text:
United States v. Carey Jones/Opinion of the Court

This was a petition for the confirmation of a land claim under the act of the third of March, 1851, and the case comes before the court upon appeal from a decree of the District Court of the United States for the Southern District of California. Appellee claims the land and property in question as purchaser from Antonio Jos e Cot and Jos e Antonio Pico, who, as he alleges, were the original grantees of the same under the departmental government of California. Claim is for the mission of San Luis Rey, situated in the County of San Diego, including the rancho of Palas, and is bounded as follows: North by Santa Margarita, east by the Sierra of Rauma, south by the rancho of San Francisco, and west by the sea-shore, excepting all prior valid grants within the specified boundaries. Title is claimed by virtue of an alleged sale of the property made under the authority of the governor of the department. Grant made in pursuance of the sale is dated at Los Angeles, on the eighteenth day of May, 1846, and purports to have been executed in payment of two thousand dollars in money and four hundred and thirty-seven dollars and fifty cents in grain, with which the grantees had assisted the government in its exigencies, they obligating themselves to satisfy the debt of the mission in produce within four years.

I. Concession is accordingly made of the property to the grantees 'in virtue of the faculties with which I find myself invested,' but the governor does not condescend to explain what those faculties were, or whence they were derived. Whether the sale was made at private or public sale does not appear, nor in the view taken of the case is it of any importance to inquire. Deposition of the governor was taken to prove the authenticity of the grant, and he testified that his signature appearing in the paper was his genuine signature. Question was put directly to the witness, whether the grant was made in virtue of the colonization law of the eighteenth of August, 1824, or of the regulations of the twenty-first of November, 1828, but his answer was evasive and unsatisfactory. He said the sale was made in virtue of what is expressed in the document itself; that the government made the sale by virtue of the authority with which it considered itself clothed from the Supreme Government, and upon the motives and considerations expressed in the document. He admitted that the governor had not received any special authority to make the particular sale in this case, but endeavored to weaken the force of the admission by adding that he had received special instructions to provide means for the defence of the country by extraordinary efforts and every sacrifice. Instead of claiming that the power to make the grant emanated from the Departmental Assembly, as was claimed in the preceding case, he stated expressly that he did not think the approval of that Assembly was necessary to the validity of the grant. Evidence was also offered by the claimant to show that the original grantees took possession of the property and remained in possession until it was delivered to the agent of the United States.

II. Commissioners confirmed the claim, and the United States appealed to the District Court, where the decree of the commissioners was affirmed. Whereupon the United States appealed to this court. Propositions discussed in the case are substantially the same as those presented in the case just decided, and for the reasons there suggested it will only be necessary to determine the question of power. When the governor stated in his deposition that he considered the local government clothed with authority from the Supreme Government, he doubtless referred to the despatch of the Minister of War, of the tenth of March, 1846, and also perhaps to the proclamation of the President, which bears date three days later; but the views of the court have been so decidedly expressed upon that subject in the preceding case, that it seems unnecessary to add anything to what was then remarked. Suffice it to say, that we are all of the opinion that the documents will bear no such construction, nor do they afford any substantial support to any such proposition. Taken as a whole, the case is governed by the same principles as the preceding case, and we refer to the reasons there given for our conclusion in this case,-that the governor of the department had no authority to make the grant.

The decree of the District Court is therefore reversed, and the cause remanded with directions to

DISMISS THE PETITION.


text: Talk:United States v. Carey Jones/Opinion of the Court

license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


text:
Page:Cournot Theory of Wealth (1838).djvu/22

 8 of individuals and of families; but such an idea of wealth as we draw from our advanced state of civilization, and such as is necessary to give rise to a theory, can only be slowly developed as a consequence of the progress of commercial relations, and of the gradual reaction of those relations on civil institutions.

A shepherd is in possession of a vast pasture ground, and no one can disturb him with impunity; but it would be vain for him to think of exchanging it for something which he might prefer; there is nothing in existing habits and customs to make such an exchange possible; this man is a landholder, but he is not rich.

The same shepherd has cattle and milk in abundance; he can provide for a numerous retinue of servants and slaves; he maintains a generous hospitality towards poor dependents; but he is neither able to accumulate his products, nor to exchange them for objects of luxury which do not exist; this man has power, authority, the enjoyments which belong to his position, but he has not wealth.

2. It is inconceivable that men should live for a considerable time near together without effecting an exchange of goods and services; but from this natural, and we may even say instinctive, action, it is a long step to the abstract idea of value in exchange, which supposes that the objects to which such value is attributed are in commercial circulation; i.e. that it is always possible to find means to exchange them for other objects of equal value. The things, then, to which the state of commercial relations and civil institutions permits a value in exchange to be attached, are those which in the language of to-day are characterized by the word


text:
Page:Cournot Theory of Wealth (1838).djvu/23

 Rh wealth; and to form an intelligible theory we ought to absolutely identify the sense of the word wealth with that which is presented to us by the words exchangeable values.

Under this conception, wealth has doubtless only an abstract existence; for, strictly speaking, of all the things on which we set a price, or to which we attribute a value in exchange, there are none always exchangeable at will for any other commodity of equal price or value. In the act of exchange, as in the transmission of power by machinery, there is friction to be overcome, losses which must be borne, and limits which cannot be exceeded. The proprietor of a great forest is only rich on condition of managing his lumbering with prudence, and of not glutting the market with his lumber; the owner of a valuable picture gallery may spend his life in the vain attempt to find purchasers; while, on the other hand, in the neighbourhood of a city the conversion of a sack of grain into money will only require the time necessary to carry it to the grain market; and at great commercial centres a stock of coffee can always be sold on the exchange.

The extension of commerce and the development of commercial facilities tend to bring the actual condition of affairs nearer and nearer to this order of abstract conceptions, on which alone theoretical calculations can be based, in the same way as the skilful engineer approaches nearer to theoretical conditions by diminishing friction through polished bearings and accurate gearing. In this way nations are said to make progress in the commercial or mercantile system. These two expressions are etymologically equivalent, but one is now taken in a good and the other in a bad sense, as is generally the case, according to Bentham, with the names of things that involve advantages and evils of a moral order.


text:
Page:Cournot Theory of Wealth (1838).djvu/24

 10 We will not take up either these advantages or these evils. The progress of nations in the commercial system is a fact in the face of which all discussion of its desirability becomes idle; our part is to observe, and not to criticise, the irresistible laws of nature. Whatever man can measure, calculate, and systematize, ultimately becomes the object of measurement, calculation, and system. Wherever fixed relations can replace indeterminate, the substitution finally takes place. It is thus that the sciences and all human institutions are organized. The use of coin, which has been handed down to us from remote antiquity, has powerfully aided the progress of commercial organization, as the art of making glass helped many discoveries in astronomy and physics; but commercial organization is not essentially bound to the use of the monetary metals. All means are good which tend to facilitate exchange, to fix value in exchange; and there is reason to believe that in the further development of this organization the monetary metals will play a part of gradually diminishing importance.

3. The abstract idea of wealth or of value in exchange, a definite idea, and consequently susceptible of rigorous treatment in combinations, must be carefully distinguished from the accessory ideas of utility, scarcity, and suitability to the needs and enjoyments of mankind, which the word wealth still suggests in common speech. These ideas are variable, and by nature indeterminate, and consequently ill suited for the foundation of a scientific theory. The division of economists into schools, and the war waged between practical men and theorists, have arisen in large measure from the ambiguity of the word wealth in ordinary speech, and the


text: Dictionary of National Biography, 1885-1900/Lola Montez


text: Dictionary of National Biography, 1885-1900/Lombard, Daniel


text: Dictionary of National Biography, 1885-1900/Lombard, Peter


text:
Page:Cournot Theory of Wealth (1838).djvu/25

 Rh confusion which has continued to obtain between the fixed, definite idea of value in exchange, and the ideas of utility which every one estimates in his own way, because there is no fixed standard for the utility of things.

It has sometimes happened that a publisher, having in store an unsalable stock of some work, useful and sought after by connoisseurs, but of which too many copies were originally printed in view of the class of readers for whom it was intended, has sacrificed and destroyed two-thirds of the number, expecting to derive more profit from the remainder than firom the entire edition.

There is no doubt that there might be a book of which it would be easier to sell a thousand copies at sixty francs, than three thousand at twenty francs. Calculating in this way, the Dutch Company is said to have caused the destruction in the islands of the Sound of a part of the precious spices of which it had a monopoly. Here is a complete destruction of objects to which the word wealth is applied because they are both sought after, and not easily obtainable. Here is a miserly, selfish act, evidently opposed to the interests of society; and yet it is nevertheless evident that this sordid act, this actual destruction, is a real creation of wealth in the commercial sense of the word. The


text:
Dermott v. Jones (69 U.S. 1)

JONES, a mason and house-builder, contracted with Miss Dermott to build a house for her, the soil on which the house was to be built being her own. The house was to be built according to very detailed plans and specifications, which the 'architect' of Miss Dermott had prepared, and which were made part of the contract. In the contract, Jones covernanted that he would procure and supply all matters requisite for the execution of the work 'in all its parts and details, and for the complete finish and fitting for use and occupation of all the houses and buildings, and the several apartments of the house and buildings, to be erected pursuant to the plan of the work described and specified in the said schedule; and that the work, and the several parts and parcels thereof, shall be executed, finished, and ready for use and occupation, and be delivered over, so finished and ready,' at a day fixed. Jones built the house according to the specifications, except in so far as Miss Dermott had compelled him,-according to his account of things,-to deviate from them. Owing, however, to a latent defect in the soil, the foundation sank, the building became badly cracked, uninhabitable, and so dangerous to passersby, that Miss Dermott was compelled to take it down, to renew the foundation with artificial 'floats,' and to rebuild that part of the structure which had given way. This she did at a large expense. As finished on the artificial foundations the building was perfect.

Jones having sued Miss Dermott, in the Federal Court for the District of Columbia, for the price of building, her counsel asked the court to charge that she was entitled to 'recoup' the amount which it was necessary for her to expend in order to render the cracked part of the house fit for use and occupation according to the plan and specifications; an instruction which the court refused to give. The court considered, apparently, that even under the covenant made by Jones, and above recited, he was not responsible for injury resulting from inherent defects in the ground, the same having been Miss Dermott's own; and judgment went accordingly. Error was taken here. Some other questions were presented in the course of the trial below, and referred to here; as, for example, How far, when a special contract has been made, a plaintiff must sue upon it? how far he may recover in a case where, as was said to have been the fact here, the plaintiff had abandoned his work, leaving it unfinished? how far 'acceptance,'-when such acceptance consisted only in a party's treating as her own a house built on her ground,-waives non-fulfilment, there being no bad faith in the matter? and some questions of a kindred kind. The most important question in the case, however, was the refusal of the court to charge, as requested, in regard to the 'recoupment:' and the correctness of that refusal rested upon the effect of Jones's covenant to deliver, fit for use and occupation, in connection with the latent defect of soil upon which the foundation was built.

Messrs. Carlisle and Davidge for the builder: In all cases of locatio operis faciendi, where a workman undertakes to incorporate his work and materials with the property of another, and loss is sustained in consequence of some inherent defect in the property, the loss falls upon the employer. The maxim of res perit domino applies. Pothier, according to Story, thus declares the law of France. It is also Scotch law. By it, if the workman is employed in working the materials, or adding his labor to the property of the employer, the risk belongs to the owner of the thing with which the labor is incorporated. The employer, by the code of France, is the guarantor of the thing upon which the work and materials of the workman are to be expended: the code of Louisiana adopts the same rule: and the common law is the same. 'If the loss in bad execution,' says Kent, 'is not properly attributable to the fault or unskilfulness of the undertaker, or those employed by him, but arises from the inherent defect of the thing itself; in such a case the loss is to be borne by the employer, unless there is some agreement by which the risk is taken by the undertaker.'

Undoubtedly the plaintiff might have assumed the extraordinary responsibility alleged; but, unless it be clearly shown that he did so, the presumption is that he contracted for no more than the sort and degree of skill and diligence belonging to his trade. His covenant is not the stipulation of an insurer of anything, but is a stipulation to give his own skill, fidelity, and diligence in the prosecution of work undertaken in pursuance of prescribed specifications and plans. Miss Dermott purchased, by the contract, the skill and diligence of Jones, in supplying the work and materials stipulated, and also his judgment, so far as involved in the work and materials. But she never bought his judgment, as regarded the plans and specifications. He was never consulted about them. On the contrary, they were prepared by her architect, and put in his hands to work by. If he deviated from them, he was guilty of a breach of contract, for which he was responsible. His business was to work by, not to override them.

It is thus apparent that the present case is not one where an architect, employed to furnish plans and specifications, is guilty of neglect, and of not exercising that degree of skill and judgment which the employer prays; but is a case where a mechanic is employed to supply work and materials according to plans and specifications which he is bound to follow. The rule of law is that a party is responsible for the ordinary degree of skill belonging to his trade or profession. But Jones was not an engineer or architect, but, as the case states, 'a mason and house-builder.' Nor did Miss Dermott treat with him in any other character than that of a mechanic, competent, not to plan, but to carry out her plans. She employed an architect, by whom the plans and specifications were prepared. Her remedy, then, for any defects in the plans and specifications, was by suit against the architect, not by recoupment against Jones. The architect should have ascertained, if necessary, by boring or otherwise, whether they were practicable.

Messrs. Poe and Brent contra: The counsel of the other side do not cite one adjudged case in support of their view. The speculations of Pothier, the dicta of Story, or even the abstract opinions of Bell and Kent, are not 'authority' anywhere, and ought not to be cited.

The theory of the other side makes the proprietor of the ground an insurer to the builder of the stability and solidity of the soil on which such builder contracts to build work. We might deny the soundness of such a doctrine in any case of a contract to build a house, where the payment of the price is to be made when the work is done; because a man cannot be said to build anything which falls down before he completes it. But, whatever may be the general rule, we rely, in the case here, upon the contract that this plaintiff will furnish every material and thing requisite to complete and finish these buildings fit for use and occupation. He does not merely covenant (as contended on the other side) to execute these specifications, but he superadds the contract that he will, over and above executing these, furnish everything necessary to complete it fit for use and occupation, and will deliver it finished and ready for occupation. The law, in cases like this, is settled and reported law from at least A.D. 1670, and from the leading case of Paradine v. Jayne, given us by the old reporter Alleyn, in 23d Charles II. The defendant there had taken a lease, covenanting to pay rent. He pleaded 'that a certain German prince, by name Prince Rupert, an alien born, enemy to the king and kingdom, had invaded the realm with a hostile army of men, and with the same force did enter upon the defendant's possession and him expelled, whereby he could not take the profits.' On demurrer, the court resolved 'that the matter of the plea was insufficient,' and that 'he ought to pay his rent.' 'And this difference,' says Alleyn, 'was taken: that where the law creates a duty or charge, and the party is disabled to perform it without any default in him, and hath no remedy over, there the law will excuse him. . . .. But where a party by his own contract creates a duty or charge upon himself, he is bound to make it good, if he may, notwithstanding any accident by inevitable necessity, because he might have provided against it by his contract. And, therefore, if the lessee covenant to repair a house, though it be burnt by lightning or thrown down by enemies, yet he ought to repair it;' and the report ends by declaring that where there is a covenant to pay, 'though the land be surrounded or gained by the sea, or made barren by wild-fire, yet the lessor shall have his whole rent;' and judgment went accordingly. This case has been always followed in England. American decisions are to the same general purpose, to wit, that a man must fulfil covenants deliberately made. Without citing earlier ones, or quoting at large even a late one in New York, we refer to one of the very latest, where the best cases, both English and American, are collected. We mean School Trustees v. Bennett, in New Jersey, a case which, like our own, was the case of building a house. This case is specially in point, or at least specially strong, for the house was there twice destroyed by natural causes. In the first instance, when it was half way towards completion, 'a violent gale of wind arose suddenly, without any of the usual premonitory signs of a storm, and prostrated the building:' afterwards, and when rebuilt, 'it fell, solely on account of the soil having become soft and miry;' though, at the time the foundations were laid, the soil was 'so hard as to be penetrated with difficulty by the pickaxe,' and its defects were latent; the softness having arisen, as was suggested, by the rising of springs; at any rate from 'natural causes wholly beyond the control of the contractors.' The court, however, was resolute, and decided that 'if a person contract with the owner of a lot to build and complete a building on a certain lot, and, by reason of a latent defect in the soil, the building falls down before it is completed, the loss falls upon the contractor;' and decided even, as in the case in New York, that the owner of the soil may recover back payments which he has made on account. The court reviewed the authorities from Paradine v. Jayne, in old Alleyn, down; and say, finally, 'No matter how harsh and apparently unjust in its operation the rule may occasionally be, it cannot be denied that it has its foundation in good sense and inflexible honesty. He that agrees to do an act should do it, unless absolutely impossible. He should provide against contingencies in his contract. . . .. The cases make no distinction between accidents that could be foreseen when the contract was entered into, and those that could not have been; they all rest upon the simple principle, 'such is the agreement,' clear and unqualified, and it must be performed, no matter what the cost, if performance be not absolutely impossible.'

Mr. Justice SWAYNE delivered the opinion of the court:

title: Dermott v. Jones (69 U.S. 1)


text: Talk:Dermott v. Jones (69 U.S. 1)

title: Talk:Dermott v. Jones (69 U.S. 1)


text:
Dermott v. Jones (69 U.S. 1)/Opinion of the Court

The defendant in error insists that all the work he was required to do is set forth in the specifications, and that, having fulfilled his contract in a workmanlike manner, he is not responsible for defects arising from a cause of which he was ignorant, and which he had no agency in producing.

Without examining the soundness of this proposition, it is sufficient to say that such is not the state of the case. The specifications and the instrument to which they are annexed constitute the contract. They make a common context, and must be construed together. In that instrument the defendant in error made a covenant. That covenant it was his duty to fulfil, and he was bound to do whatever was necessary to its performance. Against the hardship of the case he might have guarded by a provision in the contract. Not having done so, it is not in the power of this court to relieve him. He did not make that part of the building 'fit for use and occupation.' It could not be occupied with safety to the lives of the inmates. It is a well-settled rule of law, that if a party by his contract charge himself with an obligation possible to be performed, he must make it good, unless its performance is rendered impossible by the act of God, the law, or the other party. Unforeseen difficulties, however great, will not excuse him.

The application of this principle to the class of cases to which the one under consideration belongs is equally well settled. If a tenant agree to repair, and the tenement be burned down, he is bound to rebuild. A company agreed to build a bridge in a substantial manner, and to keep it in repair for a certain time. A flood carried it away. It was held that the company was bound to rebuild. A person contracted to build a house upon the land of another. Before it was completed it was destroyed by fire. It was held that he was not thereby excused from the performance of his contract. A party contracted to erect and complete a building on a certain lot. By reason of a latent defect in soil the building fell down before it was completed. It was held (School Trustees v. Bennett, a case in New Jersey, cited by counsel), that the loss must be borne by the contractor. The analogies between the case last cited and the one under consideration are very striking. There is scarcely a remark in the judgment of the court in that case that does not apply here. Under such circumstances equity cannot interpose.

The principle which controlled the decision of the cases referred to rests upon a solid foundation of reason and justice. It regards the sanctity of contracts. It requires parties to do what they have agreed to do. If unexpected impediments lie in the way, and a loss must ensue, it leaves the loss where the contract places it. If the parties have made no provision for a dispensation, the rule of law gives none. It does not allow a contract fairly made to be annulled, and it does not permit to be interpolated what the parties themselves have not stipulated.

We are of opinion that the plaintiff below was entitled to recover, but that the court, in denying to the defendant the right of recoupment, committed an error which is fatal to the judgment.

We might here terminate our examination of the case; but as it will doubtless be tried again,-and the record presents several other points to which our attention has been directed,-we deem it proper to express our views upon such of them as seem to be material.

While a special contract remains executory the plaintiff must sue upon it. When it has been fully executed according to its terms, and nothing remains to be done but the payment of the price, he may sue on the contract, or in indebitatus assumpsit, and rely upon the common counts. In either case the contract will determine the rights of the parties.

When he has been guilty of fraud, or has wilfully abandoned the work, leaving it unfinished, he cannot recover in any form of action. Where he has in good faith fulfilled, but not in the manner or not within the time prescribed by the contract, and the other party has sanctioned or accepted the work, he may recover upon the common counts in indebitatus assumpsit.

He must produce the contract upon the trial, and it will be applied as far as it can be traced; but if, by the fault of the defendant, the cost of the work or materials has been increased, in so far, the jury will be warranted in departing from the contract prices. In such cases the defendant is entitled to recoup for the damages he may have sustained by the plaintiff's deviations from the contract, not induced by himself, both as to the manner and time of the performance.

There is great conflict and confusion in the authorities upon this subject. The propositions we have laid down are reasonable and just, and they are sustained by a preponderance of the best considered adjudications.

JUDGMENT REVERSED, and the cause remanded for further proceedings in conformity with this opinion.


text: Talk:Dermott v. Jones (69 U.S. 1)/Opinion of the Court


text:
Hawthorne v. Calef

THE Constitution of the United States ordains that 'no State shall pass any law impairing the obligation of contracts.' With this provision in force, the State of Maine, on the 1st April, 1836, incorporated a railroad company; the charter providing that 'the shares of the individual stockholders should be liable for the debts of the corporation.' 'And in case of deficiency of attachable corporate property or estate,' the provision went on to say, 'the individual property, rights, and credits of any stockholder shall be liable to the amount of his stock, for all debts of the corporation contracted prior to the transfer thereof, for the term of six months after judgment recovered against said corporation; and the same may be taken in execution on said judgment, in the same manner as if said judgment and execution were against him individually; OR, said creditor, after said judgment, may have his action on the case against said individual stockholder; but in no case shall the property, rights, and credits of said stockholder be taken in execution, or attached as aforesaid, beyond the amount of his said stock.' Another section provides, that if sufficient corporate property to satisfy the execution could not be found, the officer having the execution should certify the deficiency on the execution, and give notice thereof to the stockholder whose property he was about to take; and if such stockholder should show to the creditor or officer sufficient attachable corporate property to satisfy the debt, 'his individual property, rights, and credits shall thereupon be exempt from attachment and execution.'

The plaintiff, Hawthorne, who had supplied the corporation, then embarrassed and insolvent, with materials to build its road, having obtained judgment as a creditor against it, and being unable to get from it satisfaction (the company having, in fact, no property), sued the defendant, Calef, who was a stockholder, both at the time when the debt was contracted and when judgment for it was rendered; and no transfer of whose stock had been made. A few months after the debt was contracted, the legislature of Maine passed a statute repealing the 'individual liability' clause of the charter.

On a question before the Supreme Court of Maine,-the highest court of law in that State,-whether such repeal was or was not repugnant to the clause, above cited, of the Constitution, that court held that it was not; that the original provision,-not making the stockholder personally liable in any way,-did not constitute a 'contract' between the creditor and him, within the meaning of the Constitution; and that, while, but for the repealing act, the plaintiff would have been entitled to recover of the stockholder individually to the extent of his stock, this repealing act had taken away and destroyed such right.

Judgment being given accordingly, by the said court, in favor of the State statute, the correctness of such judgment was now, on error, before this court.

Mr. Curtis, for the creditor, Hawthorne: A charter is a contract between the State and the corporation; but not necessarily between them only. If it contain provisions on which third persons are invited to give credit, and which hold out assurances to them that if they will give credit a certain fund, or certain persons, will become responsible, such assurances, when accepted and acted on, become a contract, the obligation of which is protected by the Constitution. Thus in Woodruff v. Trapnal, a charter contained the assurance that the bills of a bank would be accepted in payment of public dues. This was held to create a contract with all persons who should receive the bills while the assurance remained unrepealed. So in Curran v. The State of Arkansas, the charter of a bank contained an assurance that a certain fund should be responsible for the debts of the bank, and this was held to amount to a contract with creditors not to divert that fund from the payment of their debts. It has been held by the courts of New York, that such an act of incorporation as this is leaves the stockholders to stand as original contractors, and liable, as such original contractors, for the debts of the corporation; and the fact that the legislature has required the remedy against the corporation to be exhausted before proceeding against the stockholder does not vary the nature or ground of his liability. In Corning v. McCullough, the court say:

'The original stockholders, by their acceptance of the charter, and subsequent purchasers in becoming members, assented and agreed to the terms and conditions of the act of incorporation. The defendant in this suit, in common with the other stockholders, by his acceptance of the charter, agreed to its terms, and especially to that feature of it so strongly marked, of the individual liability of the stockholders, equally with that of the corporate body, for the debts of the company. It is a liability which every stockholder must be understood to assume and take upon himself, and to be under to those who deal with the company. Dealers contract with the corporation on the faith of that security for the performance of the contract. The credit they give is given, and they trust as well to the personal liability of the stockholders, as to the responsibility of the corporation, for the fulfilment of the engagement; and each stockholder incurs that liability to the creditor the moment the contract of such creditor with the company is consummated.'

In Conant v. Van Schaick, the question now under consideration arose; and it was held that a law repealing the liability of stockholders was inoperative as to existing creditors, because it would impair the obligation of their contracts.

Even if it should be held that no contract existed with the plaintiff, save his contract with the corporation; still, the law in question did impair the obligation of that contract. When the debts were contracted the plaintiff had two remedies: one against the corporation, the other against the stockholders. The former was, and was known to be, wholly useless; the latter was sufficient and effectual; and the law in question has destroyed this sole efficient and effectual remedy, and substituted no other in its place. Such a law impairs the obligation of the contract, to enforce which the remedy was given. The principle which is decisive of this case, was laid down in Green v. Biddle. That principle is, that a law, which so changes the nature and extent of existing remedies as materially to impair the rights of the creditor, impairs the obligation of his contract.

In Bronson v. Kinzie, the State law restrained the creditor from cutting off the right of redemption of mortgaged property, by a sale under a power contained in the mortgage; and gave twelve months, after such sale, to redeem the property. It did not affect the plaintiff's right of action against the debtor to recover the debt. It did not release the property held as collateral security for the debt; but it encumbered the remedy of the creditor upon his collateral security, so as materially to impair it. For this reason the law was held invalid.

In the case at bar, while the law in question does not affect the plaintiff's right of action against an insolvent corporation which contracted the debt, it deprives him of all recourse to his remedy on the property of the stockholders, which the charter had made liable for the debt. The difference between the two cases is, that, in the case decided, the collateral remedy for the debt was only materially impaired; in the case at bar it is destroyed.

In McCracken v. Hayward, it was decided that a law prohibiting property from being sold on execution for less than two-thirds of its appraised value, so impaired the remedy as to be invalid, upon the ground that, when the contract was made, the creditor had the absolute right to levy his execution and sell the property of the debtor. Now in the case at bar, the charter of the corporation and the law of the State had conferred on the creditor the right to levy his execution on the property of the stockholders, or to subject their property to the payment of the debt by an action on the case. These laws of the State had, in the language of the court, created this right, and attached it to the contract; it was part of its obligation. As was said by the court, in Curran v. The State of Arkansas, 'The obligation of a contract, in the sense in which these words are used in the Constitution, is that duty of performing it which is recognized and enforced by the laws. And if the law is so changed, that the means of legally enforcing this duty are materially impaired, the obligation of the contract no longer remains the same.'

Mr. Shepley, contra, for the stockholder, Calef: There was no privity of contract between the creditors of the corporation and the individual members. They are, therefore, not personally liable, unless this liability is expressly imposed by statute. 'Such liability,' says Shaw, C. J., in Gray v. Coffin, 'is a wide departure from the established rules of law, and is, therefore, to be construed strictly, and is not to be extended beyond the limits to which it is carried by positive provisions of the statute.'

Then the provisions relied on to give this personal responsibility recognize the corporation as an entity, capable of contracting debts; and these are its debts, and not the debts of any other party. No other person is made liable for them; nor is even any other thing made liable for them, originally, or absolutely, or wholly, or permanently. 'The shares of individual stockholders shall be liable for the debts of the corporation.' And only in case of deficiency of attachable corporate property, the individual property, rights, and credits of any stockholder shall be liable, to the amount of his stock. This property might be taken on the execution, which had been issued on the judgment against the corporation, to which the stockholder was no party; OR, the creditor might have his action on the case, on the statute; manifestly to reach, by the process of foreign attachment, the 'rights and credits,' which could not be reached by the execution against the corporation. But in no case could property, rights, and credits of a stockholder be taken in execution or attached, beyond the amount of his stock. And the stockholder could exempt his property entirely from the execution and attachment, by disclosing and showing sufficient attachable corporate property.

In all this, there is no recognition of any contract on the part of the stockholder, or liability under contract. The remedy, to enforce whatever liability the statute creates, excludes the theory of contract. It is a statute remedy, to enforce a statute burden against the property of the stockholder.

What, then, the plaintiff had, was a remedy created by statute. And the legislature has power to take away by statute that remedy which statute alone gave. The exception is, that it may not take away vested rights. But the rights of a party, when they exist only to the extent of statute remedy, are not vested until after judgment.

It will be conceded that the legislature might take away and destroy all legal process for compelling the corporation to perform its contract, and still leave the liability of the stockholder's property, and the creditor's statute right against that, unimpaired. So it may take away and destroy all power to enforce any rights against the stockholders, or their property, and leave the obligation of the corporation's contract unimpaired.

The obligation of the maker of a promissory note is different from that of the indorser or guarantor of the same note. But the holder has two remedies,-one against the maker, the other against the indorser or guarantor. A law which should take away the remedy against the indorser or guarantor, would not impair the obligation of the maker's contract expressed in the note,-though it would impair the obligation of the contract with the indorser or guarantor. If, now, the liability of the indorser or guarantor, instead of arising from a contract, were arbitrarily imposed by a statute, which declared, that whenever a promissory note was made for a good consideration, certain relatives of the maker, or neighbors, or religious, or literary, or political, or business associates of his, should be liable, as guarantors or indorsers of such note, who would be bold enough to contend, that the repeal of such statutory liability would impair the obligation of the contract between the maker and the payee of such note? It would add no strength to an argument in support of such a proposition, to say, that when the payee of the note parted with the consideration for it, he trusted to this liability which the statute imposed; or that the maker was insolvent, and the remedy against him was insufficient and useless, and that the repeal of the statute liability of the other persons had taken away and destroyed the only sufficient remedy which the payee had.

As respects the authorities cited by Mr. Curtis: Woodruff v. Trapnal, and Curran v. The State of Arkansas, were both decisions on the same charter, that of an Arkansas bank, and both rested upon special facts.

The legislature of Arkansas had chartered a banking corporation, of which the State was the sole owner; and in the charter had declared that the bills of this bank, which was nothing but an agent of the State itself, should be received in payment of debts due to the State. The bank, by its charter, was simply a convenient agent of the State to negotiate between the State and third parties, and its bills were substantially bills of the State of Arkansas.

Speaking in another case of its own decision, in Woodruff v. Trapnal, this court has said:

'We held that the charter constituted a contract between the State and the holder of the bills of the bank; that the pledge of the State to receive the notes of the bank, in payment of debts, was a standing guarantee, which embraced all the paper issued by the bank until the guarantee was repealed: and that this construction was founded upon the fact, that the bank belonged exclusively to the State, was conducted by its officers, and for its benefit. That, in this respect, the obligation of the contract applied to a State equally as to an individual; and that as to the binding force of a similar guarantee by an individual, there would seem to be no ground for doubt.'

To make the case at bar analogous to this, the stockholders of our railroad company should be the supreme power which chartered the company; so that the charter, instead of being a contract between the State and the stockholders, should be a contract between the stockholders who created it, and the community who accepted and acted upon its guarantees, voluntarily inserted in it by these stockholders. The State of Arkansas had, in the cases relied on, promised to receive the bills of their bank, expressly, by its charter, made by the State. The stockholders of this railroad company simply submitted to liabilities and duties,' to which the legislature compelled them to be subject.'

The New York decisions furnish still less support to the plaintiff's counsel. The passage from the opinion in Corning v. McCullough, in its reasoning, does, indeed, prim a facie, sustain this position; and if, as the counsel affirms, this reasoning were predicated upon 'such'' an act of incorporation' as that which incorporated the railroad company in Maine, it would have some weight, though it would not, to this court, be an authority. But the language of the charter there was, 'that the stockholders of the corporation shall be, jointly and severally, personally liable for the payment of all debts and demands contracted by the corporation.' By their charter, those stockholders were liable for the payment of all debts and demands, not of the corporation, but contracted by the corporation. They were the stockholders' debts, as well as the debts of the corporation,-contracted by the corporation, as if it were the agent of the stockholders. The stockholders were liable; not the 'property, rights, and credits' of the stockholders, nor their 'shares'',' but the men themselves. They were liable for the payment of all debts and demands; not to the amount of their stock or shares which they severally owned, only. They were liable in the first instance, at the very creation of the debt or demand; not only in case of deficiency of corporate property. They were liable permanently; as long as the debt remained a debt; not for a year only after the transfer of their stock, or six months after judgment recovered against the corporation, on a suit brought within such year; but forever, if the debt was kept alive; without any power of exonerating themselves by showing corporate property.

When Conant v. Van Schaick-the other New York case relied on was decided, a general statute of the State had created certain corporations, by language precisely identical with that in the charter considered in Corning v. McCullough; and the liability of stockholders of one of these corporations was, on the authority of Corning v. McCullough, held to rest on a contract, at common law, and, therefore, a statute repealing such liability was held to impair the obligation of a contract.

Reply: The only question is, whether, when the repealing law destroyed the existing right of action by the plaintiff against the defendant to recover from him the amount of the debt due to him from the corporation, it impaired the obligation of a contract? One argument of the other side is, that the right of the plaintiff was created by statute; that the legislature have power to take away by statute what was given by statute, except vested rights; and that the right of a party when it exists only by statute, does not become vested till after judgment. But this is erroneous doctrine when applied to this case.

1. The right of the plaintiff was not created by statute, and did not exist 'only by statute.' It is true there was a statute in existence which enacted that if the plaintiff should sell merchandise to a corporation which should fail to pay for it, he should have a right of action against any one of its stockholders to recover its price, to the amount of his stock. But this law did not create the plaintiff's right. This plaintiff parted with his merchandise to an insolvent corporation on the faith of this liability which the defendant, by taking stock, had assented to be subject to. The only effect of the law was to apprise the parties that if such a sale should be made, the defendant would come under a legal obligation to the plaintiff to pay the debt, and to create that legal obligation upon the sale; just as the law apprises the vendee of goods, that he will come under a legal obligation to the vendor for the price, and creates that legal obligation on the sale. The right in neither case is created by the law alone; but in both cases the law does create the legal obligation; and in one case just as entirely as in the other. It may be true that a statute may take away what a statute has given, except vested rights. But the question still remains whether this plaintiff had not a vested right to the obligation of the defendant, and to some adequate remedy to enforce that obligation. In McCracken v. Hayward the right of the plaintiff to sell the defendant's property on execution was given by a State law. Yet it could not be taken away or impaired by a State law, because the creditor had a vested right to some adequate remedy, such as existed when his contract was made. This plaintiff sold his property to an insolvent corporation on the faith of the obligation of the defendant to pay for it, and of the remedy the law then allowed him to enforce the obligation of the defendant to perform the contract.

If A. is under a complete legal obligation to B. to perform the contract of C., which B. can enforce by an action against A., and which contract B. made on the faith of A.'s obligation to perform it, has not B. a vested right to have A. perform the contract? and can A.'s obligation be released by law without impairing the obligation of a contract, within the meaning of the Constitution? It is A.'s duty to perform the contract. That duty is recognized and enforced by the law. The law is so changed that this duty can no longer be enforced. The obligation of the contract which A. was under is released. Is it any answer that C., an insolvent debtor, is yet under the obligation of the contract? The contract created two perfect and complete and several obligations,-one of A., the other of C. One is as much the obligation of the contract as the other.

It is an unfounded assumption that the obligation of a contract can be incumbent only on the party that makes the promise.

The obligation of a contract is a duty of performing it recognized and enforced by the laws. An executor or administrator, though he has made no promise, is under a legal duty to perform the contracts of the deceased; the obligation of the contract is incumbent on him; and a State law releasing him would as clearly impair the obligation of the contracts of the deceased as a law releasing the living debtor. So a husband is bound to perform the contracts of his wife before marriage. Without making any promise, he takes on himself the legal duty of performing these contracts of hers, by voluntarily entering into the marital relation at a time when and place where the law made this duty incumbent on him. Could he be released without impairing the obligation of such contracts? For still stronger reasons was the obligation of this contract incumbent on the defendant. He voluntarily entered into such relations with this corporation as created a perfect legal obligation to pay this debt when it was contracted, and the plaintiff parted with his property to an insolvent corporation on the faith of this legal obligation incumbent on the defendant.

The defendant's counsel has pointed out a supposed distinction between the cases cited from the New York reports and this case. It is that, in those cases, the charters made the stockholders jointly and severally liable for all the debts and demands ''contracted by the corporation. But the defendants were not contractors''. The contracts were made by a third person, viz., the corporation. The relation of the stockholders to the contracts was not created by the contracts themselves, but by the law, as in this case; and the obligation of this defendant to perform this contract is as complete and perfect, and arises from the same causes as the obligations of the defendants in the cases in New York.

In those cases, as in this case, there was a liability created by law, and made incumbent on one person to perform the contracts of another person. If that liability could not be discharged without impairing the obligation of a contract, how can this liability be discharged without a similar violation of the Constitution?

Mr. Justice NELSON delivered the opinion of the court.

title: Hawthorne v. Calef


text: Talk:Hawthorne v. Calef

title: Talk:Hawthorne v. Calef


text:
Hawthorne v. Calef/Opinion of the Court

The question upon the provisions of the charter of the railroad company-in connection with the sale of the property by the plaintiff to the corporation, out of which this debt accrued is, whether a contract, express or implied, existed between him and the stockholder?

It is asserted, in behalf of the latter, that a contract existed only between the creditors and the corporation; and that the obligation of the stockholder rests entirely upon a statutory liability, destitute of any of the elements of a contract.

Without stopping to discuss the question upon the clause of the statute, we think that the case falls within the principle of Woodruff v. Trapnal, and Curran v. State of Arkansas, heretofore decided in this court.

In the first of these cases, the charter of the bank provided that the bills and notes of the institution should be received in all payment of debts due to the State. The bank was chartered 2d November, 1836. On the 10th January, 1845, this provision was repealed, and the question was, whether or not, after this repeal, the bills and notes of the bank, outstanding at the time, were receivable for debts due to the State. The court held, after a very full examination, that the clause in the charter constituted a contract with the holders of the bills and notes on the part of the State, and that the repealing act was void as impairing the obligation of the contract.

In the second case, the charter of the bank contained a pledge or assurance that certain funds deposited therein should be devoted to the payment of its debts. It was held by the court, that this constituted a contract with the creditors, and that the acts of the legislature withdrawing these funds were void, as impairing the obligation of the contract.

Now, it is quite clear that the personal liability clause in the charter, in the present case, pledges the liability or guarantee of the stockholders, to the extent of their stock, to the creditors of the company, and to which pledge or guarantee the stockholders, by subscribing for stock and becoming members of it, have assented. They thereby virtually agree to become security to the creditors for the payment of the debts of the company, which have been contracted upon the faith of this liability.

This question has been repeatedly before the courts of the State of New York, and they place the obligation of the stockholders upon two grounds. The first is that of contract. In Corning v. McCullough, Chancellor Jones, then in the Court of Appeals, observes that the liability of the defendant, upon which the action is grounded, is for the payment of a debt of the company incurred by the purchase of merchandise of the plaintiffs, for the use and benefit of the company, and wherein the defendant, as one of the members, was interested, and for which he thereby, and under the provisions of the charter, became and was, concurrently with the company, from the inception of the debt, personally liable. It is, he says, virtually and in effect, a liability upon a contract and the mutual agreement of the parties; not, indeed, in form an express personal contract, but an agreement of equally binding obligation, consequent upon and resulting from the acts and admissions or implied assent of the parties. The second ground is upon the view that the legislature, by subjecting the stockholders to personal liability for the debts of the company, thereby removed the corporate protection from them as corporators, and left them liable as partners and associates as at common law.

There is another view of the case, involving a violation of the principal contract between the creditors and the corporation, which we think equally conclusive against the judgment of the court below. This view rests upon a principle decided in Bronson v. Kinzie, and the several subsequent cases of this class. There Kinzie executed a bond mortgage to Bronson, conditioned to pay $4000 on the 1st of July, 1842, and covenanted, that in case of default, the mortgagee should sell the premises at public auction, and convey them to the purchaser. Subsequently to the execution on the mortgage, the legislature passed a law that mortgagors on a sale of the premises, under a decree of foreclosure in chancery, should have a right to redeem them at any time within twelve months from the day of sale. By another law it was provided, that when the premises were offered for sale, they should not be struck off unless at two-thirds of a previous valuation. The court held that these acts so seriously affected the remedy of the mortgagee as to impair the obligation of the mortgage contract within the meaning of the Constitution, and declared them void. Now, applying the principle of this class of cases to the present one, by the clause in the charter subjecting the property of the stockholder, he becomes liable to the creditor, in case of the inability or insolvency of the company for its debts, to the extent of his stock. The creditor had this security when the debt was contracted with the company over and above its responsibility. This remedy the repealing act has not merely modified to the prejudice of the creditor, but has altogether abolished, and thereby impaired the obligation of his contract with the company.

We are of opinion, upon both of the grounds above recited, that the court below erred.

JUDGMENT REVERSED.

title: Hawthorne v. Calef/Opinion of the Court


text: Talk:Hawthorne v. Calef/Opinion of the Court


text:
Page:Cournot Theory of Wealth (1838).djvu/26

 12 publisher's inventory will rightly show a greater value for his assets; and after the copies have left his hands, either wholly or in part, if each individual should draw up his inventory in commercial fashion, and if all these partial inventories could be collated to form a general inventory or balance sheet of the wealth in circulation, an increase would be found in the sum of these items of wealth.

On the contrary, suppose that only fifty copies exist of a curious book, and that this scarcity carries up the price at auction to three hundred francs a copy. A publisher reprints this book in an edition of a thousand copies, of which each will be worth five francs, and which will bring down the other copies to the same price from the exaggerated value which their extreme scarcity had caused. The 1050 copies will therefore only enter for 5250 francs into the sum of wealth which can be inventoried, and this sum will thus have suffered a loss of 9750 francs. The decrease will be even more considerable if (as should be the case) the value of the raw materials is considered, from which the reprints were made, and which existed prior to the reprinting. Here is an industrial operation, a material production, useful to the publisher who undertook it, useful to those whose products and labour it employed, useful even to the public if the book contains valuable information, and which is nevertheless a real destruction of wealth, in the abstract and commercial meaning of the term.

The rise and fall of exchange show perpetual oscillations in values, or in the abstract wealth in circulation, without intervention of actual production or destruction of the physical objects to which, in the concrete sense, the term wealth is applicable.


text:
Drury v. Foster

FOSTER, of Minnesota, being about to engage in some enterprise, and wanting money, asked his wife, who owned, in her separate right, a valuable tract of land in that State, to mortgage it for his benefit. What exactly was said or promised did not appear. However, Foster afterwards went to a notary, who exercised, as it seemed, the business of a scrivener also, and directed him to draw a mortgage of the property, with himself and wife as mortgagors, but leaving the name of the mortgagee, and the sum for which the land was mortgaged, in blank. This the magistrate did. Foster acknowledged the deed, at the magistrate's office, in this shape, and the magistrate then took the instrument to Mrs. Foster, at her husband's house, that she might sign and acknowledge it in the same shape. When the magistrate took the mortgage to her thus to execute, Mrs. Foster said, 'she was fearful that the speculation which her husband was going into would not come out right; that she did not like to mortgage that place, but that he wanted to raise a few hundred dollars, or several hundred dollars, or something to that effect,'-the magistrate, who was the witness that gave the testimony, did not recollect the exact expression which she used,-'and that she did not like to refuse him, and that so she consented to sign the mortgage.' Mrs. Foster, having signed the instrument in this blank shape, the notary, under his hand and seal, certified, in form, that the husband and wife, 'the signers and sealers of the foregoing deed,' had personally appeared before him, 'and acknowledged the signing and sealing thereof to be their voluntary act and deed, for the uses and purposes expressed;' and that the wife, 'being examined separate and apart from her said husband, and the contents of the foregoing deed made known to her by me, she then acknowledged that she executed the same freely, and without fear or compulsion from any one.' Such form of separate acknowledgment, it may be well to say, is required by statute, in Minnesota, to give any effect to a feme covert's deed. After taking the wife's acknowledgment, the notary gave the instrument to her husband. He, finding the complainant, Drury, willing to lend as much as $12,800 upon the property, himself filled up the blanks with the name of Drury, as mortgagee, and with the sum just mentioned as the amount for which the estate was mortgaged. In this form the instrument was delivered to Drury, who, knowing nothing of the facts, advanced the money in good faith, and put his mortgage on record. There was no evidence that the wife derived any benefit from the money advanced, or that she ever knew that such a large sum was advanced.

On a bill of foreclosure brought four years afterwards by Drury against Foster and wife, in the Federal Court for Minnesota, the defence was, that the mortgage was not the wife's deed; a defence which the court below thought good as to her. It accordingly dismissed the bill as regarded her, giving a decree, however, against the husband. The correctness of its action as regarded the wife was the question, on appeal, here.

Mr. Peckham for Drury, the mortgagee: All will admit that it is not easy to conceive of a case addressing itself more to a sense of equity. Drury, without a circumstance to excite suspicion, and relying upon a mortgage regular upon its face, advanced a large sum in perfect good faith. He supposed, too, as was natural, that the mortgagors were acting in equal good faith. Mrs. Foster deliberately, and with understanding, put it into the power of her husband to obtain the loan. Will she be permitted, at this late day, in conjunction with her husband, to disavow her acts, and thus, in effect, defraud an innocent third party whom she has been chiefly instrumental in bringing into his present position? Even if Mrs. Foster were entirely innocent in the premises, and was the victim of the fraud of her husband, yet either she or the plaintiff must suffer loss in the present case; and no principle is better settled than that where loss must fall upon one of two innocent parties, it must be borne by that one who is most in fault. There is no reason for exempting the wife from the operation of this rule. On the contrary, in transactions between the husband and wife and third parties, there is the strongest reason for applying the principle. It would be against public policy, and expose transactions relative to real estate to hazard, to allow a married woman to screen herself from the consequences of her own acts under the circumstances of the present case. Such a doctrine would subordinate all other interests to those of married women.

Viewed on legal principles, the conclusion is to the same effect. It is of no pertinence to cite, in this day and this country, 'technical dogmas,' as Grier, J., calls them, out of Shepherd's Touchstone, or Perkins. These old books may, indeed, declare, 'that if a man seal and deliver an empty piece of paper or parchment, albeit he do therein withal give commandment that an obligation or other matter shall be written in it, and this be done accordingly, yet this is no good deed.' But such doctrines have been exploded, even in England, these two hundred years. Certainly the contrary, as respected a bond, was adjudged in Zouch v. Claye, 23 and 24 Charles II, in the days of Norman French and of blank-letter law. Levinz thus reports the case:

'Det sur obligation. Le case fuit tiel. A. and B. seal and deliver le bond a C., et puis per le consent do touts les parties le nom et addition de D. fuit interline, et il auxy seal l'obligation et ceo deliver. Et si l'obligation per cest alteration fuit faet void vers A. and B. fuit le question. Et per Hale et totam curiam adjudge que nemy."Debt on bond. The case was this. A. and B. seal and deliver a bond to C.; and then, with the consent of all parties, the name and addition of D. was interlined; and he also sealed the bond and delivered it. The question was whether, owing to this alteration, the bond was void as respected A. and B. Any by Hale, and the whole court adjudged that it was not.'

Texira v. Evans, cited in Master v. Miller, and reported by Anstruther, A. D. 1793 (Lord Mansfield's time), did but affirm this old adjudication. There, Evans wanted to borrow 400, or so much of it as his credit should be able to raise. For this purpose he executed a bond, with blanks for the name and sum, and sent an agent to raise money on the bond. Texira lent 200 on it, and the agent accordingly filled up the blanks with the sum and Texira's name, and delivered the bond to him. On non est factum pleaded, Lord Mansfield held it a good deed.

The principle was early enunciated in America. Chief Justice Parsons, in delivering the judgment in Smith v. Crooker, where a bond had been executed by a surety before his name had been inserted in the body of the instrument, and his name being afterwards inserted therein in his absence, holding the instrument valid, remarks: 'The party executing the bond, knowing that there are blanks in it to be filled up by inserting particular names or things, must be considered as agreeing that the blanks may be thus filled after he has executed the bond.' Ex parte Kerwin is a later case, one in New York. It was there held, that an appeal bond drawn in blank as to the recital of the judgment, and executed by the appellant and his surety, the former giving parol authority to his surety to ascertain from the justice the amount of the judgment, and fill up the blank accordingly, and deliver the bond for both, and which was done, was a good bond. This is similar to the case at bar, in the respect that the agent for the insertion of the blanks and delivery of the instrument was one of the co-obligors. Many other American cases are to the same point. This relaxation of ancient technicality is universal in our new Western States. There people deal with lands as they do with oxen; and pass a fee simple to a hundred acres with as much facility as they do the title to a plough or a cart.

We assert, and the cases just cited prove, that a paper under seal, executed with blanks, becomes, when theose blanks are filled up, and the instrument is afterwards delivered, the party's deed. And it is difficult to see why a contrary view should be entertained. Parol authority is confessedly sufficient for the mere delivery of a deed. But delivery is the act of acts. It is the act by which each and all of the other acts necessary to the execution of the deed become operative and effectual. By it the signing, the sealing, and the acknowledgment take effect. If, therefore, delivery can be made under parol authority, why may not blanks be filled in, and alterations and interlineations made in deeds before their delivery be like authority? Neither of these things constitute the execution of a deed, but are merely acts necessary to be performed in the execution thereof; acts consummating and giving effect to the execution.

The fact that the party making this deed was a feme covert is unimportant. What an ordinary person may do without examination, a feme covert may do when separately examined. If an ordinary person, without examination, may execute a deed with blanks, a feme covert may execute a similar deed, provided she be separately examined, know fully what she does, and it be plain that it was such a deed she wished and meant to execute. Why not? Certainly she could convey her whole estate, if it were conveyed by deed, whose blanks were filled. Why may she not convey a portion whose extent remains undefined, if she has wished and meant so to do? Her real wishes, her perfect knowledge of what she is doing, her entire freedom from the husband's coercion and compulsion, these are the points to which the law looks; and these being settled, her capacity is as great as if dis-covert. In this case, when separate and apart from her husband, Mrs. Foster gave her voluntary consent to a sealed instrument, with blanks; in that same manner, she authorized these blanks to be filled at the discretion of her husband, to whom she knew it would be handed over.

But even if not her deed, Mrs. Foster is estopped from asserting that she did not execute the mortgage. The mortgage in question was duly signed, sealed, acknowledged, and certified to, with the name of the grantee and the amount of the mortgage debt in blank, and was, when so signed, sealed, and acknowledged, well known to both grantors to contain these blanks. The conclusion, therefore, is, that the blanks were designedly left by both grantors to facilitate the negotiation of the loan, which was the avowed object of the execution of the mortgage, well known to and understood by Mrs. Foster, as appears by her own declarations made to the notary public at the time, and because the amount and terms of the loan which her husband might succeed in effecting, and the party of whom he might make it, were at the time unknown to either grantor. The mortgage having been thus deliberately, and with understanding, executed in such form and for such purposes by both parties, was, with the full knowledge and deliberate consideration of Mrs. Foster, delivered by her to the notary, to be by him delivered to the other grantor, her husband, which was accordingly done; and this mortgage, with all the blanks filled in, and in all respects perfect, was delivered by Foster to Drury, the complainant. The doctrine of estoppel in pais, thus laid down by Lord Denman, applies to such a case: 'The rule of law is clear, that where one, by his words or conduct, wilfully causes another to believe the existence of a certain state of things, and induces him to act on that belief, so as to alter his own previous position, the former is concluded from averring against the latter a different state of things as existing at the same time.'

There is yet another ground why this decree, as respects the wife, should be reversed. Evidence was introduced by Mrs. Foster, for the purpose of showing that, at the time of the signing, sealing, and acknowledgment of the mortgage, there were blanks in it; and this evidence was introduced upon the theory that, there being such blanks at such time in the mortgage, this deed was no deed, at least so far as defendant, Mrs. Foster, was concerned. This evidence tended to contradict, and was introduced for the purpose of contradicting, the certificate of acknowledgment, and showing the same to be false; whereas, on the highest ground of public policy, such certificates are held to be conclusive evidence of the matters they contain, and they can neither be aided nor disproved by parol testimony, except, perhaps, in cases of fraud or imposition. In Jordan v. Jordan, Tilghman, C. J., recognizing this principle, said: 'There would be no certainty to titles if that kind of evidence were permitted. The law directs the magistrate to make his certificate in writing, and he has made it. To that the world is to look, and to nothing else.' The case of Jamison v. Jamison, subsequently decided by the same court, is nearly parallel to the one at bar. It was the case of a mortgage executed by husband and wife, of the separate estate of the wife to secure the debt of the husband; and in which there was an offer to prove, by the testimony of the justice of the peace before whom the acknowledgment was taken, that his certificate thereof was false. The court held that the certificate of the judge or justice to the acknowledgment of a deed by a married woman, is to be judged of solely by what appears on the face of the certificate itself; and that parol evidence of what passed at the time of the acknowledgment is not admissible for the purpose of contradicting the certificate.

Mr. Carlisle, contra: Whatever interest the husband had, passed, we concede, by the decree. What we assert is, that Mrs. Foster's estate in the land was never conveyed. She never executed any deed in the premises. She signed, sealed, and acknowledged, but never delivered, a blank form of a deed of mortgage, containing no name of the grantee, or mortgagee, no statement or recital of the sum of money to be secured, or the time of payment; or, in short, of any of the matters indispensable to make the deed operative, except the names of the grantors and the description of the property. It was an instrument which conveyed nothing, because there was no grantee. It was an unfinished mortgage in form; but it was no mortgage at all, because there was no mortgagee and no debt, recited, described, or in any manner indicated. It consists, in natural reason, as well with Mrs. Foster's declaration at the time she signed it, that it was intended to be a security for 'a few hundred dollars,' as with the complainant's claim for $12,785; and it might as well have turned out a mortgage for a million of dollars. And because it was thus absolutely wanting in certainty, and might be anything, or nothing, when it was signed and acknowledged by Mrs. Foster, it was not, and could not become, her deed in law.

To say that Mrs. Foster is estopped from denying that she executed the mortgage, because she signed, sealed, and executed it, is a petitio principii, simply.

The fact that Mrs. Foster was a married woman does make a potential element of the case. Observe the statement of the case! 'She was fearful that the speculation which her husband was going into would not come out right: she did not like to mortgage that place;' her paternal property, perhaps, the home of her own childhood. 'But he'-her husband-wanted to raise money, and 'she did not like to refuse him, and so she consented to sign.' The case is an affecting illustration of the extent to which a woman becomes, in marriage, 'subdued to the very quality of her lord.' Her woman's fears had foreseen what her husband's intelligence never suspected; but like a woman, lovely and confiding, she yielded everything to him. This court will surely remember the language of Marshall, C. J., in Sexton v. Wheaton: 'All know and feel the sacredness of the connection between husband and wife. All know that the sweetness of social intercourse, the harmony of society, the happiness of families, depend upon that mutual partiality which they feel, or that delicate forbearance which they manifest towards each other.' Does any one doubt, if this magistrate-the great offender in the case had done the duty which the laws of the State from which he derived his commission put upon him; that is to say, had refused to take any acknowledgment till the blanks in the deed were filled with $12,800, and its contents, in fact and in truth and spirit made known to the lady-that however Mrs. Drury might have so consented,' not liking to refuse him,' the magistrate could never have certified that she executed it 'freely.' This separate examination, if faithfully made-this certificate, itself a certificate of quasi judicial approbation to what she does-if conscientiously given; given, as with the body of our higher magistracy we may hope that it only is given; is the protection with which the law hedges the gentle nature of a woman-her crowning grace and glory-from the dangers, and perhaps the ruin, which, without the law's protection, it is certain in many cases to bring upon her. The argument which treats her as an independent person, and would approximate her actions to those of our own sex which would say that all that a man may do without examination, she may do if examined-violates the central germ of truth upon the subject, the law of the inherent moral differences of our natures; the true and fine conception of the case, which gives to characters, thoughts, passions, sentiments, and all things within, their sex. A certificate in blank is an absurdity, as respects a married woman, if we look to the wise reasons of the law. By law, such a woman has no power to convey her estate at all. The law gives it to her on condition that she be examined separately, and consent fully and freely to the exact thing which she does. The certificate must have been in fact, and when made a true certificate; and everything certified to have been done by the feme covert must have been exactly and specifically done.

It is objected that the parol proof tends to contradict the official certificate of acknowledgment, and cases are cited in support of this objection. But they have no application. Here is no attempt to aid a defective certificate of acknowledgment, as in some of the cases cited. Nor is it an attack, by parol proof, upon a perfect certificate. It is simply proof of what the instrument was which was so acknowledged and certified; that it was not then the instrument which is produced by the complainant.

Mr. Justice NELSON delivered the opinion of the court.

title: Drury v. Foster


text: Talk:Drury v. Foster

title: Talk:Drury v. Foster


text:
Drury v. Foster/Opinion of the Court

By the laws of Minnesota, an acknowledgment of the execution of a deed before the proper officers, privately and apart from her husband, by a feme covert, 1s an essential prerequisite to the conveyance of her real estate or any interest therein. And she is disabled from executing or acknowledging a deed by procuration, as she cannot make a power of attorney. These disabilities exist by statute and the common law for her protection, in consideration of her dependent condition, and to guard her against undue influence and restraint.

Now, it is conceded, in this case, that the instrument Mrs. Foster signed and acknowledged was not a deed or mortgage; that, on the contrary, it was a blank paper; and that in order to make it available as a deed or mortgage, it must be taken to have been signed and acknowledged with the design to have the blanks filled by the husband, or some other person, before the delivery. We agree-if she was competent to convey her real estate by signing and acknowledging the deed in blank, and delivering the same to an agent, with an express or implied authority to fill up the blank and perfect the conveyance-that its validity could not well be controverted. Although it was, at one time doubted whether a parol authority was adequate to authorize an alteration or addition to a sealed instrument, the better opinion, at this day, is that the power is sufficient.

But there are two insuperable objections to this view in the present case. First, Mrs. Foster was disabled in law from delegating a person, either in writing or by parol, to fill up the blanks and deliver the mortgage; and, second, there could be no acknowledgment of the deed within the requisitions of the statute until the blanks were filled and the instrument complete. Till then there was no deed to be acknowledged. The act of the feme covert and of the officers were nullities, and the form of acknowledgment annexed as much waste paper as the blank mortgage itself, at the time of signing.

It is insisted, however, that Mrs. Foster should be estopped from denying that she had signed and acknowledged the mortgage. The answer to this is, that to permit an estoppel to operate against her would be a virtual repeal of the statute that extends to her this protection, and also a denial of the disability of the common law that forbids the conveyance of her real estate by procuration. It would introduce into the law an entirely new system of conveyances of the real property of feme coverts. Instead of the transaction being a real one in conformity with established law, conveyances, by signing and acknowledging blank sheets of paper, would be the only formalities requisite. The consequences of such a system are apparent, and need not be stated.

There is authority for saying, that where a perfect deed has been signed and acknowledged before the proper officer, an inquiry into the examination of the feme covert, embracing the requisites of the statute, as constituting the acknowledgment, with a view to contradict the writing, is inadmissible; that acts of the officer for this purpose are judicial and conclusive. We express no opinion upon the soundness of this doctrine, as it is not material in this case. The case before us is very different. There is no defect in the form of the acknowledgment, or in the private examination. No inquiry is here made into them. The defect is in the deed, which it is not made the duty of this officer to write, fill up, or examine, and for the legal validity of which he is no way responsible. The two instruments are distinct. The deed may be filled up without any official authority, and may be good or bad. The acknowledgment requires such authority. The difficulty here is not in the form of the acknowledgment, but that it applied to a nonentity, and was, therefore, nugatory. The truth is, that the acknowledgment in this case might as well have been taken and made on a separate piece of paper, and at some subsequent period attached by the officer, or some other person, to a deed that had never been before the feme covert. The argument in support of its validity would be equally strong.

Our opinion is that, as it respects Mrs. Foster, the mortgage is not binding on her estate.

We may regret the misfortune of the complainant from the conclusion at which we have arrived; but it seems to us impossible to extend the relief prayed for by the bill of foreclosure, without abrogating the protection which the law for ages has thrown around the estates of married women. Losses of the kind may be guarded against, on the part of dealers in real estate, by care and caution; and we think that this burden should be imposed on them, rather than that a sacrifice should be made of the rights of a class who are dependent enough in the business affairs of life, even when all the privileges with which the law surrounds them are left unimpaired.

DECREE AFFIRMED.

N. B. A decree made below, on a cross-bill ordering the mortgagee to cancel the wife's name on the mortgage, was affirmed here. The cross-bill set up, substantially, the facts disclosed in the answer to the original bill; and the proofs taken in each case were the same.

title: Drury v. Foster/Opinion of the Court


text: Talk:Drury v. Foster/Opinion of the Court


text:
Miles v. Caldwell

MILES brought ejectment against Caldwell, in the Circuit Court of Missouri; the action being brought, not in the fictitious form, still sometimes used in the United States, but in the form now more frequent with us, in which the parties actually suing appear in their proper names, as Thomas Miles against William Caldwell, and where the land claimed is described as by metes or bounds, or by both; the action being entitled, in Missouri, 'trespass in ejectment.' Both parties in the present suit claimed under one Ely, who, in 1837, and prior to that time, was owner of the land; Caldwell claiming under a mortgage made by Ely to Gallagher in that year; and a subsequent release by Ely; Miles, under a mortgage of 1838, by Ely to Carswell and McClellan, and a foreclosure and sale founded on it. The defendant, Caldwell, in that ejectment, contended that his own title, under the mortgage to Gallagher, was good; and that the title of Miles, under the mortgage to Carswell and McClellan, was bad, as having been made in fraud of creditors. Miles, the plaintiff, on the other hand, contended that the mortgage to Gallagher had been satisfied; and that his own mortgage was not fraudulent, but given for a valid debt. Both these points-that is to say, the point whether Gallagher's mortgage had or had not been paid, and whether that of Carswell and McClellan was fraudulent or was good-were submitted to the jury, who, on instructions from the court, passed upon them, finding a verdict for the plaintiff, Miles. Indeed, as to the question of fraud, there was an express agreement, now before this court, that the mortgage to Carswell and McClellan was, in the action of ejectment, impeached for fraud; and the record of that suit also established the fact that the question, whether the mortgage to Gallagher had been paid off in full, was submitted to them. But neither of these points were points put in issue by the pleadings themselves; nor, indeed, was it practicable so to put them in issue in the action,-that of ejectment.

In this state of the facts, Caldwell, wishing, as he represented, to have his title 'quieted,' filed his bill on the equity side of the court, where the judgment at law had been obtained, to enjoin execution on the judgment, and to prevent Miles's taking possession of the land.

The grounds of the complainant's application were these:

1. That his title was good and valid, founded on the senior mortgage; and, being the true legal title, should prevail.

2. That the mortgage to Carswell and McClellan was fraudulent, because made for the purpose of hindering and delaying creditors; and that a court of equity should decree it to be void, and prevent its being used to the injury of complainant.

3. That he had made valuable improvements, in good faith, on the land, supposing it to be his own, for which he was entitled to compensation before it was taken from him.

It is necessary here to say, that in Missouri one of the Revised Statutes enacts, that in ejectment, as in other actions authorized by it, a judgment, except one of nonsuit, 'shall be a bar to any other action between the same parties, or those claiming under them, as to the same subject-matter.'The court below granted the injunction, and an appeal came here.

Mr. Green, in support of the decree: Caldwell, being in possession, under a senior mortgage, had a right to stay. Even if the judgment on the note did not foreclose the mortgage, he had a release from Ely which gave him the equity of redemption. Admitting that the question of the payment of Gallagher's mortgage, and the good faith of that of Carswell and McClellan were in issue on the trial at law, what is there to prevent their being passed on here? The action was ejectment; a proceeding in which it is matter of common knowledge that one judgment never binds. Moreover, it is a rule that nothing will be held as concluded by the verdict which is not put in issue by the pleadings. Outram v. Morewood, confines the conclusiveness to questions expressly so put.

[On the third ground assigned for relief-valuable improvements put on the land-Mr. Green made no remarks.]

Mr. Gantt, contra.

Mr. Justice MILLER delivered the opinion of the court.

title: Miles v. Caldwell


text: Talk:Miles v. Caldwell

title: Talk:Miles v. Caldwell