author: Mr. Justice CATRON

text:
    Henry Miller, Plaintiff in error, v. David Austen, William S. Wilmerding, and David Austen, Jr., Defendants.
    A statute of Ohio declares all promissory notes, -drawn for a sum certain, payable to any person or order, or to any person or his assignees, negotiable by indorsement.
    The following paper, namely, —

      “No. 959. Mississippi Union Bank, Jackson, Miss. February 8, 1840. I hereby certify that Hugh Short has deposited in this bank, payable twelve months from 1st May, 1839, with five per cent, interest till due, fifteen hundred dollars, for the use of Henry Miller, and payable only to his order, upon the return of this certificate. $1,500. Wm. P. Grayson, Cashier,” —
    was negotiable by indorsement under the statute, and the indorser had a right to maintain an action against an indorsor.
    This case was brought up, by writ of error, from the Circuit Court of the United States for the District of Ohio.
    On the 8th of February, 1840, the Mississippi Union Bank issued the following certificate :
    Mississippi Union'Bank, Jackson, Miss. Feb. 8th, 1840.
    I hereby certify, that Hugh Short has deposited in this bank, payable*10 months from 1st May, 1839, with 5 per cent, interest 1 till due, fifteen hundred dollars, for the use of Henry Miller, and payable only to his order, upon the return of this certificate.
    $1500. ' Wm. P. Grayson,, Cashier.

    On which are the following indorsements:
    Pay to George Lockwood or order. Henry Miller,
    Cincinnati, Ohio.
    Pay Austen, Wilmerding & Co. or order, without recourse.
    George Lockwood.
    On the 4th óf May, 1840, L. V. Dixon, justice of <±he peace and ex officio notary-public, presented the paper declared on at the counter of the, Mississippi Union'.Bank, at Jackson, and demanded of the teller payment in specie, or its equivalent, which that officer, after consultation with the other officers of the bank, refused; but offered to pay in the notes of the bank, which the notary would not accept. The defendant, Miller, was duly notified as indorser, by a written and printed notice, directed to him at Cincinnati, and deposited in the post-office in time for the first mail of the next day. .
    In July, 1847, Austen, Wilmerding & Co.,brought an action against Miller in the Circuit .Court of Ohio. The suit was brought against Miller as indorser, and the declaration contained three counts..
    1st. Alleging it to be a promissory note of the Union Bank, payable to the order of Henry Miller, and by him indorsed to George Lockwood, who indorsed it to plaintiffs below.
    2d. Alleging it to be a draft drawn by Henry Miller, on the Mississippi Union Bank, at Jackson, requesting the said .bank to pay to George Lockwood, and by him indorsed to the plaihtiffs below, and charging a due presentment for payment, and notice of non-payment.
    3d.. On a common count for money lent and advanced, paid, laid Out, and expended, money had and received, and on an account stated.
    The plea was non assumpsit.

    In October, 1850, the cause came on for trial, when the' jury found a verdict for the plaintiff for $2,468.86.
    Upon the trial, the plaintiff offered the note in evidence, together with the protest, &c. Objection was taken, but the court overruled it and admitted the evidence. This was the subject of the first bill of exception.
    The second;exception was to the refusal of the court to grant certain prayers asked for by the defendant, of which it is only necessary to notice the following.
    • 1st. That the paper offered in evidence is not a negotiable instrument under the laws of Ohio, and cannot be sued on by the plaintiffs in the'cause.
    6th. That said paper offered in evidence is not a promissory note, nor is. it a bill of exdhange, but is a mere certificate, acknowledging the receipt and deposit of paper- or obligations of some kind, which are • payable twelve months after 1st May 1839, bearing interest at the rate of-five per cent, till due.
    Upon these exceptions the case came up to this court, and was argued by Mr. Fox, for the plaintiff in error, and by Mr. Chase and Mr. Rockwell, for the defendants in error.
    Only those parts of the arguments will be noted, which bear upon the point decided by the court.

      Mr. Fox.

    We maintain this is not a promissory note, as described in the declaration, so as to pass by indorsement, as a mercantile instrument. That it is not so considered in a" mercantile sense, nor is it a promissory note under the statute of Ohio.
    Under the statute of Ohio, (Swan’s Stat. 587,) “ all bonds, promissory notes, bills of exchange, foreign and inland, drawn for any sum'or sums of money certain, and made payable to any person or order, or to any person or bearer, or to any person or assigns, shall be negotiable by indorsement thereon ; . . . but nothing in this section shall be' construed to make negotiable any such bond, note, or bill of exchange, drawn to any person or persons alone, and not drawn payable to order, bearer, or assigns.” A check arid certificate of deposit are not mentioned in this statute as being negotiable.
    Under this statute, the Supreme Qourt of Ohio has decided that this identical paper is not a promissory note, negotiable under the laws of Ohio, as will be seen by reference to the Western Law Journal, vol. 4, p. 527. ’
    Suit was brought by these plaintiffs against Miller, on the .same certificate, apd was decided by Judge Hitchcock, May term, 1847. The case is reported very shortly, but the point decided is fully shown. We claim that this, being a decision upon a local statute, the statute must, by .this court, be construed in the same way as the same is construed by the Supreme Court of Ohio. Whether it is such a note as is negotiable in Ohio, depends upon the' statutes of Ohio; and the courts of that State having given a judicial construction to the statute, this court will adhere to the construction, because the very essence of the ■contract of indorsement depends upon the laws of Ohio, where it was made. 6 Craneh, 225; 10 Wheat. 50; 13 Pet. 379 ; 11 Wheat. 367; 6 Pet. 297^
    We suppose, therefore, that we may safely rely upon the decision of the Supreme Court' of Ohio, on this identical paper* between the ^ame parties, as decisive of this question.
    But independently of that decision, we maintain this is not such a promissory note as is dr can be negotiable under the well-settled rules of law..
    In the first place, there can be no such thing as a negotiable promissory note, unless there is an express promise to pay a certain amount. An implied promise will not answer. Story on Prdmissory Notes, sect. 14.
    Where there is “ no more than a simple acknowledgment of the debt, with such .a promise to pay as the law will imply,” it 'is not a promissory note. Patterson v. Poindexter, 6 Watts & Serg. 231. In that case this question is very fully examined by the Supreme Court of Pennsylvania, on a certificate of deposit, exactly like the one now before the court, and which was held not to be a promissory note, after two arguments. The court referred to Horne v. Redfearn, 6 Scott, 267, as conclusive on the subject.
    In Fisher v. Leslie, 1 Esp. Rep. 426, it was held that a slip of paper “ I O U eight guineas,” is nót a promissory note; the court held the paper was the mere acknowledgment of the debt, .but was neither a promissory note nor a receipt.
    An instrument acknowledging the receipt of ¿6200 in drafts, for the payment of money, and promising to pay the money specified in the drafts, is pot a promissory nóte. Williamson v. Bennett, 2 Camp. R. 417.
    In the next place, it is riot a promissory note, because it is payable upon a contingency and rtot at all events. It is payable only upon the.order of Henry Miller, and upon the return of the certificate.
    A promissory note must not depend upon any contingency whatever. Story on Prom. Notes, 22; Williamson et al. v. Bennett. et al., 2 Camp. Rep. 417; Roberts v. Peake, 1 Burrow,'323.
    This point was also decided in the case already alluded to, of Patterson v. Poindexter, 6 Watts & Sergeant, 232, where the court say the promise is a contingent one, depending upon the return of the certificate.
    We call the attention of . the court particularly to this case; because it was precisely like the present. The certificate was issued by the same bank, and the language is precisely the same, as are also the indorsements. It is the only well-considered case in the books, on this subject, and it-decides that the paper is neither a promissory note, nor a bill of exchange, nor a check upon a bank, but is only what it purports to be, á mere certificate of deposit, which is neither a bill, note, or. check.
    Again, if this is a promissory note and negotiable, can the consideration be inquired into 1 If it can, in the hands of an assignee it ceases to be' a negotiable promissory note. And we claim that the.consideration of this note may be inquired into ; that it may be shown for instance, that the statement that Hugh Short had deposited the amount named, is not in fact true. That pprtion of the note is like the statement of a ■ bill of lading, acknowledging the receipt of goods, and may, like all stateirients of receipt, be explained or contradicted.
    And we maintain that in a suit against the Mississippi Union Bank, the bank might show that instead of money being deposited, worthless bank-notes were deposited, and an offer to return the same notes would discharge the obligation.
    Again, to whom (if this is a promissory note) is it payable ? It acknowledges the receipt from Hugh Short, payable in twelve months with interest, of $1,500, for the use of Henry Miller, and payable only to his order. The amount received is from Short. It is payable, by the first par,t of the note, in twelye months, to Short, and not to Miller. The subsequent words for the use of Henry Miller,” do not alter the legal effect of the note. It is still a receipt of money from -Short. It' is payable to him in legal contemplation, notwithstanding the words “ for the use of Henry Miller.” These words do not vary the legal obligation. Supposing it had been a note promising to-pay $1,500 to Hugh Short or order, for the use of Henry Miller, could it be pretended that any one, besides Short or his indorsee, could have recovered on-the note at law? Under such circumstances, Miller would have had an equitable interest, but' not the legal, interest, and he or his assignee could not have recovered in a suit at law.
    In order to sustain this suit as' on a promissory note, the promise has to be implied, for there is no express promise to pay. Supposing that'an implied promise to pay is sufficient, (which We think it is not,) to whom is this implied promise to be raised on this particular instrument ?
    As before remarked, if the promise had been express, to pay to Short, for the use of Miller, the legal title would have been in Short. Now, if in the absence of an express promise, we substitute an implied promise, must it not have the same effect? The plaintiffs below claimed the word payable was equivalent to an express promise to pay. Supposing it is so, for the sake of argument,how does..the case stand? The certificate certifies that Hugh Short has deposited in the bank, payable in twelve months from 1st May, 1839, with 5 per cent, interest till due, $1,500. From this statement the promise to be implied, from the word payable, would be to Hugh Short. The subsequent statement, “ fol’ the use of Henry Miller,” would nó more in this case than in the case of an express promise, change the nature of the legal obligation. The words “ for the use of Henry Miller ” would in each case be of no further efficacy than to point out the equitable owner of the paper.
    But it is claimed that the additional words used, “ and payable only to his order, upon the return of this certificate,” change the whole legal character of the instrument, and make what before was payable to Hugh Short, now payable to Henry Miller, or order W'e contend that such is not the fair construction-of the instrument, but that it must be construed in the same way as though an express promise had been made to pay to Hugh Short, and if that , express promise'had been inserted, the paper would read thus:

      '“I certify that Hugh Short has deposited in this bank $1,500, which is promised to be paid 12 months from 1st May, 1839, -with 5 per cent, interest till due, to thé order of said Short, (for the use of Henry Miller,) upon the' return of this certificate.”
    In other words, we contend that the words “ for the use of Henry Miller,” only indicate the equitable rights of the parties, and do not in any way affect the legal character of the paper. And to test this matter more fully, let us suppose that Hugh Short was owing Henry Miller $1,500, and that supposing that Henry Miller would be willing to accept his pg,y in "this certificate of deposit, he obtains it in the form of the paper now in suit. Suppose further, that on his offering it to Mr. Miller, the latter refused to accept it, in whose name could the amount have been recovered in a court of law, of the bank ? Miller could not have recovered, because he had refused to becom'e the holder or. owner of the paper. Is it not clear,, then, that'in such a state Of case, Short could have received the amount? But if the construction is as contended for by counsel, Short could not have recovered, because ,the implied promise-was not to him. We,' however, contend that the promise, if expressed, would have been to 'Short, and if implied, it is also to him, and the other words, “ for the use of Henry Miller,” is only to- designate, the equitable course, which the legal owner or depositor, intends the' money'shall take, and that the words payable to his order, relate back to the original depositor, Short, and not Miller, just in the same way and manner as if there had been an express promise to pay. Short would then be the promisee, and would be a trustee for Miller, if the latter saw proper to receive the certificate.
    So that we think it clear that this was not a promissory itote; that it was not a promissory note to Henry Miller, but was an obligation of an equitable character, ahd he might have used the name of Hugh Short, in order to recover at law. That his indorsement of the certificate was .no more than a mere- authority to receive-the money, and did npt subject him to the; payment of the sum mentioned in the certificate .in pase of default by the bank. Story on Prom. Notes, §§ 128, 129.

      Mr. Chase and Mr. Rockwell.

    The first exception only remains for consideration, namely, that the paper declared on, is not a negotiable promissory note under the laws of Ohio.
    There is nothing peculiar in the legislation of -Ohio in relation to promissory notes. The statute “ making certain instruments of writing negotiable,” provides that “ all1 promissory notes drawn for any sum- or sums of money certain,, and made payable to any person or order, or to any person on bearer, or to any person or assigns, shall be negotiable by indorsement thereon,” &c. Swan’s Stat. This legislation does not at all affect the general principles so firmly established by repeated decisions in respect to negotiable paper.
    ' “ A bill or note is not confined to any set form of words. A promise to deliver or to be accountable, or to be responsible for so. much money, is a good bill or note.” 3 Kent’s Com. 75; Chitty on Bills, 40, and notes.
    No particular words are necessary ; the form may be varied at the pleasure of the individual, so, always, that it amounts to a written promise for the payment of money absolutely and at all events, and interferes with no statute regulation. Thus, an order or' promise to deliver a certain sum of money to A, or to be accountable or responsible to A, for a certain sum of money, or that A shall receive it from the maker, is a good promissory note; so a receipt for money to be returned when called for, or an acknowledgment, due to A a certain sum of money payable on demand; or a promise to pay or cause to be paid to A a certain sum of money; or an instrument acknowledging the receipt of money of A, promising to pay it on demand with interest; or acknowledging the receipt of money to be repaid in one month ; or acknowledging to have borrowed a certain sum of money, in promise bf payment thereof.” Story on Prom. Notes, 15, § 12.
    A promise implied by law, founded upon a mere acknowledged indebtment, will not be sufficient. Thus, where A wrote upon a slip of paper “I O U eight guineas,” it was held to-be a mere due-bill, and not a promissory note. But if the promise were “ Due to A B ¿620, payable to him or order,” it would be a promissory note, for it contains more than the law would imply, and becomes negotiable. Story on Prom. Notes, 17, § 14; Curtis v. Rickards, 1 Mann. & Grang. 46 ; Russell v. Whipple, 2 Cowen, 536.
    The decisions in Ohio are in strict accordance with these principles.
    In Moore v. Gano, 12 Ohio R. 302, the following instrument was held a promissory note : —
    Bridgeport, 12/A month, 30th, 1836.
    Received of John Moore, five thousand one hundred and ten dollars, which we promise to replace to the said Moore on demand, with interest from date. Gano, Thoms, & Talbott.
    In McCoy v. Gilmore, 7 Ohio R. Pt. 1, 268, it was held that “no special form of words'is necessary to constitute a promissory note. It is enough' if .the intent appear, and the sum can be made certain by calculation.”
    In Ringu. Foster, 6 Ohio R. 279, a contract by which A agreed to pay to JB one hundred and forty dollars, “ provided B delivers the crop of tobacco raised by him and C, then B is to' have one fourth of the above sum in hand, and in addition three dollars per hundred weight for that part yet to be delivered, payable one fourth in hand, and the balance in one hundred and twenty days,” was held to be a promissory note.
    These cases show the doctrine in Ohio on this subject; and that it is quite as liberal in favor of commerce as that of England, or her co-states.
    The plaintiff in error relies upon a brief note of a decision said to have been made by the Supreme Court of Ohiq in Hamilton county. The case is not reported, but merely the point supposed to have been decided; and this not by an authorized reporter, in any book of reports, but as an item of intelligence fór a"'law journal. Those conversant with the stirrup practice of the Supreme Court on 'the Circuit in Ohio, would not claim the weight of authority for this paragraph in the Law Journal.
    There is, however, it must be admitted, a decision, not of an Ohio court, but of a Pennsylvania court, both respectable and respected, which sustains the doctrine insisted on by the plaintiff in error. • In the case of Patterson v. Poindexter, 6 Watts & Serg. 227, it' was held that a certain certificate of. deposit, in all respects like that now in controversy, was riot a negotiable note: The opinion of the court maintains three propositions :
    1st. That the words “payable to order ” do not import a pro-' mise to pay; which is in direct opposition to the whole current of English and American authority.
    2d. That a promise to pay on “ return of the certificate,” is a contingent and conditional promise, and therefore the note by which such promise is made is. not a promissory note; and this, although the court is immediately after, forced to admit that “ true it is that such a contingency is no more than is implied in every promissory note.”
    3d. That the words “ payable twelve months from 18th May, 1839, with five per cent, interest till due,” constitutes a special agreement for interest, which is'inconsistent with the character of a promissory note ; and this, also, is in direct opposition to the current of authority.
    ■ Upon these three propositions the court rested their conelusiqn that the paper in question was not a negotiable promissory note.
    The only authority cited in support of this conclusion was Home v. Redfearn, 6 Scott’s Cases, 267.

      This was a decision under the Stamp Act. Suit was brought on the following letter:

      December 25, 1829.
    Sir : I have received the sum of <£20, which I bprrowed of you, and have to be accountable for the same with legal-interest.
    I am, &c., Peter Redfearn.
    It was stamped as a special agreement,- and was sued on as such. It was objected that it was a promissory note, and not being stamped as such, could not be given in evidence. But Chief Justice Tindal said: “ -I 'think this case may be decided by referring to the provisions of the Stamp Act, without referring to the cases which have been cited.” He then proceeded to hold that the instrument, being stamped as a special agreement, and not as a promissory note, fell within the exerpption of the act, 55 Geo. 3, c. 184, from the promissory note stamp “ of all other instruments bearing in any degree the form or style of promissory notes, but which shall in law be deemed special agreements, except those hereby expressly directed to be deemed promissory ■notes.” The Chief Justice added, “It would be a very harsh construction of the act to hold the document to be a promissory note, after the commissioners on stamps have impressed it with an agreement stamp, upon payment of the usual penalty.”
    This brief statement clearly shows that the case of Horne v. Redfearn -went entirely upon a construction of the Stamp Act; and it is ^remarkable enough that,.by this very act, simple certificates of deposit, issued by banks, without any words such as “ payable,” and the like, importing a promise to pay, are declared to be promissory notes. So that there cannot be a doubt that in England the paper now in controversy would be held to , be a promissory note, whether the question was decided upon general principles or statutory provisions.
    The Pennsylvania decision, then, is without the support of any English case, as it is without the. support of any general principle of law applicable to promissory potes.
    We shall proceed to show that it is in direct conflict with American authorities.
    In the case of Kilgore v. Bulkley,. 14 Conn. .Rep. 363, the Supreme Court of -Connecticut held the following certificate of deposit to be a promissory note:
    $10,608.75. Chelsea Bank, July 6,1839.
    I do hereby certify that David E. Wheeler, Robert S. Taylor, and Noah Bulkley, have deposited in this bank the sum of ten thousand six. hundred and eight dollars seventy-five cents, payable on the first day of December next, to their order, on the. return of this certificate. D. E. Wheeler, President.

      -And the following writing, indorsed upon the paper, was held to be an indorsement by which the parties made themselves liable as*indorsers of a negotiable note:
    “ For value received, we hereby assign to S. F. Maccracken, Joseph S. Lake, and Daniel Kilgore, Commissioners of the Ohio Canal Fund, or their successors, the amount of the within certificate.”
    The case of the Bank of Orleans v. Merril, 2 Hill, N. Y. Rep. 295, is also in direct conflict with the case of Patterson v. Poindexter. In that case, the action, being brought on a certificate of deposit, the court said, “ the instrument in question' is in effect a negotiable promissory note.
    Thus., then, stands the case. The paper in controversy has all the requisites which an unbroken current of decisions has pronounced essential to a promissory note. It is a promise to pay a siim of money certain, at a fixed- time, for value received. ' It was regarded by the maker, by the defendant, apd by the plaintiffs, as a negotiable promissory note. By the maker, for it was in the language of the Ohio statute, “drawn payable to order;” •by the defendant, for he issued it payable to the order of his indorsee, and he added to his signature the place of his residence, obviously that, in the event of non-payment, it might be known where to direct notice; by the plaintiffs, for they caused it to be presented for payment, and protested as negotiable paper. Two American courts, of distinguished ability,-have expressly’held similar instruments to be negotiable paper. One American court has held otherwise;
    This statement-would seem to be decisive. We do not think 'it worth while to comment on the positions of the counsel for the plaintiffs in error, that the paper in question is not a promissory note, because subject to the condition of the return of the certificate; and that, if it is a note at all, it is a note to Hugh. Short, and not to Henry Miller. The first is refuted by the remark of the court which suggested-it, that it is a condition which is implied by law in every promissory rióte-; and the second is refuted by the language of the instrument, and.the act of the defendant himself.
    We will only add two or three cases, which illustrate somewhat -strikingly the disposition to which'the Supreme Court of New York referred, when they said, “ the great commercial advantages growing out of negotiable instruments, have induced the courts to adopt a most liberal rule in construing them.” The first case is that of Walker v. Roberts, 1 Cdrr. & Marsh. 590, (41 Eng. Com. Law Rep. 321.) The following document was held to be a promissory note :

      ' “ February, 1831. William Walker lent to James Roberts £19,19,5. 11c?.; to pay five per cent, for the same £19, 19s. 11c?.; to pay on demand to the said William Walker, giving James Roberts six months’ notice of the same. James Roberts, Mary Roberts.”
    The other case is that of Henschel v. Mahler,' 3 Hill’s N. Y. Rep. 132. The action was upon the following instrument:
    ■ “ For francs 8,755.60, payable on the 31st .of December, 1839. On the-31st of October, of this-year, pay to the order of ourselves, 8,755 francs 60 centimes, payable in Paris, the 31st of December, of this year.”
    It was held a valuable negotiable bill of exchange, notwithstanding the ambiguity; the words, “ on the 31st of October, in this year,” being rejected as repugnant, and the bill held payable “ on the 31st of December.”
    We refer the court, also, to 1 Greenl. Rep. 535 ; 2 Cow. Rep. 536; TO Wend. 6.75; and, in deciding the last of which cases, Nelson, J;, said,“ the instrument is a promissory note within the statute, as it contains every quality essential to such paper. The acknowledgment of indebtedness on its face implies a promise to pay the plaintiffs,” and the payment, by its terms, was. to be in- money, absolutely. The instrument on which this last action was brought was as follows: “ Due Kimball & Kiniston three hundred and twenty-five dollars, payable on demand.”
   Mr. Justice CATRON

delivered the opinion, of the court.

. The only-question this case presents that we deem worthy of notice is, whether the paper sued on is a negotiable instrument; it is as follows : -

“ No. 959. Mississippi Union Bank, Jackson, (Miss.) Feb. 8, 1840. I hereby certify, that' Hugh Short has deposited in this bank, payable twelve months • from 1st May, 1839, with 5 per cent, interest till due, fifteen hundred dollars, for' the use of Henry Miller, and payable only to his order upon the return Of this certificate. $1,500. • Wm. P.' Grayson, Cashier.”

The suit was by the last indorsee against his immediate indorser, and brought in.Ohio.. The statute of that State declares all promissory notes, drawn for.a sum certain, payable to any person or order, or to any person or his assigns, negotiable by indorsement;

The established doctrine is, that á promise to deliver, or to be accountable for, .so much money, is a good bill or note. ■ Here-the sum is certain, and the promise direct. Every reason1 exists why the indorser of this paper should be held responsible to his indorsee, that can pre.vail in cases where the paper indorsed is in the ordinary form of a promissory note; and as such note, the State courts generally, have treated certificates of deposit payable to order; and the principles adopted by the. State courts in coming to this conclusion, are fully sustained by the writers of treatises on bills and notes. Being of opinion that the Circuit Court properly held the paper. indorsed, negotiable, it is ordered that the judgment be affirmed.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Ohio, and was argued by counsel. On consideration whereof, it is now here ordered and adjudged by this "court, that the judgment of the said Circuit Court in this cause be, and the same is hereby, affirmed with costs and damages, at the rate of six per centum per annum.


source: Caselaw Access Project

license: Public Domain

text:
    Alanson Saltmarsh, Plaintiff in error, v. James W. Tuthill.
    In a suit by the ’indorsee against the indorser of a bill, where the dgfgnce was usury, • the drawer and drawee were incompetent witnesses, when offered to prove certain facts, which, when taken in conjunction with certain other facts, to be proved by other witnesses, would invalidate the instrument.
    Being incompetent witnesses to establish the whole defence, they are also incompe- . tent to establish a part.
    This case was brought up, by writ of error, from the District Court of the United States for the Middle District of Alabama,
    The only question was one of evidence, which is fully explained in the opinion of the court.
    It was argued by Mr. J. A. Campbell and Mr. Seward, for the plaintiff in error, and Mr. Pryor, for the. defendant in error.
   Mr. Justice CATRON

delivered the opinion of the court.

Hill drew a thirty days’ bill, dated at Mobile, on "William Bower & Co.,-for 'four thousand dollars, payable to Coleman. It was indorsed by Coleman to Saltmarsh,'and by him to James W. Tuthill, who sued Saltmarsh. The parties went to trial on the general issue, and the defence relied on was usury. By the laws of Alabama, a party to any security for the payment of money, who takes more than after the rate of eight per cent, per annum for the money advanced, is prohibited from recovering any interest, and can have judgment only for the original sum loaned. And this abatement, was the matter in controversy. To prove the usury, Hill, the drawer, and William Bower, one of the drawees,.were introduced on behalf of the defendant; and objected to by the plaintiff as incompetent, on the ground that a party to negotiable paper who, by the sanction of his name, gave it credit and currency, could not afterwards, upon his own testimony, invalidate the instrument, by showing that the consideration on which it was executed was illegal. ' The witnesses were rejected.

Both Hill and Bower were offered t5 prove facts which, when taken in connection with additional facts, that might be proved by others, would invalidate the instrument in part, by abating the interest. The proof was offered, and only material to es ablish the defence of usury, this being the sole defence. It mi st be admitted, that if the party to the bill had been introduced to establish the whole defence, then he was incompetent; and to. hold, that he could prove a defence in part, tvithout which piece of evidence no successful defence could be made, would be a mere evasion of the rule, which excludes such witness from giving evidence to impeach the consideration.

No other question is presented to us, nor does any other exist in the record, worthy of notice. It is thereto *e ordered, that the judgment of the Circuit Court be affirmed.

Order.

This cause came on to be heard on the transcript of the record, from the District Court of the United States for the Middle District of Alabama, and was argued by counsel. On consideration whereof, it is now here ordered and adjudged by this court, that the judgment of the said District Court in this cause be,, and the same is hereby affirmed with costs and damages, at 'he rate of six per centum per annum.


author: Mr. Justice WAYNE

text:
    Cyril C. Tyler, and his wife, Sarah P. Tyler, Appellants, v. George N. Black.
    Where a person desired to purchase land from a party who was ignorant that he had any title to it, or where the land was situated; and the purchaser made ftaridulent representations as to the quantity and quality of the land, and also, as to a lien which he professed to have for taxes which he had paid; and finally bought the land for a grossly inadequate price, the' sale will be set aside.
    This was an appeal from the Circuit Court of the United States for the District of Maine, sitting as a court of equity.
    The facts are all stated in- the opinion of the court.
    It was argued by Mr. Fessenden, for the appellants, and Mr. Rowe, for the appellee.
    The points made by the counsel for the appellants were the following, viz.:
    The complainants claim to have their deed to Black, dated November 30,1846, cancelled, and á reconveyance of said estate, on the following grounds.
    1. For fraud and fraudulent representations.
    2. For inadequacy of price, as, of itself, furnishing evidence of fraud.
    3. For the two'preceding grounds united.

      General Considerations. The acts and 'declarations of Black, to. show he had formed k design to commit frauds in making this purchase, as opportunity should offer.
    All such acts and declarations of Black made to other persons, about the time of the transaction, are competent evidence for complainants, for that purpose. Bradley v. Chase,'22 Maine Rep. 511; Warner v. Daniels, 1 Woodb. & Minot, R. 9.0; Wood v. The United States, 16 Pet. R. 342; s. c. 14 Pet. R. 430.
    . Complainants rely on the testimony of the Vermont witnesses, viz.: Edward F. Putnam, Albert G. Soule, E. P. Soule, and Phebe Hendricks, to prove such acts and declarations of Black.

      First Proposition, The bill, answer, and evidence, establish complainants’ proposition of fraud, on the part of Black, in several particulars, either of which is sufficient to entitle them to a decree in their favor.
    1. As to complainants’ title and the evidence of it, and Black’s misrepresentations concerning it.
    2. Black’s misrepresentations as to the number of acres.
    3. Black’s misrepresentations as to incumbrances on the land, and particularly of his lien thereon for taxes, alleged to have been paid by himself.
    4. Black’s misrepresentations of the value of the land.
    (Each one of these points was examined according to the evidence.)

      Second Proposition. The doctrine is well stated in Story’s Commentaries on Equity Jur. §§ 245 and 246. After Stating the general proposition that mere inadequacy is not a sufficient ground for relief, he says, (sect. 246,) “ Still, however, there may be such unconscionableness, or inadequacy in a bargain, as to demonstrate some gross imposition, or undue influence; and in such cases; courts of equity ought to .interfere upon the satisfactory ground of fraud. But then, such unconscionableness, or such inadequacy, should be made out as would, to use an expressive phrase, shock the conscience, and amount, in itself, to conclusive and decisive evidence of fraud. And where there are other ingredients in the case of a suspicious nature, or peculiar relation betwqén the parties, gfbss inadequacy of price must necessarily furnish the most vehement presumption of fraud.”
    ; The same doctrine is stated in Fonb. Eq. B, 1, c. 2, sect. 9, note e.
    . “ Where the deed is executed, if the parties have not been on •.equal- footing, or,- if there has been any concealment, or misrepresentation, or -.imposition, courts of equity uniformly set aside such deed or contract.” Sugl Vend. 6th Amer. ed. p. 317, and not,e 2.
    “ Where the circumstances of the case are such as have afforded an opportunity, either from the situation or condition of the parties, or the nature of the property, for either of them to -take a fraudulent advantage of the- other, and the consideration is grossly inadequate,- this court considers that circumstance to be evidence of fraud, and will not only refuse a specific performance at the instance ;of the former, but will, at the suit of the latter, rescind the transaction.” Jér. Eq. Jurisd. 483, and notes..
    “A conveyance, obtained for .an inadequate consideration, froni one:not conusant of his right, by a person who has notice of such right, will be set aside, although no actual fraud- or imposition be used.” - Sug. Vend. 6th Amer. ed. 320.
    “ Although ic may be impossible, by any general proposition, to define what is to be understood by gross inadequacy of consideration, as it must, in a great measure, depend upon the cireum-. stances of each individual case in which the question may arise, yet, if it be so gross and palpable, as of itself to afford evidence of actual fraud, the court will set aside a sale.” Jer. Eq. Jur. 433, (note 7); Osgood n. Franklin, 2 Johns. Oh. 1, and cases cited..
    'in Turner v. Harvey, 1 Jacob’s Ch. It. 169, which was a case where the vendors were ignorant of a fact ór circumstance considerably increasing the value, the court say: “ If a word, a single word be dropped which tends to- mislead the vendor1.the principle that the- purchaser is not bound to give the véndof information as to the value of the property, will not be allowed to operate.” .
    ■ Again, in Hill on Trustees, 152, it is said, “ Mere inadequacy, of itself, is not enough to set aside a contract; but where the inadequacy is so gross that it is impossible to state it to a ma of common sense, without producing an exclamation as to the inequality of it, the court will infer, from that fact alone, that there must have been such imposition, or oppression in the transaction, as to amount to a case of fraud, from which' it would not suffer any benefit or advantage to be derived. Other circumstances of fraud will aid the court.”
    To apply these principles to the case at bar.
    The inadequacy of price, in this case, is such, as of itself, to afford evidence of fraud. In 1799 Parsons conveyed to Putnam for 50 cents an acre. Black paid Tyler arid wife 8| cents an acre.
    ■Black, in his answer, says that it was worth from 50 cents to $2 per acre,. November 30, 1846. Now 50 cents to $2 averages $1.25 per acre; so that Black purchased for 8| cents an acre what- he admits was worth $1.25 an acre. He bought for $50 what he admits was worth $757.50.

      Third Proposition. The bill may be sustained on the ground of fraud and fraudulent representation, and for inadequacy of price, united.
    On these principles the court will find a rule. for their guidance in Seymour v. Delancey, 6 Johns. Ch. R. 222. Chancellor Kent, in that case, found it convenient to take the average value, as established by the witnesses on the one side and the other.
    On this principle the land was worth about $4.45 an acre, or $2,688.36, in November, 1846, date of deed of Tyler and wife o Black.
    The denials of the answer are thus overcome, and the bill is maintained.
    The counsel for the defendant in error made the following points, viz.
    The court has no jurisdiction. The value of the matter in controversy is' one of the points at issue in the case. The proofs fail' to show the land to be worth $2,000. It is not worth over 50 cents per acre, as shown by respondent’s witnesses.
    (The arguments upon this point upon both sides depend so' entirely upon references to the testimony, that they cannot be reported.)

      Point 2. There was no inadequacy of price;
    The inadequacy, to be evidence of fraud, must be so gross as to shock the conscience. 1 Story’s Eq. Jur. §§ 244, 245, 246; 1 Sugd. Vend. [*422, 423,] 318, 319, and cases there cited. Here is. no satisfactory proof of such inadequacy as would even amount to damage. 1 Story’s Eq. Jur. § 203. The consideration, on Black’s part, was the $100 paid, the amount due for taxes and interest, and his claim for trouble and expenses, in-discovering and notifying the heirs. There is no sufficient proof now (as before shown) that all which Black takes by his deed is worth more than that. At the time of the contract it was doubtful how much he would take by his deed, or whether he would take any thing..
    It was not then .fully ascertained whether Dr. Putnam died seized of any portion of this lot; and it was not known of how m ch,' if any. It was not even known that Parsons had sold him any land, or if any, how much. The extent of Mrs. Tyler’s rights, as heir at law, was not clearly ascertained. The value of- the land was unknown. Defendant had .no information but that derived from Mrs. Sheldon, and Tilden, and from t> e Putnams.
    Whére neither of the parties knows the' value of the estate, no inadequacy of consideration can operate, even to prevent a decree for specific performance in favor of the purchaser. Anon, cited in 1- Bro. C. C. 158, and 6 Ves. Jr. 24; 1 Sugd. Vend. [*441, 442,] 318.

      Point 3. There was no fraudulent concealment.
    A purchaser ,is under no obligation to give any information, unless there be s5me relation of confidence between the parties. 2 Kent’s Com. (5th ed.) 490. By Lord Thurlow, in Fox v, Macreth, 2 Bro. C. C. 420; '.Laidlaw v. Organ, 2 Wheat. 178; 1 Story’s Eq. Jur. sect. 207.
    The parties to this contract were strangers to each other: The complainants are/ persons of intelligence, and in “ comfortable circumstances.”
    Black offered to communicate every thing for a reasonable compensation; and the offer was made at the commencement of the conversation, and repeated afterwards. Tn fact there wáS no concealment.
    Before the execution of the deed the complainants were informed of every fact, known to the defendant, in relation to the land and their title thereto.
    It is too late for complainants to take advantage of any concealment during the negotiation, they having executed the deed after all the facts were fully disclosed. Hovenden on Frauds, 106, cites Fleetwood v. Green, 15 Ves, 594; Burroughs v. Oak-ley,' 3 Swanst. 168; 1 Sugd. Vend. 392, sects. 27, 28, and cases cited; 1 Story’s Eq. Jur. sect. 203, a.

      Point 4. There was no misrepresentation.
    The testimony of E. F. Putnam and others, as to the representations made to them at Fairfield, is irrelevant and inadmissible. The interrogatories, which called it out, were objected to. If admissible, it is discredited by the evident bias and strong feeling of the witnesses; by their mutual contradictions, in relation to Black’s denial of knowledge of the quantity of land, and his statements in relation to the nutimer of acres, the price of land sold, the place searched for papers, &c.; and by their statement that Black said Mrs. Tyler was dead, which contradicts the case as settled by bill and answer.
    Black did not represent that he had a tax-title, or a. lien on the land.. The charge is inconsistent in its several parts, and with complainants’ proof. The claim, which he. set up, was the claim which the answer shows that he had, an equitable one on the owners of the land, and not a legal charge on the land itself. He made no representation as to the number of acres.
    This charge is not made the subject of a particular interrogatory, but is covered by interrogatories 7 and 16 ; and is denied in the answer.
    Black stated that he “ did not know how many acres belonged to said Aaron Putnam; ” he could not have known. The statement of the number of acres, if made, was a mere matter of opinion, so understood by all parties, and there is no evidence that it was insincere.
    A misrepresentation must be of something more than a mere matter of opinion. 1 Story’s Eq. Jur. 179; Hepburn v. Dunlop, 1 Wheat. 179.
    The representation, if made, was not material. The land in itself is worthless ; the only value is the timber. The number of acres gives no idea of the quantity of'that. About the timber there were no representations made and no inquiries. It was no inducement to the sale. The bill contains no' averment that it was an inducement; (see p. 627); no denial of its truth; no interrogatory in relation to it; no averment that the complainants believed it. It was not regarded as evidence of the value of the land sold by either party, for Tyler afterwards inquired again as to the character and value, and Black declared he knew nothing about it. The only inducement specifically charged is the doubt as to Mrs. Tyler’s title. The only unfairness in relation to the value of the land charged against Black is the withholding information. He said that Tilden’s part of the lot was purchased at a shilling per acre, and not at twelve and a half cents, as charged. Tilden paid a shilling. . Black so stated at Fairfield; the Soules interpolated the word “ York;” Stanwood borrows the story and reduces the York shilling to Federal currency.
    500 acres at 12) cents, = $62.50, incumbered by tax claims for about $300. The story is incredible, and inconsistent with the propositions made by Black. What Black did say was not thus incredible or inconsistent, for Stanwood believed him, and thought a doubtful title to half the land worth more than he asked for his information.
    Black’s representations of his inducements to purchase are not shown to be false; and, if they were, that would furnish no grounds for rescinding the contract.
    A purchaser is under no legal obligation to mane a true disclosure of his motives. Vernon v. Keys, 12 East, 632, 637, 638.

      Point 5. The misrepresentation must be of something, in regard to which the party places known trust and confidence in the other. If the party had no right to place reliance upon it, and it was .his own folly to give credence, to it, it will not avoid the contract. 1 Story’s Eq. Jur. sects. 197, 199.
    Before any of the representations complained of were made, Black assured Dr. Tyler that he would give no information whatever, unless paid therefor; and repeatedly made the same assurance to him, in substance, in reply to his pressing questions. If, after that, Dr. Tyler relied upon any thing, wrung from the defendant by his importunate inquiries, it was a folly, from the consequences of which a court of equity will not relieve him.

      Point 6. Before they executed the deed, the complainants knew where the land is situated, and where the evidence of their title is recorded, and could have ascertained whether the representations made' by Black were true.
    If Black made all the representations charged in the bill, they then knew .that some of them were untrue, and were put on their guard as to the rest.
    Misrepresentation of a matter, where a party was capable of seeing whether it was right or not, is no ground for relief. A ins-lie v. Medlycot, 9 Ves. 13; 1 Madd. Ch. 253; Bayley v. Merrel, Cro. Jac. 386; 3 Bulstr.. 95; 1 Story’s Eq. Jur. sect. 149 ; 2 Kent’s Com. 485, 486, note d.

    The deceit must be such as ordinary prudence would not protect the party against. 1 Story’s Eq. Jur. sect. 200, a.

      Point 7. Black’s claim on account of taxes paid, &c., is valid in foro conscientice. Complainants will not be entitled in equity to the rélief prayed for, until provision is made for that claim.
    They have never offered to pay him if he would rescind the contract; nor even requested him to rescind. The bill contain? no such offer. The parties cannot be placed in statu quo.

   Mr. Justice WAYNE

delivered the opinion of the court.

This is an appeal from the Circuit Court of the United States for the. District of Maine, sitting as a court of equity.

The complainants, Tyler and wife, filed their bill to set aside a sale of land made by them to Black, upon the ground of fraud, concealment, and fraudulent representations made to them by Black; and also uppn the ground of inadequacy of price as furnishing evidence~of fraud.

Towards the latter end of the last century, the State of Massachusetts established a lottery'for the sale of some lands in Maine; and one Zenos Parsons drew a prize of 1920 acres, being lot number one in township No. 33.

On the'25th of- March,. 1799, Parsons conveyed to Aaron Putnam, of Charlestown, Massachusetts, for the consideration of six hundred dollars, twelve hundred and twelve acres of the said land, being an undivided interest. Putnam had three children, two sons, and a daughter. The daughter marriéd Tyler, and they were^the complainants and appellants in the present cause. One of the sons died without issue, and the other son left two children, viz., Edward and Elizabeth, who married Soule, who resided in Fairfield, Vermont.

. At the time of the-death of Aaron Putnam, his daughter was a minor, and resided in Massachusetts. When the transaction. occurred which gave rise to the present suit, she was residing with her husband, Tyler, at Hopkinton, in New Hampshire. Black resided near'the land in Maine, and had acted as the agent, of the. owner of .the remaining undivided interest for upwards of twenty years.

In November, 1846, Black went to Fairfield, in Vermont, and offered to purchase the share of Edward and Elizabeth, who. were ignorant of their title to the land ; but they refused to sell. Black there learned that Tyler and his wife were the owners of one half of the 1212 acres which had been conveyed by Parsons to Putnam, and immediately proceeded to Hopkmton to see them.- At this time Black’s position was-thisi he resided at the town of Ellsworth, which communicated, by a navigable stream, with the land in question ; he had been connected, since 1833, with his father,'John Black, in the business of agency for the proprietors of nearly all the lots in the town-' fehips in which the land in question was situated; and in the seasons of 1844 - 5 and 1845-6 there had been lumbering operations upon lands in the neighborhood.

The interview' between Black and Tyler is thus described by Joseph Stanwood in his deposition.

• Second. To the second interrogatory he saith: — “I was present at the public house when Mr. Black came here and took the deed, as before stated; my father-in-law and I were then keeping a public house; Mr. Black came in and inquired for Doctor Tyler; what sort of a‘ man was he, and wh&t were his circumstances as to property; I told him- he was a physician, doing a -tolerable good share of business; had his house and other buildings clear of debt, as I supposed.”

.Third. To the third interrogatory he saith: — “I was not present at the commencement of the interview betwixt Tyler and Black; I left the room soon after Tyler came in'; after they had been together perhaps an hour, Tyler came out and told, in substance, that Black and he had. been talking about some land in Maine; I went into the room with them; Black said there'was a tract of land in Maine, and he could find ho person that had any claim to it, unless it belonged to' the heirs'of Doctor Putnam; Black said he would, give Tyler fifty dollars for a deed of the land fi;om Tyler and his wife ; or, if they would give him fifty dollars, he would tell' them all he knew about the land ; th,ey came to -no agreement at that time, but separated late at night; the next morning Black said he had concluded to make Tyler another offer for the land; he would give him one hundred dollars for a deed; I went.to Doctor Tyler, told what Black had offered, and he came in and concluded to take it.

Fourth. To the fourth interrogatory he saith: — “ The inquiries in the first part of this interrogatory were not made, if made at all, in my presence, but I inferred from their conversation that these questions had been settled before I came into the room; Black represented that the land was situated in a township, and gave the number of the township, but refused to name the county; when the deed was made, he directed me to insert a different number from that he had represented' in the previous conversation; he either- represented that the township in which the land \vas situated was thirty-one, and directed me to insert thirty-three in the deed, or represented thirty-three as the number of the township, and had thirty-one- inserted in the deed, but which I cannot now recollect.

Fifth., To the fifth interrogatory he saitb: —■ “ That Black said the land was holden, if held at all, by virtue of a lottery ticket, the form of which he attempted to describe; it was made of pasteboard or thick paper, as I understood; he said he had lately seen one in the hands of a Mr. Webster, I think, but I am not certain about the name ; Black said he had made many inquiries- about the title to this land; he had been to Springfield, Mass., and other places, for this purpose, but could find no record of the title anywhere ; and he did not suppose there was any deed of this land on record, but that the whole claim to it depended upon the lottery ticket, and that alone.

Sixth. To the sixth interrogatory he saith : — “ When Tyler inquired how many acres Doctor Putnam owned, Black answer, ed, about five hundred.”

Seventh. To the seventh interrogatory he saith: — “Black said he had á claim on this land for the taxes he had paid on it; he said he ‘ had paid taxes on this land twenty-eight or twenty-nine years; think he said twenty-nine years; the amount I do- not recollect, if he stated it; he said Tyler must pay him the amount of these taxes, and twenty-five per cent, interest, at all events, before he could avail himself of any title to this land, and this he required in. addition to the fifty dollars mentioned in my answer to the third interrogatory; he said he would have the land sold for taxes, and get a good title.”

Eighth^ To the eighth interrogatory he saith: — “ I do not recollect that Black represented, what was the value of this particular piece of land, but fie said a part of the same tract-had been sold for twelve and a half cents per acre,-and was still undivided; so that if Tyler should ever be able to find and get possession of the land, he would find himself an owner in- common with others, and it would become necessary for him to get a division before he could do any thing with the land.; he said a road had been, or would be, laid out through this township, which would much increase the „■taxes; he assigned as a reason why he wished 'to purchase the land, that another person had appeared and claimed a' large part of it, and he thought it was best for. him to fie looking out for the remainder; and he had traced it back to Doctor Putnam, and had not found that he had parted with his title ; till this claim was made to a part of the land, he had supposed he was in quiet possession, and that the claimants were all dead.

Ninth. . To the ninth interrogatory he saith: — “ Black’s first offer was fifty dollars,. and he did not vary from this till the morning, whén he offered one hundred dollars ; whether he professed to be liberal or not I do not recollect, but said it was all he would give till the morning.”

Tenth;" "To the tenth interrogatory he saith: — “ Black said he' could have had the land sold for taxes, and obtained a title that way; I asked him why he had not done so; he said, he was afraid other speculators would come in and trouble him, or get the land; I think he mentioned Norcross.”

Eleventh. To the eleventh, interrogatory he saith: — “I made the deed for Tyler and his wife to sign; - when I commenced' writing the deed, Black took from his pocket a memorandum, and dictated to me a description of the land, and caused me to use words different from those I should have used; he then, for the first time, gáve the name of the county in which the land is situated, and the number of the township, which was different from the number he had before given, as I have -before stated in my answer to the fourth' interrogatory; and he disected me to qput in a much larger sum for .the consideration in the deed than he gave Tyler, which I did.”

It appeared afterwards, in evidence, that the deed from Parsons to Putnam was on record in-the office for registering deeds for land in Hancock county, kept in the town of Ellsworth'; and it also appeared that Black had no lien upon the land for taxes paid by him.

In December, 1846, Edward Putnam wrote to Tyler giving an account of Black’s visit to him" and his ineffectual efforts to purchase his share of the land. ,

In June, 1847, Tyler and wife filed their bill against Black in the Circuit Court of the United States for the District of Maine. It set out their title; averred their entire ignorance ■ of it until informed by Black; charged that he had deceived them by false representations as to their title, and as to the character, quantity, and value of. the land; and also by setting up false pretensions’ to a lien upon it held by him on account of his having paid the taxes. The bill further charged that the land was heavily covered with timber, which could easily be carried to market, and was worth twenty thousand dollars; and that confiding in the fraudulent representations of Black, they had been induced to' sell it for the grossly inadequate consideration of one hundred dollars.

In' .October, 1849, Black filed his answer. He admitted the title of thb complainants, his interview with them; their allegation to him of their ignorance respecting their title ; his agency for lands in the neighborhood ; but he denied ever having been upon that particular lot, or that he had caused an exploration of it to be-made, or that he had any particular knowledge of it; denied that he had ever claimed to have a title or lien for taxes paid; averred that in 1844, dr 1845, he accidentally learned that Til-den;.(whom he had supposed to be the owner'of the whole lot and for whom he had been the agent,) was the owner of only an undivided part, and that thereupon he'had examined the records of the registery of deeds for Hancock county, for the purpose of ascertaining in whom the title was vested, but could find nothing there relative to it. That he then examined a plan-book, and there found the name of Zenos Parsons, Springfield, set down against this lot as the owner of it; that in- the summer of 1846 he was informed by Tilden that said Parsons conveyed to one Dr. Putnam, of' Charlestown, a part of this lot.

Both the bill and answer contained other particulars,, which it is not necessary to mention. Much evidence was taken under commissions.

At September term, 1849, the cause came up for hearing upon the bill, answer, pleadings, and evidence, when the Circuit Court ■dismissed the bill, and the complainants appealed to this court.

In the argument of the cause here it was insisted bythecounsel for the defendant'that this court had not jurisdiction, as it did not appear in the evidence that the value of the land in controversy was enough to justify the appeal. We think otherwise ; one of the witnesses gives an exaggerated estimate, and others not enough to enable us to say what the value of the land is; but the exploration, made at the instance of the complainants, satisfies us that the land for its timber alone, if it had no ‘other uses, is worth more than two thousand dollars.

If we look too at its value at the time when Black bargained for it, we think it must be admitted that the sum which he offered and which the complainants accepted upon his representations, was an inadequate price.

But the ground upon which we shall put this case is, that the defendant did not act fairly in the representations made by him to the complainants of the quantity and quality of the land, and in his statement to them that he had a claim upon the land for taxes, which was not true. The quantity of the land is larger than he said it was, and from his agency for -the owner of a part of it for many years, and his knowledge how the .title was acquired, he must have known what the grant called for. In representing it to be less, he' could only have done so to diminish, in the view of the complainants, its value. The untruth in regard to his claim for taxes, without any thing else, is sufficient for us to cancel the deed for a fraudulent misrepresentation. , ‘ f

Stanwood’s testimony has been given in detail, because, it corresponds with the averments in the bill, and is confirmed in all essential particulars by the admissions of the defendant- in his answer, especially in two, which we think decisive of the decree which ought to be made in this case. Those are the defendant’s repeated misrepresentations, made at different times and to different persons, and to these complainants when he was bargaining With them for the land, as to the quantity, and his misstatements concerning the taxes paid upon it by his father and himself for many years, especially used by him to the complainant as an inducement for him to sell the land for the small sum which he offered for it.

It cannot be doubted that the defendant knew, whén be went to Fairfield to buy' this land, where he learned that the wife of this complainant was a daughter of Aaron Putnam, that he knew the latter’s interest in the Parsons grant exceeded five hundred acres; indeed, that he positively knew it could not be short of twelve -hundred acres. He stated, however, to Stanwood, that it did not exceed five hundred ; to Louisa Stanwood. the same. When he went to Fairfield to buy the land, he said, in reply to Edward Putnam’s inquiry as to the numbér of acres, that he did not know any thing about the amount of the land, that he did not know the number of acres, and said there were four or five hundred acres. Soule, another witness, represents, that when questioned concerning the quantity, he answered that he did not know, that’ there was probably two or three hundred' acres, and that the value was merely nominal. Phebe Hendrick says that Black said, that the number of acres might be two hundred and fifty, but could not exceed three hundred acres. Mrs. Soule says the same. These statements are so inconsistent with the narrative given by Black in his answer of his and his father’s agency for many years, for. Tilden, who was the owner of a part of the Parsons grant, for which, as the agent of Tilden they had paid the taxes for more than -twenty-seven years, that’ it must be concluded he concealed and misrepresented the quantity to the complainants to induce them to sell. He Btates that he had learned, as early as February, 1846, that Til-den’s interest in the land did not exceed seven hundred and seven acres. That Tilden afterwards told him, that Parsons had conveyed to Putnam a part of the lot, but denies that he had,’prior to November, 1846, when he went to " have the deed of the complainants to him recorded, aijy knowledge that Aaron Putnam was the owner of one thousand two hundred acres "of the Parsons lot or grant. Now this last may very well be so ; but whether he had that knowledge or not, he must have misrepresented as-to the quantity of the land, when he so repeatedly Undertook to speak of it as not being more than from three to five hundred acres. .It is not the less a misrepresentation because he'did not know how .much Parsons had conveyed to Putnam, fié undertook to speak of it as if he did, as an inducement to the complainant to sell to him, and in that way misled him to do so.

The defendant’s answer in respect to the averment in the bill of his statement to them of the payment of taxes upón this land is evasive, and directly at variance with the proofs in the cause. He states that his father had been the agent for the owners of land in the township for more than thirty years, and that he had been his associate in such agencies since the year 1833, that it was a part of their agency to pay the taxes assessed on the land under their carer that the- taxes on this township have, during all t'he time of their agency for Tilden, been paid by his father and himself as though the whole of said lottery lot had been the. property of Tilden, and that he did not know until recently that Tilden did not own the whole of it. And in what he means to be a direct 'denial' of the plaintiffs’ bill in this particular; he denies. that he ever claimed any title to the land by virtue of a tax-sale and deed therefor, -or that he had any lien on the same for taxes paid by himself, but that he told.them that he might have allowed the .land to be sold for taxes, and that we, meaning his father and himself, had paid the taxes and ought to be reimbursed in the sums so paid, with such interest as the law-allowed in cases' where land was sold for taxes, which he believed to be twentyrfive per cent., and that Tyler replied' that was right, and that whoever owned the land ought to pay them.

The proofs in the cause- of the use which he made of this payment of taxes is, that he represented to the complainant when bargaining for the land that he had a claim upon the land for the taxes he had paid for twenty-eight or twenty-nine ye^rs; that Tyler must pay him the amount of the taxes and twenty-five per cent, interest before he could avail himself of any title to the land, and this he required in addition to the fifty dollars which he asked, for the information he had concerning the land, for which he would tell them all he knew about the land. This is a part of Stanwood’s evidence. Louisa Stanwood- testifies, that the defendant said, that Tyler would have' to pay the taxes at any rate before he could do any thing with the 1 and, and he could go home and have the land sold for taxes and get a good title,- and Tyler would never be'the wiser- for it. To Putnam he said the taxes hffhad paid on the land were two hundred dollars or over; that he claimed a lien upon the land on account-of it. Albert G. Soule says, that Black stated, having ascertained that Edward F. Putnam a!nd his wife were heirs to a quantity of land in Maine, which came by their grandfather Dr. Putnam, that he had come to get a conveyance of it; “that he had paid the taxes on the land for twenty-seven years, and he wanted either that they should convey to him their interest or refund the amount which he had paid for taxes. Being asked what the amount was, he replied he did not know, but thought two hundred dollars. He was asked for his account; he-answered he had it not with him. Another witness, Phebe Hendrick, says, that Black said he had paid the taxes for a long time, amounting to about two hundred dollars. Mrs. Soule repeats the same.

We have then, from these witnesses, a confirmation of what was said by Black to these complainants when he was bargaining with them for their share of this land. His object evidently was to induce them to take his small offer for the land in consideration of their obligation to repay him taxes, which there is no proof in the cause he ever paid.

In the two particulars stated, we think the entiré proceedings of Black in this transaction were inconsistent with fair dealing, and that what was said by him both as respects the quantity of the land and the taxes he had paid upon it. amount to a fraudulent misrepresentation, entitling the complainant to the relief of having the deed of conveyance to Black cancelléd. We shall direct it to be done.

We shall direct the deed from the complainants to the defendant to be cancelled, and that the defendant reconvey to the complainants all the right, title, and interest acquired of him. from them in said land. And we further direct that an account shall be taken in the court below of such profits as the defendant may have made from said land, and that he shall account for the same to the complainants, subject to a deduction'therefrom of the sum of $100 paid by the defendant to the complainants as the consideration of their transfer to him of their interes? in the land, if the said profits exceed the said $100, and if no profits have been made, then' that the complainants repay to' the defendant the aforesaid $100.

Order.

This cause came on to be heard on the transcript of thé record from the Circuit Court of the United States for the District of Maine, and was argued by counsel. On - consideration whereof, it is now here ordered, adjudged, and decreed, by this court, that the decree of the said Circuit Court in this cause be, á.nd the same is hereby reversed with costs, and that this cause be, and the same is hereby remanded to the said Circuit Court, ■with directions for further proceedings to be had therein, in conformity to the opinion of this, court.


author: Mr. Justice McLEAN

text:
    John Campbell, William Ellison, George Steece, and Hiram Campbell, Plaintiffs in error, v. John Doe, ex dem. the Trustees and Treasurer of Original Surveyed Township, No. 1, in Range No. 19, &c.
    On the 20th of May, 1826, Congress passed an act (4 Stat. at Large. 179,) giving school lands to such townships, in the various land districts of the United States, as had not been before provided -for, which were to be selected for such townships ' by the Secretary of the Treasury, out of any unappropriated public lands within the land district where the township was situated for which the selection was made.
    The Secretary of the. Treasury, through the Land-Office, directed the Registers to make selections anti return lists thereof, to bé submitted to him for his approbation.
    Under this direction, the land in question was selected and reserved from sale.
    Afterwards, the Register withdrew'the selection, by authority of the Commissioner of the Land-Office, and permitted a person to enter and take it up, this person knowing the circumstances under which it had been reserved from sale.
    Finallv, the Secretary of the Treasury selected the land in question, under the authority given to Kim by the act of 1826.
    This selection was good, and conferred a title, overrulihg the intermediate entry.
    This case was brought up from the Supreme Court of the State of Ohio, by a writ of error, issued under the 25,th section of the Judiciary Act.
    The facts are all stated in. the opinion of the court.
    It was argued by Mr. Marsh, for the plaintiffs in error, and Mr. Vinton, for the defendant in error.

      Mr. Marsh, for the plaintiffs in error,
    contended that the entry of Hamilton was legal 5 that the reservation from sale had been withdrawn, and 'consequently the land was open; that, if the Secretary of the-Treasury must be supposed to have sanctioned the first -order,'reserving the land for sale, so he must be supposed equally to have sanctioned the second order, authorizing the withdrawal of the reservation; that, if Hamilton’s entry was legal, the subsequent selection of the same lajjd by the Secretary was void, because the act of Congress only authorized him to. select unappropriated land, and this was not so; ■that there was no fraud, or any mistake, on the part of the Register or of Hamilton.

      Mr.- Vinton, for the defendant in error, contended, —
    1st. That the selection of the land in controversy, as school land, by the Secretary of the Treasury, on the 9th of January, 1834, vested the legal title thereof in the State of Ohio. See act of the 20th of May, 1826, 4 Stat. at Large, 179, and act of the 3d of March, 1803, 2 Stat. at Large, 225.
    2d. The prior sale to Hamilton and certificate of purchase cannot avail him, for several reasons: .
    1. Because the title, thus vested in the State overreaches his certificate, and reaches back to the date of the original selection of the land for schools, and the.report of it, as such, to.the. Commifesioner of the General Land-Office. Lessee of Hammond, v. Warfield, 2 Harr. & Johns. Rep. 158; 17 Ohio Rep. 287, 288.
    It will be insisted that this consequence results from the fact,' that' the duty of making the selections conferred on the Secretary, as incident to its proper discharge, a discretion, to be exercised by him in a manner most beneficial to .the objects of the'' grant, consistent with a due regard to the interests of the United States; and that, to exercise this discretion wisely and intelligibly, he must have at his command the means of ascertaining every fact necessary to a proper selection ; such, for example, as the ascertainment of the quality of the land, which could only be done through subordinate agencies. And that, therefore, the selection of the land, under the circular of the 24th of May, 1826, and the. report of it, by the Register, to the General Land-Office, by direction of the Secretary, for his decision thereon, being necessary and proper preliminary steps towards carrying the act into execution, had, the effect in law to sever the land, thus selected and reported, from the mass of the public lands, until his decision was had; and, when approved by him, the whole proceeding was in law one act, and constituted the selection by the Secretary required by the act of the 20th of May, 1826.
    That the land was, from the commencement of the act of selection, severed from the mass of public lands. See Wilcox v. Jackson, 13 Pet. 513.
    2. Because, whether the title of the State overreaches the sale to Hamilton or not, his purchase was void, for the reason that the land was at the time withheld from sale, and could not be entered by him.
    In support of this position, it will be insisted that the selection and report of the land , to the General Land-Office,-being made by the direction of the Secretary, for his decision thereon, the question of its approval was in law pending before him, and under his consideration until his decision should be made; which pending consideration necessarily, for the time being, suspended the sale of the lands selected; and, whether this be so or not, the sale was expressly prohibited by the circular of thé ,30th of August, 1832, until the Register should be officiallly advised of the approval or rejection of the selection by the Secretary.
    It will be claimed, also, that the power of reservation from sale, in such case, is incident to the proper execution of the act of May 20,1826, making the grant of these school lands, and is also incident to the general supervisory power of the Secretary over the public lands given by the act of the 25th of April, 1812, entitledAn act for the establishment of a General 'Land-Office jn the Department of the Treasury,” which act ivas at that time in force. 2 Stat. at Large, 716.
    It will also be further insisted that, though the selection of these school -lands was specially intrusted to the Secretary of the Treasury, by the law granting.them, and required his express approval, yet the circulars of the 24th of May, 1826, and the 30th of August, 1832, issued by the Commissioner of the General Land-Office, prescribing the mode of selection and withdrawing the selected lands from sate, will, in the absence of proof to the contrary, be presumed to have been issued under the direction ánd sanction of the Secretary. Wilcox v. Jackson’s Lessee, 13 Pet. 512.
    This, .however, is not a conclusive presumption Of law, but belongs to .that class of .presumptions which.may be rebutted by proof. 1 Greenleaf’s Evidence, sects.’33 and 34, page 42.
    And where the fact's of a case are agreed, this court will apply and has applied to those facts the presumptions of law belonging to this class. Doddridge v. Thompson, 9 Wheat. 483; Wilcox v. Jackson, 13 Pet. 512, 513. ;
    3d. The sale to Hamilton was void because the letter of-the Commissioner of the General Land-Office of the date of the 19th of March, 1833, giving to the register permission to withdraw the selection and make another in its stead, was written without authority from the Secretary, of the Treasury. That it was- so, is shown by the facts that the said Commissioner subsequently recommended the approval of said selection to the Secretary, who, on appeal to him, confirmed it with a full knowledge of the sale to Hamilton, of sald_ letter of the 19th of March, 1833, and of all the correspondence relating to the said tract of land existing at that date; which facts rebut theipresumption that might otherwise arise that said letter was-written by authority. 1 Greenleaf’s Ev. sects. 33 and 34.
    4th. Because, without the express permission of the Secretary, the Commissioner had no more authority to reject a- selection duly made and reported, than he had to confirm it. 17 Ohio, Rep. 288. t
    5th. Because, if said letter of the 19th of March, 1833, were written by authority of the Secretary, the Register did not comply with its directions, inasmuch as' he withdrew the selection theretofore made, and made no other in its stead, and thus, as far as in him lay, defeated- the grant altogether.
   Mr. Justice McLEAN

delivered the opinion of the court.

This action of ejectment is here on a writ of error to the Supreme Court of Ohio, under the 25th section of the Judiciary Act. The.plaintiffs in error claifn title to a quarter section of land under an entry made with the Register of the Land-Office; the defendants claim the same as reserved for school purposes. As both parties claim under an am of Congress, either, is entitled to a writ of error to have the judgment against the right asserted, •revised in this court.

By the act of the 20th of May, 1826, Congress gave school lands to such townships and fractional townships in the land districts of the United States as had not been provided for, to be selected within such townships by the Secretary of the Treasury, out of any unappropriated public lands within the land district in which the township was situated. Under that act, fractional township No. 1, range No. 19, of the Chillicothe land district of Ohio, was entitled to 160 acres of land.

On the 24th of the same month the'Treasury Department issued a circular, through the General Land-Office, to the Registers of the different land districts, directing them to' make selections of the lands, granted and return a list' to the General Land-Office, for the approbation of the Secretary of the Treasury.

The Register of the Chillicothe,land district caused to be selected the south-east quarter of section No. 15, township 2, range 18, the land now in controversy., - A return of this selection was made to the General Land-Office the 23d October, 1828. This return contained other tracts not made as required by the law, and consequently the list was returned to the Register for correction. The errors being corrected the list was again returned to the General Land-Office. • Dut afterwards, in 1832, a circular from the Land-Office was directed to the Register, accompanied by a printed form and directions so that the returns of lands selected should be uniform. The tracts selected were required to be noted and reserved from sale. Where good land could not be procured in the township, the selection was authorized to be made in the nearest adjacent township which contained good land. The land above selected is not' in township No. 1, range No. 19,- nor in the next adjacent township; but in the nearest, adjacent township in which good land could be procured. .

• In pursuance of the above instruction, the Register withheld the land from sale.' On the 7th March, 1833, he informed the Commissioner that “ some of the selections which he had reported were half quarter sections, and that others did not lie “either in the township or in the nearest adjacent township, where^ good land exists,”, “ wffiich are not in accordance urith the general rules laid down in the Commissioner’s last circular; ” and he says, “ I have withheld from sale all the lands selected which were embraced in my two reports,” and he inquires whether the fact of his having reported them takes them out of the general rule prescribed for his government; and whether he should consider all the selections heretofore made, and have them made in exact conformity to the instructions.”

In answer to the above the Commissioner says, “ on the subject of the school lands, selected by you in 1831, I have to state that, as there has been no action of the department on these selections, you are at liberty to withdraw them and select other lands in their stead, in conformity to my circular of the 30th August, 1832.”

Under this letter, it seems, the Register permitted Hamilton to enter the land in controversy; but no other school land was selected in lieu of it. On this entry being made the school trustees of the township appealed to the Secretary of the Treasury, against the sale of the land, and claimed the original selection. And the same being laid before the Secretary, he sanctioned and confirmed the original selection. This was done the 9th January, 1834.

The decision, of this case must depend upon the validity of Hamilton’s entry. He had full notice that the quarter section had been selected for school purposes, and was reserved from sale. This information was given him by the Register on his first application to enter it. He then endeavored to purchase it from the trustees. The selection' of that tract was. made, at first, as the law required, though other tracts on the same list had not been so selected.

The entry by Hamilton may have been permitted by the Register, throughdnadvertence or mistake. This supposition is at least as probable, and indeed more so, than that he withdrew the selection and failed in his duty to select another tract in place of it. But, in whatever light this may be viewed, we are clear, that the Secretary of the Treasury had the power, under the act of Congress, to make the selection ; and his decision, declaring the entry of Hamilton invalid, was, under the circumstances, conclusive. This tract, selected by the Secretary under the act of 1826, “ is held by the same tenure, as provided in the second section' of that act, and upon the same terms for the support of schools, in such towriship, as section number sixteen is held.” 'By the act of the 3d March, 1803, it is declared that lands appropriated for schools, shall be vested in the legislature of the State in trust &c.; and in the same act section number sixteen, in each township, was designated for school purposes. If, therefore the quarter section in dispute was legally selected for school purposes, the legal title .became vested in the Legislature of Ohio. '

The general duties of the Commissioner of the General Land-Office are.required to be performed “ under the direction of the head of the Treasury Department.” And where a duty is especially enjoined on the Secretary of the Treasury, although he may perform it through the Commissioner of the General Land-Office, who may well be presumed to act under his authority where the contrary does not appear; yet where the Secretary has interposed and decided the matter, as in the case under consideration, his decision must be considered as the only one under the law." So far then, as the sanction of the Secretary was given to the appropriation of the land in dispute, to school purposes, .it must be considered as a valid appropriation.

. This view imposes no hardship on Hamilton, as he had notice of the tract selected, and his repeated attempts to purchase the same land cannot be favorably considered by the court. Under the circumstances, no right became vested in him, by reason of his entry of the land, which could be regarded or enforced by a court of equity. The judgment of the State court is, therefore, affirmed.

Order.

This cause came on to be heard on thé transcript of the record, from the Supreme Court of the State of Ohio, and was argued by counsel;- On consideration whereof, it is now here ordered, and adjudged, by this court, that the judgment of the said Supreme Court in this cause, be, and the same is hereby, affirmed, with costs.