author: Hitchcock, J.

text:
    George W. Jackson vs. The State.
    Under the law of March 2, 1846, providing " for taxing all property in this State according to its true value,” capital invested in the business of purchasing hogs, and slaughtering and packing pork, for sale or transportation, is subject to taxation.
    This case was reserved in the county of Fbanklin.
    It comes before the Court on appeal from the Auditor of State, under the 65th section of the act of March 2, 1846, entitled “ An act for taxing all property in this State according to its true value.” 44 Ohio Laws, 85.
    The facts relative to this matter are, that in 1845, the appellant, who is a citizen of the State of Pennsylvania, engaged in the business of purchasing, slaughtering, and packing pork, for transportation and sale, at Columbus, in Franklin county, and continued said business in 1846- One of the assessors of Franklin county, charged in the list to John Jackson $5,000, as capital employed in manufacturing. In ascertaining this amount, not being able to find Jackson, he applied to what he considered the best sources of information, and ascertained, as near as he could, the amount employed the preceding year, and took the same to be the amount employed the current year; following, in this respect, the direction of the statute.
    In Bank.
    Dec. Term, 1846
    In pursuance of this assessment, the appellant was charged with a tax upon $9,500. He complained to the Auditor of ■State, who, under the advice of the Attorney General, decided in favor of the tax. From, this decision an appeal was taken io this Court.
    N Brush, for Appellant.

      II. Stanhery, (Attorney General,), for the State.
   Hitchcock, J.

By the before recited act, all property in the State is subjected to taxation, except such as is especially exempted by the provisions of the third section. Merchants’ and manufacturers’ stock is expressly made liable to taxation. One and perhaps the .most material question arising in this case is, whether capital employed in the buying hogs, slaughtering, cutting up, and packing the same, to be sold or transported,, comes within the meaning of merchants’ or manufacturers’ stock. In other words, whether an individual engaged in this business is a manufacturer or merchant. Now, we are not prepared to say that a person pursuing this business is a manufacturer, within the meaning of the statute. The 17th section of the before named act provides, that “ every person that shall 4 own, or have in his possession, or subject to his control, any ‘ personal property within this State, and which shall have been 4 purchased either in or out of the State, with a view to being 4 sold at an advanced price" or profit,' or which shall have been 4 consigned to him .from any place out of this State, for the £ purpose of being sold at any place within this State, shall be £ held to be a merchant.”'

It seems to us that the appellant comes within, this definition. He is a purchaser of hogs, which are slaughtered and packed', with a view to be sold as pork, for the purposes of gain. There can be no doubt that the grocer, who purchases his pork by the barrel, and retails it in small parcels, at an advanced price, and for gain, must be held to be a merchant. And it would be strange that the small retailer should be taxed, and the wholesale dealer in the same article should escape. It i's true that Jackson is charged upon the duplicate as a manufacturer, when he should have been charged as a merchant; but he cannot, for this reason, escape from the payment of the tax.

It is objected on the part of the appellant, that the property was improperly listed. The assessor seems to have pursued the law. Jackson could not be found, and the assessor took the only course he could take to ascertain the amount of capital employed in this business. He ascertained, as nearly as he could, the capital employed the previous year, and formed his opinion from the facts so ascertained, and fixed the amount for the succeeding year, supposing that, as the business was to be continued, the same amount of capital would be continued in that business for the current year. This is the mode prescribed' by the law. It seems to be supposed, that as reference was had to thé past year, it is that business or capital which is’ taxed. It is not so. The tax is for the current year; and the amount of capital employed, and which is taxed, is supposed to be the same as the previous year. Had the business not been continued, there could have been no tax.

Another objection is made, that the tax is in the name of John .Jackson, and not in the name of George W. Jackson. If George W. Jackson is not taxed, why does he complain ? He is not injured. But if he is really the person who ought to pay the tax, it can do him no injury that it is in the wrong, name. If he pay it now, he cannot be compelled to pay it over again.

Appeal dismissed at Appellant’s cost.


source: Caselaw Access Project

author: Read, J.

license: Public Domain

text:
    In Bank.
    Dec. Term, 1846.
    Samuel H. Davies and others vs. Fielding Lowrey and others.
    If a guardian convert land scrip, receivable at the land office in the purchase of public lands, into money, by investing it in land for himself and others, and accounting with his wards for the scrip, with interest from the time of its investment, he cannot, if he acted in good faith in the transaction, be charged as a trustee of the land purchased, or compelled to account for the profits growing out of the investment.
    This is a Bill in Chancery, reserved in the County of Montgomery.
    The bill is filed for the purpose of charging the defendants ■as trustees of certain lands, and compelling them to account for the profits growing out of an investment in lands, under the following circumstances:
    Mary B., wife of Samuel H. Davies, Harriet S., wife of Lewis Henman, and Anne, wife of John Howard, were, in 1831, minors, and Fielding Lowrey, their father, was appointed their guardian. In 1832, land scrip, under the act of Congress of May 23, 1828, was issued from the land office at Cincinnati for the use of said wards, as heirs of John Smith, deceased, to the amount of $4,058. The expenses for procuring the scrip was $189, which, deducted from the scrip, left $3,869.
    Thomas and Carey, two of the defendants, applied to Stoddard, another defendant, to borrow money to buy land on the' Wapaukonnetta reserve, but not having the money to loan, and being informed that Lowrey held the land scrip, application was made to him for it. It was, thereupon, agreed, that this scrip should be employed by the defendants to purchase land, they becoming responsible to account for the amount thereof, in money, with, interest, to the heirs, and to sell and dispose of, and hold the land bought in certain proportions fixéd among themselves. The scrip was issued to Anne, Harriet and Mary, “ as minors, for themselves and interest for. the other heirs of John Smith, deceased,” which, upon the face of the scrip, was made assignable, “ the indorsement to be executed or concurred in by Fielding. Lowrey, guardian pf. said minors. The scrip was assigned to Stoddard, in pursuance of the understanding of the parties, in this form:
    “ Transferred to Henry Stoddard, of Montgomery county, ‘ December 25th, 1832, for value received.
    (Signed,) “ Mary 33. Lowrey, .
    “ Harriet S. Lowrey,
    “ Anne E. Lowrey, ■
    “ Hairs of John Smith, dec’d.

      ■“ Fielding Lowrey,
    “ Guardian for said Minors.”

    With part of this scrip land was purchased at the Piqua land office, of the Wapaukonnetta reserve, amounting to 2,350™ acres, for $3,275.32. Final receipts were taken in the name of Stoddard, and patents subsequently issued to him for the land.
    On the 25th of December, 1832, Lowrey entered 'into a written agreement with Stoddard, Thomas and Carey respecting these lands, stipulating that when Stoddard should receive a patent therefor, he should hold a part for himself, and the respective parts assigned to each of the other contracting parties in trust for them, to wit: one-seventh part to Stoddard, two-sevenths to Lowréy, two-sevenths to Thomas, and two-sevenths to Carey. Stoddard agreed to pay to Lowrey $467.90, being the one-seventh part of the whole amount, the one-half in one year and the other half in two years, with interest, to be paid annually; each of the others agreed to pay $935.80, on the same terms. It was also agreed, that the parties should give each his personal attention to the lands and make sales; Stoddard to execute deeds, and the proceeds to be applied to the discharge of the amount due for the scrip to the heirs, and, after this was done, the balance to be divided among themselves in proportion to the interest of each.' Under this arrangement the lands have been held ever since the purchase. Sales have been made prior to the filing of the bill to more than one-half, and the proceeds of all the sales paid over for the benefit of the complainants, and only a small balance remaining due on the scrip. About nine hundred acres of the land remain unsold. Stoddard has paid the taxes regularly. The sum paid over to Lowrey, for the benefit of respondents, has been $3,-275.32, with the accruing interest.
    The master reports as due to the heirs, on the 1st of June, 1845, $451.53.
    The lands have risen in value two or three dollars per acre, since the purchase.
    It is claimed that these bonds, under the circumstances, are held in trust for complainants, and are to be accounted for as trust property.

      Crane Davies, for Complainants.

      Henry Stoddart, for Defendants.
    No arguments came to the possession of the Reporter.
   Read, J.

It is an admitted principle, that a trustee shall not speculate in trust funds for his own benefit. It is his duty to manage the trust property with all reasonable diligence, caution and cafe, that it may be rendered most productive, without being exposed to loss. We intend in no sense to impair the obligation of these principles.

In the case under consideration, the guardian, Lowrey, having control over the land scrip in question, it was his duty to make it most productive for his wards. The scrip itself could not be esteemed equal to money. It was only equivalent to money in the single instance of a purchase of public land, being made so by the act authorizing its issue. It could not be put out at interest, or be in any way made to yield an income. To convert this scrip, then, into money, and secure to the wards its annual interest, was beneficial to them. This was done. Had there been nothing more than a conversion of the scrip into money, all would admit that the guardian had acted for the best of the wards, because money would answer the same purpose as scrip in the purchase of land, and could be made to yield an annual interest if not otherwise employed.

But it is contended in this case, that as the scrip was employed in the purchase of land, and as that purchase would be beneficial to the wards, they have the right to its benefit. The guardian and the other respondents agree to use this scrip to purchase land, by which means it was to be converted into money for the wards, with annual interest. It is said this scrip should have been employed to purchase lands for the wards. It would nót, as a general thing, be deemed so prudent a man-, agement of the money of wards to vest it in the purchase of wild lands as to put it out at interest. Indeed, such a disposition of a ward’s money would not be tolerated. Wild lands are unproductive, taxes are to be paid, and they can only be made available by improvement or sale. They would furnish no income for the support and education of the wards. If, then, a guardian would not be permitted to vest the money of his ward in wild lands, how can it be contended that he should vest the-scrip in land, when he has an opportunity of converting it into money ? It appears to be supposed that the scrip should have been employed in the purchase of land because it was made receivable as money in scrip purchase. That is not at all to be regarded as indicating to the guardian the use he should make of the scrip, but simply pointing out wherein it would be regarded as valuable. The scrip cannot be treated as land. It was not so intended. Its transferable quality shows that it was, designed to be made most beneficial to the recipient, by enabling him to dispose of it.

Now, suppose the guardian had taken the scrip' of his wards and put in its place, for their use, money at interest, would any one suppose he had done an act injurious to his wards? This, in substance, was all that was done in this case. The fund was converted into money and put at interest, and the income thus raised expended in the education of the daughters and wards of the guardian. The wards have had the full benefit of the fund, managed in the most prudent manner, and to them most beneficial. What would the ultimate rise in value of wild lands be, in comparison with the expenditure of money in the education of these wards ? It is said the lands bought have refunded the purchase money and left a balance in the hands of the defendants. This depended upon the exertions and care of the defendants, and the risk of the whole speculation devolved upon them.

We can see nothing in this transaction which should charge the respondents as to the remaining land as trustees.

The master has reported a balance of some §400 as due the complainants. ■ A decree for that sum may go against the respondents, and if it be desired, may be charged over upon the land.

Decree accordingly.


author: Birchard, J.

text:
    Harley Bartholomew vs. Benjamin Bentley and others.
    A special action on the case may be maintained for a fraud resulting in damage, and it is no defence that the fraudulent acts were done in the capacity of corporators.
    If the design be to defraud the public generally, any one suffering injury thereby may maintain his action.
    The declaration should charge the fraudulent intent in positive terms, and not leave it to be inferred from the falsity of the facts stated in the declaration.
    This case was reserved in Wayne County, and comes before the Court upon a Demurrer to the Declaration.
    The action is in case, and the declaration contains two counts. The first count states, in substance, that the defendants, on the 23d of July, 1838, associated themselves together, with, sundry other persons, under the name and character of the German Bank of Wooster, and assumed to act ás a company duly incorporated.by'law, and'authorized to',execute all.the powers, privileges’ arid'immunities óf a bank, under and by virtue of the act entitled an ,¿ct to’incorporate certain banks'.therein.named, and to extend the .charters of existing incorporated banks, passed February. 23d, 1816 ; that the defendants, béing so associated!, and pretending to act under the authority aforesaid,, from the . day and year aforesaid, continued to exercise the customary powers, privileges and immunities of - an incorporated Joarik, .by, lending money, issuing notes and'-., bills for circulation, and performing the other ordinary business of a bank of issue, and of discount and deposit and exchange, for the space of threé years;.' that the'defendants,- while so associated, and while assuming to act under the pretended authority aforesaid, through the-agency of their offiee,rs in said pretended bank, did issue arid: put in circulation, as bank notes and bills, duly authorized'by law and correct banking usage, the several- notes and bills thereafter set forth, in .each of which said several notes, and bills the defend- ■ ants bound themselves, in the name and style of the President, Directors arid Company of the German Brink of Wooster, to pay to the persons therein named, or bearer, the amount thereof on demand,' and each of- which notes arid bill's was subscribed by the. said Benjamin Bentley, as Cashier; and' by-William M. Combs, .-or by Hiram B. Wellman, i as President-of said ■ prer tended bank; and then followed a .pertinent description of the ' notes'and bills on which the plaintiff claimed, to recover.
    In Bank.
    Dec. Term, 1846.
    The declaration then further, averred that the plaintiff, confiding in the pretensions and .'professions made to 'the public by the defendants.,' that-they were duly incorporated, and authorized to act and exercise the bariking powers and privileges aforesaid, and also confiding in-the pretensions and professions of the defendants, that they, were, in- good faith, and-according to Saw, exercising the powers, privileges and'immunities of á bank, received in good faith, and for a.valuable consideration became the holder of, the aforesáid notes'and bills, and that he was .still the holder thereof.- ,

      The declaration then further alledged that the said law, entitled as aforesaid, passed February 23, 1816, so far as the same related to the incorporation of the stockholders of the German Bank of Wooster, by the name and style of the President, Directors and Company of the .German Bank of Wooster, had been violated, and said corporation had become liable to a decree of forfeiture, for abuse of the corporate franchise, and for non-user, prior to the time when the defendants so associated themselves together; and that the defendants, when so associated, and when in the exercise of the powers, privileges and immunities of a bank, under said pretended authority, and when they issued and put into circulation the notes and bills set forth in the declaration,, were not duly organized, nor acting either in the proper corporate name, or by a board of directors and officers duly elected and constituted in conformity to said act of incorporation, and under which they pretended to act, but, on the contrary,, wholly failed to comply with all and singular the requisitions and duties required of them by said laws, according to the true intent and meaning thereof; and, also, that the defendants, so associated as aforesaid, were not possessed of a proper and suitable bona fide capital for said bank, and did not conduct the business of their said bank in good faith, but deceitfully and fraudulently confederating and combining together, and contriving to cheat and defraud the community at large, as well as the plaintiff — -as the holder of said notes and bills — after issuing and putting into circulation the notes and bills of their said bank, to the amount of $125,000, and after contracting a large indebtedness to sundry persons, for money deposited in said bank and otherwise, the defendants, so associated as aforesaid, closed their said bank, and ceased to do any further business as such, professing that said bank had become insolvent, and refusing to redeem its notes and bills, so held by the plaintiff as aforesaid, as well as the notes and bills generally of said bank, according to the tenor and effect thereof, and to discharge the other liabilities of said bank, although often requested so to do. And the defendants, in order the more effectually to defraud the plaintiff, and their creditors generally, and to secure in their own hands the property which they had acquired by the said banking operation, after having lent out the funds and money of said bank, to the amount of i$ 150,000, to several of the defendants, individually, on the day and year aforesaid, discharged, or pretended to discharge, the said liabilities of the said several defendants to said bank, by authorizing and permitting each of said defendants, so indebted to said bank, to transfer to said bank the amount of stock therein held by them, respectively, although the same had become wholly worthless. By means of which said several premises the defendants falsely and fraudulently deceived the'plaintiff, and caused him to lose and lay out of a large amount of money, to wit, &.c., and otherwise greatly injured the plaintiff, &c.
    The second count was the same in substance as the first, except that the notes and bills held by the plaintiff were not specifically described.
    The defendants filed a general demurrer, and to decide the questions thus raised, the case was reserved for decision here.

      T. W.- Bartley, for Plaintiff.
    It is the boast of the common law, that for every injury it furnishes a remedy. In cases of fraud and deceit, the comprehensive remedy is an action on the case; and no principle is better settled than that, in all cases of fraud, where damage results, the action will lie. Paisley v. Freeman, 3 T. Rep. 51; Hay croft v. Creasy, 2 East’s Rep. 92; Tapp v. Lee, 3 Bos. and Pul. Rep. 367; Hamer v. Alexander, 5 Ibid. 241; Wise v. Wilcox, 1 Day’s Cases in Error, 22; Upton v. Vail, 6 John. Rep. 181; Barney v. Dewey, 13 Ibid. 233; 1 East’s Rep. 318; 1 Camp. N. P. 277.
    The fraud may be perpetrated by any fraudulent device, pretence, or management. And it is sufficient if the intention be to defraud the public generally, without showing an intention to defraud the plaintiff in particular. Allen v. Adding-

      ton, 7 Wend. Rep. 9; Gordon v. Preston, 2 Day’s Rep. 205; Williams v. Wood, 14 Wend. Rep. 126.
    The action lies whenever the plaintiff is aggrieved and damnified by unlawful acts done by the defendants, in pursuance of a combination or a conspiracy. Mott v. Danforth, 6 Watt’s Rep. 306; Griffith v. Ogle, 1 Binn. Rep. 172; Penrod v. Mitchel, 8 Serg. and Raw. Rep. 522; Tappan v. Powers, 2 Hall’s Rep. 277; Jones v. Baker, 7 Cow. Rep. 445; Gardner v. Preston, 2 Day’s Rep. 209; Patton v. Gurney, 17 Mass. Rep. 186 ; 8 Wend. Rep. 676; 2 Murph. Rep. 329.
    In view of these well settled principles of common law, does not the declaration show a good cause of action ? Can the defendants shelter themselves behind their bank charter, when, as we claim, it has been violated, and is therefore void ?
    The charter of the German Bank of Wooster, may be found in Chase’s Stat. 913. The 43d section contains this provision: “If any bank, or the officers of any bank, shall fail to comply £ with all and singular the requisitions and duties required of £ them respectively by this act, according to the true intent and £ meaning thereof, such failure shall forfeit all and every ad- ‘ vantage, privilege, and benefit of this act; and, from the time £ of such failure, shall be placed, adjudged, and considered in £ the same condition and situation as if this act had never been £ passed.” Hence, then, by the very terms of this charter, if there has been a failure to comply with any of its provisions, from the time of such failure the charter was void, and conferred no power upon the defendants.
    Now, the declaration charges, in express terms, that the charter of the bank had been forfeited; that the defendants acted without legal authority — were guilty of fraudulent acts; and that the plaintiff has been damnified thereby. And by the demurrer, these allegations are .admitted. On what pretence, then, can it be said that the charter of the forfeited bank can protect these defendants from responsibility for their fraudulent acts?

      The plaintiff is not precluded from pursuing this remedy by ^le act entitled “ an act to prohibit the issuing and circulating of unauthorized bank paper,” passed January 27, 1816. The remedy provided by that act is cumulative. If a statute gives a remedy, and does not, in express words, or by implication, withhold the common law remedy for a matter which was actionable at common law, the party has his option to pursue the common law or the statutory remedy. 2 Inst. 200; 2 Rol. 49; 5 Johns. Rep. 175; Scidmore v. Smith, 13 Johns. Rep. 322; Farmers’ Turnpike Company v. Coventry, 10 Johns. Rep. 389; Bowen v. Huntington, 3 Conn. Rep. 423; Miles v. O’Harra, 1 Serg. and Raw. Rep. 32.
    It is where a statute creates a new right, and prescribes a particular remedy for the enjoyment of it, that he who claims the right must pursue the statutory remedy. Gedney v. Tewksbury, 3 Mass. Rep. 307; Smith v. Drew, 5 Mass. Rep. 514.
    But where a' new right is created, and no remedy is prescribed, the common law will furnish an adequate remedy. Bigelow v. Cam. and Cone. Turnpike Corporation, 7 Mass. Rep. 202; Colden v. Eldred, 15 Johns. Rep. 220.
    But assuming that the German Bank of Wooster had a legal existence at the time of the injuries complained of, does it protect these defendants ? A corporation is a mere creature of the law, and derives all its powers and capacities from the laws of its creation. It has no power except such as is expressly granted by its charter, or as is necessary to carry into effect the powers expressly granted. 2 Kent’s Corn.' (2d Ed.) 298; 2 Cranch’s Rep. 127; 8 Ohio Rep. 286.
    The directors or managers of an incorporation are but its ■ agents, to exercise its lawful powers; when they exceed them, they act not as corporators but as individuals, and are liable as individuals. Ang. &. Ames on Cor. (late ed.,) 242, 446, 450; Salem Bank v. Gloucester Bank, 17 Mass. Rep. 29; Lincoln and Kennebec Bank v. Richardson, 1 Greenl. Rep. 81; Lawrence v. Tucker, 7 Greenl. Rep. 195; Thayer v. Boston, 19 Pick. Rep. 516; Stow v. Wise, 7 Conn. Rep. 219; Goodloe v. Cincinnati, 4 Ohio Rep. 513. 1
    It will hardly be contended, I imagine, that the wrongful acts complained of in the declaration were authorized by the charter of the bank. They were the acts of individuals, as individuals.
    The following authorities support this proposition: “ If any ‘ number of persons combine with intent' to injure and defraud 1 another, they cannot defend themselves against an action by ‘ showing they did the act in the character of corporators, un- ‘ der any charter whatever.” Fose v. Grant, 15 Mass. Rep. •488; Spear v. Grant, 16 Mass. Rep. 15.
    So, too, are corporators personally liable in an action on the case, for improperly obtaining and disposing of the funds or property of the company. Franklin Insurance Co. v. Jenkins, 3 Wend. Rep. 131; 2 Am. C. L. 579; Fose v. Grant, 15 Mass. Rep. 488.

      John Harris and Levi Cox, for Defendants, maintained —
    First: That if the German Bank of Wooster had violated its charter, as claimed by plaintiff’s counsel, and as alledged in the declaration, whether by nonuser or misuser, and if, in consequence, as further claimed, the corporation had ceased to exist, and was wholly void and inoperative, then, under the act of 1824, the paper issued by these defendants, intended to pass as money, was wholly void.
    Second: That if it was intended to treat the bank as one authorized by law, whose paper was valid, then no mere irregularity in its organization, or in its business transactions, could be inquired into, collaterally, for the purpose of charging its officers and stockholders, in their individual capacity, with its indebtedness.
    Third: That this attempt to charge corporators individually for acts done by them as members of a corporation, even though fraudulent in an action on the case, and not in chahcery, was a novelty in judicial proceedings, and that none of the the authorities cited by the plaintiff’s counsel went so far as to sustain such an action; while some of them sustained the position, distinctly, that such an action was not maintainable.
    Fourth: That if this action could be sustained, endless litigation would ensue, and that it would be impossible to do equal justice to all the creditors, whereas, in chancery, the fund to be subjected could be appropriated among all the creditors and bill holders of the bank, pro rata.
    Fifth: That the declaration was uncertain, and did not charge the fraud upon the defendants in such positive and direct terms as to call upon them to meet it.
   Birchard, J.

Two questions are presented for our consideration by this demurrer —

First: Can a special action on the case for fraud, which has resulted in damage of the plaintiffs, be maintained in a case like this, upon sufficient declaration ?

Second: Is this declaration good upon demurrer 1

It may be regarded as a well settled principle, that for every fraud or deceit which results in consequential damage to a party,.he may maintain a special action on the case; Upton v. Vail, 6 Johns. Rep. 182. The principle is one of natural justice, long recognized in the law; Barney v. Dewy, 13 Johns, Rep. 236. And it matters not, so far as the right of action is concerned, whether the means of accomplishing the deception be complex or simple — a deep laid scheme of swindling or a direct falsehood —a combined effort of a number of associates or the sole effort of a solitary individual — provided the deception be effected and the damage complained of be the consequence of the deception. A valid act of incorporation, or an invalid and pretended right to exercise corporate franchises, is alike powerless to secure the guilty from the consequences of their fraudulent conduct, where it has been knowingly resorted to as the mere means of chicane and imposition, and used to facilitate the work of deception and injury. Were it otherwise, it would be a reproach to the law.

If the defendants, with the design to defraud the public generally, have knowingly combined together and held forth false and deceptive colors, and done acts which were wrong, and have thereby injured the plaintiff, they must make him whole by responding to the full extent of that injury, and they cannot place between him and justice, with any success, the charter of the German Bank, of Wooster, whether it be valid or void, forfeited or in esse. Neither a good nor a bad thing may be falsely used for purposes of deception and made a scapegoat for responsibility. Nor is it material that there should have been an intention to defraud the plaintiff in particular. If there was a general design to defraud all such as could be defrauded by taking their paper issues, it is sufficient, and the plaintiff may maintain his suit, provided he has taken the paper and suffers from the fraud. Allen v. Addington, 7. Wend. Rep. 22; Williams v. Wood, 14 Wend. Rep. 126.

The act incorporating the President and Directors of the German Bank of Wooster, admitting it to be in force, conferred no authority upon any person to hold out false colors to deceive the public, no authority to issue bills without the means of redeeming them, and those who combined to use it for the purposes of swindling, acted for themselves rather than as agents of the bank.

They would make themselves liable, at all events, upon the general principle applicable to natural persons. The agent may bind himself, if he exceed the authority of the principal, and conduct himself fraudulently when the principal is a natural person. The same rule applies to the agents of artificial persons. In Vose v. Grant, 15 Mass. Rep. 519, it is said: “If c the stockholders of a bank, whilst their charter is in force and { their bills in free circulation, should suddenly determine to 1 divide and withdraw their capital, and if the funds left in the * bank should be insufficient to pay their debts, it would ap- ‘ pear impossible to reconcile their conduct with honesty and ‘ good faith, and they would be liable to all persons injured by the measure. * * * If any number of persons combine, { with intent to injure and defraud another, they cannot defend * themselves against an action by showing that they did the act t jn character of corporators, under any charter whatever.”'

These are safe principles, founded in good sense,- which we recognize as law. ■ •

On a question of so much importance in point of principle,, and of some novelty, we owe it to the profession to notice, the ■objections urged in argument to sustaining an action in a case of this nature. ■ . ■

It is first said, that to allow bill holders who have been defrauded to sue the members of the company individually at law, will produce endless litigation, and. when applied, the remedy cannot by possibility do equal justice' to all the creditors, or' to the members of the company.

It' may be that numerous suits will be prosecuted ; and if the averments of the declaration are' true, and over one hundred and twenty-five thousand dollars in paper was fraudulently put in circulation, it is more than probable that a great many persons have been defrauded by it, and have sustained injury,, for which they will prosecute those who contrived to cheat them. And yet the doctrine, that because they have cheated' thousands they are safer than théy would be if only one man had suffered, does not obtain in courts of justice.

■ Concerning the other branch of the argument, “ the impos- * sibility to do equal justice to all the creditors,” there may be some mistake. So far as a right of action is given to each there will be equality. And if equal vigilance is pursued, no one will gain any advantage- of the other bill holder.

Again, it is said the fund sought is a trust fund, and a bill in chancery is the proper remedy. . There would be much propriety in the position, were.it in point of fact true, that a party who has been defrauded by the'act of another'has no redress save out of a fund composed solely of the proceeds of the imposition. In that case strict equity might require that ail those whose injuries had been the source of'the fund should share' equitably in it. But the rule that a person sustaining damage by fraudulent acts of another can only look to a particular fund of the wrongdoer for redress, never existed any where. Whenever the judgment shall be obtained, the sheriff will collect it out of any property liable to sale which he can find belonging to the defendants.' This is applicable to all judgments recovered in special actions on the case. In this case the damages to be recovered should be commensurate with the injury done to the plaintiff, which will not in any sense depend upon the state of the .assets of the bank, or its solvency. The judgment, therefore, that may be recovered will not affect trust funds, strictly so called, but general funds, the rights, credits and effects of the individuals instrumental in committing the fraud complained of. The rules of right are not so narrow as to compel the plaintiffs to put up with less than a full compensation in damages, and the extent of that damage in no sense depends upon the profits of the banking speculation entered upon by the defendants. It is not of any moment that the defendants should have 'made a profit by their frauds. That is an inquiry that cannot affect the plaintiff’s rights'. The gist of his complaint is, that they by their acts have imposed upon him, and that he has sustained an injury by means of the imposition.

The second branch of our inquiry relates to the sufficiency of the declaration. For my own part I should not find much difficulty in holding, upon general demurrer, that it contains a substantial cause of action. Two of my brethren are clear in the opinion that the declaration is insufficient, and out of .respect to them, arid entertaining some doubts upon the subject, I, with the other members of the Court, unite with them, much preferring to subject the party to the expense and trouble of amending, than that he should run any risk of a trial upon an insufficient declaration; and this the more readily, inasmuch as it will not delay the final disposition of the cause. The objection taken by counsel is a want of certainty. The action is founded on a fraudulent combination, and for holding out false colors at the commencement of the banking operations, and at various subsequent periods. The only direct charge of a fraudulent intention is in the withdrawal of the funds, and fo*8; for aught that appears, may have been long since the bills plaintiff’s hands were issued. Besides, the declaration does not directly charge that the false pretence of- acting, under the charter of 1816, was made, or that the association was entered into with a fraudulent intent, nor that the excessive issue of paper was so made. It is thought that the averment of a fraudulent design should have been made in positive terms, as to each specific act relied upon to sustain the action. That although it may appear, by inference, that the original design, or those subsequently formed, was to impose upon community, inasmuch as deception must necessarily result from the alledged pretences, which the declaration falsifies, yet, that the Court will not, in support of pleading, infer a criminal intention where the pleader has not ventured directly to affirm that it existed. The issue of the bills which have come to the plaintiff’s hands was the cause of his loss. These bills were, in fact, fraudulently issued, if put forth without capital to sustain them ; and to pretend that the charter of 1816 authorized the assumed operation under it, when it did not in fact confer such authority, owing to the causes assigned in the declaration, was doubtless the employing of false pretences well calculated to deceive the public; and the charge should be made in direct terms, that, in using these means, the design was to defraud. It should not be' left to inference.

On motion, leave was given to amend the declaration, and the cause continued.


author: Hitchcock, J. Read, J.,

text:
    In Bank.
    Dec. Term, 1846.
    Charles Rands and Wife vs. Uzziah Kendall.
    Where land is mortgaged by the husband and the condition is broken before the marriage, and the equity of redemption is released by the mortgagor during coverture, his widow is not entitled to dower, after his decease.
    To entitle the widow to dower, her husband must have been seized of a legal estate of inheritance during the coverture, or of an equitable interest at the time of his death.
    This is a Petition for Dower, reserved in the County of Hamilton.
    The complainant, Rachel Rands, claims dower in certain real estate of the defendant, part of lot number forty-nine, in the city of Cincinnati, as the widow of Adbeel Coleman, deceased, who died November 16th, 1824, and to whom she Was married on the 18th of March, 1821.
    The facts of the case, as they appear from the bill, answer, exhibits and testimony, are these: On the 24th of April, 1818, being before the marriage, Adbeel Coleman mortgaged out-lot, number forty-nine, to James Ferguson, to secure the payment of a note of that date to the said Ferguson, or his heirs or assigns, for the sum of $2910, on or before the 24th day of April, 1825, with lawful interest, to be paid annually, from the 24th of April, 1819. The condition of the deed is, that the same shall be void on the payment of said sum of money, according to the tenor and effect of said note, otherwise to be of full force.
    On the 18th of March, 1821, Adbeel Coleman intermarried with the complainant, Rachel Rands.
    On the 4th of October, of the same year, James Ferguson transferred said note and mortgage to Joseph Wright, by assignment duly made, and, on the same day, Wright agreed to an extension of credit on the note of three years.
    On the 2d of November, 1824, Adbeel Coleman conveyed to Joseph Wright the said lot. The deed recites the mortgage; also recites that, “ on the 4th of October, 1821, the said James £ Ferguson, by his assignment in writing, indorsed on the back £ of said indenture of mortgage, did assign and transfer all his £ interest and claim of, in and to said mortgage," for a valuable "£ consideration: "And, whereas, the whole of said sum of $2910 ‘ still remains unpaid, and no part of the interest on' the said ‘ $2910 has been paid, but remains due, to the amount of £ $785.70; and whereas I, the said Adbeel Coleman; am fully £ satisfied that the principal sum, to become due as aforesaid, £ and the interest now due thereon, is the full value of the said £ mortgaged premises, and that I, the said Adbeel'Coleman, am £ not, nor shall be able to redeem the same: Now know ye £ that I, the skid Adbeel Coleman, in consideration thereof, and £ of my being fully and clearly exonerated from the debt and £ interest, secured by said mortgage,” &c. He releases the proviso, or condition in the mortgage, and all benefit of equity of redemption, and also grants, bargains and sells the premises, to Joseph Wright, his heirs and assigns.
    This deed was executed by Coleman, and Rachel, his wife, with a relinquishment of dower on her part. It was acknowledged before a Justice of the Peace; but it is claimed that there is some informality in the acknowledgment, which, under a former decision of this Court, it is said rendered it void as to the feme covert.
    On the 16th November, 1824, Adbeel Coleman died, and, on the 23d of December, 1831, Wright, on the margin of the mortgage, entered an acknowledgment of satisfaction, under his hand and seal.
    • The defendant, Kendall, derives title from Wright, and holds the estate of inheritance. •
    The complainants intermarried before the commencement of this -suit.

      Corry fy Russell, for Complainants.
    "First: The mortgagor of fee simple lands is seized of an •estate of inheritance, subject to the lien or incumbrance of the debt. The mortgagee is not seized of any “ estate of inheritanee.” either before or after condition broken, or before or after possession taken. He is a pledgee only-until foreclosure. Lessee of Perkins v. Dibble, 10 Ohio Rep. 439; Moore v. Burnet, 11 Ohio Rep. 341; 4 Kent’s Com. (5th Ed.,) 195. ■ It follows that a mortgagor’s widow is entitled to dower out of lands mortgaged before the marriage and conveyed by the husband alone afterwards. The claim in such case is subject to the mortgage debt, which must be paid by-her, if the same be not held by the heir or grantee of the freehold, in which latter case she bears her fair proportion. Montgomery v. Bruere, 2 South. Rep. 865; Collins v. Torry, 1 Johns. Rep. 282; Coles v. Coles, 15 Johns. Rep. 319; Russell v. Austin, 1 Paige’s Rep. 192; Van Dyne v. Thayre, 14 Wend. Rep. 233; Gibson v. Crehore, 5 Pick. Rep. 147; Cooyer v. Whitney, 3 Hill’s Rep. 96 ; Smith v. Eustis, 7 Greenl. Rep. 41; Bell v. Mayor of New York, 10 Paige’s Rep. 49.
    Second: The mortgage money was not due when the marriage took place, nor when the husband alienated the land, and it is not proved that the condition had been broken in any respect.
    Joseph Wright took possession as grantee of an estate of inheritance, and not as mortgagee. The mortgage was extinguished by the release of the debt.
    Third: An outstanding mortgage estate, in a third person, cannot be set up even to defeat an action at law for dower. If the mortgage estate existed after the discharge of the debt, such estate was in James Ferguson, the original mortgagee. Hitchcock v. Harrington, 6 Johns. Rep. 290; Lessee of Perkins v. Dibble, 10 Ohio Rep. 433.
    If Joseph Wright became the mortgagee, by virtue of the transfer to him, without a conveyance of the land, the mortgage estate must have been a mere pledge, and an incident to the debt, and the mortgagee was not “ seized as an estate of inheritance.” It follows that the mortgagor must have been so seized.

      Fourth: A court of equity cannot set up a mortgage as an incumbrance upon the dower, although that is sometimes done where there is a merger at law, in consequence of a purchaser of the inheritance becoming assignee of the pledge. That is not the present case. The debt was released in consideration of the conveyance to Joseph Wright, and the mortgage was thereby extinguished.
    Fifth: When a bill for dower is filed against the owner of the inheritance, and a mortgage exists, and is brought forward as an incumbrance upon the dower estate, the widow is entitled to dower, subject to her proportion of the mortgage. 4 Kent’s Com. 46 ; Swaine v. Perrine, 5 Johns. Ch. Rep. 482; Carl v. Butman, 7 Greenl. Rep. 102; Van Vrouker v. Eastman, 7 Met. Rep. 157, and cases cited above.

      Storer. Gwynne, for Defendant.
    Dower is subject to all incumbrances against the husband’s estate, at the time of the marriage. Her dower estate is subordinate to and grows out of the estate of the husband, as the latter existed at the date of the marriage, or the period of its acquisition. Green v. Green, 1 Ohio Rep. 542; Sumner v. Hampson, 8 Ohio Rep. 364; Nazareth Institute v. Lowe, 1 fe. Mon. Rep. 258; McArthur v. Porter, 1 Ohio Rep. 101; 7 Paige’s Rep. 287; 23 Pick. Rep. 80; 1 B. Mon. Rep. -76 ; 1 Ohio Rep. 415.
    The mortgagor, at the time of the conveyance to Wright, had but an equity in the premises, and the release of this equity was equivalent to a foreclosure, and barred the wife of dower. 4 Kent’s Com. 45; 2 Serg. on Vend. 224, n.; Van] Dyne v. Thayre, 19 Wend. Rep. 173; Edwards v. Farmers’ Co., 21 Wend. Rep. 485."
    No dower exists against the mortgage or his assignee, or against any one who can avail himself of and connect himself with the mortgage. Popkin v. Bumstead, 8 Mass.-Rep. 491; Bird v, Gardner, 10 Mass, Rep. 364; Scott v. Hancock, 13 Mass. Rep. 168; Gibson v. Crehore, 3 Pick. Rep. 475; Cooper v. Whitney, 3 Hill’s Rep. 102.
    The mortgage in this case still exists, unextinguished by the release of the equity of redemption. 2 Conn. Rep. 161; 6 Conn. Rep. 388; Jones v. Morey, 2 Cow. Rep. 303 ; Dexter v. Harris, 2 Mason’s Rep. 539; Robinson v. Leavitt, 7 New Hamp. Rep. 95; Loud v. Lane, 8 Met. Rep. 518.
    The estate of Coleman was equitable merely, and the statute of Ohio only gives dower in equitable estates,, where the husband was possessed- thereof at the- time of his death. Derush v. Brown, 8 Ohio Rep. 413 ; Smiley v. Wright,- 2 Ohio Rep. 507; St. Clair v. Morris, 9 Ohio Rep. 15; 2 Ohio Rep. 224; 8 Ohio Rep. 222; Raguet v. Roll, 7 Ohio Rep. (part 2,) 72; Cowles v. Raguet et al., 14 Ohio Rep. 56; Heth v. Cocke, 1 Rand. Rep. 347.
   Hitchcock, J.

The claim of the complainants is not barred by the statute of limitation, for the bill was filed and subpoena served in January, 1825, being but little more than twenty years after the right of action accrued, whereas, under the statute, no period of time less than twenty-one years would operate as a bar.

Whether the acknowledgment of the deed executed in November,. 1824, is defective, so far as the wife is concerned, we do not deem it necessary to decide. It is a question upon which the Court is divided in opinion, and if the determination of the case depended alone upon the decision of that question, it would, probably remain undetermined.

The subject of dower, in this State, is regulated by statute, and the act upon this subject provides, in the first section, “ That the widow of any person dying, shall, be endowed of £ one full and equal third part of all the lands, tenements and £ real estate of which her husband was seized, as an estate of £ inheritance, during the coverture; and she shall in like man-c ner be endowed of one-third part of all the right, title or £ interest that her husband, at the time of his decease, had in ‘ any lands and tenements held by bond, article, lease or other f' evidence of claim;”' There is no. mistaking of the provisions of this law.' Its terms.are clear, precise and explicit.. That a . widow may have dower, her husband must have had,..át some time during the coverture,' a legal .title to the premises in which dower is .demanded, or he must-have' had an equitable interest, at the time of his death. If, at any time during coverture' Of Adbéel Coleman with the complainant, Rachel Rand,, he. had a legal title to the land now in controversy, or if, he h'ad an equitable interest in the same land at the time ,of his death, the complainants are entitled to a. decree.

Then what are the facts ? .On the 24th of April, 1848, and before his marriage to the complainant, Rachel, Adbeel Coleman-mortgaged this land to " James. Ferguson, to .secure the payment of $2,910, with, a proviso or condition in the cj,ee.d, that if this $2,910 should be paid' .on or before the 24th of April, 1825, with lawful interest, to be paid annually, from 24th April, 1819, then the deed to be void/ The mortgage was not to secure the payment of the principal sum alone, but, also, to secure the annual payment of interest. On the 24th of April). 1820, the first installment of interest, fell due, but was'riot paid, and the condition was broken. . What is the consequence ?

Complainants’ counsel contend, that as. it .was'a simple 'security for the payment of a- debt, the mortgage is a mere incident to the debt, and that although the condition is broken, yet that the' legal title, to the land remains, as before, in the mortgagor. The modern.decisions and the decisions of this'.Court, to a certain extent, favor this opinion. It has been repeatedly held that an execution might be levied upon the land, the- mortgagor being in possession; that the mortgagor was to-'be.considered' as having the legal title. But it has never been so held but with this restriction: that as between the parties to a mortgage, the deed, after condition broken, becomes obsolete. As . to all the world but the parties, the legal title is considéred as in the mortgagor; but, as between the parties and those claiming under them, the legal title is'vested in the mortgagee., I think I am not mistaken in saying, that such has been the uniform ' language of the Court; and, therefore, it is, that after •condition broken, the mortgagee may recover the possession of the land in an action of ejectment. Without the legal title, he could not so recover. Such being the law, it follows, that the condition being broken by the nonpayment of the interest which fell due on the 24th April, 1824, the legal title then became, as between Ferguson and Coleman, vested in Ferguson, and was never afterwards vested'in Coleman. It was after this period that his marriage vrith Rachel Rand took place, and during the coverture he had not an estate of inheritance in the land in which dower is demanded.

But during the coverture he had an equity — the equity of redemption. Did this equity continue in him at the time of his death? Wright, in 1821, acquired an interest by the assignment of the note and mortgage, and on the 2d of November, 1824, Coleman conveyed to him his interest in the land. That interest was nothing but an equity of redemption. In fact, it is apparent that the object was to convey or release this equity of redemption. But the language of the deed is broad and comprehensive enough to convey whatever interest he might have had in the property. His wife joined with him in this conveyance, undoubtedly supposing she had a right of dower, and intending to release that right. But now, supposing that there is some formal defect in the acknowledgment, she seeks to avoid the deed. She may, perhaps, avoid the deed, but if she does, it can do her no- good. ' She had not such an interest in the land, as that it was necessary.for her to join in the deed. Whether she could ever have an interest, depended ' upon the contingency that her husband should die possessed of an equity. Having but an equity, he could transfer it by his own deed, and, thereby, defeat his wife of dower. He did not wish to do this, however, without her consent, and, therefore, she joined him in the conveyance.

The complainant may, by possibility, be in a worse situation than she would have been had the equity of redemption not been conveyed; but it is by no means certain. In such case, it is true, she would have been nominally entitled to dower, not because her bus band was seized of a legal estate during the coverture, but because he died possessed of an equity. But her dower would have been subject to the lien of the mortgage, inasmuch as that was a subsisting lien at the time of the marriage. If, upon sale under a decree of a court of chancery, .the mortgaged premises had been sold for the satisfaction of the debt secured, and any surplus remained after the satisfaction of the debt, of this surplus she might have claimed a share in virtue of her right of dower. Beyond this, she could claim nothing.

But it is claimed that the debt was paid , and the mortgage satisfied by the execution of the deed, which operates as a relinquishment of the equity of redemption, and that the widow is to have dower as of legal estate. Now, what was the real nature of the transaction ? The land had been mortgaged in 1818, to secure the payment of a debt. In 1824, the mortgagor became satisfied that it was of less value than the amount of the debt. An arrangement was made between the mortgagor and the assignee of the mortgage and debt, by which the mortgagor was to transfer his remaining interest in the land to the assignee, which was to be received in full satisfaction of the entire debt. This arrangement was carried into effect, and now this Court is called upon, not as a court of law, but as a court of equity, to say that the effect of this agreement was such as to restore the mortgagor to his legal estate, or, at least, so far to restore him as that his widow shall have dower. This may be equitable, but I do not understand how. On the contrary, it is clear to my mind that such decision would be manifestly inequitable and unjust.

And who is it that makes this claim upon the Court ? Not the “ lone widow,” the “ poor, unprotected female” The “ widow made no complaint while a ■“ widowthe “ female ” made no complaint while unprotected.” It is not the “ widow,” but it is Charles Band, the husband of that widow, who , is calling for the equitable interference of this Court. And in order to obtain that interference, his wife is compelled to do an act which she did not do during her widowhood, that is, to deny her solemn deed, on the ground that a magistrate made a mistake in reducing the acknowledgment to writing. ’

Inasmuch as Adbeel Coleman had no legal estate in the land in which dower is demanded, during his coverture with the complainant, Rachel Rand, and inasmuch as he had no equitable interest in the same at the time of his death, she is not entitled to dower, and the bill must be dismissed at complainants’ costs.

Read, J.,

dissenting. I am of opinion that Adbeel Coleman was seized of an estate of inheritance during the coverture, within the meaning of the dower act applicable to this case.'

Up to the present term, although there have been conflicting dicta, the decisions of this Court have uniformly treated the mortgagee as a mere lien holder at law, as well as in equity. Accordingly the estate of the mortgagor has been sold upon a common law execution as legal estate, in fee simple, and mortgagees have not reconveyed on receiving payment of their debts.

The great question is, whether a mortgagee, after condition broken, holds the legal estate in fee. If he be not the owner of the legal estate of inheritance, it is clear the mortgagor is such owner. This Court has expressly decided that a mortgagee may, after condition broken, assign whatever interest he holds in the mortgaged lands by a mere assignment of the debt, and also that payment of the debt extinguishes such interest. That the mortgagee holds a legal interest and has good right to the possession of the mortgaged property, whether real or personal, is not doubted, wherefore he may maintain an action to recover the possession. This right is perfectly' consistent with the character of his lien — whereas the doctrine that the mortgagee of land, after condition broken, is the legal freeholder, and yet that he may transfer his interest without deed, is manifestly inconsistent.

It Is said-that, at all events, as between the parties, the mort- , f , ^ t ’ gagee is the freeholder. But that opinion is irreconcilable with the decision that payment of the debt destroys all the interest of the mortgagee as to all the world, including the parties. The reason given is, that the mortgagee is at law as well as in •equity a mere creditor,-who has a specific:,lien on the property for the payment'bf his debts. Perkins v. Dibble, 10 Ohio Rep. 439; Moore v. Burnet, 11; Ohio Rep. 341; Cameron v. Hill, 5 Hill’s Rep. 276 ; Edwards v. The Farmer's Fire Co. 21 Wend. Rep. 483, 486-7 ; S. C. on error, 26 Wend. Rep. 541. A's between the parties to the mortgage, an assignment of the mortgage debt confers the mortgage title upon the assignee, and he must be regarded by the debtor as.the mortgagee, both at law and- in equity.

In Collins v, Torry, 7 J. Rep. 282, the Court said : “ We cannot now, with any justice - or consistency, say. that the in- { terést of the mortgagor is the real estate- at law, and yet that ‘it is not such'.estate when the' mortgagors widow comes to ask her dower of .the heir or grantee of her husband.” Judge Southard, in Montgomery v. Bruere, 1 Southard, 276, seems most thoroughly to have .understood and most -felicitously to have explained the American doctrine of mortgages.' I shall therefore quote liberally from his opinion.'

“ The great object of inquiry on, this subject is, where was ‘ the legal seizin of the land at the marriage ? in the mortgagor ‘ or mortgagee ? It is the legal seizin which is the object of ‘search, because'that, is subject to dower. . However strong ‘ may be the light in. which the estate of. ihe- mortgagor is ‘ viewed in the courts of equity, that light} although it may ‘ direct to'the reáson and justice of the claim, will not govern ‘ the decision of this Court; We'give dower -in lands, in which ‘ we find the legal seizin.. - But when that "seizin' is'- found, it' ‘ must be subject, to all legal consequences and incumbrances! ‘ We are not -to maintain it for one purpose and deny it for ‘. another:. to toss it backward, and .forward as may suit the ‘ convenience , bf the tenant, at one time giving him .all the ben- * efits, at another freeing him from all the burdens necessarily £ flowing from a full title.

“ The seizin, if in the mortgagor before the mortgage was £ executed, must remain in him, or be transferred to the mort- £ gagee. It must be found somewhere. Is it in the mortgagee ?

££ Originally mortgages were feoffments, conveyances of land from debtor to creditor, with condition that if the money was not paid at the day appointed, the lands became absolutely 1 vested in the creditor freed from the condition. Lit. sec. 332. The strictest maxims of the common law respecting condic tions, were applied to them. Even a subsequent tender of £ the money did not avail the debtor: he lost the land, no mat- £ ter how high its value, or how small the sum which it was de- £ signed to secure. 5 Rep. 95, 114.

££ This was so obviously unjust, that courts of equity inter- fered, and courts of common law have aided in the establish- £ ment of different doctrines. Since the reign of James I. the- £ right of redemption has been fixed so that the mortgagee can in no way invade it, .even by incorporating an agreement in £ the deed itself. 1 Ver. 33, 190, 138, 488; 2 Rep in Ch. 221; ' 2 Ver. 520. Since that time, the mortgagee has had no cer- tain and absolute estate in the land until after foreclosure, and £ that is the- creation of a new. title, not the confirmation of an £ old one. 1 Atk. 603. Even if he recovers the possession by 1 entry, or by suit, he holds not for himself by title ;' he must £ account to the last farthing for the profits, and his possession £ may be at any moment, at the will of the mortgagor, terminae ted. 1 Vern. 476, 45; 2 Atk. 534. He cannot use it as £ his own: he will not be permitted to do waste. Cro. Jac. 172; '3 Atk. 728. He cannot sell or lease so as to bind the mortc gagor. 9 Mod. 1. He could not even bar him by fine or £ recovery, when they were in use. His estate is not at any £ time considered as real, but personal. 2 Ver. 401. It is a mere security, a mere charge on the land, and whatever £ gives the money gives all the estate he has for every purpose. 1 2 Burr 969.

These doctrines, though principally established in equity, ‘ operate completely at common law. A mortgagee is there £ considered as a freeholder for no single purpose of office, of benefit, or of burden. He can hold no public office, he can exercise no public duty requiring an estate in lands. He £ cannot gain a settlement: his property is personal assets in £ settling his estate, if he devises it: it will not pass by the word ‘ land or real estate, nor is it necessary that his will be executed with the legal requisites to pass them. It is not subject to £ courtesy or dower, the necessary attendants upon legal estates £in lands. Even a transfer of the debt in any way terminates £ it. 2 Burr 969. It has not one single characteristic of a 1 legal estate. It is a mere security for the money, and a power c to gain possession of the land in order to make it. ReeVes D. R. 53. Shall we then say that the seizin is in the mort- gagee ? Because it was of old so determined, when all legal £ consequences of an estate followed it, shall we. so determine when not one legal consequence follows ? For the sake of an 1 adherence to an old doctrine, shall we break down every legal ‘ reason, doctrine and distinction ? I cannot doubt on this 1 point.

“ But again,— estates at common law. pass by livery of seizin, £ or what is equivalent thereto, and, when passed, can be re- £ stored to the grantor only by an act of equal validity. If, £ then, the execution of the mortgage transfers the estate, it can £ be restored only by some legal conveyance. This is the ne- £ cessary common law doctrine, and was adjudged and acted £ upon while the estate was considered as transferred to the £ mortgagee; Cro. Car. 190. But the mere payment of the £ money — the discharge of the bond in any mode ■— is now £ said' to re-invest the estate. Is there any principle for this, £ or any . other instance in which it was ever heard that a legal estate in lands could be passed by the mere payment of a sum £ of money, without livery and without deed ? Yet such is here the doctrine.

“ Again, according to the well established rule of this day, a { wife cannot have dower in the estate or interest of the mort- ‘ gagee. If, therefore, dower be not given in the estate of the ‘ mortgagor, all lands mortgaged before marriage are free from * this claim. This is, then, a most easy contrivance to relieve £ all lands from dower, and it is time for us to expunge the as- sertion.that dower is favored in the law. We not only suffer £ it to be easily defeated, but we do not even give it the advant- * age of courtesy, a right surely not founded in equal reason.

“ It appears to me that there is no way of extricating our- ' selves from innumerable absurdities, but by deciding that the £ interest of the mortgagee is a mere incumbrance or security, £ and that the legal estate remains in the mortgagor; and if so, ‘ the consequence follows that the widow is entitled to her ' dower.

££ And is it not proper, according to the nature of the claim, £ and the analogy in other cases, that this should be so ? I think £ it is. The right to dower is acknowledged, on all hands, to £ be one founded on high legal, equitable and moral considera- £ tions, and ought not lightly to be evaded.” ,

Where the mortgage is held to be a lien at law as well as in equity — where it is held that a reconveyance by the mortgagee is unnecessary, and that he may transfer his interest otherwise than by deed, then it is held that the mortgagor is seized of an estate of inheritance, both before and after condition broken, and that his widow is entitled to dower, subject to the payment of the mortgage debt. As, however, the mortgagee has the legal right to the possession until he is satisfied, the doweress, cannot disturb him’ if he be in possession, but must first redeem the mortgage. A conveyance by the mortgagor, without his wife’s concurrence, will not affect her right, and it is immaterial whether the conveyance be to a stranger or to the mortgagee himself. If the mortgagee be in possession under his mortgage, an action at law for dower cannot be maintained, simply because the mortgagee has the legal right to the possession, and the remedy of the doweress is a bill to redeem. After the redemptíon, a court of equity will apportion the debt between the doweress and the heir. . If the latter, or the husband’s grantee be in possession, the bill is filed for dower, and not for redemption, and. the mortgage debt is fairly apportioned. These various propositions are established by the following additional authorities, cited in argument: Coles v. Coles, 15 Johns. Rep. 319 ; Collins v. Torry, 7 Johns. Rep. 282; Harrison v. Eldridge, 2 Halst. Rep. 392; Barker v. Parker, 17 Mass. Rep. 564; Gibson v. Crehore, 5 Pick. Rep. 147; Van Dyne v. Thayre, 14 Wend. Rep. 236; Cooper v. Whitney, 3 Hill’s Rep. 96; Smith v. Eustace, 7 Greenl. Rep. 41; Bell v. Mayor of New York, 10 Paige’s Rep. 54, 68; 19 Wend. Rep. 162; 4 Kent’s Com. 44, 46, 47, 66, 195; 7 Greenl. Rep. 102; 7 Met. Rep. 157; 5 Johns. Ch. Rep. 482.

There is no good reason why a court-of law should not construe a mortgage deed to mean what a court of equity declares it to mean, and what every body understands it to mean, that is, a mere security for a. debt.

It is said the mortgagee must be the freeholder, because he can eject his debtor. Now the plaintiff in ejectment recovers upon a possessory right or title to the possession, and it Í3 conceded that the mortgagee is entitled to the possession; See 2 Cruise’s Dig. 105, note by American Editor. A pledgee of chattels may maintain an action of detinue, but it does not follow that he is the real owner, in legal contemplation. He is not so regarded ; Story on Bailment, sec. 307. If I pledge my house with my creditor to secure a debt, I remain the owner notwithstanding he have both the possession and the right to the possession united. Nor does the bill in equity to foreclose a mortgage of lands or a pledge of chattels proceed upon the assumption that the debtor has only an equitable right; on the contrary, the Court act upon the legal right to redeem and compel its exercise within a reasonable time on penalty of foreclosure. A majority of the Court say that Adbeel Coleman, after the condition broken, had but an equity which he could transfer by his own deed. If he had but an equity, he could transfer it without a deed, and so could his assignee, and as the mortgagee could also transfer all his interest without a deed, the whole fee simple and inheritance might be conveyed, from time to time, without a deed, in defiance of the statute regulating the transfer of land. This is only one of the numerous absurdities flowing from the proposition that the mortgagee is the freeholder, and, yet, that he may transfer all his interest by a mere assignment of the debt. It is worthy of remark, that the assignment of the mortgage from Ferguson to .Wright was not by deed, but by mere memorandum on the mortgage. No sufficient reason can be assigned for a departure from the rule hitherto established, in this State, that the mortgagee does not hold a fee simple estate of inheritance. The rule is now abandoned for the sake of destroying the right to dower, which is acknowledged to be a right founded on high legal, equitable and moral considerations. Besides which, the breach of the rule destroys the symmetry of the whole structure of our law, and lets in inextricable confusion where order reigned before.

It is contended by defendants’ counsel, that a conveyance by the mortgagor ought to bar dower, because a foreclosure of the mortgage would have that effect. But it might as well be said that a conveyance by a judgment debtor would bar dower, because a judicial sale under a judgment rendered before marriage would have the same effect. The simple question is, at last, whether the legal estate of inheritance is in the mortgagee ? It is not in him, as we have seen, and, therefore, the mortgagor’s conveyance cannot bar her dower; nor will the conveyance of the sheriff, under a judgment rendered during the coverture, because the sheriff can only convey what the debtor could convey himself. 2 Halstead, 392.

There is a discrepancy in the opinion of a majority of the Court itself, which is quite remarkable. It affirms that the mortgagor is seized against the whole world except the mortgagee or his grantee. And yet we find that Coleman did not convey to the mortgagee nor his grantee, but to one having a mere assignment of the debt. The Court, in order to defeat dower, must go the impossible length of holding to the different rule, viz: that the mortgagor is not seized, as against such assignee; also, because, I suppose, he is, after condition broken, the freeholder of the mortgaged premises. The proposition of the Court must be materially modified, because it is now discovered that the mortgagor is not seized as to all the world except the mortgagee; for, under that rule, the widow could claim dower against the grantee of the husband, and such grantee could not deny the seizin of the husband, and insist that it was in a third person — the mortgagee. But it is in vain to look for consistency in the doctrine now advanced by a marj.oity of the Court, or to endeavor to reconcile it with former decisions in this State or elsewhere. As to the expression commonly met with, that the mortgagor is the legal owner against all the world except the mortgagee, the meaning of that is, that although the mortgagee has the legal right to the possession, the mortgagor is, nevertheless, the owner, and no other person can set up the mortgage against him in a court of law. His action of ejectment cannot be defeated by proof that the possessory right is in the mortgagee, because that possessory right is qualified and of a peculiar character, unlike the absolute right to the possession for a term certain, which, if vested in a third person, would prevent the owner of the reversion from maintaining an action of ejectment against a trespasser. As against all the world, then, but the mortgagee, the mortgagor has a complete legal litle, but as against him, his title is not complete, because the mortgagee has the possessory right for the single purpose of making his debt.

With these views of the nature of Coleman’s estate in these premises* I need not inquire into the application of the clause of the dower act giving the widow dower out of the third part of the interest of the husband, at the time of his decease, in land “ held by bond, article, lease or other evidence of claim.” If the absolute owner of land is seized, then Coleman was seized of the land, during the coverture, upon the well settled and sound American construction of a mortgage.

There is still another discrepancy in the opinion of the majority of the Court. It is assumed, that the mortgagee is not the freeholder until the condition has been broken, so that he may maintain an action of ejectment. Apply this doctrine to the present case, and the complainants are entitled to recover; for, after the marriage, an extension of credit was given on the mortgage debt. I presume that no action of ejectment could have been maintained, after this transaction, until a failure to pay interest, previous defaults, if any, having been maintained. The only proof of a previous default, is a recital in Coleman’s conveyance to Wright. Whether that is sufficient, or what is the legal presumption under the circumstances, I need not consider. Indeed, there is no end of anomalies under this decisison ; for, if the legal estate of inheritance ever become vested in the mortgagee at all, it must have become vested immediately upon the delivery of the mortgage, subject only to be divested on performance of the condition. This is the old common law doctrine of mortgages; but if we are to restore that doctrine, the mortgagor’s widow is never entitled to dower, no matter whether the marriage takes place before condition broken or after. “ The fee simple conditional ” is always a bar from the delivery of the mortgage. I do not understand that the Court are called upon by complainant’s solicitors to say that the effect of the arrangement between Coleman and Wright “ was such as to restore. the mortgagor to his legal estate.” They insist that Coleman, the mortgagor, was the freeholder at law and in equity, during the coverture, up to the time of the conveyance to Wright. They contend further, that the price of that conveyance was the mortgage money itself, thereby paid off, so that the claim of dower is not subject to any debt; but if it be so subject, they require the defendant, as owner of the inheritance, to bear his proportion according to the settled rules of equity. The bill is filed, as required by the statute,, against the next estate of inheritance. The defendant is such owner by virtue of the conveyance from Coleman, and by no other means, for he does not claim under any legal conveyance by deed from Ferguson, the mortgagee. If there be any lien by judgment or mortgage, it may, under the statute, be set up in the suit for dower against the owner of the inheritance, and be made a charge upon the dower claim. It might be set up independent of any statute; but the express provision to that effect, in our statute, is useful here, as it assumes that the defendant may be the. owner of the inheritance, notwithstanding the existence of a mortgage on his estate, and actually provides for the apportionment of the mortgage debts, upon claim of dower; Swan’s Stat. 298, sec. 10. It has been said, that the female complainant has been “ compelled,” by her husband, to deny her “ solemn deed.” T am at a loss to conjecture upon what ground this remark has been made. There is no evidence, in my opinion, affording the least countenance to it. The deed from Coleman to Wright does not appear to have been understandingly executed by Mrs. Coleman, (now Mrs. Rand,) and we have no right to say that it was so executed and was her “solemn deed.”

I am clearly and decidedly of opinion that Adbeel Coleman was seized of an estate of inheritance during the coverture, and that his widow is entitled to dower.