text:
Gregg v. Von Phul

VON PHUL and Gregg entered into articles of agreement on the 6th of December, 1856, by which Von Phul agreed to sell and convey to Gregg certain premises in Peoria, which Gregg agreed to purchase, paying Von Phul for them $8550 as follows, to wit: $2800 on the 1st of March, 1857 (which was paid), and the residue in three payments of $1900 each in twelve, eighteen, and twenty-four months from the same day. Von Phul covenanted that he would convey the premises by deed in fee simple, 'with full covenants of seizure and varranty, on or before the first day of March, 1857,' and Gregg agreed to execute his three promissory notes (dated on that day), each for $1960, payable in twelve, eighteen, and twenty-four months, and secured by a deed of trust on the land sold and conveyed. On the 4th of May, 1860, one Purple, acting by the request and as the agent of Von Phul, tendered a deed to Gregg and demanded, note the notes, but the money due on the contract of purchase. The deed which was tendered covenanted 'that the said Von Phul is lawfully seized of a fee simple in the premises aforesaid, and that he will warrant and defend the title, &c., hereby conveyed, against the claim or claims of every person.' Gregg looked at the deed and made no objection to it, but stated that he was not prepared to pay the money, and handed it back to Purple. Gregg, who was in possession, had gone into it under the contract of purchase, and had no other right of possession. Previous to the tender and demand he had improved the property, and built houses on it worth from $6000 to $7000. Von Phul was in Peoria while the improvements were being made. His residence, however, was in St. Louis.

On ejectment brought by Von Phul against Gregg, in the Circuit Court for the Northern District of Illinois, to recover possession of the property, the court, upon the above facts, decided the law to be for the plaintiff, and the defendants excepted. The question in this court on error was, whether the court below had decided rightly.

Mr. Ballance, for Gregg, plaintiff in error:

1. To answer its requisitions of a deed 'with full covenants of seisin and warranty,' the document ought to have warranted against incumbrances, and that the vendor had a right to sell. The covenants in this deed would not have been broken, had it turned out that, by reason of judgments, mortgages or other incumbrances, the title conveyed by the deed had wholly failed: nor, if it should turn out that although he was seized of the premises, yet for any reason, he could not convey it to the vendee. Suppose, for instance, an order of a court of law or injunction in chancery had prohibited him from conveying, it is no answer to say that he covenants 'that he will warrant and defend the title to said premises against the claim of every person whatsoever.' This covenant is not equivalent to a covenant of a right to sell, or that the premises were free from incumbrances, because, in this case, although the vendor may have no title, there is no cause of action until there is an eviction; but in the other two cases there is a present cause of action, provided it be known that there are incumbrances, or that there is no power to sell.

2. The covenant was, that the said Von Phul should, 'on or before the first day of March next, make said deed,' whereas, it was not done until May 4, 1860. This was material; Gregg had paid part of the purchase-money, and had Von Phul made such a deed on that day, as he had agreed to make, Gregg could, on that day, have mortgaged the premises to raise the money, especially as he had expended several thousand dollars in building stores on the ground. But Gregg had not agreed to pay any money at this time. He was only bound, in case the deed with proper covenants had been made, 'to execute his three promissory notes, dated on said first day of March, 1857,' 'secured by a deed of trust on the premises.' This he was not bound to do until the deed was executed. What, then, was Gregg's duty when the deed was tendered him (provided it had been a proper one)? Certainly not to surrender the ground on which he had paid $2850, and expended $6000 or $7000 in building houses. This was not pretended nor demanded; yet the effect of the decision of the court is to take the land and all the houses from the vendee, and give them to the vendor.

3. A tenant having gone into possession with the consent of the landlord, must be put in the wrong, by having a notice served on him to quit, and a refusal or failure on his part to do so. Here the possession was obtained under a contract of purchase, $2850 paid, and costly stores built on the premises by the vendee, with the knowledge of the vendor, and then comes a suit in ejectment, without any formal notice to quit! Had formal notice been given, perhaps the defendant would have surrendered. What right had plaintiff to mulct him with a heavy bill of costs without giving him an opportunity to do so if he liked? That all who have come into the possession of real estate rightfully, are entitled to notice to quit, before they are liable to be sued in ejectment, is well established. There is no English decision, nor decision of this court to the contrary. In England, Doe v. Jackson is like the present, except that no payment appears to have been made, and the court decided a notice to quit indispensable. Right v. Beard was similar, except that a part of the purchase-money had been paid. The defendant contended, 'that until demand and refusal of the possession, he was not a trespasser, as the declaration supposed him to be.' In answer to which it was said that 'the defendant had taken possession under a supposed title, and had not been let in under any tenancy, and therefore not as a tenant at will.' 'The learned judge concurred in thinking that the defendant's possession being lawful, required to be determined by notice to deliver it up.' In the Court of King's Bench, Lord Ellenborough said, 'that after the lessor had put the tenant into possession, he would not, without a demand of the possession, and a refusal by the defendant, or some wrongful act by him to determine his lawful possession, treat the defendant as a wrong-doer and trespasser, as he assumes to do by his declaration in ejectment.'

In the New York case of Jackson v. Rowan, which was one of purchase, one payment was made, and possession taken, pursuant to an agreement between the parties. The residue not being paid, ejectment was brought for the premises. The court says, 'At the date of the demise, the possession of defendant was lawful, and not tortious. He entered on the premises under an agreement with the lessor to sell. That agreement purported that possession was to be delivered on the payment of $100, and the defendant paid that sum on taking possession, under the agreement. He was consequently entitled to notice to quit, or a demand for possession, before suit was brought.' Sugden says: 'As the possession is in these cases lawful, being with the assent of the seller, an ejectment will not lie against the purchaser without a demand for possession, and a refusal to quit.' And authorities are quoted. The English decisions are as stated, and there is not one decision of the Supreme Court of either the State of Illinois, or the United States, annulling them. Certain New York cases, especially Jackson v. Miller, may be cited as establishing a contrary doctrine; but this case should have no weight with this court: Because 1st, the New York courts are not consistent on this subject. A number of New York cases, it may be true, lay down the law differently. In Jackson v. Miller, Savage, J., pretends to collect all the authorities on this subject, whereas, he omits those that would show his position to be fallacious. 2d. In this same decision he admits the English authorities to be against him. 3d. The English decisions are law in Illinois, and binding on this court, which, in this case, is to administer the law of Illinois; whereas, New York decisions have no efficacy in Illinois, only as they tend to show what the common law is.

Mr. Noell, for Von Phul, defendant in error:

1. The deed tendered by Von Phul was such a deed as was stipulated for in the contract which preceded it. It contained all the covenants of warranty required by the agreement.

2. The covenants in the agreement are independent covenants. Von Phul covenants for himself to convey, and Gregg covenants to pay and execute his notes. The time for the tender of the deed was immaterial, as to the rights of Von Phul under the agreement. If Gregg desired it earlier, he had but to offer to comply with his part of the contract, and thereby protect himself against the enforcement of Von Phul's legal title. There is no evidence of any such offer.

3. The covenants in the agreement being independent, the remedy of Gregg is upon the covenants for damages, in case Von Phul has failed to comply. He cannot hold possession against the legal title after the time for the performance of the covenants on both sides has elapsed.

4. The plaintiff in error having refused to receive the deed and comply with the agreement, has thereby abandoned and waived, by his own act, any right of possession he may have had, and at the same time rendered a notice to quit unnecessary. He, by the act of refusing the deed, and refusing to perform the agreement, disavowed his tenancy under a contract for purchase, and can claim no benefits from such a tenancy.

5. A tenancy may be determined in three ways: 1st. By efflux of time, or the happening of a particular event. 2d. By notice to quit. 3d. By a breach on the part of the tenant of any of the conditions of his tenancy, as non-payment of rent, or non-performance of covenants. This latter mode meets the case at bar, and in such cases no notice to quit is necessary.

Mr. Justice DAVIS, after stating the case, delivered the opinion of the court:

title: Gregg v. Von Phul


text: Talk:Gregg v. Von Phul

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

title: Talk:Gregg v. Von Phul


text:
Gregg v. Von Phul/Opinion of the Court

In the view we take of this case it is not important to determine whether the deed tendered was such a one as Von Phul was bound to make, or Gregg obliged to receive. If the deed was justly liable to objections they should have been stated. Gregg is estopped now on the most obvious principles of justice from interposing objections, which he did not even name when the deed was tendered and the money due on the contract demanded. If the deed was defective and the defects pointed out, non constat but they could have been obviated. There is nothing in the evidence, even tending to show, that Von Phul did not act in good faith. The very silence of Gregg was well calculated to influence the conduct of Von Phul, and to convince him that the want of money was the only reason Gregg had for declining to perform the contract. And it would be against good conscience to permit Gregg now to avail himself of objections which his failure to make when the deed was tendered, must have induced Von Phul to suppose did not exist.

But it is said that Von Phul covenanted to make the deed on the first day of March, eighteen hundred and fifty-seven, when in fact it was not until April, eighteen hundred and sixty. If this is so, it does not appear how the delay has harmed Gregg. He was not asked for payment until long after the contract had matured, and it is fair to presume, in the absence of testimony, that he acquiesced in the delay. At any rate, as he made no complaint that the deed was not tendered in season, he has waived his right to object to the irregularity. The doctrine of estoppels in pais, or by the act of the party, is founded in natural justice, 'and is a principle of good morals as well as law.' 'The primary ground of the doctrine is, that it would be a fraud in a party to assert what his previous conduct had denied, when on the faith of that denial others have acted.' No one is permitted to keep silent when he should speak, and thereby mislead another to his injury. If one has a claim against an estate and does not disclose it, but stands by and suffers the estate sold and improved, with knowledge that the title has been mistaken, he will not be allowed afterwards to assert his claim against the purchaser. And justly so, because the effect of his silence has actually misled and worked harm to the purchaser. And in this case the silence of Gregg concludes him. He cannot now take exceptions to a deed which he failed to perceive when it was tendered to him, or if he knew them, failed to disclose.

But it is contended that Gregg was entitled to notice to quit.

How far a notice to quit is necessary before an action of ejectment can be brought has been much discussed in England. In this country the authorities are not uniform. In some of the States the subject is regulated by statute law, or by rules of court. In New York the question has been fully considered. The courts of that State hold that where there is a contract of purchase and the vendee enters into possession with the consent of the vendor, that ejectment will lie at the suit of the vendor without a previous notice to quit.

Notice to quit is generally necessary where the relation of landlord and tenant exists, and no definite period is fixed for the termination of the estate, but where a lease is to expire at a certain time, a notice to quit is not necessary in order to recover in ejectment, because to hold over would be wrong after the duration of the estate was fixed and well known to lessor and lessee. In an executory contract of purchase the possession is originally rightful, and it may be that, until the party in possession is called upon the restore it, he cannot be ejected without a demand or notice to quit. But the vendee can forfeit his right of possession, and if he fails to comply with the terms of sale, his possession afterwards is tortious, and there is an immediate right of action against him. It would be an idle ceremony to demand possession, when to a previous demand for the money due on the contract of purchase, the vendee refused to respond. This refusal, unaccompanied by any promise to pay the money at a future day, was equivalent to a direct notice to Von Phul that Gregg declined to execute the contract.

This action is a possessory one, and it settles nothing but the right of possession. The equities between the parties must be determined in another proceeding.

JUDGMENT AFFIRMED WITH COSTS.

title: Gregg v. Von Phul/Opinion of the Court


text: Talk:Gregg v. Von Phul/Opinion of the Court


text:
Malarin v. United States

THIS was an appeal by Malarin and another, executors of Pacheco, from the decree of the District Court of the United States, for the Southern District of California; the case being thus:

Pacheco claimed a tract of land in California, known as the Bolsa de San Felipe, or Sack of St. Philip, under a grant alleged to have been issued to him in October, 1840, by Alverado, then Mexican Governor of the department.

In 1852, he presented a petition to the Board of Commissioners appointed by the act of Congress of March 3d, 1851, to settle the respective rights of the United States and claimants under the former government, asking for the confirmation of his claim. He produced in support of it, before the board, from the archives of the former government, his petition to the Mexican Governor, Alverado, for the grant specifically of the Bolsa de San Felipe, the reports of the local authorities, and their proceedings thereon. He produced, also, a formal grant to him, signed by the Governor and attested by the Secretary of State, bearing date on the 4th of October, 1840, with a record of juridical possession delivered to him.

This record contained,--

A deed by Governor Alverado, dated October 14, 1840, reciting that Pacheco had solicited the land known by the name of Bolsa de San Felipe; and that the necessary steps and investigations having taken place, and been made in conformity with the law and regulations, he, the said governor, had granted to him the said land, subject to the approval of the Departmental Junta, and to certain 'conditions:' among these were two, thus expressed:

'He shall request the respective justice to give him juridical possession in virtue of this decree; said justice will designate the boundaries, at the limits owhereof the grantee shall, besides placing the land-marks, plant some fruit trees, or wild ones of some utility.

title: Malarin v. United States


text: Talk:Malarin v. United States

title: Talk:Malarin v. United States


text:
Malarin v. United States/Opinion of the Court

'The land whereof mention is made comprises two square leagues (dos sitios de ganado mayor), a little more or less by the plat which accompanies the expediente. The magistrate who gives possession shall cause it to be measured according to law, leaving the surplus which may result to the nation for the necessary uses.'

Next follows, a memorandum by Jimeno, that 'this title has been recorded in the respective book on the back of folio 3.' Then a petition from Pacheco himself, dated 1st February, 1841, to the Senor judge of the district, reciting 'that having obtained ownership of the land called Bolsa de San Felipe, which was granted to me on the 14th of October, 1840, as appears by the title and plat which I have the honor to accompany,' he, Pacheco, begs that the judge, in virtue of his 'attributions,' would be pleased to fix a day for giving him, Pacheco, possession. A marginal decree, dated February 12, 1841, then follows. 'Proceed,' it orders, 'to give the possession asked for, to which effect, Friday, the 19th inst., is appointed. Let the neighboring landholders be summoned; appointing previously measurers and counters, informing them thereof, that they accept and take oath.'

Accordingly, on the 19th of February, the day which the justices had fixed, the neighboring landholders assembled-the record mentioned-on the ground; two citizens were appointed to measure the land; neighbors consented to the appointment; measurers were sworn 'in the name of the Lord our God, and by the sign of the Holy Cross,' to perform their duty truly; two other citizens were appointed and sworn as counters; the length of the cord was accurately ascertained in the presence of all parties. These preliminaries being all transacted, recorded, and duly attested, the measuring began. The quantity of the land was ascertained to be two leagues, or perhaps a little more, on account of the irregularity of the ground. 'Thereupon,' continued the record, 'the neighbors being all satisfied with the measurement, they went, with the witnesses, the judge, and the petitioner, to the centre of the land, where the judge ordered the petitioner to enter into possession, which the petitioner did by 'pulling up grass and making demonstrations as owner.' This proceeding was ordered to be recorded, and the original 'expediente' to be returned to the party: which order, as the record showed, had been obeyed; the proceedings being entered in the book of possessions.

The claimant proved that he had been in the use and occupation of the premises where he now was since the date of juridical delivery of possession.

The board adjudged the claim valid, and entered a decree confirming it to the extent of two square leagues; provided that quantity were contained within the boundaries called for in the grant and a map to which the grant referred; but if there were less than that quantity within such boundaries, then the confirmation was to be for such less quantity. In fact, the boundaries embraced a little more than two leagues.

Appeal was taken by the United States to the District Court, and while the case was pending there Pacheco died, and the executors of his will, Malarin and another, were substituted in his place, and the subsequent proceedings were conducted in their names. The District Court, while holding the title of Pacheco valid, limited it, notwithstanding, to one league. The court, it seemed, had been led to this decree by the fact that there was an erasure on the original grant. The Spanish word dos,' 'two,' in designating the quantity preceding the corresponding Spanish word for 'leagues,' it was plain, had been written upon an erasure, where it was said that the word uno,' 'one,' had been before. Experts being called, one of them, familiar with writing and with the effect of time on ink, thought that if the alteration had been made at the time of the execution it might have the appearance which it now presented, and he did not see anything which led him to believe that the alteration was of a later date, except that it was an erasure. Another expert, judging from the difference in the color of the ink, thought that the alteration had been made at least five years after the rest was written, although if ink of different consistencies had been used, it might have been written at the same time, and bear the present appearance.

Governor Alverado, who issued the grant, and a clerk in the office of the Secretary of State at the time, were examined. Alverado was examined twice. On his first examination, which was in May, 1858, he said: 'I noticed, when the grant was presented to me for my signature, that the clerk had made a mistake by writing one league where he should have written two. I sent the grant back to the secretary's office to repair the mistake, and have the word 'two' inserted instead of 'one,' which he did, and reported to me to that effect.' Alverado swore, also, that the other which he gave to the secretary was to issue a grant for two leagues, more or less; that this he remembered well, as likewise the order to alter the mistake that was made at the time. In his second examination, however, which was in January, 1861, nearly three years after the first one, he testified that the title, as given to Pacheco, was for one league, and that he (Pacheco) 'made the reflection, that one league was not conformable, but in fact the title should and ought to have been for two leagues.' 'Then,' continued the witness, 'I gave the order that the title should be returned to the secretary's office, that that amendment should be made, and I was informed that the amendment was made accordingly.' In answer to the question, when the title was returned to the secretary's office to be amended? he answered, that it was within one, two, or three days from the time the title was delivered; but that he could not say particularly. This last-given testimony of Alverado conformed to that given by the clerk in the office of the Secretary of State, who was examined on the same day and at the same place when Governor Alverado last testified. Alverado, also, in answer to a question, if he 'recollected' by whom the deed was written, answered, by 'Francisco Arc e, clerk in the office.' Arc e himself swore, however, that it was not written by him, but was written by another clerk named Astrada, whose handwriting resembled his own. This clerk was not produced, nor explanation offered for his absence.

Mr. Willes, for the United States, relied largely on the evidence of forgery and fraud, as exhibited by the erasures; upon the coutradictory and untrustworthy character of Alverado's evidence, and upon the omission to produce the clerk, Astrada, who had drawn the deed.

Mr. J. S. Black, contra.

Mr. Justice FIELD delivered the opinion of the court:

In his petition to the Board of Land Commissioners, Pacheco represented that in October, 1840, a grant of a tract of land, known by the name of Bolsa de San Felipe, was issued to him by Alverado, then Governor of the Department of California.

The board adjudged the grant to be valid, and confirmed the claim of the petitioner under it to the extent of two square leagues. On appeal, the District Court modified the decree of the board, affirming the validity of the title of Pacheco, but limiting it to one square league. From this latter decree the present appeal is taken by the executors of the claimant, he having died pending the proceedings. The United States were satisfied with the decree, and did not appeal. The case therefore stands in this court upon the question, whether the parties representing the claimant are entitled under the grant to a confirmation of the title to one or two square leagues.

No question can be raised here upon the genuineness and authenticity of the grant to Pacheco. The Government having declined to appeal, the validity of the grant is not open for consideration.

In modifying the decree of the board, the District Court appears to have been influenced by the opinion that the grant had been fraudulently altered after it was issued, so as to purport to convey to the grantee two leagues, when it originally conveyed only one. It appears that preceding the term leagues the word one was originally written in the instrument, and was subsequently altered to the word two, or to be more accurate, an alteration was thus made in Spanish terms, corresponding with these English words. But, as the counsel of the appellants very justly observes, the grant could not be operative for any purpose except upon the conclusion that the alteration was made before its execution, or if subsequently made, that it was made with the sanction of the granting power. If valid therefore to pass one league, it must be held valid to pass the two leagues which it purports on its face to pass.

It is not necessary, however, to rest our decision upon this consideration. Nor is it necessary to invoke the presumption which counsel insist the law raises as to the date of the alteration. The authorities upon the latter point are not uniform. Some of them hold, that where there are no particular circumstances of suspicion connected with the alteration, the presumption of law is that the alteration was made contemporaneously with the execution of the instrument, giving as the reason for the conclusion that a deed cannot be altered after its execution without fraud, which is never to be assumed without proof; other authorities hold the presumption to be the other way, and require an explanation of the alteration before the deed can be admitted in evidence.

In the case under consideration the proofs remove all suspicion from the alteration, whatever may be the presumption of the law. The governor who issued the grant testifies substantially that the alteration was made by his direction, and that the grant was subsequently delivered or redelivered to the grantee. If this were the case, it is immaterial whether the alteration was made before the grant had received his signature or after it had been once delivered. The redelivery after the alteration, if such were the fact, was in legal effect a re-execution of the grant. That some discrepancy should exist in the statements of the governor at different times, with reference to a transaction which had occurred more than eighteen years before, is not surprising. His statements are consistent and positive to the effect that the alteration was made by his direction, and that the grant was delivered or redelivered afterwards; and they disagree only upon the point whether the alteration was made before or after the grant had been once delivered. The clerk in the office of the secretary, who attested the grant, corroborates the testimony of the governor, that the alteration was made by his direction. The juridical possession of the two leagues, delivered to the grantee soon after the execution of the grant, and the subsequent occupation by him of the premises until his death, a period of nearly twenty years, dissipates whatever doubt might otherwise exist as to the truth of the statement of the governor in this particular.

When the grant to Pacheco was issued there still remained another proceeding to be taken for the investiture of the title. Under the civil, as at the common law, a formal tradition or livery of seizin of the property was necessary. As preliminary to this proceeding the boundaries of the quantity granted had to be established, when there was any uncertainty in the description of the premises. Measurement and segregation in such cases therefore preceded the final delivery of possession. By the Mexican law various regulations were prescribed for the guidance in these matters of the magistrates of the vicinage. The conditions annexed to the grant in the case at bar required the grantee to solicit juridical possession from the proper judge. In compliance with this requirement, within four months after the issue of the grant, he presented the instrument to the judge of the district, and requested him to designate a day for delivering the possession. The judge designated a day, and directed that the adjoining proprietors be cited, and that measurers and counters be appointed. On the day designated the proprietors appeared, and two measurers and two counters were appointed, and sworn for the faithful discharge of their duties. A line provided for the measurement was produced, and its precise length ascertained. The measurers then proceeded to measure off the land, the judge and the proprietors accompanying them. The measurement being effected, the parties went to the centre of the land, and there the judge directed the grantee to enter into the possession, which he did, and gave evidence of the fact 'by pulling up grass and making demonstrations as owner of the land.' Of the various steps thus taken, from the appointment of the day to the final act of delivery, a complete record was kept by the judge, and by him transmitted to the grantee after being properly entered upon the 'book of possessions.' This record was produced and admitted in evidence, no objection being taken to its genuineness or authenticity. The first document in this record is a copy of the original grant produced to the judge, which specifies two square leagues as the quantity granted. That portion of the record which specifies the quantity measured also declares it to have been two square leagues, or a little more on account of the irregularity of the land. The solemnities attending this official delivery of possession were well calculated to make an impression upon the minds of the spectators, and to preserve the recollection of the act. The ownership, extent, and general location of the land were matters thus brought within the knowledge of the neighborhood, and were no doubt afterwards the subjects of frequent reference among the adjoining proprietors. It is possible, but highly improbable, that serious alteration in the grant as to the quantity of the land, would have escaped observation and exposure. No suspicion on the subject having been suggested for eighteen years, is a circumstance of no little weight to show that no grounds for suspicion ever existed.

The decree of the District Court must be reversed, and that court directed to enter a decree confirming the claim of the appellants to two square leagues under the grant to Pacheco.

DECREE ACCORDINGLY.


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


text:
Van Hostrup v. Madison City

ERROR to the Circuit Court for the District of Indiana.

The suit was brought in the court below against the city of Madison, in Indiana, for moneys due upon coupons attached to certain bonds issued by the city authorities, signed by the mayor and the city clerk, and to which was affixed the seal of the corporation, by which the city acknowledged, that in virtue of an ordinance of the Common Council, passed 2d September, 1852, it owed and promised to pay the president of the Columbus and Shelby Railroad Company, or bearer, $1000, redeemable on the 1st of November, in the year 1872, with interest at the rate of six per cent. per annum, semiannually, on the first days of May and November of each year, from the date of the bonds, at the banking house of Winslow, Lanier & Co., in the city of New York.

These bonds were negotiated and put into circulation by the Columbus and Shelby Railroad Company, and purchased in the market by the plaintiffs, bon a fide, and for a valuable consideration. They had been issued to the railroad company for stock subscribed in that company by the city of Madison, aforesaid.

As respected the authority of the city to subscribe, it appeared that one section of its charter authorized it 'to take stock in any chartered company for making a road or roads to said city, provided, that no stock shall be subscribed, &c., unless it be on the petition of two-thirds of the citizens who are freeholders, &c., and provided, that in all cases where stock is taken, the Common Council shall have power to borrow money,' &c.

At the time when the subscription to the Columbus and Shelby road was made and the bonds issued, a railroad called the Madison and Indianapolis Railroad, a road leading from

Indianapolis, in the interior of the State, to Madison, was in operation, and brought down from one part of the interior where Indianapolis is, to Madison, on the Ohio River, the products of the State. This road passed through Columbus. The Columbus and Shelby Company (the company to which the subscription was made), was organized to construct a road from Columbus to Shelby County, terminating at Shelbyville. But Columbus was forty-six miles from Madison; Shelbyville being about twenty-three north of it. Through Columbus, and by means of the connection with the Madison and Indianapolis road, the Columbus and Shelby road did lead to Madison and nowhere else; though if regarded as an independent and isolated road, and as one between Shelby and Columbus only, it could not be said to be a road to the city designated. The diagram will elucidate the matter.

As respected the required 'petition of two-thirds of the citizens,' the matter rested apparently upon an entry on the minutes of the City Council, which stated that 'the freeholders of the city of Madison, with great unanimity, had petitioned,' &c.

The defences set up by the city, were 'that the bonds were issued to the Columbus and Shelby Railroad Company, to pay for a subscription by the city to the capital stock of the said railroad company, and for no other consideration; that the said Columbus and Shelby Railroad Company was not a chartered company for the purpose of making a road to the city of Madison aforesaid, but to make a road from Columbus to Shelbyville, the nearest terminus of said road being forty-six miles distant from Madison.'

2. That the bonds were issued without the petition or memorial of two-thirds of the freeholders of said city requesting the Common Council to take the stock and issue the bonds.

The court below gave judgment in the case, which was upon the pleadings wholly, for the city. On error here, the validity of the defences-as in the court below-were the points in issue.

Mr. Johnson, for the city of Madison: If these bonds were issued, as alleged, to the Columbus and Shelby Railroad Company,-a company not chartered to make a road to Madison, but to other points,-they were void in the hands of said railroad company when delivered to it. They appear on their face to be issued to such company, and every person must take notice of the charter of that company, and must know that it is a chartered company to make a road to Madison, because such charter is a part of the law of the land, and because it is the very thing that is required to exist to enable the city of Madison to act. Parties dealing with a corporation must know that the facts exist upon which its power to act is founded. The city of Madison, without special authority from the legislature, has no power to subscribe for stock in railroad companies. It cannot compel the citizens to become parties or stockholders in private corporations, nor pledge or incumber the individual property of the citizens in speculative undertakings. Its powers are only coextensive with its duties. The Common Council may borrow money for the special purposes of the trust and authority intrusted to them, and may levy taxes to raise money for these purposes, but none other.

If the city of Madison may subscribe to a road whose nearest terminus is forty-six miles away from it, because another road leads from that terminus to the city, it may subscribe not only to a road in parts of Indiana the most distant from Madison, but to roads in the most distant parts of the United States. It may build a road between any towns in California, provided only, that any other road or series or concatenation of roads exists by which a traveller can get from either terminus of that California road by rail, to Madison. It is easy to see how capable of abuse is such a power.

There is no sufficient evidence of a 'two-thirds' petition. The expression, 'great unanimity,' is loose. It is impossible to say, in reference to the population of a city, what it means. Whatever it may mean, it is no record of that fact which the act authorizing the subscription declares must pre-exist, and is therefore valueless.

Messrs. Porter and Roelker, contra:

1. In La Fayette v. Cox (5 Indiana, 38), it was held that the city had no power, under any circumstances, to subscribe for railroad stocks. In City v. West (9 Id., 74), that city had a power as this one has, 'to take stock in any chartered company for making roads to the city.' The Ohio and Mississippi Railroad Company was chartered to make a road between Lawrenceburgh and Vincennes, and to extend east to Cincinnati, and west to St. Louis. The city of Aurora, some five miles below Lawrenceburgh, on the Ohio River, was not mentioned in the charter; but the road was located through Aurora, and it was held that the city might subscribe for its stock as a road to the city. The court say, 'This case is entirely different from that of Lafayette v. ''Cox. There the charter did not confer the power to take stock, but it was attempted to be inferentially derived''. Here the power is expressly granted, and the question is merely whether the road in which the stock was subscribed is one contemplated by the charter.'

The geographical facts within the cognizance of the court, will not enable it to say, that the judgment of the people of Madison, in attempting to make the counties with which this road brought them into direct connection, tributary to the commercial and manufacturing interests of their city, was erroneous.

The city would undoubtedly have been authorized to take stock in a company for building a road from Shelbyville directly to the city line. But this would have secured her no greater commercial advantages, and would have involved a useless outlay of capital, since two-thirds of such a road must have run alongside the Madison and Indianapolis Railroad, already in operation. May not the city use the economical discretion that a natural person might? Must she pay three dollars instead of one, that the road to which she subscribes may fall within the literal description of the roads to which her privilege extends? Hills of solid rock surround the city of Madison. Did the legislature contemplate that the city should aid in making no roads except such as unnecessarily cut through them?

2. The City Council was the proper judge whether or not the required number of resident freeholders had petitioned for a subscription to the stock of the company to which the bonds were issued. Conceding that the entry was not in the precise language of the proviso, we nevertheless submit, that the plain implication is, that a greater proportion than two-thirds had petitioned. The entry is, that 'the freeholders of the city of Madison, with great unanimity, had petitioned,' &c.

Mr. Justice NELSON delivered the opinion of the court:

title: Van Hostrup v. Madison City


text: Talk:Van Hostrup v. Madison City

title: Talk:Van Hostrup v. Madison City


text:
Van Hostrup v. Madison City/Opinion of the Court

One point of objection to the bonds is that the Columbus and Shelby Railroad does not, by the terms of its charter or in fact, terminate at the city of Madison; and hence, that the road is not within the description of one in which the city was authorized to take stock.

The words are, 'to take stock in any chartered company for making a road or roads to the said city.' It is supposed that the authority to subscribe is tied down to a chartered road, the line of which comes within the limits of the city; and that the words are to be taken in the most literal and restrictive sense. But this, we think, would be not only a very narrow and strained construction of the terms of the clause, but would defeat the manifest object and purpose of it.

The power was sought and granted, with the obvious idea of enabling the city to promote its commercial and business interests, by affording a ready and convenient access to it from different parts of the interior of the State, and thus to compete with other cities on the Ohio River and in the interior which were or might be in the enjoyment of railroad facilities. This object and purpose, we think, should be kept constantly in view in giving a construction to the clause in the charter. For while it will operate to prevent a narrow and fruitless interpretation, it will have the effect of guarding against any abuse or unreasonable extension of the power.

We think it quite clear, a subscription to a road wholly unconnected with roads leading to the city, would not be within its fair meaning and intent, but are equally satisfied that a subscription to a road in extension and prolongation of one leading into the city is within it.

It will be admitted if a railroad had been chartered, originally, from the city of Madison to Shelbyville, by the way of Columbus, a subscription to the stock would have come within the very words of the charter, and what difference, in good sense or principle, or with reference to the object and purpose of the clause, is there between that case and the one before us? The object of the subscription in the first was to extend the facilities of railroad communication through the interior between the two towns, the termini of the road. In the second, as a road had already been made to Columbus, and in operation, the intercommunication is accomplished by a subscription to a line from Columbus to Shelby. The difference between the two cases is simply a dispute upon words.

The terms of the clause do not limit the subscription to one road or to one company, 'road or roads in any chartered company.' The argument, therefore, against the power rests exclusively upon the effect to be given to the concluding words, 'to said city.' We have already considered and given our construction of them.

It was strongly argued, that upon this construction great abuses may be committed by the city corporation in subscriptions of stock to remote companies, in which it would have but little, if any, interest or advantage. In the construction of the grant of powers, extreme cases may be suggested against it, which it is difficult to answer. But in the present and kindred cases, something may be trusted to the wisdom and integrity, as well as the interest, of the body appointed to execute the power.

Another objection taken is, that the proviso requiring a petition of two-thirds of the citizens, who were freeholders of the city, was not complied with. As we have seen, the bonds signed by the mayor and clerk of the city recite on the face of them that they were issued by virtue of an ordinance of the Common Council of the city, passed September 2d, 1852. This concludes the city as to any irregularities that may have existed in carrying into execution the power granted to subscribe the stock and issue the bonds, as has been repeatedly held by this court.

Our conclusion upon the whole case is, that full power existed in the defendants to issue the bonds, and that the plaintiffs are entitled to recover the interest coupons in question. Even if the case had been doubtful, inasmuch as the city authorities have given this construction to the charter, and bonds have been issued and in the hands of bon a fide purchasers for value, we should have felt bound to acquiesce in it.

JUDGMENT REVERSED WITH COSTS, AND CAUSE REMANDED, &C.


text: Talk:Van Hostrup v. Madison City/Opinion of the Court


text:
Miller v. Tiffany

TIFFANY filed a bill against Miller and wife, in the Circuit Court for the District of Indiana, to foreclose a mortgage which the last-named persons had given to Palmer, a merchant of New York, and Wallace, an attorney at law of Cleveland, Ohio, as assignees of two insolvent firms; which mortgage they, the said Palmer and Wallace, had assigned to him, the complainant.

The facts of the case were essentially these: Two mercantile firms, closely connected with each other and in part composed of the same persons-one in Cleveland, Ohio, and one in New York City being unfortunate in business, had made an assignment of their effects, dry goods chiefly, to these two persons, Wallace and Palmer; Palmer being a large creditor of the firms. About $50,000 worth of the goods were at Cleveland under Wallace's charge, and about $73,000 worth in New York, under Palmer's.

In this state of things, Miller, a German trader, resident at Fort Wayne, in Indiana, who had a valuable, unincumbered real estate in that State, but who was largely in debt and much embarrassed for ready money, employed two personal friends, Turner and Rufner, to go to New York and raise him money. They went there in February, 1858, and after making, according to Rufner's account, 'desperate efforts, for at least four weeks, by publication in the Herald and Tribune,' fell in with a broker, named Anthony, who introduced them to Palmer. The result was, that Palmer entered into a treaty to sell Miller $20,000 worth of that part of the assigned goods in New York, at six months' credit, and to receive in payment for them a mortgage on Miller's real estate in Indiana, payable in five years; the mortgage to provide, however, that if there should be any default in paying the interest, the principal should become due at once. Palmer wrote, on the 15th of February, 1858, to Wallace at Cleveland what he had agreed on, requested him to go to Fort Wayne in Indiana, examine the property and title, and if satisfied with both to have the papers prepared; after which the goods should be delivered to Miller or his agents. Wallace, accordingly, went to Fort Wayne, in Indiana, and being satisfied with the security, a note for the term mentioned was given by Miller, with interest at ten per cent., payable, not in New York, where Palmer lived, and where the goods were bought, nor yet in Fort Wayne, the residence of Miller, but in Cleveland (at the Commercial Branch Bank there), the residence of Wallace, with the current rate of exchange on New York. Matters being thus concluded, Rufner, the friend of Miller, went to New York and selected the goods out of the assigned stock there. They were then shipped to Fort Wayne, where Miller received them.

Six per cent., it is necessary to state, was apparently the lawful rate of interest in Indiana. Ten was allowable in Ohio, under a statute of 14th March, 1850, at that time in force. Whether on a sale of goods ten was in New York, was not so clear. On the loan of money it was not.

The interest not being paid, and the present bill filed to foreclose the mortgage, Miller set up two principal defences:

1. That the goods were not worth anything like the sum at which they had been sold to him.

2. That the contract for ten per cent. was usurious and void.

As respected the value of the goods, the testimony was conflicting. Evans, a trader of Fort Wayne, who on Miller's invitation had looked through the goods, 'without any special motive, but the same as he would look through any other stock of goods in town, to see what I had to compete with,' when interrogated as to their value replied, 'This is a difficult question to answer, one in which, perhaps, no two men would agree. Their value to any man depends upon ''his facilities for getting rid of them. I should estimate their value to me, considering the fact that the stock was an old stock of goods, a great portion of them out of style, being poorly assorted, a large quantity of goods of a particular kind, and few or none of other kinds necessary to make up an assortment in proportion to the whole amount of stock, at from sixty'' to sixty-five per cent. of the invoices.'

Walker, another resident of Fort Wayne, who had been 'engaged in trading goods for about seven years, railroading some, and a part of the time engaged in outside trading,' confirmed this estimate between invoice and cash values; adding, 'the principal objections to the stock were, that the goods were badly selected; large amounts of some kinds, and a few or none of others to make them saleable. A considerable quantity of them were out of style, which is a bad objection in selling goods. Part of the goods were worth more than the invoice price, and a part of them less, making the average value about two-thirds invoiced price.'

Gilford, who was a clerk of Miller, when the goods arrived at Fort Wayne, thought that 'the general character of the goods was not very good. The goods were principally old styles, and was a hard stock to sell, and the majority of them were billed to Miller at too high prices for retailing purposes. They were worth, in my opinion, about sixty cents on the dollar.'

As respected the matter of usury. It appeared that Mr. Hough, an attorney of Fort Wayne, where Miller lived, was employed by Wallace, on his visit to Fort Wayne, to draw the papers in the case. In giving an account of the circumstances under which the note was made payable, Hough's testimony was, that on the morning of the day when the note was drawn, Miller introduced him to Wallace. The witness stated as follows: 'The note and mortgage were drawn up in my office on the 22d of February, 1858. I first wrote a note payable in New York for the amount specified, ''with ten per cent. interest, upon which some conversation ensued between Wallace and Miller, when Miller remarked in substance that he would rather pay it to Wallace: 'I know you, Wallace; you are a clever fellow; I would rather pay you, as I don't know Palmer;' and asked if it could not be paid in Cleveland, adding that he expected to trade there, and it would be easier for him to pay it in Cleveland. Upon the request of Miller'', Wallace wrote a note, and made it payable at the Commercial Branch Bank at Cleveland, which was and is the residence of Wallace.'

There was no evidence to contradict this, except so far as it might be found in a correspondence between Palmer in New York and Wallace in Cleveland. Palmer, after concluding the negotiation with Rufner and Turner (Miller's agents in New York), gave Rufner, then on his way through Cleveland to Fort Wayne, an open letter to Wallace-the one already mentioned, and dated 15th February, 1858 and to be delivered by Rufner to him. It ran thus:

'This will be handed to you by Mr. Rufner, one of the parties who have been negotiating with me for the purchase of part of our stock of goods here; the purchase-money to be secured by mortgage on Mr. Miller's property at Fort Wayne. My proposal to them is, to sell $20,000 of our goods, at our regular prices to the country, at six months' credit, and to receive in pay therefor, a bond and mortgage on Mr. Miller's property,-provided it affords satisfactory security for the amount, and the title is undoubted; the mortgage to be the first lien on the property, and payable on or before five years, bearing ten per cent. semiannual interest; the first interest to be payable in twelve months from the date of the delivery of the goods here; the principal and interest to be payable here,' etc.

On the 22d February, 1858, Wallace, who, in pursuance of this letter, went, as already mentioned, to Fort Wayne, in Indiana, having, as he says, 'concluded the business for which I came here,' writes to his co-assignee Palmer, from that place, late in the evening and when 'tired,' a long letter and 'in full,' 'how he found things and what he had done.' He gives an account of some accidents on the way, his being detained by 'a blockade of snow,' how he had examined the property thoroughly with Mr. Hough, a full account of the character and value of the property, &c., and after a mention of some other things proper enough to be reported to his co-assignee or principal, his letter contained this sentence, the only one having any reference whatever to the place where the interest on the mortgage-note was to be paid, or as to why Palmer's instructions on that point had been departed from:

'I have taken the liberty ''to vary from your instructions in reference to the place where the note is made payable. Seven'' per cent. being, as I understand, the legal rate of interest in New York, and six per cent. being the rate in Indiana, the note would seem to be open to the plea of usury both here and in New York if made for ten per cent. So, to avoid this, I made it payable in Ohio, and ''dated it there, where ten per cent. is the legal rate with exchange on New York, which results the same''.'

Wallace, who was himself examined as a witness, gave this account. After confirming Hough's statement that the note was originally drawn so as to make interest payable in New York, and that it was by Miller's request that it was finally made payable in Cleveland, Wallace continued:

'Upon this request of Mr. Miller, I consented that I would take his note, payable as he had desired, with exchange on New York; to which he agreed; and the note in suit was thus drawn up by myself, and executed by Mr. Miller. The note was so executed by Miller, and received by me in the utmost good faith, on my part, as to the place where it was dated and made payable, ''and mainly for the reason expressed by Miller, that it would enable him to pay it in his home currency. Perhaps another reason'' which induced me to consent to the change proposed by Miller was, that I understood that by the laws of New York seven per cent. was the legal rate of interest; and as Mr. Palmer had informed me that the note was to draw ten per cent. interest, it occurred to me that perhaps the contract ''might upon its face be opened to the plea of usury if payable in New York; and not having time to examine the question, and as the laws of my own State allowed parties to contract for ten per cent. interest, and beliveing that I had the same right to make the note payable at my place of residence (as we were joint assignees in both New York and Cleveland), as at the domicile of Mr. Palmer, I thought it would remove that apparent objection upon the face, if the note was made payable at my'' residence in Ohio.'

A sharp cross-examination got no very different result. The witness said:

'I regarded my knowledge as very imperfect upon the subject, for I had no knowledge of the construction of the statute of New York. I only had queries in my mind in reference to it, and fears that the contract might be regarded upon its face as usurious. I knew that the legal rate of interest in New York was seven per cent., and at the same time I had that confidence in Mr. Palmer's experience as a business man that he must know the statute of his own State in respect to interest upon all contracts, that he would not have bargained blindly for an illegal rate. Hence my doubts as to whether or not it was usurious upon its face. I regarded the contract as important, and I had a good deal of interest; but I had less personal anxiety in regard to it, and did not investigate questions connected with it as I should have done, had I not known that Palmer, before consummating the sale, would consult his lawyer in New York, Mr. Charles Tracy.'

On the other hand, there were some indications in the evidence that the whole business, so far as Miller was concerned, was a scheme of his, and perhaps of Rufner's, to get the goods by fraud, and without paying anything to anybody for them. It appeared, at least, that after Wallace, late at night-near midnight-had written his letter to Palmer of 22d of February, 1858, a copy of it-either at his request and because he was tried, or at the request of Rufner, and for some purpose, honest or dishonest, of his-had been taken by Miller's clerk; and that copy, containing the remark as to the reason why the interest had been made payable at Cleveland, was now produced accordingly. Rufner also swore that when he and Turner were making the treaty or negotiation with Palmer, in New York, for the goods, nothing was said about the rate of interest: that he expected it was to be seven per cent., the New York rate; and that the first intimation he had to the contrary, was Palmer's open letter to Wallace, given to him, Rufner, to be delivered. Giving an account further on of the report, which, on getting to Fort Wayne, in Indiana, he had made to his principal and friend Miller, Rufner said:

'I did report to Mr. Miller the terms as were written to Mr. Wallace, it being the only evidence in writing that we had in relation to the whole transaction up to that time. Mr. Miller swore that by * * * ten per cent. would eat him up; he might as well surrender at once, and that the idea of his wife joining in a mortgage and note was a thing he had never been called upon to do, and he could not consent to accept such a * * * proposition, and that he had better let his business go to * * *. I told him of course he was the judge in the matter; that these were the terms; I knew they were hard, but it was the best and only thing I could do with Mr. Palmer, and that, in my opinion, if he objected to any portion of Palmer's written instruction to Mr. Wallace, he might as well abandon the whole; that I had understood ''Mr. Wallace had no power to act in the matter. I said I thought that the contract with ten per cent. interest was a usurious one''.'

This conversation was just before Wallace arrived in Fort Wayne to examine and conclude matters, and at Miller's request changed the place of paying the interest.

It appeared that immediately after the mortgage was executed and forwarded to Palmer at New York, Rufner, who now went to New York to select the goods, wrote, on the 25th of February, to Miller, about the subject of his business there. The contents of his letter were to be inferred from the reply. Miller writes back on the 2d of March, 1858, that is to say, ten days after the conclusion of matters at Fort Wayne, between himself and Wallace, thus:

'Friend Rufner: Yours of the 25th February was received this morning, and contents particularly noticed, and in reply, have but little to say, knowing that your good judgment will enable you to see and do things for me and yourself far better at this late day than I could suggest, being so far from the place of action, and knowing so little of the surroundings and influences under which you will have to act, in order to accomplish the object of your visit to New York. . . .. Be sure you preserve a copy of Mr. Wallace's letter to Mr. Palmer.'

And he adds in a postscript:

'P. S. In regard to the ten per cent. matter, let the Palmer party do all the talking themselves, and keep perfectly cool and shady on that subject. Don't let Turner see this letter.'

The court below made a decree of foreclosure, and from that decree the present appeal was taken; the questions here being the same as below.

Mr. Evarts and Mr. Gilette for Miller and wife, the appellants:

1. The testimony shows that the goods were not at all worth the prices charged. They were unmarketable goods, the residuum, after the season of sales, of a bankrupt firm. Palmer was a heavy creditor of the firm, nursing its assets from interest, as much as he was bound to nurse them from duty. The goods were bought before they were really seen. The selection took place after the mortgage was executed and in possession of Palmer.

2. The negotiations and the transactions were commenced and completed in the city and State of New York. Palmer having for sale in the city of New York a stock of dry goods belonging to the assigned estate of a bankrupt firm of that city, treats there with Miller's agents, and concludes all the terms of the bargain, leaving open merely an inquiry into the value of Miller's property to be mortgaged. Upon the report of his agent in this inquiry, Palmer received the securities, now in suit, from Miller's agents in the city of New York, and there delivered the goods which formed the subject of the bargain. The circumstances and the motives under which the note, instead of being dated at Fort Wayne, Indiana, where it was made and signed, was dated at Cleveland, Ohio, and made payable there, instead of at New York, refute the pretension that it was an element or ingredient of the contract between the parties, and one upon which its terms were adjusted, that the price of the goods sold in New York was to be paid in Ohio. Palmer in his letter states the terms of the bargain to be, that the bond and mortgage were 'to be drawn payable on or before five years, bearing ten per cent. semi-annual interest, the first interest to be payable in twelve months from the date of the delivery of the goods here; the principal and interest to be payable here;' and Wallace gives the whole reason of the place of payment being varied, on the face of the securities, as follows: 'I have taken the liberty to vary from your instructions in reference to the place where the note is made payable. Seven per cent. being, as I understand, the legal rate of interest in New York, and six per cent. being the rate in Indiana, the note would seem to be open to the plea of usury, both here and in New York, if made for ten per cent.; so, to avoid this, I made it payable in Ohio, and dated it there, where ten per cent. is the legal rate, with exchange on New York, which results the same.' The charge of exchange on New York being added to the face of the price, thus to be paid at Cleveland, shows that New York remained the place of payment in the intent of both payer and payee, and as a term of the bargain, notwithstanding the formal change in the tenor of the note.

The validity of the transaction, then, depends on the law of New York, the true 'place of the contract;' and Cleveland having been made the 'place of performance,' not as a substantive item of the agreement, but only as one in evasion of the 'place of the contract,' cannot furnish the rule for the exposition or government of what was done.

[3. The counsel contended, under this head, that by the statute of New York the contract was usurious, whether it was regarded as a sale, with a note and mortgage given in payment, or whether considered in the light, which was its true one, of a loan, under the guise of a sale; the purpose being that Miller should sell the goods en masse at auction.]

Mr. Coombs, on the other side:

1. The defence set up from failure of consideration breaks down completely. The first witness produced to sustain it, disproves it. The value of the goods, he says, is matter of opinion; a question, 'in which, perhaps, no two men would agree.' It would depend, he swears, on the party's 'facilities for getting rid of them.' 'The goods were badly selected,' says a second witness. But who selected them? Miller's own agents. Moreover, what did this witness, who had been engaged in 'railroading some,' and in 'railroading' as much as in trade, know on the subject? A third witness considered that they were 'billed' too high; but is every man who has goods 'billed' too high to him to set up successfully, failure of consideration, after he has inquired the price, received the goods and disposed of them for himself? Trade would not flourish under such a rule.

2. The general principle in relation to contracts made in one place to be executed in another, is well settled. They are to be governed by the laws of the place of performance, and if the interest allowed by the laws of the place of performance is higher than that permitted at the place of the contract, the parties may stipulate for the higher interest without incurring the penalty of usury.

We admit that there is one exception to this general rule, and that where the note is made payable at a place foreign to the residence of either of the parties, and to the subject-matter of the contract, for the purpose of obtaining a higher rate of interest than the laws of the place of contract allow, with intent to evade said law, the contract will be usurious, if the rate of interest specified exceed the rate allowed by the lex loci contractus. Nor shall we dispute the proposition, that where the note is made payable at a place other than the residence of either of the parties, and foreign to the subject-matter of the contract, and a higher rate of interest is stipulated for than the laws of the place of contract permit, the parties will be presumed to have intended a fraudulent evasion of those laws. This presumption, however, can never arise when the note is made payable at the place of the domicile of one of the parties, especially when it is done at the request of the payor, and for his accommodation. In the case at bar, it will be hard to show any good reason, in law or in morals, why Wallace had not as good a right to require that the note should be made payable at the place of his domicile, as Palmer had to require its payment in New York; even if the payor had been indifferent, instead of desiring that it should be made payable at Cleveland, in preference to New York.

3. Under this head, the counsel replied to the argument on the New York statute; contending that the transaction was a sale, not a loan; and that being so it was protected by the case of Cutler v. Wright, which recognized the English case of Beete v. Bidgood.

Mr. Justice SWAYNE delivered the opinion of the court:

title: Miller v. Tiffany


text: Talk:Miller v. Tiffany

title: Talk:Miller v. Tiffany


text:
Miller v. Tiffany/Opinion of the Court

Two defences to the mortgage are relied upon:

1. That the goods sold to the defendant, which formed the consideration of the note secured by the mortgage, were worth largely less than the amount for which the note was given. It is claimed, therefore, that there has been a partial failure of consideration.

The evidence upon the subject is conflicting. It has failed to establish to our satisfaction the fact alleged. Fraud or misrepresentation by the vendor is neither averred nor proved. It is in proof that the goods were carefully examined by the agents of Miller before they were bought, and that they were selected when the purchase was made. They were sold at the regular prices of the establishment. It does not appear that Miller made any objection, either to the prices or quality, when he received them; or that he ever made any objection, until it was set up in his answer in this case, more than a year after the goods were delivered to him.

The objection comes too late. The sanctity of contracts cannot thus be trifled with. The common law, unlike the civil law, does not imply a warranty from a full price. Where there is neither fraud nor warranty, and the buyer receives and retains the goods, without objection, he waives the right to object afterwards, and is finally concluded. In such cases the rule of caveat emptor applies.

2. The defence chiefly relied upon is usury. The result of our inquiry upon that subject must depend upon the lex loci that governs the contract.

Palmer and Wallace, the payees of the note, were the assignees of an insolvent firm, which did business under one name in New York, and under another at Cleveland, Ohio. Palmer resided at New York and Wallace at Cleveland. About $50,000 worth of the goods, covered by the assignment, were at the former city, and about $75,000 worth at the latter. The negotiation for the sale was commenced by Palmer and concluded by Wallace. The note is as follows: [His Honor here read the mortgage-note, already described. ] Miller lived in Indiana. The note and mortgage were executed in that State. The mortgaged premises are situated there. Wallace was present at the execution of the securities. They were transmitted to Palmer, at New York, and the goods were thereupon shipped thence to Indiana. The note and mortgage have been assigned to the appellee.

We lay out of view the imputation upon Palmer and Wallace, of a fraudulent purpose to evade by shift or device the usury statute of Indiana or New York. It is wholly unsupported by the evidence. They were acting in a fiduciary character, and could have had no motive to engage in such a transaction. There is no reason to believe that such a conception entered into their minds. On the other hand, we are by no means satisfied that it was not the deliberate purpose of Miller, when the arrangement was made, to involve them in the toils of this defence, and if possible to escape with the goods without paying anything for them. Our business, however, is to ascertain and apply the law of the case. We shall not discuss the evidence bearing upon the ethics of his conduct.

'The general principle in relation to contracts made in one place to be performed in another is well settled. They are to be governed by the law of the place of performance, and if the interest allowed by the law of the place of performance is higher than that permitted at the place of contract, the parties may stipulate for the higher interest without incurring the penalties of usury.' The converse of this proposition is also well settled. If the rate of interest be higher at the place of the contract than at the place of performance, the parties may lawfully contract in that case also for the higher rate.

These rules are subject to the qualification, that the parties act in good faith, and that the form of the transaction is not adopted to disguise its real character. The validity of the contract is determined by the law of the place where it is entered into. Whether void or valid there, it is so everywhere.

When these securities were executed the statute of Ohio of the 14th of March, 1850, upon the subject of interest, was in force. According to its provisions parties might lawfully contract for any rate of interest not exceeding ten per cent. per annum. The contract of Miller was therefore valid.

DECREE AFFIRMED WITH COSTS.

title: Miller v. Tiffany/Opinion of the Court


text: Talk:Miller v. Tiffany/Opinion of the Court


text:
United States v. D'Aguirre

APPEAL by the United States from the District Court for the Southern District of California; the case being thus:

D'Aguirre, in right of his wife Donna Maria Estudillo, claimed a tract of land in California under a grant from the Mexican Government. The tract was parcel of a larger tract, known as the 'Rancho of Old and New San Jacinto.' Two grants had been made of parts from this general tract; the surplus embracing, in fact, about eleven leagues, being that which was claimed by the respondent.

Having presented a petition to the Board of Commissioners, appointed by act of March 3d, 1851, to ascertain and settle private land claims in California, for a confirmation of his claim, D'Aguirre's title as it appeared before the board was thus:

His original petition to the prefect for the land, made in behalf of his wife, set forth 'that there was remaining a 'sobrante,' or surplus,' in the tract or rancho of San Jacinto, and that his wife 'requiring the said remnant,. . . solicited the prefect's assistance to obtain the mentioned land, the extent of which was about five leagues' within the limits of the known rancho of San Jacinto, the general plat of which is in the office of the Secretary of State, and shown in its total extent that it is bounded thus: north by the ranchos of Jurupa and San Bernardino, south by Temecula, west by Unapia, and east by Gorgonia.' The petition continued: 'Your honor will also cause previous observations to be taken.'

The petition to the prefect was followed by the report of that officer to the governor upon it. The report says: 'The land petitioned for is that remaining vacant from the land of the Old and New San Jacinto, and which is bounded by the lands mentioned in the petition; and the copy of the plat, which I have under my eyes, proves to be correct with the original which exists in the government.' The document proceeds: 'Inasmuch as it does not appear to be strange property, that which is claimed as part overplus, and never to have been the same declared, &c., it seems to me that there can result no obstacle to this concession. Notwithstanding that which is represented, your excellency, with more prudence, will resolve upon that which becomes its superior will.'

Next followed,--

THE CONCESSION OF THE GOVERNOR, PIO PICO.

ANGELES, May 9, 1846.

Having seen the petition with which commences this espediente, the report, & c., with the rest that has been reported, and finding the whole in conformity with the laws and regulation, &c., I declare to Donna Maria Estudillo d'Aguirre the property in fee of the land remaining in Old and New San Jacinto, conformably as shows the general map, which agrees with all the antecedents. Let the respective title be delivered to the claimant, and let this espediente be reserved to submit to the approbation of the most excellent Assembly, &c.

PIO PICO.

JOSE MATIAS MORENO, Secretary.

Coming after this document of 'Concession' was, what is called the Grant, a document from the same governor, Pio Pico, in substance reciting that D'Aguirre, in the name of his wife, had solicited for her, the overplus land resulting from the rancho of Old and New San Jacinto, concerning which, the investigations being previously made the governor proceeds to say, 'I have decreed this day that it be conceded to her, the mentioned land, declaring to her the property of the same in fee by these present despatches.' The document continues:

'She shall solicit the respective judge to give her juridical possession in virtue of this decree, thereby establishing the boundaries with the necessary landmarks.

'The land of which donation is made to her, is that which remains as overplus in the ranchos of Old and New San Jacinto, as will appear by the general map of both ranchos, and which corresponds with their espedientes.

'The magistrate who shall give the possession shall have it surveyed conformably to the ordinanza, commencing the surveys from the boundaries of Jose Antonio Estudillo and of Don Miguel de Pedrorena, and he will advise the government of the number of (sitos de ganado mayor) square leagues it contains.'

Next came the report of the Committee on Vacant Lands, which, declaring that D'Aguirre's petition in relation to the tract remaining as overplus, having been granted to him in conformity with the laws on the subject-matter, the said concession 'of the tract which remains as overplus from the ranchos of Old and New San Jacinto is approved.' An approval by the 'most excellent Departmental Assembly of the foregoing decree' concluded the title of D'Aguirre.

The surplus which D'Aguirre had asked for, representing its extent as being about five leagues, more or less, contained in fact, as already mentioned, about eleven leagues.

The question was, of course, as to the amount embraced by the grant; that is to say, whether D'Aguirre's representation in his petition for the 'surplus,' that its extent was five leagues, more or less, would confine the grant to a surplus containing but five leagues, or whether the grant would carry the entire 'surplus' in its full meaning, though that surplus contained eleven. The board of commissioners considered that it only carried five, and rejected D'Aguirre's claim for the entire surplus of eleven. But on appeal, the District Court was of a different opinion, and confirmed the claim; giving to D'Aguirre the surplus remaining within the boundaries of the general tract, to the extent of eleven square leagues, unless there was less than eleven within such boundaries, in which case of such less quantity the confirmation was limited to it. It was from this decree that the United States took the present appeal.

Mr. Wills, for the United States: There has been here, to say no more, such plain misconception on the part of the Mexican government as to what it was granting-that misconception being brought about by misrepresentation of facts on the part of D'Aguirre-that the court will withhold its aid. Certainly the quantity of land which the government would convey entered largely into its determination, whether it would or would not convey it all; and when D'Aguirre represented that the 'sobrante' or surplus contained five leagues or perhaps less, when in fact it contained more than double the amount of five, there is such error as the court will relieve against. The surplus is but the subject of the grant, and justice will be done by giving five leagues in the surplus described.

title: United States v. D'Aguirre


text: Talk:United States v. D'Aguirre

title: Talk:United States v. D'Aguirre


text:
United States v. D'Aguirre/Opinion of the Court

In The United States v. Fossat, this court decided that where there is no natural boundary or descriptive call for the termination of lines of a tract of land, and the quantity called for in the grant is 'one league of the larger size, a little more or less,' the survey must include only a league. The words 'a little more or less must be rejected.' It is also decided, in Yontz v. The United States, that the generality of the grant may be sustained by the words of the petition; that the petition and the concession must be taken as one act, and the extent of the grant limited by the prayer of the petition. In that case the grant was limited to the two leagues prayed for in the petition.

Mr. Williams, contra: The papers in the case iterate and reiterate that the grant is for the surplus. There is not in one of them, except in the petition itself, which also is for the 'surplus,' an allusion to quantity; and the petitioner requests the Mexican government to take 'observations' previously to granting. Every part of the case shows also, that the government proceeded not less advisedly than it did in every case.

The cases cited do not apply. The decision in The United States v. Fossat was, that the call in the grant for 'one league, a little more or less,' must be taken as 'one league' when located and surveyed by the United States. In the case at bar no quantity is named in the grant, and the only limitation is that prescribed by the colonization law, namely, eleven leagues.

In Yontz v. The United States, the petitioner confined his application to 'two leagues, a little more or less.' The grant named no quantity, but reserved the surplus. The surplus of what? Clearly of the two leagues applied for. But there is no reservation of the surplus in the grant to D'Aguirre. On the contrary, the petition was for the surplus, which surplus he estimated at five leagues, a little more or less. The distinction is plain.

Mr. Justice FIELD delivered the opinion of the court:

The only question for consideration in this case relates to the quantity embraced by the grant to the claimant. The District Court confirmed her title to lands lying within certain designated boundaries, not exceeding in extent eleven square leagues, if any surplus over that quantity existed. The United States seek to restrict the confirmation to five square leagues, and base their appeal on the language of the petition upon which the grant was made. It appears from the record that two previous grants had been issued for land situated within a track known as the 'Rancho of Old and New San Jacinto,' and that a surplus still remained. For this surplus the petition was presented, and to the description of the land which it gives, these words are added: 'the extent of which is about five leagues, more or less.' It is upon these words, as showing that the petition was only for five leagues, that the counsel of the government rely. But it is evident that they constitute a mere conjectural estimate of the extent of the surplus. The petition is for the grant of a specific tract, not for any particular quantity. The report of the prefect, to whom the petition was in the first instance presented, to be forwarded to the governor, describes the land 'as that remaining vacant from the Old and New San Jacinto,' and does not mention its extent. The concession of the governor declares to the claimant, 'the property in fee of the land remaining in Old and New San Jacinto,' and does not designate any quantity. The formal grant issued recites that the claimant has solicited 'the overplus land resulting from the rancho of Old and New San Jacinto,' and the third condition annexed describes the land 'of which donation is made,' in similar terms.

It is clear upon the face of the papers that the original concession and formal grant were for the entire surplus remaining within the designated boundaries, subject only to the limitation imposed by the colonization law of 1824, upon the power of the governor. As he could only cede to the extent of eleven square leagues, the grant could only convey that quantity whatever the amount of the overplus.

The case of The United States v. Fossat, and the case of Yontz v. The United States, have no application. In the Fossat case the grant was in terms restricted to one league, and it provided for the measurement of the quantity granted and the reservation of the surplus. In the case at bar no quantity is named, and the only limitation is that prescribed by the law of 1824. In the Yontz case the grantee expressly confined his application 'to two leagues, more or less,' according to certain designated boundaries. The grant did not mention any quantity, but provided for the measurement of the tract and the reservation of the surplus. The court in deciding the case very justly observed, that if the boundaries were conclusively defined in the grant, no surplus could be thrown off by a survey, and therefore construed the grant in connection with the petition, and held that the two leagues mentioned in the petition were to be surveyed within the larger tract; in this way only was the conditional clause as to measurement and surplus made consistent with the previous language of the grant. The case at bar is entirely dissimilar. Here the grant mentions no quantity, and reserves no surplus, but on the contrary the third condition expressly requires the magistrate who gives possession to advise the government of the number of square leagues the tract may contain.

DECREE AFFIRMED.


text: Talk:United States v. D'Aguirre/Opinion of the Court


text:
Godfrey v. Eames

THE Patent Act of 1836, provides that on the filing of an application for a patent, 'the commissioner shall make or cause to be made an examination of the alleged new invention or discovery, and if on any such examination it shall not appear to the commissioner that the same had been. . . in public use or on sale with the applicant's consent or allowance prior to the application,. . . it shall be his duty to issue a patent therefor, but whenever on such examination it shall appear to the commissioner that. . . the applicant was not the original and first inventor or discoverer thereof, or that what is claimed as new had before been invented or discovered,. . . or that the description is defective and insufficient, he shall notify the applicant thereof, giving him briefly such information and references as may be useful in judging of the propriety of renewing his application, or of altering his specification to embrace only that part of the invention or discovery which is new.

'In every such case,' the act goes on to say, 'if the applicant shall elect to withdraw his application, relinquishing his claim to the model, he shall be entitled to receive back $20, part of the duty required by this act, on filing a notice in writing of such election in the Patent Office. . .. But if the applicant in such case shall persist in his claim for a patent, with or without any alteration of his specification, he shall be required to make oath or affirmation anew, in manner aforesaid, and if the specification or claim shall not have been so modified, as in the opinion of the commissioner shall entitle the applicant to a patent, he may on appeal, and upon request in writing, have the decision of a board of examiners,' &c.

A subsequent act-an act of 1839 -provides that those who shall have purchased, sold, or made the thing patented 'prior to the application of the inventor or discoverer for a patent, shall be held to possess the right to use and vend to others to be used' the same; and that 'no patent shall be held to be invalid by reason of such purchase, sale, or use, prior to the application for a patent as aforesaid, except on proof of abandonment of such invention to the public, or that such purchase, sale, or prior use has been for more than two years prior to such application for a patent.'

With these enactments in force, Godfrey, on the 31st January, 1855, filed an application for a patent for boot-trees. This application the commissioner, on the 17th May, 1855, rejected for want of novelty. On the 24th April, 1857, within the time required by the rules, Godfrey submitted his case again. The old application was withdrawn, and a new one filed, simultaneously; the withdrawal fee of $20 going to make part of the new application fee of $30, and not in fact being received by the applicant. These different applications were made through different attorneys, and the description of invention, the claims of novelty, and the models, were in some respects different. It was admitted, however, at the bar, 'that that which was finally patented might, if it had been properly introduced, have been engrafted as an amendment to the first application.' A patent was issued March 2d, 1858.

It was part of the case 'that the patentee, in the summer and fall of 1854, and since, publicly manufactured and sold boot-trees containing his alleged invention.'

On a suit by the patentee, Godfrey, in the Circuit Court for the District of Massachusetts, against Eames, for the use of the boot-tree patented, the question was, whether Godfrey had forfeited his patent by more than two years' public use or sale of his invention, prior to his application. The court below instructed the jury that he had; and accordingly that the plaintiff could not recover. The correctness of this instruction, was the matter now before this court on error.

Mr. Causten Browne, for the plaintiff in error: The proceeding of Godfrey was in pursuance of a settled practice sanctioned by the Patent Office, and amounting simply to amendment and rehearing, with $10 additional fee. From the spring of 1855 (only a few months after the introduction of the invention into use), until the grant of the patent, there was, in fact, never a moment when the inventor was not applying to the commissioner for his patent. The case is one of two consecutive applications (no time intervening) for patent for an invention. Why is the patent declared invalid upon the ground that the latter one-that which immediately preceded the grant-is the only one to which the statute relates?

There is no sufficient ground for such distinction upon the language of the statute, interpreted with reference to its reason and policy.

The provision of the act has been construed liberally to uphold the patent. The terms, 'his application for patent,' mean not any particular paper application, but his applying; his making an application; his preferring a demand for a patent for his invention as new and useful.

Considered with reference to the policy of this provision, it is still more clear that it will not bear the construction given to it in this case by the court below. This policy was, that at as early a period as possible, having due regard to the rights of the inventor, the public should be put in possession of the best mode of practising the invention, by the deposit in the Patent Office of an open description thereof by the inventor. This description being lodged, together with demand for patent, the public were secure of the means of practising the invention when the exclusive right of the inventor should terminate, and the inventor was secure of his protection unless he abandoned the pursuit of it. Undoubtedly after an inventor has filed his application for patent, he may so conduct himself as to show an abandonment of it. If rejected, he may allow the rejection to stand so long as to show, itself or with other circumstances, an acquiescence therein and a final relinquishment of his claim. But having once filed an application, given the details of his invention to the public knowledge, and asserted his claim to a patent, he has satisfied the reasons of the law of 1836; and although he should afterwards withdraw that application, and some time should elapse before he renewed it, it is a question for the jury, whether he has abandoned his claim to a patent, on which question the fact of withdrawal is evidence only, to be weighed with other evidence. But in this case, although no time intervened, the court peremptorily directed the jury to find for the defendant.

2. If, indeed, the application was to patent something not existing in the first application, it cannot be considered a continuance of that application. But the fact that he changed his claim, or other part of his description, does not make it a different application; nor that he submitted new drawings; nor that he submitted a new model: if the drawings and model show a machine substantially the same as before, in construction and mode of operation. The same invention is disclosed in each, and might have been fully described and claimed in the first application; just as a reissue is a patent for the same invention as the original patent, if it was disclosed in the original application, and might have been then fully described and claimed. If the patentee in this case could have reissued a patent taken upon his original description and claim, so as to insert the present description and claim, the commissioner could have allowed a like substitution by way of amendment. A patentee is presumed to intent to claim all that is new with him. If it appears that the thing on which a patent was sought, was the same in the two cases, taking the model, description, and drawings together, then it is true that the inventor did, in 1855, put the public in possession of his invention, and of the best mode of practising it, and has ever since persisted in claiming a patent therefor; and the policy of the law, if rightly stated above, is satisfied.

Mr. Brooks, for the defendant in error: The real question presented is, What became of this application for a patent, which had been 'once rejected,' but which was 'entitled to a re-examination?' Did the applicant 'PERSIST in his claim for a patent, with or without any alteration of his specification?' His claim for a patent must, we suppose, be held to refer to the claim or application then before the Patent Office, and which had been once rejected. None other had been made, and none other could be persisted in. He did not persist in such claim; he did not ask for a 're-examination' of his application (the 'renewing his application' mentioned in the act of 1836); but he took the opposite alternative course authorized by that statute (though not named by the commissioner of patents), viz., he elected to withdraw his application, and receive the return fee of $20. Having made such election, he, in fact, did withdraw his said application on the 24th April, 1857, under the act of 1836, and did receive back the return-fee; and the said application then withdrawn has never since been the subject of any action whatever anywhere.

His proceeding is analogous to a discontinuance by a plaintiff in a court of law, and the commencement of another suit on the same day, in case the claims of invention and the causes of action were in each the same. In both instances, one proceeding is ended, and another is begun, even though both depended on the same ground precisely. The case is different where only an amendment is made, and the same suit is prosecuted in an amended form, without new process or new papers, or even loss of time.

Now, it is a familiar principle, that an action at law must be commenced within the period limited for that purpose; and, if not so brought, it is not aided by the fact that another suit had been previously commenced within such time, and had been discontinued or dismissed. Were it otherwise, stale demands might be kept alive forever by means of suits not brought to trial. So in this case, if the doctrine of the plaintiff in error is correct, an inventor has it in his power, after putting his invention into public use, to apply for a patent, and taking care, in case of one rejection, to withdraw, and repeat the experiment toties quoties, he thus may, if finally successful, prolong the period of enjoyment much beyond that prescribed by law. In fact, if this view of the law is sanctioned by this court, it becomes the interest of inventors to delay the grant of patents as long as possible by this very method, in order to prolong the term of enjoyment. It is obvious, however, that the patent here in suit, like all others, was and could be founded upon one application only; and it appears that such application was made (April 24, 1857), more than two years after the public use and sale by the inventor of the alleged invention, whereby the said patent was made invalid.

We do not put our defence upon the ground, that the withdrawal of the first application was an abandonment of his invention. It was merely an abandonment of that application, and left him at liberty to make other applications as like or unlike that as he pleased; but inasmuch as, in cases of withdrawal, the model and application-papers are retained in the Patent Office, and further proceedings to obtain a patent require new papers, differing from former ones at least in time of execution and filing, and also perhaps presented to officers not before having acted in the matter, a first application cannot, in the nature of things, be the second, nor a second be also the first.

It will not, of course, be claimed that what was done in April, 1857, amounted merely to an amendment of his first specification, by writing it out anew, as is sometimes allowed to be done. For that purpose, no second fee or new petition, oath or model, was necessary; and, in such case, no return of fee could have been allowed.

It is made the duty of the commissioner, by the act of 1836, to issue a patent upon an application duly filed, after due examination, if, among other things, it shall not appear that the alleged new invention had been in public use or on sale, &c., &c., (more than two years) 'prior to the application.' 'The application' must mean the one brought before him for examination, and not some previous application never perhaps known to him. The commissioner has no judicial discretion in receiving an application. The power of making one is given absolutely to the inventor. Can it, then, be pretended that the commissioner would or lawfully could have granted the patent in this case, had he known the fact of the public use and sale of the invention in 1854? 'The application' means the several papers required by law to entitle an inventor to an examination of his alleged invention, and which, if the patent is granted, are annexed to the letters-patent to distinguish it and fix its character. In this case, these papers were those filed in 1857, and none other; so that the prior application of 1855 is wholly immaterial, except upon the question of abandonment, which is not raised at all in this case. The applicant voluntarily substituted one application for another, as he says. If both were the same, his motive could not be one favored by the policy of the patent laws. If they were not the same, and he elected to give up one for the other, and did so, and got the benefit of so doing, he cannot rely now on both. If, as we understand the law, the specification makes the patent what it is, it is manifest that the application of January, 1855, was not patented in the grant made in March, 1858.

[2. The counsel then contended that in fact the object for which a patent was applied for in 1855, was one so different from that one for which a patent did issue in 1858, that they could not be considered in substance the same thing; a matter involving a question of fact only.]

Mr. Justice SWAYNE, after quoting the statutes of 1836 and 1839, delivered the opinion of the court:

title: Godfrey v. Eames


text: Talk:Godfrey v. Eames

title: Talk:Godfrey v. Eames