text:
Koehler v. Black River Falls Iron Company/Opinion of the Court

This was a bill in chancery, brought in the District Court of Wisconsin by Jacob Koehler, Daniel Koehler, and Harry Pfiffner against the 'Black River Falls Iron Company,' to forclose a mortgage.

The bill alleges that, on the 13th of August, 1858, at La Crosse, in Wisconsin, the 'Black River Falls Iron Company'-a corporation created by the laws of Wisconsin-executed and delivered their promissory note to Daniel Koehler and Caspar Bircher for $15,000, payable in nine month, to secure which a mortgage of even date, under the corporate seal, was also executed and delivered-which mortgage was witnessed, acknowledged, and recorded; that on the 21st day of September, 1858, Casper Bircher, by an instrument of writing under seal, for the consideration of $7,000, transferred to Jacob Koehler and Henry Pfiffner his interest in said note and mortgage, which was also witnessed, acknowledged, and recorded; and that the note and mortgage being over due and unpaid, the aid of the Court is asked to decree a foreclosure.

William M. Hubby, having filed his petition stating that he was a stockholder, and that in his opinion the directors did not intend to make defence, was allowed to appear and defend. Leave was given to the complainants to amend their bill so as to make Julius W. Haas and others, junior mortgagees, party defendants. Answers and replications were filed, proofs taken, and the cause was heard at the October Term, 1860. The Court dismissed the bill without prejudice and the complainants appealed.

The answers deny that the 'Black River Falls Iron Company' ever executed under its corporate seal this mortgage, which denial, if sustained by the evidence, is decisive of this case. If the seal of the corporation was not affixed to the instrument by proper authority, but was surreptitiously obtained, then the deed is not the deed of the corporation, was not duly executed as the bill charges, and is not a legal mortgage, and cannot be fore closed as such.

The mere fact that a deed has the corporate seal attached, does not make it the act of the corporation, unless the seal was placed to it by some one duly authorized. Jackson vs. Compbell, (5 Wendell, 572); Damon vs. Granby, (2 Pick., 345, 353); Bank of Ireland vs. Evan, (32 Eng. L. & E., 23); (Angell and Ames on Corporations, Sec. 223).

This mortgage had the corporate seal attached, and the presumption was that it was there rightfully, and the Court properly admitted it to be read in evidence; but the presumption thus raised was not conclusive, and parol evidence was admissible to overthrow it. St. Mary's Church, (7 Serg. & R., 530); Berks & Dauphin Turnpike vs. Myers, (6 Serg. & R., 16.)

The evidence is conclusive that the corporate seal was affixed to the mortgage wrongfully.

The mortgage purports to have been executed on the 13th of August, 1858, and signed by Charles Hauser, president, and J. M. Levy, Secretary pro tem., who both swear that the corporate seal was not present, that they did not then, nor did they ever place the seal to the instrument, and have no knowledge how it came to be sealed. It was recorded shortly after being given, and no seal was to it.

Henry Richter, the secretary of the company, was the custodian of the seal, and testifies that he was not present when the mortgage was given, that he had the seal in his possession, and did not then, or at any time afterwards, affix the seal or authorize any one to do it for him.

When the defendants proved that neither the President nor the Secretary pro tem., who signed the mortgage, nor the regular Secretary, who was the rightful custodian of the seal, had any knowledge of the way in which the mortgage became sealed, then the burden of proof was thrown on the complainants to show the circumstances under which the instrument was in fact sealed, and that it was rightfully a d properly done.

Failing to do so, the conclusion is irresistible, that the seal was fraudulently abstracted from the lawful custodian of it, and wrongfully affixed to the mortgage.

The Revised Statutes of Wisconsin of 1849 were in force when this mortgage was given, and section 1 of chapter 59 prescribes the manner in which conveyances of real can be made, and it is as follows:

'Conveyances of lands or of any estate or interest therein may be made by deed, signed and sealed by the person from whom the estate or interest is intended to pass, being of lawful age, or by his lawful agent or attorney, and acknowledged or proved and recorded as directed in this chapter, without any other ceremony whatever.'

Section 30 of this same chapter defines what is meant by conveyances as thus used, and is as follows:

'The term conveyance, as used in this chapter, shall be construed to embrace every instrument in writing by which any estate or interest in real estate is created, aliened, mortgaged or assigned, or by which the title to any real estate may be affected in law or equity, except wills, leases for a term not exceeding three years, and executory contracts for the sale or purchase of lands.'

This mortgage, not having been sealed by the Iron Company or under its authority, was not executed in conformity with law, and is therefore invalid and of no force and effect as a legal mortgage.

It is argued, that if not a legal mortgage, it is an equitable one, and that the Court should not have dismissed the bill, but granted such relief as equity could give. But this bill seeks a foreclosure on the sole ground that a legal mortgage was given.

If the complainants have any rights under this instruments as an equitable mortgage, they can be tested, on a proper bill filed, in another suit.

The defendants in their answers further insist that this mortgage was given without authority of law and by fraud and collusion on the part of the directors.

The Black River Falls Iron Company was incorporated by the General Assembly of Wisconsin March 31st, 1856, to explore for minerals, and to mine, manufacture, and vend them. The administration of the affairs of the Company was lodged in the hands of directors chosen from the stockholders to hold office for one year, and to be controlled by the rules and by-laws adopted by the stockholders. The power to sell and mortgage, and procure a common seal, was given.

By-laws were adopted, fixing the place of business at New Danemora, Jackson County, limiting the number of directors to five, who should appoint a secretary having no vote, and providing 'that all documents, orders for the payment of money and receipts to be valid, must be signed by the President and Secretary.'

A stockholders' meeting was held May 19th, 1858, and the following memorandum was entered among the minutes: 'May 19th, afternoon session-Mr. C. W. Schmidt makes the motion that the directory hereafter to be appointed shall be authorized to endeavor before all, the effecting of a loan of the highest possible amount, and in case of success to close it, and they are compowered to incumber for the same the works with buildings and appertaining lands, carried.' At the same meeting a board of directors was elected, to wit: Charles Hauser, President, and John C. Fuhr, H. Pfiffner, Jacob Koehler, and John M. Levy, who chose Henry Richter as Secretary.

The Company was evidence embarrassed and in grant need of money, and as the necessity was urgent and pressing the directors were instructed (neglecting all other business) to obtain as large a loan as they could, and so secure it by a mortgage on the lands and works. The stockholders clearly contemplated a loan of money to carry on their business, and if a loan could not be affected without real security, power to mortgage was given to the directors. No authority was given to them to secure pre-existing indebtedness, and certainly none to secure themselves in preference to other creditors.

Did these directors, as guard ans of an important trust committed to their care, endeavor, in good faith, to accomplish the object which their principals so much desired?

They met on the 13th day of August, 1858, at La Crosse, and not at their usual place of business, and failed to notify their regular secretary, who had the records in his charge, and who had acted as secretary since the organization of the Company, to attend. No reason is assigned why the secretary was not notified, but as he was a large creditor, and was not to be favored, it is barely possible that the directors thought his presence would be embarrassing.

As the by-laws required that all instruments of writing should be signed by the president and secretary, it was found necessary to appoint a secretary pro tem., and one of the directors was selected, who, unlike the regular secretary, was fortunate enough to have his debt provided for.

A note and mortgage were given to Daniel Koehler and Caspar Bircher for $15,000, who were to let the company have $1,200 in money, and $800 in provisions, and to pay the following debts of the corporation:

Metzer, Koehler & Swab, a note and interest, $3,

John M. Levy, two notes and interest, $2,

Less $124 charged, 124-2,404.

John C. Fuhr, Jacob Koehler, and John M. Levy, who were so lucky as to have their debts to the amount of $5,500 provided for, were themselves directors, and it might be inferred that Koehler, the director, was interested in the firm of Metzer, Koehler & Swab, but there is no evidence of it. It is little singular that the mortgagees, in order to get security for the $2,000 which they agreed to advance, were willing to assume the payment of $9,130. Such is not the usual course of dealing with those who in good faith make advancements and require security. The mortgage was signed and delivered by Hauser, the president, to Koehler, the director, for the mortgagees, who were neither of them present, and who did not actually make the advancements in money or provisions until some time afterwards. And Bircher, one of the mortgagees, as if to fix the true character of this transaction beyond cavil, in a few weeks from the giving of the deed, for the expressed consideration of $7,000, transfers his entire interest to Koehler and Pfiffner, two of the directors. Instead of honestly endeavoring to effect a loan of money, advantageously, for the benefit of the corporation, these directors, in violation of their duty, and in betrayal of their trust, secured their own debts, to the injury of the stockholders and creditors. Directors cannot thus deal with the important interests entrusted to their management. They hold a place of trust, and by accepting the trust are obliged to execute it with fidelity, nor for their own benefit, but for the common benefit of the stockholders of the corporation.

In executing this mortgage, and thereby securing to themselves advantages which were not common to all the stockholders, they were guilty of an unauthorized act, and violated a plain principle of equity applicable to trustees. 'The directors are the trustees or managing partners, and the stockholders are the cestuis que trust, and have a joint interest in all the property and effects of the corporation, and no injury that the stockholders may sustain by a fraudulent breach of trust can, upon the general principles of equity, be suffered to pass without a remedy.'

Angel & Ames on corporations, edition 1861, sec. 312. The Charitable Corporation vs. Sutton, (2 Atkyns, 404.) Robinson vs. Smith, (3 Paige, 220.) Hodges vs. New England Screw Co., (1 Rhode Island, 321.) York and North Midland Railway Co. vs. Hundson, (19 Eng. L. & E., 361.)

The decree dismissing the bill is affirmed.


text: Talk:Koehler v. Black River Falls Iron Company/Opinion of the Court

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


text:
Mesa v. United States

This was a California land case, in which an appeal had been taken by the Claimant and one Clark, an intervenor. The appella ts suffered a term to pass without filing a copy of the record in this Court, but at the second term brought up the transcript and had it docketed.

Mr. Gillet, of Washington City moved that the appeal be dismissed.

Mr. Magraw, of Pennsylvania, and Mr. McDougall of California, opposed the motion.

PER CURIAM.

title: Mesa v. United States


text: Talk:Mesa v. United States

title: Talk:Mesa v. United States


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

Let this appeal be dismissed. It has not been prosecuted in the manner directed nor within the time limited by the Act of Congress, which requires that the transcript shall be filed at the next succeeding term after the appeal is taken


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


text:
Moran v. Commissioners of Miami County

Error to the Circuit Court of the United States for the District of Indiana.

Mr. Porter, of Indiana, for Plaintiffs in Error.

Mr. Ross, of Indiana, contra.

Mr. Justice WAYNE.

title: Moran v. Commissioners of Miami County


text: Talk:Moran v. Commissioners of Miami County


text:
Moran v. Commissioners of Miami County/Opinion of the Court

This cause has been fully argued. It is an action to recover the interest in arrears on coupons annexed to bonds which were issued by Miami County, payable to the Peru and Indianapolis Railroad Company, or bearer, and which is declared in the bonds to be given for a loan of money. We are relieved from the task of considering several of the arguments of counsel and the pleadings on the record, believing, as we do, that the defendants are estopped from denying the declarations as to the purpose and cause for which the bonds were issued, and that the coupon holders had a right to infer from the face of the bonds that they had been regularly issued by the County of Miami.

It is not a new case to this Court, either in its facts or the principle involved. The object of this Court has been in cases of a like kind, and it is still its purpose, to give to the contracts of counties for the purchase of railroad stocks and for borrowing money, to aid in the construction of railroads and other internal improvements, a strict interpretation of the legislative acts empowering them to do one or the other; but at the same time to give protection to the bona fide holders of such contracts as have been put on sale in the money market, by corporations or by counties acting corporately, against their efforts to be relieved from the responsibilities of official acts, in putting such papers into circulation, for capitalists to invest money in them, on assurances that the principal and interest would be paid accordingly.

We repeat now, as appropriate to the subject-matter of the case in hand, as it was in the case in which this Court said it, that corporations are as strongly bound as individuals are to a careful adherence to truth in their dealings with mankind, and that they cannot by their representations or silence involve others in onerous engagements, and then defeat the calculations and claims their own conduct had superinduced. Zabriskie vs. Cleveland, Columbus and Cincinnati Railroad Company, (23 How., 400). In our construction of the Act of Pennsylvania to incorporate the Northwestern Railroad Company, the Court said, that neither privileges, powers, nor authorities, can pass, unless they are given in unambiguous words, and that an act giving special privileges must be construed strictly. That in case a sentence is capable of having two meanings, a construction must be given favorable to the public. However, that in applying those principles of construction, it must be done with reference to the subject-matter contemplated by the Legislature as a whole, so as not to allow its manifest purpose and design to be defeated by denying the use of means by which the main object could only be accomplished.

In our leading case upon the subject, that of the Commissioners of Knox County vs. Aspinwall et al., (21 How., 539), the suit having been brought for the interest due upon coupons annexed to one hundred and forty-two bonds, in which the main ground of defence was, that a Board of Commissioners had not power to execute them, and that on such account they we e not binding upon the County of Knox, our answer and judgment was, that the bonds on their face import a compliance with the law under which they were issued; and that the purchasers of them were not bound to look further for evidence of a compliance with the conditions annexed to the grant of power to issue them.

In confirmation of such conclusion we then cited the case of the Royal British Bank vs. Tarward, (6 Ellis & Blackburne, 327), decided in 1856 in the Exchequer Chambers, in error from the Court of Queen's Bench, the decision of which we will now give in full, on account of the principle and its peculiar application to the pleadings in the case before us. Jervis, C. J. 'I am of the opinion that the judgment of the Court of Queen's Bench ought to be affirmed. I am inclined to think the question which has been principally argued, both here and in that Court, does not necessarily arise, and need not be determined. My impression is, though I will not state it is a fixed opinion, that the resolution set forth in the replication goes far enough to satisfy the requisites of the deed of settlement. The deed allows the directors to borrow on bond such sums of money as shall, from time to time, by a resolution passed at a general meeting of the Company, be authorized to be borrowed, and the replication shows a resolution passed at a general meeting authorizing the directors to borrow on bond such sums for such periods and rates of interest as they might deem expedient, in accordance with the deed of settlement and the Act of Parliament; but the resolution does not otherwise define the amount to be borrowed. That seems to me to be enough. If that be so, the other question does not arise. But whether it be so or not, we need not decide, for it seems to us that the plea, whether we consider it a confession and avoidance, or a special non est factum, does not raise any objection to the advance as against the Company. We may here take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and deed of settlement. But they are not bound to do more. And the party here, on reading the deed of settlement, would find, not a prohibition from borrowing, but a permission to do so on certain conditions. Finding that the authority might be made complete by a resolution, he would have a right to infer the fact of a resolution authorizing that, which on the face of the document, appeared to be legitimately done.'

At an ensuing term of this Court we had under considertion the case of Bissell vs. City of Jeffersonville, and it was fully discussed by us in connection with the English and our own case of Aspinwall, &c. We said there: 'When the contract has been ratified and affirmed, and the bond issued and delivered to the Railroad Company in exchange for stock, it was then too late to call in question the fact determined by the Common Council-and, a fortiori, it is too late to raise that question in a case like the present, where it is shown that the plaintiffs are holders for value. Certified copies of the proceedings were exhibited to the plaintiffs at the time they received the bonds, &c., and whether we look to the bonds or recorded proceedings, there is nothing to indicate any irregularity, or to raise a suspicion that the bonds had not been issued pursuant to lawful authority. We hold that the Company and its assigns, under the circumstances of the case, had a right to assume that they imported verity.' It would be difficult to find cases more controlling of that before us than those which have just been cited.

The same ruling was made by the Court in the case of the Commissioners of the County of Knox vs. Wallace, (2 How., 546). It was substantially repeated in Aspinwall et al. vs. The Commissioners of the County of Davis. That was brought to this Court from the Circuit Court of Indiana upon a certificate of a division of opinion between the judges. The points were, whether by the Act of Incorporation of the Ohio and Mississippi Railroad, and the amendments to it of January, 1849, and right to county subscriptions had been vested in the Company, to exclude the operation of the Constitution of Indiana, which took effect on the 1st of November, 1851, and whether the Railroad Company had acquired any such right to subscription of the defendant as was protected by the Constitution of the State. Both question were answered negatively. But we said it was done reluctantly, for the subscriptions to the stock by the Board of Commissioners were made in good faith to the Railroad Company, and also sold by it, and purchased by the plaintiff in confidence of their validity.

With these cases on our minds, we will now proceed to give the facts and circumstances of the present case, that it may be seen whether there is any thing in them to take it out of our decisions.

The abstracts of it by both counsel, are so similar that either may be used without giving to the other any advantage.

It is an action of assumpsit, brought by the plaintiff in error, on interest warrants or coupons, annexed to fifteen bonds of the county of Miami for $1,000 each, bearing date the 21st of August, 1851, redeemable in ten years from the 1st of September following. The bonds were payable to the Peru and Indianapolis Railroad Company, or bearer, at the office of the Treasurer of Miami County, in Peru, bearing an interest of ten per cent. per annum, payable semi-annually at the same place. The suit is for a failure to pay coupons for the years 1857 and 1858, amounting to $3,000, the interest accrued before having been paid by the Railroad Company. It is averred in the declaration that the bonds had been issued by Miami County, in pursuance of powers conferred on its Board of Commissioners by the laws of Indiana, and particularly by an Act approved January 6th, 1849, entitled an Act to authorize the Commissioners of Hamilton, Miami, and Tipton Counties to borrow money. Howard County was afterwards permitted to borrow money. The language of the act authorizes the loaning of money to the Board to any amount not exceeding $50,000, from time to time, at any rate of interest, not more than ten per cent. per annum. The second section is, that all persons loaning money to the counties or either of them, are authorized to receive any rate of interest upon such loans as may be agreed upon, not exceeding ten per centum.

The Peru and Indianapolis Railroad Company was incorporated in January, 1846. The 28th section of the charter authorizes the County Commissioners of each county through which the road shall pass to take, by an order for either county, as much stock in it as they may think proper. After the act permitting the counties to borrow money had been passed, the Railroad Company, urged by the condition of its finances, appointed a committed to apply to the auditors of the Cunties of Hamilton, Miami, and Howard, to call special sessions of the Boards of the Commissioners of their respective counties to consider proposals which they wished to make. In a meeting afterwards held, the committee stated that they were required to ask from the counties additional subscriptions to the stock of the Railroad Company. From the Counties of Hamilton and Miami respectively, twenty thousand dollars, and from Howard County ten thousand dollars. The committee then said that their subscriptions would be received, if the respective counties would issue bonds bearing ten per cent. interest per annum, redeemable in ten years, with coupons annexed to them, which the reilroad would receive if the bonds were made payable to the company, or bearer, for the purpose of borrowing money upon them, to be applied to the payment of the stock which either of the counties should subscribe for. As a further inducement to the counties to do so, the committee stated that upon the subscription being made, and the bonds being issued, that the Railroad would issue stock to the county for its subscription, credited in full to the amount of its bonds; and for the issue of the bonds, that the President of the Railroad would execute an obligation binding the company to pay the interest annually upon the bonds as it became due, until the principal became payable and then the principal also; but that when both principal and interest had been paid by the Railroad Company, that the counties would return to it the stock certificates which they had received when the bonds were issued if it did not with to retain it. And it was further agreed between the parties, if the counties, or either of them, should at any time before the redemption of the county bonds by the railroad company elect to surrender to it its obligation, and assume the payment of the interest that shall accrue afterwards, and the principal also when it became due, that the stock issued to the counties should become absolute in their favor, entitling them to all future dividends on the stock. But that until such assumption had been undertaken and performed, that the stock was merely to be held as a security by the counties for the performance of the stipulation of the Railroad Company, but not entitling them to dividends, though it would give them the right to vote the stock in elections for directors. These proposals were considered by the Auditor and Board of Commissioners of Miami County. It resulted in an issue by them of twenty bonds, one thousand dollars each, in which it is declared in the bonds 'that there is due to the President and Directors of the Peru and Indianapolis Railroad Company, or bearer, one thousand dollars from the County of Miami, payable in ten years from the first of September, 1851,' this bond being issued for a loan of the amount to the county, as authorized by an act of the State of Indiana, permitting the Commissioners of Hamilton, Miami and Tipton Counties to borrow money. The coupons or interest warrants annexed to the bonds are in these words:

AUDITOR'S OFFICE, Miami County, Peru, Indiana.

The Treasurer of said county will pay the legal holder hereof one hundred dollars on the first day of September, 1857, on presentation thereof, being for interest due on the obligation of said county, No. 16, given to the Peru and Indianapolis Railroad Company. By other of the Commissioners.

IRA MENDENHALL, County Auditor.

The interest warrants, payable on the 1st September, 1858, are like the preceding; and others of the same kind, are annexed to the other fifteen bonds legally held by the plaintiff in error.

The bonds were delivered to the Railroad Company, were received by it in payment of the certificate of stock, and the County of Miami was credited with $20,000 upon the certificate. The Railroad Company then offered them for sale, transferred them to purchasers as commercial securities by endorsement, and the plaintiff in error bought them in the full confidence that the consideration for which they had been issued was truly expressed on the face of the bonds. The county retained the stock certificate and voted it on the election for directors as its own. Thus matters stood between the Railroad Company and the County of Miami, both being satisfied with what had been done, and that they had acted conformably to their respective powers, until the Railroad ceased to pay to the holders the interest warrants.

Upon the trial of the case, the defendants filed a plea of non-assumpsit, and the plaintiff joined issue by a similiter. At the same time the defendants put in several pleas, affirming that several irregularities had been committed by the Board of Commissioners of Miami County and the Railroad Company, in their negotiation and proceedings for the issue of the bonds and interest warrants, by the force of which it is declared that the bonds were void at law, and that they were purchased by the plaintiff with notice of these irregularities.

We have examined these pleas critically, and find the facts stated in each to be imputations, only calculated to raise supposed equities between Miami C unty and the Railroad Company, in which the plaintiffs in error, as the legal holders of the bonds and coupons, can in no event have any concern, even if it be admitted that they had notice of such irregularities when they bought, as all of them relate to circumstances contradictory to the declarations upon the face of the bonds.

Though the proposals, or contract as it is termed in the record, for additional subscriptions of stock are confusedly expressed, there can be no doubt that it was its intention to solicit subscriptions, and that it was so understood by the Board of Commissioners of Miami County when it issued the bonds; and that in furtherance of such purpose, the parties proceeded to devise the means to pay for the subscription by borrowing money. In doing that there was nothing irregular in the transaction. Both parties seem to us to have acted within their respective powers; the Railroad within its charter to allow the counties to subscribe for stock in it, and the County of Miami to do so and according to the power given to it to borrow money. When the Railroad undertook to pay the interest upon the treasury bonds and the principal also when that became due, it was substantially a loan to the county from the time of the execution of the bonds until their maturity, though it was provided that the county might then upon the cancellation of these bonds decline to return the certificate of stock which had been issued to it.

The narrative of the negotiation which led to the issue of the bonds and interest warrants, brings the case, by the declaration in the bond as to the object and purpose for which they were issued, to entirely within that we have shown to the law in such cases as to the inference which may be made from the face of the bond, of its having been regularly executed by the party having authority to do it, that we are relieved from the task of considering much of the argument made to us by counsel; and from examining the special pleas which were put in by the defendant, or the reasoning of the Court upon the third and fourth pleas upon which it rested its judgment for the dismissal of the plaintiff's case. If the contract and bonds are considered in connection with the authority of the Board of Commissioners of Miami County to issue them, it must be obvious that several of the points presented to us by the counsel of the defendant do not arise in the case. For instance, whether the Board of Commissioners of Miami County had power to issue them at the time and for the purpose for which in was done, or that the bonds and interest warrants, by having been endorsed to the plaintiff by the Railroad Company were subjected to the revised statutes of Indiana, making certain promissory notes, &c., negotiable by endorsement thereon, so as to vest the interest in the contract to the assignee, and permitting the obligor to set up any defence to the obligation against the assignee, that he could have done against the original obligee, or that it was necessary to them that the bonds were issued by virtue of a special statute, and if that did not exist, that the bonds may be held to be void.

It is true that all of these points were as well argued by the counsel of the defendants as the circumstances of the case permitted, but in the every instance, either of argument or of pleading, the point of estoppel, as made by the plaintiff's counsel in the Court below, and renewed here by him with vigor by the citation of many cases, was not directly met by the counsel of the defendant. The first point of the plaintiff's counsel was, that even if the bonds had been issued irregularly, and not in strict conformity with the power of the county to borrow money, that the defendant is, nevertheless, estopped by the bonds themselves, which, on their face, express that they were issued for a loan of the amount to the county, as authorized by the Act of the General Assembly to borrow money, and that such bonds being habitually received and possed as commercial securities, and being bona fi e in the hands of the plaintiff, that they were entitled to recover the amount of interest sued for, notwithstanding there might be equities between the original parties to the transaction. It is not necessary for us to follow out the plaintiff's argument in this particular, thinking it, as we do, conclusive. We think that the bonds in this case, with interest warrants annexed, are commercial securities, though they are not in the accustomed forms of promissory notes or bills of exchange; that the parties intended them to be passed from hand to hand to raise money upon them, so that a full title was intended to be conferred on any person who became the legal holder of them, and that the original maker under such circumstances has no equity to prevent the recovery of the interest.

But the real point in this case, as made by the counsel of the plaintiff in error, and sustained in argument by numerous adjudicated cases, was, that as it is declared in the bonds that they were issued by the Board of Commissioners of Miami County by order or resolution, pursuant to the statute authorizing the County to borrow money, passed at a regular meeting of the Board, to be used by the Peru and Indianapolis Railroad, payable to the Company, or bearer, for a loan to the County; that the bona fide holders of the bonds, whether so by endorsement or delivery, had a right to infer that the bonds had been lawfully issued, by which the County of Miami is estopped in a suit for the recovery of the interest from denying by pleas that its bonds had been issued to the Peru and Indianapolis Railroad for a loan of money to the County of Miami. We think and adjudge that the recitals in the bonds are conclusive, constituting an estoppel in pais upon the defendants in this suit. In support of this conclusion, we cite the following cases: Girard vs. Bradley, (7 Ind., § 600); Reeves vs. Andrews, (Ibid., 207); Frances vs. Porter, (213); May vs. Johnson, (3 Ind., 448); Trimble vs. State, (4 Black, 435); (8 Blackford, 258); Ryan vs. Vanladingham, (7 Ind., 416; 24 How., 375); (23 How., 381); (29 Connecticut Rep.); Society of Saving vs. City of New London, (103); (1 Vesey, senior, 123, 8 Blackf., 47). It is the opinion of this Court that the defendant is estopped from setting up the defences taken as set forth in the transcript of the record of this case, and that the judgment of the Court below sustaining the demurrer should be, and is hereby reversed and annulled, and that the case should be remanded to that Court, with directions to award a venire facias de novo.


text: Talk:Moran v. Commissioners of Miami County/Opinion of the Court


text: Page:Buttered Side Down.djvu/7

title: Page:Buttered Side Down.djvu/7


text: 1911 Encyclopædia Britannica/Greenheart

title: 1911 Encyclopædia Britannica/Greenheart


text:
Page:Cournot Theory of Wealth (1838).djvu/32

 18

7. Whenever there is occasion to go back to the fundamental conceptions on which any science rests, and to formulate them with accuracy, we almost always encounter difficulties, which come, sometimes from the very nature of these conceptions, but more often from the imperfections of language. For instance, in the writings of economists, the definition of value, and the distinction between absolute and relative value, are rather obscure: a very simple and strikingly exact comparison will serve to throw light on this.

We conceive that a body moves when its situation changes with reference to other bodies which we look upon as fixed. If we observe a system of material points at two different times, and find that the respective situations of these points are not the same at both times, we necessarily conclude that some, if not all, of these points have moved; but if besides this we are unable to refer them to points of the fixity of which we can be sure, it is, in the first instance, impossible to draw any conclusions as to the motion or rest of each of the points in the system.

However, if all of the points in the system, except one, had preserved their relative situation, we should consider it very probable that this single point was the only one which


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text:
Cross v. De Valle

HALSEY devised real estate in Rhode Island to trustees there, in trust for the benefit of his natural daughter, Maria De Valle, a married woman, during her life, for her separate use; and upon her decease the trustees were directed to convey in fee one-half of the estate to the eldest son of the said daughter living at her decease, if of age, and one-half part to her other children living at her decease, and in default of male issue to her daughters equally. Mrs. De Valle, who was born in 1823, was a native and resident of Buenos Ayres, and had five children born there. After a certain time she came to Rhode Island, and had one child born there.

The trustees were directed not to convey the real estate to his grandchildren, unless they should, within five years after being duly informed of his decease, have their permanent residence in the United States, and adopt and use the name of Halsey.

In case his daughter should die without issue living, or with issue who should neglect or refuse to comply with the conditions, the trustees were directed to pay two legacies out of the estate, and convey the residue to a certain Cross, the complainant, if then living, and if he should adopt and use the name of Halsey; or if said complainant should not then be living, or if he should refuse to adopt the name of Halsey, then to a nephew of Cross, upon condition that he should adopt the name of Halsey.

Cross now filed his bill in the Circuit Court of the United States for Rhode Island against the trustees and the beneficiaries of the trust, setting forth that the trusts in favor of Mrs. De Valle and her children had failed by reason of her and their alienage and incapacity to hold real estate in Rhode Island, and that the trust for the benefit of the complainant was hastened in enjoyment by such failure; claiming that the devise over to him took effect upon the probate of the will, or, that it took effect in favor of the heirs at law, or of the State of Rhode Island as sovereign, and praying that the estate should be conveyed to him by the trustees, or to the heirs at law, or to the State.

A cross-bill, or bill purporting to be so, was also filed in the same court by heirs at law of Halsey against this complainant, Cross, the trustees, and other parties in interest,-the parties in both bills being the same, but being partially reversed,-for the purpose of more distinctly asserting and putting in issue the rights of the heirs at law, as against Mrs. De Valle, Cross, and those other devisees, and so of having the limitations on Mrs. De Valle's life-estate declared void, as tending to a perpetuity: and generally of having the rights of the heirs at law declared and protected by the court in its exercise of equitable jurisdiction. The complainants were citizens either of Massachusetts, or of Wisconsin, or of Ohio, or of New York. The defendants were all, with one exception, either citizens of Rhode Island, or aliens commorant there. The excepted defendant, Cross, complainant in the original bill, was a citizen of Louisiana, and not commorant in Rhode Island.

On the subject of alienage, it is necessary to mention that no special enactment had been made in Rhode Island, giving to aliens more ability to hold real estate than they had by the common law. On the contrary, rather, by a statute in force at Halsey's death, it had been enacted as follows:

'Courts of Probate shall have power to grant petitions of     aliens for leave to purchase, hold and dispose of real estate      within their respective towns, provided the alien petitioning      shall, at the time of his petition, be resident within this      State, and shall have made declaration, according to law, of      his intention to become a naturalized citizen of the United      States.'

On demurrer the Circuit Court dismissed the bill, and dismissed also the cross-bill. On appeal here, along with other questions argued-including the one whether the remainders were void as tending to perpetuities-were the following, the only ones considered by the court:

1. Was the equitable life-estate given by the will to Mrs. De     Valle void in consequence of her alienage, so that persons      who have interests in remainder have a right to be hastened      in the enjoyment of the estate?2. If not, did the court err in dismissing the cross-bill,     and refusing to declare the future rights of the parties?

Mr. Jenkes in support of the Will:

1. Unless there be something special in the law of Rhode Island, alienage is no sufficient cause to declare the life-estate, ipso facto, void; however voidable the estate may be by the sovereign power, if such power is brought into action. This is familiar law. But Rhode Island herself interposes not. The statute relied on does but give the means by which an alien can acquire real estate, so that even the commonwealth has no rights of office found against it.

2. The application to declare future rights is made by what is called a cross-bill. But the bill is no proper cross-bill. It brings up new matter not touched on by the original parties. The bill of Mr. Cross asked nothing about future rights, nor did it seek to avoid anything as tending to perpetuity. This so-called cross-bill is, therefore, an original bill; and being so there was no jurisdiction. Cross was a citizen of Louisiana; all the defendants, therefore, were not citizens of Rhode Island, while all the complainants were citizens of States other than Rhode Island. Each of the complainants, therefore, could not, under the Judiciary Act, sue each of the defendants. But supposing that bill rightly brought as respects from,--

3. Will this court decree, as asked by the heirs, on future rights? If it will not, it is unimportant whether the limitations over are void for remoteness or not. The question proposed was deeply considered so lately as 1856, in an English case, in the Court of Appeals in Chancery; a case which is in point, and which we believe this court will follow. Lord Justice Turner there said, that long as he had known the court, he had always considered it to be settled that it did not declare future rights, but would leave them to be determined when they came into possession. He added, that in all cases within his experience, where there had been tenancies for life with the remainder over, the course had been to provide for the interests of the tenants for life, reserving liberty to apply upon their deaths. Various considerations were urged before him in support of the proposition, which will be pressed by the other side, here, and among them the convenience and advantage it would be to parties to have their future rights ascertained and declared. To all arguments of this kind the judge replied, in effect, that the question was not one of discretion, but deeply affected the law of the court; that the course and practice in such cases constituted the law of the court; and added: 'I cannot agree to break through that law upon any mere ground of convenience. If the law is productive of inconvenience, it is for the legislature to alter it.' In Jackson v. Turnley, the Vice-Chancellor would not entertain a suit for the purpose of declaring that a person who claims to have a right which may arise hereafter has no such right.

Messrs. Curtis and Curry on the other side:

1. The Rhode Island statute shows the only mode by which an alien can hold land in that State. He may hold it, 'provided' he gets previous license. It declares, in effect, that without license from the Courts of Probate no one can hold it at all. It gives an increased severity to the already hard rule of the common law, never previously modified in the least in Rhode Island. On the contrary, as opposite counsel will admit, before its enactment, aliens were obliged always to have recourse by petition to the General Assembly for the privilege of taking or holding, or disposing of real property in that State. Will this court, by its decision of this cause, uphold our local immemorial law, or disregard it, and make another law for us?

2. If the second bill was an original one, the objection to the jurisdiction would be well taken as respects Cross. But it is a true cross-bill; a bill by some of the defendants to a former bill, touching the same matters and still depending, against the other defendants and the plaintiff to the former bill, which plaintiff is the party on account of whose citizenship the objection is made that it cannot stand as an original bill. All the parties to both bills are the same, only that they are partially reversed. The subject-matter is the same; but the plaintiffs in the cross-bill assert rights to the property different from those allowed to them in the original bill, claiming an affirmative decree upon those rights, which the forms of pleading might deny to them as defendants to the former suit. The jurisdiction of the court having once attached to the controversy and the parties, it is coextensive, by the settled law of the court, with all the equities of the cause for every purpose properly arising in its progress, and especially as regards the original mover.

3. The general preventive power of equity; its capacity to treat vested estates in remainder as present interests to be protected; its habit of declaring a scheme of trusts, and so of deciding whether limitations over tend, or do not tend, to perpetuities, are all supposed to be shut off from exercise in a case apparently one for their application, by Langdale v. Briggs, decided in an English court. We believe that case to have been wrongly decided even upon English authorities. It is notoriously not in accordance with Scotch ones. Turner, L. J., though he said that during the hearing he had been surprised at the length to which the argument had been carried in favor of that view which we now take, yet adds: 'But having looked into the cases since the argument, I feel bound now to say that I have been not less surprised to find how little authority is to be found upon the subject.' He consoles himself by remarking, that 'authority, however, is not wholly wanting;' and makes good his assertion by citing a book of no more modern and no more full character than 'Equity Cases Abridged.' His lordship also declared: 'I am far from thinking that, to some extent, the legislature might not usefully interpose and provide some remedy for the ascertainment of future rights.' Certainly, when a case decided in the face of expressions like these is pressed upon an American tribunal of supreme authority in limitation of its powers, we may pause before we adopt it.

Space beyond that usually allowed to argument will be pardoned in favor of an examination of the case itself, and of the precedents upon which it professes to be founded. The discussion will be dry to readers generally, but it may prove valuable to any future investigator of the limits upon general chancery jurisdiction.

In the case so much relied on, the testator had settled estates during his life in strict settlement, remainder to himself in fee. He afterwards made a will, devising all his estates, freehold, leasehold and copyhold, to his eldest daughter, the complainant, Lady Langdale, for life, remainder to her first and other sons, in tail male, remainder to his other daughters, &c., in strict settlement. Afterwards, upon the birth of a daughter to Lady Langdale, he made a codicil, by which he devised all his real estates (without mention of leasehold and copyhold), subject to Lady L.'s life-estate, to her daughter for life, remainder to the sons, &c., of said daughter, in tail male, remainder over, &c. One of the questions raised at the hearing of the cause, though not apparently by the pleadings, was upon the demand by the remainder-man in tail, under the will, to have the question decided as between himself and Lady L.'s daughter, they being both parties defendant, whether under the language in the codicil, the leasehold and copyhold estates would, upon Lady Langdale's death, pass to her daughter, or would go according to the will. Upon the refusal of the Vice-Chancellor to decide this point, as well as from the remainder of the decree, the remainder-man appealed, and upon the appeal the decision of the Vice-Chancellor was affirmed; one of the Lord Justices declining to give any opinion upon this particular point, the other, Turner, L. J., giving the opinion relied on.

The first case cited by the Lord Justice is Hitchcock v. Sedgwick, or rather a case cited in a note to the report of that case. In the case cited (Seyborne v. Clifton), plaintiff and defendant had both purchased a reversion, and plaintiff brought a bill to have his right declared and to perpetuate his testimony, and his bill was dismissed, so that he finally Now, in the United States we have the New York cases of Lorillard v. Coster, and Hawley v. James. In the former, the trustees of Lorillard, who had left property to be divided among collateral relatives, brought their bill to have the trusts of the will established, and for guidance by the court. Among other provisions in the will was one requiring the trustees to convert all the residue of the testator's property into real estate in New York; the income to be paid in equal parts to such of the nephews and nieces as should from time to time be living; and two years after the death of the last of them the property remaining was to be divided among their surviving children and grandchildren per stirpes. The heirs at law, who were parties defendant to the bill, contended that the limitations, after the death of the nephews and nieces, were void, and that they were entitled to the remainder. The complainants contended that this question was not ripe for settlement, because the life-estates were pending, and because the proper parties were not yet all in esse. But the court held that the heirs at law were entitled to a settlement of the question, giving as a reason that the trustees could only be authorized to invest the property as required by the will, so far as the trusts were valid, and if the ultimate limitations were void, the investment must be made in such a way as to secure the rights of all parties. It was said that the trustees must be regarded as representing the parties not in esse. The other case, Hawley v. James, gave rise to a similar question, which received a similar decision.

It is impossible to reconcile these decisions with the views of Lord Justice Turner. Moreover, the reason given by him for the rule he lays down is insufficient. The difficulty in the way of equitable jurisdiction, in such cases, is not that the court cannot deal with future rights. A right in remainder is not a future right. It is a present right to a future enjoyment. It is recognized at Law and in Equity as an estate, and is protected as such just as an estate in possession. Even in Langdale v. Briggs, so much relied on, Turner, L. J., says that the appellant whose rights he refused to declare, might bring his bill for a receiver, if the mortgages upon the estates were not kept down. Of course the court would have to begin, in such a case, by deciding that he had an interest in the estates.

Davis v. Angel, decided by the Master of the Rolls, and on appeal by the Lord Chancellor, so lately as 1862, would indicate that the opinion of Lord Justice Turner is not law in Westminster Hall. It was a bill by a remainder-man to have his rights declared. It was held that he could not maintain the bill, because he had no vested interest, and it was contingent if he would ever acquire any. And the Lord Chancellor says, that if the complainant had had any vested interest, however future and remote it might be, it would have been sufficient.

In the case at bar, the property was devised to trustees, and if the limitations of the equitable estates are void for remoteness,-as we think they are,-the heirs at law have present vested interests by way of resulting trusts; and the trustees are accountable to them now, as the owners of those interests, as entitled to have their rights admitted by the trustees, and all investments so made as to protect those interests, and so as to enable the trustees to pass over the property to the heirs at law, on the termination of the life-estate, if that be valid. It is one of the duties of trustees to admit the existence of the trust; a duty not dependent on the right of the cestuis que trust to present possession. A vested interest in remainder is a subject of sale, and the denial of the trust throws a cloud upon that title, which the trustee cannot properly do. These trustees deny the title of the heirs as cestuis que trust under this will. And for this reason, if there were no others, equity may entertain this bill.

Mr. Justice GRIER delivered the opinion of the court:

title: Cross v. De Valle


text: Talk:Cross v. De Valle

title: Talk:Cross v. De Valle


text:
Cross v. De Valle/Opinion of the Court

The bill alleges that the trusts declared in the will are all void, because of the alienage of Mrs. De Valle and her children, and prays that the trustees may be ordered to convey to the complainant as one of these numerous contingent remainder-men who is not an alien; or that the estate be conveyed to the heirs at law of the testator. As it is not alleged that the complainant is one of these heirs, it is not easy to apprehend on what grounds he claims as an alternative remedy that the court should decree in favor of those who claim adversely to himself. Perhaps it was to favor the attempt to give jurisdiction to the court to declare the future rights of the parties by converting an original into a cross-bill.

That an alien may take by deed or devise, and hold against any one but the sovereign until office found, is a familiar principle of law, which it requires no citation of authorities to establish. Nor is it affected by the fact that a statute of Rhode Island will permit aliens to take a license to purchase, which will protect them even as against the State; nor by the fact that a chancellor may not entertain a bill by an alien to enforce a trust, which, if conveyed to him, might immediately escheat to the crown.

Now, as the court rightly decided that Mrs. De Valle took an equitable life-estate by the will, defeasible only by action of the sovereign, Cross was in no situation to call upon the court to declare the fate of these numerous contingent remainders.

1. For if the remainders were void because of remoteness and tending to a perpetuity, his own remainder fell with the others.

2. And if declared to be valid, not only the six children of Mrs. De Valle, who are parties to the suit, but possibly and before her death there might be six more, not now in esse, who would be entitled to come in before him.

3. The bill demands no such declaration of future rights, nor does it suggest how it could be done, or any sufficient reason why the court should pass upon the rights of persons not in esse.

4. The bill charges no fault to the devisees except alienage, and before any of the contingencies happen the party entitled to take may be a citizen and capable of taking and holding the estate. In fact, one of the children of defendant was born in Rhode Island, and therefore is as capable of taking as Cross.

The decree of the court was final and complete as to the case made by the complainant's bill. If the decree had been against Mrs. De Valle, and she had been held incapable of taking, then the heirs might well say, that in such a case the estate should be conveyed to them, and not to Cross, and have their cross-bill for that purpose. But the decree being in favor of Mrs. De Valle, and the bill dismissed, the cross-bill must have the same fate with the original. A cross-bill 'is a mere auxiliary suit, and a dependency of the original.' 'It may be brought by a defendant against the plaintiff in the same suit, or against other defendants, or against both, but it must be touching the matters in question in the bill; as where a discovery is necessary, or as where the original bill is brought for a specific performance of a contract, which the defendant at the same time insists ought to be delivered up and cancelled; or where the matter of defense arises after the cause is at issue, where in cases at law the defense is by plea puis darrein continuance.' The bill filed by the heirs is for an entirely different purpose from that of Cross. It called upon the court to decree on the future rights of their co-defendants and others not in esse, and decree the limitations on the life-estate to be void as tending to a perpetuity. This would be introducing an entirely new controversy, not at all necessary to be decided in order to have a final decree on the case presented by the original bill.

As an original bill the court might properly refuse to consider it. First, on account of the parties, and secondly, on account of the subject-matter.

The bill is filed in Rhode Island. All the complainants are citizens of States other than Rhode Island or Louisiana, while one of the defendants, Cross, is a citizen of the State last named, and not commorant in Rhode Island. It was admitted that this objection was conclusive, if the bill was an original. The second objection is equally conclusive, whether it be called a cross-bill or an original. A chancellor will not maintain a bill merely to declare future rights. The Scotch tribunals pass on such questions by 'declarator,' but the English courts have never assumed such power. In Langdale v. Briggs, Lord Justice Turner remarks: 'As long as I have known this court, now for no inconsiderable period, I have always considered it to be settled that the court does not declare future rights, but leaves them to be determined when they may come into possession. In all cases within my experience, where there have been tenancies for life with remainders over, the course has been to provide for the interests of the tenants for life, reserving liberty to apply upon their death.'

A remainder-man may have a decree to protect the estate from waste, and have it so secured by the trustee as to protect his estate in expectancy. The court will interfere under all needful circumstances to protect his rights, but such cases do not come within the category of mere declaratory decrees as to future rights.

There is also a class of cases in which recommendations or requests in a will to a devisee or legatee have been construed as cutting down an absolute fee into an estate for life, with an equitable remainder to the person indicated by the testator in his request. In such cases the court will entertain a bill during the life of the first taker to have the right of the claimant in remainder established. Nor do these cases infringe upon the doctrine we have stated as to mere declaratory decrees concerning future contingent executory estates.

But there is a class of cases which are exceptions to this rule, and being exceptional, only tend to prove the rule. The New York cases of Lorillard v. Coster, and Hawley v. James, cited by the counsel of the heirs at law, are of this character. There the bills were filed by the executors or trustees for their protection, and that they might have a construction of the will, and the direction of the court as to the disposition of the property. In such cases, from necessity, and in order to protect the trustee, the court are compelled to settle questions as to the validity and effect of contingent limitations in a will, even to persons not in esse, in order to make a final decree and give proper instructions in relation to the execution of the trusts. It is this necessity alone which compels a court to make such cases exceptions to the general rule. But in the present case no such necessity exists. The court is not called upon to make a scheme of the trusts, nor could they anticipate the situation of the parties in the suit, or those who may be in existence at the death of Mrs. De Valle. The court has no power to decree in thesi, as to the future rights of parties not before the court or in esse.

DECREE AFFIRMED WITH COSTS.

title: Cross v. De Valle/Opinion of the Court


text: Talk:Cross v. De Valle/Opinion of the Court


text:
Wright v. Ellison

IN 1827, the American brig Caspian was illegally captured by the naval forces of Brazil, and condemned in the prize courts of that country. There being nothing else to be done in the circumstances, her master, one Goodrich, instituted legal proceedings to recover the brig, and gave to Zimmerman, Frazier & Co., an American firm of the country, a power of attorney with right of substitution, to go on with matters. The power was essentially in these words:

'I authorize, &c., in my name and representing me, to appear in and prosecute the cause I am this day prosecuting before the tribunal of justice, &c., in which this vessel is interested; said vessel has been detained by force of the blockade of Buenos Ayres, and that they make petitions, request, and protests, here and before all tribunals, superior and inferior, before whom it is customary to appeal; that they present all the documents favorable to my rights; that they except to and decline jurisdiction; that they give and refuse terms; that they submit written evidence and proof; that they retort and contradict everything unfavorable; that they challenge jurisdiction; that they express the causes of accusation, if it be necessary so to do; that they take cognizance of all decrees and interlocutory as well as final sentences; that they admit the favorable and appeal from the adverse; that they prosecute the appeal before his Imperial Majesty in the superior tribunals of war and justice, that in right they can and ought to do; that they insinuate where and against whom they may deem advisable, doing in effect everything requisite and necessary that I, being present, would or could do; that they make transactions and obligations, name arbitrators and mediators, demanding damages or adjusting them amicably with the opposite parties, receiving in my name the said brig Caspian and her cargo; that they give all receipts right and proper to be given in faith of delivery and acquittance; and after the restitution of said vessel they may name, in my absence, any other captain and crew to navigate her if they deem it advisable, and if not, they may sell her per account of her legitimate owners, and they may receive amount of said sale. And as to the necessary power referred to, with all incidental and resulting powers, I give it to and confer it upon my aforesaid attorney, with free, frank, and general administration without limit, in order that there be no clause or special expression which would destroy the effect of it, because I gave them full power to substitute another, to revoke the appointed one's authority, and to name again substitutes, all of whom I exonerate from costs.'

Under the power of substitution thus given to them, Zimmerman, Frazier & Co. substituted in their place Mr. Wright, the consul of the United States, and a merchant of standing at Rio; whose official influence, it was apparently supposed, might be more potential than their own private efforts. Wright prosecuted the case diligently through the Brazilian courts, but without success. He afterwards came to the United States and urged our Government to demand indemnity for this as for other wrongs of a like kind. He spent money, removed difficulties, advanced proof, and furnished information. The result of his or of other efforts was that our Government finally made a demand for indemnity, and obtained it in this case, as in many others, under a treaty subsequently made. A commissioner was appointed to hear claims and decide them. But it was probable that, except for Wright's knowledge, effort and outlay, this result would not have been had, and neither this claim nor any other been asserted by our Government as they all were.

After the labor of Wright had been undergone by him, and when the money was open for claim, one Ellison, an executor of a part owner, applied to the commissioner, proved his case, and received his share of the indemnity. Wright now instituted, in the court below,-the Circuit Court for the District of Columbia,-this proceeding, a bill in equity, against this same Ellison and others interested, to have a commission out of this fund. The bill set forth Wright's long and effective services, his large outlays, and insisted that, 'by the general maritime law and law of the place where the contract was made,' he was entitled to compensation, and 'that such compensation should be retained and received by him out of the fruits of his said labors, services and expenses;' and it set forth further, 'that as well by agreements as by reason of the premises, and by force of the maritime law and the principles of equity, and the law and established usage of the place of said contract, he had a lien upon the fruits and proceeds of the claim, in whatever form of proceeding the same was realized, through or by reason of his labors, advances, or services performed, advanced and rendered.'

It did not appear that the owners of the vessel had, in form, ever ratified what Wright did; but the evidence apparently was that they were cognizant, to a greater or less degree, of what he was doing, though he himself was the promoter of what was done everywhere.

The chief question now, therefore, was, Whether the complainant, Wright, had an equitable lien upon the fund? and a preliminary question, Whether the power of attorney authorized him to do anything more than prosecute the case effectively through the Brazilian courts, and dispose of the vessel afterwards, if he should prosecute it successfully?

Messrs. Carlisle and Cox for the appellant, Wright:

1. The power gives authority to manage the suit, on behalf of the owners, and to prosecute an appeal before his Imperial Majesty in the superior tribunals, to do whatever he, being present, could or would do, to make compromises, name arbitrators and mediators, demand and adjust damages, to receive the vessel and cargo, and give receipts, and after restitution to appoint a captain and crew to navigate her if they deem advisable, or, if not, to sell her on account of the owners and receive the proceeds, with free, frank, and general administration, without limit, and power of substitution, &c. What can be more comprehensive than the complete control given over the vessel and its proceeds, with general administration, without limit? Would not the right to receive the vessel, and convert her into money, involve the right to receive the proceeds, if the former were impossible? And is it possible, that with all incidental and resulting powers, and right of general administration, or management, without limit, the attorneys would not be entitled to apply to and receive indemnity from the Imperial Government at Rio, on the failure of a suit in the Superior Court, at that place?

2. Slight circumstances suffice to establish an equitable lien upon a pecuniary fund. An order drawn by A. on B., in favor of C., for a valuable consideration, indorsing and delivering a bond to an assignee, or any order, writing, or act whatever, intended as an appropriation of a fund, or part of it, would constitute an assignment, and give a lien on it in equity. An authority to an agent to prosecute a money claim and receive the proceeds, and deduct his compensation from them, is of the same character. And this agreement may be expressed or implied. Indeed, in every authority to prosecute and receive a money claim, there is implied an authority to deduct the agent's expenses and compensation from the fund. Attorneys, solicitors and collectors have this right, just as all persons dealing with any subject-matter in their hands, have a lien upon it for their work and labor.

In the matter of the Brazilian claims, there was no room for misunderstanding. Merchants of high standing had been engaged for many years in prosecuting them. Many had been settled under a previous convention; and it had always been understood that the agent's compensation was to be retained out of the fund. This is matter of common knowledge.

To establish the agency of the appellant is sufficient, therefore, to make good his claim upon this specific fund.

Messrs. Bradley and Chetwood contra:

1. The power, filled as it is with the verbiage of a Portuguese legal document, and with exaggerated generalities, has a purpose which is expressed in few words. It authorizes,--

1st. The attorney to continue in, appear in, and prosecute the cause which the captain, Goodrich, is then himself prosecuting before the Brazilian Prize Court.

2d. To appeal from an adverse judgment, and prosecute the appeal in the superior tribunals.

3d. In case of seccess, to receive the vessel and cargo, adjusting damages.

4th. After restitution, to despatch her with crew and captain, or sell her on account of the owners.

After thus expressing its purpose, it repeats the gift of the necessary power to do these things; and this specified, qualified necessary power is what the constituent gives with free, frank, and general administration without limit.

These words, upon which the appellant lays stress, as conveying unlimited power, are, in truth, only an exaggerated mode of expressing what has already been expressed, and of giving what has already been given in a specified and definite manner: mere 'style de notaire.'

2. The appellant asks, in fact, to be paid for having helped the Government of the United States to effect a treaty. If he have any claim against Ellison under the treaty, he must have a similar claim against every party in whose favor the commissioner awarded. He does not set up a contract with the owners of the vessel, or either of them directly, or through any agent, other than has been stated, but relies on the services he has thus rendered as imposing a lien upon the awards. If there is no lien, he has no case in equity at all. The assertion of the opposite counsel as to what gives an equitable lien is perhaps correct. But it does not apply to Mr. Wright's case. He has no 'order or writing,' nor does he show any 'act intended as an appropriation of the fund.'

Mr. Justice SWAYNE delivered the opinion of the court.

title: Wright v. Ellison


text: Talk:Wright v. Ellison

title: Talk:Wright v. Ellison


text:
Wright v. Ellison/Opinion of the Court

The determination of the case depends upon the solution of the question whether the complainant has shown himself entitled to an equitable lien upon the fund, to which the controversy relates.

The instrument executed by Goodrich, the master of The Caspian, to Zimmerman, Frazier & Co., we think it quite clear, contemplated only judicial proceedings, and the disposition of the vessel, after those proceedings were successful. Zimmerman, Frazier & Co., in substituting the complainant in their place, did not attempt to give, nor could they have given, any greater authority than they themselves were clothed with. The acquiescence of the owners whose rights are here in question may be properly held to have ratified the acts of Goodrich in their behalf, but it cannot be held to enlarge the powers conferred by the instrument which he executed, beyond what is expressed, and the objects in the minds of the parties at the time of the transaction.

The services of the complainant in bringing into activity the diplomatic agencies of the United States, and otherwise, at Rio, and subsequently in prosecuting the claim in this city, were outside of his original authority. Nevertheless they were beneficial to the claimants, and the approval of the defendants may be fairly implied from their silence and inaction. When the defendant, Ellison, interposed, the fruit was ripe and ready to fall into the hands of those entitled to receive it. We regard the case as a proper one for compensation, and in an action at law the complainant could hardly fail to recover.

But this is a suit in equity. The rules of equity are as fixed as those of law, and this court can no more depart from the former than the latter. Unless the complainant has shown a right to relief in equity, however clear his rights at law, he can have no redress in this proceeding. In such cases, the adverse party has a constitutional right to a trial by jury. The objection is one, which though not raised by the pleadings nor suggested by counsel, this court is bound to recognize and enforce.

The evidence in the case is wholly silent as to any agreement touching the compensation of the complainant. It is nowhere intimated what he was to receive, or when or how he was to be paid. No established usage is shown. The matter seems to have been left to rest upon the principle of quantum meruit, and to be settled by the agreement of the parties when the business was brought to a close. The doctrine of equitable assignments is a comprehensive one, but it is not broad enough to include this case. It is indispensable to a lien thus created, that there should be a distinct appropriation of the fund by the debtor, and an agreement that the creditor should be paid out of it. This case is wholly wanting in these elements.

DECREE AFFIRMED WITH COSTS.

title: Wright v. Ellison/Opinion of the Court


text: Talk:Wright v. Ellison/Opinion of the Court


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Pomeroy's Lessee v. State Bank of Indiana

A STATUTE of Indiana passed in 1834, enacted as follows: 'That there shall be and is hereby created and established a State Bank, to be known and styled the 'State Bank of Indians,' and shall continue as such until the first day of January, eighteen hundred and fifty-nine.' The charter further provided, that all banking powers should cease after the first day of January, 1857, 'except those incidental and necessary to collect and close up its business.'

In 1849, the bank being in possession of certain real estate, was sued in ejectment, and the suit, in December, 1862, being still pending on writ of error, in this court, which writ had been allowed in December, 1861, H. W. Chase, Esquire, signing himself Attorney for the State Bank of Indiana, in the Circuit Court for the District of Indiana, asked for the abatement of the writ upon the following suggestion, to wit: 'That since the trial of the above entitled cause in the Circuit Court for the District of Indiana, and before the prosecution of the writ of error in this behalf-to wit, on the first day of January, A.D. 1859,-the said State Bank of Indiana, named as defendant in error in said cause, being a corporation created and organized in the State of Indiana by the authority of an Act of the Legislature thereof, was dissolved and ceased to exist as such corporation, by reason of the expiration of the charter granted to said State Bank of Indiana.'

In support of this motion, he argued: The dissolution of the bank by expiration of its charter leaves no defendant; and the writ must abate. Angell and Ames state it as text law that 'upon the dissolution of a corporation in any mode,' 'all suits pending for or against it, abate.' They cite, in support of this statement, various cases which sustain the position. Lindell v. Benton, referred to in the note by them, as announcing a contrary doctrine, merely decides that the dissolution of a corporation after an attachment against it has been sued out, and its debtor garnished, will not operate to deprive the attachment plaintiff of a vested right in the money in the hands of the garnishee to satisfy his debt. In this case the bank itself expires in 1859. Banking powers may exist indefinitely for the purpose of closing up business. But the capacity to defend a suit is not a banking power. The expression has reference to the renewal of notes, &c., the payment of outstanding bank bills and the like.

The writ of error here is an original writ, issuing, in effect, out of this court, to bring up the record of a cause that alleged errors may be examined, and the judgment affirmed or reversed as the law may require. The parties in the inferior court, or their heirs or representatives, must be parties here, and to that end must be duly cited. It is true, that an attorney cannot withdraw his name from a cause, after final judgment, so as to avoid the service of the citation. But the death of his client revokes his authority to appear, and the service of a citation upon him thereafter is a nullity.

A rule of this court provides against the abatement of causes in error or on appeal between natural persons, by authorizing the heirs or legal representatives, as the character of the subject-matter of the litigation may require, to be made parties. But here is a corporation, civilly dead, leaving no heirs or representatives-no party upon whom process can be served, or to whom notice can be given, or no whom the judgment can operate. This is not the first instance where parties have failed to obtain the aid of this court to correct alleged errors, because there was no provision of law whereby the cause could be brought properly before the court.

Messrs. Traphagen, Brady, and Carlisle, contra.

Mr. Justice WAYNE delivered the opinion of the court:


text: Talk:Pomeroy's Lessee v. State Bank of Indiana


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Pomeroy's Lessee v. State Bank of Indiana/Opinion of the Court

I am instructed by the court to announce it to be its opinion that there can be no abatement of the case upon the counsel's suggestion, as it is declared in the charter of the bank, that though its charter should continue as such until the first day of January, 1859, and that all its banking powers should cease after the first day of January, 1857; that it should have all the 'necessary and incidental powers to collect and close up its business,' within which we deem the rights of the plaintiff in this court to be comprehended.

MOTION REFUSED.


text: Talk:Pomeroy's Lessee v. State Bank of Indiana/Opinion of the Court


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Clearwater v. Meredith

UNDER the provisions of a statute of Indiana, passed May 11, 1852, for the incorporation of railroads, the Cincinnati, Cambridge & Chicago Short Line Railway Company-frequently entitled throughout the case, for brevity, 'The Short Line Railway'-was created and made a 'corporation' in that State. This act contained no provision by which any railroad company incorporated under it could consolidate its stock with the stock of any other corporation. In February of the year following, however, the legislature did pass an act allowing any railway that had been organized, to intersect with any other road, and to merge and consolidate their stock; an act whose privileges, on the 4th of the month following, were extended to railroad companies which should afterwards be organized. The language of the act was: 'Such railroad companies are authorized to merge and consolidate the stock of the respective companies, making ONE JOINT STOCK COMPANY of the two railroads thus connected.'

With these statutes in force, Clearwater, on the 12th July, 1853, sold a tract of land to Meredith and others for $10,000, taking 200 shares of the already mentioned Short Line Railway Company's stock in payment; Meredith and they, however, by written contract, guaranteeing to Clearwater, that the stock should be worth par, that is to say, $50 a share, in Cincinnati, on the 1st October, 1855.

The 1st October, 1855, having arrived and passed, and Clearwater, considering that the stock was not worth par at Cincinnati, brought assumpsit in the Circuit Court for the Indiana District, against Meredith and his co-guarantors, on the contract. The declaration set forth the sale, acceptance of the stock, and guaranty; that Clearwater still held possession of the stock; and it assigned for breach, that the stock was not worth par at the time and place stipulated, but on the contrary, was of no value at all.

To this declaration there were six pleas. Issues, in fact, were joined on the first and fourth, and demurrers sustained to the second, third, and sixth.

The fifth plea set forth substantially, that after the execution of the guaranty, and before the 1st of October, 1855, to wit, &c., the stock of the said Short Line Railway was merged and consolidated with the stock of a second railway company named; making one joint stock company of the two, under a new corporate name, which was given; that the said corporations were organized and formed under the already mentioned act of May 11, 1852, to provide for the incorporation of railroad companies; that the roads were connecting and intersecting roads; that the consolidation was made with the consent of the stockholders and directors of both companies; that afterwards, in August, 1854, the said newly formed joint company was merged and consolidated with a third railway corporation of the State of Indiana, whose name was also given; which company was constructing a road that intersected with the said already mentioned newly formed joint company; that by the said consolidation, the stock of the said two companies was merged and consolidated, 'forming one joint stock company out of said two companies;' that the said consolidation was made with the consent of the directors and stockholders of said two companies, and with the consent of said plaintiff; that the said consolidated company assumed a third corporate name, which was stated; and that, by reason of the said consolidation, the stock of the Short Line Railway Company in said agreement specified, was destroyed, and rendered wholly worthless and of no value. A demurrer was interposed to this plea, which was overruled.

Then the plaintiff filed a replication. To this a demurrer was put in by the other side, and the court having sustained it, an amended or rather a substituted replication was put in. To this a demurrer was also sustained. Whereupon, on motion and by leave of the court, the plaintiff withdrew his joinder in demurrer, and filed the following second amended replication:

'And the plaintiff, as to the plea of the defendants fifthly above pleaded, says that he ought not, by reason of anything therein alleged, to be debarred or precluded from having and maintaining his aforesaid action against the defendants, because he says that the said stock of the Cincinnati, Cambridge & Chicago Short Line Railway Company was not destroyed, either in whole or in part, nor was the same rendered worthless and of no value, in manner and form as the defendants by their said plea have alleged. And this he prays may be inquired of by the country.'

This replication was also demurred to, and the demurrer sustained. The plaintiff now saying nothing further, and choosing to abide by his last-named amended replication, judgment was rendered for the defendant.

The question presented on error here was this: Did the court below commit error when it sustained a demurrer to the last replication, and gave judgment against the plaintiff, Clearwater, as it did?

Mr. Pugh for Clearwater, the plaintiff in error: The demurrer asserts, of course, that the replication is bad, and the reasons which will be assigned to show that it is so are, that it is double, and also that it traverses matter of law.

1. Is the replication double? It cannot be supposed that the fifth plea intended to allege the three facts stated, namely, the consolidation, the plaintiff's consent, and the destruction of the stock, as three separate matters of defence. It means that the defendants were excused from their agreement because the stock of the plaintiff had been destroyed, and that the destruction resulted from a consolidation to which the plaintiff had consented. Now all three facts constitute (together) but a single point of defence; and that point, including all its elements, the plaintiff, by settled rule of pleading, had a right to put in issue. Sergeant Stephen thus illustrates the rule:

'In an action of trespass for breaking the plaintiff's close and depasturing it with cattle, the defendant pleaded a right of common in the close for the said cattle, being his own commonable cattle, levant and couchant upon the premises. The plaintiff, in the replication, traversed 'that the cattle were the defendant's own cattle, and that they were levant and couchant upon the premises, and commonable cattle.' On demurrer for duplicity, it was objected that there were three distinct facts put in issue by this replication, any one of which would be sufficient by itself; but the court held that the point of the defence was that the cattle in question were entitled to common; that this point was single, though it involved the three several facts that the cattle were the defendant's own, that they were levant and couchant, and that they were commonable cattle; that the replication traversing these facts, in effect, therefore, only brought in issue the single point whether the cattle were entitled to common, and was, consequently, not open to the objection of duplicity.'

The rule itself was neatly declared by Lord Mansfield, who says: 'It is true you must take issue upon a single point, but it is not necessary that this single point should consist of a single fact.' It received application stronger than any we ask for in the late English case of Selby v. Bardons. The action was replevin. The defendants avowed the taking; Bardons as collector of the rates, and the other defendant as his bailiff. The avowry alleged that the plaintiff was an inhabitant of the parish, and ratable in respect of his occupancy of a certain tenement: it then alleged the making of a rate, publication thereof, demand of payment and refusal, summons of the plaintiff before the petty sessions, judgment against him, warrant of distress, &c. The plaintiff pleaded in bar, de injuria, &c.; to which the defendant demurred, for that the plea tendered issue of several distinct matters. But Parke, J., says:

'It is true that these pleas in bar put in issue a great number of distinct facts, and it is also true that the general rule is that where any pleading comprises several traversable facts or allegations, the whole ought not to be denied together, but one point alone disputed; and I am fully sensible that the tendency of such a rule is to simplify the trial of matters of fact, and to save much expense in litigation. But it is quite clear that from a very early period in the history of the law, an exception to this general rule has been allowed with respect to all actions of trespass on the case, in the plea of the general issue, and with respect to some actions of tort in the replication de injuria sua propria absque tali causa. This replication, where it is without doubt admissible, generally-indeed, it may be said, always-puts in issue more than one fact, and often a great number.'

Other cases illustrate the distinction.

2. Does the replication traverse matter of law? These parties did not bargain with each other upon a question of names, but upon a matter of values. Assuming the consolidated company to be a corporation-a matter which we speak of hereafter-it was the successor, in law, of the Short Line Railway, and bound by the contracts of that company as if no consolidation had occurred. So complete would be the identity, in such a case, that an action of covenant might be maintained against the new company, by name, upon a deed sealed with the corporate seal of any one of its constituent bodies. The mere fact of consolidation, therefore, with or without the plaintiff's consent, is not material to the performance of this agreement on the part of the defendants. It may be that the Short Line Railway Company acquired, by means of it, additional property, or facilities of some other description for enhancing the value of its stock. So, on the other hand, the consolidation may have involved its affairs in ruin. This, however, is a question of fact, to be tried by a jury, and upon evidence. The plaintiff took issue in regard to it; but he was not allowed any trial of that issue. And so it stands upon record, as the judgment of the Circuit Court in this case, that (although the stock of the Short Line Railway was not destroyed, 'either in whole or in part,' by means of consolidation, as alleged in the plea) the defendants are excused, nevertheless, from performing their contract.

3. But a new point arises. The question is not only as to the sufficiency of our replication. A demurrer being put on the pleadings it searches the record. The first bad piece of pleading will be laid hold of, and judgment given on it. Now does the plea to which we have replied, itself put in a sufficient defence? The fifth plea does not allege that a new 'corporation' was created by the consolidation of the Short Line Railway Company with either or both of the other companies named, but that one JOINT STOCK company was formed by union of the three. And the statute of Indiana, authorizing consolidation, uses that peculiar language. Upon the other hand, the general act of May 11th, 1852, under which as well the Short Line Railway Company as both the other companies mentioned in the plea were formed, declares that the companies formed under it shall be 'corporations' in the proper sense. These two statutes show, therefore, that the Legislature of Indiana intended to express the difference between a joint-stock company (as such) and a corporation. It is not only a difference well established, but peculiarly significant in this connection. The old corporation, therefore, was not drowned, dissolved, nor otherwise destroyed. Decisions of the Supreme Court of Indiana favor, perhaps, this view. Perkins, J., in the case of Booe v. The Junction Railroad Co., says, speaking of the point before him:

title: Clearwater v. Meredith


text: Talk:Clearwater v. Meredith

title: Talk:Clearwater v. Meredith