way clearly to administer complete and ade- iquate remedial justice to all parties inter- ested, whereas, if they were remitted to a ; court of law, if relief could be afforded at I all, it could only be done by resorting to j several actions, perhaps no less than three. Upon the general principle, therefore, of ' avoiding circuity of action, and affording relief where the remedy at law Is inadequate, it was proper for the com:t of equity to ex- ercise its jurisdiction. Whenever the rem- edy at law would be incomplete and inade- quate because the court of law cannot give a conditional or modified judgment, and would be imable to preserve the benefit of the agreement to aU the parties interested, equity has jurisdiction to enforce the agree- ment. In the case of Summers v. Bean, the general principle is thus declared by Judge Moucure, (13_Grat. 412:) "Generally an ade- quate remedy may be had at law for the breach of a contract concerning any other personalty than slaves, and therefore, as a general rule, a court of equity will not en- force the execution of such a contract. But sometimes an adequate remedy at law can- not be had for the breach of such a contract, and then its specific execution will be en- ( forced in equity." As it was said In May v. Le Claire, 11 Wall. 218, in order to oust the equity jurisdiction, the remedy at law must be "as effectual and complete as the chancellor can make it." The same princi- ple is recognized by all the text-writers. See Fry, Spec. Perf. § 18; Pom. Spec. Perf. § 29. Mr. Waterman says tersely: "If, however, the remedy at law would be wholly inadequate or Impracticable, specific per- formance will be decreed." Wat. Spec. Perf. § 17. For these reasons, therefore, we think there w;as no error in overruling the demur- rer to the plaintiffs' bill. Upon the merits, al- though there was, as we have said, a great deal of unnecessary testimony taken, the plaintiffs' case might have rested, and no Qoubt did rest, upon the testimony of the defendant O. P. Leavitt himself. Out of the 168 questions propounded to him, of which some were frivolous, and nearly all imper- tinent, he is asked on the 103d question whether he did not offer Mrs. Bumgardner $850 for her stock, in order to get rid of Bumgardner, to which he replies: "Yes; I wanted to get rid of bim. Here is one of the clerks right here who asked him what he would take for it at different times." 104th question: "Did you not make a prop- osition to buy the stock on account of your obligation under that contract? Answer. Oh, yes; several times. I guess the clerk here knows that I made offers at different times through Mr. Ritchie, and Mr. Barin- ger can testify to the same thing." The de- fendant further testifies that these offers were made lu March, 1887, or a little after that time, and that the negotiations would have been concluded, except for some trivial and inconsequeutial dispute about matters foreign to the subject-matter. To take the defendant, therefore, at his own word, and fix the value of the stock at a price only dif- fering by a few dollars from what he him- self offered, with interest from the time of his offer, was a judgment of the circuit court of which he has no right to complain, and we think, therefore, that the decree complained of should be in all respects af- firmed. J /2. i^^^^of / ' I I I f 1 & SPECIFIC PERFOEMANCB OF CONTRACTS. WELTZ r. JACOBS et al. (40 N. E. 723, 171 111. 624.) Supreme Court of Illinois. Feb. 14/ 1898. /^ Appeal from appellate court, First district Bill in equity by George M. Welty to re- strain H. R. Jacobs from refusing to per- form a contract for the use of a theater, and to enjoin Ulysses D. Newell from the use and occupation of the same. From the decree of the appellate court (64 111. App. 285), aflBrming the decree of the superior court of Cook county, in favor of defend- ants, plaintiff appeals. Affirmed. Bulkley, Gray & More, for appellant. James B. Purnell, for appellee H. R. Jacobs. Partridge & Partridge, for appellee V, D. Newell. CARTER, J. This was a bill for an In- junction filed December 28, 1895, in the su- perior court of Cook county, by the appel- lant, in which he alleged that he was a the- atrical manager and proprietor; that on April 9, 1895, he entered into a written con- tract with H. B. Jacobs, manager, and repre- senting M. J. Jacobs, proprietor, of the AI- hambra Theater, in Chicago, to play his com- pany in the "Black Crook" at such theater for seven consecutive nights, commencing December 29, 1895; that Jacobs was to fur- nish the house, well cleaned, lighted, and heated, together with the stock, scenery, and equipments contained therein, stage hands, stage carpenter, fly men, regular ushers, gas man, property man. Janitor, ticket seller, doorkeepers, orchestra, house programmes, licenses, billboards, bill posting, distribution of printed matter, usual newspaper adver- tisements, and the resources of the theater in stage furniture and properties not perish- able; that Welty was to furnish a company of first-class artists, to the satisfaction of Jacobs, together with special scenery, cal- cium lights, etc., and also, 10 days in advance, certain printing, prepaid and free from all charges, consisting of a variety of bills, etc.; that appellant was to receive 60 per cent, of the gross receipts up to $5,000, and 70 per cent, on all over $5,000; that if the company should not prove satisfactory to Jacobs, whose judgment was to be conclu- sive, or if the company should prove not to be as represented, then Jacobs should have the right to cancel the contract by giving ap- pellant at least one week's notice, by mail or otherwise; that appellant's company was not to appear at any other house in the city prior to the date of the performance speci- fied; that If, by any unforeseen accident, fire, or for any reason whatever, Jacobs could not furnish the house for said perform- ance the contract was to become null and void. The bill further alleged that appel- lant had kept and performed all his cove- nants; that he had tendered the printing as required, and that he was ready to furnish a satisfactory company; that he had received no notice from Jacobs that his company was not satisfactory nor as represented, and had been given no notice of the termination of his contract as therein provided; that with- in the then last 30 days Jacobs had entered Into a contract with U. D. Newell for the Alhambra Theater for the same week that appellant's contract provided for; that New- ell claims to be the manager of another com- pany, also engaged in producing the "Black Crook"; that Jacobs and Newell were com- bining and confederating to Injure and de- fraud appellant, as Newell had agreed to produce the play for a less percentage than appellant; that appellant had 40 perform- ers under contract, and would be obliged to pay them their salaries whether they per- formed or not, and that he could procure no other place for his performance during said time, and would be compelled to remain idle, at great expense; that the money value of his contract could not be determined, ei- ther actually or approximately. In any other manner than by carrying out and fully per- forming it according to its conditions; that Jacobs and Newell had announced their in- tention of keeping appellant out of the pos- session and use of said theater; that appel- lees were financially irresponsible. The bill prays for an order enjoining appellees from hindering appellant and his company from taking possession of the Alhambra Theater, its appurtenances and stage property, and from hindering, delaying, interfering with, or preventing appellant from producing said play in accordance with said contract, and also restraining appellees from using or oc- cupying said theater, its stock, scenery, and equipments, during said period of seven days, and from allowing any other person or company to use or occupy the same; and also restraining and enjoining appellees from refusing to furnish to appellant, during such period, the usual and necessary light, heat, music, regular stage hands, stage carpenter, etc., and for general relief. The injunction was granted, and served on appellees De- cember 28, 1895. On December 30, 1895, a rule was entered on appellees to show cause why they should not be punished for con- tempt of court In violating this Injunction. The next day an order was entered modify- ing the injunction so as to permit Newell to produce the play at the Alhambra, and Jacobs was ordered to pay into court 60 per cent of the entire receipts received by him at the Alhambra for the week, and to pay to New- ell 30 per cent of such receipts, and the cause was continued to January 3, 1896. On that day both appellees answered, replica- tion was filed, and Newell moved for a dis- solution of the injunction. Appellee Jacobs In his answer admitted the making of the contract with appellant but denied that ap- pellant's company was satisfactory or as represented, and alleged that he had notified appellant thereof, and had canceled the con- SPECIFIC PEEFOEMANCE OF CONTRACTS. 593 tract; denied all combination to injure appel- lant; admitted that he had made a contract with NeweU for the same week he had for- merly contracted to appellant; denied that appellant had furnished the printing as re- quired; and that he was without remedy ex- cept in a court of equity. Appellee Newell in his answer alleged that he had been in- formed that appellant's contract had been canceled; that on November 29, 1895, he had made a contract with Jacobs to play the Tompkins Black Crook Company in the Alhambra for seven successive nights, be- ginning December 29, 1895, the contract be- ing in all particulars Uke appellant's, except as to the percentage of receipts; that as early as December 27th he had removed to the Alhambra a number of articles belonging to his company and had taken possession of the same; alleged various communications and negotiations between all the parties to this suit from December 16th until the bill was filed; that, becoming alarmed that Ja- cobs would close up the Alhambra entirely during that week, he (Newell) had procured an injunction from the circuit court on De- cember 27, 1895, and had It served on Ja- cobs the same day, restraining Jacobs from closing up the theater during said week and excluding his company from presenting their play; charges appellant with laches and bad faith in suppressing all information in re- gard to such first injunction, and alleged that appellant's contract was in violation of the statutes, which forbid any amusement or diversion on Sunday, so that specific per- formance could not be enforced. /The cause was heard by the court, and a decree entered finding that the injunction had been violated by appellees, and that under the order modifying the injunction ' there had been paid into court $1,134.75; •. that the equities were with the appellees; I and that the appellant had a complete and / adequate remedy at law, and that the in- / junction was Improvidently Issued; and the j bill was therefore dismissed, and the money ordered returned to Jacobs. Appellant ap- pealed, and asked that the money be re- tained in the clerk's hands pending the ap- peal, which was allowed, and the money ordered left with the clerk until the final de- termination on appeal. The appellate court affirmed the decree, and appellant has fur- ther appealed to this court. There was no sufficient proof that Jacobs canceled his contract with Welty on any of the grounds stipulated in it, and the ques- tion is not whether Jacobs was justified in violating the contract, but whether his bill of complaint for equitable relief can be sus- tained or he should be remitted to his action J/ at law. Strictly speaking, the bill was not H one for specific performance, but for injune- "tion only. It is clear from its allegations and the authorities bearing upon the ques- tion that specific performance of the con- tract could not be decreed. It is not, and H.& B.EQ.(2d Ed.)— 38 cannot be, contended that appellant could have been compelled, by any writ the court could have issued, to occupy the theater with his company of actors and give the per- formances contracted for, any more than a public singer or speaker can be compelled specifically to perform his contract to sing or speak. Negative covenants not to sing or perform elsewhere at a certain time than a designated place have been enforced by the injunctive process, but further than this such contracts have not been specifically en- forced by the courts, by injunction or oth- erwise. Lumley v. Wagner, 1 De Gex, M. & G. 604; Daly v. Smith, 38 N. Y. Super. Ct. 158. In Lumley v. Wagner there was an ex- press covenant not to sing elsewhere than at the complainant's theater, and the In- junction was placed on that ground. But it is urged that negative covenants may be implied as well as expressed, and, when necessarily implied from the terms of the contract, they will be enforced In like manner; citing the following cases: Mon- tague V. Flockton, L. E. 16 Eq. 189; Great Northern Ey. Co. v. Manchester, S. & L. Ey. Co.. 5 De Gex & S. 138; Chicago & A. Ey. Co. V. New York, L. E. & W. E. Co., 24 Fed. 516; Singer Sewlng-Mach. Co. v. Union B. & B. Co., Holmes, 253, Fed. Cas. No. 12,904; 2 High, Inj. (2d Ed.) § 1150; Fredricks v. Mayer, 13 How. Prac. 566. While there was a nega- tive covenant in the contract under consid- eration against Welty, it is not important to consider whether or not appellant might have been enjoined from performing else- where than at Jacobs' theater at the time in question, for It is manifest he could not have been compelled to perform at said thea- ter. Before a contract will be specifically i enforced there must be mutuality in the con- 1 tract, so that it may be enforced by either;! — !.-u-<' and, as this contract was of such a nature! _^ that it could not have been specifically en-\ [ forced by appellee Jacobs, It should not be -~^ so enforced by appellant. Lancaster v. Eob- erts, 144 111. 223, 33 N. B. 27; Pry, Spec.' Perf. 11 440, 441; Wat Spec. Perf. $ 196; Cooper v. Pena, 21 Cal. 411. But it is urged that courts of equity will by injunction restrain the violation of con- tracts of this character in many cases where they cannot decree specific performance, and the following among other cases are re- ferred to: Western Union Tel. Co. v. Union Pac. Ey. Co., 3 Fed. 423-429; WeUs, Fargo & Co. V. Oregon E. & Nav. Co., 15 Fed. 561, and 18 Fed. 517; Wells, Fargo & Co. v. Northern Pac. E. Co., 23 Fed. 469. With- out determining whether there may not be exceptional cases not falling within the gen- eral rule, we think the rule is as stated in Chicago M. G. L. & F. Co. v. Town of Lake, 130 ni. 42, 22 N. B. 616, and the authorities there quoted. It was there said (page 60, 130 m., and page 619, 2E N. E.): "The bill of complaint In this case, though not strictly a bill for the specific performance of a con- 594 SPECIFIC PERFORMANCE OF CONTRACTS. tract, Is In substance a bill of that kind. In 3 Pom. Bq. Jur. § 1341, It. Is said: 'An Iinjiinction restraining the breach of a con- tract Is a negative specific enforcement of that contract. The jurisdiction of equity to grant such injunction is substantially co- incident with Its jurisdiction to compel a specific performance. Both are governed by the same doctrine and rules. It may be stated, as a general proposition, that when- ever the contract Is one of a class which will be affirmatively specifically enforced, a court of equity will restrain its breach by Injunction, if this is the only practical mode of enforcement which its terms permit.' " It Is plain that, as a general rule, to enjoin one from doing something in violation of his contract Is an indirect mode of enforcing the affirmative provisions of such contract, although such an injunction may often fall short of accomplishing its object. It is ob- vious from what has been said and from the authorities that to enjoin appellee Ja- cobs, as prayed In the bill, from refusing to furnish the usual and necessary light, heat, music, regular stage hands, stage carpen- ter, ushers, equipments, etc., provided for In the contract, would be the same, In sub- stance, as to command him to furnish th"m. find without them the use of the theater building would oeem to be of little use. It is practically c-uuceded by counsel tor appel- lant that this part of the contract could not be specifically enforced as prayed, or other- wise, in equity; but it Is con' nded tha,t this part of the contract is merely incidental to the more important part of It, which wag the right to occupy and use the theater and Its furnishings, and give therein the per- formances provided for, and to exclude from a like occupation and use the other appellee, Newell, and that the injunction was proper for that purpose. This would have been an/\ indirect method of enforcing a part perform/ \ ance of the contract, and courts will not enf I force specific performance of particular stipL ulatlons separated from the rest of the con\ I tract, where they do not clearly stand by Ni themselves, unaffected by other provisions. \ Baldwin v. Fletcher, 48 Mlci^. 604, 12 N. W. r 873. Even if such a decree might have been -tained, we are satisfied the sound legal discretion of the court was not violated In refusing It, or in dissolving the injunctlou after it was granted. Appellant's remedy. If any he had, was at law. The judgment of the appellate court is affirmed, judgment affirmed. ■Ow-'a/'.^— <*- 32» ^^ Yf <^ y4 /r ^0 s (^ C^v^Cl V7 SPECIFIC PERFORM ANOB OF CONTRACXiS. 595 JONES V. XEWriALL. (115 Mass. 244.) Supreme Judicial Court of Massachnsptts. Suffolk. June 20, 1874. Bill for specific performance by Leonard S. Jones against Benjamin B. Newliall. From a judgment overruling a demurrer to the complaint defendant appealed. The case was heard before Ames, J., who decided that plaintiff was entitled to the decree prayed for, from which decision defendant also ap- pealed. On report to the full court. Demur- rer sustained and bill dismissed. The agreement, the specific performance of which was prayed, is as follows: "This indenture, made this fourth day of Decem- ber, A. D. 1872, by and between Leonard S. Jones, of Cambridge in the Commonwealth of Massachusetts, and Benjamin B. New- hall, of Boston in said Commonwealth, wit- Sijnesseth, That said Jones agrees to sell, and j^aid Newhall to purchase, first, all the rigljt, I title, share and interest of the saiid Jones to and in any and all property belonging to the ^j Worthington Land Associates, together wit*i I one promissory note for ten thousand doJ- ilkrs, dated April 18, 1872, belonging to said yones, and being one of five of even amount and date given by Samuel A. Wheelock and (secured by mortgage on land conveyed by said associates to T. A. Ballou and others: second, all the right, title, share and inter- est of said Jones to and in any and all property belonging to the Dorchester Land Association, the share of said Jones consist- ing of fourteen shares of the stock of said Dorchester Land Association, together with two mortgage notes of $3,467.95 and $4,743.- 36, respectively, given by Samuel A. Whee- lock to said Benjamin B. Newhall. For which said property, said Newhall agrees to pay to said Jones the amount of all moneys invested by said Jones in said associations, Interest on the same at seven per cent, per annum from the time of investment to the date hereof, and the additional sum of five thousand dollars as bonus. Said investments, interest, and bonus, amounting in all to thirty-four thousand one hundred and ninety- six 33/100 dollars, payable as follows: viz., ten per cent, of said sum, viz., 3,419o3/i„5 dollars in cash, on the delivery of this agree- ment, and the balance in nine monthly pay- ments, the first five of such payments to be 3,75534/100 dollars each, and to be made one in each of the first months of the year A. D. 1873, and the remaining four of said nine payments to be of 3,000 dollars each, and to be made one in each of the months of June^ July, August, and September of said year 1873, with interest on said payments at the rate of seven per cent, per annum. It is agreed, nevertheless, that If said Newhall shall elect to anticipate any of said pay- ments, said Jones shall receive the same when ofEered. And it is further agreed, that of said first payment of ten per cent, of said whole amount, two thousand dollars shall he applied to the payment of the property sec- ond above desci-ibed, and 1,419 os/i 00 dollars shall be applied to the payment of said prop- erty first above described; that the five of said monthly payments next ensuing shall be i applied to the payment of said property first above described, and, together with said 1,41903/100 dollars, shall be deemed full pay-' ment therefor; and when made, said Jones agrees to transfer, convey, and deliver to said Newhall or his heirs or assigns, all the property first above described, and execute and deliver to him or them all instruments of conveyance necessary or proper for the con- j veyance of said property; that after said • transfer or delivery, the property second j above described shall be transferred, convey- ; ed, and delivered to said Newhall or his i heirs or assigns, in amounts of one thousand I dollars or multiples thereof, as payments of i like amounts shall then be made by said Newhall; an amount of said property equal j to said 2000 dollars of said first payment of ten per cent, being retained by said Jones until the final transfer; and that all proper ; instruments of conveyance of the same shall i be executed and delivered as is above pro- I vided In the case of the property first de- I scribed. All increase arising in the mean i time from the sale of either of said proper- ties above described or otherwise, whether in cash, mortgages, notes, or other securi- ties, shall be held in trust by said Jones for said Newhall, and delivered, transferred, and conveyed to said Newhall, his heirs or as- signs, at the times above provided for the final transfer of either of said properties re- spectively. And it is further agreed, that said Newhall shall hold said Jones harmless from all taxes or assessments of whatever kind or by whomsoever levied or assessed upon said property above described, whether now existing or hereafter created. Said Xewhall is hereby empowered to appear at all meetings of the associations above named, vote, and otherwise take part in the transac- tion of business at said meetings, in the place and stead of said Jones, as fully as said .Tones could do; and is hereby nomi- nated and appointed the attorney of said Jones to that extent." The bill alleged the execution of the agreement, the transfer of the plaintiff's interest in the Worthington Land Association, and payment therefor, and that there remained due from defendant \ four of the monthly pavments specified inJXi. the agreement, and assessments that may / he made on the Dorchester Land Associa- tion. R. D. Smith & A. B. Jones, for plaintiff. A. C. Clark, for defendant 596 SPECIFIC PERFORMANCE OF CONTRACTS. WELLS, 3. Jurisdiction In equity is con- ferred upon ttiis court by Gen. St. c. 113, { 2, to hear and determine "suits for tlie spe- cific performance of written contracts by and against either party to the contract, and his heirs, devisees, executors, administra- tors and assigns." The power extends alike to written contracts of all descriptions, but its exercise is restricted by the proviso, "when the parties have not a plain, ade- quate and complete remedy at the common law." This proviso has always been so con- strued and applied as to make it a test, in each particular case, by which to determine whether jurisdiction in equity shall be en- tertained. If the only relief to which the plaintiff would be entitled in equity is the same in measure and kind as that which he might obtain in a suit at law, he can have no standing upon the equity side of the court, unless his remedy at law is doubtful, circuitous, or complicated by multiplicity of parties having different interests. Charles River Bridge v. Warren Bridge, 6 Pick. 376, 396; Sears v. Boston, 16 Pick. 357; Wilson V. Leishman, 12 Mete. (Mass.) 316, 321; Hil- liard v. Allen, 4 Cush. 532, 535; Pratt v. Pond, 5 Allen, 59; Glass v. Hulbert, 102 Mass. 24, 27; Ward v. Peck, 114 Mass. 121. In contracts for the sale of personal prop- erty jurisdiction In equity is rarely enter- tained, although the only remedy at law may be the recovery of damages, the meas- ure of which is the difference between the market value of the property at the time of the breach and the price as fixed by the contract. The reason is that, in regard to most articles of personal property, the com- modity and its market value are supposed to be substantially equivalent, each to the other, so that they may be readily inter- changed. The seller may convert his re- jected goods into money; the purchaser, with his money, may obtain similar goods; each presumably at the market price; and the difference between that and the contract price, recoverable at law, will be full Indem- nity. Jones V. Boston Mill Corp., 4 Pick. 507, 511; Adderley v. Dixon, 1 Sim. & S. 607; Harnett , v. Yielding, 2 Schoales & L. 549, 553; Adams, Eq. 83; Fry, Spec. Perf. §§ 12, 29. It Is otherwise with fixed property like real estate. Compensation in damages, measured by the difference in price as ascer- tained by the market value and by the con- tract, has never been regarded In equity as such adequate indemnity for nonfulfillment of a contract for the sale or purchase of land as to justify the refusal of relief In equity. When that is the extent of the right to recover at law, a bill in equity is maintainable, even in favor of the vendor, to enforce fulfillment of the contract, and payment of the full amount of the price agreed on. Old Colony Railroad v. Evans, 6 Gray, 25. Although the general subject Is within the chancery jurisdiction of the court, yet in- adequacy of the damages recoverable at law Is essential to the right to Invoke its action as a court of chancery in any particular case. The rule is the same whether applied to the contracts for the sale of real or of personal estate. The difference In the application arises from the difference In the character of the subject-matter of the contracts in re- spect to the question whether damages at law will afford full and adequate Indemnity to the party seeking relief. If the character of the property be such that the loss of the contract will not be fairly compensated In damages based upon an estimate of its mar- ket value, relief may be had in equity, whether it relates to real or to personal es- tate. Adderley v. Dixon, 1 Sim. & S. 607; Duncuft V. Albrecht, 12 Sim. 189, 199; Clark V. Flint, 22 Pick. 231; Story, Eq. Jur. § 717; Adams, Eq. 83; Pry, Spec. Perf. §§ 11, 23, 30, 37. The property in question In this case ap pears to be of such a character. It is not material, therefore, whether the interest of the plaintiff Is In the nature of realty or of personalty. But the relief he seeks is not such as to require the aid of a court of equity. At the time this bill was filed the only obligation on the part of the defendant to be enforced either at law or in equity was his express promise to pay a definite sum of money as an installment towards the purchase of certain property from the plain- tiff. That promise is supported by the exec- utory agreement of the plaintiff to convey the property, contained in the same instru- ment, as its consideration; but In respect of performance the several promises of the de- fendant are separable from the entirety of the contract, and each one may be enforced by itself as an assumpsit. The plaintiff is not obliged to sue in damages upon his con- tract as for a general breach. He may re- cover at law the full amount of the install- ment due. In equity he can have no decrgft beyond that. He can_ngt__cpme into equi^ to_obtaln~breclsely what he can have at Bw:~ Allen, Howe v. Nickerson, 14 Allen, 4( Jacobs v. Peterborough & S. R. Co., 8 Gush. 223; GIU V. Bicknell, 2 Cush. 355; Russell V. Clark, 7 Cranch, 69. The plaintiff has no occasion for any order of the court in regard to performance by him- self. At most, all that is necessary for him to do In order to recover his judgment at law, is to offer a conveyance of a portion of his interest corresponding to the amount of the installment due. We do not regard the fact, stated in the report, that the defendant "also refused to pay an assessment then due, or about to be- come due," for which he was bound by the contract to provide, and hold the plaintiff harmless; because that Is immaterial upon demurrer, there being no allegation In the SPECIFIC PERFORMANCE OF CONTRACTS. 597 bill In reference to It And besides, there would be suflSclent remedy at law for such a breach, if It were sufficiently alleged and proved. I' If the plaintiff will be compelled to bring several actions for his full remedy at law, It is because he has a contract payable in Installments; that is, he may have several causes of action. But he may sue them sev- erally, or he may join them all in one suit, when all shall have fallen due, at his own election. He is not driven into equity to - escape the necessity of many suits at law. It is true, as the plaintiff insists, that a different rule exists in the English courts of chancery, and that in numerous cases, not unlike the present, relief in equity has there been granted by decree for payment of a sum of money due by contract, although equally recoverable at law. The maxim, which, as we apply it, makes the want of adequate remedy at law essential to the right to have relief in equity in each case, has always been attached to chancery Juris- diction. But in the English courts it has been rather by way of indicating the nature and origin of the jurisdiction, and defining the class of rights or subjects to which it attaches, than as a constant limit upon its r exercise. Courts of chancery were created I to supply defects in proceedings at common \law. Story, Eq. Jur. §§ 49, 54. Their juris- diction grew out of the exigencies of the earlier periods in the judicial history of the country, and was from time to time enlarged to meet those exigencies. Its limits, having become defined and fixed by usage, have not contracted as the jurisdiction of the com- mon-law courts was extended. It has al- ways been held that jurisdiction once ac- quired in chancery, over any subject or class of rights, is not taken away by any subse- quent enlargement of the powers of the courts of common law, nor by reason of any new modes of remedy that may be afforded by those courts. Story, Eq. Jur. § 64i; Snell, Eq. 335; Slim v. Croucher. 1 De Gex, F. & J. 518. Hence arose a wide range of concurrent jurisdiction, within which chancery proceed- ed to administer appropriate remedies, with- out regard to the question whether a like remedy could be had in the courts of law. Colt V. WooUaston, 2 P. Wms. 154; Green v. Barrett, 1 Sim. 45; Blain v. Agar, 2 Sim. 289; Cridland v. De Mauley, 1 De Gex & S. 459; Evans v. Bicknell, 6 Ves. 174; Bur- rowes V. Lock, 10 Ves. 470. One of its max- ims was that there must be mutuality of right to avail of that jurisdiction. Accord- ingly, if the contract or cause of complaint was such that one of the parties might re- quire the peculiar relief which chancery alone could afford, it was frequently held that the principle of mutuality required that jurisdiction should be equally maintained in favor of the other party, who sought and could have no other relief than recovery oi the same amount of money due or measure of damages as would have been awarded by judgment in the court of law. Hall v. War- ren, 9 Ves. 605; Walker v. Eastern Coun- ties Ry. Co., 6 Hare, 594; Kenney v. Wex- ham, 6 Madd. 355. In contracts respecting land there Is an additional consideration for maintaining ju- risdiction in equity in favor of the vendor as well as the vendee, which is doubtless much more influential with the English courts than it can be here; and that is the doctrine of equitable conversion. It is re- ferred to as a reason for the exercise of ju- risdiction at the suit of the vendor, in Cave V. Cave, 2 Eden, 139; Eastern Counties By. Co. V. Hawkes, 5 H. L. Cas. 331; Fry, Spec. Perf. § 23. In Massachusetts, instead of a distinct and independent court of chancery, with a juris- diction derived from and defined and fixed by long usage, we have certain chancery powers conferred upon the court of common law, whose jurisdiction and modes of rem- edy as a court of law had already become ex- tended much beyond those of English courts of common law, partly by statutes and part- ly by its own adaptation of its remedies to the necessities which arose from the absence of the court of chancery. This difference in the relations of the two jurisdictions would alone give occasion for different rules gov- erning their exercise. Black v. Black, 4 Pick. 234, 238; Tirrell v. Merrill, 17 Mass. 117, 121; Baker v. Biddle, Baldw. 394, Fed. Cas. No. 764. The successive statutes by which the eq- uity powers of this court have been confer- red or enlarged have always affixed to their exercise the condition that "the parties have not a plain, adequate, and complete remedy at the common law." This has been con- strued as referring "to remedies at law as they exist under our statutes and accord- ing to our course of practice." Pratt v. Pond, 5 Allen, 59. It has also been repeatedly held that, in reference to the range of jurisdic- tion conferred, the several statutes were to be construed strictly. Black v. Black, and ChCxies River Bridge v. Warren Bridge, ubi supra. No reason or necessity remains for the maintenance of concurrent jurisdiction, except for the sake of a more perfect rem- edy in equity when the plaintiff shall estab- lish his right to it And such we understand to be the purport and intent of our stat- utes upon the subject. Milkman v. Ord- way, 106 Mass. 232; Angell v. Stone, 110 Mass. 54. A similar restriction upon the equity juris- diction of the federal courts is so construed with great strictness. Oelricks v. Spain, 15 Wall. 211, 228; Grand Chute v. Winegar, Id. 373; Phoenix Mut Life Ins. Co. v. Bailey, 13 Wall. 616; Parker v. Winnipiseogee Lake Cotton & Woollen Co., 2 Black, 545; Baker 598 SPECIFIC PERFOKMANCE OF CONTRACTS. V. Biddle, Baldw. 394, Fed. Cas. No. 7t54. See, also, Woodman v. Freeman, 25 Me. 531; Piscataquis F. & M. Ins. Go. v. Hill, 60 Me. 178. Even in courts of general chancery powers and of independent organization, while the power to entertain bills relating to all mat- ters which in their nature are within their concurrent jurisdiction is maintained, yet the usual course of practice is to remit par- ties to their remedy at law, provided that be plain and adequate, unless for some rea- son of peculiar advantage which equity is supposed to possess, or some other cause influencing the discretion of the court. Kerr, Fraud & M. 45; Bisp. Eq. § 200; also, Id. § 37; Snell, Bq. 334; Clifford v. Brooke, 13 Ves. 131; Whitmore v. Mackeson. 16 Beav. 126; Hammond v. Messenger, 9 Sim. 327; Hoare v. Bremridge, L. R. 14 Bq. 522, 8 Ch. App. 22. The doctrine of Colt y. WooUaston, 2 P. Wms. 154, and Green v. Barrett, 1 Sim. 45, tUougn not expressly overruled, has been questioned (Thompson v. Barclay, 9 Law J. Ch. 215, 219), and does not seem to govern the usual practice of the courts See cases above cited, and Newham v. May, 13 Price 749. But, Independently of statute restrictions, the objection that the plaintiff may have a sufficient remedy or defense at law In the particular case is a matter of equitable dis- cretion, rather than of jurisdictional right; and is therefore not always available on demurrer. Colt v. Nettervill, 2 P. Wms. 304; Kamshire v. Bolton, L. R. 8 Eq. 294; Hill v. Lane, L. R. 11 Eq. 215; Barry v. Croskey, 2 Johns. & H. 1. According to the practice In this common- wealth, on the other hand, under the stat- utes relating to the exercise of jurisdiction In equity, a bill is demurrable, not only if4 it show that the plaintiff has a remedy at law, equally sufficient and available, but also If it fail to show that he is without such remedy. Pool v. Lloyd, 5 Mete. (Mass.) 525,- 529; Woodman v. Saltonstall, 7 Cush. 181, Pratt V. Pond, 5 Allen, 59; Clark v. Jones, Id. 379; Metcalf v. Cady, 8 Allen, 587; Mill River Loan Fund Ass'n v. Claflin, 9 Allen, 101; Com. V. Smith, 10 Allen, 448; Bassett v. Brown, 100 Mass. 355, 105 Mass. 551, 560. The demurrer, therefore, must be sustain- ed, and the bill dismissed. i^^':'> 1 > >^ 2> i) :^ SPECIFIC perfor: /A OF CONTRACTS. 599 y/J- FOTHBRGIIiL v. ROWLAND. (Ii R. IT Eq. 132.) , Master of the Rolls. Nov. 4, ISTa'^i^r^ Demurrer. The, plaintiffs In this case, Richard Fother- glU and Ernest Thomas Hankey, were iron- masters, carrying on the Aberdare Ironworks. The defendant Richard Rowland was lessee of the Newbridge Colliery. The bill alleged that the plaintiffs had for some time been accustomed to purchase coals of the defendant Rowland, and that at the time of making the agreement hereinafter mentioned there was a subsisting contract, imder which Rowland was supplying the plaintiffs from 1871 to the 4th of January, 1872, with a quantity of coal from the said colliery. That at the time of the making of the agreement of the 6th of December, 1871, the Newbridge Colliery was only opened up- on one seam of coal, called "the No. 3 seam," and was only partially opened on that seam; that Rowland was anxious to extend the openings in the seam, and had made rep- resentations to that effect to the plaintiffs, and that he (Rowland) was short of capital for extending his works, and that, with a comparatively small outlay, the colliery would produce nearly 300 tons of coal a day, and that if a siding could be had on the Taff Vale Railway, near the Taff Vale Ironworks, he (Rowland) would be able to deliver the coal with greater facility and a considerable reduction of cost. That the plaintiffs were then in a posi- tion to consume at the ironworks a much larger quantity of coal than they had previ- ously taken, and were disposed to make an arrangement with Rowland to supply him with capital to enable him to extend his col- liery, and also to make an arrangement with the Taff Vale Railway Company for the con- struction of a siding, provided that Rowland would enter into a contract of sale to the plaintiffs of aU the coal which the said col- liery, would produce, for a lease of five years, provided that the quantity then sup- plied should not be less than a stated mini- mum. That negotiations for an arrangement up- on this footing resulted in an agreement, come to at a meeting, between the plaintiffs and Rowland on the 6th of December, 1871, by which they agreed that Rowland should sell to the plaintiffs, and that the plaintiffs should buy the whole of the get of the coal of the No. 3 seam of the said colliery for five years, the quantity not to be less than that then delivered to the Taff Vale Iron- works, unless the coal should fail, at 6s. per ton, provided that the Taff Vale Railway- Company would provide a siding to which Rowland should forthwith m^ke a road, and that the plaintiffs should lend to Rowland £1,000 to aid him in opemng the colliery and that this agreement was reduced to writing in the form of a pencil memorandum signed by Rowland, and about the same time the plaintiffs agreed with Rowland that, besides the coal of the said No. 3 seam, another vein should be included in the contract, and, at the option of the plaintiff Fothergill, any other vein of coal within the colliery should be included. That the said agreements were reduced to writing by a memorandum in the form of a letter of the 4th of January, 1872, address- ed to Rowland and confirmed by him in writ- ing, and another memorandum subscribed thereto of the 5th of January, 1872, which were as follows: "Dear Sir: I have been excessively occu- pied since our interview last month, and have not found time to sit down and write in detail that which we mutually agreed upon beyond the sunple sale of coal described in the pencil memorandum we drew up together in the following terms: " '6 Dec. 1871. " 'Sold R. F., Esq., M. P., the whole of the get of the No. 3 coal out of the Newbridge Colliery property for five years, the quantity not to be less than at present delivered to his Taff Vale works, imless the coal should fall, at 6s. per ton payment as usual.' "To which I desire now to add that we arranged, when so required, that you would deliver the said coal into oiu* wagons on a siding of the Taff Vale Railway at such a reduction in price as you could obtain off the cost in comparison with the delivery Into the Taff Vale works, provided that the Taff Vale Railway Company would provide such sid- ing (which you had not been able to obtain), and to which you w^ould forthwith make a road; in reference to which I am glad to Inform you that I have seen Mr. Fisher, and obtained his consent to his company provid- ing the needful siding, a most valuable con- cession In prospect of the possibly very large quantities of coal you talked of flooding me with. I also promised to lend you £1,0(X), to aid you in opening and developing the said colliery at the rate of £5 per cent, per annum interest, to be taken in such propor- tions monthly as you require in exchange for your acceptances at six months' date, all which please confirm, and I remain, "Yours faithfully, "Rich. Fothergill." "5th Jan. 1872. "It is understood between us that besides the No. 3 coal named herein that the Forest Vach vein is included in the foregoing con- tract, and, further, that any other vein of coal worked shall be Included at tie option of Mr. FotherglU or representatives. "Rich. Fothergill. "Richd. Rowland." That in part performance of the said agree- ment Rowland had commenced to deliver coal from the said coUiery to the ironworks; that 600 SPECIFIC PERFORMANCE OF CONTRACTS. the plaintiffs had advanced to him the sum ot £1,000, which he had employed in extending the colliery; and that the siding was con- structed by the Taff Vale Railway Company tmder the arrangement made with them hy one of the plaintiffs. That after January, 1872, coal of the de- scription yielded by the colliery increased very much in value, and that Rowland had appeal- ed to the plaintiffs to make some modifica- tion in the contract, which they had refused, though they had made an allowance by way of gift to the amount of one-third of the con- tract price; but that no variations in the con- tract had been assented to by the plaintiffs. That coal of the description yielded by the colliery had advanced from Cs. to 13s. per ton. That the plaintiffs had discovered that Row- land, in violation of the terms of his agree- ment, was selling coal from the said No. 3 seam to other persons than the plaintiffs; and that the deliveries were greatly below the minimum quantities specified in the contract. That in August, 1873, the plaintiffs discov- ered that Rowland had entered into an agree-' ment with the defendants Spickett, Price, Bas- sett, and Meyer, for the sale to them of the colliery; and that such agreement was enter- ed into for the purpose of evading the per- formance on the part of Rowland of the agreement between the plaintiffs and himself, and of depriving the plaintiffs of their lights in the premises. The plaintiffs prayed, first, for an Injunc- tion to restrain the defendants from selling, assigning, or disposing of or interfering with the colliery, except subject to the agreement between the plaintiffs and Rowland; and from selling, disposing of or interfering with anj\ coal gotten or to be gotten out of the said colliery, except for the purpose of the per- formance of the agreement; and, secondly, that it might be declared that the plaintiffs were entitled to the whole of the get of the seam of coal No. 3, and of the Forest Vach vein of the coUiery, and also, at the option of the plaintiffs, to the whole of the get. of any other seam of coal worked at the colliery dur- ing the period of five years, upon the terms of the said agreement embodied In the memoran- da of the 6th of December, 1871, and the 4th and 5th of January, 1872. The defendants demurred to the bill. Sharp & Ullithorne, agents for Simons & Plews, Merthyr Tydvil, for plaintiffs. I. H. Wrentmore, W. Kelly, and Mr. Goslhig, for defendants. SIR G. JESSBL, M. R. I feel no doubt whatever on the question, therefore I think it Is my duty to give a decision. I never did approve, when at the bar, and I do not ap- prove now, when on the bench, of the prac- tice of not deciding a substantial question when It is fairly raised between the parties and argued, simply because it is raised by demurrer. It is a great benefit to all parties to have the question in the case speedily and cheaply determined, and the practice of de- murring ought, if possible, to be encouraged. The question is one which I am sorry to have to decide against the plaintiffs. No hon- est man, whether on the bench or off it, can approve of the conduct of the defendants. The first defendant, Rowland, has entered Inr to a contract bona fide for valuable considera- tions to sell a quantity of coal to be raised from his mine to the plaintiffs. He has re- ceived the advantages of the contract, and be- cause coal has risen in value and he can get a better price elsewhere, he does not choose to perform his contract. Such conduct ought not to meet with the approval of anybody. Then the question I have to determine is, whether ^he plaintiffs have come to the right court to obtain that which the law will undoubtedly give them, namely, compensation in some shape or other for the loss they have sustain- ed by this breach of contract. It appears to me, as the law now stand s, a conrt of eg- _ ulty cannot give the m any relie f. The first question is, what is the contract for? In my view of the contract it is one for the sale of coals, that is, coals gotten, the get of coa!, the severed chattel, and it_has_noj:fis. lation yy hatever to a contract for re al estate. That point rSrHy was noT'SfgnS315y"Mr.~i!'ry,~ although Mr. Marten did touch upon it I think it must be assumed, therefore, to he a simple contract for the sale of a chattel of a very ord inarY fipijinriptinii^ji ot alleged to be a peculiar coal, or coal that 'cannot ie got else- where. On the contrary, as I read the hill, there is coal that can be got elsewhere of the same description, only at a higher price. The result is that the plaintiffs will incur an amount of damage to be measured by the market price which they may have to pay for the coal of the same description as the coal agreed to be supplied by the defendant Row- land. It is said, however, that, although yon can ascertain the market price as regards all the past nondelivery, you cannot ascertain exactly the market price as to future deliveries. To say that you cannot ascertain the damage in a case of breach of contract for the sale of goods, say in monthly deliveries extending over three years (which is the case here, for there are three years unexpired of the contract), is to limit the power of ascertain- ing damages in a way which would rather astonish gentlemen who practice on what is called the other side of Westminster Hall There is never considered to be any difB- culty in ascertaining such a thing, therefore I do not think it Is a case in which dam- ages could not be ascertained at law. That being so, what is there to distin- guish this from any ordinary contract for the sale of goods? We have been told It has some connection with the colliery. I suppose coals must necessarily have connection with a colliery, and it happens that the person who sold the coal to be produced from a giv- SPECIFIC PERFORMANCE OF CONTRACTS. 601 en colliery was also at that time the owner of the colliery. I apprehend there Is no dif- ficulty about entering into a contract for the sale of coal coming from a particular colliery by persons not owners of that col- liery; that is the common practice. The coals not being delivered, and there being no means of obtaining their delivery with- out compelling the defendant Rowland to raise them, it has been admitted before me that this is a contract of which you can- not obtain a specific performance in a court of equity. Therefore any relief to be obtained by the plaintifCs in the shape of compensation must be obtained at law, and I do not understand that the plaintiffs, coming here for an injunc- tion which they ask, are willing to abandon their claim to compensation at law in the shape of damages. Then it is said, assuming this contract to be one which the court cannot specifically perform, it is yet a case in which the court will restrain the defendants from breaking the contract. But I have always felt, when at the bar, a very considerable dlflftculty in understanding the court on the one hand professing to refuse specific performance be- cause it is difficult to enforce it, and yet on the other hand attempting to do the same ^thing by a roimdabout method. If it is right to prevent the defendant Rowland from sell- ing coal at all, he not having stipulated not to sell coal, but having stipulated to sell all the coal he can raise to somebody who has promised valuable consideration, — why is it not right to compel him to raise it and de- liver it? It is difficult to follow the distinc- tion, but I cannot find any distinct line laid down, or any distinct limit which I could seize upon and define as being the line divid- ing the two classes of cases— that is, the class of cases in which the court, feeling that it has not the power to compel specific performance, grants an injunction to restrain the breach by the contracting party of one or more of the stipulations of the contract, and the class of cases in which it refuses to Interfere. I have asked (and I am sure I should have obtained from one or more of the learned counsel engaged in the case every assistance) for a definition. I have not only not been able to obtain the answer, but I have obtained that which altogether com- mands my assent, namely, that there is no such distinct line to be fo'und in tht authori- ties. I am referred to vague and general propositions,— that the rule is that the court is to find out what it considers convenient, or what will be a case of sufficient impor- tance to authorize the interference of the court at all, or something of that kind. That being so, and not being able to dis- cover any definite principle on which the court can act, I must follow what Lord St. Leonards says, in Lumley v. Wagner, 1 De Gex, M. & G. 604, is the proper conduct for a judge, in not extending this jurisdiction. I am not, however, entirely without assist- ance from authority, because it appears to me that this very case has been put, though only by way of illustration, by a very great judge. Lord Cottenham, in Heathcote v. Rail- way Co., 2 Macn. & G. 112, where he says: "If A. contract with B. to deliver goods at a ceitain time and place, will equity interfere to prevent A. from doing anything which may or can prevent him from so deUvering the goods?" That is the exact case I have to deal with, because I have decided that the contract is a contract for the delivery of goods. Finding the dictum of Lord Cotten- ham express on the subject, and the plain- tiffs' counsel not having been able to pro- duce to me any authority in which there has been such an injunction granted on the sale of goods or any chattel, in a case in which specific performance could not be granted, I think I shall do right in following that au- thority; and I say, although I say it with much regret, that it is a case in which equity can afford no relief. With regard to the question of costs, I think it is undesirable to take the technical admission of the facts of the bill, when a person files a demurrer, to be an admission of the truth of the facts against him for the purpose of costs. If there is no remedy at aU at law, I think the rule that the costs should follow the result too valuable a one to be tampered with. On these grounds I allow the demurrer, with the usual conse- quences. A petition of appeal was presented against this decision, but the case was compromised before it came to a hearing. 602 SPECIFIC PERFORMANCE OF CONTRACTS. DANFORTH et al. v. PHILADBIiPHIA & CAPE MAY S. L.. RY. GO. (30 N. J. Eq. 12.) Court of Chancery of New Jersey. Oct. Term, 1878. Bill for specific performance. Heard on bill and answer. J. W. Griggs, for complainants. W. A. House, for defendants. RUNYON, Ch. The bill Is filed to obtain a decree for specific performance, by the de- fendants, of a contract entered into between the complainants, partners in business, and them, on the 19th of December, 1877, by which the former agreed to construct, equip and finish, for the latter, a single-track, nar- row-gauge railroad, and telegraph line in con- nection therewith, from the terminus of the Camden, Gloucester & Mount Ephraim Rail- way to high-water mark in the city of Cape May, with stations, engine and freight houses, machine and repair-shops, turn-tables, water- stations, &c., &c., and all necessary terminal facUitles, for $2,000,000, payable in the capital stock and first mortgage bonds of the com- pany. By the contract, the complainants were to complete the work within five months after the bonds were negotiated and sold at a price not less than ninety cents on a doUar of the par value thereof; and it was stipulated that they should not be sold at less than that price without the consent of both parties. The bill states that the complainants entered on the work, and proceeded with it from the date of the contract to the 20th of February following; that there was, at the latter date, due to them, under the contract, the sum o'f $40,000, or thereabouts; that they were then entitled to have an estimate ' made, but the defendants refused to make it, or to pay them, or to carry out the contract, which the com- plainants allege would be of great value to them if performed; and, further, that the de- fendants cannot respond in damages for their refusal to carry out the agreement; and that the complainants could profitably dispose of the bonds and stock stipulated for as payment The bill prays that the defendants may be de- creed to spedficaUy perform the contract gen- erally, and, also, that they may be required to make the estimate before mentioned, and de- liver bonds and stock to the complainants for the amount which may be found due them thereon. The defendants' answer admits the con- tract and declares their willingness to perform it, but alleges their inability to do so by rea- son of the provisions of an act of the legisla- ture of this state (a supplement to the general railroad law), approved on the 19th of Feb- ruary, 1878. By one of those provisions the provision of the original act requiring that the articles of association should not be filed until at least $2,000 of stock for every mile of the proposed railroad should have been subscribed and ten per cent paid thereon, was altered so as to require that the entire amount of $2,000 per mile shall be paid to the treasurer of this state, to be repaid by him to the di- rectors or treasurer of the company in the manner specified in the supplement, as the work of constructing the railroad shall pro- gress. By the other, the provision of the orig- inal act which authorized the mortgaging of the road, &c., of the company, to secure the payment of their bonds to an amount not ex- ceeding the amount of the paid-up capital stock, was altered by adding a provision that • if any person or persons shall issue such bonds ' to any greater amount than the amount which at the time of such issue shall have been [ actually paid up on the capital stock of the | company, he, she or they shall be guilty of a J misdemeanor, and, on conviction, be punished j by fine of not more than $5,000 or imprison- [ ment at hard labor for not more than three ' years, or both, at the discretion of the court ! These provisions of the supplement were there- in expressly made applicable to corporations already organized under the original act The defendants state that they have expended all the money received by them on account of their capital stock in the work on the road, and that they are not able to comply with the provisions of the supplement and that, by the terms of the supplement, their charter is for- feited, by reason of their failure to comply I with the provisions of that act There are several considerations which for- bid the granting of the relief prayed for in this suit If this court would undertake the performance of such a contract as that stated In the bill, a contract for building and equip- ping a long line of railroad, building station, freight and engine houses, &c., &c. (and the current and great weight of authority is de- cidedly against it— Story, Eq. Jur. § 726; Ross T. Union Pac. R. Co., 1 Woolw. 26, Fed. Gas. No. 12,080; Fallon v. Railroad Co., 1 DiU. 121, Fed. Gas. No. 4,629; South Wales R. Co. 1 V. Wythes, 5 De Gex, M. & G. 880), the dls- j ability of the defendants would be a sufficient j reason for refusing. Courts of equity will j never undertake to enforce specific perform- | ance of an agreement where the decree would I be a vain or imperfect act Tobey v. County of Bristol, 2 Story, 800, Fed. Gas. No. 14,065. And the incapacity of the defendant to carry ' the contract into execution affords a ground of defence in a suit for specific performance. Fry, Spec. Perf. § 658. In this case the defendants are willing to perform their part of the, contract if they can lawfully do so. They have never refused to issue their bonds and stock to the complain- ants in accordance with the terms of the con- tract, except because of the provisions of the supplement above referred to, under which they apprehend they may have lost their cor- porate existence, and by which, if their cor- porate existence be not lost their directors and officers who should act in the matter SPECIFIC PERFORMANCE OF CONTRACTS. 603 would be liable to severe and ignomlniouB punishment for so doing. P. L. 1878, p. 23. They have not complied with the provisions of the supplement in reference to the amount to be paid in on their capital stock, and have not been able and are not able to .do so. Only ten per cent, of the amount of their capital stock has been paid in. Their corporate pow- ers are, according to the supplement, extinct, and the corporation is dissolved. P. Ii. 1878, p. 22. The complainants, however, insist that the supplement is an unconstitutional law; that it destroys their contract, which existed when it was passed, and which was founded on the faith of the original act; that it deprives them of their vested rights thereunder, and that it should be declared to be unconstitu- tional, and its provisions, so far as they are subject to that objection, disregarded. Bat it is in nowise necessary to consider that ques- tion; for, If there were no other valid objec- tion, this court would not, under the circum- I stances of the case, declare that the appre- hensions, or doubts at least, of the defendants, as to the validity of the supplement, are whol- ly groundless, and direct them to proceed, not- withstanding the penalties above mentioned, to issue bonds according to the contract and In violation of the prohibition of the supplement; to subject themselves to indictment for mis- demeanor and the consequences of conviction. It is enough that the legislature has forbidden them to issue the bonds to induce this court to refuse to order them to issue them. But, further, there Is at least doubt whether the company still has a corporate existence. Though the court might, if the case were free from these difficulties, direct the defend- ants to make the estimate of work already done prayed for In the bill CVVaring v. Rail- way Co., 7 Hare, 482), yet, for the considera- tions already presented, that relief must also be denied. , The bill wis be dismissed. f^ 604 SPECIFIC PERFORMANCE OF CONTRACTS. SOUTHBRJST EXP. CO. v. WESTERN NORTH CAROLINA R, CO. (99 U. S. 191.) Supreme Court of the United States. Oct 1878. Appeal from the circuit court of the Unit- ed States for the Western district of North Carolina. This is a bill in equity, filed June 18, 1875, by the Southern Express Company, a cor- poration of Georgia, against the Western North Carolina Railroad Company, a corpo- ration of North Carolina, W. A. Smith, and Henry Clews, for the specific performance of a contract entered into December 2, 1865, between the railroad company and the com- plainant. The bill alleges that the railroad company was organized for the purpose of construct- ing a railroad from Salisbury, North Car- olina, to a point on the Tennessee line; that it completed that portion of its line between Salisbury and Morganton, and put it in run- ning order; that the road-bed, rolling-stock, &c., became dilapidated during the war, and that the company in 1865 was without the means to repair the road and make it safe for the transportation of passengers and freight; that the company, having been un- successful elsewhere, applied to the com- plainant for a loan or advance of $20,000; that the complainant having agreed to loan or advance that sum in consideration of se- Jeurlng the exclusive privilege of transporting (freights over said road as far as Morganton, and of certain other advantages, entered, with the advice and consent of the stock- holders of the railroad company, into the fol- lowing contract with that company: "This indenture of agreement, made and entered into this second daj of December, A. D. eighteen hundred and sixty-five, be- tween the Western North Carolina Railroad Company, as party of the flf st part, and the Southern Express Company, as party of the second part, witnesseth as follows: "Whereas the party of the second part has agreed to loan and advance to \he party of the first part the sum of twenflf thousand ($20,000) dollars upon the aotes of said rail- road company, bearing interest at the rate of six per cent per annum, which sum 1^-to be expended in repairs and equipments far said road. And whereas the party of theSret part is desirous of securing the services of an efficient and responsible agent for the trans- action of all of the express business over its road, and is willing to provide the requisite facilities for the proper transaction of said express business in the manner and upon the terms hereinafter specified: "Now, therefore, in consideration of said loan and advance, and the rents, covenants, and agreements hereinafter made and provid- ed, said party of the first part hereby agrees and binds itself to grant to the said party of the second part the necessary privileges and requisite facilities for the transaction of all the express business over the entire length of their road, extending from Salisbury to Mor- ganton, in North Carolina, arid furnish such facihtles by all its passenger trains running each way over its road as may be necessary to forward without delay all the express mat- ter that may be offered by said party of the second part, and to do all in its power to promote the convenience of said party of the second part in the transaction of its express business, both at way and terminal stations. "Said party of the second part agrees to load and unload said express matter by its own agents, at its own proper costs and char- ges, and save harmless said party of the first part against all claims for loss and damage to the express matter of the party of the sec- ond part, except that which occurs from the negligence and carelessness of said party of the first part or its agents. "The said party of the first part agrees to carry free of charge the messengers in charge of express matter and the officers and agents of the said party of the second part passing over the road upon express business. The said party of the second part agrees to pay to the said party of the first part fifty cents per hundred pounds for all express matter car- ried over the road. An account of the weights of all express matter shall be taken by said party of the first part whenever they shall see fit to do so, and delivered to the agent of the party of the first part, weekly or monthly, as may be desired. "The accounts for transportation to be made up monthly, and the sum found to be due to said railroad company for transporta- tion, at the rate hereinafter specified, shall be applied monthly toward the payment of sai(^ twenty thousand ($20,000) dollars, until the whole sum, with interest, is paid, after which payments for transportation shall be made by said party of the second part monthly in cash. "This contract shall remain in force for the full term of one year, from the first day of January, eighteen hundred and sixty-six. If the said sum of twenty thousand ($20,000) dollars, with interest thereon, shall not have been repaid to the said second party at the expiration of said one year, this contract shall continue in force for a further period, and until the whole of said twenty thousand ($20,- 000) dollars, with interest thereon, shall have been repaid. And the said party of the first. part hereby covenants and agrees that it willl not furnish express privileges over said road I ,to any other parties during the existence of I this contract on any more favorable tennsj thW those herein made with the said party of the second part, both as to rate of trans- portation paid, advance payments, and total amount paid per annum. It is mutually cove- nanted and agreed by the parties hereto that any other contracts that may now exist, whether verbal or written, for express service SPECIFIC PERFORMANCE OF CONTRACTS. 605 between the parties hereto, shall terminate and cease on the thirty-first day of December, eighteen hundred and sixty-five, at which time this contract shall take effect. "In witness whereof, the parties to these presents have hereunto set their hands and seals the day and year first above written. "Tod R. Caldwell, "Pres't W. N. C. R. R. Co. "H. B. Plant, "Pres't Southern Express Company." The bill then alleges that the $20,000 was paid tn compliance with the contract, and that shortly thereafter the complainant en- tered upon the road, transported freight ac- cording to the terms of the contract, kept regular accounts and exhibited them to the company, which were always approved, and it continued to act under said contract until ' July, 1873; that in 1870 the railroad com- pany conveyed to Tod R. Caldwell and Henry Clews, as joint tenants, and to the survivor of each,— the former of whom has since de- ceased,— all its real and personal property, in- \ eluding its franchises, in trust, to secure a \ large number of its bonds then about to be \issued; that $1,400,000 of said bonds were sold or hypothecated, aud came into the hands of persons unknown to the complainant, but for much less than their value and not by a bona fide sale; that, notwithstanding, the al- leged creditors of the company instituted fore- closure proceedings In the circuit court of the United States for the Western district of North Carolina, and in 1873 obtained a de- cree ordering the sale of all the property of said company; that the defendant. Smith, having in that suit been appointed receiver of Vthe company, forbade the complainant. In I July, 1873, from further using the cars of /the company, unless upon conditions where- / by said contract was virtually surrendered or ignored; that thereupon the complainant iwas compelled to abandon said railroad, al- though the money so loaned, with a portion of the interest thereon, Is still due and un- paid. It then alleges that the suit is brought with the consent of said court, and with the" privilege of making such parties defendant as might be deemed necessary for that pur- pose; that the trustees in the mortgage to secure the bonds of the railroad company had express notice of the contract when they ac- cepted the trust, and that it was claimed by the complainant as an existing lien; that the substance of said contract had been published separately at the instance of the stockholders of the railroad company, and was well known to its creditors and to the purchasers of its bonds at the time, and especially to the de- fendant Smith; and that the railroad com- pany having conveyed away Its property, and behig in part insolvent, the violation of the contract cannot be compensated by any dam- ages which would be recovered at law. The bill therefore prays for a decree compelling the railroad company to specifically perform Its contract, and for such other and further relief as the nature and circumstances of the case may require, and for process against the defendants. The charter of the railroad company grant- ed in February, 1855, is annexed to the bill and made a part thereof. Its twenty-fifth and twenty-sixth sections are as follows: "Sect. 25. Be it fui-ther enacted, that the said company shall have the exclusive right of conveyance, transportation of persons, goods, merchandise, and produce over the said railroad, to be by them constructed, at such charges as may be fixed on by the board of directors. "Sect 26. Be it further enacted, that said company may, when they see fit, farm out their right of transportation over said rail- road, subject to the rules above mentioned; and the said company and every one who may have received from it the right of trans- portation of goods, wares, and merchandise over the said railroad, shall be deemed and taken to be a common carrier, as respects all goods, wares, produce, and merchandise in- trusted to them for transportation." At rule-day in July, 1875, the writ of sub- poena was returned executed, and the cause continued until the October term, when it was ordered that the commissioners in pos- session of the road In the Western district of North Carolina, and Howerton, president of the company, be notified to appear and an- swer or demur to the bill of complaint at rule-day in January, 1876. The commission- ers appeared and demurred. The demurrer was sustained and the bill dismissed. The express company then brought the case here. Clarence A. Seward, for appellant A. S. Merrimon, for appellee. SWAYNE, Justice. The bill avers that it\ was filed against the receiver appointed by '' the court below, that he was in possession of the railroad, and that the institution of the suit was by the consent of the court. With- out this latter fact the bill could not have been filed or maintained. The suit would have been a contempt of the court which had appointed the receiver, and punishable as such. Davis v. Gtay, 16 Wall. 203. The citizenship of the complainant corpo- ration is sufficiently averred. Express Co. v. Kountz, 8 Wall. 342. Such a complainant need not prove its existence, unless the fact is directly put in issue by the defendant. Society for Propagation of Gospel v. Town of Pawlet, 4 Pet. 480. To the objection that the requisite corpo- rate power of the complainant Is not shown, there are two answers. The contract of a corporation is presumed to be infra vires, un- til the contrary is made to appear, 2 Waite, Act. & Def. 334. The charter is set out In the record, and forms a part of It. That leaves no room for doubt upon the subject. 'Vi'U, 606 SPECIFIC PERFORMANCE OF CONTRACTS. Adequate capacity on the part of the rail- road company to mal^e the contract is to be presumed in like manner. No party defendant was necessary but the receiver. He was In the possession of the property and effects of the railroad com- pany, subject to the order of the court, and could have specifically performed the con- tract, or paid back the money loaned if the court had so directed. The presence of the other parties was immaterial, and the bill might well have been dismissed as to them. Davis V. Gray, supra; Doggett v. Railroad Co., 99 U. S. 72. The contract between the express company and the railroad company was that the lat- ter should give to the former the necessary facilities for the transaction of all its busi- ness upon the road, forward without delay by the passenger trains both ways all the express matter that should be offered, do all in its power to promote the convenience of the express company, both at the way and terminal stations, and carry free of charge the messengers in charge of the express mat- ter, and the officers and agents of the ex- press company passing over the road on ex- press business. The consideration for these stipulations was a loan by the express com- pany to the railroad company of $20,000, to be expended in repairs and equipments for the road, the loan to bear interest at the rate of six per cent per annum, and the payment of fifty cents per hundred pounds for all ex- press matter carried over the road, to be ap- plied in discharge of the loan and Interest. The contract was to continue for one year from the first day of January, 1866, and un- til the principal and interest of the debt should be fully paid. The bill avers that the receiver had refused to carry out the contract, and that the principal of $20,000- aiid a part of the interest were unpaid. (The enforcement of contracts not relating to realty by a decree for specific perform- ance la not an unusual exercise of equity jurisdiction. Such cases are numerous In both English and American jurisprudence. They proceed upon the ground that under \ the circumstances a judgment at law would ' not meet the demands of Justice, that it would be less beneficial than relief In equity, that the damages would not be an accurate satisfaction, that their extent could not be exactly shown, or that the pursuit of the legal remedy would be attended otherwise with doubt and difficulty. Judge Story, after an elaborate examina- tion of the subject, thus lays down the gen- eral rule: "The just conclusion in all such cases would seem to be that courts of equity ought not to decline the jurisdiction for a specific performance of contracts whenever the remedy at law is doubtful in its nature, extent, operation, or adequacy." 2 Story, Eq. Jur. § 728. See, also, Stuyvesant v. Mayor, etc., 11 Paige, 414; Barr v. Lapsley,' 1 Wheat 151; Storer v. Railway Co., 2 Younge & C. 48; Wilson v. Railroad Co., L. R. 9 Eq. 28. But we need not pursue the subject further, because there is one provision of the con- tract in this case which is fatal to the relief sought. A court of equity never interferes where the power of revocation ex.iJLti.' Jj'rye. "yped-Ferf. BC' The contract stipulates that after the first year it shall c^ase upon the payment of the $20,000 and interest. This might be made immediately upon the rendition of the decree. The action of the court would thus become a nullity. There is another objection to the appel- lant's case which is no less conclusive. The road is in the hands of the receiver appointed in a suit brought by the bondhold- ers to foreclose their mortgage. The appel- lant has no lien. The contract neither expressly nor by Implication touches that sub- ject. It is not a license as insisted by coun- sel. It is simply a contract for the trans- portation of persons and property over the road. A specific performance by the receiv- er would" be a form of satisfaction or -pi^ 'ment wiiicfT ie" ca nnot , be required tt* ni!i'''f. "As well migEFhe be decreed to satisfy the appellant's demand by money, as by the serv- ice sought to be enforced. Both belong to the lien-holders, and neither can thus be di- verted. The appellant can, therefore, have no locus standi In a court of equity. Both these objections appear by its own showing. It was, therefore, competent and proper for. the court below, sua sponte, to dismiss the bill for the want of equity upon Its face. Brown v. Piper, 91 D. S. 37. Decree affirmed. SPECIFIC PERFORMANCE OF CONTRACTS. 607 McCAUUi V, BRAHAM. (16 Fed. 37.) Circuit Court, S. D. New York. March 20, 18S3. In Equity. A. J. Dittenhoefer, for plaintiff. Howe & Hummel, for defendant. BROWN, J. This action was brought in tlie state court to restrain the defendant, Helen Braham, otherwise known as Lilian Kussell, from violating her agreement with the plaintiff by singing during the current season in any other employment than at the plaintiff's theater, which the complaint alleges she is about to do. A preliminary injunction having been obtained at the time of the commencement of the action, the cause was removed by the plaintiff to this court before answer; and the defendant now moves upon affidavits to dissolve the injunc- tion. By the agreement in writing between the parties, the defendant agreed to sing in comic opera in the employment of the plain- tiff whenever required during the season of 1S82 to 1883, commencing on or about Sep- tember 1, 1882, at a stipulated weekly salary. By article 1 the agreement provides that "the artist is engaged exclusively for Mr. John Mc- Caull, and during the continuance of this en- gagement wiU not perform, sing, dance, or otherwise exercise her talent in theater, con- cert halls, churches, or elsewhere, either gratuitously or for her remuneration or ad- vantage, or for that of any other person or other theater or establishment (although not thereby prevented from fulfilling her engage- ment with Mr. McCaull) without having first obtained permission in writing of Mr. Mc- Caull; and for each and every breach of this rule the artist shall forfeit one week's salary, or her engagement, at the option of Mr. Mc- Caull; but such forfeiture of one week's sal- ary shall not be held to debar Mr. McCaulI from enforcing the fulfillment of this con- tract in such a manner as he may think fit." By article 3 it is provided that "no salaries wiU be paid for. any night or days on which the artist may not be able to perform through Illness or other unavoidable cause; and the artist absenting herself, except from illness or other unavoidable cause, will forfeit one week's salaiy, or her engagement, at the op- tion of Mr. McCaull, and will also be held liable for any loss that may be sustained by Mr. McCaull owing to such absence. Illness, to be accepted as an excuse, must be attested by a medical certificate, which must be de- livered to Mr. McCaull or his representative as early as possible, and before the com- mencement of the performance. Should such absence exceed two weeks, the engagement may be canceled at the option of Mr. Mc- Caull." The defendant entered upon the perform- ance of her engagement at tlie Bijou Opera House in this city in September, 1882, with great success, which was continued until pre- vented from further performance by pro^ tracted illness. Having partially recovered, she attempted to renew her appearances, but after three nights' performances, in Decem- ber, she suffered a relapse from which she did not recover until about the middle of February, 1883. By the written contract the plaintiff was to furnish all costumes. This was modified, prior to September, by an oral agreement by which the plaintiff was to pay a larger sal- ary and the defendant to furnish her own costumes. Both parties agree as to the modi- fication of the contract to this extent The defendant contends that in addition to the above the oral contract was further modified by the plaintiff agreeing to pay her weekly salary as at first fixed during the continuance of any illness; that the sum of about $350, paid to her by the plaintiff during her illness, was paid in pursuance of this modification of the contract; and that since the middle of December the plaintiff has refused to con- tinue such payment during that part of her illness, in violation of the agreement as modi- fied. The plaintiff denies that the modification of the contract included any agreement to pay her during illness, and asserts that the moneys actually paid her while ill were mere- ly advances on account of future salary to be earned, and so expressly stated at the time. Each party sustains Its respective claims in this respect by several witnesses. They leave this branch of the subject in so much doubt that I feel obliged to reject it from consideration, without prejudice to either in regard to their mutual claims in respect to it, since neither party made it a ground of ter- minating the contract. Up to the time this action was commenced the defendant had given no notice to the plaintiff terminating the agreement; nor had the plaintiff, as he might have done according to the express provision of the agreement, notified the defendant that it was canceled, owing to her absence beyond two weeks. I must, therefore, hold the agreement as still in force. Contracts for the services of ar- \ tists or authors of special merit are personal \ and peculiar; and when they contain nega- \ tive covenants which are essential parts of the agreement, as in this case, that the artists will not perform elsewhere, and the dam- ages, in case of violation, are incapable of definite measurement, they are such as ought to be observed in good faith and specifically enforced In equity. That violation of such covenants will be restrained by injunction, is now the settled law of England. Lumley v. Wagner, 1 De Gex, M. & G. 604; Montague V. Flockton, L. R. 16 Bq. 189, 199. The subject was exhaustively considered by Preedman, J., in the case of Daly v. Smith, 49 How. Prac. 150, in whose conclusions, in accordance with the English cases above cited, I fully concur. In the present case it 608 SPECIFIC PERFORMANCE OF CONTRACTS. is, however, virged that the remedy by In- junction should not be allowed, on the ground that the plaintiff's damages have been hq- uidated by the first article of the contract above quoted; namely, that "for each and every breach of this rule the artist shall for- feit one week's salary;" and the cases of Barnes v. McAllister, 18 How. Prac. 534; Nessle v. Reese, 29 How. Prac. 382; Mott v. Mott, 11 Barb. 127, 134; and Trenor v. Jack- son, 46 How. Prac. 389, are cited in support of this view. There is no doubt of the general principle that where the damages for the violation of a covenant are either liquidated by the agreement, or may be easUy and definitely as- certained, the parties will be left to their remedy at law. But it Is clear that In cases of contract like the present, the damages are not capable of being definitely ascertained or measured; and In the cases first above cited, injunctions were for that reason al- lowed. The only question in this case, there- fore, which distinguishes the present agree- ment from those, is whether the provision for the forfeiture of a weels's wages for every violation of article 1 is such a liquida- tion of the damages as bars the remedy by Injunction. In Barnes v. McAlister and in Nessle v. Reese and Mott v. Mott, supra, there was a covenant to pay a specific sum for failure to observe the covenant in these cases; and these sums were held by the court to be strictly liquidated damages. Where the provision of the contract is in the nature of a penalty, and not liquidated damages, it Is well settled that such a pro- vision will not prevent the remedy by in- junction to enforce the covenant specifically; and the provision will be construed as a penalty, and not as liquidated damages, where its plain object is to secure a per- formance of the covenant, and not intended as the price or equivalent to be paid for a nonobservance of It. Howard v. Hopliyns, 2 Atk. 371; Bird v. Lake, 1 Hem. & M. Ill; Fox V. Scard, 33 Beav. 327; Sloman v. Wal- ter, 1 Brown, C. 0. 418; Jones v. Heavens, 4 Oh. Div. 636. Whether the language of the contract is to be construed as a penalty or as liquidated damages is to be determined from' its lan- guage and Its presumed intent to be gath- ered from the circumstances of the parties and the .nature of the agreement. "A pen- alty," says Lord Loughborough, in Hardy v. Martin, 1 Cox, Ch. 26, "is never considered in this court as the price of doing a thing which a man has expressly agreed not to do; but if the real meaning and intent of the contract is that a man should have the pow- er, if he chooses, to do a particular act upon the payment of a certain specified sum, the power to do the act upon the payment of the sum agreed on is part of the express contract between the parties." Vincent v. King, 13 How. Prac. 234-238; Kerr, Inj. 409. In Coles T. Sims, 5 De Gex, M. & G., Lord Justice Turner says, upon this point, (p. 1:) "The question In such cases, as I conceive, is, whether the clause is inserted by way of penalty or whether it amounts to a stipula- tion for liberty to do a certain act on the payment of a certain sum." That the clause providing for the forfei- ture of one week's salary for each violation of this contract was in tiie nature of a pen- alty, and designed solely to secure the ob- servance of article 1, is manifest both from the general nature of the employment and the requirements of a manager of opera, as well as the express language of this article; because (1) the stipulation is not for the payment of a certain sum as liquidated dam- ages, but only for the forfeiture of a week's salary; (2) it gives an option to the plaintiff, instead of such forfeiture, to annul the en- gagement; (3) it declares that such forfeiture shall not disbar the plaintiff from' enforcing the fulfillment of this contract in such a manner as he shall think fit, i. e., by any available legal or equitable remedy. As the remedy by injunction is one of the remedies available, this language Is equivalent to an express declaration that the provision for the forfeiture of a week's salary for each vio- lation shall not affect his right to a remedy by injunction. This last stipulation would not, indeed, influence the court, provided it was clear that the ^damages were intended to be liquidated at a specific sum, for which the defendant was to have the option of sing- ing at any other theater. But these several clauses taken together show conclusively that no such thing was intended, and that the sole object was to secure the specific ob- servance of the contract that the defendant should not sing elsewhere; and the plaintiff is therefore entitled to restrain the violation of it. As the season will close on May 15th and the contract then terminate, there are certain equitable conditions which should be observed, and which It is competent for the court, in continuing the Injunction, to Im- pose. Russell V. Farley, 105 U. S. 433, 438. The injunction of this court must not be used directly or indirectly to -enforce the col- lection by the plaintiff of his alleged but disputed claim' for previous advances, through the nonpayment of salary hereafter earned, at least until his right is legally adjudicated. (2) Considering the short period remaining, the defendant must not be sent to California, where by the contract she might have been taken 'vnthout salary en route going and re- turning; nor, having respect to her precari- ous health, should she be sent to any very distant point; (3) the plaintiff should fur- nish satisfactory security for the prompt payment weekly for the defendant's services at -the rate of $150 per week, the contract price, from the time the defendant gives notice In writing of her readiness to sing under the contract, so long as she shall continue In readiness to perform her duties. In case of failure to pay any future salarv SPECIFIC PERFORMANCE OF CONTRACTS. 609 earned, the defendant may apply, on two days' notice, to the plaintiff's attorneys for the dissolution of this injunction. An order may be entered continuing the injunction subject to the above provisions and conditions. NOTE. Enjoining Employs from Serving Rival of Employer. — ^The decisions upon the judicial en- forcement of the stipulations common between actors, artists, authors, lecturers, or other pro- fessional worliers and their employers, that the employs shall not exercise his skill and talent for any other person, are not very numerous, and are somewhat conflicting; but they estab- lish the modern general doctrine to be that the employer is not obliged to submit to a breach of the covenant, and content himself with an ac- tion for damages, but, in a proper case, may have an injunction restraining the employs from engaging in any rival service; and this, whether compelling the latter to perform his affirmative engagement to labor for his em- ployer is practicable or not. To reconcile the decisions would be difficult, except upon the explanation that, when suits of this nature were first brought, the inadequacy of the ac- tion for damages, as a remedy, wis not fully perceived; but that, gradually, as one case aft- er another was presented, it became better un- derstood, and equity judges grew more prompt and willing to exercise their jurisdiction on the ground that employers of public performers can- not well be compensated in damages for de- partures of artists from their establishments. If an actor, continuing to perform for his gen- eral employer, according to his engagement, plays on "off nights" for a rival theater, the question how much the receipts of his employer have been diminished by the opportunity given the public of hearing the favorite elsewhere, is too vague and uncertain to be shown by legal proof. And if, as is frequently the case, he withdraws from his first engagement wholly, and devotes himself to the service of a com- petitor, the question of damages is rendered still more perplexing by the difficulty of showT ing what profits the deserted manager would have realized had the performances been con- tinued as agreed; and the latter needs, also, to have some indenmity, difficult to be estimated in money, for his liability to refund for tickets or boxes sold in advance, and for his loss of prestige tlirough failure of his announced en- tertainments. Obviously courts of justice can- not compel public performers or members of the professions to perform specific services they have promised; there are no means at the com- mand of a tribunal for compelling a person to act, sing, speak, or write, nor is there any standard for determining whether one has done so in good faith and with his best skill. The result, therefore, is that a properly-framed stip- idation, in a contract for services of this de- scription, forbidding the employs to serve else- where, may be enforced by injunction. Such injunctions are equally obtainable under the codes of procedure, upon complaint in a civil action; or, in states adhering to the old prac- tice, upon bill in equity; or, in the United States circuit court, sitting in equity, if the parties are citizens of different states. In what cases the fact that the contract of the parties, by liquidating the damages or oth- erwise, gives the employer a better remedy by action than usual, precludes his resort to in- junction, is the question particularly discussed in the text, and nothing need be added to Judge Brown's able and lucid exposition of the prin- ciples governing that branch of the subject. This note will indicate the development of the general power of equity to enjoin in these cases. Early English decisions went upon the theory that although an independent, simple covenant not to undertake specified services may be en- H.& B.EQ.(2d Ed.)— 39 forced, when reasonable and consistent witli public policy, yet in a contract between A. and B. that B. shall act or sing, etc., for A., and shall not perform for any one else, the negative clause is merely incidental to the affirmative; and unless the case is one in which the court can enforce the affirmative stipulation it ought not to enjoin a proposed breach of the negative. These decisions, therefore, generally denied A.'s prayer for an injunction to restrain B. from performing in the employment of C, unless some special ground of equitable jurisdiction over the case existed. The following are illus- trative cases : Price agreed to prepare exchequer reports for Clarke to publish, without, however, engaging not to write for any one else. The lord chancellor refused an injunction, saying that as he had no jurisdiction to compel Price, directly, to write reports for Clarke, he ought not to do so indirectly, by forbidding him to write for any one else. Clarke v. Price (1819) 2 WUs. Ch. 157. A similar application was de- nied for the same reason, where the engage- ment of the Society for the Diffusion of Useful Knowledge with Baldwin's publishing firm was simply to furnish them with certain maps and charts for publication, a thing which the court had no means of compelling directly. Baldwin v. Society (1838) 9 Sim. 393. The actor Kean was advertised to play at Drury Lane theater, while there was yet 10 days unexpired of a prior engagement at Covent Garden. The vice- chancellor denied the application of the Covent Garden proprietors to enjoin him, for the same reason, viz., that there was no jurisdiction to compel him to perform his 10 days' service, Kemble v. Kean (1829) 6 Sim. 333. Upon ex- amination of a special agreement for mercan- tile services of defendant, containing a stipula- tion forbidding his working for any other house, the affirmative stipulations of the contract were pronounced too vague and too onerous towards the employs to allow of decreeing a specific performance, and the court would not enjoin the breach of the negative covenant alone. Kimber- ley V. Jennings (1836) 6 Sim. 340. Upon the other hand, the case of Morris v. Col- man (1812) 18 Ves. 437, illustrates the principle that a covenant not to serve may be enforced by injunction where other facts give equitable jurisdiction of the controversy. Colman, noted as a dramatist, became manager of the Hay- market theater, under an agreement in the na- ture of a copartnership, which contained a clause restraining him from writing dramatic pieces for any other theater. In a suit which arose between the parties interested in the man- agement, the validity of this clause was ques- tioned before Lord Chancellor Eldon. He pro- nounced it valid and enforceable, it being be' tween partners, and being neither contrary to public policy nor unreasonable as between the parties. The decision has generally been ex- plained in later cases on the ground that the stipulation was one of several in an agreement of copartnership, and that equity has jurisdic- tion of disputes among partners, though this ex- planation has been questioned. 2 Philli. 597. Early American decisions ran in the wake of the English; our courts did not deny the juris- diction, but were loth to exercise It De Riva- finoli, while manager of the Italian theater in New York, engaged Corsetti as first bass In operas, the latter agreeing not to make use of his talents in any other theater. But before the opening of the season Corsetti was announced to sail for Cuba, to perform there under another manager. De Rivafinoli then sought an in- junction, (and ne exeat,) which Chancellor Wal- worth refused, on the ground that under the circumstances the application was premature, for before commencement of the actors engage- ment the manager could not have a right of action. On the general question he said, in ef- fect, that while it is theoretically proper that "a bird that can sing and will not sing must be made to sing," yet there is an obstacle to making a vocalist sing by order of the court of 610 SPECIFIC PERFORMANCE OF CONTRACTS, chancery, In the fact that no officer of the court has that perfect knowledge of the Italian lan- guage, or possesses that exquisite sensibility in the auricular nerve, which is necessary to the understanding and enjoyment of Italian opera; and it would be difficult for a master to deter- mine whether a defendant sang in faithful per- formance of his engagement, or ascertain what effect the coercion might produce upon his sing- ing, especially iu the livelier airs. De Riva- finoli v. Corsetti (1833) 4 Paige, 264. Similar considerations led Edwards, J., to refuse a simi- lar application in Sanquirico v. Benedetti, 1 Barb. 314. Tte comedian IngersoU agreed with Hamblin, the manager of the Bowery theater in New York, to play for him for three years, also, not to act except for Hamblin during the term; but an injunction was refused because tiiere was no ground of jurisdiction over the affirmative part of the agreement, while the negative was a mere matter between employer and employe. Hamblin v. Dinneford (1835) 2 Edw. Ch. 529. When Burton, the famous comedian of a genera- tion ago, was manager of Front Street theater, Baltimore, he bargained with Burke to with- draw Mrs. Burke's services from the employ- ment of Manager Marshall and bring her to join Burton's company. Marshall then sued for an injunction, which was issued below. On ap- peal the court held that either of three facts shown, viz., there was no express restrictive clause m the contract between the Burkes and complainant; complainant was prosecuting an actiou at law; and Mrs. Burkei's engagement, if any, would be void as that of a feme covert, — was enough to defeat the suit. Burton v. Mar- shall (1846) 4 Gill, 4Sr. De Pol v. Sohlke (1869) 7 Rob. Ecc. 280, was decided after Lum- ley V. Wagner (1 De Gex, M. & 6. 604), yet does not mention it, but takes the older doctrine for granted. The opinion assumes, however, that irreparable damage to follow from a breach of a negative covenant may be ground of equi- table jurisdiction, and the judge refused to en- join the danseuse Sohlke from performing for other employers, not for want of power, but be- cause, as the plaintiffs had not a theater in op- eration in which they could use her services, therefore they could not be irreparably damaged by her dancing elsewhere for the time being. Tflius American as well as English courts, down to the middle of our century, we're unwilling to enjoin an employe's breach of a collateral prom- ise not to serve elsewhere, unless the affirmative engagement were a propei subject-matter of equitable relief. Development of the Modem Doctrine. — Since about 1850 a broader and more liberal position has been taken. An advance was distinctly made in Dietrichsen v. Cabburn, 2 Philli. 52, and Rolfe V. Rolfe, 15 Sim. 88, (both 1846,) in which the rule adverse to enforcing a negative stipulation was distinctly questioned and lim- ited; though these were not cases of profes- sional services, but of contracts for exclusive employment in mercantile duties. The circum- stances of a controlling decision, Lumley ▼. Wagner, which soon followed them, were that Manager Lumley engaged Mile. Johanna Wag- ner to siag at Her Majesty's Theater, London, for three months, in certain specified operas, at a weekly salary of £100. The agreement, as originally signed, did not in so many words for- bid her from singing for any other employer; but a few days afterwards the manager ob- jected to the omission, and Mile. Wagner's agent then added an article, saying: "Mile. Wagner engages herself not to use her talents at any other theater, nor in any concert or reunion, public or private, without the written authorization of Mr. Lumley." Notwithstand- ing this, she did accept (for a higher salar3\ it was said) an engagement from Manager Gye to sing at the Italian opera, Covent Garden, and Lumley sued for an injunction. It was granted below. Lumley t, Wagner, 5 De Gex & S. 485. On appeal the familiar objection was urged that equity will not enjoin the breach of a negative covenant where it cannot decree performance of the affirmative one to which it is incident. 6 Sim. 333; Id. 340; 3 Macn. & G. 393. But Lord Chancellor St. Leonards said that when the reason why th« court could not decree specific performance ii not that the plaintiff is not entitled to it, but merely the want of means to compel the de- fendant to perform, he thought the court need not on that account refrain from doing what was within its power, viz., forbidding a per- formance which will violate the contract. To the objection that there was a remedy at law by action for damages, the lord chancellor re- plied that such remedy was no better than ex- ists upon covenants not to practice as attorney, surgeon, etc., within certam limits, which are often enforced by injunction. Another objec- tion was that the promise not to sing else- where was not in the original agreement; but the chancellor said that the two papers were not independent, but were in effect one con- tract; and that evfen if the stipulation not to sing elsewhere had never been made in writ- ing, he thought it was implied in the original contract; in other words, singing for Mr. Gye was a breach of the spirit and meaning of the contract to sing for Mr. Lumley. Another ob- jection was that the injunction would be mis- chievous, because it would prevent a popular artist from singing at one theater, while the court could not promote her performing at an- other; hence the tendency would be to prevent the public from hearing her anywhere; but the chancellor said that the artist had no right to complain on this groimd; the injunction would merely forbid her doing what she had engaged not to do. "The temporary injunction was, there- fore, continued. Lumley v. Wagner (1852) 1 De Gex, M. & G. 604; 13 Eng. Law & Eq. 252. The opinion embodies an elaborate review of the previous English cases on the extent to which equity may go in enjoining breach of negative covenants of various kinds; and the decision has been generally followed in both countries as establishing the jurisdiction to en- force contracts not to serve in public perform- ances or intellectual work. A firm of French photographists, Fredricks & Co., employed Constant Mayer as "artist painter" for three ^ears, at an annual salary, to retouch proofs in oil at their New York house, and he engaged not to work for any one else; yet he left them and engaged with Gumey. The question whether the court could grant an injunction was decided in their favor, the judge saying that this remedy is not ap- plicable to aU restrictive covenants, for many may be protected by action for damages; but contracts for employrnent of a great actor, or for services which involve exercise of nigh powers of mind peculiar to the one person, cannot be treated by ordinary rules, but re- quire the special remedy of injunction. Fred- ricks v. Mayer (1857) 13 How. Prac. 566. But, on the merits of the application under the par- ticular circumstances, the judge denied it; and this was affirmed in Fredxicks y. Mayer, 1 Bosw. 227. Anuetti Galletti agreed to dance at the Broadway Music Hall, New York, for six months at a weekly salary, and to "exercise her utmost abilities for the promotion of the ex- hibition." But the agreement did not contain an express clause forbidding her to perform elsewhere ; and on accoiunt of this omission the employer's motion for an injunction was denied. Butler V. Galletti (1861) 21 How. Prac. 465. , Hayes, manager of the Olympic theater in New York, engaged Willio to play at the Olym- pic for three months, and "not to perform at any other establishment," etc. After playing two months, Willio accepted an offer of a high- er salary from a Boston theater. An injunc- tion was granted, the court mentioning, wittt SPECIFIC PERFORMANCE OF CONTRACTS. 611 approval, the modern doctrine that a definite contract by an actor not to perform at any oth- er theater than his employer's may be enforced; and saying that this remedy is not impaired by the Code of Procedure. Hayes v. Willio (1871) 11 Abb. Prac. (N. S.) 167. Montague, manager of the Globe theater, London,- engaged Flockton to act at the Globe, without exacting an express stipulation that he should not act elsewhere. But the vice- chancellor said that such a stipulation was implied. An engagement to perform for a defi- nite term at one theater involves an engage- ment not to perform during the term at any oth- er theater. When a person agrees to act at a particular theater, he agrees not to act any- where else as plainly as if a negative clause were inserted. Montague v. Flockton (1873) L. R. 16 Eq. Cas. 189; 28 Law J. (N. S.) 581. And the same opinion was expressed, obiter, in Fechter v. Montgomery, 33 Beav. 22, where the suit was by Fechter as manager; and, ex parte, in Webster v. Dillon, 3 Jur. (N. S.) 432. Manager Daly engaged Fanny Morant Smith to play at his theater in New York city dur- ing the seasons of 1874, 1875, and 1876, the contract containing a stipulation that she should not act during the term of the contract at any other New York city theater without his written consent; and that if she should attempt to do so, the plaintiff might, "by legal process, or otherwise, restrain her from so performing on payment to her, during such restraint," of one- fonrth her salary under the contract. She, however, allowed herself to be advertised to play at a rival establishment, the Union-square theater, and he brought suit for an injunction. The New York superior court pronounced the stipulation not to perform, valid, and proper to be enforced by injunction; saying that, al- though the clause as to plaintiffs restraining a breach on paying a quarter salary could not give jurisdiction, yet, as the court had jurisdiction without it, the clause might be regarded as a guide in fixing the terms of the injunction. Therefore, the actress was enjoined from play- ing within the city, provided the manager should punctually pay to her one-quarter of her agreed salary. Daly v. Smith (1874) 49 How. Prac. 150. The opinion has been com- mended for its review of the authorities. For other cases in which the modern doctrine (of Lumley v. Wagner) has been incidentally recognized of discussed, and applied in a way not aiding materially to support it, see Maple- son V. Bentham, 20 Wkly. Rep. 176, where the vice-chancellor denied an application by Mapleson, lessee of the Royal Italian Opera, to enjoin his first tenor from singing elsewhere; Wolverhampton, etc.. Ry. Co. v. London, etc., Ry. Co., L. R. 16 Eq. Oas. 433, involving an agreement relative to use of a railroad; and Manufacturing Co. v. Cook, Bost. Law Rep. 547, in which an employe of a manufacturing company was enjoined from breaking his cove- nant with his employers that he would not for five years disclose their secrets or engage with any other employer; with which latter case compare Estcourt v. Estcourt Hop Essence Co., 32 Law T. (N. S.) 80; reversing same case 31 Law T. (N. S.) 567; Gower v. Andrew, 14 Cent. Law J. 50; and Deming v. Chapman, 11 How. Prac. 382. Judge Lowell's opinion in Singer Sewing-machine Co. v. Union Button- hole, etc., Co., 1 Holmes, 253, is an instructive discussion of the application of the doctrine to ordinary mercantile contracts, in which a prom- isor agrees not to deal with any other than the promisee; with which case compare Bick- ford V. Davis, 11 Fed. 549, and Fothergill v. Rowland, L. R. 17 Eq. 132. See, also, a note by B. H. Bennett, to Bowen v. Hall, 20 Am. Law Reg. (N. S.) 578, 587. The suggestion made at the close of this note, that, since mod- em equity enjoins a breach of a contract not to reveal secrets of business (9 Hare, 241; 9 Eng. Law & Eq. 182), of a contract not to write a particular description of book (2 Sim. & S. 1; 18 Ves. 437), of a contract not to practice a particular trade or calling (125 Mass. 258: 16 Vt. 176 ; 22 Law Rep. 693 ; 5 Jur. [N. S.] 976 ; 15 Sim. 88), although in either case the injured party could maintain an action for damages, there is no good reason for refusing an injunc- tion to forbid breaking a contract for exclusive professional services, is forcible and sound. A curious German case is recounted in 26 Alb. Law J. 3. Cases involving a claim of the artist that the manager first broke the contract by assigning the artist to a part or position less desirable than that which the contract assured, or by failing to give due opportunity for ap- pearances, are: Daly v. Smith, 49 How. Prac. 150, Roserie v. Kiralfy, 12 Phila. 209, and De Pol V. Sohlke, 7 Rob. Ecc. 280. Must there be an Express Negative Contract? — Several English cases support the view that an engagement not to serve elsewhere is fair- ly to be implied from a contract, in general terms, to perform under one manager or at one establishment. But American judges have generally refused to interfere unless there were an express stipulation forbidding the serv- ice sought to be enjoined. In other words, in this country a simple engagement to serve leaves the employ^ at liberty to take other serv- ice, provided he faithfully performs the first engagement. Burton v. Marshall, 4 Gill, 487; Butler V. Galletti, 21 How. Prae. 465; Wal- lace V. De Young, 98 111. 638. But compare Manufacturing Co. „v. Cook,, Bost, I^w Rep. , , /. 547, 549.- X'w*- ftA'i-O oUy^XCXj i..., I')0lj> « Form of a Restrictive Covenant. — ^The re- strictive clause may well be drawn in the fol- lowing form — making variations appropriate to the circumstances of the particular case: And it is further agreed, in consideration of the premises, that the party of the second part (the actor, artist, or other employfi) will not, during the term of this agreement, exercise his professional skill and talents as an actor (or artist, etc.) in public, (within the city of New York, or otherwise state the limits to which the restriction is intended to be confined; and the courts are more willing to enforce these restric- tions when the locality is limited), either for compensation or gratuitously, and either upon his own account or for another employer or establishment, without the consent in writing of the party of the first part first obtained, un- der pain of injunction, action for damages, or any other available judicial remedy: provided, however, that the party of the second part may at any time and as often as he thinks fit per- form gratuitously at any entertainment char- itably given for the burial expenses and relief of the family of a .deceased actor, (or other- wise state explicitly any right which the actor desires to reserve.) Procedure. — Several of the cases indicate that it is proper to join the second employer as co-defendant, and to draw the injunction so as in terms to forbid him to employ the chief defendant, as well as prohibit the latter from performing. Clarke v. Price, 2 Wils. Oh. 157; Lumley v. Wagner, 1 De Gex, M. & G. 604; Burton v. Marshall, 4 Gill, 487; Hamblin v. Dinneford, 2 Edw. Ch. 528. Whether the practitioner may have a ne exeat as well as injunction, see De Rivafinoli v. Corsetti, 4 Paige, 264; banquirico v. Benedetti, 1 Barb. 315; Hayes v. Willio, 11 Abb. Prac. (N. S.) 167. What action lies in behalf of an injured manager or other employer against a rival or eempetitor for inducing artists of his company or employes in his establishment to leave his service, see Bowen v. Hall, 20 Am. L. Ree (N. S.) 578, and note. Id. 587. BENJAMIN VAUGHN ABBOTT. New York, N. Y. 612 SPECIFIC PERFORMANCE OF CONTRACTS. CLARKE V. PRICE. (2 Wils. Ch. 157.) Cases In Chancery. July 21, 22, 1819. The bill, filed the I5th of June, 1819, stated that In 1814 the defendant George Price, Esq., proposed to compose and write reports of cases argued and determined in the court of exchequer; and the plaintiffs entered into a treaty with him as to the terms upon which the same shooild be printed and published; and that on the 27th of AprU, 1814, the foUow- ing agreement was signed by him: "Memo^ randum: It is agreed between George Price, Esq., and William Clarke and Sons, as fol- lows: Mr. Price undertakes to compose and write the cases in the court of exchequer, commencing with Easter term, 1814, and to be published periodically; the said William! Clarke and Sons to be at the charge of all ex- penses of paper, printing and advertising, which expenses, when discharged, to divide the profits of the said work equally (that is to say), one moiety to the said George Price, the other to the said William Clarke and Sons; all accounts to be adjusted at Christ- mas in every year, at the customary trade price and commission: And it is further agreed that Messrs. Clarke shall be at liberty to relinquish the undertaking should they think it advisable." The bill further stated that, in pursuance of the agreement, Mr. Price composed and wrote divers reports of cases argued and de- termined in the court of exchequer, and that the plaintiffs printed and published them at their owin costs and charges, periodically and in pari:s; that the first volume consisted of three parts, the first being published in Au- gust, 1814, the second In May, 1815, and the third in March, 1816; that on the 2d of March, 1816, a variation In the agreement was made between the plaintiffs and Mr. Price, and that a memorandum thereof waa made in writing and signed by Mr. Price, in the words following: "March 2d, 1816. Memorandum of agreement between George Price and William Clarke & Sons: Whereas, by an agreement bearing date the 27th of Ap- ril, 1814, between the above parties. It was there stipulated that Mr. Price should take the reports in the exchequer, and Messrs. Clarke should print the same, and divide the profits between the respective parties: And whereas the first volume of the Reports in the Court of Exchequer has been printed and published by the said George Price and Wil- liam Clarke & Sons: And whereas the' said George Price Is desirous of selling all his copyright and interest In the first volume: In consideration of which, the said William Clarke & Sons agree to give, and the said George Price agrees to accept of the sum of £166. And the said George Price further agrees to give any further assignment of the copyright, if required from him by the said William Clarke & Sons." That, in pursuance of the second agreement, the plaintiff duly paid to Mr. Price the £166. That In further pursuance of the agreement of the 27th of April, 1814, Mr. Price continued to write and compose reports of cases argued and deter- mined in the court of exchequer; and that before the publication of the first part of the second volume, and on or about the 11th of November, 1816, a further agreement was made between the plaintiffs and Mr. Price, and a memorandum thereof made as follows: "November 11th, 1816. Memorandum of agree- ment between George Price, Esq., and Wil- liam Clarke & Sons: Mr. Price agrees to the following terms for writing and composing the second volume of his Reports la the Ex- chequer, sale of his copyright, and interest In the said volume; Messrs. Clarke, for the con- siderations above, to pay to Mr. Price, within one month after the publication of each part, the sum of £6 10s. for each sheet of sixteen pages royal octavo, and in the same propor- tion for any less quantity than a sheet; Mr. Price to be allowed the sum of £2 on each part for corrections; all above that sum to he paid by Mr. Price, and deducted out of the payment for each part; Mr. Price to give a further assignment, if required, at Messrs. Clarke's expense." The bin further stated that, in piusuanee of the agreements, Mr. Price composed and wrote a second volume of reports of cases argued and determined in the court of ex- chequer, and which the plaintiffs, at their ex- pense, printed and published in four parts, the first part on the 20th of January, 1817, the second on the 23rd of April, 1817, the third on the 1st of June, and the fourth on the 13th of September, 1817; and that the plaintiffs duly paid the sums of money due to Mr. Price for the copyright of the second volume, according to the three memorandums of agreement. That in June, 1817, the plain- tiffs and Mr. Price agreed to make a further variation in the terms of the agreement of the 27th of April, 1814, and on the 19th of Jime, 1817, the following memorandum was signed: "London, June 19th, 1817. Memo- randum: Mr. Price agrees with M^srs Clarke to receive for his Interest in the agree ment for the exchequer reports, dated 27tb of April, 1814, commencing at the third vol- ume, the sum of £7 per sheet, and £3 per part for corrections; all above that sum to be paid by Mr. Price, and if under £3 the differ- ence to be paid to Mr. Price until the sale shall exceed a thousand, but not to apply to any reprints above that number of the parts already published or to be. Mr. Price agrees to give any further assignment of the copy- right and future Interest to Messrs. Clarke, at their expense" The bill further stated that In pursuance of the agreements of the 27th of April, 1814, and the 19th of June, 1817, Mr. Price wrote and composed, and the plaintiffs printed and published, at their expense, the third volume, consisting of four parts, and also two parts of the fourth volume, at the times specified SPECIFIC PERFORMANCE OF CONTRACTS. 613 in the bill, and that they had paid to Mr. Price the sums which by tie agreements were due to him in respect of the third volume, and also c'ivers sums on account of the fourth Tolume. The bill further stated that Mr. Price had made some contract with the other defend- ants, Brooke and Sweet, by which he had bound himself to write and compose new vol- lunes of reports of cases argued and deter- mined in the court of exchequer, and In the exchequer chamber, in order and to the in- tent that the same might be printed and pub- lished by Brooke and Sweet; and the plain- tiffs insisted that they were entitled to have an assignment duly made to them of all the copyright in such of the reports as he had written and composed, and to be the printers and publishers, and to have an assignment made to them, of the copyright of all such of the said reports as he shall hereafter write and compose, upon making to him such pay- ments as he is entitled to by virtue of the agreements of the 27th of April, 1814, and the 19th of June, 1817. The bill prayed that the defendant, Mr. Price, might be decreed specifically to per- form the said agreements expressed in the said memorandum by permitting the plain- tiffs to print and publish the reports of cases in the court of exchequer, so long as he should continue to compose and write the same, upon the terms agreed upon in the said memorandums, respectively, and deliver- ing to the plaintiffs the manuscripts of said reports for that purpose, and by duly mak- ing and executing to the plaintiffs an assign- ment of the copyright of such parts of the said work as had been published, and should thereafter be written and composed, the plaintiffs being ready to pay to him such sums of money as should be justly due to him; also praying an injimction to restrain Mr. Price from printing or publishing, or em- ploying the other defendants, or any other person or persons than the plaintiffs, to print and publish the fifth or any subsequent vol- ume or part of the same work which Mr. Price should thereafter compose and write, and to restrain the other defendants, Brooke, and Sweet, from printing and publishing the said work so written and composed, or to be written and composed, or any part there- of. The answers submitted that, on the true construction of the agreements, Mr. Price was not bound to employ the plaintiffs as the publishers of all future reports to be written by him; that the plaintiffs were Informed in October, 1818, of the contract between Mr. Price and the other defendants; that on the 1st of April, 1819, the work was advertised, as being about to be published, and that the defendants had now printed a considerable part of the fifth volume, and had thereby In- curred great expense; and that the plaintiffs, having suffered such expense to be incurred. were not entitled to the assistance of the court An injunction having been obtained ex parte, on the filing of the bill and on aflida- vit, a motion was now made to dissolve it. Mr. Wetherell, J. Wilson, and Mr. Price, for defendants Price and Sweet. Mr. Heald and Mr. Ching, for defendant Brooke. Mr. Shadwell, for plaintiffs. THE LORD CHANCELLOR. The case of Morris v. Colman is essentially different from the present. In that case, Morris, Oolman, and other persons were engaged in a partner- ship in the Haymarket Theater, which was to have continuance for a very long period, as long Indeed as the theater should exist. Ool- man had entered into an agreement which I was very unwilling to enforce,— not that he would vyrite for the Haymarket Theater, but that he would not write for any other theater. It appeared to me that the court could en- force that agreement by restraining him from writing for any other theater. The court could not compel him to write for the Hay- market Theater, but it did the only thing in its power,— it Induced him indirectly to do the one thing by prohibiting him from doing an- other. There was an express covenant on his part contained in the articles of partnership. But the terms of the prayer of this bill do not solve the diflBculty; for. If this contract is one which the court will not carry into execution, the court cannot Indirectly enforce it by restraining Mr. Price from doing some other act This is an agreement which ex- pressly provides that Mr. Price shall write and compose reports of cases to be publlsb- ed by the plaintiffs. In Morris v. Colman, there was a decree directing the partnership to be carried on. It could not be put ah end to, and it was the duty of the parties to inter- fere; buU—havfi no Jurisdi ction t o compel Mr. Price to write reports for the plaintiffs. I cannot, as in the other case, say "thalT will Induce him to write for the plaintiffs by pre- venting him from writing for any other per- son, for that ia no t the Tij itnre nf thp flp;rpp- -l-J^fiBt- The on!^ means of enforcing the exe- cution of this agreement would be to make an order compelling Mr. Price to write re- ports for the plaintiffs, which I have not the means of doing. If there be any remedy In thls^ case It is at law._ If I cannot compel Mr7 Price to remain in the court of exchequer for the purpose of taking notes, I can do nothing. I cannot indirectly, and for the purpose of compelling him to perform the agreement compel him to do something which is merely incidental to the agreement. It is also qultel clear that there is no mutuality in this agree- 1 ment I am of opinion that I have no juris- 1 diction in this case. Injunction dissolved. The bill was afterwards dismissed, with costs, for want of prosecution. 614 SPECIFIC PERFORMANCE OP CONTRACTS. LTTMLBT r. WAGNER (1 De Gex, M. & G. 604.) The Lord Chancellor, May 22, 26, 1852. The bill in this suit was filed on the 22d April, 1852, by Benjamin Lumley, the lessee of her Majesty's Theatre, against Johanna Wagner, Albert Wagner, her father, and Frederick Gye, the lessee of Covent Garden Theatre; it stated that In November, 1861, Joseph Bacher, as the agent of the defendants Albert Wagner and Johanna Wagner, came to and concluded at Berlin an agreement in writing in the French language, bearing date the 9th November, 1851, and which agree- ment being translated into English was as follows: "The undersigned Mr. Benjamin Lumley, possessor of her Majesty's Theatre at London, and of the Italian Opera at Paris, of the one part, and Mademoiselle Johanna Wagner can- tatrice of the Court of his Majesty the King of Prussia, with the consent of her father, Mr. A. Wagner, residing at Berlin of the other part, have concerted and concluded the following contract: First, Mademoiselle Jo- hanna Wagner binds herself to sing three months at the theatre of Mr. Lumley, her Majesty's, at London, to date from lie 1st of April, 1852 (the time necessary for the jojirney comprised therein), and to give the parts following: 1st. Romeo, Montecchi; 2nd. Fides, ProphSte; 3rd. Valentine, Huguenots; 4th. Anna, Don Juan; 5th. Alice, Robert le Diable; 6th. An opera chosen by common accord. Second. 'fheLtfiree first parts must necessarily be, Istr^pmeo, 2nd, Fides, 3rd, Valentine; these parti once sung, and then only she will appear, if Mr. Lumley desires it, in the three other operas mentioned afore- said. Third, These six parts belong exclu- sively to Mademoiselle Wagner, and any oth- er cantatrice shall not presume to sing them during the three months of her engagement. If Mr. Lumley happens to be prevented, by any cause soever, from giving these operas, he is nevertheless held to pay Mademoiselle Johanna Wagner the salary stipulated lower down for the number of her parts as if she had sung them. Fourth, In the case where Mademoiselle Wagner should be prevented by reason of illness from singing in the course of a month as often as it has been stipulated, Mr. Lumley is bound to pay the salary only for the parts sung. Fifth, Mad- emoiselle Johanna Wagner binds herself to sing twice a week during the run of the three months; however if she herself was hindered from singing twice in any week whatever, she will have the right to give at a later period the omitted representation. Sixth, If Mademoiselle Wagner fulfilling the wishes of the direction, consent to sing more than twice a week in the course of three months, this last will give to Mademoiselle Wagner 50£ sterling for each representation extra. Seventh, Mr. Lumley engages to pay Mademoiselle Wagner a salary of 400£ ster. ling per month, and payment will take place in such manner that she will receive lOftE sterling each week. Eighth, Mr. Lumley will pay by letters of exchange to Mademoiselle Wagner at BerUn, the 15th of March, 1852, the sum of 300£ sterling, a sum which will be deducted from her engagement in his re- taining 100£ each month. Ninth, In all cases except that where a verified illness would place upon her a hindrance. If Mademoiselle Wagner shall not arrive in London eight days after that from whence dates her engage- ment, Mr. Lumley will have the right to re- gard the nonappearance as a rupture of the contract, and wiU be able to demand an in- demnification. Tenth, In the case where Mr. Lumley should cede his enterprise to anoth- er, he has the right to transfer this contract to his successor, and in that case Mademoi- selle Wagner has the same obligations and the same rights towards the last as towards Mr.'Xumley. Johanna Wagner, ^Albert Wagner." "Berl&,_the 9th November, 1851." The biliyiien stated, that in November, 1851, Joseph Bacher met the plaintiff in Paris, when the plaintiff objected to the agreement as not containing a usual and necessary clause, preventing the defendant Johanna Wagner from exercising her professional abil- ities in England without the consent of the plaintiff, whereupon Joseph Bacher,- as the agent of the defendants Johanna WagnS?"' and Albert Wagner, and being fully author- ized by them for the purpose, added an arti- cle in writing in the French language to the agreement, and which, being translated into English, was as follows: "Mademoiselle Wagner engages herself not to use her talents at any other theatre, nor in any concert, or reunion, public or private, without the written authorization of Mr. Lumley, Dr. Joseph Bacher, "For Mademoiselle Johanna Wagner, and authorized by her." The bill then stated that the defendants J. and A. Wagner subsequently made another engagement with the defendant P. Gye, by which it was agreed that the defendant J. Wagner should, for a larger sum than that stipulated by the agreement with the plaini- tiff, sing at the Royal Italian Opera, Covent Garden, and abandon the agreement vrith the plaintiff. The bill then stated that the de- fendant F. Gye had full knowledge of the previous agreement with the plaintiff, and that the plaintiff had received a protest from the defendants J. and A. Wagner, repudiating the agreement on the allegation that the plaintiff had failed to fulfill the pecuniary portion of the agreement. The bill prayed that the defendants Johan- na Wagner and Albert Wagner might be restrained from violating or committing any breach of the last article of the agreement; SPECIFIC PERFORMANCE OF CONTRACTS. 615 that the defendant Johanna Wagner might be restrained from singing and performing or singing at the Royal Italian Opera, Cot- ent Garden, or at any other theatre or place without the sanction or permission In writ- ing of the plaintiff during the existence of the agreement with the plaintiff ; and that the defendant Albert Wagner might be re- strained from permitting or sanctioning the defendant Johanna Wagner singing and per- forming or singing as aforesaid; that the defendant Frederick 6ye might be restrain- ed from accepting the professional services of the defendant Johanna Wagner as a sing- er and performer or singer at the said Royal Italian Opera, Covent Garden, or at any other theatre or place, and from permitting her to sing and perform or to sing at the Royal Italian Opera, Coyent Garden, during the existence of the agreement with the plaintiff, without the permission or sanction of the plaintiff. The answer of the defendants A. and J. Wagner attempted to show that Joseph Bach- er was not their authorized agent, at least for the purpose of adding the restrictive clause, and that the plaintiff had failed to make the stipulated payment by the time mentioned in the agreement. The plaintiff having obtained an injunction from the vice chancellor Sir James Parker on the 9th May, 1852, the defendants now moved by way of appeal before the lord chancellor i to dis- charge his honor's order. Mr. Bethell, Mr. Malins, and Mr. Martin- dale, in support of the appeal motion. Mr. Bacon and H. Clarke, contra, in support of the injunction. THE LORD CHANCELLOR. The ques- tion which I have to decide in the present case arises out of a very simple contract, the effect of which Is, that the defendant Johanna Wagner should sing at her Majes- ty's Theatre for a certain number of nights, and that she should not sing elsewhere (for that Is the true construction) during that period. As I understand the points taken by the defendants' counsel in support of this appeal they in effect come to this, name- ly, that a court of equity ought not to grant an injunction except in cases connected with specific performance, or where the injunc- tion being to compel a party to forbear from committing an act (and not to perform an act), that injunction wiU complete the whole of the agreement remaining unexecuted. I have then to consider how the question stands on principle and on authority, and in so doing I shall observe upon some of the cases which have been referred to and com- 1 The case was heard by the lord chancellor on a representation that it was intended to con- fine the argument to the legal question alone, which it was said involved an important point of equity jurisdiction, on which the authorities were conflicting. mented upon by the defendants in support of their contention. The first was that of Martin v. Nutkin, 2 P. Wms. 266, in which the court Issued an injunction restraining an act from being done where it clearly could not have granted any specific performance; but then it was said that that case fell with- in one of the exceptions which the defend- ants admit are proper cases for the inter- ference of the court, because there the ring- ing of the bells, sought to be restrained, had been agreed to be suspended by the defend- ant in consideration of the erection by the plaintiffs of a cupola and clock, the agree- ment being in effect the price stipulated for the defendant's relinquishing bell-ringing at stated periods; the defendant having accept- ed the benefit, but rejected the correspond- ing obligation. Lord Macclesfield first grant- ed the injunction which the lords commis- sioners, at the hearing of the cause, con- tinued for the lives of the plaintiffs. That case therefore, however it may be explained, as one of the exceptional cases, is neverthe- less a clear authority shovwng that this court has granted an injunction prohibiting the commission of an act in respect of which the court could never have interfered by way of specific performance. The next case referred to was that of Barret v. Blagrave, 5 Ves. 555, which came first before Lord Loughborough, and after- wards before Lord Eldon, 6 Ves. 104. There a lease had originally been granted by the plaintiffs, the proprietors of Vauxhall Gar- dens, of an adjoining house, under an ex- press covenant that the lessee would not carry on the trade of a victualler or retailer of vrines, or generally, any employment that would be to the damage of the proprietors of Vauxhall Gardens. An under-lease hav- ing been made to the defendants, who were violating the covenant by the sale of liq- uors, the proprietors of Vauxhall Gardens filed a bill for an injunction, which was granted by Lord Loughborough. It has been observed in the argument here, that in grant- ing the injunction, Lord Loughborough said: "It is in the nature of specific performance," j and that therefore that case also falls un- j der one of the exceptional cases. When that/ case came before Lord Eldon he dissolved the injunction, but upon a different ground, namely, on that of acquiescence for many years, and in a sense he treated it as a case of specific performance. As far as the words go, the observation of those two emi- nent judges would seem to justify the argu- ment which has been addressed to me; In effect, however, it was only specific perform- ance, because a prohibition preventing the commission of an act may as effectually per- form an agreement as an order for the per- formance of the act agreed to be done. The agreement in that case being that the house should not be opened for the purposes of entertainment to the detriment of Vauxhall Gardens, the court granted the Injunction; 616 SPECIFIC PERFORMANCE OF CONTRACTS. that was a performance of the agreement tn substance, and the term' "specific perform- ance" is aptly applied in such a case, but not in the sense in which it has been used before me. It was also contended that the plaintiff's remedy, if any, was at law; but it is no objection to the exercise of the jurisdiction by injunction that the plaintiff may have a legal remedy. The case of Robinson v. Lord Byron, 1 Brown, Ch. 588, before Lord TJiur- low, so very often commented upon by suc- ceeding judges, is a clear illustration of that proposition, because in that case the defend- ant. Lord Byron, who had large pieces of water in his park, which supplied the plain- tiff's mills, was abusing his right by pre- venting a regular supply to the plaintiff's mill, and although the plaintiff had a rem- edy at law, yet this comt felt no difficulty in restraining Lord Byron by injunction from preventing the regular flow of the water. Undoubtedly there are cases such as that cited for the defendants of Collins v. Plumb, 16 Ves. 454, before Lord Eldon, in which this coml: has declined to exercise the powet (which in that instance it was assumed to have had) of preventing the commission of an act, because such power could not be properly and beneficially exercised. In that case the negative covenant, not to sell wa- ter to the prejudice of the plaintiffs, was not enforced by Lord Eldon. not because he had any doubt about the jurisdiction of the court (for upon that point he had no doubt), but because it was impossible to ascertain every time the water was supplied by the defendants, whether It was or not to the damage of the plaintiffs; but whether right or wrong, that learned judge, in refusing to exercise the jurisdiction on very sufiBcient grounds, meant in no respect to break in on the general rules deducible from the pre- vious authorities. At an early stage of the argument I ad- verted to the familiar cases of attorneys' clerks, and surgeons' and apothecaries' ap- prentices, and the like, in which this court has constantly interfered, simply to prevent the violation of negative covenants; but it was said that in such cases the court only acted on the principle that the clerk or ap- prentice had received all the benefit, and that the prohibition operated upon a conclud- ed contract, and that therefore the injunc- tion fell within one of the exceptional cases. I do not, however, apprehend that the jurist diction of the court depends upon any such principle. It is obvious that in those cases the negative covenant does not come into operation until the servitude is ended, and therefore that the injunction cannot be re- quired or applied for before that period. The familiar case of a tenant covenanting not to do a particular act was also put during the argument; but it was said that in such a case the jurisdiction springs out of the re- lation of landlord and tenant, and that the tenant having received the benefit of an ex- ecuted lease, the injunction operates only so as to give effect to the whole contract That, however, cannot be the principle on which this court interferes, for, beyond all doubt, where a lease is executed containing affirmative and negative covenants, this court will not attempt to enforce the execution of the affirmative covenants, either on the part of the landlord or the tenant, but will leave it entu-ely to a court of law to measure the damages; though with respect to the neg- ative covenants, If the tenant for example has stipulated not to cut or lop timber, or any other given act of forbearance, the court does not ask how many of the affirmative covenants on either side remain to be per- formed under the lease, but acts at once by giving effect to the negative covenant, spe- cifically executing it by prohibiting the com- mission of acts which have been stipulated not to be done. So far then each of the cases to which I have referred appears to me to be in direct contravention of the rules which have been so elaborately pressed upon me by the defendants' counsel. The present is a mixed case, consisting not of two correlative acts to be done, one by the plaintiff and the other by the defendants, which state of facts may have and in some cases has introduced a very important dif- ference,— but of an act to be done by J. Wagner alone, to which is superadded a neg- ative stipulation on her part to abstain from the commission of any act which will break In upon her affirmative covenant,— the one being ancillary to, concurrent and operating together with the other. The agreement to smg for the plaintiff during three months at his theatre, and during that time not to sing for anybody else, is not a correlative contract, it is in effect one contract; and though beyond all doubt this court could not interfere to enforce the specific performance of the whole of this contract, yet in all sound construction and according to the true spirit of the agreement, the engagement to perform for three months at one theatre must neces- sarily exclude the right to perform at the same time at another theatre. It was clear- ly intended that J. Wagner was to exert her vocal abilities to the utmost to aid the theatre to which she agreed to attach herself. I am of opim'on, that if she had attempted, even in the absence of any negative stipulation, to perform at another theatre, she would have broken the spirit and true meaning of the con- tract as much as she would now do with refer- ence to the contract into which she has actual- ly entered. Wherever this court has not proper juris- liction to enforce specific performance. It iperates to bind men's consciences, as far as fhey can be bound, to a true and literal per- lormance of their agreements; and it will lot suffer them to depart from their con- ftracts at their pleasure, leaving the party with whom they have contracted to the SPEOIFIO PERFORMANCE OF CONTRACTS. 617 mere chance of any damages which a jury may -give. The exercise of this Jurisdiction has, I believe, had a wholesome tendency to- wards the maintenance of that good faith which exists In this country to a much great- er degree perhaps than In any other; and al- though the jurisdiction Is not to be extend- ed, yet a judge would desert his duty who did not act up to what his predecessors have handed down as the rule for his guidance In the administration of such an equity. It was objected that the operation of the injunction In the present case was mischiev- ous, excluding the defendant J. Wagner from performing at any other theatre while this court had no power to compel her to perform at her Majesty's Theatre. £Tt Is true, that I have not the means of compelling her to sing, but she has no cause of complaint, if I com- pel her to abstain from the commission of an act which she has bound herself not to do, and thus possibly cause her to fulfill her engagement The jurisdiction which I now exercise T^'whoUy within ttte power of the court, and being of opinion that It is a proper case for interfering, I shall leave noth- ing unsatisfied by the judgment I pronounce. The effect too of the injunction, in restrain- ing J. Wagner from slngmg elsewhere may. In the event of an action being brought against her by the plaintiff, prevent any such amount of vindictive damages being given against her as a jury might probably be in- clined to give if she had carried her talents and exercised them at the rival theatre; the injunction may also, as I have said, tend to the fulfillment of her engagement, though. In continuing the injunction, I disclaim doing indirectly what I cannot do directly. Referring again to the authorities, I am well aware that they have not been uniform, and that there undoubtedly has been a differ- ence of decision on the question now revived before me. But, after the best consideration which I have been enabled to give to the sub- ject, the conclusion at which I have arrived is, I conceive, supported by the greatest weight of authority. The earliest case most directly bearing on the point is that of Morris V. Oolman, 18 Ves. 437. There Mr. Oolman was a part proprietor with Mr. Morris of the Haymarket Theatre, and they were partners in that concern, and by the deed of partner- ship Mr. Colman agreed that he would not exercise his dramatic abilities for any other theatre than the Haymarket He did not, however, covenant that he would write for the Haymarket, but it was merely a negative covenant that he would not write for any other theatre than the Haymarket Lord El- don granted an injunction against Mr. Col- man writing for any other theatre than the Haymarket; and the ground on which Lord Eldon assumed that jurisdiction was the sub- ject of some discussion at the bar. It was truly said for the defendants that that was a case of partnership; and it was said, more- over, that Lord Cottenham was mistaken in the case of Dieti'lchsen v. Cabburn, 2 Phil. Gh. 52, when he said that Lord Eldon had not decided Morris v. Colman on the ground of there being a partnership. I agree that the observations, which fell from Lord Eldon in the subsequent case of Clarke v. Price, 2 Wils. 157, show that he did mainly decide it on the ground of partnership; but he did not decide it exclusively on that ground. In the argument of Morris v. Colman, 18 Ves. 437, Sir Samuel Romllly suggested a case almost Identical with the present. He contended that the clause restraining Mr. Oolman from writing for any other theatre was no more against public policy than a stipulation that Mr. Garrlck should not perform at any other theatre than that at which he was engaged would have been. Lord Eldon, adverting in his judgment to the case put at the bar, said: "If Mr. Garrick was now living, would it be unreasonable that he should contract with Mr. Colman to perform only at the Hay- market Theatre, and Mr. Colman with him to write for the theatre alone? Why should they not thus engage for the talents of each other?" He gives the clearest enunciation of his opinion, that that would be an agreement which this court would enforce by way of in- junction. The late Vice Chancellor Shadwell, of whom I always wish to be understood to speak with the greatest respect, decided In a different way, in the cases of Kemble v. Kean, 6 Sim. 333, and Kimberley v. Jennings, Id. 340, on which I shaU presently make a few observations. In the former case, he observed that Lord Eldon must be understood in the case of Morris v. Colman, 18 Ves. 437, to have spoken according to the subject-mat- ter before him, and must there be considered to be addressing himself to a case in which Colman and Garrick would both have had a partnership Interest in the theatre. I must, however, entirely dissent from that inter- pretation. Lord Eldon' s words are perfectly plain, they want no comment upon them, they speak for themselves. He was alluding to a case In which Garrick, as a performer, would have had nothing to do with the theatre beyond the Implied engagement that he would not perform anywhere else; and I have come to a very clear conclusion that Lord Eldon would have granted the injunc- tion in that case, although there had been no partnership. The authority of Clarke v. Price, 2 Wils. 157, was much pressed upon me by the learn- ed counsel for the defendants; but that is a case which does not properly belong to their argniment, because there there was no nega- tive stipulation, and I quite admit that this court cannot enforce the performance of such an affirmative stipulation as is to be found in that case. There the defendant having agreed to take notes of cases in the court of exchequer, and compose reports, for the plain- tiff, and having failed to do so, the plaintiff, Mr. Clarke, filed a bill for an InjunctioB, and 618 SPECIFIC PERFORMANCE OF CONTRACTS. Lord Eldon, when refusing the injunction, in effect said, I cannot compel Mr. Price to sit in the court of exchequer and take notes and compose reports; and the whole of his judg- ment shows that he proceeded (and so it has been considered hi later cases) on the ground that there was no covenant, on the part of the defendant, that he would not compose re- ports for any other person. The expressions in the judgment are; "I cannot, as in the other case" (referring to Morris v. Colman, 18 Ves. 437), "say that I will induce him to write for the plaintiff by preventing him from writing for any other person;'" and then come these important words, "for that is not the natm*e of the agreement" Lord Eldon therefore was of opinion, upon the construc- tion of that agreement, that it would be against its meaning to affix to it a negative quality and import a covenant into it by im- plication, and he, therefore, very properly as I conceive, refused that injunctian. That case, therefore, In no respect touches the question now before me, and I may at once declare, that if I had only to deal with the affirmative covenant of the defendant J. Wagner that she' would perform at her Maj- esty's Theatre, I should not have granted any injunction. Thus far, I think, the authorities are very strong against the defendants' contention; but the case of Kemble v. Kean, 6 Sim. 333, to which I have already alluded, is the first case which has in point of fact introduced all the difficulties on this part of the law. There Mr. Kean entered into an agreement precisely similar to the present He agreed that he would perform for Mr. Kemble at Drury Lane, and that he would not perform any- where else during the time that he had stip- ulated to perform for Mr. Kembla Mr. Kean broke his engagement a bill was filed, and Vice Chancellor Shadwell was of opin- ion that he could not grant an injunction to restrain Mr. Kean from performing else- where, which he was either about to do or actually doing, because the court could not enforce the performance of the affirmative covenant that he would perform at Drury Lane for Mr. Kemble. Being pressed by that passage which I have read from in the lord chancellor's judgment in Morris v. Colman, 18 Ves. 437, he put that paraphrase or com- mentary upon it which I have referred to; that is, he says: "Lord Eldon is speaking of a case where the parties are in partnership together." I have come to a different con- clusion, and I am bound to say that. In my apprehension, the case of Kemble v. Kean was wrongly decided and cannot be maintain- ed. The same learned judge followed up his de- cision in that case in the subsequent one of Kimberley v. Jennings, 6 Sim. 340. That was a case of hiring and service, and the v>ce chancellor there virtually admitted that a negative covenant might be enforced in this court, and quoted an instance to that effect within his own knowledge. He said: "I re- member a casfe in which a nephew wished to go on the stage, and his imcle gave him a large sum of money in consideration of his covenanting not to perform within a par- ticular district; the court would execute such a covenant, on the ground that a valuable consideration had been given for it" He ad- mits therefore the jurisdiction of the court, if nothing but that covenant remained to he executed. The learned judge however adds, "but here the negative covenant does not stand by itself. It is coupled with the agree- ment for service for a certain number of years, and then, for taking the defendant into partnership, • • • this agreement cannot be performed In the whole, and therefore this court cannot perform any part of it" What- ever may have been the mutual obligations in that case, which prevented the court from giving effect to the negative covenant, I am not embarrassed with any such difaculties here, because, as I have already shown, both the covenants are on the part of the defend- ants. The case of Hooper v. Brodrick, 11 Sim. 47, was cited, as an instance in which the court had refused an injunction under circumstan- ces like the present; but, in that case, the lessee of an inn had covenanted to use and keep it open as an inn during a certain time, and not to do any act whereby the license might become forfeited. In point of fact the application was that he might be compelled to keep it open, and the vice chancellor makes this observation: "The court ought not to have restrained the defendant from discon- tinuing to use and keep open the demised premises as an inn, which is the same hi ef- fect as ordering him to carry on the business of an innkeeper; but it might have restrain- ed him from doing, or causing or permitting to be done, any act which would have put it out of his power, or the power of any other person, to carry on that business on the prem- ises. It is not, however, shown that the de- fendant has threatened, or intends to do, or to cause or permit to be done, any act where- by the licenses may become forfeited or be refused; and therefore the Injunction must be dissolved." That therefore is an author- ity directly against the defendants, because it shows that if there had been an intention to break the negative covenant this court would have granted the injunction. The case of Smith v. Fromont, 2 Swanst 330, was also relied upon by the defendants, as an instance where the injunction had been refused, but there there was no negative cove- nant. It was an attempt to restrain, by in- junction, a man from supplying horses to a coach for a part of a road, when the party who was applying for the injunction was himself incapable of performing his obUgation to horse his part of the road. Lord Eldon, in refusing the injunction and deprecating the Interference of the court in such cases, there said: "The only instance I recollect of an SPECIFIC PERFORMANCE OF CONTRACTS. 619 1 application to this court to restrain the driv- ing of coaches occurred in the case of a per- son who, having sold the business of a coach proprietor from Reading to London, and un- dertaking to drive no coach on that road, afterwards established one. With some doubt, whether I was not degrading the dignity of this court by interfering, I saw my way in that case; because one party had there cove- nanted absolutely against interfering with the business which he had sold to the other." That again is a direct authority, therefore, against the defendants, as Lord Eldon ex- pressly says he had interfered in the case of a negative covenant, although he could not interfere on that occasion because there was no such covenant Some observations have been made upon a decision of my own in Ireland, In the case of Gervais v. Edwards, 2 Dm. & W. 80; that de- cision I believe to be right, but it is quoted to show that I was of opinion that this court cannot interfere to enforce specific perform- ance, unless it can execute the "whole of an agreement I abide by the opinion I there expressed, and I mean to do nothing in this case which shall in any manner Interfere with that opinion. That was properly a case for specific performance, but from the nature of the contract itself there was a portion of It which could not be executed. I said, in effect: I cannot execute this contract which is intended to be binding on both parties; I cannot execute a portion of this contract for one, and leave the other portion of the con- tract unexecuted for the other; and, there- fore, as I cannot execute the whole of the contract, I am bound to execute no part of it That, however, has no bearing on the present case, for here I leave notliing xmperformed which the court can ever be called upon to perform. In Hills V. CroU, 2 Phil. Ch. 60, Lord Lynd- hurst refused to enforce an Injunction to re- strain the violation of a negative covenant It was a case in which A. had given to B. a sum of money, and B. covenanted that he would buy aU the acids he wanted from the manufactory of A., who covenanted that he would supply the acids, and B. also cove- nanted that he would buy his acids from no other person. Lord Lyndhurst refused to prohibit B. from obtaining acids from any other quarter, both because the covenants were correlative, and because he could not compel A. to supply B. with acids; and if, therefore, he had restrained B. from taking acids from any other quarter, he might have ruined him in the event of A. breaking his affirmative covenant to supply the acids. That case has never been rightly understood. It is supposed that Lord Lyndhurst's deci- sion was based upon a wrong principle; that he followed the authority of Gervais v. Ed- wards and such cases, and that he improp- erly applied the rule which was in that class of cases properly applied, but under the cir- cumstances of the case before him I think the rule was not Improperly applied.* The next case which has been so much observed upon was that, before Lord Cottenham, of Dietrichsen v. Cabbum, 2 Phil. Ch. 52. That was a very simple case, and the question upon what principle it was decided formed the subject of discussion before me. A man, in order to obtain a great circulation of his patent medicine, entered into a contract with a vendor of such articles, giving him a gen- eral agency for the sale of the medicine, with 40 per cent, discount, and stipulating that he would not supply anybody else at a larger discount than 25 per cent. He violated his contract and was proceeding to employ other agents with a larger discount than 25 per 2 The following, containing all the material portions of Lord Lyndhurst's judgment in Hills V. CroU, is taken from the shorthand writer's notes, and has been kindly furnished to the re- porters by one of the counsel who was engaged in that cause, and by whom a very full report of the case will be found published, in "Re- ports of Cases in the Law of Real Property and Conveyancing," volume 1, p. 541: "THE LORD CHANCELLOR "In this case of Hills v. Croll, Croll had ob- tained two patents for the purpose of purifying gas, and the result of the purification of gas was the manufacture of muriate of ammonia and sulphate of ammonia. He entered into a contract with Hills, who is the plaintiff in this suit, and the contract was to this effect: Mr. Croll was to purchase all the acids that he was to use in his process under his patent from Mr. Hills. Mr. Hills, on his side, was to have the right of purchasing all the ammonia that should be produced as the result of those processes, at certain prices as to the one and as to the other. In addition to this, there was a stipulation that, in all the licenses that were granted for using those patents, the parties to whom those licenses were to be granted should he bound to purchase all the acids which were used in the processes from Mr. Hills, and that Mr. Hills should have the same option that he had in the case of CroU, of purchasing from them all the ammonia that should be produced in the course of the processes. It was also stipulated that Mr. Hills should have the option to supply either muriatic acid or sulphuric acid, as he should think proper, regulating his option by the market prices of the muriate of ammonia and the sulphate of ammonia. I think this is the substance of the original agreement be- tween these parties. The agreement was en- tered into in the month of March, 1841. It was found, on the part of Mr. CroU, that the mode of payment and other arrangements with respect to this agreement were inconvenient, in consequence of which a correspondence takes place between him and Mr. Hills, in the month of September, 1842, and the agreement was modified according to the terms of a letter, dated, I think, in September, written by him. One of the stipulations in the original agree- ment was that Mr. Hills should be a signing party in all the licenses that were granted by Mr. Croll for the use of the patent. The first stipulation, in the letter of September, was that he should not be required to be a signing par- ty; but it provided tiat there should be a cove- nant in all those agreements, a covenant to the effect stated in the original agreement, namely, that the parties to whom the licenses were granted should purchase their acids from Hills, and give Hills the right to purchase the am- monia. Regulations were also made altering the terms on which the acids were to be pur- chased and the ammonia to be sold. There were some other subordinate stipulations to 620 SPECIFIC PEKFOKMANCE OF CONTRACTS. cent Aa injunction was applied for and was granted. It was said tliat it was prop- erly granted, because it was a case of part- nership. This, however, was not the fact; it was not a case of partnership, but was strictly one of principal and agent; and it was only because there was the negative covenant that the court gave effect to it It is impossible to read Lord Oottenham's judg- ment without being satisfied that he did not consider it to be a partnership, though he said it was in the nature of a partnership; and in a popular sense it might be so called, because the parties were there both dealing with respect to the same subject, from which which it is not necessary at present to advert The letter, however, concluded with a stipula- tion to this effect, that if Mr. CroU was in any particular to depart from the agreement so modified the original agreement was to be enforced. I think those two documents, the original agreement and the letter, formed the substance of the contract between the parties as it existed after September, 1842. "Some doubt was expressed as to whether or not the contract so modified has been acted up- on in that shape. It appears beyond all doubt that it was so acted upon, because the accounts were, from time to time, rendered on the foot- ing of the modified agreement, and it is also clear from the letter of Mr. Hills of the Sth of December, in which he refers expressly to the prices that were regulated by the letter of •September, 1842." His lordship here referred to another ques- tion raised in the course of the discussion, namely, whether the second or modified agree- ment had been put an end to by the operation of the clause providing for the enforcement of the first or original agreement; and, after re- marking that it was unnecessary for him for the purpose of the present question to come to any conclusive decision on that point proceeded as follows: "Those are the facts of the case for the pur- pose of raising the narrow question, as it ap- pears to me, which the court has to decide. The bill was filed for the purpose of calling on the court to declare that that agreement should be specifically performed. "Now there is no principle of the court which I understand to be more clearly established than this, that the court will not decree an agreement to be specifically performed, unless it can execute the whole of the agreement." The question, therefore, in this case will be whether the court has power, from the nature of this agreement, to execute the whole of it — every part of it. Part of the prayer which is consequent upon a specific performance is that the defendant should be restrained from pur- chasing acids from anybody but Mr. EQUs, and also that he should be restrained from grant- ing licenses, except according to the agreement that was in force between tte parties. Now, then, with respect to the first of these points, there is a stipulation on the part of Hills that he will supply the acids; there is a stipulation on the part of Mr. CroU that he will purchase acids from Hills, and from no other person. Has the court any power what- ever to compel Mr. Hills to comply with that? Can the court order Mr. Hills to continue the manufacture of acids for the purpose of sup- plying Mr. CroU? Can the court call upon him, if he should not manufacture acids, and require him to purchase acids for the purpose of supplying Mr. Croll? It is clear, I appre- hend, that the com't has no such power. There are cases in which the court wiU do indirectly each was to have a benefit but In no legal sense was it a partnership. Up to the period when Dietriohsen v. Cab- burn, 2 Phil. Oh. 52, was decided, I appre- hend that there could have been no doubt on the law as applicable to this case, ex- cept for the authority of Vice Chancellor ShadweU; but with great submission it ap- pears to me that the whole of that learned judge's authority is removed by himself by his decision in the later case of Eolfe v. Rolfe, 15 Sim. 88. In that case A. B. and C. were partners as tailors. A. and B. went out of the trade on consideration of receiving £1,000 each, and C. was to continue the busl- what it cannot do directly. A case commonly cited for that purpose is the case of a nuisance. The court would not compel a party who had erected a wall to the- nuisance of another,— would not compel the party by any direct order to pull down that wall; but the court can make an order requiring him not to continue the nuisance, which would have the effect of compelling him to pull down the wall. In the case of Morris v. Colman, the court restrained Mr. Colman from writing for any other dieatre, inferring from that that the order would com- pel Mr. Colman, or have the tendency to com- pel Mr. Colman, to write for the Haymarket Theatre. But in this case the court has no power to compel Mr. Hills to supply acids by ordering him not to supply acids to any other person; that is not the agreement, nor was it ever intended that it should be the agreement. Therefore, unless the court can compel him by a direct order to supply Mr. Croll from time to time with the acids that Mr. Croll requires, it is quite clear that this court cannot execute all the parts of this contract. The court cannot therefore, compel the party specifically to per- form the contract It was thrown out in the course of the argu- ment, that this court might compel one party to perform his part of the contract and leave the other party to his remedy at law. No such principle has ever been acted on in this court; it has been so laid down over and over again, and, in a recent case that was cited at the bar fGervais v. Edwards, 2 Dru. & War. 80), Sir Edward Suyden held that, unless this court can execute every part of the contract, this court will not compel a specific performance of a part. When this cause therefore comes to a hearing, I am of opinion that according to the facts as they at present stand, and according to the statement of the principle I have men- tioned, this court cannot restrain Mr. Croll from purchasing acids elsewhere, because it cannot compel Mr. Hills on his side to fur- nish all the acids that may be necessary for the manufacture carried on by Mr. Croll. If the court cannot do this, it cannot restrain the parties at the hearing. It is quite clear that upon this interlocutory application the court cannot restrain Mr. Croll from purchasing acids elsewhere. I apprehend therefore that the de- cision of the vice chancellor, which proceeded on the principle I have stated, and rightly on the grounds I have stated, and which I believe is the principle of this court, and the principle on which the vice chancellor acted as to that part of the case is correct; and equally ap- plies, as it appears to me it does, to that part of the notice of motion with respect to the li- censes, because that forms a part of the con- tract, — ^the general contract. If the court can- not execute the whole of the contract it can- not execute the contract in part; therefore I am of opinion that in this case the motion must be refused, and refused with costs. SPECIFIC PERFORMANCE OF CONTRACTS. 621 oess on his own account A. entered Into a covenant that he would not carry on the trade of a tailor, which he had just sold, within certain limits, and C. entered into a covenant that he would employ A. as cut- ter at a certain allowance. The bill was filed simply for an injunction to prevent A. from setting up as a tailor within the prescribed limits, and the vice chancellor grr ted that injunction. It was objected that this court could not grant the injunction when there was something remaining to be performed, for that A. had a right to be employed as a cutter, which right this court would not even attempt to deal with or enforce as against C. That case therefore was open to a difficulty which does not occur here; in fact the same difiiculty which might have arisen in Hills v. Croll, 2 Phil. Ch. 60, be- fore Lord Lyndhurst. But the vice chancel- lor held that to be no difficulty at all, observ- ing that the bUl simply asked for an injunc- tion which he would grant, although he could not give effect to the affinaative cove- nant to do the act in respect of which no specific performance was asked. His own decisions in Kemble v. Kean, 6 Sim. 333, and In Kimberly v. Jennings, Id. 340, were pressed upon him; but he observed, "that the bills in the cases cited asked for spe- cific performance of the agreement, and that the injunctions were sought as only ancil- lary to that relief, but the bill in the present case asked merely for an injunction." He no longer put it on the Inability of the court to enforce a negative covenant, but he put it on the form of the pleadings. Whether that form was sufficient to justify his opinion is a question with which I need not deal; but I am veiy clearly of opinion that the case of Rolfe V. Rolfe, 15 Sim. 88, does remove the whole weight of that learned judge's author- ity on this subject It was said in argument that the Injunc- tion prayed in Rolfe v. Rolfe, 15 Sim. 88, was merely ancillary to the relief; but it will be seen that that was not so, and that the prayer extended only to the injunction, and had nothing to do with relief in the shape of specific performance; and the learned judge himself stated that if it had gone to that ex- tent, he, foUovdng his former decisions, would not have granted the Injunction. From a careful examination of all these authorities I am of opinion that the princi- ples and rules deducible from, them are in direct contravention of those principles and rules which were so elaborately pressed upon me during the argument; and I wish it to be distinctly understood that I entertain no doubt whatever that the point of law has been properly decided In the court below. It was nevertheless, and with some reason, said that although the point of law should be de- cided in the plaintiff's favor, still he might be excluded from having the benefit of It on the merits of the case. His lordship here entered Into a minute examination of the statements In the an- swers and affidavits as to the unauthorized addition of the restrictive clause, and as to the nonfulfillment by the plaintiff of his por- tion of the agreement. In reference to those points he observed that, whether the clause was originally added with or without au- thority, the evidence showed a clear acquies- cence on the part of the defendants to its remaining In the agreement; that the op- eration of the agreement had been In the first instance postponed to suit the conven- ience of the defendants; and that as to the payment of the £300 although the plaintiff could not have come into a court of equity to enforce the contract without having ten- dered the amount stipulated to be paid, yet it was distinctly proved that It had In fact been paid to the common agent of both par- ties for the purpose of being handed to the defendants. His lordship concluded by say- lug that, looking at the merits and circum- stances of the case, as well as at the point of law raised, he must refuse this motion with costs. In the course of the argument, and In or- der to prove the plaintiff's readiness to per- form his part of the contract an affidavit made by Dr. Bacher was read, which was to the effect that he had written and sent a let- ter to the defendant J. Wagner, informing her of his having received from the plaintiff the £300, and offering to pay that sum ac- cording to her instructions. A letter of the same date as that referred to In the affidavit was admitted to have been received by the defendant J. Wagner, but it was positively denied that it contained any such offer. The letter itself was not forthcoming, and its nonproduetlon was not accounted for. No copy was kept by Dr. Bacher. The lord chancellor observed that, when the affidavit, as to the contents of the letter was made. Dr. Bacher could not have known that the letter would not be produced; that the affidavit therefore, if imtrue, was at the Imminent peril of exposure by the production of the letter; and that under such circum- stances the representation in the affidavit must be taken to be true. 622 SPECIFIC PERFOEMANCE OF CONTRACTS. MONTAGUE v. FLOCKTON. (li. R. 16 Eq. 189.) May 26, 1873. This was a motion on behalf of the plain- tiff, Henry James Montague, the lessee and manager of the Globe Theater in London, for an injunction to restrain the defendant, Charles Poston Flockton, from acting, or causing his name to be advertised as about to act, at any place other than the plaintiff's theater, or otherwise than for the plaintiff's benefit, for a period of nine months, from the 2d of October, 1872, and in particular from acting at an intended dramatic per- formance at the Crystal Palace, In August, 1871, an engagement was pro- posed to the defendant on behalf of the plaintiff, that the defendant should perform, upon certain terms specified, at the Globe Theater. To this proposal the following an- swer was returned by the defendant, dated the 16th of August, 1871, and addressed to Mr. Edward English, the plaintiff's agent: "Dear Sir: I accept the engagement for the Globe Theater, under the management of H. J. Montague, Esq., at a weekly salary of five poimds, and, if required to go into the provinces, traveling expenses paid and 20 per cent, on my London salary. Line of business, old men and character business; to commence on or about 2d October, 1871. For the season of not less than nine months' duration. A fortnight's rehearsal to be giv- en prior to opening, subject to the rules and regulations of the theater. "[Signed] 0. P. Flockton." During the pendency of the last-mentioned agreement, namely, on the 2d of March, 1872, the plaintiff and the defendant entered into another agreement, which was accepted by the defendant, in these terms: "I hereby accept the renewal of my en- gagement with H. J. Montague, Esq., for his next season on the same terms as at present existing between us. "[Signed] O. P. Flockton." It appeared that In May, 1872, a notice was posted in the greenroom of the Globe Theater to the effect that the season would close on the 4th of June, on which day all pending engagements would terminate, and the house was accordingly closed upon that day. A company was then formed by the plain- tiff for certain theatrical performances In the provinces, in which the defendant took part, and these performances commenced on the 4th of June, and terminated on the 28th of September, 1872. The next London season at the Globe Theater commenced In October, 1872, and the defendant, Mr. Flockton, played at the theater as he had previously done till the 10th of March, 1873, when he requested the plaintiff to allow him to perform at the Regent's Park Theater, which was to be opened In May. Upon this occasion, accord- ing to the plaintiff's statement, the defend- ant said: "I only ask you to lend me, and I shall finish my engagement with you after- wards." The plaintiff declined to accede to the defendant's request, on the ground that he should require his services for the next piece that was to be brought out. On the 2d of April the defendant wrote the follow- ing letter to the plaintiff: "Dear Sir: As you are aware my engage ment with you terminated on the 2d of De- cember last, pursuant to our agreement bear- ing date the 2d of March, 1872, I am de- sirous to close my connection with your theater, and therefore now give you four weeks' notice in pursuance of such my de- sire." The matter was then placed by the plain- tiff in the hands of his solicitors, Messrs. Lumley, who wrote to the defendant stating that he had taken a wrong view of the terms of the contract, which did not In fact terminate until nine months after the com- mencement of the season, in October, 1872; that the defendant was causing Mr. Mon- tague considerable Inconvenience and loss, by not attending the rehearsal of a new play soon to be produced, although every reasonable notice had been given him; and they called upon him to be in attendance the following morning at 11 o'clock to rehearse the part assigned to him. This summons not being attended to by the defendant, the plaintiff was obliged to engage another actor, Mr. Palmer, to per- form the part assigned to the defendant. The plaintiff then discovered that the de- fendant was negotiating for an agreement to act at a new theater In course of erection in London, before the expiration of the term alleged to be comprised in the agreement of the 2d of March, 1872, and on the 28th of April, 1873, the plaintiff also discovered that the defendant was advertised as Intend- ing to act on the 3d of May at the Crystal Palace in the part of Polonius In Hamlet, and consequently this bill was filed for an injunction in the terms already stated. It was alleged by the defendant that, ac- cording to the prevailing custom, the man- ager had the right of closing the season by notice, and that he had done so. The plain- tiff alleged that the notice did not close the season. There was conflicting evidence on this point. Lumley & Lumley, solicitors for plaintiff. Mr. Oakes, solicitor for defendant Mr. Glasse, Q. C, and Mr. E. Cutler, for plaintiff. Mr. Hemming, for defendant SIR R. MALINS, V. C, after reading the letter of the defendant dated the 16th of August 1871, accepthig the engagement to perform' for the plaintiff during the season. of at least nine months, continued: SPECIFIC PERFORMANCE OF CONTRACTS. 623 The first question Is, what is the meaning of that contract? It has been argued that it was an engagement for the season, and that it left the performer at the mercy of the proprietor to terminate the season whenever he thought fit It is said that Mr. Montague having put up a notice in the greenroom of the theater in the month of May, 1872, noti- fying that the season's engagements would terminate on the 4th of June then nert, that that has put an end to the contract. My opinion is that If an actor engages himself for the season he leaves himself at the mercy (within reasonable limits of construc- tion) of the proprietor of the theater to fix what the season is. But that is not the meaning of this contract; because, whUe the proprietor, Mr. Montague, engages Mr. Flockton for the season, there is a stipula- tion, which is for the protection of the per- former, that that season is not to be one month, two months, or three months, as the proprietor may think proper, but that, when- ever he may choose to terminate his season, that season, for the purpose of paying the actor, is not to be less than nine months. In my opinion, it was absolutely impossible, provided Mr. Flockton performed his part of the contract, for Mr. Montague to evade performing his part of it by paying the stipu- lated salary for a period of not less than nine months. This contract, then, being, as I am bound to assume, understood, in the only way it conld be understood, by each of the parties, was commenced in or about the month of October, and matters went on satisfactorily on both sides, as I must assume, because in the month of March, five months after the contract had been commenced, and while Mr. Flockton was still performing for Mr. Mon- tague, a proposal was made by Mr. Montague, and was accepted by Mr. Flockton, in these terms: "I hereby accept the renewal of my engagement with H. J. Montague, Esq., for ihis next season, on the same terms as at Ipresent existing between us." Now, what is Bthe meaning of "the next season"? I am I perfectly clear that it was a repetition of the Aold contract; it was to be the next season commencing in October, 1872, lasting for not less than nine months. It follows that, for the season beginning in 1872 and ending in 1873, Mr. Montague, accepting these terms, is bound to pay Mr. Flockton for nine months, and Mr. Flockton is equally bound to per- form for Mr. Montague, if Mr. Montague re- quires him to do so. I am surprised that by any ingenuity Mr. Flockton should have per- suaded himself that the meaning of that con- tract was, as he stated in his letter, that the next season was not the London season, but the country season. The thing Is, in my opinion, perfectly absurd. It has nothing to do with the country season; because the original contract was this: He is to have £5 a week U required to go into the prov- inces; assuming, therefore, that he may be required ta go, he will agree to do so, and in that case he Is to have his traveling ex- penses paid, and 20 per cent additional up- on his London salary. The original contract is for a London engagement, with the privi- lege on Mr. Montague's part of requiring him to go into the provinces, where he would be entitled to 20 per cent, additional and all traveling expenses paid. Therefore, when he says the next season, it is subject to the same stipulation; it is for the London theater, with the right on the part of Mr. Montague to require him to go into the provinces upon those terms. The contention of Mr. Flock-* ton that the next season commenced in the | month of June and ended in the month of / September is. In my opinion, simply ridicu- ( lous. I totally differ from it and I am clear \ that it meant the next season, commencing ' in October and terminating at the earliest at the end of nine months. Then let us see what was the view of the parties themselves, and how this was acted upon. If it were according to Mr. Flockton' s view, how did it happen that he commenced acting for Mr. Montague again in the month of October last and continued uninterrupt- edly and amicably, as I understand, to act for him down to the month of April? The object of it is evidently that which Is stated by the plaintifE in his affidavit filed the 6th of March; and, as it is not contradicted by Mr. Flockton, I must take It to be perfectly accurate. Mr. Montague says: "On or about the 20th day of March, 1873, I was in my dressing room at the Globe Theater with a friend, and the defendant came in and asked me if I would allow him to go and play a very fine part at the Regent's Park Theater, which it was proposed to open in the month of May, and, he added [now, here Is an ad-fi ,, - mission of the whole case], 'Of course, youV\ U^ will lend me for a time only; then I will\ft^ come back and finish my engagement.' I v said, in reply, 'I am sorry, my dear Flock- ton, I cannot, as I hope to have you in my next piece.' On my saying that he walked away rather annoyed." That was on the 20th of March. Then what is the next thing he does? I am satisfied from the evidence that, there being a piece then in preparation, it was the intention of Mr. Montague that Mr. Flockton should take a part in it; but, unfortunately, before it came out Mr. Flock- ton, on the 2d of April, adhering to this most unjustifiable view of the contract writes to Mr. Montague this letter: "As you are aware my engagement with you terminated on the 2d of December last, pursuant to our agree- ment bearing date the 2d of March, 1872, I am desirous to cease my connection with your theater, and therefore now give you four weeks' notice in pursuance of such my desire." Now, he knew perfectly well that Mr. Montague was not aware of any such thing as the termination of the agreement in G24 SPECIFIC PERFORMANCE OP CONTRACTS. December, for he knew that' the conversatloii of the 20th of March which occurred between them took an enthrely different view of the case, and after making that admission him- self to Mr. Montague I cannot conceive that anything could be more unjustifiable than that Mr. Flockton should say, "As you are aware, my engagement with you terminated on the 22d of December last." That was ob- jected to by Mr. Montague, who, I think, acted in perfect good faith. He remonstrat- ed, and, finding his remonstrances were not attended to, he applied to his solictors. So far from Mr. Montague not performing his part of the contract or being desirous to avoid employing Mr. Flockton in his new piece, as was suggested, Messrs. Lumley wrote a letter to this effect: "Mr. Montague states, further, that you are even now caus- ing him considerable inconvenience and loss by your not attending to the rehearsal of a new play soon to be produced, although every reasonable notice has been given you, and we now call upon you to be in attendance to-morrow on the stage to rehearse the part assigned to you at 11 o'clock, at which hour the company assemble for the purpose of rehearsal." Therefore it Is Mr. Flockton who is now repudiating his contract He is call- ed upon to perform it, but he adheres to his refusal, and seeks an engagement, first at the Regent's Park Theater, and secondly at the Crystal Palace. Now, unless theatrical managers are to be completely at the mercy |.of their performers, the performers are not I to be suffered to break their engagements / whenever they think fit. I can readily be- j lieve, if Mr. Flockton had requested Mr. Mon- tague to allow him to perform the part of Polonius in Hamlet at the Crystal Palace, that his request would have been acceded to, and this suit would not have been insti- tuted; but that was not all that Mr. Flock- ton wanted. In setting his contract at defi- ance, it is perfectly clear his object was not simply to perform at the Crystal Palace, but also to perform at the Regent's Park The- ater, either because he could get a better sal- ary or be enabled to play a higher class of characters, which perhaps to an actor is as strong an inducement as any money that can be given to him. But he is, in my opinion, entirely wrong. . If he is put upon his contract, he Is bound / to perform for Mr. Montague for the season; and I am glad to hear from his coimsel, Mr. Hemming, that Mr. Flockton expresses his willingness, If the court puts a different con- struction upon it to his own, to submit to the opinion of the court, and perform his part of the contract Now, that being the effect of the agree- ment between the parties, that Is, that Mr. Flockton has bound himself for the whole of the season which commenced In October last for nine months, which, on the one hand, obliges Mr. Montague to pay him his salary for nine months, and obliges Mr. Flockton, on the other hand, to perform for Mr. Mon- tague for the same period, it is said. In or- der to avoid this, that he Is not bound, be- cause there is no negative stipulation In the contract. I certainly am imder the impres- sion that in the case of Lumley v. Wagner, 1 De Gex, M. & G. 604, if there had been no negative stipulation the court would have In- terfered; and I gather this particularly from the passage In Lord St Leonard's judgment, Id. 618, where he says: "The agreement to sing for the plaintiff during three months at his theater, and during that time not to sing for anybody else, Is not a correlative contract; It Is, In effect, one contract and though, be- yond all doubt, this court could not interfere to enforce the specific performance of the whole of this contract, yet. In all sound con- struction, and according to the true spirit of the agreement, the engagement to perform for three months at one theater must neces- sarily exclude the right to perform at the same time at another theater." It happened that that contract did contain a negative stipulation, and, finding It there. Lord St Leonards relied upon it; but I am satisfied that if it had not been there he would have come to the same conclusion, and granted the injunction, on the ground that Mdlle. Wag- ner; having agreed to perform at Mr. Lmu- ley's theater, could not at the same time be permitted to perform at Mr. Gye's. But however that may be, it is comparatively un- important because the subsequent authori- ties have completely settled this point It appears to me, on the plainest ground, that an engagement to perform for nine months at Theater A. is a contract not to perform at Theater B., or at any other theater what- ever. How is a man to perform his duty to the proprietor of a theater if, when he has engaged himself to perform for him, he Is to go away any night that he may be wanted to another theater? I must treat Mr. Flock- ton as If he were the greatest actor In the world, and as if wherever he went the pub- lic would run after him; and according to this, if a proprietor engages an actor to per- form for him, he is not, because he is only wanted for three nights in the week, to be at liberty to go and perform at any other theater dm-lng the other three nights, and thereby take away the advantage of the con- tract which he has entered into with his em- ployer. That in my opinion, is utterly Incon- sistent with the proper construction of the contract There Is no doubt whatever that the proper construction of these contracts is, that where a man or woman engages to per- form or sing at a particular theater for a par- ticular period, that Involves the necessity of his or her not performing or singing at any other during that time. That does not rest upon my opinion only, because it was acted upon in Webster v. Dil- lon, 3 Jut. (N. S.) 432. In that case there SPECIFIC PERFORMANCE OF CONTRACTS. 625 was, It seems, no argument on the part of the defendant I suppose they did not argue It because they found they could make noth- ing of It The defendant Dillon, an actor, having agreed to perform at Sadler's Wells Theater in certain characters for twelve suc- cessive nights, proposed to perform during the same period at another theater. Mr. Swanston applied for the injunction, and Vice Chancellor Sir W. Page Wood "thought the words of Lord St. Leonards were sufficiently strong to justify his making the order, and he granted an injunction restraining the de- fendant from acting at any other place than the plaintiff's theater during the ordinary hours of performance there of twelve consecu- tive nights, commencing on the 20th of AprU, the plaintiff undertaking to abide by such or- der as to damages as the court might direct" (He fully adopts there the principle that it Is not necessary to have a negative covenant In order to prevent the performance at another theater. In Fechter v. Montgomery, 33 Beav. ' 22, I think aU men must concur In the reason- ableness of the views of the master of the rolls. Mr. Fechter had engaged Mr. Mont- gomery, who had been a provincial actor, and desired to appear on the London boards to perform Shakespeare's characters, and Mr. Fechter had kept Mr. Montgomery for ffve months idle, but he paid him bis salary. Mr. Montgomery's object was to be occupied; he did not want to be kept idle, he wanted to show his talents to London audiences, and it being clear that Fechter had kept him five months perfectly idle, and, for all that ap- peared, was likely to keep him idle for an- other five months, Mr. Montgomery would not submit to it and broke his engagement Mr. Fechter then filed a bill for an injunction, and in my opinion the master of the rolls could not have come to any other conclusion than that Mr. Fechter had broken his part of the contract and therefore he would not enforce it as against Montgomery. The contract there did not contain any negative stipulation that he would not perform except for Mr. Fechter. The master of the roUs in that case says (33 Beav. 26): "But having regard to the situation of the parties, having regard to the nature of a contract of this description, and having regard also to the previous letter of the 21st of Jime, 1862, written to Mr. Bamett, and the conversation which took place prior to this agreement being entered into, with respect to which conversation there does not appear to me to be much difference on either side, I am of opinion that it was an agreement entered into by Mr. Fechter to em- ploy Mr. Montgomery, during a reasonable time, to act at this theater, and that it was an agreement on the other side that he (Mr. Montgomery) should not perform elsewhere IiWithout the consent of Mr. Fechter; there was a mutuality in the agreement entered Into on both sides; on the one side, that he should have an opportunity of displaying H.& B.EQ.(2d Ed.)— 40 what his abilities and talents were before a London audience, and on the other side, that he should not act elsewhere unless with the permission of the plaintiff." There are, there- fore, Sir W. Page Wood, when vice chan- cellor, and the master of the rolls. Lord RomiUy, taking precisely the same view, that an engagement to act at one theater is a pro- hibition against acting at any other. There is also the whole principle involved In the case of De Mattos v. Gibson, 4 De Gex & J. 276, which was with regard to a totally dif- ferent subject undoubtedly, namely, the char- tering of a ship. The ship was chartered for a particular voyage, and the charterer pro- posed to sell her, and employ her in a totally different manner. There the court decided that there was a contract that she should not be employed for any other purpose, and grant- ed an injunction against her being so employ- ed accordingly. I think, therefore, that It is decidedly established, and I should desire, asi far as my opinion is of value on the subject,! that it should be considered my opinion, that j a man agreeing to act in one particular] theater during the season is party to a conV tract that he will act there and not anyj where else. A negative contract is as neces-, sarily implied as if It had been plainly ex- pressed. Then the result Is: here is a con- tract entered into for value. It is said by Mr. Flockton that the plaintiff has refused to perform his part of the contract, and has also refused to allow him to perform. That Is explained in the affidavits. It Is not at- tempted to be answered. It is perfectly clear that, in consequence of Flockton having ab- sented himself, and given the notice of the 2d of .October, when this new piece was about to be brought out Mr. Montague was obliged to apply to another actor, a Mr. Pabner, to act in the place of Mr. Flockton, and that, In consequence of the default of Mr. Flockton to perform his contract, he has brought this trouble upon himself. Mr. Montague very properly said: "I have engaged Mr. Palmer. I cannot turn him out. You have brought this upon yourself, and while this piece lasts I cannot employ you to perform in it" But if he had not done that, I am perfectly clear that he would have continued to employ him there, and that the circumstance of his not being employed is entirely In consequence of his attempting to repudiate his own contract. Under these circumstances, I am clearly of opinion that Mr. Montague has established that Mr. Flockton Is under an engagement to perform for him, and, being under that en- gagement, is not at li berty to perform at any other theater TyhateVer witho ut Ilia ftemrts? 'sion. 1 thinlTTFirrTirgitef "Sr'Ve^^"g?lstTSP* portance for actors to understand, that enter- ing Into a contract to perform at Theater A. obliges them to perform there alone, and that they cannot be permitted to perform any- where else so long as the other party performs his part of the agreement 626 SPECIFIC PERFORMANCE OP CONTRACTS, I am, therefore, of opinion that Mr. Mon- tague is entitled to the injunction. Mr. Hemming aslxed that the injunction might not he extended to prevent Mr. Flock- ton from fulfilling the engagement he had al- ready entered into to perform once more at the Crystal Palace. The Vice Chancellor recommended Mr. Montague to concede this request as a favor, Mr. Glasse said that Mr. Montague would not object to the defendant's performing once more at the Crystal Palace. The Vice Chancellor thereupon granted the injunction in the terms of the prayer, but so as not to Interfere with Mr. Flockton's play- ing one more day at the Crystal Palace. SPECIFIC PERFORMANCE OF CONTRACTS. 627 DONNELIi ▼. BENNETT. (22 Ch. Div. 835.) Chancery. Feb. 8, 1883. By an agreement dated the 15th of De- cember, 1882, and made between the plain- tiff, J. Donnell, a manure manufacturer, of the one part, and Cormack, a fish ciu^r and fish smoker, of the other part, it was agreed that Cormack should sell and that the plain- tiff should buy all parts of fish not used by Cormack In liis business of a fish curer and fish smoker at the price of 23s. per ton for the Sfpace of two years from the 31st of De- cember, 1882, and in consideration thereof Cormack further agreed that he would not sell during the said space of two years any fish or parts of fish to any other manufac- turer whatever; and the plaintiff further agreed that he would take and pay for all fish or parts of fish which Cormack should deliver to him at the said price of 23s. per ton delivered at the plaintifFs works. It was admitted that the defendant never delivered any fish or parts ot fish under the contract to the plaintiff, but that he entered into a contract with the defendant Bennett to deliver aU the parts of fish which he did not require in his business to Bennett; it was also admitted that the plaintiff had suf- fered damage by this breach of contract, and that the defendant Bennett had paid Cor- mack considerable sums of money to induce him to break his contract with the plaintiff, in order that Bennett might obtain the sub- stantial monopoly of all the refuse of fish In Grimsby or the neighborhood. This was an action by the plaintiff against Bennett and Cormack as co-defendants ask- ing for an Injimction to restrain Cormack from selling any fish to Bennett or any other manufacturers except the plaintiff, and to re- strain Bennett from buying any such fish from Cormack. H. A. Giffard, Q. C, and Mr. Hall, for plaintiff. Cozens-Hardy, Q. C, and Mr. Wil- liamson, for defendants. Bower, Cotton & Bower, for plaintiff. Williamson, Hill & Co., for defendants. FRY, J. The question which arises Is by no means an easy one. It is difficult because of the state of the authorities upon the point. It appears to me that the tendency of recent decisions, and especially the cases of Pother- gill V. Rowland, L. R. 17 Eq. 132, and of Wolverhampton and W. Ry. Co. v. London and N. W. Ry. Co., L. R. 16 Eq. 433, is towards this view— that the court ought to look at what Is the nature of the contract between the parties; that If the contract as a whole Is the subject of equitable jurisdic- tion, then an Injunction may be granted In support of the contract whether It contain or does not contain a negative stipulation; but that if, on the other hand, the breach of the contract is properly satisfied by damages, then that the court ought not to interfere whether there be or be not the negative^tip- ulation. That, I say, appears to me to be the point towards which the authorities are tending, and I cannot help saying that in my judgment that would furnish a proper line by which to divide the cases. But the ques- tion which I have to determine is not wheth- er that ought to be the way in which the line should be laid down, but whether it has been so laid down by the authorities which are binding on me. Now several cases have been cited by the plaintiff as authorities in favor of his con- tention. In the first place there Is the case of Dletrlchsen v. Cabburn, 2 Phil. Ch. 52, in which undoubtedly the court enforced by way of injunction a stipulation not to sell except In a particular manner, and there the whole contract was one which could not have been performed speeifleally by the court. Still more, in Lumley v. Wagner, 1 De Gex, M. & G. 604, the court enforced by way of Injunction a portion of a contract the whole of which could not have been enforced by way of specific performance; and Lord St Leonards in considering that case discussed the question whether an injunction ought to be granted in some cases In which specific performance cannot be granted, and he de- termtaed that question plainly In the affirm- ative. He made these observations (Id. 619): "Wherever this court has not proper juris- diction to enforce specific performance it operates to bind men's consciences, as far as they can be bound, to a true and literal performance of their agreements; and it will not suffer them to depart from their con- tracts at their pleasure, leaving the party with whom they have contracted to the mere chance of any damages which a jury may give. The exercise of this jurisdiction has, I believe, had a wholesome tendency towards the maintenance of that good faith which exists in this country to a much greater degree perhaps than In any other; and al- though the jurisdiction is not to be extend ed, yet a judge would desert his duty who did not act up to what his predecessors have handed down as the rule for his guidance in the administration of such an equity." It Is plain, therefore, that Lord St. Leon- ards did not adopt the view which has oc- curred to me as that towards which the more recent cases have been tending. That Is the way in which the direct au- thorities stand hi eases In which there is a negative clause, and they appear to me to show that In cases of this description where a negative clause Is foimd, the court has en- forced It without regard to the question whether specific performance could be grant- ed of the entire contract Then it is said by Mr. Cozens-Hardy that In all those cases the negative contract en- forced was but a part of a larger contract, and that It was a separable part of that larger contract, and that those cases do not 628 SPECIFIC PERFORMANCE OF CONTRACTS. apply to a case like the present, in which, as h^ suggests, the negative contract Is co- extensive with the positive contract. Upon that argument two Inquiries arise. In the first place. Is It true to say that the negative contract Is In the present instance coextensive with the positive? In my judg- ment it is not. The affirmative contract Is that the vendor will sell all his fish refuse for two years to the purchaser. The nega- tive contract is that during two years he will not sell any refuse fish to any other manu- facturer whomsoever; leaving it open to him so far as regards the negative contract, either not to sell at all, or to sell to some person other than a manufacturer. But in the next place one must inquire whether the authori- ties support any such distinction as that which has been urged by Mr. Cozens-Hardy. It appears to me that they do not In Lumley v. Wagner, 1 De Gex, M. & G. 604, the contract was that Mdlle. Wagner would sing three months at Her Majesty's Theater in London. The negative contraxit was that she would not "use her talents at any other theater, nor in any concert or re- union, public or private, without the written authorization of Mr. Lumley." It is quite true that the contract contains certain stipu- lations as to how many nights she should be required to sing, but it appears to me to be efvldent that the substantial contract— the af- firmative contract— was that she would sing there for three months. Of course she could not be always singing, and therefore the con- tract must state necessarily some limits as to how often she was to sing, but when she did sing during the three months she was to sing at Her Majesty's Theater; the negative terms were that during thti three months she would not sing anywhere else than at Her Majesty's Theater. It appears to me that those two contracts are substantially coex- tensive. But further than that it is to be borne in mind that Lord St. Leonards does not dwell on the distinction which is now sought to be drawn, and so far as I am aware no trace of It Is to be found in the earlier authorities. But then comes the case of Oatt v. Tourie, L. R. 4 Oh. 654, before the Lords Justices! in which Hills v. Croli, 2 Phil. Oh. 60, was re- ferred to. Now Hills V. CroU was a case which contained an affirmative and negative con- tract, and Lord Justice GifCard expressly said that if that case is to be taien as laying down that the court is to refuse to act on a negative covenant wherever there is a cor- relative obligation which It cannot enforce, it does not apply. If It is taken as going that length, it is contrary to the case of Lum- ley V. Wagner, 1 De Gex, M. & 6. 604, and must be considered as overruled. It appears to me, therefore, that that point which has been urged upon me does not re- ceive any sanction from the earlier authori- ties. I have come to the conclusion, therefore, upon the authorltiee, which are binding upon me, that I ought to grant this injunction. I do so with considerable difficulty because I find it hard to draw any substantial or tangi- ble distinction between a contract containing an express negative stipulation and a con- tract containing an affirmative stipulation which implies a negative. I find it exceed- ingly difficult to draw any rational distinc- tion between the case of Fothergill v. Row- land, L. R. 17 Eq. 132, and the case now be- fore me. But at the same time the courts have laid down that, so far as the decisions have already gone in favor of granting in- junctions, the injunction is to go. It appears to me that this case is wlthio the earlier decisions, and although I should be far from sorry if the court of appeal were to take a different view, I think I am bound here by the authorities, and therefore I grant the Injunction till the hearing of the cause. SPECIFIC PERFORMANCE OP CONTRACTS. 629 WM. ROGERS MANTJF'G CO. v. ROGERS. (20 Ati. 467, 58 Conn. 356.) Snpreme Court of Errors of Oonnecticnt Feb. 17. 1890. Appeal from superior court, Hartlord county; Fenn, Judge. This was a suit to enjoin the violation ol a contract between Frank W. Rogers and the Wm. Sogers Manufacturing Com- pany and the Rogers Cutlery Company as follows: "(1) That said companies will employ said Rogers in the business to be done by said companies, according to the stipulations of said agreement, for the pe- riod of twenty-flve years therein named, if said Rogers shall so long live and dis- charge the duties devolved upon him by said Watrous as general agent and man- ager of the business to be done in common by said companies, under the directions and to the satisfaction of said general agent and manager; it being understood that such duties may include traveling for said companies, whenever, in the judg- ment of said general agent, the interest o' the business will be thereby promote-" (2) The said companies agree to pay said Rogers for such services so to be rendered, at the rate of $1,000 per year for the first five years of such services, and thereafter the same or such larger salary as may be agreed upon by said Rogers and the di- reotors of said companies, said salary to be in full during said term of all services to be rendered by said Rogers, whether as an employe or an officer of said companies, unless otherwise agreed. (3) The said Rogers, in consideration of the foregoing, agrees that he will remain with and serve said companies under the direction of said Watrous, as general agent and manager, Including such duties as traveling for said companies, as said general agent may de- volve upon him, including also any duties as secretary or other officer of either or both of said companies, as said companies may desire to have him perform at the salary hereinbefore named for the first five years and at such other or further or dif- ferent compensation thereafter during the remainder of the twenty-five years as he, the said Rogers, and the said companies may agree upon. (4) The said Rogers during said term stipulates and agrees that he will not be engaged or allow his name to be employed in any manner in any other hardware, cutlery, flatware, or hollow-ware business either as manufact- urer or seller, but will give, while he shall be so employed by said companies, his en- tire time and services to the interests of said common business, diminished only by sickness, and such reasonable absence for vacations or otherwise as may be agreed upon between him and said general agent. " The complaint was held insufficient, and the plaintiffs appealed. F. Cbamberlin and E. S. White, for ap- pellants. C. R. Ingersoll and F. L. Hun- gerford, for appellee. ANDREWS, C.J. Con tracts for personal service are matters for courts of law, and equity will not undertake a specific per- formance. 2 Kent, Comm. 258, note b; Hamblin v. Dinneford, 2 Ed w. Ch. 529 ; San- qnlrico V. Benedetti, 1 Barb. 316; Haight v. Badgeley, 15 Barb. 499; De Rivafinoli v. Corsetti, 4 Paige, 264. A specific perform- ance in such cases is said to be impossible because obedience to the decree cannot be compelled by the ordinary processes of the court. Contracts for personal acts have been regarded as the most familiar illus- trations of this doctrine, since the court cannot in any direct manner compel the party to render the service. The courts in this country and in England formerly held that they could not negatively enforce the specific performance of such contracts by means of an injunction restraining their violation. 8 Wait, Act. & Def. 754 ; Marble Co. V. Ripley, 10 Wall. 340 ; Burton v. Mar- shall, 4 Gill, 487; De Pol v. Sohlke, 7 Rob. (N. Y.) 280; Kemble y. Kean, 6 Sim. 333; Baldwin v. Society, 9 Sim. 393; Fothergill v. Rowland,!.. R.17Eq.l32. The courts in both countries have, however, receded somewhat from the latter conclusion, and it is now held that where a contract stipu- lates for special, unique, or extraordinary personal services or acts, or where the serv- ices to be rendered are purely intellectual, or are peculiar and individual in their character, the court will grant an injunc- tion in aid of a specific performance. But where the services are material or mechan- ical, or are not peculiar or individual, the partj' will be left to his action for dam- ages. The reason seems to be that serv- ices of the former class are of such a nat- ure as to preclude the possibility of giv- ing the injured party adequate compensa- tion in damages, while the loss of serv- ices of the latter class can be adequately compensated by an action for damages. 2 Story, Fq. Jur. § 958a ; 3 Wait, Act. & Def. 754 ; 3 Pom. Eq. Jur. § 1348 ; California Bank V. Fresno Canal, etc., Co., 53 Cal. 201 ; Singer Sewing-Machine Co. v. Union Button- Hole Co., 1 Holmes, 253, Lumley v. Wagner, 1 De Gex, M. & G. 604; Railroad Co. v. Wy- thes, 5 De Gex, M. & G. 880; Montague v. Flockton, L. R. 16 Eq. 189. The contract between the defendant and the plaintiffs is made a part of the complaint. The serv- ices which the defendant was to perform for the plaintiffs are not specified therein, otherwise than that they were to be such asshould bedevolved upon him bythegen- eral manager; "it being understood that such duties may include traveling for said companies whenever, in the judgment of said general agent, the interests of the business will be thereby promoted ; " and also "Including such duties as traveling for said companies as said general agent may devolve upon him, including also any duties as secretary or other officer of either or both of said companies as said compa- nies may desire to have him perform." These services, while they may not be ma- terial and mechanical, are certainly not purely intellectual, nor are they special, or unique, or extraordinary ; nor are they so peculiar or individual that they could not be performed by any person of ordinary intelligence and fair learning. If this was all there was in the contract it would be almost too plain for argument that the plaintiffs should not have an injunction. The plaintiffs, however, insist that the negative part of the contract, by which 630 SPECIFIC PERFORMANCE OF CONTRACTS. the defendant stipulated and agreed that he would not be engaged in or allow hia name to be employed in any manner in any other hardware, cutlery, flatware or hollow-ware business, either as a manu- facturer or seller, fully entitles them to an injunction against its violation. They aver in the complaint, on information and belief, that the defendant is planning with certain of their competitors to engage with them in busineBS,witb the intent and purpose of allowing hisname to be used or employed in connection with such business as a stamp on the ware manufactured ; ;nd they say such use would do them great and irreparable injury. If the plain- tiffs owned the name of the defendant as a trade-mark, they could have no difficulty in protecting their, ownership ; but they make no such claim, and all arguments or analogies drawn from the law of trade- marks may be laid wholly out of the case. There is no averment in the complaint that the plaintiffs are entitled to use, or that in fact they do use, the name of the defendant as a stamp on the goods of their own manufacture, nor any averment that such use, if it exists. Is of any value to them. So far as the court is informed, the defendant's name on such goods as the plaintiffs manufacture is of no more value than the names of Smith or Stiles or John Doe. There is nothing from which the court can see that the use of the defend- ant's name by the plaintiffs is of any value to them, or that its use as a stamp by their competitors would do them any in- jury other than such as might grow out of a lawful business rivalry. If by reason of extraneous facts the name of the defend- ant does have some special and peculiar value as a stamp on their goods, or its use as a stamp on goods manufactured by their rivals would do them some special injury, such facts ought to have been set out so that the court might pass upon them. In the absence of any allegation of such facts we must assume that none exist. The plaintiffs also aver that the defendant in- tends to make known to their rivals the knowledge of their business, of their cus- tomers, etc., which he has obtained while in their employ. But here they have not shown facts which bring the case within any rule that would require an employe to be enjoined from disclosing business secrets which he has learned in the course of his employment, and which he has con- tracted not to divulge. Peabody v. Nor- folk, 98 Mass. 452. There is no errorin the Judgment of the superior court. The other Indges concurred. SPECIFIC PERFORMANCE OF CONTRACTS. 631 METROPOIilTAN EXHIBITION CO. T. EWING. (42 Fed. 19&) Circuit Court, S. D. New York. March 25, 1890. In Equity. On bill for injunction. Joseph F. Choate and George F. Duysters, for plaintiff. Henry Bacon, for defendant. WALLACE, J. This action Is brought to restrain a threatened breach of contract for the performance of personal services which require special aptitude, skUl, and experience. It is a case in -which an action at law would not afford the plaintiff an adequate remedy for the breach, and in which the power of the court should be exercised by preventive inter- position, if it is found that the contract Is such as the plaintiff claims it to be. The circumstances are such that, unless a pre- liminary injmiction Is granted, the plaintiff will obtain no effectual remedy, liecause, bo- fore the cause can be brought to final bear- ing, the time will have passed within which the relief sought would be practically useful, and, if it be then adjudged that the plaintiff is entitled to a permanent injunction, the judgment wUl be declaratory merely. Al- though preliminary relief is not to be granted ■in a case in which it is doubtful whether the plaintiff will be finally successful, yet, where the questions are such that they can be fully •considered and as safely decided upon a mo- -tion for a preliminary injunction as at final hearing, it Is the duty of the court to consider and determine them, and not defer the party invoking its assistance to a time when a de- cree, If awarded, would be too late. The contract upon which the plaintiff founds its claim for relief is in form between ihe New York Base-Ball Club as party of the first part, and the defendant as party of the second part; but there Is no reason to doubt ■that the New York Base-Ball Club was the agent of the plaintiff in entering into the contract, that the plaintiff is the real prin- cipal, that the contract was intended to inure for the benefit of the plaintiff, and that the plaintiff is entitled to enforce it against the -defendant to the extent that the New York Base-Ball Club could do so. The doctrine is now generally recognized that, while a court -of equity will not ordinarily attempt to en- force contracts which cannot be carried out by the machinery of a court, like that In- volved in the present case, it may neverthe- less practically accomplish the same end by -enjoining the breach of a negative promise, and this power will be exercised whenever the contract is one of which the court would direct specific performance, if It could prac- tically compel its observance by the party re- fusing to perform through a decree for spe- -ciflc performance. It Is Indispensable, where the contract does not relate to realty, that it Ae one for the breach of which damages would not afford an adequate compensation to the plaintiff. It must be one in which the plaintiff comes into court with clean hands, and which Is not so oppressive as to render It unjust to the defendant to enforce it It must be one in which there are mutual prom- ises, or which is founded on a suflacient con- sideration. It must be one the terms of which are certain, and in respect to which the minds of the parties have distinctly met, so that there can be no misunderstanding of their rights and obligations. The contract is executed as of the date of April 29, 1889. It is a formal document, con- sisting of 20 articles, by which the New York Base-Ball Club employs the defendant, and the defendant undertakes to perform profes- sional services as a base-ball player for the club for the season (specified in article 2) be- ginning April 1, 1889, and ending October 31, 1889. Article 20 provides that the salary to be paid the defendant shall be $2,000, pay- able semi-monthly. Among other things, the contract provides by different articles that the club may at any time terminate the con- tract on 10 days' notice to the defendant, whereupon the obligations of both parties are to cease; that the club shall provide the de- fendant while "abroad" with proper board and lodging, and pay all necessary traveling expenses; that if the defendant, during the term of his employment, be guilty of any ex- cessive indulgence in liquor, or of gambling, or of insubordination, he shall be liable to certain specified penalties; and that, if the club ceases to be a member of the National League of Professional Base-Ball Clubs, either compulsorily or voluntarily, the "de- fendant shall, if the right of reservation be transferred" by the club to any other club, receive from that club at least the same amount in salary that he receives by the present contract. It contains, also, the fol- lowing provision: "Article 18. It is further understood and agreed that the party of the first part shall have the right to 'reserve* the said party of the second part for the season next ensuing the term mentioned in para- graph 2, herein provided, and that said right and privilege is hereby accorded to said party of the first part upon the following condi- tions, which are to be taken and construed as conditions precedent to the exercise of such extraordinary rights or privileges, viz.: (1) That the said party of the second part shall not be reserved at a salary less than that mentioned in the 20th paragraph herein, except by the consent of the party of the sec- ond part; (2) that the said party of the sec- ond part, If he be reserved by the said party of the first part for the next ensuing season, shall not be one of more than 14 players then under contract,— that is, that the right of res- ervation shall be limited to that number of players, and no more." The plaintiff alleges that the defendant was one of 14 players, and no more, so re- served under said contract; that on the 22d 632 SPECIFIO PERFORMANCE OF CONTRACTS. day of October, 1889, plaintiff exercised its option to reserve the defendant for the sea- son of 1890 by giving the defendant due and timely notice, in writing, of its intention to do so; and that, nothwlthstanding the exer- cise of this option, the defendant has en- gaged his services for the season of 1890 to another organization, to act for it as a base- ball player during that season. The plaintiff insists that, by the terms of the contract, it is entitled to the services of the defendant as a base-ball player for the season of 1890 upon the terms and conditions of the con- tract for the season of 1889, except the con- dition giving a right to reserve him for a subsequent season. The case turns upon the meaning and ef- fect of the clause and contract which gives the club the right to reserve the defendant for the season next ensuing. It is plain enough that the option is a right of reserva- tion for the next ensuing season only,— the season ensuing the term mentioned in arti- cle 2,— and does not extend beyond the term from April 1, 1890, to October 31, 1890. It is equally plain that the salary for the ensu- ing season is to be the same as that for the season of 1889, unless the parties mutually consent to a change. But what is the char- acter of the option which the plaintifC is per- mitted to exercise? What is the right to "re- serve" the defendant? If it Is the right to retain and have his services as a base^ball player for the season of 1890, when is the right of election to be manifested, and upon what terms are these services to be ren- dered? Can the club wait until April 1, 1890, before it manifests its intention to exercise the option? Is the club to pay the defend- ant's board and lodging while he is "abroad," serving the club, during the season of 1890? Can the club discharge him at any time dur- ing that season on 10 days' notice? Are the penalties for intoxication, gambling, or in- subordination enforceable during the season of 1890? In short, does the contract em- body the definite understanding of the par- ties to it in respect to their reciprocal rights and obligations after the season of 1889 shall have ended? If the term, "the right to re- serve," has no defined meaning, and there were no extrinsic sources by which to ascer- tain the sense in which it is used by the par- ties, it would be an ambiguous phrase. As applied to a contract for personal services, the right to reserve would convey a very un- intelligible conception of the conditions and incidents of the service to be rendered or enjoyed. A contract by which one party agrees, for an equivalent, to reserve himself for another for a stated period, or to reserve himself as a lawyer or doctor or artist or laborer for a specified term, would very inad- equately express a promise to devote his pro- fessional or manual services exclusively to the other during that period; and the prom- ise of a base-ball player to reserve himself for a particular club for a given season would hardly, without more, convey any defi- nite meaning of the understanding of the parties. It certainly would not bind him to submit to any special rules or regulations re- specting the performance of his services not expressly consented to, or not to be neces- sarily implied from the nature of the em- ployment and the situation of the contracting parties. If it had been the meaning of the contract to allow the club to renew the en- gagement of the defendant for a second sea- son upon the same conditions as those for the first season, that intention could have been easily and unequivocally expressed. As it is, it is left wholly to implication, unless the "right to reserve" is a term having a de- fined and specific signification. This ambi- guity suggests such grave doubt as to the meaning of the clause that in two adjudged cases, in which it has been considered by the courts, the judges have thought it too indefi- nite to be enforceable. In Exhibition Co. v. Ward, 9 N. Y. Supp. 779, (in the supreme court of this state,) Mr. Justice O'Brien was of the opinion that the failure to provide for the terms and conditions of the contract for the second season rendered the clause so in- definite and uncertain that it could not be the basis of equitable relief, or that it meant that every player is bound for the ensuing season upon the same terms and conditions as those of the first season, including the signing of a new contract containing the op- tion to reserve. In Philadelphia Ball Club against Hallman, in the court of common pleas of Philadelphia, Judge Thayer was of the opinion that the failure to designate the terms and conditions of the new engagement under which the player is to be reserved rendered the contract of reservation wholly uncertain, and therefore incapable of enforce- ment. Where the terms employed to express some particular condition of a contract are am- biguous, and cannot be satisfactorily ex- plained by reference to other parts of the contract, and the parties have made other contracts in respect to the same subject-mat- ter, and apparently in pursuance of the same general purpose, it is always permissible to examine all of them together in aid of the in- terpretation of the particular condition; and, if it is found that the ambiguous term has a plain meaning by a comparison of the sev- eral contracts and an examination of their provisions, that meaning should be attrib- uted to it In the particular condition. So, also, if it appears that the term used has an established meaning among those engaged in the business to which the contract has ref- erence, and, unless it is given that meaning, is indefinite and equivocal, it should be treated. In Interpreting the contract, as used according to that understanding; and In con- struing a contract the court is always at lib- erty to look at the surrounding and ante- cedent circumstances, and avail itself of the light of any extrinsic facts which wiU enable SPECIFIO PERFORMANCE OF CONTRACTS. 633 it to Tiew the contract from the standpoint of the parties at the time when it was made. In the present case, it will satisfactorily ap- pear, by resort to these sources of interpre- tation, that the term "right to reserve" is used in the contract in the sense that ob- tains in base-ball nomenclature, and that it is intended to signify an option, the charac- ter of which was well understood by base- ball clubs and professional players when the present contract was made. Obviously, the right to reserve given by the eighteenth clause of the contract Is the same thing as the right of reservation mentioned in that part of the contract which provides that the present dub may disband, and transfer its right of reservation to some other club. The agreement is in a form common to all con- tracts between base-ball clubs organized un- der what is known as the "national agree- ment" and professional players, a form which is prescribed by the national agree- ment The national agreement is a compact between the various base-ball "associations constituting the National League Base-Ball Clubs and the American Association of Base- Ball Clubs, made with a view to regulate the rights and obligations of the members as re- spects one another. One of its paramount features consists of provisions regulating the privilege of clubs to reserve a stated number of players. The provisions are framed to prevent any club of the National League or the American Association from engaging a player already reserved by another, and to render the player so reserved Ineligible for employment by any other club. They re- quire each club, on the 10th day of October in each year, to transmit to all the other clubs a reserved list of players, not exceed- ing 14 in number, then under contract, and of such players reserved in any prior list who have refused to contract for another year, and declare such players ineligible to contract with any other club. Inasmuch as the parties to the national agreement com- prise all, or substantially all, the clubs in the country which employ professional players, this national agreement, by indirection, but practically, affects every professional player, and subordinates his privilege of engaging as he chooses to the option of the club by which he is under reservation. As is stated in a recent publication edited by a prominent professional player: "The most important feature of the national agreement, unques- tionably, is the provision according to the club members the privilege of reserving a stated number of players. No other club of any association under the agreement dare en- gage any player so reserved. To this rule, more than any other thing, does base-ball, as a business, owe its present substantial standing. By preserving intact the strength of the team from year to year, it places the business of base-ball on a permanent basis, and thus offers security to the Investment of capital. The reserve rule itself is a usur- pation of the player's rights; but It is, per- haps, made necessary by the peculiar nature of the ball business, and the player is indi- rectly compensated by the Improved stand- ing of the game. The reserve rule takes a manager by the throat and compels him to keep his hands off his neighbor's enterprise." In the contracts between clubs and play- ers as framed prior to November, 1887, there was no provision by which the player con- sented to the option for reserve on the part of the club. But the contracts did contain a condition that the player should conform to, and be governed by, the constitution and provisions of the national agreement; and the player thereby assented to become in- eligible for engagement by any other club of the league during the season of his en- gagement by a particular club, or while the option of re-engaging him for an ensuing year on the part of that club remained in force. Changes were made from time to time in various features of the national agreement. The players were obliged to in- form themselves of the latest changes, in order to understand the precise terms of their contract vrith the clubs. They became unwilling to consent to a form of contract by which they were to be subjected to con- ditlojis not mentioned in the contract itself. In November, 1887, a committee represent- ing the professional players met a commit- tee representing the parties to the national agreement for the purpose of agreeing upon certain changes to be made in the form of the contract. The committees finally agreed that the obnoxious clause In the con- tract should be omitted, and the clause now found in the eighteenth article should be in- serted. This was the origin of the clause giving to the club, by the contract itself, the option of reserve. The clause was manifest- ly inserted in order to give, by an express condition, the right of reservation to the clubs which theretofore the players had only given by agreeing to be bound by the terms of the national agreement. By ascertaining what that right of reservation was, It can be plainly seen what the parties had In mind in using the term in the present contract. If, when the contract was made, the term had a well-understood definition, there was no necessity to particularize in the contract the conditions or characteristics of the op- tion. Reference has already been made to the provision of the national agreement requir- ing each club, on the 10th day of October in each year, to transmit to all the other clubs a reserved list of players, and declar- ing such players ineligible to contract with any other club. This provision is to be read In connection with another provision of the national agreement, which prescribes that no contract shall be made "for the services of any player by any club for a longer period than seven months, beginning April 1st and terminating October 31st, and no such con- 634 SPECIFIC PERFORMANCE OP CONTRACTS. tract for services to be rendered after the expiration of the current year shall be made prior to the 20th day of October of such year." The two provisions, read together, allow a period of 10 days to intervene be- tween the time when a club can exercise the privilege of placing a player upon its reserv- ed list and the time when it can make a contract with him for services to be render- ed in an ensuing year, thus emphasizing a distinction between the right to treat the player as reserved and the contract which is to fix the terms upon which the reserva- tion is to be complete. The effect of these provisions is that, when the club has exer- cised its privilege of reservation, no other club is permitted to negotiate with the play- er; but the club which has placed him upon the reserved Ust, and no other, is then at liberty to enter into a contract with him to obtain his services for an ensuing year. Con- sequently the right of reservation is nothing more or less than a prior and exclusive right, as against the other clubs, to enter into a contract securing the player's services for another season. Until the contract is made which fixes the compensation of the player and the other conditions of his service, there is no definite or complete obligation upon his part to engage with the club. He agrees that he wiU not negotiate with any other club, but enjoys the privilege of engaging with the reserving club or not, as he sees fit. Read with this understanding, the clause In question by which the privilege of re- serving the defendant is given to the club expresses definitely the terms of the option. If the club exercises the right of reserva- tion, it agrees in advance that the player shall receive at least as large a salary as he has received during the current year, and leaves it open to him to contract on that basis for the next season, or to insist on a larger salary. All the other terms of the engagement are matters of negotiation be- tween the club and the player. The law implies that the option of reservation is to be exercised vrtthin a reasonable time; but when this has been done the right to reserve the player becomes the privilege, and the exclusive privilege, as between the reserving club and the other dubs, to obtain his serv- ices for another year if the parties can agree upon the terms. As a coercive condition which places the player practically, or at least measurably, in a situation where he must contract with the club that has re- served him, or face the probability of losing any engagement for the ensuing season, it Is operative and valuable to the club. But, as the basis for an action for damages If the player fails to contract, or for an action to enforce specific performance, it is wholly nugatory. In a legal sense, it is merely a contract to make a contract if the parties can agree. It may be that heretofore the clubs have generally insisted upon treating the option to reserve as a contract by which they were entitled to have the services of the player for the next season upon the terms and conditions of the first season, and even requiring him to enter into a new con- tract containing the option for reservation; and it may be that the players have gen- erally acquiesced in the claims of the clubs. However this may be, the players were not in a position to act independently; and, if they had refused to consent to the terms proposed by the clubs, they would have done so at the peril of losing any engagement. The facts, therefore, are not such as to per- mit any weight to be given to the acts of the parties as evincing their own construc- tion of the contract. It follows that the act of the defendant in refusing to negotiate with the club for an engagement for the season of 1890, while a breach of contract, is not the breach of one which the plaintiff can enforce. The motion for an injunction is denied. SPECIFIC PERFORMANCE OF CONTRACTS. 635 ALIiEGHHNT BASE-BALJj CLUB t. BENNETT. (14 Fed. 257.) Circuit Court, W. W. Pennsylvania. Novem- ber 18, 18S2. In Equity. Bill to enforce compliance witli agreement to enter into contract to give personal services. Bill in equity by the Allegheny Base-ball Club, a corporation of Pennsylvania, against Charles W. Bennett, a citizen of Michigan, to compel the respondent to execute a formal contract to give his exclusive services as a base-ball player to the complainant during the base-ball season of 1883, and also for an Injunction to restrain him from executing a like agreement with the Detroit Base-ball Club, and from performing such services for any other person or corporation than the complainant during the season named. The bill was filed on the fifth day of Oc- tober, 1882, and was based upon the follow- ing written instrument, to-wit: "It is hereby agreed, this third day of August, 1882, between the Allegheny Base- ball Club and Charles W. Bennett, that said Charles W. Bennett hereby promises and binds himself that between the fifteenth and thirty-first days of October, 1882, he vtIU sign a regular contract of the Allegheny Base- ball Club, a chartered company belonging to the American Association of Base-ball Clubs, which contract shall bind him to give his services as a base-ball player to said club for the season of 1883, and shall bind said Allegheny Club to pay him the sum of $1,- 700 for and during such season of 1883; and in consideration of his agreement to sign such a contract in October, the sum of $100 is now paid to said C. W. Bennett, the re- ceipt of which is hereby acknowledged. Wit- ness our hands and seals this third day of August, 1882. "The Allegheny Base-ball Club, by "H. D. McKnight, President [Seal.] "C. W. Bennett [Seal.] "A. G. Pratt Witness." The bill averred substantially that the complainant was engaged in the business of playing base-ball for profit, and that by the expenditure of much time and large sums of money it made preparations for the exhi- bition of such games, and expected to re- ceive large returns from the same; that the respondent was a skillful player of base-ball, and. In consequence of his agreement with complainant E. N. Williamson and James F. Galvln, two other skillful players, had en- tered into a similar agreement with com- plainant; that respondent had refused to sign the "regular contract" referred to, and had entered into a like contract with the Detroit Base-ball Club; that, accordingly, Williamson and Galvin refused to keep their flaid engagement with complainant, and that •the base-ball season had now so far advan- ced that complainant could not secure other players of equal skill with said Bennett, Wil- liamson, and Galvin, whereby complainant "would be seriously damaged, to an amount of not less than $1,000." The bill prayed that Bennett be required to sign the "regular contract," and perform his covenants, and also that he be restrained from entering into a similar contract with the Detroit Base-ball Club, or any other as- sociation or person, and from playing base ball "for hire,' during the base-ball season of 1883, for any other than complainant. The complainant moved for a preliminary Injunction. The motion was argued by James Batewell, and was opposed by A. Tauslg, and was denied. The respondent then filed a general demurrer, on the grounds: (1) That the bill was prematurely brought; (2) that the agreement was a mere preliminary arrangement, anticipating the making of a final contract, and that, there- fore, there was no contract before the com't capable of specific enforcement; (3) that the agreement was unlimited as to place, and was, therefore, imreasonable and void as against public policy, as covenants in re- straint of trade; (4) tiiat the complainant had an adequate remedy at law. A. Tausig, A. W. Duff, and Marshall Brown, for demurrer. To maintain a suit there must be a cause of action when such suit is commenced. 55 Ga. 329; 29 111. 497; 4 Sneed, 583. One who has anything to do on a particular day has the whole of that day to perform such act, so that suit for a breach of performance cannot be instituted until the next day. 102 Mass. 65; 6 Watts & S. 179; 18 Cal. 378. And, In general, the time within which a contract is to be executed is as much the essence of It as any other part. 6 Wis. 120; 43. Me. 158; 18 Ind. 365; 17 Me. 316; 22 Me. 133. (1) The present bill for an injunction to restrain the defendant from playing with the Detroit Club, as In violation of the alleged agreement, will not lie for the reason the con- tract is a mere preliminary arrangement, and not a final agreement What are the terms of the alleged contract? They provide and contemplate the execution of a regular agree- ment in order to bind the parties and render the contract mutual, final, and conclusive. The preliminary contract shows that it was executed with reference to a future and final agreement between the parties. A contract requires mutuality as to all its essential terms, stipulations, and conditions. Is there any allegation upon the face of the bill that a final, regular contract was ever agreed up- on between the parties? There is no con- tract, therefore, capable of being enforced in a court of equity, and the present bill must be dismissed. Railway Co. v. Wythes, 5 De Gex, M. & G. 888. Specific performance will not be decreed If It is not clear that the 636 SPEOIFIO PERPORMANOE OP CONTRACTS. minds of the parties have come together. Wlstar's Appeal, 80 Pa. 484. (2) Spect&c performance -will not be enfor- ced, directly or indirectly, unless the agree- ment is mutual, its terms certain, its enforce- ment practicable, and the complainant is without adequate redress in an action at law, (Blsp. Eq. § 377, and cases cited; 10 Wall. 339; 5 De Gex, M. & G. 888;) and it will not be enforced when it is doubtful whether an agreement has been concluded, (14 Pet. 77; 81 Pa. 484;) nor where the duties are continuous and require skill and judgment, (10 Wall. 339.) A court of chancery will not decree the specific performance of a contract, where it would be impossible for the court to enforce the execution of its decree, or where the literal performance, if enforced, would be a vain and idle act. Bisp. Eq. 436. (3) Even if the alleged contract is legal and binding on the defendant, the demurrer should be sustained, because the plaintiff has an adequate remedy at law. It may have to pay a higher salary to secure a player of Bennett's skill, and the difference would be the measure of damages for breach of con- tract. (4) Even if the court should be of the opin- ion that a contract was executed, full, final, and mutual as to all its terms, conditions, and stipulations, and also of opinion that negative covenants not to exercise a trade, profession, or calling within reasonable lim- its may be enforced by injunction, such con- clusion would have no application to enjoin and restrain the defendant. The contract is unreasonable and void on grounds of public policy, as in cases of covenants in restraint of trade, because it is unlimited. McClurg's Appeal, 58 Pa. 51; Gillis v. Hall, 2 Brewst 342; Catt v. Tourle, L. R. 4 Oh. App. 654. (5) The demurrer should be sustained be- cause equity will not indirectly enforce spe- cific performance of a' contract for personal services where the services require a succes- sion of acts whose performance cannot be accumulated by one transaction, but wiU be continuous and require the exercise of special knowledge, skill or judgment. Pom. Spec. Per. § 312; Ford v. Jermon, 6 Phila. 6; De Pol v. Sohlke, 7 Rob. (N. Y.) 280; Sanquiricio V. Benedetti, 1 Barb. 315; Kemble v. Kean, 6 Sim. 333; Hills v. CroU, 2 Phila. 60; Rolfe V. Rolfe, 15 Sim. 88; Fothergill v. Rowland, L. R. 17 Eq. 132; Kimberley v. Jennings, 6 Sim. 340. The personal acts with respect to which courts of equity entertain jurisdiction to decree specific performance have refer- ence to property of some kind. There is nona where a contract for personal services alone has been actively enforced. There are sev* eral, however, in which the court has inter- fered negatively. Thus, in the case of a the- ater, considered as a partnership, a contract with the proprietors not to write dramatic pieces for any other theater is valid, and a violation of it will be restrained by injunc- tion. Clark V. Price, 2 Wils. 157; Willard, Eq. 278. But where there is no partaership between the parties, and the defendant has violated his engagement to one theater and formed a conflicting engagement with anoth- er, a court of equity will not interfere either actively to compel performance of one con- tract, or negatively to prevent the perform- ance of the other. Willard, Eq. 278; Kem- ble V. Kean, 6 Sim. 333. The cases where injunctions have issued relate (1) to partner- ship agreements; (2) to property of some kind; (3) to express negative covenants. Willard, Eq. 277, 278. (6) If the court should be of opinion that the alleged contract is complete, mutual, cer- tain, and final, and that under it the plaintiff has no full, complete, and adequate remedy at law, the present bill will not lie for the following reasons: (1) It is prematurely brought. No injury to plaintiff (if any) can arise until the ball season of 1883 commen- ces. As the plaintiff will not be actively en- gaged under the alleged contract until the regular season of 1883 opens, no damage can result until that time from the act which it is sought to enjoin. (2) There is no right to, or necessity for, an injunction, for it cannot appear, at the present time, that defendant will play ball during the season of 1883^ in violation of said alleged contract. De Riv- aflnoli V. Corsetti, 4 Paige, 264; De Pol v. Sohlke, 7 Rob. (N. Y.) 283. If the injury be doubtful, eventual, or contingent, equity will not enjoin. Rhodes v. Dunbar, 57 Pa. 274; Huckenstein's Appeal, 70 Pa. 108. If the alleged injury Is only problematical, accord- ing as other circumstances may or may not arise, or if there is no pressing need for an Injunction, the court will not grant it until. a tort has actually been committed. Kerr, Injunc. 339. James Bakewell and J. S. Ferguson, contra. ACHESON, D. J. (orally). Demurrer sus- tained and bill dismissed. /^ SPECIFIO PERFORMANCE OF OONTRACJTS. 637 McGOWIN ▼. REMINGTON. (12 Pa. 56.) Supreme Court of Pennsylvania. Sept 20, 1849. Appeal from aistrlct court, Allegheny coun- ty, in equity. Ou the 6th Septembei-, 1847, Z. W. Reming- ton filed a bill in equity, setting forth that, prior to the grievances complained of, he had heen for many years a surveyor and regulator of the streets, lanes, and alleys of the city of Pittsburgh, and other places around said city, and as such had made many plana and plots of ground in said city and throughout said county, and maps of lands and grades of streets and roads, and drafts of surveys of plantations in other counties adjoining, and possessed certain furniture and instruments of surveying, which were of great value to him, a list of which is appended to this bill, and prayed to be made and taken as part thereof,— marked as "Exhibit A." That on or about Ist April, 1843, intending to engage in other occupations and to remove from Pittsburgh, where he had before resided and had his office for several years, and re- posing all confidence in the defendant, the defendant having been for several years un- der the complainant's tuition and under his service as a surveyor, the complainant, de- sirous and Intending to benefit defendant, who purposed to succeed and follow in the business pursued by the complainant, left in the care and custody of defendant, and for the mere purpose of promoting the interest and business of defendant, all his plots of survey and plans, drafts and property, as set forth in Exhibit A, besides other plots and drafts, which he cannot recollect, that defend- ant might refer to and use in his said busi- ness until they would be required by com- plainant, he, complainant, expecting some day to resume his old business of surveyor at Pittsburgh, in case he should not succeed in his new occupation. That complainant, after he had left the said plots, plans, drafts, and property with defendant, went to dwell in Beaver county, and left them in the office which complainant had occupied before and at his said departure from Pittsburgh, and the possession of which «aid office he gave up to defendant along with the said plots, plans, drafts, and ftimlture and instruments aforesaid, all which things are of real value to complainant, and very difficult and impossible to replace or procure, and no damages for which in a court of law ■could compensate. That complainant had used efforts since to procure his papers, furniture, and instru- ments, to no purpose, defendant refusing to deliver them up, and now threatening that he will destroy them rather than give them up to complainant. And complainant believes and is informed that the defendant is now engaged in copying many of said plots, plans, and drafts for his orwn use, and to be used by him as a surveyor in and about said city of Pittsburgh and ad- joining counties, to the great lojury of com- plainant; and complainant believes that de- fendant is disposed and is likely to injure, and fraudulently intends to destroy or secrete said plots, plans, drafts, and instruments, so that complainant may not recommence his business. That complainant returned to Pittsburgh In the spring of this year, and some time in July last went to defendant's office and demanded of defendant the return of his said plots, plans, drafts, and instruments, informing him that he had returned to Pittsburgh and open- ed an office, and resumed his business as a surveyor; defendant refused to deliver them to complainant, and said there were some of them he, defendant, could not get along with- out The bill then went on to propound Inter^ rogatories to the defendant touching the sev- eral allegations of fact before made, and prayed that McGowin be decreed to deliver up to the plaintiff the said plots, etc., and any copies thereof made since demand. The bill further prayed an injunction to restrain Mc- Gowin from copying, and from destroying, or injuring, or secreting said plots, etc., and a subpoena to answer. The exhibit, marked A, contained a detailed list of plots, drafts, fur- niture, instruments, etc., demanded. The subpoena issued forthwith, and Sep- tember 9, a bond having been filed, applica- tion was made for an Injunction, which was awarded and issued. 4th October rule to plead, answer or demur by first Monday in November. 29th October demurrer filed, which was overruled 22d December, and a second special injunction awarded. 3d Jan- uary, 1848, answer filed, and motion to dis- solve Injunction. The answer was to the following effect: It admitted that Remington was a surveyor, and as such had in bis possession plans, plots, maps, etc., such as were specified in the bill, with certain exceptions, particularized in a schedule of explanations; that he removed to Beaver, and that respondent occupied his office after he left The answer affirmed that the plans, etc., were greatly overrated in value, and have no such peculiar character- istics as to make them subjects of equity ju- risdiction, by reason of their unique and orig- inal description; that most, if not all of them, could be supplied or substituted from other offices, and from private individuals, and from the public records of the county and state, being generally copied, and mostly from papers unofficial and unauthenticated. It af- firmed that the plans, etc., belonged, some of them to the respondent, some to other persons, and denied the demand for them, etc. The complainant filed a replication, and took evidence of his having made the de- mand mentioned In his bill. On 13th Jan- uary, 1849, the cause having been heard on the bill, answer, exhibits, and proofs, and on 638 SPECIFIC PERFORMANCE OP CONTRACTS. argument of counsel, the court ordered and decreed that the clerk of the court do de- liver to the complainant the papers, maps, and plans, which have been placed by order of the court in his custody, and it is ordered and decreed further that the defendant de- liver unto Read Washington, Esq., one of the masters in chancery, all the plots, plans, drafts, furniture, and instruments, left in de- fendant's possession as set forth in the bill of complainant, and v^hich are not now in the possession of the clerk of this court, and also of any copies thereof which may have been made by respondent since the day of the de^ mand thereof stated in the bill, and that the master have power, and Is hereby required to ascertain by interrogatories to be exhibited in writing to defendant, whether there are any of the said plans, maps, plots, drafts, furni- ture, or instruments disclosed in said bill in his possession undelivered, and that the mas- ter require defendant to answer thereto upon oath, and to inquire upon interrogatories of defendant, to be administered to him under oath, what copies of or copying from said pa- pers he may have made, and whether the same have been delivered up; and that said master make report (if required by further order) to this court thereof. And further ordered that the injunction heretofore issued be continued and made per- petual, and that the said master deliver to the complainant the said plans, plots, drafts, furniture, and instruments which may be placed in his hands by virtue of this decree. And further ordered that the costs and fees in this suit be taxed by the clerk, and that the bill thereof be immediately paid by the defendant into court On 20th January, 1849, defendant appealed from this decree, and 20th June following de- cree was made for a specific delivery, for re- fusing obedience to which a rule for attach- ment was taken, and on 4th September re- spondent appealed. In this court these ex- ceptions were taken: (1) Want of jurisdiction over subject-mat- ter of the bill. (2) The bill presents no sufficient ground for the Interference of a court of equity in Pennsylvania. (3) The courts of law have adequate rem- edies. (4) The decree covers some descriptions of property which are not the subject of equity Jurisdiction under any state of facts. Craft & McGandless, for appellant. Mr. Dunlop, for appellee. BELL, J. The defendant having failed to sustain, by proof, his allegation of sale or gift of the articles sought to be recovered by this bill, the contest in this court is re- duced to two questions: First, whether the bill presents sufficient grounds to warrant the interference of a court of equity, in this state, under the statute conferring equitable jurisdiction? Secondly, whether that portloD of the decree which covers the surveying instruments and furniture described in the exhibits annexed to the bill can be sustained? As to the first point, the defendant insists that the only remedy is at law. Though the action of replevin is, with us, a broader remedy than in England, lying in all cases where one man improperly detains the goods of another, it is in no instance effective to enforce a specific return of chattels, since a claim of property and bond given is always sufficient to defeat reclamation, no matter what may be the eventual issue of the con- test. As, therefore, our common-law tri- bunals are as powerless for such a purpose, as the similar BngUsh courts, the propriety of exerting the equitable jurisdiction now invoked must depend with us on the same reasons that are deemed sufficient to call it into action there. Here, as there, the in- quiry must be whether the law affords ade- quate redress by a compensation in damages, where the complaint is of the detention of personal chattels. If not, the aid of a court of chancery will always be extended to rem- edy the injury, by decreeing a return of the thing itself. The precise ground of this jurisdiction is said to be the same as that upon which the specific performance of an agreement is en- forced, namely, that fruition of the thing, the subject of the agreement, is the object, the failure of which would be but iUy sup- plied by an award of damages. Lowther v. Lowther, 13 Ves. 389. In the application of this rule some difficulty has been experi- enced. The examples afforded by the Eng- lish books are usually those cases, where, from the nature of the thing sought after, its antiquity, or because of some peculiarity connected with it, it cannot easily, or at all, be replaced. Of these may be instanced the title deeds of an estate and other muniments of property, — valuable paintings (Lowther v, Lowther, supra); an antique silver altar piece (Duke of Somerset v. Cookson, 3 P. Wms. 389); an ancient horn, the symbol of tenure, by which an estate is held (Pusey V. Pusey, 1 Ves. 273); heirlooms (3 Ves. & B. 18); and even a finely carved cherry- stone (Amb. 77). Such articles as these are commonly esteemed not altogether, or per- haps at all, for their intrinsic value, but as being objects of attachment or ciu-iosity, and, therefore, not to be measured in damages by a jury, who cannot enter into the feel- ings of the owner. So too the impossibility, or even great difficulty, of supplying their loss, may put damages out of the question as a medium' of redress. But these are not the exclusive reasons why chancery inter- feres, for there may be cases in which the thing sought to be recovered is susceptible of reproduction or substitution, and yet where damages could not be so estimated as to cover present loss or compensate its future consequent inconvenience. And I take it SPECIFIC PERFORMANCE OF CONTRACTS. 639 this Is always so, ■where, from the nature of the subject or the immediate object of the parties, no convenient measure of damages can be ascertained; or, where nothing could answer the justice of the case but the per- formance of a contract in specie. Of this Buxton V. Lister, 3 Atk. 384, furnishes an example in the analogous instance of a con- tract for the sale of personalty,— contracts, which are most commonly left to be dealt with at law. It was a bill to enforce the performance of an agreement for the pur- chase of several large parcels of growing wood, to be severed by the defendants, who were to have eight years to dispose of it, and to pay for it in six yearly installments. Lord Hardwicke was, at first, extremely re- luctant to entertain the bill, but after dis- cussion came to the conclusion that, though relating to a personal chattel, it was such an agreement that the plaintiff might come into chancery for a specific performance. He insta/iced the case of Taylor v. Neville, which was a bill for the performance of ar- ticles for the sale of eight hundred tons of iron, to be paid for in a certain number of years, by installments, where the decree prayed for was made; and proceeded to observe: "Such sort of contracts as these dif- fer from those that are immediately to be executed- There are several circumstances which may concur. A man may contract for the purchase of a great quantity of tim- ber, as a ship carpenter, by reason of the vicinity of the timber; and this is on the part of the buyer. On the part of the seller, suppose a man wants to clear his land in order to turn it to a particular sort of hus- bandry; there nothing can answer the jus- tice of the case but the performance of the contract in specie." Similar in principle is the case of Falls v. Eeid, 13 Ves. 70, where the plaintiffs prayed the restoration of an engraved silver snuffbox, used for many years by a society, as the symbol of their association; and Nutbrown v. Thomson, where a tenant brought a bill against his lessor, who, under the pretense of the ten- ant's covenant, had repossessed himself of the land, and seized upon the stock of cattle, which by the lease the tenant was to enjoy for seven years. The objection was that the tenant's remedy, if he was entitled to one at all, was at law, in damages. But how, asked Lord Eldon, are damages to be esti- mated in such a case? The direction to a jury must be to give, not the value of the chattels, but their value to the tenant! A f similar question may well be propounded in our case. By what standard would you y measure the injury the plaintiff may sustain in future from being deprived, even for a brief period, of the use of papers essential to the prosecution of his business? Their intrinsic value might, perhaps, be ascertained by an estimate of the labor necessary to theip reproduction, admitting the means to be at hand, and within the power of tbe plaintiff. But how could a tribunal ascer- tain the probable loss which, in the mean- time, might be sustained? The present pe- cuniary Injury might be little or nothing, and so possibly of the future; or it might be very great, depending upon the unascer- talnable events of coming time, as these may be influenced by the misconduct of the de- fendant. T hese conside ra tions sh ow, I think, the case ig^ot one tof^am agp^] Besides, as many of the maps, plans, surveys, and ( calculations are said to be copies of private j papers, we are by no means satisfied they/ could be replaced at all. Certainly not with- ) out permission of the owners; a risk to which the plaintiff ought not unnecessarily to be exposed. If to these reflections we add the fact that some of these documents are the originalv work of the plaintiff, of value as being -predicated upon data possibly no longer accessible, a wrong is perpetrated i which a chancellor ought not to hesitate in ( relieving. It is enough for this purpose that alierfect relief at law is not apparent The thing to be guarded against is, not the in- vasion of the defendant's rights, for he stands here absolutely without any, except the common interest every citizen has in preserving the proper line of distinction that divides the jurisdiction and limits the pow- ers of the several courts. What is to be avoided is an unnecessary trespass upon the province of the common-law tribunals, and this is to be tested by the simple query whether they offer a full remedy for the wrong complained of? But there is another ground upon which this proceeding may be sustained. In Falls V. Reid, the snuffbox was deposited with the defendant, as a member of the society, upon certain terms, to be redelivered upon the happening of certain events. Lord Rosslyn held that under these facts, the defendant was a depositary on an express trust which, upon a common ground of equity, gave the plaintiff title to sue in that court; and in this he was supported by Lord Eldon, in the subsequent case of Nutbrown v. Thornton. According to the proof in our case, the pa- pers and documents claimed were left with the defendant under the express understand- ing that they were to be redelivered when- ever the plaintiff should see fit to resume the business of his then profession in this city. It is then the case of direct confidence I ^fj^_ violated,— a spell sufficiently potent to callj •^^^ into vigorous activity the authority Invoked.* As to the second question, it is perhaps enough to say that, when once a court of equity takes cognizance of a litigation, it will dispose of every subject embraced with- in the circle of contest, whether the question be of remedy or of distinct yet connected topics of dispute. If the jurisdiction once attaches from the nature of one of the sub- jects of contest, it may embrace all of them, for equity abhors multiplicity of suits. Thus, in the case last cited, the chancellor ruled 640 SPECIFIC PERFORMANCE OF CONTRACTS. that where a person Is found wrongfully in possession of a farm, over which the court had undoubted power, and also in pos- session of the stock upon it, at the same time and under the effect of the same wrong, the court will undoubtedly make him account for and deliver back the whole. In the case t at bar the surveying InBtruments and officey furniture stand In the same category with \ the maps, drafts, etc., were delivered to thej defendant at the same time, and are with- held by an exertion of the same wrong. In short, tJiey enter into and make part of the same transaction, and may, therefore, be the objects of the same measure of redress. Decree affirmed. Cc^^A^t^M,^— « SPECIFIO PERFORMANCE OF CONTRACTS. 641 rBOSPBOT PARK & C. I. R. CO. v. CONEY ISLAND & B. R. CO. (39 N. E. 17, 144 N. Y. 152.) Court of Appeals of New York. Dec. 11, 1894. Appeal from supreme court, general term. Second department Action by the Prospect Park & Coney Is- land Railroad Company against the Coney Ifil&nd & Brooklyn Railroad Company for specific performance. From a Judgment of the general term (21 N. Y. Supp. 1046) re- versing a judgment for plaintiftf, It appeals. Reversed. George W. Wlngate, for appellant Wil- liam N. Dykman, for respondent BARTLETT, J. The parties to this action entered into a contract June 1, 1882. and thp plaintifF seeks to compel Its specific perform- ance. The special term rendered judgment f«r plain ti£F; the general term seversed the judgment; and the plaintifiF comes here un- der the usual stipnlation In ease of affirm- ance. The reversal was for error both of law and fact, and, the failure to Insert a certificate that the case contains all the evi- dence having been cured by the amendment of the return by the supreme court, we are called upon to review the facts as well as the law. At the time of making the contract, the plaintiff owned a steam surface railroad, usually known as "Culver's Coney Island Railroad," which extended from Coney Is- land to a depot at the comer of Ninth ave- nue and Twentieth street, in the city of Brooklyn, and adjoining Greenwood Cem- etery; the plaintiff also owned certain horse- car railroads, which were entirely distinct from the steam railroad, extending from the depot to Pulton ferry; the plaintift also owned a charter entitling it to construct a herse-car line from the depot to Hamilton Ferry and other points. The defendant, at the time of executing the contract, was op- erating certain horse-car lines which ran from Hamilton, Fulton, and other ferries, and from the East River bridge, to Ninth street and Ninth avenue, and through Ninth avenue to Fifteenth street, on Fifteenth street to Coney Island avenue, and thence to Coney Island. These lines wa-e operated whoUy by horses. By the contract the plain- tiff granted the defendant the right to use its tracks on Ninth avenue from Fifteenth street to the d^>ot at Ninth avenue and Twentieth street, free of charge, for 21 years from Jime 1, 1882. The defendant covenant-| ed to run during the spring, summer, and fall months, to plaintiff's depot, cars to con- nect with the furies and all plalntifTs trains to and from Coney Island. The plaintiff agreed to furnish defendant necessary ter- minal facilities at the depot This contract was obviously advantageous to both parties. H.& B.EQ.(2d Ed.)-41 The plaintiff secured passengers to Coney Island from defendant's lines, and the de- fendant greatly increased its travel by hav- ing a direct connection with steam transit to Coney Island. The defendant's horse-car line to Coney Island could not successfully ^compete with plaintiff's steam route. The plaintiff provided defendant with the neces- sary terminal facilities as required, and the contract was acted upon by both parties ua- tU the month of October, 1889. At that time there was a change in defendant's manage- ment, and the company contracted for an electrical equipment from the Parade Ground to Coney Island, commonly known as the "Trolley System." The plaintiff, In May, 1800, finding that defendant was not running cars to the depot as required by the contract, requested performance, and was advised that the defendant was under no obligations to run the cars, and did not intend to do it' This action was commenced the following October. It is insisted by the defendant that tbi adoption of the trolley system is, in contemj plation of law, a use of steam, under th( clause in the contract .which provides thai if the defendant shall use steam as a motive power between Ninth avenue and Fifteenth street, in the city of Brooklyn and Coney Island, either party can terminate the con- tract on six months' notice, and that the cor- respondence and answer in this case are equivalent to notice, and the contract no longer exists. We agree with the special I term that the electrical system adopted by I the defendant cannot be regarded as the use | of steam as a motive power. Hudson River/ Tel. Co. V. Watervliet Turnpike & Ry. Co.,' 135 N. Y. 393, 402, 32 N. E. 148. It would be In disregard of the natural and obvious mean- ing of language to hold otherwise. We can- not agree with the general term that the use of the words "steam as a motive power" was only another form of referring to rapid tran- sit, by whatever means accomplished. To so hold would be to make a new contract for the parties. The defendant Insists, further, that by rea- son of certain acts ' of plaintiff, and by changes in the surrounding circumstances, it would be inequitable and tmjust to enforce a specific performance of the contract This leads us to consider some additional facta disclosed by the record. On the 9th of December, 1885, plaintiff \ leased to the Atlantic Avenue RaUroad Com- / pany all its franchises to eonstruct and oper-f ate horse-car railroads in the city of Brook- lyn, and on May 27, 1887, In pursuance of chapter 282 of the Laws of 1886, conveyed said rights and interests absolutely. The | l)ease and conveyance were made expressly j subject to tbe contract in question, and re- served all the defendant's rights th^eunder. They also required the Atlantic Avenue Rail- road Company to operate the Vanderbilt Ave- nue Railroad Company as had been prevt 642 SPECIFIC PERFORMANCE OF CONTRACTS. ously done by the plaintiff. The defendant made no objection to this transfer until after its refusal to perform the contract Defend- ant urges that it was greatly damaged by the fact that the Atlantic Avenue Railroad Company had completed, under the franchise obtained from plaintiff, a horse-car line to the Hamilton ferry. We are unable to per- ceive how defendant has suffered any dam- age, in view of the fact that it purchased with full knowledge of plaintiff's franchise, and its desire to dispose of the same. It appears by the uncontradicted evidence that defendant sought to purchase of plaintiff this franchise to complete a route to the Hamilton ferry either just before or about the time the contract was executed. The defendant further contends that the plaintiff, under a proper construction of the contract, was not at liberty to sell out its street-car interests, although not restrained by any positive provision. This contention is based mainly on the alleged fact that the Atlantic Avenue Railroad Company is an active rival of defendant, and did not have the same motive to deal fairly with defend- ant that plaintiff had while seeking to build up its Coney Island business. The principal complaint against the Atlantic Avenue Rail- road Company Is based upon the manner in which it performed the contract in regard to defendant's terminal facilities at the depot, corner Ninth avenue and Twentieth street. The evidence does not satisfy us that there was any persistent effort to delay the cars of defendant at that point, or to prevent pas- sengers from the steam road selecting from the cars in waiting the one in which to ride, without undue interference. .We think tha - . contract wa^ ^bstantially ^ perj n'^^^'qfl hY ^^lainGyandL^_gran^_ta|^^SS|to_tgEginal faciiffies of deferiiiant,"aSd', even if this wer^^ nottfce case, the defendant 'couinEr?S"^com- peUed the observance of its contract rights in every particular by resort to the court J r^he fact already referred to, that defendant j continued to act tmder the contract for more / than four years after this lease to the At- / lantic Avenue Railroad Company, without I objection, must be taken very strongly L against it in a court of equity. It seems to us very clear that when the management of defendant was changed In October, 1889, and the road from the Parade Ground to Coney Island was operated by electricity, it at once became an active and successful rival of the plaintiff In securing passengers to and from Coney Island, and had every motive to rid itself of the conti-act, if it could be legally done. We agree with the learned trial judge that while it is impossible, under the statie of the proofs, to determine to what extent plaintiff has been damaged by defendant's adoption of the trolley system, yet it is clear that it has suffered considerable loss. It ia, of course, entirely legitimate for defendant to secure to itself whatever share of the Coney Island travel it can by the exercise of ■] proper business methods, but we are unable to perceive any reason, unuer the proofs as presented, why defendant should be released from the obligations of a contract entered into in good faith by both parties, and that has been practically construed by years of performance. It may very well be that, un- \ der a contract having 21 years to run, chere may be such a change of conditions as wiU affect unfavorably the one party or the other; but this offers no reason for refus- ing specific performance, unless subsequent events have made iperforraance by the de- fendant so onerous that the enforcement would impose great hardship and cause little or no benefit to the plaintiff. Trustees v, Thacher, 87 N. Y. 316, 317; Murdfeldt v. Railroad Co., 102 N. Y. 703, 7 N. B. 404. In the case at bar the plaintiff, we think, would be benefited by defendant running the trans- fer car In Ninth avenue from Fifteenth street to its depot at Twentieth street. On the other hand, it may be assumed that the de- fendant, by cheaper fare, and its ability to carry passengers to Con^ Island without transfer, will be able to secure its full share of the passengers to and from the seashore. The result of compelling the specific per- formance of this contract will be to afford the general public an opportunity, when traveling over the line of defendant from the ferries, to make cliolce of the route they will take to Coney Island when arriving at Ninth avenue and Fifteenth street WhUe It may be somewhat to the disadvantage of defendant to perform Its contract, under the present circvunstances, when active competi- tion exists between plaintiff and defendant, yet that fact presents no legal reason for dis- charging it from the obligations of its con- tract As a final point, the learned counsel for the defendant insists that equity will not enforce the specific performance of a con- tract having some years to run, which re- quires the exercise of skill and judgment, and_ a conJapuous series of a cts. Whil e there^ Is some co^ic^'ln'thV ^esj" and all are_nofe tiTBe reconciled, yet the great woi^jl ^t of rii- 3^prTyper mits specific performance in ffie case'tlt bilf. " "The special term enjoinea the "tielKJlluant from operating any of its cars un- less It performs its contract with, the plain- tiff. The provisions of this contract are neither complicated nor difficult, and are such as a court of equity can enforce, in its discretion. A few of the cases may be re- ferred to, as illustrating the power vested in a court of equity to compel the specific performance of contracts similar to the one at bar. In Storer v. Railroad Co., 2 Younge & C. N. R. 48, the court compelled the de- fendant to construct and forever maintain an archway and its approaches. The court said there was no difficulty in enforcing such a decree. In Wilson v. Railway Co., I* R- 9 Eq. 28, the defendant was compelled to erect and maintain a wharf. See, also. SPECIFIC PERFORMANCE OF CONTRACTS. 643 Greene t. Railroad Co., L. R. 13 Eq. 44. In Wolverhampton & W. R. R. v. Loudon & N, W. R. R., L. E. 16 Eq. 433, the agreement between the two companies was that the defendant should work the pl.iintifC's line, and, during the continuance of the agree- ment, develop and accommodate the local and through trade thereof, and carry over It certain specific traffic. The bill was filed to restrain the defendant from carrying a por- tion of the traffic which ought to have pass- ed over the plaintiff's line by other lines of the defendant The point was made that the court could not undertake to enforce specific performance, because It would require a series of orders and a general superintend- ence to enforce the performance, which could not conveniently be administered by a court of justice. The injunction issued, and Lord Selborne said (page 438): "With regard to the argument that, upon the principles ap- ylicable to specific performance, no relief can be granted, I cannot help observing that" there is some fallacy and ambiguity in the way in which. In cases of this character, those words 'specific performance' are used. * • * The common expression, as applied to suits known by that name, presupposes an executory, as distinct from an executed, agreement • • » Confusion has some- times arisen from transferring considera- tions applicable to suits for specific perform- ance, properly so called, to questions as to the propriety of the court requiring sorhe- thing or other to be done in specie. » • • Ordinary agreements for work and labor to be performed, hiring and service, and things of that sort, out of which most of the cases have arisen, are not, in the proper sense of the word, cases for 'specific performance'; in other words, the nature of the contract is not one which requirea the performance of some definite act, such as the court Is In the habit of requiring to be performed by way of administering superior justice, rather than to leave the parties to their remedies at law. ♦ • • The question is whether, the defend- ants being in possession, they are not at lib- erty to depart from the terms on which it was stipulated that they should have that possession." The American cases are equally clear. In Lavn-ence v. Railway Co., 36 Hun, 467, the defendant was, among other things, to erect a depot at which all trains were to stop. Specific performance was de- creed; the court holUiug that although, under, the afrrcomL-nt, the defendant could not be \ compelled to run trains upon its road, yet it \ might properly be enjoined from running any 1 regular trains which did not stop at the sta- I tion. The objection that the judgment In ' this case Involves continuous acts, and the constant supervision of the com-t. Is well m'_'t by the reasoning in Central Trust Co. v. Wabash, St Louis & P. Ry. Co., 29 Fed. 546, being affirmed as Joy v. St Louis, 138 U. S. 1, 47, 50, 11 Sup. Ct. 243, where Judge BlatchPord wrote the opinion. As to in- convenience, or circumstances which affect the interest of one pai-ty alone, constituting a reason why performance should not be de- creed, the case of Marble Co. v. Ripley, 10 Wall. 339, 358, furnishes a clear discussion of the general principles Involved. J he pile. is that .acdnS'act_js_to_ bg judged as of the ^ ~ttffie _s£^EK|hlt was entered^ into, and, ir fair when ma.,de, "the fact thaifltTiai^become a hard one by the force of BUbsequenf ciT;^ cumstances orlchangilig'events will not neces- sarily prevent its speciijs^eji&rmaxice. See, also, Stuart V. Railway Co., 15 Beav. 513; Mortimer v. Capper, 1 Brown, Ch. 156; Jack- son V. Lever, 3 Brown, Ch. 605; Paine t. Meller, 6 Ves. 349; Paine v. Hutchinson, L. R. 3 Eq. 257; Telegraph Co. v. Harrison, 145 U. S. 459, 472, 473, 12 Sup. Ct 900. A large number of other cases might be cited, sus- taining the power of the court to decree the specific performance of this contract, but we do not deem It necessary. There can be no well-founded doubt as to the power of the court In the premises, and the important question is whether, in the exercise of a wise discretion, and in view of all the circum- stances, specific performance should be de- creed. After a most careful consideration of this case, we hav e reached the conclusion that thp plai'ntilT isTftntitlprl tn hay«Jj]P ''""- ^^ct.","^^1S^W^ jgr^FmB3r ''"MLe order of "1Ee~generair^^mis"reversed, and the judg- ment of the special term Is affirmed, with costs in all the courts. All concur, except ANDREWS, C. J., who dissents on the ground that plaintiff, having established a rapid- transit road, although the propulsion is by electricity, has met the condition of the con- tract which entitied it to terminate such con- tract, or at least has pla-ced itself in such a position that a court of equity will not en- force si>ecific performance. Ordered accord- ingly. A ,/\yL^ J,-rv^--v'^ t-flrvw-f t-C i^-^^f^ -^ /V>>-*.-A.rt, fe4l-W^ 644 SPECIFIC PERFORMANCE OF CONTRACTS. WILLARD T. TAYLOE. (8 Wall. 557.) Supreme Court of the United States. Dec, 1869. Appeal from the supreme court of the Dis- trict of Columbia. This was a suit in equity for the specific performance of a contract for the sale of certain real property situated in the city of Washington, in the District of Columbia, and adjoining the hotel owned by the complain- ant, Willard, and known as Willard's Hotel. The facts out of which the case arose were as follows: In April, 1854, the defendant leased to the complainant the property in question, which was generally known in Washington as "The Mansion House," for the period of ten years from the 1st of May following, at the yearly rent of twelve hundred dollars. The lease contained a covenant that the lessee should have the right or option of purchasing the premises, with the buildings and improve- ments thereon, at any time before the ex- piration of the lease, for the sum of twenty- two thousand and five hundred dollars, pay- able as follows: two thousand dollars in cash, and two thousand dollars, together with the interest on all the deferred instal- ments, each year thereafter until the whole was paid; the deferred payments to be se- cured by a deed of trust on the property, and the vendor to execute to the purchaser a warranty deed of the premises, subject to a yearly ground-rent of three hundred and ninety dollars. At the time of this lease gold and silver, or bank bills convertible on demand into It, , were the ordinary money of the country, and I the standard of values. In 1861 the rebel- lion broke out, lasting till 1865. In the inter- val, owing to the infiux of people, property In the metropolis used for hotels greatly In- creased in value, and as was alleged by Tay- loe, who produced what he deemed a record to show the fact, the complainant, Willard, assigned an undivided half of the property which had been leased to him as above-men- tioned to a brother of his. In December, 1861, the banks throughout the country sus- pended payments in specie, and In 1862 and 1863, the federal government issued some hundred millions of notes, to be used as money, and which congress declared should be a tender in the payment of debts. Coin soon ceased to circulate generally, and peo- ple used, In a great degree, the notes of the government to pay what they owed. On the 15th of April, 1864, two weeks be- fore the expiration of the period allowed the complainant for his election to purchase — the property having greatly increased In value since 1854, the year In which the lease was made— the complainant addressed a let- ter to the defendant, inclosing a check, pay- able to his order, on the Bank of America, In New York, for two thousand dollars, as the amount due on the 1st of May following on the purchase of the property, with a blank receipt for the money, and requesting the defendant to sign and return the receipt, and stating that If it were agreeable to the defendant he would have the deed of the property, and the trust deed to be executed by himself, prepared between that date and the 1st of May. To this letter the defendant, on the same day, replied that he had no time then to look Into the business, and returned the check, expressing a wish to see the com- plainant for explanations before closing the matter. On the following morning the complainant called on the defendant and Informed him that he had two thousand dollars to make the first payment for the property, and ofEet, ed the money to him. The money thus of- fered consisted of notes of the United States, made by act of congress a legal tender for debts. These the defendant refused to ac-, cept, stating that he understood the pur- chase-money was to be paid In gold, and that gold he would accept, but not the notes, and give the receipt desired. It was admit- ted that these notes were at the time greatly depreciated In the market below their nominsd value.i On repeated occasions subsequently the complainant sent the same amount— two thousand dollars— in these United States notes to the defendant In payment of the cash instalment on the purchase, and as oft- en were they refused by him. On one of these occasions a draft of the deed of con- veyance to be executed by the defendant, and a draft of the trust deed to be executed by the complainant, were sent for examina- tion, with the money. This last was prepared for execution by the complainant alone, and contained a pro- vision that he might, If he should elect to do so, pay off the deferred payments at earlier dates than those mentioned In the lease. These deeds were returned by the defend- ant, accompanied with a letter expressing dissatisfaction at the manner In which he was Induced to sign the lease with the clause for the sale of the premises, but stating that as he had signed it he "should have carried the matter out" If the complainant had prof- fered the amount which he knew he had of- fered for the property, meaning by this state- ment, as the court understood it, if he had proffered the amount stipulated In gold. No objection was made to the form of either of the deeds. Soon afterwards the defendant left the city of Washington, with the intention of being absent until after the 1st of May. On the 29th of April the complainant, find- ing that the defendant had left the city, and perceiving that the purchase was not about to be completed within the period prescribed 1 Between the 15th of April and May 1st, 1864, one dollar in gold was worth from one dollar and seventy-three cents to one dollar and eighty cents in United States notes. SPBOIFIO PERFORMAI^OE OF CONTRACTS. 645 by the covenant in the lease, and apprehen- sive that unless legal proceedings were taken by him to enforce its execution his rights thereunder might be lost, instituted the pres- ent suit In the bill he set forth the covenant giving him the right or option to purchase the prem- ises; his election to purchase; the notice to the defendant; the repeated efforts made by him to obtain a deed of the property; his of- fer to pay the amount required as the first instalment of the purchase-money in United States notes, and to execute the trust deed stipulated to secure the defeixed payments, and the refusal of the defendant to receive the United States notes and to execute to him a deed of the premises. It also set forth the departure of the defendant from the city of Washington, and his intended absence beyond the 1st of May following, and al- leged that the appeal was made to the equi- table interposition of the court, lest on the return of the defendant he might refuse to allow the complainant to complete the pur- chase, and urge as a reason that the time within which it was to be made had passed. The bill concluded with a prayer that the court decree a specific performance of the agreement by the defendant, and the execu- tion of a deed of the premises to the com- plainant; the latter offering to perform the agreement on his part according to its true intent and meaning. The bill also stated some facts, which it is unnecessary to detail, tending to show that the acquisition of the property in question was of especial importance to the complain- ant. The answer set up that the complainant, even on his own showing, had no case; that there was no proper tender; that even if the complainant once had a right to file a bill in his sole right — the way In which the pres- ent bill was filed— he had lost this right by the transfer of the half to his brother; that the complainant had not demanded an exe- cution even of the contract which he himself set forth, but by the drafts of the trust deed sent to Tayloe, and which was the trust deed of which he contemplated the execution, he proposed to pay, at his own option, the whole purchase-money before the expiration of the ten years, and thus would interfere with the duration of that security and investment in the identical property leased, which had been originally contemplated and provided for; thus subjecting the defendant to risk and expense in making a new investment. The answer concluded with an allegation, that "by the great national acts and events which had occurred when the complainant filed his biU, and which were still influencing all values and Interests in the country, such a state of things had arisen and now existed, as according to equity and good conscience ought to prevent a decree for specific per- formance in this case, upon a demand made on the last day of a term of ten years, even if in strict law (which was denied) the com- plainant was entitled to make such demand." Both Tayloe and Willard were examined as witnesses. The former testified, that when the lease was executed he objected to a stipulation for a sale of the premises, and that Willard said it should go for nothing. Willard swore that he had said no such thing. The court below dismissed the bill, and Willard took the present appeal. Curtis, Poland & Howe, for appellant. Cox & McPherson, contra. Mr. Justice FIELD, after stating the facts of the case, delivered the opinion of the court. The covenant In the lease giving the right or option to purchase the premises was in the nature of a continuing offer to sell. It was a proposition extending through the period of ten years, and being under seal must be regarded as made upon a sufficient consideration, and, therefore, one from which the defendant was not at liberty to recede. When accepted by the complainant by his notice to the defendant, a contract of sale between the parties was completed. Rail- road Co. V. Bartlett, 3 Cush. 224; Welchman V. Spinks, 5 Law T. (N. S.) 385; Warner v. Willington, 3 Drew. 523; Railroad v. Evans, 6 Gray, 25. This contract is plain and cer- tain in Its terms, and In its nature and in the circumstances attending its execution ap- pears to be free from objection. The price stipulated for the property was a fair one. At the time its market value was under fif- teen thousand dollars, and a greater increase than one-half in value during the period of ten years could not then have been reason- ably anticipated. When a contract is of this character It is( the usual practice of courts of equity to en- force its specific execution upon the applica-/ tion of the party who has complied with ltd stipulations on his part, or has seasonable and in good faith offered, and continue^ ready to comply with them. But it is not' the invariable practice. This form af re- lief I s not a^ matter of a5solute_right_ to jeitneirBftJli; ft is a" rnaFter resting in the discretion of the court, to be exercised upon a consideration of all the circumstances of each particular case. The jurisdiction, said Lord Brskine (12 Ves. 332), "is not compul- sory upon the court, but the subject of dis- cretion. The question Is not what the court must do, but what It may do. under [the] circumstances, either exercising the jurisdic- tion by granting the specific performance or abstaining from It." And long previous to him Lord Hardwicke and other eminent equity judges of England had, in a great variety of cases, asserted the same discretionary power of the court. In .loynes v. Statham, 3 Atk. 388, Lord Hard- wicke said: "The constant doctrine of this G46 SPECIFIC PERFORMANCE OP CONTRACTS. court is, that it Is in their discretion, wheth- er in such a bill they will decree a specific performance or leave the plaintiff to his rem- edy at law." And in Underwood t. Hitcb- cox, 1 Vas. Sr. 270, the same great judge said, in refusing to enforce a contract: "The rule of equity in carrying agreements into spe- cific performance is well known, and the court is not obliged to decree every agree- ment entered into, though for valuable con- sideration, in strictness of law, it depending on the circumstances." Later jurists, both in England and in the United States, have reiterated the same doc- trine. Chancellor Kent, in Seymour v. De- lancy, 6 Johns. Ch. 222, upon an extended review of the authorities on the subject, de- mares it to be a settled principle that a spe- ll cifie performance of a contract of sale is not / a matter of course, but rests entirely in the U discretion of the court upon a view of all Ithe circumstances; and Chancellor Bates, of ^^elaware, in Godwin v. Collins, i-ecently de- cided, upon a very full consideration of the adjudged cases, says, that a patient exam- ination of the whole course of decisions on this subject has left with him "no doubt that, as a matter of judicial history, such a discretion has always been exercised in administering this branch of equity jurisprudence." It is true the cases cited, in which the discre- tion of the court is asserted, arose upon con- tracts in which there existed some inequality or unfairness in the terms.by reason of which injustice would have followed a specific per- formance. But the same discretion is exer- cised where the contract is fair in its terms, if its enforcement, from subsequent events, or even from collateral circumstances, would work hardship or injustice to either of the parties. In the case of City of London v. Nash, 1 Ves. Sr. 12, the defendant, a lessee, had covenanted to rebuild some houses, but, in- stead of doing this, he rebuilt only two of them, and repaired the others. On a bill by the city for a specific performance Lord Hardwicke held that the covenant was one which the court could specifically enforce; but said, "The most material objection for the defendant, and which has weight with me, is that the court is not obliged to decree a specific performance, and will not when it would be a hardship, as it would be here upon the defendant to oblige him, after hav- ing very largely repaired the houses, to pull them down and rebuild them." In Paine v. Brown (cited in Ramsden v. Hylton, 2 Ves. Sr. 306) similar hardship, flowing from the specific execution of a contract, was made the ground for refusing the decree prayed. In that case the defendant was the owner of a small estate, devised to him on condition that if he sold it within twenty-five years one-half of the purchase-money should go to his brother. Having contracted to sell the property, and refusing to carry out the con- tract under the pretence that he was intoxi- cated at the time, a bill was filed to enforce its specific execution, but Lord Hardwicke is reported to have said that, without regard to the other circumstance, the hardship alone of losing half the purchase-money, it the contract was carried into execution, was sufficient to determine the discretion of the court not to interfere, but to leave the par- ties to the law. The discretion which may be exercised iii| this class of cases is not an arbitrary or| capricious one, depending upon the mere! pleasure of the court, but one which is con-| trolled by the established doctrines and set:\ tied principles of equity. No positive rule ' can be laid down by which the action o( the court can be determined in all cases. In general it may be said that the specific relief will be granted when it is apparent, from a view of all the circumstances of the particu- lar case, that it will subserve the ends of justice; and that it will be withheld when, from a like view, it appears that it will pro- duce hardship or injustice to either of the parties. It is not sufficient, as shown by tlie cases cited, to call forth the equitable inter- position of the court, that the legal obliga- tion under the contract to do the specific thing desired may be perfect. It must also / appear that the specific enforcement will work no hardship or injustice, for if that result would follow, the court will leave the parties to their remedies at law, unless the granting of the specific relief can be accom- panied with conditions which will obviate that result. If that result can be thus ob- viated, a specific performance will generally in such cases be decreed conditionally. It is the advantage of a court of equity, as ob- served by Lord Redesdale in Davis v. Hone, 2 Schoales & L. 348, that it can modify the demands of parties according to justice, and where, as in that case, it would be inequi- table, from a change of circumstances, to en- force a contract specifically, it may refuse its decree unless the party will consent to a conscientious modification of the contract, or, what would generally amount to the same thing, take a decree upon condition of doing or relinquishing certain things to the other party. In the present case objection is taken to the action of the complainant in offering, in payment of the first instalment stipulated, notes of the United States. It was insisted by the defendant at the time, and it is con- tended by his counsel now, that the covenant in the lease required payment for the prop- erty to be made in gold . The covenant does not in ternlSTpecify gold as the currency in which payment is to be made; but gold, it is said, must have been in the contemplation of the parties, as no other currency, except for small amounts, which coiild be discharged in silver, was at the time recognized by law as a legal tender for private debts. Although the contract in this case was not completed until the proposition of the de- SPECIFIC PERFORMANCE OF CONTRACTS. 647 fendant was accepted in April, 1864, after the passage of the act of congress making notes of the United States a legal tender for private debts, yet as the proposition contain- ing the terms of the contract was previously made, the contract Itself must be construed as if it had been then concluded to take effect suljsequently. It is not our intention to express any opin- ion upon the constitutionality of the provi- sion of the act of congress, which makes the notes of the United States a legal tender for private debts, nor whether, if constitu- tional, the provision is to be limited in its ap- plication to contracts, made subsequent to the passage of the act. See Hepburn v. Oriswold, 8 Wall. 603. These questions are the subject of special coDisideration in other •cases, and their solution is not required for the determination of the case before us. In the view we take of the case, it is immaterial whether the constitutionality of the provi- sion be aflarmed or denied. The relief which the complainant seeks rests, as already stat- ed, in the sound discretion of the court; and, if granted, it may be accompanied with such conditions as will prevent hardship and insure justice to the defendant. The suit it- self is an appeal to the equitable jurisdiction , -of the court; and, in asking what is equitable to himself, the complainant necessarily sub- mits himself to the judgment of the court, to ■do what it shall adjudge to be equitable to the defendant. The kind of currency which the complain- ant offered, is only important in considering the good faith of his conduct. A party does not forfeit his rights to the interposition of la court of equity to enforce a specific per. / formance of a contract, if he seasonably and ' in good faith offers to comply, and continues ready to comply, with its stipulations on his part, although he may err in estimating the ■extent of his obligation. It is only in courts ^ -of law that literal and exact performance is /-required. The condition of the currency at I the time repels any imputation of bad faith in the action of the complainant. The act of i congress had declared the notes of the United States to be a legal tender for all debts, without, in terms, making any distinction be- tween debts contracted before, and those ■contracted after its passage. Gold had al- most entirely disappeared from circulation. The community at large used the notes of the United States in the discharge of all ■debts. They constituted, in fact, almost the entire currency of the country in 1864. They were received and paid out by the govern- ment; and the validity of the act declaring them a legal tender had been sustained by -nearly every state court before which the question had been raised. The defendant, it is true, insisted upon his right to payment in gold, but before the expiration of the pe- riod prescribed for the completion of the pur- chase, he left the city of Washington, and thus ■cut off the possibUity of any other tender than the one made within that period. In the presence of this difficulty, respecting the mode of payment, which could not be ob- viated, by reason of the absence of the de- fendant, the complainant filed his bill, in which he states the questioq/Tvraclr-irai arisen between them, and invokes the aid of the court in the matter, offering specifically to perform the contract on his part according to its true intent and meaning. He thus pla- ced himself promptly and fairly before the court, expressing a willingness to do what- ever it should adjudge he ought in equity and conscience to do in the execution of the contract. , Nothing further could have been reason- \ ably required of him under the circumstances, even if we should assume that the act of con- gress, making the notes of the United States a legal tender, does not apply to debts cre- ated before its passage, or, if applicable to such debts, is, to that extent, unconstitutional and void. In the case of Chesterman v. Mann, 9 Hare, 212, it was held by the court of chancery of England, that where an underlessee had a covenant for the renewal of his lease, upon paying to his lessor a fair proportion of the fines and expenses to which the lessor might be subjected in obtaining a renewal of his own term from the superior landlord, and o any increased rent upon such renewal, and there was a difference between the parties as to the amount to be paid by the under- lessee, he might apply for a specific perform- ance of the covenant, and submit to the court the amount to be paid. So here in this case, the complainant applies for a specific per- formance, and submits the amount to be paid by him to the judgment of the court We proceed to consider whether any other circumstances have arisen since the covenant in the lease was made, which render the en- forcement of the contract of sale, subsequent ly completed between the parties, inequitable Such circumstances are asserted to have aris- en in two particulars; first, in the greatly in- creased value of the property; and second, in the transfer of a moiety of the complain- ant's original interest to his brother. It is true, the property has greatly in- creased in value since April, 1854. Some in- crease was anticipated by the parties, for the covenant exacts, in case of the lessee's elec- tion to purchase, the payment of one-half more than its then estimated value. If thej actual increase has exceeded the estimate] then made, that circumstance furnishes no ground for interference with the arrangement] of the parties. J£h.e ^.uestion, in sucJbL cas^ always js^ was the contract^ at the.,;^ was made, a r easonable and_faIj.jaDe? I such were the fact, the parties are consid-j ered as having taken upon themselves the! risk of subsequent fluctuations in the value I of the property, and such fluctuations are not i allowed to prevent its specific enforcement. Wells v. Railway Co., 9 Hare, 129; Low v. I 648 SPECIFIC PERFORMANCE OF CONTRACTS. Treadwell, 12 Me. 441; Fry, Spec. Perf. §§ 235, 252. Here the contract, as already stat- ed, was, wlieii made, a fair one, and in all its attendant circumstances, free from objec- tion. Tlie rent reserved largely exceeded the rent then paid, and the sum stipulated for the property largely exceeded its then market value. The transfer, by the complainant to his brother, of one-half interest in the lease, as- suming now, for the purpose of the argu- ' ment, that there is, in the record, evidence, which we can notice, of such transfer, in no / respect afEects the obligation of the defend- 1 ant, or impairs the right of the complainant \^to the enforcement of the contract The brother Is no party to the contract, and any partial interest he may have acquired therein, the defendant was not bound to notice. The owners of partial interests in contracts for land, acquired subsequent to their execution', are not necessary parties to bills for their enforcement The original parties on one side are not to be mixed up in controversies between the parties on the other side, in which they have no concern. If the entire contract had been assigned to the brother, so that he had become sub- stituted in the place of the complainant, the case would have been different In that event, the brother might have filed the bill, and insisted upon being treated as represent- ing the vendee. The general rule is, that the parties to the contract are the only proper parties to the suit for its performance, and, except in the case of an assignment of the entire contract, there must be some special circumstances to authorize a departure from the rule. The court, says Chancellor Cottenbam, In Tasher v. Small, 3 Mylne & C. 69, "assumes jurisdiction in cases of specific performance of contracts, because a court of law, giving damages only for the non-performance of the contract, In many cases, does not afford an adequate remedy. But in equity, as well as at law, the contract constitutes the right, and regulates the liabilities of the parties; and the object of both proceedings is to place the party complaining, as nearly as possible, in the same situation as the defend- ant had agreed that he should be placed in. C It is obvious, that persons, strangers to the contract, and, therefore, neither entitled to the rights nor subject to the liabilities which arise out of it, are as much strangers to a proceeding to enforce the execution of it as they are to a proceeding to recover damages for the breach of it." When the complainant has received his deed from the defendant, the brother may claim from him a conveyance of an interest in the premises, if he have a valid contract for such interest, and enforce such convey- ance by suit; but that is a matter with which the defendant has no concern. It seems that the draft of the trust deed. to secure the deferred payments, sent to the defendant for examination, was prepared for execution by the complainant alone, and con- tained a stipulation that he might, if he should so elect, pay off the deferred pay- ments at earlier dates than those mentioned in the covenant in the lease; and it is ob- jected to the complainant's right to a specific performance, that the trust deed was not drawn to be executed jointly by him and his brother, and that it contained this stipula- tion. A short answer to this objection is found in tht fact, that the parties had dis- agreed in relation to the payment to be made, and until the disagreement ceased no deeds were required. It is admitted that the form of the trust deed was not such a one as the defendant was bound to receive, but as it was sent to him for examination, good faith and fair dealing required him to indi- cate in what particulars it was defective, or with which clauses he was dissatisfied. Whether it was the duty of the complainant or defendant to prepare the trust deed, ac- cording to the usage prevailing in Washing- ton, is not entirely clear from the evidence. There is testimony both ways. The true rule, independent of any usage on the sub- ject, would seem to be that the party who is to execute and deliver a deed should pre- pare it. It is, however. Immaterial for this case, what rule obtains In Washington. Un- til the purchase-money was accepted, there was no occasion to prepare any instrument for execution. So long as that was refused the preparation of a trust deed was a work of supererogation. Besides, the execution of the trust deed by the complainant was to be simultaneous with the execution of a con- veyance by the defendant. The two were to ^be concurrent acts; and if the complainant Iwas to prepare one of them, the defendant /was to prepare the other, and it is not pre- tended that the defendant acted in the mat- ter at all. The objection to the trust deed, founded upon the omission of the name of the com- plainant's brother as a co-grantor, does not merit consideration. All that the defendant had to do was to see that he got a trust deed, as security for the deferred payments, from the party to whom he transferred the title. The defendant states in his testimony that when the lease was executed he objected to the stipulation for a sale of the premises, and that the defendant told him that it should go for nothing. And it has been argued by counsel that this evidence should control the terms of the covenant. The an- swer to the position taken is brief and deci- sive. First, nothing of the kind is averred in the answer; second, the testimony of the defendant in this particular is distinctly contradicted by that of the complainant, and is inconsistent with the attendant circum- stances; and third, the evidence is inadmis- sible. When parties have reduced their con- SPECIFIC PERFORMANCE OF CONTRACTS. 649 Aracts to writing, conversations controlling i/or changing their stipulations are, in the ab- f sence of fraud, no more received in a court I of equity than in a court of law. Upon a full consideration of the positions of the defendant we perceive none which ^ s hould preclude the com pliant from claim; "Tng a specinc "performance or the contract. ' THe o"niy~-questroh remaining is, Tipon "what terms shall the decree be made? and upon this we have no doubt. The parties, at the time the proposition to sell, embodied in the covenant of the lease, was made, had reference to the currency the n rec ognized by l aw as a legal ten der, 'whlctrco HHlsl e d O nly of goig"anjrsnYercoin^ TrTras-ier-a~specifie~BuitffBer'oi dollars of that character that the offer to sell was made, and it strikes one at once as inequita- ble to compel a transfer of the property for notes, worth when tendered in the market only a littie more than one-half of the stipu- lated price. Such a substitution of notes for coin could not have been in the. possible ex- pectation of the parties. Nor is it reasona- ble to suppose, if it had been, that the cove- nant would ever have been inserted in the lease without some provision against the substitution. Tte complainant must, there- fore, take his decree upon payment of the stipulated price in gold and silver coin. Whilst .he se^s_ggjiity Jie-mustjia. eqmts. ^TEe^ecree^of the court below will, there- fore, be reversed, and the cause remanded with directions to enter a decree for the ex- ecution, by the defendant to the complainant, of a conveyance of the premises with war- ranty, subject to the yearly ground-rent spec- ified in the covenant in the lease, upon the payment by the latter of the instalments past due, with legal interest thereon, in gold and silver coin of the United States, and upon the execution of a trust deed of the premises to the defendant as security -for the payment of the remaining instalments as they respectively become due, with legal Interest thereon, in like coin; the amounts to be paid and secured to be stated, and the form of the deeds to be settled, by a mas- ter; the costs to be paid by the complain- ant. The CHIEF JUSTICE, with NELSON, J., concurred in the conclusion as above an- nounced,-^that the complainant was entitled to specific performance on payment of the price of the land in gold and silver coin,— but expressed their inability to yield their assent to the argument by which, in this case, it was supported. 650 X SPECIFIC PERFORMANCE OF OONTEACTS. FISH V. LESER et al. (69 III. 384.) Supreme Court of Illinois. Sept. Term. 1873. Appeal from superior court, Cook county; Joseph E. Gary, Judge. This was a bill for specific performance, filed by John Fish against John Leser and Johanna Iieser, his wife. The substance of the material facts is given in the opinion of the court. Nissen & Barnum, for appellant. Wilkin- son, Sackett & Bean, for appellees. CRAIG, J. This was a bill, filed in the su- perior court of Cook county, by John Fish, ap- pellant, against John Leser and Johanna Le- ser, appellees, to enforce the specific perform- ance of a contract for the sale of a certain lot in Chicago. Upon the hearing of the case, the court entered a decree dismissing the bill and the complainant prosecuted this appeal. . Co urts of equit y wi ll not always e nforce thespecififpieHormance of a contract ^uch *"appi!cafions are addressed to ttie sound legal discretion of the court, and^tte^ourt^mugt. -b€L..goxe£ned, to a great extent, by the_ fagts of _each case, jaOEis piesented. A speci fic performance wiU not be decreed " unless the a^ffnent has been entered_ into with perfe ct fairnessr^"nd with out misa^ r^ 'TTensioiij misrepre sentatf5S ~Bf oppressionT Frisljy t. BailanceTll Scam7"287'; trnHefwood" V. Hitchcock, 2 Ves. Sr. 279. The contract must be fair, equitable and just, and the com- plainant should be prepared to show that it will not be unjust or oppressive on the de- fendant to have the contract enforced. Stone V. Pratt, 25 111. 25. We will, then, examine some of the lead- ing facts in this case, and see if the com- plainant has brought himself within the prin- ciples announced, which are necessary In or- der to enable him to obtain the relief he asks, in a court of equity. It appears that the defendants, or one of them, ui the fall of 1871, were the owners of the property in question, and had owned and resided upon it for many years. The appel- lees are foreigners by birth with but little education, and are not well acquainted with our language; they transacted but little busi- ness,— Indeed, the evidence shows that John Leser has, for several years, been scarcely competent to transact any business; they can write, but are unable to read our writing. The house In which they resided, on the property in question, together with other property on the same street, was destroyed by the fire of October 9, 1871. Previous to the fire their property was not desirable, and could not readily be sold in the market, on account of the bad repute of other houses on the same street. The fire, however, removed this objection to the street, and property Immediately began to advance. Farwell & Co. commenced to build on the same street, on the next block west, which also caused property to advance. These facts were un- known to the Lesers, but were well known to enterprising business men. Under these circumstances, the Lesers, soon after the fire, were sought out by one John P. White, a real estate agent in the city, who desired to get an agency to sell Oielr property. This property, at the time of the sale, as near as we are able to judge from the evi- dence, was worth $30,000— some of appellees' witnesses place it as high as $35,000, while appellant's witnesses fix its value at $21,000 to $22,000. Burt, who owned the east half of the same lot, testifies he fixed the price of his lot at $30,000, but withdrew it from market, and would not sell at that price, and his opinion is this lot is worth that amount. White had several interviews with the Lesers. He wanted to act as their agent; advised them to sell; claimed that property would depreciate rather than Increase in value. He never informed them that Far- well & Co., and others, were buying and pre- paring to build in that neighborhood,— a fact that was well known to business men. Johanna Leser, In her evidence, says: "White came again; said he had a man to buy the lot, and he would give $20,000, and we told him we would not sell for that; he said it would not be worth more in ten years. My husband said, if you give me $21,000 I will sell to you. This he refused. White told me to coax my husband to take $20,000. I told him I would not. He then said, well, I will not take another step to- wards selling your lot, and before spring you will offer it to me for $18,000." During this time appellant was frequently at White's office, ana he and White were negotiating on the lot. White, in his testimony, says, they had given him verbal authority to sell the lot; that, after having several interviews, he called on them with an offer from appellant of $20,000 cash for the property. This they did not decide to take, but the next day he called again to see if they would accept the offer he had made them for appellant He prepared and took with him a paper for them to execute, authorizing him to sell the lot After discussing the matter some time, they would not accept appellant's offer, but they made this proposition: they would take $16,- 000 cash, and the purchaser assume and pay a mortgage of $5,000 that was on the lot and pay commissions to White; he Informed them he did not believe appellant would give that, but he would make him the offer. The next day, which was November 1st White called on John Leser, where he and his two sons were at work, and obtained his signature to a paper, which turned out to be authority to sell the lot which reads as follows: 'Chicago, Oct 31, 1871. "John P. White, real estate agent In consideration of one dollar, by us received, SPECIFIC PERFORMANCE OF CONTRACTS. 651 we hereby authorize you to sell our lot, be- ing the west half of lot 7, in block 94, in the school section addition to Chicago, for the sum of twenty one thousand dollars ($21,- 000) net; you to have all over that amount you can get, for your commissions for such sale. The terms of payment we require is all cash, except the assumption of a mort- gage of $5,000 by the buyer, now up n said lot; we to furnish abstract showing title good in us, subject to the said $5,000 mort- gage. This proposition good for ten days from date hereof. "Yours, etc., "John Leser. [Seal.] "Johanna Leser. [Seal.]" White testifies that the paper was read to Leser, and he and his two sons understood what it was. But in this he is contradict- ed by Leser and his two sons. They swear a portion of it was read in a low tone, but none of them understood It They did not know that Leser was giving any authority to White to sell the lot; supposed it was a writing that Leser would wait ten days be- fore making a sale, but did not know it was anything further. White then carried the paper to Johanna Leser, and she, as she testifies, saw her hus- band had signed it, and not knowing what it was, also executed the paper. On November 8th White sold the property to appellant, by written contract, as follows: "Chicago, Nov. 8, 1871. "Received of John Fish five hundred dol- lars ($500) to apply as a payment on the fol- lowing described real estate, this day bar- gained and sold to the said Fish, to wit: the west half of lot seven (7), in block ninety-four (!H), in the school section addition to Chicago, sold at and for the price or sum of twenty- one thousand dollars ($21,000), upon the fol- lowing terms of payment, to wit: the said Fish is to assume and pay a certain mortgage of five thousand ($5,000) dollars, which is now upon said property, with interest from date hereof, according to its tenor and effect, and the remainder of the purchase money, to wit: fifteen thousand five hundred ($15,500) dollars, as soon hereafter as we deliver him a good and sufficient deed of conveyance to the said described real estate, with release of dower, free and clear of all liens or incum- brances, except the above mentioned $5,000 mortgage, which the said Fish assumes; we to furnish an abstract showing title good in us, said abstract to be delivered within ten days from date hereof, and the said deed to be delivered within thirty days from date hereof. "Witness our hand and seals this day and date first above written. "John Leser, [Seal.] "Johanna Ijeser. [Seal.] "By John P. White, Their Agent "John Fish." When appellees were notified of the con- tract, they refused to ratify it Can it be said that this contract, which appellant is seeking to enforce, has been en- tered into with fairness, and without misap- prehension ? ,jHiportant facts, were artfu lLv- concealed from tixe Lesers by cmewhojigim- 'ed to be their agent, and if they tad bAen.. "EnbwBrtt' cannot be "pretended the authority would have been given to sell. The fact is apparent, the Lesers, who were weak-minded and unacquainted with busi- ness,— terror-stricken with the great fire which, in a moment, swept away the home they had occupied for years, — were overreach- ed by a shrewd real estate dealer, who acted in the interest of another, under the guise of , a friend and agent of them. ^e contract can neither b e said to be fair, equita ble, or just. To take from them prop- eriF'wm-th $30,000 for $21,000, when consid- ered in connection with the other facts dis- closed by this record, is an outrage that a court of equity cannot for a moment tolerate "oP" sanClloii."" ■ TEerB~iS, however, another principle which, when applied to this case, forbids a court of equity from decreeing a specific perform- ance of this contract An agent employed to sell, c annot him self b ecome me purcn aagr; or_an_a^nt_emgIoyea" to b uy, cannot b elthe selleE 3Sd, upon tTSe'^ame principle, it is "held~ tfiat a contract made by one who acts .asthe^gentofboth paftles may be avoir" "^ _byjnher_princi^. SioryTAg^ ^Before this written authority to sell was given, White came to the Lesers with a prop- osition from appellant of $20,000, and urged them to accept it. His commissions were to come from appellant. As soon as he ex- ecutes the contract of sale, he goes with ap- pellant to the recorder's office and has it placed on record. Under his counsel and ad- vice, appellant makes a tender of the pur- chase money. He takes appellant to an at- torney for advice, and introduces him; nor does he stop at this. He offers to pay appel- lees' counsel their fees, not to exceed $1,000, if, upon an examination of the papers, they should advise and effect a ratification of the contract by appellees. These facts tend to show that this agent was employed to buy as well as to sell. Ap- pellees had bargained for the skill and labor of White, their agent and had a right to ex- pect and demand his undivided services in their behalf and for their interest. This they have not secured, and a court of chan- cery will not lend its aid to enforce a con- tract which, in equity, is regarded as con- structively fraudulent. Other questions have been discussed by the counsel on each side of this case, but, in the view we have taken of the case, it becomes unnecessary to decide them. The decree of the superior court will be affirmed. Decree affirmed. 652 SPECIFIC PERFORMANCE OP CONTRACTS. BTONE V. PRATT, (25 111. 16.) Supreme Court of Illinois. April Term, 1860. Appeal from the superior court of Chicago. This was a bill of chancery, ffled by Hora- tio O. Stone against Jeremiah H. Pratt and Amos Pratt. The bill charges, in substance, that, in 1849, one Calvin D'Wolf was the owner in fee of the north fifteen acres of the "W. %, S. W. qr., sec. 34, T. 39 N., R. 14 E., in Cook county, 111., and that, in May, 1852, by subsequent sales and conveyances, Amos Pratt acquired the title to said land; that on September 28, 1852, Amos Pratt, by an agreement in writing, sold the same, with other lands, to Clement H. D'Wolf for the sum of $4,050, of which sum $100 was paid in hand, and said D'Wolf agreed to pay the balance, as follows: $600 in one year, $670 In two years, $670 in three years, $670 in four years, $670 in five years, and $670 in six years from the date of the agreement, and to pay all assessments and taxes on the land. The agreement provided that, up- on the performance on the part of the pur- chaser, Pratt should make and deliver to D'Wolf a quitclaim deed for the premises, with covenant of warranty as to the acts of Pratt only, and also provided for a forfei- ture of the agreement, at the election of Pratt, In case of default of any of the pay- ments. In which event D'Wolf was to be treated as tenant of Pratt. The bill then charges that on September 23, 1853, Amos Pratt purchased certain oth- er lands of one Warren Parker, for the sum of $8,000, payable as foUows: $2,666.66 on October 10, 1853, the like sum on September 23, 1854, and the same sum on September 23, 1855; that, to secure the payment of the first installment, he assigned to Parker his agreement with D'Wolf, before stated, and the same, with hia written agreement with Parker, was deposited with Brown & Hurd, to be held by them till Pratt's first install- ment became due; and if Pratt paid the same when due, the papers were to be re- turned to him, otherwise to be delivered to Parker, who was to have the right to sell at public sale the agreement between Pratt and D'Wolf, and retain out of the proceeds $1,000 as liquidated damages for Pratt's de- fault; that Pratt failed to pay Parker the first installment, and that he, on January 24, 1854, sold said agreement at public auc- tion, having first given due notice of the sale, and that complainant became the purchaser of the same for the sum of $1,000. The complainant insisted that by said pur- chase he became the owner of all Pratt's right, title, and interest in the land, and the said agreement with D'Wolf, with power to enforce the same, and that If Pratt had any interest in the land, he held only a naked legal title as trustee for the complainant. The bill then charged that on January 15, 1853, the complainant bought of Clement H. D'Wolf the said fifteen acres of land for $4,225 to be paid in the manner following: $275 cash; $600 on September 28, 1853, and $670 on September 28th in each of the years 1854, 1855, 1856, 1857, and 1858; that the contractgave^mplaina nt the ri ghttojSirr Sti~tSe paymentsTSceptj ge firstTto AaTO— Pratt, upon fiiragreement with D'WSfTand that, upon payment in either way D'Wolf was to convey the fifteen acres to complain- ant; that after the purchase, by complain- ant, of the agreement between Amos Pratt and D'Wolf, the latter made a deed of the land to complainant, and the agreement be- tween the complainant and D'Wolf was can- celed; that complainant had requested Pratt to execute to him a deed for said fifteen acres of land, which he refused to do, and that the complainant had been informed that he had conveyed the premises to Jeremiah H. Pratt, his brother, and that the deed to him was without consideration, and made to defraud the complainant, and that Jere- miah H. Pratt had full notice of the rights and equities of complainant; that complain- ant had demanded a conveyance also from said Jeremiah H. Pratt, but that he refused to make it, and claimed to own the land. The bill prayed for a decree compelling the Pratts to release and quitclaim the fif- teen acre tract to the complainant, and for general relief. Jeremiah H. Pratt answered the bill, and also filed a cross-bill, making Clement H. D'Wolf a party, praying for the cancellation of the agreement between Amos Pratt and D'Wolf as rescinded for nonpayment of the purchase money. The complainant answered the cross-bill, and replications were filed to the several an- swers. The original bill was taken as con- fessed as to Amos Pratt. The cause was heard by the court upon the pleadings and proofs, and a decree entered, dismissing the original bill. Scates, McAllister & Jewett, for appellant S. W. Randall and Snapp & Cone, for ap- pellees. CATON, C. J. On the 23d of September, 1852, A. Pratt by Indenture, agreed to sell, and convey to D'Wolf, or his assigns, several par- cels of land for the gross sum of four thousand and fifty dollars, all on time except one hun- dred dollars; and D'Wolf, by the same instru- ment, agreed to pay the purchase money as therein stipulated. On the 23d of September, 1853, Pratt agreed that certain covenants with one Parker should be performed on the 10th of October, 1853, and, upon his failure to do so, was to forfeit and pay the sum of one thousand dollars as stipulated damages, to secure which he de- posited with Brown & Hurd the obligation ef D'Wolf to pay him the purchase money, and they were authorized to deliver it to Parker, in case Pratt failed to perform or to SPECIFIC PERFORMANCE OF CONTRACTS. 653 pay the thousand dollars. And Parker was authorized to sell this contract of D'Wolf, In open market, and thus raise the money with which to pay himself the thousand dollars. Before the 11th of October, 1853, Pratt, alleging that he had been defrauded by Parker, forbade Brown & Hurd delivering the contract, which had been deposited with them, to Parker. On the 15th of January, 1853, Stone purchased of D'Wolf fifteen acres, part of the premises which Pratt had sold and agreed to convey to D'Wolf. Brown & Hurd delivered the contract which Pratt had left with them, as above stated, to Parker, who, on the 28th of January, 1854, sold it in pursuance of his original contract with Pratt, and Stone became the purchaser for one thousand dollars, which was just suffi- cient to pay the forfeiture provided for in the contract between Pratt and Parker. Stone, insisting that by the purchase of the contract, he was entitled to recover the mon- ey due thereon in place of Pratt, and that Pratt was thereby in effect fuHy paid the purchase money for which he had agreed to convey the premises sold to D'Wolf, filed this bill to compel Pratt to convey to him the fif- teen acres, which he had purchased of D'Wolf, parcel of that which D'Wolf had bought of Pratt With the view we take of the case, it is unnecessary to advert to the sale of the premises by A. Pratt to J. H. Pratt It is a well settled rule of law, that an entire contract cannot be divided so as to compel a party to perform it in parcels, ei- ther to different persons or at different times. jJWhen D'Wolf sold a part of the premises to iStone, he could not thereby impose the legal obligation upon Pratt to convey that portion i'to Stone, and the balance to himself. That would be making it in fact two contracts in- stead of one. It was asking him to make satisfaction of two instead of one. In case of disagreement it exposed him to two prose- cutions instead of one, and required him to make two deeds instead of one. This is a r hardship which the common law will never allow to be imposed upon a promisor or an obligor. Nor is this principle of the common law ignored by courts of equity, although in exceptional cases they will oyerlook it, where it is necessary to protect the rights of an innocent fair, and bona fide purchaser against a contemplated fraud. This is a bill for the specific performance of an agreement by one who at law has no claims whatever upon the defendant, at least in his own name. Such a bill is always ad- dressed to the sound discretion of the court, which must be governed by the circumstan- ces of each case as it is presented. In the case of Lear v. Chouteau, 23 111. 39, this court If It, I said: "In order to induce a court of equity to enforce specifically a contract, it must b^ founded on a good consideration, it must bej reasonable, fair and Just. If Its terms are I such as our sense of justice revolts at this! court will not enforce it, though admitted to \ be binding at law." It may be added that the complainant must show no oppression or ^ unconscionable advantage, when he comes in- to a court of conscience asking for a remedy beyond the letter of his strict rights. He must not ask for a favor beyond his teclmical legal rights when he bases his claim to that favor upon a hard, oppressive, technical ad- vantage. He must stand before the court prepared to meet its scrutiny without a blush, relying upon the advocacy of a well regulated conscience in his favor. Such must not only be his own position, but he must show that is not unjust or oppressive to the defendant, to compel him to perform specifically. Let us then examine for a moment the posi- tion of these parties respectively. Waiving the question of the division of the contract the complainant, before he could call on the defendant to convey to him this land, was obliged to satisfy an obligation which secured to the defendant about four thousand dollars. He attempts to do this, not by paying him or any one else having a right to receive the money, the actual amount due, or to become due, on the contract, but he pvurchases the contract at a forced sale for one thousand dollars. This is the extent of his merit. The defendant, by his contract with D'Wolf, was entitled to receive about the sum of four thousand dollars, before he could be asked, even by D'Wolf himself, to convey any por- tion of the premises. Now, what has he real- ized for this four thousand dollars' worth of land? Absolutely nothing. His claim, or right to receive the money, was sold (and up- on the validity or effect of that sale we pass no opinion) to pay a forfeit Nothing more, —nothing for which he had received value. Now all of this may have been a strictly le- gal transaction. The defendant, by his own f^ly, may have frittered away his legal right to this money or to the land, but it is not such a transaction as should induce a court of equity to throw down the legal barriers which surround the defendant, and compel him to do more for the ease and benefit of the complainant than the strict rules of law will give him. Equity will never give the pound of flesh, although it is in the bond, butj will leave the law to give its value only We shall not compel the defendant to recog- nize a dividing up of his obligations under this contract, but shall allow him, without regret, to insist upon his legal rights. The decree of the court below is affirmed. Decree affirmed. 7 I 854 SPECIFIC PERFORMANCE OF CONTRACTS. THOMPSON V. WINTER. <43 N. W. 796, 42 Mien. 121.) Supreme Court of MiuBesota. Nov. 30, 1889. Appeal from district court, Redwood coun- ty; Webber, Judge. John H. Bowers, for appellant /. M. Thompson, for respondent. GiLFiLLAN, C. J. This is an action to compel specific performance of a contract in the nature of one to convey real estate. Tlie defendant had purchased the land from tlie state, paying 15 per cent, of the purchase price, and receiving? certificates of purchase. February 1, 1886, these parties entered into a contract in writing, whereby defendant agreed that, upon full performance on the part of the plaintilT, he would transfer by deed of assignment the said land certi licates. Plaintiff was to pay therefor $590, accord- ing to two promissory notes, — one for $190, due October 1, 1886, with interest at 10 per cent., and one for $400, due two years from February 1, 1886, with interest at 8 per cent., — and pay all taxes and assessments, and the unpaid purchase money to the state. The plai ntiff fully performedjt his contra ctjon his part : — In Miircn, iSSSTthe parties made~Hn oral" agreement, by wliich defendant agreed to make certain improvements for the plain- tiff on the land, by breaking, erecting build- ings, and digging a well, for which plaintiff agreed to i)ay him the cost thereof, with in- terest; such payment not to be made before K the expiration of five years from the time of making the improvements- Afterwards, pur- \ suant to sucli agreement, defendant made ^ such improvements to the amount of $500, no part of which has been paid. The plain- tiff was insolvent. On tliese facts the court below denied specific performance. From the memorandum filed by the court below it appears that the specific perform- ance was refused, in the exercise of what the court deemed its discretionary power, the reasons for so exercising that power being stated; that plaintiff has become insolvent; that the value of the improvements is equal to the purchase price; and that plaintiff can be compensated in damages. The mere fact thai a person has a contract for tlie convey- ance to him of real estate does not entitle him, as of right, to the interposition of a court of equity to enforce it. The matter of compelling specific performance is one of sound and reasonable discretion, — of judi- cial, not arbitrary and capricious, discretion. There must be some reason, founded in equity and good conscience, for refusing the relief. Such reason lias been generally found, by the court refusing it, in some mistake or fraud or unconscionableness in the contract, or in some laches on the part of the plaintiff clianging the circumstances so as to make it inequitable to compel a conveyance, or where the claim Is stile, or there is reason to be- lieve it was abandoned. But, whatever the reason may be, it must have some reference to, some conneclion with, the contract itself, or the duties of the pa^-ties in relation to it. We have never found a case where the court refused the relief as a means of enforcing some independent claim of the defendant against the plaintiff, nor because the defend- ant had some independent claim which he might not be able to enforce against tlie plaintiff. If such could be regarded as an equitable reason for denying relief, every ac- tion of the kind might Involve the investiga- tion of all unclosed transactions between the parties, whether relating to the contractor subject-matter of the action, or entirely dis- tinct from it. In this case there is no reason to suppose tlie contract other than a fair one. The plaintiff has been prompt in performing on his part, and in seeking his remedy. The defendant has a claim against plaintiff, en- tirely independent of the contract to convey, which claim, by the terms of the agreement ■ under which it arose, was not to become due | for more than three years after the timei when he was to convey. The possibility' that when it becomes due he may not be able to enforce it, by reason that jilalntiff's m- solvency may continue, does not make it in- equitable to enforce this contract already matured. That a purchaser may have an adequate remedy by action for damages, al- though a reason for not holding what he has done to be part performance to take the case out of the operation of the statute of frauds, is of itself no reason for withholding the proper remedy, where the contract is valid under the statute. The order is reversed, and the court below will enter judgment on the findings of fact in favor of plaintiff fur I the relief demanded in the complaint. SPECIFIC PERFORMANCE OF CONTRACTS. 655 FALCKE V. GRAY. (4 Drew. 651.) High Court of Chancery. 1859. In this case the bill was filed for a specific performance of a contract entered into be- tween the plaintiff, Mr. Falcke, and Mrs. Gray, one of the defendants, by which Mrs. Gray had agreed that, at the expiration of a six-months lease to the plaintiff of her fur- nished house, he should have the option of purchasing two china jars at the price of £40. In January, 1859, the plaintiff, being de- sirous of finding a furnished house, applied to Mrs. Gray, who was willing to let hers, and, on looking over It, he observed the two jars, the subject of the suit. He had for twenty-five years carried on the business of a dealer in curiosities, china, etc., and was eminent in his trade, and was well acquaint- ed with the prices which articles of this kind would fetch. Shortly afterwards he had an Interview with Mrs. Gray at her house; and Mr. Brend, from the oflBce of Boyle & Bryden, estate and house agents, who were Mrs. Gray's agents in the matter, attended to advise Mrs. Gray. A discussion arose as to the terms of letting, and ultimately a rent of seven guineas yer week was agreed upon, with an option to the plaintiff that he should, at the end of the term, be at liberty to purchase certain arti- cles of furniture at a valuation, to be inserted in the agreement, including the two china jars, which were valued at £40. With regard to the valuation of these jars at £40, It appeared from the evidence that Mr. Brend told Mrs. Gray that he did not know the value of the jars, but he should think they were worth £20 apiece; and the agree- ment was drawn up, putting the value of £40 on the jars, and was signed by Mrs. Gray and the plaintiff. On the 26th of January the plaintiff went to the house while his agent was taking the inventory, and then the jars had been removed; and on the same day Mrs. Gray came to Mr. Falcke's house, and inform- ed him of the removal of the jars. During the Interval between the 19th and the 26th of January Mrs. Gray, having begun to doubt whether the jance placed on the jars was fahr, was advised that it would be as well to take the opinion of Mr. Watson, also a dealer in curiosities; and, on the 26th, she accord- ingly went to Mr. Watson, and desh:ed him to come in the evening to value the jars. This he did; and on seeing the jars he was so much struck with their beauty, etc., that he offered Mrs. Gray his check for £200 for them at once. Mrs. Gray then asked Mr. Watson if he thought she would be doing any- thing wrong in so selling them, and he told her It was all right; and she then took his check and Mr. Watson took away the jars. Mr. Watson was made a defendant to the bill. The plaintiff now Insisted that he was en- titled to a decree for specific performance against Mrs. Gray, and to delivery of the jars as against Mr. Watson; and on that part of the case the question was whether the transaction was a bona fide one on the part of Watson, or whether he knew of the con- tract between Mrs. Gray and the plaintiff. The defendant insisted that it was a contract for chattels, and could not be enforced. The evidence as to the actual value of the vases was conflicting, but, putting it at the lowest, it greatly exceeded £40. Mr. Baily and Mr. Waller, for plaintiff. Mr. Glasse and Jones Bateman, for Mrs. Gray. Mr. Greene and Mr. Speed, for Mr. Watson. THE VICE CHANCEDLOR (after stating the facts above stated). The first ground of defense is that, this being a bill for the spe- cific performance of a contract for the pur- chase of chattels, this court will not interfere; but I am of opinion that the court will not refuse to interfere simply because the con- tract relates to chattels, and that if there were no other objection the contract in this case is such a contract as the court would specifically perform. What is the difference in the view of the court between realty and personalty In respect to the question whether the court will inter- fere or not? Upon what principle does the court decree specific performance of any con- tract whatever? Lord Redesdale in Harnett v. Yeilding, 2 Schoales & L. 549, says: "Whether courts of equity in their determina- tions on this subject have always considered what was the original foundation for decrees of this nature, I very much doubt I believe that, from something of habit, decrees of this kind have been carried to an extent which has tended to injustice. Unquestionably the original foundation of these decrees was sim- ply this, that damages at law would not give the' party the compensation to which he was entitled; that is, would not put him in a sit- uation as beneficial to him as if the agree- ment were specifically performed." So that the principle on which a court of equity pro- ceeds is this: "A court of law gives damages for the nonperformance, but a court of equity says, "that is not sufficient,— justice is not satisfied by that remedy"; and therefore a court of equity will decree specific perform- ance, because a mere compensation in dam- ages is not a sufficient remedy and satisfac- tion for the loss of the performance of the contract Now why should that principle apply less to chattels? If in a contract for chattels damages will be a sufficient compensation, the party Is left to that remedy. Thus if a contract is for the purchase of a certain quan- tity of coals, stock, etc., this court will not decree specific performance, because a person can go into the market and buy similar arti- cles, and get damages for any difference in the price of the articles hi a court of law; 656 SPECIFIC PERFORMANCE OF CONTRACTS. but, If damages would not be a sufficient com- pensation, the principle on which a court of equity decrees specific performance is just as applicable to a contract for the sale and pur- chase of chattels as to a contract for the sale and purchase of land. In the present case the contract is for the purchase of articles of unusual beauty, rari- ty, and distinction, so that damages would not be an adequate compensation for non- performance; and I am of opinion that a contract for articles of such a description Is such a contract as this court will enforce; and, in the absence of all other objection, I should have no hesitation in decreeing spe- cific performance. The next ground of defense is that the contract in the present case is a hard bar- gain between the plaintiff and Mrs. Gray; and it is insisted that the inadequacy in price Is so great that on that ground the court will not decree specific performance. Now the price put on these jars was £40. What was their actual value? Certainly to talk of their value is to talk of somethmg which is very artificial and fluctuating, de- pending upon the taste and caprice of the community; but still the jars derive their value from their beauty, distinction, and rarity, and those qualities give them a sell- ing value. They have a value in the mar- ket. According to the plaintiff's own state- ment their value would be £100, or, if be- tween persons not brokers, £125; and it is the interest of the plaintiff to represent their value as low as possible. A better test of their value is what Mr. Watson -has given for them; and I think I may assume that £200 at least would be a fair price, though I cannot help thinking that their real value rather exceeded than fell short of that sum; but, taking £200 as the fair value, the price placed on the jars by Mr. Brend was only one-fifth of their selling value. That this was a hard bargain in the sense of its be- ing for a very inadequate price there can be no doubt; and the defendant insists that, on this ground, the court wUl not enforce spe- cific performance. On the other hand, the plaintiff insists that, although it is true that in hard bar- gains, using the terms m one sense, the court will not decree specific performance, still that that does not apply to cases of mere inadequacy of price; and this is the question I have now to consider. The general rule with regard to hard bar- [ gains is that the court will not decree spe- ) I cific performance, because specific perform- j/ ance is in the discretion of the court for r j the advancement of justice; such discretion, / indeed, to be exercised, not according to ca- I price, but on strict principles of justice and \ equity. In the case of White v. Damon, 7 \J Ves. 30, Lord Bldon says: "I agree with Lord Rosslyn that giving a specific perform- ance is matter of discretion, but it is not an arbitrary, capricious discretion. It must be regulated upon grounds that vrtll make It Judicial." The principle upon which the com-t acts with respect to hard bargains ap- pears to me to have been truly expressed by Lord Langdale in the case of Wedgwood v. Adams, 6 Beav. 600; and the passage in which he enunciates the principle has been quoted with approbation by Lord Justice Turner in Watson v. Marston, 4 De Gex, M. & G. 239. Lord Langdale in Wedgwood v. Adams says that the court exercises its dis- cretion and decrees specific performance un- less it would be highly unreasonable to do so, and that what is more or less unreason- able cannot well be defined. It must depend on the circumstances of each particular case. As it is admitted by the plaintiff that in cases of hard bargains generally the court will not interfere, it is not necessary to go Into any of the eases on the subject other than those which turn more or less on In- adequacy of price; and here I may observe that in some cases the court has refused specific performance on the ground of the hardness of the bargain, where there has been not the least impropriety of conduct on the part of the person seeking specific per- formance. In most of the cases there has been some other ingredient besides mere in- adequacy of price, but I vnll refer to those In which I find the opinion of the judges express on that particular point. In Young v. Clerk, Prec. in Chan. 538, the defendant agreed to grant a lease of certain lands to the plaintifC for fourteen years at a rent of £40. The plaintiff had already been lessee of the same lands for many years, and knew that the value of the lands was not £40, but £167, and in that case specific performance was refused; but there was in that case the circumstance that the defend- ant, having recently come into possession of the land, came to look at it, and stayed at the plaintiff's house, and desired to see the plaintiff's underleases, in order to ascertain what the plaintiff had realized from the property. The plaintiff evaded showing him the underleases, and the defendant remained In Ignorance of the true value of the land. If the bUl had been to set aside the con- tract, it would not have succeeded. Lord Thurlow said: "I must take it to be the law that if a man contracts to purchase an estate for a certain price, and the intending purchaser knows at the time that there are mines under the estate of which the vendor is ignorant, still, as this court is not a court of honor, the court wUl not set aside the contract on a bill by the vendor; but no- body can doubt that the court would not decree specific performance of such a con- tract, and there is a wide distinction between a case in which the court would, on the one hand, decree specific performance of an In- complete contract, and, on the other, set aside a complete contract" And in giving judgment the lord chancellor said that this court was not bound to decree a specific exe- SPECIFIC PERFORMANCE OF CONTRACTS. 657 I cntion of articles where they appeared to be \ unreasonable or founded on a fraud, or jwhere it would be unconscionable to assist •them. The next case Is Klen v. Stukeley, 1 Brown, Pari. Gas. 191; Gilb. 155, which was a bill in the equity side of the court of exchequer by the vendor for the specific performance of an agreement for the purchase of land, for which lie purchaser had agreed to pay forty years' value. It was proved In the case that the plaintiff had left his deed with the de- fendant, and that there were no objections to the title; but a decree was made for spe- cific performance. On appeal, the house of lords entertained great doubt whether such a bargain should be carried out by a court of equity, but they came to no decision on that point The next case Is Southwell v. Nicholas, re- ported in a note to Howell v. George, 1 Mad. 9. In this case the plaintiff's father and the defendant Nicholas' brother, having some houses in Spring Gardens, agreerf to purchase two old houses and pull them down to make an entrance into Spring Gardens. The houses were pulled down, and the plaintiff's father paid his share of the purchase money. The defendant's brother died, and his estates were sold for the payment of his debts. On a bill by the plaintiff for the specific per- formance of the agreement as to the two houses, it was contended by the defendant that there should be no specific performance, as his brother's estates had been sold, and there would be no consideration accruing to him for the expense he would be at The master of the rolls was inclined to decree that the parties should pay for the two houses in proportion to the value of their houses to be benefited, but the matter was compromis- ed by parties agreeing that the plaintiffi should pay two-thirds and the defendant one- third for the two houses. The next case is Vaughan v. Thomas, 1 Brown, C. C. 556. In this case the defend- ant agreed with the plaintiff for the sale to him of an annuity of £300 a year for the defendant's life, at five years' purchase. The defendant then represented himself as being only fifty-five of age, and the plaintiff Insured the defendant's life on that footing; but two years afterwards he discovered that the de- fendant was sixty-one years of age at the time of granting the annuity, and the plain- tiff was obliged In consequence to Increase the insiu-ance. "Upon his representing this to the defendant, It was agreed that the plain- tiff should grant to the defendant an addi- tional annuity, which was expressed to be granted for £250, but in fact no money was paid on that occasion. In December, 1779, the defendant applied to the plaintiff to re- purchase the annuity, and an agreement was entered into by them by which the plaintiff agreed to give up the annuity on payment of £1,500, the original purchase money, and all arrears then due, deducting the sum of H.& B.Eq.(2d Ed.)— 42 £200, the amount for four years of the addi- tional annuity of £50. The arrears then due were £475, so that the sum settled for the repurchase was £1,775. After the agreement had been signed the plaintiff struck out his name, and two days after another agreement was prepared, whereby the plaintiff relin- quished the annuity and all arrears for £2,000. The plaintiff filed a bill for the specific per- formance of this agreement It was referred to the master to find the value of the original and additional annuity and the defendant's age. The master found that the annuity was worth nine years' purchase when it was granted. The plaintiff contended that the bargain was fair, and that he was entitled to the assistance of the court to carry it into execution; but the master of the rolls was of opinion that if they assisted the plaintiff they would be sanctioning a very unconscien- tious bargain, and that the plaintiff was not entitled to the aid of the court The bill was therefore dismissed. In the case of Heathcote v. Paignon, 2 Brown, 167, there was nothing but inade- quacy of price, and the master of the rolls referred it to the master to report on the actual value. The master found a value of £500, for which only £200 had been given, and the court refused specific performance. On appeal, this decision was affirmed by Lord Thurlow, and the contract was set aside as being unjust. The next case I shall mention Is Day v. Newman, 2 Oox, 77. In that case the court refused to decree specific performance, but left the parties to their remedies at law on the ground of inadequacy In price. That case appears to me to be a distinct decision on the question. White V. Damon, 7 Ves. 30, was a case of a purchase at an auction; yet Lord Rosslyn, on the simple ground of inadequacy In price, refused specific performance. This case therefore shows that inadequacy in price is a sufficient ground for refusing specific per- formance. Lord Eldon took a different view, but it was on the ground that the sale was by auction. Now • these two last-mentioned cases ap- pear to me to be decisive on the point; and I am of opinion that In the present case I ought to refuse specific performance on the mere ground of inadequacy of price, even If there were none other. But there is another circumstance In this case besides mere inadequacy. What was the nature of the transaction? It was not the case of a bargain between seller and buy- er, the one trying to get the highest, and the other to give the lowest, price. The Intention of the parties was that a fair and reasonable price should be placed on the articles, and that the plaintiff should have the option of purchasing at such fair and reasonable price. Mrs. Gray, though she was told by Mr. Brend that he was not a judge of the value, thought that the £40 mentioned by him was 658 SPECIFIC PERFORMANCE OF CXDNTRACTS. such a fair price as a competent person would place on the jars; and It was upon that foot- ing that she made the agreement. She was not herself a competent judge, though she knew they were of considerable value. Mr. Falcke knew that she was contracting on that footing, and he knew that the price put up- on the jars by Brend was not a fair price. (The vice chancellor, after going through the plaintiff's evidence, from which it appeared that he, knowing that £40 was greatly insuf- ficient, it being only two-fifths of the value, as he said, allowed the contract to be sign- ed on that footing, proceeded:) The question is whether he can come to the court to com- pel Mrs. Gray to sell the jars to him for £40. I admit that this court is not a court of hon- or, but it appears to me that, although Mr. Falcke has done nothing he was legally bound not to do, yet, consistently with the authorities and justice of the case, I must I refuse specific performance. It has, however, been contended that Mrs. Gray, having sold the Jars to the defendants the Watsons, should not have been made a defendant; but Mrs. Gray has placed herself in such a position that the suit could not go on without her being madp a party. The bill, therefore, must be dismissed without costs as against her. With regard to the defendants the Wat- sons, the question is whether they bad no- tice, when they purchased from Mrs. Gray, that she had entered Into an agreement by virtue of which she could not sell them to another person. Now I cannot help enter- taining some suspicion that the Watsons knew something more than that a mere ques- tion had arisen as to value; but the onus of proving that they had notice lies on the plaintiff, and I think that, although there is some doubt on the evidence, notice to them has not been sufliciently proved. Under all the circumstances, I think the bill, as against the defendants the Watsons, must be dis- missed, with costs. /V^^t A. ^wVit n- _ c * < SPECIFIC PERFORMANCE OF CONTRACTS. 659 PAIXE V. MEIXER. (6 Ves. 349.) Chancery. July 22, 1801. Upon the 1st of September, 1796, the plain- tiffs sold to the defendant, by auction, some houses In Katcliffe Highway, upon the usual terms, a deposit of 251. per cent, and a prop- er conveyance to be executed upon payment of the remainder of the purchase money at Michaelmas next. The premises were with others subject to certain annuities: but a trust of stock was declared for the payment of these annuities. The first abstract de- livered was clearly defective: so that the purchase could not be completed at that time. A further abstract was delivered to the solicitor for the defendant, at the end of September, or the beginning of October. He insisted upon having a release from the annuitants. The treaty continued ttirough Octob^; and about the end of that month the defendant's solicitor agreed to waive all objections, ii the plaintiff would allow him eleven guineas, and if the trustees of the stock would join in the conveyance; and re- ' fused a proposal to give up the purchase. I The plaintiff agreed to make the allowance desired. On the 4th or 5th of November the defendant's solicitor sent a draft of a con- rveyance. The trustees of the stock were pre- { vailed upon to join in the conveyance by a \new declaration of trust The draft was re- turned to the defendant's solicitor; the deeds were engrossed; and upon the 16th or 17th of December he declared himself satisfied with the title; and said, the deeds would be ready in two or three days; and that he should complete the purchase under the promise of the eleven guineas. Upon the ISth of December the houses were burnt: the insurance having been suffered to expire at Michaelmas 1796. On the 20th of Decem- ber the defendant's solicitor wrote a letter; observing, that he had taken an objection to the freehold title; and should not have thought anything more of the purchase, but for the covenant of indemnity from the trus- tees, inserted in the draft by him, and ap- proved by one of the trustees of the stock: but as that had been struck out by another trustee, he could not advise his client to ac- cept the title; and he should call for the deposit The bUl was then filed, praying a specific performance of the contract; and a decree was made by the late lord chancellor, simply referring it to the master to see whether a good title could De made. This decree was dissatisfactory to both parties, as not decid- ing the question; and a petition of rehearing was presented by the plaintiff. Mr. Mansfield and Mr. Cox, for plaintiff, Insisted, that the objection to the title from the charge of the annuities was frivolous: there being a fund of stock with a trust de- clared upon It Mr. Sutton and i.^r. Lewis, for defendant. —The delay in performing this contract arose from the defect of the title; and the plaintiff ought to have acquainted the de- fendant with the circumstance of the insur- ance expiring. In Stent v. Baylis, 2 P. Wms. 217, referred to in Mortimer v. Capper, 3 Brown, Ch. 156, Sir Joseph Jekyll expresses a clear opinion upon this case. 2 P. Wms. 220. Pope V. Roots, 7 Brown, Ch. 184. Mr. Mansfield, in reply.— All the cases re- ferred to are got rid of by Jackson v. Lever, 3 Brown, Ch. 605. The former cases pro- ceeded upon this fallacy, that the party could not have the thing bought; for chance had decided against him: but he had the chance; and he must take it each way. In the case of a life it might last fifty years, and might drop the next day. But this is not a pur- chase of property aepending upon the con- tingency of life, like an annuity. A man pur- chasing a house is to consider with himself, whether he will insure or not. Not a word was said about insurance: therefore notice was not incumbent on the plaintiffs; and there was as much negligence in the defend- ant in not inquiring about that Such an accident did not occur to either of them. If in the sale of a house nothing is said about Insurance, it could not enter into the bargain. LORD CHANCELLOR.— The abstract first delivered was undoubtedly imperfect in cer- tain respects. It did not go back further than forty-three years; and there was no specific mention of the property in Ratcliffe Highway in the abstract There was also the objection upon the annuities. Unques- tionably that abstract was not satisfactory; and the express condition of the sale could not be complied with. Harrington v. Wheel- er, 4 Ves. 686; Seton v. Slade, 7 Ves. 265. Of course the defendant could not be called on to pay his purchase money. Then It was with the vendee to choose to go on with the bargain, or to put an end to the contract. The agent however chose not to put an end to It; and though a circumstance took place at Michaelmas sufficient to put an end to any action of law, the contract was kept alive, at least to the 10th of December. It is clear, the objection was given up as to the freehold title; and the only difference was as to the indemnity against the annuities, af- fecting these with other premises. I do not consider whether this objection is of form or substance: but leave it to be determined, when it may be necessary, whether the pur- chaser under such circumstances has not a right to insist that the annuitants shall re- lease the premises;-, or whether this court will say, under all circumstances the pm'- chasers shall take the premises burthened with the annuities, with a great number of others, and seek their indemnity against the trust property and the trustees, if they pre- ferred a personal covenant by the trustees. If in equity these premises belonged to the 660 SPEOIFIO PERFORMANCE OP OONTRAOTS. vendee, he would have a title to the rents and profits at Michaelmas by relation; and he must pay the purchase money with interest from that time. First, it is said, the title was never accepted in fact: 2dly, if not, mi- der these circumstances a court of equity will not compel a specific performance. As to the second point, the objection is ground- ed upon two circumstances: 1st, the simple fact of the fire; 2dly, that the premises had been insured prior to the contract; that that fact, and the fact that the Insurance ex- pired at Michaelmas 1796, were not disclos- ed; and that the premises afterwards re- mained uncovered by any insurance. The authority of Sir Joseph Jekyll has been men- tioned: but no ease has been cited in support of that dictum; and it is in a degree suggest- ed, not admitted, at the bar, that it may be considered over-ruled by subsequent cases. As to the mere effect of the accident itself no solid objection can be founded upon that ) simply; for if the party by the contract has become in equity the owner of the premises, they are his to all intents and purposes. See Foster V. Foust, 2 Serg. & R. 11. They are vendible as his, chargeable as his, capable of being incumbered as his; they may be devised as his; they may be assets; and they would descend to his heir. If a man had signed a contract for a house upon that land, which is now appropriated to the Lon- don Docks, and that house was burnt, it would be impossible to say to the purchaser, willing to take the land without the house, because much more valuable on account of this project, that he should not have it. As to the annuity cases and all the others, the true answer has been given; that the party has the thing he bought, though no payment may have been made; for he boughtsub- ject to^conUngMicy. If^TB''"a I'tSUl' "eiitSE?" he of c5i3SeHSB^It. Then as to the non- communication, I cannot say that, in my judgment, forms an objection; for I do not see how I can allow it, unless I say this court warrants to every buyer of a house that the house Is insured, and not only in- sured, but to the full extent of the value. The house is bought, not the benefit of any existing policy. However general the prac- tice of Insuring from fire ia, it is not imiver- sal; and it is yet less general that houses are Insured to their full value, or near it The question, whether insured or not, is with the vendor solely, not with the vendee; imless he proposes something upon that; and makes it matter of contract with the vendor, that the vendee shall buy according to that fact, that the house is insured. 1 am there- fore of opinion, that if the agent on behalf of this purchaser did accept this title pre- viously to the destruction of the premises, the vendors are in the situation in which they would have been if the title and the conveyance were ready at Michaelmas 1796, but by the default of the vendee were not executed, but the title was accepted, and the premises were burnt down on the quarter day. As to the fact, where there has been a great deal of treaty, and a considerable hardship must fall upon one party, if the case is to be put entirely upon the fact, the court must guard against surprise; and I am not sure, even the plaintiff's witnesses accurately tmderstand the nature of the facts they depose to. It is to be observed, they are all the plaintiff's agents, subject to the influence necessarily belonging to that situation. The case is therefore not suffi- ciently clear upon the fact, and there ought to be some reference to the master or an Inquiry before a jury; but that must not be upon the validity of the title; for it is clear, the objection to the freehold title, that it was not old enough, and the other objection, that the purchaser had a right to insist upon a release of the annuities, were waived. The question between them Is, whether the par- ties agreed that an Indemnity should be giv- en in any form; and If so, in what form. The Inquiry must be, whether the title had been accepted by the agent on behalf of the j defendant on or before the 18th of December J 1796. That inquiry wUl miscarry, unless the master, or the jury. If satisfied that there was an acquiescence In the proposal, shall be of opinion, that Is an acceptance of the proposal. I should think, a court of law would hold that: but If there Is any doubt of it, I would rather refer It to the master to Inqtdre, whether the agent on behalf of the defendant had accepted or acquiesced in the proposal; with a dfrectlon, that he should be lixamined; and they will appre- ciate the credit due to him; and will not forget, that he was bartering for himself for eleven guineas; If that appears. The decree was reversed; and the refer- ence to the master directed accordingly. SPECIFIC PBKFORMANCB OF CONTRACTS. 661 GOULD V. MUROH. (70 Me. 288.) Supreme Judicial Court of Maine. Oct. 29, 1879. Assumpsit on two promissory notes by Bills Gould against Lewis W. Murch. It is stipulated in the report that the case was to be tried if defendant has any de- fense, otherwise defendant was to be de- faulted. The notes were given in consider- ation for a bond conveying real estate. De- fendant took possession of the property when the notes and bond were given; and while he was in possession, but before the matu- rity of the notes, the property was destroy- ed by fire. The question presented is wheth- fer such destruction of the premises consti- tuted a failure of consideration for the notes. C. L. Jones, for plaintiff. Walton & Wal- ton, for defendant. LIBBBY, J. The notes In suit, with thret others, were given in payment for a lot of land on which were a dwelling house and other buildings; and on payment of the notes at maturity, the plaintiff agreed to convey the premises to the defendant The defend- ant was to have possession of the premises till he made default of payment as agreed, and he entered into possession under the agreement. Within a year from that time the buildings were burnt without the fault of either party. The question presented to the court is whether the destruction of the buildings can be set up by the defendant as a defense to the notes. We thin k it can be. When the owner of a lot of land with build- ings upon it agrees to convey it at a future day on payment of the purchase money by the purchaser, and before payment and con- veyance the buildings are destroyed by fire without the fault of either par^, the loss must fall upon the vendor; and if the build- ings formed a material part of the value of the premises, the vendee cannot be com- pelled to take a deed of the land alone, and pay the purchase money; and If he has paid it he may recover It back. Thompson v. Gould, 20 Pick. 134, and cases there cited. Gould V. Thompson, 4 Mete. (Mass.) 224; Wells v. Calnan, 107 Mass. 514. In Thompson v. Gould, the authorities bear- ing upon the question were elaborately ex- amined and considered, and Wilde, J., in the opinion of the court says: "In respect to the loss of personal property, under the like cir- cumstances, the principle of law is perfectly clear and well established by all the author- ities. When there is an agreement for the sale and purchase of goods and chattels, and after the agreement and before the sale la completed the property is destroyed by cas- ualty, the loss must be borne by the vendor; the property remaining vested in him at the time of the destruction. Tarling v. Baxter, 9 Dowl. & R. 276; Hlnde v. Whitehouse, 7 East, 558; Rugg v. Mlnett, 11 Bast, 210. No reason has been given, nor can be given, why the same principle should not be applied to real estate. The principle in no respect de- pends upon the nature and quality of the property, and there can therefore be no dis- tinction between personal and real estate." In WeHs v. Calnan the same rule was af- firmed. Gray, J., in the opinion of the court, very clearly and tersely states it as follows: "When property, real or personal, is destroy- ed by fire, the loss falls upon the party who is the owner at the time; and if the owner of a house and land agrees to sell and convey it upon the payment of a certain price which the pturchaser agrees to pay, and before full payment the house is destroyed by accidental fire, so that the vendor cannot perform the agreement on his part, he cannot recover or retain any part of the purchase money." The reasons upon which the rule is based are clearly and fully stated In the cases cited, and it is unnecessary to repeat them here. But the use and occupation of the premises by the defendant, from the time the agree- ment for the sale and purchase was made, formed a part of the consideration for the notes; and the plaintiff can recover in this, action a sum equal to the value of the use of \ the premises while the defendant occupied ] them. Wells v. Calnan, supra. In accordance with the stipulations in the report, the action must stand for trial. APPLETON, C. J., WALTON, BARROWS and DANFORTH, JJ., concurred. SYMONDS, J., did not sit. 662 SPBCIFIO PERFORMANCE OP CONTRACTS. MARKS et al. r. TICHBNOR.1 (4 S. W. 225, 85 Ky. 536.) Court of Appeals of Kentucky. May 5, 1887. Appeal from clrcviit court, McLean county. Owen & Ellis and W. B. Noe, for appel- lants. Jep. C. Jonson, for appellee. LEWIS, J. Appellee having sold, and by deed executed October 24, 1884, conveyed, to appellants three tracts of land adjoining,, and constituting one farm, instituted an ac- tion to recover judgment on the notes given for the purchase money, and to subject the land to satisfy it In defense, appellants state that the deed as written does not con- tain the whole contract entered into between the parties, but a portion of it was by mis- take omitted, and that they accepted the deed upon the condition of the execution by appellee of the following writing, which em- braces the omitted part: "I have this day sold to James A. and Samuel C. Marks my farm known as the 'Daniel McFarland Farm.' I agree to cover said bouse, and put two coats of paint on the outside, and deliver the same to said parties by or on the first day of January, 1885. Eleven thousand of the shingles is to be hand-shaved shingles, and the remainder to be cut shingles. I also agree to furnish as much as 200 feet of sheeting if needed on said house; and, if any more is needed, said Marks is to furnish it T. C. Tichenor." It is further stated that about November 29, 1884, the dwelling-house mentioned was destroyed by fire, in consequence of which appellee never did deliver it, and they there- fore ask that the notes sued on be credited 1 The purchaser under an executory contract for the sale of land is the equitable owner. Burkhart v. Howard (Or.) 12 Pac. 79; Gilbert V. Sleeper (Cal.) Id. 172; Alpers v. Knight (Cal.) 8 Pac 446; Taylor v. Holmes, 14 Fed. 498; Martin v. Carver (Ky.) 1 S. W. 199; Bartle v. Curtis (Iowa) 26 N. W. 73w Any ac- cidental loss accruing between the time of his purchase and the conveyance of the legal title must be borne by him, and he is entitled to all the benefits. Martin v. Carver (Ky.) 1 S. W. 199. by the value of the house, which they aver was $1,0(00. It is stated in the reply, and not controverted, that, at the time of the sale of the land, it was in the possession of a tenant of appellee, whose term did not ex- pire until January 1, 1885, of which fact appellants were aware, and that time was agreed on in view of such tenancy. In the sale of land it becomes the real pf^gP^ bf'the vendeefro m j^ execution" deIT\^ry,^ anJTacceptancejof the .;^tten con-' frlct. ' "It Is veSarbTe as his, chargeable as' his' and capable of being devised or descend- ing as his." Consequently it is a well-estab- lished and reasonable rule that the destruc- tion of buildings thereon by fire, between the time of such contract of sale and the time fixed upon in the contract for the de- livery of possession by the vendor to the vendee, must be the loss of the latter and not of the former. Calhoon v. Belden, 3 Bush, 674. There are only two exceptions to this rule. The first is when, as was the case in Combs v. Fisher, 3 Bibb, 51, there is an express contract to deliver the possession of the land, with the improvements or build- ings thereon, in the same situation as was the case when the sale was made. The second Is when, as was In Cornish v. Strut- ton, 8 B. Mon. 586, the building has been destroyed by the culpable negligence of the vendor. There Is no allegation or proof that the destruction of the dwelling-house In this case was caused by the negligence of the vendor, or any other person; nor do we think the contract, fairly construed, amounts to an ex- press agreement by the vendor to assume the risk of the destruction of the buildings by fire. The purpose of the supplemental contract executed by appellee was to provide for the repair by him of the house as there- in agreed, and which the evidence shows he did do, but not to insure it against de- struction by fire, or to shift the risk from appellants to himself. He simply covenanted to deliver possession, without any express undertaking to sustain any loss that might arise from the burning of the bouse. Judgment afi^rmed. SPECIFIC PERFORMANCE OF CONTRACTS. 663 BOSTWICK V. BEACH et al. (12 N. E. 32, 105 N. Y. 661.) Court of Appeals of New York. April 26, ISSl. Application to modify interlocutory judg- ment This was an action for specific perform- ance, brought against defendants, as execu- tors, upon a contract for the sale of land, in pursuance of a power in the testator's will. The plaintiff deposited the unpaid por- tions of the purchase money at the time when the conTeyance should have been exe- cuted. Upon a former appeal (9 N. B. 41) the interlocutory judgment against the exec- utors was, with some modifications, affirmed, by which the plaintifE's prayer for specific performance was granted, and he was not required to pay interest on the purchase money. The object of this application is to have such interest allowed the executors. Milton A. Fowler, for appellants. O. D. M. Boker, for respondent RAPALLO, J. When this case was be- fore us on the appeal from the interlocutory judgment, it appeared from the findings that the unpaid portion of the purchase money ($10,500) had been tendered to the executors on the first of March, 1882, and that, on their refusal to accept the same, and deliver the deed, that sum had been deposited by the plaintiff in the First National Bank of LowviUe to the credit of the executors, 'to be paid to them on the delivery of the deed. There was nothing to show that after that deposit the plaintiff had derived any bene- fit from the use of the fund, and presump- tively it had lain idle and unproductive. Therefore the purchaser was not charged with interest on the purchase money. It is now shown, by affidavits, that, short- ly after this deposit, the fund was wholly or in part withdrawn from the bank by the plaintiff, and we are now asked to add to the modifications directed in the opinion a further provision charging the plaintiff with interest on the amoimt so withdrawn. If the fact had appeared in the case when before us on appeal, this modification would doubt- less have been proper, and even now we might find means to make it, if no other facts were shown on the part of the plain- tiff raising a counter equity. But, in op- position to the application of the defend- ants, the plaintiff presents affidavits showing that during the pendency of this action, in consequence of neglect and mismanagement on the part of the defendants, the ditches on the premises have been allowed to be filled up, the buildings to become dilapidated, the water-works to go to decay, the fences to be destroyed, and the value of the prop- erty to be thus depreciated to an amount ex- ceeding the interest on the unpaid purchase money. If these facts had appeared, they undoubtedly would have influenced our judg- ment in respect to allowing interest upon the purchase money, or making some other provi- sion for compensating the plaintiff for the dam- ages alleged to have been sustained. Where specific performance Is decreed, the court will, so far as possible, place the parties in the same situation they would have been in it the contract had been performed at the time agreed upon, and by the application of the rule of courts of equity, by which things which ought to have been done are consider- ed as having been done at the proper time, the vendor is regarded as trustee of the land for the benefit of the purchaser, and liable to account to him for the rents and profits, or for the value of the use and occupation, and the purchaser Is treated as trustee of the purchase money unpaid, and charged with interest thereon, unless the purchase money has been appropriated, and no bene- fit has accrued from it to the purchaser. But this is not the only manner which the court has adopted to adjust the equities of the parties. For instance, where the sub- ject of the purchase was a leasehold estate in a mill, and the delay of performance of the contract was attributable to the vendoi for his failure to show good right to assign his lease, and dilapidations had occurred, he was charged with the expenses of repairs required to put the mill in tenantable con- dition, and of those which had been incurred for keeping up the machinery until the pur- chaser could prudently take possession. And In Ferguson v. Tadman, 1 Sim. 530, where the estate had deteriorated in value by rea- son of mismanagement and neglect, during five years which elapsed between the filing of the bill for specific performance and the decree, the amount of the deterioration, with interest, was ascertained, and allowed to the plaintiff out of the purchase money which had been paid into court. In Worrall v. Munn, 38 N. Y. 137, these principles were recognized; and the vendee, having obtained a decree for specific performance, was allow- ed the damages sustained, during the pen- dency of the suit, by deterioration from waste committed by the defendant during the pendency of the suit. If the matter should now be opened for the purpose of letting the defendants in to claim interest on the purchase money, it would be no more than just that the same Indulgence should be extended to the plain- tiff, to let him In to prove the damages he claims by reason of deteriorations caused by mismanagement and neglect. These points appear to be the only ones as to which the parties have been unable to agree, in settling the form of the Judgment. From the affi- davits presented, it would seem that the damages claimed by the plaintiff would about equal the interest claimed by the defend- ants; but, if the judgment below is modified so as to admit the allowance of Interest, it should also be modified so as to admit proof of the damages claimed. If the statements 664 SPECIFIC PERFORMANCE OF CONTRACTS. In the affidavits are correct, justice would apparently be done by leaving the matter as it is, and confining the modifications of the interlocutory judgment to those directed in tne original opinion of this court, which ap- pear to be substantially contained in the modified judgment as proposed on the part of the plaintifC. The details, however, are subject to settlement in the supreme court. But if the defendants desire to insist upon their claim to be allowed interest, and to contest the amount of damages resulting from deterioration and mismanagement, the modified judgment should contain provisions referring it to the referee to ascertain what amount of the sum deposited in the bank was withdrawn by the plaintiff, or subject to his control, and for what length of time, and charging him with interest thereon dur- ing that time. The amount of deterioration of the property, by reason of mismanage- ment and neglect, between the first of March, 1882, and the time of plaintiff's ob- taining possession, should also be ascertain- ed and charged, either to the defendants, as executors, or to the defendant Emily P. Beach, as the equities may appear. She cer- tainly has no reason to complain of any loss she may sustain through this litigation, as it appears to have been caused by her per- sistent refusal to carry out the contract, which, according to the findings of fact, was intelligently entered into by her, and was a fair contract for the full value of the farm, and was beneficial to all concerned in the estate. By this unjustifiable refusal on her part, all parties have been subjected to dam- age, and there is no reason why the loss should fall upon the plaintiff, who seems to have been always ready to perform his part oi the contract. It is to be hoped that, upon the principles here indicated, the counsel for the respective parties may be able to agree upon the form of judgment to be entered. Otherwise it may be settled by the supreme court, and the interlocutory judgment may be modified so as to provide for the ascertainment and allowance of the interest claimed by the defendants, and also of the damages claimed by the plaintiff, at the election of the de- fendants. If the defendant shall not con- sent to have the damages ascertained and allowed, the application for the allowance of interest is denied. (All concur.) SPECIFIC PERFORMANCE OF CONTRACTS. 665 LEWIS v. HAWKINS et al. (23 Wall. 119, 23 L. Ed. 113.) Supreme Court of the United States. Oct 1874. Appeal from the Circuit Court for the Western District of Arkansas. A- H. Garland, for appellant Pike & John- son, for the ■widow. SWAYNB, Justice. Upon the execution of the notes and the title-bond between Lewis and Hawkins, Lewis held the legal title as trustee for Hawkins; and Hawkins was a trustee for Lewis as to the purchase-money. Hawkins was cestui que trust as to the for- mer and Lewis as to the latter. 1 Story, Eq. Jut. I 789; 2 Story, Bq. Jur. § 1212; 1 Sugd. Vend. 175; Swai-twout v. Burr, 1 Barb. 499; Champion t. Brown, 6 Johns. Ch. 402. The seller under such circumstances has a Ten- dor's lien, which is certainly not impaired by withholding the conveyance. The equitable estate of the vendee is alienable, descendible, and devisable In like manner as real estate held by a legal titla The securities for the purchase-money are personalty, and in the event of the death of the vendor, go to his personal representative. 2 Story, Eq. Jur. § 1212. It docs not appear that the title-bond authorized Hawkins to take possession, or that he did so. If there were no such au- thority, and he entered into possession, he held as a licensee or tenant at will. Suflem V. Townsend, 9 Johns. 35; Dollttle v. Eddy, 7 Barb. 75. The vendee cannot in such cases dispute the title of his vendor any more than the lessee can dispute that of his lessor. Whiteside v. Jackson, 1 Wend. 422; Hamil- ton V. Taylor, 1 LitL Sel. Cas. 444. Any other person coming into possession under the vendee, either with his consent or as an in- truder, is bound by a like estoppel. Jackson V. Walker, 7 Cow. 637. Hamiter, having bought and assumed the payment of the pur- chase-money stipulated to be paid by Hawk- ins, took the property subject to the same lia- bilities, legal and equitable, to which it was subject in the hands of Hawkins. 1 Story, Eq. Jur. § 789; 1 Sugd. Vend. (Perkins' Ed.) 175; Champion v. Brown, 6 Johns. Ch. 402; Muldrow's Ex'rs v. Muldrow's Heirs, 2 Dana, 887; 2 Har. & J. 64; Shipman v. Cook, 16 N. J. Bq. 254. The discharge In bankruptcy released Hawkins from personal liability for his debt, but the statute of limitations cannot avail to I»x>tect the land from the vendor's Hen upon It, for the purchase-money which Hawkins agreed to pay, and which Hamiter, when he bought the land, assumed and agreed to pay for him. We have already shown that as between Lewis and Hawkins there was a trust which embraced the purchase-money and fastened itself upon the land. The debt did not affect his assignee personally, but as we have shown also It continued to bind the land In all re- spects as If the transfer had not been made. The trust was an express one. Its terms and purposes were evinced by the title-bond, and the promissory notes to which that instru- ment referred. "As between trust.ee and ces- tui que trust, in the case of an express trust, the Eitatute of limltatian has no application, and no length of time is a bar. Accounts have been decreed against trustees extending over periods of thirty, forty, and even fifty years. The relations and privity between trustee and cestui que trust are such that the possession of one is the possession of the other, and there can be no adverse possession during the continuance of the relation. • • ♦ A cestui que trust cannot set up the statute against his co-cestui que trust, nor against his trustee. These rules apply in all cases of express trusts." Perry, Trusts, § 863. "Ag between trustees and cestui que trust, an express trust, constituted by the act of the parties themselves, will not be barred by any length of time, for in such cases there is no adverse possession, the possession of the trus- tee being the possession of the cestui que trust." Hill, Trustees, 264*. The same principle applies where the cestui que trust is in possession. He is regarded as a tenant at will to the trustee. "Therefore, until this tenancy is determined there can be no adverse possession between the parties." Id. 266*. The relation once established is presumed to continue, unless a distinct de- nial, or acts, or a possession inconsistent with it are clearly shown. Whiting v. Whiting, 4 Gray, 236; Creigh's Heirs v. Henson, 10 Grat. 231; Splekemeln v. Hotham, Kay, 669; Gar- ard V. Tuck, 65 E. C. L. 249, 8 Man. G. & S. 231; Decouche v. Savetler, 3 Johns. Oh. 190; Anstiee v. Brown, 6 Paige, 448; Kane v. Bloodgood, 7 Johns. Ch. 90. In many of the cases It is held that the lien of the vendor under the circumstances of this case Is substantially a mortgage. Lin- gan V. Henderson, 1 Bland, Ch. 236; Moreton V. Harrison, Id. 491; Relfe v. Relfe, 34 Ala. 504. It is well settled that the possession of the mortgagor Is not adverse to that of the mortgagee. In the case last cited It is said that to apply the statute of limitations "would be like making the lapse of time the origin of title in the tenant against his land- lord." That the remedy upon the bond, note, or simple contract for the purchase-money is barred in cases like this, in no wise affects the right to proceed in equity against the land. As in respect to mortgages, the lien will be presumed to have been satisfied after the lapse of twenty years from the maturity of the debt, but in both cases laches may be explained and the presumption repelled. Moreton v. Harrison, supra. The principles upon which this opinion proceeds are distinct- ly recognized in Harris v. King, 16 Ark. 122. That case alone would be decisive of the case before ua. The considerations which apply 666 SPECIFIO PERFORMANCE OP CONTRACTS. where the vendor In such cases resorts to an action of ejectment were examined by this court in Burnett v. CaldweU, 9 WaU. 290. The bill avers the tender of a deed by the complainant to Hawluns before the bill was filed. The answer of Hawkins denies the al- legation. The testimony of Lewis sustains the bill; that of Hawkins the answer. The averment is not established. Except as to the costs the point Is of no significance. If the tender of a deed had been properly made, and there had been no unjustifiable r«dstance to the taking of the decree by the complain- ant, to which he is entitled, he would have been required to pay all the costs. There be- ing a contest, and it appearing that a tender would have been without effect, the costs must abide the result of the litigation. Keis- selbrack v. Livingston, 4 Johns. Oh. 144; Han- son V. Lake, 2 Younge & C. 328. Theni is manifest error in the decree, but the bill is defective in not making the heirs- at-law of Hamiter parties, unless there is some statutory provision of the State of Ar- kansas which obviates this objection. If necessary the bill can be amended in the court below. Decree reversed, and the cause remanded with directions to proceed in conformity with this opinion. SPECIFIC PERFORMANCE OF CONTRACTS. 667 BISSELIi V. HETWABD. (96 U. S. 580, 24 L. Ed. 6T8.) Supreme Court of the United States. Oct 1877. Appeal from the circuit court of the United States for the district of South Carolina. William C. Heyward, who was seised in fee of certain lands in the state of South Carolina, made his last will and testament, bearing date Jan. 20, 1852. So much there- of a.s relates to them is as follows: "I give to my brother, Henry Heyward, of New Xorli" (here is a description of the lands), "for and during the term of his natural life, and, after the determination of that estate, I give the same to my friend, William C. Bee, and his hehs, to prevent the contingent remainders hereinafter limited from being barred; In trust, nevertheless, during the lifetime of my said brother, to apply the income thereof to his use and benefit; and, from and after his decease, I give the use of the same estate, real and personal, to his eldest son, Henry Heyward, Jr., if then living, until he attains the age of twenty-one years; and if he should survive his father, and attain the age of twentjH)ne years, to him and his heirs for ever: but in case the said Henry Heyward, Jr., should not survive his father, and attain the age of twenty-one years, then I give the whole of the said estate, real and personal, after the decease of my brother, Henry Hey- ward, for the use of the person who may thereafter, from time to time, sustain the character of heir male of the body of my said brother, Henry Heyward, as such term was used In the common law before the abolition of the rights of primogeniture, un- til such person shall attain the age of twen- ty-one years, or the expiration of twenty-one years from the death of my said brother, whichever may first happen; and, after the happening of either of those events, to the then heir male of the body of my brother, absolutely and for ever." On the eighteenth day of June, 1863, Wil- liam C. Heyward contracted to sell, for $120,000, said lands, to John B. Bissell; who took immediate possession of them, which he has ever since retained. On July 31, follow- ing, he paid $20,000 of the purchase-money. During that year, and before the completion of the purchase, Heyward died, and said Bee, appointed the executor of his will, duly qualified as such. Owing to the civil war and other causes, matters remained unaltered in their main features until March, 1870, when said Henry Heyward, a citizen of New York, filed his bill against said Bissell and said Bee, citizens of South Carolina, to com- pel the specific performance, by Bissell, of his agreement to purchase. The answer of Bissell admits the agreement and his pos- session of the property, and his payment of $20,000; and alleges that he was provided with the means of paying the balance of the purchase-money; that neither said William C. Heyward, nor, since his death, said Bee, tendered him a conveyance; and that he was willing to pay when he should receive a valid conveyance; that he sold sixty-three bales of cotton, for cash in Confederate notes, and on Feb. 11, 1861, tendered the said bal- ance, in said notes, to the executor, who de- clined to receive them, on the ground that he could not make a good title. Bee, in his answer, admitted the tender to him by Bis- sell, and his refusal to accept it, on the ground that he was advised that he could neither make a title nor safely accept pay- ment in Confederate currency. It was ad- mitted, on the hearing below, that said mon- ey was tendered at that date, in such curren- cy; that the parties through whom a good title could be made lived in New York; and that, after Bee's refusal to accept the notes tendered, Bissell used them for other pur- poses. It does not appear by the pleadings, the evidence, or the agreed statement of facts on file, whether Henry Heyward, Jr., who was living when the bill was filed, and had then attained the age of twenty-one years, is now living. There is neither allegation nor proof of his death. The court decreed that Bissell should per- form his contract of purchase, and pay, in United States currency, a sum equal to the value of $100,000 in Confederate currency on June 18, 1863, the day of sale, with interest thereon until Feb. 11, 1864; from and after which day he should pay interest only on such a sum as was the value of $100,000 on said 18th of June, less its value on said 11th of February; said values and interest to be ascertained by the clerk of the court to whom the cause was referred, as master, to state and report the same; that upon Bissell's maldng the payment as stated and reported, that the clerk, "as master to said William C. Bee, executor of William C. Heyward," con- vey the premises in fee-simple; but that, up- on his failure so to pay, the master should sell the property, at public auction, for cash. Said Henry Heyward died before the ex- ecution of the decree. On Nov. 23, 1874, Zef a Heyward, his wife, Zefita Heyward, his daughter, and Frank Heyward, his son, filed their bill of revivor, reciting the original bill, the proceedings thereunder, the reference to the master, the death of said Henry,— leav- ing a last will and testament, which was du- ly proved before the surrogate of the county of New York,— their appointment to execute the same, and that said Zefa alone took up- on herself the execution thereof, and quali- fied accordingly, and praying that the bill might be revived. This bill was duly serv- ed; no answer was made, and an order of re- vivor was entered accordingly. The master subsequently reported that the balance found by him to be due upon the contract was $28,353.50; and that, In reach- ing that result, he compared the value of the Confederate currency, in which the contract 668 SPECIFIC PERFORMANCB OF CONTRACTS. was payable, with United States paper cur- rency at the date of the contract and of the tender. He found that, on the 18th of June, 1863, $1 in United States currency was worth $5.20 in Confederate currency; and that on the 14th of February, 1864, the value was $1 to $13.01. The court confirmed the report, Dec. 15, 1874; and decreed that the inter- locutory decree previously rendered be car- ried into execution. Bissell thereupon appeal- ed to this court; Bee declining to join in the appeal. William A. Maury, for appellant. Edward McOrady, for appellee. MR. JUSTICE HUNT, after stating the case, delivered the opinion of the court. It is objected that there is a fatal defect of parties complainant. The point of this ob- jection is that Henry Heyward and William C. Bee were not able together to make a title that ought to be satisfactory to Bissell, and hence that the decree should be reversed. The will of William C. Heyward took ef- fect only upon his death. Until the occur- rence of that event, the devisees therein nam- ed had no more title to or interest in the property in question than if their names had not been mentioned in the will. If he had consummated his contract with Bissell by executing a deed of the property, this would have worked an absolute revocation of the devise as to this property. The execution of the contract (with the partial payment there- on) was a transfer in equity of the title of the land to Bissell; leaving tn the representa- tives of William 0. Heyward simply a naked title as trustee for Bissell, to be conveyed upon performance on his part. By the terms of the will, this legal title was vested in William C. Bee, the trustee to preserve re- mainders. Henry Heyward was tenant for life, and as such offered to convey to Bissell, "by feoff- ment, and livery of seisin, and to procure the release of right of entry and action by Wil- liam C. Bee, the remainder-man for preserv- ing contingent remainders;" and he avers in his bill that this would have made a good and effectual conveyance of the legal estate. Bee held the legal title under the will, and his title to the legal estate continued in force as long as the remainders were contingent; and there is nothing in any part of the rec- ord showing that such was not the condi- tion of the title when Heyward offered to convey, and that it is not so at the present time. Chancellor Kent says (4 Kent, Comm. p. 256), "The trustees are entitled to a right of entry in case of a wrongful alienation by the tenant for life, or whenever his estate for life determines in his lifetime by any other means. The trustees are under the cogni- zance of a court of equity, and it will con- trol their acts, and punish them for a breach of trust; and if the feoffment be made by the purchaser with notice of the trust, as was the fact in Chudleigh's Case, a court of chan- cery will hold the lands still subject to the former trust. But this interference of eq- uity is regulated by the circumstances and justice of the particular ease. The court may, in its discretion, forbear to interfere; or it may and will allow, or even compel, the trustees to join in a sale to destroy the contingent remainder, if it should appear that such a measure would answer the uses orig- inally intended by the settlement." To this he cites many authorities. We think this objection is not well taken. Was there error in the amount decreed to be paid? One of the statements of fact in the case sets forth that Bissell tendered the money; and falls to state that he deposited it, or in any manner set it apart or appropriated it for the purpose of the tender. The other states that he used the money he had thus provided. The legal effect is the same. To have the effect of stopping interest or costs, a tender must be kept good; and it ceases to have that effect when the money is used by the debtor for other purposes. Roosvelt V. Bank, 45 Barb. 579; Giles v. Hart, 3 Salk. 343; Sweatland v. Squire, 2 Salk. 623. The defendant insists that the value of the Confederate notes should be reduced to gold or sterling exchange, which would still far- ther depreciate their value. This objection cannot be sustained. By the laws of the United States, all contracts between individuals could then be lawfully discharged in the legal-tender notes of the United States. These notes, and not gold or sterling exchange, were the standard of val- ue to which other currencies are to be redu- ced to ascertain their value. Knox v. Lee, 12 Wall. 457; Thorington v. Smith, 8 Wall. 1; Dooley v. Smith, 13 Wall. 604; Rev. St. S. a p. 285. Confederate notes, although without the authority of the United States, and, indeed, in hostility to it, formed the only currency of South Carolina at the date of the trans- actions in question. United States currency was unknown, except when found upon the person of the soldiers of the United States taken and held as prisoners. Confederate notes can in no proper sense be treated as commodities merely. The con- tract in question was made payable in terms in dollars; but both parties agree in writing that Confederate-note dollars were intended. The $20,000 was paid in Confederate notes; and, when the defendant tendered his $100,- 000, he tendered it in Confederate notes as dollars, and he obtained them by selling six- ty-three bales of cotton for Confederate dol- lars. Stewart v. Salamon, 94 U. S. 434. Decree affirmed. SPBCIFIO PERFORMANCE OF CONTRACTS. 669 WETZIiER V. DUFFY. (47 N. W. 1S4» 78 Wis. 170.) Supreme Court of Wisconsin. Nov. 25, 1890. Appeal from circuit court, Ashland county; 3. K. Parish, Judge. Cole & O'Keefe, for appellant Sleight & Foster, for respondent. TAYLOR, J. The facts hi this ease are substantially as follows: On the 14th of May, 1887, the plaintiff agreed to convey to the said defendant a certain lot of land sit- uate In Ashland county, described as follows: "Commencing at the north-west corner of lot No. one, (1.) in block No. six, (6,) of the vil- lage of Hurley, according to the recorded plat thereof; thence east twenty-five (25) feet; thence south ninety (90) feet; thence west twenty-five (25) feet; and thence north nmety (90) feet to tne place of begmning," —for the consideration of $2,500 agreed to be paid by the defendant That on the same day the plaintiff executed a deed of convey- ance to the said defenaant which both par- ties supposed contained a correct description of the property sold to the defendant; but ui fact, the description was imperfect and does not describe the land sold and intended to be conveyed. The description in the deed is as follows: '"The following described real estate situated in the county of Ashland, and state of Wisconsin, — ^to-wit: commencing at the north-west comer of lot number one, (1,) in block number six, (6,) in the village of Hurley, according to the recorded plat there- of; running thence west twenty-five (25) feet; thence south ninety (90) feet; thence east twenty-five (25) feet; thence north nine- ty (90) feet to the original point of begin- ning." Said deed was recorded in the proper recorder's office, and on the same day the defendant executed and delivered to the plaintiff a mortgage upon the property sold by the plahitiff to the defendant in which mortgage the property is correctly described, to secure the payment of $1,000, part of the purchase money. The complaint alleges the non-payment of a part of the money due up- on the mortgage, and asks judgment first to correct the description In the deed from the plaintiff to the defendant and for a judg- ment to foreclose the said mortgage. The answer admits all the material allegations of the complaint, and further admits that supposing the plaintiffs deed had conveyed to her the land she pturchased, she went into the possession of the same, and paid $300 of the sum secured by said mortgage; that on the 27th day of June, A. D. 1887, a fire broke out In the frame store building sit- uate on said lot and It was wholly destroyed by fire, the defendant having no Insurance thereon, thereby destroying the greater part of the value of said lot to the defendant It is admitted that this frame building was on the lot when the plaintiff agreed to convey the same to the aefendant and at the time the deed was in fact made, and the mort- gage back to the plaintiff given to secure the $1,000, part of the purchase price. The defendant also alleges in her answer that, at the time she purchased the lot of the plaintiff, the building on said lot was In- sured by the plaintiff for the sum of $800, in a reliable insurance company; and that he agreed to transfer said insurance policy to the defendant, for the sum of $40, to be paid by the defendant; and that the plain- tiff neglected and refused to transfer said insurance policy to the defendant to her damage. The defendant also alleges a re- fusal on the part of the plaintiff to make a good deed of conveyance of the property actually purchased by her, and sets up, as a counter-claim, a demand for the money actually paid by her upon such purchase. The action was tried by the court, and, after hearing the testimony offered by the re- spective parties, the court decided in favor of the plaintiff and gave judgment reform- ing the deed and for a foreclosure of the mortgage. The defendant excepted to the findings of fact and conclusions of law. Aft- er a careful reading of the testimony, we think it very clear that the findings of fact are fully sustained by the evidence, and the conclusions of law, and the judgment there- on in favor of the plaintiff, are clearly right. The learned coimsel for the defendant con- tends that the judgment is erroneous, be- cause It clearly appears from the findings and the evidence that, before the commence- ment of this action, and before a perfect deed had been given by the plaintiff to the defendant for the real estate in dispute, the building situate thereon had been burned; and so the plaintiff could not make a perfect title to the premises sold to the defendant, the house burned being a very material part of the lot sold. He argues that when a party agrees to convey real estate to another for a fixed price, and when a considerable portion of such price is paid for the buildings situate thereon, and such buildings are destroyed by fire, without the fault of the purchaser, be- fore the title is conveyed to him, he may refuse to take a conveyance, and recover the purchase money already paid, and to this proposition he cites Thompson v. Gould, 20 Pick. 134, and Wells v. Calnan, 107 Mass. 514. We think this case is clearly distin- guishable from the cases cited. In those cases the buildings on the premises were de- stroyed before the time for making the deed had arrived, and it does not appear in thp case last cited that the purchaser had taken possession under his contract. In the case at bar, the contract was a sale to be paid for on delivery of a deed, and the deed was to be delivered immediately. A deed was de- livered which was supposed to convey the land to the defendant and she took actual possession, as owner thereof, gave back a mortgage to secure part of the purchase 670 SPECIFIC PERi^ORMANCB OF CONTRACTS. money, the other part having been paid In cash. We think It very clear that, when this Imperfect deed was given, the purchase price paid, and possession taken of the prop- erty intended to be conveyed by the defend- ant, the whole equitable title, at least to the land, vested In the defendant; and while such equitable title was vested In the de- fendant, the house was destroyed by fire. Upon Its destruction the defendant did not seek to avoid her contract, but rebuilt on the lot, and continued In the actual possession of the same up to the time of the commence- ment of this action. Under such a state of facts, we think the defendant must be con- sidered the owner of the premises at the time of the fire, and the loss must fall on her. Whether we would feel bound to follow the decisions of the court of Massachusetts, had the defendant been In possession of the lot under a contract for a deed to be execut- ed at some future time, and before that time had arrived the house had been destroyed by fire, without the fault of either party, need not be determined in this case. For all practical purposes, the defendant was the owner of the bouse and lot when the fire occurred, and the Massachusetts cases place their decision upon the ground that the ac- tual owner must stand the loss. In addition to this, when the court by Its judgment cor- rected the deed, the legal estate became vest- ed In the defendant from the time of the execution and delivery of the deed. The learned counsel for the appellant urges another point as error, viz.: That the court did not make any findings upon his counter- claim for damages for a breach of contract on the part of plaintiff to transfer to her the policy of Insurance he held upon the building at the time the same was burned. We have looked into the testimony which bears upon that question, and think It is entirely insuffi- cient to sustain a finding thereon In favor of the defendant But the counsel for the de- fendant Insists that, If it be admitted that the evidence is insufficient to sustain a find- ing in favor of the plaintiff, stUl, it was error for the court not to make a finding on the question. The exceptions of the defendant are not sufficient to raise that question In this court The record does not show that he called the attention oi the court to the matter, or that he asked the court to make a finding on that point. All he did was to except to the findings because there was no finding on that question. These exceptions are not made In court, and probably never came to the knowledge of the court until he was asked to sign the bill of exceptions in the case. The rule was established in this court in Wllldnson v. Wilkinson, 59 Wis. 557, 560, 18 N. W. 527; Barry v. Schmidt, 57 Wis. 172, 15 N. W. 24; Wrlgglesworth v. Wrlgglesworth, 45 Wis. 255-257; Mead v. Supervisors, 41 Wis. 205; Williams v. Lum- ber Co., 72 Wis. 487, 40 N. W. 154,— that, if a party to an action desires any particular finding of fact he must call the attention of the court to the matter of fact upon which he desires a separate finding; otherwise, he cannot avail himself of the neglect of the court to make such finding. This rule is only applicable to a case where the testi- mony sustains the findings made by the court, and there Is not sufficient evidence in the case to require, as a matter of law, a finding different from those found by the court upon some other material matter. In this case, the court having omitted to find for either party on the counter-claim made by the defendant in her answer, and the evi- dence being of such a character as would have clearly Justified the court in finding against such counter-claim, we must infer, from his omission to make a special finding on that point, that he found against the de- fendant's claim. We think the case was fairly tried, and that the judgment is right The judgment of the circuit la affirmed. {• ./■ SPECIFIC PERFORMANCE OF CONTRACTS. 671 PHINIZT V. GUERNSEY et al. (36 S. E. 796, 111 Ga. 346.) Supreme Court of Georgia. July 1^ 1900. Error from superior court, Richmond coun- ty; E. L. Brlnson, Judge. Action by Leonard Phinizy against C. H. Guernsey and others. From a judgment sus- taining a demurrer to the complaint, plain- tiff brings error. Reversed. J. R. Lamar, for plaintiff in error. Jos. B. & Bryan Cumming, for defendants In error. C03B, J. This was an action brought for the purpose of compelling the specific per- formance of a contract for the sale of land. According to the allegations of the petition, the defendants, who were the owners of a city lot upon which was situated a building, entered into a written agreement to sell the same to the plaintiff for the sum of $16,000, of which $5 was paid when the writing was signed, and the balance was to be paid when l^e vendee should satisfy himself that the (.vendors' title to the property was good. The plaintiEE had agreed to take the property, but, though it is not affirmatively stated in the petition, it is clearly inferable therefrom that he never entered into possession. The writ- ten agreement to sell the property was sign- ed on January 28, 1899. A conveyance of the property was delayed while the plaintiff was investigating the title, and after this in- vestigation a further delay was occasioned by the fact that the defendants could not have canceled a security deed which they had given to the property, for the reason that the holder thereof refused to cancel the same until his bond for titles was surrendered, and that paper had been lost by the defendants. Pending this delay, on June 8, 1899, the build- ing on the bargained premises was destroyed by fire through no fault of the defendants. There were at the date of the fire in full force policies of fire insurance for amounts aggregating the sum of $10,000. The plain- tiff avers his desire to comply with the con- tract of sale, so far as it is possible, in the changed condition of affairs, to carry the *same into effect He alleges that he is will- ■ ing to take the land, and that the amount' I to be paid by him should be ascertained by Vhe application of equitable principles. There was no agreement between the parties with reference to the ownership of the policies of insurance prior to the actual conveyance of the property, though It was agreed that when the property was conveyed In accordance with the terms of the contract the policies of Insurance should be assigned to the plain- tiff. The prayers of the petition were that the defendants be decreed to make to plain- tiff a conveyance of the land under the terms set forth in the contract of sale, the court to make an abatement in the purchase price to the extent of the value of the Improve- ments destroyed by fire, and for general re- lief. By amendment, prayers were added that, in the event the court should be of opin- ion that the plaintiff is not entitled to an abatement of the purchase money by reason of the destruction of the improvements, a decree should be entered that upon payment of the purchase money the defendants should i be required to make to plaintiff a deed to the | land, and turn over to him the insurance money collected. There was a demurrer to the petition on the ground that the facts set forth did not entitle the plaintiff to the re- lief prayed, and that on account of the chan- 1 ged condition in affairs a specific perform- \ ance of the contract was impracticable. The I court sustained the demurrer and dismissed the petition, and to this ruling the plaintiff | excepted. 1. "When a binding agreement is entered into to sell land, equity regards the vendor as a trustee of the legal title for the bene- fit of the vendee, while the latter Is looker! upon as a trustee of the purchase money for the benefit ef the former." Bisp. Eq. (5th Ed.) § 361. This rule, however, is not applica- ble unless there is an ability as well as a willingness on the part of the vendor to convey; the purchaser not being considered as the owner from the date of the contract unless the vendor is prepared to convey a clear title and is not in default. 1 Warv. Vend. p. 195. In the case of Mackey v. Bowles, 98 Ga. 730, 25 S. B. 834, it was held that if, after the parties had entered into a binding executory contract to sell, the property was damaged before the vendor was in a condition to convey, the loss fell upon the vendor, and not on the purchaser. The loss in that case arose out of the de- struction by fire of a building situated upon the land which was the subject-matter of the sale. See, also, in this connection, Kinney v. Hickox, 24 Neb. 167. 38 N. W. 816; Thompson V. Gould, 20 Pick. 134. Applying the princi- ples above alluded to to the present case, as the vendee had not gone into possession be- fore the fire, and the vendors were not, prior to that occurrence, in a position where they could make to the vendee an unincum bered title to the property, thejwere the owners of the property at thetote'Jng^^s. occurredr anf tEe""rcss *TeBTiltmg tKeref rom muSt fail , upon them.- if the cof3facr'''Iias been so far completed that the vendee is to be treated as the owner of the premises, then the loss falls upon him, as was the case in Paine v. Meller, 6 Ves. 349, where it was held that when there was a contract for the sale of houses, which, on account of defects In the title, could not be completed,— the treaty, however, proceeding upon a proposal to waive the objection upon certain terms,— and the houses were burned before the con- veyance, the purchaser was bound if he ac- cepted the title; and the fact that the ven- dor allowed Insurance on the houses to ex- pire on the day on which the contract was originally to have been completed, without notice to the vendee, makes no difference. 2. The next question to be determined is. Vxi 672 SPECIFIC PERFORMANCE OF CONTRACTS. ■who was entitled to collect the insurance? As has been seen, the loss occasioned by the fire fell upon the vendors, and it would seem that the Indemnity against loss should belong to them. This is, we believe, the rule in such cases. If the contract of sale had been so far completed that the vendors would have held the legal title as trustees for the vendee, then they would likewise have held title to the policies In the same capacity. rBiit, as they were the owners of the prop- 1 erty to the extent that the loss occasioned A\ I by the fire fell upon them, they will also be ^^ I treated as owners of the property so far as / the right to the insurance on the building / Is concerned. In Poole v. Adams, 33 L. J. l^(N. S.) G39, it was held that a purchaser of property insured, which was destroyed by fire, does not by the mere fact of purchase ac- quire a right to the insurance money. It has been held in some cases that, where a con- tract of sale Is so far completed that the ven- dor is to be treated as the trustee of the vendee, <'ie vendor would also hold In trust for the vendee a policy of insurance which was on the property at the time the contract was made, and that, if a loss by fire oc- curred between the date of the contract and the time fixed for the delivery of the deed, the vendor would be compelled to account to the vendee for the insurance money col- lected on the policy, as he was in equity the owner of the property at the time of the fire, and the loss fell upon him. Reed v. Luliens, 44 Pa. St 200. See, also, Insur- ance Co. V. UpdegrafC, 21 Pa. St 513; Wil- liams V. Lilley, 67 Conn. 50, 34 Atl. 765, 37 L. R. A. 150; Grange Mill Co. v. Western Assur. Co. (111. Sup.) 9 N. E. 274. The rule is thus stated by the supreme court of Ohio in Gil- bert V. Port, 28 Ohio St 276 (Syl., point 8): "As between vendor and vendee under a valid and subsisting contract of sale of real estate, covered by a policy of insurance, where a loss insured against occurs after the date of the contract and before conveyance, the true test for determining for whom the money recovered on the policy belongs, In the absence of stipulations governing, is to deter- mine who was the owner, and which party actually sustained the loss." As in the pres- ent case the loss fell upon the vendors, they were entitled to collect and hold the money due by the insurance companies on the poli- cies Issued on the property. 3. When there has been a binding agree- ment to sell improved real estate, and before the property is conveyed the improvements upon the property are destroyed by fire without the fault of the vendor, will a court of equity compel, at the instance of the ven- dee, a specific performance of the contract? Section 4041 of the Civil Code declares: "The vendor seeking specific performance must show an ability to comply substantial- ly with his contract in every part, and as to all the property; but a want of title, or oth- er inability as to part, will not be a good answer to the vendee seeking performance, who is willing to accept title to the part, receiving compensation for the other. If the defects in the vendor's title be trifling or comparatively small, equity will decree at his instance granting compensation for such defects." The section quoted is but a modification of the general rules recognized by courts of equity in reference to applica- tion for the specific performance of con- tracts. "It Is settled that immaterial de- ficiencies will not deprive the vendor of his right to have the contract performed as against the vendee, provided that the defi- ciencies are such as may be compensated In money. Under such circumstances, the ven- dee may be compelled to take the property, and a suitable deduction will be made in the price. But, if the deficiencies are material and Important, the vendee will not be com- pelled to take the property. He is entitled to have what he bargained for, and it would obviously be extremely unjust to force any- thing upon him which he bad not designed or contracted to buy. If there is a failure in that which is an inducement to the pur- chase, he will not be compelled to take." Bisp. Eq. (5th Ed.) § 389. In Gould v. Murch, 70 Me. 288, it was held: When the owner of land with a building thereon agrees to convey it at a future day on payment of the purchase money, and before payment and conveyance the building is destroyed by fire without the fault of either party, the loss must fall upon the vendor; and, if the build- ing formed a material part of the value of the premises, the vendee cannot be comnel- led to take a deed to the land alone, and pay the purchase money. See, also, Smith v. Cansler, 83 Ky. 367; Wells v. Cahian, 107 Mass. 514; Powell v. Railroad Co., 12 Or. 488, 8 Pac. 544; Kinney v. Hickox, 24 Neb. 167, 38 N. W. 816; Huguenin v. Courtenay, 21 S. C. 403. It may be stated as a general"! rule that, where property which Is the sub- 1 Ject of a contract of sale has been substan- tially damaged or materially changed be tween the date of the contract of sale and the time when the vendor offers to convey, the courts will not decree a specific perform- ance of the contract at the Instance of th< vendor. The reason for this Is apparent. The vendor has no right to force upon the vendee something which he has not agreed to buy. The rule is different, however, when the application for specific performance comes from the vendee. There Is a manifest reason for this difference. The vendee has a right, if he sees proper to do so,, to accept less than he bargained for, and compensa- tion for the loss of that which he does not obtain. If, for any reason, the vendor can- not convey to the vendee substantially what the contract calls for, of course a specific performance of the contract according to Its terms Is Impossible. Such obstacles to a specific performance may arise from a de- fect in the title to some portion of the prem- ises bargained for, or from the fact that the Interest of the vendor Is different from SPECIFIC PERFOEMANOE OP CONTRACTS. 673 3 that described In the contract, or the prop- erty may be subject to Hens or Incumbran- ces, or, if the subject of the contract Is land, it may be deficient in quantity or quality . or value. "In such a case there are only / three possible alternatives for a court of ' equity to pursue: Either to refuse its rem- edy entirely; or to enforce the contract with- ^out any regard to the partial failure, com- pelling the purchaser to take what there is to give, and to pay the full price, as agreed; or to decree a conveyance of the vendor's actual interest, and allow to the vendee a pecuniary compensation or abatement from the price proportioned to the amount and value of the defect in title or deficiency in the subject-matter." Pom. Cont. § 434. In the same connection the author just quoted «ays: That the first alternative might often contravene the wishes and interests of both parties, and cannot, therefore, be tal^en as Che universa. rule. That the second one would be extremely unjust and inequitable, though it Is occasionally resorted to when the vendee is not in a situation which enti- tles him to favorable consideration. That the third is based upon equitable principles. It endeavors to preserve the rights of both parties, and. is therefore constantly resorted to and applied by courts of equity in aid of a vendee, and sometimes, although under more and greater restrictions, in aid of the vendor. But that there are circumstances under which even a vendee Is not allowed to avail himself of the doctrine. In section 435 the same autnor says: "If the purchas- er is willing and desirous to tal^e the partial interest which the vendor can convey, and especially if ne is the party calling upon the court for relief, there can be but little diffi- culty in granting him the remedy of per- formance, with a reasonable compensation for the defects." Mr. Bispham, in his work on the Principles of Equity, thus states the rule: "It may sometimes happen that de- fects exist which render the property less valuable than the contract price, but which nevertheless may not be of so vital a charac- ter as to induce the purchaser entirely to -rthrow up his bargain. In such a case the ^equity of specific performance with compen- sation comes mto play for the benefit of the vendee. He is entitled to have the agreement carried out, and* yet at the same time to have an abatement or allowance made by jreason of the defects." Bisp. Eq. (5th Ed.) T'SQO. See, also, Pry, Spec. Perf. (3d Ed.) II 1222, 1223; 2 Story, Eq. Jur. (13th Ed.) § 779; 2 Suth. Dam. (2d Ed.) § 589, p. 1311; 2 Beach, Mod. Eq. Jur. §§ 624, 627; 22 Am. & Eng. Enc. Law (1st Ed.) pp. 942, 943; Bar- bers V. Gadsden, 6 Rich. Eq. 284, 62 Am. Dec. 390. The text-books and cases cited show that the doctrine of specific perform- ance, with compensation for defects when the vendor cannot convey exactly what his contract calls for, is thoroughly established, and it is in rare cases where the court will refuse such relief at the instance of the H.& B.EQ.(2d Ed.)— 43 vendee. It is true that in nearly If not quite all of the cases the Inability on the part of the vendor to convey what the con- tract called for arose from some fact which was in existence at the time the contract of sale was made, such as defects in the title to a part of the premises, deficiency in quan- tity or quality or value of the property which was the subject-matter of the con- tract, and the like. There does not seem, however, to be any good reason why the principle should not be applicable where the inability of the vendor to convey a part of that which his contract stipulated for arose subsequent to the making of the contract, out of some transaction in which the vendee was not involved; and the fact that the vendor was himself without fault would not seem to be an obstacle which would prevent the application of the rule. Requiring a vendor to pay damaees to his vendee for a failure to convey property which subsequent to the execution oi the contract of sale was destroyed by fire is no greater hardship than requiring a vendor to pay damages on ac- count of his having ignorantly, though hon- estly, and after the exercise of all possible diligence, bargained away something which he did not own, but which he believed was his own. That he would be required to pay damages in the latter case, no one will doubt. That he should be in the former case, ought not, it would seem, to be ques- tioned, upon principle. In Lombard v. Chi- cago Sinai Congregation, 64 111. 477, which was a case of an executory contract for the sale of real estate, where the vendor was to furnish an abstract of title, and, if not satisfactory, he was to have tlie option of perfecting the title, or annulling the contract and returning the money paid, and the ab- stract failed to show title, and the vendor failed to exercise his option, after notice to do so, until after buildings thereon were de- stroyed by fire, the vendor still remaining in possession. It was held, on a bill by the ven- dee for the specific performance of the con- tract as to the land, and compensation for the buildings and property destroyed, that the contract was not so complete as to make the land the property of the vendee, so as to throw upon him the loss of the buildings, and that upon specific performance being ordered the vendee was entitled to compen- sation for the loss, to be deducted from the purchase money, and that the vendor was entitled to Interest on the unpaid purchase money only from the time a good title to the property was shown, the vendor being entitled to the rents and profits up to such time. The case just referred to is the only one which has been called to our attention which is at all similar to the present case. Upon principle, however, we have no hesi- tancy In holding that the vendee in a cas.e like the present is entitiecl .to-bav e "a c^n- •"Veyance ma3e tlTHm pf^he land^ggg^ cqm- ■J¥ilsation for tH'e'loss of ttie building^ pro"- vided the loss thus" sustained Ti^apabie of 674 SPECIFIC PERFORMANCE OF CONTRACTS. computation. K the plaintiff sustains his allegations, a decree should be entered that the defendants convey to him the land which was the subject-matter of the con- tract, and that the purchase price be abated In such an amount as is Just and reasonable in view of the changed condition of the property. 4. If the difference In value between the Interest contracted for and the Interest that can be conveyed is Incapable of computation, of course the court will not undertake to en- ter a decree for specific performance, with compensation for defects. But, as has been said, In the light of many adjudicated cases, "It is conceived that the court will seldom now consider a difficulty of this kind insuper- able." Fry, Spec. Perf. (3d Ed.) § 1240. We do not think the present case falls vnthin the rule above referred to, as it seems to us that the amount which should be allowed to the plaintiff as compensation for the loss sustained by him in not obtaining a convey- ance of the land with the building on it can I be made the subject of exact computation. I Let It be kept In mind that the plaintiff Is I entitled to be placed, so far as property and jmoney will place him, in exactly the same, /position that he was In on the day that the contract of sale was entered into. If on that day the property was worth more than he agreed to pay for it, be Is entitled to the profit on his bargain. If, on the other hand, the property was worth less than he agreed to pay for It, he must suffer the loss. Let it be ascertained what was the market value of the property with the building on It on the day 'that the contract was entered Into. Let it also be ascertained what was the market value of the lot without regard to the build- Ing on that day. If the market value of the Improved lot was more than the contract price, the difference between these two sums would be the profit that the plaintiff would have realized on his bargain. Deduct the amount of profit from the market value of the lot alone, and the sum remaining will be the amount which the plaintiff should be required to pay. If the market value of the property and the contract price are the same, then the plaintiff should be required to pay a sum which would equal the market value of the lot without the building. If the mar- ket value of the whole property was less than the contract price, then the plaintiff should be required to pay the market value of the lot without the building, and in addi- tion to this the difference between the mar- ket value of the lot and building and the contract price, provided that In no event should the plaintiff be required to pay more than $16,000. While we find no rule for com- puting the amount of compensation In such cases, we think the above rules are in accord- ance with equitable principles, and are de- ducible from the general rules which seem to have been recognized by the courts and text writers. See, in this connection. Smith V. Kirkpatrick, 79 Ga. 410, 7 S. B. 258; 2 Suth. Dam. (2d Ed.) pp. 1311, 1312; 2 Beach, Mod. Eq. Jur. § 629; Wilcoxon v. Calloway, 67 N. O. 463; Fry, Spec. Perf. (3d Ed.) | 1239. The prayers of the petition were broad enough to authorize relief along the line» above Indicated. The court erred In sustain- ing the demurrer, and the case should be tried In the light of what Is here laid down. J'udg- ment reversed. All the Justices concurring. .•vu'-^'^-^A ^.'u.Hi.vw*, y^y^ *4aC«-^ t-^A^K/-^ *,v*.^.*rw SPECIFIC PERFORMANCE OF CONTRACTS. 675 LBONABD v. CRANE et al ' (35 N. m 474, 147 111. 52.) Supreme Court of Illinois. Oct. 27, 1893. Appeal from circuit court, Jefferson coun- ty; B. D. Youngblood, Judge. Bill by Elizabeth A. Leonard against J. Me- Kendree Crane and others. A cross bill was filed by Isaac Crane. A decree was ontered dismissing the biU and granting the prayer of the cross biU. Complainant appeals. Af- firmed. The other facts fully appear In the follow- ing statement by PHILLIPS, J.: A biU was filed by appellant for specific performance, and substantially alleges that complainant, in consideration of certain per- sonal property and a certain amount to be paid in cash, purchased a house and lot oc- cupied by J. McKendree Crane and wife. It is alleged by the complainant that the con- tract was consummated by a deed having been signed by the parties, whiph was de- livered to the husband of complainant. Mho was present with a notary public, by whom the acknowledgment was to be taken; and it is further claimed that the deed was ac- knowledged. It is further averred by the complainant that the wife of J. McKendree Crane, on the morning after the trade was consummated, got possession of the deed for the purpose of ezammtng it, and refused to surrender the same, and subsequently de- stroyed It. A supplemental bUl was filed, in which it Is alleged that J. McKendree Crane and wife made a conveyance of same lot to Isaac Crane, who at the time held a mort- gage on the premises. It is further averred that after the conveyance to Isaac Crane the premises were occupied by his tenant, and appellant commenced a proceeding in forcible detainer, and recovered a judgment against the tenant, which was not appealed from; and that said Isaac Crane had notice of the claim of appellant at the time he re- ceived a deed conveying the premises to him. The answer denies the execution and de- livery of a deed conveying the premises to complainant, as alleged in her biU, and avers the premises were occupied as a homestetid; and that the signing of the deed by the wife of J. McKendree Crane was procured by threatening to institute a lawsuit against her; and that at the time of the signing of the said deed by said McKendree Crane he was so intoxicated as to be wholly incapable and incompetent to do business, and the complainant had notice thereof. A crc«s bill was filed by Isaac Crane, which averred the conveyance of the premises to him by J. Mc- Kendree Crane and vrife, and that he entered into possession of the same by placing on said premises his tenant, against whom pro- ceedings were instituted in forcible detainer; and that said tenant conspired and colluded with the appellant to deprive the said Isaac Crane of possession, and neglected to sign an appeal bond; and prays in said cross bill for an accounting for rents, and that the possession of the premises may be restored to him. A decree was entered dismissing the original and supplemental bills and granting the relief prayed in the cross biU of Isaac Crane, and appellant excepted, and brings the record to this court by appeal. Albert Watson and John W. Burton, for appellant. J. M. Durham and C. H. Patton, for appellees. PHILLIPS, J., (after stating' the facts.) The evidence of this record clearly shows the premises were occupied by J. McKendree Crane and wife as a homestead, and were in value less than $1,000. The testimony shows that a deed signed by J. McKendree Crane and wife contained a clause relinquishing the homestead right, but there is no evidence to show that the acknowledgment as claimed to have been made by the notary public con- tained any clause with that relinquishment By the conveyance act it Is requisite that in the deed there shaU be contained a clause waiving the right of homestead, and a sim- ilar clause must be contained in the acknowl- edgment of both the husband and wife; and the estate of homestead thus created can be relinquished only in the mode pointed out by the statute, or by abandonment. This rule is sustained by the uniform decision of tnis court Richards v. Greene, 73 lU. 54; Eld- ridge V. Pierce, 90 lU. 474; Trustees, etc., v. Hovey, 94 lU. 394; Browning v. Harris, 99 lU. 459. Where a bUl is filed to restore a deed, by which deed a conveyance of the homestead is sought to be consummated, the proof must be such that it must show a deed that would be sufla.cient to convey the home- stead; not only by evidence of the relin- quishment of the homestead in the body of the deed, but the acknowledgment must con- tain a relinquishment of the hoinestead, ac- knowledged by the husband and wife. The evidence also shows that the husband of the complainant, with a notary, accompanied J. McKendree Crane to his house, and that oth- ers subsequently came to the house, and for more than one hotur efforts were made to in- duce the wife to sign the deed, which had been prepared before the visit of the hus- band with the notary to the house; and the proof clearly shows that at the time J. Mc- Kendree Crane was mudi intoxicated, and that both he and the complainant's husband Bought to induce Mrs. Crane to sign the deed by persuasion; and that further, complain- ant's husband said that he had pmrchased the property, and that It would save her trouble If she would sign it, and that threats of aban- donment were made by her husband, and other threats were made by him tmless she signed the deed, and during this period of time of more than an hour in which these efforts were made to induce the wife to sign this deed she was seeking to have the exe- cution of the deed put off until next morn- ing, daimlng that her husband was too much 676 SPECIFIC PERFORMANCE OF CONTRACTS. Intoxicated to do business, and claiming that It was the only home she had, and, in tears, begging for time to be allowed to consult with her father-in-law, but, overcome by the persistence with which the demand on her to execute the deed was made, she signed the deed, and just before signing her husband gave her $20, which was to be her own, and that sum she tendered the husband of the complainant when on the next morning he offered to pay the balance of the purchase money, he having previously paid Crane $20. There is no evidence in the record showing any acknowledgment of the deed by ber other than the simple signing of the same, nor is there evidence showing any inquiry made of her by the notary. On this state of facts a court of equity may well refuse specific performance. It was held in Fitzpatrick v. Beatty, 1 Oilman, 454: "Nor will a court of equity decree a spedflc performance where the contract is founded In fraud. Imposition, or mistake, or where it would be unconscientious to enforce it" In Frisby v. Ballance, 4 Scam. 287, It was held: "An application for the specific performance of a contract is addressed to the sound legal discretion of the court, and it is not a matter of course that It will be decreed, because a legal contract is shown to exist Indeed, the oii^n and ground of' tliis jurisdiction is that a compensation, for damages is inade- quate to the fuU measure of the parties' eq- uitable rights. It is not necessary to au- thorize this court to refuse a specific per- formance that the agreement should be so tainted with fraud as to authorize a decree aiat it should be given up and canceled on that account • • • A specific perform- ance will not be decreed unless the agreement has been entered into with perfect fairness, and without misapprehension, misrepresenta- tion, or oppression." To the same effect are Race V. Weston, 86 lU. 91; Proudfoot v. Wightman, 78 lU. 553. There is some con- flict in the evidence as to whether the deed was taken from the table, after it was signed, by the notary public or by the hus- band and agent of the complainant, but from the view we take of this record that ques- tion is immaterial. The evidence in this record shows the per- sonal property which was sought to be trans- ferred as a part consideraitioQ was valued at $300 between Leonard and Crane, and ttie weight of proof shows that the value of the pro.perty was not to exceed $150; and this fact in conibeetioin with the condition in which J. McKendree Crane was, and the drcumstanoes under which the signature of the wife was obtained, are such tliat it would be unconscionable for a court of eq- uity to order a conveyance to be made. In the absKice of proof that the acknowledg- ment contained a clause relinquishing the rights of homestead, a court of equity can- not decree the title as vested in the com- plainant by reason of execution of the deed shown by the evidence. Thus, it was not er- ror to dismiss the original and supplemental bnis of complainant; and, the complainant having wrongfully obtained poesession of the premises as against Isaac Crane, and he be- ing entitled to liie same, it was not error to grant the relief prayed for in the cross bill. The decree is affirmed. ^-;^»->sO , tfY C^«/vt^i_-^ ^4x_4_;-«-/vc.^'MJ CU-v y^A—^ ,'" jlAiJJ^^ . SPECIFIC PERFORMANCE OF CONTRACTS. 677 GRAYBIIiL et al. v. BRAUGH. (17 S. E. 558, 88 Va. 895.) Supreme Court of Appeals of Virginia. April 20, 1893. Appeal from circuit court. Botetourt coun- ty. Bill by E. J. Braugh against Mary W. T. Graybill and others for the specific perform- ance of a contract for the sale of land. From a decree in complainant's favor, de- fendants appeal. Reversed. E. & E. N. Pendleton, for appellants. Benj. Haden, for appellee. FAUNTLEROY, J. This is an appeal from decrees of the circuit coiut of Bote- tourt county, rendered on the 20th day of May, 1890, and the 27th day of January, 1891, in a chancery suit in said court de- pending, in which E. J. Braugh is complain- ant and Mary W. T. Graybill and Lewis H. Graybill, her husband, and A. Nash John- ston, are defendants. It appears from the record in this case that on the 12th day of March, 1888, Lewis H. Graybill bought of J. H. H. Figgatt, special commissioner of the circuit court of Botetoiut county, in the cause therein pending of J. P. Thrasher vs. Brierly and others, a tract of land in Bote- tourt county, Va., containing about 50 acres; that on the 3d day of February, 1890, be- fore the purchase money had been paid, and before any deed had been made to Graybill for the land, the said Graybill gave to E. J.-^r a : UBh an uy tlDn-tn—tmti ng - and uniler' seal^er-the purehase of this land l)y Braugh —torthe nominal considerafloh of one dollar, BttC^iirfacV nothing, it is admitted, was STer'paid to GraybiUby Braugh, not even — the-one "dollar for the said option. On the 20th of March, 1890, J. H. H. Figgatt, the commissioner aforesaid, upon the payment of the purchase money for the land by the judicial purchaser, Lewis H. Graybill, con- veyed the land to Mary W. T. Graybill, the wife of Lewis H. Graybill, by the direction of said Graybill, as he was ordered by the decree of sale to do. On the 22d of March, 1890, Lewis H. Graybill and wife conveyed this land to A. Nash Johnston for $2,000. At the time of this purchase Johnston was informed that Lewis H. Graybill had given an option to E. J. Braugh on this land for the period of 10 months from February 3, 1890, but that nothing had been paid by Braugh on said option, and that it bound Braugh to pay or do nothing whatever, and It was therefore not binding on Lewis H. GraybUl. At the April rules, 1890, of the circuit court of Botetourt county B. J. Braugh filed his bill in this suit, asserting the said option as a binding contract, which he prayed to have specifically performed, and that the deed from J. H. H. Figgatt, com- missioner, to Mary W. T. Graybill, and the deed from Lewis H. Graybill and Mary W. T. GraybiU, his wife, to A. Nash Johnston, be set aside, vacated, and annulled, and charging Mrs. Graybill, Lewis H. GraybilJ, A. Nash Johnston, and J. H. H. Figgatt, com- missioner, with notice of his option, and with fraud In the execution of the deeds aforesaid. The said parties filed their demurrers and answers, and denied the allegations and eq- tuties of the bill, and the circuit court of Botetourt county, by the decrees complained of, decided that both Mrs. Graybill and A. Nash Johnston had notice of the said option at the time qt receiving their respective deeds, and that said option is an enforceable contract, and binding on all the parties. In- cluding A. Nash Johnston, and directing A. Nash Johnston to convey the land to E. J. Braugh, without retaining a lien on the land, upon the payment by E. J. Braugh of the cash payment and first deferred payment, and , executing bonds for the second and third deferred payments of the purchase money, "with security approved by the clerk of this court," etc., "thereby substituting for the vendor's lien to secure the deferred pay- ments of the purchase money mere personal security, and that, too, not such as might be satisfactory to the parties interested, nor such as should be approved by the court, but with security approved by the clerk," etc. Johnston did not buy the land from Lewis H. Graybill, Juji from Mrs . Mars M. T- ari|vhiii Lewis _g. Graybi ll never had anj title to the land, and the interest of Braugh, if any, by virtue of a mere naked option to buy, which did not bind him to buy In any event whatever, was not such an in- terest in the sub.i ect or wnicn a purchaser "^ff^vahiejslboundjpjaotice, or which equity mKf-V w m regard !""^ Pom. Eq. Jur. § 692. "Sal or option contracts are not favored in "^ equity, and the want of mutuality of obllga- j tion and risk may generally be urged as bar / to their specific enforcement. 2 Warv. Vend, p. 769. " Equity requires an actual consider - ■ ation, and permits the want of It to be "shown, notwTtEsfanding the seal; and applies the_doctra5e To covenants, settlement's, and' executory agreementsj)f"every description.^ 1 Pom. ~Eq. Jur. § 383. In respect to volun- tary contracts, or such as are not founded on a valuable consideration, courts of eqidty do not interfere to enforce them as against the party himself, or as against volunteers claiming under him. 2 Story, Eq. Jur. § 706a. In Duval v. Bibb, 4 Hen. & M. 116, It was held that in equity either party to a deed may aver and prove against the other the true and -actual consideration on which the deed was fotmded, though a different consideration be expressed therein. .Eguity, disregards the form and looks to the s^ - s tence]7 ~ The' homln&i consiaeration of one 3oIlar in the option, it Is admitted, was never paid, and the option says: "It Is agreed by the parties hereto that there shall be no obligation upon the said E. J. Braugh by virtue of this agreement, unless within the 678 SPECIFIC PEIUFORMANCE OF CONTRACTS. .■/ period of the said ten months he pays one third ot the purchase money." He did not sign the option, and It did not bind him to do anything. He attempted to make a large profit on an inyestment of nothing, and with- out the obligation to do anything, and he simply failed. The complainant's bUl should have been dismissed In the circuit court_fflt. ■ ^wan |t,^ jnnt jalHy- of obligation In the op- tlon sued upon. It professes to bind one of the parties absolutely, and stipulates only for the Indefinite pleasure of the other; and it cannot, therefore, be specifically enforced. Ford V. Buker, 86 Va. 79, 9 S. B. 500. It, moreoyer, appears that neither party con- templated a sale subject to the wife's (Mrs. Graybill's) contingent right of dower, and In this respect this case is ruled by the case of Dunsmore v. Lyle, 87 Va. 391, 12 S. B. 610, where specific performance was refused, even though the bill offered to take a deed from Lyle subject to the wife's dower. In this case the complainant Braugh seeks to enforce a conveyance of the land free from the dower interest of Mrs. Graybill, who never signed the option, and who, on hear- ing of it, interposed her remonstrance im- mediately, and communicat ed -h er refusal to be bound by It to Braueh.'V^peeific execn- n ot ordinarily be decreed against the vendor. yTn ariiea man, whose wife refuses to J yjTv in'the lieed, w henThere Is no proof pffra^iit . oji^^is part in' Tier refusal. imles£ jhe^piiiiv chaser is ""willin ^to pay the fulTl)u rcha^ mone y^ aS3^ ac cept the^deed- jlon of an apreem pnt t^ ppl j and convey y ill. purchase It- .her Jafiring.^ 2 Wafv. Vend. p. 769. See Clarke V. Kelna, 12 Grat 98. Mrs. Graybill held the legal title to the land, and she is In no manner bound by the option of her husband, to which she was not a party, and against which she protested, from the first moment that it came to her knowledge. Dunsmore V. Lyle (Va.) 12 S. E. 611; McCann v. Janes, 1 Rob. (Va.) 256; Clarke v. Reins, 12 Grat 98; Booten v. Scheffer, 21 Grat 474; Iron Co. V. Gardiner, 79 Va. 305; Litterall v. Jackson, 80 Va. 604; Cheatham v. Cheat- ham's Bx'r, 81 Va. 395; Railroad Co. v. Dunlop, 86 Va. 846, 10 S. E. 239. The cir- cuit court erred In overruling the demurrer of Graybill and wife to the complahiant's bUI, and we are of opinion that the decrees appealed from are wholly erroneous, and our judgment Is to reverse and annul them, and to enter a decree here dismissing the com- plainant's bill. Reversed. SPECIPIO PERFORMANCE OF CONTRACTS. 679 HALL et al. v. HALL et al. (16 N. E. 896, 125 111. 95.) Supreme Court of Illinois. May 9, 1888. Appeal from circuit court, Kane county; Charles Killum, Judge. This Is a bill for the specific performance of an agreement, entered into between the heirs of Alexis Hall, to set aside a win made by him, brought against the widow and minor heirs of Eugene Hall, one of the parties to the agreement Sherwood & Jones, for appellants. A, J. Hopkins, N. J. Aldrich, P. H. Thatcher, and Charles "Wheaton, for appellees. SBCBLDON, O. J. The defense set up in this case Is that the contract of January 19, 1883, was not a complete contract, and that, not being complete. It Is as no contract, and 80 that alleged agreement cannot be specifical- ly enforced; that the only complete contract there could have been m the case would have been that of February 10, 1883, had the pa- pers of that date all been executed and de- livered, but as they were not, the attempted contract of February 10th was not com- pleted, and hence there is no contract what- ever to be specifically performed. It would seem from the evidence that the will of Alexis Hall, made on December 7, 1881, had come to the knowledge of his children, and had created a family dissatisfaction from Its giving to Eugene the larger jMirt of the estate, and Its being executed under the circum- stances It was; and that threats had been made by the other children that they would contest the will. To reconcile this family dif- ference, the writing of November, 1882, ap- pears to have been made, and signed by all the children, whereby they agreed that there should be an equal distribution of their fa- ther's estate between his four surviving chil- dren when the time for such distribution should come. It seems that another cause of difficulty had sprung up between Eugene and his sister Matilda, and her husband, from a long-standing note for $2,300 which had been given by the two latter to Eugene, and was unpaid, and for which the latter had taken collateral securities, which had failed to be collected from the negligence of Eugene, as was contended. This additional difficulty was amicably composed by these brothers and sis- ters by their all generously sharing equally among them and the widow the burden of this Plummer Indebtedness; and soon after the death of Alexis Hall they came together, and executed this second agreement, of Jan- uary 19, 1883. By this agreement all the four children and the widow agreed to settle the demands of Eugene on Matilda Plummer and her husband, by each bearing one-fifth part of the Plummer indebtedness; and they renew their former agreement of November previous to set aside the will of Alexis Hall, and that there should be a distribution of his estate as intestate estate. This agreement is signed by the widow, who did not sign the November agreement. This is an agreement of a most praise- worthy kind, — an amicable arrangement among brothers and sisters of difficulties be- tween them, which would have been carried out to the entire satisfaction of them all but for the sudden death of Eugene. It Is an agreement which a court of equity will look upon, favorably, and readily interpose its spe- cific performance, unless there be some in- superable bar to prevent. The written agree- ment of January 19th Is plain, clear, and full; It bears upon its face evidence of ample con- sideration, and is of itself a complete con- tract That this would be an obligatory con- tract, although It was understood at the time that there should thereafter be a more formal instrument drawn up and executed to express the parties' agreement, is abundantly estab- lished by the authorities. Powle v. Freeman, 9 Ves. 351; Chinnock v. Marchioness of Ely, 4 De Gex, J. & S. 638; Pratt v. Railroad Co., 21 N. Y. 305; Wbarton v. Stoutenburgh, 35 N. J. Eq. 266. All there is that can be urged against the completeness of this written con- tract of January 9th is that It omits to state one alleged term of the contract which was then made, viz., that Eugene was to have the home farm at an appraisal to be fixed by ap- praisers. This is an independent matter, separate and distinct from the two subjects of agreement named In the writing,— the Plummer Indebtedness, and the setting aside of the will. The bill does not ask to have performed a contract resting partly in a writ- ing and partly in parol. It does not depend upon, or seek anything whatever respecting, the alleged parol part of the contract; but it Is the defendants who are placing reliance upon this parol part of the contract, setting It up in defense, and In defeat of the per- formance of the contract in. writing. If the defendants would not have the enjoyment of the parol part of the contract, and so not have the benefit of what they contracted for, there would be some equity in such a de- fense. The heirs of Eugene allege, against the performance of this written contract, that he was to have the home farm, and that this is not expressed in the writing. But If he does not get the home farm, and the other children convey their interest in It to him or his heirs, there would seem to be no equity in such a defense of the mere omission of the vmtlng to say that Eugene was to have the home farm at a price to be fixed by apprais- ers. And just such is the case presented here. Two of the children, Stephen A. and Matilda Plummer, have executed agreements for conveying to Eugene their interest in the home farm. The other of the three children, Mrs. Summers, Is ready and willing, and offers by the bill, to make a like agreement for conveyance of her interest In the home farm; so that the defendants do or will, un- der the offer of the bill, get the entire benefit 680 SPEXJIFIC PERFORMANCE OF CONTRACTS. of the parol part of the contract. There is no equity, then. In the defense which is set up, that this parol part of the contract was not expressed in the writing of January 9th; and we think the authorities establish that such a defense is not sustainable where the defend- ant gets seciured to him all the benefit of the parol portion of the contract. In Railway Go. V. Winter, 1 Craig & P. 57, a bill by the com- pany for the specific performance of a writ- ten contract for the purchase of real estate, where there had been a subsequent parol agreement that the company should also pay for timber on the land, and for certain ex- penses, performance was decreed, subject to the parol variation; and Lord Chancellor Cot- tenham said: "This is not a case within the meaning of those decisions in which the court has said that it will not specifically perform the contract with a variation, If the court finds a written contract has been entered in- to, and the plaintiff says, "That was agreed upon,' but then there were certain other terms added, or certain variations made, the court holds that in such a case the contract is not in the vyriting, but in the terms which are verbally stated to have been the agreement between the parties, and therefore refuses specifically to perform such an agreement On the other hand, it is quite competent for the defendant to set up a variation from the written contract; and it will depend upon the particular circumstances of each ease whether that is to defeat the plaintiff's titie to have a specific performance, or whether the court will perform the contract; taking care that the subject-matter of this parol ' agreement or understanding is also carried into effect, so that all parties may have the benefit of what they contracted for." See Robinson v. Page, 3 Russ. 114; Price v. Dyer, 17 Ves. 357. In 3 Pars. Oont (5th Ed.) 389, the author says: "It is a principle of equity jurisprudence that parol evidence is admissible to rebut, but not to raise, an eq- uity; and this principle or rule gives rise here to an Important distinction. Although, to resist a specific performance, a defend- ant may show by parol that the written docu- ment does not fully represent the contract between the parties, and thus defeat the bUl, or compel the plaintiff to accept a perform- ance with a variation, yet a plaintiff cannot have a decree for a specific performance of a vmtten contract with a variation upon parol evidence." In Park v. Johnson, 4 Al- len, 259, after a review of the English cases upon the subject, the court says: "The weight of authority seems clearly with the plaintiff on this point, [of having specific performance, where ready to take the written agreement, and fully to perform the omitted stipulation:] and, while the court would re- fuse to give them aid in compelling the lit- eral execution of a written contract which does not contain the whole agreement, they allow the objection to operate no further than to require the party seeking the aid of the court to modify the written contract so as to embrace all the stipulations that are alleged to have been omitted or subsequently varied." When Mr. Aldrich met the parties on Feb- ruary 10th he brought with him five pa- pers, namely: (1) The agreement between the four children to set aside the will; (2) an agreement between the widow and children to settie the Plummer Indebtedness; (3) a renunciation of the will by the widow; (4) an agreement between Stephen A, Hall and Eugene A. Hall 'for a conveyance by the former of an undivided one-fourth of the Alexis Hall farm; (5) a like agreement be- tween Mrs. Plummer and Eugene A. for con- veyance of a like tmdivlded one-fourth. The first three were on that day executed by all the parties there present, and delivered to Mr. Aldrich; Mrs. Summers being the only party absent. The first three papers con- tained, essentially, nothing more than the agreement of January 19th, amplified by legal verbiage; and the signing of them by Mrs. Summers was of no moment, as she had signed the 19th January agreement The other two agreements for conveyances by Stephen A. and Mrs. Plummer were also signed by them, respectively, on February 10th. A like agreement for a conveyance by Mrs. Summers, who was absent, was thereafter to be executed by her, which she has ever been ready and willing, and offers by the bill, to execute. Whatever of hi- completeness there may be in these papers of February 10th, or any one of them, has no bearing, as we conceive, upon the present bill. It does not call In aid that transaction, and In no way depends upon it. The bill is rested wholly upon the agreement of Jan- uary 19, 1883, and asks the specific perform- ance of that agreement As the specific per- formance is only asked subject to the de- fendants having all the benefit of the alleged parol part of the agreement which is claimed to have been made, we are of opinion the complainants are entitled to have the agree- ment of January 19, 1883, specifically per- formed. It is claimed that the defendant Marion O. Hall has a dower Interest In the land. Whether that be so or not is no objection to a decree of specific performance against the heirs of BJugene A. Hall. Any decree of conveyance might be made subject to what- ever right of dower, if any, Marion O. Hall may have in the land. The decree will be reversed, and the cause remanded for further proceedings in con- formity with this opinion. SPECIFIC PERFORMANCE OF CONTRACTS. 681 KELSBT et al. v. CROWTHEIR et al. (27 Pac 695. 7 Utah, 519.) Supreme Court of Utah. Sept 12, 1891. Appeal from district court. Salt Lake coun- ty; Elliot Sanford and T. J. Anderson, Judges. Suit In equity by Lewis P. Kelsey and J. K. Gillespie against W. J. Crowther, J. T. Lynch, and William Glassman, to enforce a specific performance of a contract to sell land. Complaint was dismissed, and plaintlfCs ap- peal. Affirmed. P. L. Williams, Waldemar Van Cott, and 0. W. Powers, for appellants. Arthur Brown, for respondents. BLACKBURN, J. This is a suit In equity to enforce the specific performance of the following contract: "Salt Lake, Utah, Sep- tember 13, 1887. Received of Lewis P. Kel- sey and J. K. GiUespie the simi of fifty dol- lars, being part consideration of the purchase price, to wit, 52,750.00, at which the under- signed agrees and contracts to sell, and by good and sufficient warranty deed convey, free of all Hens, to said Kelsey & GiUespie, the following described lot of ground, to wit: The east thirty (30) acres of the south half of the southwest quarter of section three, (3) township one (1) south, of range one (1) west, of Salt Lake meridian. Said purchaser to have after this date thirty (30) days for the examination of the title of said premises, and, in case said title is adversely reported on by the attorneys of the said purchasers, thai the said part consideration hereby receipted shall be at once returned to said purchasers; but if said titie is approved I hereby contract and agree to and with said Kelsey & Gilles- pie that I wUI at once, on the payment of said balance of agreed purchase money, to- wit, ?2,700.00, duly execute, sign, and ac- knowledge a full and perfect warranty deed conveying to said purchasers the entire title to said premises, and I agree to at once fur- nish an abstract of titie to said premises and other needful papers." The complaint alleges a tender of the money, although an abstract was not furnished, a demand for a deed, and the failure to make same. The an- swer is a specific denial of the allegations of the complaint A trial was had by the court findings of fact, and a judgment that the complaint be dismissed, from which judg^ ment the plaintiffs appeal. The testimony is all in the record, and we do not deem it important to review the findings of fact made by the trial com:t The claim of the appel- lants is that the evidence does not justify the judgment It shows that the contract was signed and delivered on the 13th day of V^'/Xl September, 1887; that the defendants failed altogether to furnish an abstract; that at no time within the 30 days did the plainUfCs offer to pay the purchase money and demand a deed, but on the 31st day, October 14, 1887, defendant Crowther went to the office ofi plaintiffs, and told Kelsey, one of the plain-l tiffs, that he did not come round yesterday, and that his time was up, and Kelsey sald\ that he had forgotten it, and Crowther fur- ther told him that he had forfeited his $50; but he further said— but this Kelsey denies —he offered him back the $50. This occur- red on the street in front of the office of plaintiffs, Crowther being in his buggy with his wife; and Kelsey went immediately in- to his office, and brought a bag with money in it, and said, "Here is your money," but CrovTther drove off, and refused to wait. Kelsey says the amount of money required was in the bag. Kelsey further says that the offer of the money was on the condition that Crowther's wife would also sign the deed. We think this judgment must be af- firmed. I 1. The contract is an option. The plain- 1 tiffs had 30 days In which to tender the mon- ey and demand a deed. By the terms of the contract they did not have 31 days, and, having failed in that time to tender the mon- ey, they lost their right to enforce the con- tract Nor do we think the failure of the ( defendant to furnish an abstract extended the time. It might make him liable for dam- ages, but not enlarge or change the terms of the contract 2. It does not appear from the evidence in this case that the plaintiffs have not a full and complete remedy at law for all the dam- ages they may have suffered by reason of any and aJl breaches of this contract. If any were committed by the defendant Crowther; and as a rule specific performance of con- tracts is not enforced in equity, where the parties Injured by breach of contract can be I completely compensated in a suit at law. ' 3. The plaintiff Kelsey says that he offer- ed the money on the condition that the wife of the defendant Crowther would sign the deed. A husband cannot contract away his j wife's right of dower. A court of equity has I no power on the husband's contract to com- ' pel a wife to relinquish her dower rights. Therefore the offer of the money was upon a condition that could not be complied with, and That was not obligatory upon the d^ fendant, and "that a court of equiEy "could not enforce," and was no offer at aHT ' 3 ' Pom. Bq. Jiir. § r4(K) et seq.' We'see no reason for the reversal of this judgment It is there- fore affirmed. ZANE, C. J., and MINER, J., c4icur. J J ^ ' jV-^ s. ^. ,^ . V '^^ ■'.o-" G82 SPECIFIC PERFORMANCE OP CONTRACTS. COMBS V. SCOTT et aJ. (45 N. W. 532, 76 Wis. 662.) Supreme Court of Wisconsin. April 29, 1890. Appeal from circuit court, liincoln coun- ty ; Charles M. Webb, Judge. Curtis & Curtis, for appellants. Courts of equity will not decree specific performance in the case of stale or suspi- cious claims. Walker v. Jeffreys, 1 Hare, 348; Heaphy v. Hill, 2 Sim. & S. 29; Will- iams V. Williams, 50 Wis. 311, 318, 6 N. W. Bep. 814; Anthony v. Leftwich, 3 Rand. (Va.) 238; Pigg v. Corder, 12 Leigh, 69; Madox V. McQuean, 3 A. K. Marsh. 400; Ruff's Appeal, 117 Pa. St. 319, 11 Atl. Rep. 553; Railroad Co. V. Bartlett, 10 Gray, 384; Haughwout V. Murphy, 21 N. J. Eq. 118; Merritt v. Brown, Id. 401; Johns v. Norris, 22 N. J. Bq. 102; AVhite v. Bennett, 7 Rich. Ea. 260; McDermid v. McGregor, 21 Minn. 111. Bump & Hetzel, for respondent. Orton, J. This is an action for specific performance, brought by the plaintiff, Harrison Combs, against Walter A. Scott, trustee of the estate of Thomas B. Scott, deceased, and his heirs as defendants, of the following contract, viz. : " May 1, 1882. In consideration of one dollar and other valuable considerations, to-wit, settlement of all suits, actions, differences, and mat- ters of difference, I agree to give to Har- rison Combs, of Applington, Iowa, on or before July 1, 1882, a good and suflBcient deed in fee-simple of all my right, title, and interest of, in, and to the stump lands which I now own, lying within one and one-half or two miles of Hay Meadow creek, in Uncoln county, Wisconsin, not being adjacent to and along Prairie river, all in town thirty>two, in ranges six and seven, and town thirty-three, in ranges six and seven ; the Intention being to convey to said Combs all the lands lying on and along Hay Meadow creek from below, ad- jacent, and above the dam on said creek, not including cedar lauds on lower end of Hay Meadow, or lands below the mead- ow ; the intention being to include all etump ■ lands opposite, above, and in the vicinity of the dam of Combs, on Hay Meadow creek, — elands that the outlet of hauling off timber that would go to Prai- rie river not to be included. [Signed] Thomas B. Scott, [Seal.] In presence of W. McLeod." The plaintiff alleged in lis complaint that he demanded a convey- ince of said lands of Thomas B. Scott in \is life-time, and that he refused so to con- >y the same; and that he demanded a c0nve.yance of the same of the defendant /alter A.Scott, the trustee of said estate, and that he also refused so to do; and that he has no adequate remedy at law for the breach of said contract, and that said lands have greatly increased in value since the breach thereof; and that he owns a mill in the vicinity of said lands, built for the purpose of manufacturing the timber thereon, which will be greatly depreciated in value in case said lands are not con- veyed to him. The plaintiff also alleged the location and description of said lands, according to the terms of the contract, to -consist of certain 40 acre tracts lying in townships 32 and 33, ranges 6, 7, and 9, in Lincoln county, Wis., appended to the complaint. The defendant Walter A. Scott, as such trustee, answered said com- phiint, and alleged that said contract was incomplete, and that it was intended there- by that the plaintiff and Thomas B. Scott should thereafter select and locate said lands, and agree to such selection, and that the plaintiff neglected to cause such selection to be made for more than tour years, and until the death of said Scott, and that now it is impossible to ascertain what lands were intended by said contract. He denied that said list of lands, so ap- pended, contained the lands contemplated by the agreement, excepting, perhaps, about seven 40-acre tracts in township 32, in range 6; and alleged, further, that he is ignorant of many of the facts alleged in the complaint, and that it is now impossi- ble, by reason of the death of his father, Thomas B. Scott, to execute said memo., randum, and that the plaintiff ought not to have specific performance of the same,! on account of his laches and unreasonable! delay in attempting to enforce the same, On the trial both parties introduced testi- mony to show what lands were intended as " stump lands, " and what lands come within the boundaries mentioned in the contract, and the testimony relating there- to was quite contradictory, but tlje cir- cuit court found, upon what appears to have been, perhaps, a preponderance of the testimony, and as correctly and accu- rately as practicable and possible, that cer- tain 29 of said 40-acre tracts were the lands within theintent and meaning of said con- tract; and rendered judamient that the de- fendant Walter A. Scott^s such trustee, convey the same to the plaintiff. From that judgment this appeal is taken. The objection to this judgment that has peculiar force, and makes the strongest appeal to a court of equity, is that specific performance ought not to Bgve^^ tggn ad- "TOaged m tnis^ caseon accogft totT^hel aclieg a ug unreasonabTJEL dfiTay oftSe plaintiff in" -pntigihg his suit. ^The coritraeL is dUleil 'Ma,i> 1, aim waa to be performed July 1, 1882. Thomas B. Scott died October 7, 1886, and this action was commenced in April, 1888. These lands, July 1, 1882, when the contract was to have been performed, according to the testimony of the plaintiff himselfvJsgr g_of the valu e of only ^10 for each 402acre3ract, and at the time of the ^EpiaTEliey were wO iUi frum ' 20 to 5 D Iha ea- as much, or from $200 to $500 for each 40- acre tract. The timber on these lands has become much more valuable by the long delay, and a railroad has been built, and is in operation, through these lands, and thecountry generally has been greatly im- proved since July 1, 1882. The plaintifl Jias never taken any c are or the lands;, ^a^Jag neglected to p i[yariiy'"faxes o n t^mLaM"TrSS allowea' ffiany oi t nemto" be solffloftax'fes'; said- Thonffls~BT ScottT IffTits Itfe-time, paid all the taxes on them, and redeemed them from previous sales for taxes; and the defendant, as trustee, has paid all the taxes since the death of Thom- as B. Scott, at an expenseof many hundred dollars,— many times as much as the value SPECIFIC PERFORMANCE OF CONTRACTS. 683 — Isi of the lands when the contract was made. The enforcement of the contract at ma- turity would have been of merely nominal expense and damage to Thomas B. Scott, but will now impose an enormous claim upon his estate of many thousands of dol- lars. There was a delay of over four .^^g^while Thomas B. Scott was living, ajftr^earlv two J ^egfrs since, before bring- ing the suit, ana wffihout extenuation or excuse. It would be difficult to find a case In the books of greater change in the situ- ation and value of the lands, and the cir- cumstances material to the relief occa- sioned by the delay, or in which specific per- formance has ever granted under such cir- cumstances. Although it may not be im- possible to select, locate, and identify the lands within the intention of the contract, it has certainly been rendered much more difficult and uncertain by the death of one of the parties whose personal knowledge would seem to be requisite, if not neces- sary, to determine what lands were meant by "stump lands," and the meaning of the other unusual conditions of the contract. The material testimony of Thomas B. Scott has been utterly lost by the delay. He refused to convey the lands, and could do no more than to await the suit of the plaintiff for the specific performance or for the breach of the contract. The plaintiff waited until the statute of limitations had nearly run on the contract before bringing his suit. "It is a , 8ettled prin ciple that a s pecific pertoa nance of a contract nf sale lB"not a matt erof.c p urse,'5uf rests entirelx , 'teTEe'discretion of the court, upon a vj£K — 5f 5^ "Ehe circumstances.;^' Chancellor -iONTTin Seymour v.'belancey, 6 Johns. Ch. 222. " A ma tt g|not of absolute ri^ ht in the party, bur'Of souna aiscretion m the TiOttft."" -TStoryr Eq. Jut . §' 769. " gpeciflc I — peHbrmance' will not be decreed when for any reason it would be inequitable. ' It is I an application to sound discretion.'" Chief Justice Ryan, in Williams v. Williams, 50 Wig. 311 , 6 N. W. Rep. 814. " The unques- tionable jurisdiction » » • is not com- pulsory upon the court, but the subject of discretion. " Lord Ekskine, in Radcliffe v. Warrington, 12 Ves. 331. The learned counsel of the appellant has cited in his brief numerous authorities to the same effect, but the principle is elementary, and the above authorities are sufficient. In consideration of the peculiar circumstances of this case, we cannot but think that it. wnnld t^P, an fl.);)pafi of sound .dlscretionts, ^^^antsuch relief. " Unreasonable delay m \ bringing suTl'foFthe specific performance I of a contract to convey will be a defense to the relief, especially where the other party has made improvements in the mean time, or the property has greatly increased in value." Johns v. Norris, 22 N. J. Eq. ''102. The delay of only about two years was held sufficient to defeat the action in Haughwout V. Murphy, 21 N. J. Eq. 118, and Merritt v. Brown, Id. 401. Where oneparty to the contract has notified the other party that he will not perform it by refusing to convey as in this case, acquiescence in this by the other party, by a comparatively brief delay in enforcing his right, will be a bar to this remedy. McDermid v. McGregor, 21 Minn. HI. Change in the circumstances of the parties, and in the situation of the subject-matter of the contract, the destruc- tion of evidence, and the death of one of the parties to the contract, who if living could make clear what his successor might not be able to explain, are mentioned in Anthony v. Leftwich, 8 Rand. (Va.) 238, as reasons for denying the relief. InRuff'sAp- peal, 117 Pa. St. 319, 11 Atl.Rep. 553, a rail- road had been built, which brought the lands within reach of market, and greatly enhanced theirvalue, and some ofthelands had been sold, and the. plaJaiiff laid by for years while these changes wefe^Tffig on. It was held me^ui table 1;o'd6dreespe- cifle performance. That was very much like this case. The lands have been sold tor taxes, and yet the plaintiff waited un- til they became vastly enhanced in value by railroad and other improvements. Specifi^performance will not be enforced.if Tof^any reason if TsinequltaBIe. to do so. Williams V. Williams, supra. The follow- ing authorities enforce the principle that laches and unreasonable delay in bringing suit will defeat an action for specific per- formance of a contract to convey. Pom. Spec. Perf . §§ 407, 408, and cases cited ; Fry Spec. Perf. §§ 1072, 1078, 1079; Bads v. Williams, 4 I)e Gex, M. & G. 691; Watson V. Reid, 1 Russ. & M. 236; Southcomb v. Bishop of Exeter, 6 Hare, 226 ; Harrington V. Wheeler, 4 Ves. 686 ; Alley v. Deschamps, 13 Ves. 225 ; McWilliams v. Long, 32 Barb. 194; Delavan v. Duncan, 49 N. Y. 485; Davison v. Associates, 71 N. Y. 333; Hen- derson V. Hicks, 58 Cal. 364; Taylor v. Merrill, 55 111. 52; Smith v. Lawrence, 15 Mich. 499; Holt v. Rogers, 8 Pet. 420; Pres- ton V.Preston, 95 U.S. 200; State v. West, 68 Mo. 229. See other cases cited in appel- lants' brief. The reasons are abundant * why equitable relief should be denied In ' this case. The disparity in the value of \ the lands, of from 20 to 50 told over their value when the contract was made, as of when it was to ha ve been performed, is am- ple reason to leave the plaintiff to his legal remedy for the breach of the contract. In analogy to all other like cases, as in the sale of personal property, or for breach of the covenant of seisin in deeds, the plain- tiff would be entitled only to recover the consideration paid and interest, or the dif- ference between that and the value of lands when they ought to have been conveyed, or at most, and by the most liberal rule, the value of the lands at the time of the breach of the con tract. The equitable rem- edy in this case would be so extravagantly greater than at law that it would scarcely seem to be in the same case. Being com- pelled to remit the plaintiff to his remedy at law, the rule of damages in such a case 'may as well be considered. Therule seems not to be uniform in the different courts. In Loomis v. Wadhams, 8 Gray, 557, a case much like this, where the lands had to be selected, the rule was that the plaintiff might recover the value of the lands that might have been selected at the time the conveyance ought to have been made. Where the vendor acted in bad faith in re- fusing to convey on account of the en- hanced value of the land, the damages were the difference between the contract price and the enhanced value when the 684 SPECIFIC PERFORMANCE OF CONTRACTS. conveyance should have been made. 1 Sedg. Dam. top p. 368; Baldwin v. Munn, 2 Wend. 399; McNair v. Compton, 35 Pa. St. 23. In Key v. Key, 3 Head. 448, the rule waB the consideration paid and interest, whether the vendor acted In bad faith or not. The rule in the supreme court of the United States is the price of the land as settled by the contract at the time of its breach. Hopkins v. Lee, 6 Wheat. 109. This is in' analogy to the sale of personal property. In Gale v. Dean, 20 111. 320, the rule was the value of the land at the time (of the breach of the contract. It would seem that in the majority of cases the rule is the consideration money and interest, lor the difference between the consideration /and the value of the land when it should Uiave been conveyed. It would be fruit- less to examine the cases to any greater extent. In cases of property consideration, or cases where the consideration Is other than money, or barter contracts, the value ot the land at the time of the breach is the rule from necessity, and as approximating nearer to what the plaintiff has lost. Brigham v. Evans, 113 Mass. 538. The rule in such a case as this has not been settled /in this state. For non-delivery of chat- / tels, the damages are their value at the I time when they shall have been delivered, and interest to the time of trial. In- gram V. Rankin, 47 Wis. 406, 2 N. W. Hep. 755. , In Hall v. Delaplaine, 5 Wip. 206, it was a contract to convey, but with some peculiar features, and the rule was thecon- sideration and Interest. In Yenner v. Hammond, 36 Wis. 277, the penalty was fixed in the contract, but Chief Justice Ryan discusses the rule in such cases, and leaves the question open whether, in some cases, the vendee may recover damages in excess of the consideration and Interest. The rule, so far as it has been considered bv this court i s. unauestionablv. th at noth- ^SS-i3-§5S§SILPL.i^5. consifleration^HTi^ £ere8t_can..^e,re£P verecTTor perEaps I ougnt" to' say that such is the general rule. This" rule is in harmony with cases of breach of the covenant of seisin. Rich v. Johnson, 2 Pin. 88; Messer v. Oestreich, 52 Wis. 684, 10 N. W. Rep. 6. In this case the considera- tion is very small and Indefinite. The con- tract Is based on a final settlement of suits and other mattgjs between the parties. The learned counsel of the appellant has well said in his brief that " of course the amount claimed in these suits would af- ford no criterion as to the amount the plaintiff was to receive, " or, I may add, that it was understood by the parties he did receive, by the contract. The best, if not the only, criterion of that amount, would seem to be the value of the lands at the time the contract was made, or when the deed was to be made, which wouM be the same thing ; for there is no evidence that their value had changed in the mean time. That would be the most favorable rule to the plaintiff that could be adopted in this case. Such a rule, we have seen, has been sanctioned in many cases, and, if applied to this case, must stand as an ex- ception to what I understand is the gen- eral rule already established by this court, in consequence of the impossibility of as- certaining with any certainty the consid- eration ol the contract in money or values. The real consideration must have been very small in amount, and scarcely more than nominal, for it appears that Thomas B. Scott paid the plaintiff, on such settle- ment, the sum of $5,000 in money. The f value of the lands, at the time the deed was to be made, was only f 10 for each 40 acres, or $290 in gross, according to the testimony of the plaintiff himself. That sum, and interest thereon to the time of the trial, is all the compensation in money the plaintiff is entitled to recover, and of this he, at least, has no reason to com plain. The question remains, what can be done with this suit? The usual practice would be to dismiss this complaint, and leave the plaintiff to proceed in an action at law to recover his compensation in money for the breach of the contrax;t by the defend- ant. But it seems that the statute ol| limitations has already run on the con- 1 tract, and the plaintiff has no remedy at I law. We have conclade d , therefore , that the cireuTt courj c.QHghtjQjfitaiiy^iB_Buit T b equityr Ep^,£OB!JBlSlg. , jUS tiE§.. JjetweeBT "ttlBTfSraS&rrThe usuaTrule in equfty'is, If " tBie~Ti!Wurt" cannot grant the relief prayed, to grant such relief as the partyis entitled to upon the fEicts, and In cases ot specific performance, if for any reason the title cannot be conveyed, to hold the case tor compensation to the plaintiff. Story, Eq. Jur. § 19, and cases there referred to. Hall V. Delaplaine, supra. But in this case the court deems it inequitable to adjudge the conveyance of the land, notwithstanding the defendant is able to convey. This is an unusual case for retaining jurisdiction in equity to grant compensation, but there does not appear to be any reason why it may not be done as well as In cases of Inability of the defendant to convey, on the well-known principle that a court of equity, having obtained juri8diction _Jar. roose. m &y felain it lor anbth er, to", betWEen tne give fHH-TeU(Ji, o parties, pertinent to the facts of the case "When the impossibility of a specific per- formance is disclosed at the hearing, and the suit was brought by the plaintiff in ignorance of such fact, the- court will award the remedy of damages. " Pom. Eq. Jur. § 1410, and note. In Hopkins v. Gil- man, 22 M'^is. 476, a bill was filed tor spe- cific performance of an agreement to arbi- trate, and to execute a lease, and the court held that such relief could not be granted. The present chief justice says in his opin- ion: "Now, although the facts alleged are insufficient to justify a decree for specific performance, yet we think a court of eq- uity may retain the suit for the purpose of awarding compensation for the value of the improvements. Undoubtedly an ac- tion for damages for non-performance of the contract would be the usual remedy. But must this suit be dismissed, and the plaintiff tumedoverto that remedy alone? It seems to us not, but that the court, having acquired jurisdiction of the cause, should provide and grant any relief con- sistent with the case made by the com- plaint and embraced within the issue;" citing Tenney v. Bank, 20 Wis. 152; Leon-" ard v. Bogan, Id. 540 ; Greason v. Ketel- SPECIFIC PERFORMANCE OF CONTRACTS. 685 tas, 17 N. Y. 491; and Barlow v. Scott, 24 N. Y. 40. We think this case comes with- in the principle and practice ol that case, and may be retained for the purpose of awarding compensation as above deter- mined. The circuit court applied the same principle in giving compensation to the plaintiff for one 40-acre tract, which had been sold ajnd conveyed for non-payment of taxes, but in doing so adopted a rule of damages unsupported by any authority, by gi'Wng the plaintiff the present value thereof. The present attitude of this case was not anticipated sufllciently for the counsel to argue or cite authorities upon the above question, but to save time and expense, and malie a full disposition of the case in this court, and determine the man- date to be sent to the circuit court, we have concluded to decide all questions nec- essary to a full disposition of the case. We think that the selection and location of the lands, and the identification thereof, made by the finding of the circuit court, should be taken as the lands within the meaning of the contract, and $10 for each 40-acre tract thereof should i>e taken as the value of said lands at the time when a conveyance thereof was to be made ac- cording to the contract, and interest there- on from that time to the time of the trial, as full compensation and damages for the breach of said contract by the said Thomas B. Scott, deceased, and by the defendant as trustee of his estate, and judgment should be rendered accordingly. But this, we think, should be left optional with Bald defendant, or to have a new trial to determine what lands are within the intent and meaning of said contract, and the value thereof on the 1st day of July, 1882, the time fixed in said contract for the conveyance thereof. We do not think that the contract is so uncertain that it cannot be executed or enforced, and we think that the finding ol the circuit court as to the lands embraced in the con- tract, and the value thereof at $10 for each 40-acre tract at the time aforesaid, are sup- ported by the evidence, and are as near correct as practicable. It is doubtful if the result of another trial to determine the same facts would be of any advantage to either party. But inasmuch as the defend- ant contends that the finding of what lands are embraced within the contract is not supported by the evidence, and as the retaining of the suit for damages to avoid the operation of the statute of limitations, and the rule of damages established, are favorable to the plaintiff, we have con- cluded to make a new trial in the case op- tional with the defendant. The judgment of the circuit court is reversed, and the cause remanded, with directions to render judgment for the plaintiff in accordance with this opinion, or to grant a new trial at the option of the defendant, to deter- mine the above facts, viz. : (1) Whatlands are embraced in the contract ; and (2) their value on the 1st day of July, 1882 ; and to render judgment accordingly. liYON, J., took no part. ^AJU*-' i'-^JL'^ii/^^ Y<- "V-*-^ «»■ .^<— « wt .. < V-V/ *---^ Cet-fcJ/ .**VwJr TUw-^ jCv" 686 SPECIFIC PEEFORMANCE OP CONTRACTS. FRAME V. FRAME et al. (9 S. E. 901, 32 W. Va. 463.) Supreme Court of Appeals of West Virginia. June 26. 1889. Appeal from circuit court, Braxton coun- ty; Henry Bbannon, Judge. This was a chancery suit, brought Septem- ber 12, 1887, in the circuit court of Braxton county. The bill was filed at October rules, 1887, and it alleged that the plaintiff, L. M, Frame, was the son of William B. Frame, deceased, who was a former resident in said county. That the plaintiff lived with his father, and worked, aided, and assisted him on his farm till the plaintiff married, on May 1, 1855. That the said father owned seven or eight different tracts of lands in said county, and, being desirous of compensating the plaintiff for his services and of starting him in life, proposed to him, if he would go upon a certain tract of land, situated on the south side of Elk river, about one mile from Frame's mill, in said county, — containing 100 acres, — and cultivate and improve the same, that he would give him said land, and make him a deed therefor. This tract was granted to said William B. Frame by the commonwealth of Virginia, by patent dated September 30, 1846, a copy of which is filed with the bill, and shows the metes and bounds of this tract. That the plaintiff ac- cepted the proposition, and, on or about May 12, 1855, moved upon said tract of land, and has ever since lived upon said land, claim- ing, as the bill says, and holding, the same adversely to all the world, — and further al- leged that the plaintiff's possession has been open, notorious, and exclusive from that day to this, — a period over 32 years, — and he still owns, possesses, and claims the same. Some years after the plaintiff moved upon said tract of land, his father became the surety of one A. W. Wilson, on a constable's bond, in the month of May, 1868. Being ap- prehensive that he might be made liable, by reason of such suretyship, for the default of said Wilson, he determined to convey all of his lands to his two sons, John W. Frame and Thomas J. Frame; and accordingly, by deed bearing date the 26th of May, 1868, — a copy of which was filed with the bill, — ^he con- veyed to his said two sons seven different tracts of land, one of the said tracts being the same tract which 13 years previously he had granted to the plaintiff, and placed him in possession of. Why his father, William B. Frame, included the plaintiff's tract of land in said conveyance, the plaintiff is not advised. "Certain it is that it was never in- tended by his father or by his brothers to de- prive him of the ownership or possession oi said tract of land, even if tliey could legally have done so. His said brothers well knew all the facts in relation to the agreement un- der which he went into possession of said land; well knew his long possession, im- provement, and cultivation of the same, and well knew he was entitled to a deed therefor. [n fact, they never disputed the plaintiff's right to said land, never attempted to oust him from the possession thereof, never set up any claim thereto, nor did any act in the least tending to assert a claim thereto, ex- cept as hereinafter stated. The character of said conveyance was well understood by the said William B. Frame and his said two sons, the said William B. Frame remaining in possession of said lands, except the tract sold to the plaintiff, until his death, and pay- ing taxes therein, except the tract owned by the plaintiff, the taxes upon which were paid, by the said plaintiff. It was not until July, 1886, that either of said brothers did any act which in the slightest asserted any claim to the plaintiff's land. On the 1st day of July, 1886, John H. Frame, by deed of that date, conveyed an undivided half of five of said tracts of land, including the tract owned by the plaintiff, to George Goad, trustee, to se- cure to Jelenko & Bro. the sum of ®482.54, evidenced by a negotiable note of that date and payable six months after date, also to se- cure to Jelenko & Loeb the sum of $536.54, evidenced by note of that date, payable six months after date, with provision that upon default of payment of said notes, or either of them, said trustee should, upon request of the holder of said notes or either of them, sell the said undivided half of said land ac- cording to law, for cash. A copy of said deed is here filed as part hereof, marked 'Ex- hibit No. 8.' The firm of Jelenko & Bro. is composed of the defendants Jacob Jelenko and Gustavus Jelenko, and the firm of Jelen- ko & Loeb is composed of the defendants William Jelenko and Charles Loeb. At the time of the conveyance by John H. Frame to said George Goad, trustee, the plaintiff was still in the open, notorious, and exclu- sive possession of said 100 acres of land, and by law the said George Goad and Jacob Jelenko and Gustavus Jelenko and William Jelenko and Charles Loeb had constructive notice of the rights of the plaintiff to said 100 acres of land, and his ownership thereof, and, in addition thereto, had actual notice of such right and ownership. That on the 22d day of August, 1877, the said John H. Frame having made default in the payment of said notes, the said George Goad, as trustee, sold the said undivided one-half of said five tracta of land, including the plaintiff's tract of 100 acres, at public auction, to the highest bid- der, at which sale the said defendant Charles Loeb became the purchaser of said undivid- ed one-half of said five tracts of land, includ- ing the land of plaintiff, at the price of $700. That the said George Goad is about to con- vey the same to the said Loeb by a deed as such trustee. The plaintiff says that the said deed from William B. Frame to his sons Thomas J. and John H. Frame, and the trust-deed from the said John H. Frame to the said Goad, constitute a cloud upon thfr title of the plaintiff to said 100 acres of land^ and the deed from Goad to Loeb, when made, will still further cloud liis title. He is ad- vised that he has a right to have said clouds- removed, and to have specific execution of. SPECIFIC PERFORMANCE OF CONTRACTS. 687 his said contract, made with his said father, and the legal title to said land conveyed to him. He therefore asks that said contract he specifically executed; that the said George Goad be restrained and enjoined from 'Con- veying the undivided one-half of said 100 acres to the said Charles Loeb; that the said John H. Frame, Thomas J. Frame, George Goad, and the parties secured by said deed of trust, be held to have no interest in said 100 acres of land; that the clouds arising from the conveyance hereinbefore set out be re- moved by this honorable court; that the said John H. Frame, Thomas J. Frame, and George Goad be required to unite in a deed conveying said 100 acres of land to the plain- tiff, and that he have such other, further, and general relief as the court may see fit to grant." The parties defendant to this bill were the plaintiff's said two brothers, and the trustee George Goad, and said two firms secured by said deed of trust, and Charles Loeb, the pur- chaser of this tract of land at the public sale under the deed of trust. The exhibits re- ferred to in the bill were all filed with it. The following is the answer of Thomas J. Frame, filed December 5, 1887: "To the Hon. Henry Brannon, etc. — Defendant, for answer to said bill, says that he does not de- sire to controvert the right of the said L. M. Frame to have specific execution of his con- tract, as set out in said bill, and he here ten- ders a deed for all his right, title, and inter- est in the said 100-acre tract of land, and, having answered, asks to be hence dismissed, with his costs. Thomas J. Feame." The deed referred to in this answer was filed with this answer, and thereupon this order was made: "Thomas J. Frame this day filed his answer to plaintiff's bill, to which the plain- tiff replies generally, and the said Thomas J. Frame, having by his answer tendered a deed for all his right, title, and interest in the tract of 100 acres of land in the bill men- tioned, which deed is accepted by the plain- tiff, it is ordered that this cause be dismissed as to the said Thomas J. Frame, but be re- tained for further proceedings against the other defendants; and said L. M. Frame hath leave to withdraw said deed from the papers of this cause. " At the October rules, 1887, all the other defendants other than John W. Frame filed their joint and several answers, wliich were as follows: "These defendants, for answer to said bill, say that it is true, as alleged in the plaintiff's said bill, that defendants Jel- enko & Bro. and Jelenko & Loeb were cred- itors of John H. Frame in the sums and at the times set out in the plaintiff's bill, re- spectively, and for which the said John H. Frame, in order to secure them in their re- spective sums on the day of , 188-, conveyed to the defendant George Goad, trustee, his undivided half interest in the five tracts of land in the plaintiff's bill mentioned, situated on Elk river, near Frame's Mill, in Braxton county, among which was a tract containing 100 acres, claimed by plaintiff in his bill filed in this cause. It is also true that the said undi- vided half interests in the said five tracts of land conveyed to the S84d George Goad, trus- tee, as, aforesaid, were on the 22d day of Au- gust, 1887, by order of the defendants Jel- enko & Bro. and Jelenko & Loeb, sold by the said George Goad, trustee, after giving notice as required by law, at public auction, at the front door of the court-house of Braxton county, for cash, to Charles Loeb, at the price of $700.00, he being the highest bidder therefor, wliich amount was paid on day of said sale by said Loeb. A deed was obtained by said Loeb from said trustee, on 1st day of October, 1887, which is here filed, marked •Exhibit No. 1,' and made part of this an- swer. These respondents deny that the plaintiff ever had any title, or semblance of title, to the said 100 acres of land claimed by him in his said bill, or that his possession thereof was adverse and exclusive for the pe- riod of time alleged in his bill, or it ever was so held by him for any period of time from the time his said father obtained his grant from the commonwealth of Virginia there- for to the present time. ■ These respondents here expressly deny ever having had any no- tice, either actual or constructive, of any claim of title by plaintiff to said tract of land, or of any right thereto by him whatever. These defendants, for further answer, say that they are advised and believe and charge that plaintiff never had any contract of pur- chase with his said father for said 100 acres of land, but that, if he had any such con- tract, it was without consideration, and can- not affect the title of either George Goad, trustee, or defendant Charles Loeb, to said land ; that if the plaintiff ever occupied, re- sided on, or controlled in any manner said tract of land in the life-time of his said father, it was a mere tenancy at will, and not under a contract of purchase. These defendants also deny that William B. Frame, in his life- time, ever made plaintiff any proposition to the effect that if he (plaintiff) would move upon said 100 acres of land, and improve it, that he would give said land to him. These defendants, having answered fully all mate- rial allegations in the plaintiff's bill charged, pray hence to be dismissed, with their costs in this behalf expended, and they will ever pray," etc. The exhibits referred to in this answer were filed as exhibits with it. Depositions were taken both by the plaintiff and by the defendants. The plaintiff proved by one witness, a nephew of "William B. Frame, that the plaintiff, L. M. Frame, had had posses- sion of and lived upon the 100-acre farm named and described in the bill for 31 years, —ever since 1856. That he, the witness, went to the residence of plaintiff's father one morning in 1856, and William B. Frame told him he had given the plaintiff, "Lemuel, a farm yesterday morning, " and he pointed out this 100-acre tract, which was in sight, SPECIFIC PERFORMANCE OF CONTRACTS. "across the river, " as the farm he had given him; and he said he had given his otlier lands to John and Thomas, his sons. He said that "Lemuel could go to work, or starve." He said they would have to give a woman who was in the house on this farm two bushels of corn in order to get her to leave and give up the house to Lemuel, so he could move in. Lemuel Frame, the plaintiff, moved on the place a week or 10 days after- wards, and has been in the occupation of it ever since. The witness proved, also, that he had since then gotten timber trees off this tract of land. He got the timber trees of the plaintiff, L. M. Frame, who always clMimed this as his farm. These trees were sawed for the witness at the mill of the plain- tiff's father, William B. Frame, who knew where these trees came from, but set up no claim to them. He never disputed about them, and never claimed that the plaintiff, L. M. Frame, did not own this tract of land, as he claimed. The members of William B. Frame's family,— his wife, sons, and daugh- ter, and a son of the plaintiff's family, — who were all examined, all testified they had never heard of William B. Frame's giving his sons John H. Frame and Thomas J. Frame any lands in 1856, as bad been testified to by their cousin. But the daughter testified that she had lived with her father in 1856, up to 1864, and at that time she heard him say fre- quently he had given L. M. Frame the farm lie claimed in this suit; that he moved on the land within a month after it was given to him, and has lived on it ever since. Her father always called it "Lemuel's place." The widow of William B. Frame, whom he married in 1864, proves the same statement that she heard made by William B. Frame frequently. She never heard him say he had given any other lands to his other children in 1856. The plaintiff himself testified that he had lived on tlie 100-acre farm in contro- versy since the 18th or 20th of May, 1856; that his father gave it to him, and he moved on it and occupied it as his own, and he did not occupy it as a tenant of his father. His occupancy of it has been open, notorious, and visible. He has cultivated the land, cleared it, fenced it, and cut saw-logs from it. He cleared and fenced on it some 72 acres. The whole of this was fenced prior to 1871. He has planted on it 800 apple-trees, and some 50 peach-trees, and, while the house he lived in was on the land when he went there, he had put up another house on the land; also, a log stable. John H. Frame and Thomas J. Frame, his brothers, to whom he had con- veyed this and other tracts of land in 1868, frequently got timber trees off of the land, buying them from him and not disputing his ownership of the land. John H. Frame had in this way bought timber from him off of this land in 1868 and 1869. The plaintiff's son proved that about 18 months ago his father. Lemuel M. Frame, had offered to sell this farm of 100 acres to one T. A. Reip at $50 for the house and garden, and $1 apiece for the bearing apple-trees and walnut-trees. Witness told John H. Frame of this offer, which he had declined. John H. Frame said witness' father had better have reduced the price, of the trees to 50 cents, rather than miss the sale. He knew of John H. Frame on several occasions buying a stick of timber off of this tract of land and paying witness' father for it. He proved his father had li ved on this land from his earliest remembrance, and he was now 30 years old. He always claimed the farm as his own, and every one spoke of it as his father's farm. He had cleared and inclosed about three-fourths of it. On the other fourth was a maple-sugar orchard of 15 or 16 acres, from which his father made sugar every year. He knew of his father more than once selling a stick of timber off of this land to his grandfather, William B. Frame. He bought one of these sticks of wood about 1866. William B. Frame died in 1876. It was also proved by other witnesses that the plaintiff, L. M. Frame, had lived on this tract of land some 30 years; that during all that time he claimed it as his own farm ; that, although it was taxed to his father, William B. Frame, till 1868, and after that to John H. Frame, and Thomas J. Frame, yet the taxes were always paid by plaintiff, L. M. Frame. He testified that about 1882 he refused to pay the taxes on this tract of land, unless the sheriff made out a separate receipt for this tract, and did not have it as it had been on the receipt for the taxes of all the lands owned by John H. Frame and Thomas J. Frame, and after that a separate receipt was made out by the sheriff for this tract of land. The defendants Jelenko & Bro. and Jelenko & Loeb were wholesale merchants, doing busi- ness in Charleston, Kanawha county, W. Va. John H. Frame was a retail merchant at Frametown, Braxton county, W. Va. He purchased goods of these two wholesale firms in 1882, and continued thereafter to do so. When he commenced doing business with these firms they made inquiry of the clerk of the county courtof Braxton with ref- erence to his financial condition, and what real estate he owned, and with what per- sonal property he was taxed, and whether there were any liens on his property. They were informed that he owned a moiety of the seven tracts of land conveyed to him and his brother Thomas J. Frame. They includ- ed the 100-acre tract now claimed by the plaintiff, L. M. Frame. At the foot of a copy of this deed for these seven tracts of land from William B. Frame to Thomas J. Frame and John H. Frame was this memo- randum, sent to a member of the firm by said county clerk: "The only lien on record against the above, so far as I have been able to find, is a judgment lien against John H. Frame, in favor of Philip Frankenberger, for $143.90, with interest from the 13th day of June, 1885, and $1.90 costs. I find that John H. Frame is assessed on the personal property book of this county with the aggre- SPECIFIC PERFORMANCE OF CONTRACTS. 689 gate sum of $96, consisting of 8 head of cat- tle, at $40; 2 hogs, $4; 1 watch or clock, at $2; farming implements, $5; household, etc., $45; I have given the boundary to each tract as it is in the deed above mentioned." A member of one of the firms, Charles Loeb, went up to Braxton county, to try and collect the amount due them for boots and shoes they had sold to John H. Frame, which amounted to $536.54. He said he could not pay it, but was willing to secure them on his real estate, if they would give him six months' longer credit. To this Charles Loeb, one of the members of said firm, agreed; whereupon John H. Frame gave his note for the balance due the firm, payable in six months, and a deed of trust dated July 1, 1886, on an undivided moiety of five tracts of land, including the 100-acre tract claimed by the plaintiff. "When I made this arrangement for my firm, Jeleiiko & Loeb, I also, as the agent of the firm of Jelenko & Bro., wholesale dry-goods mer- chants in Charleston, settled the balance due them from him to Jelenko & Bro.', bought of them by .John H. Frame. This balance was $482.54, for which he executed his note to Jelenko & Bro., dated July 1, 1886, payable in six months, which was secured by said deed of trust on said five tracts of land, in- cluding the 100-acre tract claimed by the plaintiff. " This deed was executed, and du- ly acknowledged and recorded in the county court clerk's ofBce of Braxton county, on July 2, 1886, both by John H. Frame and his wife, Amanda Frame. The trustee in this deed of trust, Gleorge Goad, pursuant to the provisions in this deed of trust, sold the said one undivided moiety of these five sev- eral tracts of land, and Charles Loeb became the purchaser thereof for $700, which being paid in cash, said trustee executed and de- livered to him a deed for one undivided moi- ety of these five tracts of land, including this 100-acre tract claimed by the plaintiff. This deed is filed with the answer of the defend- ants, it having been recorded. A lawyer, on behalf of Lemuel M. Frame, when these lands were being offered for sale and before they were sold, publicly announced that the party purchasing this 100-acre tract claimed by Lemuel M. Frame could not get any title thereto, as he had claimed the land for 30 years, and lived upon it, and the trustee. Goad, said: "Certainly, you can only get such title as is in me." J. F. Brown, for appellants. Byrne, for appeUee. W. a R. Green, J., {after stating the facts as aSooe.) The first question presented by this record is, will a court of equity specifically enforce in any case, or against any one, a verbal gift of land from a father to a child, as in some cases it is difiScult, if not impos- sible, in principle, to distinguish gifts and sales? I will, before considering directly this question, state briefly the law in refer- H.& B.E(}.(2d Ed.)-44 ence to the specific enforcement of verbal sales of land, and the principles on which it is based. By the statute of frauds, passed in 1677, and a similar statute to be found where- ever the common law prevails, "No action shall be brought upon any contract or sale of lanil, tenements or hereditaments, or interest in or concerning them, unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or by some person tliere- unto by him lawfully authorized." See Code W. Va. 1887, c. 98. The English courts, very soon after the passage of their statute of frauds, took the view that, while the chan- cery courts were as much bound by this stat- ute as the common-law courts, yet, as it was the peculiar province of a chancery court to relieve against fraud, a court of chancery, despite this statute, would specifically enforce a verbal contract for the sale of land when the refusal to execute the contract would it- self amount to the practicing of fraud by the defendant on the plaintiff. In so doing, they said, they were engrafting no exception on this statute, but simply proceeding to prevent fraud upon general principles which prevailed universally in courts of equity, and it would never do to so construe the statute of frauds, as to promote instead of suppressing fraud, as it was intended to do. See Browne, St. Frauds, § 457. If the defendant has partly performed his part of such contract, and his act of part performance is incapable of com- pensation in damages, it would obviously be fraud on the plaintiff to permit the defend- ant to refuse to execute such contract because it was verbal; and in such case a court of equity will compel the specific performance of such verbal contract. If, for example, the vendor of real estate, by a verbal contract, has delivered possession of the land to the vendee, this will entitle the vendee who is in iY)sses- sion of the land to compel a specific perform- ance of the contract by making a deed there- for on the payment of the purchase money; for otherwise the vendor might sue the ven- dee as a trespasser, and to permit him to do so after he has put the vendee in possession under the verbal contract would be to permit him to take advantage of his own wrong, in repudiating bis obligation, and it would be punishing the vendee, who has complied with his ovra obligation. If the vendee has taken possession of the land, the courts regard that the wrong done by compelling him to surrender the possession of it as a trespasser is such an injury as could not be compensated In dam- ages, and hence there is no other way of pun- ishing the recalcitrant vendor for committing a fraud on the vendee, who has complied with his contract, by treating him as a trespasser. The authorities supporting these views are numerous, both in England and America. See 2 Loraax, Dig. p. (40,) 55; 1 Story, Eq. Jur. § 761 ; Wat. Spec. Perf . § 270. It is also settle'd, both in England and America, that, if the vendee under a verbal agreement for the purchase of real estate expends labor or 690 SPECIFIC PERFORMANCE OF CONTRACTS. money in improving tlie same, the contract is thereby partly performed, and the statute of frauds has no application to it. In such a case the improvements by the vendee in pos- session constitute valuable and equitable con- sideration, and entitle him to specific execu- tion of the contract which he complies with fully on his part. There is, then. First, the verbal agreement; second, the delivery and taking possession of the estate in accordance with the agreement; and, third, the expend- iture of money in consequence and in faith of the agreement; and, fourth, a complete compliance with the agreement by the ven- dee, by the payment of the entire purchase money. If the first of these circumstances alone exists, the statute of frauds denies all rerftedy. When the second ensues, the ven- dee has partly performed his contract, and has taken a step which would render it a fraud on the part of the vendor to divest him of his possession and refuse him a deed. When the third circumstance follows, in expenditures to improve the land, all the powers of equity are summoned into action to protect the ven- dee on several grounds, each sufficient and each distinct in its nature. It will then, when the vendee fully complies with his con- tract, compel specific execution by the vendor — First, because it would be a fraud in him to refuse it; secondly, he would profit by his own fraud, in acquiring the improvements with the land he sold; and, thirdly, because the vendee has introduced a valuable consid- eration, which, if he lost it, could not be re- stored to him, and is not ordinarily of a nat- ure to be compensatory in damages. These views are well sustained by both English and American authorities. See I Sugd. Vend. (8th Amer. Ed.) p. (151,) 226; 1 Story, Eq. Jur. § 761 ; Browne, St. Frauds, § 487a; Wat. Spec. Perf. § 280; Rhea v. Jordan, 28 Grat. 683; Tracy v. Tracy, 14 W. Va. 243. If a donee, being a child, under a parol gift of real estate by a father, take possession and expend money or labor to improve it as against the donor, he stands upon the same footing as a piirchaser for a valuable consid- eration. The statute of frauds has no appli- cation to the transaction, and equity will compel its specific performance by requiring him to execute his deed to consummate his gift. We will now consider parol gift spe- cially. If A. points to a house and lot, and says to his child, 13., "I give you this house and lot," and B. says, "I accept the gift," and nothing more passes in reference to the matter, a court of equity will take no cogni- zance of it. B., if he had paid A. for the house and lot, without taking possession, could not compel him to execute a deed, be- cause he could have his remedy in recovering the money he had paid, with interest, in a court of law. A fortiori, a court of equity will not entertain B. when he has paid noth- ing; and, if B. should sue at law, he can re- cover nothing, because A.'s promise or gift was without consideration, — a nudum pac- tum, — and B. has suffered no damages. The donee has not changed his situation, and there is no basis for an appeal to a court of equity to interpose. But suppose B. enters the house and makes it his home, and goes on to act as owner, and improves the prem- ises by the expenditure of money or labor. He digs ditches and enriches the land. He builds fences for its permanent protection. He plants out trees, clears the land and lives in the house. These acts change the situation and fix the gift. Why? Because valuable consideration has now entered into the transaction. The agreement of gift has been partly performed, by acts which cannot be undone. A valuable consideration may be a detriment to the promisee or a benefit to the promisor. What was in its inception? A promise sustained only by a good consid- eration — the love and affection of a father to a child— has by such acts become in effect a promise sustained by a valuable considera- tion. It may be regarded as settled law in this state and in Virginia that a verbal donee of land — a child, who, under the verbal gift, has taken possession of the land and improved it — has a right to demand in a court of equity a specific performance of the contract by the execution of a deed by the father, thereby consummating his verbal gift. This was so held in Shobe's Ex'rs v. Carr, 3 Munf. 10, de- cided as long ago as 1811, and this case has been repeatedly followed or recognized as law by numerous Virginia decisions ever since. See Darlington v. McCoole, 1 Leigh, 36; Reed's Heirs v. Vannorsdale, 2 Leigh, 569; Pigg v. Corder, 12 Leigh, 69; Cox v. Cox, 26 Grat. 305. There are also numerous authorities in other states to the like effect. Freeman V. Freeman, 43 N. Y.34; Lobdellv. Lobdell, 33 How. Pr. 347; Shepherd v. Bevin, 9 Gill, 32; Young v. Glendenning, 6 Watts, 510; Gal- braith V. Galbraith, 5 Kan. 409; Kurtz v. Hibner, 55111. 521; McLain v. School-Direct- ors, 51 Pa. St. 196 ; Neale v. Neales, 9 Wall. 1; Hardesty v. Richardson, 44 Md. 617. If, however, a father give his child verbally a farm, and put him in possession thereof, but he neither spends money nor labor in improv- ing the land, it is very questionable in Vir- ginia and in West Virginia whether the child, in a court of equity, could compel the father to make him a deed. It was so decided in the cases of Stokes v. Oliver, 76 Va. 72, and Kef- f er V. Grayson, Id. 517. In these cases it was held that the love and affection of a father to a child is not enough, of itself, to warrant a decree for a specific performance, even when the agreement to make the gift is in writing, and the child in possession of the farm. But the contrary was held by this court in Mar- ling V. Marling, 9 W. Va.-79. But, in deliv- ering the opinion of the court, in that case, on page 95, 1 express my own opinion, that, while such agreement need not be under seal, it must be a formal agreement, in writing, duly delivered as such, and while in such case, the consideration being good, though not valuable, a court of equity could properly dis- SPECIFIC PERFORMANCE OF CONTRACTS. 691 pense with the seal to it, yet it could not dis- pense with its being a formal agreement in writing, and a verbal agreement to give a farm to a child could not be enforced speciflo- ally, even when the child had been put in possession of the farm, but such agreements of gift, when performed in part by putting the donee in possession, have been enforced in some states. See Tilghman, C. J., in Lessee of Syler v. Eckhart, 1 Bin. 380; Big. Fraud, 386; Smith, Eq. 254, 255; Mahon v. Baker, 26 Pa. St. 519. And it must be ad- milted that the reasoning which supports tha enforcement of a verbal contract of sale part- ly performed by the simple delivery of pos- session appears equally applicable when there is a verbal gift of land by a father to a child, accompanied by the delivering of the posses- sion of the land. See 1 Story, Eq. Jur. § 761, and articles of John W. Daniel in the April, 1883, number of Virginia Law Journal, where the question we are considering is elab- orately discussed in an able article. Many of the views taken in said article I ha,ve adopted in this opinion. I have thus far been discussing the right of a donee or vendee of real estate by a verbal agreement to enforce specifically such verbal agreement when the donor has put the donee in possession of the land. We will now con- sider whether the law is modified when the vendee or donee in possession of the land seeks to have his contract specifically enforced against a subsequent purchaser for valuable consideration of the donor, or against a jud^- ^ygient creditor of the vendor or donor.y Inthe /nrsf'prace,Tt mus¥beobserved~that wBen the vendee or donee is in possession of the land, openly and notoriously living upon it, for in- stance, there cannot be a purchaser of the land for valuable consideration without no- tice from the vendor or donor, because such possession by the vendee or donee of itself conveys notice to the whole world of the equitable title of the vendee or donee, and of bis right to the legal title; the possession of realty being the fact of most comprehensive and far-reaching consequences that bears up- on its title. The perfect legal title was origi- nally conferred by this delivery of possession or livery of seisin. A fee was not perfect without this delivery of possession, but, if accompanied by such delivery of possession, it was perfect, even though it was a mere verbal transfer. The earth has been described as that universal manuscript, open to the eyes of all. "When, therefore, a man pro- poses to buyer deal with realty, his first duty is DO read this public manuscript; that is, to look and see who is there upon it and what are his rights there. And, if the person in possession has an equitable title to it, be is as much bound to respect it as if it was a per- fect legal title, evidenced by a deed duly re- corded. See 2 Sugd. Vend. 866; Sedg. & "W. Tr. Title Land, §717; IStory.Eq. Jur. §400; Big. Fraud, 293, 294; Floyd v. Harding, 28 Grat. 410; Merithew v. Andrews, 44 Barb. 207; Grimstone T. Carter, 3 Paige, 421; Had- dnck V. Wllmavth, 5 N. H. 181; Knox v. Thompson, 1 Litt. (Ky.)350; Tuttle v. Jack- Bon, 6 Wend. 213; Parks V. Jackson, 11 Wend. 442; Morgan v. Morgan, 3 Stew. (Ala.) 383. When the sale or gift of the land is by a ver- bal agreement, the terms of such agreement must be definite and made out with reasona- ble certainty. See Wright v. Pucket, 22 Grat. 370. By reasonable ceitainty is not meant a mathematical certainty; but what is meant is that the evidence adduced must leave the court satisfied and convinced as to the terms of the agreement, and it must be so definite as to guide the court safely into car- rying it into execution. The plaintiff who seeks a specific performance of a verbal con- tract or gift of land, or, indeed, who seeks the aid of a court of equity to enforce any equitable right, must show that he has used reasonable diligence, and that his claim is not a stale claim. See 1 Bart. Ch. Pr. § 23. As there stated, it is a familiar doctrine of the courts of equity that nothing can call them into activity but conscience, good faith, and reasonable diligence. Where these are want- ing, the court is passive, and does nothing. We will assume, first, that a verbal gift of this 100 acres of land, patented to William B. Frame September 30, 1846, was by him, about May 12, 1856, made to his son Lemuel M. Frame, and the donee then took posses- sion of this 100 acres, exercising an undisput- ed ownership over it from that time, selling timber off it to his father and others, and had lived upon it and cleared it up and cultivated it ever since, and that considerable time and money had been spent by him in improving this tract of land. These facts the counsel of the plaintiff, L. M. Frame, regard as clearly proven. If they are really proven, with the requisite degree of distinctness and certainty, then, on the authorities we have cited, it would seem clear that the son of L. M. Frame had a right to specifically enforce this agreement against his father, William B. Frame, provided he used reasonable diligence in instituting his suit, and did not permit his claim to become too stale before he brought his suit. It is claimed by the plaintiff, L. M. Frame, that he was in the exclusive and un- interrupted possession of this farm, claiming against all the world, and especially against his father, the donor, — actually selling him timber off this land. It was unnecessary for him to institute this suit while this state of things existed. The donee, L. M. Frame, was not called upon to act, no one disputing his right to the same, and he having held possession and use of it. There is much strength in this view; and, so long as this state of things existed, the court might be disposed to excuse the plaintiff, L. M. Frame, for not instituting this suit for a specific performance. How long did this state of things exist? The record shows until May 26, 1868. But not thereafter, for William B. Frame, the father, exercised the most deci- sive act of ownership over this 100-acre tract; for on that day, tor a consideration stated on 692 BPECIFIO PERFORMANCE OF CJONTRACTS. the face of the deed to have been $500, he ana his wife conveyed to their sons Thomas J. and John "W. Frame seven different tracts of land, including the tract of 100 acres claimed to have been given verbally to said L. M. Frame 13 years before. This put it entirely out of his power to make a deed of this land to L. M. Frame, knowing that he could not acquire a valid title for this tract of land, on which he was living, except by instituting in a court of equity a suit for the speciflc per- formance of the verbal agreement to give it to him, made by his father some 13 years before. He never could have acquired a good title to this tract of land by living upon it, claiming it as his own, and exercising rights of ownership over it, no matter how notori- ous, undisputed, and exclusive such posses- sion was. For, as he entered upon the land by permission of his father, who had the legal title, his possession was admitted in subordi- nation to his father's title, and was not, therefore, and could not become, adversary to his father's title, or the title of those claim- ing by deed under his father. See Hudson v. Putney, 14 W. Va. 561. He knew, there- fore, as early as June, 1868, that if he want- ed a title to this 100-aore tract, on which he lived, he would have to get It by asking a court of equity to compel the legal owners to convey the land to him, as the true equitable owner. It was his duty, therefore, if he did not mean to abandon his equitable title, to have instituted this suit in a reasonable time after January 1, 1868. It may be said that he did not know that his father then con- veyed this tract of land to his two brothers. But though, perhaps«we cannot assume that be knew this deed was made to his brothers by bis father simply because it was promptly put on record, yet there is his own statement in his deposition of facts, which shows that he did know of the making of this deed to his brothers, for he says he always paid the taxes on this land, though it was taxed in his father's name until 1868, and then in the name of his brothers ; that the tax-bill was thus made out, and he paid the taxes on this tract, though the tax-bills were made out against his brothers, and that he refused to pay them after a while, if not differently made out. He was thus reminded each year by these tax-bills, tl;iat the legal title of this land was in his father till 1868; after that, in his brothers. It was clearly his duty, when it was thus made known to him that he could not acquire legal title to this land except by suit, for him to have brought such suit with reasonable promptness, especially as 13 years had already expired since he claimed the equitable right to this land. But he did not institute such suit for more than 19 years, and some 32 years after the alleged verbal promise of his father to give him this land. In the mean time his father had died, and one of his brothers, to whom, in 1868, his father had conveyed this land, and the records of the clerk of tlie county court showed that, upon the fact that he owns this land, this broth- er had acquired a credit, and been trusted, and, on his giving security to pay debts so owed, hi the shape of a deed of trust on his Interest in this and other lands, the trustee had sold said interest in said land at public auction for cash. There is a strong contrast between the care and diligence of the plaintifE in protecting his rights and that of the defendants. Before they extended credit to the plaintiff's brother, and took this deed of trust of him, they had the clerk's records in the county court of Braxton, where his brother lived, examined, to ascertain what lands he owned, and whose liens were upon them, and all they now ask is that, as they liave used every precaution in conducting their business, the court will not deprive them of the security they took by setting up an equitable title of the plaintiff, of which they bad no actual notice and of which the plaintiff must have, in the nature of things, known that they could take no no- tice. They were wholesale merchants, liv- ing remote from Braxton county, in Charles- ton. The defendant John H. Frame was engaged in the mercantile business in the county of Braxton, and his brother, (the plaintiff,) who lived near him, must have known that in conducting such business he would buy his goods of wholesale mer- chants, at a distance, and thus incur debts, and such creditors would have no means of knowing his pecuniary condition, except as it was shown by the records in the clerk's oflBce of the county court. So, by his neglect in bringing the suit the plaintiff must have known he was furnishing his brother John H. Frame the means of imposing on the wholesale merchants, of whom he was buy- ing his goods on credit, as to his pecuniary condition. Just what might have been ex- pected did occur, and loss must now be sus- tained. Should this loss be sustained by the plaintiff, who was so grossly careless, or by the defendants, who acted with caution and diligence? Vigilantihus non dormientibus Jura suhveniunt. But the staleness of the plaintiff's clahn is not the only difficulty in making out this case, as presented by this record. I have hereto- fore assumed that he proved the verbal gift of this 100 acres of land from his father in 1856. But has he proven the agreement to make this gift with the requisite degree of certainty and distinctness, such as a court of equity should require, especially when it is borne in mind that the plaintiff, who al- leges this verbal agreement, asks to have it speciflcaUy enforced, to the obvious loss of purchasers from his brother for valuable consideration, without any actual notice of such verbal gift? The bill alleges that the plaintiff lived with his father, and worked and assisted him on his farm, until his mar- riage, which occurred on May 1, 1855; that his father at that time was the owner of seven or eight different tracts of land in Braxton county, W. Va., and being desirous of com- pensating tlie plaintiff for his services, and starting him in life, proposed to him that if SPECIFIC PERFORMANCE OF CONTRACTS. 693 he would go upon a certain tract of land, situated on the south side of Elk river, about one mile above Frame's mill, in said county, containing 100 acres, and cultivate and im- prove the same, he would give said land to him, and make him a deed therefor. The plaintiff accepted this proposition of his father and on or about May 12, 1855, moved upon said land, and has since held and claimed the same adversely to all the world. This possession has been open, notorious, and ex- clusive from that day to this, — a period of over 32 years . " Some years after the plaintiff moved on this land, — in the month of May, 1868, — being apprehensive that he might be made liable by reason of his suretyship of a constable named Wilson, because of his de- fault, he determined to convey all of his said land to his two sons, the defendants Thomas J. and John H. Frame. He made them a deed, duly recorded, a copy of which is filed with the bill. On the face of the deed the consideration purports to be $500 cash." This verbal agreement by the, plaintiff's father to give him this tract of land was not an absolute promise to give him the land, and make him a deed therefor, but was only a conditional promise that he would do so if the plaintiff (his son) would cultivate and improve the same. In what way he was re- quired to improve the same is not stated in the bill, if it were specilied by the father at tlie time. But, as the bill states that "the plaintiff [the son] accepted the proposition, moved upon the land, erected a house there- on, and commenced to cultivate and improve the same," it is very probable that the build- ing of a dwelling-house on this farm, as a residence for his son and his family, (he hav- ing married,)' was an improvement required of the son by the father. This is the more probable as we may Infer from the proof in the case that the house then on the land was a very indifferent one, — in fact, one not fit to be occupied by his son's family as tlieir dwelling. But even this very indifferent house was then occupied by a woman, who might not surrender the possession of it. There is no direct proof as to the character of this house that was on the land, but the plaintiff's son proves that about a year be- fore this suit was brought his father (the plaintiff) offered to sell to T.A. Eeip the house and garden at $50, and his brother John said his father should have taken less than he asked for it. We may, I think, fairly infer from this that the house was hardly fit for a man and his family to occupy. The plaintiff testified he built a house on this land. But I assume it was a very poor house, as he con- tinued to live in a house worth less than $50. When he built this house does not appear. It only appears that the son (the plaintiff) moved into the house on the place when the gift was made by the father. This, the proof shows, was not at the time he was married, on May 1, 1855. There is nothing said about his marriage in the evidence. If the agreement was that the father would make the deed to the plaintiff, (the son,) if he would build a residence on the farm and improve it, as the bill says, such an agree- ment was a conditional agreement. The building of the residence and improv- ing the farm being a condition precedent to the son's acquiring a riglit to demand a deed of the father, and if a time was named when the house was to be built, if the son failed to build the house in the specified time, or of the character named, he lost forever a right to demand a deed of the fatlier. Keffer v. Grayson, 76 Va. 517. Some 12 years after this parol agreement to make a gift on cer- tain conditions to his son, (the plaintiff,) the father actually conveyed this land to two other sons. "Why he did so," the bill says, "the plaintiff is not advised. Certain it is that it was never intended by his father or his brothers to deprive him of the ownership or possession of this tract of land." It seems to me, a probable explanation of the conduct of the father and brothers to the plaintiff is that, he having failed to comply with the condition on which only the father was to convey him the land, — that is, as I surmise, to build in a certain specified time a house of a particular character, — he had no right to demand a deed of his father, and his father was at liberty to convey It to his other sons; and this he did because of the failure of the plaintiff to comply with the condition imposed on him by his father, the plaintiff, and hia famUy, after 12 years, still living in a house worth less than $50. The answer of the de- fendants to the appellee's bill denied this ver- bal gift by the father to his son (the plaintiff). of this land. This put on him the burden of proving this parol agreement of his father to give him this land; and the law, we have seen, required him to prove the agreement with deflnlteness and accuracy. Has tliis been done? It seems to me, it has not. No one who was present when the alleged ver- bal agreement was entered into by the father and son for the gift of this tract of land tes- tifies in the case to what then transpired, or as to the terms of, or conditions attached to, the gift. That it was a conditional agree- ment we only learn from the allegations in the bill. There is not one particle of evi- dence showing what the terms or conditions of this gift were. The whole proof consists of subsequent admission by the father that he had given this land to his son (the plain- tiff) or admission by conduct or by acts that he regarded this farm as belonging to his son (the plaintiff.) But such statements and conduct are what would naturally have oc- curred had the verbal gift of this farm to his son (the plaintiff) been a conditional one, such as is set out in the bill, or such as I have above suggested. Naturally, the father would haveexpectedtheconditionprecedentattached to the gift would in good time have been complied with by the son, and the gift thus perfected; and, anticipating that this would be the case, the father would naturally speak and act as if this farm belonged to his son. 694 SPECIFIC PERFORMANCE OP CONTRACTS. and tbongh he bad no right to demand a deed Tor this farm unless he complied strictly with the conditions precedent to the gift, what- ever they were. The most direct and satis- factory evidence of this verbal agreement was deposition of a nephew of the father, giving what was said casually by the father to the witness the day after this verbal gift of this farm to bis son, (the plaintiff.) This we will analyze. He says in his deposition taken October 17, 1887: "L. M. Frame, the plain- tiff, has resided on this farm of 100 acres about 31 years. I went to his father's, Will- iam B. frame's, one morning, and be said to me: 'I have made way with my land.' I said, • Have you?' and he said, • Yes. I gave Lemuel a farm yesterday,' — and he pointed to the 100-acre farm across the river as the one be bad given him. He said be let John and Tom have the balance. He had owned six or seven tracts of land. He said: 'Kow Lem- uel can go to vrork, or starve.' He said too, they would have to give Nancy Jones, to get her out of the bouse, two bushels of corn, be- fore Lem could move in." Though this wit- ness is so definite as to what was said then, still it is obvious that bis testimony is far from being satisfactory. It gives the details of a casual conversation in which the witness had had no interest and which occurred some 31 years before. We know there must have been very substantial errors in it For in- stance, the bill does not pretend that Will- iam B. Frame gave all his land to bis three sons at that time, in 1856; but it says he gave this one farm of 100 acres to bis son (the plaintiff) then, and the balance of bis land to bis two other sons, John and Tom, some 12 years afterwards, and not one member of the family, or a single other witness, ever beard of any gift at that time of any of his lands by William B. Frame to any of his children except this 100 acres to bis son, (the plaintiff.) This, I suppose, was a mistake made by the nephew as to what his uncle, William B. Frame, then said to him. He beard this many years afterwards. This witness said the father said, "Now Lemu- el," (the plaintiff,) "must go to work." This does not look as if the gift was made, as stated in the bill, "to compensate the plain- tiff for bis past services, and to start bim in life." He bad lived with his father, but we may infer from what his father said that he did not think bis past services deserved com- pensation, but rather considered that be bad heretofore supported him in idleness, and he proposed to do so no longer, but he must "go to work or starve." There is in this conver- sation corroborative evidence of the small value of the house on this 100 acres of land, for it was supposed Nancy Jones would let the son move into this house, and she would give it up, for the trifling compensation of two bushels of corn. She could not have re- garded the house at all desirable to live in, if she could surrender it so easily. This con- versation took place before the son (the plaintiff) had taken possession of this farm, and when, of course, the conditional gift named in the bill was imperfect, and when, of course, the son bad no right to demand a deed of the father; and, though the state- ments and acts of the father subsequently show simply that he had given his son (the plaintiff) this farm, and were made after he bad taken possession, yet none of them are inconsistent with the gift being conditional and the condition not compli^ with, and this, one suspects, was the case, from his father having some 12 years' afterwards made to two other sons a deed for this farm. It seems to me, therefore, that the plaintiff has failed to show with the requisite degree of distinctness and accuracy the terms of the verbal agreement made by his father, giving him this land, because of the great lapse of time (31 years) before the institution of this suit. The court below ought to have dismissed his bill at his costs. The court below, obvi- ously, by its order made December 5, 1887, properly dismissed the bill as to the defend- ant Thomas J. Frame, he tendering with his answer a deed to the plaintiff for his moiety of the land, which the plaintiff was willing to accept, but the court below erred in its de- cree of May 2, 1888, specifically enforcing said alleged verbal contract against the other defendants. This decree must be set aside, annulled, and reversed, and the appellants must recover of the appellee, L. M. Frame, their costs in this court expended, and this court, entering such order as the court be- low should have done, must dismiss the bill of the plaintiff, and the defendants below, other than Thomas J. Frame, must recover of the plaintiff below their costs expended in the court below. Sntdee, p., and English, J., concurred. Brannon, J., absent. SPECIFIC PERFORMANCE OF CONTRACTS. 695 OHENET V. LIBBT. <10 Sup. Ct 498, 134 U. S. 68, 33 L. Ed. 818.) Supreme Court of the United States. March 3. 1890. Appeal from the circuit court of the United States for the district of Nebraska. This is a suit to compel the specific per- formance by the appellant, Cheney, of a written agreement entered into May 28, 1880, between him and the appellee, Libby, whereby the former demised and let to the latter tjie possession and use of, and con- tracted, bargained, and agreed to sell to him, two sections of unimproved land in €age county, Neb. The defendant claimed that the contract was forfeited, long before this suit was brought, by Llbby's failure to comply with its stipulations. Upon that ground he resists the granting of the relief asked. The circuit court adjudged tliat the plaintiff was entitled to a decree. The question to be determined is wheth- er there was any such default upon the part of the plaintiff, Libby, as deprived him of the right to specific performance. The sum agreed upon forthe possession, use, occupancy, and control of the land was $1,861.60 yearly, represented in Llb- by's notes, and in the taxes assessed and to be assessed against the land. The price for the land was $8,960, of which $1,600 was paid at the date of the contract. The balance was to be paid, " without notice or demand therefor," in annual install- ments, at the times specified in promissory notes, of .even date with the contract, which were executed by Libby to Cheney at Tecumseh, Neb. The notes were made payable to the order of Cheney, at the oflSce of Russell & Holmes, private bankers in that cil^. Eight of the notes represented the balance of the principal debt, — each one being for $920,— and were payable, re- spectively, in 3, 4, 5, 6, 7, 8, 9, and 10 years after date. The remaining 10 notes repi-e- sented the annual interest. Libby agreed to meet the notes as they respectively matured, pay the taxes on the land for 1880 and subsequent years, and, during that year, ( the weather permitting, ) break 200 acres, and build on the land a frame barn of 16 feet by 20, and a frame dwelling-house of a story and a half. Cheney undertook to pay the taxes of 1879 and previous years, and bound himself to convey the land, in fee-simple, with the or- dinary covenants of warranty, (reserving the right of way that might be demanded for public use for railways and common roads,) upon the payment by Libby of the several sums of money aforesaid at the times limited, and the strict performance of all and singular the conditions of the contract. , It was further stipulated between the f parties that "time and punctuality are 'i material and essentiaV ingredients in this contract. " t That if Libby tailed to perform and com- plete all and each of the payments, agree- ments, and stipulations in the agreement mentioned, "strictly and literally," the contract should become void; in which event all the interests created by the con- tract in favor of Libby, or derived from him, should immediately cease and deter- mine, and revert to and revest in Cheney, without any declaration of forfeiture or re-entry, and without any right in Libby of reclamation or compensation for mon- eys paid or services performed. That, in case the contract was forfeited, Cheney could take immediate possession of the land, with all the crops, improve- ments, fixtures, privileges, and appurte- nances thereon or appertaining thereto ; Libby to remain bound for all taxes then assessed against the premises, and all in- stallments of principal or interest then due on the contract to be regarded as rent. That whenever one-half of the purchasi price was paid, with all accrued interes and taxes, Cheney should execute a deed as provided for in the contract, and taki notes and a mortgage for the remalnin; payments, to run the unexpired time. That when Libby's right to purchase the land terminated by reason of non-per- formance of his covenants, or his failure to make the payments, or any of them, at the time specified, he should be deemed to have only the rights of a tenant, and to hold the land underthe contract as alease, sub- ject to the statute regulating the relation of landlord and tenant; with the right in Cheney to enforce the provisions of the contract, and recover possession of the land, with all thefixtures, privileges, crops, and appurtenances thereon, as if the same was held by forcible detainer. The agreement also contained these stringent provisions: That no court should relieve Libby from a failure to com- ply strictly and literally with the contract; that no modification or change of the con- tract could be made, except by en try there- on in writing signed by both parties ; and that no oversight or omission to take no- tice of any default by Libby should be deemed a waiver by Cheney of the right to do so at any time. Libby went into possession under the contract. He, and those in possession un- der him, had, prior to the commencement of this suit on the 26th of February, 1887, broken up and cultivated most of the land, and made improvements thereon of a per- manent and substantial character. Nearly all of these improvements were made prior to the 1st of January, 1885. He met all the obligations imposed upon him with re- spect to the breaking up of the land and its improvement by the erection thereon of buildings. His evidence, which is un- contradicted, was: "We have broken up and cultivated aboutl,200 acres; built five houses and stable and outbuildings to each house; made wells to each house; erected two wind-mills ; fenced one whole section with wire and posts, and fenced half of other section with hedge; we have set out some fruit-trees and shrubbery, — all to the value of about ten thousand dollars. All was done under and in pursuance of this contract. " He also met promptly all the notes giv- en for principal and interest maturing pri- or to 1885. Thetotal amount paid by him prior to that date, including $1,600 paid at the execution of the contract, was in ex- cess of $5,000. 696 SPECIFIC PBEFORMANCB OF CONTRACTS. ^ / But the defendant insists that there was such default upon the part of the plaintiff, with respect to the notes maturing May 28, 1885, as worked a forfeiture of the eon- tract, and, consequently, that specific per- formance cannot be decreed. The precise grounds upon which this contention rests, as well as those upon which the plaintiff relies in support of his claim for relief, can- not be clearly understood without a care- ful scrutiny of all that passed between the parties in reference to the lands in ques- tion. The plaintiff resided in Iowa, while the defendant resided at Jerseyville, 111. The notes given by the former were upon blanks furnished by thelatter's agent, who caused them to be made payable in Te- cumseh. Neb., at the private bank of Kus- sell & Holmes, through whom the defend- ant had, for many years prior to 1880, made collections, and with whom he had kept an account. The first payment un- der the contract was made in bank drafts delivered to the defendant's agent in Te- cumseh. All the other notes falling due in 1880 to 1884, inclusive, (except the interest note maturing in 1882,) were paid by bank drafts sent to Russell & Holmes, who placed the proceeds to the credit of Cheney in their bank. The checks of the latter upon that bank, on account of those de- posits, were always paid in current funds. The draft to pay the interest note for 1882 was also sent to Russell & Holmes, but, as Cheney had not transmitted that note to them, the draft was forwarded to him. He received it, and sent thenote to Libby. jj In no single instance prior to 1885 did he \j>' tmake objection to the particular mode in ' ' which. Libby provided for the payment of his notes, or intimate his purpose to de- mand coin or legal-tender notes in pay- ment. In every instance, except as to the interest note for 1882, the notes were paid at the banking-house of Russell &Holme8, and by drafts sent to' and used by them for that purpose. Butitis quite apparentfrom theevidence that Cheney, in 1885, indulged thehope that he could bring about a forfeiture of the contract for non-compliance upon the part of Libby with its provisions, and that he would, in that or some other way, get the land back. It is proper to advert to the circumstances justifying thatconclusion. On the 4th of March, 1885,— all previous installments having been punctually met, —Libby offered. In writing, to pay all the principal notes mentioned in the contract, as well as the interest note due May 28, 1885. if a deed was made to him . To this of- fer Cheney replied, under date of March 19, 1885: "Your letter of the 4th has just reached me. I have no papers with me, and cannot attend to the matter as you request. I expect to go to New Orleans "to the Exposition, and to be at home in time to s^ to it properly. If I am behind time, no harm will come to you." Libby wrote again, under date of May 20, 1885, renewing the offer contained in his letter of March 4th. Under date of May 23, 1885, —only five days before the notes for 1885 matured,— Cheney replied: "Tours of 20th is received. I think it probable that I can do as you suggest, but I will be in Beatrice [the county-seat of Gage county, where the lands are] between the 1st and 10th of June on other business, and will then make inquiries, and see if I can lend the money to good hands, and will then let you know more certainly. " On the 26th of May, 1885, Libby sent to Russell & Holmes a draft upon the First National Bank of Omaha, Neb., made by one Stuart, a private banker doing busi- ness at Madison, in the same state, for $1,251.20, which was the amount of Lib- by's two notes for principal and interest that matured May 28, 1885. It was sent in payment of those notes, and was re- ceived for that purpose by Russell & Holmes. They accepted it for the amount of money named in it, and were therefore ready to take up Libby's two notes when presented for payment at their office. On the 28th of May, 1885, A. W. Cross, of the First National Bank of Jerseyville, 111., — where Cheney resided,— appeared at the banking-house of Russell & Holmes, and made a deposit of $5,000, all in current funds, and a good portion of it in bills of his own bank. While there he inquired of Russell & Holmes (without disclosing the reason for his inquiry) whether they kept, "a legal-tender revenue, [reserve,] as na- tional banks were required to do." He was told that they did not, but that a supply of legal tender was on hand. About 2 o'clock of the 1st of June — which, as May 31st fell on Sunday, was the last day of grace for Libby's two notes due in 1885, (Comp. St. Neb. c. 41, § 8)— one of Cheney's attorneys went into the bank of Russell & Holmes, and asked if he could begivenf5,- 000 in legal-tender notes in exchange for other currency. His request was complied witl At a later hour of the same day Cheney appeared in the bank, without hav- ing responded to Libby's offer, twice made, to pay all the notes for the principal debt, and the interest note maturing in 1885. He came there with checks, drawn by Cross, to be cashed, and asked, as an ac- commodation to him, that they be paid in legal-tender notes. He was promptly ac- commodated to the extent of $2,500. But, when he asked for $2,500 more in legal-ten- der notes, Holmes suspected there was a scheme to exhaust his bank of legal-tender notes, and refused to comply with this re- quest. After Russell & Holmes had thus, by way of accommodation, paid to Cheney and his attorney $7,500 in legal-tender notes, — but not until the hour for closing the bank, on that day, against the public had passed,— Libby's two notes were pre- sented by Cheney, and payment thereof de- manded in coin or legal-tender notes. The bank offered to pay in current funds, as they had previously done inrespectto Lib- by's notes, but Cheney declined to take in payment anything except coin or legal- tender notes. The notes were then placed by him in the hands of a notary, who was conveniently present, and the latter pre- sented them for payment, announcing that he would not receive anything except United States notes or legal-tender funds. Payment in such funds was refused by the bank, and the usual protest was made. The notary and Cheney then left the room, the latter saying, before leaving, that "he J SPECIFIC PERFORMANCE OF CONTRACTS. 697 would call in the morning. " But he did not call the next or upon any subsequent day. Within 15 or 20 minutes after Cheney and hisnotary leftthebank, Holmes, of the firm of Russell & Holmes, went to the office of the notary to find Cheney and pay the notes in the funds demanded. But Cheney was not there, and the notes were in his hands. iDQuiry was made at the principal hotel and at other places, but he could not be found. Holmes was Informed that he had left town. Libby having been notified of the protest of the notes, notwithstanding he had, in due time, sent a bank draft to Russell & Holmestu be used in payingthem, directed Stuart, the banker at Madison, Neb., tc go immediately to Tecumseh. The latter arrived there on the 9th of June, and, hav- ing learned what passed between Cheney and Russell & Holmes, determined to pay off the notes in such funds as Cheney de- manded. He informed the notary, who had protested the notes for non-payment, that hewas then ready, in behalf of Libby, to pay them in gold. The latter did not have the notes, did not know where Cheney had gone, and said that the latter "did not want the money, but that he wanted the land back." Stuart having knowledge of Cheney's letter, in which he notified Libby of his purpose to visit Beatrice between the 1st and 10th of June, went to that place in seai-ch of Cheney, but could not find him. Libby wrote to Cheney, under date of June 12, 1885, informing him that gold was deposited at Russell & Holmes' office to pay the two notes due May 28, 1885. This letter was received by Cheney in due course of mail. On the 20th of June, 1885, the lat- ter inclosed to Libby twelve unpaid notes, (including the two due May 28, 1885,) say- ing that the contract of May 28, 1880, was "terminated and ended by your failure to pay the two notes due May 28, 1885, and otherwise to comply with the contract, which is now null and void. " How Libby had " otherwise " failed to meet his obliga- tions under the contract does not appear. Under date of June 23, 1885, Russell & Holmes advised Cheney by letter of the fact that they were authorized by Libby to pay, and they were ready to pay, the notes due May 28th, including protest fees, in legal-tender notes or coin. Libby, un- der date of June 25, 1885, replied to Che- ney's letter, saj ing . " I refuse to accept said notes, excepting the two which were paid, and have this daysentthem to your bank- ers, Messrs. Russell & Holmes, of Tecumseh, Neb., for your use and benefit, and subject to your order. I shall make payments as fast as they become due, and shall require you to execute a conveyance of the land in accordance with the terms of the con- tract. It will be useless for you to send me any of these notes, except you send them for payment. " Under date of June 29, 1885, Russell & Holmes advised Cheney that they had received from Libby his notes, amount- ing to $6,679.20, subject to his (Cheney's) order. The latter wrote July 9, 1885, in re- ply to Libby's letter of June 25th, that he did not recognize the notes placed with Russell & Holmes as being subject to his order. On the 20th of August, 1885, Libby, by hia attorney, made a tender to Russell & Holmes of $120 in gold coin as a balance of one-half of the purchase money, and offered to surrender the contract and execute a mortgage and notes for the balance of the purchase money, as stipulated in the con- tract, and demanded a deed; of all which Cheney was notified. The latter replied, under date of August 22, 1885, that he would not receive any money from Libby, and refused to make a deed. It further appears that the plaintiff punctually paid into the bank of Russell & Holmes the amounts of the notes due in 1886 and 1887. The funds remained in that bank and are now there, subject to Che- ney's order, on presenting the notes. Of these payments hewas promptly informed. Shortly before the commencement of this suit Libby again offered to Cheney to pay in cash all the unpaid portion of the princi- pal debt named 4n the contract, and all in- terest due at that date. He also renewed his offerto execute a mortgage on the land to secure all unpaid installments not due, and demanded a deed. But those offers being declined, the present suit was brought. A. A. Goodrich, for appellant. 8. P. Da- vidson, for appellee. Mr. Justice Hahlan, after stating the facts in the foregoing language, delivered the opinion of the court. The peculiar wording of the written con- tract renders itsomewhatdoubtful wheth- er there was a sale of the lands to the ap- pellee to be made complete by a convey- ance of the legal title or defeated .altogeth- er, according to his performance or failure to perform the conditions upon which he was to receive a deed ; or whether he was simply given possession, paying a fixed amount, annually, for use and occupancy, with the privilege of purchasing, and with the right to demand a conveyance in fee- simple, upon the performance of those conditions. Taking the whole contract together, we incline to adopt the former as the true interpretation. Such was the view taken by the supremecourt of Nebras- ka of a similar contract as to land be- tween Cheney and one Robinson. Robin- son V. Cheney, 17 Neb. 673, 679, 24 N. W. Rep. 378. But it is not necessary to express any decided opinion upon this question; for, in any view, it is clear from the con- tract, not only that appellant could re- tain the legal title until the appellee's ob- ligations under it had all been performed, but that he could resume possession im- mediately upon the failure of the appellee to meet, punctually, any of the conditions to be performed by him. Time may be made of the essence of the contract "by the express stipulations of the parties, or it may arise by implication from the very nature of the property, or the avowed objects of the seller or the pur- chaser." Taylor v. Longworth, 14 Pet. 172, 174 ; Secombe v. Steele, 20 How. 94, 104 ; Holgate v. Eaton, 116 D. S. 33, 40, 6 Sup. Ct. Rep. 224; Brown v. Trust Co., 128 U S. 403, 414, 9 Sup. Ct. Rep. 127. The parties in this case, in words too distinct to leave room for construction, not only specify the time when each condition is to be per- 698 SPECIFIC PERFORMANCE OF CONTRACTS. formed, but declare that "time and punct- uality are material and esBential ingredi- ents" in the contract, and that it must be "strictly and literally" executed. How- ever harsh or exacting its terms may be, as to the appellee, they do not contravene public policy; and therefore a refusal of the court to give effect to them, according to the real intention of the parties, is to make a contract for them which they have not chosen to make for themselves. 1 Sugd. Vend. (8th Amer. Ed.) 410, (268;) Barnard v. Lee, 97 Mass. 92, 94; Eipwell V. Knight, 1 Tounge & C. 401, 415. These observations are made because counsel for the appellant insists, w^ith some confidence, that an affirmance of the decree below will necessarily be a departure from the gen- eral principles just stated. But there are other principles, founded in justice, that m ust control the decision of the present case. Even where time is made ma- terial, by express stipulati on, theli ^£5El2IISS-4i." ^i^-lio" t^ unreasonable delay, aafljlQ.?ircTims Laiices haveintervened that woSllnrSrderirunTusrBrinnr^ give such relief. The discretion which a court of equity has to grant or refuse spe- cific performance, and which is always ex- ercised with reference to the circumstances of the particular case before it, (Hennessy v. Woolworth, 128 D. S. 438, 442, 9 Sup.Ct. Rep. 109,) may and of necessity must often be controlled by the "conduct of the party who bases his refusal to perform the con- tract upon the failure of the other party to strictly comply with its conditions. Seton V. Slade, 7 Ves. 265, 279; Levy v. Lindo, 3 Mer. 81, 84; Hudson v. Bartram,3 Madd. 440, 447; Lilley v. Fifty Associates, 101 Mass. 432, 485; Potter v. Tuttle, 22 Conn. 512, 519. See, also, Ahl v. Johnson, 20 How. 511, 518. To this class bel ongs, i n our iudg;ment. tBTcSBrBHSre^sr^lthough thecontract ""between Cheney and Libby called tor naSr m.ent in dollars, the latter might well have supposed, unless distinctly informed to the contrary, that the former would be willing to receive ^sarsoLJnnds ; that is, such as are ordinarily received by men of business or by banks; and such funds were received in payment of all of Libby 's notes falling due in 1880 to 1884, inclusive. While this course of business was not aji abso- lute waiver by Cheney of his right to de- mand coin or legal-tender paper in pay- ment of notes subsequently falling due, such conduct, during a period of several I years, was calculated to produce the Im- 7 pression upon Libby's mind that current / or bankable funds would be received in / payment af any of his notes ; and there- fore, upon every principle of fair dealing, [Cheney was bound to give reasonable no- Itice of his purpose, after 1884, to accept 1 ^.O*!^^'^ ^'^'^^ funds as under the contract, '^'■'^^Btrictly interpreted, be was entitled to de- Viand. No such noticewas given. On the contrary, the just inference from the testi- mony is that Cheney designed to throw Libby off his guard, and render it impos- sible for the latter, or for the bankers to whom he sent drafts to be used In paying his notes, to supply the requisite amount of coin or legal-tender paper on the very day the notes matured, and at the moment of their presentation for payment. The efforts of Russell & Holmes, within a few moments after Cheney left their bank on the 1st of June to find him, and to pay off the notes in legal-tender paper, and the eftorts of Libby, by his agent, as soon as he was informed of Cheney's demand for payment in coin or legal-tender paper, to reach him, and to pay off the notes maturing in 1885, in lawful money, and his repeated offers, subsequently, to pay them in such money, showed the utmostdill gence. and suffi- Rient.ly e^fiiHP his fflmTm^.n pay in ppln mi Megal-l^TiMgrpn.pffr p^ th^ y"''Y ?"y *"'" ""notes matuTSoT To permit Cheney, under ffie circiimsEailces disclosed, to enforce a forfeiture of the contract, would enable him to take advantage of his own wrong, and to reap the fruits of a scheme formed for the very purpose of bringing about the aon -performance of the contract. But it is contended that the provisionin thecontract forbidding its modification or change, "except by enti^ thereon in writ- ing signed by both parties, " coupled with the provision that no court should reUeve Libby from a failure to comply strictly and literally with the contract, stands in the way of a decree for specific performance.. It is sufficient, upon this point, to say that such provisions — if they could in any case tetter the power of the court to do justice i according to the settled principles of law — cannot be applied where the efficient cause of the failure of the party seeking specific performance to comply strictly and literally with the contract was the con- duct of the other party. If the defendant had agreed, in writing, signed by himself alone, to accept current funds, and not to demand coin or legal-tender notes, and, notwithstanding such agreement, he bad demanded coin or legal-tender notes, un- der circumstances rendering it impossible for the plaintiff to meet the demand on the day limited by the contract, would he be permitted to say that the contract was for- feited for the failure to make payment ac- cording to its pro-visions? We suppose not, although, according to his argument, such an agreement, not having been signed by both parties and indorsed on the con- tract, would not estop him from insisting upon a strict and literal compliance with its terms. It results from what has been said that the failure of the plaintiff, Libby, in person or by agent, to pay the notes maturing in 1885 in coin or legal-tender paper, at the time they were presented by Cheney for payment at the banking-house of Russell & Holmes, did not work a forfeiture of the contract, and does not stand In the way of a decree for specific performance. In respect to the notes falling due in 1886 and 1887, the evidence satisfactorily shows that the plaintiff, at the times and place ap- pointed for their payment, offered, and was then and there ready, to pay them in lawful money, but, the notes not being on either occasion in the hands of Russell & Holmes tor collection, he could not make actual payment, but left the money at SPECIFIC PERFORMANCE OF CONTRACTS. 699 their bank to be paid over to Cheney when- ever the notes were presented at that place. The notes due in those years were, it is true, in the manual possession of Rus- sell & Holmes, but they were not in their custody by direction of Cheney, for collec- tion or for any other purpose. Libby did aJl that he could do with respect to the notes falling due iu those years in order to comply " strictly and literally" with the contract. Indeed, after the surrender by Cheneyln 18S5 of the notes due In that and subsequent years, and his formal notifica- tion to Libby that he regarded the con- tract as forfeited and would not receive any money from him, Libby was not bound, as a condition of his right to claim specific performance, to go through the use- less ceremony of tendering payment at the banking-house of Russell & Holmes of the lotes maturing in 1886 and 1887. Brock v. ^idy,13 Ohio St. 306 ; Deichmann v. Deich- ;nann, 49 Mo. 107, 109 ; Crary v. Smith, 2 N. Y. 60. In Hunter v. Daniel, 4 Hare, 420, 433, it •vas said • " The only remaining point insist- ed upon was that the making of every pay- ment w as a condi ti on precedeirt to the right of the plaintiff to call for the execution of the agreement, or, in fact, to call for the benefit of it ; and it was argued that the bill could not properly be tiled before the plaintiff had, out of court, fully performed Ms agreement. The general rule in equity certainly is not of that strict character. A party filing a bill submits to do every- rhing that is required of him ; and the prac- nice of the court is not to require the party to make a formal tender w^here, as in this case, from the facts stated in the bill, or from the evidence, it appears that the ten- der would have been a mere form, and that the party to whom it was made would have refused to accept the money. " Whether that be a sound view or not with reference to the particular contract here in question, Libby did, in fact, make a proper tender of payment as to these notes. Be- fore the bringing of this suit he had paid, and offered to pay, more than one-half of Che price for the land and all accrued in- terest and taxes, and therefore was en- utled by the terms of the contract to a deed, he executing notes and a mortgage for the remaining payments to run the un- expired time, as stipulated in the agree- ment. The court below found that the notes falling due in 1885, 1886, and 1887 were paid ; that the plaintiff had deposited with the clerk for the defendant a mortgage on the land to secure the payments due 8, 9, and 10 years after the date of the contract; and that he had fully done and performed every obligation imposed upon him to en- title him to a deed. It was adjudged that the defendant, within 40 days from the de- cree, execute, acknowledge, and deliver to the plaintiff a good and sufficient deed, with the usual covenants of warranty, (excepting the right of way that maybe de- manded for public usefor railways or com- mon roads,) conveying to him the land in question, and In default of which it was adjudged that the decree itself should oper- ate, and have the same force and effect, as a deed of the above description. We are not able to concur in the finding that the notes falling due in 1885, 1886, and 1887 had been paid when this decree was passed. If those notes had been placed by Cheney with Russell & Holmes for collec- tion, and the latter had collected the amounts due on them, then they would have been paid; for, in such case, that firm would have been the agent of the payee to collect the notes, and the money received by them would have belonged to him. In Ward v. Smith, 7 WaU. 447, 450, the question arose as to whether a bank at which certain bonds were made payable was the agent of the holder to receive pay- ment. The court said: "It is undoubted- ly true that the designation of the place of payment in the bonds imported a stipula- tion that their holder should have them at the bank, when due, to receive payment, and that the obligors would produce there the funds to pay them. It was inserted for the mutual convenience of the parties. And it is the general usage in such cases for the holder of the instrument to lodge it with the bank for collection, and the party . bound tor its payment can call there and \ take it up. If the instrument be not there lodged, and the obligor is there at its ma- turity with the necessary funds to pay it, he so farsatisfles the contract that he can- not be made responsible for any future damages, either as costs of suit or interest, for delay. Whpii th e instrument is lodged jyjth the ba nk for collectio n, the bank hs z- comes the agent on:15el)ayee or "obligee to. reeeivje payments The agency extends na further, and without special authority an] agent can only receive payment of the debt! due his principal in the legal currency of| the country, or in bills which pass as mon- ey at their par value by the common con- seiit of the community. In the case at bar | only one bond was deposited with the Farmers' Bank. That institution, there- fore, was only agent of the payee for its collection. It had no authority to receive payment of the other bonds for him or on his account. Whatever it may have re- ceived from the obligors to be applied on the other bonds, it received as their agent, not as the agent of the obligee. If the notes have depreciated since in its posses- sion, the loss must be adjusted between the bank and the depositors ; it cannot fall upon the holder of the bonds. " See, also, Adams V. Commission, 44 N. J. Law, 638, where this question is elaborately exam- ined ; Hills V. Place, 48 N. Y. 520 ; Gas Co. v. Pinkerton, 95 Pa. St. 62, 64; Wood v. Sav- ing Co., 41 111. 267. Russell & Holmes, then, did n ot becom e the agent-otehene3rto receive fhTi iHJUOCnT of the notes, by reason simply drtltrtacT that the notes v/ete made payable at their bank. The funds left by Libby with them to be applied in payment of the notes of 1885, 1886, and 1887 are therefore his prop- erty, not the property of Cheney. The ut- most effect of Libby's offer, within a rea- sonable time after June 1, 1885, to pay the note of that year in lawful money, and of his offers, at the appointed times and place, to pay the notes of 1886 and 1887, was to prevent the forfeiture of the contract, and to save his right to have it specifically per- formed, so far as that right depended upon his paying those notes. But they must be y 700 SPECIFIC PERFORMANCE OF CONTRACTS. axitnally paid by him before lie is entitled S to a deed, or to a decree that will have the force and effect of a conveyance. Under the circumBtances it was not absolutely neces- sary thathe should havebronght the mon- ey into court for the defendant at the time he filed his bill. His offer in the bill to per- form all the conditions and stipulations of the contract was sufficient to give him a standing in court. Irvin v. Gregory, 13 Gray, 215, 218; Hunter v. Bales, 24 Ind. 299. 303; Fall v. Hazelrigg, 45 Ind. 576, 579. But the decree of specific performance ought not to become operative until he brings intocourtforthedefendantthe full amount necessary to payoff the notes for principal and interest falling due in 1885, 1886, and 1887 Caldwellv.Cassidy,8Cow.271; Hax- tonv. Bishop, 3 Wend. 13, 21; Hills v. Place, supra; Wood v. Saving Co., supra; Web- ster V. French, 11 111. 254, 278; Carley r. Vance, 17 Mass. 389, 391 : Doyle v. Teas, 4 Scam. 202, 261, 267 ; McDaneld v. Kimbrell, 3 G. Greene, 335. The defendant is not en- titled to interest after the respective ten- ders were made, because it does not appear that the plaintiff has, since the tenders, realized any interest upon the moneys left by him for Cheney at the bank of Russell & Holmes. Davis v. Parker, 14 Allen, 94, 104; January v. Martin, 1 Bibb, 586, 590; Hart V. Brand, 1 A. K. Marsh. 159, 161; 2 Sug. Vend. (8th Amer. Ed.^ 314, 315, (627, 628.) The decree below is affirmed. But it is adjudged and ordered that the said decree be and is hereby suspended, and shall not become operative until the plaintiff brings into the court below for the defendant the full amount of the notes for principal and interest executed by him to the defendant, and madepayable on the 28th daysofMay, 1885, 1886, and 1887, without interest upon any note after its maturity. SPECIFIC PERFORMANCE OF CONTRACTS. 701 CHICAGO, M. & ST. P. RT. CO. v. DURANT et al. SAME v. HOSPES. SAME v. STAPUEJS. SAME v. UNION DEPOT ST. BY. & T. CO. (46 N. W. 676, 44 Minn. 361.) Supreme Court of Minnesota. Oct. 7, 1890. Appeal from district court, Washington county; McCluer, Judge. W. H. Norris, for appellant. Fnyetto Marsh, for E. W. Durant and others. J. N. & I. W. Cfistle, for E. L. Hospes and Isaac Staples. Searlea dk Gail, tor Union Depot St. Ry. & T. Co. Vanderburrh, J. The demurrers to the complaint interposed in behalf of defend- ants Durant, Hospes, Hersey, Staples, the Union Depot Company, and O'Gorman, receiver, were sustained by the trial court, and the complaint held sufficient as to the other defendants. From the order sus- taining the demurrer the plaintiff appeals, and the principal question presented for our determination is whether the com- plaint states a cause of action in respect to the defendants above named. Gener- ally, in equitable actions of this kind, the merits can be best determined upon proofs after answer; but we will examine and consider such questions as are fairly be- fore us on this appeal. 1. If the action were brought solely against the defendants who executed the contract for the right of way, whom, for convenience, we will style "obligors," though equitable relief is demanded, a re- covery might be had for damages, and treating it as an action for damages, the defendants would, if they required it, be entitled to a jury trial. Davison v. Asso- ciates, 71 N. Y. 334. But certain lots, through which the right of way was bar- gained for, are alleged to have been con- veyed to certain other defendants, who are joined in the action, and who are not parties to the agreement, and against whom equitable relief, by way of specific performance, is sought. The two causes of action — one for damages and one for the special relief — cannot properly be unit- ed, and this is one ground of the demurrer. The action, then, must be treated as an equitable one for specific performance, with incidental relief, by way of compen- sation for such portion of the property in question as cannot be reached ; and the sufficiency of the complaint must be deter- mined solely In respect to the right of the plaintiff to such relief. 2. It is charged in the complaint that, In order to induce the plaintiff to con- struct a line of its railroad from a point on its River Division from Hastings to the city of Stillwater, the defendants Staples, Durant, Hospes, Hersey, and Sabin, with one Torinus, since deceased, on the 15th •day of July, 1881, agreed in writing with this plaintiff that the city of Stillwater would and should give this plaintiff a right of way, 56 feet wide, through certain real property, as described in the com- plaint; and that on its part the plaintiff. In and by the same agreement. In consider- ation of the Dremises, undertook and agreed, among other things, that It would at once begin the construction of such branch line, and continue the same with all practical dispatch until the completion thereof; and that it did in all things well and truly fulfill and perform such agree- ment on its part. There is no doubt as to the sufficiency of the consideration to uphold the undertaking of the defendants, or that the parties are mutually bound, subject to the conditions of the contract. Railroad Corp. v.Babcock,6 Mete. (Mass.) 846. 3. In respect to the defendants in whose favor the demurrer was sustained, it is not claimed that any of them now own or are interested in the property in question here, except the Union Depot Company, and O'Gorman, receiver. The last named are not parties to the agreement, but are properly joined as having some interest in the property. But the decree of the court for specific performance of the contract could only be made operative against them, or any other persons than the original obligor^, in so far as they have acquired from the latter portions of the right of way contracted for with notice. As to such lands, such parties would stand in their shoes, and be bound; but as to the lots acquired by the Union De- pot Company of other parties, by pur- chase or condemnation, the contract is en- tirely nugatory, and in respect to the sev- eral tracts of land designated in the com- plaint as having been so acquired by the Union Depot Company, it could not be bound in this action. From the terms of the contract providing that the city would give a right of way, and the specifi- cation of the ownership of the several lots set forth in the complaint, it will not be Implied that the defendants at any time owned or had title to any of them, save as therein set forth. From the complaint It appears that theUniou Depot Company acquired title to the north 49 feet of lot 2, in block 28, from Helen M. Torinus and Louis E. Torinus, her husband. What the latter's interest was, does not appear. The defendant Sabin, one of the signers of the agreement in question, acquired, by purchase from Torinus, an undivided half of the south 35 feet, in width, of lot 7, and of the north 56 feet of lot 8, Septem- ber 16, 1881. Sabin also purchased of defend- ant Durant and another, September, 1881, the north 15 feet in width of lot 7, and the undivided half of the south 35 feet in width thereof, and the undivided half of the north 56 feet in width of lot 8; and at the same time purchased of Torinus the other undivided half of south 35 feet of lot 7, and north 56 feet of lot 8. Sabin also pur- chased lot 5, and a portion of lots 5, 7, and 8, described in the complaint, was con- veyed by him to the Union Depot Compa- ny, and is included in the right of way, 56 feet in width, described in the agreement. It is also alleged that the title in fee to the south 30 feet in width of lot 8 to lot 9, and the north 75 feet in width of lot 10, block 28, appear to be in the city of Stillwater, since 1875, as and for a part of Nelson street, and as part and parcel of the " Le- vee, " so called. It further appears that the depot company have acquired divers 702 SPECIFIC PERFORMANCE OF CONTRACTS, other parcels of the same block from other persons, not parties to the contract, and have also granted to the plaintiff a cer- tain portion of the lots 2, 3, 4, 5, 7, 8, 9, 10, 11, in blocli 28, lying within sucli 66-feet strip, or right of way. The defendant Sa- bin is the only one of the signers of the contract who appears to have title to any of the land in question, in block 28, and hia interest is confined to that part of lots 5, 7, and 8, above described, and not already conveyed to the depot company. The on- ly land in block 28, within the right of way, which. In case specific conveyance were decreed under the contract, would be subject to be so conveyed, is the land held by Sabin, and so much of the land of the depot company within the right of way not already conveyed to the plaintiff by it as it derived from Sabln, as above stated. As before intimated, land pro- cured by the depot company from stran- gers to the contract would not be affected by it. As to block 27, the obligors, by the same contract, further agreed to purchase so much of block 27 as lay east of the al- ley, and to grant such right of way, as aforesaid, through the same to the plain- tiff. As respects the lots in this half block, through which the right of way in ques- tion was in fact located, it appears that on September 15, 1881, the Union Depot Company, defendant, acquired title from Isaac Staples to one-half of lot 1, and lots 3, 4, and 5; and March 1, 1882, from de- fendant Hersey and others, to the other half of lot 1; and March 23, 1882, to lot 2, from Seymour, Sabin & Co., of which firm defendant Sabin was .: member. It does not appear, however, what Interest Her- sey and Sabin had in the lots conveyed. 4. The city has not furnished the right of way, as agi-eed, and the defendants have not caused it to be done, or procured it themselves, through either block. Tlie question now arises whether, upon the facts herein stated, a case is made for the interposition of a court of equity so as to warrant a decree for specific performance as to the defendants Union Depot Com- pany and Sabin, and to award a judg- ment for damages against other defend- ants, by way of compensation for the defi- ciency. The court will not undertake to compel the defendants, jointly or severally, to purchase the specific property, or to procure the right of way from the city. And it is not a case for compensation, be- cause, conceding that the court niigbt compel the depot company and Sabin to convey a partial interest representing a relative or proportionate share of individ- ual obligors, as above described, the same would be relatively so small, as compared with the whole amount embraced in the contract, that the compensation or dam- ages would apparently be the main object of the suit, in such cases a court of equity will not assess damages as com- pensation, but only where they are inci- dental to the principal ground of relief, and the court will leave the party to hi9 action at law, unless he will consent to- accept the part subject to conveyance without damages. Earl of Durham v. Legard, 34 Law J. Ch. 590. In some cases, however, where the vendor shows title to a portion only of the land con- tracted, or has wrongfully parted with part, justice maybe donebyan apportion- ment of the consideration, if the vendee consent to take part with an abatement of the price. 2 Lead. Cas. Eq. (4th Ed.), pt. 2, p. 1146. So, where the vendee knows at the time of entering into the contract (as may be implied in this case from the terms of the contract) that the vendor has title to a part only of the land, com- pensation will be denied. Wat. Spec. Peri. § 506; 5 Wait, Act. & Def.781. This is not a case between vendor and vendee. By the contract the right of way was to be procured by or from others by gift or pur- chase. The plaintiff did not contract for a conveyance from the defendants. It did not rely upon the individual ownership of the obligors. The city was to give the right of way; and, as to block 27, the de- fendants were to purchase the entire half block jointly, and jointly bear the harden. It was not fairly within the contempla- tion of the parties that the interests which the individual obligors might have- in some of the land embraced in the pro- posed right of way should be made sub- ject to enforced conveyance under the con- tract, if unfulfilled in its scope and pur- pose by the obligors, who jointly entered into it. Equity, it is true, looks at the substance of the contract, and, when the agreement can be substantially, though not literally, carried out, without chang- ing the nature of the contract, or substi- tuting a new one, and do justice between the parties, it will be so enforced. The doctrine of compensation rests upon this principle. And so where land is held as- tenants in common by several persons, who have joiutly agreed to convey the same, some of whom are not bound, or are deceased, those who are liable, or who survive, may be compelled, in a suit on the contract, to convey their individ- ual or proportionate interests as tenants in common. Hooker v. Pynchon. 8 Gray, 550. But such is not this case. The con- tract did not contemplate a conveyance of individual interests, but the acquisition of the right of way by the public, and by the joint act or purchase by the obligors ; and, as to block 27, an essential condition and inducement to the parties was the purchase of the half block, and not the right of way merely. In any view of the case, and apart from the question of laches, considering the nature of the con- tract, the state of the title, the indefinite- ness and uncertainty in the description set forth in the contract, we think that the parties should be left to their action at law, and the interposition of a court of eq nity is not warranted. Order affirmed. ''jj' \ SPECIFIC PERFORMANCE OF CONTRACTS. \/\' HAFFEY V. LYNCH. (38 N. EJ. 298, 143 N. Y. 241.) Court of Appeals of New York. Oct 9, 1894. Appeal from supreme court, general term, first department. Action by Michael H. HafCey against Sarah Lynch for specific performance of a con- tract for the sale of land. From a judg- ment of the general term (23 N. Y. Supp. 59) affirming a judgment dismissing the com- plaint, plaintiff appeals. Reversed. Charles Strauss, for appellant Henry H. Anderson, for respondent EARL, J. At an auction sale of the de- fendant's real estate the plaintiff purchased a parcel of land described In the complaint at the price of $7,800, and paid 10 per cent of the purchase price, besides certain fees and expenses. The parties signed a written con- tract specifying the terms of s^le, and the time and place of full performance by the parties. By the written contract the defend- ant was to convey the land "by the usual deed containing full covenants with warran- ty." The defendant did not tender to the plaintiff such a deed as he claimed he was en- titied to, and then he commenced this action against her to compel the specific perform- ance of the contract Until the trial of the action it appeared that she had at the time of the sale such a titie to the land as she was bound to give. But subsequently one Nathaniel Jarvis, Jr., claiming the land in fee, brought an action of ejectment against her to recover the land, and filed a lis pen- f dens. The plaintiff knew of this claim and J the lis pendens when he commenced this /action; and solely on account of the exist- ence of the lis pendens, and such knowl- edge thereof, the court refused specific per- formance, and dismissed the complaint We think the learned court fell into error, and that tpon the undisputed facts found. It shoidd have given to the plaintiff judgment for specific performance. We must first notice the issue joined by the pleadings. The plaintiff alleged in his complaint the contract; that he had perform- ed the same, and was ready and willing to perform the same upon receiving such a conveyance as he was entitled to; that after several postponements of time for the per- formance of the contract at the request of the defendant her attorney tendered to him a deed of the land, at the same time saying to him that she could not give him a valid and marketable titie to the land, because it was incumbered; that he rejected the deed on the ground of the alleged incumbrance upon the land, at the same time notifying her that he was ready and willing to perform on his part if she would give him such a deed as he was entitied to; that she refused to give him such a deed; that the title to the land was Incumbered and rendered unmar- 703 ketable by the lis pendens filed In the eject- ment action; that the defendant could at all times have obtained the cancellation and dis-. charge of the lis pendens, and could havel conveyed to him such a title as the contract j entitled him to. She, in her answer, ad- 1 mitted the making of the contract; denied that he had performed, or was ready and willing to perform, the contract, on his part; admitted the commencement of the ejectment suit and the filing of the lis pendens; al- leged that she had tendered to him such a deed as she was bound to give; denied that she was at any time unable or unwilling to convey the land; and alleged that she could at all times since the execution of the contract have conveyed the titie of the land to him according to the contract, had she been so disposed, and that she has at all times been ready and willing so to do. It thus appears that the issue between the par- ties was as to the performance of the con- tract the plaintiff alleging that he had per- formed,- and was ready and willing to per- form, and the defendant alleging that she had performed, and was ready, willing and able to perform, on her part On the trial the plaintiff was the sole witness sworn, and the trial judge, after finding the ownership of the land by the defendant, and the making of the contract, found as follows: "That the plaintiff has in all things performed all the terms and conditions of said contract, and has been, on his part, ready and willing to fulfill the same, and accept a conveyance of the fee of the said property." "That the said defendant, through her attorneys, has, prior to the commencement of this action, re- fused to make said conveyance under the said agreement, notwithstanding the plain- tiff's frequent requests therefor." "That such refusal on the part of the defendant to make such conveyance was due to the fact that one Nathaniel Jarvis, Jr., had, after said sale, but before the day fixed for the delivery of the deed thereunder, commenced an action in ejectment in this court against said defendant claiming the ownership of the premises in question, and had filed a notice of the pendency of said action in the office of the clerk- of the city and county of New York, on March 6. 1889." "That there- after, and before the trial of this action, the said ejectment suit was brought to trial, and the complaint therein was dismissed, and from the judgment entered on which dis- missal an appeal was taken to the general term of this court which court affirmed said judgment; and no appeal from said order of the general term has been taken to the court of appeals, and the time to do so has now expired." "That the said plaintiff has ex- pressed his consent at the trial of this action to accept from the defendant a conveyance of said land by the usual deed containing full covenants with warranty, subject to the reservations contained in the eighth para- graph of the said terms of sale." "That less than three years have passed since the 704, SPECIFIC PERFORMANCE OF CONTRACTS. ;H rendering of judgment and the filing of the Judgment roU in the said decision of Jarvis V. Lynch." And he found, as conclusions of law, "that the sale having been made in good faith, and the question as to the title of the said premises having arisen since the sale, the defendant should not be compelled to give a warranty deed, or procure a policy of title insurance of the Lawyers' Title In- surance Company, insuring the title to the said premises to' the plaintiff;" "that the de- fendant is entitled to judgment dismissing the complaint upon the merits of the action;" "that such judgment should be without prej- udice to the right of the plaintiff to bring an action for damages for breach of the con- tract set forth in complaint." (^ The plaintiff has been defeated In his ac- tion thus far on the ground that It was im- possible for the defendant to perform her contract at the time of the commencement of the action, and that he knew it was. She did not set up such a defense in her answer, but, on the contrary, alleged that she was able and ready to perform her contract, and there was no proof showing that it was then Impossible for her to perform the contract There was no evidence showing what basis, if any, the claim of title to the land by Jarvis had. It may have been colorable, and not real or substantial. It did not appear that she had made any effort whatever to re- ■move the incumbrance of the lis pendens. It rwas her duty to perform the contract, and /to make all reasonable efforts to remove any I obstacle which stood In the way of her per- Iformance. The plaintiff was not In fault for refusing to accept a deed which the de- fendant at the lime declared would convey an incumbered title. He was entitled to_a marketable title. MdMe "V. Williams, 115 [TT-^rSSBr^SrwrE. 233; Vought v. Williams. 120 N. Y. 257, 24 N. B. 195. It Is a gen- eral rule in equity that the specific perform- ance of a contract to convey real estate vrill not be granted when the vendor, In con- sequence of a defect in his title, is unable to perform. In such cases specific perform- ance Is denied because the court cannot en- force its judgment, and because, also. It would be oppressive to the vendor. But If the defect in the title existed at the date of the contract, or was due to some fault or to some act of the vendor subsequent to the contract, the court wiU generally entertain an action for specific performance, and re- tain jurisdiction for the purpose of award- ing damages for the breach of the contract. But where, as in this case, the defect In the title arises after the making of the contract, without any fault of the vendor, and the vendee knew of the defect In the title when he commenced his action, the court will not retain the action for the purpose of award- ing the damages. Wiswall v. McGrOwan, Hoff. Ch. 125; Morss v. Elmendorf, 11 Paige, 277. This rule was adopted because the vendee should not commence a fruitless ac- tion In equity simply to recover there his damages for a breach of contract The rule has been modified since the Code practice which authorizes the joinder of legal and equitable causes of action; and, while the equitable relief will be denied in such a case, now the action wUl be retained, and the issue as to the breach of contract and damages will be sent to a jury for trial. Sternberger v. McGovem, 56 N. Y. 12. But this rule was adopted in equity not solely because at the time of the commencement of the action the defects In the title existed, to the knowledge of the vendee, but also because the case was such that at the time of the rendition of the judgment the court could not grant the equitable relief. The rule and the ground upon which it Is based have no application to a case where the defect has disappeared at the time of the triaJ, and the court can then give an effective judgment for the equitable relief demanded; and no case can be found, prior to this, where an equity court has de- nied si)ecific performance because the ven- dor's title was defective at the commence- ment of the action, but valid and perfect at the time of the trial. In such a case, why should not the vendor perform? He is able to, and the vendee Is entitled to performance unless some other defense has intervened, and the court Is able to enforce performance!. Here the plaintiff was willing to take such 1tTWS'*as"Tjifer'defeBdairt-efenaant has no right ^ insist that he~"was unexpectedly placed in this peculiar position, relying on the promise of plaintiff; for, if it was a pro mise which a cou rt of e quity wouSTnot enforce, ne had no' "RgETtoTeiySD BtrCE-promise. He was*BOTina te'~EHbw that ihe plaintiff might refuse to carry out his agreement, and that In that event he (the defendant) would be powerless to compel its performance, but must, to save himself from being baffled in his scheme, buy the stock at such a figure as it could be purchased for. Even assuming the contract to allow defendant to control the stock to be valid, so that its breach would subject plain- tiff to liability for damages, still defendant cannot use the breach of that promise as a basis for rearing upon it this'' argument that plaintiff took advantage of his neces- sities, unless such contract could be specif- ically enforced in equity. Plaintiff had a le- gal right to take advantage of his necessities, and exact such price as he could under the circumstances secure, if he could not be com- pelled by a court of equity to allow defend- ant to vote the stock. If plaintiff could break this promise without liability for damages, because it was void, he could charge what he chose for the stock, and defendant would have no legal ground for complaint. So if the breach of this promise, assuming it to be valid, subjected him to liability only for damages, he yet could break it, and compel the defendant to buy the stock and pay him what he asked for it, without rendering him- self liable to the charge of having, in legal contemplation, extorted an unconscionable contract from the defendant. Suppose that the contract was valid, and that its breach would have subjected the plaintiff to liabil- ity for $500 damages. He might have broken It, and then have taken the position that, while he was liable for these damages, he yet had the undoubted legal right to break such contract and Incur such liability, and thereupon sell the stock to whom he pleased, without being liable for anything more; and. If the defendant desired to purchase on the SPECIFIC PERFORMANCE OF CONTRACTS. 715 Vage tloi can jiro same terms as another person had offered, he had a legal right to make a new contract of sale with him (the defendant), and the contract would be as valid as a sale to a ^stranger. The defendant could not complain 'that an unfair advantage had been taken of him, for, if it is the law that a court of eq- uity will not enforce such an agreement as the original one in this case, but will leave the party to his action for damages, then defendant was bound to know that he was all the time at the mercy of the plaintiff, who might at any moment repudiate the con- tract, without other liability than for dam- ages; and the defendant was in this posi- tion because be had failed to take the pre- caution to secure a promise that would fully rotect him. He has no legal right to ap- peal to equity for relief because the plain- tiff took advantage of this struggle for su- premacy to exact from him (defendant) an enormous price for his stock, if he (the de- fendant) failed to secure from plaintiff such a contract to protect him against such exac- tion as a court of equity would enforce for his protection. Before this promise to al- low the defendant to vote the stock was made, plaintiff might have sold his stock to defendant for $5,000 without the possibility ot any rescission of the contract. If defend- ant saw fit to let the Shaw stock go, without securing in place of it an agreement that he could enforce in equity against the plaintiff, and without securing the plaintiff's stock it- self, he voluntarily relinquished his vantage (ground without taking the precaution to pro- 1 tect himself legally, and trusted himself and ; his interests to tije honor of the plaintiff; / knswing full well, as he testifies himself, that I the plaintiff, in the Impending struggle for su- I premacy, would be sorely tempted to desert Vhim, and, being only human, might fall. If we should affirm this judgmenl^ we would give the defendant all the benefit he r the defendant, in his learned and exhaustive brief, and in his very able oral argument be- fore the court, has presented everything that could possibly be urged in favor of the case he represents; and this, too, with great ingenui- ty and force. But while we fully agree with him thali if the facts foimd be true, his client has a just grievance in the forum of con- science, yet we are unable, because of the considerations of public policy to which wa have alluded, to give him any legal redress. The Judgment of the district court is in all things reversed, and that court is directed to modify its conclusions of law in accordance with this opinion, and to enter judgment for the plaintiff for the full amount due on the note, for principal and Interest All concur. 720 SPECIFIC PERFORMANCE OF CONTRACTS. NEW ENGLAND TRUST CO. v. ABBOTT. (38 N. B. 432, 162 Mass. 148.) Supreme Judicial Court of Massachusetts. Suffolk. Oct. 18, 1804. Report from superior court, Suffolk county. Action by the New England Trust Com- pany against Abbott, executor of the will of Josiah Gr. Abbott, deceased, to compel a transfer to the company of certain shares of its stock held by defendant's testator, and to enjoin defendant from further prosecuting an action at law to recover the dividends on said shares. Judgment for plaintiff. W. G. Russell and J. L. Stackpole, for plaintiff. L. S. Dabney and F, J. Stimsom, for defendant. MORTON, J. This Is a bill brought by the plaintiff to compel the transfer to it, by the defendant, as executor of the will of Josiah 6. Abbott, of certain shares in the plaintiff corporation, which were held by said Abbott at his decease, and which, it is alleged, he agreed, when the certificates were issued to him, should be appraised at his death by the directors, and transferred to the plaintiff at the appraisal, if the di- rectors so elected. The biU also seeks to enjoin the defendant from prosecuting an action at law brought by him against the plaintiff to recover certain dividends upon said shares that have been declared by it The plaintiff was organized in 18G9, under a special charter (Acts 1869, c. 182), with a capital of $500,000, which was afterwards increased to $1,000,000. The terms of the alleged agreement are found in the by-laws, of which all that is now material is as follows: "Art 7. Any member of this corporation who shall be desirous of selling any of his shares, the executor or administrator of any member, deceased, and the grantee or as- signee of any shares sold on execution, shall cause such, their shares, respectively, to be appraised by the directors, which It shall be theh: duty to do on request and shall thereupon offer the same to them for the use of the corporation at such appraised value; and, if said directors shall choose to take such shares for the use of the corpora- tion, such member, executor, administrator, or assignee shall, upon the payment or ten- der to him of such appraised value thereof, and the dividends due thereon, transfer and assign such share or shares to said corpora- tion; provided, however, the said directors shall not be obliged to take said shares at the appraised value, unless they shall think it for the interests of the company; and If they shall not within ten days after such shares are offered to them in writing, take the same, and pay such member, executor, administrator, or assignee the price at which the same shall have been appraised, such member, executor, administrator, or assignee shall be at liberty to sell and dispose of the same shares to any person whatever. "Art 8. The directors shall have power, and it shall be their duty, to sell and dispose of the shares which may be transferred as aforesaid to the corporation, whenever, In their judgment, it can be done with safety and advantage to the corporation; and in all sales made by the directors, under any of the aforesaid provisions, it shall be their duty to sell the shares to such persons as shall appear to them, from their situation and character, most likely to promote con- fidence in the stability of the institution; no greater number than one himdred shares being assigned to any one person, nor, in the case of a person already a member, a greater number than will be sufficient to increase his previous number to one hundred shares." These by-laws were adopted before any certificates of stock were issued. After- wards, but before the capital was increased, article 7 was duly amended by adding to it the following: "It shall be the duty of such executor, ad- ministrator, grantee, or assignee to offer said shares for appraisal, and to be taken by the corporation, if it shall so elect, when- ever requested by the actuary or secretary, and no dividends or interest shall be paid or allowed after a failure to comply with such request: provided, that such request shall not be made imtil after the payment ot one dividend and the expiration of six months from the death of the owner or sale as aforesaid, but the offer may be made at any earlier period if the party shall prefer." Every certificate contained on Its face, as part of the certificate, the provision that "said shares are transferable only in person or by attorney, duly constituted, on the books of the company, and In the manner and upon the conditions expressed in the by- laws of the company, printed upon the back of this certificate." On the backs of the certificates were printed by-laws 7 and 8. By-law 7 was printed as amended on the backs of those issued after the increase. There were also on the stubs from which the certificates were detached, in the certificate books, two receipts given and signed by the defendant's testator at the time the two cer- tificates were issued to him in the original and increased capital, which were each as follows: "Received the above certificate subject to the conditions and restrictions therein referred to, and to the by-laws of the company, to which I agree to conform." The defendant contends that these by-laws are void. We have not found it necessary to consider that question, and we express no opinion upon it We think that the case may well stand on the ground that the de- fendant's testator entered into an agreement with the plaintiff to do what the plaintiff now seeks to compel his executor to do. It is manifest that a stockholder may make a SPECIFIC PERFORMANCE OF CONTRACTS. 721 contract with a corporation to do or not to do certain things in regard to his stock, or to waive certain rights, or to submit to certain restrictions respecting which the stockhold- ers might have no power of compulsion over him. In Adley v. Whitstable Co., 17 Ves. 315, 322, Lord Eldon says: "It has been frequently determined that what may well be made the subject of a contract between the different Interests of a partnership would not be good as a by-law. For Instance, an agreement among the citizens of London that they would not sell except In the mar- kets of London would be good; yet it has been declared by the legislature that a by- law to that effect is void." See, also, Davis V. Proprietors, etc., 8 Mete. (Mass.) 321; Bank of Attica v. Manufacturers' & Traders' Bank, 20 N. Y. 505, 6 Cook, Stocks & S. § 408. In the present case the certificates were is- sued to the defendant's testator In consid- eration of the payment by him to the cor- poration of the amount due for the stock, and of the agreements with it on his part which they contained. By accepting them without objection, and by signing the re- ceipts, he must be held to have agreed to the conditions printed on the backs of the certificates. The fact that the conditions were contained in by-laws which may have been invalid as such does not render his agreement void, if the contract was in substance one which the corporation had power to make. We think that it had such power. It is held in this state that a cor- poration, unless prohibited, may purchase its own stock (Dupee v. Water Power Co., 114 Mass. 37); and we see nothing opposed to public policy in such an agreement as this, with corporations like this. If honestly car- ried out by the directors, it tends to secure a trustworthy body of stockholders, from which those having the care and manage- ment of the affairs of the corporation nat- urally would be selected. It certainly can- not be contrary to public policy that the managers of this and similar institutions should be persons of skUl who possess the confidence of the public. The restraint upon alienation is no greater than is often agreed to. In England it is not unusual to find in the deeds of settlement or articles of associa- tion under which corporations or joint-stock companies have been organized, and which correspond to the charter and by-laws here, provisions requiring the stockholder, in case he wishes to transfer his stock, to offer it to the directors, or to submit to them the name of the transferee for approval.' Bargate t. Shortrldge, 5 H. L. Cas. 297; Poole v. Mid- dleton, 29 Beav. 646; Ex parte Penney, 8 Oh. App. 446; Moffatt v. Farquhar, 7 Ch. Dlv. 591; Chappell's Case, 6 Ch. App. 902. No objections seem to have been made to these provisions. In this state, the legisla- ture, in numerous instances, has provided, in the charters of corporations like this, that the shares shall be transferable according to H.&B.B(J.(2dEd.)— 46 such rules and regulations as the stockhold- ers shall establish, and not otherwise. It is hardly possible that the legislature was Ig- norant of the construction which has been put upon the power thus conferred, and which in the case of the first corporation of the kind chartered In the commonwealth, the Massachusetts Hospital Life Insurance Company (Acts 1818, c. 180), was shown, it is said, by the adoption of by-laws from which those in this case were copied. It is true that this charter contains no provision in regard to by-laws or to the transfer of shares; but the policy of the legislature can- not be affected by such an omission, es- pecially in view of the fact that many of the charters since granted contain this provi- sion. Neither do we think that the agreement Is void for the reason that it authorizes the plaintiff to invest, as the defendant con- tends, in its own stock, or because it compels the defendant to submit .to the appraisal of the directors. If the enumeration in its char- ter of certain things in which it may invest Is to be construed as excluding, among others, its own stock, we think that the object of the agreement is not to secure the transfer of the shares to the plaintiff as an investment, but to enable the directors to dispose of it to such person or persons as shall appear to them, from their situation and character, most likely to promote confidence in the sta- bility of the institution; and though, pending its disposition by the directors, it may, for convenience's sake, be placed with the com- pany's securities, and dividends, if declared, collected upon it, that does not alter the es- sential character of the tenure upon which the company holds It It is settled that one may agree to sell his property at a price to be determined by another, and that he will be bound by the price so fixed, even though the party establishing it was interested; pro- vided the interest was known, and no ob- jection made by the parties, and no fraud or bad faith is shown. Brown v. Bellows, 4 Pick. 179, 189; Palmer v. Clark, 106 Mass. 373, 389; Haley v. Bellamy, 137 Mass. 357, 359; Fox V. Hazelton, 10 Pick. 275; Strong V. Strong, 9 Gush. 569; Benj. Sales (6th Am. Ed.) § 88, note 3. The defendant objects that there was no real appraisal, and that he did not offer the stock for appraisal. The records of the plain- tiff show that at a directors' meeting, at which were present 16 directors, it was voted that the defendant's stock be appraised at $220 per share, and taken for the use of the corporation. The directors were not bound to give the defendant notice or a hearing (Palmer v. Claxk, supra); and we must as- sume that they gave the matter such atten- tion as, in their opinion, was necessary, and that the appraisal correctly expresses their judgment, after taking into account such matters as they thought should be consider- ed. There is nothing to show that they were 722 SPECrPIO PERFORMANCE OP CONTRACTS. so mistaken about the facts that what they did was in no fair sense an appraisal of this stock, but of something eise. It Is said that they omitted the good will. If so, it was, at most, an error of judgment, which would not Invalidate the appraisal. It was not a condi- tion precedent to the appraisal that the de- fendant should offer the stock. The agree- ment of defendant's testator was, in sub- stance, that the stock should be appraised by the directors, and that it might be taken at the appraisal by them if they so elected; and that has been done. The offer was for the purpose of fixing a time from which the 10 days should begin to run at whose expiration the stockholder could dispose of his stock If the directors had not elected to take it. If the directors appraised the stock, and voted to take it at the appraisal, an offer was unnecessary. Lastly, the defendant contends that the plaintiff is not entitled to specific perform- ance, because the stock was greatly under- valued, and because the plaintiff has a rem- edy at law. It is evident that to remit the plaintiff to an action at law for damages would defeat the very purpose of the con- tract, and would not, we think, furnish an adequate remedy. No stock in the plaintiff company has ever been sold in the market, and all the shares that have been transferred have been transferred to the plaintiff, and disposed of by the directors in the manner provided. About three-fourths of the stock of the original subscribers has been thus transferred. There is no evidence that the testator ever objected to this mode of dealing with it; and we see no good reason why the plaintiff should be obliged to accept dam- ages for which it might be difBcult to lay down a clear rule, instead of performance. Railroad Corp. v. Babcock, 6 Mete. (Mass.) 346; Oushman v. Manufacturing Co., 76 N. T. 365. The case would perhaps stand differ- ently If the shares were bought and sold in the market like most stocks. Adam v. Mes- singer, 147 Mass. 185, 17 N. B. 491. The de- fendant does not charge the directors with any fraud in the appraisal. He expressly dis- claims that. It is well settled that where one agrees that another may fix the price for cer- tain property, or the sum to be paid for ma- terial or services, the decision of the party selected cannot be impeached by showing that he has committed an error of judgment, or failed to avail himself of all the informa- tion which he might have obtained, or has valued the property too high or too low. Palmer v. Clark, supra; Flint v. Gibson, 106 Mass. 391; Robbins v. Clark, 129 Mass. 145; Railroad Co. v. March, 114 U. S. 549, 5 Sup. Ct 1035; Stevenson v. Watson, 4 0. P. Div. 148; Sharpe v. Railway Co., 8 Ch. App. 597; Richards v. May, 10 Q. B. Div. 400; Tullis v. Jacson [1892] 3 Ch. Div. 441; Ranger v. Rail- way Co., 5 H. L. Cas. 72. The evidence that was offered by the defendant relating to the value of the stock was therefore rightly ex- cluded. It is equally well settled that specific performance of an agreement to convey will not be refused merely because the price is inadequate or excessive. The difference must be so great as to lead to a reasonable conclu- sion of fraud, mistake, or concealment in the nature of fraud, and to render it plainly in- equitable and against conscience that the contract should be enforced. Chute v. Quincy, 156 Mass. 189, 30 N. B. 550; Lee v. Kirby, 104 Mass. 420; Park v. Johnson, 4 Allen, 259; Railroad Co. v. Babcock, 6 Mete. (Mass.) 346, 352; Cathcart v. Robinson, 5 Pet 271; Underhill v. Van Cortlandt, 2 Johns. Ch, 339; Belchier v. Reynolds, 2 Keny. pt 2, p. 87; Weekes v. Gallard, 21 Law T. (N. S.) 655; Fry, Spec. Perf. (3d Am. Bd.) § 424, note L It is to be observed that this is a suit direct- ly between the company and a stockholder, to enforce a contract made with the com- pany by the latter, and that the rights of third parties are not involved. Many of the cases cited and relied upon by the defend- ant are cases where the rights of third par- ties are involved, and therefore inapplicable to this. The result is that the plaintiff is entitled to a decree compelling the defendant to con- vey the shares upon payment by It of the amount of the appraisal, with interest, and enjoining him from prosecuting the action at law. Ordered accordingly. SPECIFIC PERFORMANCE OF CONTRACTS. 723 CONGER et al. v. NEW YORK, W. S. & B. R. CO. (23 N. E. 983, 120 N. Y. 29.) Court of Appeals of New York, Second Divi- sion. March 18, 1890. Appeal from supremocourt, general term, second department. Action by Clarence R. Conger and an- other against the New York, West Shore & Bnfialo Railroad Company. A judg- ment In favor of defendajit, entered upon the decision of the special term, vras af- firmed at the general term, and plaintiff again appeals. Clarence R. Conger, for appellants. Cal- vw Frost, for respondent. Haisht, J. This action was brought to compel a speclflc performance of a con- tract. The Jersey City & Albany Rail- way Company was incorporated for the purpose of constructing and operating a railroad from Fort Montgomery, in the county of Orange, to a point on the Hud- son river opposite to the city ot'NewTorli. As such incorporation it entered into a written agreement with one Catherine A. Hedges, the plaJntiffgl^rflator, in and by the ternfs oi wnicn shegave' to the com- pany a right of way across her premises in Rockland county upon certain condi- tions, one of which was that the company should locate a station in the gorge com- monly known as the " Long Clove, " and stop thereat five express trains each way ■ dally. Subsequently the Jersey City & Al- r bany Railway Company was consolidated j with the North River Railway Company, / under the name of the North River Rail- [ road Company, and that company was L^onsolidated with the defendant, which was incorporated for the purpose of con- structing and operating a railroad from the New Jersey state line, through the state of New York, to the city of Buffalo. The defendant has entered upon the lands of the said Catherine A. Hedges, and con- structed its road-bed across the same, but^ It has not constructed any j tatio n there- ' on m Ta»^^^Eon ^ ClOVfe ..^O l'geror~stopped '~a5y~Of-^ttirexBreB8 trains.- thereat. The TnaTtfOurt has found as facts that a suita- ble station for the accommodation of pas- sengers, and the receipt and delivery of freight, at the Long Clove gorge, could be built by the defendant only at a consid- erable expense, because of the nature of the ground at tliat point; that the place where the plaintiffs demand that the stei- tion be located is near the mouth of a long tunnel, and at a sharp curve in the de- fendant's railroad, upon the side of a steep mountain approached by steep grades in both directions ; that it is sparsely settled. and if a station were established there it would be of no use to the public; that very little, if any, benefit would result to the plaintiffs, by the erection of a station, or the stoppage of the trains thereat; that the public convenience would not be promoted, but the public travel would be delayed; and, as a conclusion of law, that a specific enforcement of the agreement would work hardship and injustice to the defendant, and such enforcement will not subserve the ends of justice; that specific performance should be denied, and the plaintiffs left to their action for damages for a breach of the contract. The evi- dence sustains the findings of the trial court, which have been affirmed by the general term. The questions for our con- sideration are therefore narrowed to a determination as to whether the conclu- sions of law reached are justified under the findings of fact. It has been the well-settled doctrine ot\ this court that the specific performance of a contract is discretionary with the court, and that performance will not be decreed where it will result in great hardship and injustice to one party, without any con- sideration, gain, or utility to the other, or in a case where the public interest would be prejudiced thereby. Clarke v. Railroad Co., 18 Barb. 350; Trustees v. Thacher, 87 N. T. 311-317; Murdfeldt v. Railway Co., 102 N. Y. 703, 7 N. E. Rep. 404; Day v. Hunt, 112 N. Y. 191-195, 19 N. E. Rep. 414. As we have seen, the Long Clovegorgeis located upon the side of a steep mountain, in a sparsely settled district, and is ap- proached by a steep grade, and that a passenger station, with an approach there- at, could be constructed only at a consid- erable expense. These are reasons wor- thy of consideration, but, if there were no others, the trial court might not have deemed them sufficient to refuse specific performance. But they are followed by another, which gives additional force and weight, and that is that the public travel will be delayed by the stoppage of the trains, and that the public convenience will not be promoted. The defendant is a corporation organized under the laws of the state, and is a common carrier of pas- sengers and freight. Its duties are large- ly of a public nature, and it is bound to so run its trains.and operate fiEsToad las"x5 promote ' the pubTic interest ' and conven- ience, andj in view of the tact that bat lit-; tie if any benefit would result to the plam; tiffs by the erection of a station arid the Bt'oppage of trains thereat^ as found by^ the trial court, it appear^ to us fKat" that court properly refused to decree specific performance and remanded the plaintiffs to their action for damages. The judgment should be affirmed, with costs. All con- cur, except Bbown, J., not sitting. 724 SPECIFIC PERFORMANCE OF CONTRACTS. ROSS et al. y. PARKS. (8 South. 368, 93 Ala. 153.) Supreme Court of Alabama. Nov. IS, ISQO. Appeal from chancery court, Jackson coun- ty; Thomas Cobbs, Chancellor. Bill to enforce specific performance of a contract to convey land. The title to the land in controversy was in one Jeremiah French. On the 15th day of December, 1887, French agreed, in writing, to convey the land to the complainant, Parks, if Parks would pay him $200 by December 15, 1888. At the execution of this option, 50 cents was paid, and expressed in the contract as the consideration. This contract to sell, or op- tion, was signed by French and his wife, but was not signed by Parks. It was re- corded In the probate office, and defendants, Ross and McClendon, had actual notice of its execution. After the execution of this contract, French moved to Texas. Subse- quently, Ross and McClendon sent an agent out to Texas where French was, and through said agent offered French $800 for the land in controversy, and thereby, on November 21, 1888, procured a deed from French and his wife, conveying to Ross and McClendon the legal title to the land in controversy. Be- fore the expiration of his option, under the contract of French, Parks paid French the $200 purchase money as therein agreed, and received a deed to said lands from said French and his wife, which was executed on and bore the date of 28d of November, 1888. On December 21, 1888, the said Ross and McClendon brought an action of eject- ment against Parks to recover the posses- sion of the land in controversy, of which Parks was in possession. Thereupon, on January 29, 1889, Parks filed the bill in this case against said Ross and McClendon, and prayed to have the ejectment suit enjoined; the deed made by French and wife to Boss and McClendon canceled; and to have Ross and McClendon specifically perform the con- tract entered into by French and wife,— making to the complainant a good and per- fect title to the land in controversy. On a final hearing upon the pleadings and proof, the chancellor granted the relief prayed, and the defendants now appeal, and assign this decree as error. J. E. Brown and Watts & Son, for appel- lants. L. W. Days and D. D. Shelby, for appellee. COLEMAN, J. A general rule governing cases of specific performance is that the contract must be mutual, and that either party is entitled to the equitable remedy of a specific performance. Exceptions to this general rule are well established, and one class of contracts to which the exceptions may be applied are those which are unilat- eral in form. Pom. Cont §§ 167, 168. The exception as to unilateral contracts has been fully recognized and adopted in this statei The case of Moses v. McClain, 82 Ala. 370, 2 South. 741, was for a specific performance of the following contract: "For and in consid- eration of the sum of one dollar in hand paid, I hereby give A. J. Moses an option on my lands and improvements situated near Shef- field, and known as my 'House Place,' con- taining one hundred and twenty acres, more or less, for the sum of eight thousand dol- lars. * * • This option good for 2 days. [Signed] J. W. McClain." It was contended that Moses, the covenantee, bound himself by no writing, and not having bound him- self, he could not in this proceeding hold McClain bound; that the contract not being mutually binding, chancery will not compel its specific performance. The court declared as follows: "Mutuality is frequently said to be one of the conditions of a rightful suit for specific performance. The authorities, however, do not carry it to the length con- tended for. Where the contract is fair, just, and reasonable in all its parts, and the party- sought to be charged has so bound himself as to meet the requirements of the statute of frauds, the election of the other contract- ing party to treat the contract as binding, and to enforce it, meets all the requirements of the rule;" citing Wilks v. Railroad Co., 79 Ala. 180; 3 Pom. Eq. Jur. § 1405, and notes; Wat. Spec. Perf. Cont. § 201; Cherry V. Smith, 39 Am. Dec. 150. The case of Johnston v. Trippe (C. C.) 33 Fed. 530, is an authority directly on the point in question, the contract being almost Identical in its pro- visions. The difCerent authorities are very generally quoted and commented on, and the conclusion the same as held by this court, The evidence fails to show that there was such forcible entry and unlawful detainer as to deprive complainant of his right to file a bill to remove a cloud from title, but the equity of the bill does not depend upon that principle. "The complainants, holding the equitable title, bring their bill to compel a conveyance of the legal title by those who hold it in ti'ust for them. In such a case, the jurisdiction in no wise depends upon pos- session." Gray v. Jones (0. C.) 14 Fed. 83; Shipman v. Fumiss, 69 Ala. 562. The doctrine is well settled that when the vendor, after entering into a contract of sale, conveys the land to a third person, who has knowledge or notice of the prior agreement, such grantee takes the land impressed with the trust In favor of the original vendee, and holds it as trustee for such vendee, and can be compelled, at the suit of the vendee, to specifically perform the agreement by con- veying the land in the same manner, and to the same extent, as the vendor would have been liable to do had he not transferred the legal title. Pom. Cont. § 465, and note. The same rule Is declared in Dickinson v. Any, 25 Ala. 424; Meyer v. Mitchell, 75 Ala. 475. It may be stated as a sound principle of law. If an owner of land in writing gives SPECIFIC PERFORMANCE OF CONTRACTS. 725 another an option on land, for a valuable consideration, whether adequate or not, agree- ing to sell it to him at a fixed price, if ac- cepted within a specified time, it is binding upon the owner, and upon those who pm*- chase from the owner with a knowledge of such agreement. Moses v. McClaIn, 82 Ala. 370. 2 South. 741; 33 Fed. 530, supra; MauU V. Vaughn, 45 Ala. 134, and authorities. Under such dreumstances, the fixed time is a material part of the contract, and when supported by a valuable consideration, the owner of the land cannot revoke the ofCer be- fore the time has expired within which the offer may be accepted. We do not declare that if no specified, definite time was fixed by the parties, and the contract of offer was not supported by a valuable consideration, such an offer could not be revoked. We ex- press no opinion upon this question. John- ston V. Trippe (C. C.) 33 Fed. supra; Wilks v. Railway Co., 79 Ala. 185; Falls v. Galther, 9 Port. 617; Cherry v. Smith, 3 Humph. 19; 1 Story, Cont § 496; 1 Pars. Cont. *481, bot- tom p. 511; Bish. Cont. § 325; Benj. Sales. § 42. We find no error in the decree of the chancellor. Affirmed. >726 y SPECIFIC PERFOEMANCE OP CONTRACTS. JOHNSTON T. TRIPPB.1 (33 Fed. 530.) Circuit Court, N. D. Georgia, December 19, 1887. •.n equity. Bill for specific performance by complainant J. L. Johnston against R. B. Trippe, defendant On demurrer. G. A. Howell, for complainant Hopkins & Glenn, for defendant NEWMAN, J. This is a bill filed by com- plainant against defendant to enforce the spe- cific performance of a certain conditional or optional contract for the sale of land. The bill, after stating some preliminary corre- spondence and negotiation between complain- ant and defendant relative to the sale of cer- tain land In White county, Geor^a, by the latter to the former, alleges that in January, 1887, defendant prepared and executed the following written instrument: "Georgia, Pulton County. This agreement witnesseth, that the imdersigned R. B. Trippe, of said state and county, agrees that if said J. Lamb Johnston, of Charleston, S. C, or any one for him, pays or causes to be paid to the said R. B. Trippe, one thousand dollars, on or before January 20, 1888, that the said R. B. Trippe, for himself, his heirs and as- signs, covenants and agrees that he .will make to the said Johnston good and sufficient title to lots of land numbers 9 and 25, in 3d dis- trict, White county, said state. And it is fur- ther agreed that if a draft for $50.00 this day drawn by R. B. Trippe, with this option bond attached, is paid at sight, then said R. B. Trippe wUl make said title. If nine hundred and fifty dollars is paid him on or before Jan- uary 20, 1888; If said sums of money are not paid within the time mentioned, that is, $50.00. on sight draft and $950.00 within twelve months from this date, then this bond to be null and void; and It is understood that if the balance of one thousand dollars (i. e., $950.00) is not paid by January 20, 1888, the $50.00 paid on sight draft is forfeited to said R. B. Trippe, and that this option bond is null and void, otherwise of full force and ef- fect "Witness my hand and seal, this January 20, 1887. "[Signed] R. B. Trippe. "Witness: "[Signed] 3. H. Curtright, M. L. Cohen." Tjhis Instrument was sent, about the time of its execution, by defendant to complain- ant by mail to his home In Charleston, South Carolina, and received by complainant De- 1 That equity will not specifically enforce a contract wanting in definiteness or mutuality, see Bourget v. Monroe (Mich.) 25 N. W. Rep. 514; Hall y. Loomis (Mich.) 30 N. W. Rep. 374; Mosea v. McGlain (Ala.) 2 South. Rep. 741; Recknagle v. Schmalz (Iowa) 33 N. W. Rep. 366; Durkee v. Cota (Cal.) 16 Pac. Rep. 5; Fogg V. Price (Mass.) 14 N. B. Rep. 741. fendant also drew on complainant a sight draft for $50, which was sent with the fore- going written histruihent to Charleston. His draft was honored and paid at once by com- plainant and defendant received the $50. Some time after this, defendant wrote to com- plainant, saying he had an offer of $1,500 for the land, and offering, if complainant would release him from his obligation, to return the $50 paid him, and to pay complainant $50 in addition, if the other sale was made. In the same letter defendant stated that the bond sent by him to complataant was not legally binding anyway. Complainant promptiy re- plied, both by wire and letter, to defendant refusing to release him from his obligation to convey the land In pursuance of the before stated contract In the same letter hi which the complainant refused to release defendant be Instructed defendant to submit his deeds to complainant's attorney, and that upon, their approval by him, complainant would pay the balance, $950. This defendant failed and refused to do, but wrote complainant that he declined to furnish the tities or convey the land in accordance with his contract; and in the same letter inclosed a check payable to his, defendant's, order, and Indorsed by him In blanl^ which he tendered as a repayment of the $50. This letter was received by com- plataant ta Nacoochee, Georgia, on the night of March 17, 1887. On the next day, March 18th, complainant went to Atianta, the home of defendant, sought an Interview with him, and immediately returned to him the $50 check which he had received from him; stat- ing to defendant that he refused to receive it; and defendant now has the check in his pos- session. Complainant at the same time ten- dered to defendant $950 ta cash, and demand- ed that defendant make complainant a good and sufficient titie to the land ta controversy, which tender defendant refused, and refus- ed to convey, and repeatedly refused to carry out his contract with complataant. A tender is made ta the blU of $950; and the prayer is for a decree for specific performance against defendant with an alternative prayer for dam- ages, ta the event specific performance can- not be obtained. An amendment has been fil- ed to this bill, which amendment alleges that the property described ta the bill, bargataed by defendant to complainant. Is now worth the sum of $3,000, and also that the damages to complainant resnlttag from such refusal and the failure of the defendant to perform his contract exceed $3,000. To this bill a de- murrer has been filed, which demurrer is on two grounds: First, that this court has no Jurisdiction of the subject-matter in the bill .eta ted; and, second, that the complataant has not shown a right to any relief against de- fendant The first ground Is based upon the fact that the amount ta controversy, as shown by the original bUl, Is not sufficient to give this court jurisdiction; the bill havtag been filed 8tac@ the passage of the act of March SPECIFIC PERFORMANCE OF CONTRACTS. 727 3, 1887. This objection seems to be obvi- ated by the amendment since filed, fixing the value of the land at $3,000 and the dam- ages at not less than that sum. There was very little discussion upon this point, in the argument, and it was not strongly urged. The serious and main question in the case arises under the second ground of the de- miurrer, that the complainant has not shown a right to any relief against defendant. The question made is that this contract between defendant and complainant lacks the ele- ment of mutuality, which is necessary to au- thorize a court of equity to decree a spe- cific performance. That is to say, that, as complainant was not compelled by his con- tract to take the land and pay defendant the remainder of the purchase money, de- fendant could not be required to carry out the agreement There is a general rule of law, un- doubtedly, that this element of mutuality must exist to justify enforcement of specific per- formance. Fry, Spec. Perf. i 286; Wat Spec. Perf. § 196. It is also true that there are cle ar exceptions to this rule. In Fry on specific performance it is stated in sec- uon 291, as follows: "The contract may be of such a nature as to give a right to the performance to the one party which it does not give to the other; as, for Instance, where a lessor covenants to renew upon the request of his lessee, or where the- agreement is in the nature of an undertaking. But the more accurate view of such cases as the first, — perhaps of all that could be treated as want- ing miatuality,— seems to be that they are conditional contracts; and when the condi- tion has been made absolute, as, for instance, in the case above stated, by a request to renew, they would seem to be mutual, and capable of enforcement by either party alike." In Wat Spec. Perf. § 200, in discussing the matter of exceptions to this general rule, the author says: "But it is w ell settled that an optional agreement to convey^or_to renew a~l6ase, wrEEout~"any "' caren ant 'or""o6 Iiga^ "OrnrTolpurcEase oFacceptTand without any 'mntuality of reinedy, wiU be "enforced in eq- "TiilyTrTtTs1Ena30e~5gon proper cbnsideraflon,^ ~"oF~l?jrffis parT^oTa lease of other contract between the parties that may be the true consideration for it, though such an agree- ment can perhaps scarcely be called an ex- ception; for, being in fact a conditional con- tract, when the condition has been made absolute by a compliance with its terms, the contract becomes mutual, and capable of enforcement by either party. A contract f or the sale of real estate, at the option of ihe vendee only, upbn"nstection and lioace, may not only T3e~specificairy enforced, but th%~ refusarerthe'vendor to accept the purchase money will not destroy the mutuality, though the vendee' could thereupon withdrawTiis '^election." The decisions upon this question have been numerous, and It has been discussed ably and at length by many courts of high au- thority. The case very generally referred to and relied upon to sustain the rule re- quiring that a contract must be mutually binding to justify its enforcement, is the decision of Lord Redesdale in the case of Lawenson v. Butler, 1 Schoales & L. 13. A careful examination of that case and the argument and reasoning of the Lord Chan- cellor will show that the decision was put mainly upon the ground that where parties, enter Into an agreement, each supposing the other to be bound thereby, and it transpires that one was not bound, such party could not have specific performance of the con- tract by the other. He says, in concluding the opinion, (page 21:) "No man signs an agreement but under a supposition that the other party is bound, as well as himself; and therefore, If the other party is not bound, he signs it under a mistake. That mistake might be a ground for relief in equity, but is surely not a ground for spe- cific performance. Under these circumstan- ces, the impression upon my mind is that I must dismiss the bill. This agreement was signed in mistake. It is manifest that But- ler could not have executed a lease in com- pliance with it; and as he could not, it is manifest that this is not the agreement he meant to sign." F.rom a note to this case, (page 21,) it would seem that the Lord Chancellor was not himself entirely satisfied with the deci- sion, as he proposed that the case lie over until the next day to look into the cases cited, when plaintifE's counsel stated that they were content with a dismissal of the bill without costs, and it was ordered ac- cordingly. These comments upon and cita- tions from this much-quoted case, are not miade to question the existence of the gen- eral rule alluded to, but to show that its application, even m its origin, was a matter of difficulty, and its extent uncertain. Counsel for defendant relied in argument here mainly on the cases of Marble Co. v. Ripley, 10 Wall. 339; Tyson v. Watts, 1 Md. Ch. 1; Duvall v. Meyers, 2 Md. Ch. 401; and Peacock v. Deweese, 73 Ga. 570. In the case of Marble Co. v. Ripley, other questions were made growing out of com- plex and intricate partnership relations; but one reason why specific performance should not be decreed was want of mutuality. After stating this as a reason why specific performance should be refused in that case, the court proceeds to give what is termed a "still more satisfactory reason for with- holding a decree for specific performance." But want of mutuality was undoubtedly rec- ognized as applicable to that case. In the later case of Butler v. Thomson, 92 U. S. 412, the court, in the opinion, uses the fol- 1 lowing language: "There may be an offer ' to sell subject to acceptance, which would bind the party offering, and not the other party until acceptance. The sarnie may be 728 SPECIFIC PEEFORJIANCE OF CONTRACTS. said of an optional purchase upon a suffi- cient consideration." The court then alludes to a class of cases under the statute of frauds where one party signed a contract and the other did not. The language as ^quoted seems to me to indicate a recognition by the court of offers to s ell subject to ac- ceptance, and optional purchases upon "suffl- "cTent consideraHonras'eice ptioSrtoTEiFgen- era lrule' re gmrlng mutua lity of_ o bIigation i"n " the contraci. it woumte far from clear that Marble Co. v. Ripley, even standing alone, should be regarded as controlling in this case; but the language used in the later case of Butler v. Thomson shows clearly, I think, that that court would not so regard it. The two cases from the Maryland Chan- cery Decisions referred to may be disposed of with the remark that in neither case cited were the facts at all like the facts that are presented in the case now before this court. In the case of Peacock v. Deweese, the supreme court of Georgia held that the contract sought to be enforced, in that case lacked the element of mutuality, and stated that as one reason why specific performance would not be decreed. The court also stated, however, that "the agreement is gratuitous, and entirely voluntary on the part of the defendant in error. A court of equity never ^^ieci iees a specific performance of a voluntary qr^ gratuitous contract. Code, § 3189. Any "fiact showing" fhe con&act to be unjust or unfair or against good conscience, justifies the court in refusing to decree a specific performance. Code, § 3190." The undertak- ing of the two Deweeses in that case was en- tirely without consideration to them\. Pea- cock agreed to make such tests of the land for the discovery of minerals as were "sat- isfactory to himself." The two Deweeses had their land tied up by this option for six months without receiving any remuneration therefor, and it was evidently the view of the court that the agreement by Peacock to make such tests as were "satisfactory to himselC" was not such a consideration as would support the contract This may be gathered, I think, from the use of the lan- guage "voluntary or gratuitous contract" This, then, was an optional agreement to sell, wholly without consideration. I have thus far given attention prlncipaUj* to the authorities relied upon by the eminent counsel for defendant in this case, without referring to the long line of decisions which, It seems, hold that contracts such as the one be- fore the court will be enforced. In the case of Powle V. Freeman, 9 Ves. 351, it was held Ithat an agreement in writing for the sale of \an estate was binding If signed only by the Ivendor, and followed by direction to his at- (tomey to prepare a proper agreement for both I parties to sign. In the case of Ormond v. I Anderson, 2 Ball & B. 863, where the court dismissed the bill upon another ground, the following language was used In the opinion: "An objection has been made to the execu- tion of this agreement on the ground that It has not been signed by the plaintiflC, and that the defendant could not have enforced It against the plaintiff. I am very well aware that a doubt has been entertained by a judge .in this court of very high authority, [refer- ring to Lord Redesdale, hi Lawenson v. But- ler,] whether courts of equity would specifi- cally execute an agreement where one party only was bound. There exists no provision in the statute of frauds to prevent the execu- tion of such an agreement; and Sir James Mansfield, who certainly had great experience in courts of equity, lays it down in the case of Allen V. Bennet [3 Taunt 169,] that a con- tract signed by one party would be enforced in equity against that party, and that such was the daily practice of that court." He proceeds to say that "in a case where the court finds a party who has been and is endeavoring to obtain some undue advantage, or has been playing what is called fast and loose,' the court would not assist him." In the case of Clason v. Bailey, 14 Johns. 484, the chancellor, after discussing, among other cases, those I have just cited, concludes thus: "I have thought, and often intimated, that the weight of argument was in favor of the con- struction that the agreement concerning lands, to be enforced in equity, should be mutually binding; and that the one party ought not to be at liberty to enforce, at his pleasure, an agreement which the other was not entitied to claim. It appears to be settled (Hawkins v. Holmes, 1 P. Wms. 770) that though the plain- tiff has signed the agreement he never can enforce it against the party who has not sign- ed it. The remedy, therefore, in such cases Is not mutual. But, notwithstanding this objec- tion, it appears from the review of the cases that the point is too well settled to be now questioned." In a later case in New York— In re Himter, 1 Bdw. Ch. 1— the vice-chancellor uses the fol- lowing language: "In the next place. It Is said the covenant to sell is not mutual, the lessee not being bound to purchase, and that as this is a 'one-sided' agreement, the court will not decree a specific performance. The cases of Parkhurst v. Cortlandi, 1 Johns. Ch. 282, and Benedict v. Lynch, Id. 370, have been referred to as eslablishing this point Chancellor Kent there intimated that such was the rule; but in a subsequent case in the court of errors— Clason v. Bailey, 14 Johns. 484— he had occasion to review that opinion, which he found to be erroneous, and admits that the point is too well settled the other way to be questioned. The court may, therefore^ In a proper case, where there is a covenant on one side, and no mutuality, decree a perf^ a^ ancc: — Bestaesrui a case jiES the_tijeg gntlt may be peculiarly proper. The"rent may have been fixed at $600 as an inducement to the power of purchasing the property. This is a fair Inference." In the case of Van Doren v. Robinson, 16 N. J. Eq. 256, it is held that "the general prin- SPECIFIC PERFORMANCE OF CONTRACTS. 729 dple is that where the contract Is Incapable of being enforced against one party, that par- ty is equally incapable of enforcing it against the other. But the principle does not apply ■where the contract, by its terms, gives the one party a right to the performance, which it does not give to the other party." And in the case of Howralty v. Warren, 18 N. J. Eq. 124, after stating the general rule as the existence of mutuality, and that unilateral or optional contracts are not favored in equity, the court proceeds: "But modern authorities have narrowed this doctrine down to cases in which there is no other consideration. And it is now well settled that an optional agree- ment "tp^^eoirTgy, or~Tenew ~a-lease;'"WItg6ut any" covenant or ob ligati on to purehas£_orjie;_ ceptr anS^wittoiJt any mutuiallty of sesmgdjj wiirWeoIorcedin'equrEyT ifit is made upon propeF^o nside ration",' or forms part of a lease' or "other contract between the parties, that may beTlTeWie'coHgiaefatlon for it." A number of cases are then cited by the court to sustain this view, among them the cases I hare just referred to. The language last quoted seems to me to be a very clear statement of the correct rule in this matter. In Smith's Appeal, 69 Pa. 474, the matter be- fore the court being an optional contract for the sale of land, it was held that thg cnntrapt would be enforced. In the case of Rogers t. Saunders, IS Me. 92, 33 Amer. Dec. 635, the com-t cites the decision of Chancellor Kent in Clason v. Bailey, and states that this ap- pears to be now the generally received doc- trine. In Vassault v. Edwards, 43 CaL 458, it is held that: "A proposal to sell real estate, reduced to writing and signed by the vendor alone, in which he recites that he has sold to the vendee the land for a price named, and has received a certain sum as a deposit, as part payment, which the vendor was to refund if the title was rejected or bad, the sale to be subject to a search of and approval of title, the vendee to have twenty days for the exam- ination of the title, is a valid contract of sale entered into between the parties." To the same effect is the case of Schroeder V. Gemeinder, 10 Nev. 355. The court, after stating that there are many exceptions to the rule in the cases, as to mutuality, says: "We thini: it may now be considered as well set- tled by all, or nearly aU, of th e modem a ub thofttjesriiwtt-g-conrl at ecijfll£_ln. acflsfisjor the sneciflc perf orman ce of. optional contracts. ~a9.d covefaal S-to lease or convey la nd. wiH en- for ce thT co venantralthoush the remedy is not mutual, provided It Is shown to- have been made upon a fair consideration, or where it forms part of a contract, lease, or agreement, which may be the true consideration for it." Entering into the discussion of this ques- tion, in many of the cases, is that part of the statute of frauds providing that contracts for the sale of land must be in writing, signed by the party to be charged thereby, or some per- son by him lawfully authorized. (This law as codified in Georgia, is in section 1950, Code 1882.) It is held in some of these cases that the question should be controlled by the lan- guage of the statute just quoted; and that, as the contract need be signed by only one par- ty, viz., the party to be charged thereby, it is only necessary that he should be bound. It seems to me, however, that the question of mutuality is one distinct and apart from any question that might arise under the statute of frauds. It is a matter separate from, if not over and above it, and I have considered it in that view. I thinli it is settled by the above authorities, and others that might be cited, that where an owner of land gives another, for a sufficient consideration, an option or privilege to purchase the land within a given time, in writing, with full knowledge of the fact that he is bound and the other party is not, it is such a contract as will be enforced in equity at the instance of the party holding the option. Does such a contract Indeed lacli mutuality? The seller, for fair consideration, agrees to give the proposed purchaser a cer- tain fixed time in which to make the contract mutual, by acceptance of the offer to sell. If he accepts within the specified time, both par- ties are fully bound. Now, as to this case. Here, for a reason- able consideration, the sum of $50, the de- fendant agrees that the complainant shall have the privilege of buying his land within a year; that is, the defendant sells to him for $50 the privilege of purchasing the land with- in a year. That contract, the sale by defend- ant to complainant of the privilege of purchas- ing, is executed by the payment by complain- ant of the sum agreed upon. The remainder of the contract Is conditional upon the com- plainant's accepting within a year the con- tinuing offer of the defendant to sell him the land. I see no reas on w hy a court o f equity sh ould'no ^ enforce" such a contract. On the "contrary, it seems to 'me "TTwoulH^e Inequi- table to refuse Its enforcement. I am clear, therefore, that this case does not come with- in the class where laclt of mutuality will pre- vent enforcement of the contract, and that it does come within a well-recognized exception to that rule, of optional sales upon fair consid- eration. This case Is considered now, of course, upon the facts as stated in the bill. How it may be affected by what the defend- ant can hereafter show must be a matter for future consideration. My conclusion is that the demurrer must be overruled on both grounds, and it will be ordered accordingly. 730 SPECIFIC PEBFORMANCE OF CONTRACTS. O'CONNOR V. TYRRELL et aL (30 Atl. 1061, 53 N. J. Eq. 15.) Court of Chancery of New Jersey. Jan. 21, 1895. Bill by Lawrence O'Connor against Peter Tyrrell and others for specific performance of a contract to convey land. On motion to dismiss bill. Motion denied. Charles L. Corbin, for the motion. John Garrick, opposed. McGILL, Ch. The motion Is made in vir- tue of the 213th rule, and takes the place of a demurrer to the bill. The case presented by the bill is this: James Tyrrell, for himself, and as attorney in fact for others, who are cotenants with him of certain land In the city of Bayonne, on the 20tli of April, 1894, agreed to sell that land to the complainant for $7,250, of which $250 was to be paid up- on the execution of the agreement of sale, and the balance was to be paid upon the de- livery of the deed, on the 21st of the follow- ing May,— $5,000 in cash, and the remainder by assumption of the payment of a mortgage of $2,000, by which the property was incum- bered. Upon examination of the title. It was discovered that the power of attorney under which James Tyrrell assumed to act for his cotenants, who lived in Ireland, though duly executed, was defectively acknowledged by some of the cotenants. Therefore, It was agreed that, Instead of having the power of attorney reacknowledged, the deed should be directly executed by all owners of the prop- erty, and be sent to Ireland for that purpose. As more time would be required in such exe- cution than the terms of the contract of sale would admit of, a new agreement was enter- ed into on the 8th of May, by which the for- mer contract was annulled, and the 26th of June w?s fixed for the delivery of the deed, and the full consummation of the transaction. The litter agreement contains this stipula- tion. "Said party of the second part [O'Con- nor] shall have possession of said premises on the 14th day of May, 1894; and, in the event of the failure of said parties of the first part to deliver the deed at the time and in the manner hereinafter referred to, the said parties of the first part hereby agree to repay to said party of the second part the said sum of $250, heretofore paid as part of the consideration money, and, in addition thereto, such sum, not exceeding $1,250, as said party of the second part shall have paid upon the examination or guaranty of the ti- tle to said premises, or in the repair, im- provement, or furnishing of the building, or ground, or the survey thereof, or shall have In any way incurred or expended In the prep- aration for the purchase of and taking of ti- tle to said premises, not exceeding the said sum of $1,250; such payment to be accepted by said party of the second part as liquidated damages for any breach of this agreement by the said parties of the first part; and. In event of the failure of said parties of the first part so to deliver said deed at the time herein stated, said party of the second part hereby agrees to surrender possession of said premises, within fifteen days from June 26th, 1894, to James Tyrrell, one of said parties of the first part hereto. And said party of the second part shall not, under any circumstan- ces, be held to be liable for any rental for the occupancy of said premises." In pursu- ance of this agreement, the complainant paid $250 In cash, broke up his home in the city of New York, and moved to the premises con- tracted to be conveyed to him, upon which he made repairs which have cost him near- ly $2,000. On the 26th of June, 1894, he du- ly tendered the $5,000 he was then to pay, and demanded a deed, in accordance with the terms of the agreement To which ten- der and demand, James Tyrrell replied that, as attorney in fact, he was unable to deliver the deed, and that he desired a statement of the complainant's expenditures, contemplated by the clause of the contract which has been quoted, in order to ascertain and pay the sum agreed upon as liquidated damages, and also that he desired to fix a day, within the terms of the contract, upon which the complainant would surrender to him possession of the land. The only question presented in the argu- ment was whether this court will compel a conveyance to the complainant, notwithstand- ing the provision for the payment of liqui- dated damages upon the breach of the con- tract; the contention in behalf of the defend- ants being that by the agreement the par- ties have expressly stipulated the measure of the damages which will result from the defendants' nonperformance of the agree- ment, and therefore equity will leave the complainant to the recovery of those dam- ages, on the groimd that an appeal to equity is unnecessary, since the legal relief, by agreement, has been rendered adequate. For the breach of contracts the common law gives a single remedy. It requires the wrongdoer to pay a sum of money as com- pensation. When the contract broken Is an obligation to pay money, that remedy amounts to specific performance. But there are many contracts, for the breach of whidi such a remedy is inadequate; and that Inadequacy has given rise to the jurisdiction of chancery to enforce specific p^ormance of contracts, requiring the performance or omission of the very acts agreed upon. The remedy is thus made identical with the right withheld, and the defendant is thereby deprived of the op- tion, which the legal remedy practically gives him, to disregard the actual obligation by which he Is bound, and pay a sum of money in the place thereof. Pom. Spec. Perf. Cont. § 3. The Inadequacy of the legal remedy, by com- pensation in damages. Is generally regarded as conspicuous In cases of agreements for the sale and purchase of real estate^ each parcel of which differs in some respects from others. SPECIFIC PERFORMANCE OF CONTRACTS. 731 Sucli property Is usually bought because it possesses some feature -which attracts by per- sonal gratification, and determines the pur- chaser to make some particular use of it The present case is not an exception to this usual condition. The description of the prop- erty discloses Its boundary upon the shore of the Newark Bay, with its expanse of water, and the occupancy of it by the complainant Indicates that he has determined to make it his residence, and his expenditures upon it give evidence of his appreciation of its situa- tion and surroundings. It is thus made plain that compensation in damages will not be the full measure of relief which a breach of the contract by the defendants, In justice, demands. Tliis situation primarily leads to a critical examination of the contract and the meaning of its clause which I have quoted, to ascertain the correctness of the defendants' assumption that a stipulated sum has been fixed as damages to be had for the mere non- performance of the contract by the defend- ants. That which was contracted foir was the purchase and sale of land. A portion of the purchase money was to be paid at once, and the purchaser was to go into possession pending the execution and delivery of the deed, when the remainder of the purchase money was to be paid. It was in contem- plation that he would proceed to repair, im- prove, and furnish the property. In the event of the defendants' failure to deliver the deed, he was to surrender the possession of the land to their agent; receive back the pur- chase money paid, together with his expendi- tures, not exceeding $1,250. That repayment and surrender were expressly made depend- ent upon the failure of the defendants to de- liver the deed. In this arrangement, which contemplated repayment upon the happening of the one event, — failure to deliver the deed, —was Interpolated the parenthetical clause, that such repayment was to be accepted by the complainant as liquidated damages for "any breach" of fiie contract by the defend- ants. As the repayment was limited to a single event, and made payable upon the hap- pening of that event only, the words "any breach," in the parenthetical clause, could not have a broader significance than failure to deliver the deed, for the complainant was bound to accept the repayment only in that event It is to be noted that upon the de- fendants' failure to deliver the deed, the com- plainant is to have merely pecuniary reim- bursement, and not compensatory damages. He is to have nothing for his disappointment, trouble, and discomfort The inference from a submission to such inadequate damages is, I think, that a stronger meaning was intend- ed to be given to the word "failure" than mere arbitrary refusal of the defendants to deliver the deed. "Failure" is the result of action 'Which predicates earnest effort and not mere inaction and refusal to do. It Is in this sense, I think, that the word was used in this contract It demanded from the de- fendants a bona fide effort to deliver the com- plainant a deed which would vest in him the titie to the property. It was failure after such effort that was to constitute the breach for which reimbursement was to be accepted as satisfaction. It is obvious that the con- tract was not an alternative one, to convey or pay damages. Damages were to be paid upon a "breach" of the contract which pri- marily required an honest effort to perform, and failure, and do not become a factor m the consideration of remedies until that preced- ent condition Is performed. The professed Inability of James Tyrrell to deliver the deed required does not prove the inability of him and his cotenants to carry out the contract upon their part The case presented, then, is this: A certain sum is agreed upon as satis- faction to the complainant if bona fide effort to make him title fails. So far as it appears by the bill, the defendants can make that title, and the aid of this court is invoked to compel them to do so. I think that as the facts now appear, the complainant is clearly entitied to a decree, and that the case is not brought within the controversy referred to in Crane v. Peer, 43 N. J. Eq. 557, 4 Aa 72, or affected by the intimation of Chancellor Halsted in St Mary's Church v. Stockton, 8 N. J. Eq. 520, as the defendants' proposition suggests. The motion will be denied, with costs. AVL. ■" ^«- c --, L'.t^XM "^ c ■> ... I 7»2 SPECIFIC PERFORMANCE OF CONTRACTS. GRUBB et al. v. SHARKEY et al. (20 S. E. 784, 90 Va. 831.) Supreme Court of Appeals of Virginia. Dec. 22, 1894. Appeal from circuit court, Botetourt county. Bill by one Sharkey and others against one Grubb and others. Decree for complainants, and defendants appeal. Affirmed. Benj. Haden and John H. Lewis, for ap- pellants. J. 5. H. Figgatt and C. M. Luns- ford, for appellees. LEWIS, P. This was a suit for specific performance. In April, 1887, the appellees conveyed to the appellants a tract of land con- taining about 19 acres, adjoining the lands of the Lynchburg Iron Company, situate in Bo- tetourt county. Below and contiguous to this land is a grazing farm owned by the appel- lees, which, at the time of the conveyance to the appellants, was mainly, if not solely, wa- tered by a stream flowing through both tracts. The land was purchased by the appellants for the purpose of erecting and operating thereon an ore washer. It was accordingly covenanted in the deed of conveyance that if the said stream should be made continuously muddy by the proposed ore washing, so as to render the water therein unfit for stock, the appellants would lay a %-inch pipe from a certain spring branch above, so as to conduct a supply of clear water over the land to a designated point on the appellees' farm, and there erect a trough for the use of stock. The bill, which was filed In October, 1889, after setting out substantially the foregoing facts, alleges that this covenant has not been observed by the defendants (the appellants here); that they have not laid a pipe and erected a trough, as they covenanted to do, notwithstanding the water in the said stream has been continually muddy and unfit for stock, in consequence of washing ores on the land, since the date of the conveyance, and although they have often been requested so to do. The bill also states that the complain- ants have been compelled. In consequence of the defendants' default, to drive their stock a considerable distance to water, whereby they have been greatly inconvenienced and dam- aged. And the prayer of the bill is that the defendants be required to specifically perform their covenant, and to make proper compen- sation to the complainants for the damage sustained by them, etc. The defendants being nonresidents, there was an order of publication. An attachment was also sued out, which was levied on the said 19 acres of land. At the May term, 1890, a decree was entered for the specific perform- ance of the contract, with a further provision that the defendants pay to the complainants $750 damages for the breach of the contract At the ensuing October term, the defendants appeared, and filed their petition, praying that the decree be set aside, and that they be al- lowed to make defense. They thereupon,, with the leave of the court, demurred to the bill, and also answered. In their answer they stated, among other things, that since the commencement of the suit they had laid the pipe and erected a trough as they had agreed to do, and that this was done before the decree was entered. The cause was then referred to a commissioner, with directions to ascertain and report, among other things, what damages, if any, the complainants had sustained by reason of the alleged breach of the contract, in obedience to which the com- missioner subsequently reported that they had been damaged to the amount of $900. This finding was afterwards, upon exceptions to the report, reduced by the court to $750, and by the same decree it was ordered that "per- formance of said contract be confirmed to the complainants." 1. A number of objections have been urged to this decree, none of which, in our opinion, are well founded. In the first place, the case stated in the bill is undoubtedly within the jurisdiction of a court of equity. The con- tract therein sought to be enforced Is not one requiring personal labor, or the exercise of any peculiar skill or judgment, or in- volving the performance of continuous duties and supervision. On the contrary, it is such a contract as could be readily performed bj a lmost any ordina ry jorkroan, and-itaastturg. Ts such tnat jhelFemedy at law f pr itg b r^gf]l_ IsT^ge ciuater~T£is brines the case within the~general rule that a court of equity has) jurisdiction to enforce specific performance st a contract by a defendant to do defined work upon his own property, in the per- formance of which the plaintiff has a ma- terial interest, and which is not capable of adequate compensation In damages; as, for ' example, an agreement on the part of a rail- way company to make an archway under its tracks, or to construct a siding at a par- ticular point for the convenience of an ad- joining landowner. 1 Story, Eq. Jur. § 721a; Storer v. Railway Co., 2 Younge & 0. Oh. 48; Greene v. Railway Co., L. li. 13 Eq. 44. It is, moreover, well settled that, as auxiliary to its authority to decree specific perform- ance, a court of equity may award damages for a breach of the contract, to be assessed either by an issue of quantum damniflcatus or by a master, at its discretion. Phillips v. Thompson, 1 Johns, Ch. 131; Nagle v. New- ton, 22 Grat. 814; CampbeU v. Rust, 85 Va. 653, 8 S. B. 664. This, indeed, is not dis puted. But the appellants contend that their performance of the contract in question be- fore the entry of the decree, although sub- sequent to the filing of the biU, left nothing to be specifically enforced, and consequently that the auxiliary power to decree damages was likewise at an end. In other words, the contention is that, after the pipe was laid and the trough erected, the suit was nothing more than a suit to recover dam- ages, of which equity has not jurisdiction. PECIFIC PERFORMANCE OF CONTRACTS. 733 i But this Is a mistaken view. The court having acquired jurisdiction of the" case .ji fmi BiiuTla We'ground, no subseqiient asLplL ^Ee defendants' could oust t hat jur isdiction. . ;f~principle, as laid" d6Wn ' bf Judge Staples in Walters v. Bank, 76 Va. 12, that, when a court of equity has once acquired jurisdiction of a cause, it may go on to a complete adjudication, even to the ex- tent of establishing legal rights and grant- ing legal remedies, which would otherwise he beyond the scope of its authority. That is a very strong case. The object of the suit was to subject the estate of a married woman to the payment of a certain negotiable note, upon which the appellant was Indorser, or to require the appellant to pay It In the progress of the case, it appeared that there was no separate estate, whereupon it was insisted that, as the supposed existence of a, separate estate was the sole ground for ^oing into equity, the court could proceed no further, and that the bill should be dis- missed. But this view was rejected, and a ■decree rendered against the appellant for the debt, which this court aflarmed, on the principle above stated. So it has been held that where the complainant was originally ■entitled to a specific performance, but pend- ing the suit the subject-matter of the litiga- tion Is established or destroyed, he will not be turned round to his remedy at law, but compensation or damages will be decreed him. 2 Story, Eq. Jur. § 794; Ndson v. Bridges, 2 Beav. 239; Chapman v. Railroad Co., 6 Ohio St 119. 2. As to the further point made by the appellants in the petition for appeal, upon the authority of Pennoyer v. NefE, 95 U. S. 714, that state courts have no power to render, judgments or decrees in personam against nonresident defendants, who are summoned merely by publication, it is enough to say that here the defendants, after rendition of the decree of the May term, 1890, appeared and defended on the merits, thus submitting themselves to the jurisdic- tion of the court; so that the case stands upon the same footing, so far as the power and jurisdiction of the court are concerned, as if they had been personally served with process at the commencement of the suit 3. Both sides complain of the amount of damages awarded; the appellants contend- ing that the amount is excessive, while the appellees insist that the sum reported by the commissioner, viz. $900, ought to have been allowed, and that the circuit court erred in reducing the amount to $750. Without re- viewing the evidence before the commission- er, we deem it suflScient to say that we see no reason to disturb the decree on this or any other point It is therefore affirmed. Decree affirmed. V e. , ^.y- el-f^ -% •f.-f rNTUNCTIOSJS. EOGERS LOCOMOTIVE & MACHINE WORKS V. ERIE RY. CO. (20 N. J. Eq. 379.) Oct Term, *-^/\^i^ «*-jl>C.VA> Court of Chancery of New Jersey. 1869. This was a motion for a preliminary In- jvmction. The argument was had upon a rule to show cause upon the biU filed and an affidavit of James Fisk, Jr., hi reply to the allegation of the bill as to the insolvency of the Brie Railway Comi)any. The bill sets forth that the Erie Railway Company, by virtue of the provisions of the charter of the Paterson & Hudson River Railroad Company, of the lease of that road, and the acts of the legislature giving validity to that lease, and authorizing it to finish and extend that road to the Hudson river, and confirming the reorganization of the Erie Railway Company under its present name, became a common carrier between the city of Paterson and the present termination of its railway near the Hudson river, at the Long Dock; that it ^ wna 'bouiifl to _^aEry ^J ^ight iv amV^^^iajCoJi^S^o^^^st^^B jratesJ^^Ta ■^^fnoHve ^eSgiBS^f senE'~awr~''^ !se actir" wKcril' f o T^ loco - ie°^ize usually made 35d ^""■TiOT^iaffianEsr wo^ amoimt to $31.80 for each locomotive; that the company or some of its directors have devised a scheme for the purpose of Il- legally increasing the rate to be charged for such transportation; that they procured the company to be chartered by the name of the "Union Locomotive Express Company," with power to forward and carry locomotives and other property; and that the Erie Railway Company or its stockholders or directors are using this express company, and combining with its directors, for the purpose of increas- ing the rates of transportation from Pater- son to Long Dock; and that it has entered into an agreement with the express company that it should have the exclusive right of transporting locomotives over the road; that the express company have the power to charge for forwarding without any limit as to amount, and do actually charge $250 for transporting ^aeh locomotive, and as- sume only the llaDility of forwarders, and the Erie Railway Company refuses to accept for transportation at its depot at Paterson any locomotive to be transported to Long Dock, or to transport the same, unless through the express company; that the com- plainant built two trucks, on which it was in the habit of placing its engines and draw- ing them over the street railway from the manufactory to the depot of the Erie Rail- way Company at Paterson, which were suita- ble to rim upon that road, and which could be taken to tiong Dock with the locomotives thus loaded upon them; that the Erie Rail- way Company, when these trucks so loaded were last tendered to it for transportation, caused them to be taken over its road in the opposite direction, into the state of New York, and detains and keeps them there, so- that the complainant has no means to offer its locomotives to the Erie Railway Com- pany for transportation, and that this is done Intentionally to carry out the fraudulent com- bination with the express company, so that the latter must be employed, at their exorbi- tant rates, to carry all the locomotives; and that new trucks cannot be constructed or pro- vided under several months. The bill further alleges that the manufac- ture of locomotives has become a large and imiwrtant business in Paterson, and that the complainant and others have established their worlfs there on faith of the means of trans- portation provided by law over the railway of the defendants; that being compelled to pay such sum for transportation will compel them to add the amount to the price of their locomotives, and will injure their business in competition with other establishments, and omission to deliver would make them liable to damages. The bill alleges that this combination of the Erie Railway Company is a fraud upon the stockholders, because they receive by the agreement only $10 for each locomotive transported by the express company, when, by law, they would he entitled to receive, and would receive from the complainant and others, more than three times that amount for the same service, if performed directly for them. The bill prays for an Injunction to direct and compel the Erie Railway Company to re- turn the two trucks to Paterson into the pos- session of the complainant, and to transport to the wharf, at Long Dock, all locomotive engines of the complainant that may be de- livered at the depot at Paterson, at the rates prescribed by law, and to direct and compel it to perform its duty as a common carrier; also to restrain It from removing the com- plainant's trucks out of its possession, and from preventing it from obtaining possession thereof, an^restraining the other defendants, that is, Jay/Gould, James Fisk, Jr., the Union Locomotive Express CompaBy,^.N. Marsh Kasson, James G. Dudley, Henry J. Smith, and C. Valletta Kasson, from entering Into any agreement or doing anything to prevent or hinder the Erie Railway Company from transporting the locomotives of the complain- ant over its road. , The bill charges that the Union Express Company was got up by Jay Gould, James Fisk, Jr., and Frederick A. Lane, three of the directors of the Erie Railway Company, in combination with N. Marsh Kasson, James 6. Dudley, Henry J. Smith, 0. Valletta Kas- son, and P. K. Randall, as a contrivance to shift the duties of common carriers from the Erie Railway Company, and to enable the defendants, or some of them, to make Il- legal and exorbitant charges for transporta- tion. A. B. Woodruff, for the motion. L. Za- briskie, opposed. INJUNCTIONS. T35 THE CHANCELLOR. If the allegations of the bill are true, and they are supported by the affidavits annexed, and are not de- nied by answer or affidavit, they present a flagrant case of refusal to perform the du- ties imposed upon it by law, and for which its franchises were granted, by a corpora- tion public in its object and almost such in Its character. Railway companies have dele- gated to them as part of their franchises much of the sovereign power of the state. In consideration of their discharging part of what are the proper duties of government, that is, providing the means of commerce and intercourse by constructing the roads which are the avenues of that commerce. And when, being authorized, they assume to operate these roads, they have devolved up- on them in consideration of that franchise the additional duty, which is not one of the proper functions of the government, of com- mon carriers, and are obliged to transport all merchandise and passengers on the terms fixed in the grant through whigh they obtain their franchises. In this case the wrong is attempted to be aggravated by the charge that it is done through a corrupt combina- tion between the directors of the company and others, by which these directors, in vio- lation of their duties and trust, conspire for their own emolument to cause the company under their control to refuse to perform the duties imposed on it by law. In such manner that the public are injured by extortionate charges, and the stockholders defrauded of their just dues, and also in such manner that the state can cause the valuable fran- chises of which they are possessed as a right of property to be annulled and forfeited for the willful violation of the compact by which they were granted. These allegations may not be true, and may be totally disproved at the hearing; but as their truth is sworn to, and is not denied, I am hound to treat them as true for the pmv poses of this application. So far as they relate to dereliction in duty to the stockhold- ers of the Erie Railway Company, the com- plainant cannot have here any relief based upon them. I will also assume for the purposes of this application that the Brie Railway Com- pany having, as the legal assignees of the Paterson & Hudson River Railroad Comr pany, and of their franchises. Including the right to finish the road to the Hudson river and to tunnel Bergen hill, constructed the extension of the road to the Hudson river, holds it as part of that road, and subject to all the restrictions and duties imposed upon that road by the charter of the original com- pany; and that it Is therefore a common car- rier, bound to transport goods over this ex- tension, as well as over the residue of the road, at the rates fixed in the charter. Whether this duty could be performed by delegating to another person or company who would discharge It in the same manner, and for the same compensation, and with the same liabilities, need not be discussed here. They have attempted to delegate it to a company who do not attempt or offer to perform the duty as common carriers, or subject to the liabilities of common carriers, but only as forwarders, and who charge for this imperfect performance more than four times the rate authorized to be charged by the Erie Railway Company. They there- fore do not provide any one to discharge the duty required of them, and they utterly re- fuse to perform it themselves, and have bound themselves by a contract that no one but the express company shall perform it. Such contract may be void, both as ultra vires and contrary to law, yet it is proper to be .considered as showing the Intention of the company not to perform this part of their duty. The injury to the complainant, too, is of that nature, that while there may be aj remedy at law, as by recovery of damage for Injury, yet is such that cannot be ad& quately relieved by suits for damages. I is continually recurring, and will require continued and repeated suits, and continued litigation, and the expenses of each suit would make the recovery of the excess paid an inadequate remedy. I now assume that the Erie Railway Company Is, and will re- main, solvent. The affidavit of the proper officer of the company, which is legally be- fore the court, clearly shows that the com- pany is not solvent, or likely to prove so. But, although the injury is proved, and the subject-matter is such that a court of equity will not refuse relief, on the ground that there is adequate relief at law, the question remains whether the injunction here applied for can be granted, or any part of it. There are injuries which this court cannot redress, although there may be no satisfactory remedy at law, and those which this court can redress, for which no pre- liminary Injunction can Issue. The two chief objects for which the in- junction is asked are to compel the railway company to return to the complainant its trucks, and to compel it to transport the loco- motives of the complainant from Paterson to Long Dock at the legal rates of freight i These are to compel the company to act, not to refrain from acting. And the act com- manded Is the whole duty of the company, and its performance is the whole right of the complainant It is not the case of a prohibition of keeping up a structure or maintaining some material object, the erec- tion and continuance of which is the act that deprives the complainant of his right, and the destruction or removal of which would restore the enjoyment of It It is contended by the defendant that a mandatory Injunction, or one which com- mands the defendant to do some positive act, will not be ordered, except upon final hearing, and then only to execute the decree 736 INJUNCTIONS. or Judgment of the court, and never on a I preliminary or interlocutory motion. Or that, if it ever does so issue, it is only in cases of obstruction to easements or rights of like nature, in which a structure erected and kept as the means of preventing such enjoyment will be ordered to be removed, as part of the means of restraining the defendant from Interrupting the enjoyment of the right. Although there is some conflict in the au- thorities and decisions, I am of opinion, after examining into them, that this position, with the limitation, is the established doc- trine of the courts of equity, and that it is a proper and discreet limitation of the use of the preliminary injunction, as well as sus- tained by the weight of authority. .Tustice Story, in 2 Eq. Jur. § 861, says: "A writ of injunction may be described to be a Judicial process, whereby a party is required to do a particular thing, or to re- frain from doing a particular thing, accord- ing to the exigency of the writ. The most common form of injunction is that which operates as a' restraint upon the party in the exercise of his real or supposed rights, and Is sometimes called the remedial writ of injunction. The ot her _form, commandi ng an act t o be. doner. I s sometimes c all ed ffie* ' 3ui|iffl§I]]]wrtC because"rt issues "altST a de^. 'Ta'ee, and 1l~"ln'*TEi~nature otista e^eeaogni to efllorce ttie_jame7^ "5f£ ' Eden*"begiiis^ his treatise on Injunc- tions by saying: "An injunction is a writ Issuing by the order and under the seal of a court of equity, and is of two kinds. The one is the writ remedial; for, in the endless variety of cases In which a plaintiff is enti- tled to equitable relief, if that relief con- sists in restraining the commission or con- tinuance of some act of the defendant, a court of equity administers it by means of the writ of injunction. The other species of Injunction is called thg^lTOfgiaTwrit, and - Tasmig'''mliggaTe1irt;rT'' aegfeerttnrTrTnTT^ "IgfTy aFsTnB^ai~TJ§TiI|rTSnra^]|naturej^^ execuTOiir* ^" " "' ' — — ~— ■ - f Til "nfewT Inj. p. 260, It is laid down: "It (seems settled that equity has not Jurisdlc- jtlon to compel, on motion, the performance f of any substantive act" In 3 DanieU, Oh. Prac. 1767, it is said: "It is to be observed that the court wUl not, by I injunction granted upon interlocutory appli- J cation, direct the defendant to perform an ( act, but might, upon motion, order the de- fendant to pull down a building which was clearly a nuisance to the plaintiff." Lord Hardwicke, in an anonymous case in 1 Ves. Jr. 140, restained the further dig- ging of a ditch, but refused, on motion be- rore answer, to order the part dug to be filled up. Chancellor Vroom, in Attorney-General v. New Jersey R. & Transp. Co., 3 N. J. Eq. 141, says: "The injunction is a preventive remedy. It interposes between the complain- ant and the Injury he fears or seeks to avoid. If the Injury be already done, the writ can have no operation, for it cannot be applied correctively, so as to remove it." In that case, the Injury done was driving piles for a bridge, so as to obstruct navi- gation. A mandatory Injunction to remove them would have remedied the whole evil. In Hooper v. Broderick, 11 Sim. 47, a preliminary injunction to restrain a tenant from discontinuing to keep an inn was dis- solved on the ground that it was mandatory, the same as if he was commanded to keep an inn. in Blakeman v. Navigation Co., 1 Mylne & K. 154, Lord Brougham, after a review of the cases (page 188) and quoting with approbation what Lord Hardwicke said in Kyder v. Bentham, that "he had never known an order to puU down on motion, and but rarely by decree," refused so much of the injunction prayed for as directed the defendant, Powell, to fill up the collateral pond. The cases of the East India Co. V. Vincent, 2 Atk. 83; Spencer v. London and Birmingham Hallway Co., 8 Sim. 193; and of Durell v. Prltchard, 1 Ch. App. 244, are to the same effect And In the last case. Lord Romilly, M. K., held that the court, upon final hearing, could not issue a mandatory injunction directing a wall to he taken down; yet the lords justices on ap- peal held that it had the power, but that in the case before them it should not be ex- ercised, and dismissed the appeal. There are cases In which mandatory in- junctions have been ordered on motion, but they are ail, or nearly all, cases in which some erection placed and maintained by the deiendant to effect the injury complained of was ordered to be removed, or its mainte- nance forbidden, on the ground that the defendant effected the act he was restrained from doing by continuing such section. In Robinson v. Lord Byron, 1 Brovra, Ch. 688, which is referred to as the leading case for mandatory injunction. Lord Thurlow or- dered an injunction to restrain defendant from using his dams and other erections, so as to prevent the water from flowing to the com- plainant's mill in such quantities as It had ordinarily done before April 4, 1785. The ef- fect of this may have been to compel the re- moval of the part erected after 1785. But as the case states the injury complained of to be that Lord Byron so used his dam and gates as to let the water flow irregularly, to the complalnant^s injury, I do not see in the report any direction, express or implied, to take down anything, or to do any act what- ever. In Lane v. Newdigate, 10 Ves. 192, the ob- ject of the injunction was to compel the re- storing of a stop gate which was viTongfully removed. Lord Bldon would not order It to be restored, but restrained the preventing the use of the water by complainant by the removal of a stop gate, which was equivalent to an order to restore it, and was bo Intended. INJUNCTIONS. 737 In Eanken v. Husklsson, 4 Sims. 13, the court restrained the defendant from permit- ting an erection to remain. This was equiv- alent to an order to remove it; but it is like the others, simply removing that by which the defendant continued, the nuisance to be re- strained. In Mexborough v. Bower, 1 Beav. 127, Lord Langdale ordered an injunction to restrain permitting the communication complained of, by which complainant's mine was flooded, to remain open. The Injunction was to prevent the flowing of the mine, by restraining or re- moving the means by which the defendant continued to do it. In North of England By. Co. v. Clar- ence By. Co., 1 Golly. 507, the Injunction prayed for was against maintaining a wall, and after the rights of the parties had been referred to, and settled in the court of the exchequer. Vice Chancellor Bruce hesitated to grant the Injunction, although he held (page 521) that mandatory injunctions might be granted; yet he referred the case to Lord Chancellor Lyndhurst, who, it is stated, grant- ed the injunction In nearly the terms of the prayer; but whether it included this manda- tory part does not dlstinctiy appear. The case established the right of the complainant to build a bridge over the railway of the defend- ant and to rest the supports of the scaffolding on the soil; and the mandatory prayer was that defendants should remove a wall placed on their grounds to hinder it. In Greatrex v. Greatrex, 1 De Gex & S. 692, the Injunction was against preventing the plaintiffs from having access to the books of the firm, and against removing them from, or keeping them at, any other place than the place of business of the partnership, as the defendant had removed the books. This was equivalent to an order to restore them, but yet it did not command any act to be done. In Heracy v. Smith, 1 Kay & J. 389, the Injury was covering with tiles the chimneys from the butler's pantry of the complainant Lord Hatherly (the present lord chancellor, then vice chancellor, Sir W. P. Wood), on the authority of Bobinson v. Lord Byron, granted an injunction the effect of which was, and H.& B.EQ.(2d Ed.)— 47 was intended to be, to compel the defendant to remove the tiles; but he declined to adopt the mandatory form, but restrained the de- fendant from doing any act to prevent the smoke from arising. The substance of the judgment is grounded on the power of the court to remove an erection made by the de- fendant to effect the Injury to be redressed, when that erection is the means by which the defendant continues to inflict the injuries from which the court intended to restrain; and the form of it is an acknowledgment of the gen- eral principle that an Interlocutory injimction should not command the doing of any positive act A number of authorities and cases were cit- ed on the argument to show that courts of equity will, in certain cases, decree the resti- tution of particular chattels; but these are all cases where it was so ordered upon final hearing. There is no case of any interlocu- tory Injunction being granted or even applied for, for such purpose. It would be a simple and easy substitute for the action of replevin; and there is nothing in this case to warrant such order, even upon final decree. The value of these trucks can be fully recovered at law, and, as to the use of them in the meantime, new ones could be built sooner than a suit in equity be brought to final hearing. I feel, therefore, constrained to refuse the Injunction so far as these mandatory prayers are concerned. As to so much of the prayer as asks to restrain James Fisk, Jr., and the, other defendants named in it from entering in- to any agreement, or doing anything to pre- ' vent or hinder the Erie Railway Company transporting the complainant's locomotives, 1 think the injunction ought to be granted. They are conspiring with the Erie Railway Company to injure the complainants in a way for which the redress at law Is not ade- quate, and therefore should be enjoined from doing any acts to that end. I do not intend to intimate any opinion upon the question whether this court has power on the final hearing to give the complainants the relief they seek by compelling the Erie Bail- way Company to transport their locomotives at the established fares. 7^7 "^^ C_^.-^._./^ IviuJiy } /LuJ^^y^ f-^-c ■/-^^"^'^ ^i^...-.-^ V 738 INJUNCTIONS. WHITECAR et al. v. MICHEJNOR et al. (37 N. J. Bq. 6.) Court of Chancery of New Jersey. May Term, 1883. Bill for injunction. On motion for manda- tory Injunction. On order to show cause. On bill and answer. S. K. Bobbins and B. ,D. Shreve, for com- plainants. R. S. Jenkins, for defendants. THE CHANCELLOR. The complainants are Rev. Dr. Charles H. Whitecar, a minister of the Methodist Episcopal denomination, who has been duly appointed for the present conference year to the charge over the Meth- odist Episcopal Church at Moorestown, and certain of the members of that church. The defendants are the trustees of that church. The bill states that the defendants, on the 29th of March last, closed the church against the members and congregation, and have kept it closed ever since. It prays an in- junction to compel them to open It for the religious uses to which it was dedicated. It appears from the blU and the admissions of the answer that the church was organized imder the rules, regulations, and discipline prescribed by the general conference of the Methodist Episcopal Church in the United States, and was duly Incorporated on or about the 21st of August, 1815, under the act "to incorporate trustees of religious socie- ties," by the name of "The Methodist Epis- copal Church at Moorestown"; that Rachel S. Andrews, In September, 1858, conveyed to Deacon Brock, Caleb Penimore, Thomas Mar^ ter, James Moore, John Ireland, Isaac Brown- ing, and Paul Crispin, "trustees of the Meth- odist Episcopal Church at Moorestown, in the county of Burlington and state of New Jer- sey," the lot of land on which the church edifice la built, for the use and benefit of the members of the Methodist Episcopal Church at Moorestown, and that afterwards the members of that church built thereon the church edifice in question as a place of wor- ship, according to the rules of faith of the Methodist Episcopal Church in the United States, and subject to Its discipline, and that fthe church edifice has been used as such j from the time of its erection until it was clos- ed by the trustees on the 29th of March last; that on the 27th of that month the ' Rev. Dr. Wiley, one of the bishops of the Methodist Episcopal Church of the United States, and in whom, by the rules and reg- ulations of the general conference, was re- posed the power, and on whom was Imposed the duty, of appointing for the present con- ference year the ministers for the various churches constituting the New Jersey Annual Conference, to which annual conference the church at Moorestown belongs, appointed Dr. Whitecar to that church for that year (being his second annual appointment to that church) as minister in charge, and the latter accordingly entered upon the discharge of his duties, and in the course thereof proceeded to the church building on the 29th of March for the purpose f holding the usual prayer meeting there, but found the doors of the church locked and a notice thereon dated that day, and purporting to be given by the board of trustees and signed by its secretary, that the church would remain closed until fur- ther notice; that he and the members of the church there assembled were compelled to disperse without gaining entrance to the church; that the members present appointed a committee of six of their number to call with the minister upon the president of the board of trustees and learn the cause of the closing of the church and preventing the minister and the members from holding serv- ice therein; that the committee called on the president and made inquiry; that at the time another of the trustees was present with the president; that In reply to the in- quiry the president said that he had not the keys and did not know where they were, and, at the same time, said to the committee that the trustees had the power and au- thority to close the church^Jtait gave no rea- son for doing so; that the committee, on the same occasion, asked him to show them the deed of the diurch property, but he, while admitting that he had it in his house, where the interview took place, refused to show it to them. It also appears, by like statement and admission, that the trustees have kept the church locked ever since the date men- tioned, the 29th of March, and have refused to permit It to be used for public worship or even for the meeting of the quarterly con- ference, which is presided over by the elder of the district. The defendants, by their an swer, assert their loyalty to the Methodist Episcopal Church In all respects, and theli willingness to obey its rules, regulations, ani discipline so far as they comport with thefc* legal obligations, as they understand them under the before-mentioned deed of trust, and allege that their action In closing the church against Dr. Whitecar is in accord- ance with the expressed wishes and deter- mination of the majority of the members of the church, and because they are of opin- ion that the welfare of the church demands that he should not be its pastor. On the argument of this motion It was stat- ed in behalf of the defendants, and it is so averred in the answer, that their action in closing the church was due to the fact that, in view of the trust in the deed for the land on which the church edifice is built, they con- sidered It their duty to obey the wishes of the majority of the members of the church as to who should ofiJciate as its settled pastor, not- withstanding those wishes may be in confiict with the rules, regulations, and discipline of the Methodist Episcopal Church. This view, however, is entirdy erroneous. Not only so, but there is, in fact, no ground whatever for assuming that, by reason of anything in the INJUNCTIONS. 739 deed, they are under any obligation different from that which would devolve upon them merely as trustees of the church had the deed been made directly to the corporation and ex- pressed no trust The deed, as before stated, was made, not to the corporation, but to certain persons who, at the date of the con- veyance, were the trustees of the church. It conveys the property to them with the addi- tion of "Trustees of the Methodist Episcopal Church at Moorestown, in the County of Bur- lington and State of New Jersey," after their names, in trust for that church, and the only proper use and behoof of the members there- of. Neither the defendants nor any of them are parties to that deed, and neither they nor any of them claim by descent, grant, or devise from the grantees therein. They are merely trustees of the corporation, elected in Febru- ary, 1882. Neither th e legal n or theequi- table title to"the "property is in them. The "-tHtter-1«te-Ts~ln^Bre TTOrperationranaP they merely represent the corporation as trustees holding the title of the corporation on a sim- ple trust which makes them bar^ depositaries of the title. Morgan v. Rose, 22 N. J. Bq. 583. And the case would not be different if they held the legal title under the deed. But they ! do not hold that title. By the act of incor- poration the trustees did not acquire the au- I thority which they claim to close the church j building at their discretion. Morgan v. Rose, ; ubi supra. vMo r have they power, under the_dlscjpline ot-thfijchuishijodose itJLgainst_the_duiy_ ap- pointed preaehOTJ~llK(ugir'a majoHfEy of the mSbefs'are'desirous that they should do so. Nor have they such power under the trust in ' the deed. The trust is that the grantees therein named, and the survivors of them, their successors and assigns, will hold the property for the only proper use and behoof" of the members of the Methodist Episcopal Church at Moorestown, their successors and assigns, forever. It is admitted that that church was organized under the rules, regula- tions, and discipline prescribed by the gener- al conference of the Methodist Episcopal Church of the United States, and It is not denied that it has been so ever since. It was Incorporated in 1815, now nearly seventy years ago. The very name of the corporation indicates its character and connection. As a Methodis t Episcopal chi achjt_is subject to those rtjfisj-regiilattons, and^discipJiner ITW not alleged thaF the appoilrtmenr^of tha preacher was unauthorized or Irregular, but that a majority of the members of the church desire that the preacher appointed shall not be permitted to act as the pastor of the church,— to discharge the duties of the place to which he has been duly appointed. It is not claimed that there is any warrant In the discipline of the church for the action of the trustees, nor that the discipline provides that the wishes of the majority of the members shall determine whether the preacher appoint- ed to the charge shall act as such or not. If the church belongs to the Methodist Episcopal connection, as it is admitted it does, there is no warrant of law, discipline, or usage for the acts of the defendants. What is known as the itinerancy of the preachers, and the abso- lute power of the bishops over the appoint- ments of the preachers to the churches, is part of the discipline. Chief Justice Gibson said, in Com. v. Cor- nish, 13 Pa. 28S, 290, that in the Methodist Episcopal Church in England and America the election and ordination of the priesthood by the general or annual conference, the ordina- tion of them by laying on of hands by a bishop and elders, and fixing of their appointments by the bishop, are cardinal points, the last of them a distinctive one. He adds that it is the rock on which the church is founded and on which it has prospered. Remove the church from it, he says, and it ceases to be Metho- ~3istic; and he also says that the election and ordination of elders, and the fixing of their appointments, are regulated by articles which are fundamental. Said Judge Edmonds, in the ease of People v. Steele, 2 Barb. 397, 413: "I am irresistibly conducted to the conclusion that the itinerancy of the priesthood, enforced by the power of the episcopacy. Is now and for more than a century has been the well-estab- lished practice of this church, is clearly defined In the doctrines and discipline, and has been again and again understandingly and advised- ly justified and defended by the highest ecclesi- astical tribunal known in its constitution." In the case last cited, which is the leading case on the subject, and which in Its circumstances was s,ubstantially identical with this, the very question presented here as to the right of the trustees ofTKMetiiodist Episcopal church to. exclude' the blslop'S' appointee" "Was"J53iclaliy decided against the trustees:," Therer" as ~h6fe7 the trustees claimed to be supported In their action by the majority of the members of the church. See, also, Brunnenmeyer v. Buhre, 32 111. 183. But it is urged by the defendants that ac- cording to the practice of this court there should be no mandatory injunction In this case before the final decision of the cause. On the filing of the bill an injunction was grant- ed, but it was not mandatory in its character. It indicated that in the judgment of the court, on the case made by the bill, the defendants ] ought to be restrained from closing the church , building against the preacher and the church, i It did not, however, require them to open it, and they refused to open It under the non- mandatory prohibition. Their refusal was not a violation of the command of the writ, and the application for an attachment against them for contempt was therefore properly de- nied. The present application was subsequent- ly made to me for a mandatory injunction. I thereupon granted an order to show cause why such an injunction should not be granted, and the defendants then put in their answer. The whole case is now before me, and the de- fendants have been heard upon the applica- 740 INJUNCTIONS. tion. I am of the opinion that judged by tlielr answer, and assuming the truth of the facts therein alleged, they are without justifica- t tion for the act complained of; and I see no ' reason, either Jurisdictional or prudential, for refusing the writ While the jurisdiction of the court to interfere by way of mandatory injunction should be exercised with the great- est possible caution, yet where the right to re- strain the violation of which the Injunction is asked for is clearly made out, and there is a present want of the use of that right, the court should not hesitate. The court is al-. ways very reluctant to grant a man3al^7 Tiijun^ctibn oh ah inter!Kutory appncat JonTTSut" — wE§fe"exfreme or very _serious~aamage woulff" — Snsi35"fiom wittholding it, as m~cases ot iff" TSffCTOTcejwith easemen ts or other cases fl fc. '^ndtogjmgjedftte. rellem_^wiji De ^nted. Joyce, Prin. InJ. 57; Rogers Locomotive & Machine Works v. Brie R. Co., 20 N. J, Eq. 379; Thropp v. Field, 26 N. J. Bq. 82; Long- wood Valley R. R. Co. v. Baker, 27 N. J. Eq. 166. In this case it is not reasonable, under the circumstances, to permit the defendants to deprive the church of the use of the edifice imtil the final hearing. The property is held, by the defendants on a simple trust, and thej are unwarrantably withholding the use of it from those for whose use they hold it. They have been heard and thehr defense fully laid before the court and considered. There will\ be an injunction commanding them to desist] and refrain from continuing to keep the church/ closed at such times as to prevent the preach-j er, Dr. Whitecar, and the members of the church, from using it for the purpose of relig- ious worship and church business. <>i^.cztJLA %M.«.-^^-^-^^ ^ZZ:z^l^^ .^^^-^oL^l INJUNCTIONS. 743 WATSON T. SUTHERLAND. (5 WaU. 74.) Supreme Court of the United States. Dec, 1866. Appeal from circuit court of the United States for the district of Maryland. Watson & Co., appellants in the suit, hav- ing issued writs of fieri facias on certain judgments which they had recovered in the circuit court for the district of Maryland against Wroth & Fullerton, caused them to be levied on the entire stock in trade of a retail dry goods store In Baltimore, in the possession of one Sutherland, the appellee. j Sutherland, claiming the exclusive owner- ship of the property, and insisting that Wroth & Fullerton had no interest whatever In It, filed a bill in equity, to enjoin the further prosecution of these writs of fieri facias, and so to prevent, as he alleged, irreparable in- jury to himseU. The grounds on which the bill of Sutherland charged that the injury would be irreparable, and could not be com- pensated in damages, were these: that he was the bona fide owner of the stock of goods, which were valuable and purchased for the business of the current season, and not aU paid for; that his only means of pay- ment were through his sales; that he was a young man, recently engaged on liis own account in merchandising, and had succeed- ed in establislung a profitable trade, and if his store was closed, or goods taken from him, or their sale even long delayed, he would not only be rendered insolvent, but Ills credit destroyed, his business wholly broken up, and his prospects in life blasted. The answer set forth that the goods levied on were really the property of Wroth & Ful- lerton, who had been partners in business in Baltimore, and who, suspending payment In March, 1861, greatly in debt to the appel- lants and others, had, on the 27th October, 1862, and under the form of a sale, conveyed the goods to Sutherland, the appellee; that Sutherland was a young man, who came to this country from Ireland a few years ago; that when he came he was wholly without property; that since he came he had been salesman in a retail dry goods store, at a small salary, so low as to have rendered it impossible for him to have saved from his earnings any sum of money sufficient to have made any real purchase of this stock of goods from Wroth & Fullerton, which the answ» set up was accordingly a fraudulent transfer made to hinder and defeat creditors. It further stated that the legislature of Maryland had passed acts staying executions from the 10th of May, 1861, until the 1st of Novembw, 1862; that previous to the 1st November, 1862, Wroth & Fullerton had de- termined to pay no part of the judgments rendered against them; and that from the 10th May, 1861, until the 1st November, 1862, judgments, amounting to between $30,000 and $40,000 had been rendered against them; that between the date of the suspension, March, 1861, and the 27th October, 18C2, they had sold the greater portion of their goods, \ and collected a great many of the debts due them, but had paid only a small portion of those which they owed; secreting for their own use the greater portion of the money collected, and with the residue obtaining the goods levied upon. It added that there was no reason to sup- pose that the levy aforesaid, as made by said marshal, would work irreparable injury to the appellee, even if the goods so levied on were the property of the complainant, as property of the same description, quantity, and quality, could be easily obtained in mar- . ket, which would suit the appellee's purpose as well as those levied upon, and that a jury would have ample power, on a trial at com- mon law, in an action against the respond- ents, now appellants, or against the marshal on his official bond, to give a verdict com- mensurate with any damages the said ap- pellee could sustain by the levy and sale of the goods aforesaid. On the filing of the bill a temporary In-\ f Junction was granted, and when the causes was finally heard, after a general replication! filed and proof talsen, it was made perpetual./ These proofs, as both this court and the one below considered, hardly established, as respected Sutherland, the alleged fraud on creditors. The appeal was from the decree of per- petual Injunction. Mason, Campbell & McLaughlin, for de- fendants. Wallis & Alexander, contra. Mr. Justice DAVIS delivered the opinion of the court There are, in this record, two questions for consideration. Was Sutherland entitled to / invoke the interposition of a court of equity ? and, if so, did the evidence warrant the ^ court below In perpetuating the injunction? It is contended that the injunction should have been refused, because there was a com- plete remedy at law. If the remedy at law is sufficient, equity cannot give relief, "but It is not enough that there is a remedy at law; it must be plain and adequate, or in other words, as practical and efficient to the ends of justice, and its prompt administra- tion, as the remedy in equlty."i How could Sutherland be compensated at law, for the Injuries he would suffer, should the grievan- ces of which he complains be consummated? If the appellants made the levy, and pros- ecuted It In good faith, without circumstan- ces of aggravation. In the honest belief that Wroth & Fullerton owned the stock of goods (which they swear to In their answer), and It should turn out, in an action at law insti- tuted by Sutherland for the trespass, that the merchandise belonged exclusively to him. It Is well settled that the measure of dam- I Boyce's Bx'rs v. Grundy. 3 Pet. 210. 742 INJUNCTIONS. ages, If the property were not sold, could not extend beyond the Injury done to It, or, If sold, to the value of I^ when taken, with In- terest from the time of the taking down to the trial. 2 ' And this is an equal rule, whether the suit is against the marshal or the attaching cred- itors, if the proceedings are fairly conduct- ed, and there has been no abuse of authority. Any harsher rule would Interfere to prevent . the assertion of rights honestly entertained, U , /i4id which should be judicially Investigated ' Mand settled. "Legal compensation refers ij/" /solely to the Injury done to the property tak- / j en, and not to any collateral or consequen- I tlal damages, resulting to the owner, by the nrespass."» Loss of trade, destruction of ■credttr and failure of business prospects^ are 'coDartef al or^consequehllal damages, which" it - l8~cIaimeil~wouId~result from "the trespass, but__for wHck compensation cannot be awaxd- jd j n a tr ial at law, "Commercial ruin to Sutherland might, therefore, be the effect of closing his store and selling his goods, and yet the common law fail to reach the mischief. To_preYent a consequence like this, a court of egul^ /steps "iSParfests'tfie proceedings in limine; brings the parties before it; hears their al- legations and proofs, and decrees, either that the proceedings shall be unrestrained, or else perpetually enjoined The absence of a '"plain and adegagta-^emfijy^^atjawaffords t he only teSt o f equity'jurisdj ction, aScTSe' g^plication of this principle £b ft particular case, must depend altogether upon the char- acter of the case, as disclosed in the plead- ings. In the case we are considering, it is very clear that the remedy in equity could alone furnish relief, and that the ends of justice required the injunction to be issued. The remaining question In this case Is one of fact. The appellants. In their answers, deny that the property was Sutherland's, but Insist » Conard v. Pacific Ins. Co.. 6 Pet. 272; 282. » Pacific Ins. Co. v. Conard, 1 Baldw. 142, Fed. Gas. No. 10,647. that it was fraudulently purchased by him of Wroth & Fullerton, and is subject to the payment of their debts. It seems that Wroth & Fullerton had been partners In business In Baltimore, and suspended pay- ment In March, 1861, In debt to the appel- lants, besides other creditors. Although the appellants did not recover judgments against them until after theh: sale to Sutherland, yet other creditors did, who were delayed In con- sequence of the then existing laws of Mary- land, which provided that executions should be stayed until the 1st of November, 1862. Taking advantage of this provision of law, the answer charges that Wroth & Fullerton, after their failure, collected a large portion of their assets, but appropriated to the pay- ment of their debts only a small portion thus realized, and used the residue to buy the very goods In question, which Sutherland fraudulently purchased from them on the 27th of October; 1862, In execution of a com- bination and conspiracy with them to hin- der, delay, and defraud their creditors. The answers also deny that the Injury to Suther- land would be Irreparable, even If the stock were his, and Insist that he could be amply compensated by damages at law. After gen- eral replication was filed, proofs were taken, but, as In all contests of this kind, there was a great deal of Irrelevant testimony, and very much that had only a remote bearing on the question at Issufe between the parties. It ia unnecessary to discuss the facts of this case, for it would serve no useful purpose to do so. We are satisfied, from a consideration of the . whole evidence, that Wroth & Fullerton act- ed badly, but that Sutherland was not a/ party to any fraud which they contemplated/ against their creditors, and that he made the \ purchase In controversy, In good faith, andj for an honest purpose. The evidence also shows conclusively, that had not the levy been arrested by Injunc- tion, damages would have resulted to Suth- erland, which could not have been repaired at law. The decree of the circuit court Is, there- fore, affirmed. INJUNCTlONa. 743 McHENRY V. JEWETTT. (90 N. Y. 58.) Court of Appeals of New York. 1882. Action by one McHenry against one Jew- ett From an order of the General Term affirming an order of the Special Term grant- ing a preliminary Injunction restraining de- fendant from voting on certain stock either In person or by proxy, or from giving a proxy pendente lite, defendant appeals. Reversed. W. W. MacFarland, for appellant B. F. Dunning, for respondent ANDREWS, C. J. The complaint shows that the plaintiff Is pledgor of shares of rail- road stock transferred on the books of the company to the defendant as trustee for the pledgee, and the action is brought to restrain the defendant from voting upon the shares at the meetings of stockholders, which it is alleged he has heretofore done, and claims the right to do In the future by reason of his title and right as trustee of the stock. The order from which this appeal is taken grant- ed a temporary injunction restraining the defendant, pendente lite, from voting on the shares. We think the Injunction was im- properly allowed, for the reason that it does not appear from the complaint that the plaintiff is entitled to the final relief for which the action is brought, and in such case a temporary injunction is unauthorized. Code, § 603. It is claimed on the part of the plaintiff that within the general rule that a pledgee has no right to use the thing pledged, the defendant is not entitled to vote upon the shares, which it is insisted is a use of the shares in violation of this rule. On the other hand, the defendant claims that the voting power passes to the pledgee of corpo- rate shares transferred on the books of the corporation to the pledgee, as incident to the pledge, and according to the presumed intention of the parties. Without consider- ing this question, but conceding the plain- tiffs claim, it does not follow that he Is en- titled to an injunction restraining the de- fendant from voting on the shares. ,It is nnf- i^iif^ cient to authorize the remedy by in- junctio n that a„Yi, o;^atian (ft a naked _j[egal^ right oif property is threatened,__There must ^ some special ground of jurisdiction, and where an injunction is the final relief sought facts which entitie the plaintiff to this rem- edy must be averred in the complaint and established on the hearing. The complaint In this case is bare of any facts authorizing final relief by injunction. It is true that it is alleged that the defendant by the use of the shares has been enabled to a great extent to control the management of the corpora- tion in the interest of the New York, Lake Erie & Great Western Railway Company, with Uttie or no regard to the best Interests of the company issuing the shares. But there are no facts Supporting this allegation, nor is it averred that the interests of the lat- ter company have been prejudiced, or that the value of the shares has been impaired by the acts of the defendant So also it is alleged that it is greatiy against the plaintiff's in- terest as a shareholder to permit the defend- ant to vote upon the shares, and that the plaintiff will suffer great and irreparable in- jury if the defendant is permitted to do so. But no facts justifying these conclusions are stated, and the mere allegation of serious or irreparable injury, apprehended or threat- ened, not supported by facts or circumstan- ces tending to justify it is clearly insufficient Neither injury to the plaintiff's property, inadequacy of the legal remedy, or any pressing or serious emergency, or danger of loss, or other special ground of jurisdiction, is shown by the complaint. The complaint therefore does not show that the plaintiff is entitied to final relief by injunction. Corpo-' ration, etc., v. Mapes, 6 Johns. Oh. 46; Print- ing Establishment v. Fitch, 1 Paige, 98; High, Inj. §§ 22, 34, 35, and cases cited. The preliminary injimction was granted up- on the complaint, and an affidavit verifying the statements therein, without stating any additional facts. It is doubtless sufficient that a probable or prima facie case be made, to justify the granting of an injunction pen> dente lite, but where, as in this case, it clear- ly appears that the complaint shows no cause of action, then a preliminary injunction is unauthorized, and the granting of It is error of law, which may be reviewed by this court on appeal. Code, § 190, srubd. 2; Allen V. Meyer, 73 N. Y. 1; Wright v. Brown, 67 N. y. 1; CoUins v. Collins,. 71 N. Y. 270; Paul V. Hunger, 47 N. Y. 469. The order of the general and special terms should thererore be reversed, with costs. All concur, except BAPALLO, J., dissenting, MILLER and TRACY, JJ., absent Order reversed. \ Tt^-A v« / , / . :..C-4 744 INJUNCXlOiNS. STEHNAU T. CINCINNATI GAS-LIGHT & 00KB CO. (27 N. B. 545, 48 Ohio St 324) Supreme Court of Ohio. May 5, 1891. Error to circuit court, Hamilton county. Action was brought in the court of com- mon pleas by the gas company against the plaintiff in error to obtain an injunction. In its. petition the company alleged the ex- ecution -of the following contract: "This contract, entered into this' 16th day of March, 1886, by and between the Cincinnati Gas- Light & Coke Company and Chas. J. Stei- nau, proprietor and occupant of the premises Imown as 'The Palace,' and situated No. 80 West Fourth street, between Walnut and Vine streets, witnesseth: First. The said the Cincinnati Gas-Light & Coke Company, for and in consideration of the continued use of not less than three-fourths the pres- ent average consumption of gas on said premises, or other premises which the party of the second part may occupy or remove to, hereby agrees and binds itself to supply, un- der existing rules and regulations, at the premiises above described,— except in cases of unavoidable accident,— all the gas which may be required to properly illuminate the same, for a period of ten years next ensuing. The gas so furnished shall at no time be of less power or pm-ity than the present legal standard. That it will accept in full i)ay- ment for gas so furnished in accordance with the terms of this contract the sum of one dollar and thirty cents per thousand cubic feet, if paid at the office of said gas company within the first three business days after presentation of bill for gas supplied during the period covered by said bill, but in case such payment is not made within the time specified, then the price shall be one dollar and forty cents per thousand cubic feet. Second. That the said Charles J. Steinau, for himself, his heirs, or assigns, for and in consideration of the reduction in price above specified, hereby agrees to re- ceive from the said the Cincinnati Gas-Light & Coke Company aU the gas necessary for the proper illumination of the premises above described, or of other premises to which he may remove, in quantity not less than three-fourths of the present average consumption; and that he vnll not, during the period above named, introduce into or use on said premises oil lamps, electric lights, or other material or power for gen- eral illuminating purposes; or any other gas than that supplied by the said the Cin- cinnati Gas-Light & Coke Company. Third. It is further agreed and understood by both parties to this contract that if during the period above named the city council shall pass, and the gas company accept, any ordi- nance by virtue of which the price of gas to all private consumers in said city is re- duced below the price above specified, then. In that case, the said Chas. J. Steinau shall not thereafter be required to pay any price In excess of that named in said ordinance; but in all other respects this contract shall continue in force during the period afore- said." It further alleged, in substance, that at the date of the contract the regular price for gas to private consumers was $1.70 per thousand cubic feet, with a discount of 10 cents per thousand on monthly bills paid within 5 days after presentation. That price continued until February 28, 1887, when the price was fixed by the city council at $1.25, with same rate of discount as before. The average monthly consumption of gas for the current year on the premises would be over 18,000 cubic feet if the defendant fulfilled his contract The plaintiff duly performed all the stipulations and conditions of the con- tract on its part, and was ready, able, and willing to continue to do so. But the de- fendant, disregarding his obligations under the contract, refused to receive all the gas necessary for the proper Illumination of the premises, and has introduced and is using for general illuminating purposes material or power other than the gas supplied by plaintiff, viz., the Edison incandescent light "By means of the light so created the eon- sumption of gas for Illuminating purposes will be and has been largely reduced below the quantity agreed to be consumed on said premises, as stated in said contract, if not wholly done away with, and the company will lose the benefit of said contract and the gain and profit it is entitled to there, from, and will suffer irreparable damage." Wherefore plaintiff asks that defendant be enjoined from using said electric light, or any material other than gas snppUed by plaintiff, for general Illuminating purposes on said premises, and for such other and further relief as the nature of the case may require. A demurrer to the petition was overruled, and final decree of Injunction entered against the defendant This judg- ment was affirmed by the circuit court To reverse both judgments this error proceeding is brought. Kramer & Kramer, for plaintiff In error. B. A. Ferguson, for defendant in error. SPEAR, J. (after stating the facts as above). In consideration of the continued use of not less than three-fourths the pres- ent average consumption of gas by Steinau, the company stipulated that It would fur- nish him, for 10 years, all the gas neces- sary for the lighting of his place of business at a price much lower than the then regular price, to be paid monthly. Steinau stipu- lated to receive the gas in quantity not less than three-fourths of the then average monthly consumption, for the time named, and further stipulated not to introduce or use electric lights or material for general lUnmiiTiating purposes otber than gas to be furnished by the company. No past consid- INJUNCTIONS. 745 eration appears. The obligations of each party are wholly in covenant, and are wholly executory. In other words, they are promises merely. The prayer is for injunction to re- strain Steinau from using the electric light or any material for general illuminating purposes other than the gas to be furnished by the com- pany. Injunction is frequently resorted to as a means of obtaining specific performance. In this case the purpose intended Is to prevent the use of electric lights in order that Steinau shall thus be compelled to comply with his con- tract, and use the company's gas. The ob- ject thus sought is specific performance. Against the demand of the company it is Insisted that a court of equity will not grant an injunction to restrain a breach of neg- ative covenants where the result will be to effect specific performance of affirmative covenants unless the affirmative stipulations of the complaining party can be specifically enforced against him, and that the petition does not show but that the company has an adequate remedy at law. If either proposition is sound, the demurrer was improperly over- ruled. As already stated, the object of the proceeding is, and the result reached, if it is successful, will be, to specifically enforce the contract as against Steinatk. It seems plain that, if the situation of the parties were reversed, and specific performance were sought against the company, the court would have no power to compel a full compliance by the company with its stipulations to fur- nish all the gas needed for the period pro- vided for in the contract It might be in the power of the court to enjoin the com- pany from turning the gas off from Steinau's service pipes so long as he complied with its reasonable rules and regulations, and it is possible that the company could, by man- damus, be compelled to furnish gas to Stei- nau while it continued to use the franchises and privileges accorded it as a corporation by virtue of the statute and the ordinances of Cincinnati. But these partial remedies. If they might be available, would be wholly apart from the contract; and, be this as it niay„ it admits of no question that, upon any state of facts appearing by the allega- tions of this petition, it is beyond the power of any com^ to compel the company to man- ufacture and supply gas for a period of 10 years. How can the court order the com- pany to continue the manufacture of gas for the purpose of supplying this consumer? How can it prevent this company from dis- Bolvlng and going out of business, or from Belling out to another which would not be bound by its personal contracts? The in- quiry, then, is, if the contract could not be specifically enforced against the company, may it be specifically enforced in its favor? The authorities on the point are numerous, and, to some extent, conflicting. Mr. Pom- eroy, in his work on Contracts, § 163, ob- serves: "The peculiarly distinctive feature of the equitable doctrine Is that the re- medial right to a specific performance must De mutual. If, therefore, from the nature or form of the contract itself, from the rela- tions of the parties, from the personal in- capacity of one of them, or from any oth- er cause, the agreement devolves no obliga- tion at all upon one of the parties, or if it cannot be specifically enforced against him, then, and for that reason, he is not in gen- eral entitled to remedy of a specific perform- ance against his adversary party, although otherwise there may be no obstacle arising, either from the terms of the contract or from his personal status and relations, to an enforcement of the relief against the latter individually." Again, (section 165,) he says that "it is a familiar doctrine that if the right to the specific performance of a con- tract exists at all it must be mutual. The remedy must be alike attainable by both parties to the agreement." To this general rule the courts have made an exception where peculiar skill and labor are involved, and this, apparently, upon the ground that the element of personal and artistic sklU renders the chances of damages at law un- certain and conjectural. Of this class the case of Lumley v. Wagner, 1 De Gex, M. & G-. 604, Is perhaps the leading case. The defendant was a celebrated singer. She was under contract to sing for a certain period at the plaintiff's theater, and not to sing at any other. The court restained her from the threatened breach of this negative cove- nant Later cases have followed this, and the exception appears to be quite well es- tablished. There are cases, besides those above re- ferred to, both in England and in this coun- try, which sustain the holding of the circuit court, (2 Ohio Ch-. Ct E. 286,) that "where there Is a clear and continuing breach of a negative covenant in a contract, and where an Injunction against the breach of It will do substantial justice between the parties by obliging the defendant to carry out his contract or lose the benefit of a breach of It, and the remedy at law is not adequate, or the damages for such a breach are not sus- ceptible of proper assessment by a jury, a court of equity may properly restrain the defendant from such a breach, though the court might not be able to enforce a com- plete specific performance of the contract against the other party." Singer Sewlng- Mach. Co. V. Union Button-Hole, etc., Co., 1 Holmes, 253, Fed. Cas. No. 12,904; Chicago, etc., Ry. Co. v. New York, etc., Ry. Co. (C. C.) 24 Fed. 516; People v. Gas-LIght Co., 45 Barb. 137; Dietrichsen v. Cabburn, 2 Phil. Oh. 52. However, after a somewhat care- ful examination of the numerous cases cited by counsel, and many others, we are in- clined to the conclusion that the general doctrine laid down by Mr. Pomeroy is sus- tained by the apparent weight of authority. Hills V. Croll, 2 Phil. Ch. 60; Fothergill v. Rowland, L. B. 17 Eq. 132; Bailey v. Col- 746 INJUNCTIONS. lins, 59 N. H. 459; Pingle v. Conner, 66 Mich. 187, 33 N. W. 385; Iron Age Pub. Co. V. W. U. Tel. Co., 83 Ala. 498, 3 South. 440; Pullman Palace Car Co. v. Texas & P. By. Co., 4 Woods, 317, 11 Fed. 625; Mea- son T. Kaine, 63 Pa. 335; Tyson v. Watts, 1 Md. Ch. 13; Richmond v. Railway Co., 33 Iowa, 423. It is important to note that an essential element of the proposition quoted above is that the complaining party has no ade- quate remedy at law, and that his damages are not susceptible of proper assessment by a jury. It goes without saying that if this element is found wanting the rule laid down cannot apply. On the part of the company it is insisted that the condition referred to is present in the case at bar. Let us see. The stipulation of Steinau was that he would receive gas in quantity not less than three- fourths of the present average consumption. The contract was to continue for 10 years. It had been in force at the commencement of the action about one year. The "present average consumption" was a quantity easy of ascertainment. So long as Steinau used the quantity of gas specified he wa-s in full performance of his contract. When he ceas- ea taking that quantity he violated the con- tract, and when he established electric lights in his place, and proceeded to Illuminate in that way, it was clear that he intended to wholly break and abandon the contract. The company had the right to regard the con- tract as at an end, and no pretense or claim of Steinau, so long as he refused to perform, could avail to prevent the company from so treating it All contractual relations be- tween the parties would then be terminated. By force of the ordinance, and at prices fix- ed by the ordinance, and subject to all rea- sonable regulations, the company might still be bound to furnish gas, but it could not be required to furnish a foot of gas under the contract The contract being thus, by the action of Steinau, at an end so far as he was concerned, the company's cause of ac- tion was immediate. It could, if the dam- ages were susceptible of proper assessment at any time, have an action at once for Its entire damages for the breach, and this remedy did not involve a multiplicity of suits. James v. AUen Co., 44 Ohio St 226, 6 N. B. 246, is a case, in principle, like this one. This court there held that where the offending party had wholly broken and aban- doned the contract the party injured by the breach could bring his action at once, and recover his entire damages for the breach, and that one judgment upon such claim would be a bar to a future recovery. That rule, we think, applies to this case. What would stand in the way of adequate dam- ages being awarded by a jury? The amount of gas agreed to be nsed each month, the duration of the time, the price to be paid per thousand, (subject to changes, if any, produced by the new ordinance,) were all shown by the contract. If, added to these facts, the jury should be put in possession of the amount of "gain and profit" the com- pany were making per thousand, what would prevent a clear ascertainment of damages upon that basis, reduced probably on ac- count of payment in advance? Fothergill v. Rowland, L. B. 17 Eq. 132; Chicago, etc., Ky. Co. V. New York, etc., Ry. Co. (0. C.) 24 Fed. 516. It is doubted by some members of the court whether a court of equity. In a case of specific performance, where the granting or refusal of relief may depend so largely upon the court's discretion, should exercise it in favor of the enforcement of covenants which deprive a party of new and valuable discoveries of science, and, in a measure, tend to create a monopoly by con- tract But a decision of this question is not necessary to a disposition of the case at bar, and that, as well as whether a court of eq- uity should, in any ' case, where full per- formance cannot be enforced, decree per- formance of negative covenants of one par- ty, may properly be left to be determined when a case arises which necessarily re- quires a decision upon them. We are con- tent to rest the decision of this case upon the ground that the remedy of the defendant In error is at law, and not in equity. Judgment reversed. INJUNCTIONS. 747 MANHATTAN MANUFACTURING & FER- TILIZING CO. V. NEW JERSEY STOCK- YARD & MARKET CO. et al. (23 N. J. Eq. 161.) Oourt of Chancery of New Jersey. May Term, 1872. Bill for an Injunction. Heard on a rule to show cause why an injunction should not is- Mr. McCarter, for complainant I. W. Scudder and Mr. Winfield, for defendants. ZABRISKIB, Ch. The complainant is a corporation of the state of New York, doing business at Communlpaw. The defendant, the stock yard company, a corporation of this state, owns a large and extensive abattoir or slaughter-house at Communipaw. It has not, for some years, slaughtered animals there, but let to butchers the privilege of slaugh- tering their animals in the abattoir. Pre- vious to August, 1870, the blood and other re- mains of animals thus slaughtered there by the butchers, not being removed or properly cared for, had created a stench which became a nuisance to the adjoining country, and the I company was restrained by an injunction from permitting the business to be carried on Vhere, unless on condition of having the blood jand offal perfectly cared for. The butchers paid for the privilege of slaughtering there, and left the blood and offal on the premises, to be cared for by the stock yard company. These di£9culties became a serious embar- / rassment in the enterprise. The complainant j undertook to manage this, and to remove and I manufacture the blood and other abandoned * refuse left on the premises by the butchers, J so as to prevent any public or private nui- ' sance that might else arise from them. I To effect the objects of this arrangement, ; the stock yard company, on the 5th of Au- gust, 1870, made a lease to the complainant of certain premises adjoining the abattoir, for the specified business of manufacturing and preparing fertilizers and manures, and the materials for that purpose. The term was for twenty years from April 20th, 1867, with privilege of renewal, and the rent to be paid was fifteen per cent, of the net profits of the business. The lease contained this provision: "The parties of the second part shall also have the refusal and exclusive right of sav- ing and taking all the blood of animals slaughtered in the abattoir and sheep-house of the parties of the first part, and of saving and taking the animal matter and ammonia from the rendering tanks of the parties of the first part, and of using the same in their business;" and also this agreement on part of the complainant: "Said parties of the sec- ond part hereby bind themselves to save all that is possible of the blood from the ani- mals slaughtered, and the animal matter and ammonia from the tanks, to prevent any ef- fiuvla or stenches from escaping, and to pre- vent any and all nuisance from being cre- ated in any manner whatsoever, either in sav- ing the blood, animal matter, or ammonia, oi In converting the same into articles of com- merce." The lease was executed by the president of the stock yard company, in the name of the company, by aflSxing its common seal and his signature. The execution was duly proved, and the lease recorded in Hudson county clerk's oflice, August 20th, 1870. The complainant, on faith of the lease, erected on the demised premises expensive buildings and machinery for the purpose of the manufacture. These were completed by January 9th, 1871. In the meantime ar- rangements had been made by the complain- ant with the stock company and its employes for coagulating the blood on the premises, and for preventing nuisances arising from slaughtering in the abattoir. Part of this coagulated blood had, with complainant's ac- quiescence, been delivered to John J. Craven, one of the defendants, for making experi- ments or manufacturing it. In April, 1871, the stock yard company leased its abattoir to Henry R. Payson and David H. Sherman, two of the defendants, who have since carried on the business un- der the name of D. H. Sherman & Co. The defendant, Isaac Freese, who was In the em- ploy of the stock yard company as superin- tendent, and continued In the employ of D. H. Sherman & Co. in the like capacity, en- tered into partnership with the defendant Craven, who was also In the employ of the stock yard company at the making of its lease to the complainant, and with the de- fendant Sherman, under the name of "The Bergen Manufacturing Company," for the purpose of manufacturing albumen and fer- tilizers. After January 9th, 1871, the complainant demanded all the blood of the animals slaugh- tered at the abattoir, but Craven made an ar- rangement with certain butchers who slaugh- tered there, for saving and taking the blood of the animals slaughtered by them, and this was permitted by Sherman & Co., and Freese, their superintendent; and a large part of the blood is thus taken and delivered to Sher- man, Freese and Craven, and is lost to the complainant. By the record of the lease to the complain- ant, Sherman, Craven and Freese had con- structive notice of its contents, and also It is clear that they, as well as Payson, had ac- tual notice. They do not deny this, but take the ground that the blood, like all other parts of the animal slaughtered, belongs to the butcher, and that they or the stock yard com- pany can no more control or deliver It than they could control the flesh or hides. That the butchers having discovered that the blood has a merchantable value, have a right to dispose of It for their own benefit; and that 748 INJUNCTIONS. when they had determined to sell It, and not to abandon It, Craven was under no obliga- tion not to buy it, and his firm might receive it through him without breach of faith. This defence, at first sight, is seemingly good; but it wholly rests upon the correct- ness of the premises, to wit, that the stock ~-o-i^- ~U, 762 INJUNCTIONS. GRIFFITH V. HILIilARD. (25 Atl. 427, 64 Vt 643.) Supreme Court of Vermont, General Term. Nov. 5. 1892. Appeal from cliancery court, Rutland county; Taft, Chancellor. Action by Silas L. Griffith against John H. Hilliard. From a decree sustaining a demurrer to plaintiEf's bill for an injunc- tion and dismissing the bill pro forma, orator appeals. Reversed and modified. J. C. Baker, for orator. S. A. Barman, for defendant. START, J. The defendant, John H. Hil- liard, by the demurrer contained in his answer, claims that a court of equity haa no jurisdiction of the matters alleged in the bill. The bill alleges, among other things, that the orator is the owner of the land in question; that its substantial value is made up of the wood and timber growing thereon; that some of the de- fendants, under a license from the defend- ant, Hilliard, have entered upon the land, are engaged in cuttingand drawing tiiii tier therefrom, and threaten to continue to do so. For the purpose of determining the question now beforn the court, these al- legations must be taken as true. To per- mit this wood and timber to be cut in the manner the defendants are doing, and threatening to do, under a license from defendant, Hilliard, is to permit a destruc- tion of the orator's estate as it has been held and enjoyed. The power of a court of equity to interpose by injuuctiuu to prevent irreparable injury and the de- struction of estates is well established, and this power has been construed to embrace trespasses of the character complained 6( In the orator's bill. Where trespass to property consists of a single act, and it is temporary in its nature and effect, so that the legar remedy of an action at law for damages is adequate, equity will not in- terfere; but if, as in this ca se, repeate d. acts are^doliBor threatened, altJipjjgh eaeiTOf Btipnacfs, talten by itself, may not be destructive to.t.lie estate,j)ir inflicjt,irr, reparable iniuryj— aiul^tlTe j egaT^reinedy may, therefore, bead ^le act if it stoa may be' prevented or e io r^^each sin- aloflailtiifi_.en tire"wrong stopped by Injune- T^ion.'^Smith v.KocE759 Vt. 23270 tl. Kep. 551; Langdon v. Templeton, 61 Vt. 119, 17 Atl. Rep. 839; Erhardt v. Boaro, 113 U. S. 539, 5 Sup. Ct. Rep. ^15; Iron Co. v. Rey- mert, 45 N. Y. 703; Power Co. v. Tibbetts, 31 Conn. 165; Irwin v. Dixion, 9 How. 28; Livingston v. Livingston, 6 Johns. Ch. (Law Ed.) 496; High, Inj. 724-727; Shipley v. Ritter, 7 Md. 408; Scudder v. Trenton Delaware Falls Co., 1 N.J. Eq.694; 1 Pom. Eq. Jur. § 245; 3 Pom. Eq. Jur. § 1357; Murphy v. Lincoln, 63 Vt. 278, 22 Atl. Rep. 418. In the case of Murphy ▼. Lincoln, supra, the bill charged the committing of several trespasses by the defendants by drawing wood and logs across the orator's land. The defendants claimed a right of way. The court ft)und the issue of fact in favor of the orator, and held that a court of equity had jurisdiction to enjoin the com- miBBlon of a series uf trespasses, alUiough the legal remedy be adequate for each sin- glei.act if it stood alone. It is said by J udge Story in his work on Equity Juris- prudence, (volume 2, §§ 928, 929:) ""If the trespass be fugitive and temporary, and adequate compensation can be obtained in an action at law, there is no ground to justify the interposition of courts of I equity. Formerly, indeed, courts of eq- uity were extremely reluctant to interpose at all, even in regard to cases of repeated trespasses; but now there is not the slightest hesitation if the acts done or threatened to be done to the property would be ruinous or irreparable, or would Impair the just enjoyment of the property in the future. In short, it is now granted in all cases of timber, coals, ores, and quarries, where the party is a mere tres- passer, or where he exceeds the limited right with which he is clothed, upon the ground that the acts are, or may be, au irreparable damage to the particular spe- cies of property. " In Iron Co. v. Reymert, supra, it is said that mines, quarries, and timber are protected by injunction, upon the ground that injuries to and depredar cions upon them are, or may cause, an irreparable damage, and also with a view to prevent a multiplicity of actions for damages, which might accrue from continuous violations of the rights of the owners ; and that it is not necessary that the right Should be first established in an action at law. In Ei-hardt v. Eoaro, su- pra, Mr. Justice Field says: "It is now a common practice in cases where irre- mediable mischief is being done or threat- ened, going to the destruction of the sub- stance of the estate, such as the extract- ing of ores from a mine, or the cutting down of timber, or the removal of coal, to issue an injunction, though the title to the premises be in litigation. The author- ity of the court is exercised in such cases, through lis preventive writ, to preserve the property from destiruction pending legal proceedings for the determluatioQ of the title." When It appears that the title is in dis- pute, the court may, in its discretion, is- sue a temporary injunction, and continue it in force for such time as may be neces- sary to enable the orator to establish his title in a court of law, and may make the injunction perpetual when the orator li.-is thus established his title; or the court may proceed and determine which party has the better title; or ft may dismiss the bill, and leave the orator to his legal rem- edy. Bacon V. Jones, 4 Mylne & C. 43a; Duke of Beaufort v. Morris, 6 Hare, 340; Campbell v. Scott, 11 Rim. 31 ; Kerr, Inj. 209; Ingraham v. Dunnell, 5 Mete. (Mass.) 118; Rooney v. Soule, 45 Vt. 303; Wing v. Hall, 44 Vt. 118; Lyon v. McLaughlin, 32 Vt. 423- Hastings v. Perry, 20 Vt. 278; Barnes v. Dow, 59 Vt. 530, 10 Atl. Rep. 258; Barry v. Harris, 49 Vt. 392. In Bacon v. Jones, supra. Lord Cottenham says: "The jurisdiction of this court is founded upon legal right. The plaintiff cominginto court on the assumption that he haa the legal right, and the "court granting Its as- sistanceon that ground. When a party applies for the aid of a court, the applica- tion for an injunction is made either dur- ing the progress of the suit or at the hear- ) INJUNCTIONS. 76a Ins; nnd In both cases, I apprehend, great latitude and discretion are allowed to the -court in dealing with the application. When the application is tor an interlocu- tory injunction, several courses are open. The court may at once grant the injunc- tion siaiplicifer, without more,— a course which, though perfectly competent to the court, is not very likelyto be taken where the defendant raises a question as to the valid- ity of the plaintiff's title; or it may follow the more usual, and, as I apprehend, more wholesome, practice in such a case, of either granting an injunction, and at the same time directing the plaintiff to proceed to establish his title at law, and suspend- ing the grant of the injunction until the result ol the legal Investigation has been ascertained, the defendant, in the mean time, keeping an account. Which of these several courses ought to be taken must depend entirely upon the discretion of the court, according to the case. When the cause comes to a hearing, the court has also a large latitude left to it; and I am far from saying that a case may not arise In which, even at that stage, the court will he of opinion that the injunction may properly be granted without having re- course to a trial at law. The conduct and dealings of the parties, the frame of the pleadings, the nature of the patent right and of the evidence by which it is estab- lished, these and other circumstances may combine toproducesucha result, although this is certainly not very likely to happen, and I am not aware of any case in which it has happened. Nevertheless it is a course unquestionably competent to the court, provided a case be presented wWch satisties the mind of the judge that such a course, if adopted, will do justice between the parties. Again, the court may at the hearing do that which is the more ordi- jnary course, — it may retain the bill giving I the plaintiH the opportunity of first estab- [ llshing his right at law. There still remains a third course, the propriety of which must also depend upon the circum- stances of the case, — that of dismissing the bill atonee." Although Bacon v. Jones was a case relative to a patent right, the re- marks of the lord chancellor are applicable to any case in which the orator's title is in dispute. The case of the Duke of Bean- fort V. Morris, supra, was a bill for an in- junction toprotect the orator'scoal mines from injury from the water flowing into them from the defendant's coUiery ; and it was ordered that the bill be retained for 12 months, with liberty to the orator to bring such actions as he might be advised were necessary, and thatthe injunction is- sued in the cause be continued for such time. We think the granting of the temporary Injunction in tbiH case was a proper exer- cise of the discretionary power which the court possesses. The orator, by his bill, makes out a strong case forequitable con- sideration. The sole value of the prem- ises in question is in the wood and timber growing thereon. The orator has here- tofore held and occupied them for the pur- pose of manufacturing lumber and char- coal from such timber and wood. He has expended large sums of money in the erec- tion of mills and coal kilns, in building roads, and in procuring teams and work" men for the prosecution of said business, and has made contracts for the sale of tsaid manufactured products. The defend- ants are engaged in cutting and removing that which constitutes the chief value of the estate, and threaten to continue to do so. These acts, if continued, wiU. worit a destruction of the estate; and render it of no value for the purpose lor which it has been held and enjoyed. The case is one peculiarly within the province of a court of equity, through its preventive writ, to Interpose and stop the mischief complained of, and preserve the property from de- Btryction. The defendant, John H. Bil- liard, having, before any evidence has been taken or hearing had, put in issue the ora- tor's title, insisted that this issue be tried in a court of law, the case is one in 1 which the court may properly, in its dis- I cretion, require the orator to establish his I title in snch court before proceeding fur. I ther with the cause, and such will be the order of this court. The pro forma decree of the court of chancery is reversed; the demurrer contained in the answer of the defendant, John H. Billiard, is overruled ; the orator's bill is adjudged sufficient, and defendant's (Billiard's) answer is ordered brought forward, from which it appears that the orator's title to the premises is in ^ controversy; therefore the cause is re- manded to the court of chancery, with di- rection to that court to retain the cause, and continue in force the injunction for such time as, in the opinion of said court, may be necessary to enable the orator to bring and prosecute to final judgment Buch action oractions as may be necessary to establish bis title in a court of law; and, in default of the orator so establish- ing his title within the time aforesaid, the orator's bill to be dismissed, as against the defendant, John H. Billiard, with costs. But if the orator shall, within the time aforesaid, by a final judgment in his favor in a court of law, establish his title to the premises as against the defendant, John B. Billiard, then the court will enter a decree making perpetual the temporary injunction, and make such order in rela- tion to costs as to the court shall seem meet. TAFT, J.,didnotsit. 4'L ^\ f^_J_<_,_^-i' - C*i^< . .... i- -i (/'" "7 764 INJUNCTIONS. WHEBLOCK V. NOONAN. (15 N. E. 67, 108 N. X. 179.) Court of Appeals of New York. January 17, 1888. Appeal from general term, superior court, city of New York. Suit for mandatory injunction, by William A. Wheelock, respondent, against Michael Noonan, appellant. B. Laflin Kellogg, for appellant Martin & Smith and Geo. A. Strong, for respondent. FINCH, J. The findings of the trial court establish that the defendant, who was a total stranger to the plaintiff, obtained from the latter a license to place upon his unoccupied lots, in the upper part of the city of New York, a few rocks for a short time, the in- definiteness of the period having been ren- dered definite by the defendant's assurance that he would remove them in the spring. Nothing was paid or asked for this permis- sion, and it was not a contract in any just sense of the term, but merely a license which by its terms expired in the next spring. Dur- ing the winter, and in the absence and with- out the knowledge of plaintiff, the defend- ant covered six of the lots of plaintiff with "huge quantities of rock," some of them 10 or 15 feet long, and piled to the height of 14 to 18 feet This conduct was a clear abuse of the license, and in excess of its terms, and so much so that if permission had been sought upon a truthful statement of the intention it would undoubtedly have been re- fused. In the spring the plaintiff, discover- ing the abuse of his permission, complained bitterly of defendant's conduct and ordered him to remove the rocks to some other lo- cality. The defendant promised to do so, but did not, and in the face of repeated demands has neglected and omitted to remove the rocks from the land. The court found as matter of law from these facts that the orig- inal permission given did not justify what was done either, as It respected the quantity of rock or the time allowed; that after the withdrawal of the permission in the spring, and the demand for the removal of the rock, the defendant was a trespasser, and the tres- pass was a continuing one which entitled plaintiff to equitable relief; and awarded judgment requhrlng defendant to remove the rocks before March 15, 1886, unless for good cause shown the time for such removal should be extended by the court The sole question upon this appeal is whether the relief granted was within the power of the court, and the contention of the defendant is mainly based upon the prop- osition that the equitable relief was improp- er since there was an adequate remedy at law. The plaintiff objects that no such de- fense was pleaded. If it arises upon the facts stated in the complaint it can scarcely be said to be new matter requu:ed to be stated In the answer, and I doubt whether, under the present system of pleadhig, the technical ob- jection is good. It is better, therefore, to con- sider the defense which is interposed. One who would justify under a license or permis- sion must bring his acts within the terms of the license. He exceeds them at his imril. There is no equity in allowing him to strain them beyond their fair and reasonable inter- pretation. The finding shows permission ask- ed for "a few stone," described as "a por- tion" of what defendant was getting from the boulevard. The plaintiff was justified in in- ferring that for the bulk of his stone the defendant had a place of deposit and only wanted additional room for a small excess, — for a few stone. Under this permission de- fendant was not justified in covering six lots vrith heavy boulders to a height of 14 to 18 feet. The thing done was gravely and substantially in excess of the thing granted, and the license averred does not cover or excuse the act. Beyond that the permission, extended only to the spring of 1880, and ex- pired at that date. The immediate removal: of the stone was then demanded, and from that moment its presence upon plaintiff's- lands became a trespass, for which there- was no longer license or permission. Such, parol license, founded upon no consideration, is revocable at pleasure, even though the li- censee may have expended money on the- faith of it Murdock. v. Railroad Co., 7a N. Y. 579. And this was a continuing tres- pass. So long as It lasted It incumbered the lots, prevented their use and occupation- by the owner, and interfered with the possi- bility of a sale. It is now said that thfr remedy was at law, that the owner could have removed the stone and then recovered of the defendant for the expense incurred. But to what locality could the owner re- move them? He could not put them In thfr street; the defendant presumably had no va- cant lands of his own on which to throw the burden; and it would follow that the owner would be obliged to hire some vacant lot or place of deposit, become responsible for the rent and advance the cost of men and machinery to effect the removal. If any adjudication can be fomid throwing such burden upon the owner, compelling him to do in advance for the trespasser what the latter is bound to do, I should very much doubt Its authority. On the contrary, thfr law Is the other way. Beach v. Grain, 2 N. Y. 97. And all the cases which give to thfr Injured party successive actions for the con- tinuance of the wrong are inconsistent with the idea that the injured party must once for all remove it Such is neither an ade- quate remedy nor one which the plaintiff was bound to adopt But It is further said that he could sue^ at law for the trespass. That is undoubted- ly true. The case of TJllne v. Railroad Co., 101 N. Y. 98, 4 N. B. 536, demonstrates upon abundant authority that In such action only INJUNCTIONS. 765 the damages to its date could be recovered, and for the subsequent continuance of the trespass new actions following on in suc- cession would Iiave to be maintained. But in a case Uke the present, would that be an adequate remedy? In each action the dam- ages could not easily be anything more than the fair rental of the lot It is difficult to see what other damages could be allowed, not because they would not exist, but be- cause they would be quite uncertain in amount and possibly somewhat speculative in theur character. The defendant, there- fore, might pay those damages, and continue his occupation, and if there were no other adequate remedy, defiantly continue such occupation, and in spite of his wrong make of himself in effect a tenant who could not be dispossessed. The wrong In every such case is a continued unlawful occupation, and any remedy which does not or may not end it is not adequate to redress the injury or re- store the injured party to his rights. On the other hand, such remedy in a case lilie the present might result to the wrong-doer in something nearly akin to persecution. He is liable to be sued every day, die de diem, for the renewed damages following from the continuance of the trespass; and while, ■ordinarily, there is no sympathy to be wast- ed on a trespasser, yet such multiplicity of suits should be avoided, and especially under circumstances like those before us. The rocks could not be immediately removed. The courts have observed that peculiarity -of the case, and shaped their judgment to give time. It may take a long time, and during the whole of it the defendant would be liable to daily actions. For reasons of this character it has very often been held -that while, ordinarily, courts of equity will not wield their power merely to redress a trespass, yet they will Interfere under pecu- liar circumstances, and have often done so where the trespass was a continuing one, and a multiplicity of suits at law was involved In the legal remedy. The doctrine was recog- nized and the authorities cited in the Mur- dock Case, supra, and the rule deemed per- fectly settled. That case, and those refer- red to, it is true, were cases of intrusion where no consent had been given for the en- try of the intruder, but whether the trespass was such from the beginning, or became one after a revocation of the license, can make no difference, as it respects the adequacy of the legal remedy. That is the same in either event Two cases of the former character were cited In the Uline Case. Bowyer v. Cook, 4 Man. G. & S. 236; Holmes v. WU- son, 10 Adol. & E. 503. In one stumps and stakes had been left on plaintiffs land and in the other buttresses to support a road; in each an action of trespass had been brought, and damages recovered and paid; and in each, after a new notice to remove the obstruction, a further action of trespass was brought and sustained,— so that as I have said, the legal remedy is identical, how- ever the trespass originated. It is a general rule that a court of equity wiU act in such cases only after the plaintiff's right has been established at law; but that rule has its exceptions. Troy & B. R. Co. v. Boston, H. T. & W. Ky. Co., 86 N. Y. 128. Where the facts are In doubt, and the right not clear, such, undoubtedly, would be a just basis of decision, though the modern system of trying equity cases makes the rule less important. Where, as in an intru- sion by railroad companies whose occupa- tion threatens to be continuous, the Injury partakes of that character, an action at law to establish the right has not been required. Indeed, I am inclined to deem it more a rule of discretion than of jurisdiction. In Avery v. Eailroad Co., 106 N. Y. 142, 12 N. E. 619, to which we have been referred since the argument, we were disposed to sustain a mandatory injunction requiring defendant to remove so much of a fence as obstructed plaintiff's right of way, although the obstruc- tion was not a nuisance, but an Invasion of a private right. In that case the equitable remedy was not challenged by either coimsel or the court, and evidently stood upon the groimds here invoked; those of a continuing trespass, the remedy for which at law would be inadequate, and involve repeated actions by the injured party for damages daily oc- curring. These views of the case enable us to sup- port the judgment rendered. It should be af- firmed, with costs. All concur, except EUGBR, C. J., not vot- ing. r66 INJUNCTIONS. WILSON T. CITY OP MINERAL POINT et al. (39 Wis. 160.) Supreme Court of Wisconsin. Aug. Term, 1875. Action for injunction by one Wilson against the city of Mineral Point and one W eldenfeller. Defendants demurred to the complaint on the ground of defect of par- ties defendant, misjoinder of causes of ac- tion, and for insufficiency of facts to con- stitute a cause of action. From an order overruling the demurrer, defendants appeal. Affirmed. The material allegations of the complaint are that plaintiff is the owner and in pos- session of certain lots In the defendant city, on which his dwelling house is situated; that the lots are Inclosed with fences, and en- tirely surrounded by what purport to be pub- lic streets; that standing and growing upon such lots are a great many fruit and orna- mental trees and much shrubbery of several years' growth and cultivation, and of great value, and which greatly enhance the value of the lots, and that such lots have been so inclosed for twenty-five years; that the au- thorities of the defendant city claim that such fences encroach upon the public streets; that the common council of the city has or- dered the defendant Weidenfeller, who is the street commissioner thereof, to remove all obstructions from the streets unless the per- sons encroaching upon the streets remove the same within a specified time; and that such commissioner threatens to, and, unless re- strained by the court, will destroy the plain- tiff's said fences, and will dig up and de- stroy many of his said fruit and ornamental trees, and expose the balance thereof to be destroyed for want of fences, to his "great and irreparable damage." It further alleges that such fences do not encroach upon the public streets of the city, and that the de- fendants have no right to remove the same, or to dig up or destroy the plaintiff's trees, etc. The prayer Is for perpetual and tempo- rary injunction. M. M. Cothren, for appellants. Wilson & Jones, for respondent LYON, J. It is sufficiently averred In the complaint that the defendant Weidenfeller, acting under the authority and orders of the regularly constituted authorities of the de- fendant city. Is about to destroy fences, fruit and ornamental trees and shrubbery standing and growing upon premises owned by the plaintiff and occupied by him as his residence and homestead; that the pretense for J V. so doing is that such fences, trees and shrub- bery are within the limits of public streets; but that such pretense is unfounded in fact, and the defendants have no lawful authority to do the threatened acts. On the facts averred it is clear that the plaintiff is entitled to an injunction as pray- ed In the complaint. It is quite true that the courts will not Interfere by injunction to restrain the committing of a mere trespass, for which, if committed, the recovery of dam- ages in an action at law would be an ade- quate remedy. It is also true that the courts will interfere by injunction and prevent a threatened injury, which, if infiicted, will be irreparable. An injury is irreparable when it Is of such a nature that the injured party cannot be adequately compensated therefor in dam- ages, or when the damages which may result therefrom cannot be measured by any cer- tain pecuniary standard. High, Inj. § 460, and cases cited. It is said by Judge Story that: "If the trespass be fugitive and tem- porary, and adequate compensation can be obtained in an action at law, there is no ground to justify the Interposition of courts of equity. Formerly, indeed, courts of equity were extremely reluctant to interfere at all, even in regard to cases of repeated tres- passes. But now there is not the slightest hesitation, if the acts done or threatened to be done to the property would be ruinous or ir- reparable, or would impair the just enjoy- ment of the property In future." 2 Story, Bq. Jur. § 928. That the threatened injuries which this ac- tion was brought to prevent, would. If in- flicted, be irreparable, In the legal accepta- tion of that term, and would greatly Impair the just enjoyment of the plaintiff's property. Is perfectly well settled. No one will serious- ly contend that a money compensation is an adequate remedy for the loss of the trees and shrubbery which the complaint avers the defendants threaten to destroy; and it would be a denial of justice were the courts to re- fuse the plaintiff the protection he asks, and thus permit his home to be permanently de- spoiled. See High, InJ. g 467, and cases cited. We think the complaint states a cause of action against both defendants, and that there is no misjoinder of causes of action, and no defect of parties. We do not decide whether or not the complaint states facts sufficient to entitle the plaintiff to recover damages, but only, that If the averments therein contained are true, he is entitled to the Injunction prayed. Order affirmed. INJUNCTIONS. 767 QABJONBR V. TRUSTEES OF VILLAGE OF NEWBURGH et al. (2 Johns. Ch. 162.) Chancery. Aug. 22, 1816. The bill, which was for an injunction, stat- ed, that the plaintiff is owner of a farm, la the village of Newbnrgh, through which a stream of water has, from time immemorial, run, having its source from a spring in the adjoining farm of the defendant, Hasbrouck, and after entering the plaintiff's land, contin- ues its whole course through his farm until it empties into the Hudson river. That this stream greatly fertilizes his fields, and, running near his house, serves for watering his cattle, and for various domestic and economical pur- poses. That it supplies water to a brick-yard on the farm of the plaintiff, where most of the bricks used in Newburgh are made; it also supplies a large distillery erected by him at great expense, and a churning mill, and wa- ter for a mill-seat, where the plaintiff is about to erect a mill for grinding plaster of paris. That the trustees of the village of Newburgh, the defendants, by false representations, ob- tained an act of the legislature, passed the 27th of March, 1809 (Sess. 32, ch. 119, vol. 5, Webst Ed. 489), to enable the said trustees to supply the inhabitants of the village with pure and wholesome water. That the trus- tees applied to the plaintiff for leave to di- vert the stream, offering him a trifling and very inadequate compensation, which he re- fused. That the said trustees having obtain- ed leave from the defendant, Hasbrouck, the owner of the spring, to use and divert the water, or a part thereof, that is, a stream one inch and a quarter In diameter, taken from a great elevation, have commenced a conduit, and threaten to divert the stream, dr a great part thereof, from the plaintiff's farm. That the plaintiff is apprehensive that if this is done, there will not, in a dry season, be wa- ter sufficient even for Ms cattle, &c. The plaintiff, therefore, prayed an injunction to prevent the defendants from diverting the wa- ter, &c. The blU was sworn to, and the plain- tiff produced several affidavits, which stated that the stream was not more than sufficient for the distillery, brick-yard, &c., of the plain- tiff, and If diverted through a pipe, or tube, of the proposed diameter, would greatly injure, if not render the works useless. One of the affidavits stated, that the whole stream would pass through a tube of one inch diameter, with a head of five feet Mr. Burr and J. V. N. Yates, for plaintiff. THE CHANCELLOR. The statute under which the trustees of the village of Newburgh are proceeding (Sess. 32, c. 119), makes ade- quate provision for the party injured by the laying of the conduits through his land, and also affords security to the owner of the spring, or springs, from whence the water is to be taken. But there is no provision for making compensation to the plaintiff, through whose land the water issuing from the spring has been accustomed to flow. The bill char- ges, that the trustees are preparing to divert from the plaintiff's land, the whole, or the, most part of the stream, for the purpose of supplying the village. The plaintiff's right to ;' the use of the water is as valid in law, and asj useful to him as the rights of others who are indemnified or protected by the statute; and he ought not to be deprived of it, and we can- ! not suppose it was Intended he should be de- j prived of it, without his consent, or without ] making him a just compensation. The act is, ■unintentionally, defective, in not providing for his ease, and it ought not to be enforced, and it was not intended to be enforced, until such provision should be made. It is a clear principle in law, that the own- er of land is entitled to the use of a stream of water which has been accustomed, from time immemorial, to flow through it, and the law gives him ample remedy for the violation of this right. To divert or obstruct a water course is a private nuisance; and the books are full of cases and decisions asserting the right and affording the remedy. Fitzh. Nat. Brev. 184; Moore v. Browne, Dyer, 319, b; Lutterel's Case, 4 Coke, 86; Glynne v. Nich- ols, Comb. 43, 2 Show. 507; Prickman v. Trip, Comb. 231. The court of chancery has also a concurrent jurisdiction, by injunction, equally clear and well established in these cases of private nui- sance. Without noticing nuisances arising from other causes, we have many cases of the application of equity powers on this very sub- ject of diverting streams. In Finch v. Res- brldger, 2 Vern. 390, the Lord Keeper held, that after a long enjoyment of a water course running to a house and garden, through the ground of another, a right was to be presum- ed, unless disproved by the other side, and the plaintiff was quieted in his enjoyment, by in- junction. So, again, in Bush v. Western Free. Ch. 530, a plaintiff who had been in posses- sion, for a long time, of a water course, was quieted by injunction, against the interruption of the defendant, who had diverted it, though the plaintiff had not established 'his right at law, and the court said such bills were usual. These cases show the ancient and established jurisdiction of this court; and the foundation of that jurisdiction is the necessity of a pre- ventive remedy when great and immediate mischief, or material injury would arise to the comfort and useful enjoyment of property. The interference rests on the principle of a clear and certain right to the enjoyment of the subject in question, and an injurious interrup- tion of that right which, upon just and equi- table grounds, ought to be prevented. Anon., 1 Vern. 120; East India Co. v. Sandys, Id. 127; Hills v. University of Oxford, Id. 275; Anon., 1 Ves. 476; Anon., 2 Ves. 414; Whit- church V. Hide, 2 Atk. 391, 2 Ves. 453; Attor- ney General v. Nichol, 16 Ves. 338. In the application of the general doctrines 768 INJUNCTIONS. \ of the court to this case, it appears to me i to be proper and necessary that the pre- ! ventive remedy be applied. There is no need, from what at present appears, of send- ing the plaintiff to law to have his title first established. His right to the use of the stream is one which has been imme- morially enjoyed, and of which he is now In the actual possession. The trustees set up no other right to the stream (assuming, for the present, the Charges in the bill,) than what is derived from the authority of the stat- ute; and If they are suffered to proceed and divert the stream, or the most essential part of it, the plaintiff would receive immediate and great injury, by the suspension of all those works on his land which are set in operation by the water. In addition to this, he will lose the comfort and use of the stream for farming and domestic purposes; . and, besides, it must be painful to any one to be deprived, at once, of the enjoyment of a stream which he has been accustomed aiways to see flowing by the door of his / iiwelling. A right to a stream of water is I as sacred as a right to the soil over which it I flows. It is a part of the freehold of which no man can be disseised "but by lawful judgment of his peers, or by due process of law." This is ah ancient and fundamental maxim of common right to be found in magna charta, and which the legislature has incorporated into an act declaratory of the rights of the citizens of this state. Laws, Sess. 10, c. 1. I have intimated that the statute does not deprive the plaintiff of the use of the stream, until recompense be made. He would be entitled to his action at law for the inter- ruption of his right, and all his remedies at law, and in this court, remain equally in force. But I am not to be understood as denying a competent power in the legislature to talie private property for necessary or useful public purposes; and, perhaps, even for the purposes specified in the act on which this case arises. But to render the exercise of the power valid, a fair compensation must, in all cases, be previously made to the indi- viduals affected, under some equitable as- sessment to be provided by law. This is a necessary qualification accompanying the ex- ercise of legislative power. In taking private property for public uses; the limitation is admitted by the soundest authorities, and is adopted by all temperate and civilized gov- ernments, from a deep and universal sense of its justice. Grotlus (De Jur. B. & P., bk. 8, c. 14, § 7), Puffendorf (De Jur. Nat. et Gent. bk. 8, e. 5, § 7), and Bynkersb.cck (Quoest Jur. Pub. bk. 2, c. 15), when speaking of the eminent domain of the sovereign, admit that private property may be taken for public uses, when public necessity or utility require it; but they all lay it down as a clear principle of natural equity, that the individual whose property Is thus sacrificed, must be indemni- fied. The last of those jurists Insists, that . private property cannot be taken, on any terms, without consent of the owner, for purposes of public ornament or pleasure; and, he mientions an Instance in which the Roman senate refused to allow the praetors to carry an aqueduct through the farm of an individxial, against his consent, when in- tended merely for ornament. The sense and practice of the English government are equally explicit on this point. Private prop- erty cannot be violated in any case, or by any set of men, or for any public purpose, without the Interposition of the leglslaturei And how does the legislature interpose and. compel? "Not," says Blackstone (1 Bl. \ Comm. p. 139) "by absolutely stripping the subject of his property, in an arbitrary man- ner, but by giving him a full indemnification and equivalent for the injury thereby sus- ' tained. The public is now considered as an individual treating with an individual for an exchange. All that the legislature does is to oblige the owner to alienate his posses- sions for a reasonable price, and even this is an exertion of power which the legislature Indulges with caution, and which nothing but the legislature can perform." I may go further, and show that this in- violability of private property, even as it re- spects the acts and the wants of the state, imless a just indemnity be afforded, has excited so much interest, and been deemed of such importance, that it has frequently been made the subject of an express and fundamental article of right in the consti- tution of government Such an article is to be seen in the bill of rights annexed to the constitutions of the states of Pennsylvania, Delaware, and Ohio; and it has been incor- porated 4n some of the written constitutions adopted in Europe, (Constitutional charter of Lewis XVIII. and the ephemeral, but very elaborately drawn, constitution de la Kepublique Francaise of 1795.) But what is of higher authority, and is absolutely decisive of the sense of the people of this country, it is made a part of the constitution of the United States, "that private property shall not be taken for public use, without just compensation." I feel myself, therefore, not only authorized, but bound to conclude, that a provision for compensation is an indispen- sable attendant on the due and constitutional exercise of the power of depriving an indi- vidual of his property; and I am persuaded that the legislature never intended, by the act in question, to violate or interfere with this great and sacred principle of private right. This is evident from the care which this act bestows on the rights of the own- ers of the spring, and of the lands through which the conduits are to pass. These are the only cases In which the legislature con- templated or Intended that the act could or should interfere with private right, and in these cases due provision is made for its protection, or for compensation. There la INJUNCTIONS. 769 no reason why the rights of the plaintiff should not have the same protection as the rights of his neighbours, and the necessity of a provision for his case could not have occurred, or It, doubtless, would have been inserted. Until, then, some provision be made for affording him compensation, it would be unjust, and contrary to the first principles of government, and equally con- trary to the Intention of this statute, to take from the plaintiff his undoubted and pre- scriptive right to the use and enjoyment of the stream of water. In the case of Agar v. Ganal Co., Cooper, H.& B.EQ.(2d Ed.)— 49 77, an injunction was granted, on filing a bill supported by aflBdavlt, restraining defend- ants acting under a private act of parlia- ment, from cutting a canal through the land of the plaintiff, in a line and mode not sup- posed to be within the authority of the stat- ute. I shall, accordingly, upon the facts charged in the bill, and supported by affidavits, as a measure immediately necessary to prevent Impending injury, allow the injunction, and wait for the answer, to see whethCT the mer- its of the case will be varied. Injunction granted. 770 INJUNCTIONS. SHERRY V. PERKINS et aL (17 N. E. 307, 147 Mass. 212.) Supreme Judicial Ckturt of Massachusetts. Essex. June 19, 1888. Report from supreme judicial court, Essex county; C. Allen, JiTlge. Bill in equity, by I'atrick P. Sherry against Charles E. Perkins and Charles H. Leach, for an injunction to restrain the defendants, re- spectively president and secretary of the Last- ers' Protective Union, from causing to be car- ried in front of the plaintiff's shoe factory a banner on -which was the following inscrip- tion: "Lasters are requested to keep away from P. P. Sherry's. Per order L. P. U.;" and also a banner on which was the. follow- ing: "Lasters on a strike; all lasters are re- quested to keep away from P. P. Sherry's un- til the present trouble is settled. Per order L. P. U." The court, at the trial, found as facts that members of the Lasters' Protective Union entered Into a scheme, by threats and intimidation, to prevent persons in the em- ployment of the plaintiff, as lasters, from con- tinuing in such employment, and in like man- ner to prevent other persons from entering In- to such employment as lasters; that the de- fendants participated In the scheme; that the use of the banner was a part of the scheme, and Its use an injury to the plaintiff in his business and property. The coiurt, after find ing the facts, reported the case to the full court H. P. Hurlburt, R. Lund, and T. M. Os- borne, for plaintiff. The principal question in this case Is wheth- er this court, as a court of equity, has juris- diction to enjoin the acts complained of, upon the findings of facts reported by the justice who heard the case. The carrying of a ban- ner or placard before a person's place of busi- ness, which injures such person in his business and property, is a private nuisance. An au- thority directly in point is Gilbert v. Mickle, 4 Sandf. Ch. 357, in which it was held that a placard paraded or posted in a public street, before the door of an auctioneer, cautioning strangers to beware of mock auctions, consti- tuted a private nuisance remediable by injunc- tion. The injunction in that case was refused upon grounds not affecting the jurisdiction of the court. If the highway is obstructed by crowds of people In consequence of the ban- ner's being carried as described in the bill, such carrying of the banner is a public nui- sance. Rex V. Cross, 3 Camp. 224; Rex v. Carllle, 6 Car. & P. 636; Reg. v. Grey, 4 Fost. & F. 73. But as the damage to the business and property of the plaintiffs, found In the re- port, is special to the plaintiffs, they are en- titled to an injunction. Walker v. Brewster, L. R. 5 Eq. 25; Stetson v. Faxon, 19 Pick. 147; Soltau V. De Held, 2 Sim. (N. S.) 133. The entire scheme, "by threats and Intimidation, to prevent persons in the employment of the plaintiffs, as lasters, from continuing In such employment, and in like manner to prevent other persons from entering into such employ- ment as lasters," is a private nuisance to the plaintiffs. Wood, Nuis. § 141, and cases cited. Among the things which have been held to be private nuisances are a market Illegally con- ducted within the limits of an established mar- ket, (Yard v. Ford, 2 Saund. 172;) a ferry car- ried on, without right, near a duly-licensed ferry, (Stark v. McGowen, 1 Nott. & McC. 387;) the use of a toll-bridge Inside the limits of a lawfully established toll-bridge, (Bridge Co. V. Lewis, 63 Barb. 111.) See 1 Com. Dig. "Action on the Case for Nuisance," C. The scheme in which the defendants are found to have participated, has the same elements of Injury as these cases of nuisance. It is ille- gal, injurious to property, and continuous in character. See Railroad Co. v. Church, 108 U. S. 317, 2 Sup. Ct. Rep. 719. This court has full power to restrain a private nuisance by injunction, both under the special provision of the statute, (Pub. St. c. 151, § 2, cl. 9,) and by virtue of its general equity powers conferred by the statute of 1877, c. 178, which is embodied in Pub. St. c. 151, § 4. The juris- diction in equity now possessed by this court is not Ifmlted by any restriction contained in the last clause of Gen. St. c. 113, § 2, but is In all respects as full as that of the Blnglish court of chancery. 1 Pom. Eq. Jur. §§ 311, 312. In respect to private nuisances, the Eng- lish court of chancery has from early times exercised the right to restrain by Injunction. This is not limited to cases in which there is no redress at law. Indeed, the ability to re- cover substantial damages at law has been declared to give the right to ask for an in- junction against the continuance of the nui- sance. Lord Romilly, M. R., in Crump v. Lambert, L. R. 3 Eq. 409, 412; 2 Story, Eq. Jur. § 925 et seq.; 1 Pom. Eq. Jur. § 252; 8 Pom. Eq. Jur. § 1350; Emperor v. Day, 3 De Gex, F. & J. 240, 241, (Lord CampbeU.) The scheme in which the defendants participated was plainly Illegal and criminal, both under the statute and by common law. Pub. St c. 74, § 2; Reg. v. Druitt, 10 Cox, Crim. Cas. 592; Com. v. Hunt 4 Mete. Ill; Com. v. Dyer, 128 Mass. 70. But the nuisance, or its criminal character, prevent the court from enjoining V. Mickle, 4 Sandf. Ch. 358, Lord Calms In Assurance Co. v. E:nott L. R. 10 Ch. 144. The jurisdiction of courts of chancery over pri- vate nuisances is concurrent with that of courts of law. Fisk v. Wilber, 7 Barb. 395. This court has repeatedly exercised its juris- diction to restrain private nuisances. Cadigan V. Brown, 120 Mass. 493; Mills v. Mason, Id. 244; Woodward v. Worcester, 121 Mass. 245; Tucker v. Howard, 122 Mass. 529; Davis v. Sawyer, 133 Mass. 289. But whatever the in- jury complained of may be called, there Is abundant authority for the intervention of a court of equity to prevent Injury to property by unlawful or' forcible acts, when the injury [etc. Ill; Com. v. the illegality of the I character, does not I ijolning it Gilbert^ INJUNCTIONS. 771 Is continuous. Macanlay v. Shackell, 1 Bligh, (N. S.) 96, 127; Lord Bldon In Gee v. Pritch- ard, 2 Swanst. 402, 413; Emperor v. Day, 3 De Gex, F. & J. 217, 240, 241, 253; Spinning Co. V. Riley, L. R. 6 Eq. 551, 37 L. J. Ch. 889, and 19 Law T. (N. S.) 64. The various cases in which the unauthorized use of the plain- tiff's name has been restrained, go upon the principle of the injury to property involved. Routh V. Webster, 10 Beav. 561; James v. James, L. R. 13 Eq. 421 ; Hookham v. Pottage, L. R. 8 Ch. 91; 3 Pom. Eq. Jur. § 1358. The case of Spinning Co. v. RUey, supra, is al- most precisely parallel to the present case, ex- cept that in the present case the placards are paraded in a manner which makes them more distinctly a nuisance than If they were merely posted up. See, also, Dixon v. Holden, L. R. 7 Eq. 488; Assurance Co. v. Knott, L. R. 10 Ch. 142; Mulkem v. Ward, L. R. 13 Eq. 619; Pood Co. V. Massam, 6 Ch. Div. 582. In No- vember, 1874, the judicature act went into ef- fect, and in a decision under the act, in the case of Saxby v. Easterbrook, 3 C. P. Div. 339, it was held that, after the jury had found the fact of libel, an injunction would issue against the continuance of the libel. Thomas v. Williams, 14 Ch. Div. 864, (1880,) Fry, J.; Loog V. Bean, 26 Ch. Div. 306. In this court the case of Spinning Co. v. Riley, was refer- red to in the case of Diatite Co. v. Manufac- turing Co., 114 Mass. 69, and the dissent there expressed to the views of Malins, V. C, must be understood as applicable only so far as the language of the former case applies to the question of libel, since the question of libel did not arise in that case. The same is true of the reference to the same case in Partridge v. Hood, 120 Mass. 403, 406. See 3 Pom. Eq. Jur. § 1358. As to private nuisance. Bridge v. Bridge, 6 Pick. 376; 2 Story, Eq. Jur. §§ 925- 928. As to the criminal character of the acts complained of: The fact that the nuisance is indictable as a nuisance does not prevent the court from enjoining its continuance. 1 High, Inj. §§ 745, 752, and cases cited; Attorney General v. Hunter, l.Dev. Eq. 12; People v. St. Louis, 5 Gilman, 351. The English judica- ture act did not enlarge the jurisdiction of courts of equity. Day v. Brownrigg, 10 Ch. Div. 294; Gaskin v. BaUs, 13 Ch. Div. 324. As to differences between this court, as a coin:t of equity, and the English chancery court be- fore 1874, see remarks of Wells, J., in Milkman V. Ordway, 106 Mass. 232, 255. The acts are not libelous, but calculated to injure trade by direct interference. See Bridge v. Bridge, 6 Pick. 398; Cafew v. Rutherford, 106 Mass. 1, 15. As to the parties against whom the In- junction should issue, inasmuch as the Last- ers' Protective Union is aj^oluntary associa- tion, and all its members cannot be ascertain- ed by the plaintiflE, the same rule applies which makes it proper for a few individuals to sue in behalf of such an organization rep- resented by and associated with the defend- ants named in the bUl. See Birmingham v. GaUagher, 112 Mass. 190; Snow v. Wheeler, 113 Mass. 179; 1 Daniell, Ch. Pr. (4th Ed.) 272, note 5. John R. Baldwin, for defendants. The carrying of the banner named in the report, in the manner stated in the bill of complaint, is not a nuisance. If the words printed on the banner are libelous, the com- plainants have an adequate remedy at law. Equity will not restrain a libel. The man- ner of the publication of the words on the banner cannot be restrained. The case of Spinning Co. v. Riley, L. R. 6 Eq. 551, is not a precedent that establishes the injunctive ju- risdiction. That case has been expressly over- ruled by Assurance Co. v. Knott, L. R. 10 Ch. 145, and unfavorably noticed in Diatite Co. v. Manufacturing Co., 114 Mass. 69. The prayer of the bill is so broad that no decree comport- ing wif h the terms thereof would be equitable. ALLEN, J. The case finds that the defend- ants entered, with others, into a scheme, by threats and intimidation, to prevent persons in the employment of the plaintiff from con- tinuing in such employment, and to prevent others from entering into such employment; that the banners, with their Inscriptions, were used by the defendants as part of the scheme, and that the plaintiff was thereby injured In hia business and property. The act of displaying banners with devices, as a means of threats I and intimidation, to prevent persons from en j tering into or continuing in the employment o: the plaintiff, was injurious to the plaintiff, ana^ illegal at common law and_bj_Btatate^ Pub; St. c. 74, § 2; Walkefv. Cronin, 107 Mass. 555. We_ thinkjthat^ thejplalntiff is not re- strjcted to his remedy by action at law, butjs erititieano reliefbyjnjuiiction^ The acts and "tiie injury"" were~^continuous. The banners were used more than three months before the tiling of the plaintiff's blU, and continued to be used at the time of the hearing. The in- jury was to the plaintiff's business, and adg> q uate remedy coul d not be given by dama ges_, tn^ suit at law. The wfoiag is not as argued by' the defendants' counsel, a libel upon the plaintiff's business. It Is not found that the inscriptions upon the banners were false, nor do they appear to have been in disparagement of the plaintiff's business. The scheme, in pursuance of which the banners were display- ed and maintained, was to Injure the plain- tiff's business, not by defaming It to the pub- lic, but_bijntlmidatmgi workmen, so as to de- ter iEh«n f rojn^eep^ or making engagernents wiith the plaintiff^ The"Banner was a stand- ing menace" to all who were or wished to be in the employment of the plaintiff, to deter them from entering the plaintiff's premises. Main- taining it was a continuous, unlawful act, in- jurious to the plaintiffs business and proper- ty, and was a nuisance, such as a court of eq- uity wiU grant relief against. Gilbert v. Mickle, 4 Sandf. Ch. 357; Spinning Co. v. Ri- ley, L. R. 6 Eq; 551. Diatite Co. v. Manufac- turing Co., 114 Mass. 69, was a case of defam- 772 •INjnNCTIONS. atlon only. Some of the language in Spinning Co. V. Riley has been criticised, but the deci- sion has not been overruled. See Diatlte Oo. V. Manufacturing Co., ubi supra; Assurance Co. V. Knott, L. B. 10 Ch. 142; Saxby v. Eas- terbrook, 3 C. P. Div. 339; Loog v. Bean, 26 Ch. Div. 306; Fooa Oo, ▼. Massam, 14 On. Div. 763; Thomas v. Williams, Id. 864; Hill V. Davies, 21 Ch. Div. 778; Day v. Brown- rlgg, 10 Ch. Div. 294; Gaskln v. Balls, 13 Ch. Div. 324. Decree for plaintiff. INJUNCTIONS. 773 VBGEIiAHN y. GUNTNER et aL (44 N. B. 1077, 167 Mass. 92.) Supreme Judicial Couirt of Massachusetts. SufEolb. Oct 27, 1896. Report from supreme judicial court, Suffolk county; Oliver Wendell Holmes, Judge. Bill by Frederick O. Vegelahn against George M. Guntner and others for an injunc- tion. An Injunction issued pendente lite re- straining the respondents from interfering with the plaintiff's business by patrolling the side- walk in front of or In the vicinity of the prem- ises occupied by him, for the purpose of pre- venting any person In his employment, or de- sirous of entering the same, from entering It or continuing In It; or by obstructing or inter- fering with any persons in entering or leav- ing the plaintiff's said premises; or by intimi- dating any person In the employment of the plaintiff, or desirous of entering the same; or by any scheme or conspiracy for the purpose of annoying, hindering, interfering with, or preventing any person In the employment of the plaintiff, or desirous of entering the same, from entering It, or from continuing therein. This injunction was approved. Hale & Dlckerman, for plaintiff. Thomas H. Russell and Arthur H. Russell, for respondents. ALLEN, J. The principal question in this case is whether the defendants should be en- joined against maintaining the patroL The re- iport shows that, following upon a strike of the plaintifTs worlnnen, the defendants conspired to prevent him from getting workmen, and thereby to prevent tiim from carrying on his business, unless and until he should adopt a certain schedule at prices. The means adopte d were peranas ion and s ocial pressure, threats of personaijnjunf_ or mJawfiirMrm_s:onvej^^[^ ^^re^_employedj3rseek^- employment, and a patrol of Two men Jn^ front j)f the plaintiff's ~~ffictoiy, maintamed^ from half past 6 in the morning till half past 5 in the afternoon, on one of the busiest streets of Boston. The num- ber of men was greater at times, and at times showed some litOe disposition to stop the plain- tiffs door. The patrol proper at times went further than simple advice, not obtruded be- yond the point where the other person was will- ing to listen; and It was found that the patrol would probably be continued it not enjoined. There was also some evidence of persuasion to break existing contracts. The patrol was main- tained as one of the means of carrying out the defendants' plan, and it was used In com- bination with social pressure, threats of per- sonal injury or unlawful harm, and persuasion to break existing contracts. It was thus one means of Intimidation, indirectly to the plaintiff, and directly to persons actually employed, or seeking to be employed, by the plaintiff, and of rendering such employment unpleasant or In- tolerable to such persons. Such an act la an unlawful Interference with the rights both of employer and of onployed. An employer haa a right to engage an persons who are willing to work for him, at such prices as may be mutually agreed upon, and persons employed or seelong employment have- a corresponding right to enter into or remain in the employment of any person or corporation willing to employ them. These rights are secured by the consti- tution itself. Com. v. Perry, 155 Mass. 117, 28 N. B. 1126; People v. Gillson, 109 N. Y. S-9, 17 N. E. 343; Braceville Coal Co. v. Peo- ple, 147 ni. 71, 35 N. E. 62; Ritchie v. People, 155 lU. 98, 40 N. E. 454; Low v. Printing Co. (Neb.) 59 N. W. 362. No one can lawfully in- terfere by force or intimidation to prevent em- ployers or persons employed or wishing to be employed from the exercise of these rights. It is in Massachusetts, as in some other states, even made a criminal offense for one, by in- timidation or force, to prevent, or seek to pre- vent, a person from entering into or continuing In the employment of a person or corporation. Pub. St. c. 74, i 2. Intimidation is not Um- Ited to threats of violence or of pliysical Injmy to person or property. It has a broader sig- nification, and there also may be a moral in- timidation which is illegal. Patrolling or pick- 1 etiog, under the circumstances stated In the] report, has elements of intimidation like those I which were found to exist in Sheny v. Perkins, 147 Mass. 212, 17 N. E. 307. It was declared to be unlawful in Reg. v. Druitt, 10 Cox, Or. Cas. 592; Reg. v. Hibbert, 13 Cox, Cr. Cas. 82; Reg. v. Bauld, Id. 282. It was assumed to be unlawful in Trollope v. Trader's Fed. (1875) H L. T. 228, though in that case the pickets were withdrawn before the bringing of the biU. The patrol was an imlawful interference both with the plaintiff and with the workmen, with- in the principle of many cases; and, when in- stituted for the purpose of Interfering with his business, it became a private nuisance. See Carew v. Rutherford, 106 Mass. 1; Walker v. Cronin, 107 Mass. 555; Barr v. Trades Council (N. J. Ch.) 30 AU. 8S1; Murdock v. Walker, 152 Pa. St. 595, 25 Ati. 492; China Co. v. BroWn, 164 Pa. St 449, 30 Ati. 261; Coeui D'Alene Gonsol. & Min. Co. v. Miners' Union of Wardner, 51 Fed. 260; Temperton v. Rus- sell [1893] 1 Q. B. 715; Floyd v. Jackson, [1895] 11 L. T. 276; Wright v. Hennessey, 52 Alb. Law J. 104 (a case before Baron Pollock); Judge V. Bennett, 36 Wkly. Rep. 103; Lyons V. Wilkins [1896] 1 Ch. 811. The defendants contend that these acts were I justifiable, because they were only seeJdng to \ secure better wages for themselves, by com- pelling the plaintiff to accept their schedule of wages. This motive or purpose does not justi^ maintaining a patrol In front of the plaintiff's premises, as a means of carrying out their con- spiracy. A combination among persons merely to regulate their own conduct is within allow- able competition, and Is lawful, although others may be indlrecfly affected thereby. But a com- bination to do injurious acts expressly directed to another, by way of intimidation or constraint, either of himself or of persons employed or seek- ing to be employed by him, la outside of allow- 774 INJUNCTIONS. able competition, and Is unlawful. Various de- cided cases fall within the former class; for ex- ample: Worthington v. Waring, 157 Mass. 421, 32 N. E. 744; Snow v. Wheeler, 113 Mass. 179; Bowen v. Matheson, 14 Allen, 499; C!om. v. Hunt, 4 Mete (Mass.) Ill; Heywood v. TiUson, 75 Me. 225; Cote t. Murphy, 159 Pa. St. 420, 28 Atl. 190; Bohn Manuf'g Co. v. Hollis, 54 Minn . 223, 55 N. W. 1119; steamship Co. v. McGregor [1892] App. Cas. 25; Curran v. Tre- leaven [1891] 2 Q. B. 545, 561. The present I case falls within the latter class. Nor does the fact that the defendants' acts might subject them to an indictment prevent a court of equity from issuing an injunction. " It is true that, ordinarily, a court of equity wiU decline to issue an injunction to restrain the commission of a crime; but a continuing Injury to property or business may be enjoin- ed, although it may also be punisliable as a nuisance or other crime. Sherry v. Perkins, 147 Mass. 212, 17 N. B. 307; In re Debs, 158 TI. S. 564, 593, 599, 15 Sup. Ot 900; Baltimore & P. R. Co. V. Fifth Baptist Church, 108 U. S. 317, 329, 2 Sup. Ct. 719; Cranford v. Tyrrell, 128 N. Y. 341, 344, 28 N. E. 514; Gilbert v. Mickle, 4 Sandf. Ch. 357; Port of Mobile v. Louisville & N. R. Co., 84 Ala. 115, 126, 4 South. 106; Arthur v. Cakes, 11 C. O. A. 209, 63 Fed. 310; Toledo, A., A. & N. M. Ry. Co. v. Pennsylvania Co., 54 Fed. 730, 744; Em- peror of Austria v. Day, 3 De Gex, P. & J. 217, 239, 240, 253; Hermann Loog v. Bean, 26 Ch. Div. 306, 314, 316, 317; Monson v. Tus- saud [1894] 1 Q. B. 671, 689, 690, 698. A question is also presented whether the court should enjoin such interference with persons in the employment of the plaintiff who are not bound by contract to remain with him, or with persons who are not under any existing contract, but who are seeking ' or intending to enter into his employment. A ' conspiracy to interfere with the plaintiff's business by means of threats and intimida- ;' tion, and by maintaining a patrol in front of i his premises, In order to prevent persons from { entering his employment, or in order to pre- ' vent persons who are in his employment from ! continuing therein, is unlawful, even though I such persons are not bound by contract to enter into or to continue in his employment; 1 and the injunction should not be so limited as 1 to relate only to persons who are bound by ex- * Isting contracts. Walker v. Cronin, 107 Mass. 555, 565; Carew v. Rutherford, 106 Mass. 1; Sherry v. Perkins, 147 Mass. 212, 17 N. B. 807; Temperton v. BusseU [1893] 1 Q. B. 715, 728, 731; Flood v. Jackson [1895] 11 L. T. 276. We therefore think that the injunction should be in the form as originally issued. So ordered. FIELD, 0. J. (dissenting). The practice of Issuing injunctions in cases of this kind is of very recent origin. One of the earliest au- thorities in the United States for enjoining, in equity, acts somewhat like those alleged against the defendants in the present case, is Sherry v. Perkins (decided In 1888) 147 Mass. 212, 17 N. E. 307. It was found as a fact in that case that the defendants entered into a scheme, by threats and intimidation, to pre- vent persons in the employment of the plain- tiffs as lasters from continuing in such em- ployment, and, in like manner, to prevent oth- er persons from entering into such employ- ment as lasters; that the use of the banners was a part of the scheme; that the first ban- ner was carried from January 8, 1887, to March 22, 1887, and the second banner from March 22, 1887, to the time of the hearing; and that "tliie plaintiffs have been and are in- jured in their business and property thereby." The full court say: "The act of displaying banners with devices, as a means of threats and intimidation to prevent persons from en- tering into or continuing in the employment of the plaintiffs, was injurious to the plaintiffs, and illegal at common law and by statute. Pub. St c. 74, § 2; Walker v. Cronin, 107 Mass. 555." "The banner was a standing menace to all who were or wished to be in the employment of the plaintiffs, to deter them from entering the plaintiffs' premises. Maintaining it was a continuous unlawful act. Injurious to the plaintiffs' business and property, and was a nuisance such as a court of equity will grant relief against Gilbert v. Mickle, 4 Sandf. Ch. 357; Spinnhig Co. v. Riley, L. R. 6 Eq. 551." Gilbert v. Mickle, one of the authorities cited in Sherry v. Perkins, was a suit in equity by an auctioneer against the mayor of the city of New York to restrain him and those acting under him from parad- ing, placing, or keeping before the plaintiff's auction rooms a placard as follows: "Stran- gers, beware of mock auctions." A temporary Injunction was issued, but, on hearing, it was dissolved. Notwithstanding what is said in the opinion of the vice chancellor, his con- clusion is as follows: "I am satisfied that it is my duty to leave the party to his remedy by an action at law." Spinning Co. v. Riley is a well-known decision of Vice Chancellor Malins. The biU prayed that the defendants might be "restrained from printing or publish- ing any placards or advertisements similar to those already set forth." The defendants had caused to be posted on the walls and other public places in the neighborhood of the plain- tiff's works, and caused to be printed in cer- tain newspapers, a notice as follows: "Want- ed aU well-wishers to the Operative Cotton Spinning, &c., Association not to trouble or cause any annoyance to the Springhead Spin- ning Company lees, by knocking at the door of their oflSce, until the dispute between them and the self-actor minders is finally ter- minated. By special order. Carrodus, 32 Greaves Street, Oldham." The case was heard upon demurrers. The vice chancellor says: "For the reasons I have stated, I over- ruled these demurrers, because the biU states, and the demurrers admit, acts amounting to the destruction of property." Of this case, the court, in Sherry v. Perkins, say: "Some INJUNCTIONS. 775 of the language In Spinning Co. t. Riley lias been criticised, but the decision has not been overruled." The cases are there cited in •which that decision lias been doubted or crit- icised. Of that decision, this court, in Boston Diatite Co. t. Florence Manuf'g Co., 114 Mass. 69, say; "The opinions of Vice Chan- cellor Malins in Spinning Co. v. Riley, L. R, 6 Eq. 551, in Dixon v. Holden, L. R. 7 Eq. 488, and in Rollins v. Hhiks, L. R. 13 Eq. 355, appear to us to be so inconsistent with these authorities [authorities which the court had cited], and with well-settled principles, that it would be superfluous to consider whether, upon the facts before him, his de- cisions can be supported." Much the same language was used by the justices in As- surance Co. V. Knott, 10 Ch. App. 142, a part of the headnote of which is: "Dixon v. Hold- en and Spinning Co. v. Riley overruled." In Temperton v. Russell [1893] 1 Q. B. 435, 438, Lindley, L. J., says of the case of Spinning Co. V. Riley that it was overruled by the court of appeal in Assurance Co. v. Knott. Since the judicature act, however, the courts of England have interfered to restrain, by in- junction, the publication or continued publi- cation of libelous statements, particularly those injuriously affecting the business or property of another, as well as injunctions similar to that In the present case. St. 36 & 37 Vict. c. 66, § 25, subds. 5, 8; Monson v. Tus- saud [1894] 1 Q. B. 671, 672; Lyons v. Wll- kins [1896] 1 Ch. 811, 827. But, In the ab- sence of any power given by stalnite, the juris- diction of a court of equity, having only the powers of the English high court of chancery, does not, I think, extend to aijoining acts like those complained of in the case at bar, unless they amount to a destruction or threatened destruction of property, or an irreparable in- jury to it In England the rights of employ- ers and employed with reference to strikes, boycotts, and other similar movements have not. In genwal, been left to be worked out by the courts from common-law principles, but statutes, from time to time, have been passed defining what may and what may not be per- mitted. The administration of these statutes largely has been through the criminal courts. As a means of prevention, the remedy given by Pub. St c. 74, § 2, would seem to b€ ade- quate where the section is applicable, unless the destruction of, or an irreparable injury to, property is threatened; and there is the I additional remedy of an indictment for a I criminal consgiggy at common law, if the '"«6ts of the defendant amount to that. If the acts complained of do not amount to intimi- dation or force, It is not in aU respects clear what are lawful and what are not lawful at common law. It seems to be established in this commonwealth that, intentionally and without justifiable cause, to entice, by peiv suasion, a workman to break an existing con- tract with his employer, and to leave his em- ployment, is actionable, whether done with actual malice or not Walker v. Oronin, 107 Mass. 555. What constitutes Justifiable cause remains in some respects undetermined. Whether to persuade a person who is free to choose his employment not to enter into the employment of another person gives a cause of action to such other person, by some courts has been said to depend upon the question of actual malice; and, in considering this ques- tion of malice. It Is said that it is important to determine whether the defendant has any lawful Interest of his own in preventing the em- ployment, such as that of competition in busi- ness. For myself, I have been unable to see how malice is necessarily decisive. To persuade one man not to enter into the employment of another, by telling the truth to him about such f ' lier person and his business, I am not convinced is actionable at common law, what- ever the motive may be. Such iwrsuasion, when accompanied by falsehood about such other person or his business, may be action- able, unless the occasion of making the state- ments Is privileged; and then the question of actual malice may be Important. This, I think, is the effect of the decision in Rice v. Albee, 164 Mass. 88, 41 N. E. 122. When one man orally advises another not to enter Into a third person's employment, it would, I think, be a dangerous principle to leave his liability to be determined by a jury upon the question of his malice or want of malice, ex- cept in those cases where the words spoken, were false. In the present case, if the estab- lishment of ai patrol is using Intimidati'on or force, within the meaning of our statute, it is illegal and criminal. If it does not amount to intimidation or force, but is carried to such a degree as to interfere with the use by the plaintiff of his property, it may b e lUegaL aafl. acti onable,. But something more is nee- \ 'essaryTo" justify issuing an Injunction. If It is in violation of any ordinance of the city regulating the use of streets, there may be a prosecution for that, and the police can en- force the ordinance; but If It Is merely a peaceful mode of finding out the persons who intend to enter the plaintiff's premises to ap- ply for work, and of informing them of the actual facts of the case, in order to induce them not to enter the plaintiff's employment. In the absence of any statute relating to the subject, I doubt If It Is illegal, and I see no ground for issuing an injunction against it. As no objection Is now made by the defend- ants to the equitable jurisdiction, I am of opinion on the facts reported, as I under- stand them, that the decree entered by Mr. Justice HOt-MES should be affirmed, without modification. HOLMES, J. (dissenting). In a case like the present, it seems to me that, whatever the true result may be, It will be of advantage to sound thinking to have the less popular view of the law stated, and therefore, although, when I have been unable to bring my breth- ren to share my convictions, my almost in- variable practice is to defer to them in si- y 776 INJUNCTIONS. i lence, I depart from that practice In this case, notwithstanding my tinwlUlngness to do so, m support of an already rendered judg- ment of my own. In the first place, a word or two should be said as to the meaning of the report. I as- sume that my brethren construe It as I meant It to be construed, and that, if they were not prepared to do so, they would give an oppor- tunity to the defendants to have It amended In accordance with what I state my meaning to have been. There was no proof of any threat or danger of a patrol exceeding two men, and as, of course, an Injunction Is not granted except with reference to what there is reason to expect In its absence, the ques- tion on that point Is whether a patrol of two men should be enjoined. Again, the defend- ants are enjoined by the final decree from in- timidating by threats, express or implied, of physical harm to body or property, any per- son who may be desirous of entering into the employment of the plaintiff, so far as to pre- vent him from entering the same. In order to test the correctness of the refusal to go further. It must be assumed that the defend- ants obey the express prohibition of the de- cree. If they do not, they fall within the I Injunction as it now stands, and are liable to I summary punishment. The important differ- ence between the preliminary and the final I injunction Is that the former goes further, I and forbids the defendants to interfere with f the plaintiff's business "by any .scheme * * * ; organized for the purpose of • * • pre- / venting any person or persons who now are or I may hereafter be • • * desirous of enter- ! Ing the [plaintiff's employment] from enter- ing it." I quote only a part, and the part which seems to me most objectionable. This Includes refusal of social intercourse, and even organized persuasion or argument, al- though free from any threat of violence, either express or implied. And this Is with reference to persons who have a legal right to contract or not to contract with the plain- tiff, as they may see fit. Interference with existing contracts is forbidden by the final decree. I wish to insist a little that the only point of difference which involves a differ- ence of principle between the final decree and the preliminary Injunction, which It Is proposed to restore, Is what I have mention- ed, in order that it may be seen exactly what we are to discuss. It appears to me that the opinion of the majority turns In part on the assumption that the patrol necessarily car- ries with It a threat of bodily harm. That as- sumption I think unwarranted, for the rea- sons which I have given. Furthermore, It cannot be said, I think, that two men, walk- ing together up and down a sidewalk, and speaking to those who enter a certain shop, do necessarily and always thereby convey a threat of force. I do not think It possible to discriminate, and to say that two workmen, or even two representatives of an organiza- tion of workmen, do; especially when they are, and are known to be, under the Injunc- tion of this court not to do so. See Stimson, Labor Law, f 60, especially pages 290, 29g- 300; Reg. V. Shepherd, 11 Cox, Cr. Cas. 325. I may add that I think the more intelligent workingmen believe as fully as I do that they no more can be permitted to usurp the state's prerogative of force than can their op- ponents In their controversies. But, If I am wrong, then the decree as It stands reaches the patrol, since it applies to all threats of force. With this I pass to the real difference between the interlocutory and the final de- cree. I agree, whatever may be the law in the case of a single defendant (Bice y. Albee, 164 Mass. 88, 41 N. E. 122), that when a plaintiff proves that several persons have combined and conspired to Injure his business, and have done acts producing that effect, he shows temporal damage and a cause of ac- tion, unless the facts disclose or the defend- ants prove some ground of excuse or justifi- cation; and I take It to be, settled, and rightly settled, that doing that damage by combined persuasion Is actionable, as well as doing It by falsehood or by force. Walker v. Cronin, 107 Mass. 555; Morasse v. Brochu, 151 Mass. 567, 25 N. B. 74; Tasker v. Stanley, 153 Mass. 148, 26 N. E. 417. Nevertheless, In numberless instances the law warrants the intentional Infliction of tem- poral damage, because it regards it as justi- fied. It is on the question of what shall amount to a justification, and more especially on the nature of the consideratlpns which really determine or ought to determine the answer to that question, that Judicial reason- ing seems to me often to be Inadequate. The true grounds of decision are considerations of policy and of social advantage, and It Is vain to suppose that solutions can be attain- ed merely by logic and general propositions of law which nobody disputes. Propositions as to public policy rarely are unanimously accepted, and still more rarely. If ever, are capable of unanswerable proof. They re- quire a special training to enable any one even to form an intelligent opinion about them. In the early stages of law, at least, they generally are acted on rather as inarticulate Instincts than as definite ideas, for which a rational defense is ready. To illustrate what I have said In the last paragraph: It has been the law for cen- turies that a man may set up a business in a small country town, too small to support more than one, although thereby he expects and Intends to ruin some one already there, and succeeds In his intent. In such a case he Is not held to act "unlawfully and with- out justifiable cause," as was alleged in Walk- er V. Cronm and Rice y. Albee. The reason, of course, is that the doctrine generally has been accepted that free competition is worth more to society tnan It costs, and that on this ground the Infilctlon of the damage ia INJUNCTIONS. 777 privileged. Com. t. Hunt, 4 Mete. (Mass.) Ill, 134. Yet even this proposition nowadays Is disputed by a considerable body of per- sons, including many whose intelUgence is not to be denied, little as wa may agree with them. I have chosen this illustration partly with reference to what I have to say next. It shows without the need of further authority that the policy of allowing free competition justifies the intentional inflicting of temporal damage. Including the damage of interference with a man's business by some means, when the damage is done, not for its own sake, but as an instrumentality in reaching the end of victory in the battle of trade. In such a case it cannot matter whether the plaintiff Is the only rival of the defendant, and so is aim- ed at specially, or is one of a class all of whom are hit. The only debatable ground ig the nature of the means by which such dam- age may be inflicted. We all agree that it cannot be done by force or threats of force. We all agree, I presume, that it may be done by persuasion to leave a rival's shop, and come to the defendant's; It may be done by the refusal or withdrawal of various iieeun- lary advantages, which, apart from this con- sequence, are within the defendant's lawful control. It may be done by the withdrawal of, or threat to withdraw, such advantages from third persons who have a right to deal or not to deal with the plaintiff, as a means ftf inducing them not to deal with him either as customers or servants. Com. v. Hunt, 4 Mete. (Mass.) Ill, 112, 133; Bowen v. Mathe- son, 14 Allen, 499; Hey wood v. TlUson, 75 Me. 225; Steamship Co. v. McGregor [1892] App. Cas. 25. I have seen the suggestion made that the conflict between employers and employed was not competition. But I ven- ture to assume that none of my brethren would rely on that suggestion. If the policy on which our law is founded is too narrowly expressed in the term "free competition," we may substitute "free struggle for life." Cer- tainly, the policy is not limited to struggles between persons of the same class, competing for the same end. It applies to all conflicts .of temporal Interests. / I pause here to remark that the word • "threats" often Is used as if, when it appear- ' .ed that threats had been made, it appeared ; that unlawful conduct had begun. But it \4 depends on what you threaten. As a general rule, even if subject to some exceptions, what you may do in a certain event you may threaten to do— that Is, give warning of your Intention to do— In that event, and thus allow the other person the chance of avoiding the consequence. So, as to "compulsion," it de- pends on how you "compel." Com. v. Hunt, 4 Mete. (Mass.) Ill, 133. So as to "annoyance" or "intimidation." Connor v. Kent, Curran v. Treleaven, 17 Cox, Or. Oas. 3.54, 367, 368, 370. In Sherry ▼. Perkins, 147 Mass. 212, 17 N. E. 307, it was found as a fact that the display of banners which was enjoined was part of a scheme to prevent workmen from entering or remaining in the plaintiff's employment, "by threats and intimidation." The context show- ed that the words as there used meant threats of personal violence and intimidation by causing fear of it. < Bo far, 1 suppose, we are agreed. But ther^ I Is a notion, which latterly has been insisted \ on a good deal, that a combination of persons \ ' to do what any one of them lawfully might 1 / do by himself wiU m&ke the otherwise lawful 1/ conduct unlawful. It would be rash to say / that some as yet unformulated truth may i not be hidden under this proposition. But, in the general form in which it has been pre- sented and accepted by many courts, I think it plainly untrue, both on authority and prin- ciple. Com. V. Hunt, 4 Mete. (Mass.) Ill; KandaU v. Hazelton, 12 AUen, 412, 414. There was combination of the most flagrant and dominant kind in Bowen v. Matheson, and in the Steamship Co. Case, and combi- nation was essential to the success achieved. But it is not necessary to cite cases. It is plain from the slightest consideration of practical affairs, or the most superficial read- ing of industrial history, that free competi- tion means combination, and that the organi- zation of the world, now going on so fast, means an ever-increasing might and scope of combination. It seems to me futile to set our faces against this tendency. Whether beneficial on the whole, as I think it, or detri- mental, it is inevitable, unless the funda- mental axioms of society, and even the fun- damental conditions of life, are to be chan- ged. One of the eternal conflicts out of which life is made up is that between the effort of every man to get the most he can for his services, and that of society, disguised under the name of capital, to get his services for the least possible return. Combination on the one side is patent and powerful. Combi- nation on the other is the necessary and de- sirable counterpart, if the battle is to be car- ried on in a fair and equal way. I am una- ble to reconcile Temperton v. Russell [1893] 1 Q. B. 715, and the cases which follow it. With the Steamship Co. Case. But Temper- ton V. EusseU is not a binding authority here, and therefore I do not think it necessary to discuss it. If it be true that workingmen may combine with a view, among other things, to getting as much as they can for their labor, just as capital may combine with a view to getting the greatest possible return, it must be true that, when combined, they have the same liberty that combined capital has, to support their Interests by argument, persuasion, and the bestowal or refusal of those advantages which they otherwise lawfully control. I can remember when many people thought that, apart from violence or breach of contract, strikes were wicked, as organized refusals to work. I suppose that Intelligent economists and legislators have given up that notion to- 778 INJUNCTIONS. day. I feel pretty confident that they equal- ly will abandon the Idea that an organized refusal by workmen of social intercourse with a man who shaU enter their antagonist's . employ is unlawful, if it is dissociated from any threat of violence, and ira made for the^ sole object of prevailing, if possible, in a con- test with their employer about the rate of wages. The fact that the immediate object of the act by which the. benefit to themselves Is to be gained is to injure their antagonist does not necessarily make It unlawful, any more than when a great house lowers the price of goods for the purpose and with the effect of driving a smaller antagonist from the business. Indeed, the question seems to me to have been decided as long ago as 1842, by the good sense of Chief Justice Shaw, In €om. v. Hunt, 4 Mete. (Mass.) 111. I repeat ia.t the end, as I said at the beginning, that this is the point of difference In principle, and the only one, between the interlocutory and final decree; and I only desire to add that the distinctions upon which the final decree was framed seem to me to have coincided very accurately with the results finally reach- ed by legislation and judicial decision in Eng- land, apart from what I must regard as the anomalous decisions of Temperton v. Russell and the cases which have followed It Reg. V. Shepherd, 11 Cox, Cr. Cas. 325; Connor v. Kent, Gibson t. Lawson, and Curran v. Tre- leaven, 17 Cox, Cr. Cas. 354. The general question of the propriety of dealing with this kind of case by injunction I say nothing about, because I understand that the defendants have no objection to the final decree If It goes no further, and that both parties wish a decision iq>on the matters which I have discussed. INJUNCTIONS. 779 HAAni/TON-BROWN SHOE CO. v. SAXEX et al. (32 S. W. 1106, 131 Mo. 212.) Supreme Court of Missouri, Division No. 1. Nov. 26, 1895. Appeal from St. Louis circuit court Bill by the Hamilton-Brown Shoe Com- pany to enjoin A. J. Saxey and others from attempting, by threats and Intimidation, to force complainant's employes to quit work. A demurrer to the bill was overruled, and defendants appeal Affirmed. John P. McDermott, for appellants. Silas B. Jones, for respondent. PER CURIAM. This is an appeal from the final judgment of the circuit court of the ■city of St Louis on a demurrer to the plain- tifif's petition, which is as follows: "Plain- tifC states that It is a corporation duly organ- ized under the laws of the state of Missouri, and is engaged in the manufacture of shoes in the city of St Louis, Missouri, at Twenty- First and Locust streets in said city, at which place its factory for the purpose of its said manufacturing business is located. And plaintiff says that it has in its employ in said manufacturing business, in its factory as aforesaid, between eight and nine hun- dred persons; that all of these persons are at work as operatives in some department or other of said factory; that of these employes as aforesaid a large number, to wit, about two or three hundred, are women and girls, and a large number, to wit, about two or three hundred, are young persons, many of them not being of age, and the balance of said operatives are adult men; that all of these persons are engaged in earning a live- lihood at the business of this plaintifC afore- said, and, on the other hand, this plaintifC requires the services of these persons to successfully carry on its business of manu- facturing shoes as aforesaid. Plaintiff fur- ther states that all of these employes now In the employ of this plaintiff are desirous of continuing in the service of the plaintiff In its said business as aforesaid. Plaintiff further states that ten or fifteen days ago some of Its employes, including all the de- fendants herein, except the defendants Thomas Beaty and P. J. McGarry, went out of the employ of this plaintiff on what is commonly called a 'strike,' claiming to have some grievance against this plaintiff, and which this plaintiff says was without any reasonable ground to rest upon, and there- upon attempted to inaugurate among the employes of this plaintiff what is commonly called a 'strike'; that thereupon the said de- fendants, lately employSs of this plaintiff, together with the defendants Beaty and Mc- Garry and divers other persons, unlawfully and wrongfully combined and confederated together to terrorize, and thereby, by in- timidation and threats, to prevent the other employes of this plaintiff from peaceably or otherwise prosecuting their work in plain- tiff's factory; that thereupon all of the de- fendants hereto, together with their associ- ates and confederates, whose names are at this moment unknown to this plaintiff, be- gan and have constantly pursued in a course of threats of personal violence and intimida- tion and persuasion, for the purpose, by means of such intimidation and threats and fear, to prevent the other employes of this plaintiff from peaceably or otherwise prose- cuting their work in plaintiff's factory; that all of the said defendants hereto, together with divers and sundry other persons, who are their associates and confederates, have constantly hung about the plaintiff's said factory at the place aforesaid, and upon the streets in close proximity, for the purpose of picketing the premises of this plaintiff, and, by putting the employes of this plain- tiff in fear of bodily injury, to thereby keep them from continuing their employment with this plaintiff, and also for the purpose of preventing other persons from entering the employ of the plaintiff; and the said de- fendants and their associates and confed- erates, as a part of their policy of threats and intimidation, and for the purpose of carrying on their unlawful combination, have gone to the homes of divers of the employes of this plaintiff at nighttime, and then and there undertaken to induce, by persuasion and by intimidation and threats, the employes of this plaintiff from further prosecuting their work in plaintifCs said factory. And the plain- tiff charges that the said defendants therein named, and their associates and confeder- ates, for a number of days, by the use of threats arid personal violence, intimidation, and other unlawful means, have been and are now, undertaking to prevent the em- ployes of this plaintiff from prosecuting their ordinary work, and are endeavoring to induce them, by the unlawful means afore- said, to quit the employment of this plaintiff. And plaintiff says that by reason of the fact that a great many of its employes are wo- men and girls and young persons, that tue defendants aforesaid and their associates and confederates have succeeded in exciting in the minds of the plaintiff's said employes, or many of them, fear for their bodily safe- ty, to such an extent that they cannot hap- pily, as they have a right to do, prosecute their ordinary work; and plaintiff says, by reason of the premises. It cannot peaceably and successfully prosecute its said business. And plaintiff says it is without remedy at law, and can only be fully protected and relieved in a court of equity. Plaintiff there- fore prays that the defendants, their associ- ates and confederates, be enjoined by a temporary order of Injunction, to be made final upon the hearing of this cause, issued out of this court, from in any manner Inter- fering with the employes of this plaintiff 780 INJUNOTIONS. now in the employ of the plaintiff, and from In any manner interfering with any person who may desire to enter the employ of this plaintiff, by the use of threats, personal vio- lence, intimidation, or other means calcu- lated to terrorize or alarm the plaintiff's em- ployes, in any manner or form whatever, and that said defendants and their associ- ates and confederates aforesaid be restrain- ed by the order of this court from undertak- ing, by the use of the means aforesaid, to in- duce or to cause any of the employes of this plaintiff to quit the employment of this plaintiff, and that the defendants aforesaid and their associates and confederates be enjoined from congregating or loitering about the premises of this plaintiff at the place aforesaid, and that they be required by the injunction of this court to go about their ordinary business, and to abstain from In any way interfering with the business of this plaintiff, and for such other and further and general relief as may to the court ap- pear proper In the premises." The case was tried before the Hon. L. Valliant, one of the judges of that court, who, on overruling the demurrer, delivered the following opinion: "The amended petition states in substance that the plaintiff conducts a large shoe manufactory in this city, and has in its em- ploy some eight or nine hundred persons, all of whom are earning their living in plain- tiff's employment, and are desirous of so continuing; that the defendants, except two of them, were lately in plaintiff's employ, but have gone out of the same, on a strlte, and are now, with the other two defendants, engaged in an attempt to force the other employes of plaintiff to quit their work and join in the strike, and that to accomplish this purpose they are Intimidating them with threats of personal violence; that among the plaintiff's employes who are thus threat- ened are about 300 women and girls and two or three hundred other young persons; that the effect of all this on the plaintiff's busi- ness, if the defendants are allowed to pro- ceed, would be to Inflict incalculable dam- age. Upon filing this amended petition, and the plaintiff's giving bond as required by law, a temporary injunction issued, restrain- ing the defendants from attempting to force the plaintiff's employes to leave their work by Intimidation and threats of violence, or from assembling for that purpose in the vi- cinity of plaintiff's factory. The defendants have appeared by their counsel, and, by their demurrer filed, admit that all the state- ments of the amended petition are true; but they take the position that, even if they are doing the unlawful acts that they are char- ged with doing, still this court has no right to Interfere with them, because they say that what they are doing is a crime, by the stat^ law of this state, and that for the commission of a crime they can only be tried by a jury in a court having criminal jurisdiction. It will be observed that the de- fendants do not claim to have the right to do what the injunction forbids them doing. Their learned counsel even quotes the stat- ute to show that It Is a crime to do so. But he contends that the constitution of the Unit- ed States and the constitution of the state of Missouri guaranty them the right to com- mit crime, with only this limitation, to wit, that they shall answer for the crime, when committed, in a criminal court, before a jury, and that to restrain them from committing crime is to rob them of their constitutional right of trial by jury. If that position be correct, then there can be no valid statute to prevent crime. But that position is con- trary to all reason. The right of trial by jury does not arise untU the party Is ac- cused of having already committed the crime. I f_you see a ma n advancing upon an- otherr ^^ murder ous dflmeanof"and a_deaj-" Ty^eaponTandyQ a. arrest him.— disarm him. " — ygi TTlave'pCTEan a. jrevented an act which would have brought abo ut a tria l by jury, but c an you be "Baidrt6 ha v e deprivea~EIin~or " iy'jury ? The his.ronsupil3on al right of Trial train^thou^i put In motion by the argu- ment of the learned counsel for defendants on this point leads only to this end, to wit, I that the constitution guaranties to every man' the right to commit crime, so that he may) enjoy the inestimable right of trial by juryi "Passing now to the question relating to' the particular jurisdiction of a court of equi- ty, we are brought to face the proposition that a court of equity has no criminal juris- diction, and will not interfere by injunction to prevent the commission of a crime. These two propositions are firmly established; and asj to the first, that a court of equity has no 1/ criminal jurisaic tibn',' t^r gI3s_no exception. < • ^ TO tne "sgcgnd," that a ^^ ~of 'entity wllT •got interfefe by" Injunction to pre yent th g coj nmission of a crim e, that, too, is perhaps- without exception, when properly interpret- ed, but it is sometimes misinterpreted. When we say that a court of equity will never interfere by injunction to prevent the ' commission of a crime, we mean that it will not do so simply for the purpose of prevent- ing a Violation of a criminal law. But when theactcompla ined of threatens ^ n irrepa-^ "fafilejojjSFlErthepro perty of an individual' 'a .^ourt of equity will in terfere to prevent tha£.injury, notwithstanding ttgact may al- s6"be it f io ^tion of a criiSiinarKw. In such case the court does not Interfere to prevent the commission of a crime, although that may incidentally result, but it exerts its force to protect the individual's property from de- struction, and ignores entirely the criminal portion of the act. There can be no doubt of the jurisdiction of a court of equity In such a case. On this question counsel have dted cases in which courts of equity have been denied jurisdiction to enjoin the publi- cation of a libel, and in those opinions are to be found the general statement of the INJUNCTIONS. 781 proposition above mentioned. But the law of libel is peculiar, and those cases turn up- on that peculiarity. The freedom of the press has been so jealously guarded both in England and in this country that our law of libel is like no other law on the books. Oiu: constitution provides that a man may say, write, and publish 'whatever he will,' being answerable only for the 'abuse of lib- erty." Libel Is the only act injurious to the rights of another which a man ca'nnot, un- der proper conditions, be restrained from conmiitting; and that is so because the con- i.stitution says he shall be allowed to do it, band answer for it afterwards. Equity will §-not Interfere when there is an adequate rem- 'f cdy at law. But what remedy does the law afCord that would be adequate to the plaln- tifE's injury? How would their damages be •estimated? How compensated? The defend- ants' learned counsel cites us to the criminal statute, but how will that remedy the plain- tiff's injury? A criminal prosecution does not propose to remedy a private wrong. And, even if there was a statute giving a legal remedy to plaintiff, it would not oust the . equity jurisdiction. The legal remedy that closes the door of a court of equity is a common-law remedy. Where equity had ju- risdiction because the common law affords no adequate remedy, that jurisdiction is not. affected by a statute providing a legal rem- edy. What a humiliating thought it would be If these defendants were really attempt- ing to do what the amended petition char- ges, and what their demurrer confesses, — that is, to destroy the business of these plain- tiffs, and to force the eight or nine hundred men, women, boys, and girls who are earn- ing their livings in the plaintiff's employ to quit their work against their will,— and yet there is no law In the land to protect them. \'5The injunction in this case does not hinder the P defendants doing anything that they claim //they have a right to do. They are free men. and have a right to quit the employ of plain- tiffs whenever they see fit to do so, and no one can prevent l^em; and whether their act of quitting is wise or unwise, just or un- just. It is nobody's business but their own. And they have a right to use fair persuaslonl' to induce others to join them in their quit-j ting. But when fair persuasion is exhausted they have no right to resort to force or I threats of violence. The law will protect / their freedom and their rights, but it will not permit them to destroy its freedom and rights of others. The same law which guar- anties the defendants in their right to quit the employment of the plaintiffs at their own will and pleasure also guaranties the other employes the right to remain at their will and pleasure. These defendants arel their own masters, but they are not the mas-/ ters of the other employes, and not only are/ they not the masters of the other employes,) but they are not even their guardians. There is a maxim of our law to the effect that one may exercise his own right as he pleases, i provided that he does not thereby prevent! another exercising his right as he pleases.! This maxim or rale of law comes nearer than any other rule in our law to the golden rule of Divine authority; That which — soa- — iB Qiiifi hflv r nnntlirr_d" unto' you, do you. .even--so--«Bta_JUifim,2---WhiIst_^e__stH3[[^^, forcement of the golden rule is beyond lEe mandate of a human tribunal, yet courts of equity, by injunction, do restrain raen who are so disposed from so exercising thW own rights as to destroy the rights of Athers. The demurrer to the amended petit^n is overruled." The law applicable to the case is so cleSS-ly stated In this opinion of the learned judge that to add anything to it would be a work of supererogation. We adopt it as the opin- ion of this court, and affirm the judgment All concur. v^ vw \782 INJUNCTIONS. CRAWFORD et al, v. TYRRELL (28 N. B. 514, 128 N. T. 341.) Court of Appeals of New York. Oct 6, 1891. Appeal from supreme court, general term, Secoria department. Action by John P. Crawford and others against Martin B. Tyrrell, to restrain de- fendant from keeping a house of ill fame, and to recover damages for injury sustain- ed. Judgment for plaintiffs. Defendant appeals. Affirmed. Jas. & Thos. H. Troy, for appellant Al- fred B. Mudge, for respondents. GRAY, J. In this action, -which was brought to restrain the defendant from keep- ing a house of ill fame and from using his premises as an assignation house, and to re- cover damages for injuries sustained, the trial court found as facts that the house, as maintained by defendant, was a resort for prostitutes and licentious men, and that the persons occupying rooms acted in a boister- ous and noisy manner, and indecently ex- posed their persons at the windows, "where- by the use and occupation of the plaintiffs' premises have been interfered with and ren- dered uncomfortable, and whereby the occu- pants of the plaintiffs' premises have been annoyed and seriously disturbed." Such a finding -was amply justified by the evidence, and, indeed, it is not discussed by the ap- pellant; but he argues that the plaintiffs could not maintain a civil action of this na- ture, inasmuch as the damage they suffered was a damage common to the whole com- mimity, and not special to them. If that position had been sustained by the facts, I do not doubt but that it would have been the duty of the trial judge to have denied the relief prayed for. The rule of law requires of him who complains of his neighbor's use of his property, and seeks for redress and to I restrain him from such use, that he should I sliow that a substantive injury to property is committed. The mere fact of a business be- ing carried on which may be shown to be immoral, and, therefore, prejudicial to the character of the neighborhood, furnishes of itself no ground for equitable interference at the suit of a private person; and, though the use of property may be unlawful or unrea- sonable, unless special damage can be' shown, a neighboring property owner cannot base thereupon any private right of action. It is for the public authorities, acting in the com- mon interest, to interfere for the suppression of the common nuisance. See Francis v. Schoellkopf, 53 N. Y. 152. If the business complained of is a lawful one, the legal question presented In a civil action for pri- vate damage is whether the business is rea- sonably conducted, and whether, as con- ducted, it is one which is obnoxious and hurt- ful to adjoining property. If the business is unlawful, the complainant in a private ac- tion must show special damage, by which the legitimate use of his adjoining property has been interfered with, or its occupation rendered unfit or uncomfortable. That the perpetrator of the nuisance Is amenable to the provisions and penalties of the criminal law is not an answer to an action against him by a private person to recover for injury sustained, and for an Injunction against the continued use of his premises in a similar manner. The principle has been long settled that the objection that the nuisance was a common one is not available if it be shown that special damage was suffered. Rose v. Miles, 4 Maule & S. 101; Rose v. Groves, 5 Man. & G. 613; Francis v. Schoellkopf, su- pra; Lansing v. Smith, 4 Wend. 9. One who uses his property lawfully and reasona- bly, in a general legal sense, can do injury to nobody. In the full enjoyment of his legal rights in and to his property the law will not suffer a man to be restrained, but his use of the property must be always such as in no manner to invade the legal rights of his neighbor. The rights of each to the enjoyment and use of their several proper- ties should, In legal contemplation, always be equal. If the balance is destroyed by the act of one, the law gives a remedy in damages, or equity will restrain. If the use of a property is one which renders a neigh- bor's occupation and enjoyment physically uncomfortable, or which may be hurtful to the health, as where trades are conducted which are offensive by reason of odors, noises, or other injurious or annoying features, a pri- vate nuisance is deemed to be established, against which the protection of a court of equity power may be invoked. In the pres- ent case the indecent conduct of the occu- pants of the defendant's house, and the noise therefrom, inasmuch as they rendered the plaintiffs' house unfit for comfortable or re- spectable occupation, and unfit for the pur- poses it was intended for, were facts which constituted a nuisance, and were sufficient grounds for the maintenance of the action. If it was a nuisance which affected the general neighborhood, and was the subject of an indictment for its unlawful and immoral features, the plaintiffs were none the less entitled to their action for any Injury sus- tained, and to their equitable right to have its continuance restrained. The judgment appealed from should be affirmed, with costs^ All concur, except FINCH, J., absent INJUNCTIONS. 783 WEINSTOOK, LUBIN & 00. t. MAEKS. (Nb. 18,375.) (42 Pac. 142, 109 Gal. 529.) Supreme Court of California. Oct. 12, 1895. Department 1. Appeal from superior court, Sacramento county; Matt F. Johnson, Judge. Action by Weinstock, Lubin & Co., a cor- poration, against H. Marks. There was a judgment for plaintiff, and defendant appeals. Reversed in part Holl & Dunn, for appellant Johnson, Johnson & Johnson, for resx>ondent GAROUTTB, J. Plaintiff Is a «»rporatIon carrying on a large clothing and dry-goods business in the city of Sacramento. Defend- ant is also a dealer in clothing of the same general character, and Is carrying on business in a building adjoining plalntifPs place of business. The present action is one of injunc- tion, and by its decree, among other things, the court ordered defendant to. refrain from further use of the name "Mechanical Store" as the designation of his place of business, and further decreed that defendant maintain and place in a conspicuous part of his store, and also in a conspicuous place on the out- side or front thereof, a sign showing the pro- prietorship of his said store, in letters suffi- ciently large to be plainly observable by pass- ers-by and customers entering therein. De- fendant appeals from the foregoing portions of the judgment The judgment is based upon certain find- ings of fact made by the trial court upon the evidence offered at the trial, and no com- plaint is now heard that this evidence does not fuUy support these findings. It therefore follows that the merit of this appeal presents' itself upon a consideration of those findings and the decree based thereon. These findings of fact are fuU and in detail, and, for present purposes, we deem it sufficient to state the general tenor and effect of some of them, (1) The court finds that on or about the 8th day of October, 1874, H. Weinstock and D. Lubin entered into a copartnership imder the firm name and style of Weinstock & Lubin, of the city of Sacramento, and, as such partners, engaged in the business of dealing in wearing apparel for men, women, and children, and that said Weinstock & Lubin selected as the name of their place of business "Mechanics' Store," and designated the same by that ap- peUatlon, by which name their said store thenceforth was continually knovm; that, in the management and conduct of their business, they fixed a price upon each and every ar- ticle carried by them In the stock of said store, and marked the said prices In figures upon each article, and sold such articles at the prices so marked, and never deviated there- from; and they advertised the said method of doing business extensively throughout the entire Pacific coast by means of newspapers, etc., by means whereof their said method of doing business became widely known to the trade and public throughout the entire Pacific coast, and by reason whereof it became and was well knovsm to the trade and public in California and the other states and territories of the Pacific coast that at the store of said Weinstock & Lubin only one price was char- ged for goods sold therein, and that no devia- tion from said price was permitted. (2) That, by care, attention, skill, and strict adherence to business and the rules as aforesaid, this plaintiff has materially increased the volume and importance and value of said business, and enhanced the good will thereof, and the said plaintiff has established for the said store and business throughout the said states and ter- ritories a wide and honorable reputation, and thereby said business has become extensive and valuable and profitable, and the pub- lic have become accustomed to plaintiff's said method of doing business, and have been in- duced to rely, and do rely, upon the good faith of the plaintiff in managing and conducting its business in the manner aforesaid, and by reason thereof have been induced to bestow and do bestow upon the plaintiff their custom, trade, patronage, and business. (3) That on or about 1885 the defendant, who had pre- viously been engaged in business elsewhere, and was without any established reputation of his own, and whose business was unknown to the trade and general public, removed his business from the place he then occupied to the premises on the east of and near the premises of this plaintiff; and the defendant then and there engaged In a similair line of trade as this plaintiff, and ever since then he has maintained and conducted, and stiU main- tains and conducts, the said store at said place, and carries on the said business therein; and Tie named his store in the year 1887 or thereabouts the "Mechanical Store." (4) Thai the defendant, well knovnng the foregoing facts, and contriving, intending, and design- ing fraudulently to injure this plaintiff, and to obtain undue advantage of plaintiff, and to deprive the plaintiff of its business, and fraudulently and unlawfully to increase his own business, and to pirate and make use of and appropriate to himself the good will of the plaintiff's business, and the said reputa- tion and honorable esteem and confidence that the plaintiff enjoyed in the minds of the peo- ple of the Pacific coast, and in order to create confusion In the public mind, and to take ad- vantage of the standing that the plaintiff by its aforesaid acts had acquired in said ter- ritory, and fraudulently designing to deceive the public and people Intending to trade with the plaintiff, and to divert the custom of the plaintiff to himself, and to deprive the plain- tiff of its customers and of the trade, and to Induce the people to trade with the defend- ant under the belief that they were trading with the plaintiff, and for the purpose of de- ceiving plaintiff's customers and persons in- tending to trade with plaintiff into believing that the defendant's store was that of the 784 INJUNCTIONS. plaintiff, ana thereby Inducing them to enter said store of defendant to trade with said defendant, to his profit, and in order to carry out his fraudulent and corrupt designs as aforesaid,— the defendant has persistently car- ried out a system of deceit and misrepresen- tations concemiafi Ms store and its ownership, in connection with plaintiff's store and busi- ness, as follows: That in 1891 plaintiff, at Its place of business, erected a store, the front of which is of peculiar architecture, contain- ing arches and alcoves, of which there was none other similar in the city of Sacramento; Ithat afterwards the defendant, at his said \place of business, and adjoining plaintiffs ptore, erected a building which, so far as the st or lower story is concerned, was and Is bimilar in architecture in every respect to the ^tore of plaintiff, so much so that passers-by vere liable to go Into the store of defendant thinking that they were entering the store of plaintiff, and that customers of plaintiff in many instances did so enter the store of de- fendant thinking they were in the store of plaintiff; that defendant had no sign inside of his store or on the outside of his store by which customers could for themselves ascer- tain the true proprietorship thereof; that the erection of the defendant's building exactly the same as plaintiff's building in every par- ticular, and the adoption of the use of the words "Mechanical Store," and the absence of any name or sign upon or in defendant's store designating the true proprietorship of defendant's store, were all done by the de- fendant for the purpose of deceiving the pub- lic, and more especially plaintiff's customers, and enticing and pirating and securing the patronage of said customers from plaintiff to defendant (5) That, by the aforesaid means the defendant has diverted from the plaintiff a large part of plaintiff's trade and custom; has induced many persons to trade with the defendant who otherwise would have traded with the plaintiff; has sold large quantities of goods in his said store to persons who, but for said acts of defendant, would have pur- chased said goods of the plaintiff; has de- prived the plaintiff of a large share of its legit- imate profits; has injured the business and reputation of the plaintiff; has impau-ed the confidence of the public in the plaintiff and its method of doing business; and has deprived the plaintiff of a large number of its custom- ers and patrons. The foregoing chapter of facts makes in- teresting reading, and we first turn our at- tention to that portion of the judgment re- straining defendant from the further use of the words "Mechanical Store" as a designa- tion of his place of business. We see but little difficulty in arriving at a conclusion upon this branch of the case. Defendant assails the judgment in this pai-ticular with but a single weapon. He insists that the words "Mechanics' Store" are not the sub- ject of trade-mark, and that, therefore, plain- tiff can have no exclusive right to them. As we view the picture presented by the findings of fact, the question as to what may or may not be the subject of trade-mark Is not the problem to be solved. That these words are of a kind that may be used as a trade-name we have no doubt, and, having established that fact, we are required to pursue the investigation no further. That certain names and designations which may not become technical or specific trade-marks may become the names of articles or of places of business, and thereby the use thereof receive the protection of the law, cannot be doubted, for the cases everywhere recognize that fact. The learned judge said In Lee v. Haley, 5 Ch. App. 155: "I quite agree that they [the plaintiffs] have no property right in the name, but the prin- ciple upon which the cases on this subject proceed is not that there Is projmrty In the word, but that it Is a fraud on a person who has established a trade, and carried it on un- der a given name, that some other person should assume the same name, or the same name with a slight alteration, in such a way as to induce persons to deal with him In the belief that they are dealing with the person who has given a reputation to the name." A similar doctrine is declared in Manufactur- ing Co. V. Hall, 61 N. Y. 226, and also in the late case of Coats v. Thread Co., 149 TJ. S. 562, 13 Sup. Ct 966. This court said in Pierce v. Guittard, 68 Cal. 71. 8 Pac. 645: "We are of opinion that it is not necessary to de- cide whether the plaintiff's label, with the accompanying words and devices, constituted a trade-mark, and, as such, the exclusive property of the plaintiff, for the reason that it is a fraud on a person who has established a business for his goods, and carries it on under a given name or with a particular mark, for some other person to assume the same name or mark, or the same with a slight alteration, in such a way as to induce persons to deal with him in the belief that they are dealing with a person who has given a reputation to that name or mark." The same general principle is also recognized and approved in Schmidt v. Brieg, 100 Cal. 672, 35 Pac. 623. While in these two cases the fact appears that the defendants were selling an inferior article, and thereby de- ceiving and defrauding the public, it is not apparent that such fact was a necessary ele- ment in pointing the judgment. Neither do we consider It so upon principle; and in cases without number, restraining defendants from trespassing upon the good will of plaintiff's business, such fact was an element foreign to the litigation. It may be said that the adjudged cases for relief are based solely upon the ground of loss and damage to the tradesman's business, by unlawful competi- tion. In Levy v. Walker, Cox, Man. Trade- Mark Cas. No. 639, the learned judge de- clared: "The court Interferes sole^ for the purpose of protecting the owner of a trade or business from a fraudulent invasion of INJUNCTIONS. 785 that business by somebody else. It does not interfere to prevent the -world outside from being misled into anything." While our statutes attempt to deal with trade-marks, and provide for the filhig there- of with the secretary of state, with accom- panying affidavits, etc., yet trade- names are e qugJUy p rotected upon analogous'''princ'lple3 oIlaw!""35id that the words ''Mechanics* S!Me**"lnay be made a trade-name, and the user thereof become entitled under the law to protection from pirates preying upon the Bea of commercial trade, we have no doubt. W e thlnkjth e defendant should b g_restralned from tne JjiseoI ^'^M^ jyprfls ^^eclianical Store.*'' Th'e' court has declared tfie fact to be,-''SBa it is not challenged by defendant, that these words were used as a designation of his store for the purpose of deceiving the public, and especially plaintiff's customers, and thereby securing the advantages and benefits of the good wlU of plaintiff's busi- ness. To say that such conduct upon the part of defendant is unfair business compe- tition is to state the fact in the mildest terms. In Celluloid Manuf'g Co. v. Cello- nite Manuf'g Co., 32 Fed. 97, Justice Brad- ley, of the supreme court of the United States, in speaking to the question of sim- ilarity in name, said: "It was not identical with the plaintiff's name. That would be too gross an Invasion of the complainant's rights. Similari ty , not id entity, is the usual re eourse . when one party see KS to oenffif hlms^ byT Se gooSTame 'STSnotner. WBaF '^milarity is^suffcient to effect the "oBject has to be determined in each case by its circum- stances. We may say, generally, that a sim- ilarity which would be likely to deceive or mislead an ordinary unsuspecting customer, is obnoxious to the law." In this case the trial court determined that there was a suf- ficient similarity In the names to deceive the pubUc; that the defendant adopted the name for the purpose of deceiving the pub- lic and securing plaintiff's business; and that such results had followed. These things being true, the decree must go against him. The remaining branch of the case presents a novel and original proposition of. law. In its facts we apprehend no case like it can be found, either in this country or England. The decree orders the defendant to place, both upon the outside and inside of his store, a sign, plainly legible to customers and pass- ers-by, indicating his proprietorship; and, while the power of the court to issue manda- tory Injunctions In many cases must be con- ceded, yet cases where such power has been exercised have generally involved matters of nuisance, or at least cases where courts have ordered the subject-matter of the litigation to be placed in its original condition; as, for instance, the removing of obstructions to an- cient lights. But let us for a moment turn our attention to the facts of this case. The store of plaintiff was known as the "Mechan- ics' Store." By various kinds of advertising, H.& B.E<}.(2d BM.)— 50 and attention, honesty, and skill In the cao^ duct of the business. It Increased the volume thereof and enhanced its good will, and throughout the Pacific coast established for It a wide and honorable reputation as a fair and reliable house with whichi to deal. Plaintiff erected a store building of peculiar architecture, there being none like it in the city of Saa-amento; and defendant thereupon erected a store building, immediately adjoin- ing that of plaintiff's, in every respect of sim- ilar architecture. It further appears that de- fendant erected this particular kind of build- ing for the purpose of deceiving the public, and securing the patronage of plaintiffs cus- tomers; and for the same purpose he refrain- ed from placing any sign in or upon the buUding Indicating the proprietorship of the business, or designating it In any way so that it might be distinguished from the store of plaintiff. And, by reason of these acts of defendant, many of plaintiff's customers were deceived into purchasing goods in defendant's store, believing that they were trading In plaintiff's store; and defendant thus diverted from the plaintiff a large part of its trade and custom, and thereby Injured its business and curtailed the value of its good will. Up- on this bald statement of facts, it caimot be gainsaid that defendant has done the plain- tiff wrong; _and_it_Js^^d that f or every ^ wt08gjthere_is^a_remedyr~The8e'^acts ceF talnly indicate a case of unlawful business competition, and courts of equity have ever been ready to declare such things odious. It Is strange If plaintiff may be deprived of the fruits of a long course of honest and fair dealing In business by such wicked contriv- ances, and, upon appeal to the courts for re- lief, should be told there was no relief. This cannot be so, for the whole law of trade- marks, trade-names, etc., is recognized, ap- proved, and enforced for the very purpose of protecting the honest tradesman from a like loss and damage to that which threatens this plaintiff; and the fact that the question | comes to us in an entirely new guise, and ' that the schemer has concocted a kind of de- ception heretofore unheard of in legal juris- prudence, is no reason why equity is either unable or unwilling to deal with him. It has been said by some judge or law writer that "no fixed rules can be established upon which to deal with fraud, for, were courts of equity to once declare rules prescribing the limitations of their power In dealing with it, the jurisdiction would be perpetually cramp- ed and eluded by new schemes which the fer- tility of man's invention would contrive." By device, defendant is defrauding plaintiff of its business. He is stealing Its good wUl, —a most valuable property,— only secured aft- / er years of honest dealing and large eipendi- j tures of money; and equity would be impo- tent, indeed, if it could contrive no remedy for such a wrong. The fundamental principle underlying this entire branch of the law is that no man has 786 INJUNCTIONS. the right to sell his goods as the goods of a rival trader. Mr. Browne, in his work upon Trade-Marks, declares the wrong to be, "not in imitating a symbol, device, or fancy name, for any such act may not involve the slight- est turpitude; the wrong consists in unfair means to obtain from a person the fruits of his own ingenuity or industry,— an injustice that is in direct transgression of the deca- logue, 'Thou Shalt not covet » • • any- Athing that Is thy neighbor's.' The most de- I testable kind of fraud underlies the filching / pf another's good name. In connection with ' pafllcklng." We think the principle -may be broadly stated that when one tradesman re- sorts to the use of any artifice or contrivance for the purpose of representing his goods or his business as the goods or business -of a rival tradesman, thereby deceiving the people by causing them to trade with him when they Intended to and would have otherwise traded with his rival, a fraud Is committed, —a fraud which a court of equity will not al- low to thrive. In Howard v. Henrlques, 3 Sanf. 725, the court, In speaking of the com- petitor In business, said: "He must not by any deceitful or other practice impose on the public, and he must not by dressing himself in another man's garments, and by assuming another man's name, endeavor to derive that man of his own ' Individuality and of the gains to which by his industry and skill he is fairly entitled." It may well be said that the defendant, by duplicating plaintiff's building, with Its peculiar architecture and Immediately adjoining, entering into the same line of business, with no mark of iden- tification upon his store, has dressed himself In plaintiff's garments; and, having so dress- ed himself with a fraudulent Intent, equity will exert Itself to reach the fraud In some way -'^'In 'the~leading case of Liee~vr Haley,' supra, the whole question Is condensed by the final conclusion of the court Into the principle of law "that It Is a fraud on the part of a defendant to set up a business un- der such a designation as is calculated to lead and does lead other people to suppose that his business is the business of another person." If the same evil results are accom- plished by the acts practiced by this de- fendant which would be accomplished by an adoption of plaintiff's name, why should equity smile upon the one practice and frown upon the other? Upon what principle of law can a court of equity say, "If you cheat and defraud your competitor In business by tak- ing his name, the court wiU give relief against you, but, if you cheat and defraud him by assuming a disguise of a different character, your acts are beyond the law?" Equity will not concern itself about the means by which fraud is done. It is the re. suits aristQg from the means— it is the fraud itself— with which it deals. The foregoing principles of law do not ap- ply alone to the protection of parties having trade-marks and trade-names. They reach away beyond that, and apply to all cases where fraud Is practiced by one In securing the trade of a rival dealer; and these ways are as many and as various as the ingenuity of the dishonest schemer can invent In Glenny V. Smith, reported in the Jurist of 1865 (page 965), the Cburt held: "Where a tradesman, in addition to his own name upon his shop front, placed upon his sunblind and upon his brass plate the words 'From Thresher & Glenny' (in whose employment he had been), the court, be- ing of opinion that this was done In such a way as to be likely to mislead, and there being evidence that persons had been actually misled, granted an Injunction to restrain such a use of the name of the firm Ttiresher & Glenny." In Knott V. Morgan, 2 Keen, 213, the "Lon- don Conveyance Company" had its omnibuses painted green, and its servants clothed In the same colors. Another adopted the same name, and likewise Its vehicles were so painted and its servants so clothed. It was conceded that plaintiff could have no exclusive propertynght in any "ftf these things, buttfie coufTTSsuea " itsTSjIJneEicSniseiaMng f liarpIainHSrBM-"ar flghttoeall upon this court to restrain the de- fendant from fraudulently using precisely the same words and devices which they have tak- en for the purpose of distinguishing their prop- erty, and thereby depriving them of the fair profits of theh: business by attracting custom on the false representation that carriages really the defendant's belong to and are under the management of the plaintiffs." The author, by a note, approves the doctrine here declared, saying: "There was an obvious attempt to trade upon the plaintiff's reputation,— a con- structive fraud,— coupled with pecuniary loss, which was made the ground for the issuance of a broad Injunction." The same principle is reiterated by the same learned judge in Croft V. Day, 7 Beav. 84, in the following words: "It has been very correctly said that the prin- ciple of these cases is this: Tliat no man has a right to sell his own goods as the goods of an- other. You may express the same principle In a different form, and say that no man has a right to dress himself in colors, or adopt and bear symbols to which he has no peculiar or exclusive right, and thereby personate another person, for the purpose of Inducing the public to suppose either that he Is that other person or that he is connected with and selling the manufacture of such other person while he is really selling his own. It Is perfectly mani- fest that to do these things is to commit a fraud, and a very gross fraud." In the very recent case of Coats v. Thread Co., 149 U. S._ 566, 13 Sup. Ct. 966, the court said: "There can be no question of the soundness of the plaintiff's proposition that, irrespective of the technical question of trade-mark, the defend- ants have no right to dress their goods up In such manner as to deceive an intending pur- chaser, and Induce him to believe he is buy- ing those ot the plaintiffs. • • • They have no right by imitative devices to beguile the public into buying their wares under the im- INJUNCTIONS. 787 presslan they are buyliig those of their rivals." To the same point, see System Co. v. Le Bou- tUlier (Super. Ct.) 24 N. Y. Supp. 890; Ap- polinaris Co. v. Scherer, 27 Fed. 18; Burgess V. Burgess, 3 De Gex, M. & G. 896; Von Mumm V. Frash, 56 B'ed. 830. Having decided that defendant's acts con- stitute a fraud upon plaintiff, and that a court of equity will administer relief, the question then presents Itself, what shall he the form of the decree.' How may the court reach the wrong Y The defendant had the right to erect his building, and erect it in any style of archi- tecture his fancy might dictate. He had the right to erect It in the particular locality where it was erected. He had the right there to con- duct a business similar to that of plaintiff. He had a right to do all these things, for, of themselves, they did not offend against equity; but when they were done with a fraudulent intent, when they were done for the purpose of tolling away the customers of plaintiff, by a deception, a fraud is practicetd, and equity will do what it can to right the wrong. The decision of the trial court In effect ordered de- fendant to place signs both Inside and outside his building, showing to the world the proprie- torship thereof. We think this decree holds | defendant to a rule too strict, in that it re- quires the proprietorship of tie store to be shown. In this particular we thinls the decree should be modified so as to require that the defendant. In the conduct of this business, shall distinguish hiSrffM''^ business from that in which the plaintiff is carrying on its business, in some mode or form that shall beta sufficient Indication to the public that it is a different place of business from that of the plaintiff. For the foregoing reascm, the judgment In this respect only Is reversed, and the cause remand- ed, with directions to the trial court to modify the same, as heretofore suggested; and there- upon It Is ordered that said judgment stand affirmed. Appellant is to pay the costs of this appeaL We concur: HARRISON, J.; VAN FLEET, within thirty days after the entry of this or- der, serve on the defendant's attorney a , stipulation, deducting from the judgment of April 6, 1863, the sum of $2,407.45 as of that ' date. If such stipulation be not served, then the judgment shall be reversed and a new trial ordered, with costs to abide the event In case the attorneys do not agree as to the details of the judgment, the same can be set- tled before one of the commissioners. EARL, O. (dissenting). As I cannot con- cur with my brethren in this case, I will briefly give the reasons for my dissent. No mistake is alleged In the contracts, and no reformation of them Is claimed. And un- der no allegations or proof could the con- tracts be reformed, as a cause of action, for such purpose, would be barred by the stat- ute of limitations. If, as claimed by the plaintiff In his com- plaint, and by his counsel on the argument before us, the deed was given in pursuance REFORMATION. 793 and In fulfillment of the contracts, then there can be no reformation of the deed, as It Is in precise conformity to the contracts. If the two contracts of December 7, 1846, are construed together, they must be read as if embodied in one; and the timber is not re- served, and the contract does not provide for any reservation in the deed. The vendees were to get out certain lumber upon shares, and were to pay $4 per acre besides. The contract in reference to the lumber was a binding contract and, if performed as the parties contemplated, it would be fully per- formed before the deed was required to be given; and such was manifestly the inten- tion of the parties, and hence no provision was made for any reservation in the deed. The deed was given without any mention of the lumber, and hence the only claim the vendor could thereafter have, upon the lum- ber contract, was to sue for damages on ac- count of its non-performance. The only contract the defendant ever made or Intended to make, as found by the referee, is that which Is embodied in the deed. He never Intended or was willing to take a deed with any reservation in it. What right then has a court of equity to reform the deed, so as to give him such a deed as he was never bound to take? There was never a time when, by action for specific perform- ance, he could have been compelled to take a deed with a reservation, and the court has Qo right to compel him to take such a deed by the reformation of the one he did take. If by fraud or mistake on his part, the plaintiff was induced to give this deed, the only relief he could have was to set aside the deed; and to obtain this relief, it was his duty, on the discovery of the fraud or mistake, to proceed promptly and not ratify the deed by taking the money on the note given for the purchase-price, after he discov- ered the mistake or fraud. As I understand the opinion In which my brethren have concurred, it sustains the re- lief granted to the plaintiff, upon the ground of fraud, and yet the complaint does not in any way intimate even that the defendant was guilty of any fraud, nor does It allege that the defendant used any artifices to pro- cure the deed to be drawn with the reserva- tion omitted, or that he knew it was omitted. The charge of fraud should have been dis- tinctly made in the complaint, so that the de- fendant could have taken issue upon It. And it does not appear that any claim was made, at the trial, that the defendant was guilty of fraud, and the case was manifestly not tried upon any such theory. The judge at special term did not put his decision upon the ground of fraud. If he had, he would certainly have decided against the plaintiff, under his finding as to the statute of limita- tions, as follows: "That within a month after the execution of said deed, the plain- tiff discovered said mistake, and shortly thereafter applied to the defendant to cor- rect the same, which he neglected and re- fused to do; but proceeded to cut large quan- tities of said timber and appropriate the same to his own use; that the cause of action for which this suit is brought has not ac- crued to the plaintiff within six years before the commencement of this suit." The learned judge evidently proceeded and granted reUef upon the ground that the scriv- ener made a mistake in drawing the deed, and this was the ground upon which the gen- eral term placed its decision of affirmance. The cause of action for the mistake was not barred by the statute of limitations, because the action was commenced within ten years from the time the alleged mistake occurred. A cause of action, for such a fraud as is now alleged In this case. Is deemed to accrue, when the aggrieved party discovers the facts constituting the fraud, and it is barred in six years from that time. Code, § 91. All the fraud, if any, that was perpetrated in tliis case was in procuring and taking the deed without the reservation, and this was dis- covered, according to the finding of the judge, more than nine years before the suit was commenced, and hence I cannot be mistaken In saying that relief was granted at Special Term upon the ground of mistake alone, and not of fraud. And stiU further, the counsel for respond- ent in his argument before us, did not claim to sustain the judgment below upon the ground of fraud, but upon the ground of mis- take alone. Hence under all the circumstances I cannot consent to uphold this judgment, or any part of it, upon the ground of fraud, against the decisions of both courts below, the claims of plaintiff's counsel, and the explicit finding of the judge at special term, that the cause of action for fraud was barred by the statute of limitations. It was the duty of the plaintiff to show that he discovered the fraud within six years before the commencement of the suit, and there can be no pretense that he gave. any evidence to show this. I concur with my brethren In holding that In any view of the case the plaintiff could re- cover only for timber cut within six years be- fore the suit was commenced. For affirmance, as modified: LOTT, C. C, and HUNT and LEONARD, CO. For reversal: EARL and GRAY, CC. not voting. Judgment affirmed without costs to either party in the court of appeals, provided the plaintiff within thirty days after the entry of this order, serves on the defendant's at- torney a stipulation reducing the judgment $2,407.45 and Interest from the date of the judgment, April 6, 1863. If such stipulation be not served, then the judgment is reversed and a new trial ordered, costs to abide the event. Judgment affirmed. 794 CANCELLiATION. TOWN OF VENICE v. W0013IIUFF. (62 N. Y. 462.) Court of Appeals of New York. 1875. Action by the Town of Venice against Dor- cas Ann WoodrufC and others for the cancel- lation of certain bonds. From a judgment of the Supreme Court affirming a judgment for defendants entered on report of referee, plaintlfC appeals. Affirmed. The bonds in question were issued by the railroad commissioners and supervisors of the town pursuant to the authority of Laws 1852, c. 375, to pay for stock of the Lake On- tario, Auburn & New York Railroad Com- pany. The assent of two-thirds of the tax- payers of the town, required by the act, was not obtained when the bonds were issued. A few of the bonds were sold for cash, but the rest were transferred directly to the railroad in payment of the stock subscribed for. De- fendants are bona fide holders of the bonds directly delivered to the railroad. RAPALLO, J. The referee has found that all of the bonds, which the plaintiff seeks by this action to have delivered up and can- celed, were made and issued without the requisite consent of two-thirds of the tax payers of the town. That fact, according to '" the decisions of this court, rendered the bonds void, even in the hands of bona fide holders. Starin t. Town of Genoa, 23 N. Y. 439; People v. Mead, 24 N. Y. 114, 36 N. Y. 224. It was further held in these cases that the burden of proving the requisite consent of the tax payers rested upon the party seeking to enforce payment of the bonds, and that the affidavit directed by the act under which the bonds purported to be Issued, to be filed with the consent, was not evidence of the requisite consent. It is therefore settled by the adjudications of this court that no re- covery can be had in an action upon these bonds, without affirmative extrinsic proof of the requisite consent. The fact being found that such consent was not given, it is clear that a perfect defense to the bonds exists, should an action be brought upon them in any court of this state, either by the present holders of the bonds, or by any person to whom they may be transferred. Upon this state of facts the question arises, whether an equitable action can be main- tained by the town to restrain the holders of the bonds from suing upon or transferring them, and to compel the surrender and can- cellation of the instruments. The cases in which a court of equity exer- cises its jurisdiction to decree the surrender and cancellation of written instruments are, in general, where the Instrument has been obtained by fraud, where a defense exists which would be cognizable only in a court of equity, where the instrument is negotiable, and by a transfer the transferee may acquire rights which the present holder does not pos- sess, and where the instrument Is a cloud upon the title of the plaintiff" to real estate. Under the chancery system, where a bill of discovery was necessary to estaMish a de- fense, the court having acquired jurisdiction of the case for the purpose of discovery, might proceed and award relief, but this ^ound of jurisdiction no longer exlats. It is true that the jurisdiction of the court of chancery has been asserted to decree the sur- render of every instrument which ought not to Be enforced, whether void at law or not, and whether void from matter appearing on its face, or from matter which must be estab- lished by extrinsic proof. Hamilton v. Cum- mings, 1 Johns. Ch. 520-522, 523. But Chan- cellor Kent in the case cited, in asserting this jurisdiction recognizes the necessity of show- ing strong grounds for the exercise of the power, and endeavors to reconcile the appa- rently conflicting English authorities by ad- verting to the general principle that the ex- ercise of the power is to be regulated by sound discretion, as the circumstances of the Individual case may dictate, and that a resort to equity, to be sustained, must be expedient either because the Instrument Is liable to abuse from its negotiable nature; or because the defense not arising on its face may be difficult or uncertain at law; or from some other special circumstances peculiar to the case, and rendering a resort to equity highly proper. And it Is now well established that equity will not interpose to decree the cancellation of an instrument, the invalidity of which appears upon its face. Story, Eq. Jur., § 700, a. There must exist some circimistance es- tablishing the necessity of a resort to equity, to prevent an Injury which might be irrep- arable, and which equity alone is compe- tent to avert. If the mere fact that a de- fense exists to a written instrument were sufficient to authorize an application to a court of equity to decree its surrender and cancellation. It Is obvious that every con- troversy in which the claim of either party was evidenced by a writing could be drawn to the equity side of the court, and tried in the mode provided for the trial of equitable actions, instead of being disposed of in the ordinary manner by a jury. Whether therefore the question be regarded as one of jurisdiction or of practice. It is es- tablished by the later decisions that some special ground for equitable relief must be shown, and that the mere fact that the In- strument ought not to be enforced Is insuffi- cient, standing alone, to justify a resort to an equitable action. Grand Chute v. Wine- gar, 15 Wall. 374; Mintum v. Farmers' Loan 6 Trust Co., 3 N. Y. 498; Perrine v. Striker, 7 Paige, 598; Morse v. Hovey, 9 Paige, 197; Field V. Holbrook, 6 Duer, 597; AUertoa v. Belden, 49 N. Y. 373; Reed v. Bank of New- burgh, 1 Paige, 215, 218. In the present case m so far as the In- validity of the bonds results from the want of consent of the tax payers, there Is no OANCBLXlA.TION. 795 ground whatever shown for resorting to an ; equitable action. Not only is the want of . the consent a perfect defense at law, but the onus of proving the consent is upon the party seeking to enforce the bond; and the court cannot assume that he will be able to establish a fact that does not exist, and of which there is no documentary evidence. If it be said that the town may by delay lose evidence now existing, which would be avail- 1 able to meet and rebut false testimony, one decisive answer is that the statutes now pro- vide a summary mode of perpetuating testi- mony in all cases, and an action is not neces- sary for that purpose. The case Is analogous to those of Field v. Holbrools, 6 Duer, 597, and AUerton v. Belden, 49 N. Y. 373. It is urged that the action should be sus- tained for the purpose of preventing a trans- fer of the bonds to a bona fide holder. This court has held that such a transfer could not prejudice the plaintiff, as the defense would be available even against a bona fide holder. Starin v.' Town of ©enoa, 23 N. X. 439. But it is said that although such is the rule in this state, a different rule has been adopted in the courts of the United States, and the bonds might be transferred to a bona fide holder, who niight sue in those courts. There would be force in this argu- ment provided it were established in the case that the present holders of the bonds were not bona fide holders. In that case it might be proper for a court of equity to prevent their subjecting the town to liability by a transfer of the bonds. But if they are themselves bona fide holders, there is no justification for interfering with the right of transfer. In contemplation of law the trans- j ferees would acquire no greater rights than ' are possessed by the present holders. The real purpose of the litigation seems to I, be to prevent a resort to the courts of the United States for the collection of these / bonds; and the question is, whether it is the province of a court of equity in a state to interfere for the purpose of preventing a resort to the federal courts for the enforce- ment of obligations on the ground that they may be held in those couits to be valid, while according to the decisions of the state courts the same obligations are held to be void. I apprehend that the power of a court of equity to decree the surrender and can- cellation of instruments has never before been appealed to or exercised for such a purpose. Equity will interfere to control the action of parties and restrain them from transferring negotiable obligations, on the ground that it is against conscience to al- low them to create in their transferee a right or equity which they themselves do not pos- sess. But where the effect of a transfer is not to change in any respect the rights or equities of the parties, I am not prepared to hold that the allegation that the transferee might resort to a tribunal in which a rule of decision prevails, or may prevail, difCering from that of the court which Is asked to en- join the transfer, is sufficient to justify the interference asked. The wrong sought to be prevented by such a proceeding is not any wrongful act of any party, but a decision of another court. The facts of the case and the abstract rights of the parties are not changed by the transfer. The greatest effect it can have is to enable a transferee to sue in a i court to which the present holder could not resort. This, in general, would not be re- garded as any wrong which a court of equity I would restrain. If it is a wrong in this case it must be on the assumption that the federal court will render a decision at vari- ance with the decision of this court. I am of opinion that such an apprehension is not a legitimate ground for the action of a court of equity in restraining a transfer or di- recting the cancellation of the instrument. There is no finding that the present holders are not bona fide holders of the Donds. As the judgment entered upon the report of the referee was in favor of the defendants it could not be disturbed unless facts were found showing that the conclusions of law were erroneous. We have held over and over again that the facts showing error m the legal conclusions must be found, and that the appellate court will not search for them in the evidence. In this case the findings are in favor of the bona fides of the defend- ants. As to five of the bonds it is found that they were sold and delivered by the supervisor and railroad commissioner to Hutchinson & Murdock, who paid for them par in cash. This finding is not weakened by the further finding that the money was in the first instance advanced on a pledge of the bonds which was subsequently con- verted into a sale. As to the twenty bonds which were issued direct to the railroad com- pany, the referee finds that the holders pur- chased them without being informed that they had been delivered directly to the com- pany. No fact is found impeaching the bona fides of the holders of any of the bonds, and therefore it does not appear that any transfer of them can be made which will confer upon the transferees any greater equities than are possessed by the present holders. The fact that twenty of the bonds were delivered directly to Ihe railroad company in- stead of being sold by the railroad com- missioners, is relied upon as a ground for granting relief as to those bonds. In the case of People v. Mead, 24 N. Y. 124, 125, it seems to be considered that this fact would not constitute a defense, even in the state court, as against a bona fide holder of the bonds. But to entitle the town to aifirma- tive equitable relief on that ground, it should have been made to appear that the defend- ants were not bona fide holders; which, as has already been shown, the plaintiff has failed to do. Another ground urged in support of the claim to equitable relief is, that it is neces- 796 CANCKLLATION. sary for the purpose of avoiding a multi- plicity of suits; and the case of New York & N. H. R. Co. v. Schuyler, 17 N. T. 592, and 34 N. Y. 30, is referred to as an au- thority in point. But that case was essen- tially different from the present. There the defendants all claimed shares in the same corporation, which had authority to issue only a limited number; shares had been issued in excess of that limit, and some of them must be rejected. The spurious shares were held to be a cloud upon the title of the hold- ers of the genuine shares, and the corpora- tion was held to be the proper representative of the genuine stockholders to seek the in- terposition of the court to remove that cloud. Here was a solid ground upon which the plaintifC could found its application for relief. The plaintifC having this standing in court, it was held that all the alleged spurious share- holders were properly joined as defend- ants. But jurisdiction was not entertained on the sole ground that the holders of spu- rious shares were numerous. In the present case there is no question of any cloud upon the title. The plaintiff seeks to have can- celed certain written instruments pvirport- ing to be obligations for the payment of money, which are held by various independ- ent owners. If it fails to make out a case which would sustain an action for that pur- pose against any one of them alone, the mere fact that there are several such hold- ers is not of itself sufficient ground for en- tertaining the suit. If the facts were such as would have sustained the action against one person had he been the holder of all the bonds, then the case of the New Haven Rail- road Company would be an authority In favor of the position, that if there were sev- eral holders all might be joined as defend- ants. But it does not support the position, that the mere fact that numerous independ- ent parties hold separate instruments upon which they might bring separate suits Is suf- ficient to justify a court of equity In enter- taining an action by the debtor to compel them to litigate their claims in an action in the form which be selects. Under any circumstances, I am Inclined to concur with Judge Talcott, in the opinion,' that a court of equity would not interfere! affirmatively to relieve the plaintiff against\ these bonds, except upon condition that it| surrendered what it had received for them. The relief sought is discretionary with the j court; and the plaintiff is not entitled to it ' as matter of absolute right. Actions of this class are In that respect governed by the same rules which apply to actions for specif- ic performance; and relief wUl never be granted except upon equitable terms, where the case is such as to call for the Imposition of terms. Story, Bq. Jur., §§ 692, 693, 696, and cases cited section 742. But the reasons before given I deem sufficient to sustain the conclusion of the referee dismissing the com- plaint. There is great doubt whether the defense of the statute of limitations is available In this case. In respect to the limitation of time it is analogous in principle to an action to remove a cloud upon the title to land; and in such cases I do not understand the rule to be that the statute runs from the time the cloud was first created. See Miner v. Beek- man, 50 N. Y. 338; Hubbell v. Medbury, 53 N. Y. 99; Arnold v. Hudson R. R. Co., 55 N. Y. 661. On the ground that the facts of the case are insufficient to justify the Interposition of a court of equity to decree the surrender and cancellation of the bonds, or to restrain their transfer, so much of the judgment as Is appealed from should be affirmed, with costs. All concur; CHURCH, O. J., not sitting. Judgment affirmed. -a. > ) d^ y\JL Til .1 Q '> 3 (^.-'^ RECEIVERS. 797 BOOTH V. CLARK. a? How. 322.) Supreme Court of the United States. Dec Term, 1854. The case is stated in the opinion of the court Mr. Bradley, for appellant Lawrence & May, contra, WAYNE, J., delivered the opinion of the court. We learn from the record of this case that Juan de la Camara recovered a judgment tn the supreme court of New York, against Ferdinand Clark, for $4,688.49, with interest at seven per cent; that a fieri facias was issued upon the judgment, and that there was a return upon it of "no goods, chattels, or real estate of the defendant to be levied upon." Upon this return, Camara filed a creditor's biU, before the chancellor of the First circuit in the state of NeV York, setting out his judgment and the return upon the fieri facias, in which he seeks, under the laws of that state, to subject the equitable assets and choses in action of Clark to his judgment; and he asks for a discovery of them from Clark, for an injunction, and the appointment of a receiver. Notice of this proceeding, and of the action upon it were served upon the solicitor of Clark, and the blU of complaint was taken as confessed, upon the defendant's default in not answer- ing. Booth, the present complainant, was appointed receiver on the 3d August, 1842. Clark had been previously enjoined under the proceeding from making any disposition of any part of his estate, legal or equitable. Thus matters stood from the time of the re- ceiver's appointment, in 1842, until June, 1851. Then Booth, as receiver, reports that no effects of Clark had come to his knowl- edge, except a claim upon Mexico, which had been adjudged to Clark by the United States commissioners, under the treaty with Mex- ico; and that, as receiver, he was contest- ing It; and he asks from the court authority to proceed for that purpose, which was granted. Such is an outline of the case In New York, containing every substantial part of It We will now state the proceedings of this fluit at the instance of the receiver, In the circuit court of the United States for the District of Columbia, from the decision of which, dismissing the receiver's bill, it has been brought to this court for revision. On the 29th May, 1851, Booth, the receiver, filed his bill in the circuit court for the Dis- trict of Columbia, reciting so much of the proceedings of the New York courts as was •deemed necessary to support his suit. He declares that Clark, when the original suit was instituted against him by Camara, and from that time until after he had been ap- 3>ointed receiver, had resided in New York. That his effects consisted principally, If not wholly, of the claim upon Mexico, and that he claimed that fund as receiver for the purposes of that appointment. Clark an- swered the bill. He denies that the pro- | ceedings against him in the courts of the / state of New York created any lien In behalf i of Camara, or the receiver, upon the fund I In controversy. He admits that no part of / his property ever came into receiver's hands, under those proceedings, and that he had the claim upon Mexico whilst the suits were pending against him, and when the receiver was appointed under Camara's creditor's bill; but that all the evidences and papers In support of his Mexican claim were then In the public archives at Washington. He also states, that the board of commissioners under the act of congress of March, 3, 1849 (9 Stat. 393, 992), entitled "An act to carry Into effect certain stipulations of the treaty between the United States and the republic of Mexico, of the 2d February, 1848," had made an award in his favor for the sum of ?S6,78e.29, which sum was then In the hands of the secretary of the treasury of the Unit- ed States. He then alleges that being a . resident of the state of New Hampshire, he j filed In the clerk's office of that district, on the 28th January, 1843, his petition to be | declared a bankrupt That he had been de- clared a bankrupt on the 22d March follow- I ing, pursuant to the "Ant to establish a uni- i form system of bankruptcy throughout the ' United States," passed August 19, 1841 (5 Stat 440). He then recites that there had been attached to his petition In the bank- rupt's court a schedule of his property, rights, and credits of every kind and de- scription, in which his Mexican claim had been stated; and that It was upon that claim the commissioners had awarded to him the sum before mentioned. He declares that, under the decree of the court In bank- ruptcy, one John Palmer had been appointed assignee; and that, having given his bond in compliance with the order of the court, he was vested, as assignee, in virtue of the operation of the bankrupt law, of all the defendant's property, for the benefit of his creditors, including the Mexican claim. It is also stated in his answer, that notice of all the proceedings in his matter of bank- ruptcy had been published in the leading newspapers of New Hampshire, and that the name of Juan de la Camara, and his residence, was placed among the list of his creditors attached to his petition to be de- clared a bankrupt And he avers tbat all of his creditors had had notice of the pro- ceedings in bankruptcy. That neither Cam- ara nor any other creditor had filed or made any objections to those proceedings, or to the action of the assignee, until after the award had been made upon the Mexican claim. It Is not necessary, for the purposes of this opinion, to state the defendant's recital of the sale of his effects by Palmer, the as- 798 BECEIVERS. slgnee; his purchase of them, Including the Mexican claim, or the rights claimed by the defendant under his purchase, all relat- ing to the same having been fully acted up- on by this court at this term, in the case of Ferdinand Clark v. Benjamin O. Clark and W. H. Y. Hackett We state, however, that Palmer, the original assignee in Clark's bank- ruptcy, having died, he had been succeeded by the appointment of Hackett as assignee. This suit, then, is substantially between Hackett, as the assignee of Clark in bank- ruptcy, and Booth, the receiver under Cam- ara's creditor's bill; that it may be deter- mined by this court, which of them has the official right to the Mexican fund, for the distribution of it between the creditors of Clark, or whether Booth, as receiver, shall have from that fund a sufficient sum to pay Camara's entire debt, leaving the residue of it for distribution between Clark's other creditors. It appears also from the record that Booth, the receiver, took no steps to execute his official trust, from the time of his appoint- ment in 1842, until 1851, after the award of the Mexican claim had been made in Clark's favor. And, also, that the court of chan- cery, acting upon the creditor's bill brought by Camara, had not been applied to, either by Camara or by the receiver, for any order up- on Clark in personam, to coerce his com- pliance with its . injunction and decree. Upon this statement of the case, we will now consider it. There is no dispute con- cerning the regularity or binding operation of the judgment obtained by Camara against Clark. None in respect to the proceedings under the creditor's bill. The leading point In the case is the effect of the proceedings [ under the last, to give a right to the receiver, : In virtue of a lien which he claims upon the ; property of the debtor, to sue for and to : recover any part of it, legal or equitable, i without the jurisdiction of the state of New York. In other words, as an officer of a court of chancery, for a particular purpose, will he be recognized as such by a foreign judicial tribunal, and be allowed to take from the latter a fund belonging to a debtor, for its application to the payment of a par- ticular creditor within the jurisdiction of the. receiver's appointment, there being other creditors in the jurisdiction in which he now sues, contesting his right to do so. Or can he as receiver claim, in virtue of a de- cree upon a creditor's bill given in one juris- diction, a right to have the judgment upon which the creditor's bill was brought, paid out of a fund of a bankrupt debtor In a for- eign jurisdiction; because his appointment preceded the bankrupt's petition. It is urged that the receiver in this case, j by the decree of the court in New York, was entitled officially to the entire property of ■ Clark, real, personal, or equitable, both wlth- / in and without the state of New York. That he could, as receiver, maintain any action for the property and rights of property of the debtor which the latter could have done. That the fund now in controversy was a chose In action, belonging to the debtor when the receiver was appointed, and, though not within the state of New York, that it follow- ed the person of the owner and passed to the receiver, because the owner was domiciled in New York. And it was also said that, having such official rights or liens upon the property of the debtor, the comity of nations would aid him in the assertion of them in a foreign tribunal. The counsel for the re- ceiver cited from the reports of the state of New York several cases in support of the foregoing propositions. We have perused all of them carefully, without having been able to view them altogether as the learned counsel does. Whatever may be the opera- tion of the decree in respect to the receiver's powers over the property of the debtor with- in the state of New York, and his right to sue for them there, we do not find any thing in the cases in the New York reports show- ing the receiver's right to represent the cred- itor or creditors of the debtor in a foreign juris- diction. It is true that the receiver in this case I is appointed under a statute of the state of New York, Jbut that oMymakeg.,^imjin_^S; cer of the courf ' 'f oi: TffaFs^ferHeTs'a rep- "fesenEatlTe of the court, anf may, by its di- rection, take Into his possession every kind of property which may be taken In execu- tion, and also that which Is equitable, if of a nature to be reduced into possession. But it is not considered in every case that the right to the possession is transferred by his appointment; for, where the property Is real, and there are tenants, the court is virtually the landlord, though the tenants may be compelled to attorn to the receiver. Jeremy, Eq. Jur. 249. When appointed, very little discretion is allowed to him, for he must apply to the court for liberty to bring or defend actions, to let the estate, and In most cases to lay out money on repairs, and he may without leave distrain only for rent In arrear short of a year. 6 Ves. 802; 15 Ves. 26; 3 Brown, Ch. Cas. 88; 9 Ves. 335; 1 Jac. & W. 178; Morris v. Elme, 1 Ves. Jr. 139; Id. 165; Blunt v. Cllthero, 6 Ves. 799; Hughes V. Hughes, 3 Brown, Ch. Cas. 87; 5 Madd. 473. A receiver is an Indifferent person between II parties, appointed by the court to receive] the rents, issues, or profits of land, or other thing in question In this court, pending the suit, where it does not seem reasonable to I the court that either party should do It. Wyatt's Prac. Reg. 355. He is an officer of the court; his appointment Is provIsionaL He is appointed in behalf of all parties, and not of the complainant or of the defendant only. He is appointed for the benefit of all parties who may establish rights In the cause. The money In his hands Is In cus- todia legis for whoever can make out a title to It. Delany v. Mansfield, 1 Hogan, 234 RECEIVERS. 799 j It Is the court itself which has the care of I the property in dispute. The receiver is but the creature of the court; he has no powers except such as are conferred upon him by the order of his appointment and the course and practice of the court. Verplancls v. In- surance Co., 2 Paige, Ch. 452. Unless where he Is appointed under the statute of New Torli, directing proceedings against corpora- tions (2 Rev. St. 438), and then he is a stand- ing assignee, vested with nearly all the powers and authority of the assignee of an insolvent debtor. Attorney General v. Life & Fu-e Ins. Co., 4 Paige, Ch. 224. In the case just cited. Chancellor Walworth says, that the receiver has "no powers except such as are conferred upon him by the order of his appointment and the course and practice of the court." In the statement which has been made of the restraints upon a receiver, we are aware that they have been meas- urably qualified by rules, and by the prac- tice of the courts in the state of New York, as may be seen In Hoffman's Practice; but none of them alter his official relation to the court, and, so far as we have investigated the subject, we have not found another in- stance of an order in the courts of the state of New York, or in the courts of any other state, empowering a receiver to sue in his own name officially in another jurisdiction for the property or choses in action of a judgment debtor. Indeed, whatever may be the receiver's rights under a creditor's bill, to the possession of the property of the debt- or in the state of New York, or the permis- sions which may be given to him to sue for such property, we understand the decisions of that state as confining his action to the state of New York. Such an inference may be made from sev- eral decisions. It maj- be inferred from what was said by Chancellor Walworth, in Mitchell V. Bunch, 2 Paige, Ch. 615. Speak- ing of the property which might be put into the possession of a receiver, and of the pow- er of a court of chancery to reach property out of the state, he declares the manner in which it may be done, thus: "The original and primary jurisdiction of that court was in personam merely. The writ of assistance to deliver possession, and even the seques- tration of property to compel the perform- ance of a decree, are comparatively of re- cent origin. The jurisdiction of the court was exercised for several centuries by the simple proceeding of attachment against the • bodies pf the parties to compel obedience to r its orders and decrees. Although the prop- / erty of a defendant is beyond the reach of the court, so that it can neither be seques- tered nor taken in execution, the court does not lose its jurisdiction in relation to that property, provided the person of the defend- V ant is within the jurisdiction. By the or- dinary course of proceeding, the defendant / may be compelled either to bring the prop- I erty In dispute, or to which the defendant claims an equitable title, within the juris- diction of the court, or to execute such a conveyance or transfer thereof as will be suflicient to vest the legal title, as well as the possession of the property, according to the lex loci rei sitoe." It is very obvious, from the foregoing extract, that up to the time when Mitchell v. Bunch was decided, in the year 1831, it had not been thought that a court of chancery in the state of New York could act upon the property of a judg- ment debtor in a creditor's bill which was not within the state of New York, but by the coercion of his person when he was within the jurisdiction of the state; and that it had not been contemplated then to add to the means used by chancery to en- force Its sentences, In respect to property out of the state of New York, the power to a receiver to sue in a foreign jurisdiction for the same'. It is true that the jurisdiction of a court of chancery In England and the United States, to enforce equitable rights. Is not confined to cases where the property Is claimed in either country, but the primary movement in the chancery courts of both countries to enforce an injunction, is the at- tachment of the person of the debtor, where he is amenable to the jurisdiction of the court. 1 We find in the second volume of Spence on the Jurisdiction of the Court of Chancery in England (pages 6, 7), this language: "When,' therefore, a case Is made out against a per-: son resident within the jurisdiction of the court. In respect to property out of it, but within the empire, or its dependencies, which would call for the interference of the court of chancery if the property were situate In the country, the court, as it had the power, has assumed the jurisdiction,' when such an interference is necessary to the ends of justice, of enforcing the equita- ble rights of the parties to or over property out of its jurisdiction, by the coercion of the person and sequestration of his property here, in the same manner as it would have done had the property been situate In this country." And Sir John Leach said: "When parties defendants are resident in England, and are brought upon subpoena here, the court has full authority to act upon them personally, with respect to the subject of the suit, as the ends of justice require, and with that view to order them to take or to omit to take any steps or proceedings in any other court of justice, whether in this or in a foreign country. This court does not pretend to any Interference with the other courts." It acts upon the defendant by punishment for his contempt, for his dis- obedience of the court. The court of chan- cery has no power directly to affect prop- erty out of the bounds of Its jurisdiction. Roberdeau v. Rous, 1 Atk. 544; 2 Spence. We believe such to be the proper course, in chancery, in cases of injunction, and that its jurisdiction, by injunction, rests entirely on 800 RECEIVERS. the coercion of the person. Such, however, was not the course pursued in this case, though the debtor was then a resident of the state of New York, and amenable to the ([jurisdiction of the court. No motion was made to force Clark to comply with the in- junction which Camara had obtained under the creditor's bill. The matter was allowed to rest for seven years, Camara being aware that Clark had a pecuniary claim upon the republic of Mexico, at least as early as in the year 1843. The receiver during all that time took no action. His first movement is an application to be permitted to sue for the fund in the hands of the government, which had been awarded to Clark by the commis- sioners under the treaty with Mexico. Per- mission was given lo sue. He has brought his bill accordingly, and it directly raises the question, whether he can, as an oflacer of the court of chancery in New York, and in his relation of receiver to Camara, be permitted to sue in another political juris- diction. We have already cited Chancellor Wal- worth's opinion as to the course which is to be pursued in New York upon an injunction in a creditor's bill. Mr. Edwards, in his excellent work on Receivers in Chancery, after citing the language used in Mitchell v. Bunch, says: "Still, the difficulty remains as to a recognition of the powers or officers of the court, by persons holding a lease upon the property, especially realty, out of the jurisdiction. Then in Malcolm v. Montgom- ery, 1 Hogan, 93, the master of the rolls ob- served, that a receiver could not be effectu- ally appointed over estates in Ireland, by the English court of chancery, in any direct .proceeding for the purpose; and that at- tempts had often been made to do so by serving orders made by the English court of chancery, but that they had failed, because the English court of chancery has no direct means of enforcing payment of rent to its receiver, by tenants who reside in Ireland. The attorney-general and another counsellor also said, that to their knowledge such at-' tempts had been frequently made, but had been uniformly given up as impracticable. A conflict might also arise between the re- ceiver out of the jurisdiction and creditors, and also other persons out of the jurisdic- tion. The comity of nations and different tribunals would hardly help a receiver." We also infer, from the case of Storm v. Waddell, 2 Sandf. 494, that the receiver's right to the possession of the property of a debtor in the state of New York, and hfs right to sue for property there, is limited to that jurisdiction. The chancellor, in the last case mentioned, after having given an epitome of the cause of proceeding in a cred- itor's bill, and speaking of equitable inter- ests and things in action belonging to the debtor, without regard to the injunction, says: "The property of the defendant is sub- jected to the suit, wherever It may be, If the receiver can lay hold of It, or the com- plainant can reach it by the decree. The injunction, when served, prevents the debtor from putting it away or squandering it." This language indicates the receiver's locality of action. Taken In connection with that of Chancellor Walworth, in Mitchell v. Bunch, it shows that the receiver's right to the i possession of the debtor's property is limited | to the jurisdiction of his appointment, and ? ' that he has no lien upon the property of the 'f debtor, except for that which he may get ! the possession of without suit, or for that ' which, after having been permitted to sue for, he may reduce into possession In that way. Our industry has been tasked unsuc- cessfully to find a case in which a receiver has been permitted to sue in a foreign ju- risdiction for the property of the debtor. So far as we can find, it has not been al- lowed in an English tribunal; orders have been given in the English chancery for re- ceivers to proceed to execute their func- tions in another jurisdiction, but we are not aware of its ever having been permitted by the tribunals of the last. We think that a receiver has never been recognized by a foreign tribunal as an actor in a suit He is not within that comity which nations have permitted, after the man- ner of such nations as practise It, in respect to the judgments and decrees of foreign tri-. bunals, for all of them do not permit It in the same manner and to the same extent, to make such comity International or a part of the laws of nations. But It was said that re- ceivers in New York are statutory officers, as assignees in bankruptcy are. That being so, he had, as assignees in bankruptcy have upon the property of the bankrupt, a hen up- on the property of a judgment debtor, under an appointment in a creditor's bill. But that cannot be so. An assignee in bankruptcy In England, and in this country when It had a bankrupt law, is an officer made by the statute of bankruptcy, with powers, priv- ileges, and duties prescribed by the statute, for the collection of the bankrupt's estate for an equal distribution of It among an of his creditors. In England, the property of the bankrupt is vested In the assignees In bankruptcy by legislative enactment. Where commissioners have been appointed. It is imperative upon them to convey to the assignees the proper- ty of the bankrupt, wherever it may be or whatever it may be, and It is done by deed of bargain and sale, which is after- wards enrolled. It vests the assignees with the title to the property from the date of the conveyance, it having been previously vested in the commissioners for conveyance by them to the assignees. As to the bank- rupt's personal estate, the statute looks be- yond the debts and effects of a trader with- in the kingdom, and vests them in the com- missioners in every part of the world. The last Is done in England, upon the principle RECEIVERS. 801 that personal property has no locality, and is subject ta the law which governs the per- son of the owner. As by that law the prop- erty of a bankrupt becomes vested in the assignee, for the purposes of. the assignment, his title to such property out of England is as good as that which the owner had, ex- cept where some positive law of the coun- try, in which the personal property is, for- bids it. CuUen, 244. In claiming such a recognition of assignees in bankruptcy from foreign courts, England does no more than is permitted In her courts, for they give effect to foreign assignments made under laws analogous to the English bankrupt laws. Solomons v. Ross, 1 H. Bl. 131, note; JoUet v. Deponthieu, Id. 132, note. But such comity between nations has not become International or universal. It was not admitted in England until the middle of the last century in favor of assignees in bankruptcy. Lord Raymond decreed it in 1811, In the case of a commission of bank- ruptcy from Holland. Sir Jos§ph Jeliyll, In 1715, said, the law of England takes no no- tice of a commission In Holland, and there- fore a creditor here may attach the effects in the city of London, and proceed to con- demnation. 3 Burge, 907. Lord Mansfield, in Warring v. Knight, (sittings in Guildhall, after Hilary term, Geo. HI.) Cooke, Bankr. Law, 200, 3 Burge, 907, ruled, that where an English creditor proceeded subsequent to an act of bankruptcy, by attachment in a for- eign country, and obtained judgment there and satisfaction by the sale of the debtor's personal property, the assignees in an action In England could not recover from such cred- itor the amount of the debt which had been remitted to him. Again, his lordship ruled, that the statutes of bankrupts do not extend to the colonies or any of the king's domin- ions out of England, but the assignments un- der such commissions are, in the courts abroad, considered as voluntary, and as such take place between the assignee and the bankrupt, but do not affect the rights of any other creditors. So the law stood in England until the case of Polliott V. Ogden, 1 H. Bl. 123, when Chancellor Northlngton stimulated it Into a larger comity, by giving effect to a claim to the creditors of a bankrupt in Amsterdam over an attaching creditor in England, who had proceeded after the bankrupt had been declared to be so, by the proper tribunal In Amsterdam. England had just then become the great creditor nation of Europe, and of her provinces in North America. Her Inter- est prompted a change of the rule, and her courts have ever since led the way In ex- tending a comity which had before been de- nied by them. The judicial history of the change, until the comity In favor of as- signees became In England what It now is, ,is given in 3 Burge, c. 22; Bankr. Laws, 886, 906-912, Inclusive, and from 912-929. It may now be said to be the rule of comity H.& B.EQ.(2d Ed.)— 51 between the nations of Europe; but it has never been sanctioned in the courts of the United States, nor In the judicial tribunals of the states of our nation, so far as we know, and we know that It has been re- peatedly refused In the latter. Our courts, when the states were colonies, had been schooled, before the Revolution, In the ear- lier doctrines of the English courts upon the subject. The change in England took place but a few years before the separation of the two countries. That comity has not yet reached our courts. We do not know why It should do so, so 1' long as we have no national bankrupt laws. 1 The rule which prevailed whilst these states were colonies still continues to be the rule In the courts of the United States, and It is not otherwise between the courts of the states. It was the rule In Maryland, before the Revolution. It is the rule still, as may be seen In Birch v. McLean, 1 Har. & McH. 286; Wallace v. Patterson, 2 Har. & McH. 463. An assignment abroad, by act of law, has no legal operation in Pennsylvania. We find from McNeil v. Colquhoon, 2 Hayw. (N. C.) 24, that it has been the rule in North Carolina for sixty years. South Carolina has no other. 1 Const. (S. C.) 283; 4 McCord, 519; Taylor v. Geary, Kh-by, 313. In Mas- sachusetts, the courts will not permit, an assignment in one of the states, whether it be voluntary or under- an insolvent law, to control an attachment in that state of the property of an insolvent which was laid after the assignment, and before payment to the assignees. The point occurred recently in the circuit court of the United States for that district. In the case of Betton v. Valentine, 1 Curt. 168; and It was ruled that the as- signee of an Insolvent debtor, appointed un- der the law of Massachusetts, does not so far represent creditors In the state of Rhode Island as to be able to avoid a conveyance of personal property In the latter state, good as against the Insolvent, but invalid as against creditors, by the law of Rhode Island. In New York, the "ubiquity of the operation of the bankrupt law, as respects personal property," was denied In Abraham v. Ples- toro, 3 Wend. 538. Chancellor Kent consid- ers It to be a settled part of the jurisprudence of the United States, that a prior assignment under a foreign law will not be permitted to prevail against a subsequent attachment of the bankrupt's effects found in the United States. The courts of the United States wIU not subject their citizens to the Inconvenience of seeking their dividends abroad, when they have the means to satisfy them under their own control. We think that it would preju- dice the rights of the citizens of the states to admit a contrary rule. The rule, as it Is with us, affords an admitted exception to the universality of the rule that personal prop- erty has no locality, and follows the domicile of the owner. This court, in Ogden v. Saun- ders, 12 Wheat 213, disclaimed the English 802 EEOEiVjSRS. doctrine upon this subject; and In Harrison V. Sterry, 5 Craneli, 289, 302, this court de- clared tliat tlie banlirupt law of a foreign country Is incapable of operating a legal transfer of property in the United States. Such being the rule in the American courts, in respect to foreign assignments in bank- ruptcy, and in respect to such assignments as may be made under the insolvent laws of the states of the United States, there can be no good reason for giving to a receiver, ap- pointed in one of the states under a cred- itor's bill, a larger comity in the courts of the United States, or in those of the states or territories. On the contrary, strong rea- .sons may be urged against it. A receiver lis appointed under a creditor's bill for one lor more creditors, as the case may be, for /their benefit, to the exclusion of all other I creditors of the debtor, if there be any such, I as there are in this case. Whether appoint- ' ed as this receiver was, under the statute of New York, or under the rules and practice of chancery as they may be, his oflicial rela- tions to the court are the same. A statute appointment neither enlarges nor diminishes the limitation upon his action. His responsi- bilities are unaltered. Under either kind of appointment, he has at most only a pas- sive capacity in the most important part of what it may be necessary for him to do, until it has been called by the direction of the court into ability to act He has no ex- tra-territorial power of oflBcial action ; none -Wtrttih 1Mfro'art-^p^H5f*ffim"«a'n"fconfer, with authority to enable him to go into a foreign jurisdiction to take possession of the debtor's property; none which can give him, upon the principle of comity, a privilege to sue in a foreign court or another jurisdiction, as the judgment creditor himself might have done, where his debtor may be amenable to the tribunal which the creditor may seek. In those countries of Europe in which for- eign judgments are regarded as a foundation for an action, whether it be allowed by treaty stipulations or by comity, it has not as yet A been extended to a receiver In chancery. In the United States, where the same rule pre- vails between the states as to judgments and decrees, aided as it is by the first sec- tion of the fourth article of the constitution, and by the act of congress of 26th May, 1790 (1 Stat 122), by which full faith and credit are to be given in aU of the courts of the United States, to the judicial sen- tences of the different states, a receiver under a creditor's biU has not as yet been an actor as such In a suit out of the state In which he was appointed. This court considered the effect of that section of the constitution, and of the act just mentioned, in McElmoyle v. Cohen, 13 Pet. 324r-327. But apart from the absence of any such case, we think that a receiver could not be admitted to the comity extended to judgment creditors, without an entire departure from chancery proceedings, as to the manner of his appointment, the securities which are taken from him for the performance of his duties, and the direction which the court has over him in the collec- tion of the estate of the debtor, and the ap- plication and distribution of them. If he seeks to be recognized in another jurisdiction, it is to take the fund there out of it, without such court having any control of his sub- sequent action in respect to it, and without his having even official power to give secur- ity to the court, the aid of which he seeks, for his faithful conduct and official account- ability. All that could be done upon such an application from a receiver, according to chancery practice, would be to transfer him from the locality of his appointment to that where he asks to be recognized, for the ex- ecution of his trust in the last, under the coercive ability of that court; and that it would be difficult to do, where it may be ask- i ed to be done, without the court exercising ; its province to determine whether the suitor, ' or another person within its jurisdiction, was i the proper person to act as receiver. Besides, there is much less reason for al- lowing the complainant in this case to be rec- ognized as receiver for the fund out of the state of New York, and in this jurisdiction, even if the practice in chancery in respect to receivers was different from what we have said it was. The remedies which the judgment creditor in New York had under his creditor's bUl against his debtor, were not applied as they might have been in that state, according to the practice in chancery in such cases. When Clark had been en- joined under the creditor's bill, and the re- ceiver had been appointed, both judgment creditor and receiver knew at the time,— certainly, as the record shows, in a short time afterwards,— that Clark had a pecuniary claim upon the republic of Mexico. No at- tempt was made, according to chancery prac- tice, to coerce Clark by the attachment, of his person under the injunction, to make an assignment of that claim for the payment of Camara's judgment It cannot be said that Clark had not property to assign, and that it was therefore unnecessary to attach him. That would make no difference; for whether with or without property, he might have been compelled to make a formal assign- ment, even though he had sworn that he had none. It was so ruled in Chipman v. Sab- baton, 7 Paige, 47, and In Fitzburgh v. Bver- ingham, 6 Paige, 29. There was a want of vigilance in this mat- ter, which does not make any equity which he may have in New York upon Clark's prop- erty, superior to that of Clark's creditors, who are pursuing the funds in this district Nor, according to the rule prescribed in the United States, that personal property has no locality on account of the domicile of the owner, to transfer it under a foreign assign- ment, can the receiver have in this case any thing in the nature of a lien to bind the property of ' Clark not within the state of RECEIVERS. 803 New York. When we take Into consideration also the origin of the fund In controversy, the manner of its ultimate recovery from Mexico, the congressional action upon It, In every particular, to secure it, after the awards were made, to those who might be entitled to receive It; the jurisdiction given to the circuit court of this district, with an appeal from its decision to this court, upon the principles which govern courts of equity to adjudge disputes concerning It, and that such cases were to be conducted and govern- ed In all respects as in other cases in equity, we must conclude that the complainant in this case, as receiver, cannot be brought under the rule prescribed for our decision. We concur with the court below In the dismis- sion of the bill. 804 EECBIVERS. DAVIS V. GRAY, (16 Wall. 203.) Supreme Court of the United States. Dea, 1872. Appeal from the circuit court for the West- ern district of Texas, the case being thus: The state of Texas had at the times here- inafter named, certain public lands. A gen- eral land office was established at the cap- ital of the state for the registration of titles and surveys, and the lands were divided when surveyed into sections of six hundred and forty acres each. One Kuechler was the chief of this office, under the title of the "commissioner of the general land office." All certificates for the public lands were is- sued by this commissioner; and all patents were issued vmder the seals of the state and the general land office, and were re- quired to be signed by the governor and coun- tersigned by the said commissioner. These certificates were evidences of obligation on the part of the state to grant and give -a patent to the, holder for a certain amount therein mentioned of the vacant and un- reserved public lands of the state; when the certificates are located and surveyed, and the surveys returned to the commissioner and approved by him, a patent, conveying the fee, is executed as above mentioned. In and about the year 1856, and for many years thereafter the state of Texas, though of great extent, was, as it still is, sparsely inhabited, while its public domain was far from markets, and without connection with the more settled parts of the country; and it was greatly to the interest of the state to attract immigration and capital. To pro- duce this result it became the settled policy of the state to make grants and reservations of public lands to corporations, conditioned upon the construction of certain amoimts of railroad within certain times. In pursuance of this policy the Memphis, El Paso & Pa- cific Railroad Company, was incorporated February 4th, 1856, by the state of Texas, to build a railroad across the state from the eastern boundary to EI Paso, with a land grant of 16 sections to the mile; certificates for 8 sections per mile to be issued on the grading of successive lengths of road, and 8 more per mile upon the complete construc- tion of the same; and a reservation was grarited of the alternate or odd sections of land for eight miles on each side of the road, within which the company should have an exclusive right to locate its certificates, while it also had the privilege to locate said certificates on any other unappropriated pub- lie lands. This reservation, of course, was of the greatest value, as it enabled the company to reap the advantage of the enhancement 01 price which the construction of the road by them would cause in the lands along the Ime. In the same year of 1856 the company was organized in reliance on the grants, and especially on the reservation, and duly ac- cepted the same. There were certain conditions precedent to the vesung of the charter, land grant, ana reservation; but they were all com- plied with, and at a cost to the company for surveys of over $100,000. These and subsequent surveys resulted, for the com- pany, in the official designation of the road line and the center line of the reservation for some 800 miles, and the "sectionizing" and number- ing of the odd sections of land in said reserva- tion in a belt of country some 250 miles in length and 16 in width; and for the state in the surveying and mapping of the same belt of country and the "sectionizing" and numbering of the alternate or even sections for the benefit of the state. The company also graded some 65 miles of road westerly from Moore's Landing, in Bowie county, and was interrupted in the work of construction by the rebellion and so-called "secession" of Texas; but resumed work after the war, and graded between 20 and 30 miles further, from JefCerson in Marion county, in the di- rection of Moore's Landing. There were certain conditions subsequent annexed to the charter, viz.: That if the company should not have completely graded -not less than 50 mUes of their road by the 1st of March, 1861, and at least 50 miles additional thereto within two years there- after, then the charter of said company should be mill and void. The first 50 miles were graded within the required time; the second 50 miles have never been graded. Within two years after the performance of the ifirst condition, however, the legislature of Texas, by act "for the relief of railroad companies," approved February 11th, 1862, enacted, that the failure of any chartered railroad company to complete any section, or fraction or a section, of its road as re- quired by existing laws, should not operate as a forfeiture of its charter, or of the lands to which the said company would be entitled under the provisions of an act entitled "An act to encourage the construction of railroads in Texas by donation of land," approved January 30th, 1854; provided that the said company should complete such section, or fraction of a section, as would entitle it to donations of land, tmder existing laws, with- in two years after the close of the war be- tween the Confederate States and the United States of America. Within the two years after the close of the war, the provisional legislature, by act of November 13th, 1866, enacted, "that the grant of 16 sections of land to the mUe to railroad companies here- tofore or hereafter constructing railroads in Texas shall be extended, under the same re- strictions and limitations heretofore provided by law, for 10 years after the passage of this act;" and by article 12, section 33, of the present constitution of Texas, while de- claring that the legislatures which sat from RECEIVERS. 805 March 18th, 1861, to August 6th, 1866, were without constitutional authority, yet enacted that such declaration should not affect, prej- udicially, private rights which had grown up under such acts, and that though the leg- islature of 1866 was only provisional, its acts were to be respected, so far as they were not In violation of the constitution and laws of the United States. By act of July 27th, 1870, the Southern Transcontinental Railroad Company was in- corporated, and it was enacted, in terms, that it might "purchase the rights, fran- chises, and property of the Memphis, El Paso & Pacific Railroad Company, heretofore incorporated by the state." The laud grant was limited to fifteen years from the 4th of February, 1856, but thia time had not yet expired, and by an act of November 13th, 1866, for the benefit of rail- road companies, it was enacted, that this grant of 16 sections of land to the mile to railroads theretofore or thereafter construct- ing railroads in Texas, should be extended under the same restrictions and limitations theretofore provided by law, for ten years after the passage of this act. The land reservation was conditioned up- on certain surveys: (1) It was to be surveyed from the eastern boundary of Texas, as far as the Brazos river, within four years from March 1st, 1856. (2) The centre line of the reserve was to be run and plainly designated from the Brazos to the Colorado within fifteen months from February 10th, 1858. (3) The whole reservation was to be surveyed within ten years from February 10th, 1858. (4) The company was to have a connection with some road leading to the Mississippi river or the Gulf of Mexico, within ten years from February 10th, 1858. The first and second of these conditions were fulfilled vrith- in the times limited. The legislature, by act approved January 11th, 1862, enacted that "the time of the continuance of the present war between the Confederate States and the United States of America shall not be com- puted against any internal improvement com- pany in reckoning the period allowed them in their charters, by any law, general or special, for the completion of any work contracted by them to do." This act the company considered extended the time for the performance of the third and fourth conditions till the 10th of June, 1873. In the years 1867 and 1868 the company executed two series of bonds, known as land grant bonds, amounting in the aggregate to the par value of $10,000,000 In gold, and also executed and delivered to one Forbes and others, trustees as aforesaid, two mort- gages to secure said bonds, by one of which they mortgaged aU lands actually acquired or thereafter to be acquired by said com- pany by grading, constructing, and equipping the first 150 miles of the road of said com- pany, from Jefferson in Marion county to Paris in Lamar county, and by the other of which they mortgaged the like property for the second 150 miles, from Paris to Palo Pinto in Palo Pinto county. These bonds were put on the bourse in Paris, France, and sold for value to the extent of $5,348,700 of their par value, mostly in small lots, and to persons of limited means. The grants, guar- antees, and assm-ances by the state of Texas to said company of the said franchises, and especially of said land grant and land reser- vation, were recited in said mortgages, and were also announced and repeated to the purchasers personally, and by advertisement and prospectus, and the purchasers took the bonds relying on said grants, and upon the exclusive right of the company to locate cer- tificates within the territory so reserved. The bonds not being paid the circuit court for the Western district of Texas, on motion of Forbes, trustee under the mortgage, on the 6th of July, 1870, enjoined the railroad company from disposing of any of its effects, and put the road into the hands of one John A. C. Gray, as receiver: "To taJie posses- sion of the moneys and assets, real and per- sonal; roadbed, road, and all property, what- soever, of the said Memphis, El Paso & Pacific Railroad Company, wheresoever the same may be found, with power under the special order of the court, from time to time to be made, to manage, control, and exercise all the franchises, whatsoever, of said com- pany, and, if need be, under the direction of the court, to sell, transfer, and convey the road, roadbed, and other property of said company, as an entire thing," &c. On the 20th of January, 1871, it was fur- ther ordered by the court: "That the said John A. C. Gray, receiver, as aforesaid, be, and he is hereby, authorized and empowered to defend and continue all suits brought by or against the said Memphis, El Paso & Pa- cific Railroad Company, whether before or after the appointment of said receiver, and whether in the name of said company or otherwise; defend all suits brought against him as such receiver or affecting his receiv- ership, and to bring such suits in the name of said company, or in the name of said re- ceiver, as he may be advised by counsel to be necessary and proper in the discharge of the duties of his office, and for acquiring, securing, and protecting the assets, fran- chises, and rights of the said company and of the said receiver, and for securing and protecting the land grant and land reserva- tion of the said company." In November, 1809, the present constitu- tion of Texas was adopted, and was approved by congress. The fifth and sixth [seveiith] sections of this constitution are as follows: "Sec. 5. All public lands heretofore reserv- ed for the benefit of railroads or railway com- panies shall hereafter be subject to location and survey by any genuine land certificates." "Sec. 7. All lands granted to railway com- panies which have not been alienated by said companies in conformity with the terms 806 RECEIVERS. of their charter respectively and the laws of the state imder which the grants were made, are hereby declared forfeited to the state for the benefit of the school fund." The constitutional convention which fram- ed this constitution passed an ordinance to the effect that all heads of families actually settled on vacant lands lying within the Memphis & El Paso Railroad reserve, shall be entitled to and receive from the state of Texas 80 acres of land, including the place occupied, on payment of all expenses of sur- vey and patent; and that all vacant lands lying within said reserve are declared open and subject to sale to heads of families ac- tually settled on or who may actually settle on said reserve, at the price of one dollar per acre; and that said vacant lands within said reserve shall be open to pre-emption set- tlers, and subject to the location of all gen- uine land certificates. There were in 1869, and were on the 20th of January, 1871, when Gray was ordered by the coiirt to bring such suits in the name of the company as he might be advised by counsel were necessary and proper In the discharge of the duties of his office, a great number of land certificates outstanding and unlocated In Texas. Since the passing of the said ordinance, and the adoption of the said constitution, many hundreds of the hold- ers of certificates other than those issued to the company had located their certificates on the sections reserved to the company, had returned their surveys and locations to the commissioner of the general land office, and had applied for patents on the same. Before the 19th day of September, 1870, Commis- sioner Kuechler and Governor Davis, pro- fessing to act under the said constitutional provisions, issued 2 of such patents. On the 19th of September, 1870, the receiver filed a protest with the commissioner against issu- ing any further patents for lands reserved to the company, but the commissioner and gov- ernor disregarded the protest and issued 32 additional patents within the reserve; the whole of the land thus patented amoimting to nearly 20,000 acres. Hereupon on the same 20th of January, 1871, Gray, who was a citizen of New York, filed a bill in the court below against one Davis, governor of the state of Texas, and Kuechler, already mentioned as commission- er of the land office of the state. The bill- averring that "the Memphis, El Paso & Pa- cific Railroad Company" is "a corporation created by and existing under certain statutes of Texas," already referred to, and that it hid done "all acts and things necessary to_ the full and complete vesting, securing, and preserving of the franchises, rights, and priv- ileges granted thereby"— set forth a history much as above given. It averred that the company was Insolvent, and could not con- tinue the construction of the road, and that the holders of said bonds would necessarily be remitted to the security of the mortgages; that the said security was worthless unless the receiver, under order of court, should be able to sell the franchises and property of said company to some party or parties who, by constructing the road, should acquire the lands referred to in the mortgages, and hold the same subject to the lien of them. It set forth that the general laws of Texas author- ized to the fullest extent the conveyance of the franchises of a railway company by ^ale under execution or foreclosure; and that by act of July 27th, 1870, the Southern Trans- continental Railroad Company was created, and, as before mentioned, was expressly au- thorized by its charter to "purchase the rights, franchises, and property of the Mem- phis, El Paso & Pacffic Railroad Company, heretofore incorporated by the state;" that the Southern Transcontinental Company stood ready to do this, and to devote the lands to be acquired by the exercise of said Memphis & El Paso franchises to the set- tlement of the land grant mortgage debt, provided the receiver could convey the char- ter, the land grant, and the grant of the land reservation imimpaired and in. full force. It set forth further, that the receiver, on negotiating for a transfer of the franchises of the company, foimd that the marlcet for them was peculiar,' In the following respects: It was limited, as the franchises are only of use or value to those who desired and were able to construct the road; it depended in great measure upon the reputation of and confidence in the enterprise, and a belief among capitalists, outside of the state of Texas, that the state could and would have to abide by the grants contained in the char- ter; that it depended peculiarly and essen- tially upon the preservation of the land grant and land reservation, inasmuch as the country through which the road was to be built was sparsely inhabited, without cities or towns to furnish local traffic; that Texas lands at a distance from raUroads were of but nominal value compared with lands along the line of the roads, and that the Southern Transcontinental Railroad Compa- ny, to whom the receiver chiefly looked as a purchaser, already had the right of way across the state and parallel with the route of the Memphis & El Paso charter, follow- ing "as near as might be practicable the old survey of the Memphis & El Paso road;" making the mere right of way of the latter of comparatively little value without the lands and the reservation. It asserted that the acts of the governor and commissioner of the land office, in ex- ecuting and causing to issue patents for the reserve, were, and their continuance would be, irretrievable destruction of that portion of the franchise of the company which con- sisted of the right to have the odd sections of the reservation devoted exclusively to the location and patenting of the company's cer- tificates, would destroy all confidence in the RECEIVERS. 807 other grants of the company, as well as in the grant of the reservation, and render the franchise of the company valueless in the hands of the receiver, doing irreparable in- jury to the interests committed to his charge. It set forth further that the Southern Transcontinental Company asserted and in- sisted to the receiver, that unless the said acts were judicially declared unlawful, and perpetually restrained, the said franchises would be valueless to them, and that they would not carry out the purchase of the same. [It was an admitted fact in the case, that the Memphis, El Paso & Pacific Railroad Company had never sectionized or numbered the land reservation of the same west of Brazos river, or any portion of said reserva- tion west of said river; and that no work had been done on the road of the said com- pany before or since the year 1861, either by grading or otherwise, except those as al- ready affirmatively stated and set forth.] The bill further asserted that the charter of the company was a contract between the state and the company, which contract was now in the hands of the complainant as re- ceiver, and under direction of a coiu:t of equity, to be used for the benefit of the cred- itors of the company; that the said provi- sions of the constitution of Texas and the said ordinance of convention impaired the ob- ligation and value of the said contract, and also of the said contracts of mortgage, and were in so far contrary to article 1, § 10, of the constitution of the United States, which declares that "no state shall pass any law impairing the obligation of contracts," and were in so far null and void; and that the acts of the governor of the state and commissioner of the land office, in issuing such patents, were without authority of law, and illegal, and that any repetition of the same should be perpetually restrained. The bill prayed an injunction accordingly. As a reason for confining the bill to the two defendants named, an amendment to the hUl alleged that the complainant had applied at the general land office of Texas, to have the number and names of the par- ties who had located land certificates other than those issued to the Memphis, El Paso & Pacific Railroad Company, on lands with- in and forming a part of the land reserva- tion of the said company, and to obtain a list of the same; that he had been informed, on making such application, and by the de- fendant, Kuechler, the commissioner of the general land office, that the number of the same was very great, to wit, many hundreds, and that a list could not be furnished with- out great time and labor. The amendment further alleged that parties were constantly making locations and surveys of land cer- tificates as aforesaid on the lands of said reservation; and that parties who had made such locations and surveys had months allowed them by law, after making the same, before they were required to make returns thereof to the commissioner of the general land office, and that the complainant was consequently unable, and never would be able, to obtain a correct list of such parties. To this bill the defendants demurred: (1) Because it did not appear from it that the defendants, or either of them, had any direct or personal Interest in the lands which were the subject-matters of this suit; but on the contrary that they were sued in their official capacities only; and that the lands were a part of the public domain of the state of Texas, which was not and could not be made a party to this suit. (2) Because it did not appear that while under the amendment 11 to the constitution of the United States [which declares that "the judicial power of the United States shall not be construed to extend to any suit in law or equity commenced or prosecuted against onfe of the United States by citizens of another state, or by citizens or subjects of a foreign state"], the court could have no jurisdiction as between the complainant and the state of Texas, jurisdiction existed in a suit against two of the officers of said state in their official capacity alone, to de- cree portions of the constitution of the state, which had been accepted by the congress of the United States, and which the de- fendants were sworn to obey, void. (S) Because it did not appear that the bill was founded on fraud, accident, mistake, trust, specific performance, or any ground of equity jurisdiction; or that the same set out any equity against the defendants what- ever; on the contrary, it appeared that the bUl was brought to have sections 5 and 7 of article ten of the constitution of the state of Texas decreed void. (4) Because it did not_ appear that the complainant, being an officer of the com't, had a right to sue the defendants therein, nor that the court could have jurisdiction as between the complainant, though a citi- zen of the state of New York, and the de- fendants, as citizens of the state of Texas, in either their respective official or indi- vidual capacities. (5) Because the "act incorporating the Memphis, El Paso & Pacific Railroad Com- pany," and the other acts referred to in the bill, did not amount to a contract be- tween the state of Texas and the company. (6) Because it did not appear that any designated third person or persons was or were about to have a patent granted him or them by the defendants, and that such third person or persons was or were sought to be made a party or parties, nor that said bUl was not too vague and indefinite. (7) Because it did not appear that the cred- itors not specified of the company were made parties thereto, nor that the persons not spec- ified applying for patents on locations of cer- tificates, within the limits of the lands that were reserved, were made parties thereto; all 808 EBCBIVERS. of whom, according to the hill, had equities that ought to be aetermined in this suit, and hence were necessary and proper parties to this suit. (8) Because it did not appear that the com- plainant had any equities that he was not bound to have litigated against such third per- sons not specified, and also against those not specified who had located certificates within the limits of the lands that were reserved, be- fore he would have a right (which was not conceded) to invoke any action by means of a bill in a court of equity, In case such a court might have jurisdiction. The demurrer was overruled, and, no answer being filed, a decree pro eonfesso was taken for the complainant, and on the 16th of Feb- ruary, 1871, a final decree was granted In ac- cordance with the prayer of the hill, to the following effect: "That In July, 1870, and at the time of the appointment of Gray as re- ceiver, and at the date of the decree, the com- pany was duly possessed of the franchise and right of and to the land grant and land res- ervation of the company; that the said right and the franchise of the company were unim- paired, and In full force and virtue; that the provisions of the constitution of Texas, and of said ordinance of convention, so far as they impaired, or purported to Impair the said char- ter, land grant, or land reservation, were con- trary to the provisions of article 1, section 10, of the constitution of the United States, and were In so far, null and void; and that the defendants should be perpetually enjoined from Issuing, or causing or permitting to is- sue, any patent of the lands of the odd sec- tions of said reservation, except on the certifi- cates granted to the company, or Its assigns." From this decree appeal was taken by the defendants to this court. T. J. Durant and G. F. Moore, for appellants. B. R. Curtis, J. A. Davenport, and C. Parker, for appellees. SWAYNE, Justice. This Is an appeal In equity from the decree of the circuit court of the United States for the Western district of Texas. The appellee was the complainant in the court below. The defendants demurred to the bin. The demurrer was overruled. The defendants stood by it. A decree as prayed for was thereupon rendered pro eonfesso for the complainant. The defendants removed the case to this court by appeal, and It Is now be- fore us, as It was before thp court below, up- on the demurrer to the bill. This brings the whole case as made by the bill under review. The facts aveiTed, so far as they are material, are to be taken as admitted and true. We shall refer to them accordingly. The question presented for our determination Is, whether the circuit court erred In overruling the demur- rer. The appellants having elected not to an- swer, the decree for the complainant followed as of course. At the outset of our examination of the case, we are met by Jurisdictional objections as to the parties— both complainant and de- fendants—which, before proceeding further, must be disposed of. We will consider first, those which relate to the complainant, and then, those with respect to the defendants. The complainant was appointed to his office of receiver, in the suit In equity of Forbes and others against the Memphis, Ea Paso & Pa- cific Railroad Company, a corporation created by the state of Texas. The suit was in the same court whence this appeal was taken. In that case, on the 6th of July, 1870, It was, among other things, ordered and decreed, that the corporation should be enjoined from dis- posing of any of its effects, and that John A. 0. Gray, the complainant In this suit, should be, and he was thereby "appointed receiver; to take possession of the moneys and assets, real and personal; roadbed, road, and all property whatsoever, of the said Memphis, Bl Paso & Pacific Railroad Company, whereso- ever the same may be found, with power un- der the special order of the court, from time to time to be made, to manage, control, and exercise aU the franchises, whatsoever, of said company, and. If need be, under the direction of the court, to sell, transfer, and convey the road, roadbed, and other property of said com- pany, as an entire thing," &c. On the 20th of January, 1871, It was furth- er ordered by the court "that the said John A. C. Gray, receiver as aforesaid, be, and he is hereby, authorized and empowered to defend and continue all suits brought by or against the said Memphis, Bl Paso, and Pacific Rail- road Company, whether before or after the ap- pointment of said receiver, and whether In the name of said company or otherwise; de- fend all suits brought against him as such re- ceiver or affecting Kis receivership, and to bring such suits In the name of said company, or In the name of said receiver, as he may be advised by counsel to be necessary and prop- er in the discharge of the duties of his office, and for acquiring, securing, and protecting the assets, franchises, and rights of the said com- pany and of the said receiver, and for secur- ing and protecting the land grant and land reservation of the said company." It Is to be presumed the receiver filed this bill, as it Is framed In accordance with the advice of counsel. Bank v. Dandridge, 12 Wheat. 70. The authority given by the decree Is am- ple. Still the question arises whether It was competent for him to proceed In his own name instead of the name of the company whose rights he seeks by this bill to assert. A re- ceiver Is appointed upon a principle of justice for the benefit of all concerned. Every kind of property of such a nature that, if legal. It might be taken In execution, may. If equitable, be put into his possession. Hence the ap- pointment has been said to be an equitable ex- ecution. He is virtually a representative of the court, and of all the parties In interest In the litigation wherein be is appointed. Jer- RECEIVERS. 809 emy, Eq. 249; Davis v. Duke of Marlborough, 2 Swanst. 125; Shakel v. Duke of Marlbor- ough, 4 Madd. 463. He is required to take possession of property as directed, because It Is deemed more for the Interests of justice that he should do so than that the property should be in the possession of either of the parties in the litigation. Wyatt Prae. Reg. 355. He is not appointed for the benefit of either of the parties, but of aU concerned. Money op property in his hands is in eustodla legis. In re Colvln, 3 Md. C!h. Dec. 278; Delany v. Mansfield, 1 Hogan, 234. He has only such power and authority as are given him by the court, and must not exceed the prescribed lim- its. Bank v. "White, 6 Barb. 589; Verplanck V. Insurance Co., 2 Paige, 452. The court win not allow him to be sued touching the property in his charge, nor for any malfeas- ance as to the parties, or others, without its consent; nor will it permit his possession to be disturbed by force, nor violence to be of- fered to his person while in the discharge of his official duties. In such cases the court will vindicate its authority, and, if need be, will punish the offender by fine and imprison- ment for contempt. De Groot v. Jay, 30 Barb. 483; Angel v. Smith, 9 Ves. 335; Russell v. Railroad Co., 3 Macn. & G. 104; Parker v. Browning, 8 Paige, 388; Noe v. Gibson, 7 Paige, 513; 2 Story, Eq. Jur. § 833, A. & B. The same rules are applied to the possession of a sequestrator. 2 Daniell, Ch. Prac. 1433. Where property in the hands of the receiver is claimed by another, the right may be tried by proper issues at law, by a reference to a master, or otherwise, as the court in its dis- cretion may see fit to direct. Empringham v. Short, 3 Hare, 470. Where property, in the possession of a third person, is claimed by the receiver, the complainant must make such person a party by amending the blU, or the receiver must proceed against him by suit in the ordinary way. 8 Paige, 388; Noe v. Gib- son, 7 Paige, 513; 2 Story, Bq. Jur. supra; 2 Jae. & W. 176; 2 Daniell, Ch. Prac. 1433. After tenants have attorned to the receiver, he may distrain for rent in arrear in his own name. 2 Daniell, Ch. Prac. 1437. In a suit between partners he may be required to carry on the business, in order to preserve the good- will of the establishment, until a sale can be effected. Marten v. Van Schaick, 4 Paige, 479. Here the property in question is not In the possession of the defendants. The posses- sion of the receiver has not been invaded. He has not been in possession, is not seeking pos- session; and there Is no question in the case relating to that subject. But the order of the court expressly requires the receiver to se- cure and protect "the assets, franchises, and rights," and "the land grant and reservation of said company." He Is seeking to perform that duty by enjoining the appellants from doing Illegal acts, which the bill alleges. If done, would render the rights and title of the company to the Immense property last men- tioned, of greatly diminished value, If not wholly worthless. We think it is competent for him to per- form this function in the mode he has adopt- ed. The decree, in the case wherein he was appointed, expressly authorizes him to sue for that purpose in his own name. The order was made by a court of adequate authority in the regular exercise of its jurisdiction. No appeal has been taken, and the order stands unrevers- ed. This bill is auxiliary to the original suit. Freeman v. Howe, 24 How. 451; Jones v. An- drews, 10 Wall. 327. It is analogous to a pe- tition by a receiver to the court to protect his possession from disturbance, or the prop- erty in his charge from threatened injury or destruction. No title in the receiver is neces- sary to warrant such an application, or the administration by the court of the proper remedy. There can be no valid objection to the receiver here, in analogy to that proceed- ing, maintaining this suit. In the progress and growth of equity jurisdiction it has be- come usual to clothe such officers with much larger powers than were formerly conferred. In some of the states they are by statutes charged with the duty of settling the affairs of certain corporations when insolvent, and are authorized expressly to sue in their own names. It is not unusual for courts of equity to put them in charge of the railroads of com- panies which have fallen into financial em- barrassment, and to require them to operate such roads, until the difficulties are removed, or such arrangements are made that the roads can be sold with the least sacrifice of the in- terests of those concerned. In all such cases the receiver is the right arm of the jurisdic- tion invoked. As regards the statutes, we see no reason why a court of equity, in the exer- cise of its undoubted authority, may not ac- complish all the best results intended to be secured by such legislation, without its aid. A few remarks will be sufficient to dispose of the jurisdictional objections as to the ap- pellants. In Osborn v. Bank, 9 Wheat 738, three things, among others, were decided: (1) A circuit court of the United States, In a proper case in equity, may enjoin a state of- ficer from executing a state law in conflict with the constitution or a statute of the Unit- ed States, when such execution will violate the rights of the complainant. (2) Where the state Is concerned, the state should be made a party, If It could be done. That It cannot be done is a sufficient reason for the omission to do It, and the court may proceed to decree against the officers of the state In all respects as if the state were a party to the record. (3) In deciding who are parties to the suit the court will not look beyond the record. Making a state officer a party does not make the state a party, although her law may have prompted his action, and the state may stand 810 RECEIVERS. behind him as the real party In Interest. A state can be made a party only by shaping the bill expressly with that view, as where indi- viduals or corporations are intended to be put in that relation to the case. Dodge v. Wool- sey, 18 How. 331; Bank v. Knoop, 16 How. 369; Bank v. Skelly, 1 Black, 436; Trust Co. V. Debolt, 16 How. 432; and Bank v. Debolt, 18 How, 380,— proceeded upon the same princi- ples, and were controlled by that authority, with respect to the jurisdictional question aris- ing In each of those cases as to the defend- ant. In Woodruff v. Trapnall, 10 How. 190, a writ of mandamus was issued to the proper representative of the state of Arkansas to compel him to receive the paper of the Bank of the State of Arkansas in payment of a judg- ment which the state had recovered against the relator. The bank was wholly owned by the state, and the claim was made under a clause in the charter which had been repeal- ed. Judgment was given against the respond- ent. The question of jurisdiction does not appear to have been raised. In Ourran v. Arkansas, 15 How. 304, it appeared that the bank had become insolvent. A creditor's bill was filed to reach its assets. The objection was taken that the state could not be sued. This court answered that the objection involv- ed a question of local law, and that as the state permitted herself to be sued in her own tribunals, that was conclusive upon the sub- ject. According to the jurisprudence of Tex- as, suits like this can be maintained against the public officers who approyrlately represent her touching the Interests involved in the con- troversy. Ward V. Townsend, 2 Tex. 581; Cohen v. Smith, 8 Tex. 51; Commissioner Gen- eral Land Office v. Smith, 5 Tex. 471; McLel- land V. Shaw, 15 Tex. 319; Stewart v. Cros- by, Id. 547. In the application of this prin- ciple there Is no difference between the gov- ernor of a state and officers of a state of lower grades. In this respect they are upon a footing of equality. Whitman v. The Gov- ernor, 5 Ohio St. 528; Houston & G. N. R. Co. V. Kuechler, Sup. Ct Tex., not yet re- ported. [36 Tex. 382]. , A party by going into a national court does not lose any right or appropriate remedy of which he might have availed himself in the state courts of the same locality. The wise policy of the constitution gives him a choice of tribunals. In the former he may hope to escape the local influences which sometimes disturb the even flow of justice. And In the regular course of procedure, if the amount in- volved be large enough, he may have access to this tribunal as the final arbiter of his rights. Ex parte McNiel, 13 Wall. 236. Up- on the grounds of the jurisprudence of both the United States and of Texas we hold this bill well brought as regards the defendants. It is Insisted that the corporation, on be- half of which this suit was instituted, has ceased to exist. The bill avers that "the Memphis, El Paso & Pacific Railroad Company" • • • is "a corporation created by and existing under certain statutes of the state of Texas herein- after set forth," and that withm the times limited by the charter and extended by other acts the company "did all acts and things necessary to the full and complete vesting, se- curing, and preserving of the franchises, rights, and privileges granted thereby." The demurrer admits the truth of these averments unless they are inconsistent with the statutes which bear upon the subject. The corpora- tion was created by an act of the legislature of Texas, approved February 4th, 1856. By the first section certain parties are named and created a body politic and corporate, alid the general powers inherent in all such bodies are formally given. The second gives the right to construct a railway, commencing on the eastern boundary of the state, between Sul- phur Fork and. Red River, at the western terminus of the Mississippi, Ouachita & Red River Railroad, or of the Cairo & Fulton Rail- road, and running thence westerly to the Rio Grande, opposite to or near the town of El Paso. The twentieth section declares that no rights shall vest under the charter until a certain amount of stock therein named shall have been subscribed, and the percentage pre- scribed shall have been paid upon it. This requirement Is covered by the averment in the bill that the company had done every- thing necessary to secure the vesting of all the franchises given to it. We do not under- stand that there is any controversy on this subject. All the other conditions prescribed, Involving the existence of the corporation, are clearly subsequent. They are found in the fourteenth section of the charter, in the first section of the act of February 5th, 1856, and in the third section of the act of Feb- ruary 10th, 1858. To any argument drawn from these provisions there are two conclusive answers: (1) There has been no judgment of ouster and dissolution. Without this they are in- operative. To make them effectual they must be grasped and wielded by the proper judicial action. See Aug. & A. Corp. § 777, and the authorities there cited. (2) The offences and punishment denoun- ced have been condoned and waived by the subsequent action of the legislature. The act of March 20th, 1861; the act for the re- lief of railroad companies, approved January 11th, 1862; the act for the relief of com- panies incorporated for purposes of internal improvement, approved February 18th, 1862; and the third section of the "Act to incor- porate the Transcontinental Railroad Com- pany," of the 27th July, 1870, each and all have that effect The section last men- tioned authorizes the company therein nam- ed to "purchase the rights, franchises, and property of the Memphis, El Paso & Pacific Railroad Company, heretofore incorporated by this state." This is a clear affirmation, by implication, of the existence of the cor- EEOEIVERS. 811 poratlon, and of the possession of the rights, franchises, and property conferred by its -charter. What is implied is as efEectual as what is expressed. U. S. v. Babbit, 1 Black, 57. These considerations are so clearly con- cliisiTe, that it is needless to advert more particularly in this connection to the legis- lation in question, or to pursue the subject further. There is no warrant for the propo- sition that the corporation had ceased to ■exist The heart of this litigation lies in the Im- mense land grant which is in controversy be- tween the parties. The objections we have considered are only outworks thrown up to prevent the conflict from reaching that point. It is insisted that the rights of the company touching the entire reservation have become forfeited. The fifteenth section of the charter pro- vides as follows: "All the vacant lands with- in eight miles on each side of the extension line of said road, shall be exempt from loca- tion or entry, from and after the time when such line shall be designated by survey, rec- ognition, or otherwise. The lands hereby re- served shall be surveyed by said company at their expense, and the alternate or even •sections reserved for the use of the state. And it shall be the duty of said company to furnish the district surveyor of each district through which said roadway runs, with a map of the track of said road, together with -such field-notes as may be necessary to the proper understanding and designation of the same." There are other provisions prescribing va- rious details not necessary to be particularly stated or considered. A proviso in the seventeenth section de- clares that no title shall be permanently vested in the company or their assigns for land granted for the grading as contemplated by the act, until twenty-five miles of the road shall have been completed and put in running order. The proviso in the twentieth section of the charter, that no rights shall vest under it until the condition therein pre- scribed is complied with, has already been considered. Conditions of forfeiture of the lands granted are prescribed in this and sub- sequent acts. They are found in the four- teenth section of this act; in the first and fourth sections of the supplemental act of the same date; and In the third and fourth sections of the act of February 10th, 1858. These conditions will be considered here- after. The act for the relief of internal Improve- ment companies of February 18th, 1862, de- clared that the time of the continuance of the war between the Confederate States and the United States should not be computed against any internal improvement company in reckoning the period allowed them for the completion of any work they had contracted to do. The act of January 11th, 1862, for the relief of railroad companies enacted that the fail- ure of any chartered railroad company of the state to complete any part of its road, as required by existing laws, should not op- erate as a forfeiture of its charter or of the lands to which the company would be en- titled, under the provisions of the act enti- tled "An act to encourage the construction of railroads in Texas by donations of land," approved January 30th, 1854, and the several acts supplementary thereto, provided the company should complete such portion of its road as would entitle it to donations of land under existing laws within two years from the close of the war. The act for the benefit of railroad compa- nies of November 13th, 1866, declared that the grant of sixteen sections of land to the mile to railroad companies theretofore, or thereafter, constructing railroads in Texas, should be extended under the same restric- tions and limitations theretofore provided by law, for ten years after the passage of the act. These several acts are valid. See the 33d section of the constitution of Texas of 1869, and Texas v. White, 7 Wall. 700. By an act approved July 27th, 1870, the Southern Transcontinental Railroad Company was incorporated. It was declared that the object of the company thus created was to construct and establish a railway line and telegraphic com- mvmication from the eastern boundary of the state of Texas, "and thence as near as prac- ticable to the route of the Memphis, El Paso & Pacific Railroad Company, to, or near, the town of El Paso." It was enacted that "the main line of said road shall follow, as near as may be practicable, the old survey of the Memphis & El Paso road." It was further enacted that "the said company, here- by incorporated, may purchase the rights, franchises, and property of the Memphis, El Paso & Pacific Railroad Company, hereto- fore incorporated by this state," as before mentioned. The first section of the ordinance of 1869 declared that aU heads of families settled on vacant lands lying within the Memphis & El Paso railroad reserve, should be en- titled to receive from the state of Texas eighty acres of land, including the place oc- cupied, upon payment of the expenses of survey and patent. By the second section it was declared that all the vacant land within the reserve was open to sale to settlers and pre-emption set- tlers, and subject to the location of land certificates. The third section declared that the company had forfeited its right- to the land, and that certain certificates having been issued to the company and patents issued thereon, it was made the duty of the attorney- general to institute legal proceedings to have such certificates and patents cancelled. In November, 1869, the present constitu- tion -of Texas was adopted. It was subse- quently approved by congress. 812 EEOBIVEKS. Sections 5 and 7 of this constitution are as follows: "Sec. 5. All public lands heretofore re- served for the benefit of railroads or railway companies shall hereafter be subject to lo- cation and siu-vey by any geniune land cer- tificates." "Sec. 7. All lands granted to railway com- panies which have not been alienated by said companies in conformity with the terms of their charter respectively, and the laws of the state under which the grants were made, are hereby declared forfeited to the state for the benefit of the school fund." This summary gives a view of the statu- tory and constitutional provisions necessary to be considered in disposing of the ques- tion before us. On the 20th of June, 1857, the company filed in the land office at Austin surveys showing the line of the road from the eastern boundary of the state to El Paso, which line was officially recognized by the commission- er of the general land office of Texas. By the 1st of March, 1860, the company had surveyed, sectionlzed, and numbered all the sections and fractional sections of the va- cant lands within the reservation, from the eastern boundary of the state to the crossing of the Brazos, of which due retmns were made to the commissioner, and by him ac- cepted. By the 10th of May, 1859, the com- pany had. marked and designated the central line of the road from the Brazos to the Colorado, and made proper returns to the office of the commissioner, by whom they were accepted. The lands granted to the company thereby became defined and official- ly recognized as such along the whole extent of their line. In doing this work the company surveyed, numbered, and mapped each alternate or even section of public lands for two hundred and fifty miles in length, and sixteen miles in width, in behalf of the state of Texas. It was of great benefit to her, and is reported to the receiver to have cost the company more than $100,000. By consent of parties the bill was amended nunc pro tunc in three particulars. The com- plainant admitted that no land within the re- serve had been surveyed, sectionized, or num- bered west of the Brazos river, and that no work had been done on the road before or since 1861, except as averred in the bill. He averred that he applied to the general land office for the number and names of those who had located certificates other than such as were issued to the company upon lands vrithin the reservation, and that Kuechler, the de- fendant, answered that the number was very great, amounting to hundreds, and that a list could not be furnished without great time and labor. He averred further that parties were constantly locating certificates and making sur- veys within the reservation, and that they were allowed a specified time to make their returns, so that it was impossible for him to> obtain a full list of such parties. The company commenced work withia one year from the 1st of March, 1856, and before the 1st of March, 1861, had completely graded more than fifty miles of Its roadway, begin- ning at the eastern boundary line of the state and extending west in the direction of El Paso. See section 3 of the act of February 10th, 1858. We do not understand that up to that time there was a Ijreach of any condition touching the existence of the corporation or its right to the lands within the reservation. Before that time the tracts east of the Brazos covered by the grant were definitely fixed by the surveys which the company had made. The title of the company to those west of the Brazos, though the sections were not designated, was equally valid. The good will of a lease which the landlord is in the habit of renewing is property, and rights growing out of it, whether by contract or otherTvise, will be protected and enforced by a court of equity. Phyfe v. War- dell, 5 Paige, 268. See, also, Amour v. Alex- ander, 10 Paige, 571. The rights of the company west of the Bra- zos were of a much more substantial character than those which were the subjects of judicial action In the cases cited. The real estate of a corporation is a dis- tinct thing from its franchises. But the right to acquire and sell real estate is a franchise,, and the right to acquire the particular real estate designated In the charter of this com- pany, and here in question, is withui that category. It might, therefore, well be doubt- ed whether this right could be taken from the company without an appropriate proceeding instituted for that purpose, and prosecuted to Judgment by the state. But the view which we take of the case renders it unnecessary to pursue the subject. We will recur to the conditions of forfeiture touching the land grant, and consider them ir- respective of that point. The provisions tot that effect, in the fourteenth section of the- charter, are expressly superseded by those In the first section of the supplemental act of February 5th, 1856. The fourth section of that act prescribes a further condition. These provisions again are superseded by the third and fourth sections of the amendatory act of February 10th, 1858. The conditions pre- scribed by the last-named act are: (1) To survey the reserve as far as the Brazos river, within four years from the 1st of March, 1856. (2) To run and designate the centre line of the reservation from the Brazos to the Colo- rado, within fifteen months from the 10th of February, 1858. (3) To survey the whole reserve within ten years from February 10th, 1858. (4) To have a connection with some road leading to the Mississippi or Gulf of Mexico within ten years from February 10th, 1868. RECEIVERS. 813 (5) That the company shall have finished •and In running order at least twenty-five miles •of their road within one year after it is con- nected with certain other roads mentioned in the act, and at least fifty miles every two jears thereafter nntil the road is completed. (6) That the right to acquire lands from the state by donation shall cease at the expiration of fifteen years from February 10th, 1858. The two first conditions were performed within the time prescribed. These points are covered by the averments of the bill. The time limited for the performance of the third and fourth is extended from February 10th, 1868, to June 10th, 1873, by adding the time of the continuance of the war, according to the act of February 18th, 1862, before referred to. When the bill was filed- there were no such roads as those mentioned in the fifth condition with which a connection could be formed. The fifteen years limited by the sixth condition expired February 10th, 1873. The period that elapsed during the war is to be added. That extends the time so much fur- ther. The title of the company is therefore un- affected by the breach of any condition an- nexed to the grant. But suppose there had been such breaches, as is insisted by the counsel for the appellants, the result must still be the same. Except as to a small portion of the land In question the legal title is yet in the state. Whatever may be the right of the company it is whoUy equitable In its character. With a few exceptions, which have no applicability in this case, the same rules apply in equity to equitable estates as are applied at law to legal estates. They are alike descendible, devisa- ble, alienable, and barrable. Jickling, Estates, 17; Croxall v. Shererd, 5 Wall. 281. There is wide distinction between a condi- tion precedent, where no title has vested and none is to vest until the condition is perform- ed, and a condition subsequent, operating by way of defeasance. In the former case equity can give no relief. The failure to perform is an inevitable bar. No right can ever vest. The result is very different where the condi- tion is subsequent. There equity will inter- pose and relieve against the forfeiture upon the principle of compensation, where that prin- ciple can be applied, giving damages, if dam- ages should be given, and the proper amount! can be ascertained. Wells v. Smith, 2 Edw. Ch. 78; see, also, as to the principle of compen- sation, Beaty v. Harkey, 2 Smedes & M. 563. By the common law a freehold estate could not be created without livery of seizin, and it could not be determined without some act in pals of equal notoriety. Conditions subsequent are not favored in the law (4 Kent, Comm. 129), and when they are sought to be enforced in an action at law, there must have been a re-entry, or something equivalent to it, or the suit must fail. The right to sue at law for the breach Is not alienable. The action must be brought by the grantor or some one in priv- ity of blood with him. NicoII v. Raih:oad Co.. 12 N. Y. 121; Ludlow v. Eaih-oad Co., 12 Barb. 440; Webster v. Cooper, 14 How. 488. In Dumpor's Case, 4 Reports, 119, it was de- cided that a condition not to alien without license is finally determined by the first license given. Here the controlling consideration is, that the performance of all the conditions not per- formed was prevented by the state herself. By plunging into the war, and prosecuting it, she confessedly rendered it impossible for the company to fulfil duriug its continuance. This is alleged hi the bill, and admitted by the de- murrer. The rule at law Is, that if a condition sub- sequent be possible at the time of making it, and becomes afterwards impossible to be com- plied with, by the act of God, or the law, or the grantor, the estate having once vested, is not thereby divested, but becomes absolute. Co. Litt. 206a, 208b; 2 Bl. Comm. 156; 4 Kent, Comm. *130. The analogy of that rule applied here would blot out these conditions. But this would be harsh and work injustice. Equity vrill, therefore, not apply the principle to that extent. It will regard the conditions as If no particular time for performance were specified. In such cases the rule is that the performance must be vrithin a reasonable time. Hayden v. Stoughton, 5 Pick. 528; 4 Kent, Comm. *125, 126; Com. Dig. tit. "Con- dition G, 5." We are clear in our conviction that, under the circumstances, a reasonable time for performance had not elapsed when this bill was filed. As the state, by the act of July 27th, 1870, created the Southern Transcontinental Railroad Company, and au- thorized that company to "purchase the rights, franchises, and property of the Mem- phis, El Paso & Pacific Railroad Company," it will be but right to allow a reasonable time for that purchase to be made, if such an arrangement can be effected, and for the vendee thereafter to perform all that was Incumbent upon the Memphis, El Paso & Pacific Railroad Company by its charter and the supplementary and amendatory acts. If that arrangement cannot be made, the lat- ter company will have the right to provide othervpise for the fulfilment of its obligations to the state within such time, and thus con- summate Its Inchoate title to the lands with- in the reservation. Either will be in ac- cordance with the principles of reason and justice, and within the spirit of well-consid- ered adjudications. Walker v. Wheeler, 2 Conn. 299; Beaty v. Harkey, 2 Smedes & M. 563; Moss v. Matthews, 3 Yes. Jr. 279; 2 Vctu. 366; 1 Vern. 83; 3 Brown, Ch. 256; Taylor v. Popham, 1 Brown, Oh. 168; 1 Bac. Abr. 642; 1 Madd. Ch. Prac. 41, 42; Bank v. Smith, 3 Gill & J. 265. Both parties will thus be put in the same situation, as near as may be, as if the breach- es had not occurred. Neither wiU be sub- jected to any serious hardship. The state, by her own acts, has lost the benefits of an 814 RECEIVERS. earlier completion of the work. The com- pany has lost the Income which it might have enjoyed, and has doubtless been thrown into embarrassments it would have escaped. The circumstances do not call for a severe application of the rules of law upon either side. Breaches of such conditions may be waiv- ed by the grantor expressly or In pais. Dumpor's Case, 1 Smith, Lead. Cas. Bq. 85, Am. note. Such waiver is expressed in the statutes relating to the subject, to which we have referred, except the act creating the Transcontinental Company, and there it ex- ists by the clearest implication. That the act of incorporation and the land grant here in question, were contracts, is too well settled in this court to require dis- cussion. Fletcher v. Peck, 6 Cranch, 137; New Jersey v. Wilson, 7 Cranch, 166; Dart- mouth College V. Woodward, 4 Wheat. 518; Bank v. Knoop, 16 How. 369. As such, they were within the protection of that clause of the constitution of the United States which declares that no state shall pass any law im- pairing the obligation of contracts. The or- dinance of 1869, and the constitution adopt- ed in that year, in so far as they concern the question under consideration, are nulli- ties, and may be laid out of view. Von HofEman v. City of Quincy, 4 Wall. 535. When a state becomes a party to a contract, as in the case before us, the same rules of law are applied to her as to private persons under like circumstances. When she or her representatives are properly brought into the forum of litigation, neither she nor they can assert any right or immunity as incident to her political sovereignty. Curran v. Arkansas, 15 How. 308. A case more imperatively demanding the exercise of jurisdiction in equity could hard- ly be imagined than that presented in this bill. Should the interposition invoked be refused, doubtless the reservation would speedily be thatched over with adverse claims. A cloud would not only be thrown upon the title of the company, but the time, litigation, labor, and expense involved in the vindication of its rights, would very greatly lessen the value of the grant and materially delay the progress of the work it was In- tended to aid. The injury would be irrepar- able. It is the peculiar function of a court of equity in a case like this to avert such results. it has been insisted that those holding ad- verse claims should have been brought into the case as parties. They are too numer- ous for that to be done. An applicatioii was made to one of the defendants for a list of their names, and it was not given. The im- portant questions which have arisen be- tween the appellants and the company can all be properly determined without the pres- ence of other parties than those before us. The parties referred to are sufficiently rep- resented for the purposes of this litigation by the governor and the commissioner of the general land office. We feel no difficulty in disposing of the case as It Is presented in the record. There are other points, ably maintained by the learned counsel for the appellants, to which we have not adverted. They are suffi- ciently answered by what has been said. It would extend this opinion unnecessarily, and could serve no useful purpose, specifically to consider them. The circuit court decided correctly. The decree appealed from is affirmed. Mr. Justice HTTNT did not hear the ar- gument in this case and did not participate in its decision. Mr. Justice DAVIS, with whom concur- red the CHIEF JUSTICE, dissenting, said: I am constrained to enter my dissent to the opinion and judgment of the court in this case, for the reason that this suit, although in form otherwise, is in effect against the state of Texas. The object which it seeks to obtain shows this to be so, which is to deprive the state of the power to dispose, in its own way, of its public lands, and this object, by the decision just rendered, is ac- complished. In my judgment the bill should have been dismissed, because the state is exempt from suit at tne instance of private persons, and on the face of the bill it is apparent that the state is arraigned as a de- fendant. KECEIVERS." 815 In re FLOWERS et aL {1 Q. B. Div. 14.) Court of Appeal. Oct 30, 1896. Appeal from an order of a registrar In bankruptcy dismissing a petition for a re- ceiving order presented against the debtors. The debtors were a firm consisting of five members, some of whom, being desirous of dissolving partnership, commenced an action In the chancery division, and in that action a receiver and manager was appointed. The members of the firm thereupon ceased to at- tend at the place of business, and the busi- ness was carried on by the manager. The petitioning creditors, who had previously brought an action against the firm, -obtained judgment and issued a bankruptcy notice, which was served on four out of the five partners. The fifth partner could not be found, and the notice was thereupon served on the receiver and manager at the place of business. On objection that no proper serv- ice of the notice had been effected, the regis- trar dismissed the petition. The petitioning creditors appealed. F. Cooper Willis, for petitioning creditors. Muir Mackenzie, for debtors. LORD ESHER, M. R. I am of opinion that this appeal should be dismissed, and I come to that conclusion upon what I consider to be the true construction of rule 260. As to the position of the receiver appointed by the court, he is the officer and servant of the court, and not of the partners. As I pointed out in the case of Burt v. BuU (1895) 1 Q. B. 276, only the court can dismiss him, or give him directions as to the mode of carrying on the business, or interfere with him If he Is not carrying on the business properly, and he is in no sense the servant of the partner- ship. On the true construction of rule 260, I think there is a necessary implication that the person described in the rule as having the control or management of the business must be a person having authority from the partners, and acting as their agent, and that consequently the rule does not apply to a re- ceiver and manager appointed by the court, and deriving his authority from that appoint- ment, and not from the partners. The serv- ice was therefore ineffectual, and the regis- trar was right in dismissing the petition. LOPES, L. J. I am of the same opinion. The material words of rule 260 of the Bank- ruptcy Rules, 1890, are, "any person having at the time of service the control or manage- ment of the partnership business there." I agree with the master of the rolls that these words Imply a person having the control or management of the business for and on ac- count of the partners, and Indicate some one In the position of an agent or servant. Hav- ing regard to the fact that the person served in this case did not stand in any such rela- tionship to the partners, but was a receiver appointed by and responsible to the court, I think the decision of the registrar was right RIGBT, L. J. A receiver and manager ap- pointed by the court is certainly not the agent of the parties; but, admitting that to the fullest extent, I do not know that, if I had to decide this case sitting alone, I should have arrived at the same conclusion as the other members of the court, from which, however, I do not dissent. Appeal dismissed. 816 EEOBIVERS. SEMPLB V. FLXNN et aL (10 Atl. 17T.) Court of Chancery of New Jersey. June 30, 1887. BUI for relief. On December 5, 1885, Semple and James D. Flynn entered into an agreement for the purpose of carrying on the saloon and res- taurant business at Mount Holly, New Jer- sey. Semple was to furnish the money to buy the necessary fixtures and chattels with which to run the business, while Flynn was to take charge of and conduct the business; it being run in his (Flynn's) name. Out of the proceeds arising from the earnings an equal division was to be made between the two. Semple bought the fixtures for $1,200, pay- ing $850 in cash, and giving a chattel mort- gage of $350 for the balance. Flynn agreed to pay $250 to Semple, and take up the $350 mortgage in the spring of 1886. Flynn paid Semple the $250, and took up the $350 mort- gage, giving a $300 one In place of it, and, according to the charge of the complainant, has refused to cancel or pay off the $300 mortgage. In November last, Flynn refused to further divide the profits. The complain- ant also charges that the defendant fraud- ulently, and without any consideration, in February, 1887, gave a second chattel mort- gage on the fixtures to his brother John J. Flynn for the alleged securing of the pay- ment of $500. The bill asks for an account- ing since last November, the appointment of B receiver to continue the business imtil the complainant is paid the money he advanced, and the restraining of the selling or transfer- ring of the second mortgage. The defendant denies part of the agreement respecting the payment of the chattel mortgage, and also claims that the $a50 advanced by Semple was loaned to him, and that he has since paid Semple the amount in full; that the mortgage was given to his brother to secure moneys advanced by the said brother. The cause was heard on bill, answer, and proofs, on motion for receiver and preliminary in- junction. Alfred Hugg, for complainant C. E. Hen- drickson, for defendant. BIRD, V. C. In this case I am asked to appoint a receiver to take possession of goods and of a business which the complainant claims are held and used in partnership. I cannot advise such appointment 1. It is not at all established by. the proofs, by way of affidavits, that there Is or ever was a copartnership. There are many cir- cumstances tending to show that a partner- ship was never intended. 2. If there ever was a copartnership, the presumption, from several circumstances, is that it was broken and abandoned according to its original terms, and such settlement had as to preclude the complainant from any fur- ther claim on the goods or interest in the business as a partner. 3. These things being so, no sufilcient cause appears to justify the court in taking the goods, and the business, too, out of the hands of the defendant to whom It was originally committed, when so to do would totally de- stroy the business, and that necessarily, ■ be- cause such business is carried on under a license, which, of course. Is personal to the defendant, and cannot be delegated nor as- signed nor committed to the care of a re- ceiver by any court Before the court will take a step which will work such results, it must be reasonably certain that the allega- tions upon which relief depends are true. 4. But I will advise an injunction restrain- ing the defendant from selling, assigning, or Incumbering any of the goods, chattels, or fixtures now in use In said business, or the said business itself, or the good will thereof, —not, however, to restrain him from manag- ing and carrying on said business In the or- dinary way in which he has heretofore been carrying it on during the continuance of the alleged copartnership. I feel justified, under the proofs. In going thus far in the interests of the complainant, but no further. This will preserve the present status until final hearing. Costs to abide final decree. RECEIVERS. 817 SIMMONS HARDWARE CO. v. WAIBEL et al. (47 N. W. 814, 1 S. D. 488.) Supreme Court of South Dakota. Jan. 30,1891. Appeal from district court, Beadle county. Mouser & Vollrath, for appellant A. B. Melville and E. H. Aplin, for respondents. CORSON, P. J. On March 1, 1889, the plaintiff filed its verified complaint In the' dis- trict court, in which it is alleged, in substance, that it is engaged in the wholesale and retail hardware business in the city of St. Louis; that it has a large amount of capital invested in its said business, several hundred clerks, and about 90 traveling salesmen engaged in selling its wares and merchandise in nearly all the states and territories; that it has prepar- ed and published, at great expense, an illus- trated and printed catalogue containing about 1,500 pages, for distribution among its cus- tomers; that it has invented arid prepared, at a cost of many thousand dollars, a secret code or system, represented by letters, figures, and characters, showing the cost and selling price of its many articles of merchandise, which is marked in such of its catalogues as are in- tended for use in its said business by its trav- eling salesmen, and which said secret code or system is not marked in the catalogues dis- tributed to its customers; that in January, 1887, it employed one Frank Meech as one of its traveling salesmen, and intrusted to him, as such, one of its catalogues containing its said secret code or system of letters, figures, and characters marked therein, with the key thereto; that in his business as snch traveling salesman said Meech frequently visited the city of Huron, in Dakota, and made sales of goods to the defendants, who were customers of plaintiff, and engaged in the hardware busi- ness; that during the year 1888 the defend- ants, in collusion with said Meech, who still continued in the employment of plaintiff as such traveling salesman, wrongfully and fraudulently obtained from said Meech the said privately marked catalogue, containifig its secret code or system of letters, figures, and characters, showing the cost and selling price of its said wares and merchandise, with the key thereto, and copied the same therefrom into one of plaintiff's catalogues that had been furnished to defendants as customers of plain- tiff, and that defendants thereby wrongfully and fraudulently became possessed of a knowl- edge of plaintiff's said secret code or system, and a copy of the same; that plaintiff, upon ascertaining said fact, demanded of defend- ants the said copy of its secret catalogue so wrongfully and fraudulently made by them, and that on or about February 19, 1889, de- fendants returned to plaintiff said marked copy, but before doing so they fraudulently and wrongfully copied said secret code or sys- tem into one of plaintiff's said catalogues it had furnished to Shefier Bros., also customers H.& B.EQ.(2d Ed.)— 52 of plaintiff, from whom defendants had ob- tained it, and that said defendants now retain said last-mentioned or Shefier copy, refuse to return same to plahitlff, and threaten to make known said secret code or system, with the key thereto, to customers of plaintiff, to the great damage and injury of plaintiff; that to invent and prepare a new code or system will cost the plaintiff several thousand dollars, and require at least six months' time, and that dur- ing such change of system plaintiff will be greatly embarrassed in the transaction of its business. An injunction, receiver, etc., ara prayed for. On filing the complaint, and two supporting affidavits, the court granted ex parte a tem- porary injunction, and appointed a receiver, to whom defendants were required to deliver said (Shefier) copy of the catalogue alleged to have been copied by them from the former copy returned to plaintiff. On April ISth the de- fendants moved the court, upon the affidavit of defendant Donaldson, pleadings, proceed- ings, etc.. In the case, to vacate said order made March 1st. The court on the bearing re- fused to vacate said order, but made an order modifying it by directing that receiver to re- turn said (Shefier) copy of catalogue to de- fendants. From so much of said order of April 18th as required the receiver to return said copy of catalogue to defendants, plaintiff appeals to this court, and assigns such modifi- cation of the original order as error. The appointing or refusing a receiver within the sound judicial discretion of the court to which application Is made, and this court will not interfere with the exercise of this discretion by the lower court when the evidence is conflicting, unless this court is satisfied such lower court has abused its dis- cretion. Mays V. Rose, Freem. Ch. 703; Chi- cago & A. O. & M. Co. V. United States P. Co., 57 Pa. 83; Whelpley v. Raikoad Co., 6 Blatchf. 271; Story, Eq. Jur. §§ 831, 832; High, Rec. §§ 7-25; Pom. Eq. Jur. § 1331. Was there, then, a substantial conflict in the evidence upon the material facts in this case? and, if there was such conflict, was there an abuse of discretion by the court? The re- spondents contend that the affidavit of Donald- son denies all the equities of the bill relating to the Shefler catalogue, and invoke the rule of courts of equity applicable to injunctions, that, when the equities of the bill are denied by the answer, the injunction will be denied. Anderson v. Reed, 11 Iowa, 177; Stevens v. Myers, Id. 184. But that rule does not apply to this case, for the reason that the receiver was appointed, not upon the complaint alone, but upon the complaint and supporting affi- davits, and upon the hearing additional affi- davits were read on the part of the plaintiff; and the rule itself Is subject to many qualifi- cations and exceptions not necessary now to be noticed. This affidavit will therefore be considered as the other affidavits in the case. The only evidence introduced on the part of the defendants on the hearing was the affi- isi iel Ms \ 818 RECEIVERS. davit of defendant Donaldson, before reftoed to. This aflBdavit, while It denies each and every allegation in the complaint in general terms, does not deny the various allegations of the complaint and supporting affidavits in that dear and specific manner that entitles it to much weight in a court of equity. It is evasive and unsatisfactory, and leaves upon the mind the impression that, while there Is an attempt to deny the allegations of the com- plaint and supporting affidavits, there is a want of good faith on the part of Donaldson, and an effort on his part to conceal the real facts in the case. All the material facts stat- ed in the complaint were fully sustained by affidavits introduced and read in evidence on the part of the plaintiff. That defendant Don- aldson did. In collusion with Meech, plaintiff's traveling salesman, wrongfully and fraudu- lently obtain from said Meech the secret cata- logue Intrusted to him by the plaintiff, and make a copy of the same, and that he did in the same manner obtain the key to the same, and did thereby become possessed of a knowl- edge of plaintiff's secret code or system to which he was not entitled, is proved by too clear ajid satisfactory evidence to admit of any doubt. That he did return to plaintiff the first copy so made is admitted. The only ques- tion remaining is, did Donaldson, before re- I turning the said marked copy, make a second copy therefrom in the Shefier catalogue now in controversy? After a careful examination of the evidence, we think there cannot be much doubt upon this question. It may be true that there were some slight changes made in the letters, figures, and characters used by plaintiff to represent the cost and selling prices of plaintiff in the Shefier copy, but we think It Is equally true that In the changes made, if any, defendant Donaldson had so ar- ranged them that he preserved, in substance, the plaintiff's system. H. P. Hnckins says in his affidavit that he Is one of the traveling salesmen of plaintiff, and is fully acquainted with the private and secret code of plaintiff, represented by letters, figures, and characters showing the cost and selling prices of plain- tiffs goods, and the key thereto, and that he had examined the Shefier catalogue in the hands of the receiver, and that the basis of the prices marked therein Is throughout the said cost price to plaintiff, and that It would have been impossible for any one to have marked the said Shefier catalogue with the prices marked, and the explanatory remarks therein contained, unless the person who so marked the same had access to and copied from one of plaintiffs private catalogues. In connection with this testimony are to be con- sidered the efforts made by Donaldson to ob- tain one of plaintiffs catalogues from some one of plaintiff's customers before he returned to it his own marked" copy. After efforts by himself and through his confederate, Meech, he obtained one from George C. Shefier, who says, in his affidavit, that he first loaned to Donaldson his catalogue on February 15, 1S89, and that when, soon after, he requested Don- aldson to return it, he replied: "I have mark- ed the price of my goods in the catalogue, but am expecting a catalogue from the Simmons Hardware Company every day, and as quick as it comes I wlU express It to you." It is true he couples the admission that he had marked the Shefier catalogue with the qualification that he had marked the price of his own goods in it, but this Is not inconsistent with the fact that he had marked the prices con- tained in plaintiff's secret catalogue, as he was a customer of plaintiff, and was then in pos- , session of a copy made from one of plaintiff's . catalogues intrusted to Meech; and he subse-j quently took great pains to obtain a bill of I sale of this catalogue from Shefier. Whyj these efforts and this haste to get another catalogue before he returned the first copy marked by him, if he did not require it in which to make another copy? We are of the opinion that there is no substantial confiict Inj the evidence, and that upon the facts the court I below should have retained the catalogue in I question in the hands of the receiver. | It is contended on the part of respondents that the catalogue in controversy was the ab- solute property of defendants, and that the court, under ttie established rules of equity, was not authorized to take it from them, and place it in the hands of a receiver. It may be conceded, as claimed, that the Shefier cata- logue in its original condition was the abso- lute property of defendants; but the catalogue in controversy had been changed from its orig- inal condition by the defendants by incorporat- ing therein the private code or system invented and prepared at great expense by the plaintiff. The original catalogue was of itself of but trifling value, but with the private code or system of plaintiff marked therein it was of great value. That such a code or system as was invented and used by plaintiff in Its busi- ness, and described in its complaint, was its^ property. Is well settled, both at common law and under our own Code. Section 2676, Comp. Laws. It was the product of the skill and labors of the plaintiff, and as such is property, and Is entitled to the protection of the law; and when the injury threatened would be ir- reparable, and the remedy at law is inade- quate, a court of equity vrill Interfere to pre- vent a party who has vreongfully obtained possession of the secret from using It or dis- closing It to others. And when, as in this case, a party has not only obtained knowledge of the secret code or system, but has wrongfully made a copy of the secret system, a court of equity wlU, In furtherance of justice and to prevent the party from fraudulently making a disclosure of the secret, not only enjoin him, but will, we apprehend, take into Its posses- sion, by means of a receiver, who is an officer of the court, such copy, so wrongfully made, to prevent fraud; and if on the trial the facti alleged are established the court will be au- thorized to place such copy in the hands of the plaintiff, or at least see that plaintiffs secret RECEIVERS. 819 marks therein shall be erased or canceled. This accords with the spirit, if not with the letter, of onr Code. See sections 3213-3221, Comp. Laws. These sections embody the rules of the civil law upon the doctrine of accessions to personal property, except perhaps section 3219, which Is a rule of the common law. Sils- bury V. MeCoon, 3 N. Y. 379. That courts do not hesitate to grant injunctions in such cases, Is well settled by the adjudged cases. In ToTatt V. Whiyard, 1 Jac. & W. 394, the court granted an injunction against one who had ob- tained a knowledge of a secret by a breach of trust In Morison v. Moat, 9 Hare, 241, the court restrained the defendants from using a secret in compounding a medicine, surrepti- tiously obtained. In Peabody v. Norfolk, 98 Mass. 452, the court held that an injunction -to restrain a party from communicating a secret imparted to htm in the court, of his business, was proper. See 2 Story, Bq. Jur. | 952. The court was therefore clearly right in granting and continuing the temporary injunction, and, this being so, we' are unable fo see any legal reason why the court should not have retained in the hands of the receiver the marked cata- logue in controversy in this action. The pow- ers of courts of equity over property, the title to which is Involved In litigation. Is broad and comprehensive, and its power to take intoi its possession, through its receiver, any property that Is the subject of litigation, Is ample and unquestioned. The contention of defendants that, as they were the ovmers of the catalogue of trifling value, into which they have copied plaintiff's valuable secret code or system, it cannot be taken Into Its possession by a court of equity through Its receiver, and held pendente lite, we cannot assent to. One of the grounds upon! which a receiver will be appointed is that there Is no other adequate remedy. In this case the remedy by Injunction Is not adequate to ac- complish the ends of justice. The plaintiff, by Its complahit and affidavits, shows that its business extends over a large number of states and territories, tn which it has many custom- ers. Enjoining a party, therefore, from using or communicating the plaintiff's secret code or . system, whUe effective so long as the defend- 1 ants are within the jurisdiction of the court,} would yet be of little efficacy in case defend- 1 ants should go beyond the jurisdiction of the\ court, and take with them the copy, where \ they might use this secret by communicating | It to plaintiff's customers, to the irreparable | Injury of the plaintiff. The flexible nature of the equitable jurisdiction of courts of equity enables that court to so mould and administer its remedies as to prevent such fraudulent and vrrongful use of the catalogue In question, by at once placing It vyithin the control of the court, and thus placing It beyond the power of the defendants to make any improper disposi- tion of It pending the suit, by taking it beyond the jurisdiction of the court; We are clearly of the opinion that under the established juris- diction of courts of equity the power exists in that court to take into its possession this cat- alogue, and we think under the evidence it | was clearly the duty of the court to do so, and that its modification of its order of March 1st was an abuse of its judicial discretion. The modified order, so far as It directed the return of the catalogue to defendants. Is re- versed. All the judges concurring. 820 REOEIVEES. In re SCHUYLER'S STEAM TOWBOAT CO. (32 N. E. 623, 136 N. Y. 169.) Court of Appeals of New York. Nov. 29, 1S92. Appeal from supreme court, general term. Third department. Proceeding for the dissolution of the Schuy- ler's Steam Towboat Company. From an or- der of the general term (19 N. Y. Supp. 565) affirming an order granting an injunction re- straining the further prosecution of suits brought in the United States district court, Michael J. Moran and others appeal. Af- firmed. Carpenter & Mosher (Joseph F. Mosher, of counsej), for appellants. James W. Baton, for respondent. PECKHAM, J. A receiver of the property and effects of the above-named corporation ■was duly appointed by a special term of the supreme court of the state sitting at Albany on the 31st of July, 1891, and the order ap- pointing him was filed and entered in the proper cleric's office August 1, 1801, at 11 a. m. The receiver executed his bond, and It was duly approved August 3, and filed in the clerk's office August 4, 1891. The proceed- ing was one for the voluntary dissolution of a corporation, and the distribution of its property and assets among those entitled to I receive the same. Intermediate the time when the receiver was appointed and the ■ execution and filing of his bond, and In the I afternoon of August 1st, a Mr. Moran, in his own behalf and in behalf of other cred- ' Itors of the corporation, libeled several ves- \ sels which were the property of the corpora- 1 tion, by filing libels in the United States dis- /trlct court for the Eastern district of New I York, and upon process issued from that ) court the marshal took possession of such f vessels. When Moran instituted his proceed- ings he says he had been informed that ap- plication had already been made for the ap- pointment of a receiver, but he was not In- formed, and did not know, that one had been appointed. Finding the marshal In posses- sion of the vessels, and as he refused to give up such possession, the receiver instituted these proceedings to restrain the libelants from further steps in the United States dis- trict court. The courts below have granted the order restraining further proceedings, and the other parties have appealed here. The courts below have held that by the proper presentation of a petition to a state court, praying for the dissolution of the corporation, and by the appointment of a receiver upon due notice of the application to the attorney general, the court acquired jurisdiction of the subject-matter of the proceeding, and took the property of the corporation Into the cus- tody of the law for the purpose of due ad- ministration; and that, having thus acquired jurisdiction of such subject-matter and taken the property into the custody of the law, al- though the receiver had not actually and physically seized and taken it into his man- ual possession, the state court acquired the exclusive jurisdiction and right to take such possession and make a final decree; and that the libelants acquired no rights under their process, and should not be permitted to fur- ther proceed in the district court. The libel- ants, on the other hand, contend that this i£ a question of jurisdiction over the particular property, and that court obtains it which through Its process and officer first actually seizes and takes possession of the property itself; and that, although the receiver may have had a prior right to take possession, it was not exercised before actual possession was taken under the process from the United States court, and hence the first manual pos- session must determine the question of juris- diction. We think the contention of the libelants ought not to prevail. The question of the effect of the appointment of a receiver upon the title to the property of the person or corporation for which he was appointed is not a new one. In Mann v. Pentz, 2 Sandf. Ch. 257, it was said that when the appoint- ment of a receiver was completed the title to all property and effects which were sub- ject to the order vested in him. To the same effect are Porter v. Williams, 9 N. Y. 142- 148, and Van Alstyne v. Cook, 25 N. Y. 489- 496. The appointment of receiver Is complet- ed at the furthest by the filing and entering of the order appointing him, although before he proceeds to the discharge of his duties he may he directed to execute and file a proper bond. When that is done, he can take ac- tual, manual possession of the property, and his title relates back to the time of his ap- pointment. In re Christian Jensen Co., 128 N. Y. 550, 28 N. E. 665, and cases cited by Earl, J. In Storm v. Waddell, 2 Sandf. Ch. 494, it was said that property that was liable to levy under execution at law could not be. levied upon subsequent to an order appoint- ing a receiver, as such order was equivalent to an actual levy upon the property. I think the proposition involved in this case has been held adversely to the claim of the libelants by the decision In Re Christian Jensen Co., supra. The receiver was there appointed March 10th, his bond filed March 11th, and on March 12th he took possession of some of the property of the corporation. On the 11th of March, intermediate the appointment and qualification of fhe receiver, certain parties commenced an action against the corporation, and sued out process in replevin in a New York district court, and under it took posses- sion of certain property, which was then In the possession of the corporation. On the same day an action against the corporation was commenced in the New York common pleas to recover a money judgment, and a warrant of attachment vras issued, and the sheriff on the same day attached some of the property of the corporation. The receiver then asked for an order restraining the fur- RECEIVERS. 821 ther prosecution of these actions, and, after hearing, the order was granted permanently restraining such proceedings. At the same time the court directed the sheriff, who had seized under Ids process in replevin certain property in the possession of the corporation, to surrender the same to the receiver. Some question was made as to the right of the cor- poration to the possession of the property tak- en in replevin, hut upon the facts it was held the receiver was entitled to possession, and, if any question arose as to whether the prop- erty seized under the replevin writ actually belonged to the corporation at the time of the appointment of the receiver, that question might be inquired of by some action or pro- ceeding against the receiver, commenced or taken with leave of the court. What was in- tended to be asserted was that the appoint- ment of the receiver vested the property of the corporation in him, although he was to thereafter qualify by giving a bond; and that, the title being in him, and the property in the custody of the law, no other court could obtain jurisdiction over the property after such appointment, even under process upon which possession was taken prior to the qualifying of the receiver. A diA srent rule does not prevail because one court is a state and the other a United States court. It is a question of jurisdiction in each case, and the same principles apply in both. The same rale obtains whether one court is of common-law or equitable jurisdic- tion and the other is a court of admiralty, al- though the nature of the jurisdiction of these courts is so different Mr. Chief Justice Taney, in his dissenting opinion in Taylor v. Carryl, 20 How. 583-600, endeavored to es- tablish that such a difference in the nature of the jurisdiction of common-law and admiral- ty courts over the vessel which was attached and libeled ought to make a difference in the decision to be made. The jurisdiction of the district court of the United States in that case was invoked for the purpose of collect- ing seamen's wages by the enforcement of the maritime lien upon the vessel given for that class of services, and it was said that such lien is by weU-establlshed authorities prior and paramount to all other claims on the vessel, and must he first paid, and that by the constitution and laws of the United States the district courts, acting as courts of admiralty, were the only courts which had jurisdiction over such lien or that were au- thorized to enforce it, and that, it was the duty of that court to do it The chief justice then argued that, as the attachment of the vessel under the state laws and by process from the state court only bound the interest of the ovraer, while the maritime lien upon the vessel bound the res itself, the court which had jurisdiction only of a subordinate and inferior interest should not be able, by virtue of such an attachment, to close all proceedings to enforce the paramount lien for wages for 12 months, as by the laws of the state that period or more might elapse be- tween the seizure of the vessel imder the at- tachment and its sale or release from the process. The case was decided upon what a majority of the court held was no new prin- ciple, and it was solved by the application of what was said to be a principle that was comprehensive, and just, and equal, and op- posing no hindrance to the efficient adminis- tration of judicial power. The jurisdiction of the state court was upheld, notwithstanding its limited character, and that of the admiral- ty court was denied, although it was the sole court where the lien of the seaman for his wages could be originally enforced against the vessel itself. The case shows that the fact that the different courts in the Christian Jansen Co. Case, supra, were courts of the same state, and of concurrent jurisdiction, is immaterial, and the same rule would hold if one court were a state and the other a Unit- ed States tribunal. The cases cited by the counsel for these ap- pellants do not involve the question as to the effect of the appointment of a receiver in an action or proceeding where the court has ob- tained jurisdiction by the proper service of papers. This court has held that the effect is, in a case of this kind, to take the prop- erty of the corporation into the custody of the law, and that the court has power to pre- serve and protect it. As was said in Heidrit- ter V. Oil Cloth Co., 112 U. S. 305, 5 Sup. Ct Rep. 135: "When the object of the action re- quires the control and dominion Qt the prop- erty Involved in the litigation, that court which first acquires possession, or that do- minion which is equivalent, draws to itself the exclusive right to dispose of it" That dominion was acquired by the order appoint- ing the receiver in this proceeding. The same principle was declared in Union Trust Co. V. Rockford, R. I. & St. L. E. Co., 6 Blss. 197; Steele v. Sturges, 5 Abb. Pr. 442; Rail- road Co. V. Lewis, 81 Tex. 1, 16 S. W. 647. Different considerations apply upon a motion to punish as for a contempt an alleged inter- ference of a third person with property in re- gard to which a receiver may have been ap- pointed, but which he has not yet taken ac- tual possession of. In the case of Bank v. Schermerhorn, 9 Paige, 372, the chancellor re- versed the decree of the vice chancellor ad- judging the appellants to be in contempt, be- cause the facts were not sufficient to enable the chancellor to judge whether the parties were or were not in contempt. The question was one of procedure,— whether it was prop- er to proceed as for a contempt for the pur- pose of enforcing the actual delivery of prop- erty to the receiver. The court held such proceeding was improper where the receiver had never had actual possession, although his right to pos.session flowed from the order ap- pointing him. The question now before the court was neither Involved, discussed, nor de- cided in the case cited. A party might not be guilty of contempt in taking control of 822 EBCBIVEBS. property not actually seized by the receiver, and while such party was In Ignorance that a receiyer had been appointed; and yet the property thus Interfered with may notwith- standing have been in the custody of the law, and jurisdiction over It may unquestionably have existed In the court which appointed the receiver. Onr decision here does not affect the legal rights of the libelants In the vessels In question. The receiver will be obliged in this proceeding to distribute the proceeds aris- ing from a sale of the property among the creditors of the corporation, as their priority of rights may appear and be held valid. We think the order was right, and It must be affirmed, with costs. All coocnr. .s^J^::> •*-*^ -J^^^iSCtiA RECEIVERS. 823 ST. LOUIS, K. & S. R. CO. et al. v. WEAR, Judge. (36 S. W. 357, 135 Mo. 230.) Supreme Court of Missouri. June 15, 1896. In banc. Application by the St Louis, Kennett & Southern Railway Company and others for a writ of prohibition agaiust Judge Wear, judge of the circuit court. Writ granted. The proceeding before Judge Wear was up- on a petition in which Mr. Kerfoot was nam- ed as plaintiff, and the "St. Louis, Kennett & Southern Railroad Company, a corporation, and Louis Houck, B. F. Blomeyer, L. B. Houck, Theophllus Besel, and E. S. MeCar- ty, as directors In said railroad company, and the Pemiscot Railroad Company, a cor- poration, and RobMt G. Ranney, Leo Doyle, Robert T. Giboney, and John R. Jeannln, di- rectors LQ said railroad company, and Louis Houck," defendants. The substance of that petition (according to the statement of the counsel for defendants in the supreme court, which statement is regarded as suflaclently full for the purposes of the prohibition case) is as foUows: "On the 17th of March, 1890, there was or- ganized under the laws of this state the St Louis, Kennett & Southern Railroad Com- pany, with a capital of $180,000, divided into 1,800 shares of the par value of $100 each, de- signed to be constructed and operated from Campbell to Kennett, Dunklin county, Mis- souri,— a distance of 19 miles. Of this stock, A. J. Kerfoot held, and still holds, 108 shares, and B. S. McCarty, Harry H. Ferguson, Melvin L. Gray, and George Denison, respec- tively, held 108 shares. Prior to the day of July, 1891, all the shares of the other stockholders in said company were purchased by said A. J. Kerfoot and B. S. McCarty. On July 8, 1891, said Kerfoot and McCarty en- tered into a contract with relator Louis Houck, by the terms of which said Houck agreed to transfer to said Kerfoot and Mc- Carty ten interest-bearing extension bonds of the Cape Girardeau SouthwestCTn Railway Company, each for $1,000, which were repre- sented to be worth »Vioo of their face value, and also to organize a construction company for the purpose of making a connection be- tween the said railroads at the town of Camp- bell, said connection being of the approxi- mated length of 30 miles. Of the stock of said construction company, said Kerfoot and McCarty were to receive 49 per cent, and on the construction of said connection, said Ker- foot and McCarty were to be superintendent and general manager, respectively, at salaries of not less than $175 per month. By the terms of this contract one-half of the real es- tate belonging to said St Louis, Kennett & Southern Railway Company at Kennett was to be transferred to said Kerfoot and McCar- ty. In consideration of the foregoing, said Kerfoot and McCarty were to transfer to said Houdt 300 shares of their stock In said rail- road company, on the completion of the con- tract aforesaid. After the above terms of said contract had been agreed on and set forth therein, additional stipulations were in- serted by said Houck in said contract, with- out the knowledge and consent of said Ker- foot and McCarty, to the effect that in no event was said Houck to be personally re- sponsible for the fulfillment of said contract, and that If said contract should not be kept on his part such failure should not affect in any wise the said contract, and that 1,360 ad- ditional full-paid shares of stock in said com- pany should be issued to said Houck, and that the 240 shares of said Kerfoot and Mc- Carty should be considered full paid. While the bonds above referred to were by said Houck transferred to said Kerfoot and Mc- Carty, not only were they not of the value represented by said Houck, but of no value whatsoever; and while said construction com- pany was organized, and certain certificates of its stock transferred to said Kerfoot and McCarty, the purpose of its organization — the construction of a connection between the aforesaid railroads— was not only never ac- complished, but never attempted to be car- ried out, and said certificates are consequent- ly of absolutely no value. Shortly after the transfer of the 300 shares of the stock of the St. Louis, Kennett & Southern Railroad Com- pany by said Kerfoot and McCarty to said Houck on the faith of the performance of the terms of said contract by said Houck, said Houck held a meeting of the pretended share- holders holding shares in excess of those held by said Kerfoot and McCarty,— to whom no notice of said pretended meeting was ever given, or attempted to be given, and of which they had no knowledge or information, — whereat said pretended shareholders did at- tempt and pretend to issue to said Houck 1,360 additional shares of stock of said rail- road company. This action of said pretend- ed shareholders, respondent, Kerfoot, claims to be fraudulent, lUegal, and void, against which he has protested, and now protests, and in afSrmance of which be has done and will do nothing. By reason of the aforesaid facts, it is claimed that the consideration for the transfer of said stock to Houck has failed, and was only brought about by the false and fraudulent representations of said Houck, with the intent to cheat and defraud said Kerfoot and McCarty. "It is also charged in said petition: That, having thus fraudulently obtained control of said railroad, said Houck and the other re- lators have mismanaged, and been guilty of gross negligence and misconduct In ttieir trust capacity as directors, officers, etc, and fraudulently combined to cheat and defraud respondent, Kerfoot, and to render his shares of stock valueless, etc., together with those of other of the stockholders. That the other relators, as directors of said, company, are under the influence and control of said relator 824 EKCBIVERS. HoucK, ana conrorm tneir actions to accom- plish his fraudulent and illegal purposes, and to carry out h^ unlawful designs. That said Louis Houck Is the principal shareholder in a company organized to construct a rail- road through the counties of St GeneTieve and Perry, in the state of Missouri, -which said road is located many miles from the St. Louis, Kennett & Southern, and that, being entirely without credit, said Honcli has nsed in the construction of said road divers funds belonging to said St. Louis, Kennett & Southern Railroad Company, without- any authority so to do from the stockholders and directors of said company, although with the pretended authority of said board of di- rectors. That said Houck is also the principal stockholder in a certain railroad in process of construction through Scott county, Mis- souri, and' In the construction of this road said Houck has illegally and fraudulently, in like manner and to like ends, appropri- ated the funds of said St Louis, Kennett & Southern Railroad Company. That on or about February 15, 1892, the Pemiscot Rail- road Company was organized, — and con- structed during the year 1894,— of which said Houck was the real and substantial owner. That in the construction of this road said Houck wrongfully and fraudulently appro- priated certain of the funds of said St. Louis, Kennett & Southern Railroad Company, in the manner and with the purposes as afore- said. That on the 22d day of April, 1895, said Houck, in furtherance of his said de- signs to destroy the value of said Kerfoot's stock, and of the property of said St Louis, Kennett & Southern Railroad Company, caused the said pretended stockholders of said company to adopt a contract attempted to be entered into between the directors of said last-named companies, whereby the two said railroads should be consolidated into one road. Of none of these proceedings was said Kerfoot notified, and of none of which did he have any knowledge or information, nor did he in any manner participate there- in. Under this pretended contract of con- solidation, the stock of the two companies was to be called in, and new stock in the consolidated company issued in lieu thereof. That said contract was submitted to a pre- tended meeting of said shareholders of the St. Iiouls, Kennett & Southern Railroad Com- pany, and the minutes of said meeting pur- port to show that said contract was adopted by ar majority of its stockholders, all of which is false. That a copy of said minutes, and also the minutes of a similar meeting of thS shareholders of said Pemiscot Rail- road Company, showing a like pretended ratification of the same contract, have been filed in the office of the secretary of state of the state of Missouri. The said attempted consolidation was fraudulent and void, in that it was not effected in conformity with the laws of the state of Missouri, and with a fraudulent intent and purpose, and because no notice »f said meeting was given said Kerfoot, who was not present thereat, al- though In the copy of the minutes of said meeting on file with the secretary of state he is falsely represented as voting in favor of said consolidation. That the terms of said contract of consolidatioh were not carried out by said Houck, or the other relators. That the earnings of said company are not sufficient to discharge its accruing obligations, and that the salaries and wages of its em- ployes have not been paid for the last six months, and that it Is now in debt to Its said employes to the extent of many thou- sand dollars. That by reason of the acts aforesaid said company is unable to secure supplies needed In the operation of the road. That the rolling stock and other properties are in need of repair and replenishing, which the relators have failed and refused to have done. That no provision has been or is now being made for the extinguishment of the outstanding debts and bonds hereafter to ac- crue. That said Houck on the 2d day of December, 1895, did remove respondent, Ker- foot, from his position as superintendent of said road, and did appropriate his salary to himself, through one of the relators, his kinsman Louis B. Houck. That the said Pemiscot Railroad Company is, and was at the time of the attempted consolidation aforesaid, hopelessly insolvent That its debts have not been i>aid, except such as were paid out of the earnings of the St. Louis, Kennett & Southern Railroad Com- pany as aforesaid, and that said attempted consolidation was but a part of the plan of said Houck to secure and absorb both prop- erties. That by reason of all of which the said St Louis, Kennett & Southern Railroad Company has become greatly embarrassed financIaUy, and that a continuation of such acts of mismanagement will bring about the Insolvency and bankruptcy of said cor- poration. "The prayer of the bUI is that relators, as officers of said company, be restrained from diverting further amounts of money from the treasury of said company; that they be suspended from office as directors, etc, and tiiat a new election be ordered to be held to supply the vacancy thus to be created; that an accounting be had with respect of the funds diverted as aforesaid; that a decree be rendered annulling said pretended con- solidation, and restoring the funds' so divert- ed from the treasury of the St. Louis, Ken- nett & Southern Railroad Company; that said 300 shares of stock, or their proportion- ate interest therein, transferred by said Ker- foot and McCarty, be restored to them, and that said contract under which the transfer was made be annulled, for reasons aforesaid; that said issuance of the 1,360 shares of stock be annulled and canceled, for the rea- sons before mentioned; and that said Houck be required to account for the benefits that have accrued to him by reason of the trans- EEOBIVBRS. 825 fer of said 300 shares of sto(^, and the issu- ance of said 1,360 shares; and that he be ordered to pay one-half of the same to said Kerfoot An ofCer ie made to return to said Eouck one-half ef the shares of stock in the eonstrnction company before mentioned, and Hke offer with resi)ect of said extension bonds. The petition then asks for the ap- pointment of a receiver pending the determi- nation of the issues tendered, in order to prevent the misappropriation, and to insure the preservation of the properties involved." The order of Jndge Wear, appointing the receiver, is as follows: "State of Missonri, County of Dunklin— ss.: In the Carcuit Court, July term, 1896. A. J. Kerfoot, Plaintiff, v. The St. Louis, Kennett & Sotithem Railroad Company, a Corpora- tion, and Iiouis Houck, E. F. Blomeyer, U B. Houck, Theophilus Besel, and E. S. Mc- carty, as Directors in said Railroad Compa- ny, and the Pemiscot RaUroad Company, a Corporation, and Robert G. Ranney, Leo Doyle, Robt. T. Giboney, Louis Houck, and John R. Jeannin, Directors in Said Railroad Company, and Louis Houck, Defendants. In Vacation. Order of Appointment of Receiv- er. Now, on this 11th day of April, 1896, comes A. J. Kerfoot, and presents to me, John G-. Wear, judge of the circuit court of Dunklin county, Missouri, in vacation, at chambers, in the city of Pedlar Bluff, in the county of Butler, in the state of Missouri, a certified copy of his petition filed in the office of the derk of the said circuit court of said DunJdin county, in a certain cause entitled above; and with it he presents I^ motion, verified by his affidavit, by which he asks the appointment of a receiver of the real and personal property of the said defendant corporations named above, which said mo- tion is hereto attached. And the said John O. Wear, Judge as aforesaid, having heard said motion, and having duly considered the same, together with the facts offered in con- nection therewith, does hereby order that Samuel W. Fprdyee, of the city of St. Louis, Missouri, be, and he is hereby, appwnted as receiver of all and singular the real and per- sonal property, wherever situate, of the said St Louis, Keimett & Southern Railroad Com- pany, and of the said Pemiscot Railroad Company, and that he shall immediately qualify aa such^ by giving bond for the faith- ful performance of his duties as such receiv- er, in the sum of twMity-five thousand dol- lars, and that after his qualification as such receiver, having duly taken, the oath pre- scribed, he shall proceed to the county of Dunklin, and to the county of Pemiscot, in the state of Missouri, and shall take charge of the said property of the said railroad com- panies, including the rolling stock, the de- pots, books, and papers of the said compa- nies, and that he shall then take an inven- tory of all of the said property so taken charge of by him; that he shall manage tt>e said raiLc.>ad properties carefully and discreetly; that he shall continue to fulfill and perform all of the existing contracts of the said raUroad companies until the further order of the court in the premises; that he shaU discharge all of the current expenses of the management as such receiver out of the earnings of the said roads while they are in his hands or custody; that he shall keep an accurate and exact account of the expenses and of the income of the two said railroads, the one extending from Camp- beU, Missouri, fo Kennett, Missouri, and the other extending from Kennett, Missouri, to Caruthersville, Missouri, preserving the said expenses and income sepaiate in all of the transactions of himself as such receiver, and that he shall keep and maintain the said properties in good condition until the further order of the said circuit court of Dunklin county, or the judge thereof in vacation; and that he make a full report of his acts as such receiver to the next term of said court, unless ordered to do so before that date. It Is further ordered that each and every agent and employe of the said defendant railroad companies named above, whether regarded as the employes of the said companies as one corporation, or as two separate corporations, shall, upon the demand of said Samuel W. Fordyce, after his qualification as such re- ceiver, immediately yield to said receiver the possession and control of all the prop- erty, books, and accounts of the said defend- ant railroad companies or company, and the said Louis Houck and the other defendants named as the officers and directors of said defendant companies are hereby ordered to turn over and deliver to the said receiver aU of the books and papers of the said com- pany or companies which pertain in any wise to the management and business of the said company or companies. It is further ordered that in the event that any such employe of said company or companies shall fail or re- fuse to so deliver to said receiver the proper- ty in his said care and custody, or should said defendants fail or refuse to so deliver to said receiver the books, papers, or other property of the said defendant company or companies, the said receiver shall at once report the person so failing or refusing to the undersigned judge for his further orders in that behalf. The said defendants and their employes are hereby enjoined and for- bidden from in any manner interfering with the said possession of the said receiver aft- er he shall have obtained the possession of the said property hereby ordered into his hands, until the further orders of the said court, or of the judge thereof in vacation. It is further ordered that this order be filed In the office of the clerk of said court of said Dunklin county, and that a certified copy thereof be furnished the said Samuel W. Fordyce, as such receiver, and that a duly- certified copy thereof be served upon the de- fendants named above. It is further ordered that the said defendants be notified to a,p- 826 RECEIVERS. pear before me, the undersigned Judge of the circuit court, at the next term of the cir- cuit court, in the county of Dunklin, in the state of Missouri, then and there to show cause. If any they can, why the appoint- ment hereby made should not be continued, and the property liept by the said receiver, pending a hearing upon the merits of this controversy, and until the said defendants may be heard upon the merits thereof. And the service of a duly-certified copy hereof shall be deemed sufficient service of the said notice. Done at chambers in the city of Pop- lar BlufC, in the county of Butler and state of Missouri, this 11th day of April, 1896. John G. Wear, Judge." The writ Issued by Judge Wear for the seizure and delivery of the prop«ty of the railroad company is as follows: "State of Missouri, County of Dunklin— ss.: In the Circuit Court, to July Term, 1896. A. J. Kerfoot, PlalntlfE, v. The St Louis, Ken- nett & Southern Railroad Company, a Cor- poration, and Louis Houck, E. F. Blomeyer, L. B. Houck, Tbeophilus Besel, and B. S. McCarty, as Directors in said Railroad Com- pany, and the Pemiscot Railroad Company, a Corporation, and Robert G. Ranney, Leo Doyle, RobL T. Giboney, Louis Houck, and John R. Jeannin, Directors in said Railroad Company, and Louis Houck, Defendants. To W. G. Petty, Sheriff of Dunklin County, Missouri: Whereas, it appears to me, John G. Wear, judge of the circuit court of said Dunklin county, Missouri, sitting in chambers, in vacation, by the report of S. W. Fordyce, whom I did on the 11th day of April, 1896, api>oint as receiver of all of the property of the said St. Louis, Kennett & Southern Railroad Company, and of the said Pemiscot Railroad Company, which report is duly veri- fied, that the said Samuel W. Fordyce did on said 13th day of April, 1896, proceed to the town of Kennett, In said Dunldin coun- ty, Missouri, and did then and there cause to be served upon one Louis B. Houck, whom he found in the charge and management of the said property of the said railroad com- panies or company named above, a duly- certified copy of my order made in the above-entitled cause, appointing him, the said S. W. Fordyce, as such receiver, and that he did then and there demand of the said Louis B. Houck the possession and custody of the property of the said railroad companies or company, and did demand that the said Louis B. Houck relinquish the pos- session and control thereof to him, the said receiver, and that said Louis B. Houck did then and there fail and refuse so to turn over and deliver to said receiver the posses- sion and control of the said railroad or rail- roads, and of the said property of the said railroad company or companies, and did then and there fail and refuse to relinquish the said possession and control thereof; and that the said Louis B. Houck did vdllfully Tiolate the commands of my said order of appointment of the said Samuel W. Fordyce as such receiver: Tliis is, therefore, to com- mand you that you do forthwith summon the power of the said county of Dunklin, If necessary, and that you proceed to the prop- erty of the said railroad company or com- panies named above, and to its railroad office or offices, wherever situate or found in your county, and that you put and place the said Samuel W. Fordyce, as such receiver, in charge, custody, and possession thereof, and that you dispossess therefrom, and from every portion or part thereof, the said Louis B. Houck, or any other official or employs or agent of the said Louis B. Houck or of the said railroad companies named above, or of any defendants named herein above; tnat you take and deliver to the said receiver all of the engines and cars and other equ^ ments of the said railroad or railroads, all of its books and papers, its tickets and other movable property, its deiwts and ticket offices, and every other property of every description. You are further commanded that you immediately take into your custody the body of the said Louis B. Houck, and him safely keep, so that you have him, the said Louis B. Houck, before me, at cliam- bers, in the city of Poplar Bluff, in the coun- ty of Butler and state of Missouri, on Thursday, April 16, 1896, then and there to show cause, if any he can, why he should not be committed to the common jail of said Dunklin county for his disobedience of my. said order of appointment of said receiver. And you are further commanded that if any other person shall attempt to obstruct the full and free execution of the above order, or to aid or assist in the attempt to remove any of the said property from the said county of Dunklin, except by orders of the said re- ceiver, you shall, by virtue hereof, arrest each and every such person, and have him or them before me at the time and place designated above, then and there to be further dealt with according to law. In testimony where- of, I have hereunto set my hand, at cham- bers, in the town of Bloomfield, in the county of Stoddard and state of Missouri, this 14th day of April, 1896. John G. Wear, Judge of the Circuit Court of Dunklin County, Mis- souri." The return of the sheriff upon the above writ follows: "Executed the within writ in the county of Dimklin and state of Missouri on the 14:th day of April, 1896, by placing S. W. For- dyce, as receiver, in charge of the depot and all of the property of the above-named company or companies which were at that time at the town of Kennett and In said county, including one engine and two pas- sengM coaches, which were afterwards taken away by L. B. Houck, and carried eastward Into Pemiscot county, Missouri. I did fur- ther on the 15th day of April, 1896, put the said receiver in charge of all the remainder of the property of the said companies or com- RECEIVERS. 827 pany In my salfl county. Saifl Louis B. Houck was not arrested as ordered above, because he left the said county of Dunklin. W. G. Petty, Sheriff of Dunklin County, Mo." Other necessary facts appear In the opin- ion of the court. M. R. Smith, for plaintiffs. BARCIiAT, J. (after stating the fects). This action is original in the supreme court The plaintiffs are the St. Louis, Kennett & Southern Railroad Company, Louis Houck, and a number of other shareholders in said company. The defendants are the learned circuit judge anying this opinion. The main features of the order are that Mr. Fordyce was ap- pointed receiver of all the real and personal property of defendant companies. He was directed to Immediately qualify, by giving bond, etc, and then to take charge of all 828 RECEIVERS. the real and personal property of said com- panies, "including the rolling stoclt, the de- pots, books and papers, of the said com- panies'*; to "manage the said railroad prop- erties carefully," and "continue to fulfill and perform all of the existing contracts of the said railroad companies until the further order of the court in the premises"; to keep accounts, make reports, etc. The order fur- ther directed defendants to deliver all said property to said receiver, and enjoined them from interfering with the possession of the latter. TTie defendants were further ordered to appear before the judge "at the next term of the circuit court in the county of Dunk- lin," then and there to show cause why the receivership should not be continued "pend- ing a hearing upon the merits." This order was dated April 11, 1896. The next term of the Dunklin circuit court, as appointed by law, will begin on the second Monday (the 13th) of July, 1896. Sess. Laws 1892, p. 13, { 50. An ordinary summons to defendants to appear and answer the petition in the cause at the opening of the July term of the circuit court of Dunklin county was issued on the 10th of April, 1896. Mr. For- dyce, at the time of his appointment as re- ceivei-, was president of the St Louis South- western Railroad Company, popularly known as the "Cotton Belt" route. It is alleged in the petition for prohibition in this court that the latter is "a competitive railroad com- pany, whose iwllcy has ever been hostile te. relaitor railroad company, for the reason that it occupies the same teiTltory for busi- ness," and that the connection of the Kenr nett road with the Mississippi river secures to the people of Dunklin and Pemiscot coun- ties advantages of competition between that road and the Cotton Belt. There is no de- nial of these allegations in the return of any of the defendants to the preliminary rule In aiis court, and like statements as to the roads being in competition appear in the replies to the returns. The above recital shows the substance of the charges on that poinst "When Mr. Pordyce, in obedience to the order for his appointment, demanded possession of the Kennett road, the oflBcers in charge of the property refused to deliver It. That demand was the first actual notifi- cation given to them of the receivership. After the refusal to turn over the property, an application was made to the circuit judge for further action, whereupon he issued the writ or warrant of date April 14, 1896, to the sheriff of Dunklin county, directing him to summon the power of his county to pat the receiver In pos8essi<»i of the property of the two railroad companies, and to dispos- sess any official of said companies. The warrant Is recited In full In the statement accompanying the opinion. But it may be properly noted here that tibe warrant was leetied tn Stoddard county. It directed the arrest of Louis B. Houck, and that he be produced before the circuit judge, at ehaxo- bers, in the city of Poplar Bluff, Butler county, April 16, 1896, to show cause why he should not be committed to jail for dis- obedience of the order appointing the re- ceiver. Under the last-described writ, the sheriff put Mr. Fordyce, as receiver, into possession of the property of the Kennett railroad in Dunklin county, and otherwise returned the order unexecuted, for the rea- sons appearing in his return. At that stage of the case the application for a prohibition was presented to the supreme court, and a preliminary rule issued. 1. It is urged by defendants that prohibi- tion is not applicable to the situation exist- ing on the circuit in the receivership case, and that no review can occur at this time as to the propriety of the disputed orders. But, if those orders were beyond the legiti- mate authority of the judge, the enforcement of them may be prohibited. Morris v. Lenox (1843) 8 Mo. 252. The fact that the suit in the circuit court invokes the equity powers thereof does not preclude the use of a pro- hibitory writ to keep the judicial action with- in the limits marked by law. A court of equity, no less than a court of law, may be called back within the boundaries of its rightful jurisdiction by the process of pro- hibition. Where a court or judge assumes to exercise a judicial power not granted by law. It matters not, so far at coucems the right to a prohibiticm, whether the exliibiticwi of power occurs in a case which the court is not authorized to entertain at all, or Is merely an excessive and unauthorized application of judicial force in a cause otherwise prt^erly cognizable by the court or judge In question. State V. Walls (1892) 113 Mo. 42, 20 S. W. 883; In re Holmes (1895) 1 <4. B. 174. Pro- hibition, however, will not ordinarily be grant- ed where the usual modes of review by ap- peal or writ of errcw fnrnleh an adequate and efficient remedy for the correction of an In- jury resulting from the unauthorized exer- cise of judicial power. But where those \ remedies are inadequate to the exigency of the situation. In a particular case, a super- vising court may properly interfere by the remedy now asked. If the orders in the Ket- foot suit were in excess of the jurisdiction of the learned judge who entered them, and If they have resulted in the seizure of a large part of a railroad line, and its detention from those entitled to— and whose duty requires them to— operate it for the convenience of the public, the case is one which would per- ant, If not demand, the application of a writ of prohibition to eerrect the wrong com- pbUited of. The remedy of prohibition af- fords opportunity for a direct attack upon proceedings questioned upon the point of JHTisdietioa. If the facts shown by a rewwd reveal an imwaiTsuited application of judicial power, causing an Immediate aitd wrongful invasion of rights of property, the wilt of prohibition may go to check the execution of any unfinished part of the extrajurisdictional. RECEIVERS. 829 programme that may have been outlined. Sometimes the writ may be so shaped as to undo the steps that have been taken in such a programme. To justify the use of the writ, it is not essential that the proceedings in dis- pute ^ould be so entirely void as to warrant a declaration of nullity upon a collateral in- quiry. The statute governing proceedings in prohibition makes no change in the ancient law on these points. Laws 1895, p. 95. 2. The plaintiffs in this court contend that the learned judge had no jurisdiction to ap- point a receiver for the railroad company upon the showing made by the petition of Kerfoot, and that the order of appointment is there- fore a nullity. It is true that there are prec- edents declaring that, in the absence of statutory authority for so doing, the prop- erty of a solvent and going corporation cannot rightfully be taken from the control of its officers at the suit of a mere creditor at large, and be placed in the hands of a re- ceiver, on account of mismanagement mere- ly, or to secure the performance of some engagement of the company, even in regard to its shares. Some decisions have gone so far as to correct, and even to prohibit, such proceedings, as entirely beyond the general jurisdiction of courts of equity. Port Huron & G. R. Co. ▼. Judge of St Clair Circuit (1875) 31 Mich. 456; Iron Ca v. Wilder (1892) 88 Va. 942, 14 S. B. 806; Mason v. Supreme Court of Baltimore City (1893) 77 Md. 483, 27 Atl. 171; In re Binghamton Gen- eral El. Co. (1894) 143 N. Y 261, 38 N. E. 297; People v. Weigley (1895) 155 lU. 491, 40 N. B. 300; State v. Superior Court of Pierce County a895) 12 Wash. 677, 42 Pac. 123; Fischer v. Superior Court of San Francisco (1895) 110 Cal. 129, 42 Pac. 561. But in view of the other serious and sufficiently difficult question involved in the case at bar, and the desirability of prompt announcement of tJie conclusion that has been reached, we shall not now stop to investigate the soundness of plaintiffs' contention above stated. 3. A power to ^point receivers is express- ly conferred upon judges of trial courts in vacation l^ section 2193, Rev. St. 1889, which greatly broadened the terms of the old law (Gen. St. 1865, p. 678, § 52) under which State V. Gambs (1878) 68 Mo. 289, was de- cided. We shall not be obliged to consider whether the judge might not appoint a re- ceive In vacation by virtue of Inherent power in the circuit court to make such an order, for in the instance under review the order was made in another county than that in which the petition for a receiver had been filed. The inherent as well as the ex- press powers of a court must be exercised within the territorial jurisdiction of that court, unless positive law enlarges the field of their nae. But, whrare a judicial power is given by statute to a judge in vacation, he may exert that power (at least within his circuit) out of as weU as in the county where the cause is pending, unless there is some- thing In the statutory authority to forbid such action. It may be conceded for the present, without examining the proposition closely, that the power given to the judge to appoint a receiver carries vrith it, as a necessary in- cident, a power in his court. It not in thel judge personally, to enforce obedience to orders made within the ambit of that power, and in accordance with established principles of law governing the exertion\ of such a power. (As to the mode of applying that power we shall have more to say in the next section of this opinion.) But the judicial authority to deal with prop- erty by means of a receivership is not un- limited or absolute. Harris v. Beauchamp' [1S94] 1 Q. B. SOL By a very late statute" of Missouri an appeal may be taken from any; order "refusing to revoke, modify or changef j an interlocutory ordsr appointing a receiveiij at receivers." The same statute further' provides for a very summary determlnatioH of such appeals, and tac that reason directs that they shall, on motion, be advanced on the appellate docket. Laws 1895, p. 91, amending Rev. St 1889, §2246. The pur^ pose of this enactment is to moderate the hardships resulting from the long continu- ance of receiverships granted on insufficient grounds, when no review of interlocutory ap- pointments was permissible. The reports of court proceedings in the United States prior to the passage of that act afforded illustra- tions of the injuries possible from erroneous judicial action in the matter of receiverships, — injuries for which the law seemed to afford no adequate redress. The right to a summary review of an interlocutory order maintaining a receivership Is clearly given by the statute cited. It is a valuable and substantial right The administration of the law must conform to the intent of the legis- lature in regard to it Andrews ▼. National Foundry & Pipe Works (1894) 18 TJ. S. Ak). 458, 10 C. C. A. 60, 61 Fed. 782. It is noticeable that a prompt review is allowed by the act of 1895 only where the order con- tinues, not where it dissolves, the receiver- ship. Thus the statute is plainly aimed at the possible abuse of maintaining a receiver^ ship (without just grounds) beyond a period required for an investigation of its correct- ness. If the purpose of the new law Is kept in view and effectuated, the procedure in such cases must be shaped so as to permit a ^eedy review of interlocutory orders ap- pointing receivers in vacation as well as in term. Otherwise such orders, in many parts of Missouri, might stand for nearly half a year without the possibility of even a first review, under the existing law in regard to terms of court Laws 1892, p. 10, §30 and following. In other states where statutes \ allow appeals from Interlocutory Injunction j orders, appointments of receivers, etc., tt j has been hrfd that the appeals may be taken In vacation as well as in term. Griffin v. ; Bank (1846) 9 Ala. 201; Montana, etc, Ooi. I 830 REOBIVBRS. V. Helena, etc, Co. (1887) 6 Mont 416, 12 Pac. 916; Railroad Co. t. Dykeman a892) 133 Ind. 56, 32 N. B. 823. Such rulings ap- pear necessary to conform to the plain design of the legislation on that subject The new provisions In this state most clearly import that persona whose possession is to be in- vaded by a receivership shall have at least a prompt and fuU opportunity for a hearing (both preliminary and by appeal) as to the justice and equity of such a drastic remedy. Keeping the purpose of the new statute in mind, how must we regard the orders of the learned circuit judge in the Kerfoot suit? The appointment of the receiver was made without notice to, or any hearing of, the defendants. They had no opportunity to offer the facts which they assert, tending to prove that the demand for any sort of re- ceivership was without foundation. The learned judge's order fixed a time, three months distant, at which they might show cause why the reeMversliip "should not be continued, and the property kept by the said receiver, pending a hearing upon the merits." The details of the order plainly contemplate that meanwhile the railroad was to be oper- ated and managed by the recelvw; at least until the next term of court, then three months off. The receiver was directed, for Instance, to perform existing contracts "until the further order of the court" The whole framework of the order suggests that the receivership was established for at least a rfhree-months term. The facts which justify ' the appointment of a receiver, without notice ! to the party whose pr-ssession is disturbed, ' are exceptional, at best Nothing but the 'plainest showing of an Imperative necessity for such an order, to prevent a failure of justice, should move a court to grant a mo- tion to that end, though there Is no hard and fast rule, that we can give, prescribing when the discretionary power to make such an order may or may not be used. But of this proposition we feel sture: that under our existing law no temporary receivership can rightly be set up, to last three months, without affording first a hearing to the party whose possession of property Is determined by such an order. If the court had been in session, so as to permit immediate applica- tion to modify the order, the relief then pos- sible might affect the applicability of a prohibitory writ But the facts here are r different In vacation, at least a party , should not be obliged to hunt up the judge for a correction of an order made in excess i of his power in the premises. The right to i appoint a temporary receiver in vacation is \ limited by the necessity from which alone \ the right to make such appointment springs. Larsen v. "Winder (1896; Warfu) 44 Pac. 123. No court in Missouri may, without notice, declare a receivMBhlp, pending suit for a longer time than is fairly and reason- ably requisite to allow the defendant whose possession is invaded, to show cause against a further continuance of the receivership. What Is such reasonable time will depend on the circumstances of each case. But we have no doubt that three months is beyond (and very far beyond) any reasonable day for the showing of cause. The statute al- lowing appeals from Interlocutory receiver- ship orders must be given due force. It contemplates that an early opportunity shall be allowed to combat and, If desired, to review, the appointment The courts must yield to that obvious purpose, and permit no receivership to stand without a simimary opportunity to review the equity of it. When a judge in vacation deems the exl-^ gency sufficiently great to warrant an ex parte order for a receivership of property, such as that in question here, he should by the same order appoint a very early da,y for the showing of cause against the order by defendants, so that the latter may then have opportunity for the motion to vacate which the statute permits. Our law confers. In- deed, power to appoint a receiver In vaca- tion, but It also allows an appeal from an order refusing to vacate an Interlocutory ap- pointment. A reasonable construction of the latter act would appear to permit in vacation a motion to revoke the appointment in vaca- tion; otherwise «ie of the chief remedial objects of the appeal statute on this subject would be frustrated. It has been held by f some courts that a power to do a certain ■ judicial act out of term implies a power to [ undo that act If justice appears to require! that move. Railroad Co. v. Sloan (1877) 31 i Ohio St 1; Walters v. Trust Co. (1892) 50* Fed. 316. We hold that the learned judge's > ' order in the case on the drcnit was In excess j'. of the limitations on the power of appoint- ! ment without notice, which we think the law '. Imposes by the clearest Implication. 4. But another patent infirmity Is noticear ble in the proceedings In question. Had the first order fixed a reasonable date to show cause against it the question of the jurisdic- tional validity of the second order (the order to the sherifO would demand serious atten- tion. That order was made after the refusal of the superintendent of the new Kennett road to surrender possession to the receiver. The petition itself gave notice that the pn^ erty over which the receivership was sought to be established was in possession of the new company by virtue of the alleged con- solidation. The old Kennett Company and Its directors were parties defendant in the pe- tition. The new company was not a party to It for the list of directors shows that only the old company was pointed out as defend- ant The receivMship asked of and granted by the court reached for the property of the old Kennett C!ompany, and of the Pemiscot Railroad Company. "The directions to the re- ceiver exhibit that meanii% of the order quite clearly. Then It was evidently beycmd the IMJwer of the learned judge to order a seizure of property in the possession of the new com- RECEIVERS. 831 pany wlttiont at least glying the latter an op- portnnlty to show cause against the proposed order. By that order the learned judge vir- tually decided that the transfer to the new company was invaUd, and the union of the two old companies merely nominal. That ruling was made without any but an ex parte bearing, as against a stranger to the case in court. The order to the sheriff was in the nature of a writ of assistance, as known to the chancery practice. Such a writ could not rightly be issued, even on a final decree (and, for stronger reason, not upon an ex parte in- terlocutory order), as against one not a party to the STUt, without a chance to the latter to show cause against the order therefor. Peo- ple V. Rogers (1830) 2 Paige, 103; Howard v. Railroad C!o. (1879) 101 U. S. 848; State v. Ball (1892) 5 Wash. 387, 31 Pac. 975. The summary writ, issued from another county, to seize the property and deUvrar it to the re- ceiver, was beyond the jurisdiction of the learned judge, so far as it concerned or af- fected the rights of the new Kennett Com- pany; and, as to the latter company, the ef- fect of the writ should be checked by the pro- hibition now invoked. 5. The fact that no objection was made on the circuit to the want of jurisdiction is no barrier to a prohibition, where the order com- plained of was entered In vacation, ex parte, and the defect of jurisdiction appears on the face of the papers. Nor can the want of an exception to the objectionable order have any weight where no c^portunity to except was bad by reason of the ex parte nature of the order. 6. Assuming that the learned judge was without jurisdiction to require the immediate delivery of the property of the new Kennett Company to the receiver without a hearing, then the disobedience of the order by Mr. Hont^ as superintendent of that company, ivolves no contempt. It Is always permissi- ble to show, upon process .for contempt, that the order disobeyed was beyond the jurisdic- tion of the authority from which it emanat- ed. If that showing is successfully made, no punishable contempt has been committed. Tn re Sawyer (1888) 124 U. S. 200, 8 Sup. Ct 482; Smith v. People (1892) 2 Colo. App. 99, 29 Pac. 924; Schwartz v. Barry (1892) 90 Mich. 267, 51 N. W. 279; State v. Winder 0896; Wash.) 44 Pac. 125. 7. It Is mslsted by the plaintiffs In thler court that the action of the learned circuit Judge was void because the appointee named 88 custodian of the pre^ierty could not law- fully be appointed receiver of their railway line. Tlie constitution declares that: "No raOroad or other ccap<>ratlon, or the lessees, purchasers or managers of any railroad cor- poration, shall • • • In any way control, any railroad corporation owning or having Tmdo: its ecmtrol a parallel or competing line; nor shall any officer of such railroad corpora- tion act as an officer of any other railroad coi^ poration owning or having the control of a \H, \jn parallel or competing line. The question whether railroads are parallel or competing lines shall, when demanded, be decided by a jury, as in other civil Issues." Const. 1875, art 12, § 17. Two aectlons of the statute law. In furtherance of the purpose of the organic law quoted, are as follows: "It shall be un- lawful for any railroad company, corporation or individual owning, operating or managing any railroad in the state of Missouri, to enter Into any contract, combination or association, • * • or in any way whatever to any de- gree exercise control over, any i-allroad com- pany, corporation or Individual owning or having under his or their control or manage- ment a parallel or competing line in this state, but each and every such railroad, whether owned, operated or managed by a company, corporation or individual, shall be run, operated and managed s^arately by its own officers and agents, and be dependent for Its support on its own earnings from Its local and through business In connection with other roads, and the facilities and accommodations it shall afford the public for travel and trans- portation under fair and open competition." Rev. St. 1889, § 2569. "It shall be unlawful for any officer of any railroad company or cor- poration, or any individual owning, operating or managing any railroad in this state as a common carrier, to act as an officer of any other railroad company or corporation owning, operating or managing, or having the control of a parallel or competing line, and the question whether raih'oads are par- allel or competing lines shall be decided by a jury, when so demanded." Id. § 2570. At various pohits In the state stat- utes concerning railroads, receivers are men- ti(Hied among other managing operators of such lines. Rev. St 1889, §§ 2631, 2644, 2645. \ So that it Is obvious that the president of a\,i parallel or competing raUroad, however high [ his business quali&catlcms, is not eligible tow appointment as receiver of the competing rail- / way line, in Missouri. The fact Is alleged in ' this court that Mr. Fordyce is the president ot the Cotton Belt Route, and that it Is a rail- way In competition with the new Kennett road. The fact stands admitted by the plead- ings here, in their foresent form. But, to make it available as the groundwork of a iffo- Mbition, the fact should appear in some way In the proceedings on the circuit. It does not appear In the record of those proceedings. Nor does It appear that the learned circuit Judge was aware of the fact when the ap- pointment was made. Hence we are not call- ed upon to say whether or not the fact would furnish of Itself a cause to prohibit the execu- tion of the order of anointment. 8. The summary order for the seizure of the I»operty In imssession of the new Kennett road was, we think, in excess of the rightful power of the learned circuit judge In vaca- tion. We hence consider that the rule In prohibition should be made absolute, and di- rect that judgment for a peremptory writ be 832 RECEIVERS. entered, ^rohiUting the rticnit judge frxMn enforchiS any order heretofore made In the Kerf oot case, under which said receiver has taken possession, or is attempting to talce pos- session, of some part of the railway or other property of the St Louis, Kennett & Southern Railroad Company, or of the Pemiscot Rail- road Company, and prohibiting him from making any order (upon the priding petition of said Kerfoot in said cause) directing or permitting any receiver to take possession of any property of said companies without first allowing the presoit St Leois, Kennett & Southern Railroad O^pany an omMrtunity to be duly heard; and by the writ the said re- ceiver will be pndiibited from attempting to take or hold possession of any property of said railroad c(Hnpanies by virtue of said or- der, and the receiver will further be ordered to restore forthwith any and aU property of the new Kennett road tliat may be in his pos- session by reason of his said receiversMp. BRACE, C. J., and GANTT, MacPAR- LANE, BURGESS, and ROBINSON, JJ., con- cur. SHERWOOD, J., dissents. REGEIVERS. 833 CHILDERS et al. y. NEELY. (34 S. E. 828, 47 W. Va. 70.) Sitpreme Court of Appeals of West Virginia. Nov. 28, 1899. Appeal from circuit covirt, Tyler county; B. H. Freer, Judge. Bill by J. M. Ohilders and another against S. H. Neely. Judgment for plaintiffs, and de- fendant appeals. Reversed. F. L. Blackmarr, for appellant Robert Mo- Eldowney and G. M. McCoy, for appellees. BRANNON, J. Childers and Ramey filed a bill in equity in the circuit court of Tyler against Neely, praying that a partnership be- tween them be dissolved, an account taken "of all its accounts, dealings, and transactions whatever," and that a manager be appointed to take charge of the property. The business was oil production. Neely admitted the Joint enterprise, but denied the partnership; and he joined in request for account, and did not re- sist a dissolution, if a partnership. The de- crees made a partial account, decreed its bal- ance against Neely, and denied him further participation in the partnership, and he a.p- pealed. This case raises an Interesting and impw- tant subject in this mining state; that is, whether, and when, joint tenants or tenants in common, jointly operating for oil, are part- ners, or merely co-owners. The bill asserts a partnership, while Neely denies it; asserting that it is a case, not of partnership, but co- ownership. In two leases of town lots for oil and gas purposes, Childers owned a one-fourth inter- est; Ramey, a three-eighths interest; Neely, a three-eighths interest They were so far joint' tenants. They agreed to develop the lots for oil, but made no written articles of partner- ship,— in fact, no oral express formation of a partnership. They simply, by an indefinite understanding, agrfeed to develop their com- mon property, each giving his skill, paying his share of outlay proportionate to his owner- ship, and getting his share of the product pro- portioned to such ownership. I use the word "product" instead of "profits," because there was no contract explicit on this point to distin- guish product from profit "Partnership must be distinguished from joint management of property owned in common. Where two part- ners own a chattel, and make a profit by the use of it, they are not partners, without some special agreement which makes them so." T. Pars. Partn. § 76. Two heirs or other co-own- ers of a farm, jointly farming it for profit are not partners. There Is a peculiar partnership, called a "mining partnership," partaking part- ly of the nature of an ordinary trading or gen- eral partnership, on the one hand, and partly of a tenancy in common, on the other. It is an Important question to those engaged in the oil and other mining business whether each one is Jointly and severally liable for all the doings of every or any other of the associates in the H.& B.EQ.(2d Ed.)— 53 venture, as In ordinary trading partnerships. What is a mining partnership? 15 Am. & Eng. Enc. Law, p. 609, says: "When tenants in common of a mine unite and co-operate in working it, they constitute a mining partner- ship." Many authorities there cited thus de- fine it See the California case of Skillman v. Lachman, 83 Am. Dec. 96, and note discuss- ing it fuUy; Lamar's Bx'r v. Hale, 79 Va, 147. Mere co-working makes them partners, without special contract. Barring. & A. Mines & M. Courts of equity take jurisdiction of them as if general partnerships. 2 Colly. Partn. c. 35. Of course, owners of mines, oil leases, or farms can by agreement make an ordinary partnership therein; but "where ten- ants in common of mines or oil leases or lands actually engage in working the same, and share, according to the interest of each, the profit and loss, the partnership relation sub- sists between them, though there is no express agreement between them to be partners or to share profits and loss." Duryea v. Burt, 28 Cal. 560. The presumption in such case would be that of a mining partnership, rather than an ordinary one, in absence of an express agreement forming an ordinary general part- nership. Perhaps the case of Bank v. Os- borne, 159 Pa. St 10, 28 Atl. 163, and other cases in that state cited in Bryan, Petroleum & Natural Gas, 283, would Justify the infer- ence that the parties operated as tenants in common; but the current of authority else- where recognizes the inference of mining part- nerships. That state does not recognize such a partnership. Justice Field said in Kahn v. Smelting Co., 102 U. S. 645, 26 L. Ed. 266; "Mining partnerships, as distinct associations, with different rights and liabilities attaching to their members from those attaching to members of ordinary partnerships, exist In all mining communities. Indeed, without them successful mining would be attended with dif- ficulties and embarrassments much greater than at present" One leading distinction be- tween the mining partnership and the general one is that the general one has, as a material element of its membership, the delectus per- sonee (choice of person), while the other has not. Those forming an ordinary partnership select the persons to form it always from fitness, worthiness of personal confidence; but we know such is not always or often the case in oil ventures. It is because of this delectus personse that the law gives such wide author- ity of one member to bind another by con- tracts, by notes, and otherwise. One is the chosen agent of the other. Hence, when one member dies or is bankrupt, or sells his inter- est to a stranger, even to an associate, the partnership is closed, one chosen member Is gone, the union broken, because he may have been the chief dependence for success, and the newcomer may be an unacceptable person, who would entail failure upon the firm. In the mining partnership those occurrences make no dissolution, but the others go on; and, in case a stranger has bought the interest of a mem- 834 RECEIVERS. ber, the stranger takes the place of him who sold his Interest, and cannot be excluded. If death, insolvency, or sale were to close up vast raining enterprises, in -which many per- sons and large interests participate, it would entail disastrous consequences. From the absence of this delectus personae In mining companies flows another result, distinguish- ing them from the common partnership, and that Is a more limited authority in the in- dividual member to bind the others to pecu- niary liability. He cannot borrow money or execute notes or accept bills of exchange binding the partnership or its members, un- less it is shown that he had authority; nor can a general superintendent or manager. They can only bind the partnership for such things as are necessary in the transaction of the particular business, and are usual in such business. Charles v. Eshleman, 5 Colo. 107; Sldllman v. Lachman, 83 Am. Dec. 96, and note; McConnell v. Denver, 35 Cal. 365; Jones v. Clark, 42 Cal. 181; Manville V. Parks, 7 Colo. 128, 2 Pac. 212; Cong- don V. Olds, 18 Mont 487, 46 Pac. 261; Judge V. Braswell, 13 Bush, 67; Waldron v. Hughes, 44 W. Va. 126, 29 S. B. 505. In fact, it is a rule that a nontrading partnership, as distin- guished from a trading commercial firm, does not confer the same authority by implication on its members to bind the Arm; as, e. g. a partnership to run a theater or other single enterprise only. Pease v. Cole, 53 Conn. 53, 22 Atl. 681; Deardorf's Adm'r v. Thacher, 78 Mo. 128; Smith, Merc. Law, 82; T. Pars. Partn. § 85; Pooley v. Whitmore, 27 Am. Rep. 733. A mining partnership is a nontrading partnership, and its members are limited to expenditures necessary and usual In the par- ticular business. Bates, Partn. § 329. Mem- bers of a mining partnership, holding the ma- jor portion of property, have power to do what may be necessary and proper for carrying on the business, and control the work, In case all cannot agree, provided the exercise of such power is necessary and proper for carrying on the enterprise for the benefit of all concerned. Dougherty v. Creary, 89 Am. Dec. 116. These principles settle much of this case. The demurrer was properly overruled, because there was a partnership, and equity only has jurisdiction to settle partnership accounts. 5 Am. & Eng. Dec. Eq. 74; 17 Am. & Eng. Enc. Law, 1273. Neely excepted to the commissioner's report of settlement because of the allowance to Ramey of an expenditure advanced by Ramey of $369.75, as excessive, and because for re- pairs on two boilers without his consent. If the parties were mere joint tenants, consent would be necessary. Ward v. Ward's Heirs, 40 W. Va. 611, 21 S. E. 746, 29 L. R. A. 449. But, being partners, as above stated, a part- ner has power to order necessary repairs. Besides, Ramey owned a majority interest. The boilers were burnt badly, and It seems that this outlay, though large, is proven, and was necessary and usual In such a business, and, if unattended with other circumstances, would be clearly allowable under principles above stated. The commissioner reports that the injury to the boilers cajne from neglect of the pumpers; but much evidence tends to show that Ramey, without consent of Neely, removed the boilers off the ground owned by the firm, upon a lease of Ramey and Childers, in which Neely had no Interest, and used them with another boiler In boring and operating wells thereon in connection with these wells of the firm, in Neely's absence, and put too much work upon them, with inadequate sup- ply of water, which, likely, by heavy firing, caused the burning of the boilers. If this Is so, how can Ramey expect pay for this out- lay? Would so serious an injury have occur- red to the boilers had this improper use of them not been made? We cannot say so with certainty, but it seems not likely. Ramey has no just claim to be repaid expenditure for re- pairs caused by himself,— the diversion of the firm property to his own work, from the work of the firm. Losses from neglect of duty or bad faith of a partner, or breach of duty, or breach of a partnership agreement, or Im- proper diversion of its property to purposes foreign to its business, wiU be charged to him, in accounting. 17 Am. & Eng. Enc. Law, 1217; 1 Colly. Partn. S 312; Story, Partn. § 169; T. Pars. Partn. f 151. Ramey does not deny such use. The exception for the $239.75 allowed Ramey for three-eighths of expense seems not well taken, and was properly overruled. The commissioner reports that Neely should be al- lowed nothing for such use of the boilers for business of Childers and Ramey outside the legitimate firm business, yet allows him $100 therefor. We are unable to say that such sum is not correct in amount, and will have to sus- tain the commissioner as to it. Neely excepted because the commissioner reported that he was not entitled to any al- lowance on the claim made by Neely, that by reason of the use of the firm's boilers in bor- ing and operating wells of Childers and Ram- ey on adjoining leases owned by them, ia which Neely was not interested, the two wells of the firm, which had been bored before the others were, and were paying wells, were often shut down and unproductive, while those other wells were going on, and that by reason of want of water and steam, and the inade- quacy of the engines to run all the wells, five or six in number, the production of the firm's wells was diminished. The commissioner says that Neely suffered no appreciable injury thereby. If hijured at aU, It was appreciable, and to be estimated. Ramey states, in short, that Neely was not entitled to a cent on this score. Neely's evidence is distinct that he was there numerous times, and found these two wells still. He swears to a large loss from this cause. He furnishes considerable evi- dence to sustain him in some loss from this score, and it seems that equity should make some compensation for It. There is evidence RECEIVERS. 835 that Ramey, when asked why the wells were shut down, said that he had a larger Interest In the other wells. Ramey (having bought out Childers' interest, and Neely being absent al- most all the time of operation) had sole charge. The commissioner bases his opinion of no Injury to Neely from pipe-line reports, which are not before us; but It does seem from the evidence that the firm business was neglected, and loss to It accrued therefrom to an appreciable extent, for which some com- pensation should be made. It is difficult to say what should be allowed on this account. It being a thing of only approximate estimate; and still it seems an allowance should be made, as Ramey is claiming for outlay, and himself controlled the business. When this suit was brought, OhUders and Ramey obtained tn it an Injunction enjoining the pipe-line companies transporting the firm's oil from paying Nedy for his share of the oil to which he was entitled under his division or- ders, and joining Neely from any further participation In the partnership, and from sell- ing his share of the oil; thus taking from him the wells and their proceeds, and leaving Ramey in sole charge of them. Neely com- plains that the court refused to dissolve this injunction. His counsel says there was no right to It, as the biU charged no Insolvency. The bm, however, did charge that Neely had failed to contribute his part of the expense of the business, and that Ramey and Childers had made large outlays therefor, and that Neely had refused to make settlement, and was largely Indebted to his associates from the transactions of the partnership. This jus- tifies the Injunction, if the oil of Neely were social assets, as partners, in advancing for expenditures for the partnership, have a lien on partnership property for advances. SkiU- man v. Laehman, 83 Am. Dec. 109; Duryea ▼. Burt, 28 Cal. 570; T. Pars. Partn. i 402, note. But this lien Is only on partnership property, while distinctly such; for it is the law that if there is a separation or division of the proper- ty, or part of It, there is no lien. If two part- ners consign goods for sale, and direct the consignee to carry the proceeds to the account of each, and It is done, neither partner has any lien on the share of the other in those proceeds, though It would have been other- wise if they had remained part of the com- mon property. 2 Lindl. Partn. § 683; 1 Colly. Partn. { 108, note. Now, these partners agreed to have division orders when they be- gan business (that Is, the pipe lines to give each a certificate of his share of the oil com- mitted to them, which was a product of the wells); and this effected a separation of that product, mailing each one's share his several property, and severing it from the social prop- erty, if It was such at any moment. There being no lien, there was no justification for the Injunction. It perhaps disabled Neely from payuig as the bill demanded of him. There Is another error in the proceeding. The bUl demanded a dissolution. It showed abundant cause, and the evidence shows abundant cause, of dissolution. The bill char- ges that the plaintiffs and Neely made a set- tlement to a certain date, but that they had been unable to get Neely to make a settle- ment since then; that he was violent and abusive, had threatened them with violence, and declared he would have nothing more to do with them; that he would not contribute to expenses; that bills remained unpaid; and that because of the unsatisfactory condition of the business, and the "disagreements, dis- sensions, and disaffections between the part- ners, the property and business were suffer- ing." The evidence shows these disagree- ments and dissensions. Thus, it was plain that the business was hopeless of success and prosperity, and the interests of all parties de- manded absolute dissolution at the hands of the law. Reconciliation, harmony, and suc- cess were utterly beyond hope. 17 Am. & EJng. Enc. Law, 1104. Therefore the court should have decreed dissolution absolute, and directed an account of the partnership, and wound It up. But It decreed no dissolution, but, on the contrary, suffered the partnership still to subsist, and, indeed, go on in the sole hands and management of Ramey, excluding Neely therefrom, and decreed that the settle- ment by the commissioner should only apply to Its date, leaving it open to future account. The decree perpetuated the injunction, forever prohibiting Neely from participation in the business, and provided that when he should pay $487.15 found due from him, and costs, the Injunction should cease. That excellent, very late work, containing the leading late decisions in equity in America and England, the American and English Decisions In Equity, with elaborate notes collecting decisions (volume 5, p. 52), lays down the rule that equity can only entertain jurisdiction for an account when it can make a final decree in the suit; citing Randolph's Adm'x v. Kinney, 3 Rand. 394. That work (page 109) says, "As a general rule, a bill for accounting between partners which does not also seek a dissolu- tion of the partnership will not be maintain- ed;" citing cases,— among them, Coville v. Gilman, 13 W. Va. 314, in which Judge Green fully sustains this position. T. Pars. Partn. § 206; 2 Lindl. Partn. 948. If ever there were cases which, by bill and proof, called for dis- solution and final account, not partial, this is one. And, besides the showing of bill and proof, a petition for rehearing alleged that Ramey had sold the boilers. The evidence so shows. This would charge Ramey to credit of Neely. There was partnership property In Ramey's hands. There could only one ade- quate relief be given,— dissolution, sale of the property entire, and full account But no pro- vision was made for dissolution, sale, pr full account, — only a partial setUement and de- cree against Neely for the sum found by it. The bill alleged that the property could not be divided In kind. If the injunction applied to property belonging to the firm, on which a S36 RECEIVERS. lien rested for the other partners, It would be proper to continue it until final account and decree. Eobrecht v. Robrecht (this term) 34 S. E. 801. But Neely's share of the oil was his separate property. And I do not see why he should, without cause, be excluded from participation, letting Ramey have sole control. A receiver, impartial between them, was proper, under the circumstances. "If no dissolution Is sought, a receiver and man- ager will not be appointed; but, with a view to a dissolution or winding up, a receiver and manager will be appointed. If there are any such grounds for appointment as are proper in other cases, or if the partners cannot agree to working the mines until sold." OoUy. Partn. § 381. Therefore we dissolve the In- junction, reverse the decree, overrule the de- murrer to the bill, and remand for further proceedings as herein indicated, and further according to principles governing courts of equity In such cases. RECEIVERS. 837 FECHHBIMER et al. v. BAUM et al. (37 Fed. 167.) Circuit Court, S. D. Georgia, W. D. January 3, 1889. In equity. Motion for an injunction and appointment of a receiver. The bill before the chancellor was filed by the plaintiffs, residents and citizens of Ohio, against Baum & Bro., a firm doing business at Tocmsboro, Irwinton, and Dublin, in this district, to assert the right to an injunction and the appointment of a receiver given by the law of Georgia. Code, § 3149a, This section provides: "In case any corporation, not municipal, or any trader or firm ot trad- ers, shall fail to pay at maturity any one or more matured debts, payment of which has been properly demanded of such debtor and by him refused, and shall be insolvent, it shall be in the power of a court of equity, under a creditors' bill, to which one or more of the creditors who have matured debts un- paid shall be necessary parties, to proceed to collect the assets, real and personal, includ- ing choses in action and money, and appro- priate the same to the creditors of such trad- ers, firm of traders, or corporation." The averments of the bill made and sworn to conform to the requirements of the statute in all respects; and so far as they indicate the existence of matured debts due by the defendants to the plaintiffs, the demand for payment, its refusal, and the insolvency of the defendants, the averments are not de- nied. In addition, the bill alleges other facts not less important to the Jurisdiction in eq- uity. They are that on May 21, 1888, the defendants, Baum & Bro., made a statement to Bradstreet's Mercantile Agency, which showed a condition of prosperous solvency upon their part, which statement Is append- ed as an exhibit to the bill; that plaintiffs, in the usual course of business, had knowl- edge of that statement, believed it to be true, and IcQew this before their merchandise was sold to the defendants; that the defendants owe $160,000; have made many fraudulent assignments and preferences; that some of these are given to favored creditors, upon the goods of the plaintiffs not yet paid for; that the plaintiffs' debts were created for a large stocls Of clothing, part of which Is yet in possession of the defendants; that the purchase was made by the defendants with the deliberate intention not to pay therefor, and with no reasonable expectation that the defendants would be able to pay; that the sales are void, and that the title did not pass; that the statement made to the Bradstreet's Mercantile Agency as to the standhig and '.ondition of the firm was made with intent to deceive the public, and especially the plain- tiffs, and was a part of a scheme to defraud creditors who would extend credit; that the fraudulent preferences amount to $70,000, which Is larger than the annual amount han- dled in business by the defendants. The prayer is for an injunction and receiv- er, and that goods purchased by defendants from plaintiffs be liept separate for the bene- fit of plaintiffs, and for a general judgment, and for general relief. The temporary in- junction was granted upon consideration of plaintiffs' bill, and thereupon plaintiffs filed an amendment thereto. This prayed that H. M. Comer & Co., a firm of cotton factors of this district, be made parties; that the pref- erences to Comer & Co. are void, (they consist of certain mortgages to secure an alleged Indebtedness of $35,000, given upon stock worth $43,000;) that in addition to these mortgages the defendants have transferred and assigned to H. M. Comer & Co. notes and accounts in a sum largely in excess of Comer's demand; that on August 22d these accounts were worth $50,000, and plaintiffs charge on information and belief that these transferred choses in action have been in- creased by other transfers to $75,000; that since the mortgage and preferences were giv- en, the defendants, Baum & Bro., have paid to Comer & Co. $18,000, which reduces their demand to $17,000, and yet Comer & Co. hold as collateral and otherwise in mortgages on real and personal property the full sum of $100,000 to secure this debt. This was stated on the hearing, without objection, to be $24,- 600, and the chancellor, for the present, as- sumes that to be correct. The bill alleges that the transactions be- tween Comer & Co. and the defendants were the result of a fraudulent confederacy to hinder and delay creditors, and to compel them to accept a smaU pittance in full sat- isfaction of large debts; that the demands of Comer & Co. should not be paid by the proceeds arising from the sale of the mer- chandise of plaintiffs and other creditors, not yet paid for; that Comer & Co. had actual notice of the defendants' insolvent condition at the time of certain payments made to them from such proceeds. The amendment further alleges that, prior to the insolvency of the defendants, or at some other time, Comer & Co. obtained from the defendants an agreement in writing that when the de- fendants should become weak or insolvent that they would execute and make to Comer & Co. a mortgage covering their entire prop- erty, and should assign to them all of their notes, accounts, and choses in action; that said mortgages and preferences were given In pursuance of said agreement; that Comer & Co. permitted the defendants to retain pos- session of the notes and accounts and choses In action transferred to him; that the large amount of assets In the hands of Comer & Co., over and above their lawful demand, win be sacrificed to the injury of plaintiffs; that the defendants bought a large stock of goods on credit, with the intention not to pay for them, and to defraud creditors. The 838 RECEIVERS prayer is that Comer & Co. be required to produce tlie said agreement on the hearing, and that they be enjoined from proceeding to foreclose the mortgage or mortgages, and that they be enjoined from collecting the notes and accounts, or from any way inter- fering with the assets of the defendants, and that a receiver be appointed to talie charge of all such assets for the benefit of the cred- itors. The bill expressly waives discovery. In reply to the motion for injunction, etc., the defendants Baum & Bro. deny, in their answers, that plaintiffs' debt was contract- ed after the financial statement was made; that they gave the statement of the 21st of May, yielding to the solicitation of the Brad- street Company; that there were no mort- gages or liens at the time the statement was made; that the statement appended to the bUl itself is erroneous; that their deal- ings have been honorable and successful up to the time of this failure; that their failure is a thoroughly honest failure; that they have not made any preference upon which suspi- cion or doubt can be cast as to its entire good faith; that their creditors have given uniform evidence of their entire and un- abated confidence in the defendants' integ- rity; that they have paid large amounts to their creditors, and have drawn out nothing from their business except for the necessary support of their families; that the mortgages were given to secure bona fide debts; and that, if a receiver is appointed, the loss in winding up the business will be so great that the creditors will get nothing. H. M. Comer makes answer by affidavit. He states that on the 10th day of March, 1888, he took the agreement to the court shown, which was referred to in the bill. This had been done every year previously. It was taken in entire good faith, to protect the advances that deponent made. He gave the creditors knowledge of it on the 3d of December, and never attempted to conceal It. He denies utterly fraud and confederacy. That in his preferences defendants reserved no right or benefit to themselves. He never had any reason to suspect fraud on the part of the defendants. That in the spring and summer of 1888, before he knew defendants were embarrassed, they sent to him notes and accounts of the face value of $43,263.45, as collateral for about $27,000 then due. These notes and accoimts he sent to the de- fendants to collect for him. This collateral was more valuable than that obtained in November. Then the debt was increased, and Comer & Co. took by transfer the notes and accounts referred to. Another affidavit was presented by H. M. Comer. It recites that his firm are cotton factors and commis- sion merchants in the city of Savannah; that they have been the factors of Baum & Bro. and Baum & Co., the defendants, for five years; that they would make advance- ments in the spring and summer with the understanding that they were to be paid ofC In the fall and winter; that the business has been large, and the statement taken from his books is attached. It shows an indebt- edness of $43,078.23, subject to credits from Baum & Bro.; also amounts due by the con- cerns at Dublin and Irwinton, all subject to a credit of 521 bales of cotton, which, estimated at $38 per bale, leaves Bamu & Bro. indebted to H. M. Comer & Co. $24,- 661.07. This indebtedness is secured by a mortgage on real and personal property, dat- ed November 13, 1888, by a mortgage on the personalty, dated November 17, 1888, by cer- tahi notes and accounts transferred by the Batmis to deponent's firm. This security was given for the sole purpose of securing the debt. He denies that the charges of the bill were true. Upon the hearing, several creditors were made parties plaintiff by intervention, among them, H. P. Claflin & Co., New York, whose debt is $11,986.16; A. Gibian, about $1,600; S. Waxelbamn; Culver, Moore & Culver and others. On the hearing plaintiffs put in evi- dence this statement of Baum & Bro. to their creditors, made December 3d, which is as follows: STATEMENT. Liabilities. Amount secured claims $69,625 SO Amount unsecured claims 81,277 61 Total liabilities n50,90S 44 Assets. Merchandise at Toomsboro $18,095 36 Mercbandise at Dublin 17,900 45 Merchandise at Irwinton 6,540 00 Real estate, mules, horses, etc. . 7,166 00 Total notes and ac- counts $105,150 92 Deduct lor worthless and doubtful claims.. 72,310 S4 Notes and accounts at actual value 32,840 38 Cash on hand 1.385 00 Total available assets 83,926 IS Recapitulation. Total available assets $83,926 19 Deduct for secured claims ^ 69.625 80 Leaving balance 14,300 39 Amount of unsecured claims 81,277 64 Also the affidavit of Albert M. Holstein, agent of plaintiffs, which proves the account and demand of the plaintiffs, and states that it was made on the faith of the statement to Bradstreet, made by the defendants. This showed that the defendants were entirely solvent The statement is as follows: "88 Exhibit A. "[Late Report] "Executive Offices, 279, 281, 283, Broadway, New York. "Bradstreet' s. "No. 82 West Third Street "Cincinnati, July 19, 1888. "The Bradstreet Company: Give us in confidence, for our exclusive use and benefit in our business, under our agreement with you, such information as you may have or may be able to obtain concerning the re RECEIVERS. 839 Bponsibillty, character, reputation, credit, etc., of "Name— N. B. Baum & Bros. "Business— Gen. Store, i July 20, I "Street and No. I 1888. J "City (or P. O. Address)— Toomsboro. "County— Wilkinson. "State— Ga. "Signature of M. & L. S. F. & Co., Sub- scriber. "2402— P. O. Address. "icy Information will be furnished upon the proper filling up of this blank and the signa- ture of the subscriber. "2-13-S-lOm. "Inhibit B. "Baum, N. B. & Brc, Toomsboro, Ga., Wil- kinson county. "A. W. Baum, aged 36 years, and married. "N. B. Baum, aged 39 years, and married. "States: Began business in 1875 in a smaU way, and have been quite successful. As per inventory taken January 15, 1888, our status is as follows: Stock of merchandise, nineteen thousand dols.; bonds and stocks, par value, twenty-one thousand dollars; mar- ket value, twelve thousand dollars; notes and accounts, thirty-five thousand dollars; real estate, town property and lands, ten thousand dollars; making total assets of the firm, seventy-six thousand dollars. Liabili- ties: Borrowed money for the year 1888, twenty-four thousand dollars; mercantile and other Indebtedness, twelve thousand doUars; total liabilities, thirty-six thousand dollars. Net: Forty thousand dollars. We have a branch store at Irwinton, Ga. The business there is rim under the style of 'Baum & Co.' Stock on hand there, two thousand dollars; notes and accoimts, four thousand dollars; cash, five hundred dollars; total, sis thousand five hundred dollars; and owe three thousand dollars. After allowing for shrinkages, bad debts, etc., consider ourselves worth fully thirty thousand dollars, over liabilities. There are no mortgages or liens on any of our property, either real or personal. Our stock is Insured for thirteen thousand dollars; fix- tures, two thousand dollars. When we bor- row money from banks we deposit our bonds and stocks as security. From our cotton fac- tors we borrow on farmers' notes as collater- al, give no other security. Do an annual business of seventy-five to eighty-five thou- sand dollars. In addition to the above we sell 5 or 6 hundred tons of fertilizers per an- num, which we buy outright Give notes for the same, payable in fall. To only one com- pany do we give farmers' notes as collateral. At this point we cleared ten thousand dollars on guano alone. "The Mercantile News Agency states: We learn they carry an average stock of about fifteen thousand dollars, and do a large busi- ness, sell largely on credit, and consequently have considerable due them. Said to borrow considerable money to use in their business. and generally put up planters' notes as col- lateral. They are reputed to own real estate worth five to eight thousand dols. Would be difficult to give correct estimate of their net worth, but it is the general belief that the firm is estimated worth fully twenty thousand dollars, or more. They are of good character, and steady habits, and of fine busi- ness ability. Appear to do nearly all the business that Is done at this point, and are generally prompt in meeting their obligations, and are quoted in good credit "May 21st 1888. "[Indorsed:] Bradstreet's. 10-19-1888. To M. & L. S. Fechheimer & Co. The cor- ^rectness of this report is not guaranteed; but having been obtained by us in good faith— from authorities deemed reliable — it is trans- mitted to you in strict confidence for your exclusive use and benefit and in accordance with the terms of the contract existing be- tween us. Respectfully, "The Bradstreet Co. "State of Ohio, Hamilton County, ss.: Be- fore me personally appeared Levi O. Goodale, who, being duly sworn, says that he is the superintendent of the Bradstreet Co. Mercan- tile Agency, oflSce at 82 West Third street Cincinnati, Ohio. That on July 19, 1888, they received a ticket of inquiry from M. & L. S. Fechheimer & Co., of Cincinnati, Ohio, asking for information concerning the responsibility, character, reputation, credit, etc., of N. B. Baum & Bro., whose post-offlce address was Toomsboro, Ga. Said ticket of inquiry is attached hereto, made part hereof, marked 'Exhibit A.' That on the 20th day of July, 1888, we made a report in answer to said in- quiry, an exact copy of which answer is at- tached hereto, made part hereof, marked 'Ex- hibit B.' We obtained this information in the regular coiu:se of our business, and for our company in that section of Georgia in which the business of N. B. Baum & Bro. is located. Levi C. Goodale. "Sworn to before me, and subscribed in my presence, this 19th day of December, 1888. "William S. Littie, "Notary Public, Hamilton County, Ohio." R. W. Patterson, one of the solicitors for the plaintiffs, testifies that he was present at the meeting of defendants' creditors on De- cember 3, 1888. Baum offered to unsecured creditors 12% per cent of their claims in 30 days' time, and 12% per cent, additional in 12 months, neither secured. Subsequentiy in- quiry was made by Mr. H. M. Comer if the offer would be accepted if he (Comer) would guaranty the first 12% per cent Some of the creditors, and among them the plaintiffs, declined to accept C. H. Cohen, attorney for H. P. Claflin, testified that on Novem- ber 23d he called on the defendants at Tooms- boro; that N. B. Baum told him that he had been under contract to Mr. Comer for some time to give the Comers a mortgage whenever they demanded it, and he felt com- 840 EEOBIVERS. pelled to do as he had previously agreea, which deponent understood was to give the mortgage upon all his assets, including the goods that deponent's clients had but recent- ly sold him. This witness proves the account of H. P. Claflin & Co. in the sum of $11,- 986. IG. R. W. Patterson, J. W. Lindsay, and a H. Ckihen testify that they heard H. M. Comer state before the meeting of creditors that he bad an agreement with N. B. Baum, ot the defendants, to the effect that Baum would execute a mortgage to him upon whatever as- sets he had, and that on this agreement Co- mer had made him advances, and that the agreement had been in force for as much as a year prior to that time. Deponents fur- ther say that they heard N. B. Baum, at the creditors' meeting, state that he was insol- vent at the time he made his statement to Bradstreet's agency, in May of the present year, although he did not know it at the time. C. A. Turner testified by affidavit that, after the deputy-marshal had closed the store of the defendants at Toomsboro, he heard N. B. Baum say in a conversation with de- ponent that he had in his possession the notes, accounts, and assets of Baum & Bro. and Baum & Co., which had prior to that time been turned over to H. M. Comer & Co., of Savannah. The bills for most of the plain- tiffs' goods sold to Baum were dated on Au- gust 6th, August 10th, August 13th, and a renewal note was taken on October 9, 1888. It was shown by the evidence that this was the manner in which the .goods were sold: The traveling agent of the plaintiff took the order in July, subject to ratification by the house, on inquiry as to solvency. This in- quiry was made to Bradstreet. The goods were not shipped unless the reply was satis- factory. The sales were not completed until the goods were sent. For the defendants the following evidence was submitted: The agreement entered into between N. B. Baum & Bro. and Baum & Co. and H. M. Comer & Co., dated March 10, 1888. It recites that for and in consideration of cer- tain advances to the amount of $18,000, as evidenced by five promissory notes for $3,200 each, signed by N. B. Baum & Bro., and in- dorsed by Baum & Co., and payable at the office of Comer & Co., as follows, respective- ly, on September 15th, October 1st, Novem- ber 1st, and November 10th; and one note for $2,000, signed by Baum & Co., and Indors- ed by Baum & Bro., due October 20th next. "Now, in order to secure these and any other sum that may hereafter be due them, we agree to deposit with them as collateral se- curity, notes and mortgages of good planters and others to whom we sell goods, in amount equal to at least two dollars for every one dollar due by us to the said Comer & Co. We also agree to transfer to them as additional security our insurance policies on our build- tags and stocks of goods; and we further obli- gate and bind ourselves to give said H. M. Co- mer & Co. a first lien or mortgage upon all our stocks of goods and real estate, in case we shall at any time become financially embar- rassed while indebted in any way to them, or in case our said notes above described are not paid promptly at maturity. It is also under- stood and agreed that all drafts drawn, or money advanced upon account or otherwise, over and above the eighteen thousand dollars herein named, shall be paid out of the pro- ceeds of cotton shipments first and before said proceeds are to be applied to said notes; in other words, only credit balances as may appear from open account are to be paid on said notes unless by consent of said H. M. Comer & Co. in writing. It is understood and agreed that 8 per cent, per annum vrill be charged on all advances, etc. [Signed] N. B. Baum & Bro., and N. B. Baum & Co." The mortgage dated the 17th day of No- vember, to secm-e the payment of $38,000, including the five notes before mentioned and three other notes for $5,000 each, dated Oc- tober 12, 1888, and due at various dates un- til December 10, 1888, and one note for $5,000, due January 12, 1888, and one note dated March 10, 1888, for $2,000, signed by Baum & Co., indorsed by Baum & Bro., pay- able October 20, 1888, upon 150 half rolls of bagging, 100 bundles cotton ties, 100 sacks salt, all in the planters' warehouse at Dub- lin; and also all goods, merchandise, dry goods, groceries, etc., stored ta the store of L. C. Perry & Co., at Dublin, 6a.; also, a mortgage made 13th of November, 1888, to secure $30,000, betag apparently the same notes just mentioned, and given upon certain lots of land situated in Toomsboro, and up- on which is erected store-houses; and also certain stocks of general merchandise ta said store, describing them particularly; and also all such articles and things as may be here- after placed in such stock; also the stock in the store at Dublin, more particularly de- scribing it, with the same provision as to future acquisitions; also a lot of land, one- half acre in Irwinton, with store-house thereon, and also the stock of goods there- to contained. The mortgages comprehend all the safes, show-cases, and fixtures of every kind in said three stores. ' Numerous affida- vits were presented as to the policy or Im- policy of granting the prayer of the bill for the appointment of a receiver, and an affi- davit to sustain the good character of H. M. Comer.— in the opinion of the court a dep- osition altogether superfiuous. Other por- tions of the testimony are not material or necessary to the proper determination of the cause. After a full hearing and exhaustive argrument on Friday last the court took time to consider, and has reached the followmg conclusions: Patterson & Hodges, for plaintiffs. Hill & Harris and Denmark & Adams, for defendants. RECEIVERS. 841 SPEER, J. (after stating the facts as above). Baum & Bro. and Baum & Co., two firms composed of the same individuals, are traders, in the meaning of the statute of tWa state quoted ahove. That they are Insolvent it is conceded. The plaintiffs are creditors, whose demands, as the court is at present advised, are within the class provided for in the statute above quoted, (Code Ga. § 3149a,) giving, in certain cases, the equitable right to the extraordinary remedies applied for. This right of the creditor to put the debt- or's assets, when the latter is an insolvent trader, in the hands of a receiver, is peculiar to the law of this state. It has no existence in the general jurisprudence of equity which obtain in these courts. It is now settled, however, that the courts of the United States may administer an equitable right granted by the law of the state in suits of which, from other reasons, they have jurisdiction. It was urged in argument for the defendant that the creditors, v?ithout a judgment at law, have no right to apply In equity for the appointment of a receiver. That this is a general rule in undeniable, but there are ex- ceptions to it, and one of these exceptions ot apparently clear distinctness is where the law-making power has enacted in terms that the debt need only be mature, with payment demanded and refused, as is the law in Georgia. It is true, also,— as held in this circuit, in Jaffrey v. Brown (C. C.) 29 Fed. 477,— that a party not intending to pay, by inducing one to sell him goods on credit through the fraudulent concealment of his insolvency and of his intent not to pay for them, is guilty of a fraud, which entitles the vendor, if no innocent third party has ac- quired an interest in them, to disaffirm the contract, and recover the goods. See, also, Crittenden v. Coleman, 70 Ga. 295; Donald- son V. FarweU, 93 U. S. 633; note to Jaflfrey V. Brown (O. C.) 29 Fed. 485, and authorities cited. The remedy at law must be quite as complete as that in equity to defeat the pow- er of equity to proceed. Id. The demurrer filed to the bill, while not finally overruled, is not deemed sufficient, as the court is at present advised, to defeat the relief sought by the bill, should that relief be granted. The chancellor has given very anxious thought and careful inquiry to the ascertainment of his duty in the premises. It is true that the prayers of the bill seek to obtain perhaps the most vigorous and far- reaching action In the power of the court— action which should not be taken in cases of this character, except In the presence of plain fraud or irreparable injury. On the other hand, the statements of the defendants themselves show the most utter Insolvency, and a failure to comply with their duty to their creditors, which evinces either negli- gence of the most flagrant character, or fraud scarcely less marked and decided. Upon the 21st of May, whatever may have been the motive which led to the pubUcation, it is undeniable that the defendants gave to the mercantile community, by means of a usual and widely known commercial news agency, a statement which shows remark- able solvency, and indeed prosperity, for their section of the country. "Our total assets," they said, "are seventy-six thousand dollars; our liabilities, thirty-six thousand dollars, net After aUowiog for shrinkages, bad debts, and so forth, we consider our- selves worth fully thirty thousand dollars over liabilities, etc. There are no mortgages or liens on our property, either real or per- sonal. Our stock is insured for thirteen thousand dollars. When we borrow money from bank we deposit our bonds and stocks as security. When we borrow money from our factors we give farmers' notes as col- lateral; give no other security." In a little more than six months we find this firm in debt $150,903.44, with total assets of $83,- 926.19, leaving debts to the amount $66,- 976.25, altogether hopeless. In other words, ta a half year there had been a change for the worse in their condition of nearly $100,- 000,— if their respective statements to Brad- street's and to their creditors is reliable. For this startling transformation of their condition they offer neither explanation nor excuse. There had been no disaster from flood or fire, no epidemic, none of those ex- traordinary circumstances which at times cause the stoutest busuiess houses to trem- ble. In May there is an indebtedness of thirty-six thousand, in December a debt of one himdred and fifty thousand. In May there are neither liens nor mortgages, in December they approximate seventy thou- sand dollars. In the spring creditors were assured of prompt payment, in the fall they are met by hopeless Insolvency; and yet the court is asked to consider this an innocent and unavoidable failure, and this, too, in the absence of a syllable of proof to accoimt for it. What makes it more remarkable Is that the business was conducted in quiet villages, and among a rural population, where all legitimate trade was marked by careful pur- chases and conservative transactions; where every p^rehaser is personally known to the merchant,— his solvency and disposition or ability to pay debts as familiar as house- hold words. But this is not all. In the proclamation of Baum & Bro. to the busi- ness community of the country, they say "there are no mortgages or liens upon our property." At that moment it was all in. cumbered with a secret obligation which a court of equity in a proper case would de- clare to have all the effect of a mortgage. In less than six months every cent* s worth of their stock or other assets, whether paid for or not, is shingled with mortgages, made in pursuance of that covert stipulation. In the presence of such facts as these It would seem futile to urge upon the court the con- siderations of business capacity and business Integrity and mercantile popularity, which 845 RECEIVERS. form so large a part of the defendants' showing. "We give to ovir factors no secur- Ity save farmers' notes." As that public pledge was being made their contract was in existence, not only to give two dollars for one, in notes and choses in action, for everj dollar obtained from their factors, but to give mortgages which are undeniably other and very different security. "Our stock is insured for $13,000," said they to Brad- street's,— they did not say the policies had been pledged to H. M. Comer & Co., and out of the reach of other creditors. It would seem superfluous to analyze the •widely variant statements of the defendants, and it requires no elaborate inquiry to ascer- tain the law controlling the rights of the par- ties with such facts before the court. The statutes of the state are sufficiently explicit Suppression of a fact material to be known, and which the party is under an obligation to communicate, constitutes fraud. The obliga- tion to communicate may arise from the confi- dential relations of the parties, or the peculiar circumstances of the case. Code Ga. § 3175. Can it be doubted that the fact that the de- fendants were under a written obligation to execute mortgages upon their entire stock and all their other property, was "material to be known" by those giving them credit? Can it be doubted that when the Baums undertook to give to Bradstreet's, for the information of the business world, a statement of their assets, liabilities, and methods of borrowing money, that the obligation was upon them to com- municate the truth? Will the most credulous believe for a moment that Fechhelmer & Co. would have given them credit for $4,000; that Claflin & Co. would have given them credit for $11,000,— had they known the existence and the nature of their obligation to Comer? We think not. The statements of such mercantile agencies as Bradstreet's are intended to influ- ence the action of merchants and others who give credit. It is well understood that the mercantile community relies largely upon such statements, and the persons giving them are under the weightiest obligation, which will be enforced in foro conscientise, to speak the truth. If there has been deliberate suppression of a vital fact in a statement of this character, which does mislead, it is a fraud upon the person misled, which a court of equity will redress, If possible. Again, "misrepresentation of a material fact, made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party, or. If made by mistake, and innocently, and acted on by the opposite party, constitutes legal fraud." Code Ga. { .3174. See, also, section 2634. Now, It appears from the evidence of Messrs. Patterson, Lindsay, and Cohen that N. B. Baum admitted Iti thehr presence and hearing that he was insolvent at the time the state- ment to Bradstreet was made, although he there asserted a net worth, above all liabilities and doubtful assets, of fully $30,000, but that he did not then know his Insolvent condition. Conceding, therefore, that this statement "was honest, it is none the less fraudulent in con- templation of these provisions of the Code. It follows that, even in the absence of the In- solvent traders' act, before quoted, the plain- tiffs would be entitled to the relief they seek if it can be made to appear that there is a prospect of redressing their wrongs thereby. Much more, then, are they so entitled under the provisions of that act. It is said, how- ever, for the defendants, that the liens created by Baum & Bro. to Comer and others will ex- haust the assets, and that the imsecured cred- itors can get nothing through the action of a receiver, however vigilant he may be. But the defendants themselves admit that the assets amount to about $86,000 more than the pref- erences he has given. It is true that he states that $72,310.54 of notes and accounts are worthless and doubtful, but the coin-t is not Inclined to accept this statement as flnal. It would be very remarkable if his doubtful debts In December should be as much as his total assets in May. A diligent receiver will collect many of those claims, or the court wUl know the reason why. Besides, by the same statement there is a balance of $14,300.39 to be divided among the imsecured creditors. This is itself no mere bagatelle. We have known original suits to be brought for less. But perhaps more important than either of these is the fact that Comer & Co., who only claim $24,671.07 as thei sum of their demands against the Baums, have now in their pos- session $50,000 worth of good notes and ac- counts, and mortgages on $49,000 worth of property consisting of merchandise and other personalty and certain realty. However valid iliay be the demand of Comer & Co., when it is paid they will not be permitted to retain a dollar in excess of their proven claims. It is true that by the law of Georgia, section 1953, "a debtor may prefer one creditor to another, and to that end he may bona flde give a lien by mortgage or other legal means, or he may sell in payment of the debt, or he may trans- fer negotiable papers as collateral security, the surplus in such cases not to be reserved for his own benefit or that of any other favored creditor, to the exclusion of other creditors." The large surplus conveyed to Comer & Co. to secure their debt they hold as trustees for the creditors of the defendants, the Baums. Be- sides, the balance which Comer & Co. present is ascertained by estimating more than 500 bales of cotton shipped to them at $38 a bale. They have turned over notes and accounts of the insolvent firm to one of its members for collection. This will not be permitted. The Insolvent debtor who has failed under such circumstances is not the best custodian for convertible assets of this character. This investigation has satisfied the court that this is a suit where it is manifestly the duty of the chancellor to make the orders prayed for. A receiver will be appointed, and an injunction granted. Comer & Co., who are now formally made parties defendant to the EEOEIVERS. 843 bill, will be required to make proof of their account, and if found just and true and a valid lien,, as it now appears to be, it will be paid in fuD if the funds are suflflcient. This Is true of other debts of superior dignity, and the remainder of the fund in the hands of Comer & Co. and elsewhere within the reach of the court will be apportioned to the creditors. The court will appoint receivers of undoubted qualifications, who vrill at once talse possession of the assets of the insolvent firm, and as fast as collected pay the funds into the registry of the court, and the cause will proceed with the utmost expedition. 844 RECEIVERS. OGDEN CITY v. BEAR LAKE & RIVER WATERWORKS & IRRIGA- TION 00. et al. (55 Pac. 385, 18 Utah, 279.) Supreme Court of Utah. Dec. 5, 1898. Appeal from district court, Salt Lake coun- ty; Ogden Hiles, Judge. Action by Ogden City against the Bear Lake & River Waterworks & Irrigation Com- pany, Bear River Irrigation & Ogden Water- works Company, and others. Judgment for plaintiff, and defendant Bear River Irrigation Sc Ogden Waterworks Company appeals. Modified. Bennett, Harkness, Howat, Bradley & Richards and Rogers & Johnson, for appel- lant. E. M. Allison, Jr., C. C. Richards, and J. H. Macmillan, for respondents. ZANB, C. 3. This Is an appeal by the Bear River Irrigation Sc Ogden Waterworks Company, a defendant, from the order of the court below approving the report of Thomas D. Dee, receiver, and allowing the various items thereof, and ordering them to be paid out of funds In his hands. As to the motion of plaintiff to dismiss this appeal for the reason, as alleged, the order appealed from was not a final judgm«it, we are of the opinion the order requiring the compen- sation to the receiver and I. N. Pierce, and the payment to Griffln and the Ogden Stand- ard, out of funds in the receiver's hands, was final, and therefore appealable, and we there- fore overrule It. It appears from the record that Mr. Dee was appointed receiver pendente lite of the waterworks system tn Ogden City on Jan- uary 17, 1898, on the application of plaintiff, Ogden City; that he immediately qualified and took possession and charge of the sys- tem and its buildings, and managed and operated it u'ntil April 20, 1898; that the or- der appointing him receiver was reversed by this court, with directions to the lower court to order a return of the property to the ap- pellant, which was done; that on April 27, 1898, Dee filed his report as such receiver, showing a collection of water rents to the amount of $11,247.07, and that he had dis- bursed $1,266.45 fpr labor, $148.53 for ma- terial, and $90.50 for general expenses, and, in addition, he asked the court to allow him $750 out of the funds as compensation as receiver; and to I. N. Pierce, as inspector, $219.80; and S. 6. Griffin, for a stamp, $3.25; and the Ogden Standard, for advertising, $14.00. To the allowance of these last four items the appellant objected, and it assigns the order of the court allowing them and or- dering their payment out of the fund as eryAt BARTCH and MINER, JJ., concur That the compensation to the receiver and to Griffin were customary and reasonable for their time and services, and that the charges for the stamp and publication were reason- able, no question is made. The sole question Is, was it error to order their payment out of the fund? It appears the receiver was appointed on the application of the plain- tiff, and over the objections of the appellant, and that it would not have been necessary to incur the Items of compensation to the re- ceiver, or to Mr. Pl«"ce, or for the stamp or publication, had the property remained in appellant's hands and the bu^ness under Its control. The appellant was wrongfully de- f prived of the possession of Its property, and of the control of Its business without its con- \ sent, upon the petition of the plaintiff. It, would be inequitable to require the appellant \ to pay the extra expense of conducting its j business caused by the erroneous order ob- j talned by the plaintiff. We understand the- rule supported by the weight of authority is that when a receiver is appointed on the application of one of the parties, and takes possession, and the appointment Is after- wards set aside because erroneous, and the- property is returned, all expenses incurred In consequence of the appointment, additional to those that would have been necessary had the property remained with such opposite- party, ought not to be paid out of the fund, but by the party at whose Instance the ap- pointment was made. The expenses incur-' red by the receiver that would have been \ necessary for the appellant to incur had remained In the possession of Its property, and In the control of its business, were prop erly paid out of the fund, but such as It would not have been necessary for it to incur should be charged to the party procur- j Ing the order. Such expenses should be re- garded as Incurred In consequence of an er- ror at his Instance. Weston v. Watts, 45 Hun, 219; City of St. Louis v. St Louis Gas- light Co., 11 Mo. App. 237; Bank v. Bayne, 140 N. Y. 321, 35 N. E. 630; Moyers v. Coin- er, 22 Fla. 422; French v. Glfford, 31 Iowa, 428. We hold that so much erf the order appeal- ed from was erroneous as authorized compen- sation to the receiver and to I. N. Pierce, and the Items for a stamp and for the publica- tion of notice, out of the fund. Such ex- penses should have been taxed against the plaintiff. The remainder of the order is af- firmed. The cause is remanded to the court below, with directions to tax the expenses In accordance with this opinion, and to so order them paid; costs of appeal to be taxed- against plaintiff. itfr—jL REOEIVBES. 845 WHITNEY V. HANOVER NAT. BANK et al. (two cases). SAME V. BANK OF GREENVILLE et al. (15 South. 33, 71 Miss. 1009.) Supreme Court of Mississippi. April 9, 1894. Appeal from chancery court, Washington county; W. R. Trigg, Chancellor. Proceedings between George Q. Whitney and the Hanover National Bank and others relative to the funds of the Bank of Green- vlllft From three adverse decrees, Whitney appeals. Affirmed. Nugent & Mc Willie and S. H. King, for ap- pellant Yerger & Percy, for appellees. CAMPBELL, O. J. These three cases were argued and submitted together, and will be so considered. Their history is this: The Bank of Greenville was found to be in- solvent, and came to a stop, on the 22d day of December, 1891, when the directors, head- ed by the president, applied, by petition to the chancellor, to take charge of the assets of the bank, by appointing a receiver to col- lect and manage its affairs. The chancellor appointed the president of the bank receiv- er, and, on his application, enjoined all per- sons from proceeding by suit against it The receiver appointed entered upon his du- ties as designated, and continued until he resigned, on the 6th of July, 1892. On the 11th July, 1892, the Hanover National Bank and other creditors of the Bank of Green- ville exhibited their bUl, In the chancery court in which the receiver had been appointed, against the Bank of Greenville, and averred the foregoing facts, and that since the 22d December, 1891, the officers and directors of the bank had ceased to manage it, and that its affairs had been managed wholly Dy Pollock, as receiver, who had collected a large sum of money due said bank, and that the appointment of another receiver was necessary for the preservation of the assets of the bank and the protection of the rights of Its creditors; with other specific allegations, designed to show the necessity for the immediate appointment of a receiv- er. Upon due notice to the defendant a re- ceiver was appointed in this proceeding on the 18th July, 1892, and the former receiver was directed to deliver to him all the assets of the bank in his hands. On July 23, 1892, George Q. Whitney and others, creditors of the Bank of Greenville, united in a bill against the bank and G. D. Thomas, who had qualified and was acting as receiver by virtue of his appointment on July 18th, and against other defendants, tat said chancery court. This bill set forth the suspension of the bank on the 22d December, 1891, and the appointment by the chancellor of Pollock as receiver on the application of the presi- dent and directors of the bank, and that Pol- lock took exclusive control of all the assets of the bank, and acted as receiver, but that defendant Thomas, at the time of exhibiting said bill, claimed to be receiver of said bank by virtue of an appointment by the chan- cellor of said court; that the application to the chancellor on December 22, 1891, and all the proceedings had, including the pro- curement of the appointment of Thomas as receiver, were devices to hinder, delay, and defraud creditors, and "Invalid and void." Discovery was sought by the bill as to all the assets of the bank, of whatever kind, and a lien upon them prayed to be estab- lished from the date of filing the bill, and their appropriation to the demands of the complainants. The Bank of Greenville in- terposed a plea to this bill of the proceed- ing by the Hanover National Bank et al. v. Bank of Greenville, and the appointment in that case of Thomas as receiver, and that he had qualified as such, and was in posses- sion of the assets of the bank under that appointment, and relied on this plea as a bar to the bill filed 23d July, 1892. The plea was set down for hearing upon its suffi- ciency, and was sustained, and the bill dis- missed. From that decree an appeal was taken, and case No. 7,460 on the docket of this court is that appeal. On October 4, 1892, George Q. Whitney petitioned the chancery court of Washing- ton coimty, in which these cases were pend- ing, and which had been consolidated, set- ting forth that he was a creditor to a large amount of the Bank of Greenville, and had recovered judgment for a large sum against It In the court of the United States at Vicks- burg, Miss., July 28, 1892, which had been duly enrolled, and, he claimed, was a para- mount lien on all the assets of said bank, notwithstanding all the various proceedings in the said chancery coin-t, which are set forth with detailed particularity, and de- nounced as void, and no obstacle In law to the application of the assets of the bank to the claim of the petitioner, who prayed to be allowed to be made a party defendant to said cause. At the same time he present- ed a petition and bond for removal of said cause. In which he prayed to be made a de- fendant, to the United States court at Vicks- burg. The complainants in the cause In which Whitney sought to Intervene as a de- fendant opposed his application, and it was denied by the court, and from this he ap- pealed, and that appeal Is contained in No. 7,459 on the docket of this court. Defeated in his effort to be made a de- fendant as stated, Whitney made an abor- tive effort to have the United States court at Vicksbm-g take charge of his suit, and enforce his claim to be paid out of the as- sets of the Bank of Greenville in preference to other creditors; but with that we have no concern, and state the fact historically only, being in the record before us. On February 6, 1893, Whitney, who had been baffled In all his efforts to obtain payment as a cred- itor entitled to precedence out of the assets 846 RECEIVERS. of the Bank of Greenville, exhibited an orig- inal bill in the chancery coiirt of Washington county against the complainants in the bill of the Hanover National Bank and others against the Bank of Greenville, exhibited July 11, 1892, and the Bank of Greenville and W. A. Pollock, receiver, and G. D. Thomas, receiver. In this bill is narrated with detail the history of the dealing by and with the bank from the time of Its suspen- sion and taking refuge from creditors in the chancery com-t to the filing of this bUl, which also relates the persistent, but ineffectual, ef- forts of the complainant, in state and federal courts, to secure recognition of his right, as claimed, to be first paid out of the assets of the Bank of Greenville. It assails the ac- tion of the chancery court of Washington county as void for want of jurisdiction over the subject-matter dealt with, and seeks to vacate all orders that stand in his way, and the payment of his as a preferred claim out of the effects of the bank. The bill seeks In- junction, which was obtained. This bill was answered, and most of its allegations admit- ted, but the claim made by it to the right of the complainant to priority of payment out of the assets of the bank was denied. A mo- tion was made to dissolve the injunction, and some affidavits were taken, and some facts were agreed on for the hearing of the motion to dissolve, and it was agreed that the case should be heard on the motion to dissolve, and for final decree on such hearing. The re- spondents gave notice of a claim for damages to be allowed on dissolution of the injimction to amount of $2,500 for attorney's fees In de- fense of the suit. The case was heard in ac- cordance with the agreement, and a decree was made dissolving the injunction, dismiss- ing the bill, and awarding damages against the complainant in the sum of $2,000 as attor- iiey's fees, the decree reciting that the court had heard testimony in open court as to the attorney's fees, and taxed the costs against the complainant, who appealed, and this is No. 7,749 of the docket of this court From this complete but succinct history of this Litigation, as disclosed in voluminous form in the' three cases before us; It is ap- parent that the only question presented for de- cision by the appeal in No. 7,459 is as to the propriely of the action of the court in refus- ing to permit Whitney to intervene as a de- fendant in the case of Hanover National Bank et al. v. Bank of Greenville, against the objection of the complainants, who protested earnestly against it The court did right in this refusal. "No such practice is known in equity as making a person a defendant to a suit upon his own application over the objec- tion of the complainant" 1 Danlell, Oh. PI. & Pr. 287, note 2, and cases cited; Stretch V. Stretch, 2 Tenn. Ch. 140,— where the sub- ject is fully treated, and the action of the court in the case before us is fully vindicated on principle and authority. The question presented by cases 7,460 and 7,749 is whether the chancery court of Wash- ington county was so wanting In jurisdiction of the case of Hanover National Bank and others exhibited against the Bank of Green- ville, July 11, 1892, as to render its action in the case void, and liable to be assailed col- laterally, and treated as a nuUlty, whenever and however called in question; for, if it be conceded that the action of the court was er- roneous, unless It was void, the fact that It had assumed jurisdiction, and taken control of the assets of the Bank of Greenville, and appointed a receiver in the case, was an an- swei' to the original bUl exhibited by Whit- Qey and others on the 23d July, 1892, and likewise to Whitney's blU of February 6, 1893. We regard the action of the chancel- lor on the 22d December, 1891, appointing a receiver on the ex parte application of the directors of the bank, and his subsequent ac- tion in pursuance of that appointment, as utterly void, and of no legal effect It could be assailed collaterally, and disre- garded with Impunity, by anybody. The proposition that an insolvent debtor can take refuge In a chancellor's decree on his or its own application, and obtain protection asainst pursuing creditors, who may be enjoined from pursuing their ordinary remedies, is without foundation. We cannot account for the mistake fallen into in the proceeding of December 22, 1891, and all that was done un- der it, except by supposing that what is pro- vided for by statute in other states was con- sidered admissible in the absence of statute In this state. The suit of Hanover Bank et aL V. Bank of Greenville, instituted July 11, 1892, is evidence of the fact that it was con- sidered necessary to strengthen the grasp of the chancery court on the assets of the bank, and that it was a timely proceeding for the purpose of the complainants tn that suit, for it results from what we have said that all that went before was of no legal validity; and, but for that suit, there would have been no barrier to his proper proceeding by any creditor, the Injunction issued to the con- trary notwithstanding. But, if the court was not wholly vrtthout jurisdiction In that suit. It was inadmissible to inject Into it other suits, as sought to be done by the bUl of July 23, 1892, and that of February 6, 1893. The question, then, is as to the case of Hanover Bank et al. v. Bank of Greenville, begun by original bUl July 11, 1892. Was the action of the court as to that case void? It is to be observed that the bill in that case is not one to seciu:e any priority or advan- tage to the complainant In it, to the injury of other creditors, but it is for all creditors of the Bank of Greenville, as shown by Its prayer for the appointment of a receiver to preserve and collect the assets, and distrib- ute the money among aU the creditors, ac- cording to their rights as ascertained. There was no time when Whitney could not join in this suit as a complainant, or assert his right of priorily as claimed, if he had chosen RECEIVERS. 847 to do so; but his persistent effort -was to ob- tain priority over other creditors and secure full payment, if the assets were sufficient; and he was iinwilling to make common cause with all creditors, but, asserting the voidness of all the proceedings In the chancery court as to these matters, he sought, as he had a right to do, to obtain precedence as a cred- itor by getting judgment against the bank, and enforcing it He got judgment, and, if that entitled him to be paid out of the bank's assets In the hands of the receiver, he might have propounded his claim of priority In the chancery court, and demanded Its recogni- tion and payment by an order therefor, but he maintained his attitude of asserting the nuUity of all the proceedings in this matter of the chancery court, and attacked them as void; and the maintenance of his bUl of February 6, 1893, depends on maintaining the legal proposition on which it rests. His learned counsel has been not only persistent, but consistent, in the many methods em- ployed to obtain for his cUeat an advantage over other creditors. It remains to be stated whether or not he shall succeed In securing the reward of his Industry in behalf of his client By his bill of February 6, 1893, he has pursued the proper course to obtain an adjudication of the question on which the claim made by his client depends. This bill attacks the validity of the proceedings in the chancery court in the case of Hanover Bank et al. V. Bank of Greenville, on the ground that it Is not the province of a court of chan- cery to dissolve a corporation, or interfere with the exercise of its franchise, or displace its officers, or appoint a receiver, or other- wise exercise jurisdiction over It, at the in- stance of creditors who have no judgment against It In this case there was no Inter- ference by the court with the bank or its franchise, and the performance of the ordi- nary functions of its officers. There was no attempt to dissolve or restrain the corpora- tion. Its directors had volimtarily surren- dered Its assets to the keeping of the chan- cellor, and ceased to perform their duties as to them. The chancellor had accepted the trust, and designated a receiver to take charge of these assets, and care for them, and had enjoined all creditors of the bank from suing it, and had proceeded in the ad- ministration of the trust he had accepted, as If there had been a creditors' bUl; and, al- though this feU little short of being a mere farce, saved from it only by the seriousness of the performance with judicial gravity, In good faith, it was, nevertheless, the condi- tion In which the complaining creditors found the affairs of their debtor on the 11th July, 1892, when they instituted thedr suit repre- senting the deplorable conditions existing, and prayed the Interference of the chancery court to take charge of the assets of their debtor, the bank, thus abandoned by It, and smrendered to the chancellor, who, though without authority to receive them, had yet taken control of them as if he did have the right to receive them, and had been dealing with them accordingly. The bill urged the necessity for the immediate appointment of a receiver for the preservation of the assets of the bank, which had suspended, and ceased to care for them since December 22, 1891. It is true that none of the com- plainants was a judgment creditor of the bank, and none had a specific lien on the assets of the bank. Yet these assets con- stituted a trust fund. In a general sense, for the payment of the creditors of the bank, and, having been abandoned by the man- agers of that corporation, and transferred to the chancellor, who was dealing with them as of right, when he had no more legal authority over them than a private individ- ual, who might have found them, if it may be said that, under these circumstances, it was erroneous for the chancellor to entertain the suit of general creditors of the bank, and appoint a receiver, it certainly cannot be maintained that this proceeding was wholly unauthorized and void, so as to be subject to collateral attack for want of ju- risdiction to entertain the suit Vanfleet, Collat Attack, § 100; Brown v. Iron Co., 134 U. S. 530, 10 Sup. Ct 604; Mellen v. Iron Works, 131 U. S. 352, 9 Sup. Ct 781; Graham V. Kaih:oad Co., 102 V. S. 148; Goodman v. Winter, 64 Ala. 410; Barbour v. Bank, 45 Ohio St 133, 12 N. B. 5; Bouse v. Bank, 46 Ohio St 493, 22 N. E. 293. Many other books might be referred to In support of the proposition asserted, but, if the doctrine announced did not prevail else- where, there can be no doubt as to the law here since the constitution of 1890. By sec- tion 160 of that instrument, "In all cases where said com-t [chancery] heretofore ex- ercised jurisdiction, auxiliary to courts of common law, it may exercise such jurisdic- tion to grant the relief sought, although the legal remedy may not have been exhausted, or the legal title established by a suit at law." This Is In harmony with the scheme of the constitution reversing the former re- lations of the courts, in which the circuit court possessed general jmrisdictlon, and was the repository of the power to administer legal remedies, and the chancery coiu-t had jurisdiction of certain designated matters, and where there was not a full, adequate, and complete remedy at law. Now the cir- cuit court has original jurisdiction "in all matters, civil and criminal, in this state, not vested by this constitution in some other comi:." Section 156. A residuary grant is thus made to the circuit court This man- ifests the policy of enlarging the domain of chancery, and limiting that of the court of law. What may be the effect of the provi- sions mentioned In widening the scope of the comrts of chancery cannot be determined now, and is not necessary to be decided; but that they will be influential In considering the class of cases In which chancery coiu-ta 848 RECEIVERS. may entertain Jurisdiction Is undeniable. Wlien we look to section 147 of the consti- tution, all doubt as to the proper resolution of the question presented by this case van- ishes. Because of that section, error is not predicable of "any error or mistalie as to whether the cause in which it was rendered was of equity or common law jurisdiction." "No judgment or decree in any chancery or circuit court, rendered in a civil cause, shall be reversed or annulled on the ground of want of jurisdiction to render said judg- ment or decree, from any error or mistake as to whether the cause in which it was ren- dered was of equity or common law jurisdic- tion," is the mandate of the fundamental law, and sweeps away all distinction be- tween equity and common-law jurisdiction, after it has been entertained, in a civil cause in the chancery or circuit courts. It may be an action of crim. con., or for libel or slander, or trespass, or any other civil cause in the chancery court, or an equity matter in a court of law; if entertained there, error is not predicable, and the decree or judg- ment shall not be annulled for want of ju- risdiction. The chancellor or circuit judge conclusively and finally settles the question of jurisdiction, as between equity or com- mon-law jurisdiction, of the particular case; for It would be the height of absurdity to bold that, while error may not be afiSrmed of It, such Judgment or decree Is void. The reason we do not apply the provisions of the constitution mentioned to the matter of De- cember 22, 1891, and uphold It, and what followed, is that it was not a cause. There was no suit or action, and no parties plaintiff and defendant, but a mere ex parte surren- der by the bank to the chancellor of its af- fairs, for which there is no authority In law; and therefore the constitution does not ap- ply, but relates to a civil cause, as properly understood, and not to all that a chancellor or judge may do. The case of Hanover Na- tional Bank et al. v. Bank of Greenville Is a suit regularly begim by bill against a de- fendant, and regularly proceeded with to a final decree; and, while we will not be un- derstood to hold that there was even error in the action of the chancellor,— -which ques- tion Is not before us for decision, — ^we are sure his action cannot be held void or an- nulled, and that disposes of cases Nos. 7,749 and 7,460. The decree allowing $2,000 for damages In the way of attorney's fees Is complained of, but, as the evidence on which the chancellor decided this sum to be reasonable was not put In the record, and is not before us, we cannot disturb the decree for this. The re- sult is that the decree In each of the three cases hereinbefore mentioned must be af- firmed. RECEIVERS. 849 STATE ex rel. INDEPENDENT DIST. TEL. CO. et al. V. SECOND JUDICIAL DIS- TRICT COURT OP SILVER BOW COUN- TY et al. (39 Pac. 316, 15 Mont. 324.) Supreme Court of Montana. Feb. 18, 1895. Certiorari by the state of Montana ex rel. the Independent District Telegraph Com- pany, the Citizens' District Messenger & Bnrglar-Alann Telegraph Company, and G. A. Lauzier against the Second judicial dis- trict court of the state of Montana in and for the county of Silver Bow, and the judges presiding, to review the action of such court in appointing a receiver for the two corpora- tions. Dismissed. This Is a writ of certiorari directed to the district court to review its action in appoint- ing a receiver of the properties of two of the relators, viz. the Independent District Tele- graph Company and the Citizens' District Messenger & Burglar-Alarm Telegraph Com- pany, it being claimed by the relators that the district court acted in that matter with- out jurisdiction. The receiver was appoint- ed in an action entitled as follows: "H. L. Haupt and E. A. Nichols, trustee. Plain- tiffs, V. Independent District Telegraph Com- pany, Citizens' District Messenger & Bur- glar-Alarm Telegraph Company, Fred B. Puddington, H. Sommers, John O'Rourke, Thomas D. Butterfleld, G. A. Lauzier, Alex. Johnston, and John Doe (whose true name Is nnknown), D^endants." The appoint- ment was made upon the complaint in that case and upon affidavits filed. The following facts appear from the complaint: Each of the companies defendant In the case in the district court (and who are re- lators here) is a corporation organized un- der the laws of this state. The plaintiff Haupt is owner of 76 shares of the stock of the Independent Company. The plaintiff Nichols, as trustee, is also owner of 76 shares of said company. The Independent Company Is the owner of a franchise from the city of Butte permitting it to carry on the district messenger business, and grant- ing to the company the use of the streets and alleys of the city for the purpose of said business. The Citizens' Company owns a similar franchise. On May 1, 1892, the said two companies entered into an agree- ment by which they should put their re- spective stocks, franchises, and property in- to a common business, to be carried on by officers and agents to be appointed by the two corporations jointly. This agreement was to run for 20 years. All moneys earned should go Into a general fund, and be In the hands of a general treasurer. After paying expenses, a reserve fund of $500 was to accumulate in the hands of the treas- urer. After paying expenses and the ac- cumulation of this reserve, the profits were to be paid by the general treasurer to the H.& B.E(j.(2d Ed.)— 54 respective corporation treasurers In the pro- portion of five-ninths to the Independent Company, and four-ninths to the Citizens' Company, to be distributed by the said re- spective companies as dividends on their stock. Thereupon the general manager and general treasurer were elected to carry on this joint business. The reserve fund of $500 was accumulated. The business was carried on until June 1, 1893. At that date the stockholders Sommers, Lauzier, Butter- field, and O'Rourke united together and ob- tained a majority of the stock of each com- pany. After obtaining this stock, those stockholders united and conspired together to manage and conduct the combined cor- porations for their Individual benefit, and to exclude from the management, profits, and benefits the plaintiffs Haupt and Nich- ols. Since that time said plaintiffs Haupt and Nichols have been entirely excluded from the profits, management, and benefits of said corporations and the combination of the corporations. From the time said as- sociation of the two corporations was form- ed until said Sommers, Lauzier, Butterfield, and O'Rourke obtained control of the said combined business, there was paid to the treasurers of the said corporations $500 a month, to be distributed by them as divi- dends on the stock of the corporations. That, when said Sommers and others ob- tained control of the said associated cor- porations, there was in the hands of the gen- eral treasurer said reserve fund of $500, and also cash in the sum of $1,000, and also interest on the reserve fund of $25. That this total sum of $1,525 was turned over to Lauzier, the general treasurer elected by his friends Sommers, Butterfield, and O'Rourke. That the current expenses which then re- mained unpaid did not exceed $300, and that there was therefore $1,225 available as a dividend to be paid to the stockholders. That, ever since said Sommers and others obtained control as aforesaid, they have re- fused to give the plaintiffs any account of the profits of the association, and have re- fused to pay any dividends on the stock. Plaintiffs allege, on Information and belief, that, since the Sommers control obtained, — that is, since June 1, 1893,— the net profits of the associated corporations have been $500 per month, and that said Sommers, O'Rourke, Butterfield, and Lauzier, instead of paying those profits as dividends, have converted the same to their own use. On February 9, 1894, the officers elected under the Sommers management executed to Fred B. Puddington three promissory notes, pay- able each in nine months, for the sums, re- spectively, of $5,000, $2,000, and $2,000, bear- ing interest at the rate of m per cent, per month. That said Sommers management, also as security for said notes, executed to said Puddington a chattel mortgage upon the franchises and all the property of said corporations. That said notes purported to 850 HBCEIVERS. be given for the purchase price of a certain franchise granted by the city of Butte to said Puddington,— a franchise to erect and maintain a district messenger and burglar- alarm telegraph system in the city of Butte. That said franchise was granted by the city subject to certain conditions precedent The complaint then sets out those conditions, and then alleges that none of those conditions were fulfilled. The complaint alleges that said Puddington's franchise is forfeited and void, and was forfeited and void at the time of the pretended sale of the same to the two said companies and the execution of said notes and mortgage. The complaint fmther states that said Sommers and others, at the time of said pretended sale, weU knew that the Puddington franchise was forfeited and void and was of no value whatever. It is further alleged that said Sommers, Lauzier, Butterfield, and O'Rourke conspired togeth- er to defraud the plaintiffs, and to obtain possession of the plaintiffs' stock, and all in- terest in the Independent Company, and of the said combination of the two companies; and that in fact they executed said mortgage and notes without any consideration, and for the purpose of bringing about the sale of said property and franchises of the said companies, and of foreclosing all Interest of the plaintiffs therein. The complaint fur- ther alleges that unless the negotiation of the said notes is restrained, and the notes and mortgage declared fraudulent and void, aU the property of the Independent Company will be sold under the mortgage, and plain- tiffs will be deprived, of their interests in the said corporation. The complaint prays for several items of relief, among them that said Fred B. Puddington, and all persons claim- ing under him, may be enjoined from nego- tiating said notes or mortgage, or from col- lecting or foreclosing the same, or from inter- jferlng in any manner with the properties or franchises of the said companies, and that said mortgage and notes be adjudged null and void. In addition to the allegations made In the complaint, a number of affidavits were filed and used on the hearing. One Le Clare de- poses that he heard John O'Rourke and O. A. Lauzier, two of the defendants in the dis- trict court, conversing about the business of the said district messenger companies, and that O'Rourke said "that it they [meaning himself, Butterfield, Lauzier, and Sommers] would stand together, they would do that Dutch outfit up [referring to the Shultzes and the other stockholders]." H. A. Nel- denhofer deposes that from December, 1890, to February, 1892, he was manager of the Independent Company, and that all that time monthly dividends were paid to its stockholders amounting to $750 per month, excepting during the time when there was an opposition company, and that those divi- dends were net profits. This affiant also states that after the combination was made between the two companies they paid divi- dends of $500 a month. Seth B. Smith, an- other affiant, stated that, prior to the time when Sommers and his party obtained con- trol of the combined corporations, he (affi- ant) was treasurer of the combination. He testifies In his affidavit rather fully about the formation of the combination between the two companies. He testified that the reserve fund above mentioned, of $500, ac- cumulated in the hands of the treasurer; that finally Sommers and his party bought the affiant's stock, and he retired from the management; that he turned over to the new management all the funds in three dif- ferent checks of $911.80, $107.94, and $14.25; that at that time there were expenses out- standing and unpaid of only $400; that when he retired he was just preparing and ready to declare a dividend of $500, but he was in- structed by the Sommers party not to pay said dividend; that while affiant was treas- urer of the company he paid dividends to the stockholders of about $500 a month. Carl Shultz and his wife, Mary Shultz, each made an affidavit in which they testify as to Lauzier's and Butterfleld's negotiations for the purchase of affiants' stock, and threats that if they did not sell that they (Lauzier and Butterfield) would freeze out said affi- ants. Haupt, one of the plaintiffs, also makes an affidavit that for more than n year after the combination of the two com- panies he received monthly dividends on his stock of 50 cents per share. This affiant also alleges, on information and belief, that the combined corporations keep two sets of books, one of which sets of books shows the actual receipts and disbursements and the net profits of the association, and the other set of books does not show the correct ac- counts of the said corporations, but is kept for the purpose of deceiving and misleading stockholders who have been excluded from the management and participation in the management of said business; that, since the Sommers party obtained control of the business, affiant has received no dividends on his stock, although thenj have been large profits. This affiant then sets forth the ex- ecution of the Puddington notes and mort- gage. He also sets forth the facts showing that the Puddington franchise which he (Pud- dington) purported to sell to the companies for $9,000 was absolutely void and worth- less. One of the employes of the combined corporations testifies to hearing Butterfield say that the business was good and paying as weU as any business in town. An answer was filed by the defendants, and also some affidavits. It is not neces- sary to recite the contents of these papers, for on the writ of certiorari In this court the question of the discretion of the lower court In appointing a receiver is not under review. After hearing argument In th& district court as recited in its order, the court found that the plaintiffs w^e entitled to the appoint- RECEIVERS. S5t ment of a receiver pendente lite. It was therefore ordered that A. H. Barrett be ap- pointed receiver pendente lite of the fran- chises, plants, business, books, and accounts, and of all other property belonging to the said two corporations, for the purpose of managing and conducting said business; and he was by the order authorized and di- rected to take possession of the said prem- ises, franchises, plants, and all property, books, and accounts, of any nature whatso- ever, belonging to the said corporations, and to manage and control the same during the pendency of this action, and for that pur- pose to take care of and manage and control the said property and business, and to pay aU debts and obligations, and collect all moneys due to the said corporations. It was ordered that the receiver give a bond, with sureties, in the sum of $10,000. Upon the appointment of the receiver, the said G. A. Lauzier made an application to this court upon behalf of himself, and purporting to be also on behaif of the two district telegraph companies, asking for a writ of certiorari to review the action of the district court in ap- pointing a receiver. The application, of course. Is made upon the ground that the district court had no jurisdiction to make the appointment. That is the point dis- cussed and decided in the opinion below. Robinson & Wapleton and John W. Cot- ter, for relatoBS. Geo. Haldorn and Oliver M. Hall, for respondents. DE WITT, J. (after stating the facts). The question in this case is simply whether under the facts, as recited In the statement above, the district court had Jurisdiction to appoint a receiver. State v. Judge of- Second Judicial Dist Ct, 10 MoHt 401, 25 Pac 1053. See, also, French Bank Case, 53 Cal., at page 550. There is here no question of the court's dis- cretion under consideration. The relators in this application rely very largely upon the decision in the French Bank Case, but we think that the case at bar is distinguishable from that case In many respects, and, in or- der to make the distinction apparent, we quote as follows from the California case: "Irrespective of the effect of the fifth sub- division of section 564 of the Code of Civil Procedure, which wiU be presently consid- ered, there Is no Jurisdiction vested In courts of equity to appoint a receiver of the prop- erty of a corporation In a suit prosecuted by a private party. This Is only to say that there is no Jurisdiction vested In these courts In such a case to dissolve a corporation; for the power of a receiver, when put In motion, of necessity supersedes the corporate power. Jt necessarily displaces the corporate manage- ment, and substitutes its own, and assumes, in the language of the order under review, to do all and everything necessary (In the Judgment of the receiver, under the advice of the court) to protect the rights of the cred- itors and depositors of said corporation.' This precise question was brought directly under consideration here In the case of Neall v. Hill, 16 Cal. 145, where, in a suit brought by a stockholder, a receiver had been appointed by the district court to take possession of the property of the Gold Hill & Bear River Wa- ter Company, a corporation existing under the laws of this state. The opinion In that case, rendered by Mr. Justice Cope, and con- curred In by the whole court, after referring to the adjudicated cases in England and in this country, uses this language: 'This de- cree. If permitted to stand, must necessarily result In the dissolution of the corporation; and In that event the court will have accom- plished. In an indirect mode, that which, in this proceeding, it had no authority to do directly. It Is well settled that a court of equity, as such, has no Jurisdiction over cor- porate bodies for the purpose of restraining their operations or winding up their con- cerns. We do not find that any such power has ever been exercised in the absence of a statute conferring the Jurisdiction.* Of course, it Is not to be doubted that the trus- tees of a corporation, the persons who con- stitute its direction, and from time to time exercise the corporate authority in the man- agement of Its affairs, are subject to the con- trol of courts of equity; or, as observed by Chancellor Kent, that the persons who from time to time exercise the corporate powers may, in their character of trustees, be ac- countable to this court [the court of chancery] for a fraudulent breach of trust; and,' he adds, to this plain and ordinary head of equity the Jurisdiction of this court over cor- porations ought to be confined.' Attorney General v. Utica Ins. Co., 2 Johns. Ch. 388. And In exercise of these admitted equity powers of the court, referable to the well- known grounds upon which its Jurisdiction ordinarily proceeds, embracing the cogni- zance of fraud, accident, trust, and the like, the rights of natural persons. Injured or put at hazard through corporate proceedings un- authorized by law, will find ample protec- tion and redress. But, even In such a pro- ceeding as that, the trustees must, of course, be made parties defendant; and It will be observed, upon looking at the complaint of Gallagher In this view, that It Is not sub- stantially sufficient In its scope to put the equity powers of the court In motion for any purpose. The corporation Itself being the sole party defendant, the trustees— those persons upon whom the management of its affairs Is devolved— are not parties, nor is any relief sought against them personally. That there Is no inherent power In the dis- trict courts, as being courts of equity, to appoint a receiver In such a case as that presented by the complaint of Gallagher, is therefore apparent, both upon principle and authority." In the California case an Important ele- ment In the decision, as it appears, was that 852 RECEIVERS. the appointment of the receiver acted as a dissolution of the corporation. In the case at bar no such result Is intended by the or- der appointing the receiver, or is accom- plished by that order. It Is true that the complaint in the case in the district court asks for a dissolution of the corporation, but whether such relief may be granted in that action is not now before us for review. The complaint also asks another relief, as set forth in the statement, namely, that the negotiation of the notes described be re- strained, that the foreclosure of the mort- gage be prohibited, and that the notes and mortgage be declared null and void. While the determination of these matters is pend- ing in the action, the receiver is to act. His appointment is pendente lite only, and he Is authorized to do only those acts which are peculiarly pendente lite. Again, in the French Bank Case, one ground of the deci- sion was that the action was against the corporation only (see page 546 of the deci- sion), and not against the malfeasing trus- tees; that Is, the "persons upon whom the management of its affairs Is devolved" (at page 551). But in the case at bar the man- aging officers of the corporation are joined as defendants, and their unlawful acts are sought to be set aside, and their future wrongful conduct enjoined. The receiver Is not to wind up the corporation under his appointment. He is simply to manage the affairs of the same while charges of the most outrageous frauds by the managers and controllers of the corporation are being Investigated in the trial of the action. We are fully aware of the reluctance of courts of equity to Interfere by receivership In the management of corporations, or to take that management from trustees elected by the shareholders. It is said In Morawetz on Private Corporations (section 281) as follows: "A court of equity will grant all relief to a shareholder which the nature of his case may require. But it has always been a set- tled principle that no Interference with the management of a corporation can be justi- fied, unless such interference Is absolutely necessary to the attainment of justice. The reason of this rule is obvious. The officers of a corporation are generally elected by a vote of the shareholders. Every sharehold- er has a voice in their appointment, and may insist that they shall represent the corpora- tion when duly appointed. If an officer is guilty of a breach of duty, he may in many cases be removed by act of the corporation; but no minority of the shareholders have any authority to restrain his action, or re- move him and appoint another officer in his place. Nor can a court of chancery inter- fere at the suit of a portion of the share- holders, and remove an offending officer, or even enjoin him generally from acting for the corporation, unless this be essential to the protection of the corporate rights; as, for example, where the directors have con- spired to defraud the corporation, or have otherwise shown themselves to be totally unfit to be Intrusted any longer with the management of the company's affairs. The court must ordinarily confine Its remedy to the redress of the specific wrongs which have been charged." But the case before us Is not an ordinary one, and perhaps it may be doubted that many such histories of fraud will be found In the conduct of human affairs. It is difficult to imagine a case more thoroughly saturated with fraud than this which was presented to the district court on the application for the appointment of a receiver. Four share- holders of two small corporations, which were paying handsome dividends, obtained con- trol of the majority of the stock, and elected their own officers. These four conspirators. Instead of paying $500 a month dividends which the corporations were earning, pro- ceeded to put that money Into their own pock- ets. They kept false books to deceive the shareholders. They pretended to buy for the corporations an absolutely worthless fran- chise, when they already owned two good and valid franchjlses, which were more tloan ample for the same purpose. They gave the corporations' notes for this worthless fran- chise, and mortgaged all of the property of the corporations for the purpose of having the mortgage foreclosed, and the property of the corporations wiped out. It Is needless to enlarge upon these facts. They are all set forth In the statement preceding this opin- ion. This is a story of wrecking and rob- bing that would make a pirate of the Spanish main exclaim, in the language of Lord CUve, "X am surprised at my own moderation." Is not interference here absolutely necessary, as Morawetz says, to the attainment of jus- tice? Again Morawetz remarks, as quoted above, the eovrt of chancery will not interfere at the suit of the shareholders unless this be essential to the protection of the corporate rights. We can scarcely conceive of a case where It would be more essential than it Is here, for the protection of the corporate rights, for, if the interference is not had, the corporate property will be swept away from the corporations Intothe grasp of the consplra- twTs; and, while the investigation Into the acts of the Sommers-O'Rourke party is be- ing made by the court, should the court allow this same band of marauders to remain in possession of the corporations and their prop- erty, and continue to convert the assets to their own use, and exercise th^ own pleas- ure as to the trusts imposed upon them? To allow such a proceeding, it seems to ns, would shock the conscience of the most in- different court. Our statute provides that "a receiver may be appointed by the court in which an action is pending, or by the judge thereof: • • • Sixth. In aU oth- er cases where receivers have heretofore been appointed hy the usages of courts of equity." Code Civ. Proc. § 229. We are of RECEIVERS. 853 opinion that the decisions ol the courts sus- tain the doctrine of the powers and the usages of courts of equity in such a case as that which was made in the showing before the district court We note the following language from a very recent decision (Janu- ary, 1894) of the Kansas supreme court. While the Kansas statute is broader than om-s, and the case of In re Lewis, 52 Kan. 660, 35 Pac. 287, is decided largely upon the statute of that state, still the. following re- marks of the Kansas court are valuable, as is also the collection of authorities appended to the decision. We extract from the opinion as follows: "By the averments of the peti- tion, it would appear that all the officers of the corporation have conspired together to divert its business to another company, and to absorb its earnings and assets, and ap- propriate the same to their own uses. Un- der those circumstances, it would be useless to apply to the officers to bring an action against themselves, and in such cases the law permits the appointment of a receiver at the instance of a stockholder. In most cases of this character no other adecLuate remedy exists. The appointment of a re- ceiver is not necessarily a proceeding to dis- solve a corporation, nor wUl it necessarily result in its extinction. The property and assets of the corporation, which are being dis- sipated and fraudulently absorbed, will be preserved and rightfully applied under the supervision of the court, and may be restored to the officers of the corporation when there has been a change of officers, or when it is deemed prudent and safe to restore the prop- erty and affairs of the corporations to its duly-constituted officers. See First Nat. Bank v. United States Tile Co., 105 Ind. 227, 4 N. E. 846; Pike Co. v. Hammons, 129 Ind. 368, 27 N. E. 487; Order of Iron Hall v. Baker (Ind. Sup.) 33 N. E. 1128; Haywood V. Lumber Co., 64 Wis. 639, 26 N. W. 184; Consolidated Tank-Line Co. v. Kansas City Varnish Co., 43 Fed. 204; Mor. Priv. Corp. { 281; Pom. Eq. Jur. § 1334; High, Rec. i 313; Spel. Priv. Corp. § 1001; 20 Am. & Eng. En& Law, 272." We also find it stated in High on Receivers as follows: "It has already been shown that in most of the states of this country the general jurisdic- tion of courts of equity over corporations has been enlarged to the extent of authorizing the appointment of receivers in behalf of creditors and shareholders." Section 313. The supreme court of Michigan (October, 1892), in Miner v. Ice Co., 93 Mich. 97, 5S N. W. 218, after reviewing the history of a fraud which perhaps is worthy to be ranked with that of the case at bar, says: "The present case furnishes an instance of gross abuse of trust. Must the cestui que trust be committed to the domination of a trustee who has for seven years continued to violate the trust? The law requires of the majority the utmost good faith in the control and management of the corporation as to the minority. It is of the essence of this trust that it shall be so man- aged as to produce for each stockholder the best possible return for his investment. The trustee has so far absorbed all returns. What Is the outlook for the future? This court, in view of the past, can i^ve no assurances. It can make no order that can prevent some other method of bleeding this corporation, if it is allowed to continue. If Lorman be re- moved, who shall take his place? He has the absolute power to determine. Once de- posed, he may elect a dummy to fill his place. There are practically but three persons con- cerned. Miner, Lorman, and Lorissa Carpen- ter, and she has for seven years, in fraud of complainant's rights, been paid a dividend to secure her acquiescence. Who has any right to complain if ample and complete jus- tice is awarded to Miner? Who shall be per- mitted to stand between him and an ade- quate remedy? This corporation has utterly failed of its purpose, not because of matters beyond its control, but because of fraudulent mismanagement and misappropriation of its funds. Complainant has a right to insist that it sliall not continue as a cloak for a fraud upon him, and shall not longer retain his capital, to be used for the sole advantage of the owner of the majority of the stock, and a court of equity wUl not so far tolerate such a manifest violation of the rules of nat- ural justice as to deny him the relief to which his situation entitles him. I think a court of equity, under the circumstances of this case, in the exercise of its general equity jurisdiction, has the power to grant to this complainant ample relief, even to the disso- lution of the trust relations. Complainant is therefore entitled to the relief prayed. A receiver will be appointed, and the affairs of this corporation wound up." In the Midii- gan case the decision went to the winding up of the corporation, but in the case before us the receiver is only to hold until the charges of fraud are investigated. The Michigan de- cision is an able discussion of the powers of the court of equity in this rvjspect, and a val- uable review of decisions. It may be said here, as was said in the Michigan case, that the corporations have utterly failed of their purpose, not because of matters beyond their control, but because of the fraudulent mis- management and misappropriation of their funds. An equal if not greater mismanage- ment and misappropriation has been done by the officers of the corporations who are here made defendants, and whose acts are sought to be restrained and set aside and declared null and void. We also find the same general subject mentioned In the fol- lowing language in Waterman on the Law of Corporations (volume 2, § 356): "The pow- er to appoint a receiver is necessarily in- herent in a court which possesses equitable jurisdiction. It Is exercised when an estate or fund Is In existence, and there is no com- petent person entitled to hold it; or the per- son so entitled is in the nature ot a trustee, ^54 EEOEIVBRS. and is misusing or misapplying the trust; or the property is about to be removed beyond the reach of the court; and, generally, when It is necessary to secure rights and prevent a failure of justice. The property is thus placed m tne hands of an officer of tne law la oraer that it may be under the protecting care and control of the court, and be delivered unim- paired to the persons to whom it Is legally ascertained to belong." See, also. Ranger v. Cotton-Press Co., 52 Fed. 611; Mor. Prlv. Corp. § 642. Upon questions of equity jurisdiction, aid is always found in the records of the courts of chancery of New Jersey, and from a decision rendered in May, 1894, by that learned covart, we quote as follows: "The power of this court to appoint a receiver of a corporation, either because it has no prop- erly constituted governing body, or because there are such dissensions in its governing body as to make it impossible for the corpo- ration to carry on its business with advan- tage to its stockholders, I think must be re- garded as settled; but I think it is equally Well settled that this power is subject to cer- tain limitations, namely. It must always be exercised with great caution, and only for such time and to such an extent as may be necessary to presei^e the property of the corporation, and protect the rights and inter- ests of its stockholders. As soon as a law- fully constituted and competent governing body comes into existence, whether it is brought into existence by an adjustment of the dissensions or by the election of a new body, and such body is ready to take posses- sion of the property of the corporation, and proceed in the propa* discharge of its duties, the court must lift its hand and retire. This is the doctrine, as I understand it, which was laid down by Vice Chancellor Malins in Featherstone v. Cooke, L. R. 16 Bq. 298, and Auxiliary Co. v. Vickers, Id. 303, and which was approved by Chancellor Runyon in Bin- stein V. Rosenfeld, 38 N. J. Bq. 309, and by Chancellor McGill In Archer v, Waterworka Co., 50 N. J. Bq. 33, 24 AtL 508." Bdison v. Phonograph Co., 29 AtL 197. It Is true, of course, that the power must be exercised with great caution, but we are of the opin- ion that the most scrupulous caution would not cause a court to hesitate In the matter which was before the district court Further- more, the district court did not go any fur- ther in the appointment than was necessary to preserve the property of the corporations, and protect the rights and interests of its stockholders, as was stated in the New Jer- sey case. It does not seem necessary to go further in this discussion. The facts of this case will not afford a precedent in the fu- ture for any imprudent or unauthorized ap- pointment of a receiver for corporations, or the unwise withdrawal of the business of a corporation from the management of its duly- elected and lawfully acting trustees. The case is a precedent only as to its own facts. Here the objects of the existence, and, in- deed, the practical existence itself, of the corporations, are being totally destroyed by the unlawful (not to use a stronger term) acts of its managers; and one object, at least, of the action in the district court, is to set aside and prevent such unlawful acts of such man- agers, and the action itself is against such unlawfully acting persons. If they are al- lowed to go on in their course which they are pursuing, the corporations are to be to- tally wrecked, their funds are to be embez- zled, and their property is to be taken from them by a fraudulent conspiracy of the man- agers, whose position is one of trust towards the plaintiffs In the action in the district court. Under such a vigorous showing of facts, we believe that the decisions of the courts of equity uphold the powers and usages of those courts to interfere by a re- ceivership. See the cases cited In this opin- ion and the cases referred to in those cita- tions. We are th^efore of the opinion that the writ of certiorari must be dismissed, and It Is so ordered. Dismissed. PEMBERTON, C. J., and HUNT, J., con- cur. RECEIVERS. 855 MERCHANTS' & MANUFACTURERS' NAT. BANK OF DETROIT v. KENT CIRCUIT JUDGE. (5 N. W. 627, 43 Mich. 292.) Supreme Court of Michigan. April 14, 1880. Mandamus. Morris & UU, for the writ. Jacob Ferris and Blair, Kingsley & Klelnhaus, against. COOLEY, J. The application for a man- damus in this case brings under review ques- tions of the validity and propriety of the or- der appointing a receiver. The bill was filed to foreclose a chattel mortgage. The mort- gage was by Hebbard & Graff, merchant millers of Grand Rapids, to Philip M. Graff, and bore date March 17, 1880. The purpose was to secure the mortgagee for having be- come accommodation indorser for the mortga- gors on a large amount of commercial paper. The mortgage covered "all the flour, wheat, com, oats,- bran and feed owned by the par- ties of the first part, and situated in the city of Grand Rapids, Michigan, whether on the track, or in the mills or warehouses, or In the elevator at Berlin, Ottawa county, Michi- gan; all the barrels, sacks, bags, tools and office furniture and fixtures, including safes, situated in and about and used in connection with their two mills, being three large teams and larries, two pairs of large sleighs and one light delivery wagon, and the blankets used with said teams. Also the engine and boiler used in the Valley City Mills, and put in by Hebbard & Graff since their lease of the same, and the shafting and pulleys used by them in connecting the engine with the miU and machinery. Also all the wheat, corn and oats which may be purchased by the parties of the first psit and delivered to them in the city of Grand Rapids, either on the track, in store or in their mills, and all flour, feed and bran manufactured by them while any portion of the debts secured by this mort- gage remains unpaid." The mortgage reserved to the mortgagor the privilege of making sales in the ordinary course of their business, and provided that "in case of the non-payment of the said notes, or any of them, at maturity, by the party of the first part, or if the party of the second part shall at any time deem himself insecure, he, • • • whether the party of the second part shall have paid anything on said notes or not, is hereby authorized to enter upon the premises of said party of the first part, or any place or places where the said goods and chat- tels, or any part or portion thereof, may be, and take possession thereof, and sell and dis- pose of the same at private sale or public auction, • * ♦ whether any of such notes have matured or not, and apply the proceeds thereof to the payment of said notes as fast as they mature." A bill to foreclose this mortgage was filed the day after its date. It was alleged there- in that one of the notes, the payment of which was secured by the mortgage, was long past due, and that another became due March 17, 1880, and another March 18, the day the bill was filed, and both remain unpaid, and that by reason thereof the whole sum secured by the mortgage, amounting to $38,800, has become due and payable immediately; that by reason of disastrous speculations the mort- gagors have become Insolvent, and have transferred to complainant the mill property whereon they conducted their business; that the wheat and other unground grain describ- ed in the mortgage cannot be profitably sold and converted into money except after being ground; that to manufacture said grain into flour, and other proper products, will yield larger returns, and be more for the interest of all parties concerned, than to sell or dis- pose of the same in an unmanufactured state; that the total value of all the mortgaged prop- erty wiU not exceed $40,000, and if disposed of at forced or auction sale will not yield more than $30,000, or thereabouts. The bill prays for the appointment of a receiver, and nominates the law partner of the solicitor for complainant as a suitable person to be ap- pointed. No persons were made parties defendant to this bill except the mortgagors. Late lu the evening of March 18th, and before the bill had been filed, it was presented to the cir- cuit judge, at his dwelling-house, and an ap- plication made for the appointment of a re- ceiver as prayed. The mortgagors appeared at the same time, by a solicitor of the court, and consented to the appointment The cir- cuit judge, apparently looking upon the case as an amicable proceeding. In which all par- ties concerned were working in harmony to preserve and dispose of the property for the benefit of aU, made the appointment prayed for. The appointment purports to be one made in open court, but the court was not in session at the time, and the bill not being then filed, there was no cause pending. The order of appointment directed the receiver to proceed to manufacture the grain mortgaged into flour and other proper products, and to sell in the usual course of trade and on credit It soon appeared that the proceeding was far from being an amicable one, except so far as the mortgagors and mortgagee were concerned. At the very time the mortgagee was having his bill for foreclosure prepared and obtaining his order for a receiver, other parties were suing out writs of replevin for some portions of the property. One of these parties was William B. Ledyard, by virtue of whose writ the wheat in the Orescent Mills, previously operated by the mortgagors, was seized an hour or so before the order appointing a receiver was made. Another was by Euphrasia Aldrich, who replevied a quantity of wheat at or about the time when the order was made. Another was by the Merchants' & Manufacturers' Bank of De- 856 RECEIVERS. troit. The circuit coiirt appears to liave come to the conclusion that the writ of this plain- tiff was not served until the receiver had be- come possessed of the property in dispute, ■which could not have been earlier than about 10 o'clock on the night of March 18th, that being the hour when his bond as received was filed. On March 19, 1880, the receiver petitioned the circuit court in chancery for an order restraining the several plaintiffs in the re- plevin suits from proceeding further therein. A hearing was had on this petition, and its prayer was granted so far as the suit by the bank was concerned, and detiied as to the other suits. The bank, however, was grant- ed leave to bring an action of trover to re- cover the value of the property described in its writs. The receiver was, by the same or- der, required to deposit in bank the net pro- ceeds of sales of the property made by him. Both the receiver and the bank appealed from this order. 1. The appeal of the receiver was from those parts of the order which refused an in- junction against the Ledyard & Aldrich suits. The order in that regard was not a "final or- der," and was therefore not appealable under the statute. Wing v. Warner, 2 Doug. 288; Caswell V. Comstock, 6 Mich. 391; Boing v. Coats, 17 Mich. 411; Spencer v. Steams, 28 Mich. 463. These appeals must therefore be dismissed. 2. The order, in so far as it enjoined the bank from interfering by suit with the pos- session of property to which the bank claim- ed title, inasmuch as it finally took from the bank a legal right, was in the nature of a final order, and was appealable. Lewis v. Campau, 14 Mich. 458; Barry v. Briggs, 22 Mich. 201. 3. The order appointing a receiver was void, for the reason that it was made when there was no suit pending. It is perhaps fortunate for all parties interested that such was the fact, inasmuch as, if it had been legally valid, the appointment, though of a person eminently fit for the position, but for the relations to the litigation through his law partner, must necessarily at some time have been set aside, and the longer it should stand the greater must have been the prob- ability of confusion in the rights of the par- ties growing out of his proceedings, and of unnecessary costs and expenses to be borne by some one or more of the claimants to the property. In Ex parte Pinche, 2 Meriv. 452, the lord chancellor refused to appoint the solicitor to the commission as receiver of a lunatic's estate, though it was stated that no one else would accept the office. The ground of the refusal was that it might be- come the duty of the solicitor himself to call the receiver to account. So in Stone v. Wish- art, 2 Madd. 63, where the parties united in a request that the next friend of infant com- plainants be appointed receiver, the vice chancellor said: "I cannot accede to this mo- tion, although it is consented to. It is the duty of the next friend to these infants to watch the accounts and conduct of the re- ceiver; to be control over him. The two characters cannot be united, they are incon- sistent." We cannot shut our eyes to the fact that the law partner of the solicitor is presump- tively as much interested in the proceedings as the solicitor himself, and it would be pe- culiarly objectionable that he should act in a position requiring impartiality in a case like this, where the parties to the suit are manifestly acting in concert, and adversely to the Interests of other persons, who cannot watch their proceedings. The practical result would be that the receiver would supervise his own accounts. Garland v. Garland, 2 Ves. 137. The practice in equity does not even permit the receiver to employ a solicitor in the case as his own counsel, lest it might disarm his vigilance in watching the receiv- er's proceedings. Ryckman v. Parkins, 5 Paige, 543; Adams v. Woods, 8 Cal. 306. This rule may, no doubt, be departed from by consent of all parties concerned, but this must mean by consent of all parties concern- ed in the results of the receivership, and one not a party to the suit may be as much con- cerned in these as the persons who are par- ties. The present suit is an illustration. 4. The order appealed from by the bank was improper, in that it forbade a person not a party to the suit from testing, in the cus- tomary common law method, the title which is asserted to specific property, and In so do- ing stretched unnecessarily, improperly and oppressively the power of the court of equity in abridgment of the jurisdiction of the court of law. There may be cases in which it would be proper for a court of equity, by means of a receivership, to draw to Itself the jurisdiction to try disputed titles to prop- erty; but the jurisdiction to do so is excep- tional, and must be supported by circumstan- ces which render the common law remedies Inadequate, or for some reason unfit and un- suitable in the particular case. No such cir- cumstances appear or are suggested here. It was proper and just that the bank be allow- ed to go on with the suit in replevin, if that seemed most for its interest, and improper and unjust that it should be restricted to a suit in trover, which would be, in effect, for net proceeds only, after the costs of a receiv- ership, which the bank did not desire or as- sent to, had been deducted. If the property belonged to the bank the injustice of requir- ing the owner to submit to such management, manufacture and sale of it as another person might think expedient, and to recover the net proceeds only after the costs of a receivership In a suit between other parties had been wholly or In part deducted, would be too manifest to require more than mere mention. 5. It cannot escape attention that the whole scheme of giving a chattel mortgage which would be immediately due, filing a bill REOEIVEES. 857 In equity upon it at once, and obtaining the appointment of a receiver, who should take possession of the property to the exclusion of other creditors, and go on with the business as the mortgagors themselves might have done, and as the order in this ease contem- plated, was an attempt, by means of the ma- chinery of the law, to accomplish indirectly what, without calling in the aid of the court, could not be legally done at all. We do not enlarge upon this aspect of the case, as it is not necessary here; but it must be manifest that the parties were creating a trust, by means of the mortgage and of a consent order, which could not stand the test of the law, if made by an assignment. It resembles very closely an attempt, by cir- cuitous methods, to avoid a legal principle. The order which is appealed from by the bank must be reversed, with costs against the complainant in the suit. What has been said will render unnecessary any award of the writ of mandamus. The other justices concurred. 858 RECEIVEKS. MEROANTILB TRUST CO. OP NEW YORK V. MISSOURI, K. & T. RY. CO. et aL (36 Fed. 221.) Circuit Court, D. Kansas. Oct 8, 1888. Xn equity. Bill for foreclosure and appoint- ment of a receiver. Bill by the Mercantile Trust Company of New York, trustee for certain bondholders se- cured by a mortgage on the property of the Missouri, Kansas & Texas Railway Company, against said company sind the Missouri Pacific Railway Company, to foreclose the mortgage, and appoint a receiver. Alexander & Green, Thos. H. Hubbard, John J. McCook, and William N. Cromwell, for complainant. Shiion Steme, Charles F. Beach, Jr., James O. Broadhead, and L. B. Wheat, for defendants. BREWER, J. (orally). In this case, I have had no opportunity to write out the conclusions to which I have come, nor, for that matter, to arrange my thoughts in any very orderly and systematic manner. I should have pre- ferred to take a little further time to put in better shape what I have to say; yet, aware of the fact that many of you gentlemen are from a distance, and are anxious to return home, I concluded to waive the matter of form and order, and state, in a crude way, my conclusions. Nor are these conclusions reach- ed simply from information developed in these few days. This bill was presented to me more than three months ago. I have had a copy of it in my possession since, and have taken fre- quent occasions to examine the stipulations of this mortgage. Further than that, the news- papers have been full of many of the features of this controversy; and the property itself, being a property starting in my own state, and growing up there, is, neither In itself nor its history, a stranger. So that many of the facts which have been presented and discussed are facts which were not new. This bill was filed a few days after default in the payment of interest, June last. And the first question— a vital question— is whether this suit was prematurely brought; for, being a suit to foreclose, and not one for the preser- vation of the property, if prematurely brought, it would finally have to be dismissed, and a receiver ought not to be appointed ad interim. The ground upon which the claim rests is the fact that this mortgage or deed of trust re- quires a six-months delay after the default be- fore certain proceedings — and foreclosure, it is claimed, is one— are permissible. The second article provides for entry by the trustee, but by its terms such entry cannot be tiU six months after default and demand of payment The third article likewise authorizes sale by advertisement, and that is equally limited. At the close of that article follows this paragraph: "This provision is cumulative to the ordinary remedies by foreclosure in the courts; and the trustee herein, or Its successor or success- ors In this trust, upon default being made as aforesaid, may, at its discretion, and upon the vsTitten request of the bondholders of a ma- jority in value of said bonds then unpaid, shall," etc. Now, the contention Is that those words, "upon default being made as aforesaid," being in the last part of this article, by fair con- struction refer back to the entire provision in the first part in respect to default, and include both the happening and continuance of the de- fault The argument rests merely on the force of the last two words, "as aforesaid," and Is forcibly put by counsel. That is the real ques- tion in the case, for, if this last paragraph la article 3 were omitted, the decision of the supreme court in the case of RaUroad Co. v. Fosdlck, 106 U. S. 47, 1 Sup. Ct 10, would leave no question. In that case, as appears from the statement, there were in the mort- gage stipulations providing for entry and sale by advertisement six months after default The validity of those provisions was recogniz- ed by the supreme court; but it held that, notwithstanding this, if by other stipulations in the mortgage it was a security for the pay- ment of interest as it semi-annually accrued, as well as of the principal, the trustee, or, on his failure to act, any bondholder, might, on the non-payment of interest, bring suit and foreclose. Turning to this mortgage, I find the same provision. It is given as security for the payment of the Interest as well as of the principal. By article 2 possession is se- cured to the railroad company,— the mortgagor, —until default be made in the payment of principal pr interest. Unquestionably the right of action at law on the coupon exists. Unquestionably, if articles 3 smd 4 were omit- ted, the mere fact that this property was by the mortgage pledged as security for the pay- ment of coupons would permit the coupon- holder to come into a court of equity and en- force that pledge. It is insisted that these articles, not exclud- ing the jurisdiction of courts of law, not de- barring a party from his right of action upon the coupons, deprive him of a present right of action upon the mortgage by a suit in equity to enforce that pledge. Language requiring such construction should be clear. If the par- ties—and it is to be assumed that they who drafted this mortgage or deed of trust were competent for that business — contemplated not merely that no entry should be made, no sale under the power until the lapse of six months after default, but also that the coupon-holder, having his right of action at law on the cou- pons, should not have a right of action in equity, such purpose, It seems to me, would naturally have been expressed in dear and un- mistakable language, and not in that of doubt- ful interpretation. In every other place that I have been able to find in this mortgage, where a right rests upon the continuance of the default, and that appears in articles prior and subsequent to this paragraph, the lan- guage is express: "In case default shall be RECEIVERS. 859 made Jn payment of Interest, and shall con- tinue for sbc months." Now, if It was intend- ed to limit the jurisdiction of a court of equity until after the lapse of six months from the time of the happening of the default, it seems to me that the draughtsman would have pla- ced the stipulation therefor in a separate ar- ticle, and would have made its meaning so plain that there would be no question. We all know in the preparation of instruments how common the expressions "said" or "as afore- said" are used without any clear or definite intent. They are words which we use, not thoughtlessly, but carelessly; and although they are used here, yet as it is also fouud that the continuance of the default Is not men- tioned, it seems to me it is giving to those words an enlarged and unnecessary force to hold that they broaden the expression "mak- ing default" into "making and continuing de- fault," as expressed in the first part of the article. Xor is this a mere resting upon the language of the paragraph. It opens with the distinct announcement that these special pro- visions in respect to entry and sale under a power are cumulative to the ordinary remedies by foreclosure; contemplating, in its opening words, a proceeding in a court of . equity in any case of default Nor is it strange that there should be special limitations upon the two matters provided in articles 2 and 3, and none about proceedings in a court of equity. An entry is a speedy remedy; it runs to the corpus of the property; it takes instant hold of it, and takes It away from the mortgagor. The parties may well have contemplated that, If there was a temporary default, there should be no such speedy interference and summary seizure by the mortgagee. So a sale by ad- vertisement—in this case an advertisement of eight weeks — is speedy and summary; and if, upon the happening of a temporary default, the trustee at the instance of a single coupon- holder should thus advertise and sell the prop- erty, it is obvious that great wrong might be done; and six months' delay Is a very natiu-al provision. But proceedings in a court of eq- uity are not thus hasty. They are not within the control of any coupon-holder or any trustee. They stand advanced or delayed, as in the judgment of the chancellor the best interests of the property require. If it appears in any case that a coupon-holder, from improper mo- tives, .or from a simple greed for his money. Is willing to wreck a large property, and comes into a court of equity upon the happen- ing of a temporary default, it goes without saying that the chancellor holds his hands un- til it becomes apparent that the property as a whole cannot be saved to Its owners. Inas- much as these proceedings stand upon the dis- cretion of a court of equity, it Is not strange that the parties were willing to leave to the bondholders and coupon-holders an open door Into such a court. They left an open door into a court at law, and there is at least equal chance, if not greater, that the freer motions of a court of equity will afCord as full pro- tection to the mortgagor. These considera- tions, perhaps not very clearly expressed, are the reasons which have led me to hold that this case is withm the rule laid down in 106 V. S. 47, 1 Sup. Ot. 10, supra, and that this suit is not prematurely brought. That only passes from one trouble to an- other. The right to foreclose does not carry with it the right to a receiver. There are many considerations that bear upon that question. Every case, of course, stands on Its own merits. It is difficult to formulate any rule which, briefly stated, will control in all cases. It should appear that there is some danger to the property; that its pro- tection. Its preservation, the interests of the various holders, require possession by the court before a receiver should be appointed. It does not go as a matter of course; and yet it is not a matter that a court can refuse simply because it is an annoyance. If, look- lag at the situation of the litigating parties, and of the property, with the prospects of the future, it should appear to a court that they would be benefited, that their Interests woiild be subserved by the appointment of a receiver, why, no com't— although a matter resting, as it is said, in its discretion — could refuse to make the appointment. I shall not go over all the matters that have been discussed. I want to suggest some things that have impressed me. Of course, so far as the adequacy of this secm-ity, so far as the solvency of the corporation, is concerned, so far as the question whether this is a temporary embarrassment or per- manent, these facts stand out confessed, in- disputable at least. It has ceased to pay interest on its mortgages; one, two, three, and four have defaulted. The amount of that interest runs considerably over a mil- lion; and the payment of interest on the large mortgage comes due in two months. The business of this year from the 1st of June to the 1st of September, as shown by the statistics, is decreasing; from the 1st ot September to the 14th there was a Blight increase. The road is not along the mala highway of travel eastward and westward. It is one running north and south, along which business to-day is, as we all in the west know, comparatively in Its Inception. It crosses for two or three hundred miles a territory which is occupied by Indians, and furnishes little business. It hag been for years the only road that traversed that ter- ritory. Within the last year or two, two more roads have crossed, and a third is seeking to cross. Competition between these roads traversing that traritory, and bringing Texas and Its commerce into relations with Kansas, Missouri, and the north, as a matter of necessity. It seems to me, must tend against the Increase of earnings. The report of the committee— a committee appointed by the company— tends to sho\» that the payment of interest which has been made prior to this year, has been largely at 860 RECEIVERS. the expense of the proper repairs and im- provement of the road. I do not mean to say that all this is absolutely conclusive on the question, but these are matters which have forced themselves upon my mind. While it is true that— the road paying no in- terest since the 1st of Jirne— the revenues have diminished by four or five himdred thousand, the amount which is due as claim- ed to the Missouri Pacific for advancements, yet the earnings must Increase largely be- fore these back interests can be met, to say nothing of future interests speedily matur- ing. That a road thus situated, some 1,600 miles in length, is burdened with a mort- gage of $28,000 a mile, carries with it, to my mind, very strong evidence that there is no reasonable probability of its ever being kept in proper condition when paying the interest on such a debt. The only way in which any mortgagee can get possession of the rents and profits is through a receiver. The law of Kansas forbids any other rem- edy upon a mortgage than a foreclosure In the court. No possession could be had under article 2. No sale could be made under the power attempted to be given in article 3. The sole remedy Is by foreclosure. Unless a receiver is appointed, the rents and profits pass into the possession of the mortgagor, to be expended by it according to its best judgment. That is affirmed by the three cases of Railroad Co. v. Cowdrey, 11 Wall. 463; Gilman v. Telegraph Co., 91 U. S. 603; and Dow v. Railway Co., 124 V. S. 652, 8 Sup. Ct. 673. Not merely that; suppose this foreclosure proceeding should pass to a decree, and the defendant appeal, its bond on appeal would be no protection to the mortgagee in respect to the rents and profits. That is settled in tlie case ot Kountze v. Hotel Co., 107 TJ. S. 378, 2 Sup. Ct. 911. So that this litigation might pro- ceed and continue for a long time in this and in the supreme court, without ever giv- ing the mortgagee a hold upon the profits, unless a receiver is appointed. This mort- gage is a second mortgage on a large part of the road. As such mortgagee it has, more than any other party, an interest In reaching after and securing those rents and profits. The first mortgagee, having a limited amount upon the part of the road upon which its mortgage rests, may feel safe; for his prin- cipal and interest must be paid before the second mortgagee can come in. So that the complainant has a special interest in reach- ing for, and as soon as possible obtaining possession of, the surplus earnings. More than that. It is perfectly obvious that the real owners of this property are not in har- mony. The stock controls the road, but with .?45,000,000 of bonded indebtedness-^$28,000 a mile— on the road, the real owners are the bondholders, and that they are not agreed In respect to what shall be done with this prop- erty Is, I think, confessed. For years the property was in the management of a cer- tain interest. That Interest was removed last spring from the control. It was not. removed so long as the road was apparently prosperous, and paying its coupons. When adversity threatened it, as was natural, those- who held Interests in the road were not sat- isfied with the management, and sought con- trol. If these gentlemen now in control could make it a promptly paying road with- in a reasonable time, why, it might be ex- pected, according to the laws of human na- ture, that they would remain In control; but we all know how, when one falls and con- tinues to fail, aU who are interested are prone to lay the responsibility upon him, and to seek a change. And there Is no cer- tainty that another year different interests might not combine, and so the road be sub- ject to different control. At any rate, it is very evident that there is no harmony— no unity of purpose— between those who are the real owners. Now, if It were a partnership, and it was apparent to a court that the part- ners had got into a quarrel, the very fact of their quarrel would be a strong reason why It should take possession of the prop- erty. Of course that consideration has not so much .force In respect to a corporation, but it strengthens other considerations. Those are the principal reasons that have operated on my mind, — ^the default In inter- est, the fact that the rents and profits can only be appropriated In this way, the de- creasing revenues, the recent construction of parallel roads, the fact that it passes through such a portion of territory so unprofitable, the condition of the road as developed by this report of the committee, and the confilct be- tween various parties having real and sub- stantial Interests. Much as I should be glad to be free from the annoyance of a receiver- ship,— and I know something about it,— it seems to me I should be delinquent If I re- fused this application. There are some minor matters that I might refer to, yet, perhaps, they would not strengthen anything I have said. There is one matter, however, I must no- tice,— the suggestion of the Missouri Pacific that It could defeat this application, and that. It was here In the attitude of a party to consent upon the condition that the balance due it was properly protected, and that no order should be made in reference to the possession by the receiver of the Interna- tional & Great Northern Railroad or its stock. If I understood the situation to be that this application depended on the con- sent of the lessee, the Missouri Pacific, and its consent was tendered upon any such con- dition as that, there would be no receiver appointed. The rights of the lessee, as 1 look upon these two instruments, are sub> ordinate to the rights of the mortgagee, and it is the mortgagee whose application Is sus- tained, and all parties having claims of any kind must depend upon the Inherent equity of their claims. So far as the stock In the- BECBIVERS. 861 International & Great Northern Is concerned, as well as some other assets, they are, as stated, now under pledge, and in the posses- sion of this complainant; perhaps, also, at- tached by certain garnishment proceedings. I think the interests of the mortgagor require that there should go an order upon the com- plainant not to part with that possession, except in obedience, of course, to the process of the courts in New York, until the ulti- mate rights of the parties are determined. As to the possession of the International & Great Northern, I doubt whether it is with- in the province of this court to determine that question. It is a separate road, whose stock, I believe, in part has become the property of the Missouri, Kansas & Texas corporation; but it Is wholly situated in an- other circuit, and certainly at present 1 am aot prepared to say that this court would have a right to determine whether a receiver of the Missouri, Kansas & Texas should take possession of that separate road. It may be that is a question which will have to be de- termined by the judge of that circuit. At any rate, I should not at present, without further consideration, perhaps consultation with Judge Pardee, feel like making any or- der in respect to it. It is a matter in which I shall be glad to hear counsel hereafter upon, and perhaps try and arrange with Judge Pardee jointly to hear them as soon as practical. That, I think, is about all I have to say in reference to this matter, except as to the receiver. If parties agree upon a re- ceiver, of course I shall apiroint whoever you agree upon. If not, I will hear any sugges- tions from any of the parties in Interest, and reasons for or against any person to be nam- ed by one side or the other. 862 RECEIVERS. BELDING et al. v. MELOCHE et al. (71 N. W. 592, MS Mich. 223.) Supreme Court of Michigan. May 28, 1897. Appeal from circuit court, Ionia county, In chancery; Frank D. M. Davis, Judge. Suit by Alvah N. Belding and another against Albert F. Meloche' and others. From a decree for complainants, defendants Meloche appeal. Affirmed. B. A. Hawley, for appellants. McGarry & Nichols, for app^ees. HOOKER, J. On May 2, 1892, the com- plainants sold to the Meloches (two of the de- fendants), upon contract, a business block in the village of Belding, at an agreed price of ?36,000, to be paid In 120 monthly install- ments of $300, without interest. The contract does not expressly state that the vendees shall be entitled to possession, but does provide that. In ease of default, the vendors may "elect to consider themselves released and discharged of and from any and all liability in any of the covenants specified to be done and performed by them, and aU Improvements made by the said parties of the second part shall be deem- ed forfeited as stipulated damages for the non- fulfillment of this contract; and said parties of the first part, or their authorized agent, may, without notice to quit or demand of pos- session, re-enter Into and repossess the said premises, and the said parties of the second part, and each and every occupant hired by, through, or under them, to remove and put out; it being expressly understood that such failure of said second parties shall forfeit all claim, either in law or In equity, which might otherwise exist on the provisions of this con- tract in favor of the said parties of the second part" The vendees made default in the pay- ments, and this bill of complaint was filed to foreclose their rights under the contract At this time portions of the building were rented, and the biU prayed the appointment of a re- ceiver, to receive the rents and profits of said premises, and such receiver was appointed, and has received said rents. A decree of fore- closure and sale was made, and, after the sale occurred, an order of confirmation was entered. No appeal was taken from any of the proceedings thus far. Subsequently, the com- plainants filed their petition, alleging that on March 9, 1896, a decree was entered for the complainants for the sum of $6,172.44 and costs, makUig a total of $6,648.30; that, at a sale of the interest of the Meloches in said premises, the complainants purchased the same for $3,000, and that there was a de- ficiency of $3,648.30; that the final account of the receiver, duly filed, shows a balance in his hands at the date of the report of $2,349.36, which, after the allowance of compensation to and disbursements by the receiver, woul4 leave $1,856.98, which the petition prays may be applied upon the deficiency, and that it be declared that the remaining deficiency const!" tute a personal judgment, upon which execu- tion may issue against the Meloches. A de- cree was made in accordance with the prayer of the petition, and the defendants Meloche ap- pealed. It is claimed— First, that the court had no authority to appoint a receiver to take the rents during the foreclosure, and that the mon- eys collected should not be turned over to the complainants; second, that there should be no decree for a deficiency against the appellants, because, upon the trial of the case, counsel for complainant stated that they did not care to ask a personal decree. Counsel base thetr first contention upon a class of cases which hold that, under How. Ann. St § 7^7, the mortgagee is not entitled to the profits of land during foreclosure. See Wagar v. Stone, 36 Mich. 366. In that case the court said: "The mortgagor is entitled to the possession during the proceedings taken to foreclose the mortgage, and until a sale has been made and the title of the purchaser has become absolute; and, until the title has become absolute upon a foreclosure of the mortgage, an action of ejectment cannot be maintained by the mortgagee, his assigns or representa- tives, to recover possession of the mortgaged premises. 2 Comp. Laws, § 6263. Since the passage of this act, which prevents the mort- gagee from obtaining possession until he has acquired an absolute title to the mortgaged premises, the mortgage binds only the lands. The rents and profits of the land do not enter Into or form any part of the security. At the time of giving the security, both parties im- derstand that the mortgagor will, and that the mortgagee will not, be entitled to the rents. Issues, or profits of the mortgaged premises until the title shall have become absolute up- on a foreclosure of the mortgage. Until the happening of this event, the mortgagor has a clear right to the possession and to the income which he may derive therefrom; and the leg- islature, by the passage of this statute, con- templated that he should have such possession and income to aid him in paying the debt. It would be a novel doctrine to hold that the mortgagee had a right to the profits Incident to ownership, and yet that he had neither a legal title, nor right to possession. The legislature, In depriving him of the means of enforcing possession, Intended thereby also to cut off and deprive him of all rights which he could have acquired in case he obtained possession before acquiring an absolute title. To deprive him of this particular remedy, and yet allow him in some other proceedings to, in effect arrive at the same result, would be but a mean- ingless proceeding, and would not be securing to the mortgagor those substantial rights which It was the evident Intent he should have. We do not overlook the fact that a contrary doctrine has been held elsewhere un- der a similar statute. We cannot avoid think- ing, however, that for us to so hold would be but a mere evasion of our statute." In Michi- gan Trust Co. V. Lansing Lumber Co., 103 RECEIVERS. 863 3iich. 393, 402, 61 N. W. 668, we recognized the validity of a contract whereby possession by the mortgagee may precede foreclosure; and the case of Wagar v. Stone shows that in other states possession may be given to receiv- ers pending foreclosure of mortgages, and the decision In that case Is made to rest upon the statute. The statute does not In terms apply to equitable mortgages If we should hold this to be one. In the Wagar Case the court said that the object of the legislature was that the mortgagor "should have possession to aid him in paying the debt"; but In this case the ven- dee seeks to avoid the payment of the debt, and to appropriate the fund in the hands of the receiver, to the exclusion of the complainants' just claim. Again, it is contended that the complainants are not entitled to a personal decree for tlie deficiency. This claim seems to rest upon an alleged waiver or estoppel, by what occurred upon the hearing of the original case. It does not appear to have been set up in the answer to the petition, and Is said not to have been claimed In the circuit court upon the hearing. We do not discover that this statement is dis- puted. Under these circumstances, we think the order of the circuit court in chancery should be affirmed, with costs; and it Is so or- dered. The other justices concurred. 864 BBCEIVERS. MARSHA Till & IliLSLET BANK v. CADY et al. (77 N. W. 831, 75 Minn. 241.) Supreme Court of Minnesota. Jan. 9, 1899. Appeal from district court, Ramsey county; Charles E. Otis, Judge. Action by the Marshall & Illsley Bank against Frank M. Cady and others. Judg- ment for plaintiff. Defendant Cady appeals. Affirmed. Chas. J. Berryhill, for appellant William G. White, for respondent. PER CURIAM. Assuming, without decid- ing, that an order appointing a receiver In fore- closure during the pendency of the action can be reviewed on appeal from the final judgment or decree, we are of opinion that, wliile the plaintiff did not present a very strong case, yet we could not hold that the court abused its discretion In appointing a temporary receiver. The affidavits presented would have justified the court in finding that the mortgaged prem- ises were inadequate security; that the mort- gagor was insolvent; that four years' taxes were unpaid and delinquent, for three of which the premises bad been sold, and unredeemed; that portions of the building on the premises were somewhat out of repair, and that repairs were necessary for the full preservation of the property; and that the mortgagor was receiv- ing rent for part of the premises, which be was not applying to the payment of taxes or the mailing of repairs. There was some evidence that the mortgagor was using a part of the building as his sleeping apartments, and, hence, that the premises were his homestead. While a court should ordinarily require a somewhat stronger showing for the appointment of a re- ceiver of the mortgagor's homestead than In the case of other property, yet, when a debtor mortgages bis homestead, he subjects the prop- erty to all the ordinary legal and equitable rights of a mortgagee, among which is the right to have a receiver appointed when neces- sary to prevent waste or to preserve the prop- erty. The same facts which would justify the court in appointing a receiver during the pend- ency of the action would justify it In providing In the final judgment that the receivership should be continued. As there Is neither a "case" nor bill of exceptions, the question whether the evidence justified the findings is not presented. The findings are presumed to have been based upon the evidence introduced on the trial, and not upon the affidavits pre- sented on the motion for the appointment of a receiver during the pendency of the action. The judgment Is sUent as to the duration of the receivership. No point is made on this by the defendant; but we mention the fact in order that It may not be Inferred that we im- pliedly hold that a receivership could be con- tinued after a foreclosure sale, or that the rents and profits of the property could be ap- plied towards paying the mortgage debt, or used for any other purpose than to prevent waste and preserve the property. The Judg- ment should be affirmed. So ordered. BUCK, J. I dissent I think that the evi- dence quite conclusively shows that the prem- ises are Cady'a homestead, and tills is one of the material facts that lead me to think that the receiver should not upon the evidence ad- duced, have been appointed. When the trial court appointed the receiver. It was done by the court upon affidavits submitted by the re- spective parties. The application therefor was made in the month of July, 1897, but not granted until October 29, 1897. All of the affidavits upon which the receiver was appoint- ed appear in the record, and the sufficiency of the plaintiff's affidavits are assailed and con- tradicted by the defendants' counter affidavit Not only was a receiver appointed by order of the court and therein directed to collect all and singular, the rents, profits, and Income of the premises, but by a subsequent order of the court the defendant Cady was ordered, within five days after the service upon him of the order, to quit, siurrender, and deliver up to the receiver said premises, and vacate the same. It is true that the judgment appealed from is dated November 12, 1897, and the last order directing the defendant Cady was not made untU November 20, 1897, and not appealed from. But as I regard this case, this is im- material. The gist of the controversy is over the right to appoint a receiver at all. Prob- ably, if there existed a sufficient cause to ap- point a receiver in the first instance, and the case appeared to be one where ordinarily the right of a receiver to act at aU was presented, the appointment would carry with it the right to the possession of the property. It Is the right to Invoke the aid of the court In the first Instance, upon the case being presented, which in my opinion is one of more than serious doubt Such a proceeding is an extraordinary remedy, sometimes, and perhaps I might say frequently, operating harshly, and the cir- cumstances of peril which invoke the remedy should be established with reasonable certain- ty. Such appointment is not a matter of right and should not be used where its exercise will produce injustice, and the fact should be clear- ly proved. Beach, Rec. 65-68. And this rule ia strictly applied In mortgage cases, where it must dearly and fairly appear that the secur- ity is inadequate, or there is Imminent danger of waste, removal, or destruction of the prop- erty. Id. 574. Mere default In the payment of the debt would not be sufficient ground for the appointment of a receiver. It Is true that power to make the appointment of a receiver is generally discretionary, yet "the judicial authority to deal with property by means of a receiver Is not unlimited or absolute." Id. 2. "It must be exercised in conformity to the general principles of equity jurisprudence. The petition should, therefore, state clearly the facts upon which the application is made, and also give proof of the same. If this is not done, the relief will be denied, and the burden RBOEIVBRS. 865 of proof Is always upon the petitioner." Id. 567. As I differ from my associates, It is proper that I should fully examine the evidence which formed the basis for such appoint- ment. The only evidence presented was by aflldavits. The plaintiff presented three which showed that the property was worth $3,500, and one that the house alone wai worth $1,500. The defendants presented five affidavits which showed that the value of the property ranged from $5,800 to $4,400, averaging $5,220, and the affidavit of another person states the value of the house to be $2,500 alone. The total average value of the property was $4,360. This is more than $500 over the entire judgment in foreclosure, in- cluding interest and costs up to the time of the judgment This was all the evidence Introduced upon the question of the value of the premises, and I think that the plaintiff's evidence in this respect was clearly refuted by that of the defendants. The only evi- dence of waste or act of omission of duty in this respect on the part of Cady was that of one witness for plaintiff, who gave details tending to show that the dwelling house needed repairs to the amount of $400; but no other one of plaintiff's witnesses testified to any such fact, and this testimony is squarely refuted by five of defendants' wit- nesses. I am not willing to take his testi- mony alone as outweighing that of all of the others. It certainly does not, in my mind, justify the appointment of a receiver, where the rule is, in such case, that the injury or Impairment of the security must be immi- nent Union Mut Life Ins. Co. t. Union Mills Plaster Co., 37 Fed. 286. I now come to the consideration of the question that the premises were the home- stead of the defendant and which he was occupying as such, and whether a stricter rule should not be applied in the appoint- ment of a receiver to take possession of such property, and apply the income, rents, and profits thereof towards the payment of the mortgage debt This question is one of great importance, and, if a receiver can thus be appointed, it will greatly disturb, if not sub- stantially destroy, the homesteads of thou- sands of people, especially in our cities and villages, where the use of homesteads, and rental therefrom, often constitute part of the income, and frequently the only income, for the support of the family Itself. As I have stated, the appointment of a receiver is a drastic measure, and to permit it to be used to oust a man and his family from their home, and sequester the income, rental, and profits thereof, is to deprive them of all the benefits of a homestead in a most summary manner. It certainly is a most extraordi- nary proceeding which authorizes such a step. Waples, in his work on Homestead (page 720), says: "It is questionable whether It is ever proi)er to take possession of a mort- gagor's homestead while proceedings to fore- H.& B.BQ.(2d Ed.)- 55 close are pending. Certainly it Is not prop- er practice as a general rule. An applica- tion for such appointment should always be refused when the amount of the mortgage debt is a subject of contention in the case." Of course, I do not overlook the doctrine laid flown in this court in the case of Lowell v. Doe, 44 Minn. 144, 46 N. W. 297, where It was held that the homestead rights of the mortgagors are subject to the ordinary legal and equitable rights of the mortgagees in re- spect to the mortgaged premises, which may be enforced by the appropriate remedies; cit- ing Gen. St 1878, c. 68, | 2 (Gen. St 1894, § 5522), which provides that the homestead exemption shall not extend to any mortgage thereon lawfully obtained. But the home- stead law looks with favor upon homesteads, for the good of society and for the protection of f amUy life in all classes, and seeks to save them from the rapacity of creditors, and from destruction, so far as it can without in- justice to others. The reasons for this are many and cogent To this end, I think that all steps to deprive the owner of a homestead of the right of himself and family to occupy and receive the benefits of it during foreclo- sure of a mortgage upon it should not be permitted, or should be resorted to only in extreme cases, and where justice would be defeated by withholding it, and only in cases reasonably clear and free from doubt. This is not such a case. It is a notorious fact that in many Instances the receiver, in the performance of what he claims to be his duty, incurs large expenses, greatly lessen- ing the assets which should go to the pay- ment of the debt itself, and this operates to the detriment of both parties to the action. In other words, the benefit to the owner of the homestead and his family, as a home and support, might be appropriated to the sup- port of the receiver, by way of fees and ex- penses, with loss to both parties to the ac- tion. Our statute provides that "a mortgage of real estate is not to be deemed a convey- ance so as to enable the owner of the mort- gage to recover possession of the real estate without a foreclosure." Gen. St. 1894, § 5861. ■ This is an express statutory enact- ment, so far as possession Is concerned, and the owner of the mortgage is prohibited from taking possession of the property without foreclosure. Of course, this means that no right of possession arises until the period of redemption expires, viz. one year after fore- closure. If possession of land is wrongfully withheld after foreclosure, and after final decree, the court may then compel delivery of possession to the party entitled thereto, by order directing the sheriff to effect such delivery. Id. § 6073. Thus, by clear and express statutory provisions, means are pro- vided for obtaining possession of lands upon which mortgages are foreclosed. But until such time the mortgagee has no title, and no right of possession. It is true that, notwith- standing the law expressly exempts a home- 866 RECEIVERS. Btead, Gen. St. 1894, § 5522, provides that "such exemption shall not extend to any mortgage thereon lawfully obtained"; but this provision does not operate to deprive the owner of the right to the possession of the homestead during the period of redemption from foreclosure sale. Now, the appoint- ment of a receiver is one purely of an equita- ble origin; and whether it can, in the case of a homestead, supersede the express statutory enactment which forbids possession by the owner of the mortgage during foreclosure, may well admit of serious doubt Equity is not intended to operate harshly, but a doc- trine which permits a receiver, upon the com- mencement of a foreclosure action, to taJce Immediate possession of the homestead, oust the family, and receive the rents and income of the property, seems unjust and a harsh measure. Such a right is denied in In- vestment Oo. V. Farrar (Iowa) 54 N. W. 361, upon the ground that It is a violation of the statutory rights of the mortgagor, even in a case not involving homestead rights. See, also, cases cited In 2 Jones, Mortg. { 1522. But even if the power exists to appoint a re- ceiver to oust the owner of a homestead and his family, and take possession of the prop- erty, and deprive them of the use and bene- fits thereof, and thus cut short the statutory right of redemption, I think the facts in this case fall far short of making this an extraor- dinary case which justifies such an extraor- dinary remedy, and that the receiver ought not to have been appointed. I think that the Judgment should be reversed. RECEIVERS. 867 WIEDEMANN t. SANN et aL (31 Atl. 211.) Court of Chancery of New Jersey. Feb. 26, 1895 Bill by Frank W. Wiedemann aglnst An- nie Sann and others to foreclose a mortgage, and for an injunction, and for appointment of a receiver. Receiver appointed. Gilbert & Atkinson, for complainant B. Budd, for defendants. BIRD, V. O. The bill In this case Is filed to foreclose a mortgage of chattels given by Annie Sann, asking for an injunction against an attaching creditor, whose attach- ment issued against Charles Sann, and also asking for a receiver. The chattel mort- gage bears date January 11, 1895, and was duly recorded on the same day. It was given to secure the payment of $550, money loaned to the mortgagor. The whole of the said loan, together with interest, is claimed to be due to the complainant The biU states that on the 9th day of January, being two days before the execution and delivery of the chattel mortgage aforesaid, one Sarah M. HaU procured to be issued a writ of at- tachment out of the circuit court of the county of Burlington against one Charles Sann on the demand for $650, under which writ of attachment an auditor has been ap- pointed, and that the said auditor has been ordered by the said circuit court to sell all of the said goods and chattels as perishable property, and that the said auditor has ad- vertised all of the said goods and chattels for sale, in his advertisement or notice of sale giving assurance to bidders that he wiU sell the said goods and chattels free from all Uens or incumbrances. The complain- ant having obtained an injunction restrain- ing the auditor from selling, now asks for the appointment of a receiver with au- thority to sell the said personal property. This is resisted by the plaintiff in the at- tachment. It will be perceived that the complainant claims that these goods and chattels were the goods and chattels of An- nie Sann, and that the plaintifC in the at- tachment claims them as the goods and chattels of Charles Sann. Charles Sann is the husband of Annie Sann. The complain- ant rests his case upon the rule laid down by Chancellor Green in Smithurst v. Ed- munds, 14 N. J. Eq. 408. The case in hand is not like that In that case the property which execution Creditors offered for sale was not claimed by such creditors as the property of another person than the mort- gagor of the same goods. As to that there was no dispute. Hence the question now before me is, can this court appoint a re- ceiver in a foreclosure case to take charge of and sell personal property for the pur- pose of preserving It, covered by the mort- gage sought to be foreclosed, when that same property has been attached by the creditor of another person, as the property of that other person, and has been adver- tised to be offered for sale by an auditor ap- pointed in said attachment proceedings? In Moore v. Diament, 41 N. J. Eq. 612, 7 Atl. 509, In the court of errors and appeals, a question somewhat like the present was be- fore the court. In that case Hammell con- fessed judgment to his creditors, who levied upon certain goods and chattels. Moore filed a bill in this court, alleging that he had been in partnership with Hammell, and that Hammell became indebted to him as part- ner, and that, to satisfy such indebtedness, Hammell had made to him a biU of sale of all his interest in these goods and chattels, and asked for and obtained an injunction restraining the execution creditors of Ham- mell from proceeding to a sale. A receiver was appointed in that case, and, upon Moore's offering to give a bond to take care of the property, and to return it or to pay the value thereof, except in case of unavoid- able accident, such bond was accepted. From this brief statement it will appear that execution creditors claimed a lien upon the property as the property of one man,— Hammell, their debtor,— while Moore claim- ed it as his own individual property aoso- lutely, by virtue of a bill of sale made to him by Hammell, and that a receiver was appointed. The question involved in that case was one of title to personal property; Moore, the complainant claiming the title was in himself, while the creditors of Ham- mell claimed that the title was in Hammell, and that they, as his creditors, by virtue of their judgments and executions, had a right to sell the same. It is claimed in this case that the question involved is purely a ques- tion of title to personal property, strictly legal in its nature, and can be determined by an action ^f replevin, and. that conse- quently a court of equity has no jurisdic- tion. The case cited seems to present the same characteristics. Moore filed his bill, and claimed the property levied upon by virtue of a bill of sale, praying an injunc- tion against such sale imder the executions at law. Clearly, in such case, the principal question to be decided was whether the title was in Moore or Hammell. In the case now under consideration the question to be determined is whether the title to the prop- erty named in the chattel mortgage was in Annie Sann or in her husband, Charles Sann. If that were all, it might well be said that in neither case would this court be justified in assuming jurisdiction. But in the case cited, if the property which Moore claimed were to be sold by the execution creditors, with the confiicting claims of title thereto, he might In a variety of ways, suffer great loss; which view is, in every sense, appli- cable to the case before me. In that case it was distinctly held in the court of errors and appeals that this court had the right to pro- 868 BECEIVEKS. ceed to setQe the rights of the parties by i virtue of the bond given, notwithstanding a decree dismissing the bill of complainl^ In this case the complainant claims a lien upon the goods and chattels by virtue of her mortgage. She undoubtedly has a right to file her bill to foreclose such mortgage, which beyond question gives the court juris- diction. But still the further question arises, can this court, because it is the only tribunal authorized to foreclose a mortgage upon goods and chattels, appoint a receiver to take charge of and sell such goods and chat- tels, when they are claimed by and under attachment by the creditors of another per- son than the mortgagor, and offered for sale by an auditor appointed in such attach- ment proceedmgs? There is a well-settled rule that courts of equity have the right and power to take possession of property about which are conflicting claims, for the purpose of preserving it until the rights of the re- spective parties thereto have been settled. May this rule be applied to the present case? i It is evident, if the auditor makes sale of ' the goods and chattels because they are per- ishable, they will be likely to sell for a nom- inal price only, and will also be likely to go into the possession of many different per- sons. The fact that the complainant makes claim in the manner in which he does will cast such a shadow upon the title as to de- ter prudent men from bidding. The fact that they will in all probability go Into the hands of many different persons would make it obligatory upon the complainant, if it should turn out that the title thereto be in him, to bring as many actions at law as there are purchasers. High, Rec. § 192. "A court of equity, appointing a receiver to take possession of property pending a liti- gation concerning the rights of the parties tnereto, Is vested with the power to sell the property In the receiver's hands, when- ever such course becomes necessary to pre- serve the Interest of all the parties." Id.; Crane t. Ford, Hopk. Ch. 114. When a court of equity properly acquires Jurisdic- tion of the parties and of the subject-matter In a cause, and appoints a receiver therein, and orders him to sell the property in con- troversy, such order, although irregular and improvident, cannot be assailed or ques- tioned In a collateral action, and such action wUl not lie to set aside the order of sale and proceedings thereunder. High, Rec. | 196; Libby v. Rosekrans, 55 Barb. 219; Brande v. Bond, 63 Wis. 140, 23 N. W. 101. It being evident that the auditor cannot make sale of these goods except under great disadvantage, and that, if it should ulti- m.ately appear that the title is In the chattel mortgagor, and it also appearing that since the mortgagee was justified in filing his bill in this court, thereby acquiring jurisdiction of the subject-matter, and the court un- questionably having the authority to appoint a receiver, and it being the constant prac- tice, when a receiver is appointed, to take possession of the perishable goods and chat- tels which are the subject of litigation, te make sale thereof for the purpose of pre- serving the value of them for the parties who may ultimately appear to be entitled thereto, I conclude that It is my duty to advise the appointment of a receiver in this case, with authority to make sale of the goods and chattels in question. The de- fendant, the attaching creditor, offered to give bonds for the value of the goods. A bond was offered and accepted In the case of Moore v. Diament, supra, but in that case the person who gave the bond did not pro- pose to sell them, as in this case the auditor proposes to do. I will advise accordingly. RECEIVERS. 869 STE3TSON V. NORTHERN INV. CO. et al. (70 N. W. 595, 101 Iowa, 435.) Supreme Court of Iowa. April 7, 1897. Appeal from district court, Woodbury coun- ty; George W. Wakefield, Judge. This appeal Is by the plaintiff from an or- der and decree entered upon a motion to dis- charge the garnishees. The issues and facts appear In the opinion. Affirmed. Shull & Farnsworth, for appellant Joy, Call & Joy and William Milchrlst, for appel- lees. GIVEN, J. 1. AppeUees moved to strllie the appellant's abstract, which motion was overruled, and therefore we are to take the facts to be as shown in the abstract, the ma- terial parts of which are as follows: On April 11, 1895, this plaintiff commenced three separate actions to foreclose three mortgages executed by the defendant company to him to secure certain debts. These mortgages covered all of lots 4, 5, and 6, block 26, Mid- dle Sioux City. Attachments were sued out in each case, and A. C. Baker and 16 others were served as garnishees. The answers of these garnishees showed that they are ten- ants of the defendant company, occupying premises other than that covered by plain- tiff's mortgages, and that some of them oc- cupied under verbal leases, and some under written leases, extending to different periods of the future. Their answers also showed that some of them were Indebted for rents due, and that all would become indebted in the future under said leases. PlaintifTs three actions were consolidated, and formed the present action. On the 9th day of May, 1895, T. A. Black, though not a party to this action, filed his motion herein, supported by his affidavit, for the discharge of all of said garnishees except W. Chaffee, and showing as grounds therefor. In substance, as fol- lows: That on the 11th day of April, 1895, In the case of Charles 0. Harrison v. The Northern Investment Co. et al., then pending la said court for the foreclosure of a mort- gage upon the real estate occupied by said garnishees, he was appointed and qualified as receiver of all the property of said com- pany involved In said action; also, that he was appointed and qualified prior to the time said garnishees were served with notice of garnishment. Charles C. Harrison, though not a party to this action, did on the 18th day of May, 1895, file his motion joining with said Black in asking the discharge of said garnishees. By the record in the Case of Harrison, as it appears In the abstract, it was alleged in the petition that the Northern Investment Company was insolvent; that the property covered was insufficient to pay the mortgages and taxes thereon. It was asked, for these and other reasons stated, that a receiver be appointed; and Mr. Baker was appointed and qualified as receiver for aU the property of the company described In the mortgage to Mr. Harrison, and ordered to collect all rentals, Income, and profits therefrom. It does not appear that any ob- jections were made to the right of these per- sons to make such motions In this action. The motions having been submitted, the court says in the order complained of that "the court Is of opinion, and doth adjudge, order, and decree, that as to all rentals pay- able or accruing on or before the 11th day of April, 1895, the said motion be, and is hereby, overruled, and as to all rentals ac- cruing and payable after the 11th day of April, 1895, the said motion of T. A. Black, receiver, and C. C. Harrison Is sustained." Following this, it was ordered that the amounts found to be due from the several garnishees up to April 11, 1895, be paid to the clerk of the court, and that upon pay- ment the garnishees be discharged. It was further ordered as follows: "And upon the motion of T. A. Black, receiver as aforesaid, time is given him until the 20th day of Au- gust, 1895, to file his petition of intervention, claiming the funds so ordered to be paid to the clerk aforesaid." 2. Appellant presents in argument three contentions, namely, that the court had no authority to appoint a receiver under the allegations of Harrison's petition; that Har- rison and Black could not give the court Jurisdiction to discharge garnishees by sim- ply filing motions in this cause; they not being parties thereto and not filing petitions of intervention; that the garnishment of the tenants made them liable to appellant, in case he is successful in this case against the company, for all rent accrued and to accrue. That part of Harrison's petition asking a receiver states numerous grounds, and at such length as that we should not take space to set them out. It is sufficient to say that the petition shows that the rents of the mortgaged premises are pledged for the pay- ment of the debt, that they are not being ap- plied, that the company is a foreign corpo- ration; that it is insolvent, that the property Is insufficient to paj the mortgages and over- due taxes, and other facts showing that the rents were in danger of being 'lost to the mortgagees. Conceding that the sufficiency of that petition in this respect may be ques- tioned in this case, we think it was sufficient to warrant the appointment of a receiver. 3. Appellant does not question the right of Mr. Black, as receiver, if duly appointed, to intervene in this action to claim said rents, but denies his right to do so by mo- tion. The record falls to disclose, except in- ferentlally, that any such objection was made in the lower court. The abstract was prepared by other than the counsel now ap- pearing, and with the view, no doubt, of not Incumbering the abstract with more than was actually necessary to an understanding of the questions to be presented. Questiona- ble as the record is as to this contention, we will consider it. It will be observed that 870 RECEIVERS. the order of the court is not final, as be- tween these parties, as to the rents due up to April 11, 1895. The court, having full jurisdiction over that fund, ordered it to be paid into court, to be held until the rights of these parties thereto are determined. There has been no final order or judgment against appellant as to that fund, and he has nothing of which to complain. The question as to which of these parties is entitled to that money is not before us, and we express no opinion thereon. 4. If nothing further appeared than the pendency of this action and the service and answers of the garnishees, it might be said that they are liable to q.ppellant, in case he is successful in this action against the com- pany, for rents accrued and to accrue under their leases. The mortgage from the North- ern Investment Company to Charles 0. Har- rison contains the following: "And It Is fur- ther agreed that if default shall be made In any of the conditions of this mortgage, or In the bond which It Is made and given to se- cure, that the right of possession of the mort- gaged premises, with all the appurtenances thereunto belonging, shall immediately vest In the party of the second part, his heirs or assigns, and he may immediately take pos- session of the same, and collect aU rents, profits, and incomes therefrom, or, at his option, may proceed by foreclosure, and shall then be entitled to have a receiver appointed immediately, and in vacation, for all of the property herein described and embraced, to talie charge of the said property, and collect rents, incomes, and profits of the same, to be applied upon the said mortgage debt." It seems to us entirely clear that under this provision the rents accruing from said mort- gaged property after the appointment of the receiver are assets in his hands, and not subject to garnishment by other creditors. We do not think the court erred in either of the respects claimed, and the order and judgment are therefore affirmed. RECEIVERS. 871 FIRST NAT. BANK OF JOLIET v. ILLINOIS STEEL CO. (51 N. E. 200, 174 111. 140.) Supreme Court of Illinois. June 18, 1898. Appeal from appellate court, Second dis- trict. Creditors' bill by the First National Bank of Joliet against the Ashley Wire Company and others for the appointment of a receiver, with which was consolidated a petition by the Illinois Steel Company, also for the ap- pointment of a receiver. From a decree of the appellate court (72 111. App. 640) affirm- ing a decree In favor of the Illinois Steel Company, the First National Bank of Joliet appeals. Affirmed. This was a bill In the nature of a credit- ors' bill, filed December 26, 1893, by the First National Bank of Joliet, the appellant, against the Ashley Wire Company, a cor- poration In Joliet, WUl county, 111., which for many years had been engaged In the manufacture of barbed fence wire, wire nails, etc. The bill alleged the recovery of a. judgment by said First National Bank of Joliet on the 14th day of December, 1893, for $12,657.77, against said Ashley Wire Company; that execution was issued and delivered to the sheriff the same day, which execution was returned, after demand made, "No property found." Alleged the recovery of a Judgment on the 8th day of December, 1893, by John Y. Brooks against said Ash- ley Wire Company for $11,090, upon which execution had been Issued and levied upon all the tangible personal property of said Ashley Wire Company, and that the value of such property so levied upon would ilot exceed $5,000; that the sheriff had not sold ■aid property so levied upon, and It was not sufficient to satisfy the said Brooks execu- tion. Alleged the execution by said Ashley Wire Company on the 19th day of July, 1893, to the Illinois Steel Company, of a note for $67,246.24, payable on or before two years after date, with interest at 5% per cent, per annum, payable semiannually, and secured by a mortgage on its manufacturing plant; that said Ashley Wire Company Is insolvent, and for many months has suspended Its bus- iness, and its plant has remained idle; that It has not been able for the last year to meet Its trade obligations, and has been seriously embarrassed In Its financial affairs; that said wire corporation Is and remains In the possession of Its real estate and manu- facturing plant, and, while It Is not worth said mortgage Indebtedness, Is a valuable property, and ought not to be allowed to de- teriorate in value or be greatly hazarded by neglect or want of care; that watchmen should be In charge. Insurance should be kept up, and taxes paid; that all this should be done in the Interest of said corporation, Its stockholders and creditors generally; that ■aid corporation Is without means to protect and preserve said property, and keep up its Insurance or taxes; that the tangible prop- erty levied upon is of a kind and character so peculiar in its nature that It could not t)e sold at ordinary execution sale, except at a grievous sacrifice. Avers that the interests of defendant and all its creditors demand that a receiver should be appointed of its as- sets, both equitable and tangible; that said receiver should be directed to take posses- sion of said manufacturing plant, its books of account, and Its equitable assets and property. The Ashley Wire Company, John T. Brooks, and Thomas Hennebry, as sheriff, were made parties defendant. Although the bill showed that the Illinois Steel Company, of Chicago, held a first mortgage on the Ash- ley Wire Company plant, machinery, etc., and was the principal creditor, yet it was not made a defendant to the bill. The ap- pearance of the defendants was entered, and on the 26th day of December, 1893, the de- fendants not objecting, the court appointed George W. Bush receiver. The order Invests him with all the authority and power usually granted receivers of courts of chancery, and directs that he at once take possession of the real estate and manufacturing plant of said Ashley Wire Company, together with all the machinery, tools, implements, and appliances connected therewith, and constituting real estate, as part and parcel of said plant; that he care for all such property, that it may not be wasted or deteriorate for want of proper care; that he keep the buildings in- sured In responsible Insurance companies In a reasonable amount; and that he pay all taxes legally levied upon such real estate. It was further ordered that the said sheriff turn over to the receiver all the personal property levied upon by bim under the ex- ecution In favor of John Y. Brooks, such sheriff to retain the execution, and the lien of such execution is preserved upon all such property levied upon, and the proceeds there- of levied upon by said sheriff, and turned over to said receiver. The receiver present- ed a petition on February 19, 1894, as to the payment of taxes, which states that there was duly assessed against and levied upon the personal property of the Ashley Wire Company for the year 1893 $799.10 taxes, and that he has no money with which to pay said taxes, or the real estate taxes then due, and prays that an order be entered authoriz- ing him to pay such taxes, and that he may be permitted to borrow money therefor. On the 26th of February, 1894, an order was en- tered authorizing the receiver to pay the taxes assessed upon the real estate, and au- thorizing the receiver to borrow money for that purpose at such legal rate of interest as he may be able, and to issue therefor his receiver's certificate, which was by the or- der of the court declared to be a first and prior lien upon the real estate of said Ash- ley Wire Company. The court denied the prayer of the petition as to the payment of 872 RECEIVERS. the personal property tax. On March 5, 1894, the Illinois Steel Company asked leave of the court to make George W. Bush, re- ceiver, a party defendant to a chancery pro- ceeding, which the court granted; and on the 7th day of March, 1894, the steel com- pany filed a bill to foreclose its mortgage against the Ashley Wire Company plant, making said Ashley Wire Company, the First National Bank of Joliet, John Y. ]ferooks, and George W. Bush, the receiver, defendants. On the 12th day of July, 1894, after the commencement of the foreclosure proceedings, the receiver borrowed of the Illinois Steel Company $2,037.82, in pursu- ance of the court's order, for the purpose of paying taxes, and Issued a receiver's cer- tificate therefor. The mortgage upon which the foreclosure proceedings were based, against the Ashley Wire Company, was to secure the note for $67,246.24, payable on or before two years after date, with interest at 5% per cent, per annum; and the mort- gagor expressly covenanted to keep the build- ings insured for $50,000, for the benefit of the Illinois Steel Company, mortgagee. It also contained a clause authorizing the ap- pointment of a receiver, with power to col- lect the rents, issues, and profits during the period of redemption, in case of a foreclo- sure of the mortgage, and that such rents and profits should be applied towards the payment of the indebtedness. Answers were filed by the Ashley Wire Company and the First National Bank, defendants. A final decree of foreclosure was awarded the Illinois Steel Company January 14, 1895, and the property was sold to the said steel com- pany for $70,000. The master reported an unpaid balance, and a deficiency decree or Judgment under the statute was entered for the deficit of $5,316.50, with interest from March, 1895, and execution was awarded thereon. On the 10th of April, 1895, the IIU- nois Steel Company filed its petition in the foreclosure case, setting up the decree of foreclosure and the sale, the deficiency de- cree for $5,316.50, and the foregoing provi- sion in regard to the appointment of a re- ceiver by the court to collect rents until the time of redemption, and asking for the ap- pointment of a receiver. A hearing was had June 20, 1895, and the court refused to ap- point a new receiver, but extended the re- ceivership of George M. Bush existing over the property of the Ashley Wire Company by virtue of an order in the case of the First Kational Bank of Joliet, so that said re- ceiver should stand as a receiver appointed In the case of the Illinois Steel Company against the Aahley Wire Company, and that the receivership be extended to include the property and effects of the Ashley Wire Company; and the receiver was directed to receive the rents, and hold the same for all persons who should be found entitled there- to. The receiver had previously, under the order of the court, leased the Ashley wire plant for one year from December 1, 1894, for $6,000, with the privilege of another year, at the option of the lessee, on the same terms. The receiver collected in all for rents $12,000, and after paying the taxes and ex- penses there was left in his hands $4,373.48. On March 3, 1897, the petition of the Illinois Steel Company was, by agreement of par- ties, consolidated with the cause of the First National Bank of Joliet against the Ashley Wire Co. et al., and was to be heard and dis- posed of as one case by decree to be entered in the case of the First National Bank of Joliet against Ashley Wire Co. et al. The principal contention is over the distribution of the balance of $4,373.48; the trial court decree- ing this amount to be paid the Illinois Steel Company out of the moneys in the receiver's hands derived from rents, to be Indorsed on the deficiency decree. From this decree of the circuit appellant appealed to the ap- pellate court for the Second district, which affirmed the decree of the circuit court; and from the Judgment of the appellate court appellant has appealed to this court, and asks for the reversal of the Judgment of the bppellate court. George S. House, for appellant. Garnsey & Knox (Elbert H. Gary, of counsel), for ap- pellee. CRAIG, J. (after stating the facts). It is first contended by appellant that the Illinois Steel Company, the mortgagee, having obtain- ed its decree of foreclosure and sale, and ap- plied the proceeds, the mortgage has accom- plished Its purpose, and is functus officio; that no further rights or equities can be enforced by the Illinois Steel Company. The claim of appellee is that the provision In the mortgage authorized the appointment of a receiver by the court to collect the rents and profits during the period of redemption, and, as the sale un- der the foreclosure decree did not pay the debt, to apply them In payment of the deficiency. The agreement In the mortgage is as follows: "Upon the filing of any bill to foreclose this mortgage. In any court having Jurisdiction thereof, such court may appoint A. F. Knox, or any proper person, receiver, with power to collect the rents. Issues, and profits arising out of said premises during the pendency of such foreclosure suit, and until the time to redeem the same from any sale that may be made under any decree foreclosing this morfe gage shall expire; and such rents. Issues, and profits, when collected, may be applied to- wards the payment of the indebtedness and costs herein mentioned and described." Un- der this clause in the mortgage a lien is given, by express words, upon the rents and profits, and such an equitable lien a court of equity will enforce. Rents and profits are the sub- ject of mortgage. Jones, In his work on Mort- gages (volume 1, i 140), says: "A mortgage may be made of rents under a lease, and, al- though a right of entry be given the mort- gagee, the mortgage la a mere security, like EECEIVERS. 873 any other mortgage of real estate, and the mortgagor remains the real owner until fore- closure and sale." In section 771 he says: "A mortgagee has no specific lien upon the rents and profits of the mortgaged land, unless he has, In his mortgage, stipulated for a specific pledge of them as part of his security." This was expressly stipulated in this mortgage giv- en by the Ashley Wire Company to appellee. Had there been no deficiency after the fore- closure sale of the AsWey Wire Company prop- erty and plant, the rents would have belonged to the owner of the equity of redemption. Un- der the express agreement in the mortgage, there being a deficiency of $5,316.50 after the sale, the Illinois Steel Company had an equi- table right to have the rents and profits ap- plied towards the payment of the deficiency decree, from the time of the foreclosure sal« untU the expiration of the time of redemption, and this right might properly be enforced on an application to the court to appoint a re- ceiver. The contention by appellant in this case that the enforcement of this provision rests entirely in the sound discretion of the chancellor is not tenable. The chancellor was authorized to act under this clause in the mortgage, and appoint a receiver for the col- lection of the rents and profits during the pe- riod of redemption, to be applied on the defi- ciency decree. In the case of Oakford v. Robinson, 48 lU. App. 270, which Is similar to the one at bar, the mortgage contained a clause authorizing the appointment of a re- ceiver, with power to talie possession of the premises and collect the rents due and to be- come due thereon during the period allowed for redemption, and to apply the same in pay- ment of any deficit, should the premises prove insufficient to pay the amount secured by the mortgage. In the decision of the case the court said: "The rents and profits of the land, as well as the land, were pledged by the mort- gage for the security and payment of the amount due the appeUee. This authorized the appointment of a receiver, In the discretion of the court, without regard to the solvency of the mortgagor. 2 Jones, Mortg. | 1516; 8 Am. & Eng. Enc Law, p. 234. And such ap- pointment was lawfully made, though by a decree subsequent to the original decree. Id., p. 239. By the appointment of the receiver the appellants obtained an equitable lien on the rents and profits of the land during the statutory period allowed for redemption, II necessary for the full payment of any defi- ciency In the security. In support of this view, see 1 Jones, Mortg. §§ 773-775; 2 Jones, Mortg. § 1536; High, Rec. H 643, 644; Beach, Rec. I 532." That a court of equity has pow- er to appoint a receiver and grant equitable i«llef where there are no express words In the mortgage giving a lien upon rents and profits derived from the property Is conceded. In such a case, whether relief will be granted Is dependent upon the facts and circumstances at the time the application Is made. This court said ia Haas t. Society, 89 IlL 498, at page 502: "We find the decided weight of American authority to be in favor of the prop- osition that the court may, even when the mortgage does not by express words give a lien upon the income derived from such prop- erty, appoint a receiver to take charge of It and collect the rents, issues, and profits arising therefrom. Such action will not be taken, however, unless it be made to appear the mort- gaged premises are an insufficient security for the debt, and the person liable personally for the debt Is Insolvent, or at least of very jquestionable responsibility. A combination of these two things seems to be required in all the cases we have examined, and in one or more of the states It is held necessary still other elements should be conjoined to these before such procedure Is justified." Tested even by this requirement, if the mortgage did not give a lien by express words, or authorize the appointment of a receiver, the facts in the case at bar show that the court committed no error. The deficiency decree itself evidences the fact that the Ashley Wire Company's prop- erty was insufficient security for the mortgage debt, and the facts established the allegation In the petition that the Ashley Wire Company, the mortgagor, was insolvent. Undoubtedly, a court of equity exercises a certain discretion, even where express words are used for the purpose of giving a lien on the income of the mortgaged property. The court must deter- mine whether the language used in the mort- gage is sufficient to give a lien on the income. In the one case the authority arises from the contract, the express words giving a lien on the rents and profits; in the other, the court exercises its equitable powers under the facts and circumstances presented at the time the application to appoint a receiver Is made. Appellant also contends that the final de- cree foreclosing the mortgage ought to have provided for a receiver to take possession of the rents and profits of the Ashley Wire Com- pany pending the redemption; that a decree of foreclosure and sale, as to all questions that might have been adjudicated between the parties, is final. It could not be ascertained until after the sale whether there would be a deficit requiring the appointment of a re- ceiver to collect the rents and profits during the time of redemption. Under the decree of foreclosure the property described in the mortgage was sold. The rents and profits to accrue during the period of redemption were not sold, and no order could be entered until It was ascertained at the foreclosure sale that the mortgaged premises were insufficient to pay the indebtedness evidenced by the mort- gage. In Haas v. Society, supra. It was said (page 506): "The necessity for the appropria- tion of the rents to the payment o* the mort- gage debt may frequently not appear until after both decree and sale. The amount due Is often matter of dispute, and can only be determined by the decree, and what the prop- erty will sell for can only be ascertained with certainty from the result at tbe Judicial sale. 874 RECEIVERS. If an appropriation of the rents on the In- debtedness is Justified by the surrounding facts before sale, we see no good reason why the same and more weighty facts existing after sale may not warrant a similar proce- dure. The security, plainly, is not exhausted by the sale, for there is a fund included in it which is secondarily liable. It is true, the mortgagee has elected to foreclose and sell; but then he has pursued that remedy to the end, and without getting satisfaction of his debt, and he may avail himself of any just and equitable means of collecting the residue, —not that he may have such extraordinary remedy in all cases of a deficit in the pro- ceeds, but only where it is indispensably nec- essary for his protection, and jnist and equi- table. We hold, then, both upon the prin- ciples of equity that lie at the foundation of the chancery court, and upon authority, a re- ceiver may sometimes be allowed after decree and sale, and that a mortgagee does not in all cases exhaust his security by a foreclo- sure and sale. It la, however, a power that the chancellor will be slow to exercise, except in an extreme case, and to prevent palpable wrong and injustice." The cases of Seligman V. Laubheimer, 58 111. 124, Ogle v. Koemer, 140 lU. 170, 29 N. B. 563, and Davis v. Dale, 150 111. 239, 37 N. E. 215, cited by appellant in support of its contention that a decree of foreclosure and sale extinguishes the mort- gage and renders the mortgage functus officio, are decided on a state of facta entirely dlfEer- ent from the facts in this case. In Seligman V. Laubheimer, after a sale for less than the debt a junior mortgagee redeemed, and a pe- tition was filed to order a resale to pay the balance due the first mortgagee. It was held that as to the property sold the mortgage was not operative, and a resale could not be had. No question of a mortgage of rents accruing during the statutory period of re- demption was involved. In Ogle v. Koemer the facts were the same as to the mortgage, the sale, and redemption by an assignee of a second mortgage, who was a party, as In the Seligman Case. The tenor of the case, as to its application here, may be seen by the fol- lowing quotation from the court's opinion (page 179, 140 111., and page 565, 29 N. B.): "A mortgage, or, as in this case, a deed of trust in the nature of a mortgage, vests in the party secured a lien upon the mortgaged premises. By virtue of that lien the mort- gagee is entitled to have the mortgaged prop- erty sold under a decree of foreclosure, and the proceeds of the sale applied to the pay- ment of the debt secured. This is the mode provided by law for the enforcement of the Uen, and when the lien has been once en- forced by the sale of the property It has, as to such property, expended its force and ac- complished its purpose, and the property is no longer subject to it" In Davis v. Dale a mortgage was foreclosed. Pending foreclo- sure a receiver was appointed. The property was sold for the full amount of the debt, in- terest, and costs; but the receiver was con- tinued, as appears, unnecessarily. The court said (page 243, 150 111., and page 216, 37 N. E.): "The only purpose of appointing a re- ceiver at the instance of the mortgagee or cestui que trust under or trustee in the trust deed is to preserve the security of the mort- gage or trust deed, and apply the rents, is- sues, and profits, when necessary, in dis- charge of the indebtedness; and it follows, necessarily, that where the property is bid off at the foreclosure sale for the full amount of the decree, interest, and costs, as was here done, the necessity for continuing the receiv- er ceases, and he should be discharged, and the possession restored to the owner of the equity of redemption. In any event, the pos- session of the receiver, and his receipt of the rents and profits arising from the property, would be for the benefit of the person enti- tled to the same, so that the parties acquired no additional right because the fund is in the hands of the receiver." The question involv- ed in this case, to wit, where the property sold does not pay the mortgage debt, and where the mortgage has a provision that the rents and profits may be applied towards the payment of the Indebtedness and costs, was not before the court in either of the cases cited by appellant Here the receiver was properly appointed after the foreclosure de- cree and sale, as the security of the steel company was not exhausted by the sale. Moreover, the necessity for the appointment of a receiver, and the collection of the rents and profits, and their application to the pay- ment of the deficiency, did not appear until after the foredoeure decree and sale. Appellant also contends that the court erred In directing the receiver, in its several orders, to pay the taxes on the property of the Ash- ley Wire Company out of the funds in his hands derived from rents of the real estate. Appellant filed its bill to have the equitable assets of the Ashley Wire Company applied to the satisfaction of Its judgment and also to have these taxes paid by the receiver out of moneys collected by him. The bill alleges that said corporation defendant Is and re- mains In the possession of its real estate and manufacturing plant, and, while not worth the said mortgage indebtedness, is a valuable property, and ought not to be allowed to de- teriorate in value or be greatly hazarded by neglect or want of care; that watchmen should be in charge, insurance should be kept up, and taxes paid; that all this should be done in the interest of said corporation, its stockholders and creditors generally; that said corporation is vrithout means to protect and preserve said property, keep up its Insurance, or pay the tax- es, and l8 without means to preserve, care for, and collect its equitable assets. The receiver was appointed on appellant's motion, and its own solicitor's name is recited in the order of the court December 26, 1893, inter alia: "That upon obtaining possession he properly care for aU such property, to the end that RECEIVERS. 875 It may not be wasted or deteriorate for want of proper care, that he keep the buildings and all Improvements insured In responsible In- surance companies in a reasonable amount, and that he pay all taxes and assessments legally levied upon such real estate." This order of the court has never been rescinded, so far as the record shows. The order of March 11, 18^, authorizing the receiver to pay the taxes of 1894, recites: "It is there- fore ordered, adjudged, and decreed by the court that the said George W. Bush, as re- ceiver, out of the moneys In his hands pay to the said township collector the personal prop- erty taxes assessed against the said Ashley Wire Company for the year 1894, being the sum of $669.12, taking proper receipt there- for, and that said receiver in the making of said payment, all parties In interest in open court consenting thereto," etc. On June 20, 1895, the receiver, by appeUanf s counsel, pre- sented his petition, and in the order of the court directing him to pay the taxes on the real estate the same order of consent ap- pears. In Armstrong v. Cooper, 11 111. 540, this court said: "A decree made by consent cannot be appealed from, nor can error prop- erly be assigned upon It Even a rehearing cannot be allowed in the suit, nor can the decree be set aside by a bill of review. 1 Barb. Ch. Prac. 373." Smith v. Kimball, 128 111. 583, 21 N. B. 503; Roby v. Trust Co., 166 111. 33G, 46 N. E. 1110. These orders being made at the request of appellant, and by con- sent, it cannot question their validity. Objection is also made to the order of courS directing the payment of the real and per- sonal taxes for the year 1895 by the receiver. The amount paid was $1,874.41. The order extending the receiver on the petition of the Illlnoia Steel Company was made June 20, 1895, authorizing him to receive the rents and profits, to be held by him subject to the order of court. The redemption from the sale un- der the mortgage foreclosure of the Illinois Steel Company against the Ashley Wire Com- pany expired June 9, 1896. This money de- rived from rents belonged to the Illinois Steel Company by virtue of the specific lien in the mortgage, and, the receiver having paid these taxes from funds belonging to ap- pellee, appellant cannot complain. Finding no reversible error in the record, and the decree of the court appearing to be equitable, the judgment of the appellate court Is affirm- ed. Judgment affirmed. 876 RECEIVERS. CENTRAL TRUST 00. v. NEW YORK >. CITY & N. R. CO. (ATTORNEY GENERAL, Intervener). (18 N. E. 92, 110 N. Y. 250.) Court of Appeals of New York. Oct. 2, 1888. Appeal from supreme court, general term. First department. On the petition of the attorney general the supreme court, at special term, in New York county, made an order directing Joel B. Er- hardt, the receiver appointed in the action of the Central Trust Company against the New York City & Northern Railroad Company, to make provision for the payment of the taxes levied on the corporate franchise of the rail- road company. From this order the receiver appealed, and the general term (Daniels, J., delivering the opinion. Van Brunt, P. J., and Brady, J., concurring) reversed the order. From the order of reversal the attorney gen- eral takes this appeal. Charles F. Tabor, Atty. Gen., for appellant Artemas H. Holmes, for respondents. PECKHAM, J. The railroad company above named was incorporated under the laws of this state, and had its principal business office in the city of New York. In May, 1882, a receiver tiereof was appointed in pro- ceedings taken to sequestrate its property by a judgment creditor whose execution bad been returned unsatisfied. Such receiver op- erated the road from the time of his appouit- ment to February 3, 1885, when another re- ceiver was appointed In the action above en- titled, which is brought to foreclose certain mortgages executed by the company upon its property. The first receiver turned over the property and the possession of the road to the receiver appointed in the foreclosure proceed- ings, and from the time of the appointment of the latter up to a time subsequent to the year ending June 30, 1886, he has operated the road by virtue of such appointment Taxes became due and payable under the cor- poration tax act of 1880, as amended by chap- ter 361 of the Laws of 1881, which amounted at the time of the filing of his petition by the attorney general. In February, 1887, to about the sum of $8,000; being for taxes on the gross earnings of the road as thus operated for the years ending June 30, 1883, 1884* 1885, and 1886, respectively. No question Is made as to the amount of the tax in each year, or that there is a sum in the hands of the receiver which may be applicable to their payment; but the counsel for the receiver in- sists that the corporation is alone answera- ble for the taxes, and that recourse must be had to It for the payment of the same, or to such funds as may remain in the receiver's hands after the claims of the mortgagees have been satisfied; which In this case is but another manner of stating that there Is no way of collecting these taxes, for. If their payment Is to be postponed to the payment of the whole amoimt of the mortgage debt of the company, all of Its property will have been wholly exhausted long before payment in full of its mortgage indebtedness could be made. Various other objections were taken to the granting of the petition of the attorney general. The taxes in question, having l»een levied by virtue of the above-mentioned corporation tax law, were taxes upon the franchise, as dis- tinguished from the property, of the corpora- tion. People V. Insurance Co., 92 N. Y. 328. Upon this assumption the counsel for the re- ceiver claims that the taxes are not made a lien upon property by the act creating them, and cannot, therefore, be held to be a prior or paramount charge upon the funds In the receiver's hands, on the groimd that they are debts due to the state, or on the ground of public policy. The manner of proceeding to collect these taxes has been designated in the act which imposes them, and Is to be found In sections 7 and 9 of such act. By section 7 the tax "shall be collected for the use of the state as other taxes are recoverable by law from such corporation," etc.; and by section 9 the taxes "may be sued for In the name of the people of the state, and recovered in any court of competent jurisdiction In an action to be brought by the attorney general at the instance of the comptroller." Under section 7, the proceedings to collect the taxes being the same as other taxes are recovered by law, (not relating to those imposed on real estate,) those proceedings would be regulated by the Revised Statutes, as amended by chapter 45S of the Laws of 1857. It Is argued thai; as proceedings to enforce the collection of taxes thus imposed are provided for In the very act which imposes them, such proceedings must in all cases be taken, and that all other reme- dies are absolutely excluded. It Is upon this ground that the learned judge who wrote the- opinion at the general term proceeded, the result of which was to reverse these proceed- ings, because not undertaken pursuant to the provision of the statute In question. General- ly speaking, the rule as thus laid down Is to be followed, and the remedy Is confined la- the manner stated. But In such a case as this we think the rule is not to be applied. When the property of a corporation Is already sequestrated, and a receiver appointed, and where in addition thereto foreclosure proceed- ings are pending against It to foreclose mort- gages to an amount in excess of all its prop- erty, and a receiver has also been appointed under such proceedings, and where the cor- poration is largely and hopelessly insolvent and all of its property in the hands of the receiver appointed by the court, and where the money to pay the taxes has arisen front' the gross earnings, and an amount sufficient to pay them Is In the hands of the receiver, we are of opinion that the proceedings to ob- tain payment of those taxes thus in the re- ceiver's hands are not confined to those pro- vided for by the act cited, but that a direct application for an order on the receiver for RECEIVERS. 877 their payment may be made to the court by petition, as in this case, having made the corporation and the receiver a party thereto. If there are any disputed questions of fact to be determined, the court may direct an action to be brought, or may determine it In some other and more summary way. We feel more certain in regard to this question by looldng at the proceedings which are provided to be taken under the general laws. They are to be instituted by petition upon which the court may sequestrate such part of the property of the company as shall be necessary for the purpose of satisfying the taxes In arrear with the costs, etc.; and in its discretion the court may proceed fur- ther, and enjoin the company and its ofScers from any further proceedings under the char- ter, in order to enforce the payment of the taxes. But, in a case where the whole of the property has already been sequestrated under other proceedings, the sequesti-ation provided for would not be very efiScient. Nei- ther would an injunction *which simply en- joined the company and its officers from fur- ther proceedings under the charter be in and of itself very efficient as against a receiver who was operating the railroad under the order of the court. In such case, if the in- junction were granted, it would only become effective because the court would then order its officer, the receiver, to pay the tax, and go on with the operation of the road. But it would be a farce for the court to first is- sue the injunction against the receiver, re- straining him from operating the road until he paid the tax, and then ordering him to pay it for the purpose of continuing its proper operation. The result would be that the re- ceiver in the end would pay the tax, be- cause he was ordered to do so by the court The order might just as well be issued in the first instance, without this circuitous method. The privilege granted by the other section of the act of 1881, to sue for the taxes in the name of the people, in an action brought by the attorney general at the instance of the comptroller, would also result in the court ordering the receiver to pay the tax, for in no other way could the judgment for tne re- covery of the tax become efCectual. In all cases, therefore, the payment by the receiver would be made by order of the court, and in all cases the order might just as well be made in the first instance. We do not thinli that these provisions of the statute should, under such circumstances, be held to restrict the general power of the court to direct its officer to pay those claims which exist In favor of the state for taxes Imposed upon the corporation, where tha claim of the state for the payment of such taxes is, as we think, a paramount one. An insolvent corporation In the hands of and op- erated by a receiver was not in the minds of the framers of the statute when providing for the enforcement of payment of taxes from what may be termed a "going corporation." It may be admitted that in a strict and tech- nical sense these taxes, when first Imposed, are not a lien upon any specffic property of the corporation. But we are of the opinion that the railroad, when in the receiver's hands and operated by him, is operated under and by virtue of the franchise which has been conferred upon the corporation by the state; and that when he receives the gross earnings arising from its operation, and has in his hands money enough to pay these tax- es, the state has a paramount right to collect them before the moneys applicable to such payment shall be paid away by the receiver. Having such paramount right, the court may in its discretion listen to the petition of the state through its attorney general, and direct its officer to make the payment asked for. It ia claimed, however, that when a re- ceiver Is appointed by the court, if he oper- ates the railroad under its order, he does so by virtue of the equity powers of the court conferred by the constitution; and hence that the receiver Is not bound to pay the taxes, although he receives all the earnings of the company. But what does the receiver oper- ate? Under this order of the court he takes possession of all the property of the corpora- tion, and proceeds to operate, that is, to run, its trains, and to do all that was formerly done under the direction of the board of di- rectors. In this way he uses the franchise which has been conferred by the state upon the company, and he uses it as an officer of the court which is administering the afCairs of the company, and through the court he acts as the company to the same extent, pro hac vice, as if the board of directors were op- erating the railroad. It is the franchise which is being used in both cases, only in one case it is used for the company, and sub- 'stantially by it, by means of its board of di- rectors; while in the other case the same franchise is being used, and the road is oper- ated under it, by an officer of the court, until, by virtue of the legal proceedings connected with the receivership, the receiver is dischar- ged, and the road returned to its former pos- sessors, or other proceedings taken under a reorganization, as provided by law. The learned counsel for the receiver has cit- ed the ease of Com. v. Bank, 123 Mass. 498, as authority for the proposition that after a corporation is placed in the hands of a re- ceiver no tax of this nature can be levied up- on or collected from It But the case is not In the least analogous to the one under dis- cussion. In the case in Massachusetts the tax was laid upon the amount of the average of deposits in the bank for the preceding sis months, which was held to be a tax on the value of the franchise thus ascertained; and It was further held that if on the day when the tax was to be laid the bank was in the hands of a receiver it was not liable to pay any part of the tax, although it transacted business during a part of the preceding six months. It will be seen, however, that the 878 BECEIVBRS. receiver was appointed under a decree of the court perpetually enjoining the bank from do- lug any further business, and the receiver was appointed to wind up its affairs, and the bank was at once and forever deprived of the exercise or use of Its franchise. The court held that as the tax was upon the franchise, the value of which was to be ascertained on the day the tax was Imposed, by reference to the amount of the average of deposits for the past six months, if on that day the franchise had ceased to exist, no tax could for that reason be Imposed; and it was wholly Imcia- terial that for a portion of the preceding six months the franchise had been in existence and was actually used. It thus appears that the appointment of the receiver was one of the steps to wind up a corporation which was, on the day set for the imposition of the tax, to all intents and purposes dissolved, and was no longer In existence, and hence the deci- sion of the court was entirely unassailable. No such fact exists in the case before us. The corporation was not dissolved in form nor In substance, so far as this question Is concerned. The franchise was in existence and was actually used, and no decree of dis- solution had ever been pronounced. The agent who used the franchise was an officer of the court, acting under its authority, in- stead of the board of directors; but it was the franchise of the company which was In use at all times. In Trust Co. v. Railroad Co., 117 U. S. 434, 6 Sup. Ot. 800, the supreme court of the United States, while declining to give preference to receiver's certificates over mortgage bondholders under the facts In that case, did grant preference to the claims of the state for taxes. The taxes were. It is true, upon property; but the case is not au- thority for the proposition that if the tax Is not a technical lien on specific property when imposed, then no preference can be granted In a case like this. We reiterate the state- ment of Porter, J., in Re Columbian Ins. Co., 3 Abb. Dec. 239, that there Is great force in the claim that "the state has succeeded to all the prerogatives of the British crown, so far as they are essential to the efficient exer- cise of powers Inherent in the nature of civil government, and that there is the same prior- ity of right here, in respect to the payment of taxes, which existed at common law In fa- vor of the public treasury." We certainly have no doubt that. In a case like this, the court can make the order, (slight- ly modified as mentioned below,) which was made herein at special term, and that the statutory remedies for the collection of taxes of the nature herein specified are not con- trolling In the case of an insolvent corpora- tion and upon such facts as are herein prov- ed. The parties hereto both agree that, as there is a fund applicable to the payment of these taxes, there is no necessity for the in- sertion in the special term order of the provi- sion for issuing certificates by the receiver to raise money to pay the taxes. Without dis- cussing or deciding the question, therefore, whether. In case the receiver had not the money on hand with which to pay these tax- es, the coxirt would order him to issue and sell receiver's certificates, and with the pro- ceeds pay them, we shall modify the special term order by striking out such a provision. As thus modified, we think that order was correct For these reasons the order of the general term of the supreme court should be revers- ed, and that of the special term be modified, as already stated, and as modified affirmed, without costs. All concur. RECEIVEES. 879 FARMEJRS' LOAN & TRUST CO. y. GRAPE CREEK COAIi CO. (50 Fed. 481.) Circuit Court, S. D. Illinois. May 7, 1892. In Equity. Bill by the Farmers' Loan & Trust Company against the Grape Creek Coal Company to foreclose a mortgage. A receiver was appointed, and he now asks leave to is- sue receiver's certificates. Runnells & Burry, for Farmers' Loan & Trust Go. W. J. Calhoun, for J. G. English, receiver. Hess & Johnson, for Travellers' Ins. Co. and other objecting bondholders. GRESHAM, Circuit Judge. The defendant, a private corporation, whose chief business Is mining and selling coal, conveyed to the com- plainant, in trust, lands and two coal mines in Vermilion county. 111., to secure an issue of bonds amounting to $500,000. An install- ment of interest was allowed to remain due for more than six months, and this bill was filed to foreclose the trust deed. Joseph G. English, who was appointed receiver, asks for an order authorizing him to issue receiver's certificates not exceeding in all $24,000, which shall be a first lien npon the trust property, to enable him to pay taxes now due, amounting to $3,428.64, take up outstanding certificates amounting to $6,400, which were issued under an order of the Vermilion circuit court, in a suit to foreclose the same trust deed, and to continue the operation of the mines. The receiver represents that, with additional working capital, he could operate the mines profitably, and better protect them. The holders of 75 per cent, of the bonds and the corporation join In the receiver's request. The holders of the remaining 25 per cent, re- sist the application. The corporation Is in- solvent It Is not claimed that the receiver is without means to pay taxes, and it is chief- ly to enable him to continue the operation of the mines for anticipated profits that he de- sires authority to Issue certificates. When it becomes necessary for a court of chancery to take possession of property which l8 the subject of litigation, by placing it in the hands of a receiver, all expenses incident to Its safe-keeping and preservation are prop- erly chargeable against it; and, if there be no Income, such expenses will be paid out of the proceeds of the corpus before distribution to lien or other creditors. It does not follow, however, that because property of a private coTroratlon or a natural person may be thus protected and preserved before sale, that. In order to raise money to operate It for profit, a court may place a charge upon It in ad- vance of existing liens. Pending a suit to foreclose a mortgage executed by a railroad corporation, the road may be operated by a receiver, and debts contracted for labor, sup- plies, and other necessary purposes before as well as after the appointment of a receiver, may be made a first lien upon Income, and, if that Is not adequate, upon the corpus of the property. In the exercise of this exceptional and extraordinary jurisdiction, which Is of comparatively recent origin, courts have en- tered orders making receiver's certificates first liens on the mortgaged property. This has been done, however, on grounds not applica- ble to mortgages executed by private corpora- tions. A railroad corporation Is a quasi pub- lic Institution, charged with the duty of op- erating Its road as a public highway. If the company becomes embarrassed and unable to perform that duty, the courts pending pro- ceedings for the sale of the road will operate It by a receiver, and make the expense in- cident thereto a first lien. This Is done on account of the peculiar character of the prop- erty. It is generally mortgaged to secure bonds, and persons who invest in such securi- ties Imow that the mortgage rests upon prop- erty previously impressed with a public duty. Private corporations owe no duty to the pub- lic, and their continued operation is not a matter of public concern. It Is only against railroad mortgages that the supreme court of the United States has sustained orders giving priority to receiver's certificates representing particular indebtedness, and, as already stat- ed, then only on principles having no applica- tion to a mortgage executed by a private cor- poration owing no duty to the public. Fos- dick V. Schall, 99 U. S. 235; Barton v. Bar- bour, 104 U. S. 126; Mlltenberger v. Railroad Co., 106 U. S. 286, 1 Sup. Ct. 140; Union Trust Co. V. lUinois M. R. Co., 117 U. S. 434, 6 Sup. Ct. 809; Wood v. Trust Co., 128 U. S. 421, 9 Sup. Ct. 131; Kneeland v. Trust Co., 136 U. S. 89, 10 Sup. Ct. 950; Morgan's L. & T. R. & S. S. Co. V. Texas Cent. Ry. Co., 137 U. S. 171, 11 Sup. Ct. 61. In Wood V. Trust Co. the court said: "The doctrine of Fosdick v. Schall has never yet been applied in any ease except that of a railroad. The case lays great emphasis on the consideration that a railroad is a peculiar property, of a public nature, and discharging a great public work. There Is a broad dis- tinction between such a case and that of a purely private concern. We do not undertake to decide the question here, but only point it out." In Kneeland v. Trust Co., supra, in discuss- ing the jurisdiction of the chancellor to dis- place the lien of a railroad mortgage, the court said: "Upon these facts we remark, first, that the appointment of a receiver vests in the court no absolute control over the prop- erty, and no general authority to displace vested contract liens. Because, In a few spec- ified and limited cases, this court has declar- ed that unsecured claims were entitled to priority over mortgage debts, an idea seems to have obtained that a court appointing a re- ceiver acquires power to give such preference to any general and unsecured claims. It has been assumed that a court appointing a re- ceiver could rightfully burden the mortgaged 880 RECEIVERS. property for the payment of any unsecured indebtedness. Indeed, we are advised that some courts have made the appointment of a receiver conditional upon the payment of all unsecured indebtedness In preference to the mortgage . liens sought to be enforced. Can anything be conceived which more thoroughly destroys the sacredness of contract obliga- tions? One holding a mortgage debt upon a railroad has the same right to demand and expect of the court respect for his vested and contracted priority as the holder of a mort- gage on a farm or lot. So, when a court ap- points a receiver of railroad property, it has no right to make that receivership condition- al on the payment of other than those few unsecured claims which, by the rulings of this court, have been declared to have an equitable priority. No one is bound to seU to a railroad company, or to work for it; and whoever has dealings with a company whose property is mortgaged must be assum- ed to have dealt with it on the faith of its personal responsibility, and not in expecta- tion of subsequently displacing the priority of the mortgage liens. It is the exception, and not the rule, that such priority of liens can be displaced. We emphasize this fact of the sacredness of contract liens for the reason that there seems to be growing an idea that the chancellor, in the exercise of his equitable powers, has unlimited discretion in this mat- ter of the displacement of vested liens." And further on in the same opinion the court said: "If, at the instance of any party right- fully entitled thereto, a court should appoint & receiver of property, the same being rail- road property, and therefore under an obliga- tion to the public of continued operation, it; in the administration of such receivership, might rightfully contract debts necessary for the operation of the road, either for labor, supplies, or rentals, and make such expenses a prior lien on the property itself." Tn the language above quoted, there is a plain implication that the limited power which courts may exercise in displacing the liens of raUroad mortgages should not and cannot be extended to mortgages executed by private corporations. The court is not asked to subvert the lien of the mortgage on the ground that the trustee or bondholders have got possession of anything which, in equity, belongs to general creditors. It is to enable him to operate the mines for the benefit of bondholders, against the wish of part of them, that the receiver desires to be invested with authority to issue certificates which shall be a prior lien upon the property embraced In the trust deed. Extensive as are the powers of courts of equity, they do not authorize a chancellor to thus impair the force of solemn obligations and destroy vested rights. In- stead of displacing mortgages and other liens upon the property of private corporations and natural persons, it is the duty of courts to uphold and enforce them against all subse- quent incumbrances. It would be dangerous to extend the power which has been recentiy exercised over railroad mortgages, (sometimes with unwarranted freedom,) on ao.'ount of their peculiar nature, to all mortgages. The power does not exist, and the application is denied. RECEIVERS. 881 HANNA et al. v. STATE TRUST CO. et al. (70 Fed. 2, 16 C. C. A. 586.) Circuit Court of Appeals, Eighth Circuit. Sept 23, 1895. No. 593. Appeal from the circuit court of the United States for the district of Colorada On the 1st day of November, 1889, the Denver-Arapahoe Land Company, a Colorado corporation, eiecuted to the appellant John R. Hanna its trust deed on 11,320 acres of land in Arapahoe and Douglas counties, Colo., to secure to the appellant Rufus Clark the payment of its promissory notes aggregat- ing the sum of $97,000. On the same day the same corporation executed to . the Mer- cantile Trust Company of Neve York, as trustee, a deed of trust on 4,480 acres of land in Arapahoe county, Colo., to secure an issue of its first mortgage bonds amoimting to $140,000. On the 1st day of March, 1890, the Denver Water-Storage Company, a jOoIo- rado corporation, executed tb the State Trust Company of New York, as trustee, a deed of trust on about 1,100 acres of land in Douglas county, Colo., together with the Castlewood dam and reservoir, irrigating canals, ditches, etc., to secm-e the payment of its first mort- gage bonds amounting to the sum of $300,- 000. Each of these deeds of trust covers different properties, and is the first and valid lien upon the property covered by it. On or about the 1st day of May, 1891, the Denver Land & Water-Storage Company was organ- ized, pursuant to the laws of Colorado, by the consolidation of the Denver-Arapahoe Land Company and the Denver Water-Stor- age Company, and by virtue of such consoli- dation acquired, subject to the deeds of trust above described, all of the property covered by or embraced therein. Immediately after its organization the Denver Land & Water- Storage Company executed a deed of trust upon the entire property acquired by the con- solidation mentioned, subject to the several deeds of trust executed by the constituent companies, and above set forth, to the State Trust Company of New York, as trustee, to secure an issue of its general or consolidated mortgage bonds to the amount of $800,000. On the 4th day of June, 1894, the State Trust Company of New York, as trustee in the consolidated mortgage last above men- tioned, filed its bill of complaint in the cir- cuit court of the United States for the dis- trict of Colorado against the Denver Land & Water-Storage Company, alleging that it had made default, and failed to pay the taxes on its lands or interest upon its bonds, and that it was insolvent, and prayed for the fore- closure of its mortgage and the appointment of a receiver. This bill admitted the priority of the underlying deeds of trust executed by the constituent 'companies, and that any re- lief granted in the suit, by foreclosure or otherwise, must be subject to the rights and equities existing under the prior mortgages. H.& B.EQ.(2d E<1.)— 56 On the day the bill was filed the Denver Land & Water-Storage Company appeared and answered; admitting its insolvency, and confessing all the allegations to the bill. The court thereupon appointed a receiver. On the 24th of July, 1894, the State Trust Company filed its amended and supplemen- tal bill of complaint, to which the Mercantile Trust Company of New York, and the appel- lants, John R. Hanna and Rufus Clark, were made defendants. This amended blU prayed relief as follows: That the said Mercantile Trust Company, John R. Hanna, and Rufus Clark might be brought in as defendants in tbe action, and required to set up their re spective rights upon the real estate covered by the deeds pf trust executed by the Den- ver-Arapahoe Land Company; that the re- spective rights of the trustees under the sev- eral mortgages or deeds of trust might be judicially ascertained and determined by the court; that the properties covered by the respective deeds of trust might be marshal- ed, and judicially ascertained and adjusted; that the amounts due upon tne notes and bonds issued under the several deeds of trust might be adjudicated and determined; that the said deeds of trust might be foreclosed; that the receiver theretofore appointed in the action might be continued as receiver of all the property covered by each and all of said deeds of trust; that the said John R. Hanna, Rufxis Clark, and the Mercantile Trust Com- pany, and the holders of any of the notes, bonds, or securities issued under said deeds of trust, might be enjoined and restrained from commencing any action or proceeding in the circuit court of the United States for Colorado, or any other court, for the fore- closure of the said deeds of trust, and from enforcing their said notes and bonds, or for the collection thereof, against the Denver Land & Water-Storage Company, or its prop- erty and effects, except in this action. On the 16th day of August, 1894, a special master appointed in the cause made a report, from which it appears that the company was endeavoring to carry on a colonization business, and was engaged in selling small tracts of land, for fruit raising and garden purposes, to settlers, or those who proposed to become settlers, or colonists; that in many cases the company sold these tracts of land (usually 10 acres), under executory contracts, for small amounts of cash down, and defer- red payments extending over a period of five years, when the various purchasers were to receive the deeds. The company agreed to plant these ti-acts with fruit trees, and cul- tivate and care for them during the five years. On the 16th of August the receiver filed his petition, stating, substantially, that the property of the Denver Land & Water- Storage Company consists of 17,000 acres of land in the counties of Arapahoe and Doug- las, Colo., and an extensive dam or reservoir, known as the "Castlewood Dam," and a sys- tem of canals and irrigating ditches connect- 882 RECEIVERS. ed therewith, and a large number of land- purchase contracts and land-purchase notes, referred to in the report of the special mas- ter; that the original plan of tne Denver Land & Water-Storage Company contemplat- ed the colonization of these lands; the amount of the land-purchase contracts and notes, as shown by the report of the special master; the agreements made by the Denver Land & Water-Storage Company to plant and cultivate the lands, already referred to, and that in consideration thereof the various purchasers have made large payments, and have a right, in Justice and equity, to de- mand performance of the contracts of the Denver Land & Water-Storage Company, and that otherwise the fruit trees upon the tracts sold under the planting and cultivation contracts will die, and the paypients made by the purchasers will be alwolutely lost; and that, moreover, it is of vital importance to the company that it should collect the balance due upon the land-sale notes and contracts mentioned, which collection is en- tirely dependent upon the lieeping up of the tracts of land, and the performance by the company of the contracts with the purchas- ers aforesaid. The petition then presents a number of reasons and arguments why, in the judgment of the receiver, certificates should be issued, and calls attention to the default in taxes upon the company's lands, alleged to amount to about $4,000. The par- ticulars of the three underlying mortgages and the consolidated mortgage are then giv- en, and the receiver calls the court's atten- tion to the opportunity which presents itself for engaging in the colonization of the com- pany's barren lands, if he is authorized to issue certificates of indebtedness to raise funds with which to properly present the merits and advantages of the Denver Land & Water-Storage Company's property. On the 15th day of September, 1894, the court made an order, upon the receiver's petition, which authorized the issue of receiver's cer- tificates to pay taxes due upon the lands, and to redeem the same from tax sales, and mak- ing such certificates a first and paramount lien upon the property upon which the taxes were paid. The order also contained this provision: "(5) It is further ordered, ad- judged, and decreed that in addition to the amounts which may be necessary to pay the taxes now in arrears upon the property set forth and described in paragraphs 2, 3, and 4 of this order, the receiver shall have, and Is hereby granted, authority to borrow such additional sum of money as shall, together with said amounts for taxes, amount in the aggregate to a sum not exceeding $10,000, and to issue therefor his certificates of in- debtedness, which said certificates of indebt- edness shall be first and paramount liens upon all the property, rights, and franchises now owned or controlled by the said the Denver Land & Water-Storage Company, de- fendant herein, wheresoever situated, and subject to the Jurisdiction of this court And said additional simis of money shall be used and applied by said receiver for the purpose of preserving the property of the Denver Land & Water-Storage Company in his possession and custody, and carrying out and maintaining the contracts of the com- pany now in existence, under and by which the company has heretofore sold tracts of land to various parties, which said contracts are referred to In the report of said receiver, and for such other purposes as are set out in said petition, with reference to the main- tenance, preservation, and protection of the property of the company, or as the court may from time to time direct" From this order, John R. Hanna, trustee in the deed of trust dated November 1, 1889, and Bufus Clark, the beneficiary named therein, and the holder of a large amount of the bonds secured by the mortgage to the Mercantile Trust Company, appealed to this court. John S. Macbeth (Enos Miles, on the brief), for appellants. A. C. Campbell (A. E. Pattison and Henry W. Hohson, on the brief), for appellees. Before CALDWELL, SANBORN, and THAYER, Chrcuit Judges. CALDWELL, Circuit Judge, after stating the case as above, delivered the opinion of the com-t The precise question in this case is wheth- er a court of chancery which has appointed a receiver for an insolvent private corpora- tion in a foreclosure suit brought by a sec- ond mortgagee may, against the objection of the first mortgagee, authorize Its receiver to issue receiver's certificates to raise money to carry on the business of the Insolvent corpo- ration and to improve its lands, and make such certificates a first and paramount lien upon the lands covered by the first mortgage. So far as we are advised, the power to do this has been denied in every case in which the question has arisen. One of the first cases In which the question arose was Raht v. At- trill, 106 N. Y. 423, 13 N. B. 282. In that case a hotel company mortgaged its proper- ty to raise funds to build a hotel. Before the completion of the hotel the corporation became insolvent, and upon the application of Its principal stockholder a receiver was ap- pointed; and upon an application and show- ing that the wages of the men who worked on the hotel building were impaid, and that they threatened, unless paid, to burn the building, the court made an order authorizing the receiver to issue certificates, which were declared to be a lien prior to the trust mort- gage, to raise funds to pay the wages due the laborers. A referee reported that If the money had not been raised to pay the wages due the men, the hotel and other property of the corporation "would, in all probability, have been destroyed or seriously injured." RECEIVERS. 883 In the progress of the case the mortgagee de- nied that the court had authority or power to set aside the prior lien of the mortgage and mal^e the receiver's cerUflcates, issued under the circumstances mentioned, a first and prior lien upon the property. The court delivered an exhaustive opinion, covering every aspect of the question. We quote some of its utter- ances. The court said: "The lien of the mortgage attaches, not only to the land in the condition in which it was at the time of the execution of the mortgage, but as chan- ged or improved by accretions or by labor expended upon it while the mortgage is In existence. .Creditors having debts created for money, labor, or materials used in im- proving ttie mortgaged property acquire on that account no legal or equitable claim to displace or subordinate the lien of the mort- gage, for their protection. * * * The act of the court in taking charge of property through a receiver is attended with certain necessary expenses of its care and custody; and it has become the settled rule that ex- penses of realization, and also certain expens- es which are called 'expenses of preservation,' may be incurred, under the order of the court, on the credit of the property; and it follows, from necessity, in order to the effectual ad- ministration of the trust assumed by the court, that these expenses should be paid out of the income, or, when necessary, out of the corpus, of the property, before distribution, or before the court passes over the property to those adjudged to be entitled. * * * It would be difficult to define, by a rule applica- ble in every case, what are expenses of pres- ervation which may be incurred by a receiver by authority of the court. It was said by James, L. J., in Re Regent's Canal Iron- Works Co., 3 Ch. Div. 411, 427, that 'the only costs for the preservation of the property would be such things as the repairing of the property, paying rates and taxes which would be necessary to prevent any forfeiture, or putting a person in to take care of the property.' Wherever the true limit is, we think it does not include the expenditure au- thorized by the order of August 17th, and that such an expenditure is, and ought to be, excluded from the definition. There must be something approaching a demonstrable neces- sity, to justify such an infringement of the rights of the mortgagees as was attempted in this case." After referring to the cases in which the receivers of insolvent railroad cor- porations have been authorized to issue cer- tificates which were declared to be a first lien on the property of the corporations, the court said: "It cannot be successfully denied that the decisions in these cases vest in the courts a very broad and comprehensive jurisdiction over insolvent railroad corporations and their property. It will be found, on examining these cases, that the jurisdiction asserted by the court therein is largely based upon the public character of railroad corporations, the public interest in their continued and suc- cessful operation, the peculiar character and terms of railroad mortgages, and upon other special grounds, not applicable to ordinary private corporations. • • * These cases furnish, we think, no authority for upholding the order of August 17th, or for subverting the priority of lien which, according to the general rules of law, the bondholders acquir- ed through the trust mortgage on the proper- ty of the company. It would be unwise, we think, to extend the power of the court in dealing with property In the hands of receiv- ers to the practical subversion or destruction of vested interests, as would be the case in this instance if the order of August 17th should be sustained. It is best for all that the integrity of contracts should be strictly guarded and maintained, and that a rigid, rather than a liberal, construction of the power of the court to subject property in the hands of receivers to charges, to the preju- dice of creditors, should be adopted." We concur in the doctrine expressed in this case. See, to the same effect. Farmers' Loan & Trust Co. v. Grape Creek Coal Co. (C. O.) 50 Fed. 481; Laughlln v. RoUing^tock Co. (C. C.) 64 Fed. 25; Fidelity Insurance Trust & Safe-Deposit Co. v. Roanoke Iron Co. (C. C.) 68 Fed. 623; Snively v. Coal Co. (C. C.) 69 Fed. 204; and Hooper v. Trust Co. (Md.) 32 Atl. 505, 513. The contention of the appellees is that the order made by the circuit court finds sanc- tion in the cases of Wallace v. Loomis, 97 V. S. 146; Fosdick v. Schall, 90 U. S. 235; Bar- ton V. Barbour, 104 U. S. 126; Mlltenberger V. Raikoad Co., 106 U. S. 286, 1 Sup. Ot. 140; Trust Co. V. Souther, 107 TJ. S. 581, 2 Sup. Ct 295,— and other later cases of like char- acter, in which receivers of insolvent railroad corporations were authorized to Issue receiv- ers' certificates for various purposes, which were made a first and paramount lien on the property of the insolvent railroad company. But the doctrine of these cases has no appli- cation to this case. They rest on the pecul- iar character of railroad property and of a railroad corporation. The distinction between railroad corporations, which are of a quasi public character, and purely private corpora- tions, has been often pointed out, and need not be repeated here. It is enough to say that the supreme court Itself has said that the doctrine of the cases cited has only been applied in railroad cases. In Wood v. Safe- Deposit Co., 128 U. S. 416, 9 Sup. Ct. 131, the court said: "The doctrine of Fosdick v. Schall has never yet been applied in any case ex- cept that of a raikoad. The case lays great emphasis upon the consideration that a rail- road is a peculiar property, of a public nature, and discharging a great public work. There is a broad distinction between such a case and that of a purely private concern. We do not imdertake to decide the question here, but only point it out." The bill in this case is one to foreclose a second mortgage. To such a bill the prior 884 RECEIVERS. mortgagees are not even necessary parties. Jerome v. McCarter, 94 U. S. 734. The va- lidity and priority of tlie liens of tbe mort- gages under which the appellants claimed is distinctly admitted in the original and amend- ed bills. The pm^jose of filing the amended bill making the prior mortgagees defendants seems to have been to enjoin them from fore- closing their mortgages, and subject the lands covered by their mortgages to a prior lien for money borrowed to carry on the business of the corporation and improve its lands. It prays that the receiver may be empowered to manage and operate the property of the in- solvent corporation, which consists in irrigat- ing, improving, and colonizing, or settling, arid lands; and,, to the end that the receiver may not be interfered with in the conduct of the business, it prays that the holders of all mortgages prior to the complainants' may be enjoined from foreclosing the same. The amended bill would seem to be founded on the theory that a private corporation conducting any kind of business may, when it becomes insolvent, obtain immunity from the compul- sory payment of its debts by procuring a junior mortgagee, or some other creditor, to file a bill alleging the insolvency of the cor- poration, and praying for the appointment of a receiver with authority to manage and conduct its business. Upon the filing of such a bill, it is supposed to be competent for the court, in addition to appointing a receiver to carry on the business of the corporation, to enjoin its creditors, including the holders of the prior liens on its property, from collecting their debts by due course of law, and to continue such injunction in force so long as the court, in its discretion, sees fit to carry on the busi- ness of the insolvent corporation. When a re- ceiver is appointed under such a bill, he usu- ally makes haste, as the receiver did in this case, to assure the court that, if he only had some capital to start on, he could greatly bene- fit the estate by carrying on the business that bankrupted the corporation. In this case, the company being insolvent, and its property mortgaged for more than it was worth, there was no way of raising money to set the re- ceiver up in business, except by the court giv- ing Its obligations, in the form of receiver's certificates, and making them a paramount lien on all the property of the corporation, by displacing the appellants' prior liens thereon. As commonly happens in cases of this char- acter, the receiver, the insolvent corporation, and the junior mortgagee united in urging the court to arm its receiver with the desired pow- ers. They ran no risk in so doing. The cor- poration was insolvent, and a foreclosure of the prior mortgage would leave the junior mortgagee without any security; so that it had nothing to lose, and everything to gain, in experiments to enhance the value of the mortgaged property, so long as the cost of those experiments was made a prior lien there- on. The effect of the proceeding was to bur- den the prior mortgagee with the whole cost of the expenditures and experiments made for the betterment of the property on the petition, and for the benefit of the insolvent corporation and the junior mortgagee. The representation is always made, in such cases, that the re- ceiver can carry on the business much more successfully than was done by the insolvent corporation. This commonly proves to be an error. Raht v. Attrill, 106 N. Y. 430, 13 N. E. 282. But, if It were true, it would afford no ground of equitable jurisdiction, for it is not a function of a court of equity to carry on the business of private corporations, whether solvent or insolvent. It is obvious that if the holders of the first mortgages and the other creditors of the insolvent corporation were al- lowed to proceed, in the customary and lawful mode, to collect their debts, it would put an end to the business of the receiver, and they are therefore enjoined from foreclosing their mortgages or collecting their debts. The chan- cery court thus assumes, in effect, all the pow- ers and jurisdiction of a court of bankruptcy or insolvency, but without any bankrupt or Insolvent law to guide or direct it in the admin- istration of the estate. Its only guide is that varying and unknown quantity caUed "judicial discretion." The powers claimed for a court of equity in such cases are, indeed, much greater than a court of bankruptcy can exer- cise. There never was a bankrupt court, un- der any bankrupt act, authorized, at its dis- cretion, to displace or nullify valid liens on the bankrupt's property, or Itself to create liens paramount thereto. The rights of the citizen, lawfully acquired by contract, are un- der the protection of the constitution of the United States, and, like the absolute rights of the citizen, are not dependent for their exist- ence or continuance upon the discretion of any court whatever. Constitutional rights and obligations are no more dependent on the dis- cretion of the chancellor than they are on the discretion of the legislature. "Rights," says the supreme court of the United States, "un- der our system of law and procedure, do not rest in the discretionary authority of any offi- cer, judicial or otherwise." In re Parker, 131 U. S. 221, 9 Sup. Ct. 708. If junior lien cred- itors of an insolvent private corporation could do what has been attempted in this case, every private corporation operating a sawmill, grist- mill, mine, factory, hotel, elevator, irrigating ditches, or carrying on any other business pur- suit, would speedily seek the protection of a chancery court, and those courts would soon be conducting the business of all the insolvent private corporations in the country. If it were once settled that a chancery court, through a receiver appointed on the petition of a junior mortgagee, could carry on the business of such Ihsolvent corporations at the risk and expense of those holding the first or prior liens on the property of the corporation, such liens would have little or no value. It is no part of the duty of a court of equity to conduct the busi- ness of Insolvent private corporations, any more than it is to carry on the business of RECEIVERS. 885 Insolvent natural persons. If It may take un- der Its control the property ot an insolvent private corporation, and authorize a receiver to carry on its business, and maize the debts incurred by the receiver in so doing paramount liens on aU the property of the corporation, and enjoin its credltora in the meantime from collecting their debts, it is not perceived why it may not proceed in the same way with the estate of an insolvent natural person. Without pursuing the subject further, we re- fer to what is said, and to the cases cited, in Scott V. Trust Co., 10 C. C. A. 358, 69 Fed. 17. The order appealed from is void, whether the suit In which it was made is treated as one tQ foreclose a second mortgage, or as a bill in equity to administer the estate of an insolvent corporation. It was open to the com- plainant to take and execute a decree foreclos- ing its second mortgage, and it is good prac- tice in such cases to require this to be done, on pain of dismissing the bill. And if the complainant desired that money be spent, be- yond the income of the property, in carrying on the business of the corporation or improv- ing the mortgaged property, it was at lib- erty to furnish the means for that purpose; but It had no equity to asli that the expense and the hazards of doing so should be saddled on the first mortgagee, and the court had no jurisdiction or power to place it there. Taxes are the first and paramount lien on all property, and must be paid. When taxes are due on property In the hands of a receiver, and he has no funds to pay them, the court will authorize him to borrow money for that PTu:pose, and maize the obligation given for the money so borrowed a prior lien on the proper- ty on which the taxes were due. This is not fixing a new or additional lien on the prop- erty, or displacing any prior lien. It is sim- ply changing the form of the lien from one for taxes to one for money borrowed to pay the taxes. The order and decree of the circuit court appealed from, which authorizes the receiver to borrow money to "be used and applied by said receiver for the purpose of preservhig the property of the Denver Land & Water-Stor- age Company in his possession and custody, and carrying out and maintaining the con- tracts of the company, now in existence, un- der and by which the company has heretofore sold tracts of land to various parties, which said contracts are referred to in the report of said receiver, and for such other purposes as are set out in said petition with reference to the maintenance, preservation, and protection of the property of the company," and which authorizes the receiver to issue his certificates of indebtedness for the money borrowed for these purposes, and makes such certificates of indebtedness the fi*st and paramount lien "up- on all the property, rights, and franchises now owned or controlled by the said the Denver Land & Water-Storage Company," Is void, in so far as it makes the certificates issued by the receiver a first and paramount lien on the lands embraced in the mortgages of the ap- pellants, and is therefore reversed. 886 RECEIVERS. HOWARTH V. ELLWANGBR. SAME v. KENT. SAME v. WOODWORTH. (86 Fed. 54.) Circuit Court, N. D. New York. Marcli 31, 1898. Nob. 3,211-3,213. At Law. Tried by the court. These actions are brought against the de- fendants who were stoeliholders of the Trad- ers' Bank of Tacoma, Wash., to enforce a lia- bility created by the law of that state mak- ing them individually responsible equally and ratably to the extent of their stock for all debts of the bank while they remained stock- holders. The plaintiff is a citizen of Wash- ington residing at Tacoma. The defendants are citizens of New York residing at Roches- ter. On the 19th day of May, 1894, the plain- tiff was appointed receiver of the Traders' Bank by an order of the superior court of Washington made in an action commenced against said bank by Henry Hewett, Jr., and George Browne In which it was adjudged that the bank had suspended business and was Insolvent. The plaintiff duly qualified as receiver and has since acted as such. On the 12th of September, 1894, the court made an order in said action permitting certain stock- holders to Intervene for the benefit of them- selves and all other stockholders of the bank. On the 20th of October aU the defendants, ex- cept Chauncey B. Woodworth, were by order of the court upon their own petition made parties to the said action. After applying all the property of the bank to the payment of its debts there remained a deficiency, which, on March 17, 1897, was adjusted and ad- judged by the court to be the sum of $131,670. The plaintiff was thereupon directed by the court to levy upon the stockholders an assess- ment of 26.34 per cent and bring suit against those stockholders who, after demand, refus- ed to pay. The amounts assessed against the defendants respectively were duly demanded and payment thereof refused. P. M. French, for plaintiff. Charles M. Williams, for defendant Ell- wanger. M. H. McMath, for defendant Kent. William F. Cogswell, for defendant Wood- worth. COXE, District Judge. It Is not disputed that the defendants were stockholders of the Traders' Bank, that the bank became insol- vent, that the plaintiff was appointed receiv- er, that a large deficiency was ascertained, that an assessment was levied by the receiv- er upon the defendants and that all this was done under and pursuant to the constitution and laws of Washington and In conformity to the orders and decrees of the superior court of that state. The first proposition argued by the defend- ants is that the plaintiff, as receiver. Is not entifled to maintain the action. The consti- tution and statutes of Washington (Const, art 12, § 11) provide: "That each stockholder of any banking • • * association shall be Invidually and personally liable, equally and ratably, and not one for another, for all the contracts, debts and engagements of such corporation or association accruing while they remain stockholders to the extent of the amount of their stock therein, at the par val- ue thereof. In addition to the amount invested in such shares." The courts of Washington have decided that this liability can only be enforced by a receiver tmder the direction of the court Cole V. Raihroad Co., 9 Wash. 487, 37 Pac. 700; Wilson v. Book, 13 Wash. 676, 43 Pac. 939; Hardin v. Sweeney, 14 Wash. 129, 44 Pac. 138; Watterson v. Masterson, 15 Wash. 511, 46 Pac. 1041. The practical effect of a ruling that a receiver cannot maintain the suit woTild be to render the law nugatory as to all but resident stocKholders. The Wash- ington courts having ruled that a receiver only can bring the suit it Is manifest, should the federal courts and other state courts hold that he cannot maintain the action, that the defendants not only but all stockholders be- yond the jurisdiction of the Washington courts will escape a liability Intended to be tmiform and for the benefit of all the cred- itors. The precise question was Involved In Sheafe v. Larimer (C. C.) 79 Fed. 921, and was answered adversely to the defendants' contention. The case arose imder the same law, and, upon the facts, was almost Identical with the case In hand. See, also, Schultz v. Insurance Co. (C. C.) 77 Fed. 375, 387; Av- ery V. Trust Co. (C. C.) 72 Fed. 700; Pailey v. Talbee (C. C.) 55 Fed. 892. Again It is argued that the orders and de- crees of the Washington court were not bind- ing upon the defendants, and in support of this view various alleged defects in the pro- ceedings are pointed out The defendants Kent and BUwanger were parties to the Washington action and are therefore In no position to attack the judgment of the court in a collateral proceeding. The defendant Woodworth was not a party. But whether parties or not the law seems clear that the stockholders are boimd by the order making the assessment. Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct 739. In Sheafe v. Larimer, supra, the court says: "In this case It must be held that it is not open to the defendant to question the validity of the assessment or- der, on the ground that the stockholders were not personally notified of the application for the order, or for the reason that the stock- holders should not have been assessed until the other assets of the corporation had been wholly exhausted." The actions are not barred by the statute of limitations for the reason that the cause of action did not accrue to the receiver prior to RECEIVERS. 887 ■the assessment and that was not made until March 17, 1897. The actions were commen- ■ced two months thereafter. It follows that the plaintiff Is entitled to judgment as demanded in the complaints, re- spectively, with interest at the rate of 6 ppr cent, per annum from May 18, 1897, and costs. 888 BECEIVBRS. WYMAN V. BATON et al. (77 N. W. 865, 107 Iowa, 214.) Supreme Court of Iowa. Jan. 20, 1899. Appeal from district court, Pottawattamie county; Walter I. Smith, Judge. As a statement of facts, we bave taken the following substantially from those made by counsel: This was an action brought by Al- bert U. Wyman, the receiver of the Nebraska Fire Insurance Company, to enforce against the several defendants their constitutional lia- bility under the Nebraska statute for their unpaid subscriptions to the capital stock of the company. This company was incorporat- ed on March 13, 1883, in conformity with the laws of the state of Nebraska, under the name of the Nebraska & Iowa Insurance Company, its name being subsequently, on February 28, 1800, changed to the Nebraska Fire Insurance Company, under which name it transacted business until its insolvency, in 1891, when an application for its dissolution by W. G. Madden, one of its stockholders, re- sulted In the appointment of the plaintiff, first, as temporary, and then as permanent, receiver of the corporation, and a decree ad- judging the dissolution thereof. The testimo- ny shows that one J. T. Hart, of Council Bluffs, was largely instrumental in the organ- ization of the company; that the subscribers to its stock and the original stockholders were citizens prominent in Omaha and in Council Bluffs; and that when this company, the Ne- braska & Iowa Insurance Company, was or- ganized, there was organized at the same time, mainly through the instrumentality of Mr. Hart, anotber insurance company, called the Iowa & Nebraska Insurance Company, and having its principal place of business at Coun- cil Bluffs, Iowa. The original intention oi the organizers, as gathered from the testimo- ny of Mr. Hart, and the contract of subscrip- tion, was to consolidate the two companies after their organization. This, however, was never done, the two corporations being oper- ated separately in each state, although the stockholders were at first the same. The Iowa corporation did business until about May 29, 1885, when it was merged into a company known as the Western Home of Sioux City, and went into the hands of a receiver. The capital of each company was $100,000, and the certificates of stock contemplated sub- scriptions to both companies, and were sign- ed, as appears, by ofBcers of each company. The stock was originally issued in this dupli- cate or combined form. These combined cer- tificates were subsequently canceled, and were separately rewritten and issued. The con- tract of subscriptions of the several defend- ants to the stock of the two companies, and upon which it is claimed that the defendants herein are answerable for the unpaid 50 per aent. thereof, is as follows: "We, the under- signed subscribers hereto, in consideration of 3ach other's subscription to the capital stock Cor an insurance company In the stite of Iowa and the state of Nebraska, to be organized in both states separately, and after the organ- ization to be consolidated, to be known as the Iowa and Nebraska State Insurance Company, for the purpose of carrying fire and lightning, windstorm and tornado, insurance, business to be done under the laws of both states, do hereby subscribe and agree to pay and secure as provided by the laws of said states the several sums set opposite our respective names, if such an insurance organization is perfected, and on demand, to the secretary thereof, on or before the 12th day of March, 1883." Under this subscription, shares of stock of $100 each were issued to the sab- scribing stockholders, one-half of such shares being issued to them in the Iowa company, and one-half in the Nebraska company. The defendants paid 50 per cent, of their several subscriptions upon the stock of the Nebraska & Iowa Insurance Company at the time of its organization, as required by the laws of the state of Nebraska. Nothing more was ever paid upon the stock except in the manner in- dicated hereafter. The defendants In this ac- tion, who had been subscribers to the capital stock of the consolidated company, and to whom had been issued the Joint certificates of stock in the Iowa and Nebraska companies, had surrendered their stock, and new stock had been issued to the parties purchasing from them. These purchasers, as the' record shows, were in large part the original pro- moters of the company. Upon the organiza- tion of the company, one-half of the capital stock subscribed being paid in cash, the prom- issory notes of the subscribers, payable on de- mand and secured, were given in payment of the other one-half of the stock of the corpo- ration. Prior to 1887, these defendants had transferred the stock issued to them, by a sur- render of their stock, and reissuance of other certificates to the purchasers; the company accepting the surrender, and recognizing the transfer, returning the stock notes of the de- fendants, and accepting the stock notes of the transferee In lieu thereof. This was done, as shown by the record, at a time when the cor- poration was solvent, and the transfers were made and new stock issued to solvent pur- chasers; all being done In good faith on the part of the corporation, the transferror, and the transferees. Practically, the entire stock passed into the hands of a syndicate compos- ed in large part of original promoters of the consolidated corporation, but not including any of these defendants. From the date of these transfers, these defendants ceased to have any connection with or control over the corporation. The district court entered judg- ment for the defendants, and the plaintiff ap- pealed. Affirmed. B. & A. C. Wakley and Flickinger Bros., for appellant Harl & McCabe, Finley Burke, Wright & Baldwin, Sanders & Stuart, John Y. Stone, and C. R. Marks, for appellees. RECEIVERS. 889 GRANGER, J. It wIU be weU to repeat that this action Is by a receiver appointed to wind up the affairs of the Nebraslca Fire In- surance Company, on the application of one of its stockholders, to recover from the de- fendants on their subscriptions to' the original enterprise, wherein was contemplated the or- ganization of two companies,— one in Nebras- ka, to be known as the Nebraska & Iowa In- surance Company, and one in Iowa, to be known as the Iowa & Nebraslsa Insurance Company; the two companies to be thereaf- ter consolidated. The first-named company was organized under the laws of Nebraska, and located at the city of Omaha, in that state; and the latter under the laws of Iowa, and located at the city of Council Bluffs, In Iowa. The consolidation was never made, and the latter company was changed to that of the Western Home of Sioux City, and its place of business changed to Sioux City, Iowa, about May, 1885. The Nebraska & Iowa Company was changed to the Nebraska Fire Insurance Company, and continued to operate until 1891, when the insurance de- partment of Nebraska withdrew Its certifi- cates authorizing the company to do business, and, on the application of one of its stock- holders, its insolvency was decreed; and the plaintiff is now engaged in winding up Its affairs, and this action Is in aid of that purpose. The action has for a legal basis a provision of the constitution of Nebraska, as follows (section 4, art. 11): "Liabilities of Subscribers to Stock. In all cases of claims against cor- porations and joint-stock associations, the ex- act amount due shall be first ascertained, and after the corporate property shall have been exhausted, the original subscribers thereof shall be individually liable to the ex- tent of their unpaid subscriptions, and the liability for unpaid subscriptions shall follow the stock." Dismissing for the moment the effect of an arbitrary legal liability, which must be respected and enforced when linown, there Is not, in view of the entire record in this case, an equitable consideration favorable to a recovery against these defendants. The present liabilities of the Nebraska corporation cannot truthfully be said to have accrued In consequence of, or with reliance upon, the former connection of these defendants with the enterprise from which sprang the present company. These facts are important as aid- ing in the solution of a legal proposition, urg- ed by apflellees, to the effect that this action cannot be maintained in Iowa, because it Is brought by a receiver of a Nebraska corpo- ration to enforce a provision of the law of that state; the claim being that such a proceeding can only be bad as a result of comity be- tween the states, and that the basis of such an exercise Is that the citizens of the state granting it shaU not be thereby prejudiced or Injured. Admitting, for the sake of argu- ment, the rule that comity controls as to the authority of plaintiff to sue in this state, and. as we have In effect said, the record leaves us without doubt that its exercise should be de- nied, because it would be in contravention of the rights of our citizens, and operate to their injury. Upon the question of the absolute right of plaintiff to sue in this state, we are not with- out precedent in our own decisions; and while, in announcing a rule, we have recognized the fact of a conflict of authority, we are not per- suaded by the argument in this case that a change should be made, or the rule modified. Stress is given in argument to the fact that the order of appointment in Nebraska gives to the receiver authority to bring suits in other states. That authority is valuable as an aid to secure the right to do so In the state where the privilege is sought and is judicious- ly granted; but it is without efliciency to create such a right independent of sanction within the state. The case of Booth v. Clark, 17 How. 321, contains a somewhat exhaustive consideration of the question of the right of a receiver appointed in one state to bring a suit for the possession of property in another state, and It Is there said: "He has no extra- territorial power of otllcial action; none which the court appointing him can confer, with authority to enable him to go into a for- eign jurisdiction to take possession of the debtor's property; none which can give, upon the principle of comity, a privilege to sue In a foreign court or another jurisdiction, as the judgment creditor himself might have done, where his debtor may be amenable to the tribunal which the creditor may seek." An underlying thought of the rule seems to be that, within the jurisdiction of one's appoint- ment as receiver, he Is amenable in his official capacity to the courts, and he may exercise his authority under the law of the jurisdic- tion; while, in a foreign jurisdiction, the law does no more than to make the person enter- ing it amenable to its laws, and in no way recognizes the official capacity. As a citizen In a jurisdiction foreign to his residence, he has a legal status, and is amenable to, and may Invoke the protection of, the law. As an officer of a court from a foreign jurisdiction, Ke has, and is entitled to, no legal recognition, except as the courts may. In their discretion, grant it, because he Is without the official ob- ligation that he assumed In his own juris- diction, and which is essential to a proper and safe exercise of such power. In Ayres v. Siebel, 82 Iowa, 347, 47 N. W. 989, we denied the right of a trustee, appointed by the court in Indiana, to sue and recover on a contract in this state; and in Parker v. Lamb & Sons, 99 Iowa, 265, 68 N. W. 686, we denied such a right to a receiver, and cited the Ayres-Slebel Case. In Parker v. Lamb & Sons, we quoted approvingly from High, Bee. § 289, as fol- lows: "Upon the question of the territorial extent of a receiver's jurisdiction and power for the purpose of Instituting actions connect- ed with his receivership, the prevailing doe- trine established by the supreme court of the S90 RECEIVERS. United States, and sustained toy the weight of authority in Tarious states, Is that the re- ceiver has no extraterritorial jurisdiction or power of official action, and cannot go into a foreign state or jurisdiction, and there insti- tute a suit for the recovery of demands due the person or estate suhjeet to his receiver- ship. His functions and powers, for the pur- pose of litigation, are held to be limited to the courts of the state in which he was appointed; and the principles of comity between states and nations which recognize the judicial de- cisions of one tribunal as conclusive on an- other do not apply to such a case, and will not warrant a receiver In bringing an action in a foreign court or jurisdiction." These authorities are broad and conclusive, and, un- less we are to set them aside, are conclusive of this case. Counsel have shown great zeal and tact in presenting authorities more or less In point, and we acknowledge somewhat of a conflict, as we have done in other cases; but the weight of authority we regard as in line with our holdings, and we are not disposed to disturb them. Beach on Receivers (section 680) states the same rule, and cites Booth v. Clark, supra, from which we have quoted, and then says: "The rule thus laid down by the supreme court of the United States has been followed by other courts with essential unanimity, and can hardly be said to be seri- ously questioned." In Fitzgerald v. Construc- tion Co. (Neb.) 59 N. W. 838. these authori- ties are approvingly cited and applied. It re- mains for us to state as a conclusion that the plaintiff is not entitled to recover in the courts of Iowa, and the Judgment of the district court will be affirmed. RECEIVERS. 891 AMERICAN BISCUIT & MFG. CO. v. KLOTZ et al. (44 Fed. 721.) Circuit Court, E. D. Louisiana. Januai? 8, 1891. In Equity. T. J. Semmes and Bayne, Denegre & Bayne, for complainant. W. S. Benedict and Rouse & Grant, for defendants. Before PARDEE, Circuit Judge, and BIL- LINGS, District Judge. PER CURIAM. This cause Is submitted upon an application for a receiver. Some time in May last, the defendant Klotz, and Fitzpatrick, his partner, composing the firm «f B. Klotz & Co., sold to the complainant their biscuit and confectionery manufactory for the price of $259,000, and an assumption of the debts of B. Klotz & Co., amounting to $42,000, which It was understood and agreed should be paid out of the income from the future business. The visible property was estimated to be of the value of $101,000, and the good-will of the business to be of the value of $200,000. The price was paid In stock of the complainant's corporation, es- timated to be of value at par; that is, to be worth 100 cents on the face value. The ptu*- chase was completed, price paid, property de- livered, the factory and good-will transferred by Klotz & Co. to the complainant. Klotz leased his bakery premises to complainant for the term of years, and contracted in writ- ing to become, and did become, the agent of the complainant, at a salary of $ per year. Klotz continued to carry on the bu^- ness as agent for the complainant down to some time in November, when he repudiated the sale and the lease, erased the name of complainant from the bakery, as agent, transferred the policies of insurance from the complainant to himself, as an Individual, then to B. Klotz & Co., and, for and in the name of the late firm, resumed the possession of all the property he had sold to the com- plainant, and the conduct of the business of the bakery and the confectionery establish- ment. He did this without resort to any legal proceedings. He thereafter held pos- session adversely to the complainant, and ex- cluded it from the bakery. In this state of things, the complainant filed its bill fOT an Injunction, and for an account and for a re- ceiver, against Klotz and W. A. Schall, who was alleged to be co-operating with him In the possession adverse to the complainant. Klotz has filed an answer, and he, together with his former partner, Fitzpatrick, who Intervened by petition pro interesse suo, have filed a cross-bill asking a rescission of the entire transaction, 1. e., the sale and the lease, and tendering the stock which had been received by them as the consideration of the sale. Numerous exhibits and afllda- vits have been adduced by each party upon this hearing. The recital thus given shows that, in an order inverted from what would he expected, we have before us a cause in which a party who has sold and delivered a business to another, and become his agent, and, as such agent, was in possession of the property sold, sets up a possession adverse to his principal, asks for a cancellation of the sale, and the purchaser and principal asks that the agent shall account, shall be en- joined from asserting any claim hostile to his principal,— In a word, for a confirmation of Its rights under the purchase. The immediate question before us la, what disposition shall be made of the res, the business of the bakery and manufactory, pending this contest? The vendor and agent asks that he be allowed to remain in ad- verse possession. The purchaser and prin- cipal asks for a receiver. It is clear that, as to this provisional disposition of the res, the defendant Klotz cannot be allowed to gain anything by his ouster of his vendee and principal. He must stand with those equities, and none other, which existed be- fore the ouster. The case as to the appoint- ment of a receiver must be reviewed and determined -as if he (Klotz) had filed his bill averring possession as agent, which he ask- ed to have changed by a decree into a pos- session as owner, through the cancellation of the sale and the lease; that is, he must aver a legal title in the American Biscuit & Manufacturing Company, which he seeks to have avoided and annulled. If, as in this case, he seeks to do all this by reason of fraud, and he establishes the fraud, a court of equity will not refuse to hear him. He would not be estopped, for fraud vitiates and sets aside even estoppels. Herm. Estop, par. 22, p. 244; Pendleton v. Rlchey, 32 Pa. 58, 63. But, while he is not estopped from pro- ceeding to set aside the sale and the lease by reason of his agency and his obligations as trustee, he comes into coiu:t assailing and seeking to cancel a legal title; for until that is done his possession is that of the com- plainant. Under these circumstances, until the hearing, the practice in the courts of chancery is not to disturb the possession un- der the legal title prior to the final decree, imless a case of monstrous wrong is estab- lished. StilweU V. Wilkins, Jac. 280, report- ed in full in Edwards on Receivers, p. 28, Lord Eldon, when a similar question was presented, observed: "The point that struck me was whether, on a bill to Impeach a sale for fraud, the court Interposes so strongly before the hearing as to take away the pos- session from persons holding It under the effect of deeds not yet set aside by decree," —and he holds that "it was not the general habit of the court" There the case was so monstrous, and the proof was so strong, that "It was hardly possible that the transaction could stand," and the legal title was inter- fered with. This is a leading case, and gives what we 892 RECEIVERS. find is the rule. The possession under the title Is not disturbed unless the proof of fraud is so strong as to lead the court to the clear conviction that it will, on the final hearing, be established. The fraud set up and relied upon by the defendant and in- tervenor is false and fraudulent representa- tions by the agents of the complainant In this: that they represented that the stock was fully paid-up stock, whereas, in truth and fact, it was none of it paid up in money, and only paid up in part, and, to the extent of that part, by transfer of plants or bakeries and manufactories at an estimated value as capital. The stock delivered to the defend- ant and intervener was not paid up until it was issued to them, and was paid for by a transfer of the bakery and good-will; and then it became paid up, and they were dis- charged from all liability to be made to eon- tribute as shareholders therefor. The tes- timony as to what was represented by com- plainant's agents about the stock being paid up is conflicting; but, when viewed in con- nection with the circumstances under which the stock was received, fails to satisfy us, upon this preliminary hearing, that any false i-epresentations are proved to have been made. The case of the defendant and in- tervener, set up in their cross-bill, whereby they oppose the appointment of a receiver, is that of parties who seek to rescind a deed on the ground of fraud, which upon this hearing they fail to establish. So far we have considered the question of appointing a receiver of the property in con- troversy inter partes, and mainly from the stand-point presented by the defendant's showing, and thereon such appointment seems proper, and we should accord it, but for an aspect of the case originally suggested by the defendant, when the case was pending in the state court, apparently abandoned here, but sufficiently brought to our notice by the exhibits of both parties. We are not satisfied that the complainant's business is legitimate. While the nominal purpose of the complain- ant's corporation, as stated in its charter. Is the manufacture and sale of biscuit and con- fectionery, its real scope and purpose seems to be to combine and pool the large compet- ing bakeries throughout the country into practically what is known and called a "trust," the effect of which is to partially, if not wholly, prevent competition, and enhance prices of necessary articles of food, and se- cure, if not a monopoly, a large control, of the supply and prices in leading articles of bread- stufCs. The case shows that an insignificant number of shares of complainant's stock was unconditionally subscribed for, apparently enough to qualify directors; but the great mass was taken and held by Irresponsible parties, to be used in parceling out as full- paid stock to such leading and successful bakeries throughout the country as could be induced to come in on an agreed value of the property and a large estimate of good-wiU. £:ach bakery when secured to be carried on by its former managers, subject, however, as to control of fimds, territory, prices, and competition, to the central management; all profits pooled, and of course division thereof to be made on the basis of the stock assign- ed to each bakery. Under this arrangement complainant has already secured the control, and pooled the business, of 35 of the leading bakeries in ]2 different states of the West and South, and is evidently seeking more con- stituents. The act of congress approved July 2, 1890, entitled "An act to protect trade and commerce against unlawful restraints and monopolies," expressly prohibits, under se- vere penalties, "every contract, combination, in the form of trust or otherwise, or conspir- acy, in restraint of trade or commerce among \b.e several states," and declares pimishable "every person who shall monopolize, or at- tempt to monopolize, or combine or conspire with any other person or persons to monopo- lize, any part of the common trade or com- merce among the several states." The en- forcement of this act is, by the statute, de- volved upon the circuit courts of the United States. The first and third sections of an act of the legislature of Louisiana, approved July 5, 1890, entitled "An act to protect trade and commerce against unlawful restraints and monopolies, and to provide penalties for the violation of this act," declare: "Section 1. That every contract, combina- tion in the form of trust, or conspiracy in re- straint of trade or commerce, or to fix or lim- it the amount or quantity of any article, commodity, or merchandise to be manufactur- ed, mined, produced, or sold in this state, is hereby declared illegal." "Sec. 3. That every person who shall mo- nopolize, or attempt to monopolize, or com- bine or conspire with any other person or persons to monopolize, any part of the trade or commerce within the limits of this state, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by a. fine not exceeding five thousand dol- lars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court." In construing the federal and state stat- utes, we exclude from consideration all mo- nopolies which exist by legislative grant; for we think the word "monopolize" cannot be intended to be used vrith reference to the acquisition of exclusive rights under govern- ment concession, but that the law-maker has used the word to mean "to aggregate" or "concentrate" in the hands of few, practical- ly, and, as a matter of fact, and according to the known results of human action, to the exclusion of others; to accomplish this end by what, in popular language, is expressed in the word "pooling," which may be defined to be an aggregation of property or capital belonging to different persons, with a view to common liabilities and profits. The expres- sion in each law "combinatioa in the form REOBIVBBS. 893 •of trust" would seem to point to just what in popular language, is meant by pooling. Now it is to be observed that these stat- utes outline an offense, but require for its complete commission no ulterior motive, such as to defraud, etc.; and, further, that the language is altogether silent as to what means must be used to constitute the offense. The offense Is defined to "combine in the form of trust, or otherwise. In restraint of trade or commerce," and "to monopolize, or attempt to monopolize, any of the trade or commerce." To compass either of these things, with no other motive than to compass them, and by any means, constitutes the of- fense. One just and decisive test of the meaning of the expression "to monopolize" is obtained by getting at the evil which the law-maker has endeavored to abolish and re- strict. The statutes show that the evil was the hindrance and oppression in trade and commerce wrought by its absorption in the hands of the few, so that the prices would be in danger of being arbitrstrily and exorbitant- ly fixed, because all competition would be -swallowed up, so that the man of small means would find himself excluded from the restrained or monopolized trade or commerce as absolutely as if kept out by law or force. If this is the meaning of the defining words, does not this corporation, thus glutted with the 35 industries of 12 states, disclose an "attempt to monopolize?" So far, therefore, AS the complainant's business is a combina- tion in restraint of trade, or Is an "attempt to monopolize, or combine, in the form of a trust, or otherwise, any part of trade or com- merce," as these words are properly defined, the law stamps it as unlawful, and the courts should not encourage it. Aside from tnis, the complainant's business, even if lawful, being ■of the kind shown above, is not of that mer- itorious kind that it should be encouraged by a court of equity. The appointment of a re- ceiver by a court of equity is not a matter of strict right, but of judicial discretion. Fos- dlck V. SchaU, 80 U. S. 235. It falls within that class of interlocutory remedies which courts must grant or withhold, according to a discretion conscientiously exercised, upon a consideration of all the facts which a cause presents, involving the rights of the parties and the Interests of the public. The attempt to accumulate in the hands of a single or- ganization the business of supplying bread itself to so large a portion of the poor, as well as the rich, people of the United States should not be favored by a court of equity. It carries with it too much of danger of ex- cluding healthy competition, thereby Increas- ing the difliculty to the general public of participating in a most useful business, as well as adding to the possibility of multi- tudes of citizens being temporarily, at least, compelled to pay an arbitrary and high price for daily food. "Whatever we may feel compelled to do, on the final hearing of this cause, towards rec- ognizing the complainant's legal rights, and compelling a faithless trustee to account, we are clear that at this preliminary stage, with our present impressions of the character and general scope of complainant's business, the court ought not, by the appointment of a re- ceiver, to aid complainant to perfect, and perhaps to enlarge, his combination or trust; and the refusal to appoint a receiver can re- sult in no serious and lasting injury to com- plainant, because the shares of stock of com- plainant company, forming the entire consid- eration of complainant's purchase, have been tendered in court, and may be Impounded, to be held as security for any damages sus- ceptible of proof resulting from defendant's mismanagement of the property pending the suit. The motion for a receiver is denied. 894 RECEIVERS. HAYWOOD et al t. LINCX>LN LUMBER. CO. et al. (26 N. W. 184, 64 Wis. 639.) Supreme Court of Wisconsin. Dec 23, 1885. Appeal from circuit court, lincoln county. Pullings, Hoyt & Holway and D. S. Ord- way, for appellants Murray Haywood and another. Silverthorn, Hurley & Ryan, for respondents Lincoln Lumber Co. and others. ORTON, J. This is an action brought by the appellants to foreclose a mortgage given by the defendant lumber company, by its president and secretary, to the said appel- lants and the defendant T. P. Matthews and one George G. Smith, on the fourth day of February, 1884, on all of the real property of said corporation, to secure a bond In the penal sum of $100,000, given at the same time by said company, to said mortgagees, condition- ed to pay them certain indebtedness of the company past due them, respectively, in the aggregate of over $50,000. The Interest in said mortgage of said George 0. Smith was assigned to said plaintiffs. The defendant Robert C. Parcher was appointed receiver in April, 1884, in a suit of one .T. C. Clark against said company; and said Parcher, as such receiver, in June, 1884, loaned of the' de- fendant the First National Bank of the City of Wausau the sum of $10,000, to be used in the management of the business and property of said lumber company; and, by the order and leave of the court, executed, as such re- ceiver, a mortgage upon the real property of said company to said bank to seciu-e the same. The said defendant Parcher and the defendant the Lincoln Lumber Company an- swered the complaint, alleging, substantially, that the said mortgage sought to be foreclosed was executed by the president and secretary of said company, without authority; and that, at the time, said corporation was insol- vent, to the knowledge of said mortgagees, and owed large Indebtedness to others; and that said mortgage was given by said offi- cers, and authorized, if at all, by the directors of said company to be given to themselves, to secure their own claims against the com- pany, as an unlawful and fraudulent prefer- ence of themselves as the creditors of the company, in fraud and with intent to de- fraud the other creditors and the company, and that said bond and mortgage were there- fore void. The said defendant the National Bank answered, setting up its mortgage by the receiver, and alleging its priority to the mortgage in suit by the agreement of the mortgagees in said mortgage, and prays a foreclosure thereof. The circuit court sub- stantially held that said mortgage was given without authority, because the majority of the quorum of the directors voting that said bond and mortgage be given were interested in the same, and that said company was then inlelrent; and that the directors held the property In trust for the creditors, and the- execution of said mortgage by the officers and by the authority of the directors to them- selves to secure their antecedent claims against the company was an unlawful prefer- ence, and was fraudulent and void; and that the said mortgage to the bank has priority, and was lawfully executed by said receiver. The special findings are numerous, and the case voluminous; but the above are believed to be substantially the findings, and upon the substantial issues in the case. The principles involved in this suit are really very simple, and almost elementary, and not at all complicated; and we cannot but think they have been greatly magnified and more earnestly contested on account of the amount in controversy. The plaintiffs contest the power of the receiver, Parcher, to give the mortgage to the bank on the ground of the want of jurisdiction of the court to ap- point him or any one receiver in the case of Clark against the company. These plaintiffs were directors of the company, and one of them the secretary, and both mortgagees, when the said Parcher was appointed such receiver, and as directors and as mortgagees counseled and advised his appointment, and consented thereto, and the directors over and over again recognized and confirmed it by dealing with him as such, and placing the property of the company in his hands; and, after his appoint- ment, the plaintiffs, together with the defend- ant Matthews, as said mortgagees, by writ- ing under seal, authorized the said receiver to borrow not exceeding $15,000, and give a mortgage on the property of the company in his hands to secure it, for the purpose of car- rying on the business in running the mills and sawing up the logs, and released their said mortgage so far as It would have prefer- ence of the mortgage so given by the receiv- er, and so as to give the same priority to their said mortgage. There is abundant evi- dence of the plaintiffs' estoppel to dispute the authority of said receiver, both in pais and by deed. But accepting the allegations of the complaint in that case as true, the court not only had the power, but it was its duty, to appoint a receiver. The directors and officers had given the mortgage in suit alleged to be in fraud of the creditors of the company, nearly or quite insolvent af the time, and threatened afterwards to sell out in gross all the property of the company without notice, and to bid the same off In their own names and for their own benefit, in fraud of many other creditors of the company, and in this way to close up the business of the company. These are some of the substantial allegations of the complaint of Clark, the plaintiff, who was himself one of the stockholders of the company. Within the general powers of a court of chancery, which are preserved In the fifth subdivision of section 2787, Rev. St.. this was a proper case for an Injunction and receiver both. The property of the company was being mismanaged, and was in dangMr RECEIVERS. 895 of being lost to the stockholders and creditors through the collusion and fraud of Its officers and directors. The only place of safety for the business and property of the company ■was In the "hand" of the court through a re- ceiver pendente lite. A stronger case for a receiver could scarcely be made, and the nu- merous authorities cited In the able brief of the learned counsel of the respondents, and the facts stated in the complaint, abundantly authorize and justify his appointment in that case. We think the circuit court properly held that the court had jurisdiction to appoint Parcher a receiver; and, upon the evidence, properly found that the mortgage to the bank was not only valid, but has priority over the mortgage in suit. Under repeated decisions of this court, the exceptions of the respond- ent cannot be considered, except to support the judgment rendered, unless the respondent also appeal. Therefore this court cannot go further than the circuit court In ordering a foreclosure of the bank mortgage in this ac- tion. But the matter of this bank mortgage is of only Incidental importance in this case. The main question is of the validity of the mort- gage in suit There was abundant evidence to justify the finding of the circuit court that at the time It was given the company was in- solvent. In such case, the authorities seem to be uniform that the directors and officers of the corporation are trustees of the creditors, and must manage its property and assets with strict regard to their interests; and, if they are themselves creditors while the in- solvent corporation is under their manage- ment, they cannot secure to themselves any preference or advantage over other creditors. The directors are, then, trustees of all the property of the corporation, for all of its cred- itors, and an equal distribution must be made, and no preference to any one of the creditors, and much less to the directors or trustees, as such. I have carefully examined all the au- thorities cited on both sides touching this principle, and find it recognized in every case. Many of the authorities cited by the learned counsel of the appellants as holding a con- trary doctrine state this doctrine as fully es- tabUshed, and cite many of the authorities In Its favor cited here by the learned counsel of the respondents, and cases are made an ex- ception only because, in their facts, this T)rln- ciple has no application. It is reiterated in the text of elementary works, and numerous cases are cited to sustain it Mor. Priv. Corp. 579-581. A few only of the cases holding this principle will be cited here, but many others may be found in the brief of counsel and elsewhere too numerous for citation. Marr v. Bank, 4 Cold. 471, 484; Koehler v. Iron Co., 2 Black, 715; Curran v. >4xkansas, 15 How. 306; Richards v. Insurance Co., 43 N. H. 263; Bradley v. Farwell, Holmes, 433; Drury v. Cross, 7 Wall. 299; Paine v. Rail- road Co., 31 Ind. 353; Gas-Ught Co. v. Ter- rell, L. R. 10 Eq. 168. I have been unable to hnd a single case, which In its facts is like this, in which this doctrine is even questioned and was not strictly applied. But there is another principle equally un- questionable which renders the mortgage in suit void. The directors and officers made the mortgage, or directly caused it to be made, to themselves. They occupied a fiduciary rela- tion to the corporation, its stockholders, and its creditors, and they had no right to use such relation and their official position for their own benefit, to the injury of others in equal right This principle was applied to the taking of a mortgage by the directors on the property of the corporation to secure their liability as sureties, upon a note of the cor- poration, in Corbett v. Woodward, 3 Sawy. 403, Fed. Cas. No. 3,223, which is a strong case, and very similar is the case of Koehler V. Iron Co., supra. See, also, Mor. Priv. Corp. 243; Hoyle v. Railroad Co., 54 N. T. 314; Railway Co. v. Poor, 59 Me. 277; Butts v. Wood, 38 Barb. 188; Railway Co. v. Huxon, 19 Eng. Law & Eq. 365; Scott v. Depeyster, 1 Edw. Ch. 513; and Verplanck v. Insurance Co., Id. 85; Railway Co. v. Magnay, 25 Beav. 586; 1 Perry, Trusts, § 194, and cases cited. But it is really unnecessary to cite cases from abroad when the same principles have been estabUshed in our own cases, as in Cook v. Berlin Woolen Mills, 43 Wis. 434, and Pickett V. School-district, 25 Wis. 553. Directors, officers, and agents, and other like trustees, cannot mortgage or convey to themselves any more than one can contract VTith himself. The Idea that the same per- sons constitute different identities of them- selves by being called directors or officers of a corporation, so that, as directors or officers, they can convey or mortgage to or contract wili themselves as private persons, is in vio- lation of common sense. In re Taylor Or- phan Asylum, 36 Wis. 552, and cases above cited. See 1 Perry, Trusts, § 207, and Mor. Priv. Corp. § 245; Walworth County Bank v. Farmers' Loan & Trust Co., 16 Wis. 629; Coal Co. V. Sherman, 30 Barb. 553. It is unnecessary to decide the question whether there was a quorum of disinterested directors that directed the mortgage to be given. The mortgage is an entirety, and it makes no difference how many persons are severally Interested in it as mortgagees. If such mortgagees, as directors, authorized it, they authorized an act in which they were all jointly interested. They may not have been joint creditors, but they are joint mort- gagees, because the mortgage as a security is an entirety. Whether, in this view, the mortgage was never authorized to be given by the president and secretary of the company, by the company through its directors, it may not be necessary to decide; but it seems to me rather illogical to say that, because there is a quorum of directors who are creditors severally, a majority of them may authoriz' their claims to be secured by one mortg^ and do not act on their own claims, but '' 896 RBCBIVBES. one acts In respect to the claims of the other. If A., B., and C. are several creditors and a quorum of directors, and A. and B. vote to give C. an Interest In the mortgage to secure his claim, A. and C. so vote as to the claim of B., and B. and C. as to the claim of A.,— do they not vote for themselves in respect to one mortgage? This would be an ingenious and convenient collusion to vote to themselves all the property of the corporation at almost any time, on the ground that the majority so voting is disinterested and Impartial. But It is very clear to us that the mort- gage is void in view of the above principles, and that disposes of the action of foreclosure. Beyond that, the findings of the court are not very important as to the rights of the defend- ants. The judgment of the circuit court is af- firmed. RECEIVERS. 897 BANK OV FLORENCE et al. v. UNITED STATES SAVINGS & LOAN 00. (16 South. HO, 104 Ala. 297.) Supreme Court of Alabama. Aug. 9, 1894. -Appeal from district court, Lauderdale county; w. P. Chitwood. Judge. Suit by the United States Savings & Ijoan Company against the Bank of Florence and others. From a decree appoinOng a receiv- er, defendants appeal. Reversed. In addition to the aUegations of the bill, which ai-e stated in the opinion, and upon which is predicated the right to have the re- ceiver appointed, the bill also averred that the officers of the bank had, wrongfully and without authority of its stockholders, turned over the assets of the bank to one S. S. Broadus, who had assumed complete control of the same, and that he was pursuing reck- less methods in disposing of the assets of said bank. Roulhac & Nathan and. Emmet O'Neal, for appellants. Paul Hodges, for appellee. BRICKBLL, 0. J. The material allega- tions of the original bill, on which is predi- cated the right to the appointment of a re- ceiver, and the right to the ultimate equitable relief which is prayed, are capable of being reduced to a narrow compass. The com- plainant is a corporation organized and eix- isting under the laws of the state of Minne- sota, having a place of business in the city of Florence, in this state. The Bank of Florence was engaged in a general banking business at Florence, and became the agent of complainant for the collection of moneys there dne and owing, and which were to become due, and was charged with the duly of remitting such moneys to the complainant as collected. Neglecting the duty of remit- tance of these moneys, the bank suffered the sum of $538.80 to accumulate tn its hands, and suspended payments. Though insolvent, the bank made no transfer or assignment of its property and assets, but proceeded in winding up its affairs, with the acquiescence of its creditors. Judgments were being ren- dered against it, and it was making prefer- ences in payment of its creditors. These are the material allegations of the bill, upon which is founded the right to the appointment of a receiver; and the specific relief prayed is that, for the payment of the sum due, the complainant be decreed a lien on all the assets of the bank, in priority of all general liens, by which we suppose is intended in priority of all creditors not having a specific lien. When an application is made for the appointment of a receiver, the primary in- quiry is whether there is shown a reasonable probability that the plaintiff asking the ap- pointment wUl ultimately succeed in obtain- ing the general relief sought by the suit If ultimate success is a matter of grave doubt, or if, as in the present case. It be clear that H.& B.EQ.(2d Ed.j-oT the general rdlef sought cannot be obtained, the appointment ought not to be made. 2 Pom. Eq. Jur. (2d Ed.) § 1331; High, Rec. (2d Ed.) § 8; Randle v. Carter, 62 Ala. 95. It Is ti-ue, as a general rule, that. In making or refusing the appointment of a receiver, the court will not forestall or anticipate the decision which may be made on final hear- ing. This Is true when a case Is presented upon which there is a reasonable proba- bility the plaintiff may ultimately obtain relief. In such cases the pleadings may not be drawn with technical accuracy. The bill may be subject to demurrer for the want of proper parties, or because of defects of form or the absence of substantial allega- tions, — insufficiencies curable by amendment These Insufficiencies, of themselves, do not form an impediment to the appointment of a receiver, if a case be made by a party hav- ing interests to be protected and preserved entitling him to the general relief which is prayed. Ex parte Walker, 25 Ala. 81. The relation between the complainant and the Bank of Florence was that of principal and agent, created by their agreement,— a legal relation strictly, though, to attain the ends of justice, and preserve the confidence it involves, courts of equity, under some cir- cumstances, deal with it as a fiduciary rela- tion. The debt created by the breach of duty of the agent is a mere simple contract debt, for the recovery of which legal reme- dies are adequate. Crothers v. Lee, 29 Ala. 337; Knotts v. Tarver, 8 Ala. 743. The de- mand being a simple contract debt, purely of a legal character, the complainant in the ab- sence of some peculiar equity, is not entitled to the intervention of a court of equity to en- force its payment Reese v. Bradford, 13 Ala. 838; Sanders v. Watson, 14 Ala. 198. These well-recognized principles are not con- troverted. The insistence is that as the agent converted to his own use the money of the principal, commingling it with his own mon- ey, or in some form with his other assets, so that it cannot be identified or the specific uses to which it was applied traced, it is suf- ficient to trace it into the general assets of the agent to impress them with a trust for the payment of the money,— a trust which is peculiarly of equitable cognizance. It is true that a trustee or an agent or other per- son standing in a fiduciary relation cannot derive benefit from commingling with his own the moneys of his cestui que trust or principal; and it is equally true that, if he makes an Investment of such moneys, a court of equity, so long as the moneys may be distinctly traced, will follow them, and impress upon the investment the trust to which the moneys were subject The con- version of the trust moneys, as distinguished from other moneys of the trustee or agent, must be clearly shown. It is not sufficient to show that there has been a conversion cv trust fimds, and the acquisition or posf^ sioia by the trustee or agent of proper'^ 898 RECEIVERS. assets, which may be supposed a substitute for such funds. As is said by the supreme court of Massachusetts: "The court will go as far as it can in traclns and following trust money; but when, as a matter of fact, it cannot be traced, the equitable right of the cestui que trust to follow it fails. Under such circumstances, if the trustee has be- come bankrupt, the court cannot say that the trust money is to be found somewhere in the general estate of the trustee that still re- mained. He may have lost it with property at his own, and in such case the cestui que trust can only come in and share with the general creditors." Little v. Chadwick, 151 Mass. 109, 23 N. B. 1005. There is no ques- tion of tracing or identifying the moneys of the principal. The naked averment of the bill is that, in violation of duty, the agent converted to his own use the moneys of the principal, creating a mere simple contract debt There is no averment that the assets upon which it Is sought to fasten the trust had not been acquired by the agent before the conversion; no averment that in any form the moneys of the principal entered in- to their acquisition. All that can be said is that which may be said of any delinquent trustee or agent,— that he had converted the moneys of his cestui que trust or principal; and from the busiuess in which the agent was engaged it may be presumed that, in the com-se of the business, they were com- mingled and used with the moneys of the agent If a trust were raised to charge the assets of the agent a like trust would arise and be fastened on the general assets of every delinquent agent or trustee,— a trust which would prevail against all others than bona fide purchasers. The moneys of the principal are incapable of being identified and traced into any of the assets of the bank, and, this being true, the principal, we re- peat, is a mere simple contract creditor of the agent, not entitled to any preference or priority of payment over other creditors. EUison V. Moses, 95 Ala. 223, 11 South. 347; Association v. Austia (Ala.) 13 South. 908. It is quite an error to suppose that the two cases chiefiy relied on by counsel for the ap- pellee (National Bank t. Insurance Co., 104 D. S. 54; In re Hallett's Estate, 13 Ch. DIv. 696) support a contrary doctrine. It is ap- parent the original bill is without equity, the complainant is not entitled to the general re- lief sought and the appointment of the re- ceiver was erroneous. If the case was of equitable cognizance, en- titUng the complainant to reUef, a fatal ob- jection to the regularity of the order ap- pointing the receiver is that it was made without notice to the defendants. A receiv- er may be appointed without notice to the defendant who is to be dispossessed of his property or assets, but the cases in which no- tice may be dispensed with are exceptional. There must be shown a strong case of press- ing emergency, rendering immediate inter- 'ference necessary before there is time to give notice; or It must be shown that notice would jeopardize the delivery of the proper- ty over which the receivership [s to be ex- tended. Moritz ▼. Miller, 87 Ala. 331, 6 South. 269; Dollins v. Lindsey, 89 Ala. 217, 7 South. 234. The averment of the bill on which the court below proceeded to the ap- pointment without notice is expressed in these words: "And complainant alleges the necessity exists for the appointment of a re- ceiver, to prevent the further unauthorized and illegal action by the said Broadus, and to prevent irreparable injury and total de- struction of the assets of the said bank." It is not on such vague and indefinite allega- tions, the opinions or conclusions of the pleader, not accompanied by a statement of the facts on which they are founded, that no- tice of a judicial proceeding can be dis- pensed with, and parties deprived of the pos- session or control of properly. The particu- lar facts and circumstances supposed to create the necessity for the Immediate ap- pointment should have been stated, submit- ting to the judgment of the court whether they created the necessity— the pressing emergency— for judicial interference. Ver- plank V. Insurance Co., 2 Paige, 438. Upon the bill alone, without affidavits or other evi- dence, the appointment was made. The or- der appointing the receiver must be vacated and annulled, and the cause remanded. Re- versed, rendered, and remanded. RECEIVERS. 899 COLTON et al. ▼. DOVER PERPETUAL BUILDING & LOAN ASS'N OF BALTIMORE. (45 Atl. 23, 90 Md. 85.) Court of Appeals oi Maryland. Nov. 24, 1899. Appeal from circuit court of Baltimore city; Henry Stoekbridge, Judge. Exceptions by the Doyer Perpetual Build- ing & Loan Association of Baltimore to the auditor's account distributing the assets of the South Baltimore Bank, refusing to allow said building association to set oS a deposit against a note executed by it, and held by the bank. Prom an order sustaining the ex- ceptions, William Colton and Simon P. Schott, receivers of the bank, appeal. Affirmed. Argued before McSHERRY, G J., and PAGE, PEARCE, FOWLER, BOTD, and SCHMUCKER, JJ. Wm. S. Bryan, Jr., and Martin Lehmayer, tor appellants. L. P. Henninghausen and P. C. Henninghausen, for appellee. BOYD, J. A bill was filed in the court be- low against the South Baltimore Bank, a cor- poration of this state, on the 24th day ot February, 1898, asking for the appointment of a receiver, and that the bank be declared insolvent. An answer was filed the same day, admitting that the bank was insolv^it, and consenting to the appointment of a re- ceiver. One of the appellants was appointed on that day, and afterwards the other was appointed co-receiver. On the 1st day of June, 1898, a decree was passed adjudicat- ing the baJik Insolvent, and determining It was so when this bill was filed. The re- ceivers proceeded with the discharge of their duties, and in due course the case was re- ferred to the auditor to state an account dis- tributing the assets of the bank. When the bill was filed, the bank held a promissory note of the appellee for $1,000, which be- came due on March 2, 1896, and the applies had a deposit with the bank of $357.25. At the maturity of the note the appellee ten- dered the receiver then In office the sum of $642.75 in payment of said note, claiming tiie amount of the deposit as a set-off, and demanded the note, but the receiver refused to accept that amount Subsequently that sum was accepted, under an agreement that It should be credited on the note, without prejudice to the receiver's claim for the bal- ance, and that no suit should be Instituted until it was determined whether the appellee was entitled to set off the deposit against the balance due on the note. The auditor refused to allow the set-off, but distributed to the appellee its proportion dividend as a creditor. £ixceptions were filed to the audit, which were sustained, and a decretal order was passed directing the receivers to allow the association the deposit as a set-off against the balance due on the note. From that order this appeal was taken by the re- ceivers, with the permission of the court; it Deing represented that there were a number of other claims that would be affected by the decision. The question, therefore, to be determined by us, is whether the appellee Is entitled to set off the amount of its deposit with the bank at the time of Its failure against the balance due on the note, under the circumstances we have stated. Several reasons have been assigned by the appellants In support of the position that the appellee Is only entitled to receive a distribution on the amount of the deposit, as other cred- itors are. 1. One ground relied on E,t the argument was that a depositor in a bank cannot main- tain a suit for his deposit unless he has pre- viously made a demand for it, and that no lemand was made in this case. "It is now perfectly well settled that the relation be- tween banker and customer, who pays money into the bank, or to whose credit money is received there on deposit, is the ordinary relation of debtor and creditor." Hardy v. Bank, 51 Md. 585. And it is equally well settled that a depositor cannot, as a general rule, maintain an action to recover his de- posit until he has first made a demand for its payment. 3 Am. & Eng. Enc. Law (2d Ed.) 8S8. But, while that is true, there may be circumstances under which no demand is necessary prior to bringing suit; and, on page 839 of the volume ot the Encyclopedia of Law above referred to, it is said that "where the bank has suspended, or where for any other reason it would be manifestly futile to make demand, none need be made." In the case of Planters' Bank v. Farmers' & Mechanics' Bank, 8 Gill. & J. 449, it was held that the necessity for a demand would ^o dispensed with by the susi>ension of spe- cie payments and discontinuance of banking operations by the bank, provided those acts were known to the plaintiff, and from the time of such knowledge the statute of limita- tions would begin to run. It would have been "manifestly futUe to make demand" on the bank or the receiver for the amount of deposit; and, if the appellee had sued, the fact that a demand was not previously made would not have defeated the action. If the bank had not failed, and had sued the appel- lee for the amount of the note, it would not have been necessary for the latter to have proven a demand for the deposit prior to the time suit was instituted by the bank. A defendant can set off against a plaintiff's demand a nole of the plaintiff which ma- tured after the commencement of the ac- tion. Clarke v. Magruder, 2 Har. & J, 77. As early as Whittington v. Bank, 5 Har. & J. 489, our predecessors held that the defend- ant in an action by a bank on a promissory note against him may set off against the claim of the bank any money he has In bank, and it is not intimated that a previous de- mand was necessary In order to enable b'"' to do so. The bank being a debtor to **® depositor, the right to set off such dep"*^* • 900 RECEIVERS. within the very terms of our statute; and hence in a suit by the bank the claim for the deposit can be set off, although no pre- vious demand for it has been made. That being so, It would seem to be clear that no demand would be necessary in order to en- able the defendant to set off the amount of the deposit against a claim made by the re- ceiver of the bank, if there be no other rea- son for not allowing it. In Morse, Banks, § 338, It is said: "Where the bank itself stops payment and becomes insolvent, the customer may avail himself, in set-off against his Indebtedness to the bank, of any indebtedness of the bank to himself,— as, for example, the balance due him on his deposit account. So, also, even though the debt to him has not matured at the time of the in- solvency." This may be done whether a demand had or had not been previously made. Fort v. McOully, 59 Barb. 87; Sey- mour V. Dunham, 24 Hun, 93. 2. We come then to the main question In the case. It is argued that to allow the set-off would be, In effect, to give the appellee a. preference over the other creditors of the bank, and that it is the duty of the receivers to distribute the assets pro rata, and not to pay In full any one creditor. If the appellee was merely a creditor, that argument might prevail, but that was not the relation that ex- isted between the two. The appellee was not only a creditor to the amount of its deposit, but it was a debtor to the amount of the note held by the bank. Its debit was larger than its credit, and, if the bank had not failed, it could only have recovered the difference be- tween the two. Do the receivers occupy any better position? The general mle undoubtedly Is that a receiver takes subject to set-offs which the defendant might have set up against the original owner. See 22 Am. & Eng. Enc. Law, 308, and Merrill y. Granite Co. (Mass.) 36 N. B. 797, 23 L. R. A. 313, note, where many authorities are collected. There are some exceptions to the rule, one of which may be mentioned, although not directly involved in the case, as some of the authorities cited by the appellants are to that point; and that is that a claim obtained after the commencement of the proceedings which resulted in the ap- pointment of a receiver should not be allowed as a set-off unless there be some statute au- thorizing it to be done. In this case, however, the debt was due by the bank to the appellee before the proceedings under which the ap- pellants were appointed were instituted. As we have seen, the relation of debtor and creditor existed; and the question discussed ibove, as to whether demand must be made before suit can be brought, does not in any wise reflect upon the question of Indebtedness, but only on the right to sue for the indebted- ness before demand Is made. But it is said on behalf of the appellants that, inasmuch as the We fell due after the appointment of the tot receiver, he took it free from all equities, just as a bona fide purchaser for value would have done, and that a claim In favor of the bank which did not mature until in the hands of the receiver is not subject to a set-off by a claim which existed against the bank before the receiver's rights accrued; in short, that in one case the debt is due by the bank to the customer, and In the other by the custom- er to the receiver. If that were strictly cor- rect, there would be some ground for the con- tention; for if, for example, the appellee had purchased some property from the receiver, it would not be permitted to set off its claim against such indebtedness to the receiver, for it would thereby not only obtain an unwar- ranted preference over other creditors, but it would prevent a proper settlement of the in- solvent estate, and, moreover, they would not be mutual claims. But when the receiver was appointed he took the assets of the bank, and among those assets was this note. It was a debt already incurred by the appellee, and payable to the bank when due. By reason of the fact that it was payable to and held by the bank, it was an asset that became vested In the receiver, and he took it subject to the equities existing between the appellee and the bank. Although there are some authori- ties to the contrary, the great weight of au- thority is to the effect that the fact that tht daim thus held by the receiver does not ma- ture until after his appointment does not pre- vent a defendant from using his claim as a set-off. Among other decisions are Berry v. Brett, 6 Bosw. 627; Scott v. Armstrong, 140 U. S. 499, 13 Sup. Ct. 148, 36 L. Ed. 1059; Piatt V. Bentley, 11 Ain. Law Reg. (N. S.) 171; In re Hatch, 155 N. Y. 401, 50 N. B. 49, 40 L. R. A, 664; Bank v. Balliet, 8 Watts & S. 311; Aldrich v. Campbell, 4 Gray, 284; Smith V. Spengler, 83 Mo. 408; McCagg v. Woodman, 28 111. 84; Armstrong t. Warner, 49 Ohio St. 376, 31 N. B. 877, 17 L. R. A. 466; Yardley v. Oothier, 2 C. O. A. 349, 51 Fed. 506, 17 L. R. A. 462; Skiles v. Houston, 110 Pa. St. 254, 2 Atl. 30. See, also, Fera v. Wick- ham (N. Y. App.) 31 N. E. 1028, 17 L. R. A. 456. note. Some of these cases make a distinction between a technical set-off in suits at law, and cross demands allowed by courts of equity, but, as we are now considering a distribution In a court of equity, all of the cases can prop- erly be referred to here. 3. But It is contended by the appellants that if It be conceded that the general rule Is as we have stated, about the rights of the receiv- ers, they occupy a different position, by reason of our statute. Section 264a of article 23, c. 349, Acts 1896, provides that when a coroora- tion has been determined or proven to be in- solvent and dissolved, in accordance with sec- tion 264, "all of its property and assets of ev- ery description shall be distributed to the creditors of said corporation in the sr'me man- ner that the property and assets of an in- solvent debtor are distributed under the provi- sions of article 47 of the Code. * • • And the date of the filing of the bill against such corporation, upon which it may be dissolved |1 RECEIVERS. 901 shall be taken and treated for the purpose of determining the validity of preferences and for all other purposes as the date of the filing of the petition in Insolvency by or against a natural person." In short, receivers of cor- porations that are dissolved under that stat- ute are placed on the same basis as trustees in insolvency of natural persons, and the date of filing the bill is the time fixed to determine the status of the parties affected by It. But section 11 of article 47 of the Code provides that "the estates of the Insolvent shall be distributed under the order of the court ac- cording to the principles of equity." WhUe set-off in equity is generally governed by the same principles as at law, courts of . equity sometimes allow a set-off where for some tech- nical reason It could not be allowed at law. The insolvency of the party against whom it is claimed frequently affords equitable groimd for allowing it. A technical set-off is wholly of statutory origin, but courts of equity exer- cise an original jurisdiction over the subject, and wiU, when reason and justice require it, enforce a counterclaim, though not within the letter of the statute. Smith v. Donnell, 9 Gill, S4, and Manning v. Thruston, 59 Md. 218, are instances of such equitable relief. It would sometimes work great Injustice to customers of banks if they should be required to pay in full their indebtedness to the bank, and only receive a dividend on their deposits. A cus- tomer might from time to time make deposits in bank with a view to meet his. note held by it, and It would manifestly be a great hard- ship, if, under those circumstances, he could not apply his deposit towards the payment of the note, because the bank had failed and a receiver had been appointed. A court of equi- ty would certainly not permit such unjust re- sults in the distribution of funds before it, if such facts were proven; and, although In this case there is no evidence that the deposit was made with special reference to the ma- turity of the note, yet, as It became due a few days after the receiver was appointed, It might well be inferred that the appellee had that (act In view in making the deposits. If the bank had not failed, it could have applied the deposit of the appellee towards the payment of the note. 3 Am. & Eng. Enc. Law (2d Ed.) 828, 835; Miller v. Bank, 30 Md. 392. And It would be unreasonable to permit a receiver of an Insolvent bank to collect the note in fuU, without allowing the set-off, particularly as the bank had a lien on the deposits. "The bank holds a lien upon the deposits in its hands to secure the repayment of the depos- itor's indebtedness, and may enforce that lien as the debts mature, by applying the debtor's deposits upon them, thus setting the two off against each other." 3 Am. & Bug. Enc. Law (2d Ed.) 835; Miller v. Bank, supra. If the appellee was not financially responsible, and had attempted to assign its claim for deposits against the bank to a third person, could there have been any question about the right of the receiver to Insist upon the application of the deposit to the payment of the note? Clearly not, as the assignee of the claim would have taken It subject to equities existing between the appellee and the bank, and a court of equity would have protected the bank or its representatives, the receivers. Marshall v. Cooper, 43 Md. 46. It would seem clear, then, that at least In equity the deposit should be allowed as a counterclaim or set-off. But even at law it should be allowed against the receiv- ers. It Is true that a trustee appointed under our insolvent laws does not occupy precisely the same position that an ordinary trustee un- der a conventional deed of trust does, as he has greater powers, and represents the cred- itors. He can, for example, have a deed made by the insolvent in fraud of his creditors set aside, which an assignee under a voluntary deed of trust cannot do, because the latter can only do what his assignor could. But the in- solvent law does not vest him with such pow- ers as would enable him to collect more than is actually due the Insolvent, and there was only actually due the balance between the two accounts. "All Oie property of every descrip- tion, rights and claims of the insolvent," vest In the trustee; and, if the insolvent has dis- posed of any of his property in violation of the insolvent law. It is void, and the trustee can recover It. It could not be successfully contended that the creditors of an insolvent could deprive one who owes the insolvent of the right of set-off, and how can the trustee who represents them do so? Nor can he avoid the right of set-off on the theory that he oc- cupies the position of a bona fide purchaser for value. Haitun v. Bishop, 3 Wend. 13, re- ferred to by the appellants, tends to sustain that position, but that case has not met with approval. See (N. Y. App.) 31 N. B. 1028, 17 L. R. A. 458, note. In Dowler y. Cushwa, 27 Md. 354, this court quoted with approval from Van Wagoner v. Gaslight Co., 23 N. J. Law, 291, that: "The rule pervades both bankrupt and insolvent laws, founded on general prin- ciples of equity, that all cross demands, wheth- er connected or independent, provided they be mutual, as between the bankrupt or the insol- vent and the creditor, shall be set off, and the balance only shall be deemed the indebtedness on one side or the other. The assignees take a bankrupt's property in the same condition, and subject to the same burthens, as the bankrupt himself held It, on the principle that they are not purchasers for a valuable con- sideration, but as voluntary assignees and per- sonal representatives, and are therefore dis- tinguished from particular assignees." Al- though fully recognizing the distinction be- tween the trustee of an insolvent and one ap- pointed by the debtor In a deed of trust, as made by this court in previous cases, we can- not adopt the view urged upon us, that the former is to be regarded as a bona fide pur- chaser for value of the assets that come into his hands, and thereby permit him to depri^ a debtor of such a right as that to set o* debt due by the insolvent prior to the w*' titu- 902 RECEIVERS. non of the Insolvent proceedings; and we find nothing in our statute, or in the authorities we feel called upon to follow, to cause us to reach a conclusion that in our opinion would work such manifest injustice. It Is not claim- ed that a receiT^r appointed under the sta^ ute referred to can occupy any better posd- tlon than an insolrent tinistee, and. for the reasons we haye given, we will attiiui the or^ der of the court appealed from. Order af- firmed; the costs to be paid out of the ins(d- vent estate. RECEIVERS. 903 BAILEY V. PITTSBURGH COAL R. CO. et al. (21 Atl. 72, 139 Pa. 213.) Supreme Coui^t of Pennsylvania. Jan. 6, 1891. Appeal from court of common pleas, Al- legheny county. Bill in equity for the appointment of a re- ceiver to collect unpaid stock subscriptions from the stockholders of a company, for the payment of a judgment creditor of said com- pany. J. N. MeCreery, an employs of the Pittsburgh Coal Raih:oad Company, obtained a judgment against it. The plaintiff, his as- signee, filed a bill against said company and seven of the stockholders, for the appoint- ment ot a receiver to collect sufficient unpaid stock subscriptions to pay him his claim. The said stockholders joined with said com- pany as defendants, and filed demurrers to the bill, which were all overruled. Defend- ants were ordered to plead in 15 days. Said stockholders then filed a plea and answer, but the company filed no plea or answer at any time, and no decree w£is ever taken against it. A general replication was filed, and a master was appointed. Subsequently, pending the hearing before him, Keams, Risher, and McClure, other creditors of said company, presented petitions for leave to intervene, and were allowed to become plaln- ti&s. On the same day R. B. Brown, one of the seven stockholders, on behalf of himself and his co-defendants, presented a petition, setting forth the names of the other stock- holders than those made defendants original- ly, and the amount of stock held by each, and prayed that the petitions of Keams, Risher, and McClure be granted only upon condition that the said stockholders named by him be made defendants. Keams, Risher, and McClure were joined as plaintiffs, and the stockholders named by Brown were made defendants. The pleadings remained as they were at tile appointment of the master, who proceeded to hear the ease. He recommend- ed a decree in favor of -plaintlfiCs, in accord- ance with the prayer in the bill. The report was referred back to him, for a supplemental report of the several sums due the respective plaintiffs, the amount of the subscriptions of each of aaJd defendants, and in pro rata share which each should be decreed to pay said plaintiffs, respectively. Pending the hearing upon this second reference to the master William Vankirk, one of the original defendants, petitioned the court to grant leave to said defendants to pay Bailey's claim, and the costs of the t»roceeding, and to vacate the appointment of the master, alleging the want of an issue as to the cred- itors who had been permitted to become plaintiffs with Bailey. This was refused. The master, under the court's order, filed his supplemental report recommending a decree against 14 of the 22 defendants, which was made in accordance with the recommenda- tion, whereupon 4 of them, to-wlt, William Vankirk, R. B. Brown, John F. Dravo, and W. H. Aldred, appealed, assigning for error (1) the decree of the court; (2) the appoint- ment of the master, and the confirmation of his report, "where said case was not at issue as against the Pittsburgh Coal Railroad Company, defendant;" (3) the confirmation of the report, and the making of the decree as to the claims of Keams, Risher, and Mc- Clure, when "no issue was ever made up as between them or any of them, and the said defendants, or any of them." John S. Ferguson, for appellants. C. S. Fetterman, for appellees. PER CURIAM. This appeal Is entitied as though it had been taken by the Pittsburgh Coal Railroad Company. Such Is not the fact, however. The appeal was entered by William Vankirk, R. B. Brown, John F. Dravo, and W. H. Aldred, four of the de- fendants below. Lane's Appeal, 105 Pa. 49, and Bell's Appeal, 115 Pa. 88, 8 Atl. 177, are authority that such a bill can be maintained. The record is voluminous, and consists prin- cipally of questions of fact We must as- sume that the learned master has decided these correctly, inasmuch as he is sustained by the coiurt below, and no clear error has been pointed out. The matters referred to in the second and third assignments are purely technical, and do not affect the merits. We find nothing In the record to justify us in reversing the decree. Decree affirmed, and the appeal dismissed, at the costs of the ap- pellants. INDEX. ACCIDENT, redemption from a decree of mortgage fore- closure prevented by accident, 166, loss of sealed instrument as ground for eq- uity jurisdiction, 171. breach of contract for sale of bouse and lot when destroyed by fire, 173. ACTTJAL FRAUD, ignorance or mistake of fact not essential to contract, 227. right of purchaser of patent to rely upon representation of inventor, 273. false representation made in ignorance of facts, 277. fraudulent representations as to value of land, 279. reliance by purchaser on fraudulent repre- sentations, 282. false representations, 287. statements made without knowledge, 289. exchange of property brought about by fraudulent representations, 292. evidence of adequacy of consideration, 294. deed executed to trustee, 296. subscription to capital stock on representa- tion of party interested, 302. fraudulent representation by partners, 304. CANCELLATION, bonds issued by railroad in violation of stat- utes, 794. CONSTRUCTIVE FRAUD, gross inadequacy of price, 308. contract by medical partner to refrain from practice, 310. inequality of parties by reason of age, 316. disability of party from infirmity or mental weakness, 320. deed from parent to child, 323. actual or constructive possession of land after conveyance, 326. evidence of undue Influence of child over parent; 331. deed made to party in trust by dying per- son, 335. concealment of value by party in fiduciary relation, 337. imrchase of property by commissioner hold- ing sale, 340. contract between attorney and client, 343. transaction between debtor and third per- son exacted by creditor, 351. composition with creditors by secret agree- ment, 353. transaction between husband and wife, 357. CONSTRUCTIVE TRUSTS, money so mingled as to be indistinguish- able, 461. CONSTRUCTIVE TRUSTS— Cont'd. executor liable for money intermingled and not traceable, 465. misappropriation of trust funds by trustee, 466. failure of bank after collection, 468. funds followed into hands of third parties, 471. preferences in case of conversion of trust property, 475. securities stolen and afterwards sold fol- lowed into hands of purchasers, 477. partners secretly taking a lease of prem- ises, 480. purchaser under foreclosure sale for ben- efit of mortgagor, 488. money obtained and invested under a prom ise to marry, 493. beneficiary refusing to perform intention of testator, 495. property devised with instructions to dis- tribute, 501. CONVERSION AND RECONVERSION, bequests of personal estate, 39. contract of sale of land enforceable in eq- uity, 157. what constitutes equitable conversion, 160. election to prevent conversion of realty in- to personal property, 163. DUTIES AND LIABILITIES OF TRUS- TEES, liability for costs properly incurred, 504. trustees of a savings bank bound by its charter, 507. investment of trust funds by trustee for benefit of minor children, 511. guardian responsible for Investment of ward's fimds, 515. loans on mere personal security without di- rections as to mode of investment, 524. investment in stocks of incorporated com- pany, 526. partner accountable to firm for all profits, 530. contract between bondholders of insolvent corporation and new company, 530. right of agent intrusted with sale of real estate to purchase for himself, 535. profits made in business of principal, 537. compensation of trustee for services, 542. adjustment of compensation of trustee up- on judicial investigation, 543. deposit by agent of proceeds of property sold by him for principal, 545. negligence of trustees and liability there- for, 549. bankrupt trustee dealing with convertll'l"' trust funds, 554. H.& B.EQ.(2d Ed.) (905) 906 INDEX. ELECTL'ION, doctrine of election under deed or will, 123. what is election in equity, 128. right of heir concluded by election, 129. compensation for loss sustained by virtue of widow's election, 131. provisions in lieu of dower, 132. time within which election should be made, 134. compelling election, 136. EQUITABLE ESTOPPEL, right of party to prove his own representa- tions false, 101. promise not to assert claim to property, 109. bank bound by voluntary certification of forged check, 112. effect of acquiescence under a bona fide mistake, 117. garnishee's right to deny indebtedness aft- er voluntary declaration, 122. EXPRESS TRUSTS, writing subscribed by party declaring trust, 364. conveyance of property in discharge of debt reserving any surplus of proceeds, 3G6. written statement of a trust in lands sub- scribed by the party to be charged there- with, 368. express trust of land created by parol, 370. trust of mortgage debt created by parol, 372. declaration in will giving full power and authority to executors, 374. EXPRESS TRUSTS — PRECATORY WORDS, protection, comfort, and support of chil- dren, 377. devise subject to charge foi^upport of wife and sister, 380. a desire and request by testator for provi- sion for certain relatives, 382. EXPRESS TRUSTS — VOLUNTARY TRUSTS, interest in property must be absolutely dis- posed of, 385. unequivocal words must be used to create tmst, 387. executory contract to create trust, 392. deposits in savings bank in trust for rela- tives, 393. intent as distinguishing gift from trust, 396. creation of voluntary trust, 400. FRAUD— JURISDICTION OF EQUITY, adequate and complete remedy at law, 265. cancellation of agreement and reinstate- ment of contract, 268. deed executed upon faith of fraudulent agreement, 271. INJUNCTIONS, railway company agreeing not to transport goods at fates fixed by law, 734. trustees of cbjurch closing building against B^uly appointed preacher, 738. vinVawful execution ground for injunction, 741."> INJUNCTIONS-Cont'd. vote by stockholder of shares at corporate election, 743. Introduction of electric lights in breach of illuminating contract, 744. breach of contract under a lease, 747. landlord's right to prevent unauthorized use of premises, 749. agreement by physician to refrain from practice, 751. right to restrain reliable company from se- curing services of employe, 629. violation of negative stipulation in contract, 614. threatening purchaser of goods with suits for infringements of patents, 753. disclosure by servant of trade secrets, 755. waste by life tenant, 760. cutting and drawing timber from land, 762. continuing trespasses ground for injunc- tion, 764. destruction of fruit and ornamental trees by city, 766. diversion and obstruction of water course by city, 767. carrying and displaying banner for purpose of boycotting, 770. conspiracy to injure business, 773. attempt to enforce employSs to join strike, 779. maintenance of house of ill fame, 782. adoption of trade-name, 783. LIS PENDENS, doctrine founded on notice, 98. MAXIMS OF EQUITY, * no wrong without a remedy, 3. ^ equity follows the law, 5, 9. "^ equity aids the vigilant, 15. ^ equality is equity, 17. *> he who seeks equity must do equity, 19, 28. >^ equal equities, the first in time prevails, 23. "* equal equities, the law must prevail, 26. (X he who comes Into equity must come with clean ^hands, 31, 32. 0^ equity- regards substance, rather than form. 39, 55. \* equity looks on that as done which ought to be done, 44. V equity acts specifically and not by way of * compensation, 47. ^Veqiiity imputes an Intent to fulfill an obli- gation, 49. , . \^equity acJU^ln personam, 51, 53. MISTA^rOEJ'ACT, matejjpjJSiy w^ mistake to warrant rescis- sion of contract, 217. reinstatgjnent of insurance policy, 221. mutual mistake, 225. ignorance or mistake of fact extrinsic, and not essential to contract, 227; gross negligence as relief against party's own acts, 230. reformation of contract on parol evidence of mutual mistake, 234. MISTAKE OF LAW, letter of attorney revoked on death of donor, acts thereafter void, 177. INDEX. 907 MISTAKE OF LAW— Cont'd, mistake arising from ignorance of law not ground for reformation of written instru- ment, 182. deeds in future given by mistake, 188. contract corrected so as to express inten- tion of parties, 191. mutual mistake of parties to contract, 193. bond for judgment executed under mutual mistake, 197. mistake as to words expressing intent of parties to contract, 208. discharge of lien by refusal of tender, 212. fraudulent representations to party igno- rant of law, 213. voluntary payment of money unaffected by fraud, 216. MISTAKE— PAROL EVIDENCE TO COR- RECT, failure to have trust properly declared in deed, 238. intention of parties to contract, 244. deed, conveying less lapd than orally bought or paid for, 246. discretion of court to correct mistake, 248. reformation Involving specific enforcement of oral agreement within statute of frauds, 254. reformation of contract by including more land than therein specified, 262. MORTGAGES, right of mortgagor to have rents and profits applied to cancellation of debt, 555. proof of loss of assignment of mortgage, 557. interest of mortgagee, 562. PENALTIES AND FORFEITURES, agreement for liquidated damages, 57. equity jurisdiction of enforcement of for- feiture, 60. penalty or liquidated damages, 61, 62, 63. POWERS IN TRUST, general power created by will, 407. PRIORITIES AND NOTICE, priority of mortgage lien not lost by can- cellation, 70. insolvency proceedings set aside without notice, 72. definition of active and constructive notice, 75. notice to purchaser of satisfaction of mort- gage, 77. priority of right of bona fide purchaser, 80. actual, constructive, and implied notice con- strued, 84. constructive notice as affecting priority of right, 86. unrecorded d€ed as constructive notice, 90. record as notice to subsequent purchaser, 92. notice to agent as notice to principal, 92. notice to purchaser by recital in deed, 97. RECEIVERS, authority of receiver against foreign gov- . emment, 797. right to enjoin officers of state, 804. RECEIVERS— Cont'd. service of notice on receiver, 815. appointment of receiver resulting in de- struction of business, 816. protection of secret code, 817. time when title vests in receiver, 820. iwwer of judges of trial courts to appoint, 823. dissolution of mining partnership, 833. right of creditor to ask for appointment of, 837. revocation of appointment on payment of expenses, 844. ex parte application by creditor of bank, 845. misconduct of shareholders of corporation as ground for appointment, 849. proper parties to be appointed, 855. excessive mortgage and decrease of busi- ness of railroad, 858. disposition of rents collected, 862. appointment during pendency of action of foreclosure, 864. attaching creditor interfering with mort- gage foreclosure, 867. collection of rents on property insufficient to secure mortgage, 869. validity of acts of receiver, 871. funds in hand of receiver liable for taxa- tion, 876. right of receiver to issue certificates of in- debtedness, 879. right to issue certificates to pay taxes, 881. action by receiver to enforce liability of stockholders, 886. suits in foreign jurisdictloh, 888. combinations in restraint of trade, 891. mismanagement of property of insolvent corporation, 894. Injury and destruction of insolvents' assets, 897. .set-off by insolvent bank against note of depositor, 899. enforcement of liability of corporate stock- holder, 903. REFORMATION, deed executed by party mentally weak, 788. contract procured by fraud and mistake, 790. RESULTING TRUSTS, next of kin to take surplus of trust for his own benefit, 442. life estate of wife resulting to husband, 444. deed from husband to wife, 446. A. purchases estate with his money and takes deed In name of B., a trust results to A., 447. legal estate taken jointly results to party advancing purchase money, 452. delivery of deed as affecting trust, 455. evidence of intention of establishing trust. 459. SATISFACTION, legacy as satisfaction of bond debt, 140. devise to satisfy debt, 142. two bequests of the same sum of money to the same legatee construed, 144. 908 INDEX. SATISFACTION— Cont'd. intention of testator, 146. ademption of legacies, 150. ademption of legacies determined by parol evidence, 152. foundation of rule of ademption of legacies, 155. .SFBCIPIC PERFORMANCE OF CON- TRACT, heir entitled to land held by tenure of horn, 573. enforcement of promise for conveyance of land, 574. competency of party to contract, 575. adjoining proprietor's right to compel build- ing of party wall, 578. sale of debts proved under commission of bankruptcy, 584. sufficiency of description a defense to a contract for a conveyance of land, 585. jurisdiction of decree for conveyance of land, 587. delivery of shares of stock loss of which cannot be compensated, 588. agreement between theater and stock com- pany, 592. tender of performance in enforcement of contract of sale, 595. refusal to deliver coal on account of ad- vance in price, 599. forfeiture of charter of railroad company for failure to build and equip road, 602. parties to action for enforcement of rail- road building contract, 604. penalty or liquidated damages for breach of contract, 607. agreement to write and report cases deter- mined, not mutual, 612. affirmative stipulation not enforceable. 614. actor to perform at certain theater, 622. negative stipulation in contract for sale of chattels, 627. injunction against rival manufacturers for use of stamp on goods, 629. right to reserve ball player for subsequent season, 631. agreement to execute formal contract, 635. return qf personal chattels where detention cannot be compensated, 637. use of same tracks by street railway com- panies, 641. covenant giving right to purchase premises leased a continuing offer to sell, 644. discretion of court governed by merits of the case, 650. stipulated damages for a refusal of per- formance, 652. insolvency as a defense to conveyance of real estate, 654. lease with option to purchase chattels, 655. effect of desti-uction by Are of property to be conveyed, 173. time of acceptance or acquiescence of pro- posal, 659. SPECIFIC PERFORMANCE OF CON- TRACT— Cont'd. destruction of property by fire as a defense to contract, 661. agreement to repair as defense to contract, 6G2. deterioration of land caused by misman- agement, 663. execution of contract for sale of real estate with part payment equivalent to trans- fer, 667. vendee taking possession of property liable for its destruction, 669. right of vendee to compel conveyance of property destroyed, 671. release of homestead affecting the right to compel conveyance, 675. refusal of a wife to join in conveyance, 677. parol variation of contract as affecting con- veyance, 67^. refusal of a wife to relinquish right of dow- er, 681. uncertainty of description in contract, 682. laches as a defense in action for perform- ance of contract, 686. payment and legal tender as gfound for forfeiture, 695. right of way granted to railroad in consid- eration of constructiiOn of road, 701. removal of incumbrance pending suit, 703. incumbrances as defense to contract for conveyance, 706. omission to affix stamp by United States collector, 709. jurisdiction to enforce agreement to give note for purchase price and secure it by mortgage, 711. public policy as defense to enforcement of agreement, 713. stockholder's agreement to transfer shares to company, 720. construction of railroad stations in discre- tion of court, 723. mutuality as ground for specific perform- ance, 724. acceptance of optional contract, 726. liquidated damages agreed upon for breach of contract, 730. damages awarded for breach of contract, 732. SUBROGATION, right of purchaser of void municipal aid bonds to recover value, 568. TRUSTS— ACTIVE AND PASSIVE, estate consistent with contention of party creating trust, 404. TRUSTS-PUBUC OR CHARITABLE, construction of charitable trusts, 410. Intention of testator in a will creating trusts, 431. uncertainty of beneficiaries as ground foi invalidating charitable trust, 438. WBflT FirBLlSHIN& CXX , FBINTEBB AST) BTSBE0TTPEB8, ST. FAUl., MDOk