text:
    Brooks et al. v. Hill.
    An act was passed by the legislature for the organization of banks, generally, declaring them to be corporations, and making the directors individually liable for the debts of the corporation in ease of insolvency. So much of the act as purported to confer corporate, rights on the banks organized under it, was afterwards decided to be unconstitutional. By a prior act, banking was made unlawful unless authorized by law, and penalties were imposed for its violation. In an aotion brought against the directors of an insolvent bank organized under the first named law, it was held that the act against hanking was not repealed by the first named act, except in favor of incorporated ianiks organized under it; and, as by the constitution corporations could not be created under it, the banks so organized were illegal, and therefore the action could not be sustained.
    Error to Wayne Circuit Court. An action of debt was brought by Warren Hill in the circuit court, against Edward Brooks and other directors of the Detroit City Bank. The declaration stated the organization of the bank in November, 1837, under and by virtue of an act entitled “an act to organize and regulate banking associations,” approved March 5th, 1837; that Brooks and the other defendants were elected directors, and always were directors of the bank, which claimed to have complied with the provisions of the act and to be a body politic, and on its organization commenced doing business as a hank under the act, and continued the same until the 10th February, 1839, when it failed and became insolvent, and was still insolvent; and that when it failed it was indebted to Hill in the sum of $2,000, for money deposited with it while it was doing business, &c. Hill obtained judgment by default, to reverse which defendants brought the case to this court by writ of error.

      Romeyn, for plaintiffs in error.

      Seaman, for defendant in error.
   By the court,

Wing, J.

The Detroit City Bank was organized under the act of March 5th, 18-37, and became subject to the provisions of the amendatory act of the 30th December, 1837.

I shall not attempt to give a synopsis of either of these laws, as this has been done, and a full history of these laws has been given by the court in the case of Green, Receiver v. Graves, 1 Doug. Mich. Rep. p. 351.

It may be well to notice a few of the sections of these laws, having an immediate bearing on the question under consideration.

The 9th section of the act of the 5th of March, and the 4th section of the act of the 30th December, provide, that “ all such persons as shall become stockholders of any such association shall, on compliance with the provisions of this act, constitute a body corporate and politic, in fact and in name, and by such name as they shall designate and assume to themselves, which name shall not be changed without the consent of the Legislature,” &c. This section further declares, that “ by this name they shall have continual succession; and shall, in their corporate capacity, be capable of suing and being sued, &c.; may have a common seal and be capable of purchasing, holding and conveying any estate, real or personal, for the use of the said association.”

The 21st section provides, that if such banking association shall become insolvent, the directors in the first place shall be liable in their individual capaeity to the full amount which such insolvent associations may be indebted; and each stockholder shall thereafter be liable in like manner in proportion to his or her amount of stock, for the payment of the full amount of the debts of such insolvent association.

This suit is brought upon the statutory liability of the defendants in the court below, as directors of the Detroit City Bank, arising- under the 21st section. The cause of action is averred to have grown out of dealings with the Detroit City Bank as a bank, and in the exei'cise of its functions as such. By the terms of the 21st section, the liability of the directors is made to depend upon an indebtedness of the bank, and upon the contingency that the bank has become insolvent; and after their responsibility is exhausted, recourse may be had to the stockholders.

The question is therefore presented, whether there can be a recovery on a contract made with an association organized under the general banking laws. The plaintiffs in error insist that there cannot be a recovery—

1. Because such contract was made by the bank as a corporation, when there was -no corporation.

2. Because such contract was made by , it as a bank, contrary to the inhibitions of the restraining act of this state.

In the case of Green v. Graves, it was decided by this court, that “ so much of the act to organise and regulate banking associations as purports to confer corporate rights Upon the associations organized under its povisions, is in violation of the 2d section of the 12th article of the constitution of this state, which declares, that‘ the legislature shall pass no act of incorporation unless rvith the assent of at least two-thirds of each house,’ and is therefore void.”

The defendant in error suggests that this court should review their decision in the case cited, because it was counter to previous decisions, and the decisions of the judges at circuit. The suggestion is very well, and this court would not hesitate to do so in this or any other case, if convinced of their error. But that case was decided upon mature deliberation, and subsequent examinations of these statutes, and a careful examination of the New York decisions, have convinced us that that case was rightly decided, and that the general banking laws were and are void, so far as they purport to copier corporate powers up on banking associations organized under them.

It is manifest from the course of the decisions of the New York courts, and the opinions of the profession in that state, that if the question was now presented to their courts for the first time, disconnected with considerations of public policy, their general banking law would be held to contravene the provisions of their constitution. The history of the decisions of the New York courts upon their general banking law, is, to say the least, quite singular. The supreme court first held, that banking associations organized under their law were not corporations. The court of errors held, that they were not corporations within the meaning of the constitution; they attempted to establish a distinction between certain money corporations and municipal corporations; but the doctrine having been afterwards established that there was no such distinction, the chief support of their former decision was withdrawn. Shortly afterwards, another case upon the same law was taken to the same court, and they were compelled to yield their former opinion, and admit that these associations were within the prohibition of the constitution ; and, though they sustained the law, it was not upon legal principles. See 1 Denio 1.

If, then, the courts of New York have finally adopted such views in reference to then- constitution, which is not as strict as ours, and in reference to a law which does not upon its face' profess to create corporations, most certainly we cannot but affirm the doctrine of the case cited when applied to a law in which these associations are by an express- enactment declared to be corporations. No other case was ever brought before this court where the same question was raised.

The Detroit City Bank was organized as a corporation under our general banking laws. There can be no pretence that it was organized as a partnership, or a joint stock company. The idea that any of these-banking associations were partnerships, was never urged from any quarter in this state until after the case of Green v. Graves was decided by this court, or at least until about that period. None of these banking associations ever contracted, or professed to contract, with imdividuals or the public as partnerships. The stockholders organized it as a bank, and in the powers which it exercised, and in the manner of their exercise, it exhibited the functions and modes of action of a corporation; and, in the language of the counsel for the plaintiffs in error, it was baptized as such. But as the grant of corporate franchises was not authorized by the constitution, this court declared it to be void. What, then, remained of these associations ? They could not exist as corporations, but they maintained in their proceedings all the forms prescribed by the law. What were they? They were joint stock companies usurping the franchises of corporations. They had an actual existence; but was it a legal existence ?

It is conceded by the counsel for the plaintiffs, that, as individuals or private partners, its stockholders might have issued promissory notes, or bills of exchange, and received drafts and loaned money; but it is insisted that in this case the contracts were made with them as corpora-tors, professedly and avowedly as such, and that they were consummated as such; that they were made and were received as the contracts of the Detroit City Bank, a corporation — and not Brooks, Brown and others, private partners.

I do not understand that these last propositions are denied by defendant’s counsel; neither, indeed, can they be denied. It was a matter well understood by all — both those who -composed the associaion, and those who dealt with them — that they professed to be corporators, and were universally treated and dealt with as such, and not otherwise. If so, such transactions were void, at the least so far as these associations are to be considered as corporations. Coll, on Part. 421 to 425; Chitty on Cont. 718, 720, (edition of 1842;) Hall v. Franklin, 3 Mees. & Wels. 259; Josephs v. Pebrer, 3 Barn. & Cress. 639.

But plaintiffs insist that from 'this fact the important consequence flowed — that the bank was not exempted from the penalties and restrictions of the act restraining unauthorized banking.

The constitution of this state does not inhibit banking in any 'form to individuals or associations-; it was not illegal at the common law; but,by the restraining law of 1833, Laws of 1833, p. 530, and R. S. of 1838, p. 222, it is forbidden to persons to associate together for the purpose of banking, unless authorized by law. Was this done by the general banking law ? Of course the legislature had the power to do it; but did they do so ?

This question presents the main point in the case of the defendant in error, tie assumes the position, that if so much of the general banking law as purports to create and confer corporate powers, is unconstitutional, the remaining part of the law is valid. His position is, also, that the principal end and object of the legislature was not to'create corporations; that corporate powers were but a means to effect an ulterior object, viz: to supply a paper circulating medium; that corporations are not created for the sole purpose of calling such soulless beings into existenee; but as a convenient and proper means of carrying into effect and attaining some other object.

If it can be shown, or fairly assumed, that the general banking laws are substantial modifications of tbe restraining law, that only so much of these laws as confers privileges that corporations only can possess, is void, and the remainder is valid, we shall be led to the conclusion that the plaintiff must recover.

That a statute may be good in part and bad for the residue, is a sound rule of law, which has often been affirmed by the courts of the United States, of this state, and the English courts.

. The same doctrine holds good in regard to deeds and wills. If a man grants more than he owns, the grant will be good for what he owned, and void for the rest.

It is also a rule of construction of statutes, that if an affirmative statute which is introductive of a new law, directs a thing to be done in a certain manner, that it shall not, even though there are no negative words, be done in any other manner.

jThe intention of the legislature in passing the law, is to be carefully sought in the law itself; and if it can be carried into effect, it is the duty of courts to do so. And granting that it was the object of the legislature to grant greater facilities for organizing banking associations or corporations as a means to increase the circulation of a paper currency, we must carefully examine to ascertain whether the organization of associations was only ancilliary to this object, or whether this object was connected with others, upon which it was made dependent by the law, and without which it was not intended to be accomplished.

The act of March 5, 1831, assumed to create corporations. The associations authorized by it not only were to possess the faculties of corporations, but, by the 9th section, they were expressly declared to be bodies corporate and politic. When the corporation was organized in all respects, according to the requirements of the law, then it, the corporation, the body politic and corporate, in its artificial character, and as such artificial person, was allowed to issue bank notes, to receive deposits, and to make discounts. Its action was confined to. banking. Business and investments entirely lawful for its stockholders as private partners, were inhibited to them as corporators; and privileges were bestowed upon them as members of a corporation, which by the restraining act were forbidden to them as individuals. Sec. 26, 21.

The corporation, the legal entity, exists separate and apart from its stockholders — it is a distinct person, and must be so regarded. In tho case of Moss v. McCullough, 5 Hill 132, Judge Cowen says: “The corporation, an artificial person, is the principal. Independently of the statute, the stockholder is no more liable to be sued than a stranger. The company and he are, in legal contemplation, distinct individuals.”

The legislature appear to have had two objects in view: 1. to create corporations; and, 2. to vest in such corporations or artificial persons the franchises of banking. The act did not profess to throw open the business of banking to any and all persons, without restriction; but to allow individuals to form themselves into corporations, and then to permit the corporation to engage in banking.

It is said that there are only six sections in the amendatory act that contain the word corporations, viz: the third, fourth, twenty-fifth, thirty-second, thirty-third and thirty-sixth; that in all the other sections the companies are called banks, banking associations, or such associations; and that in all the provisions in relation to the organization of banks, and their mode of doing business and making contracts, and which confer on them banking powers, it is done by the name of banking associations, and not by the name of corporations. The defendant claims that if those sections containing the designation of corporations were stricken out, it would not affect the substantial banking powers of the associations.

Rut by the 9th section it is provided, that all such persons as become stockholders of such associations shall, on compliance with the provisions of this act, constitute a body corporate and politic.” When a number of persons assemble together and subscribed to the stock (if to a proper amount), they became an .association, and that moment they bfr came a corporation, and are made so by the law. When the association is named in the different sections of the law, such association as is thus declared to be a corporation is meant, and this quality or attribute enters into and becomes a part of its being; the effect is the same as if it was said such association being a corporation,

If we are right in this view of the law, it is of no importance to the argument of the defendant’s counsel that the term corporation is in fact omitted in any of -the sections, since in law it is understood and made á part of all the sections. If the sections containing the word corporation are stricken out, the essential attributes .of ¡a corporation are found in the other sections.; .and the supreme court „of New York, ig the case of The People v. the Assessors of Watertown, 1 Hill 623, by Judge Bronsou say, “ It may be true, as has been urged, that the legislature intended to make a legal being, and give it all the essentia] attributes of a corporation. That, the legislature could not do. I do not refer to any written constitution. The constitution of things, the order of nature, forbids it. Human powers are r\ot equal to the task of changing a thing by merely changing its name.”

If, then, there were no corporations having a valid existence under the law, there were no recipients of the proffered franchises of banking, for the grant was to them only upon condition of their becoming organized as corporators, and transacting business as such. Take away their corporate attributes, and what remained of these associations? The privilege of banking was not proffered to Brooks and others as partners, but to them as corporators, constituting an artificial person, contracting and acting as such. They were required to comply with the provisions of the law, before they could engage in banking; and when they had done so, they become, by express enactment, corporations. If they failed .to comply with the law in the subscription of stock, or in neglecting to assume a corporate name, could they have claimed the privilege of banking ? and if they did these things, they usurped the franchises of a corporation. There was no grantee in this case capable of taking. The privilege was offered ,to corporations potentially and in name, but the legislature failed to create the corporations.

Conceding, as we have said, that an act may beg-ood in part, and bad in part, the legislature might have repealed the restraining act; if they had done so, and then, by an independent enactment, the creation of .a» indefinite number of corporations had been authorized as a distinct provision, the latter would not have invalidated the former. But in this case the good and bad aré inseperably blended. Na3r, the vicious is a condition precedent to what would have been a valid enactment. The restraining act. was repealed, not in favor of individuals, but of corporations ; and where there were no corporations of the character required by it, it remained in full force.

If these views are correct, what is the effect of the restraining law upon the claim set up in this case ?

IS the general banking law did not have the effect to repeal the restraining law, then the first step in the organization of these associations ' was penal. All securities taken by them were void. As nothing is said in the law as to the validity of their issues, this must be determined upon general principles.

The principle is- this: The organization of the company being forbidden, and its objects being unlawful, its contracts made in furtherance of the illegal objects by such association, are all tainted with illegality, and cannot be enforced against either party. The law is not satisfied by a payment of the penalty. See the following authorities on this point. 2 Kent’s Com. 466; Story’s Conflict of Laws 244, 248; Lightfoot et al. v. Tenant, 1 Bos. & Pul. 551, 556; De Groot v. Van Duzen, 20 Wendell 390; Bank U. S. v. Davis, 2 Hill 458-9; Jackson v. Walker, 5 Hill 30; 1 Maule & Sel. 596; 14 Mass. 322. In the case of Pennington v. Townsend, 7 Wendell 276, the check sued on had been discounted in Kew York by the agents of the Kew Jersey Protection and Lombard Bank. The opinion of the court was delivered by Judge Kelson, and the conclusion is as follows: “But it is said that the incurring the penalty of $1,000, is the only consequence of a violation of the restraining act of 1818, and that the contract may be enforced as valid; that the transaction is only malum prohibitum, and not malum in se, and that the former differs from the latter in this, that the penalty is the only punishment or consequence. Castle’s case, Cro. Jac. 644, and Rex v. Wright, 1 Bur. 543, cited in support of this doctrine, are not authorities to the extent claimed; they establish the position, that where a new offence is created by statute, and a penalty affixed, the punishment for an infraction of the law, can only be in the mode prescribed. The same principle is recognized in the 2 R. S. 696, Sec. 39. Giving full effect to this principle, the civil rights and remedies arising "out of the inhibited acts are left untouched, and I apprehend it will be found that so far as these are concerned, there is no distinction between an act malum prohibitum and malum in se. Both are equally forbidden and unlawful; and I will add, both are immoral, and cannot be the foundation of a civil right that will be enforced in a court of justice. 14 Johns. R. 273. In Thallimer v.Brinkerhoof, 20 Johns. R. 397, Ch. J. Spencer says: ‘ It is a fundamental rule, that all-contracts which have for their object any thing repugnant to the general policy of the law, or contrary to the provisions of a statute, are void; for it is a rule as well in law as in equity, ex turpi contractu actio non oritur.’ In the same case, Mr. Justice Woodworth says; ‘An agreement expressly prohibited by statute must necessarily be considered inoperative and void. It will not be seriously urged that the party is subject to the penalty only, and that the courts are bound to consider the contract legal and valid.’ The principle had before been avowed, and frequently enforced, that an action in affirmance’of an illegal contract, the object of which was to enforce the performance of an engagement prohibited by law, could in no case be maintained. The question has been recently fully examined by the supreme court of the United States, Bank of U. S. v. Owen, 2 Peters 527, and in which the distinction urged by the. plaintiffs, so far as civil rights and remedies are concerned, is repudiated as unsound. It is said, if the security should be declared void, still the plaintiffs are entitled to recover the money loaned, under the common counts. Whether this principle is applicable at all to this case, I will not stop to inquire, for there is no pretence for its application to this defendant, inasmuch as no money was ever loaned by the plaintiffs to him. Utica Ins. Co. v. Cadwell, 3 Wendell 302.”

' There is another ground upon which this ease might have been decided. The defendants in the court below are not declared against as original promisors, but as directors of an incorporated bank, and on a contract of the bank. There being no such body, there can be no directors of it. Defendants cannot be held as sureties of a principal that never existed. Their contingent liability is indissolubly connected with and dependant on the existence of a contracting corporation, apart from the stockholders. Their statutory liability was secondary and subsidiary to that of the principal; and if defendants could be held liable in any form, it would be as original promisors, but they are not declared against as such.

We have decided the broad question as it was submitted by both parties. On either ground, the plaintiff in the court below must fail.

We have not been unmindful of the fact.that large interests were involved in this question; that a few bad men will, by our decision, go free with their ill-gotten gains; at the same time hundreds of misguided' and innocent men will be relieved from entanglements into which they have been led by the influence and example of others equally honest and innocent, and in whose judgment they confided. As a general thing, one common fate appears to have awaited, the banker and his creditor, the deceiver and the deceived — all, or nearly all, are bank- , rupts.

This is the first time this question has been brought before this court for a decision. "We entered upon the examination of it under a full sense of its magnitude and importance. We feel a strong conviction that our conclusions are correct; and this is all we feel it proper or necessary for us to say in reference to our feelings, to the obligations that rested upon us, and the part which we have enacted in the closing scene of this great drama.

Judgment reversed.


source: Caselaw Access Project

author: Whipple, C. J.

license: Public Domain

text:
    Weed et al. v. Snow.
    S, being endebted to W, & Go., as indorser on a promisor/ note, assigned to them as collateral security a mortgage he held against H., which W. & Co, were to collect and apply on the note. W. & Co. advertised the mortgaged premises for sale, under the statute; but, before the day of sale, it was agreed between them and S. that the premises should he bid off at the sale hy A. S. W., for the amount due on the mortgage, and that he should hold them in trust for S. and W. & Co.; and that if within one year S. paid W. & Co. what was dne on the note, A. S. "W, should convey the premises to him, hut if not, then he should sell them at public or private sale for what they would bring, pay W. & Go. from the proceeds, and the balance, if any, pay to S. In pursuance of the agreement the premises were bid off by A. S. "W. for $572, the amount dire on the mortgage. S. failed to pay "W. & Co., and A. S. "W. advertised and sold the premises, which were purchased hy W. & Co. for $25, who afterwards sued S. for the balance due on the note. Selét, S. could not show in bar of the action that the mortgaged premises purchased hy W. & Co. were, at the time of sale, worth the amount due on the note.
    Case reserved from Lenawee Circuit Court. Assumpset against defendant as endorser of a promissory note. ■ Plea general issue.J On the trial, by consent of parties, the following agreements were introduced in evidence : An agreement between plaintiffs and defendant, dated Nov. 29th, 1839, which stated that the defendant had tjiat day assigned to the plaintiffs certain notes and mortgages, among which were a note and mortgage against William A. Hawkins, for $394 48, “which several notes and mortgages are intended as collateral security to them for his endorsement of J. D. Palmer & Co.’s note for $498 86, due and payable the 11th January, 1839. The understanding between the parties is this, that the said plaintiffs shall endeavor to collect, by course of law or otherwise, and in their own names, or in the name of said Snow, the money due or to grow due on the said several securities, and apply the proceeds after paying the costs and expenses of collecting, towards the extinguishment of said Snow’s liability as endorser of said note of J. D. Palmer & Co., and the surplus, if any, refund to him, said Snow; and that in the mean time all legal peoceedings against said Snow be foreborne.” Also an agreement between plaintiffs and defendant, dated May 5,1842. This last agreement, after reciting the previous assignment and agreement between the parties, and stating that the property mortgaged by Hawkins was advertised to be sold on the mortgage, on the 7th of May, then instant, was as follows: “ How it is understood' and agreed by and between the said several parties concerned in this matter, that the said property so advertised for sale under said Hawkins mortgage (when the same shall be offered for sale), may be bought in by Alpheus S. Williams, or other disinterested person, for the whole amount due by said Hawkins on said mortgage and its accompanying note and costs, to whom the deed or evidences provided for by the statute shall be duly made, who shall thereafter hold the said property, or the interest which he may acquire therein, in trust for the said H. & H. Weed & Co., (the plaintiffs,) and the said Fielder S. Snow, (the defendant,) as follows, subject to any equity of redemption or other condition which the law may annex to his purchase, to wit: in trust that if within one year from this time the said Snow shall pay to said H. & H. Weed & Co. the balance which may be due then on said note of J. D. Palmer & Co., and all costs and expenses connected with the same and with said securities, then said Williams, or other person who shall purchase, shall assign ■ and transfer all his right and interest in and to' said mortgaged premises which he may acquire by such purchase, to said Fielder 8. Snow. But in case the said H. & H. Weed & Co. shall not have been paid, at the end of one year from this time, all the balance which may be due them as aforesaid, and costs and expenses, then the said Williams, or other person who shall purchase as aforesaid, may and shall immediately thereafter, or at such future time as the said N. & H. Weed & Co. may'direct, either at public or private sale, as shall bo deemed expedient and for the interest of all concerned, sell, assign and transfer all the said property so to be bought in by him, or the interest therein which he may have acquired by purchase as aforesaid, for the greatest price in cash which he may be able to obtain for the same; and the proceeds of such sale, or redemption of the property, (should the property before such sale be redeemed,) after deducting costs and expenses, pay to said N. <fc H. Weed & Co., towards the liquidation of said indebtedness of said Snow to them, and interests, costs and expenses; and the surplus, if any remaining, pay over to said Snow. It is the intention of the parties concerned, that the liability of the said Snow to said N. & H. Weed & Co. shall not be affected or impaired by the sale of the mortgage property contemplated to be made under the said Hawkins mortgage by advertisement as aforesaid. But said advertisement and sale are intended as well for the protection of said Snow against the insolvency of said Hawkins, as to facilitate the collection of said N. & H. Weed & Co,’s claim against said Snow; and the said N. & H. Weed & Co. shall be at full liberty, at the end of one year from this time, to call upon and proceed against the said Snow for any balance of his said indebtedness, and costs and expenses, which may then be remaining due and unpaid.”
    In pursuance of this agreement, the property in the Hawkins mortgage was bid off by A. S. Williams, on the day of sale, for $512, the amount due, including costs. Snow did not pay N. & H. Weed & Co., and the property was advertised by Williams for salé at auction, on the 21st June, 1845, on which day it was put up at auction, and sold to N. & H. Weed & Co. for $25. Defendant then called a witness, by whom he offered to prove that the property, at the time of the sale and purchase, was worth the amount due the plaintiffs on the note, on which the suit was brought. This evidence was objected'to, and the objection sustained; and, under the charge of the court, a verdict was rendered for plaintiffs. Defendant moved for a new trial, which motion was reserved for the opinion of this court.

      Baker and MUlerd, for plaintffs.

      Tiffany and Beaman, for defendant
   By the court,

Whipple, C. J.

The motion for a new trial is founded upon an objection taken by the defendant to the ruling of the court, by which evidence, touching the value of the real estate described in the Hawkins mortgage, was rejected.

It was then and is now contended, that it was competent to prove that the property was in fact worth the full amount specified in the note, and thus extinguish the debt.

In support of this position, it is urged that the transaction was in the nature of a mortgage; and that, if a mortgagee of real or personal property take the mortgaged property, it is a satisfaction of the debt, if equal in value to the debt it was intended to secure. Under the agreement of November, Í839, the mortgage and notes therein mentioned were assigned to the plaintiffs, as collateral security for the payment of Palmer & Co.’s note, endorsed by the defendant. The plaintiffs were, under the agreement, to collect the amount due on the securities thus assigned, and apply the proceeds to the liquidation of the note. By the agreement of May, 1842, Alpheus S. Williams was authorized to purchase the mortgaged premises described in the Hawkins mortgage, for the full amount due on the note which the mortgage was intended to secure, and the costs of foreclosure. It was further provided, that Williams should hold the property in trust, as well for the plaintiffs, as for the defendant; and if the defendant, within one year, paid the amount due on the note of Palmer & Co., and certain costs, then Williams was authorized to convey to him all his right, title and interest in the property. It was further provided, that in the event that the defendant failed to pay the several sums above specified, then Williams was authorized to sell the property at public or private sale, and after satisfying the note, costs, &c., to pay any surplus that might remain in his hands to the defendant. It was further stipulated between the parties, that at the expiration of one year the plaintiffs were at liberty to proceed against the defendant for any balance that might be due then on the note.

The assignment of the mortgage gave to the plaintiffs full power and authority to foreclose the equity of redemption of Hawkins; it was, in legal contemplation, as well a mortgage of the debt as of the power of sale. If the mortgaged premises had been sold under a statutory forecloseure, to a stranger, the defendant could not claim a right to redeem; and if the premises had sold for an amount less than the debt due by defendant to the plaintiffs, the latter would have had a claim upon the former for such balance. The assignment, however, being in the nature of a mortgage, such a foreclosure would not operate as a foreclosure of the mortgage thus created by the assignment; this would remain open to redemption by the assignor. This equity of redemption, however» would in such case attach, not to the land, but to the money for which the land was sold. ' But if the mortgagees of the mortgage become the purchasers, the assignor’s equity of redemption attaches to the legal estate ; this legal estate passes on the execution of the assignment, and remains unchanged by a foreclosure; the only effect of which is to divest the orignal mortgagor of his equity of redemption. If, therefore, the mortgaged premises had been sold by the plaintiffs under the agreement of November, 1839, the rights of the parties would have been determined by the rules I have stated. But in May, 1842, after the property was advertised for sale, the parties enter into a new arrangement, and Williams becomes the purchaser, at the sum-of $572. Williams thus became vested with the legal estate, charged with the trusts created by this last agreement. By that agreement, he is declared a trustee for the benefit of both parties. The legal rights of the parties under the agreement of 1839, were changed by the agreement of 1842, The defendant, instead of permitting the plaintiffs to foreclose, and in the event of their becoming the purchasers, insisting upon his right to redeem, waived this right, and assented that Williams might become the purchaser, with the understanding that if he paid Palmer & Co,’s note, Williams was to convey the estate to him; hut if he failed to pay, then Williams was at liberty to sell the property, and apply the proceeds to the liquidation of the debt owing by the defendant to the plaintiffs, Williams did sell, and the monies arising from the sale were applied according to the terms of the agreement. Whether a court of equity would consider the plaintiffs, having become the purchasers, as holding the property subject to any equitable 'rights of the defendant, jt is unnecessary to determine — a court of law can give no relief. The bid, therefore, made by Williams^ cannot, under the facts in this cáse, be considered as a payment on account of Palmer & Co.’s note, Such a decision would contravene the express terms of the agreement made by the parties; it would, in effect, he making a new agreement for the par» ties. The object of the agreement was to benefit the defendant, who probably foresaw that if the property was sold at the time designated in the advertisement, but little would be realized from the sale, and his indebtedness to the plaintiffs inconsiderably reduced; whereas, if the property was held for a year, he might pay the debt, and thus obtain title to it; or if driven' to the necessity of having it sold, a greater amount might be realized.

After a careful review of the facts, I am unable to perceive why testimony should have been received touching the value of the property. The first ground assumed by counsel is certainly untenable, if the relation existing between the parties has been correctly defined. As an assignor of the mortgage, he certainly had rights; the nature of those rights has already been stated. But he permitted the mortgage sale to taire place under the agreement of 1842, by which .rights reserved under that of 1839 were waived. Williams did not sell mortgaged property; but he sold property vested in him by virtue of the mortgage sale, under an agreement made between the parties. By that agreement, the defendant virtually waived his right to redeem in the event of the plaintiffs becoming the purchasers under the mortgage sale; and acquired new rights: that of obtaining from Williams a title to the property, upon payment, within one year, of the debt due the plaintiffs. Not having paid the debt, the property was sold by Williams to the plaintiffs, for $25.

That the debt was paid, from the fact that the mortgaged premises were struct off to Williams for nearly, if not quite, the amount due on the note, would certainly be inequitable, and would defeat the obvious intention of the parties, as expressed in the agreement of 1842. To permit the defendant to give in evidence the present value of the property to extinguish the debt, would equally defeat the object and purpose of that agreement. By it, the amount for which -the property sold was to be offset against the defendant’s indebtedness — not its value several years afterwards, and when suit is instituted for the purpose of recovering any balance that might be due on the note, after deducting the amount realized at the sale. This sale was not the foreclosure of a mortgage. The principles which define the rights of parties circumstanced as they were under the agreement of 1839, are inapplicaple when considered with reference to the agreement of 1842, under which the plaintiffs purchased. At all events, we cannot relieve the defendant under his misfortunes; if he has any remedy, it is in a court of equity.

The suggestion that the evidence is admissable to show the sale fraudulent, is equally untenable. If fraudulent, the remedy of the defendant is clear. His course is to resort to a court of chancery, where questions of this nature can be fully investigated', and where the rights of all parties can be most effectually protected.

But in a contest upon the note in question, it would appear somewhat extraordinary if a collateral issue, in which parties other than those on the record are concerned, should be tried. Upon such an issue, the trustee, mutually chosen by the parties to this suit, would be vitally interested ; we are not disposed to try him without giving him an opportunity to defend.

If there has been fraud, a court of equity will relieve the defendant; we can give no relief in the present suit.

It must be certified that the motion for a new trial should te overruled.

Certified accordingly.


author: Wing, J.

text:
    People ex rel. Reynolds v. Judges of Macomb Circuit Court.
    A party wfio has stayed execution on a judgment against him in a justice's court, cannot afterwards appeal.
    Motion for a madamus.
    Terry, for the motion.
    D. C. Walher and Hand, contra.
   By the court,

Wing, J.

Judgment was recovered before a justice of the peace against the relator, who thereupon gave security for stay of execution; and thereafter, and within five days from the rendition of judgment, gave notice of his intention to appeal the case to the circuit court, and entered into a recognizance therefor. The circuit court ruled that no appeal could he taken from the judgment under such circumstances, and refused to allow the appeal to he entered; and the relator now moves this court for a mandamus directed to said court, commanding them to allow the appeal to be entered.

The 9th section of the justices’ act of 1841, provides, that any party to a judgment rendered by a justice of the peace, conceiving himself injured or aggrieved by such judgment, may appeal to the circuit court; and the 95 th section provides, that the party appealing, his agent or attorney, shall, within five days from the rendition of judgment, enter into a recognizance, with at least one sufficient surety, conditioned to prosecute such appeal.

By the 77th section of the same act, it is provided, that no execution shall issue on any judgment rendered by a justice, except, &c., if the judgment debtor shall, within five days after the rendition of the judgment, give security in writing, with one or more sureties, satisfactory to the judgment creditor or the justice, for the stay of the execution and for the payment of the debt or damages, with the interest thereon, and costs, in three months, &c.

By the 78th section of the same act, it is provided, that when execution shall have issued within five days after the rendition of judgment, if the defendant shall, within the five days, give security, the execution shall be returned, and the property or body of defendant, if taken upon it, shall be released.

It is provided in section 73 of the same act, that in all cases where security is given for stay of execution, if the debt or damages, and' the interest thereon, together with the costs, shall not be paid within the time limited by law for such stay, execution shall be issued by the justice, on application of the judgment creditor, or his agent, against both principal and surety, in the same manner as if judgment had been entered against both such defendant and surety on return of process personally served.

The relator, for the purpose of staying execution on the judgment rendered against him, gave security, under the provisions of the 77th section. He had, during the five days next after the rendition of the judgment, the option of staying execution, or of appealing; he could not do both — for the one is inconsistent with the other.' And shall we say the last act in this case should he the only operative and effectual act 3 It could not have been the intention of the legislature to give to the judgment debtor the privilege of sporting with the rights granted to him.- If, for any cause, he did not obtain justice, he could appeal; if satisfied with the judgment of the justice, he could delay the execution by giving security. Abundance of time is granted for deliberate consideration, with the full privilege of choice between the two expedients afforded him by the statute. The statute does not, in express terms, impose any restriction in either case, nor make it a condition that he may do the one act if has not done the other; neither does it provide that if he elects to adopt one course, he may subsequently avoid it by the adoption of the other. He has two absolute unqualified rights — he cannot effectually exercise but one. The relator, by entering stay of execution, in effect admitted that the judgment was right, and the debt honestly due to the respondent. He has entered into a formal mitten engagement, together with his surety, that the debt shall be paid within a specified time. By this act, a new party is added to the judgment; and by it, and as a compensation to the respondent for the indulgence granted to the relator, additional security is acquired for the payment of the debt. The respondent had not the power to control the choice of the relator; but when once his choie is made, and the security is given, it becomes like a recognizance, a solemn undertaking, a statutory judgment acknowledged to the respondent, who is a party to it, and without whose consent it cannot be annulled. See Schenck v. Lincoln, 17 Wendell 606. The security cannot appeal, he must pay the judgment if the relator fails to do so. Shall it he said that this liability is subject to the right of appeal by the relator; and that if an appeal is taken, the judgment against the surety is canceled ? As against the relator, and before he had given security, the effect of an appeal would have been to open the judgment and grant a new trial. 17 Johns. R. 131. But after he has made his election, and the security has been given, does it vacate the security? The statute does not so declare. If allowed, would it not operate as a surprise upon the judgment creditor ? After he knew security was given, would he probably inquire if an appeal had. been taken 3

It is our duty to give such construction to the act as will harmonize its different provisions, and preserve the rights of parties, as well plaintiff as defendant. I think this can be accomplished by holding, as this court does, that the relator, by filing security, has made his election, and is estopped from further litigating the justness of the respondent’s claim.

In the case of Nealy v. Sexton, Wright’s R. 314, the same question was presented, and it was decided that a party against whom there is a judgment, may stay execution and appeal also; that a party may desire to stay execution, in order to obtain counsel as to the propriety of appealing, and thus save the expense of taking his property or body in execution.

By the laws of Ohio, the judgment creditor might issue execution the moment-judgment was rendered. By the 77th section of our act this is prohibited, except in one case, until after the expiration of five days; so that there is not the same necessity for giving stay to get time for reflection, with us as in Ohio. Again, in Ohio the surety for stay of execution enters into a recognizance, and if the debt is not paid at the time specified in the recognizance, execution does not issue against the principal and surety, as with us, hut suit must be brought on the recognizance, as in other cases.

Motion denied.


text:
    People v. Collier.
    An indictment for perjury must aver the false allegation was material to the matter in question, or it must clearly appear from the indictment to have been so from the statement alleged to he false.
    Where an indictment for perjury stated, “it became and was material to ascertain the truth of the matters hereinafter alleged to have been sworn to,” stating what defendant swore to, the averment was held insufficient.

      An innuendo is bad when there is -nothing previously stated to which it can refer. It. S. 1838, p. 639, sec. 2, does not make that perjury which is not material to the isaue.
    Cask reserved from the District Court for the county of Jackson.

      II. N. Walker, attorney general, for the people.

      Joy, for defendaut.
   By the court,

Wing, J.

It is alleged, among other reasons, in arrest of judgment, that there is no sufficient averment of the materiality of the alleged false testimony or matter falsely sworn to by tbe defendant, to the question or matter which was the subject of inquiry before the justice.

The indictment alleges, in substance, that a complaint was made against one Allen Boyce, charging him with having stolen a hay horse and one mule, the property of one Benjamin L. Collier (the defendant); and that the matter came on to he' heard and determined, and that the defendant was in due form of law sworn as a witness. There is then inserted in the indictment the following averment: “ and then and there upon the hearing of the said complaint, it became and was material to ascertain the truth of the matter hereinafter alleged to have been sworn to and stated by the said Benjamin L. Collier, upon his oath.” This averment is inserted in both counts of the indictment, immediately preceding the statement of the matters alleged to have been falsely sworn to; and this is the only averment to be found in either count, in relation to the materiality of the evidence given by defendant to the matter pending and in question before the justice.

It is a well settled rule, that it must appear on the face of the indictment that the false allegation was material to the matter in question; for if it be of no importance, though false, it will not be perjury; for, as it does not concern the issue, it is extra-judicial in this respect. 2 Chilty’s Crim. L. 305. If it mutt he material, it must be averred to be so, or it must clearly appeal1 to be so from tbe statements alleged to be false.

In stating the question which is averred to be material, it is proper to mention the circumstances, which must afterwards he connected with the terms of the defendant’s oath, in order to assign perjury upon that meaning. The usual -form, when an express allegation of materiality is made, is, that it became a material question whether such a thing happened or existed. In this case it might have been, whether a certain bill of sale, executed by Boyce to Collier, was executed for such and such purposes; whether by it a certain horse was conveyed or sold to Collier; and whether he had said so and so about it. The materially of the question must be raised by the issue, and must have existed ; t the time the inquiry is entered upon and before the witness gives his evidence. The supposition of the count is, that the evidence is false; therefore, if the defendant be guilty, his allegations had no foundation in fact; nor does it ap>pear, even in suggestion, till he gave his evidence; and when he had given his evidence, it became material to ascertain the truth of what he had stated; but it is not stated that he gave any evidence after it became material. In the case of Regina v. Goodfellow, 1 Carrington & Marshman 569 (41 Eng. C. L. 310), the indictment contained the same averment. The court says, “ As to the allegation of materiality, I am of the opinion that the allegation is clearly bad. It seems to me it is quite absurd to say, it became material to ascertain the truth of what the witness stated; the witness’ statement itself must be given to ascertain the truth of something which has become material to the inquiry before the statement has been made.”

It is then stated in the indictment, that the defendant “did depose and give in evidence to the effect following, that is to say, that he, the said Benjamin L. Collier, did not, in conversation with one Charles Boyce, tell him, the said Charles Boyce, that bill of sale [referring to a bill of sale executed by the said Allen Boyce to the said Benjamin L. Collier, then and there produced, and proved and read in evidence, before the said John Ganow, as such justice of the peace, on the hearing of the matter of the said complaint, and which, amongst other things, purported to convey from the said Allen Boyce to the said Benjamin L. Collier the goods and chattels alleged to have been stolen in the said complaint], was intended as a collateral security for the payment of the amount the said Allen Boyce was indebted to him,” &c.

The subject matter of the bill of sale is introduced into the second count in the same way, and all the evidence of defendant is stated to have been in reference to it. There is no prefatory statement to which it rofeis. The innuendo embraces all that is stated in the indictmentin relation to Collier’s interest in or title to the horse. All his evidence relates to the validity of the bill of sale, when executed, what he had afterwards said concerning it, and what was intended by it. This is the first time the bill of sale is mentioned in the indictment — nothing is previously said in relation to its materiality to the question to be determined by the justice. But for the innuendo, it would not apper that it related to a horse. Can the innuendo have the effect which is claimed for it ? Mr. Chitty explains the office of an innuendo as follows: “ It is a mode of exj)lammg some matter clearly expressed; it serves to point out when there is precedent matter, but can never introduce a new charge; it may elucidate what is already averred, but cannot add to, or enlarge or alter its sense; and, therefore, if it be intended to explain any thing, the matter must first be put upon the record for it to explain. Thus the words, he has burned my barn, cannot, by innuendo, be taken to be a barn full of corn; but, if it had been stated before, by way of inducement, that the owner had a barn full of corn, and then the innuendo had referred to it as such, the meaning would have been complete.” 2 Chitty’s Crim. L. 310. So in this case, if the subject matter of the bill of sale had been set out in the prefatory part of the indictment, and it had been averred that it became material to ascertain, &c., and thus made it proper to refer to it, it might have been done by innuendo. We think the innuendo bad. There is nothing previously stated to which it can refer. We have seen it cannot add a new charge as in this case. Here the nature of the bill of sale, its substance, its effect and bearing upon the case before the court, is all contained in the innuendo. Without the explanation afforded by it, the evidence of Collier would be unintelligible; and therefore, as some use is made of the innuendo, which is imperfect, it cannot be rejected as sprplusage. 2 Chitty’s Crim. L. 310, 311; 1 Ld. Raym. 256,

It does not appear from the indictment, that the evidence was given by defendant on a cross-examination, and we cannot, in a casp ljke this, infer that it was: as all the facts necessary to show its materiality "must appear upon the face of the indictment.

The whole of the evidence given by the defendant relates to matters (so far as appears) collateral to the question before the cpurt> which was whether Boyce had stolen defendant’s horse, and not in relation to a bill of sale, which does not appear to have any connection with or relate to a horse. The defendant is not charged with having testified in relation to a horse; his evidence is confined to a bill of sale, and what he has or has not said about it to different persons. And even if it was averred that the evidence was given upon a cross-examination — as it appears to relate to a collateral matter, it could not lay the foundation for an impeachment, and therefore it could not be material in this respect. 1 Stark. Ev. 164.

The attorney general refers to the Revised Statute of 1838, page 639, and, as I understand him, insists that it changes the rule in relation to the materiality of the testimony to the matter in question before a court; but the statute does not make that perjury which is not material to the issue. The statute says, if any person, of whom an oath shall be required by law, shall wilfully swear falsely in regard to any matter or thing, respecting which such oath is authorized or required, he shall be guilty of perjury. This statute embraces cases which before were not embraced by law, but it does not in any way change the rules regulating the mode in which indictments for perjury are to be framed.

The result of our examination of this case is, that the averment referred to is not well made; that th'e innuendo stated above is improper, and not in conformity to the rules of pleading in such cases; and that, in the absence of the averment and the innuendo, the materiality of the testimony of defendant, upon which peijury is assigned, is in no wise apparent from any other portion of the indictment; and, therefore, that the indictment is bad, and will not sustain a conviction, and judgment must be arrested. We do not deem it necessary to notice the other objections.

Let it be certified to the circuit court of the county of Jackson, in which said case is now pending, that the law of the case is with the defendant upon the point submitted and noticed by this court.

. Certified accordingly.


text:
    The People v. Jerome.
    It is not libelous to write and publish of and concerning one who is a druggist, “ The above druggist in the city of Detroit refusing to contribute his mite with _ his fellow merchants for watering Jefferson Avenue, I have concluded to water said Aveuue in front of Pierre Teller’s store, for the week ending June 2Tth, 1846.”
    Case reserved from Wayne District Court.

      J. M. Howard, for defendant.
   By the court,

Wing, J.

An indictment was presented to the district court for the county of Wayne, at the December term of the court in the year 1846, against defendant, Edwin Jerome, for an alleged libel on Pierre Teller, to which a general demurrer was filed. Upon the argument of the demurrer, the following questions were made,'viz;

1. Is the published matter set forth in said indictment libelous?

2. Is the same set forth in said indictment with legal certainty ?

' The presiding judge of the district court deeming these questions of sufficient importance to have the same submitted” to this court for its opinion thereon, did accordingly certify the same to this court.

The charge made against Pierre Teller in the supposed libel, is, that he “ the above druggist in the city of Detroit refusing to contribute his mite with his fellow merchants for watering Jefferson Avenue, I have concluded to water said avenue in front of Pierre Teller’s store, for the week ending June 2'7th, 1848.” This embraces all that is said of Mr. Teller personally.

The general rule, that a libel upon an individual is “ a malicious defamation, expressed either in printing or writing, and tending to blacken the memory of one that is dead, or the reputation of one that is alive, ¡and expose him to public hatred, contempt or ridicule,” is plain and easily understood; but its application, in" the most of the cases which have been presented to the courts, has been found to he difficult. There are many cases in which the rule does not furnish a sure guide; and this, to my apprehension, is one of them.

Only the latter part of the rule can he supposed to have any bearing upon this case. Does the publication tend to expose Mr. Pierre Teller to public hatred, contempt or ridicule ?

It is said that where there is no imputation upon the moral character, no words of ridicule or contempt, and nothing which can affect the party’s reputation in life, it is no libel. An illustration of this rule is found in Robinson v. Jermyn, 1 Price 11. The defendant published of and concerning the Reverend John Robinson, as follows: “ The Reverend John Robinson and his brother, James Robinson, inhabitants of-this town, not being persons that the proprietors and annual subscribers think it proper to associate with, they are excluded this room.” The libel was published in the Cassino Room, by posting it on a paper. It was held that the paper and the mode of promulgating it, did not amount to a libel: 1. Because it did not; by any necessary or probable implication, affect the moral fame of the party. 2. That it was the regulation of a subscription assembly, and the paper might import no more than that the party was not a social and agreeable character in the intercourse of common life. 3. That the words charged him with nothing definite, threw no blame on his reputation, and implied no unfitness for general society. The same reasons will apply to this case. The statement does not assert or imply that Teller was under a legal, moral, or even honorary obligation to contribute his mite with his fellow merchants, to water Jefferson Avenue. All'that can be inferred from the statement is, that the merchants on the avenue had united, or had proposed to unite, in watering the avenue, and that Teller had refused to unite with them. The proposition, for ought that appears, was a new one — there was no obligation resting upon Teller to join in the furtherance of this project. It was addressed to his discretion — it was not a work of necessity; and if a matter of taste or general convenience, all the inhabitants of the city werg alike interested in it. The position of Teller did not make it any more incumbent on .him to assist in this measure, than it was upon any other citizen who might desire to Walk or ride on the avenue, free from the annoyance of dust. If, then, there was any motive which could prompt to such liberality on the part of merchants, and which was peculiar to them, it was their personal interest, in being able to expose their goods upon the side walk without their being soiled by dust: they, in an especial manner, reaped the advantages to be derived from watering the street. Those of them who preserved their goods unsoiled would present greater attractions to purchasers than those who allowed them to be covered with dust. How was Mr. Teller to participate in this peculiar benefit, since drugs and soda water are not usually exposed to the open air ? He would derive no greater benefit from the wetting of the street, than any other citizen doing business or residing upon the street. The merchants, guided by their views of their peculiar interest, did what they thought would promote it. If the dust was kept down, their goods would be preserved in good order; whereas, if the dust was permitted to rise and float in the atmosphere, and be drawn into the throats of the good people passing to and fro upon the street, it would be likely greatly to promote the sale of Mr. Teller’s soda water. He refused to contribute his mite: and if this was not commendable, at the least, it is-obvious it was his right to do so; and I cannot see how the charge has any tendency to expose him to public hatred, contempt or ridicule; and surely it does not fall within any other branch of the rule I have stated.

The defendant, having stated what Mr. Teller refused to do, proceeds to state what he has been advised to do, and what he will do, and that he will receive his pay according to the proposition of sundry persons. He does not again allude to Mr. Teller; his expectations are from the public. All that is said in the publication, besides the statement in relation to Mr. Teller’s refusal to contribute his mite, &c., relates to the defendant himself — it does not bear upon Mr. Teller.

In this country, and particulary in this western country, great latitude has been allowed to individuals in speaking and writing “ of and concerning” private and public characters; and though it is not pretended that by this habit a new rule has been established, or the effect of the old rule has been destroyed, yet it may be doubted if it has not been much weakened. There are many scurilous epithets, which scholars and gentlemen seldom, if ever, use, but which it is the province and habit of the vulgar to apply, as well to the good as to the bad — not doubting that in this land, where the largest liberty of speech is guarantied to all by the constitution, where our laws and the conventional rules of society are moulded and changed by the influence of public opinion, spoken or written, that ridicule is as innocent, if not as powerful, a mode of conveying to the mind public sentiment or opinion, as any other. It is not to be doubted that it is allowable, by speaking, writing or printing, to ridicule to some extent tbe acts and opinions of public men, and also private individuals, when their acts are connected with public measures. The great difficulty consists in defining the boundary between what may, and what may not, be said or written, without subjecting the person so speaking or writing to a public prosecution. .

In this case, there is no moral delinquency charged upon Teller; nor can I see that what is said of him implies any unfitness for general society, or that it tends to expose him to public hatred, contempt or ridicule, particularly in the first part of the publication. And if there is in any part of it any thing tending to expose any one to public hatred, contempt or ridicule, the defendant, and those persons who proposed to pay him by penny contributions, and those who so contributed, had it all to themselves.

The matter is not set forth with legal certainty in the indictment.

There is no prefatory averment that Pierre Teller is a merchant, a druggist, a keeper of a soda fount, or is engaged in any particular business of and concerning which the statements were made.

We are therefore of the opinion, that the matter set forth in the indictment is not libelous; and if it is, it is not set forth with legal certainty in the indictment; but looking upon the statement as not libelous, wa do not think it necessary to examine the structure of the indictment with much particularity.

Certified accordingly.


text:
    Brooks v. Delrymple.
    In an action in a justice’s court against defendant for falsely representing himself to have title to a piece of land, which plaintiff was induced to purchase of him, it was held, the title to the land must necessarily be drawn in question, and that the justice, therefore, had not jurisdiction of the case.
    "Where there are two issues — the general issue, and an issue on a special plea — and the jury find a verdict for plaintiff on the general issue, but rendered no verdict on the other issue, the judgment will not be reversed, if the verdict on the general issue negatives the special plea of defendant on which the other issue was joined, and the jury could not have found for plaintiff had defendant established his special plea.

      Error to Berrien (Jircuit Court.

      Bacon, for plaintiff in error.

      Dana, for defendant in error.
   By the court,

Whipple, C. J.

From an examination of tlie record, it appears that Dalrymple commenced a suit against Brooks, in the court below, to recover damages for an alleged fraud in procuring certain property and a promissory note.

The declaration contains three counts, differing somewhat id the statement of the manner in which the fraud was perpetra ted, yet unquestionably relating to the same transaction. A brief statement of the first count will sufficiently indicate the character of the others.

. It is alleged that the plaintiff was the owner of a piece of land containing about sixty acres, on which he had paid the taxes assessed thereon, according to law; that the defendant, well knowing that the plaintiff was unlettered, and unable to read or write, fraudently represented to him that he had a deed and valid tax title to the sixty acres of land — that he had been offered $300 for it, and that he would sell the land unless the ¡fiaintiff would give him $150; that the plaintiff ignorant of the nature of tax titles and of the falsehood of the representations, and induced by the threatened loss of his land, paid to the defendant $85, or its equivalent, for his pretended tax title; that in fact the defendant had no just title or claim to the land, and the pretended deed was of no binding force or effect.

To the declaration, the defendant plead the general issue, and two special pleas. The first special plea alleged, in substance, that the plaintiff impleaded the defendant before a justice of the peace for the same cause of action mentioned in the plaintiff’s declaration; that upon hearing the proofs and allegations of the parties, the justice adjudged, “ that the said plaintiff should go thereof without day, and that the defendant recover against the said plaintiff $10 29, costs,” &c. The other special plea differs from the first in this, that it is averred that the suit was commenced before the same justice, but that a jury was empanneled to try the issue, who returned a verdict of “ no cause of action;” .that thereupon the justice “ determined and adjudged that the said plaintiff should go thereof without da}’, and that the defendant do recover his costs,” &e. Appended io the pleas was a notice, embracing the same matters set out in the special pleas. To the special pleaáf the plaintiff replied, in substance, as follows: “ And the said plaintiff; as to the pleas by defendant secondly and thirdly above pleaded, says, the plaintiff did not implead the defendant &c. for the same identical cause and causes of action,” &c. “ And the said plaintiff, as to the plea of the defendant by him thirdly above pleaded, and the matters, &c., says, that no verdict or judgment thereon was rendered in said justice’s court,” <fec., and concludes with an issue to the country. The record further discloses that the plaintiff below, on the 10th October,. 1844» filed with the court an amended replication, in substance as follows: “ And the said plaintiff, as to the plea of.the defendant by him secondly above pleaded, &a., says, precludi non, because, he says, that the judgment of the court before the justice of the peace, in that plea mentiond, was a judgment of nonsuit,” &c., and concludes with a verification.

A verdict was rendered in favor of the plaintiff below, for less than $100 and costs of suit, to reverse which the writ of error in this cause is prosecuted. The errors assigned are: 1. That the verdict and judgment being for a less sum than $100, a judgment for costs should have been rendered in favor of Brooks. 2. That the jury rendered no verdict on the issues secondly and thirdly joined between the parties.

By the justices’ act of 1841' (Sess. L. 1841, p. 81, sec. 1), original jurisdiction is conferred on justices of the peace in all civil actions wherein the debt or damages demanded do not exceed the sum of $100, excepting real actions, &c., and actions in which the title to real estate shall come in question. An examination of the record shows very conclusively that the title to real estate was involved. The fraud charged upon the defendant below, consisted in representing himself as having title to the land described in the declaration; upon this representation, the plaintiff below parted with his property, and executed the promissory note also set forth in the declaration. It was, therefore, incumbent on the plaintiff, upon the trial in the court below, to show the falsehood of the representation; to do this, he must necessarily have shown that the defendant had in fact no title to the land. It is clear, therefore, that the title of the defendant below to the land in question, must have been drawn in question, and that the justice of the peace had no jurisdiction of the case.

The second allegation of error must have been, founded on- a .misconception of the state of the pleadings. The second plea was no answer to the declaration; it avers that judgment was rendered as in case of nonsuit, and was, therefore, no bar to a second suit for the same cause of action. The third plea avers that the jury returned a verdict of “ no cause of action,” and that thereupon judgment as in case of nonsuit was rendered. This last plea might be regarded as good, inasmuch as a verdict upon the merits, rendered by a jury before a justice, would have the same force and effect as a judgment rendered by a justice, when the merits are tried without the intervention of a jury. A verdict of no cause of action,” being sufficient, the words which follow may be rejected as surplusage. ' The replication is bad; but it is, perhaps, good enough for the pleas. The plaintiff, in his replication to the second and third pleas, avers that he did not implead the defendant for the same identical cause of action; and then, as to the third plea, says, that no verdict or judgment thereon was rendered in said justice’s court. The plaintiff might well have disregarded the second plea, as it simply averred that a judgment of nonsuit was rendered against the plaintiff by the justice, which constituted no bar to another suit for the same cause of action. In respect to the third plea, the replication gives two answers: 1. That the plaintiff did not implead for the same identical cause of action. 2. That no verdict or judgment was rendered in the justice’s court. Upon which of these propositions the plaintiff intended to rely, does not appear — the record is silent on the subject. The next feature in this masterly exhibition of special pleading, is to be found in the amended replication filed on the 10th October, 1844. How this paper got on the record, we are not advised; we are bound, however, to suppose it rightfully there — more especially as the defen? dant in error, in his brief, says, that by leave of the court, a new rep? lication was filed. This replication purports to be an answer to the second plea, and avers that the judgment rendered before the justice was a judgment of nonsuit. In other words, the amended replication admits precisely what the plea states, to wit, that there was a judgment of nonsuit rendered before the justice. It is to be noticed, that this amended replication takes no notice whatever of the third plea, which plea, if true, constituted a bar to the action. Nor does it conclude with an issue to the country, but with a verification. To this replication there was no rejoinder, nor was any necessary, inasmuch as the replica? tion purported to reply to the second plea, which was a mere nullity. Having sketched the somewhat remarkable history of the pleadings in this cause, we are now prepared to determine whether the second allegation of error is well founded. There is some doubt as to whether the amended replication was intended to supersede the first replication, or whether it was intended simply to remedy the difficulty apparent in the first replication — that difficulty consisting, in the fact that, in attempting to reply to the second plea, it purports to give a partial answer to the third plea. It seems to be a more sensible view of the question, to consider the amended replication as simply an answer to the second plea — leaving the replication to the third plea to stand. The -issues, then, on the record to be tried, were: 1. The general issue. 2. The issue formed upon the matters contained in the defendant’s third plea. The record shows a verdict for the plaintiff on the first issue, but is silent as respects the second. This objection will be decisive of the case, unless the finding of the jury on the plea of the general issue, negatives the special plea; if such be its legal effect, then the jury did, in effect, pass on the issue joined on that plea. It seems to me very clear that the jury could not have found for the plaintiff on the plea of the general issue, if the defendant had successfully established his special plea. A verdict for the defendant on that plea, would have authorized a court in directing a verdict for the defendant on the first plea, the general issue, for the obvious reason that such finding necessarily implied that the plea must have been supported, and, if supported, it constituted a perfect defence to the aetion; and the failure to find for the defendant on the first issue, would be mere matter of form. Thus, if in assumpsit there be a plea of non-assumpsit and payment, and a verdict for the plaintiff on the first issue, judgment may be entered for the plaintiff, although the plea of payment remain undecided: so a verdict for the defendant on the plea of payment, will be sufficient, although the record shows no finding on the plea of the general issue. If, in an action of replevin, there be a plea of non cepit, and property in the plaintiff, or a stranger, a verdict for the plaintiff on the first plea, would not be sufficient, for the reason that such a finding would not necessarily negative the other plea; there would, in such case, be no inconsistency in finding for the plaintiff on the first plea, and for the defendant on the other.

Upon the whole, there are errors enough apparent on the record, but none of so weighty a character as to authorize a reversal of the judgment.

Judgment affirmed.


author: Miles, J.

text:
    Engle, Administrator, et al. v. Shurts.
    Where a penal statute is repealed, without a reservation or saving clause in favor of penalties that had accrued under it, such penalties cannot afterwards he recovered.
    Appeal from the Court of Chancery. Shurts, on 20th April, 1843, ■filed his bill in the court of chancery to foreclose a mortgage executed to him by Engle, deceased, in August, 1839. Defendants, by their answer, admitted the mortgage, but insisted it was usurious. A replication was filed to the answer, and testimony was taken by defendants to prove- the usury. The chancellor was of opinion the usury was established by the proofs, and on 25th June, 1845, made a decree in favor of Shurts for the money actually loaned only, with interest. Fromthi* decree defendants appealed.

      Gurney, for appellants.

      Bacon, for appellee.
   By the cowt,

Miles, J.

It is insisted by the aj>pellants that the usury is proved, and that it is equitable that the appellee have a decree only for the amount of the mortgage, after deducting not only the amount of the usury, but also the penalty under R. S. 1838, p. 161, sec. 5, that being the law in force when the contract was made.

But before this bill was filed, that part of the statute imposing the penalty for taking .usurious interest, was repealed, without reservation or saving clause. Sess. L. 1843, p. 54. In such case the penalty is gone. 1 Wash. C. C. Rep. 84; 1 Binney 601; 3 Burr. 1456; 1 Black. Rep. 451; 7 Wheaton 551.

The case of Aymer v. Gault, 2 Paige 284, referred to by appellants’ counsel, was decided under the revised statutes of New York, containing the usual saving clause; as were also the cases in 4 Wendell 206, 210 and 211. The only questions that arose in those cases, under the statute, was as to the mode of proceeding, and that was expressly required to conform to the new statute.

The statute of 1843 before referred to,'also repeals that part of the statute of 1838 by which the defendant was, in an action upon an usurious contract, entitled to recover costs, and confines the recovery of the plaintiff to the amount of the principal and legal interest: and as that appears to be the amount for which the decree was made in this case, we think it must be affirmed, with costs.

Decree affirmed.


author: Green, J.

text:
    Campau v. Fairbanks.
    The return to a summons in these words, “ Served the within by reading personally,” — the statute requiring it to be served by reading it to defendent and delivering him a copy — is bad, and does not give the justice jurisdiction of the person of the defendant.
    Certiorari. In August, ÍSSÍ, Fairbanks sued Campau in a justice’s court. The constable made the following return to the summons: “ Served the within by reading personally;” to which he affixed the date of the service and subscribed his name. Campau did not appear on the return day, and Fairbanks proceeded ex parte before the justice and obtained a judgment, to reverse which Campau sued out a writ of certiorari from this court.
    Tryon, for platntiff in error.
    --, for defendant in error.
   By the court,

Green, J.

The only ground of error assigned, is, that the service of the summons was insufficient, and that the justice did not, therefore, acquire jurisdiction of the defendant below, and that, consequently, the judgment is absolutely void.

Tim law in force at the time these proceedings were had before the justice (Laws of 1833, p. 194), required that the summons should be served by reading the same to the defendant, and delivering a copy thereof to him, if such defendant should be found; and that the sheriff or constable serving such summons should, upon the oath of his office, return thereupon the time and manner he executed the same; and that in case the defendant did not appear at the time and place mentioned in such summons, the said justice should then, or at such other reasonable time as he might ap2>oint, proceed to hear and examine the proofs and allegations, and give judgment thereupon agreeably to law and evidence.

The service of the summons was clearly insufficient; and had the defendant appeared, he might have taken advantage of the irregularity, or might have waived it by pleading in bar, or taking some other step which pre-supposed a sufficient service. Did the defendant waive the irregularity by neglecting to appear and make the objection before the justice ? The doctrine appears to be well settled, that a party who does not appear in a suit before a justice of the peace, waives nothing, but may raise the objection upon ap2mal or certiorari.

The return of the constable in this case being the only evidence of the time and manner of the service of the summons, upon which the justice could act, and that return not showing a service in accordance with the requisitions of the statute, the justice acquired no jurisdiction of the defendant, and, therefore, had no authority to render the judgment. 13 Wendell 85; 14 John. R. 481; 19 id. 39; 3 Wendell 202; 1 Doug. Mich. R. 384, 390.

The judgment of the court below must be reversed, with costs to the plaintiff in error.

Judgment reversed.


text:
    Smalley & Nelden v. Bristol.
    In declaring on a promissory note absolute on its face' and in tlie ordinary form, H is not necessary to1 notice a contemporaneous agreement in -writing varying the terms of the note, contained in a separate paper. Suob- agreement is matter of defence only.
    Case reserved from Oakland Circuit Court.-

      Barstow and Lockwood, for plaintiffs'.

      Uosmer, foi defendant'.
   By the' court,

Wing, J.

The action in this case is assumpsit. The declaration contains a special count on a promissory note, and the common counts. Plea, the general issue. On the trial the plaintiffs produced the note declared on, which was in the usual form,- executed by the defendant to the plaintiffs, payable one day after date, and proved the necessary facts- to entitle them to recover on the same under the special or common counts, and then rested.

The defendant then introduced, or offered to introduce, in evidence a paper of which thefollowing is a copy: “Reed., Pontiac^ July 17,1844, from Mr. Thomas W. Bristol, two notes, payable one day after date, for the sum of 231 83-100, to be paid on the following conditions, to wit: The said Thomas W. Bristol is security for Charles L. Bristol, in a suit brought by the Farmers’ and Mechanics’ Bank at Pontiac, which said suit is now pending imdetermined in Oakland county. Now if said suit is decided against said Charles L. Bristol, and the said Thomas Bristol has to pay the said liability, then the above stated notes to be void. But if the suit is decided in favor of said Charles L. Bristol, then the said Thomas Bristol is to pay one of said notes-immediately thereafter, and the other in one year from the date hereof. If the aforesaid notes are paid according, to the above stipulation, then Smalley & Nelden agree to deduct from the note- payable in one year, one hundred dollars, and the interest on the same. (Signed) Smalley & Nelden.”

The defendant contended that this paper writing, of itself, without any additional evidence of any kind, was a full defence to the action, on the ground that the paper writing was contemporaneous with the notes, and that it, together with the notes, constituted a mere common law contract, all of which, and the consideration thereof, should have been set forth in the declaration.

A verdict was taken for the plaintiffs, by consent of defendant and under the direction of the presiding judge, and the question of law presented by the defendant was reserved for the consideration of this court.

In support of his objection, the defendant’s counsel cites Chitty on Bills, p. 160, in which it is stated that, “ the rule that a bill or note payable on a contingency is invalid as such, extends also to cases where the bill or note is absolute on the face of it, but rendered contingent by a contemporaneous endorsement, or even by a written memorandum on a detached paper” The cases cited by Chitty in support of this position, are aíl caseá in which the endorsement was on the back of the same note, and not on a detached paper, as in this case. It is not denied that an endorsement upon the back of the same note of a condition or contingency upon which the note is to be payable, will be considered as part and parcel of the note; but tire authorities cited hy Mr. Chitty do not establish the position stated by him. Indeed, it may be considered doubtful whether he intended to say that a contemporaneous writing on a detached paper would he considered as a part of the note — for in the next paragraph, which is under the head of “ a separate memorandum,” he says: “ So, although the memorandum be on a separate paper, yet if it were contemporaneous, it is admissible between the original parties and theh representatives: as where there was a written stipulation to renew on a separate paper, it was considered that it qualified the liability, although it did not vitiate the instrument itself.” He cites Bowerbank v. Monteiro, 4 Taunt. 844. That was an action on a bill of exchange,. and the plea was the general issue. The defendant introduced a writing signed hy the plaintiff at the time the hill was accepted, but it was not set forth in the declaration — for it was questioned whether it ought not to have been plead specially. Nor was it objected that it was not set forth in the declaration, hut the writing was held to he a defence to the note.

Defendant’s counsel also cites the case of Carlos v. Fancourt, 5 T. R. 482. In this case the note was payable on a contingency expressed in the note, and it was held it was not a promissory note, and could not be declared upon as such; but must be declared upon as a special agreement. This case does not bear upon the case in band, for it was not a ease in which there was an absolute promise, which was modified by a separate, if not a subsequent, agreement. I do not find any references in Chitty on Bills which establish the position as a matter of pleading, that in a case like the present, the declaration should count upon a special agreement, and not upon the note as a negotiable instrument.

In Story on Promissory Notes, sec. 24, the Judge says: “In order to make a note invalid as a promissory note, the contingency to avoid it must be apparent, either upon the face of the note, or upon some contemporaneous written memorandum on the game paper; for, if the memorandum' is not contemporaneous, or if it be merely verbal, in each Gase, whatever may be its effect as a matter of defence between the original parties, it is not deemed to be a part of the instrument, and does not affect, much less invalidate, its original character.” Same doctrine in Bayley on Bills, 17.

In New York a contemporaneous written agreement endorsed upon the back of a promissory note, making its payment depend upon a contingency, does not affect its negotiability — its only effect is to give notice of the consideration to subsequent holders; and in a suit upon it, the maker may avail himself of any defence which he could set up against the payee. 15 Wendell 363, The New York courts acknowledge the English rule is different in cases of endorsement upon the note itself.

If these notes were negotiable promissory notes at the time they were delivered to the plaintiffs, and could be declared upon as such by subsequent parties as endorsers, may not the plaintiffs so declare upon them ? In the cases cited by defendant’s counsel, the decisions turned npon the ground that the notes were not negotiable promissory notes, being payable on a contingency, which was incorporated into the note by the endorsement being on the same instrument, and, of course, known to all; and plaintiff could not prove his note without also showing the endorsement, which showed it was not a negotiable note, because payar ble upon a contingency. The rights of the maker in this case, and which may be claimed to be a defence to these notes, are only known to the original parties. The receipt expresses a contingent defeasance, on the happening of which, the maker may use it as a defence against thq payee; and in the mean time the receipt passes into the hands of the maker of the note, beyond the control of the payee, who cannot set it forth in his -declaration, because he has it not, and most probably could not get it, after suit commenced, or for the purpose of commencing suit. He has promissory notes, which, so far as appears, are good as such. A .separate -writing, expressing- that plaintiffs had received the notes, -to be operative as such, on a contingency, or unless a certain event should happen, must be regarded as a contingent defeasance, of which the defendant may or may not avail himself, as -the contingency may or may not happen. Where the matter is such that its affirmation or denial is .essential to the apparent or prima facie right of the party pleading, then it ought to • be affirmed or denied by him in the first instance, though it may be such as would otherwise form the subject of objection .on the other side, Stephen’s PL 396; Chitty’s PL 22S. Here the plaintiffs make out a good prima facie case and should recover, unless there is something shown extrinsic of the notes. The defence is matter which would come more properly from the other side — it is in bis power. A plaintiff is never called upon to set forth more than his own case: he declares upon the contract of the defendant in his hands. The matters of defence set forth in the receipt, do not vitiate the promissory notes, but show, perhaps, that -plaintiffs should not recover. There is no variance between plaintiffs’ declaration and their proof.

Certified accordingly.