m-^'^::'.-^■ I- . "^ "t? -. '^- THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW li ELEMENTS OF EQUITY FOR THE USE OF STUDENTS. ELEMENTS OF EQUITY FOR THE USE OF STUDENTS BY MELVILLE M. BIGELOW III LECTUREll IN THE SCHOOL OF LAW, BOSTON UNIVEUSITT BOSTON LITTLE, BROWX, AND COMPAXY 1879 Entered according to Act of Congress, in the year 1871), by MELVILLE M. BIGELOW, In the Office of the Librarian of Congress, at Washington 3 4--? \<(7 eq (Txi\t;rsity Press: .loiiN Wilson and Son, CAMnniDGE. TO DWIGHT FOSTER, LL.D. 670368 PREFACE. The present work has been prepared in a similar style to that of the author's Elements of Torts. An attempt has been made to present the subject of equity jurisprudence in the concrete, — to show to the student the actual working of the system of equity in the administration of justice. Equity, however, is a more difficult subject than torts in which to carry out such an attempt. The facts liti- gated in equity causes are generally complicated ; and short, forcible examples are difficult to find in the Reports. For this reason, fewer examples taken directly from the facts of particular causes will be found in this work than in its predecessor ; but this necessary defect has been supplied, as far as possible, by connecting the principles stated with appropriate and usual classes of facts. In addition to the materials furnished by the He- ports, the most useful text-books, both upon the gen- eral subject of equity and upon particular branches of it, have been brought under contribution ; and any success which the work may attain will be due in no small degree to the fact that the author has attempted to lay before the student the best results thus far reached in the investigation of this depart- ■viii PEEFACE. ment of law. It is hardly necessary to add that statements founded upon conclusions of others have in all cases been carefully weighed, and their cor- rectness established to the satisfaction of the author before adopting them into these pages. The author ventures to hope that the division of the subject into (1) Property in Equity, (2) Grounds of Relief in Equity, and (3) Modes of Relief in Equity, though not entirely new, may tend to sim- plify the study of this complicated branch of juris' prudence. Boston, July 1, 1879. CONTENTS. PAOB Cases Cited xiii CHAPTER I. The Court of Chancery . . . . I. PROPERTY IN EQUITY. CHAPTER II. Trusts 10 CHAPTER III. Express Trusts 13 § 1. Of the Trust Estate 13 § 2. Of Executed and Executory Trusts 26 § 3. Of the Trustee and his Duties 31 CHAPTER IV. Trusts by Implication of Law 48 § 1. Of Trusts arising by presumed Intention ... 48 § 2. Of Trusts raised by Law for the Purpose of satis- fying the Requirements of Honesty and Fair- dealing 55 CHAPTER V. Mortgages 64 § 1. Of Mortgages Proper . . 64 CONTENTS. PAGR § 2. Of Irregular or Incomplete Mortgages and Liens . 72 § 3. Of Exoneration, Contribution, and Marshalling . 80 § 4. Of Payment or Discharge 8i CHAPTER YI. Assignment 90 II. GROUNDS OF RELIEF IN EQUITY. CHAPTER VIL Actual Fraud " 95 § 1. Of Deceit 95 § 2. Of Fraud on Powers 103 § 3. Of Inadequacy of Consideration 108 § 4. Of Fraud between and by Partners, Co-tenants, and Joint Purchasers 109 § 5. Of Corporations 114 § 6. Of Volunteers 116 § 7. Of Marriage effected by Fraud 117 § 8. Of Judgment and Awards 119 § 9. Of Waiver of Fraud 125 § 10. Of Fraud upon Creditors and Purchasers . . . 126 CHAPTER VIIL Presumptive or Constructive. Fraud 1,35 § 1. Of the Nature of the Subject 135 § 2. Of Attorney and Client 136 § 3. Of Principal and Agent 146 § 4. Of Trustees 149 § 5. Of Guardians 152 § G. Of Executors and Administrators 153 § 7. Of Parent and Child 1.55 § 8. Of Pliysician and Patient 1.57 § 9. Of Spiritual Advisers 158 CONTENTS. XI PAGE § 10. Of Expectant Heirs 158 § 11. Of Sailors 161 § 12. Of Feeble, Weak-minded, and Illiterate Persons . 101 CHAPTER IX. Unconscionable Stipulations 1'34 CHAPTER X. Accident and Mistake • 169 CHAPTER XI. Notice 180 § 1. Of Facts suggesting Inquiry ISO § 2. Of Lis Pendens 188 § 3. Of the Registration of Instruments 190 III. MODES OF RELIEF IN EQUITY. CHAPTER XII. Specific Performance of Contracts 194 § 1. Of the Nature and Application of the Remedy . . 194 § 2. Of Part Performance 209 CHAPTER XIII. Rescission and Cancellation of Instruments . . 21-3 § 1. Of the Nature and Grounds of the Remedy of Rescission 213 § 2. Of Tender of Performance or Return of Consid- eration 219 § 3. Of Waiver of the Right to Rescind 230 § 4. Of Cancellation and Surrender 231 Xll CONTENTS. CHAPTER XIV. PAGE Administration of Debts and Assets . . . . , 239 § 1. Of Marshalling 239 § 2. Of Exoneration 212 § 3. Of Conversion 241 CHAPTER XV. Contribution and Exoneration 246 CHAPTER XVI. Election 254 CHAPTER XVII. Account 262 - CHAPTER XVIII. Receivers 272 CHAPTI^R XIX. Tackino 278 CHAPTER XX. Subrogation 281 CHAPTER XXI. Discovery 287 CHAPTER XXII. Injunction 291 INDEX 315 CASES CITED. 159, PAGE Abbot V. Allen 192 Abbotts V. Barry .... 216 Abingdon v. Butler . . . 199 Aclieson v. Miller .... 247 Acker v. Campbell . . . 216 Adams i". Adams ... 25, 107 V. Johnson .... 74 V. Stevens .... 180 Adderley v. Dixon . 195, li)6 Addison v. Cox 94 Adsit V. Adsit . . Agnew V. Bell . . Albert v. Burbank . Aldborough v. Trye Allan V. Gott . . Allen V. Hart-field . V. Morris . . AUerton v. Allerton AUin V. Millison AUore v. Jewell Almony v. Hicks . Ambrose v. Ambrose V. Nott . American Academy vard College . . Amstead v. Hundley Anderson v. Anderson V. Hooks V. Maltby . Andrews v. Montgomery Angel V. Smith 274 Annett y. Terry . . 121,122 260 249 238 100 243, 244 216 189 227 219 235 237 15 293 20 219 122 236 113 122 Har- Antrobus v. Davidson Archdeacon v. Bowes Arrington v. Liscom Arthur v. Lamb Arundell v. Phipps Ashhurst's Appeal Aston V. Aston . . Atlantic Delaine Co. i . . 253 . . 274 . . 236 . . 298 . . 304 . . 44 . . 300 James 234 PAtiE Attorney-General v. Brad- ford Canal 300 Attorney-General v. Cam- bridge Gas Co 303 Attorney-General v. Forbes BOO V. Skinner's Co. . 265 Attwood V. Coe 288 Aylesford v. Morris . . . 161 Aylett V. Ashton .... 205 Ayres v. Willis 255 B. Babbitt v. Babbitt .... 107 Bac V. Cosby 261 Bailey v. Bussing .... 247 V. Robinsons . . . 155 Baker v. Backus . . 273, 275 V. Bradley . . . 155 V. Davis 144 V. Jordan .... 100 V. Monk 162 V. Spencer .... 232 V. Vining .... 67 V. Whiting .... 93 Bank of Commonwealth v. Mudgett ... 182 Kentucky v. Vance 241 Orleans ;;. Flagg 184 Penn v. Potius . 282 Banks v. Evans .... 235 Barkley v. Reay .... 275 Barnard v. Campbell . . . 133 w. Lee 207 Barnardiston v. Lingood . 223 Barnet v. Dougherty ... 60 Barnett v. Stanton ... 101 Barnewall v. Cawdor . . . 240 XIV CASES CITED. Barney v. McCarty Barnliart v. Greenshields BaiTO'.v V. Richard Barry v. Bennett . V. Butlin V. Wliiiney . Bartliolonievv v. Bentley V. May Bartlett v. Cowles . V. Drake 220 V. Tucker . Bascom v. Albertson Bassett v. Brown . Bates I". Graves . . Battle V. Rochester Bawtree v. Watson Beal y. Cliase . . V. Warren . . Beam v. Macoinber Beaumont v. SaUsbury Beckett v. Cord ley Behn v. Kemble Bell V. Twilight . Bellamy v. Sabine . Benbow v. Townsend Beiuiet V. Whitehead BeDuett, Ex parte . Berney v. Sewell . Berrien v. McLane Best V. Drake . . Beverley v. Brooke Bicknell v. Field . Bilbie v. Luinley Billafje v. Southee Binns v. Nichols Birmingham v. Kirwan Bishop r. Schneider Black V. Shreeve . Blackburn v. Stable i: Tweedle Blacket v. Lamb Blakemore v. Shelby Blakeney i;. Dufaur Blakeslee v. Starring Blakesiey v. Johnson Blanchard v. Ware Bleakley's ApiJcal Bliss V. Ameri'jiin BibU ciety Blodgett V. Hildreth Blore V. Sutton . . Blount ('. Robeson . Bond V. llupkins 12 PACE 191 181 305 113 138 142 115 83 220 223, 226 102 20 228 225 215 IGO 306 132 125 25 117 101 192 190 14 265 150 27;] 137 29!) 272 123 175 158 84 260 191 251 28, 29 75 2(i0 214 277 55, 56 120 189 230 12 So 19 61 202 130 b Boon V. Barnes . . Booth V. Clark . . V. Storrs . . Borden v. Fitch . . Bostwick V. Bowers Botsford V. Burr Bowditch V. Green Bowman v. Cunningham Box V. Barrett . . . Boyd V. Murray . . Bozon V. Farlow . . Bradbury v. White Branch v. Mitchell Brewer v. Boston Theatre Brice v. Stokes . . Bridges v. Longman Briggs V. Penny Briley v. Sugg . . Brisc»e v. Power . Bristow V. Warde . Bromley v. Smith . Brooke v. Garrod . Brooks V. Greathed Brothers v. Brothers V. Harrill . Brown v. Cowell V. Desmond V. Dwelley . V. Higgs /- I' Buck V. Swazey V. Warren . . Bufi'alo Bank v. Howard Hiiffalow ij. Buffalow Bulkley v. Wilford Buncc V. Gallagher IJurchard v. Fairhaven Burchell v. Marsh . liurdick v. Jackson Burke v. Murphy . Buries v. Popple well Burnham «. Ivempton Burns u. Ilmitington Burr V. Hutchinson Burtis ('. Burtis . . Burton i'. Wookey Buswcll c. Davis . Butler V. Miller . . V. New York & Ry. Co. V. Viele . IJuxton V. Lister Bycrs y. Soi'jjet Volkening PAGE 133 272 99 122 190 56,57 285 203 257 276 203 197 236 115 36 168 22 282, 283 252 107, 257 160 67 73 151 63 41 208 63 16 185 57 57 114 144 142 237 190 124 74 295 293 302 281 173 117 111 117 108 93 237 198 IIU CASES CITED. X^ Co PAGE . 199 130, 305 . 97 R. Cadman v. Horner . Cadogan v. Keiinett Calkins v. State Calvo V. Davies . . Cambridge Bank v. Delano Campbell v. Campbell V. Gardner Candler v. Tillett . Cardwell v. Cheatham Carpenter v. Herriot Carter v. Palmer Carver v. Leite . . Case V. Boughton . V. Carroll . . Casey v. Casey . . Cass V. Pittsburg Ry Caton V. Caton . . Cavan v. Darlington Cavander v. Bulteel Cecil V. Spurger Chambers v. Crook Chander v. Dyer Chase v. Peck . . Chase's Case . . Chedworth v. Edwards Cheever v. Rutland & B Co Chesterfield v. Janssen Citizen's Coach Co. u. Cam den R. Co. . . Chichester v. Donegal Christian v. Ransotne Christmas v. Russell V. Spink Clark V. Malpas V. Ricker . . Clarke v. Abingdon Clarkson v. Creely Clason V. Morris Clay V. Williams . Cleland v. Fish . . Clements i'. Moore Clementson v. Gaudy Clermont v. Tasburgh Cleveland v. Burrill ■ Clinan ;;. Coolije . • Clos V. Boppe . . , Clough V. Dixon . , V. London Ry. Co. 219, 220, 233, 234 Clowes V. Dickenson . . . 252 Coleman v. Barklcw . . . 185 122, 209, 86 180 58 217 38 105 201 144 289 101 140 155 116 209 257 186 98 125 70 76 272 304 273 159 291 290 200 123 218 162 182 166 59 253 155 157 130 257 97 208 210 69 38 PACE Coleman v. Simms . . . 306 Colemere, hi re ... , 130 Coles V. Sims .... . 306 V. Trecothick . . ■^ 1, 150 Coleson v. Smith . . . . 222 CoUett V. Morrison . . . 173 Collin V. Wright . . 102 Collins V. Evans . . . 101 Colquitt V. Thomas . . 182 Comegys v. Vasse . . . 93 Compere v. Hicks . . . 25 Const V. Harris ... 27 6,277 Cook V. Gilman . . . 228 V. Gudger . . . 63 Cooke V. Nathan . . . 176 Copis V. Middleton . 12 8, 282 Coppage V. Barnett . . 56 Corbin v. Sullivan . . . 191 Cotton V. W^ood . . . 58 Cowden's Estate . . . 252 Cowdry v. Day .... 142 Cox V. Peters .... 277 V. Sullivan .... 141 Crane i\ Hearn . ... 34,35 Cravvshay v. Collins . . 270 Crossley v. Parker . . 143 Crowe V. Ballard . . . 46 Cumberland Coal Co. v Sherman 44 Cumming v. Forrester . . 255 Cummings v. Little . . 216 Curtis V. Curtis . . . 266 V. Lyman . . . 191 Cutter V. Powell . . . 172 Cutts V. Salmon . . . 145 D. Dalby v. Pullen . . . 214 Daniel v. Joyner . . . 263 Darby v. Darby . . . 245 Darvill v. Terry . . . 130 Daubeny v. Cockburn . 224 David V. Park . . . . 102 Davidson c. Little . . . 109 Davis V. Abraham . . . 145 V. Christian . . . 190 V. Hone . . . . 195 V. Marlborough 159, 274 V. Smith . . . 141 Dawson v. Massey . . 201 Day V. Newman . . . . 20C XVI CASES CITED. Deare v. Carr . . . De Armond v. Adams Deep River Mining Co Fox Deering v. Winchelsca Delaware & R. Canal Co Raritan & D. R. Co. De Rose v. Fay . . . Despard v. Walbridge Devlnney v. Norris Devoe v. Brandt . . Dickey v. Lyon . . . Dill 0. Shahan . . . Dillett V. Kemble . . Dillon V. Blake . . . Dinwiddle v. Bailey . Dixon V. Muckleston . Dobson V. Pearce . . Doe d. Compere v. Hicks d. Noble V. Bolton d. Otley V. Manning Doggett V. Hart . . ])oorman ". Jenkins Dowd V. Tucker Doyle V. Blake . . »'. Knapp V. Teas • . . Duchess of Kingston's C Duncan's Appeal . . Dunlap V. Cody . . Dunnage v. White . . Dyster, Ex parte . . V. PAGE . 87 , 121 . 47 . 249 V, . 302 . 139 . 62 . 144 . 133 . 184 . 176 . 217 . 30 . 269 . 77 ' . 120 . 25 . 24 . 132 . 251 •46, 148 . 201 37,38 . 215 . 190 121 100 119 ^175 147 ase E. Eaden v. Boddam . . . . ]70 V. Firth 302 East India Co. i' Campion . 165 Easum v. Applcford ... 64 EchlifE V. Baldwin .... 305 Edgerly v. Emerson . . 283, 284 Edwards v. Browne . . . 159 V. Meyrick , . 138, 139 Egerton v. Brownlow ... 27 Eli V. Gridley 184 Ellcock r. Mupp 60 Ellis V. Mathews .... 161 Elmhirst v. Spencer . . . 303 Ely V. Wilcox 191 Emerson i'. McNamara . . 228 V. Udall .... 123 Emery v. Lawrence ... 91 Engel V. Sheuerman Espey V. Lake . . Evans v. Richardson PAGH 122, 123 . 304 203 F. Fairburn v. Pearson . . . 277 Farquharson v. Pitcher . . 295 Fawcett v. Whitehouse . . Ill Featherstonhaugh v. Fen- wick 271 Ferlat v. Gojon 117 Findon v. Parker .... 92 Firemen's Ins. Co. v. Powell 173 Fish V. Cleland 157 V. Leser 204 Fisher v. Worrall .... 202 Fisk V. Miller 120 Fitch V. Weber 53 Fitzgerald v. Vestal ... 91 Flagg V. Mann 184 Fletcher v. Dodd .... 268 V. Hubbard . . . 123 Fogg V. Johnston .... 109 Foley V. Hill 263, 264 F'ord V. Harrington .... 142 Fordham v. Wallis .... 250 Forniquet v. Forstall . . . 228 Foster v. Cautley . . . 107 V. Grossett .... 214 V. Trustees of Athe- naeum 282 Fowle V. Lawrason .... 264 Fowler's Trust, In re . . . 259 Fowler v. Palmer .... 238 Fox V. Wright 159 Frame i'. Dawson .... 210 Freeman v. Curtis .... 176 r. Harwood . . . 161 Frost V. Brunson . . . . 214 V. Lowry 228 Fulton V. Loftis 214 Furnival v. Crew .... 198 G. Gardner v. Iloeg .... 91 Garrison v. Memphis Ins. Co. 251 Gaston i;.American Ex. Bank 188 Gatiingy. Newell . . .222,22.3 Gaunt V. Fynney .... oOl CASES CITED. XVll PAGE Gedtles's Appeal . . 112 George v. Milbanke 106 Getty V. Devlin . . 112 Gibbs V. Marsh . . 16 V. Rumsey . 17 Gibson v. Jayne 312 V. Jeyes . . 147 V. Monlfort . 24 Gillett V. Peppercorne 40 ,147 Gilnian R. Co. v. Kelly , 115 Glass V. Hulbert 59, 61, 174, 178, 179 Glassington v. Thwaites 111 112 Glenorchy i\ Bosville i >6, 27, 2!) Glisson V. Hill . . . 63 Goddard v. Snow . . 100 Goodtitle v. Whitby . 24 Gordon v. Green . . 14 Gowland v. DeFeria . 15*9 160 Grant v. Lathrop . . 297 V. Law . . . . 224 V. Ludlow . . 93 V. Lyman . . . 16 Graves v. Graves . . 22 V. Lebanon Bank 99 Great Falls Co. v. Worstt ?r . 121 Great Western Colliery Co. V. Tucker . . , . 289 Green v. Creighton . . 251 V. Lowes . 305 Greene v. West Cheshire ' Ry'. Co. ...... 198 Greenfield v. Edwards 99 Gregory i: Mighell 210 V. Wilson . . 168 v. Winston . 100 Gresley v. Mousley 139 Gretton y. Haward . . 256 Grierson v. Eyre . . 267 Grover v. Flye . . . 85 Grymes v. Sanders . . 176 ,177 Guinn v. Locke . . , 58 H. Hadlev v Clinton Import Co.' Hadley v. London Bank Haines v. Pohlmann . Hall V. Hall .... Hallenbeck v. Dewitt . Hammond r. Douglas . ng 98 305 187 277 162 270 PAGE Hanson v. Edgerly .... 98 Harden v. Parsons .... 36 Hardwicke v. Vernon . . 148, 209 Harper v. Bibb 191 V. Perry 140 Harrington v. Stratton . . 221 Harris v. Equitable Life Ins. Co 227 Harrison v. Guest . . . 108, 162 V. Nettleship . . 294 Hart V. Ten Eyck .... 269 Hartford v. Ciiipman . . . 236 Hartman v. Ogboru . . . 120 Harvard College v. Amory . 38 Hatch V. Fogerty .... 140 Hatliaway v. Noble . . . 184 Ilatliornthwaite v Russel . 276 Hawley v. Cramer .... 138 Hayes o. Stiger 217 V. Ward 281 Hays r. HoUis 55 Heatlicote v. Paignon . . . 109 Heastings v. McGee . . . 225 Hendrickson v. Hinckley . 296 Henry v. Raiman .... 140 Herbert v. Ford 223 Hibbard v. Eastman . . . 296 Hicks V. Stone 133 Higginbotham v. Cornwell . 260 Highway v. Banner ... 30 Hill V. Barclay .... 171, 172 V. Bush 176 Ins. Hills V. Rowland . . Hincksman v. Smith . Hiufle V. Longworth . Hitchcock V. Covill H()l)day v. Peters . . Hodges V. Armstrong . V. Tenn. Ins. Co Hodgkinson v. National Co Hodgson V. Butts . . V. Duce . . V. Shaw . . Hoffman v. Stroliecker Holbrook r. Bliss . . Holderstaffe i\ Saunders Holliday i\ Overton . Holman v. Loynes . . Holme ('. Brown . . Holroyd v. Marsliall . Holsman v. Boiling Spring Bleaching Co 301 168 159 129 216 145 283 62 115 128 301 2.53 191 295 ■294 20 139 296 92 xviii CASES CITED. rioltzapffel V. Baker Ilonywood v. Forster Hooker v. Axford . Hookliam v. Pottage Hopkins v. Mazyck Hotchkis V. Dickson Hotchkiss V. Elting Hovey i\ Blakeinan How V. Weldon . Howe, In re . . Howel V. Howel . Howell V. Ashmore c. Baker. Huglies V. Edwards V. Williams Huguonin v. Baseley Hull V. Hull . . . Hume V. Kundell . Huiigerford v. Sigerson Hunsaker v. Sturgis 47, Hunt V. Kousmaniere Hunter v. Lawrence Hylton V. Hylton . Hyman v. Devereux 23 148, 174, PAGE 172 257 61 310 17G 201 6, 237 38 161 73 30 288 140 77 268 148 117 255 2H6 149 176 45 153 72 Ingraham v. Bunnell . . 300, 302 Ingram v. Ingram . . . _ 259 International Life Assur. Soc, In re 242 J. .lackman v. Ringland Jackson v. Burgott . V. Ludeling V. Pliillips . V. Smitii James v. Drake . . Jarvis V. Chandler . Jayne v. Boisgerard Jeffries u. Jeffries . Jenkins v. Eldridge Jerome v. Ross . . Jolms V. Norris . Jolmson V. Unversaw V. Woods . Jolmstone v. Hall Jones V. Bad ley . . u. Beach . . 18. 00 117 44 19, 54 185 182 295 235 197 57 303 181 120 52 301 61 171 PAGB Jones V. Jones 252 V. Smith 181 Jordan v. Gillen 93 Joy V. Campbell .... 32, 37 Juniata Bank v. Brown . . 126 126 Kane v. Vanderburgh Kemble v. Kean Kempson v. Ashbee Kendall, Ex parte . V. Mann . Kennedy v. Greene Kent V. Pickering . Ker V. Wauchoj)e . Kerneys v. Hansard IvM-r V. Freeman Kej-es V. Keyes . Kimberley v. Jennings King V. King . V. Morris & E. R V. Paterson R V. Smith . . V. Talbot . , Kisling V. Shaw . , Knapp I'. Douglass Axe Co Knight V. Bougliton V. Duplessis V. Selby . . Knuckolls V. Lea Koelder v. Black River Co Kortright ?'. Cady Kyner v. Kyner . Co C 230, 117, 0. . Iron 300 307 231 242 57 180 293 256 199 235 118 307 276 304 182 71 83 138 291 15 276 20 231 44 85 282 Laccv, Ex parte . . . . 41, 160 Laidlaw v. Organ . . . 98 Lake v. Doud . . . . . 73 Lane v. Debenham . . . 36 Langstaffe v. Fenwick . 176 V. Taylor . . 143 Latlirop's Appeal . . . 283 Lawrence v. Campbell . 288 Lawson v. Hudson . . . 240 Leach v. Duvall . . . . 101 Leather Cloth Co. v. Am L>ri- can Leatiier (Moth Co. . 310 Lechmere c. Lavie . . - - 22 CASES CITED. XIX PAGK L«e V. Alston 267 V. Haley 310 V. Jones 97, 99 V. Kirby 200 V. Park 293 V. Sankey 35 Lester v. Malian .... 218 Levy !'. Briisli ... .59 Lewis V. Lewis 256 V. Kogers 122 Lidderdale v. Kobinson . . 283 Lincoln v. Wrigbt .... 182 Littleton v. Littleton ... 101 Livermore v. Johnson . . . 188 Livingston w. Livingston . . 58 V. Tompkins . . 168 Lloyd V. Attwood ... 40, 149 V. Passingliani . . . 275 Lockey v. Lockey . Long V. Majestre . Long Branch Com. v. Wes End R. Co. . . Lord V. Lowry . . Lorimer v. Lorimer Louisiana Bank v. Orleans Nav Co. ... Lounsbery v. Locander Lovell V. Leland V. Minot . • Lowber v. Connit . Lowther v. Lowther Lowthian v. Hasel . Liiniley i". Wagner Lynch v. Utica Ins. Co Lyon u. Home . . V. Richmond . Lyster v. Foxcroft . Lytle V. Pope . . . 265 111 291 14 267 188 205 87 34 208 147 280 307 75 158 176 209 218 M. McAndrew v. Bassett . . . 311 McCahan v. Reamey . . . 124 McCarroll v. Alexander . . 57 McCarthy v. Decaix . 126, 231 McCaskey v. GraflF . . 228, 229 McConnell v. Scott ... 253 McCormick v. Grogan . . 61 McCourtnay v. Sloan . . 295 McCrillis v. Carlton . . . 222 McCuiioch V. Scott . . 233 McCunn v. Belt . ... 260 FAOH McDonald v. Trafton ... 101 McDonough v. O'Neil . . 57 McGowan v. McGowan . . 57 Mackenzie v. Johnston . . 269 McKinney v. Clarke . . . 119 McPherson v. Talbott . . 249 McQueen v. Farquhar . . 106 Maddeford v. Austwick 110, 112 Maddison v. Chapman Malione v. Williams . Mahurin v. Harding . Maitland v. Backhouse Malim v. Keighley . . Mallory v. Leach . . Mandeville v. Mandeville Manning v. Albee . . V. Spooner . Marlatt v. Warwick . Marsden's Trust, In re Marsh v. Whitmore V. Wilson . . Marshman v. Conklin Marston i?. Rowe . . Martel v. Somers . Martin v. Martin . . V. Mitchell . . V. Nutkin . . Martindale v. Harris . Mason v. Martin . . Masson v. Bovet • . Matteson v. Holt ^ . . Matthews ;•. Bliss . . Mayo v. Carrington Mead v. Bunn . . . Mecutchen v. Kennady Meek v. Perry . . . Melick ^\ Voorhees Mellish V. Robertson . Mendes v. Guedella Mercier v. Hemme . . Merritt v. Brown . . Merry weather v. Nixan Messeena v. Carr . . Metcalfe v. Pulvertoft Michael v. Michael Michoud V. Girod . . Mickles v. Tliayer . . Middleditch v. Sharland Milkman v. Ordway . Miller v. Meetch . . V. Rutland & W. Ry, Milligan v. Cooke 257 71 101 152 22 97 276 227 240, 243 212 104, 105 43 96 61 235 182, 183 157 199 305 226 41, 151 22: 61, Minet v. Morgan 227 231 113 160 192 188 152 34 176 37 192 212 247 35 275 47 40, 154 125 269 207 16 74 205 288, 28y XX CASES CITED. PAGE 08 225 97 19, 54 Mitchell V. McDougall V. Moore . Mizner v. Kussell . . Mobile & C. P. Ry. Co. v. Tal man Moffett V. Bates .... Montague v. Dudman . . Montesquieu v. Sandys . Montgomery v. Pickering 226, 232 Moore v. Appleton . V. Cleghorn . V. Moore . . Moreland v. Atchison Morpliett V. Jones . Morret v. Paske Morris ;;. Colman . Morse v. Brackett . V. Royal . . Morton v. Tew art . Mott V. Harrington Moxon V. Payne Mulford V. Mincli . Mundy v. Mundy . Murphy v. O'Slica . Murray v. Ballon' . V. Lylburn . Mutual Life Ins. Co. v. Duke 75 258 294 138 247 20 250 176 . 210 278, 280 . 306 . 228 . 147 . 17 142 232 151 266 147 189 189 191 137, 126, 41, 46. Naldred v. Giham . . Napier v. Elam . . . Neblett v. Macfarland 219, Neptune Ins. Co. v. Dorsey Nesbit V. Brown . . . , Nesbitt V. Tredennick . , New Albany R. Co. v. Fields 132 192 221, 222 282 165 42 116 V. Slaughter 116 Newcomb v. Bonhani New Jer.sey Ky. Co. v. Wor- tendyke Newnham v. Stevenson Newton i\ Cliorlton . Nias V. Northern Ry. Co Nicholson ;'. Hal,>iey . Nickels v. Haticock Nickerson c. Loud . . Nixon's Appeal . . . Noble V. Bolton . . . .Nolte V. Creditors . . 68 280 234 284 288 225 208 238 56 24 285 Norway v. Rowe Noys V. Mordaunt . Nunemacher v. Ingle O. PAOB 298 , 254 , 86 Obert V. Obert . • . Ochsenbein v. Papelier O'Conner v. Renipt 17. Spnight . Odell V. Montross . . Oifilvie V. Jeaffreson . Oliver V. Com. 185 Ins. Mutual Co. . . . . . V. Oliver V. Richardson . . . .r. Walsh Owgon Steam Nav. Co. v. Winsor Ormonde v. Kynersley . . Orplian Asylum v. McCartee Osgood V. King . Otley V. Manning Overton v. Traccy Owen V. Foulkes Oxford V. Rodney 154 .120 235 265 76 186 174 60 2G6 93 307 267 273 116 132 60 140 240 Padbury v. Clark . . 257, Panama Tel. Co. v. India Rubber Co. . . . 217, Pannell v. McMechen . Parke v. Loewriglit Parker v. Nickerson . Parkbani v. Randolph Parks V. Evansville R. Patterson v. Kirkland Payne v. Hathaway Pcake, A'.T jKiiie . . Pearce v. ( )lncy Pcarsoll V. (^hapin . Pcckham v. Haddock Peeler r. Levy . . Peirsoll v. Elliott . People V Tioga . Percival v. Iliciiborn Pcrens v. Jolmson . Perley v- Balc'.i . Peter v. Wriglit . . Pcttiward v. Prescott 255, Co. 122, 261 218 86 212 40 102 221 98 285 113 123 225 75 206 237 93 ■223 110 221 180 205 CASES CITED. XXI Petty V Petty , . Peugli V. Davis . . Pliilndelphia v. Girard Phillips V. Silvester Pickering v. Vowles Pierce v. Robinson Pieters v. Thompson Pilcher V. Smith Pinckaril >: Woods Pitt V. Jackson . Plummer v. Keppler Plunket !'. Penson . Poillon V. Martin . Pole V. Somers . . Polk V. Gallant . . V. Rose . . . Popham V. Bampfeild Porter v. Peckham . Post V. Kimberly . Potter V. Tit/coinb . Potts V. Leigliton . V. Plaistcd Powell V. Wiiite Powers V. Hale . . Powis I'. Corbet . . Pratt i: Philbrook . Preston v. Grand Collier Dock Co. . . . Preston v. Preston . Price V. Dewhurst . V. Evans . . V. Furman Probasco v. Johnson Proudfoot r. Wightman Prudential Assurance Co Thomas .... Pugh V. Vanghan . Pulteney >\ Warren Purdy V. Bullard . Pyer v. Carter . . PAGE . 101 68, 77 . 19 267, 268 . 42 77 293 220 187 107 199 240 145 257 253 312 167 144 264 222 268 85 283 200 280 231 . 115 . 197 . 120 41, 293 . 220 . 77 . 200 266, Q. Quinton v. Frith R. Racouillat v. Sansevain -tains V. Mann . . . Kanclyffe y. Parkyns . Rand o. Webber . . 297 298 267 213 308 153 75 87 257 223 p 43 46, Randall v. Russell . Rankin v. Huskisson V. Lay . . V. Porter . RatclifEe v. Barnard Rawlins v. Wickhara Read v. Gaillard Reade v. Livingston V. Reade . Reeves v. Baker Reilly r. Smith . Rhodes v. Bate . V. Mostyn Rice V. Stone Richardson i'. Inglesby V. Washington Bank 282, Richmond v. Gray . Riddell V. Johnson . Ricsz's Appeal . . Ringo V. I?urns . . Roberts v. Walker . Robertson v. Cole . Robinson v. Byron . V. Holt . V. Litton !'. Williams Robson V. Flight Rockwell I'. Hobby Rogan V. Walker . Rogers v. Gwinn V. Lockett . V. Saunders V. Simmons . 61, V. Vosburgh Rolfe V. Peterson Ropes V. Upton . . . 309. Rose V. Mynatt . Ross V. Butler . V. Harper . Rowley i'. Rowley Roy V. Beaufort Rush V. Higgs Russell V. Jackson V. Southard Rutherford v. Branch Bank Ryan v. Dox . . S. Sadler ik Holjbs . . St. George i'. Wake AGS 44 306 204 148 77 109 73 129 265 15 206 136 274 93 16 285 197 138 206 46 244 118 299 130 297 72 32 77 105 12;^ 46 197 212 293 166 310 137 300 296 104 166 292 61 77 248 69 38 100 XXll CASES CITED. PAGE Salmon v. Bennett . . . . 130 Salusbury v. Denton . . . 16 Sam well v. Wake . . . . 242 Sanborn v. Osgood . .220,221 Sanders v. Pope . . . . . 172 Sandeson v. Jones . . . . 312 Sandoe's Appeal . . . 256 Sands v. Cod wise . . . . 228 V. Huglies . . . 185 Sanford v. McLean . . . 285 Sankey v. Alexander , . . 183 Saunders v. P^dwards . . . 2y V. Frost . . . . 71 Saunderson v. Glass . .137,220 Savery v. King . . . . . 219 Say V. Barwick . . . . . 200 Sayre v. Townsend . . . 57 Schryver v. Teller . . . . 252 ScSiutz's Appeal . . . 62 Schweizer v. Tracy . . . 131 Scofield V. Lansing . . . . 236 Scott V. Shufeldt . . .117,118 V. Umharger . . . . 154 Sea Ins. Co. ". Stebbii IS . . 274 Seaman v. Higgins . . . 216 Seddon v. Connell . . . . 247 Selden v. Myers . . . . . 162 Sexton V. Wlieaton . . . 12!) Seymour v. Delancey . . . 200 Sliaeffer v. Chambers . .71,^2 Shannon v. Bradstreet . . 202 Sharpe v. Foy . . . . 184 Shartwell v. Smith . . . 275 Sliaw V. Spen(!er . . . 187 Sheilden v. Patrick . _. . 120 Sheffield Waterworks .j.Yeo- mans . . 311 Sliirras v. Caig . . . . 72 Shitz V. Dieffenbach . . 77 Short V. Mercier . . . . 287 Sidensparker v. Sidens parker 121, 122 Sidney v. ILanger . . - . . 140 Silver V. Norwich . . . . 274 Simpler j;. Lord . . . . . 157 Skelton v. Flanagan . . . 101 Skinner v. Judson . . . . 288 V. White . . . . 160 Skip V. Iluey . . . . . . 169 Slaughter v. Gerson . . . 102 Sloan V. Rice . . . . . . 86 Smith V. Bowen . . . . . 16 V. Brotherline . . . 140 PAGH Smith V. Camelford . . . 106 V. Countryman 98 V. Jackson . . 184 V. Jeyes . . . 276 V. Holyoke . . 226 V. Leveaux . . 263 V. Matthews 15 V. Orton . . . 236 V. Osborn . . 1.33 V. Smith . . . '. 87,220 I'. Thompson . . 140, 142 V. Wright . . . . 62 Snedaker v. Moore . . . . 199 Snell V. Mitchell . . . 196, 19" Sohier v. Loring . . . . 86 Soltau V. De Held . . . . 301 Somerby v. Buntin . . . 195, 198 Soper v. Stephens . . . . 216 Smith Carolina R. Co V. Moore . . 124 Sowell V. Barrett . . . . 63 Spaulding v. Backus . . 292, 295 Speer v. Bidwell . . . 123, 124 Spofford ;; B. R. Co. . . . 303 Spurr V. Benedict . . . 296 Stacy V. Ross . . . . . 225 Stanley v. Stanley . . . 28 Stanton v. Allen . . . 307 Starr o. Strong . . . . 133 V. Vanderheyden . 137 Steere v. Steere . . . . 15 Stephenson v. Little . . 269 V. Taverners . 253 Sterr}' v. Arden . . . . 132 Stevens v. Mid-Hants Ry. Co. 70 Steward v. Blakeway . . 245 Stewart v. Hutchins . . . 75 V. Stewart . . 175,176 Stockley v. Stockley . . 175 Stockton V. Ford . . . 140 Stokes V. Clarke . . . . 43 Stohvell V. Shotwell . . 235 Storer v. Great Western 1 Iv. Co ' . 198 Stump V. Findlay . . . 256, 261 Sturge V. Eastern Union 1 ?v. Co ' . 304 Sturtevant v. Jaques . . . 197 Stuyvesant r. Hall . . . . 189 Stylos V. Guy . . . . . 39 Sulfield ('. Brown . . . 307, 308 Sutplicn r. Fowler . . . . 208 Sweetajiple v. Bindon . . . 3J CASES CITED. XXlll Taber v. Hamlin Taiiiter v. Cole . . Talbot V. Radnor . V. Scott . . Tate V. Williamson Tatliam v. Vernon . Tatum c. Tatum Taylor v. Boardman V. Lutlier . V. Taylor . Taylour v. Koclifort Thalmaii v. Canon . Thomas v. Bartow . V. Coiiltas . V. Kennedy V. IMcCormac V. White . Thompson v. Brown V. Finch V. Hudson Thompson's Appeal Thurston v. Blancliard Tiernan v. Roland . V. Tliunnan Tisdale v. Bailey . Tobias v. Ketchum Toiig V. Martin . . Topliani ;;. Portland Toulniin v. Heidelberg Tovvnley v. Sherborne Townshend v. Stangroom Tracey v. Sacket . Tracy v. Herrick . Trevor v. Trevor . Trigg V. Read . . Truly V. Wanzer Tucke V. Buchholz Turner v. Turner . Tuttle V. Standish . Tweddell 1-. Tweddell Twining v iMorrice Tyrrell v. Bank of Loudon 218, 166, PAGE 80 206 258 276 145 20 253 148 63, 77 51, 156 . 232 . 34 . 177 219 185 63 311 292 37 167 . ■ 122 . 228 . 256 . 181 . 101 . 260 . 224 . 107 . 236 . 36 . 203 . 163 . 124 . 30 . 176 . 296 . 153 . 240 . 171 . 155 . 203 137, 141 Van Cortlandt v. Underbill u. ■Jnderwood v. Wing ... 50 fjnited States v. Flint 119, 120 Updike V. Doyle . . . 292 Utterson r. Mair . . . 276 Uzzle V. Wood .... '^3 Van Keuren v. Central 11. Vanmeter v. McFaddin Van Ornian v. Merrill Vansant v. Allmon Vasquez v. Richardson Vasser v. Henderson . Venice v. Woodruff . Viers a. Montgomery . Villiers v. Villiers . . w. Wade V. Green . . V. Pettibone . Wadsworth i>. Williams Walker v. Hill . . V. Jackson . V. Synionds Wallace v. Brown . V. Wallace Wallis i\ Woodyear Walmesley v. Booth Walter v. Kloek . . Warren v. Swett Wartemberg v. Spiegel Waterman v. Seeley Watts V. Kinney Weeden v. Hawes . Wei by V. Welby . Wells V. Polk . . Welsh, In re . , , V. Usher West V. Anderson . V. Cliamberlin V. Reid . . V. Skip . . . Western Bank v. Addie Westley v. Clarke . Wlialley v. Small . Wheeler v. Reynolds V. Sage V. Wheeler V. Whitall Wiiite V. Carpenter V. Cohen . . V. Lincoln . V. Madison . V. St. Barbe . V. Watkins Co PAGE 124 185 77 184 86 154 237 234 132 23 253 140 130 212 242 37 211 155 84 140 57 180 161 58 283 228 258 191 158 77 214 87 77 270 219 36 191 218 112 72 167 57 301 269 102 1(16 ■IVI XXIV CASES CITED, White V. Whaley . V. White . . Whitney v. Allaire . I'. Union Ily. Co. Whittemore v. Gibbs Wier V. Still , . . AVilbanks i'. Wilbanks \Vilbrain, Ex parte . "Wilbur V. Flood .... 225; Wilcox V. Wheeler . Wilkinson v. Dent ... 2. V. Malin . V. Stafford Williams v. New York Cen R. Co. V. Owen . i;. Roberts V. Spurr . V. Stratton V. Williams Williamson v. New Jersey Ry. Co Williamson v. Wilson NVMUink v. Vanderveer Willis V. Vallette . Wilson V. Arny . . V. Eggleston V. Eurness Ry. Co. V. Keating , V. Moran PAGE 143 252 225 306 72 118 256 110 226 302 258 35 151 21 303 07 207 9H 77 22 205 277 113 181 261 58 1 Adams, Equity, 122 ; Berney v. Sewell, 1 Jac. & W. 647 ; Brooks V. Greathed, lb. 176. See post, pp. 273-275. '^ Adams, 123. 8 Read v. Gaillard, 2 Dessaus. Eq. 552; In re Howe, 1 Paige, 125; Lake v. Doud, 10 Ohio. 415. 74 rPtOPERTY IN EQUITY. [Chap. V. An instrument which was intended to be the mortgage deed of a corporation, but which, by not being executed b3' the corporation, or in its name, cannot take effect as its deed, ma}' nevertheless be regarded as an equitable mortgage, and entitle the holder of it in equity- to the full benefit of the securit}' intended to be given. ^ An agreement to give a mortgage, not objectionable for want of consideration, is treated in equity as a mortgage, upon the principle that equit}' will treat that as done which parties have agreed to do. This doctrine is of frequent application under bankrupt and insolvent laws, where it operates to make valid a mortgage given to a creditor shortly before the filing of a petition in bankruptc}' by the mortgagor, where this is done in pursuance of an agreement made at a time when the giving of the mort- gage would not have amounted to a fraudulent preference.^ The mortgage in such a case would have been invahd, had it not been for the prior valid agreement. That agree- ment entitled the creditor to a mortgage ; and equity, considering that as done which ought to have been done, will accept the instrument actuall}- executed as an expres- sion of the duty, and thus as constituting the mortgage which it (equity) deems to have been executed. An agreement to make a conversance of land, when intended as a security for debt, is also in equity deemed a mortgage ; provided some particular propert}- is specified for the promised conveyance. An agreement to convey sufficient property to secure a debt is not effectual as a mortgage.^ However, an instrument whereby a corpo- ration pledges its " real and personal estate" for the fulfilment of a contract, may be enforced in equity as a mortgage against the body, and persons claiming under 1 Miller v. Rutland & W. Ry. Co., 36 Vt. 452. 2 Jones, Mortgages, § 16-3; Bunlick v. Jackson, 7 Hun, 488. 8 Jones, Mortgages, ut supra ; Adams v. Johnson, 41 Miss. 258. §2.1 MORTGAGES. 76 it with notice. Such an agreement is deemed to inchide the entire property- of the party, and precise speciiication is therefore unnecessary. ^ In like manner, a covenant b}^ a debtor to execute to his creditor a mortgage upon the debtor's share under his father's will whenever a division shall be made, is deemed in equit}' a mortgage ; ^ and so of a provision in a deed that the grantee shall pay certain legacies which are a chai'ge upon the property convej'ed ; ^ and so of a parol agreement providing that the purchase- money of land, if not sold b}- the purchaser, should be secured by the property-, and if sold, then paid from the proceeds.^ A written agreement attempting to appropriate specific property to the payment of a debt, and giving the creditor possession of it to hold till the debtor shall make sale of the land and satisf}' the debt out of the proceeds, the occu- pation of the land and the doing of certain w^ork to offset interest on the debt, has a like effect, and constitutes an equitable mortgage upon the land.^ The same is true of an agreement, sufficientl}' definite, on the back of a note, making it a charge upon land.^ It is not necessar}- that the agreement should have been put into writing, provided there be a valid consideration and evidence of subsequent performance or part perform- ance of it, or some act deemed tantamount thereto. The subsequent act makes good the oral agreement, by relation ab initio. It seems thiit subsequent acts in recognition and performance of the oral agreement may make such unenforceable undertaking binding, though the subsequent 1 Mobile & C. P. Ry. Co. v. Tahnan, 15 Ala 172. 2 Lynch v. Utica Ins. Co., 18 Wend. 2.36. 3 Stewart v. Hutchins, 6 Hill, 14-3. * RacoiuUat v. Sansevain, 32 Cal. 376 ; Jones, Mortgages, § 166. 6 Blackburn v. Tweedle, 60 Mo. 505. 6 Teckham v. Haddock. 36 El. 38. 76 PKOPEKTY IN EQUITY. [Chap. V act would of itself aloue be impeachable ; as in the case already referred to of a debtor on the eve of bankruptcy, executing a mortgage in pursuance of an oral agreement made upon a valid consideration at a time when he could have lawfully executed the mortgage. ^ The following will serve as a further example of an equitable mortgage : Upon receiving a grant of land the grantee executes an agreement, not under seal, to support and maintain the grantor, pledging for that purpose the produce of the land, and should that prove insufficient, appropriating the entire fee. This agreement being the consideration of the grant, takes effect as an equitable mortgage of the land.^ A conveyance absolute in term^ given as_ a security for a debt is a mortgage with all the incidents of a mortgage, and the rights and obhgations of the parties to the instru- ment are the same as if the deed had been subject to a defeasance expressed in the body of the instrument, or . executed simultaneously with it.^ Equity looks beyond the terms of the instrument to the real transaction ; and where that is shown to be one of security, and not of sale, it will give effect to the actual contract of the parties. And as the equity upon which the court acts in such cases arises from the real character of the transaction, any evidence, written or oral, tending to show this is admissible. The rule which excludes parol testimony to contradict or vary a written instrument has reference to the language used by the parties. That can- not be qualified or varied frorri its natural import, but must speak for itself. The rule does not forbid an inquiry into the object of the parties in executing and receiving the in- strument. Thus, it may be shown that a deed was made to defraud creditors, or to give a preference, or to secure a 1 See Jones, Mortgages, § 164. 2 Chase v. Peck, 21 N f . 681. 8 Odell V. Montross, 68 N. Y. 499. § 2.] MORTGAGES. 77 loan, or for any other object not apparent on its face. The object of parties in such cases will be considered by a court of equity ; it constitutes a ground for the exercise of its jurisdiction, which wiU always be asserted to prevent fraud or oppression and to promote justice.-' A mortgage may, according to some of the authorities, be created by the deposit of title-deeds. Thus, it is held in England, and in some of the States of the Union, that if a debtor deposit his title-deeds with his creditor as security for an antecedent debt, or upon a present loan of money. It is a valid agreement between the parties for a mortgage.^ A strong disposition has, however, been manifested to- wards the restriction of this doctrine within definite limits. It is not ordinaril}' applied to enforce parol agreements to make a mortgage, or to make a deposit of title-deeds for such a purpose. It is strictly confined to an actual, im- mediate, and bona fide deposit of the title-deeds with the creditor as a security in order to create the lien. Such an equitable mortgage wiU not, however, avail against a sub- sequent express mortgagee, whose mortgage has been duly registered, without notice of the deposit of the title-deeds. But it may be the duty of the second mortgagee to call for the mortgagor's title-deeds. If such be the case, and the dut}' be not performed, the equitable mortgagee will fcake precedence of the legal mortgagee.^ 1 Peugh V. Davis, 96 U. S. 332 ; Hughes v. Edwards, 9 \^^^eat. 489 ; Russell V. Southard, 12 How. 139; Taylor y. Luther, 2 Sumn. 228 ; fierce v. Eobinson, 13 Cal. 116. 2 2 Story, Equity, § 1020. The agreement is not within the Stat- ute of Frauds. lb. The doctrine of the text is held in New York, South Carolina, and Mississippi. Rockwell v. Hobby, 2 Sandf. Ch. 9; Welsh v. Usher, 2 Hill, Ch. 107; Williams v. Stratton, 10 Smedcs & M. 418. It is denied in Pennsylvania, Kentucky, and Ohio. Shitz V. Dieffenbach, 3 Barr, 233 ; Vanmeter v. McFaddin, 8 B. Mon. 435 ; Probasco v. Johnson, 2 Disn. 96. 3 See West v. Reid, 2 Hare, 249 ; Ratcliffe v. Barnard, Law Rep. 6 Ch. 652 : Dixon v. Muckleston, Law Rep. 8 Ch. 155. 78 PROPERTY IN EQUITY. [Chap. V. A mortgagee, b}^ deposit of title-deeds, has only an equitable charge upon the land ; he has no legal title, and hence cannot, apart from express agreement, take posses- sion. But he is, for this reason, entitled to call for the appointment of a receiver, like the mortgagee of an equity of redemption.^ A Welsh mortgage is a conversance of an estate redeem- able at any time on paj'ment of principal and interest ; its chief imperfection being the want of a specified day of forfeiture. The consequence of this want is that the mort- gagee's remedy is confined to a perception of the rents, and that he is not entitled to foreclosure or sale ; nor will his hability to account be determined by the lapse of time, unless he has continued in possession foT twenty ^-ears after the debt has been paid.^ Such mortgages are not common in this countr}'. Another kind of imperfect mortgage, not uncommon in some of the States, is that of a trust-deed b}' a debtor to uis creditor, on trust for the debtor until default, and after default on trust to sell and retain the amount of the debt out of the proceeds. Thei' imperfection of such a security', like that of the Welsh mortgage, consists in the want of a day of forfeiture, and in the consequent absence of a right to foreclose. The estate, apart from express agreement, never vests absolutely in the creditor. Still another kind of imperfect mortgages exists by way of lien in favor of the vendor or purchaser of land. A legal lien upon chattels is a right to hold the goods, and is lost upon a surrender of possession. The same result follows, prima facie, in case there is an agreement to postpone the time of payment of the debt. The equitable lien of a ven- dor or purchaser of land is something different. Such a lien operates after the possession has been changed, and is available b^" way of charge, instead of b}' detainer. ^ 1 Adams, Equity, 125. 2 Jb. s jb. 127. § 2.] MORTGAGES. 79 s It is an established principle of equity that, when a eon- vej'ance has been made befcu-e papnent of the purchase- pvice, the paj-ment of such price is charged upon the land in the hands of the purchaser, and of all persons taking under him, with notice. And, on the other hand, when the money is paid before the couA'eyance is executed or delivered, the pa3'ment thereof becomes, iu like manner, a charge upon the estate in the hands of the vendor, and of all persons affected with notice. This doctrine prevails in most of the States of the Union, either by judicial author- it}' or by legislative enactment. In a few of the States, however, it does not prevail.^ The hen of the vendor as purchaser being useless by way of retainer (since the land is not in the hands of the party to be protected), it is available onl}' b}' yvay of charge. It has, therefore, been deemed to be a security' in the na- ture of a mortgage.^ The remed}' under it is bj- suing in equit}' to have the land sold, and the deficiency in the price obtained, if there be a deficiency, made good by the de- fendant, or to have the contract rescinded, retaining the deposit as forfeited ; which is practically a foreclosure of the charge.^ There is another charge somewhat in the nature of an incomplete mortgage, and that is the statutory lien of a judgment creditor upon the lands of his debtor. The English enactment upon this subject, which may be taken as a t^'pe, in the main, of the American statutes, provides that a judgment, properly registered, shall operate as a charge in equit}- on all lands and hereditaments to which the debtor may, at or after the time of entering the judg- ment, be entitled, for any estate or interest at law or in oquity, whether in possession, reversion, remainder, or ex- 1 See the summary in the Am. ed. of Adams's Equity, 128. 2 See, however, 1 Lead. Cas. in Eq. 373 (Am. ed.). 8 Adan's, Equity, 128. 80 PROPERTY IN EQUITY. [Chap. V. pectancy, or over which he may at either of such times have a sole disposing power, exercisible for his own bene- fit, and shall be binding against him and all persons claim- ing under him.^ § 3. Of Exoneration, Contribution, and Marshalling.^ Every mortgage in the strict sense implies a loan, and every loan implies a debt for which, at least, the person- alty of the borrower is liable. But the debt is of the nature of simple contract only, unless there be a bond or covenant to give it the character of a specialty. When the mortgage is of the ordinary kind, the mortgagee may make use of either or both of his remedies against the mortgagor : he may sue him upon his personal liability, or may proceed against the mortgaged estate. And in case of an ahenation of the mortgaged estate, the mortgagor still remains. liable, and the estate also, in the hands of the purchaser. The personal estate of the debtor, however, is at com- mon law primarily liable for the debt ; and hence in case of the debtor's death, the personalty, in a contest between the heir and i^ersonal representative, will be first liable to pay the mortgage. And though upon a transfer of the estate in the lifetime of the mortgagor, the transferee, who generally assumes payment of the mortgage, can then have no such equity against the transferor ; still, either by the terms of the contract for payment of the mortgage, or by other acts, he may so adopt tlie debt as to create between his own real and personal representatives an equity similar to that which arises on the death of the mortgagor. Out of such transaction, and out of the origi- nal subject of more than one estate to the mortgage, and out of testamentary and other dispositions of the mort- 1 1 & 2 Vict. c. no, § 13. 2 See post, oli. U. §3.] MORTGAGES. 81 gagor for paj-ment of the debt, arise the doctrines of exon eration, contribution, and marshalling of securities.^ As has just been stated, between the personal represen- tative of the mortgagor and the heir or devisee of the estate, the personalt}- of the mortgagor is primarilj- liable for the debt. But this rule is to be understood as appl}*- ing onl}' to such securities as have been given for actual debt, due from the mortgagor at the time the mortgage was executed.^ It does not appl}- to a transaction in which no debt is created, such as a security upon an estate for a provision under a mortgage settlement, though there be a covenant for pa3-ment ; unless the provision were first secured bj' a covenant creating a debt, to which the covenant for securing the charge upon the estate were manifestl}' auxiliarj-. Nor does the doctrine apply to a security for a loan where the security onl}^, and not the personal ability, or circumstances of the borrower, were considered.* When the mortgaged estate has descended or has been devised by the mortgagor, or when he has sold it in his lifetime, then, inasmuch as the person who has become possessed of the estate did not contract or become person- ally Hable for the debt, his personal estate is not bound to exonerate the mortgaged propertj'. The same is true also of the estate of a person who, having mortgaged his lands to secui-e the debt of another, stands in the position of a suret}- for the real debtor.* But the person who originall}' contracted the debt maj- shift the primary liabilit}' to the mortgaged property or to some other estate ; or he mcf fix it upon the personalty, or on another estate, in cases in which it would otherwise fall upon the mortgaged estate. So, too, he who has ae- 1 2 Fisher, Mortgages, §§ 1112, 1113. 2 Yonge V. Furse, 20 Beav. 380. 8 2 Fisher, § 1114. * lb. § 1115. 6 82 PROPERTY m EQUITY. [Chap, V. quired the mortgaged estate by descent or purchase, or is otlierwise free from personal liabilit}" for the debt, may adopt it or manifest an intention that it shall be borne by some other than the mortgaged estate. The intention to exonerate the personalty need not be expressed in direct terms, but it must so clearly appear as to show that the mortgagor intended to charge the real estate with, as well as to exonerate the personalty from, the payment of the debt. In the case of a will, the inten- tion as to exoneration is to be sought in the context as well as in particular expressions. The exoneration will operate in favor only of the person for whose benefit the exemption of the personalty was intended. Hence, in the case of a will, if ttie gift of per- sonalty' intended to be exonerated should lapse by the death of the legatee in the lifetime of the testator, or should for other reason fail, the exemption will fail also, — unless an intention appear to apply the exonerated fund in discharge of the debt without regard to the benefit to the intended legatee of the fund exonerated.^ It is next to be observed, that, as between the mort- gaged estate and other property of the mortgagor, or as between diflJerent estates subject to the same mortgage, one part ma}' become liable to conti'ibute to the payment of the debt, either primarily, or by the deficiency of the estate or fund upon which the primary liability has been fixed. The equities which thus arise between the different funds are adjusted under the doctrines of contribution and mar- shalling. The adjustment of these equities is made to rest upon the principle that a fund which is equally liable with another fund to pa}' the debt, will not be exempt because the creditor has been paid out of that other fund alone ; and, on the other hand, that a creditor who haa 1 2 Fisher, § 1131. § CJ MORTGAGES. 83 the means of satisfying his debt out of several funds must so exercise his right as not to take from another creditor or claimant the fund which forms his only security.^ If several estates, whether of one or of several owners, be mortgaged for, or subject equally to, one debt ; or if the owner of several estates, having mortgaged one of them, charges his real estate with, or devises it in trust for payment of his debts, and the estates descend or are devised to different persons, — the several estates must contribute ratably to the debt, being valued for that pur- pose, after deducting from each an}' incumbrance to which it is subject. So, if one of two estates has been mort- gaged for one debt, and both of them for another, though the first must bear alone the burden solely imposed on it, both must contribute ratably to that which is later ; the amount of the first debt being first deducted from the value of the estate which has paid it.^ There is no contribution against the devisee of a mort- gaged estate, where the testator has bequeathed other property subject to the pajTnent of his debts. For exam- ple : The testator devises mortgaged land to R. He then devises other land to T., subject to his (the testator's) debts. T. must pay off the mortgage without contribution from R.' This rests upon the ground that the testator's intention is allowed to prevail as between two objects of his bounty. The case would be different in a contest between a creditor and the devisee of the mortgaged estate. The doctrine of marshalling as between incumbrancers on several estates, which are also subject to one security, enables the incumbrancer with one fund to control, for his own benefit, the application of the securities of another who has several. If the owner of two estates mortgage them both to one 1 2 Fisher, § 1141. 2 jb. § 1142 * Bartholomew v. May, 1 Atk. 487. 84 PROPERTY IN EQUITY. [Chap. V. person, and then one of them to another, without notice, the second mortgagee may insist that the debt of the first shall be satisfied out of the estate not mortgaged to the second, so far as that will go. Or he ma}- pa}- off the prior mortgage and take the place of the first mortgagee. In this case, he throws upon both estates his own debt, which, under the contract with the debtor, was charged upon but one of them.'' The courts apply the doctrine of marshalling not merely before the debt of the mortgagee or creditor who has the double fund has been paid ; but if he has been alread}' paid, they permit the disappointed creditor to stand in his place against the estate upon which the^ creditor with the double fund would otherwise have been thrown, Tor the amount which he has taken out of the subsequent creditor's secu- rity. But equity will not interfere with the first mortga- gee's right to take his debt out of that part of his security which first becomes available upon the ground that other funds are comprised in his security ; ^ nor will it compel him, when he is executor of the mortgagee to apply the personalty as it comes t6 his hands in discharge of the debt.* § 4. Op Payment or Discharge. Paj'ment or tender at the time mentioned in the con- dition of the mortgage deed whollv discharges the incum- brance. And pa^'ment (but perhaps not tender) before the day named, equally withpa3'ment when due, saves the breach of condition and defeats the estate. In such a case no written release is needed except to remove the apparent incumbrance upon the records. If the mortgagee should refuse to receive a sufficient tender, properl}' made, the mortgagor would have the right to re-enter. The land 1 2 Fisher, § 1150. 2 Wallis i'. Woodyear, 2 Jur. n. g. 179. 8 Binns v. Nichols, Law Rep. 2 Eq. 256; 2 Fisher, § 1157. 5 4.1 MORTGAGES. 85 « would, in such a case, be freed from the condition of for- feiture, though the debt for which the mortgage was given would still remain.^ Paj^ment or tender after the day named in the mortgage does not, at least at law, by the more general current of authorit}', have the same effect. In such a case, a recon- vej'ance becomes necessary, in order to revest the legal estate in the mortgagor.^ To revest the title by payment or tender, the condition of the mortgage must be fully performed. The estate of the mortgagee is at law defeas- ible only by the strict performance of the condition, in the manner and at the time stipulated. When this is done, the estate reverts, at law, as well as in equity, to the mortgagor, without a reconve^-ance or release, b^' the sim- ple operation of the condition. But, after a failure to comply with the exact terms of the condition, the estate is forfeited at law, and a reconveyance is necessary' to restore the estate to the mortgagor.^ And if the mortgagee then refuse to reconve}' or release, the mortgagor must apply to a court of equity for relief. In some of the States, however, this matter is regulated by statute, and in others the rule is different from that here stated. In such States, it is considered that the acceptance of payment is a waiver of the condition, having the same effect as strict perform- ance.* And tender has the same effect.^ No change in the form of an indebtedness secured by a mortgage, strictly so called, will have the effect to dis- charge the security. Nothing short of actual pa^'ment oi' an express release will operate to discharge the mortgage. The mortgage remains a lien until the debt for the se(;urity of which it was given is satisfied, and is not, prima facic^ affected by the taking a new note or a different instrument 1 2 Jones, Mortgages, § 886 ; Grover v. Flye, 5 Allen, 543. 2 lb. 3 lb. § 887. * lb. i Kortright v. Cady, 21 N. Y. 343; Potts v. Plaisted, 30 Mich. ]49. 86 JPROPERTY IN EQUITY. [Chap. V. as evidence of the debt, or by a judgmeut upon the mort- gage note, or by a recognizance of record taken in heu of the mortgage note.^ The effect to be given tc the taking of a new note from the mortgagor is, however, dependent upon the intention of the parties. An intention affecting the mortgage se- curity may appear either by evidence of an express agree- ment, or by the circumstances attending the change of situation. But it devolves upon the mortgagor to show the existence of an agreement or understanding that the mortgage was to be considered as released, and not in the fii'st instance upon the mortgagee to show that the mort gage was to be treated as subsisting after the change. "■^ The same is true of the extension of the time of paj'- ment of the debt, unless the mortgagor be only surety for another, the principal debtor. In the latter case, an ex- tension of the time of payment in favor of the principal debtor operates to discharge the mortgage, if the exten- sion be made without the mortgagor's consent ; unless the mortgagee, without having impahed the rights of the sm-ety against his .principal, as by the surrender of securities, has expressly reserved his rights under the mortgage.^ Foreclosure does not necessarily discharge the debt for which the mortgage was given.* The mortgagee may stiU sue for and recover the whole debt or the balance ; but recovery of judgment upon the debt is good ground for opening the decree of foreclosure. The mortgagor may, indeed, upon the commencement of an action' upon the ' 2 Jones, Mortgages, § 924 ; Taber v. Hamlin, 97 Mass. 489, 492. 2 2 Jones, § 926; Sloan v. Rice, 41 Iowa, 465. 8 Compare, as to the qualification of the general rule, Sohier v. Loring, 6 Cush. 537 ; Pannell v. McMechen, 4 Har. & J. 474. But see Calvo V. Davies, 8 Hun, 222. * Vansant v AJlmon, 23 111. 30 ; Nunemacher v. Ingle, 20 Ind. 135. § i.] MORTGAGES. 87 diibt, file a bill for redemption, and upon offering therein to make payment will be entitled, on tender of the debt, interest and costs, to a reconve^-ance. If, however, he cshould fail to file his bill to redeem before the judgment, and the judgment should be declared for only the balance due above the value of the mortgaged estate, the mort- gagor would be barred of the right to redeem.^ On the other hand, complete foreclosure discharges the debt to the extent of the value of the mortgaged premises ; ^ and if the propert}' is worth more, at market value, than the amount of the debt and costs, the debtor is entitled to the surplus. But foreclosure must be complete, and the title of the mortgagee absolute, before an^^ defence of pay ment can be set up by the mortgagor by reason of the foreclosure.* By a sale of the mortgaged premises, whether by virtue of a power of sale in the mortgage deed, or under a decree of court in a suit for foreclosure, or upon a judginent for the amount of the debt, the mortgage debt is discharged to the extent of the sum realized.* The mortgage lien, how- ever, is, of course, entirely discharged upon a sale of the entire estate ; and this whether the sale was for the entire debt or only for a balance or instalment due.^ Hence, if a person have several debts secured by one and the same mortgage, and foreclose and sell the entire estate for one of the debts, without including the others, his rights with respect to the mortgage are gone, and the other debts must stand without the old security to support them.® The nature of the lien of a vendor or purchaser of land protects it from being lost (as would be the result in the case of a lien upon goods) by postponing the day of pay- 1 Lovell V. Leland, 3 Vt. 581. 2 2 Jones, Mortgages, § 950. s West V. Chamberlin, 8 Pick. 336. * Deare v. Carr, 2 Green's Ch. 513. 5 Smith V. Smith, 32 lU. 198. e Rains j;. Mann, 68 III. 264. 88 PROPERTY IN EQUITY. 'Chap. V, ment. A postponement of the time of paj-ment, though inconsistent with a right of detainer, is not inconsistent with a right of charge. Nor will it be lost by taking an- other personal securit}', executed bj- the other partj-, such as as a bill of exchange or promissorj- note, at whatever time payable. Such an act affords not even prima facie evi- dence of a relinquishment of the charge. The lien of a vendor for the unpaid purchase-money will be sustained whenever he has taken the personal securit}^ of the pur- chaser only, by whatever kind of instrument it be mani- fested, unless there be an express agreement to waive the charge. But, in the absence of an express agreement to the contrary, the hen will be considered as waived wher- ever any distinct and independent security is faken, whether by mortgage of other land or pledge of goods, or the per- sonal responsibiht}- of a third person, such as the indorse- ment of the purchaser's note, either for the whole or a part of the unpaid purchase-mone^'.^ This latter principle rests upon a presumption that it could not, prima facie^ have been intended that the pur- chaser was to give a further security to the vendor, — a security in addition to that afforded b}' the lien upon the land and the purchaser's personal habihty for the purchase- price. And it may be stated comprehensively that when- ever the additional securit}^ is inconsistent with a continuance of the charge, the lien is prima facie at an end. For example : The purchaser executes a mortgage back to the vendor for part of the purchase-price of the land. This is inconsistent with the existence of a charge upon the premises for the whole amount of the money due.^ The question whether the lien is gone or not is a ques- tion of intention, to be determined upon all the circum- 1 Lead. Cas. in Eq. 373 (Am. ed.). '^ Adams, Equity, 128. § 1.1 MORTGAGES. 89 stances of the case. Facts, which iu themselves would not afford even prima facie evidence for or against the exist- ence of the lien, may become of importance in connection with other facts ; and in such case they are to be consid- ered, if having any bearing upon the subject ; such weight being attached to them as their natui'e and the circum- stances attending them justify. 90 PROPERTY IN EQUITY. [Cfap. VI CHAPTER VI. ASSIGNMENT. The term ' ' assignment " has come to have a wide mean- ing in the law ; but as here used it refers onl}' to that class of acts by which the right or title to something of value is transferred to another before the object of transfer has ever become property in possession.'^ The common law in early times treated all assignments of this class as invalid ; and this upon the ground that they were in contravention to the laws against champerty and maintenance. These laws were established to repress improper litigation ; and it was conceived that to allow a person to assign over to another a right to receive a debt or property, not yet acquired by the assignor, would be to encourage litigation. The assignor might not (according to the reasoning apparentl}' advanced) have put his claim into suit upon a refusal to acknowledge and respect it ; while the assignee, by the very act of purchasing the claim, indicated a purpose to insist upon the right acquired. According to the common law, therefore, there could be no transfer of things not at the time in rerum natura^ and under the immediate control, in some particulars at least, of the transferor. It was not necessary' that the party 1 The subject of assignments m trust for creditors is regulated by statute to such an extent in the different States that it cannot be profitably considered in a work like the present. Much of the sub- ject, however, belongs to the general law of trusts, — much also to the general law of fraud. • Chap. VL] ASSIGNMENT. 91 should have absolutvi control over the thing, but he must have some vested right in or over it.* The Court of Chancery, however, refused to adopt the rule of the common-law courts, and it has long been estab lished in equit}' that assignments of choses in action, possi- bilities, expectancies, and of things not in esse, are valid and enforceable. The assignee is treated as the true owner of the subject of transfer, and is entitled to take it into his possession at the time when the right to do so would have accrued to the assignor, and to treat it as his own. A mere chance of acquiring an estate ma}' accordingly be transferred in equit}', and if the title accrue, the assignee can call upon a court of equity, if necessarj-, to assist him to the enjoj'ment of the right assigned. Upon the same principle, a share in the profits of a vo3'age which a seaman is to receive in a whaling cruise, in lieu of wages, is assign- able in equity before the commencement of the voj'age.^ In like manner, a workman may assign his future wages. ^ The expectant interest which a son has in the lifetime of his father in his father's real estate ma}' be the subject of a sale, and equity will recognize its validity' and enforce it where the vendor's right attaches, provided a good consid- eration has been paid,* and no unfairness has been prac- tised upon the heir.* An alienation or assignment, however, which attempts to transfer the title to property not in existence, or not in the control of the vendor, must point out the propert}'. But if a person agree to sell particular property, real or personal, of which he is not possessed at the time, and he 1 See Bispham, Equity, § 162 (2 J ed.). Two limitations were made to the rule : one excepting the King from its application, another excepting assignments of annuities. lb. § 163. 2 Gardner v. Hoeg, 18 Pick. 168. 3 Emery v. Lawrence, 8 Gush. 151. * Fitzgerald v. Vestal, 4 Sneed, 258. ^ Bigelow, Fraud, 274-277 92 I'KOrERTY IN EQUITY. [C;hap. VI receive the consideration for the contract, a/Lcl afterwards become possessed of property answering the description in the contract, equitj^ will compel him to perform the con- tract. In eqnit^', the contract would also pass the title to tlie property upon its acquisition by the vendor, not only against the vendor, but also against his attaching credit- ors. For example : The plaintiff purchases of A. certain specified machinery, made and to be made, paying a good consideration therefor. The machinery which was to be made, having been manufactured, is attached by the de- fendants, A.'s creditors. The plaintiffs are in equity en- titled to take it.^ Purely litigious rights cannot be assigned even in equity. To this extent courts of equity have deemed it necessary to yield to the policy of the laws against champerty and maintenance. Champerty is a bargain between one of the parties to a cause and a third person, called a champertor, to divide the products of the judgment to be rendered, if in their favor ; the champertor agreeing, in consideration of such division, to carry on the suit at his own expense.^ Maintenance is said to Jbe van officious intermeddling in a suit which in no direct manner concerns the party thus interfering, by assisting in the prosecution or defence of the cause. ^ But the term seems more properly to signify a taking in hand or upholding of quarrels to tlie disturb- ance or hindrance of justice, by one having no interest in the htigatiou. Maintenance appears to be confined to cases where a person, for the purpose of stirring up litiga- tion and strife, encourages others to bring frivolous ac- tions or to make frivolous defences.* Equity will not uphold assignments tainted with such elements.^ The 1 Holroyd v. Marsliall, 10 H. L. Cas. 191. 2 2 Story, Equity, § 1048. 3 jb. * See Findon v. Parker, 11 Mees. & W. 6^5. i 2 Story, § 1049. Chap. VI.] ASSIGNMENT. 93 doctrine of champerty and maintenance, however, is not applied to transactions between father and son, master and seiTant, and the hke.' But a person may take an assignment of the interest of anotlier in a contract or in propert}' in suit, provided there be nothing which savors of maintenance in tlie transaction. If a trust fund should be involved in litigation, the cestui que trust could assign his interest in the fund ; and the assignee could in equity enforce his rights to the same, in the absence of any thing showing maintenance.^ Indeed, the general tendenc}' of the later authorities is towards restricting the law of champerty and maintenance within the narrowest limits. According to the general doctrine, personal actions which die with the person cannot be assigned ; ^ but ac- tions for the taking and converting of personal property, or for damage done to personal property', are assignable, if unaffected with champerty or maintenance.* The assign- ment of a judgment obtained is, it is apprehended, always valid in equit}'.^ No valid assignment can be made, according to the general current of authorit}', of part of a claim, even in equit}-. This proceeds upon the ground that the claim cannot be split up without the consent of him who owes it, so as to require him to make pavment to different persons. There is, however, a conflict of authority upon this point. ^ The assignment of a debt does not in equit}' require the consent of the debtor ; but notice to him maj- be necessary 1 2 Story, § 1049. 2 Baker v. Whiting, .3 Sumn. 475. 3 Comegjs V. Vasse, 1 Peters, 193; Rice v. Stone, 1 Allen, 566; People V. Tioga, 19 Wend. 73; Grant v. Ludlow, 8 Ohio St. 1 ; Oliver V. Walsh 6 Cal. 456. * Butler V. New York & E. Ry. Co., 22 Barb. 110; Jordan v. GiJ- len, 44 N. H. 424. 5 See Rice v. Stone, supra. ^ See Bispham, Equity, § 1C6 (2d ed.) 94 PROPERTY IN EQUITY. [Chap. VL to protect the assignee against the claims of others. Un' til notice, the debtor is not affected bj' the trust created by the assignment.^ If, for instance, a creditor should assign to another the debt due him, without notice to the debtor, and should then effect a settlement with the latter, the rights of the assignee against that person would be barred. It is enough to complete the equitable assignment of a chose in action that notice is given to the person by whom payment of the assigned debt is to be made, whether that person be himself liable or is merely charged with the dutj' of making the payment. Nor is it material whether the right to receive the money and the consequent obligation to pay it is, at the time when the notice is given, absolute or conditional, so long as the person who receives the notice is himself bound by some contract or duty, existing at the time when the notice reaches him, to receive and pay over (or to pay over, if he has previously received) the fund out of which the debt is to be satisfied."^ It will not be sufficient, however, to give notice to a mere possible agent or trustee before he has become an actual agent or trustee,: — before the time when he is in any sense liable to make payment.' 1 2 Story, Equity, § 1057. 2 Addison v. Cox, Law Rep. 8 Ch. 76, Lord Selbome. • lb. Chap. Vn.] ACTUAL FRAUD. 95 11. GROUNDS OF RELIEF IN EQUITY. CHAPTER VII. ACTUAL FRAUD. The law of fraud is divided into two branches, actual and presumptive or constructive fraud. The former, strictly speaking, alwa3's involves moral turpitude ; the latter never. But each of these terms has a technical sense in the law ; and as will hereafter appear, there are cases fall- ing under the head of actual fraud in which there is no trace of turpitude, and cases falling under the head of con- structive fraud in which moral turpitude is an aggravating factor. The legal difference between the two Ues chiefly in the burden of proof. ^ § 1. Of Deceit. The most important branch of the law of actual fraud is the law relating to deceit ; to the redress of which five elements may be necessar}'. Subject to some qualifications to be hereafter mentioned, a person who complains of deceit practised upon him b}' another must be prepared to prove : (1) that that party has made to him or for him a false representation of material facts ; (2) that he made the same with knowledge of its falsity ; (3) that he (the complaining party) was ignorant of the falsit}" of the rep- resentation, and believed it to be true ; (4) that it was made with the intent that it should be acted npon ; (5) that 1 See post, p. 135. 96 GHOUNDS OF RELIEF IN EQUITY. [Chap. VII it was acted upon by the complaining partj' to bis dam- age.^ And tbesc several elements enter into the law of deceit, wbetber it is invoked for the recover}' of damages, for rescission of a contract, as a bar to a proceeding to enforce a contract, or as an equitable estoppel against the denial of a false representation.^ Redress for injuries of this nature maj^ often be obtained without difficulty at law ; and when no special element of equit}' is contained in the plaintiff's case, the usual if not the only course (upon which there is some conflict of authority^) to be pursued is to bring an action at law, called an action of deceit, for the recovery of damages. In this aspect, the law of deceit has been considered in detail in another work.* But inasmuch as^ questions con- cerning the same law of deceit constantly arise in equity by reason of the fact that purely equitable remedies often turn upon questions of deceit, it will be proper to consider the subject brieflj- in the present work ; premising, how- ever, the remark that there is no substantial difl^erence between the rules of law and of equity' upon this subject. The false representation complained of may be in acts as well as in words. There is no distinction in law be- tween frauds effected by acts alone and frauds effected by words. ^ The law regards the impression produced, or to be naturally produced ; and a man's conduct may 1 See Bigelow, Torts (Students' Series), ch. 1. 2 There is nothing sufficiently peculiar to the law of equitable estoppel, apart from the general law of deceit, to require a separate chapter for that subject in the present work. The whole law of equitable estoppel is embraced in the law of deceit. It is only to be remembered that the estoppel precludes a party who has made a false representation, knowingly, with intent that it should be acted iipon, from denying its truth as against the party to whom it was made; provided the latter was ignorant of its falsity, and, believing it to be true, acted upon it to his damage. » See Bigelow, Fraud, 3-32, .3.33. * Bigelow, Torts (Students' Scries), c. 1. 6 Marsh v. Wilson, Busb. 143. § l.J ACTUAL FRAUD. 97 fasten liabilitj' upon him, though no word may have been uttered. It follows, even as to language used, that it is not necessary to constitute a fraudulent misrepresentation that statements should be made in terms expressly affii'miug the existence of a fact. If the false representation be such as would naturall}' lead the plaintiff to suppose the exist- ence of a particular state of facts, it is equall}'^ objec- tionable as though it had been made in terms exactly expressive of the existence of such fact.^ A person cannot, then, escape the natural meaning of his language b}' resort- ing to a literal interpretation of it. Again, a person may perpetrate a fraud upon another as well by false and fraudulent representations of the meaning of words or terms used in a contract negotiating between them as in any other way. And if such words or terms are material to a proper understanding of the con- tract, and the injured part}', being ignorant of their true import, relies and acts upon the representation made, he will have a good defence to an action upon the engage- ment.^ The statement of onl}' part of the truth, with a view to deception, is no less objectionable.^ And the effect of a partial misrepresentation, if material, is probably not merely to alter or modify a transaction pro tanto, when the transaction is divisible, but to give the defrauded party the right to set it aside altogether. It is clearly sufficient in a suit for the specific performance of a contract to show that the plaintiff, in the negotiations of the engagement, was guilty of misrepresenting the facts in part.* 1 Lee I'. Jones, 17 Com. B. n. s. 482; s. c. 14 Com. B. n. s. 386; Mizner v. Kussell, 29 Mich. 229. 2 Calkins v. State, 13 Wis. 389. » Mallory v. Leach, 35 Vt. 156. * Clermont v. Tasburgh, 1 Jac. & W. 112. The law of specific performance, however, is peculiar. 7 98 GROUNDS OF RELIEF IN EQUITY. [Chap. VTI Generall}' speaking, the representation should be of mat- ter of fact, capable of definite knowledge, — not matter of opinion. A misrepresentation of the law will not afford ground for rehef, unless the part}' making it profess special knowledge of the law, and purposely make a false statement thereof to deceive one in ignorance, trusting his word. Upon the same principle, representations of value in matters of barter are in most cases deemed not to afford a right of redress. The statement of specific facts going to make up value are, howe^er, generally treated as stiinding upon the footing of other representations.^ It is generally laid down that mere passive concealment, unaided b}' any active conduct misleading, or tending to mislead, the plaintiff, is not a ground of redress.^ The bu3'er of goods, for instance, is not bound to' communicate intelligence of external circumstances which might influ- ence the price of the commodity, and is exclusively within his knowledge.® If, however, the slightest act be done, tending to put "the complaining party off his guard, he wil. be entitled to relief.* In like manner, according to the current of authority, mere silence on the part "of A vendor of goods with respect to a latent defect therein, of which the purchaser is igno- rant (the defect not going to the exi-stence or substantial existence of the article, but affecting its quality merely) will not be gi'ound for avoiding the sale. But the slightest active conduct, having a tendenc}' to mislead the buyer will give him the right to repudiate the transaction.^ 1 Torts (Students' Series), 14, 15. 2 Laidlaw v. Organ, 2 Wheat. 178; Hanson v. Edgerly, 29 N II, 343; Smith v. Countryman, 80 N. Y. 655; Hadley v. Clinton Import- ing Co., 1:3 Oiiio St. 502; Williams v. Spurr, 24 Mich. S.^; Mitchell V. McDougall, 62 111. 408. But see Cecil v. Spurger, 32 Mo. 462 Patterson v. Kirkland, 34 Miss. 423. 2 Laidlaw v. Organ, supra. * lb. ' See Iladley v. Clinton Importing Co., supra. §1.1 ACTUAL FRAUD. 99 K the defect be of a character to change the article or thing purchased in hind, the sale may be repudiated, though the vendor had no knowledge of the defect ; but this proceeds on the ground of a lack of identity between the thing intended and the thing delivered. Where a person is induced to enter into a contract of suretyship upon a false representation of the state of facts, or where there are circumstances connected with the trans action which are concealed by the creditor, the surety may repudiate his undertaking. But the concealment must be a concealment of facts which it was the duty of the creditor to disclose. If no dut}- was incumbent upon him to reveal the facts, the surety cannot complain.^ It is not necessary that a creditor should disclose to u surety every material circumstance of the situation. The surety is generally a friend of the principal debtor, act- ing at his request, and not at the request of the creditor ; and it is assumed in ordinar}- cases that he has obtained from the principal debtor all the information which he re- quires.'^ A creditor, for instance, is not bound, without inquiry, to disclose to a surety that the principal debtor is indebted to him beyond the amount of the security signed by the surety.^ On the other hand, persons proposing to become sureties to a corporation or company for the good conduct and fidelit}' of an officer to whose custody its moneys and other valual)les are to be intrusted, have a right to be treated wHh the utmost good faith. If the managers are aware of secret facts materially affecting the risk to be assumed by the person about to become surety", such person is en- titled to a disclosure of the facts ; and if such disclosure be not made, the surety will not be bound.* 1 Greenfield v. Edwards, 2 DeG., J. & S. 582. 2 Lee V. Jones, 17 Com. B. n. s. 482. 3 Booth v. Storrs, 75 111. 438 * Graves v. Lebanon Bank, 10 Bush, 23. 100 GROUNDS OF RELIEF IN EQUITY. [Chap. VII Antenuptial settlements made by an intended wife are held voidable in England by the husband after marriage, provided it appear (1) that intermarriage was in con- templation of the parties at the time ; (2) that the woman executed the settlement in contemplation of the future marriage ; (3) that she concealed it from her intended husband. If these facts are proved, the settlement cannot stand against the marital rights of the husband. ^ And the same doctrine prevails at common law in this country.^ But the husband cannot avoid the wife's settlement when, before the marriage, he had sufficiently early notice that it was intended to settle the wife's property, if nothing afterwards transpire to justify a belief on 4he husband's part that at the time of the marriage no settlement had been made.^ However, in appljdng the principle upon which con veyances made by the intended wife pending a treaty for marriage are avoided on the ground of fraud upon the marital right, equity will take into consideration any meri- torious object of such con^veyances, and the situation of the intended husband in point of pecuniary means.* Non disclosure of a voluntary settlement by the wife does not necessaril}' render the conveyance invalid. The courts wiU consider the nature of the provision made, the ex- tent of the husband's means, and any other facts tending to show that no fraud was intended.^ In some States, however, .it has been held that if a widow, during a treaty for a second marriage, convey her property secretly, and with intent to deceive her intended 1 Goddard v. Snow, 1 Russ. 485. 2 Baker v. Jordan, 73 N. C. 145; Duncan's Appeal, 43 Penn. St. 67 » Wrigley v. Swainson, 3 DeG. & S. 458. « St. George v. Wake, 1 Mylne & K. 610. 6 Gregory v. Winston, 23 Gratt. 102. §1.] ACTUAL FRAUD. 101 husband, he can avoid the convej'ance, though it be made to children of the widow by her former husband, and they be innocent of participation in the fraud. ^ Convej'ances in good faith and for a valuable consideration, made b}- a woman pending a treaty of marriage are valid, though concealed from the intended husband. In some of the States, antenuptial conveyances secretly made by the husband for the purpose of defeating the wife of dower, are voidable at her election, to the extent of her dower interest.^ Thus far of the representation as an element of liabil- ity for deceit. The next of the elements in order is the knowledge of the alleged wrong-doer of the falsity of the representation. In general an honest statement of fact, believed to be true by the party making it, though made with a view to bemg acted upon, will not, upon turning out to be false, give a right to relief against the party making it. Fraud is not established, and relief will not be granted without proof that the party who made the false representation knew at the time that it was false. ^ The law raises no presumption of knowledge from the mere fact that the representation is false.* There are, however, manj^ cases in which the law does raise a presumption of the party's knowledge concerning the facts of which he has made a false representation. Most of these cases stand upon the principle of requiring a man to know his own business. It is settled law, in 1 Tisdale v. Bailey, 6 Ired. Eq. 358. '^ Littleton v. Littleton, 1 Dev. & B. 327 ; Petty v. Petty, 4 B. Mon. 215; Leach v. Duvall, 8 Bush, 201. 3 Collins V. Evans, 5 Q. B. 820, 826 ; Behn v. Kemble, 7 Com. B. N. 8. 260; Mahurin v. Harding, 28 N. H. 128; Case v. Boughton, 11 Wend. 106. * Barnett v. Stanton, 2 Ala. 181; McDonald v. Trafton, 15 Maine, 226. 102 GROUNDS OF RELIEF IN EQUITY. [Chap. VII accordance with this principle, that if a person, however honestly , assume to act for another in respect of a matter over which he has no authority, he renders himself liable for anj' damages that maj- be sustained by reason of liis want of authority'. ^ In the next place, it must appear that the complaining party was ignorant of the truth of the matter, and believed the representation made. In some cases, he will not be permitted to assert his ignorance of the facts. If his attention was called to facts leading directly to the truth, and he refused to make the proper inquiry, he will be treated as fixed with knowledge. Indeed, it is laid down as a broad proix)sition of law that, if the means of knowl- edge be at hand and equallj- availalile to both parties, the injured party will not be pennitted to allege his ignorance.' If, however, the injured party was prevented by the alleged wrong-doer from making inquiry', whether by de- "vice or b}' a positive statement at variance with the truth, his ignorance of the facts will then be available. A pur- chaser of land, for instance, is entitled to relief against the vendor for fraudulent ^misrepresentations as to the title, even though the existence of the paramount title was spread upon the public records of the registrj-.^ As to the element of intentional wrong on the part of the person making the representation, that will sometimes appear as a necessary part of the transaction itself, and sometimes not. If a vendor of goods make a false repre- sentation concerning their quality', knowiugl}', the intention to deceive the purchaser appears without further evidence. But if the false representation was made concerning the 1 Collin V. Wright, 8 El. & B. 647 ; White v. Madison 26 N. Y. 117; IJartlett v. Tucker, 104 Mass. 3:36. 2 Slaughter v. Gerson, 13 Wall. 379. 3 Parkliam v. Randolph, 4 How. (Miss.) 4.35. See Davfd v. "P^ri 103 Mass. 501. §2.] ACTUAL FRAUD. 103 financial standing of another person with whom the injured party has thereby been induced to deal, the fact that the representation was false to the knowledge of the party making it, and that it was acted upon, docs not neces- sarily show an intention in the part}' making the repre- sentation to injure the plaintiff. In such cases, express evidence of the intention must be given. ^ The last of the elements of redressible deceit requires that the complaining party should Lave acted upon the representation made to his damage. If he has suffered no loss by reason of the misrepresentation, he cannot complain of it ; unless indeed the wrong-doer should at- tempt to enforce a bargain effected by his own fraud. The injured party, however, to be entitled to redress, must have acted upon the defendatd" s representation. It matters not that the defendant made a false and fraud- ulent representation, intending to injure the plaintiff: if the plaintiff did not act upon it, but acted upon the repre- sentation of other's, or upon the results of his own inde- pendent investigation, the defendant has not caused the damage, and is not liable. Aside from cases which ma}' be classed under the gen- eral head of actions for deceit, there are some special heads of actual fraud, over which equit}' has a nearly ex- clusive jurisdiction ; such being cases in which the deceit or other fraud is accompanied b}' circumstances which tend to embarrass, if not to exclude, the interference of courts of law. To these attention is now directed. § 2. Of Fraud on Powers. A fraud upon a power must be committed either on the donor of the power or on the objects of it. It is commit- ted upon the former when a power to create a burden upon the estate in settlement is used for a purpose not intended. 1 See, further, Torts (Students' Series), 30, 31. 104 GROUNDS or RELIEF IN EQUITY. [Chap. VII, It is committed upon the latter when a power to control the devolution of the estate is used to give a benefit to some one not an intended object of it.^ An appointment made with the purpose of giving an ex- clusive benefit to the appointor is invalid ; but, if the pur- pose of the appointment be to secure a benefit for all the objects of the power, the appointment is good, though the appointor may to some extent participate in the benefit. - It is not, indeed, necessary' that an appointment under a power should be directed (contrary to the intention of the donor) to the exclusive benefit of the appointor, in order to make it invalid. Where the donee exercises a power 'of appointment in favor of one of several objects of the power with the view to benefit a stranger, the appointment is deemed fraudulent ; and this, too, though the appointee be ignorant of the fraud, and though the motive of the donee be not morally- wrong. For example : A married woman having a power to appoint a fund (of which she is to receive the income during life) among her children, appoints the whole fund at her death to her eldest daugh- ter. The object of this is that the daughter shall, out of the fund, benefit her father. The appointment is invalid, though the daughter has no knowledge of it until after her mother's death. ^ Appointments under powers are in fact a kind of discre- tionar}' trust ; and the same principles which have been seen to prevail as to discretionary trusts proper prevail in these cases. Unless it can be shown that the trustee having the discretion is exercising the trust in a manner not consistent with its purposes, the courts will not control or interfere with the discretion of the appointor. Though there be a suspicion that the trust has been exercised in a 1 Rowley v. Rowley, Kay, 242, 258 ; Skelton r. Flanagan, Irish Rep. 1 Eq. 362, 369. '^ Skelton v. Flanagan, supra. » In re Marsden's Trust, 4 Drew. 594 §2.] ACTUAL FRAUD. 105 particular manner, or from a motive, which, if true, would be fatal ; still, if there be nothing but suspicion, and noth- ing come from following it out which would amount to a judicial inference or conviction of fraud, the courts will not act u]ion it. On the other hand, if it can be proved to the satisfaction of the court that the power has been exercised either corruptly, or for a purpose which would defeat rather than carry into etfect the object of the trust, equity will not permit such an exercise of the power to prevail.^ If real estate be conveyed by a husband to a trustee, for the sole and separate use of the grantor's wife, with power to sell and convey, the proceeds to be reinvested as the wife may direct, it is the duty of both the trustee and the purchaser, in the event of a sale, to see that the fund is paid over to the former, and reinvested b}' him for the benefit of the wife. If, in violation of the terms of the trust, the purchaser contract with the husband, pay him the purchase-money, and then, even upon the authority of the wife, receive a conveyance from the trustee, the trans- action is a fraud upon the power ; and, upon the wife's ap- plication, it will be set aside. •^ But the contrary would be true, if the purchaser had no notice of the breach of trust.' The donor of a power cannot buy in the interest of one entitled, before the power has been executed, and then execute the power according to his own pleasure as to the amount of the share of such person, though in other re- spects the trust ma}' be faithfully executed by him. If, for instance, a parent, having a power of appointment among his children, should purchase the share of a child, he could not entitle himself, in the execution of the power, 1 In re Marsden's Trust, supra. 2 Cardwell v. Cheatham, 2 Head, 14. 8 lb. 106 GROUNDS OF RELIEF IN EQUITY. [Chap. VII to more than the child would have been entitled to receive on default of an appointment. ^ He could not appoint in his own interest. Vj would be equally obnoxious to equit}- if a father were to appoint to a child who was deceased, intestate and with- out issue, or who, though living, was an infant in a hope- less state of health.^ That would be, indirectlj", to make an appointment to himself. Where the legal estate is outstanding in trustees, a bill bj' a purchaser for valuable consideration and without no- tice, under a fraudulent appointment of property in settle- ment, will be dismissed as against the persons who, in default of a valid appointment, are entitled. The pay- ment of a monev consideration cannot make a stranger become the object of a power created in favor of others. He can only claim under a good appointment. An ap- pointment, at first impeachable as voluntary, may, indeed, be sustained b}' a consideration ex post facto ; as, for in- stance, where the subject of appointment is purchased for a valuable consideration f};om the appointee. But that is only where a valuable consideration was all that was want- ing to make the appointment good ab initio.^ But though, under circumstances similar to those above stated, the whole transaction is void, there is a distinct class of cases in which the execution of powers is void only in part ; as where a parent, having power to appoint amongst children only, appoints (without their consent *) a part to grandchildren. This is a fraud onl}' to the extent in which it deprives the true objects of the power of the benefit intended for them by the partj' who created the power ; the execution of which, therefore, is held void for 1 Smith V. Camelford, 2 Vcs. jun. 698, 7U. 2 McQueen v. Farquhar, 11 Ves. 467, 479. 8 George v. Milbanke, 9 Ves. 190. * White V. St. Barbe, 1 Ves. & B. 399. §2.] ACTUAL FRAUD. 107 the excess outy.^ And, in general, the rnle that where an appointment is made for a bad pui-pose, the bad purpose affects the whole instrument, does not apply to cases in which the evidence enables the court to distinguish what is attributable to an authorized from what is attributable to an unauthorized purpose.^ If a father and his family are all beneficiaries of a trust fund intended for their common support, and the father grossly fails to discharge the dut}' imposed upon him of dispensing the income for the purposes for which it was given, though he has been made by the instrument which created the trust sole judge of the necessities of his famil}', equity' will assume the distribution of the income of the fund so as to secure to all the beneficiaries a just and equitable participation therein.^ Where persons have a power to appoint a fund among children, and in default of appointment the fund is to go among all the children equally, this prima facie does not exclude the one in whose favor an appointment may have been made from afterwards sharing in the unappointed part. Nor does the amount of the appointment to the particular child make any difterence. The amount to be given by appointment not being fixed, it follows that the beneficiaries may be appointed to different shares, and that so long as the power of appointment remains unexhausted, a second or third appointment may be made to the same person ; * provided such acts do not exhaust or substan- tially exhaust the fund in favor of one to the entire exclu- sion of the rest of the class intended. 1 Adams v. Adams, 2 Cowp. 651 ; Pitt v. Jackson, 2 Brown, C. C. 51 ; Bristow v. Warde, 2 Ves. jun. 336, 350. - Topham v. Portland, 1 DeG. J. & S. 517. 3 Babbitt v. Babbitt, 26 N. J. Eq. 44. « Wombwell v. Hanrott, 14 Beav. 143; Foster v. Cautley, 6 DeG. M. & G 55. 108 GROUNDS OF RELIEF IN EQUITY I Chap. VII § 3. Of iNADEQUACr OF Consideration. When parties understand fully what they are doing, and they stand upon an equal footing in law, mere inad- equacy of price will not suffice to impeach a sale, though there be also the absence of professional assistance to the complaining part3\ Nor will the mere circumstance that one of the parties is in povert}' and distress, and the other wealthy, take a case out of this rule.^ He who, standing in an independent position, though subject to such (non- legal) disabilities even as these, would impeach a con- tract for fraud, must establish the fact that the transaction has been attended with other and more objectionable cir- cumstances. The term " fraud," however, when applied to such cases is not to be understood in its ordinary sense of base and corrupt conduct. It is enough to impeach a bargain obtained for an inadequate consideration, under circum- stances of hardship, that the transaction has been effected b}^ undue influence.^ Indeed, inadequacy of consideration and the absence of professional advice, added to the pres- ence of distress, though insufficient of themselves to estab- lish fraud, are always material facts, and in connection with other facts, alike insufficient alone, may afford ground for relief.^ For example : The plaintiff is a person of reck- less and improvident habits, greatly embaiTassed, indebted to the defendant, and to some extent dependent upon him. He has made a sale of property to the defendant for less than half its value, acting without professional advice ; and there is evidence of management and contrivance on the part of the purchaser in procuring the plaintiff's signature to the contract of sale, and of his having depreciated the title and having deterred others from purchasing, though himself aware of counsel's favorable opinion as to the title, ^ Harrison v. Guest, 6 DeG., M. & G. 424 ; s. c. 8 H. L Cas. 481. 2 Butler V. JVIiller, Law Eep. 1 Irish Eq. 195, 210. ^ jb. §4.J ACTUAL FRAUD. 109 and has not informed the plaintiflF of the fact. The sale will be set aside. ^ Again, if there be such inadequacy as to sho^ that the person whom it affects did not understand the bargain he was making, or was so oppressed that he was glad to make it, though knowing the inadequac}' of consideration, this perhaps will be such a command over him as to be tanta- mount to fraud. ^ According to some authorities, it is held that gross inadequacy, though sufficient to shock the conscience of the court, is insufficient ground alone to set aside an executed contract between parties standing upon a legal equality, though the case might be otherwise of an execu- tory contract.^ The more general language of the author- ities, however, is that inadequacy so great as to shock the conscience may be treated as equivalent to fraud. But this must be admitted to be a somewhat uncertain standard.^ § 4. Of Fraud between and by Partners, Co-tenants, AND Joint Purchasers. Courts of equity will grant relief where a partnership has been entered into b}' one partner under ch'cumstances of fraud or gross misrepresentation by the others. In such cases equity will not only decree the partnership to be void, but will also interpose and restore the injured part- ner to his original rights and property as far as practicable.* In like manner, equity will grant relief where a retiring partner has been induced to sell his interest to his co- partners at an inadequate consideration, in consequence of 1 lb. 2 Heathcote v. Paignon, 2 Brown, C. C. 167. 8 Davidson v. Little, 22 Penn. St. 245. * For examples, see Bigelow, Fraud, pp. 138, 139. 5 Story, Partnersliip, § 232 ; Fogg v. Johnston, 27 Ala. 432 ; Raw lins V. Wickham, 3 DeG. & J. 304. 110 GROUNDS OF EELIEF IN EQUITY. [Chap. VII the fraudulent concealmeut and misrepresentation of the condition of the firm property hy one of the firm whose special and peculiar business it is to know the state of such propert}'.! Equity will not grant the dissolution of a partnership for every trivial violation of duty by one of the partners ; but wheie there is gross misconduct, such as abuse of known authorit}^ or gross want of good faith, such as must, if continued, be disastrous to the interests of the other part- ners, equity will interfere and grant a dissolution. ^ To justif}' such extraordinary interposition, however, the court always requires strong and clear evidence of positive or meditated abuse. It is not enough to show that there is a temptation to such misconduct, abuse, or bad_faith : there must be an unequivocal demonstration by overt acts or gross departure from duty that the danger is imminent, or that the injury is already done.^ For minor acts of mis- conduct, equity will ordinarily go no further than to grant an injunction against the partner.* Though a fraudulently concerted petition of bankruptcy against one partner by his associates will not be supported, it is not necessary that the sole motive for issuing it should be the distribution of the bankrupt's estate among his cred- itors. It may not only be prudent, but it may be perfectly consistent with good faith, to get the bankrupt partner out of the firm, since otherwise the firm might be ruined by his presence. When such is the motive, and there is no fraud, the petition is proper.^ It is the duty of partners towards each other to refrain from all concealment in the transaction of the partnership business. If a partner be guilty of any such concealment 1 Madilcford v. Austwick, 1 Sim. 89 ; Perens v. Johnson, 3 Sniale & G. 419. 2 Story, Partnership, § 287; 3 Kent, Comin. GO, 61. ** II)- ■* lb. 6 Ez parte Wilbram, Buck 461. §4.J ACTUAL TRAUD. Ill and derive a benefit therefrom, he will be treated in equity as a trustee for the finn, and compelled to account to his co-partners.^ This principle will prohibit aU clandestine bargains by one partner for his own exclusive benefit, made in contem- plation of establishing a partnership with other persons.* In like manner, each partner is bound to refrain from en- gaging in any other business or speculation which will deprive the partnership of a portion of the skill, industry, diligence, or capital which he is bound to employ therein. In other words, he is not at liberty to deal on his own private account in any matter or business which is obviously at variance with his primary duty to the part- nership. In accordance with this prohibitive rule, if one partner carry on another trade or the same trade for his own advantage, especially if this be to the injury of the part- nership interest, or if he divert the capital or funds of the partnership to some secret purpose, he will be compelled to account in equity for all the profits made thereby.^ So if one partner should purchase articles on his own private account in some special trade or business in which the partnership was engaged, the purchase being to the injury of the partnership, he would be held to account in equity for his profits.* In cases of this sort, equity will even restrain the partner from carrying on any such business without the consent of the co-partner.^ While equity, however, will not permit parties bound to each other b}' engagements undertaken for their common benefit, to secretly engage in other enterprises adverse to 1 Story, Partnership, § 172. 2 Fawcett v. Whitehouse, 1 Russ. & M. 132, 148. * Long V. Majestre, 1 Johns. Ch. 305 ; Story, Partnership, § 178. « Burton v. Wookey, 6 Madd. 367. 6 Glassington v. Thwaites, 1 Sim. & S. 124. 112 GROUNDS OF RELIEF IN EQUITY. [Chap. VII the welfare of the partnership ; still, if it merely appear that such other enterprises offer a temj}tation to betray the partnership, no ground for injunction is deemed ^.o exist. -^ One partner cannot make a secret profit out of dealings with the firm. He cannot, for instance, supply the firm with goods which he has himself bought for his own use at a lower price, without informing his partners of the facts. ^ But it is considered no fraud in one member of a partner- ship, intrusted by the firm with business outside of the operations of the firm as such, to enter into an arrange- ment with a stranger by which the partner shall derive a special benefit from the outside transaction, not shared by the other partners, if the}', too, have been guilty of fraud in relation to the same outside transaction.^ It has already been stated that a partner in business intending to purchase the interest of his co-partner must, where he (the former) has had the management of the business or the keeping of the accounts, make a full dis- closure of the extent and situation of the business.* Partners, however, are presumed to have equal access to and knowledge of the books and business of the firm ; and, in the absence of evidence to the contrary, they stand upon an equal footing in respect of inter-alienations of their respective interests, and the rules governing ordinary sales will apply to them.^ There is no special relation of confidence between part- ners by mere virtue of the partnership ; nor is there any relation of confidence between co-tenants by mere virtue of the relation of co-tenancy. Acting partners, having an equal part in the management of the business, deal with 1 Glassington v. Tliwaites, 1 Sim. & S. 124. 2 Getty V. Devlin, 54 N. Y. 403. 3 Wheeler r. Sage, 1 Wall. 518 ^ Maddeford v. Austwick, 1 Sirti. 89. 6 Geddes's Appeal, 80 Penn. St. 442. § i ] ACTUAL FRAUD. 113 K each other at arm's length. And in the like dealing with each other the position of co-tenants is analogous to that of partners. It is onl}' when in fact a confidence is re- posed b}' the one in the other, that any other principles than those applying to ordinar}' parties dealing at arm's length apply to their engagements and bargains inter se.^ So, too, as to the dealings of co-tenants and joint purchasers with others for the common benefit, principles analogous to those prevailing as to partners apply. The acting party has no right, by concealment or collusion with the outside party, to obtain a personal benefit which ought to be shared by his associate ; but it is apprehended that fraud must be alleged and proved b}' the complaining part}'. There is no presumption of wrong-doing in such cases, since there is no relation of confidence between the parties.^ If two partners enter into a contract for defrauding their joint creditors, the one permitting the other to withdraw mone}' out of reach of the creditors, such a contract may be impeached by the creditors.' But the mere fact that at the time when it was determined to dissolve a partnership both partners knew that the joint effects were insufficient to pay the joint debts will not, of itself, be enough to in- validate a dissolution of the firm, if honestlj' made ; though it be one of the terms of the dissolution that the retiring partner shall receive a premium for relinquishing his share in the business. If there be no actual fraud in the case, it is competent to partners to make such a bargain, however advantageous or disadvantageous it may be to either part}'.^ A retiring ostensible (or open) partner who conceals his 1 See Matthews v. Bliss, 22 Pick. 48. ^ For instances of dealings by joint purchasers and owners to the detriment of their associates, see Willink v. Vanderveer, 1 Barb. 599; Barry v. Bennett, 45 Cal. 80. 3 Anderson v. Maltby, 2 Ves. jun. 244, 255. * Ex parte Peake, 1 Madd. 346, 354. 114 GROUNDS OF RELIEF IN EQUITY. [Chap. VD witbdrawal, and allows the remaining members of the firm to contract in his name, is guilty of a fraud upon persons who may, in ignorance of the withdrawal, still give credit to the firm on the faith of the continuance of the old part- nership.^ Both the retiring partner and his associates will be liable to creditors of the firm as it existed before llx change, of which change they have no notice ; notwithstand- ing, moreover, any private attempt between the partners to adjust the extent of their several liabilities. And this rule will apply equally to persons dealing for the first time with the firm after the withdrawal of the partner, if he allow the other partners to hold him out as still a member of the partnership.^ For the protection, then, of himself and of his associ- ates, a retiring ostensible partner should gi^\K notice of his withdrawal, and be careful that he is no longer held out as a member of the firm. A dormant partner, how- ever, need not give notice upon retiring ; because, having never been held out as a partner, credit cannot be sup- posed to have been given to him.^ His withdrawal without giving notice cannot, then, operate as a fraud. s § 5. Of Corporations. It is not in the power of the majority of the members of a corporation to exercise control over the corporate management, for the purpose of appropriating the corpo- rate property or its avails or income to themselves or to any of the shareholders, to the exclusion or prejudice of the others. And if any such unfair advantage have been obtained by fraud ot abuse of the trust confided to them as officers or agents of the corporation, the majority have no power to ratify or condone the fraud and breach of ' Buffalo Bank v. Howard, 35 N. Y. 500. 2 2 Story, Contracts, § 3U (5th ed.). » lb. § 5.] ACTUAL FRAUD. 115 trust, so far as it affects the rights of the others, without reasonable restitution. This is not onl}^ true as to ordinary transactions, such as assessments of capital or dividends of income,^ but also as to indirect appi^opriations of the corporate prop- erty", profits, or means of profit, to their own benefit by an}^ portion of the corporators in fraud of their associates. No act of the majorit}' can purge such fraud. If it were otherwise, the minority would be without the means of . protection or redress against inequality and injustice.^ Where the charter of a corporation provides that stock- holders only shall be elected directors, persons having no interest in the stock, but fraudulently and collusively re- ceiving the transfer of a share to qualify them, are not eligible ; and the stockholders combining in such fraud have no power to confer upon them authority to do corpo- rate acts. And such fraud and combination will prevent those participating in it from claiming any protection un- der its provisions to escape personal responsibility.* So, also, if the directors of a railway company should give awa}' certificates of stock, — a major part of the whole issue, — to contractors building the road, for the purpose of giving them a controlling influence in the election of officers and in the management of the road, equit}- would declare the gift void, especiall}' if part of the directors were interested in the contract of construction.* The officers of a corporation are chargeable with fraud if they receive in pajnnent for stock property at a valua- tion known to be in excess of its real worth, and thereon issue paid-up certificates of stock. But such a fraud is J Preston v. Grand Collier Dock Co., 11 Sim. 327 ; Hodgkinson v National Ins. Co., 26 Beav. 473. 2 Brewer v. Boston Theatre, 104 Mass. 378, 395. 3 Bartholomew v. Bentley, 1 Ohio St. 37 ; 8. c. 15 Ohio, 666. * Oilman R. Co. v. Kelley, 77 111. 426. 116 GROUNDS OF RELIEF IN EQUITY. [Chap.VII greatly aggravated when the officers deal with themselves as stockholders, and accept such a conveyance in pa3-ment of their own stock. ^ In like manner, private arrangements between an agent of a corporation procuring subscriptions of stock, b}' which peculiar privileges or exemptions from payment are ac- corded to certain subscribers, are a fraud upon the other subscribers ; and it is held that they cannot be set up in defence to an action upon the subscription.^ It is equally true, it is apprehended, that the subscribers upon such private agreements could obtain the aid of a court of equity to enjoin the corporation from disregarding the ar- rangements, if authorized by the managers, or perhaps to have their names taken off the subscription' upon the managers treating the parties as standing in the same situ- ation with the rest of the subscribers. If a corporation secure subscriptions of stock, to be binding onl}- when a sufficient sum shall be subscribed to secure the completion of a certain work, the directors have no right to pass a resolution that the subscriptions are sufficient for the work when obviousl}' the}' are not. Such action would be evidence of fraud, and the subscribers could probably be relieved in equity from their under- taking to pay,* without waiting for relief bj' way of defence to an action upon the contract of subscription. § 6. Of Volunteers. A person cannot take advantage of circumstances aris- ing from a project communicated to him by another to secure to himself a benefit from the action of the person ' Osgood V. King, 42 Iowa, 478. 2 New Albany R. Co. v. Fields, 10 Ind. 187 ; New Albany R. Co. V. Slaughter, lb. U18. 8 See Cass v. Pittsburgh Ry. Co., 80 Penn. St. 31, as to the non- liability of the parties. § 7.] ACTUAL FRAUD. 117 ruakiug the commuuicatiou, to the exclusion of such per- son ; especiall}- if he advised the latter to take the course pursued. 1 For example: A creditor of a thu'd person having knowledge that part of the real estate of his debtoi was mortgaged, apparently* to its full value, is informed b}' another ci editor that he proposes to effect an arrange- ment by which that mortgage may be removed and one taken lo himself. The former advises the latter to make the ar'angement; and after the same has been jiai'tly effected and the fii'st mortgage discharged, but before the second one has been executed, levies an attachment upon the land to secure himself. The attachment may be re- moved at the instance of the other creditor."'^ § 7. Of Marriage effected by Fraud. The statutory grounds of fraud, though not specifying fraud, do not exclude it. The law is settled that (apart from statutory enactment) if a marriage be brought about by fraud, the injured party may go into equity and obtain a decree of nullity ; and this is true whether the fraud were committed by the other part}- * to the marriage or by third persons.* Fraud, however, may not always be established by proof of false representations beheved to be true, any more than it is in cases of actions of deceit.^ Thus, if a stranger were to present himself to a woman (especially tc a widow) of mature years, for marriage, falsely repre- 1 Buswell V. Davis, 10 X. H. 413. 2 Beckett i-. Cordley, 1 Brown, C. C. 357; Jackson v. Burgott, 10 Johns 457, 461. 8 S>>ott V. ShuieUt, 5 Paige, 43 ; Ferlat v. Gojon, Hopk. 47S ; Burtia V. Burtis, lb. 657, 568. * Keyes v. Keyes, 22 N. H. 653 ; Hull v. Hull, 15 Jur. 710 • s c. 6 Eiig. Law & Eq. 5S9. * See Bigelow, Torts (Students' Series), 24, 25. 118 GEOIIN'DS OF RELIEF IN EQUITY. [Chap. VII. seuting himself to be a man of respectability aud good standing in liis own community, and propose marriage at once, and should be accepted, the courts would be slow to grant the woman a divorce, though it should turn out that she had been joined to a person of the worst char- acter.^ Marriages have been annulled, however, on pntof of certain deception by the wife concerning the paternity oi a child, of which she had been delivered before the marriage ; the woman having falsely and fraudulentl}' represented that it was begotten bj- him who was to marrj' her, when it afterwards appeared to be of another race from the plaintiff.^ The same decree has been granted in a case where it appeared that the plaintiff was but eighteen years old at the time of the marriage ; that her parents had not given their consent to the marriage ; that the marriage license required by law had been procured by fraudulent representations and false swearing by the defendant ; and that the plaintiff, as soon as she heard of these facts, repu- diated the ceremony and refused to cohabit with the de- fendant.^ In another case, it appeared that friends of the defendant, with whom she haH been living, had by artifice procured the plaintiff to marry her, knowing that she was insane, and keeping the plaintiff ignorant of the fact. A separation was granted him.* It is, however, immaterial how fraudulent may be the motives prompting the parties to marry, or what may be the consequences resulting from such marriage as to third persons, so long as the marriage is not absolutely void in all respects. No court has the power, upon the petition of a third person, except by the attornej'-general on behalf 1 Wier I'. Still, 31 Iowa, 107. 2 gcott v Shufeldt, 6 Paige, 43. 8 Robertson v. Cole, 12 Texas, 356. * Kcyes v. Keyes, 22 N. H. 553. For further exanii)les, see Bigolow, Fraud, 91. § 8.J ACTUAL FRAUD. 119 of the State, for criminal violation of law, either to dissolve the bonds of matrimon}- or to relieve against any of the consequences which result from the marriage.^ § 8. Of Judgments and Awards. For certain kinds of fraud, a judgment may, during the term in which it was rendered or afterwards (subject to statutory regulations and the rule of diligence) be set aside. The merits of a decision concerning a question of fraud put in issue cannot, however, at common law be opened after the term in which the judgment was rendered. The fraud which will justify a proceeding to open a judg- ment after the term of rendition must consist either of facts relating to the manner of obtaining jurisdiction of the cause, to the mode of conducting the trial, to the con- coction of the judgment, or to facts not actually' or neces- sarily in issue at the former trial. ^ In regard to the manner of obtaining jurisdiction of an action, it is laid down that a judgment rendered in a cause, jurisdiction of which was obtained b}^ the fraud of the prevailing part}', is liable to impeachment.^ If, for in- stance, a person residing in one jurisdiction be induced under false pretences or representations to go into another for the real purpose of getting service of process upon him, the jurisdiction and the judgment will be deemed (so it has been held) to have been fraudulenth' obtained ; and such fact will be a sufficient ground for proceedings to set aside the judgment, or, if it were rendered in another State or country', for den3'ing its validity in a collateral action brought to enforce it.* In the case of a foreign 1 McKinney v. Clarke, 2 Swan, 321. 2 See United States v. Flint, U. S. Circ. Ct. Cal. 187G. 8 Dunlap V. Cody,. 31 Iowa, 260. * Dunlap V Cady, supra. This, however, is going a great k'ligth 120 GROUNDS OF EELIEF IN EQUITY. [Cuap. VII judgment thus obtaiued, the prevailing part}' could also be enjoined, it seems, against proceeding to enforce it.-' If through the instrumentalit}- of one part}' to an action, the witnesses of his adversar}- be forcibly and illegally detained, or bribed to disobey his subpoena, or if the testi- mon}' of his adversary be secreted or purloined,"^ or if the citation to him be given under such circumstances as to defeat its natural object, a fraud is committed for -ohich rehef will be granted in equit}', if it produce injury to the innocent part}'.^ So, if the litigation be collusive, if the parties be fictitious, if real parties be falsely stated to be before the court, the judgment may be set aside or its enforcement restrained.* Fi'aud ma}- also be shown in equity for the purpose of impeaching and vacating a judgment, where -the fraud consists in deceit practised upon the court in which the former suit was tried ; the injured party being absent, and having no notice of the acts resorted to. To obtain judg- ment, for instance, in violation of an agreement between the parties, and without the knowledge of the other party, would be gi'ound for relief in equity.^ And this is true, though the agreement was ijiade on Sunday.^ A judg- ment cannot, however, be impeached merely because false testimony was given in the cause.'' . "With regard to fraud in the concoction of a judgment, if a party's own counsel should prove false to him, and by collusion with counsel for the other side, submit to judg- ment against his client, this would afford ground for ^ See Price v. Dewhurst, 8 Sim. 279. '^ Sliodden v. Patrick, 1 Macq. 535. 8 United States v. Fliiit, siijmi. ■^ lb. ' Oclisciibein v. Papelier, Law Kep. 8 Ch. 695 ; Jolinson v. Unver- Baw, 30 Inil. 435 ; Dobson v. Poarce, 12 N. Y. 156. •• IJIakesley v. Jolinson, 13 Wis. 530. ^ Fisk f. Sliller, 20 Texas, 579 ; Ilartman v. Ogborn, 54 Penn. Si 120. §8.] ACTUAL FRAUD. 121 vacating the judgment. So, too, if a trustee in violation of bis duty to his cestui que trust, or a guardian in violation of his dut}' to his ward, or one of several partners, plain- tiffs in a cause, in violation of the rights of his copartners, should consent to a collusive and corrupt judgment ; — in all of these and the like cases, it is apprehended that the facts would constitute a ground for vacating the judgment. Cases of this kind are more common where the fraud is sjught to be practised upon a third person. It is often laid down in general terms that third persons are not bound b}' judgments, not being parties to them, and therefore that they may impeach them for fraud.^ It was long declared that in civil suits all strangers might falsify for covin either fines or recoveries if collusion were practised to prevent a fair defence ; and this whether the covin were apparent upon the record or consisted in something extrinsic.^ As to strangers whose right or title is directly affected by the judgment, this doctrine has been uniformly fol- lowed.^ But the doctrine needs some explanation. Third persons are bound by judgment inter alios, and, it is apprehended, cannot allege that they were obtained by fraud or collusion, except in so far as the}' have at the time of the judgment a legal right to insist upon its fair- ness as it ma}' affect them. The fact that they have no present right of this kind, or a present right that is only remotel}' and indirectly affected by the judgment, will dis- entitle them to attack it for fraud. But third persons who have a present interest either in the amount of the judgment, or in the property concerned, are permitted to > DcArmond v. Adams, 25 Ind. 455 ; Annett v. Terry, 35 N. Y. 256 Great Falls Co. i-. Worster, 45 N. H. 110 ; Sidensparker v. Sidens parker, 52 Maine, 481. 2 Duchess of Kngston's Case, Bigelow, Estoppel, 134 (2d ed.). 3 lb. 135-137. 122 GROUNDS OF llELIEF IN EQUITY. [Cii-vr. VU coinplaiu tliat the judgment was concocted in fiaud of their rights. In accordance with this principle, creditors may attack a judgment which is a fraud upon them ; but they cannot object merel}' on the ground that it is a fraud upon the debtor.' 'I'tiey can attack the judgment for colhision, but not for matter of defence, original or subsequent.^ That "13 a matter which is personal to the debtor.' Under the like circumstances, a surety can allege that a judgment against the principal debtor, now sought to be enforced against him (the surety) was obtained bj' collusion be- tween the principal debtor and his creditor, in fraud of the Buret}-,'* Foreign judgments, whether in rem or in personam^ may be impeached for fraud; though this does not, mean that it may be shown that such judgments were obtained by false or perjured testimony'. Parties are probably allowed to impeach foreign judgments only in the particulars in which the like privilege is granted as to domestic judg- ments. The rule as to the right to impeach for fraud a judgment rendered in a sister State qf the Union has never been fullv settled. Some of the courts have asserted the rioht,^ and others have denied it.® The apparent conflict of authority' may be partly- reconciled in the fact that several of the cases which assert the right of impeachment for fraud were proceedings in equity ; and most of the authori- 1 Thompson's Appeal, 57 Penn. St. 175. 2 Lewis V. Rogers, 16 Penn. St. 18- 8 Sidcnsparker v. Sidensparker, 52 Maine, 481. * Annctt V. Terry, 35 N. Y. 25G. 6 Borden v. Fitch, 15 Johns. 121 ; Andrews v. Montgomery, 19 Jolins. 1G2; Pearoe i;. OIney, 20 Conn. 544; Engel v. Slieuernian, 40 Ga. 200. Anderson v. Anderson, 8 Ohio, 108 ; Bicknell v Field, 8 Paige, 440; Christmas v. Russell, 5 Wall. 290 §8.] ACTUAL FRAUD. 123 ties agree tliafc in equity fraud is a good ground of relief.' Thus, it has been lield that equity will enjoin proceedings upon a judgment rendered in a sister State if it was ob- tained by fraud. ^ It seems clear that such judgments may be attacked for fraud wherever domestic judgments could be so impeached ; but whether the right of impeach- ment goes further than this remains to be settled.^ An award not made under a rule of court cannot be set aside in a court of law for fraud. The remedy is by a bill in equity. This is true, howcA^er gross the misconduct or even corruption of a party or of the arbitrators.^ It is equally true that, after an award under a rule of coui-t has been entered as the judgment of the law court, it cannot be set aside for fraud, except under a practice applicable to judgments general!}'. The fraud should have been al- leged before the award became a judgment of the court, or at all events before the end of the term. At that time, the court would have vacated the award on motion of the injured party, or upon a plea of the facts in opposition to a motion by the opposite part}' to have the award entered as a judgment of the com't.^ Afterward the remedy is in equity.^ An aAvard is assailable also for corruption or misbehavior of the arbitrators, notwithstanding the fact that the parties may have agreed that there shaU be no appeal." And the same would doubtless be true in respect of fraud in the 1 Contra, Bicknell v. Field, supra. 2 Pearce v. Olney and Engel v. Sheuerman, supra ; Rogers v. Gwiun, 21 Iowa, 68. 3 The question can only be set at rest by the Supreme Court of the United States, as it involves a construction of the Federal Con- stitution and of acts of Congress. The equity side of the question did not arise in Christmas v. Russell, 5 Wall. 290. * Fletcher v. Hubbard, 43 N. H. 58; Russell, Awards, 50 (4th ed.) 6 Morse, Awards, Gil. 6 gee Emerson v. Udall, 13 Vt. 477. ' Speer v. Bidwell, 44 Penn. St. 23. 124 GROUNDS OF RELIEF IN EQUITY. [Chap. VII opposite part}' alone ; for it cannot be presumed that the agreement against exceptions or appt al was intended to cover any fraudulent practice that mighi be resorted to. Such an agreement merely bars the parties from setting up mistakes of law or of fact Ij}' the arbitrators.^ As 1.0 what constitutes evidence of fraud or corruption, no general rule can be laid down : each case must be judged by its own facts. However, it is considered that the fact that the damages assessed are much larger than a court of justice would probablj-give, and that the}- are divided very disproportionall}- and to appearance arbitrarily between two parties, will not constitute evidence of fraud or improper conduct on the part of the arbitrators, — at any rate, not so decisively alone as to furnish ground for setting aside the award. ^ A very excessive award, however, might perhaps be set aside for error,^ and a shockingly extravagant award might be treated as virtuall}- fraudulent.* But strong evidence is required to impeach a result upon which the arbitrators heard the parties and exercised their judgment, if there were no actual concealment of facts. Something more is necessary, for instance, than a mere showing b}^ an accountant that the statement of ac- count presented to the arbitrators by the opposite party was in a form not in accordance with the rules of book- keeping, when it is apparent that the statement as made out could not have misled, if compared with other papers in the case, to which it must be presumed that all the par- ties looked for information.^ 1 Speer i-. Bidwell, 44.Penn. St. 23; McCahan v. Reaiiey, i'6 Penn. St. 5.J5. 2 Burchell i;. Marsh, 17 How. 344. 8 South Carolina R. Co. v. Moore, 28 Ga. 398. ♦ Van Cortlandt «. Underhill, 17 Johns. 405; Tracj •. Herrick, 25 N. II. 381. * Beam v. Macomber, 33 Mich. 127. 5 9.] ACTUAL FRAUD. 125 Equity will restrain the collection of the amount of an award procui-ed by false and fraudulent pretences and tes- timony, though the injured part}' might not be able to make a successful defence in a court of law to an action upon the award ; and it is said that the fact that the award has been confirmed at law by the highest court of the State in which it was made will not prevent equity from enjoining the collection of the judgment rendered upon such award.' The whole award, however, need not be disturbed when the fraud complained of can be discriminated and sepa- rated from the other elements of the case.^ In some cases, if not in all, arbitrators may themselves open and retr}- a judgment or decree upon the matter sub- mitted to them, if they find that it was obtained b}' artifice, trick, or other fraudulent practice. Thus, if a plaintiff in equit}' has been induced b}- fraud to settle the suit, and his bill has thereupon been dismissed without an entr}- that the dismissal is without prejudice ; and if then, without apply- ing to the court for a correction of the decree, an agree- ment is made to submit to arbitration " all claims, whether in law or in equity, existing between the parties," the arbi- trators may receive evidence that the settlement was ob- tained by fraud, and proceed to retrj' the subject-matter of the equity suit.* § 9. Of Waiver of Fraui>. If a party, with knowledge that a fraud has been per- [)etrated upon him in a particular transaction, make new engagements with respect to it, as though it were valid, or, in the case of a sale, retain and use the subject of the sale as his own, after knowledge of the fraud, or otherwise treat the transaction as effective, he thereby waives the right to 1 Chambers v. Crook, 42 Ala. 171. 2 Beam v. Macomber, 33 Mich. 127. ' Mickles v. Tliayer, 14 Allen, 114. 126 GROUNDS OF RELIEF IN EQUITY. [Chap. VII treat it as invalid, and abandons his right to rescind, if it be a case of contract ; proAided the injured party was sui juris at the time, and stood upon a legal equalit}" with the other partj'.^ In order, however, to prove a binding confirmation of a contract tainted with fraud by the opposite partj', very strong facts must be adduced, particularly that the injured party had full knowledge of the truth and of his rights.^ Fraud, indeed, is not condoned unless there be ample knowledge of the facts attending it and also of the rights growing out of those facts, and the parties are at arm's length.' The confinnation, therefore, of a bond obtained by undue influence, the ratifying act being made under pressure (though short of duress) , and in ignorance that the original obligation was not valid, is not biiidiug.^ To constitute a binding confirmation in such a case, it is nec- essar}' that there should be knowledge of the invalidity of the obligation ; and, though this be matter of law, the courts ■will not presume it.^ § 10. Of Fraud upon Creditors and Purchasers. Two statutes generally in force in this country, which ^•ere passed in the reign of Queen Elizabeth, lie at the foundation (though probably only exiDressive of the Eng- lish common law) of a branch of the law of fraud known as fraud upon creditors and purchasers. The first of these statutes is known as the statute of ^ That is, supposing any relation of trust or confidence had been 'iissolvcd, or the defrauded party was not weak-minded or intoxicated at the time. ' Juniata Bank v. Brown, 5 Scrg. & R. 226. 5 Note 1, supra ; Moxon v. Payne, Law Rep. 8 Ch. 881. * Kcmpson i'. Ashhee, Law Rep. 10 Ch. 15. 5 lb. See, also, McCarthy v. Decaix, 2 Russ. & M. G14. Further upon the subject of Waiver, see jiost, chapter on Rescission, § 3. § 10.] ACTUAL FRAUD. 127 13th Elizabeth, c. 5, and relates to creditors. This act declared that all feigned, covinous, and fraudulent feoff- ments, gifts, grants, convejiances, bonds, suits, judgments, and executions, of lands and tenements, or goods and chattels, dcA'ised and contrived of malice, fraud, covin, collusion, or guile, to the end, purpose, and intent to delay, hinder, or defraud creditors and others, should be deemed (as against the defrauded persons, their heirs, administrators, and assigns alone) to be utterly void. But it was provided that the act should not extei'.d to the conveA'ance of any estate in lands, tenements, heredita- ments, leases, rents, profits, goods, or chattels, made upon good consideration and bona fide to any persons or bodies not having at the time of the conve3"ance an}' notice or knowledge of such covin, fraud, or collusion.^ It will be observed that the statute does not declare all conveyances made without consideration (technically called voluntary conve3'ances) void : onlj' fraudulent con- veyances are referred to. On the other hand, any convey- ance made to hinder, delay, or defraud creditors is invalid unless made to a hona fide purchaser upon a good consid- eration and without notice. But, in order to have the benefit of this saving clause, the purchaser must be both a purchaser upon a good consideration and without notice : it is not enough that he has but one of the two positions, if the conveyance be fraudulentl}' made by the grantor or donor. ^ The terra "good consideration" of the statute, though c^immonl}' used in contradistinction to "valuable consid- eration," and thus importing only the consideration aiising 1 See this and the other English and American statutes relating to this subject, in Bigelow, Fraud, pp. 517 et seq. It will be seen that the statutes of Elizabeth have been much varied in this country. The substance, however, remains. 2 1 Story, Equity, § 353. 128 GEOUNDS OF RELIEF IN EQUITY. [Chap. YII. from blood or affection, has been understood to include both classes, so as to protect purchasers for value, as well as persons coming under the designation of the term in its ordinary' sense. -^ Voluntar}' conA'e3'ances, as has been stated, are pro- tected b}' the statute when not made in order to prejudice creditors. But it is not necessary for the purpose of invalidating a voluntary conveyance to prove an express intent in the grantor or donor to hinder or delay his cred- itors : such an intent ma}' be inferred from tlie nature of the transaction. If a person who is heavily indebted con- ve}^ property to his wife or children, without the payment of value, the transaction is deemed to be within the stat- ute. The conversance, it is true, is made upon a "good consideration," but it is treated as not made bona fide; for it is properly considered inconsistent with good faith towards existing creditors for the debtor to withdraw his propert}' from their reach without substituting other prop- ert}' in its plfice.^ This construction of the statute appears to be substan- tially equivalent to making the term " good consideration " read " valuable consideration ; " for wherever the transfer is made as a gift, the same objection can be made, that the debtor has not conformed to the dictates of good faith with his creditors. And the object of his bounty at the time of the conveyance has acquired no rights which should stand against them. The debtor should be just before he is generous. It was formerly supposed in England, and to some ex- tent in this countr}', that this result of invalidating the voluntary convej-ance was effected in any case of such a conve3'ance made bj' a debtor, regardless of the amount ol 1 Copis V. Middleton, 2 Madd. 410, 480; Hodgson v. Butts, 3 Crancli, 140. 2 1 Story, E-iity, § 355. 10.] ACTUAL FRAUD. 129 his debts as proportioned to the amount of his propert}-.^ This doctrine, however, was never generall}' accepted, and has been for the most part, if not eutirel}', abandoned. The doctrine which generally obtains has in substance been thus stated : A voluntary conveyance by a person not indebted cannot be impeached by future creditors upon the mere ground that it is voluntar}*. It must be shown to have been fraudulent, as with a view to defeat debts about to be created.^ On the other hand, the mere fact that the gi'antor or donor is in debt at the time does not, per se, afford ground for avoiding the transfer, even as to exist- ing creditors. The question whether the transfer in such a case is fraudulent or not is to be ascertained, not from the mere fact of the debt, but from all the circumstances of the case. If all the circumstances taken together fail to indicate fraud, the transfer is valid against the creditors, just as it is in all cases as between the parties to the gift or gi'ant. The mere fact, then, that the grantor is indebted to a small amount would not make the grant fraudulent. If it appear that he was in prosperous circumstances at the time, and unembarrassed, the fact that he has made a gift to his child or friend, retaining property enough for the payment of his debts, will not be ground for objection by creditors.^ The want of a valuable consideration may be a mark of fraud ; but it is not conclusive evidence of it. It may be met and disproved b}- countervailing evidence.* On tlie other hand, though there be no fraudulent intent, yet if the grantor was considerabl}^ in debt and embarrassed at the time, and on the eve of insolvency ; or if the value of the gift be unreasonable, considering the condition in » Reade v. Livingston, 3 Johns. Ch. 481, 500. 2 Sexton V. Wlieaton, 8 Wheat. 229; Hinde v. Longworth, 11 Wheat. 199. ' Hinde v. Longworth, supra. * lb. 9 130 GROUNDS OF RELIEF IN EQUITY. [Chap. VIL life of the grantor, and disproportioned to the amount of his property-, leaving bnt a scant provision for the payment of his debts, the transfer may be impeached by creditors.^ It should also be observed that a conversance ma}^ be within the terms of the statute, though it was made for full value. Instances have often occurred in which persons have given a full and fair price for goods, followed by an actua,.<;hange of the possession, and yet the transaction has been set aside at the instance of creditors on the ground that the sale was made to hinder or delay them in the recover}' of their demands.^ This supposes, however, that the purchaser had notice of the purpose of the seller. For example : A person with knowledge of a decree against another, buys the latter's house and goods, giving full price for them. The purchase is voidable at the instance of the judgment creditor, as being made with a view to prejudice him.^ In like manner if a person should know of a judgment and execution against a debtor, and, with a view to defeat it, should purchase the debtor's property, the transaction would be invalid.* But if the sale be bona fide., and not a mere cover for fraud, the mere fact of an intent to defeat a particular one of severM ordinary creditors will not render the transaction invalid.^ So, also, an insolvent may sell or mortgage where the purpose is to get money with which to pay his debts.* Fraudulent conveyances of the foregoing kind are to be distinguished from cases of sales or assignments amount- 1 Salmon v. Bennett, 1 Conn. 525, 548-551. 2 1 Story, Equity, § 3G9. 8 Cailogan v. Kennett, 1 Cowp. 432, 434. See, also, Watlsworth ». "Williams, 100 Mass. 12G ; Robinson v. Holt, 39 N. H. 557; ClemcntH V. Moore, 6 Wall. 299. * Cadogan v. Kennett, snjwa. 6 Wood V. Dixie, 7 Q. B. 892 ; Darvill v. Terry, 6 Hurl. & N. 807. 6 In re Colemere, Law Rep. 1 Cli. 128. § 10.] ACTUAL FRAUD. 131 ing to a mere preference of one creditor over another. Such transactions are lawful. Secret preferences, how- ever, made to induce particular creditors to agree to a general assignment, without the knowledge of the other creditors, are fraudulent and invalid as to the latter.^ Upon the subject of this statute of Elizabeth, there is, however, much diversity of decisions, consequent partly upon a diversit}' of language in the various statutes, and partly upon different views of the proper interpretation of similar language. The other statute above referred to, called the Statute of 27th Elizabeth, c. 4, was passed for the protection of subsequent purchasers. This, Uke previous act, is in force in substance throughout the greater part of the United States. This statute provided that all fraudulent, feigned, and covinous conveyances, gifts, grants, charges, uses, and estates, of lands, tenements, or hereditaments, made for the purpose to defraud and deceive such persons or bodies as have purchased, or shall afterward purchase, in fee- simple, fee-tail, for life, Uves, or years the same estates, or to defraud and deceive such as have purchased or shall purchase any rent, profit, or commodity out of the same, or an}' part thereof, shall be deemed (only as against the defrauded purchaser, having pui'chased for money or other good consideration, his heirs, administrators, and assigns) to be utterly void. The true interpretation of this statute, like that of the 13th Eliz., has, in some particulars, been a matter of much doubt. It was long a question whether the statute was intended to avoid all voluntary conveyances, or whether it applied only to conveyances made with a fraudulent intent, objection coming from bona fide purchasers without notice. The decision finall}^ reached in England was that all vol 1 1 Story, Equity, § 370. 132 GROUNDS OF RELIEF IN EQUITY. [Chap. VII untarj' conveyances were void as to subsequent purchasers, whether they pui'chased with or without notice ; and this, too, though the original couve3'ance was made bona fide. without any intention of committing fraud. ^ There has been much diversit}' of opinion in America upon this point. The English doctrine has been sti'enu- ously maintained.^ The later and the general current of authority in this country, however, is opposed to rule established in England. The true construction of the statute has been declared in America to be, that conve3'ances are not avoided merely because thej^ are voluntary, but because they are fraudu- lent ; that a voluntary gift of property is vahd as against subsequent purchasers and all other persons, unless it was fraudulent at the time it was executed ; that a^ subsequent conveyance for a valuable consideration is evidence, but not conclusive evidence, of fraud committed in the first (voluntary) convej'ance ; and that a voluntary gift made when the grantor is not indebted, in good faith, and with- out intent to defraud future creditors or subsequent pur- chasers, is good as against a subsequent purchaser for value with notice.' y, As between successive grantees under voluntary convey- ances, the first grantee will prevail, if the conveyance to him was made hona fide; otherwise not.'* Generally, how- ever, it is said that equity will refuse to interfere between different volunteers, leaving the parties where it finds them.^ 1 Doe d. Otey v. Manning, 9 East, 59. 2 Sterry v. Arden, 1 Johns. Ch. 261, 270 ; s. c. 12 Johns. 536. 8 Beal V. "Warren, 2 Gray, 447, Thomas, J. See 4 Kent, Comm. 463, note. * Naldred v. Gihana, 1 P. Wms. 580; Viers v. Montgomery, 4 Cranch, 177. 5 1 Story, Equity, § 433. § 10.1 ACTUAL FRAUD. 133 A purchaser for value, according to most of the authori- ties, is one "who, at the time of his purchase, advances a new consideration, surrenders some security, or does some other act which, if his purchase were set aside, would leave him in a worse position than he occupied before the pm-chase.^ One who has bought property, but not paid for it, is not a pm'chaser for value, though he has agreed to pay for it,^ unless he has given security for the payment.^ In some of the States, it is held that one to whom prop- erty, purchased through fraud, has been delivered by the defrauding bu^'er in pa3Tnent of a pre-existing debt, or in performance of an executory contract of sale made prior to acquiiiug possession of the property in question, though a consideration was paid at the time of the execution of the contract, is not a purchaser for value.* It is also laid down that an execution creditor does not become a piu'chaser for value by bupng goods at a sale thereof, without making an advance upon them, when the goods were fraudulently purchased by the defendant in the execution. Such a proceeding, it is said, gives the creditor no better title than a mere deliver}' would do from the de- frauding defendant. The creditor advances nothing, and can lose nothing by the proceeding. That is, the creditor had no right, under the circumstances, to levy upon the goods in question ; and the sale, without paj-ment or secu- rity thereof, availed him nothing.^ A mere attaching creditor is not deemed to have parted with value in making his lev3\ He parts with nothing in exchange for the attachment ; nor is the debt thereby paid. ' Boon V. Barnes, 23 Miss. 136. 2 Ilicks h'. Stone, 13 IVIinn. 434. 8 Starr v. Strong, 2 Sandf. Ch. 139 * Barnard v. Campbell, 58 N Y. T). See Smith v. Osbom, 39 Mich. 410. 6 Devoe v. Brandt, 63 N. Y. 462. 134 GKOUNDS OF RELIEF IN EQUITY. [Chap. VU. The propert}^ is seized merely for the purpose of afterwards haying it appropriated to that object.^ But, if the at- taching creditor buy at the sale and pay for the property, or furnish security therefor, he becomes a purchaser for value as much as if he had bought in the ordinary way at private sale. 1 Schweizer v. Tracy, 76 lU. 345, 351. § 1.1 PRESUIVIPTIVE OR CONSTRUCTIVE FRAUD. 1B5 CHAPTER VIII. PRESUMPTIVE OR COXSTRUCTIVE FRAUD. § 1, Of the Nature of the Subject. In cases of actual fraud, the subject of the precediug chapter, it devolves upon the plaintiff to give satisfactor}', express evidence of fraud. The kind of fraud now to be considered is of an entirely different nature. Corrupt conduct has no necessary connection with it ; and the bur- den of proof, instead of resting upon the plaintiff to estab- lish the alleged fraud, rests upon the defendant to relieve himself from the effect of a presumption of misconduct. Upon the appearance of certain relations between the parties to an impeached transaction, such relations being termed relations of confidence, a presumption arises that the defendant has been guilt}- of fraud, or something tantamount in law thereto, — a presumption thus raised by reason of the fact that the defendant at the time of the transaction in question occupied a position with reference to the plain- tiff which afforded him (the defendant) peculiar facilities for taking advantage of the plaintiff. Having such facil- ities for committing fraud upon the party whose interests have been intrusted to him, the law, looking to the frailt}' of human nature, requires the party in the superior position to show that his conduct has been free from reproach. A confidential relation arises wherever a continuous trust is reposed in the skill or integrity' of another, or the prop- erty or pecuniary interest, in whole or in part, or the bod- il}' custody, of one person is placed in charge of another. For the protection of the former, the law raises a presump- 136 GROUNDS OF RELIEF IN EQUITY. [Chap. VIII tion that any transaction between such parties has been effected through undue and illegal means by the latter, — that the party in the superior position has made use of his opportunity to the detriment of the plaintiff; and this pre- sumption must be overcome, if the transaction be im- peached, before the party in the superior position can retain the benefits acquired.^ With regard to the evidence in general, which will serve to overturn this presumption, it is an established rule that the defendant, the superior party in a relation of confidence, in order to hold the benefits of a gift by or contract with the plaintiff, must show that the plaintiff had competent and independent advice as to the propriety or advisability of the transaction, or at least that the defendant made to him a full disclosure of all facts connected -therewith ; unless the benefit consist in some mere trifling gratuit3^■^ The rehef granted in such cases stands, upon a general principle, applicable to all the variet}' of relations in which dominion ma^' be exercised by one person over another.' And, when a confidential relation is once estabUshed be- tween parties, either by act of law or by agreement, the rights incident to that relation continue until the relation terminates ; and time will not operate as a bar during the existence of the relation.^ § 2. Of Attorney and Client. The relation of attorney and client is one of close confi deuce, in which the attorne}' stands at great advantage For this reason, courts of equity often interpose, just as iu the case of the acts of trustees, to declare transactions in valid which in other cases would be held unobjectionable By the law both of England and of this country, a gratuity, 1 Rhodes v. Bate, Law Rep. 1 Ch. 252. 2 lb. 3 Huguenin v. Baseley, 14 Ves. 273, 285. * Blount V. Robeson, 3 Jones, Eq. 73. §2.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 137 or a security for a gratuity, given during the pendency of a suit, and with reference to the litigation, will seldom be upheld ; and, if services have been actually' rendered, the security or gift mil be valid in most cases only in so far as just services have been the consideration for it, especially if the client be a person of weak mind.^ The relationship of attorney and client, however, creates no absolute incapacit}- on the part of the attorney to re- ceive a gratuity from his client. He may not only receive a gift made without reference to a particular htigation or to particular services, but he may also receive a gift made in view of special pending or prospective services. As to past legal services, there has never been an}' doubt that the client can bind himself by a gratuit}' to his attorney. In cases of this kind, the relationship in hac re for which the gift was made having terminated, the attorney' stands in the same position which an}' other person would occupy ; and the transaction will stand or fall upon the general doc- trines of law pertaining to gifts. But as to pending or prospective services, the attorney, to hold the gratuity, must be prepared to show that he had divested himself of the advantage of his position, and put himself upon the footing of a third person. He must have disclosed every fact within his knowledge with regard to the propert}' given which might have had an influence upon the mind of the client, and he must have abstained from bringing to bear any pressure for the bestowment of the gratuity. He must have put the client at arm's length. If he can prove such facts, the gift will stand ; otherwise not." 1 Saunderson v. Glass, 2 Atk. 296 ; Tyrrell v. Bank of London, 10 H L. Cas. 26 ; Rose v. Mynatt, 7 Yerg. 30 ; Berrien v. McLane, Hoff. Cli. 421 ; Starr v. Vanderheyden, 9 Johns. 253; Mott v. Harrington, 12 Vt. 199. 2 See cases in note 1, supra ; also, Bigelow, Fraud, 195, 196. 138 GEOUNDS OF RELIEF IN EQUITY. [Chap. VIIL A bequest in favor of an attorney who writes a will is not necessarily' void. But the fact that the draftsman of a will takes a benefit under it is a circumstance which ought to excite the suspicion of the court, and call upon it to be vigilant in examining the evidence in support of the instru- ment ; in favor of which it ought not to pronounce unless the suspicion is removed and the court satisfied that the instrument expresses the true will of the testator.^ But the most that has been required in such cases is satisfactory evidence that the testator was of sound mind and clearly understood the contents of the will, and was at the time under no restraint or improper pressure.^ Sales and contracts in favor of a man's legal adAdser stand upon the same footing with gifts. They will be up- held as against the chent when the attorney was not, to use the common language of the books, attorney in hac re, and derived no information from the client. In other words, a sale b}' a client to his attorney will be upheld when the circumstances are not such as to put the latter under the duty of advising the former.^ The courts of this country will not annul a sale by a client to his attorney by reason merely of the existence of a confidential relation between the parties, nor even where, added to this, it is proved that undue influence was exercised b}' the attorney ; provided it appear that the client received an adequate consideration. Courts of equity wiU not interfere in favor of the client in cases in which no damage was sustained by him by reason of the transaction.* 1 Barry v. Butlin, 1 Curt. Eccl. 614, 637 ; Eiddell v. Johnson, 26 Gratt. 152. 2 Wilson V. Moran, 3 Bradf. 172; Riddell v. Johnson, supra. 8 Montesquieu i'. Sandys, 18 Ves. 302 ; Edwards v. Meyrick, 2 Hare, 60 ; Holman v. Loynes, 4 DeG., M. & G. 270. * KisHng V. Shaw, 33 Cal. 425; Hawley v. Cramer, 4 Cowen, 717. §2.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 139 It is a general doctrine that fraud without damage gives no gi'ound of action at law or in equit}'.^ But in the relation of attorney and client, mere inadequacy of consideration, though not so gross as to indicate fraud, will suffice to obtain the intervention of equity on behalf of the client.^ The burden of proving the sufficiency of the consideration, further, is upon the attorne}' ; since he is bound to prove the general fairness of the transaction.' The statement of consideration in a conversance between such parties is not enough of itself to support the deed, even where no evidence is offered to contradict it.* If none of the circumstances indicated exist (that is. if they are disproved), the sale will be upheld, though it ap- pear that the purchase was one of speculation on the part of the attorney, and by the development of other facts turn out greatly to his advantage. For example : A client sells and conveys to his attorney at law a parcel of mine- ral lands for a fair price according to the existing state of things ; the transaction being also free from undue influ- ence or concealment of facts on the part of the purchaser. A railroad, in contemplation at the time of the sale, is afterwards constructed through the neighborhood, enhanc- ing the value of the lands. The client cannot impeach the sale.^ Attorneys also rest under at least a prima facie ® inca- pacity to purchase adversel}^ the property of their chents at judicial sales. The position of an attorney in the man 1 Story, Equity, § 203; Bigelow, Torts (Students' Series), 32. 2 Holman v. Loynes, 18 Jur. 839; s. c. 4 DeG., M. & G. 270. See Bigelow, Fraud, 206. 3 DeRose v. Fay, 4 Edw. Ch. 40. 4 Gresley v. Mousley, 3 DeG., F. & J. 433. 5 Edwards v. Meyrick, 2 Hare, 60 ; Bigelow, Fraud, 204, 205. 6 Whether the attorney's incapacity in these cases is absolute or not, at the election of the client, is not settled. See Bigelow, Ftaud 208-211. 140 GROUNDS OF EELIEF IN EQUITY. [Chap. VIH agement of a litigation is considered as inconsistent with such a right of purchase.-' If an attorney" make such pur- chase, at all events if he pay an inadequate price, the act will be treated as done in trust for the client, or the sale will be set aside on equitable terms upon application by the client.^ Even after confirmation of a purchase at judi- cial sale, equit}" will open the transaction if any indirec- tion appear, such as a purchase b}- the attorney under an assumed name, and will order the property to be offered for sale again, beginning at the price finally bid by the at- torne}-. But, if no higher price be offered, the purchase by the attorn e}' will be binding.^ The situation of an attorney also disables him from pur- chasing an outstanding title to property claimed by the client, either from the State or from a third person, and holding the property adversely- to the cHent.* But if the client, upon full knowledge of the facts, should request his attorne}' to bu}' in the title for himself (as in a case where he intends to give or sell the propert}' to the attorne}-) , a fair purchase by the latter would probabl}' be valid. ^ The same disabilitj^ attaches to an attorney in the pur- chase of equitable interest^ or choses in action (such as judgments and notes®) of the client, and of property levied ujDon in execution against the client's debtor.'' The cUent may, if he elect within a reasonable time, and before the rights of innocent third persons have intervened, treat 1 Howell V. Baker, 4 Johns. Ch. 118 ; Smith v. Thompson, 7 B. Men , 305; Byers v. Surget, 19 How. 303; Wade v. Pettibone, 11 Ohio, 57. 2 See cases just cited. ' Sidney v. Ranger, 13 Sim. 108 ; Owen v. Foulkes, 6 Ves. 630, note. 4 Henry v. Raiman, 25 Penn. St. 354; Smith v. Brotherline, 62 Penn. St. 461; Case v. Carroll, 35 N. Y. 385; Harper v. Perry, 28 Iowa, 57. 6 See Hatch v. Fogerty, 10 Abb. Pr. n. 8. 147. •^ Stockton V. Ford, 11 How. 232, 2\.t '< Wade V. Pettibone, 11 Ohio, 57. §2.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 14] all such transactions as effected in his interest and foi his benefit. This privilege of the client, however, is to be taken with some qualification. The law will not permit the client to take the benefit of a purchase made b}' an attorney with- out reimbursing the latter to the extent of the sum paid in making the purchase,-' including, probabl}', interest. And it has also been decided that where an attorney, in the exercise of dihgence beyond that required of him, against a debtor of his chent has realized a fund due himself from such debtor, he is not bound to apply it to his client's claim against their common debtor.^ Similar rules concerning disclosure apply to the case of property sold to the client, either directl}' by the attorne}' as owner, or by a third person through the intervention of the attorney. In cases of the latter kind, the attorney must make a full disclosure to his client of an}^ interest he may have in the property' on pain of losing the same, or becoming a trustee for his client, according to the nat- ure of the case.^ For example : The defendant, a solicitor has had a private arrangement with R., by which he (the defendant) is to receive from him a share in certain prop- erty belonging to 11. , and to share in the profit of a sale of the property. The defendant has acted for the plain- tiffs in his capacit}^ of solicitor in the purchase of a large portion of that property, without communicating to them the fact of his interest therein. The defendant may be treated as having acted in the transaction as trustee for the plaintiffs.* In like manner, where a security has been obtained by the attorney from his client, either for the payment of fees or to indemnify him for acts done on behalf of the client, 1 Davis V. Smith, 43 Vt. 269. 2 Cox v. Sullivan, 7 Ga. 144. 8 Tyrrell v. Bank of London, 10 H. L. Cas. 26. * Tyrrell v. Bank of London, su2:ira. 142 GROUNDS OF RELIEF IN EQUITY. [Chap. VIII, the nature, purposes, and consideration of the security' will be narrowlj' scrutinized. The attorney -will not be per- mitted to make any undue gain out of it, or to use it in any waj' to the disadvantage of the client, further than is necessarily implied in making it available for the object for which it was given. When that object is accomplished, the security must be surrendered.^ And if a security ob- tained by the attorney from his client contain unusual stipulations to the client's disadvantage, it cannot as to them be enforced.^ Again, an attorney who will contract with his client during the pendency of litigation must not only not be guilty of undue influence and false representations or concealment, but he is bound to advise his chent of the falsity of any representations (concerning the contract) made to the client by others to the knowledge of the attorney. 8 Indeed, it is laid down that contracts will be set aside for the non-disclosure of legal consequences of which the attorney claims to have been ignorant.* Releases and compromises obtained from chents in respect of services already rendered, probably stand upon a differ- ent footing as to the bur.den -of proof, from gifts, sales, and the like, especially when made after the termination of the relation. An attorney is entitled, prima facie ^ to pay- ment for services rendered ; and a release or compromise, especially if under seal, is evidence of services rendered, and also of the value of such services. While, therefore, equity will readily listen to charges of unfairness, exorbi- tance, or fraud, preferred by, chents against their attor- neys,^ it would seem that the burden of impeaching the validit}' of such transactions would be upon the client. 1 See Ford v. Harrington, 16 N. Y. 285; Mott v. Harrington, 12 Vt. 199. 2 Cowdry v. Day, 1 GifE. 316. » Smith v. Thompson, 7 B. Men. 305. < Bulkley v. Wilford, 2 Clark & F. 102 ; s. c. 8 Bligh n. s. 111. 6 Barry v. Wliitncy, 3 Sandf. 696. §2.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 143 Accounts between attorney and client, however, stand upon a different ftwting from those between parties treat- ins; at arm's length. That which between others would be a conclusive settlement is not so between them. Set- tlement and payment of a bill, even though a long period may since have elapsed, is not conclusive, and will not bar an examination of the fairness of the demand. If the settlement were made during the pendency of litigation as to which it is made, the client is presumed to have been somewhat under the control of the attorne}^, and the ac- count will be opened.-^ It is not essential to the creation of the relation of attorney and client that the attornej^ should be emplo3-ed in litigation. It is enough that he is engaged profession- ally, to exercise his skill or to give advice as a law3'er. An attorney who is emploj'ed and consulted as such to draw a deed, or to make application for an original title to land, becomes thereby in hac re the attorney of the party who has thus engaged him for the purposes now under consideration. In hke manner, the mere obtaining by a law3'er of a power of attorney to collect a judgment, under which the collector is to have a share of the proceeds of the judgment is deemed sufficient to bring the parties within the relation of attorney and client, and to enable the latter to avoid the contract in case of a non-disclosure of facts. ^ But a mere proposition by a former attorney, who has not recently been professionally emploj'ed b}^ the person to whom it was made, the proposition being rejected, does not renew the relation of attorney and client.* So the mere consulting of legal counsel, and directing him to pre- 1 Crossley v. Parker, 1 Jac. & "W. 462 ; LangstafEe v. Taylor, 14 Ves 263. 2 White V. Whaley, 3 Lans. 327. 3 Taylor v. Boardman, 24 Mich. 287. 144 GROUNDS OF RELIEF IN EQUITY. [Chap. VIII. pare a conveyance, which, however, is not done, owing to a failure of negotiations with the intended grantee, will not prevent the attorney' from purchasing adversely to the party who employed him, provided he acquired no infor- mation from him relative to the property.^ Nor will the actaal existence of a hmited relationship of attorney and client prevent the attorney from acting adversely to the client in matters beyond the limits of such relationship, where he has derived no information from the client.^ Where an attorney is employed to collect a claim secured by mortgage, his relation to his client ceases after fore- closing the mortgage and, under his client's direction, bidding: off the land at the sale thereunder. If after- wards the same land should be put up for sale, as for non-paj-ment of taxes, the attorney may purchase, pro- vided he has not been further retained by the 'client. And his retention of the deed executed by the sheriff under the foreclosure sale, to secure his fees, would not be a continuance of the relation of attorney and client.' The same principles which appl^' to transactions between attorney and client, apply between persons who stand in a similar relation to litigation, though the relation be not in strictness that of attorhe}^ and client. Thus, a party who acts as the confidential adviser of a litigant, though such adviser be not an attornej^ at law, is bound to the same circumspection of conduct in his transactions with the litigant, and acts under the same disabilities as if he were a lawj-er. Gifts and sales to him will be voidable under the same circumstances that would render them invalid in cases of attorney and client.* The same is 1 Porter v. Peckham, 44 Cal. 204. 2 Devinney v. Norris, 8 Watts, 314. 8 Baker v. Davis, .35 Iowa, 184. * Buffalow V. Buffalow, 2 Dey. & B. Eq. 241; Carter v. Palmer, 8 Clark & F. 657, 707. §2.J PRESUMPTIVE OK CONSTRUCTIVE FRAUD. 145 true, of one who has constituted himself the legal adviser of another,^ or has offered legal advice," and also of a clerk of an attorney who has gained the confidence of his employer's client.'^ The doctrine upon all this subject is that in respect of acts done pending the litigation or other matters involving legal advice, or in expectation thereof, the Court of Chan- cery- will extend to the client its aid in regard to gratuities and unfortunate contracts obtained by undue influence, suppression of facts, or the failure to give such advice as would be given b}- a disinterested attorney in the matter.'* The rule bears alike against transactions made with ref- erence to present or future legal business. If the trans- action be intended as compensation for legal services, or for security of the same, the court will see that the compensation is a reasonable one.^ If it be intended as a gratuit}-, it will only be upheld upon affirmative proof on the part of the attorney or quasi attornc}' that the parties stood in the position of strangers ; that is, that the attornej- had so far divested himself, pro hac vice, of the advantage of his position, as to leave the client upon an equal footing with liimself. But, after the litigation or other legal business has been wholl}' completed, the parties are considered as standing, with reference to such past business, in the situation of strangers ; or, to use the common expression, they are now 1 Tate V. Williamson, Law Rop. 1 Eq. 528 ; s. c. Law Rep. 2 Ch. 55. 2 Dayis v. Abraham, 5 Week. Rep. 465. 8 Hobday v. Peters, 28 Beav. 349; Poillon v. Martin, 1 Sandf. Ch. 569. * It is not necessary that the independent advice of another law- yer should be given ; but, in the giving advice by the purchaser or recipient of the bounty to his client, he must put himself in the posi- tion of a disinterested third party. See Cutts v. Salmon, 21 Law J. Ch. 750. 5 The rule does not prevent the attorney from contracting in ad- vance as to the value of his services. 10 1 16 GROUNDS OF RELIEF IN EQUITY. [Chap. VIII Biipposccl to be at arm's length. The client may now make a binding disposition of his property- in favor of his attor- nc}', wlicthcr b}' way of gratuity, of sale, or of compensa- tion for services at tlicir agreed value ; ' and tlie transaction will be subject to impeachment only as other transactions between persons not in confidential relations are impeach- able, with probably this exception, that an attornc}- would not be justified in concealing from his client facts affecting the transaction, which he had learned as his attorney. § 3. Of Principal and Agent. Agents also occup}- a relation of trust, with peculiar op- portunities for committing fraud upon their principals ; and the rules of law in respect of transactions between them, concerning the interest in trust, are in some particulars more unfavorable to the agent than the rules relating to nttornc}' and client are to the attoriic}'. Tliere is, however, no rule prohibiting an agent from dealing with his principal in respect of the trust. At the same time, the presumptions of law, as in the case of deal- ings between attorne}' and client, are against him. If an agent seek to uphold a transaction between himself and his princi[)al, or a principal to avoid a transaction between himself and his agent, the burden is upon the agent to show that he gave to his principal the same advice in the matter as an independent, disinterested adviser would have done ; and that he made a full disclosure of all he knew respecting the propert}-, and that the principal knew with whom he was dealing and mad"e no objection, and finally, that the consideration was fair and just.- The position of an agent differs from that of an attorney in that it appears to be unnecessary that the principal should have suflJered injury from the agent's action, or 1 Walmoslcy v. Booth, 2 Atk. 27. 2 Tlic autlioritics for this general rule are numerous. See Bigelow Fraud, 223. §3.J PRESUMPTIVE OR CONSTRUCTIVE FRAUD, 147 would suffer injury if the transaction were uplield.^ A purchase, for instance, of the agent's propert}' b}' the prin- cipal, which the principal has bought through his agent as the property' of another person, is deemed to be impeach- able b\' the principal on grounds of public policy alone ; and it is declared not necessary for him to show either that fi'aud was intended, or that loss afterwards took place in consequence of the transaction.'^ Subject to a strict and jealous investigation in equity, an agent maj* bu}' from his principal, if the latter, being fuU^- informed who is the proposed purchaser, and laboring under no influence or deception on the part of the agent, be willing to sell to him.^ But, as has just been seen, an agent is not permitted to act clandestinel}', setting up a nominal purchaser, and dealing with his own principal in the name of a third person. The principal would thus be thrown off his guard. Instead of a person acting solely with a view to his (the principal's) interest, the agent would practicall}' be contracting with himself, and fixing the price to be paid b}' himself. Upon such principles as these, it is considered that if a person make himself an actual principal in a transaction in which he is ostensibly concerned as a broker, he can maintain no suit, either at law or in equit}", in respect thereof. A broker is the agent of the buj-er, or of the seller, or of both, and is bound to exercise his skill in favor of those who, for that sole purpose, have confiden- tiall}" emploj'ed him ; and if he were allowed to introduce himself as principal, his duty and his interest would be set in decided opposition.* 1 Murphy v. O'Shea, 2 Jones & L. 422, 425 ; Gillett v. Peppercorne, 3 Beav. 78. 2 Gillett V. Peppercorne, supra. 8 Morse v. Royal, 12 Ves. 355, 373 ; Gibson v. Jeyes, 6 Ves. 266, 277 * Lowtlier v. Lowther, 13 Ves. 95 ; Ex parte Dystcr, 1 Meriv. 155. 148 GROUNDS OF RELIEF IN EQUITY [Chap. VIII And not only where an agent emplo3-ed to sell property becomes himself the real purchaser will eqnit}' charge liim (subject to the qualification heretofore stated) with the value of the estate ; but also whenever such agent from corrupt or even doubtful motives has let part of his em- ploj'er's estate at a rent less than he could have obtain iid from a responsible tenant, the agent is himself liable In his lifetime, and his estate is liable after his death. For as to the event of the agent's death, it is to be observed that though at common law actions of tort sounding in damages (except trover) generally die with the wrong- doer, the ground of jurisdiction in equity in such a case is deemed to be debt.^ In considering whether an agent can be allowed the benefit of any voluntary' settlement obtained from his em- plo3'er before the connection between them was dissolved, it is necessary to ascertain clearly not only that such set- tlement was the purely uninfluenced and well understood act of the principal's mind, and that he executed the gift with that full knowledge of all its effects and consequences which it was the agent's duty to communicate ; but a fur- ther question will arise, to, wit, how that intention was produced, — with reference to which the pecuniary circum- stances and transactions between the parties must be attended to.^ The rule of law forbidding the abuse of confidence applies as strongly against those who have gratuitously or offlciousl}^ undertaken the management of another's prop- erty, as to those who are retained or appointed for tliat purpose and paid for it.^ Hence, if a person of his own motion become gi-atuitous agent of another to negotiate 1 Hardwicke v. Vernon, 4 Ves. 411, 417. 2 Huguenin v. Baseley, 14 Ves. 300. 8 Rankin v. Porter, 7 Watts, 300 ; Hunsaker v. Sturgis, 29 Cal. 142 i Doorman v. Jenkins, 2 Ad. & E. 256. §4.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 1^9 a sale of stock, and then receive compensation from a purchaser as a reward for acting in his behalf and procur- ing a sale for less than the purchaser would have paid, the agent becomes liable to the vendor for the loss sus- tained by the breach of confidence ; ^ and if the agent him- self become part purchaser, the sale can be set aside, even if it cannot be impeached without proof of such fact. After the termination of the agenc}', the parties may contract so as to bind the late principal just as though the confidential relation liad never existed ; provided the agent does not conceal from the principal any material facts (of which the latter is ignorant) that were ascertained dui'ing the ageuc}'. § 4. Of Trustees. The duties of trustees to their cestuis que trust have already been considered,^ and nothing more than an epitome of the subject need be here presented. In all delicate or complicated transactions between trus- tees and their cestuis que trust, it devolves upon the trustees to see that the latter are properly advised as to their rights. And this advice should come from some compe- tent, disinterested person, whom the cestui que trust has himself authorized to give counsel.^ A trustee cannot be both buyer and seller at the same time except upon the amplest disclosure. It would be fatal to his purpose if he should buy from the cestui que trust through a nominal purchaser, set up to conceal the true party purchasing ; and the same would be the case wheie he had a part interest in the enterprise, undisclosed to the vend(;r at the time of the sale. It would be equally fatal to his puipose to effect a sale of his own property to the cestui que trust, if the trustee should hold out another 1 Hunsaker v. Sturgis, supra. 2 Ante, pp. 31-47. 3 Lloyd v. Attwood, 3 DeG. & J. 6U 150 GROUNDS OF RELIEF IN EQUITY. [Chap. VIII as owner of the property, and effect a sale in Ms name as vendor.^ The rule, however, that a trustee cannot act in the double capacity of seller and buyer towards his cestui que trust does not necessarily apply to all dealings with the latter. A trustee may hwy from his cestui que trust, provided that, upon scrupulous examination of all the circumstances, it appear that there was a clear contract of sale ; that the vendor intended that the purchaser should bu}' ; and that no fraud or concealment or advantage was taken hy the trustee in respect of information acquu'ed by hhn in his fiduciary position. '^ But though the authorities agree that a man may put off the confidential character of trustee, it may frequently be difficult to determine that he has done so effectuall}',^ — a question to be investigated with gi-eat jealousy. And even though the connection has been dissolved, still the trustee cannot use, against the interests of the cestui que trust, any information derived by him while in the trust position unless such information has been fully imparted to the cestui que trust.* When trustees depart from that rule of conduct which their duty prescribes, neither they nor those who claim under them with notice, can sustain an interest derived from the breach of trust. Xor are the cestuis que trust called upon in such cases to prove actual injury in order to enable them to set aside the objectionable transaction.^ But the cestuis que trust ma}-, with full knowledge of hig rights, when under no legal disability or undue influence, ^ See, upon this subject, "Woodhouse v. Meredith, 1 Jac. & W. 201 2 Coles V. Trecothick, 9 Ves. 234, 247. 3 Ex parte Bennett, 10 Ves. 381, 394. * Ex parte Lacey, 6 Ves. 626 ; Coles v. Trecothick, supra. * 1 Hovenden, Fraud, 484 §4] PRESmiPTIVE OR CONSTRUCTIVE FRAUD. 151 confirm such acts and debai* themselYCS from making objection. Where a person has the management of two estates, in ono of which he is interested personally, and in the other as trustee of an infant, he will not be allowed to refer an engagement into which he has entered to one account or the other as he may think fit, after he has seen the proba- bility of its turning out advantageouslj" or otherwise. If he has once embarked the infant's property, though no part of the trust fund has been laid out, the trustee can- not, in the hope of personal gain, abandon the contract on the part of the infant and take it upon himself. ^ It is an inflexible rule that, when a trustee buys at his own sale, the cestui que trust maj* treat the sale as a nullit}', though the trustee paid a fair price, — not because there is necessarily, but because there is likely to be, fraud.' Thus, it has been decided that where shares of stock, standins: in the name of a trustee, were assessed bv an act of the Legislature and put up at auction for non-pay- ment, and struck off to the trustee, the sale was invalid, and the trustee liable in trover for the value of the shares at the time of the sale, and the dividends he had received thereon, less the amount of assessments and expenses of sale.* Still, if in buying, the trustee acted without moral tur- pitude, equit}' wiU protect him to the extent of giving liim a lien upon the property' for any advances of a reasonable kind which he may have made.^ And if the trustee, acting hoaajide^ put improvements upon the trust property which he has purchased, he will be allowed therefor upon a resale ; provided the premises bring more than the sum agreed to be paid by the trustee,® 1 lb. 481 ; Wilkinson v. Stafford, 1 Yes. jun. 32. 2 Brothers v. Brothers, 7 Ired. Eq. 150. ^ Freeman r. Harwood, 49 ]SIaine, 195. * Mulf ord V. Llinch, 3 Stockt. Ch. 16 ' Mason v. :Martin, 4 Md. 124 152 GROUNDS OF RELIEF IN EQUITY. [Chap. VIll. § 5. Of Guardians. Property transactions between guardian and ward are looked upon with tlie same suspicion which arises in tlie eases above considered. But there is no absolute prohibi- tion of sales by the guardian to the ward or bj' the ward to the guardian, or even of girts by the ward to his guardian. The burden of proof, however, rests upon the guardian, if the sale or gift should be brought into question by the ward ; and the guardian must be able to show that the ward acted with all the deliberation and infonnation neces- sary to a right understanding of his act.-' The principle of law which protects a ward from the consequences of improvident transactions with his guar- dian, extends to the execution of a will by the ward in %vor of his guardian. A testament so made will be-held void as to the latter, unless the legal presumption of the exercise of undue influence is removed.^ Nor does the guardian's disability terminate the moment of the dissolution of the relation. The jurisdiction of equity will be exercised, for instance, to restrain an ac- tion at law upon a negotiable security obtained b}' a guardian from his ward while under the influence, though absolved from the connection, of the confidential relation. For example : The plaintiff, two years and a half after coming of age, at the request of her late guardian, with whom she is still living, indorses a promissory note made in his favor. The note comes into the defendant's hands for value, but with notice of the circumstances. The plaintiff now files a bill to restrain the defendant from suing her upon the indorsement. She is entitled to the injunction.^ ludecd, when a person acts as guardian or trustee In 1 Meek v. Perry, 36 Miss. 190. 2 ib. * Maitland v. Backhouse, 16 Sim. 68. §6.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 153 the nature of guardian over an infant, the courts are extreme!}' watchful to prevent such person taliing anj' advantage upon the ward's attaining majorit}',-^ and also at the time of setthng accounts or delivering up the trust. Gifts and releases of rights to the guardian under such circumstances are seldom permitted to stand, even though there may have been no actual unfairness in the conduct of the guardian at the time. Bounti(!S by wards just come of age are not, however, necessarily invalid. A ward ma^' even at such a time mt,ke an unimpeachable gift to his guardian ; as where, being himself in actual possession of an estate, and fully sui Juris, he makes a gift with his e3'es open, by wa}- of reward for care and trouble.^ A person entering upon the estate of an infant, whether the infant had been in possession or not, will be fixed with a fiduciarj' relation towards the infant ; first, whenever he is the actual guardian of the infant ; secondly', when he is so connected by relationship or otherwise with the infant as to have the duty to protect, or at least not to prejudice, the infant's rights ; or, thirdly, when he takes possession with notice of the infant's rights.^ § 6. Of Executors and Administrators. Executors and administrators also come under the gen- eral designation of persons standing in confidential rela- tions, and the principles alread}* stated generally apply to them. Al executor or administrator cannot, without consent, unite the opposite characters of buyer and seller. Thi3 rule applies to purchases by executors at open sales, though they were empowered b}- the will to sell the estate 1 Tucke V. Buchholz, 43 Iowa, 415. 2 Hyltou V. Hylton, 2 Ves. sen. 548. 8 Quinton v. Frith, Law Rep. 2 Irish Eq. 396. 154 GROUNDS OF RELIEF IN EQUITY fCuAP. VIII of their testator for the benefit of heirs and legatees, of whom they themselves were part. ^ Nor cau an executor or administrator effect the purpose of a purchase by buy- ing through another person.^ The rule which limits the rights of executors and ad- ministrators, and persons generally in situations of trust, as to buying the property under their charge, does not go so far as to restrain them from buying the property from one who has purchased the same for value and in good faith. If there be no collusion between such parties, the executor, administrator, or trustee may treat for the pm-- chase as in other ordinarj^ cases, and acquire the title to , the property immediately after it is sold to th€ party from whom he buj's.^ But such purchases will be carefully scrutinized, if-there be any ground to suspect collusion. The fact, for instance, that a purchaser at an administrator's sale is a man of no pecuniar}' means, that on the same day on which the administrator, conve3^s the property to him, he reconveys it to the administrator, is sufficient, in the absence of ade- quate explanation, to show that the first purchase was made in the interest of the administrator ; and the trans- action may accordingly be set aside.* The mere fact, however, that the property is conveyed to the adminis- trator by the first purchaser will not suflflce alone to fix fraud upon the administrator.^ A part}' who voluntarily interferes with and enters upon the management of an estate in behalf of heirs as their representative, and as such apquires information to which a stranger would not have access, stands in the situation of an administrator or executor duly appointed. And in 1 Michoud V. Girod, 4 How. 503. ^ gj-ott v. Umbarger, 41 Cal. 410 * Wortman v. Skinner, 1 Beasl. .358. ♦ Obert V. Obert, 2 Stockt. Ch. 98. 6 Vasquez v. Richardson, 19 Mo. 96. § 7.] PRESUMPTIVE OE CONSTEUCTIVE FRAUD. 155 treating with the heirs for the purchase of the estate, he is bound to disclose every matter which it is important they should know, or the sale will be invalid, unless the necessit}' of such disclosure is distinctly and fully waived.* "When an txecutor's purchase at his own sale is set aside, the executor will not be held to take the property at what it was worth by the estimate of witnesses. The property will again be put up for sale ; but if more cannot be obtained for it than the executor was to pay, his pur- chase will be confirmed.^ A court of equit}- will not assist in carrying into effect compositions of claims b}' an executor or administrator, unless the party praying the same will first disclose all the circumstances of the case, that the court may see that there has been no fraud, and that every thing was faii'.^ § 7. Of Parent and Child. In respect of bounties by children in favor of their parents, it has been laid down by high authority that the Court of Chancery will not look upon such transactions in the light of objectionable reversionary bargains, but will regard them as family arrangements, with a reasonable degTee of jealousy, and will not look into all the motives and feelings which might actuate the parties in entering into such transactions.* And the same principle often has been asserted, and is well settled law.^ Still, it is true that the courts look with jealousy upon gifts of valual)le property made by children to their parents, and this even when they are made after the donors have reached majority, if recently after. This is more especially the case when the parent has during the minority of the child 1 Casey v. Casey, 14 Dl. 112. '■^ Bailey v. Robinsons, 1 Gratt. 4. 8 Clay V. Williams, 2 Muuf. 105. 4 Tweddell v. Tweddell, Turn. & R. 1, Lord Eldon. 6 Wallace v. Wallace, 2 Dru. & War. 452, 470; Baker v. Bradley 2 Smale & G. 631. 559. 156 GROUNDS OF RELIEF IN EQUITY. lChap. VIU. been guardian of his property and in receipt of the icnts of a considerable estate. In all cases, the burden of proof hy the Enghsh law rests upon the parent to show that the gift was made, not in consequence of representations on his part, but by the spontaneous act of the child, and that the child had full knowledge of the nature of the deed by which the gift was effected, and of his own position and rights in reference to the property. ^ A gift by a child just come of age to his father or mother is not, then, necessarily void even in England ; and in this countr}' it is not even prima facie invalid. The rule in tlie United States is considered to be that there must be some evidence of undue influence on the part of the parent, operating upon the hopes or fears of the child ; and the exercise of such influence will not be presumed when the donor or grantor had at the time arrived at majority.^ However, it is laid down b}' the same authority that the natural influence which a parent has over a child renders it important for courts of justice to watcli over and protect the interests of the latter. And hence all contracts and conveyances whereb}' benefits are secured b}' children to their parents are objects of jealousy ; and if they be not entered into with scrupulous good faith, and are not rea- sonable under the circumstances, they will be set aside un- less third (innocent) persons have acquired an interest under them.^ On the other hand, while in the case of a gift from a minor child to a parent undue influence may be inferred from the parental relation alone, there arises no presump- tion of improper influence when the gift is from the parent to the child. In the former case, it may be inferred that the bount}' proceeded from the exercise of parental authority. It is natural that the known wishes of a parent should be strongly felt by a child accustomed to impUcit trust and 1 Wright V. Vanrlerplank, 2 Kay & J. / ; s. c. 8 DeG., M. &G. 133. 2 Taylor v. Taylor, 8 How. 183, 201. » Taylor v. Taylor, siojr^ §8.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 157 obedience. But when the gift is from the parent to the child, the case is different. A parent does not in ordi- nary cases 3'ield obedience to his child further than affec- tion or dut}' prompts ; and it is in accordance with the promptings of nature that parents should make gifts to their children. But the principles applicable to gifts by childi'en to their parents apply when the natural position of the parties has become reversed, and the child has become the guardian or protector of his aged or infirm parent, and the manager of his estate. Thus, it has been decided that a son, the principal legatee of a will procured by him from an infirm mother, who was generally under his influence, must, in a contest upon the will for alleged fraud on his part, pro- duce the most satisfactory evidence of the uprightness of his conduct.^ Again, a son emplo3'ed hy his father to procure a deed making a certain disposition of his property, thereby as- sumes a fiduciary relation to his father. If in such a case the son should procure a deed to himself, or to himself and one of his brothers or sisters, to the exclusion of the rest, it would require strict proof on the part of the beneficiaries under the deed to show that they had taken in accordance with the free will and consent of the parent.^ There is no such relation of trust and confidence exist- ing between a son-in-law and his mother-in-law, by force of the mere relationship, that in dealings between them the latter should be supposed to act upon the presumption that there would be no concealment of facts from her.^ § 8. Of Physician and Patient. Upon the same principle of coiTccting abuse of confi- dence, equity looks with favor upon the claim of a patient » Simpler v. Lord, 28 Ga. 52. 2 Martin v. Martin, 1 Heisk. 644, 8 Fish V. Cleland, 33 111. 238; Cleland v. Fish, 43 111. 282. 158 GROUNDS or BELIEF IN EQUITY. [Chap. VIIL against his medical attendant in respect of relief ft-^om gifts made to him. Relief has been granted, for instance, against the liability of the maker of a promissory note, taken by his medical attendant from a poor patient, on the occasion of an accession of property by him, bej'ond what was really due for his services even upon the most extravagant scale of charges.^ § 9. Of Spiritual Advisers. The relation of spiritual adviser, where the person holding it procures a bounty for the church under his charge, may sometimes afford sufficient ground to raise a prima facie presumption of the exercise of undue influence. Thus, it has been decided that the rector of a church which is residuary legatee in a will, the rector having the nomi- nation to two scholarships created by it in a theological seminary, having procured the draft of the will with him- S'Gif named therein as executor, and having superintended its execution, is a person so benefited by it that the ques- tion whether the will was freely executed should be care- fully examined.^ § 10. Of Expectant Heirs. The foregoing classes of cases complete the common heads of persons standing in confidential relations towards each ; but there are other cases in which a similar burden of proof is cast upon persons seeking to maintain the validity of gifts and bargains against an attempt to impeach the same. One of these is that of bargains obtained from ex- I ectant heirs. Generally speaking, as has elsewhere been observed,' a contract cannot be avoided on the gi-ound that advau- 1 Billage v. Southee, 9 Hare, 534. 2 In re Welsh, 1 Redf. 238. See, also, Lyon v. Home. Law Rep. 6 Eq. 655. 8 Ante, p. 108. § 10.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. 159 tage, if not fraudulent, has been taken of distress ; but the case of an expectant heir, dealing as to his expectancy during his ancestor's lifetime, is an exception. To that class of persons equity has extended a degree of protec- tion approaching nearly to fixing an incapacity to bind themselves b}^ any contract.^ Though the sale of a reversion by an expectant heir may be supported, still, if it appear that the vendor is a 3'oung person, desirous of raising money upon post obit obliga- tions, and the sale is to take place at auction, for instance, without proper safeguards for the protection of the ven- dor's interests, he will be considered as acting under the dominion of those who deal with him. And a sale at auc- tion under such circumstances would not afford fair evi- dence of the market price of the property.^ Nor will it suffice to make the sale of an heir's expec- tancy effectual that a present interest is included, at least if that be small and the facts indicate that the purchase of such interest was colorable only, so as to give to the main transaction only a fair appearance.^ It has been said by eminent authority to be incumbent upon those who have dealt with an expectant heir relative to his future interest to make good the bargain by show- ing that a full and adequate consideration was paid.* And though some doubt has been suggested as to the correctness of this proposition,® it appears to express the estabhshed rule of equity.® But by this rule is meant, not the valuation that ma}' be set upon the interest by actu- aries upon the tables of mortality, but the fair market 1 Chesterfield v. Janssen, 2 Ves. sen. 125, 157. 2 Fox V. Wright, 6 Madd. 111. ' Davis V. Marlborough, 2 Swanst. 108, 151 * Gowland v. DeFeria, 17 Ves. 20, 24, Sir William Grant. » Edwards v. Browne, 2 Coll. C. C. 100, 104 ; Hincksman v. Smitb. 3 Buss. 433, 435. 6 Aldborough v. Tiye, 7 Clark & F. 436, and notes (Am. ed.). 160 GROUNDS OF RELIEF IN EQUITY. [Chap. VIII. price at tlie time of the dealing.^ The rule itself, how- ever, has recently been abrogated in England by act of Parliament. 2 But the common-law doctrine still prevails generally' in this country.^ The application of this rule is not affected either by the fact that the transaction was a charge and not a sale, or that the expectant heir was at the time a person of mature age, or that he perfectly understood the nature and extent of the transaction. Nor is it deemed necessary for the heir to show that he was in pecuniary distress at the time. That is assumed from the circumstance of his havins: dealt with another upon such a footing ; and the probability that the person advancing the money has taken advantage of that distress is the reason why the courts throw upon him the burden of proving that the bargain was reason- able." When, however, the transaction is set aside for mere inadequacy, 5 the evidence failing to disclose actual fraud, the conveyance will be decreed to stand as a securit}- for the money paid and interest. The suit in such a case is con- sidered as in the nature of a bill for redemption ; and the vendor has sometimes been charged with the costs of the suit.^ In this class of cases, fraud does not mean deceit or cir- cumvention any more than it does in the ordinary case of confidential relations. It is enough that there has been an unconscientious use of the power arising out of the situation of the complaining party. When the relative situation of the parties to a transaction is such as to raise 1 Aldboroiigh v. Trye, 7 Clark & F. 430, and notes (Am. ed.). Upon this point, Gowland v. DoFeria, supra, was overruled. 2 31 Vict. c. 4. 3 1 Story, Equity, §§ 336 et seq. * Bromley v. Smith, 2(3 Beav. 644. ^ This is not allowed in Virginia. Mayo v. Carrington, 19 Gratt. 74. « Bawtree v. Watson, 3 Mylne & K. 339. § 12.] PRESUMPTIVE OR CONSTRUCTIVE FRAUD. IGl this presumption, the transaction cannot stand unless the person defending it is able to repel the presumption by evidence proving it to have been fair, just, and rea- sonable.^ The doctrines of equity as to the relief of expectant heirs from unconscionable bargains have not been affected by the repeal of usury laws.^ § 11. Of Sailors. The courts treat with like indulgence the rights and interests of common sailors engaged in the mercantile or naval service.' The contracts of seamen are watched with great jealousy, and will generally be set aside whenever any inequalit}' appears in the bargain or any undue advan- tage has been taken ; * of which, it seems, there easily arises a presumption. § 12. Of Feeble, Weak-minded, aud Illiterate Persons. One who deals in property with an aged and feeble per- son is bound, if the transaction be impeached by the latter, to prove its fairness.^ And though a contract made by a person of sound mind and fair understanding may not ordinarily be set aside merely because it is a rash or improvident bargain, still if the same contract be made with a person of weak understanding, there arises an infer ence that it was obtained by fraud or undue influence.® In hke manner, where the vendor of an estate is an ill it orate person, unable to judge of the precautions which should be taken in selling, or of the proper mode of sale, or of the mode of securing the price when not paid down, 1 Aylesford v. Morris, Law Rep. 8 Cli. 484. 2 Aylesford v. Morris, supra. ^ How v. Weldon, 2 Ves. sen. 516, 518 * 1 Story, Equity, § 332. 5 Wartemberg v. Spiegel, 31 Mich. 400 6 Elhs V. Mathews, 19 Texas, 390. 11 162 GEOUNDS OF RELIEF IN EQUITY. [C^hap. VIIL and acts without professional advice, these circumstances added to inadequac}' of cunsideration will afford such per- son ground in equit}^ for relief.^ For example: Real estate is sold b}' an elderh', uneducated woman in humble Hfe to a person far above her in station. The bargain is made without the intervention of an}' one acting on her behalf; and the consideration is inadequate. The transaction will be set aside, though no actual fraud be shown. ^ Slight circumstances, however, will sometimes suffice, — such possibly as the refusal of the complaining part}' to have counsel, — to overturn the presumption of unfairness.' It has been decided that proof that the grantor of land was a very ignorant and illiterate man, and could not read writing, and that the deed was not read to him, -is not alone sufficient to avoid the conveyance unless the grantor requested that the deed should be read to him.^ But on the other hand it has been decided that a person dealing with an illiterate man, unable to read and write, and tak- ing from hhu a promissory note for the payment of money, and also a deed for propert}' in trust to secure the pa}-- ment thereof, must show,s when seeking to enforce the securities, that the}', or the material parts of them, were read and fully explained to the defendant before they were executed, and that he full}- understood their meaning and effect.^ It may, indeed, be laid down in general that the con- tracts of weak-minded persons will be held invalid in equity if the nature thereof justify the inference either that the party through undue influence has not exercised a 1 Clark V. Malpas, 4 DeG., E. & J. 401. 2 Baker v. Monk, 4 UeG., J. & S. 388. 8 See Harrison v. Guest, 6 DeG., M. & G. 424. * Hallenbeck r. Dewitt, 2 Jolins. 404. 6 Selden v. Myers, 20 How. 506. § 12 ] PRESUMPTIVE OE CONSTEUCTIVE FRAUD. 163 deliberate judgment, or that he has been imposed upon or overreached by cunning or artifice. Where inadequacy' of consideration or undue influence is joined to imbecihty or weakness of mind arising from old age, sickness, intem- perance, or other cause, equity will set aside the transac- tion at the suit of the injured party ; i unless, in the case of inadequac}^, the act can be accounted for upon some rational and sufficient ground, as that the defendant was a natural subject for the plaintiff's gratitude and bounty, and the contract or transaction was in all respects fairly effected. 1 Tracey v. Sacket, 1 Ohio St. 54. 164 GROUNDS OF RELIEF IN EQUITY, | Chap. IX CHAPTER IX. UNCONSCIONABLE STIPULATIONS. Closely allied to the jurisdiction which equity exercises in cases of fraud, there exists a jurisdiction to protect a contracting party from the rapacity of one with whom he has been dealing, and who is disposed to take unnecessary advantage of the consequences attached to the non-per- formance of some unconscionable stipulation contained in the contract between the parties. Stipulations for pen- alties or forfeitures for the non-performance of engage- ments are the subjects embraced under this species of equity jurisdiction. Whenever a penalty is fixed merely to secure the per- formance or enjoyment of a collateral object, the latter is deemed to be the principal object of the instrument, and the penalty is deemed to b6 accessory, and hence intended only to secure the due performance thereof or the paj'meut of the real damage incurred b}^ non-performance. Against the consequences of a penalty of this nature, equity will grant relief. The true test of the right of equity to in- terfere is, to consider whether compensation can be made or not upon non-performance. If it can be made, not- withstanding the terms of the engagement (that is, if the terms of the engagement are considered not final) , equity will relieve against the penalty and leave the question of compensation to be determined at law, or proceed itself to determine it, according to the nature of the relief sought. In the case of money obligations, the compen- sation will be simply the payment of the principal and Chap. IX.] UNCONSCIONABLE STIPULATIONS. 165 interest.^ If compensation cannot be made under the just interpretation of the contract, equity will not relieve against the damages agreed.^ It is a general rule in equity that interest is a sufficient compensation for relief against a breach of condition sub- sequent, when the pa^Tnent of money is the only condition to be performed.^ In accordance with this proposition, a covenant in a conve^'ance that in case of the eviction of the grantee the grantor will pay twice the amount- of the purchase-money and interest, besides compensation for all damages occasioned by the eviction, will not be enforced be}ond the amount of the purchase-monej'' and interest.* On the other hand, if the party entitled to a security containing a penalty be unreasonabl}^ deprived of his right to enforce it, until it is no longer adequate to compensate him, equity will decree to him interest exceeding the pen- altj' of the security. This will be the case, for instance, where by unfounded and protracted litigation the defendant has prevented the plaintiif from successful!}^ prosecuting his claim at law, for a length of time which has impaired the rights of the latter at law. In such cases, equity will supply and administer a substitute for the original legal rights of the plaintiff,^ giving the party interest upon the security, though that exceed the penalty. If a party has given two securities for the same debt, one containing a penalty and the other not, the creditor msLy enforce either at his option ; and if he prefer to enforce the one not containing any penalty, he will be entitled to legal interest thereon, though that exceed the amount of the penalty' provided in the other security. Equitj^ wiU not compel him to sue upon the latter instru- ment,® 1 See 1 Story, Equity, § 1314. 2 lb. 8 Rogan V. Walker, 1 Wis. 527. * Nesbit v. Brown, 1 Dev. Eq. 30 6 East India Co. v. Campion, 11 Bligh, 158, 187. 8 Clarke v. Abingdon, 17 Ves. 106. 166 GEOUNDS OF RELIEF IN EQUITY. [Chap. IX In the case of a covenant to do or not to do some par- ticular act, or doing it or not doing it to pay a certain sum by way of liquidated damages, equity will not relieve against the payment thereof.^ Liquidated damages are damages which the parties have agreed, in cases of engagements to do or not to do a particular thing, that the defaulting partj' shall pay as the just, appropriate, and true amount of the damages sustained by reason of the default. Equity allows the engagement of the parties to stand in such cases ^ on the ground that they have pur- 230sely assessed the damages, and that they are in the best situation to know the extent of the loss which will natu- rally follow a breach. To exclude the jurisdiction of equity, however, the damages must appear to be reall}' liquidated, in the above sense. For such a purpose the damages must not assume the character of gross extravagance or of unreasonable proportion to the nature or extent of the injur3\ Equity will not suffer its jurisdiction to be excluded, merely by the fact that the parties have called a sum liquidated dam- ages, when it is in truth and intent a penalty-. ^ It is often, however, a matter of ilifflcultj' to determine whether the damages were really intended to be liquidated or were inserted as a penalty. An agreement binding a person to paj' a sum of money which he actual owes, in case he should fail to pa}' at a certain time a certain smaller sum, which for a good con- sideration has been substituted for the larger amount due, is valid, and is not to be taken as a penal t}' for the non- performance by the debtor of the more favorable contract.^ The distinction between such a case and the ordinary case 1 Roy V. Beaufort, 2 Atk. 190, 194 ; Rolfe v. Peterson, 2 Brown, P. C. (Toml.) 470. 2 Skinner v. White, 17 Johns. 357. » 2 Story, Equity, § 1318. * Thompson v. Hudson, Law Rep. 2 Ch. 255, 279. Chap. IX.J UNCONSCIONABLE STIPULATIONS. 167 of a promise to pay a larger sum in default of payment of a smaller is this : In the orclinarj^ case a part}' stipulating for the payment of a larger sum, upon default at a certain time, gives up nothing b}* way of consideration for the larger amount ; but, in the case of an antecedent debt, he gives up the difference between the amount of the debt and the smaller sura stipulated, in consideration of the latter sura being paid at the appointed time.^ The difficult}' arises in those cases in which no distinct consideration exists for the paj'ment of the alleged penalt}'. In such cases, the question to be detemiined is, whether, the amount fixed for paj'ment appears to have been set- tled upon as a proper estimate of damage sustainable upon a breach of the contract, as well as can be ascertained in advance. Conditions precedent, that is, conditions to be performed before a right vests, must in general be literally per- formed ; and equity will never cause an estate to vest where, b}' reason of the non-performance of a condition precedent, it will not vest at law,^ unless the remainder-man or rever- sioner who was to take the estate on non-performance of the condition has prevented the performance thereof.^ As to conditions subsequent, that is, conditions to be performed after the vesting of a right, the rule is different. Though the court cannot relieve against all conditions subsequent, yet where compensation can be made in damages for the non-performance of the condition, equity will generally grant relief. But if compensation cannot be made, and the value of the thing for enforcing which the forfeiture is imposed cannot be estimated, relief is denied.^ ^ Thompson v. Hudson, supra. 2 Popliam V. Bampfeild, 1 Vern. 79, 83. 8 Wheeler v. Whitall, 2 Freem. 9. < 2 Story, Equity, § 1324. 168 GROUNDS OF RELIEF IN EQUITY. [Chaf IX. It is said to be a universal rule of equity never to enforce either a penalty or a forfeiture.^ Hence equity will not gives its aid to divest an estate for breach of covenant on a condition subsequent ; though it will often interfere to prevent the divesting of an estate in such a case.^ But while equity is generally ready to extend its aid to prevent the forfeiture of an estate ; still where the forfeit- ure is to arise from the breach of a covenant to do some act collateral to the main purpose of the deed, such as the breach of a covenant to repair, it is held in England that equity will not grant relief from the consequences attached by the deed to the breach,^ unless there be evidence of acquiescence in the party entitled to take advantage thereof, or evidence of unavoidable accident or the like.* Nor is it material that compensation in damages migljt be made.' The reason for this distinction, however, is not clear. 1 Livingston v. Tompkins, 4 Johns. Ch. 415, 431 ; 2 Story, Equity, § 1319. 8 Gregory v. Wilson, 9 Hare, 683; Hills f. Rowland, 4 DeG., M. & G. 430. 4 Wing V. Harvey, 5 DeG", M. & G. 265 ; Bridges v. Longman, 24 Beav. 27. * Storv Equity, § 1321. Ohap XI ACCIDENT AND MISTAKE. 1G9 CHAPTER X. ACCIDENT AND MISTAKE. If an instrument evidencing a transaction is lost, or by accident or mistake, or the act of the defendant, destro3'ed, or if by accident or mistake an instrument has been incor- rectl}' framed, or if a transaction has been conducted in mistake of material facts, an equity arises to have the in- strument re-executed, the error corrected, or the miscon- ceived transaction revoked.^ The jurisdiction for re-execution, or other like relief, arises upon the loss or destruction of an instrument where the missing instrument is such that its non-production would perpetuate a defect of title, or would preclude the plaintiff from establishing his rights at law. If, for in- stance, a conveyance to a purchaser has been accidentally burned before recording, so that the purchaser is unable to show a legal title to the estate, the vendor may be compelled to reconvey.*^ The most common case for the exercise of this sort of relief is that of lost bords or negotiable insti'uments. And in such cases the decree is not confined to re-execu- tion, but, to avoid circuit}' of action, extends to payment also.^ And in the case of a bond lost, burnt, or cancelled b}' accident or mistake, equitj' will give relief, not only against the principal, but also against the surety,* and this 1 Adams, Equity, 166. « lb. » lb. < Skip V. Huey, 3 Atk. 91, 93. ITO GROUNDS OF RELIEF IN EQUITY. [Chap. X though the principal debtor be out of the jurisdiction of the court. ^ The jurisdiction of equity ao to lost bonds originated in the doctrine of profert at law. It was formerly a rule of pleading in courts of law that no remedy' could be given for a debt secured bj* bond, unless the creditor would pro- duce his bond in court, — this is, make profert of it. If the bond were lost, profert became impossible, and the remed}^ at law was gone. But equit}-, on proof that the bond was reall}' lost, or that the defendant had destroyed it, or that the plaintiff had done the like by mistake, enter- tained jurisdiction to compel a re-execution and pa3Tnent of the mone}' secured. The rule at law no longer prevails, but equit3' still retains its jurisdiction ; ^ upon the principle that when once a court has obtained jurisdiction of a -sub- ject, it cannot lose it but b}' act of the legislature. The jurisdiction in respect of negotiable instruments originated in a different wa}'. Profert of such instruments was never necessary at law. Thus far there would be no ground for the interference of equity. But a negotiable instrument which has been lost may fall into the hands of a bona fide purchaser for value, against whose claim a court of law could not protect the debtor. Plence it is held necessary at law, so far as the subject remains untouched hy statute, that the negotiable instrument sued upon should be delivered up to the defendant upon satisfaction. But equity can enforce a proper indemnity from the plaintiff, and will accordingly entertain jurisdiction to compel pa^'- ment on the giving of such indemnit}'.' In some cases, however, a mere bond of indemnity would not be sufficient ; as where an attempt is made to enforce paj'ment of a lost negotiable note against an indorser. Such party has a 1 East India Co. v. Boddam, 9 Ves. 464. 2 Adams, Equity, 167. * lb. No indemnity is necessary if the instrument be unnegotia ble, and equity has no jurisdiction in sucli a case. lb. Chav. X.] ACCIDENT AND MISTAKE. 171 right, it seems, to insist upon the delivery of the note, for the purposes of an action by him against prior parties.' The construction of covenants is the same in equity aa at law, but the proper performance of them is treated very differently in courts of law and courts of equity. At law, a covenant must be strictly and literally performed ; in equity,- it is enough if it be really and substantially per- formed, according to the true intent and meaning of the parties, so far as circumstances will permit. If, then, by accident, fraud, surprise, or mistake, parties have been pre- vented from performing it hterall}', equity will interfere and give relief.^ A common instance of the application of this doctrine arises where an estate has been purchased and a covenant executed for pa^'ment on a certain da3\ If the money be not paid on that da}', and the party can still show that he took the means of pacing it, and was prevented by acci- dent, without fault of his own, equity will not permit the other party to take any stipulated advantage by reason of the default. But this doctrine must be taken subject to qualification. It proceeds upon the ground that exact performance was not of the essence of the contract, which may not always be true. And, whenever it clearly appears that a literal performance was understood to be vital, equity will not, it is apprehended, give relief upon failure to comply with the engagement. There is no branch of equity jurisdiction more delicate than that which goes to restrain a legal right, and it has been termed a dangerous jurisdiction.* In cases of contract by lease to pay rent, with a cove- nant and clause of re-entry on non-pajnuent, equity wUl relieve the tenant on payment of the rent, with interest 1 See Tuttle v. Standish, 4 Allen, 481. a 1 Haddock, Chancery, 29. • lb. 80, 31 ; Hill v. Barclay, 16 Ves. 402, 406. 172 GEOUNDS OF EELIEF IN EQUITY. [CnAr. X. and expenses, and will not permit the lessor to turn him out; for in such cases it is said that the loss is certain, and may be compensated in damages,^ though this cannot always be satisfactory. In like manner, relief has been granted against a for- feiture and right of re-entr}', incurred by not laying out, according to covenant, a specific sum in repairs in a given time.^ But doubt has been expressed as to the conectness of this rule, except when applied to cases of real accident or surprise ; as, for instance, where the state of things is due to the weather, or where there has been a permissive want of repair, the landlord standing by and looking on.' It is clear that where the tenant's conduct is reprehensible, relief will not be granted him ; as where, the premises being much out of repair, contrary to the tenant's c'ove- nant, the landlord has made a proper demand upon the tenant to perform his undertaking and he has refused.'* And, in general, whenever there has been a wilful or vol- untary breach of covenant, equity will not relieve the part}' from the consequences incurred.^ It appears also to be settled that, if a tenant covenant to repair, damage by fire- excepted, he cannot be relieved from the payment of rent upon a destruction of the prem- ises b}' fire ; ^ though it has been said that, if the tenant then offer to surrender his lease, the court will relieve jim.^ Squitj- has jurisdiction, further, to correct written instru- ments which b}' mistake have been incorrectly framed. A court of law must either construe the instrument as it stands or throw it away altogether: it cannot compel alteration or correction. 1 Sanders v. Pope, 12 Ves. 282, 289. « lb. 8 Hill V. Barclay, 18 Ves. 56, 62, Lord Eldon. » lb. 6 lb. 6 lloltzapffel V. Baker, 18 Ves. 115. 7 Cutter V. Powell, 6 T. R. 320, 32.3, Lord Kenyon. Chap. X.] ACCIDENT AND MISTAKE. 173 Accordingly, where a grantor has bargained one parc: relief for a mistake as to the legal effect of an act. This is certainl}' true in transactions between parties to confi- dential relations, as against the party holding the relation 1 Stockley v. Slockley, 1 Ves. & B. 23, 30; Dunnage v. White, 1 Swanst. 137 ; Adams, Equity, 188, 189. 2 Stewart v. Stewart, 6 Clark & F. 911. 3 TgiiOrantia legis neminem excusat. * Bilbie o. Lumley, 2 East, 469. 176 GROUNDS OF RELIEF IN EQUITY. [Cuap. X of tnist or the like.^ So, too, a contract eflected by an in- tentional misrepresentatiou of the law made by one pro- fessing special knowledge thereof, as by an attorney at law, to one ignorant of the same, is invalid, and could doubtless be set aside in equity. ^ Perhaps cases of this kind afford the only settled excep- tion to the doctrine referred to. The general statement is that equity will not relieve for ignorance or mistake of law ; ^ though a distiuctiou has sometimes been suggested between ignorance and mistake,^ — a distinction without much force except as applied to cases Hke those men- tioned in the preceding paragraph. It may probably be safely affirmed that mere naked mistake of law, unattended with am- special circumstances like those above mentioned, furnishes no ground for the jurisdiction of equity.^ A mistake as to matter of fact, to warrant rehef in equit}', must be material, and the fact must be such that it directed and controlled the conduct of the part}-. It must go to the essence of the object in view, and not be merely incidental. The court must be satisfied, that but for the mistake the complainant would not have assumed the obligation from which he "seeks to be relieved.^ Mistake, to be available in equity, must not have arisen from negligence, where the means of knowledge were easily accessible. The party complaining must have 1 1 Story, Equity, § 135; Langstaffe v. Fenwick, 10 Ves. 405. 2 Moreland v. Atchison, 19 Texas, 303 ; Cooke v. Nathan, 16 Barb. 342 ; Dill v. Shahan, 25 Ala. 694. . 3 Hunt V. Rousmaniere, 1 Peters, 1 ; Lyon v. Richmond, 2 Johns. Ch. 51, 60; Freeman d.' Curtis, 51 Maine, 140; Mellish v. Robertson, 25 Vt. 603. * Hopkins v. Mazyck, 1 Hill, Eq. 242. 5 Stewart v. Stewart, 6 Clark & F. 911 ; 1 Story, Equity, § 138. •> Grynies i'. Sanders, 93 U. S. 65; Trigg v. Read, 5 Humph. 529; Hill V. Bush, 19 Ark. 522. Chap. X.] ACCIDENT AKD MISTAKE. 177 exercised at least tlie degree of diligence which may be fairly expected from a reasonable person. In order to sustain a bill for the correction of a written contract, it is essential that the error be mutual, and that there be a mutual intention as to the fact to be stated ; in other words, that the minds of the parties should have been ad idem. If the mistake be not mutual, or (what is the same thing) if it cannot be shown that there was a common understanding of the parties, there is no basis for correction ; and the most that can be done will be to rescind the instrument or refuse to enforce it speciflcalty.^ The Statute of Frauds will not operate to prevent the introduction of parol evidence to show a mistake in the conve^-ance of land, or to suppl}- facts proving what was the intention of the parties. A will, however, cannot be corrected by evidence of mistake. The probate of the instrument furnishes final evidence of the mind of the tes- tator, except as to certain eases of fraud heretofore alluded to.2 \Yhere a part}' desires to rescind upon the ground of mistake or fraud, he must, upon discover}' of the facts, at once announce his purpose, and adhere to it. If he be silent, and continue to treat the property as his own, he will be held to the contract, as if the mistake or fraud had not occurred. He cannot play fast and loose. Delay and vacillation are fatal to the right which had before sub- sisted.^ The power to rectify deeds and other written instru- ments for accident or mistake is always exercised in sub- ordination to other fixed principles of law, and especially to statutory provisions. If the rules, restricting the administration of judicial remedies, which are prescribed by the Statute of Frauds, were to be disregarded in this 1 Young V. McGown, 62 Maine, 56. « Ante, p. 138. 8 Grymes v. Sanders, 93 U. S. 55 ; Thomas v. Bartow, 48 N. Y. 19a 12 178 GROUNDS OF RELIEF IN EQCITY. [Chap. X. branch of equity procedure, it would open the door to all the forms of fraud which that statute was intended to prevent. The statute is not a mere rule of evidence, but a limitation of judicial authority to aflbrd a. remedy. It requires that contracts for the sale of lands, in order to be enforced b}' judicial proceedings, must be substantiated by some writing. This provision of law cannot be dis- pensed with merel}' for the reason that the want of such writing was occasioned by accident, mistake or fraudulent representations, unless some other ingTedient enters into the case to give rise to equities, stronger than those which stand upon the oral contract alone, — equities which estop the other part}' from setting up the statute. It makes no difference whether the want of a wiiting was accidental or intentional, by way of refusal, or by reason of mutual mistake ; nor that there were false repre- sentations and a pretence of conve3ing the land, but a fraudulent evasion by means whereof there was no convey- ance in fact, and no proper written evidence of the agree- ment to convey. From the oral agreement, there can be derived no legal right, either to have performance of its stipulations or written "evidence of its terms. So long, therefore, as the effect of the fraud or mistake extends no further than to prevent the execution, or withhold from the other part}' written evidence of the agreement, it does not furnish sufficient ground for the court to disregard the Statute of Frauds and enter into the investigation of the oral agreement for the purpose of enforcing it.-^ In order to prevent the defendant from setting up the bar of the statute in such cases, it has been decided that there must concur with the mistake some change in the condition or position of the party seeking relief, by reason of being induced to enter upon the execution of the agree- 1 Glass V. Hulbert, 102 Mass. 24. Chap.X.] accident and MISTAKE. 179 raent, or to do acts upon the faith of it as if it were executed, with the knowledge and acquiescence of the other part}', either express or implied, for which he would be left without redress if the agreement were to be defeated.^ » Glass V. Hulbert. 102 Mass. 24. 180 GKOUNDS or RELIEF IN EQUITY. [Chap. XI CHAPTER XI. NOTICE. § 1. Of Facts suggestixg Inquiry. Another ground of relief in equity (and the relief is applied almost as frequently in courts of law) is found in the doctrine of notice. A purchaser of property, with notice that the title of the vendor is liable to be disputed for fraud or other infirmity, is entitled to no consideration at law or in equity, if the fraud or other infirmit}- be estab- lished. He stands, in ordinary cases, in the precise posi- tion of the vendor himself.^ Of notice, there are two kinds, — actual and construc- tive notice. The former is knowledge, and needs no ex- planation. The present chapter will be devoted to a consideration of the law of constructive notice. The general proposition of law as to the latter kind of notice is that, if facts are brought to the knowledge of a person which would lead him, as a man of common saga- city and prudence, to make inquir}^ for further iight upon the subject of his contemplated action, he is bound to make such inquiry ; and if he neglect to do so, he will be chargeable with notice of all the facts which a reasonable inquiry would disclose, and will be visited with the conse- quences thereof.^ 1 Peter v. Wright, 6 Ind. 183; Adams v. Stevens, 49 Maine, 362. 2 Warren v. Swett, 31 N. H. 332 ; Cambridge Bank v. Delano, 48 N. Y. 326; Woodwortli v. Paige, 5 Oliio St. 70; Kennedy v. Greene, 3 Mylne & K. 718. § 1.1 NOTICE. 181 In accordance with this principle, a jerson who haa knowledge that certain property which he is about to buy is charged, incumbered, or in some way affected with the claims of others, is considered as affected with construc- tive notice of all facts and instruments, to a knowledge of which he would have been led by the inquiry suggested by his knowledge of the preliminary fact.^ In like manner, a person is chargeable with notice of an unrecorded lien, though he have no knowledge of its existence, if he have notice of the contents of the insti'ument which gives the hen.^ Even in the absence of knowledge of an}' fact that would put a prudent man upon inquiry, a person may sometimes be affected with constructive notice. This will be the case where the court is satisfied from the evidence before it that the party sought to be charged has designedly abstained from inquuy for the very purpose of avoiding notice.' Such evidence indicates that the party had a suspicion of the existence of some iniu'mity in the subject of the nego- tiation, and a fraudulent determination not to learn what it was.'* If, however, there is no actual knowledge that the thing in question is in some way affected with infirmity of title, and no fraudulent turning away from a knowledge of facts which the thing under consideration would suggest to a prudent mind ; — if mere want of caution as distinguished from fraudulent or wilful bhndness is aU that can be im- puted, the part}' will not be treated as charged with notice.^ But this principle is subject to modification in those cases in which notice is fixed by statute, as in the .ase of the registry laws. 1 Willis V. Vallette, 4 Met. (Ky.) 186. 2 lb, ; Tiernan v. Thurman, 14 B. Mon. 279. 3 Jones V. Smith, 1 Hare, 43, 55 ; Woodworth v. Paige, 5 Ohio St 70. •* lb 6 lb. 182 GROUNDS OF RELIEF IN EQUITY. [Chap. XI The principle just stated will explain the rule which gen- erally obtains that, in the absence of statute, a person cannot be charged with notice of an advertisement in a newspaper merely because he is a subscriber to the paper.* The common law does not require men to read their peri- odicals, much less to read the advertisements which they contain. It follows that notice can be fixed only by definite and certain facts. Mere rumor, clearly, is not notice. To hear, for instance, fioating reports from no responsible source, of an incumbrance upon land about to be bought, does not, it is held, aflect the party with notice."^ It is said to be otherwise, however, of general reputation and behef.' With regard to the question. What constitutes notice of a material fact going to the defeat of a conveyance? while it appears to be settled that vague and general asser- tions, resting on mere hearsay and made by strangers, may be disregarded, stiU, a direct statement to a purchaser of the existence and nature of an adverse claim or title will operate as notice, whether it was made by or on behalf of the holder of the adverse claim or by a mere stranger.* The general doctrine, indeed, is that notice is not bind- ing, unless it proceed from a person interested in the prop- erty, and in the course of a treaty for its purchase. But this rule appUes to notice only in its limited sense, as dis- tinguished from knowledge or such infonnation as is sub- stantially equivalent to knowledge.^ If it be shown that a purchaser knew or was informed of the existence of a 1 Clark V. Ricker, 14 N. H. 44 ; Lincoln v. Wright, 23 Penn. St. 76 ; Bank of Commonwealtli v. Mudgett, 44 N. Y. 614. But see King v. Paterson R. Co., 5 Dutch. 82. 2 Colquitt V. Thomas, 8 Ga. 258; James v. Drake, 3 Sneed, 340. 3 James v. Drake, supra. * Martel v. Somers, 26 Texas, 651. 6 The notice of dishonor of a bill or note is not under consideration § 1.] NOTICE. 183 fact tending to impeacli or cut down the title of his vendor, it is immaterial whether his knowledge was obtained from parties in interest or third persons. From whatever quar- ter it may proceed, it will be sufficient if it be so definite as to enable the purchaser to ascertain whether it is au- thentic or not, and sufficiently clear and definite to put him upon inquir}', and to conduct that inquiry to aa ascer- tainment of the fact.^ This doctrine of constructive notice is applicable only between the part^' alleged to be aflTected with it and third persons, not parties to the matter in question. If, indeed, a party have actual notice of fraud, or of some other mis- conduct by the opposite party to a transaction, and act in spite of such knowledge, he cannot afterwards complain of it against the person with whom he has thus dealt. ^ But it is not so with mere constructive notice. It would be absurd to sa}^ that a client should not have a remedy against his attorne}' for the attorney's fraud, on the ground that the client is presumed to know what his attorney knows, and has, therefore, constructively assented to the fraud. Scarcel}' less absurd would it be to consider the client barred of relief, where others besides the attorney would be involved in the misconduct complained of, on the ground that the chent was affected with his attorne3''s knowledge of the facts. ^ The doctrine of constructive notice rests upon the ground of protecting innocent persons, not of shielding wrong-doers. And this is none the less true where the client finds it necessary to his case to impute to himself part of the knowledge of the attorne}^ and repu- diate the rest.* Again, even in a case otherwise appropriate for the ap- phcation of this doctrine, where it appears that it waa ^ Martel v. Somers, supra. ^ Volenti non Jit injuria. 8 Sec Sankey v. Alexander, Law Rep. 9 Irish Eq. 259, 298 » lb. 184 GROUNDS OF EELIEF IN EQUITY. [Chap. XI understood that the person through whose knowledge the constructive notice was alleged to arise was to suppress the facts from his principal or emplo3'er, the doctrine of notice will not be applied. For example : The defendants com- municate the existence of a settlement to the plaintiff's solicitor, and he tells them that he will not inform his cli- ent, lest it might trouble him. The client is not affected with constructive notice of the settlement.-' If a man take a conversance of land from another, while a third person is in the open and visible possession of the estate, he will be affected with notice of ever}- thing in re- lation to the title which could be known by diligent inquiry. And, if in such a case the person in possession have an equitable title to the land, the taking of the conve^'ance will be deemed a fraud, and nothing will pass to the grantee which can avail him against such equitable title. ^ Hence, actual possession b}' a cestui que trust is constructive notice to a purchaser that there is some claim, title, or possession of the property adverse to the vendor's claim. ^ It has been thought in England that notice of a tenancy is not notice of the title of the lessor.* But the weight of authorit}' in this countr}^ is to, the contrary.^ The ground of the American rule is that a purchaser from the assumed owner is put upon notice that his grantor's ownership is not complete ; and, having notice of this fact, due dili- gence requires him to ascertain how far short of a perfect owner the grantor is. The possession of land which will afford notice of the ^ Sharpe v. Foy, Law Rep. 4 Ch. £(5. '^ Hathaway v. Noble, 55 N. H. 508; Eli v. Gridley, 27 Iowa, 376; Van Orman v. Merrill, lb. 476. 3 Johns V. Norris, 12 C. E. Green, 485. ^ Barnhart v. Greenshields, 9 Moore, P. C. 18. 5 Dickey v. Lyon, 19 Iowa, 544 ; Smith v. Jackson, 76 111. 254 ; Wright V. Wood, 2.3 Penn. St. 120, 130; Bank of Orleans v. Flagg, .S Barb. Ch. 316. Contra, Flagg v. Mann, 2 Sumn. 486 § 1 ] NOTICE. 185 pai't3''s rights must be as open, notorious, and exclusive as is required to constitute adverse possession under the limitation laws.^ If land upon which there are no build- ings be used for pasture b}" the grantee and others, this is not such notorious and exclusive possession b}' the grantee as amounts to constructive notice that he has a title to the land, when the registry contains no grant to him.^ In like manner Where real estate is as much in the possession of a husband as of his wife, there is no such possession by the latter as will import notice of an equitable interest possessed by her in the laud, to a purchaser, for instance, at execution sale, under a judgment against the husband, in whom the legal title apparently existed at the time the judgment was rendered.^ In cases of fraudulent sales or mortgages, the rights of a subsequent purchaser are materially affected by the ques- tion of possession on the part of the intermediate vendor. Want of possession in him will generally operate as notice to the bu3'er.'* The rule of notice does not appl}' in favor of a vendor remaining in possession, so as to require a purchaser from his grantee to inquire whether he has reserved any interest in the land conveyed. So far as the purchaser is concerned, the vendor's deed is conclusive. Having declared b}^ his deed that he makes no reservation, he cannot afterwards set up any secret arrangement by which his grant would be impaired.^ Nor has the doctrine of constructive notice of defects in the title to land, arising out of the neglect of the purchaser to make inquirj', any application to cases of adverse possession and outstanding claim.® 1 Jackson v. Smith, 76 111. 254; Brown v. Volkening, &1 N. Y. 76. 2 Coleman v. Barklew, 3 Dutch. 357. 3 Thomas v. Kennedy, 24 Iowa, 397. 4 See Ogilvie v. Jeaffreson, 2 Giff. 353, 379. 5 Van Keui-en v. Central R. Co., 9 Vroom, 165. ^ Sands v. Hughes, 53 N. Y. 287. 186 GROUNDS OF RELIEF IN E<^UITy. LChap. XI The doctrine as to possession does not require the sub- sequent purchaser to take actual possession. The contrary was at one time said to be the law ; but it has since been decided that possession bj' the purchaser is not necessai-y, proYided he purchased from an apparent owner who was actually in possession.^ The occupation as tenants in common of land b}' persons who afterwards become partners, and turn the land into the partnership, is sufficient to put a person dealing with either of the firm, in respect of the land, upon notice of the nature of the rights of the partners over the land inter se. If, for instance, a person take a mortgage from one of the partners in such a case, with knowledge that the land was owned b}^ them in common, and has since been turned into use for partnership puiposes, he is affected with notice of the rights of the partners, as between them- selves, in respect of the property. If, then, it appear that the mortgaging partner's interest in the land was subordi- nate to the rights of his co-partner, the mortgagee must stand in a similar position.^ Such a result as this could not, it seems, take place in the case of lands held by 5. partnership in the ordinary wa}-. In the illustration referred to, the land is assumed to have been held b}" the parties as tenants in common before the partnership was formed, of which fact the mortgagee has knowledge. Such a state of things is unusual, and suffi- cient to demand inquiry as to an}' change in the relationship of the parties to the land. Partners cannot cany on the partnership business upon property of which thej' are tenants in common without some special bargain as to the use of it for partnership purposes. A person therefore who knew that the property is occupied for the purposes of the partnership has impUed notice that the part-owners have 1 Ogilvie V. Jeaffrcson, 2 Giff. 353, 370. 2 Cavander v. BuUeel, Law Rep. 9 Cli. 7C. § 1 I NOTICE. 187 made some bargain about it which gives each an interest in the moiety belonging to the other ; and he must ascer- tain what that interest is,^ On the other hand, the want of possession of that of which a party should have possession is generally, if not always, sufficient to put a person dealing with him upon inquiry. A debtor is authorized to infer that an attorney or agent who has been emplo^'ed to make a loan is em- powered to receive both principal and interest, from his having possession of the bond and mortgage or other secu- rity given for the loan. But the inference in such cases is founded upon the custody of the securities, and it ceases whenever they are withdrawn by the creditor. The debtor, finding such to be the state of things, is therefore put upon inquiiy, and considered to have notice that the agent's authority has been withdrawn, when that is the case : if he make a payment of interest or upon the princi- pal to the supposed agent under such circumstances, he makes it at his peril. ^ Again, one who purchases property from an executor or trustee below its value, under circumstances which ought to put him upon inquiry as to the right of the executor or tnistee to make the sale, becomes thereby a party to the executor's misconduct. As to what should put a purchaser upon inquiiy in such a case, it is held that the purchase from an executor of bonds payable to the testator is sufiS- cient to indicate that prima facie they belong to the testa- tor's estate ; and the purchaser, buying at an inadequate price, acts at his peril.' If, therefore, a certificate of stock ex[5ressed to be in the name of A., trustee, be by A. pledged to secure his own debt, the pledgee is by the lan- guage of the certificate put on inquiry as to the character and hmitations of the trust.* 1 lb. 2 Haines v. Pohlmann, 25 N. J. Eq. 179. 3 Pinckard v. Woods, 8 Gratt. 140. 4 Shaw v. Spencer, 100 Mass. 382 188 GROUNDS OF RELIEF IN EQUITY. [Chai-. XI In accordance with the same principle, a note made pa^'able on its face to a guardian eo nomine carries notice that the security' belongs to the ward, and a holder can acquire no rights adverse to those of the party in whose intei'est the restriction is made. The authority of the guardian to indorse and transfer the paper may be dis- puted by the ward.' Again, if the propert}' or paper of a firm be taken in pa3TQent of the private debt of one of the partners, the law charges the creditor with notice of an abuse of trust, and imposes upon him the burden of overturning the presump- tion." It will not take a case out of the operation of this prin- ciple that a negotiable note of the firm, made pa3'able to a third party and by him indorsed, is found before maturity in the hands of one of the partners, and is by him indorsed to the plaintiff. The presumption in such a case is that the note is accommodation paper, the property of the firm, and not of the individual member ; and if such note be transferred to a creditor for the private debt of the partner in whose possession it is, the creditor takes it charged with knowledge that it is firm property. The presumption, however, may be rebutted b}' showing that the note was regularly indorsed in due course of business, and had be- come the private property of the individual partner.^ § 2. Of Lis Pendens. A person who, pendente lite, purchases property in litiga- tion, is treated as a purchaser with notice, and is subject to all the equities of the person under whom he claims, and is bound bj' the decree that may be made against the per- 1 Louisiana Bank v. Orleans Nav. Co., 3 La. An. 294 ; Liverniora V. Johnson, 27 Miss. 284; Gaston v. American Ex. Bank, 29 N.J Eq. 08. ■■* Mecutchen v. Kennady, 3 Dutch. 230. « lb. §2.1 NOTICE. 189 son from wliom he derives title ; ^ and this, too, thongh the vendor may have fraudulently concealed the litigation from him.^ . This rule, however, applies onty to cases in which the purchaser acquires title from one of the litigating parties." If he claim adversely to both, and not under either, the proceedings will not bind him. The judgment or decree settles the rights of the parties to the suit only, and those claiming through them.^ Nor does the rule appl}' to pur- chasers at tax sales. The authorit}' of the State to make ■ a tax sale is paramount to the rights of the owner and of all others ; and when made in accordance with law, the sale is conclusive against all persons.^ The groinid of the doctrine of Us pendens is that, if a transfer of intei'est pending a suit in relation to it were to be allowed to affect the proceedings, there would be no end to litigation ; for, as soon as a new party was brought in, he might transfer the property to another, and render it necessary to bring that other into court ; and thus the suit might become interminable. This, however, has no application to a third person whose interest existed before the suit was commenced, and who might have been made an original part}".® A purchaser who has constructive or even actual notice of a pending suit can onl}- be held chargeable with knowl- edge of facts of which the record in the cause, as it ex- isted at the time of the purchase, would have informed him. If these facts inform him that the vendor is com- mitting a fraud in making the sale, he becomes, by pur- 1 Allen V. Morris, 5 Vroom, 159; Murray v. Ballon, 1 Johns. Cli 666, 574. 2 Blanchard v. Ware, 43 Iowa, 530. 3 Stuyvesant v. Hall, 2 Barb. Ch. 151. * Allen v. Morris, supra. 6 Wright V. Walker, 30 Ark. 44. ^ Murray v. Lylburn, 2 Johns. Ch. 441. 190 GEOUNDS or RELIEF IN EQUITY. [Chap, XI. chase, a party to that fraud. But he cannot be fixed with knowledge of facts which afterwards came into the case, of which facts he was then ignorant. ■* Mere service of a subpoena or summons is not sufficient to constitute lis pendens. But when the bill or declaration is filed, the doctrine of lis pendens relates to the service of the process. So, too, if the suit fail for defect of process, there is no Us pendens. Thus, where there is a defect in an attachment, the debtor can convey a good title to a purchaser for value without notice of the attachment pro- ceedings.^ This doctrine of Us pendens is never to be used for the accomphshment of injustice. A person, for instance, who purchases, without knowledge of litigation, from one of the defendants in an action, property which is the subject of the action, is not, in consequence of the pendency of the suit, aflfected by an equitable title of another defend- ant, which appears on the face of the proceedings, but of which he has no knowledge, and to which it is not neces- sary, for any of the purposes of the suit, to give eflect.' § 3. Of the Registration of Instruments. A purchaser is constructively aflTected by the registra- tion of an instrument required by law to be put on record not only with notice of the existence of the instrument, but also with such knowledge as an examination of it would disclose, — at least if the index entries contain a reference to the instrument in question.* In some cases this doctrine has been carried so far as to require a purchaser to take notice of that of which he can in fact derive no knowledge from the books fif registration, 1 Davis V. Christian, 15 Gratt. 11 '^ Burchard v. Fair Haven, 48 Vt. 327. 3 Bellamy v. Sabine, 1 DeG. & J. 566. * Bostwick V. Pc Ters, 12 Iowa, 456 ; Doyle v. Teas, 4 Scam. 202. g 3.1 NOTICE. 191 except by examining every instrument recorded therein. Thus, it has been decided that the registration of a deed required to be recorded constitutes notice to subsequent purchasers, though the record of the instrument be not indexed.^ This, however, proceeds upon the gi'ound that, under the statute as to registration, the index is no part of the record : it could not well be sustained on the ground of constructive fraud, upon which most of the present sub- ject rests. A man cannot be guilt}' of constructive fraud of this kind, except by shutting his eyes to facts which would put him upon further inquiry. The case in question turns simplj^upon statutory- inteipretation ; and, as to this, it should be remarked that the strong doctrine above men- tioned has been controverted by other authorities.^ The registration of a deed defectively acknowledged does not afford constructive notice to a subsequent bona fide purchaser for value.* And the registration of any deed affords notice of such facts onl}" as appear on the face of the instrument ; it is not notice of fraud, for instance, perpetrated in its execution.* Further, the registration of a deed is notice only to those who claim through or under the grantor.^ The pur- chaser of land is not bound to take notice of a registered hen or incumbrance upon the estate, created by an}' per- son other than those parties through whom he is compelled to make title.® The doctrine of constructive notice to a purchaser by 1 Mutual Life Ins. Co. v. Duke, 4 Cent. L.J. 340; Curtis v. Lyman, 24 Vt. 338; Bishop r. Sclmeider, 46 Mo. 472. ^ Barney v. McCarty, 15 Iowa, 510 ; Whalley v. Small, 25 Iowa, 184 3 Wells V. Polk, 36 Texas, 120. * Hoffman v. Strohecker, 7 Watts, 86. 5 Corbin v. Sullivan, 47 Ind. 356; Ely v. WUcox, 20 Wis. 523, 530 6 Harper v. Bibb, 34 Miss. 472. 192 GROUNDS OF RELIEr IN EQUITY. [Chap. XI. registration does not apply where there is a false repre- sentation ; for instance, that the vendor has an unincum- bered title. In such a case, the purchaser can, without an eviction, enjoin the collection of the price agreed upon, though the conve3'ance contain covenants of warrant3^^ This proceeds upon the ground that every contracting party, not in actual fault, has the right to rel}- upon the express statement of an existing fact, capable of specific knowledge, the truth of which is known to the party who made it and unknown to him to whom it was made. The latter is under no obligation to investigate and verify a statement to the truth of which the other party has made positive assertion.^ The prior registration of a conveyance obtained in fraud of a grantee registering later will be of no -avail against the rights of the latter. Thus, if after knowledge of a sale to another, a person should procure another con- veyance to himself from the vendor, and have the deed recorded before the registration of the deed to the first grantee, he would be compellable in equity to surrender his fraudulent claim to the latter.^ The kind and degree of notice sufladent to stand as a substitute for an actual record of a deed must be such as to charge a party with fraud in taking the second convey- ance. He must either know of the prior conveyance, — a floating rumor is insuflflcient, — or he must be possessed of definite facts such as would lead to a knowledge of the unrecorded deed.* A purchaser for value, without notice of a prior unreg- istered conveyance, may make a valid conveyance to one who has such notice.^ And it would seem that the same rule ought to apply where the grantee had notice that the 1 Napier v. Elam, 6 Yerg. 108 ; Abbot v. Allen, 2 Johns. Ch. 519. 2 Mead v. Bunn, 32 N. Y. 275. » Mercier v. Hemme, 50 Cal. 006. * Bell t'. Twilight, 18 N. H. 159, 164. 6 jij. § 8.] NOTICE. 193 estate had been obtained from a remote grantor by fraud : if he derived title from a purchaser for value, v^ithout no- tice of the fraud, his claim to the estate should stand. The doctrine is explained on the ground that otherwise the hona fide purchaser would not be able to enjoy the full benefit of his own unexceptionable title. ^ 1 1 Story, Equity, § 409. 194 MODES OF RELIEF IN EQUITY. [Chap. XU UI. MODES OF RELIEF IN EQUITY. CHAPTER XII. SPECIFIC PERFORMANCE OF CONTRACTS. § 1. Of the Nature and Application of the Remedy. The cowrts of common law afford redress, upon the re- fusal of a part^- to a valid contract to perform his uiTder- taking, by giving the other party damages for the breach thereof. But it often happens that such redress would be inadequate, and that the injured part}' is entitled, in good conscience, to insist upon the actual execution of the agreement. In such cases as this, and in some other cases to be mentioned, the Court of Chancery will grant the required relief, upon a bill |)raying for an order for the specific performance of the contract. Chancer}-, it seems, originally regulated its decisions under this head implicit!}' upon the authority of the courts of law, sending the parties there, in the first instance, to ascertain whether the plaintiff in equity had the right to call for redress ; and, according to the verdict, it gave or with- held its more perfect remedy. • In the course of time, how- ever, this precaution became obsolete ; and equity has sometimes directed specific performance where damages would not have been awarded at law.^ Equity has also decreed execution of a contract where an action at law ^ Jeremy, Equity, 423. §1.] SPECIFIC PERFORMANCE OF CONTRACTS. 195 has been lost b}' the default of the party seeking relief, in cases where it was still just that the same should be carried into effect, as in cases where the terms of the agreement have not been strictly performed on the part of the person seeking specific performance, when this fact would be fatal to an action at law for damages.-^ The principle, then, upon which equity decrees specific performance, instead of damages, is that of granting more perfect justice. An agreement, which is not so specific in its terms or nature as to make it certain that better justice will be done by attempting specifically to enforce it than by leaving the parties to their remedy in damages, is not one which the court will execute.^ The subject in respect of which equity has most fre- quent occasion to interfere to give specific relief of this kind is realty, or things relating thereto of a permanent nature. It is chiefly with regard to such property that the remedy given by the law courts is inadequate. But, though this specific relief is generally unnecessary in matters of personalty, there are instances in which, from the peculiar nature of the chattel, arising either from an artificial value attached to it or from other special circumstances, an execution of the agreement would be the only sufficient remedy.* Courts of equity do not, indeed, act upon any neces- sary distinction between realt}' and personalty in such cases, but upon the ground that damages at law may not, in a particular case, afford a complete remed}'. Thus, equity decrees performance of a contract as to land, not because the contract relates to land, but because damages, .vhich must be calculated upon the money value of the 1 Davis V. Hone, 2 Schoales & L. 341. 2 Wilson V. Northampton Ry. Co., Law Rep. 9 Ch. 279. 3 Adderley v. Dixon, 1 Sim. & S. 607. See Somerby v. Biintin, 1 18 Mass. 279. 196 MODES or RELIEF IN EQUITY [Chap. Xn, land, may not be a complete remedy to the purchaser, to whom the land may have a special value. On the other hand, equity will not generally decree performance of a contract for the sale of goods, not because goods are per- sonalty, but because damages are as complete a remedy to the purchaser as the delivery of the goods contracted for ; since, with the money awarded as damages, he may pur- chase the same quantity of the like goods.-' Such at least is the language of the courts, whatever may be thought of its weight. However, where damages for the non-performance of a contract relating to personalty cannot afford an adequate redress to the injured party, he will, generally speaking, be entitled to a specific performance ; ^ and the same is true where the damages cannot be accurately measured for any reason, and must be determined, if at all, by conjec- ture.^ An application for a decree of the specific performance of a contract for the conveyance of land is said to be ad- dressed to the sound discretion of the court. Neither party to a contract can insist, as a matter of right, upon such a decree. The courts of law are always open to them, and ordinarily an action at law furnishes an ample remedy for the breach of a contract ; and when such is the case, a court of equity generall}^ declines to take jurisdiction.* If a contract for the conversance of real estate is in all respects fair and free from ambiguity, and there are no insurmountable difficulties in the way of a specific per- formance, its performance will ordinarily be decreed. On the contrary, if the contract is unconscionable or ambigu- ous, or through fraud or mistake or want of skill on the 1 Adderley v, Dixon, supra. 2 The right to specific performance, however, does not depend upon the ability of the party to respond in damages. 8 Adderley v. Dixon, supra. * Snell v. Mitchell, 65 Maine, 48. § 1.] SPECIFIC PERFORMANCE OF CONTRACTS. 197 pari of the draftsman does not truly embody the agree- ment of the parties, or, if for any other reason the court is of opinion that the contract is one which in equity and good conscience ought not to be specificall}- enforced, it will decline to interfere, and will leave the parties to such redress as can be obtained in an action at law.-' A contract for the conveyance of lands, which a court of equity will specifically enforce, must be certain in its terms ; and the certainty required has reference both to the de- scription of the property and the estate to be convej^ed. Accordingly, where the property cannot be identified, spe- cific performance will be denied.^ A defendant, in proceedings for specific performance, will not be compelled to accept a title in the least degree doubtful. It is not necessary that he should satisfy the court that the title is defective, so that he ought to prevail at law. It is enough if it appear to be subject to adverse claims, which are of such a nature as may reasonably be expected to exjDose the purchaser to controversy to main- tain his title or rights incident to it. He ought not to be subjected, against his agreement or consent, to the neces- sity of litigation to remove even that which is only a cloud upon his title. ^ Contracts for the performance of services are also sub- ject to the jurisdiction of equit}' in this particular. It is competent for the court to interfere to enforce specific per- formance of a contract to do definite work, in the perfonn- ance of which the plaintiflT has a material interest, and the breach of which cannot be suitably redressed in damages. For example : A railway company undertake to build and 1 Snell V. Mitchell, 65 Maine, 48 ; Rogers v. Saunders, 16 Maine, 92 ; Bradbury v. White, 4 Me. 391. 2 Preston v. Preston, 95 U. S. 200. 8 Jeffries v. Jeffries, 117 Mass. 184; Richmond p. Gray, 3 A lien, 25; Sturtevant v. Jaques, 14 Allen, 523. 198 MODES OF RELIEF IN EQUITY. [Chap. XII maintain an archwa}' on the pleasure grounds of the plain- tiff (through which the railway is to pass) upon his with- drawing all opposition, and to make it sufficient to permit a carriage to pass under. This agreement will be specifi- cally enforced against the company.* It has been said that agreements to form partnerships, and to execute articles accordingly, may also be specifically enforced on the same ground, that redress b}' way of dam- ages would be unsuitable.^ In like manner, equit}- will direct the specific execution of a covenant for a lease or for renewal of a lease.' So, also, of a contract to insure against loss by fire ; and so of contracts for the sale of a good- will in trade, and for keep- ing the banks of a river in repair^ and for the sale of an annuity payable out of the dividends of stock, and for the sale of debts proved under a commission of bankruptcy where an assignment of the debt has not already been ex- ecuted.^ There has been considerable conflict of authority how far courts of equity ought to entertain jurisdiction to order the specific performance of a contract to build or rebuild a house of a specified foi-m and size. In the earlier cases, the jurisdiction was maintained, though it was at the same time denied that a covenant to repair could be specifically executed.^ In later cases, it has been held that covenants to build or rebuild are not proper subjects for specific ex- ecution. The just conclusion as to such cases has, how- ever, been thought to be that equity ought not to decline jurisdiction for specific performance whenever the remedy 1 Storer v. Great Western Ry. Co., 2 Yoiinge & C. Ch. 48, 53. See Wilson V. Furness Ry. Co., Law FJoii. 9 Eq. 28; Greene v. West Cheshire Ry. Co., Law Rep. 13 Eq. 44. 2 Buxton V. Lister, 3 Atk. -383; 1 Story, Equity, § 722. See Sora- erby v. Buntin, 118 Mass. 279. 3 Furnival v. Crew, 3 Atk. 83. ■» 1 Story, Equity, § 722. s lb. § 725. § 1.] SPECrFIC PERFORMANCE OF CONTRACTS. 199 at law, in its nature, extent, or operation, is inadequate, as it must sometimes be.^ An executory contract for the sale of land will not bo specifically enforced where the tract is described as con taining a certain number of acres, when in fact it contains much less, even though the vendor offer to make up the deficiency b}' the conve3-ance of adjoining lands. The law will not compel a man to pa^' for land he did not buy, or to accept less than he contracted for.^ Specific performance is never compelled unless the case is entirel}' free from the Imputation of deception. The rem- ed}' is deemed one of sound discretion.' The conduct of the person seeking must be wholl}' free from blame : misrepre- sentation, even as to a small part of the subject, will ex- clude him from relief in equity.* When, therefore, a lease has been executed, thougli with perfect good faith, before any circumstances are known to the lessee which would make the transaction fraudulent on his part ; still, if before delivery he discover any fact which gives him an undue advantage over the lessor, the fact being contrarj' to the representations upon which the bargain was made, he can- not enforce delivery of the lease, or have a specific per- formance of the agreement.^ Wliere weak-minded or illiterate persons are induced bj' a party, in the absence of their professional adviser, to make an improvident bargain, no assistance towards com- pelling the execution thereof will be aflforded by equity," though the case might not be one for an action at law. In the case of an illiterate person, addicted to intoxication, I lb. § 728. 2 SneJaker v. Moore, 2 Duvall, 542. 3 Plummer v. Keppler, 11 C. E. Green, 481. * Cadman v. Horner, 18 Ves. 11. 6 Abingdon v. Butler, 1 "Ves. jun. 206. 6 Martin v. Mitchell, 2 Jac. & W. 413 ; Kemeys v. Hansard, Coop 125. 200 MODES or RELIEF IN EQUITY [Chap. XH whose course in life makes him liable to imposition, ground exists for strict examination whether a contract executed by him Las not been improperly obtained.^ Mere inadequacy of consideration is not sufficient to induce a court of equity' to set aside a contract ; but it may suffice to induce the court to sta}^ the exercise of its power to enforce the specific performance of the contract,^ though in some States this rule does not prevail.^ So, too, it has been held that if a written agreement be entered into for the purchase of an estate at a price far bej'ond its value, but without any circumstances of fraud or surprise, the court will not decree specific performance.* And inade- quacj' is fatal as to transactions effected by a man's agent or trustee wdth another who seeks, to enforce the bar- gain. For example : The defendant's agent, authorized' to sell land at a given price, sells it three 3'ears after, when the value has greatl}' enhanced and is rapidly rising, at the price originally named bj' his principal. Equity will re- fuse specific performance at the suit of the purchaser.^ There is therefore a distinction between the exercise of jurisdiction for setting aside a contract and for refusing spe- cific execution.* Equity will not carr}' hard or unreasonable agreements into execution. The question of awarding spe- cific execution of contracts rests in the conscience of the court, and will not be exercised in cases that are hard, unfair, or unreasonable, or founded upon greatly inade- quate considerations. The case may therefore often be such that equity will neither decree execution for the one party nor set aside the contract for the other. 1 Say V. Barwick, 1 Ves. & B. 195. 2 Powers V. Hale, 25 N. H. 145; Seymour v. Delancey, 6 Johns. Cli. 222; Proudfoot v. Wightman, 78 111. 653; Christian v. Ransome, 46 Ga. 138. * Lee V. Kirby, 104 Mas3. 420. * Day v. Newman, 2 Cox, 77. 6 Proudfoot V. Wightman, 78 111. 553. 6 See Powers v. Hale, 25 N. H. 145. ^1.) SPECIFIC rERFOKMANCE OF CONTRACTS. 201 Famil}- arrangements will not be closely scrutinized as to the pecuniary consideration, when they are not strik- ingly unreasonable. But satisfactory evidence will be re- quired, in order to specific execution, to show that there has been no exercise of undue influence or fraud in the transaction.^ It would be thought a suspicious and doubt- ful circumstance, for instance, if an uncle should obtain from his nephew a beneficial bargain of any kind, upon an inducement held out to the nephew that to consent to it ' would ultimately be to his advantage, but without any security for the carrying out of such suggested advantage, or any provision against the caprice or change of mind of the uncle. Such a bargain would not be specifically' en- forced against the nephew.''^ If a person acquire property under a will, upon a verbal promise to make a certain disposition concerning pai:^ of it, which promise is fraudulently made, equity will compel him to do what he agreed. For example : The respondent's aunt having given all her property by will to the respondent, de- sires upon her death-bed to change her will, and to give a certain piece of real estate to a niece of hers, and has a codicil prepared for that purpose. Before signing the in- strument, she desires to secure the respondent's consent, and calls him in. After hearing her, he replies that she is weak, and need not trouble herself to sign the codicil ; that he will carry out her wish, and convey the property to her niece. Trusting his word, the testatrix omits to sign the codicil. The respondent is bound to convey at the suit of the niece. ^ An innocent lessee under a defective title is entitled to reasonable protection, which equity will extend according 1 Hotchkis V. Dickson, 2 Bligh, 303, 348 ; Carpenter v. Herriot, I Eden, 338. 2 Dawson v. Massey, 1 Ball & B. 219, 235, s Dowd V. Tucker, 41 Conn. 197. 202 MODES or RELIEF IN EQUITY. [Chap. XII to the nature of the case. If, however, the title of the lessor was derived through fraud, and the part}' defrauded come for relief without laches, it will be granted, but on condition that the innocent lessee shall be remibursed for an}' permanent improvements made upon the estate at his expense. But the lessee cannot, against such a party, in- sist upon his engagement with the lessor to fiu'nish him a good lease ; though it would clearly be otherwise if there was any collusion between the lessor and owner against the lessee at the time the lease was executed, or perhaps if, with notice of the situation, the owner should puiposely delay action. In the case of a tenant for life, however, who has a leasing power, no fraud can be imputed to the remainder-man, in looking on without interfering to prevent expenditure upon the property by one who has only an invalid verbal agree- ment from the tenant for life for a lease. The remainder- man has a right to presume that the party laying out his money has a valid lease, granted under the power, or at least a binding agreement for a lease. As against the re- mainder-man who has entered into no agreement, and has done no act on the faith ef which the other party depended, fraud cannot be imputed, if, when he succeeds to the es- tate, he refuse to grant the expected lease. The only way, it is said, in which fraud could be fixed upon him would be by shijwing that an expenditure had been connived at by him, with knowledge that the part}' in possession had no valid lease or binding agreement therefor. ■^ The misrepresentation by a vendor of land of an occult quality of the property, though made in ignorance of the truth, and though the purchaser agree to take tlie risk of this, is considered to be a decisive objection to a bill for specific performance by the vendor.'^ So, too, equity will 1 Blore V. Sutton, 3 Meriv. 2.37, 24G; Slianiion v. Bradstrect, 1 Schoalcs & L. 62, 73. 2 Fisher v. Worrall, 5 Watts & S. 478. §1.] SPECIFIC PERFOKMAXCE OF CONTRACTS. 203 refuse to enter a decree of specific performance against a vendor of land, if it appear that at an auction the agent of the purchaser was mistaken by those present at the auc- tion for a puffer on the part of the seller, who had been in the habit of employing him, and that the sale was thereby cliilled, and the property in consequence knocked off at a ver}- inadequate price, though nothing like fraud was im- puted to the purchaser.^ A decree for the specific performance of an agreement, entered into in fraud of the laws or policy of the countrj', can never be obtained. Nor in such a case is it necessary that the defendant should raise the objection ; the court will, or ought to, set it up.^ And, in general, equity will refuse to enforce a contract growing directly out of another which is illegal or immoral.^ Equity will also refuse to order specific performance, where the effect of enforcing the contract would be to endanger the interests of the pub- lic. Thus, though it has been decided at law that there is nothing illegal in a stipulation that the name of the vendor of the good-will of a business shall be continued in the firm of which he was a member after the part}- has entirely dissolved connection with the firm ; still, as the natural effect of such an agreement will be to allure and influence customers, it is not a contract which equit}' will enforce.* A fortiori, specific performance will be refused in a ease of plain fraud on the part of the plaintiff. And, in such a case, equity will not onl}' refuse the request for specific performance, but it will even rescind the contract in the same suit, if such relief be asked for by the defendant.* Specific performance will also be refused, as well for 1 Twining v Morrice, 2 Brown C. C. 326 ; Townsliend v. Stangroom, 6 Ves. 328, 338. 2 Evans v. Richardson, 3 Meriv. 469. 3 Bowman v. Cunningham, 78 III. 48. * Bozon V. Farlow, 1 Meriv. 459. ^ Lowber v. Connit, 36 Wis. Hd 204 MODES OF BELIEF IN EQUITY. [CiiAf. XII misconduct or other vice on the part of the agent of the person against whom execution is sought as on the part of the plaintiff; provided the conduct of the agent was in fraud of his duty to the defendant, his principal. For ex- ample : The defendant, owner of a city lot, being a weak- minded foreigner, unacquainted with business matters, and understanding the English language but imperfectly, is induced by repeated solicitations to sign a paper, authoriz- ing one professing to act as his agent to sell the same, and important facts having a bearing upon the value of the property are concealed from him, and the property is thereby sold for much less than its value. The contract of sale will not be specifically enforced against the ven- dor.^ If in a proceeding by a tenant for specific performance of an undertaking by the defendant to grant him a lease, it appear that there has been a breach of the agreement, — that is, if there has been what would have amounted to such a breach of any covenant which ought to have been in- troduced into the lease (had it been granted) as would have worked a forfeiture, and that is clearly made out, — that is an answer to the action.- But (according to the Eno-lish rule, at least), if that is not proved, the course pursued is to grant specific performance, and direct that the lease shall bear date from the time of the agreement, so as to give the landlord opportunity, if he desire, to bring an action of covenant upon the lease, or an ejectment for the alleged forfeiture. 2 However, for such a purpose, the evidence must be not merely contradictory, but such as to leave it in doubt whether there, has been a breach of covenant of a character to make specific perfonnance improper.^ ^ Fish V. Leser, G9 111. 394. It appeared that the agent was really working in the interest of the purchaser ; but it is apprehended the decision must have been the same had not this been the case. * Rankin v. Lay 2 DeG., F. & J. Go, 72. » ji,. § 1.] SPECIFIC PEKrORMANCE OF CONTRACTS. 205 Specific performauce may sometimes be decreed in re- spect of a mortgage intended to cover after-acquired prop- erty. But equit}' will not do injustice to an innocent third person having rights over such after-acquired propert}'. Where, for instance, the property' has been acquired by the mortgagor through a purchase fraudulently' effected by him, equity will not give effect to the purchase in the in- terest of the mortgagee, and thereby deprive the defrauded vendor of his right to rescind the sale and reclaim the property.^ While a purchaser will not be compelled, in ordinary cases, to accept compensation in lieu of performance, still, the vendor may be required to give compensation, in case he is able to make title for a part, but not for the whole, if the purchaser is willing to receive part performance with compensation. But equity will not compel the vendor to give indemnit}' against the claims of others, except in ex- traordinary cases. Equity has sometimes decreed specific performance by a vendor, with indemnity against the in- choate right of dower of his wife, upon her refusal to join in the convej^ance, when she was encouraged therein by the fraud of her husband.^ And in other cases, where a vendor has been unable to make as perfect a title as he has covenanted, indemnity has been I'equired against a contin- gent incumbrance which clouded the title. ^ These are said to be the only exceptions to the rule that equit}^ will decree compensation in favor of the purchaser, but not indemnit}'. In other cases, the doctrine is pro- nounced to be unyielding, that a covenant of indemnity will onl}' be required when the parties have contracted for it.* If, for instance, a wife refuse to join in a convej'ance by her 1 Williamson v. New Jersey R. Co., 29 N. J. Eq. 311. ? Young V. Paul, 2 Stockt. 401. 3 Milligan v. Cooke, 16 Ves. 1 * Lounsbery r. Locander, 25 N. J. Eq. 554; Aylett v. Asliton, 1 Myhie & C 105. 206 MODES OF BELIEF IN EQUITY. [CHAr. XIL husbaud, and there is no fraud or collusion in the matter bj' the husbaud, the court will not require him to procui'e a release from her, or to furnish an indemnit}' against her claim of dower. ^ In cases in which specific performance is impossible, when, if it were possible, the plaintiif would be entitled to it, compensation may be decreed in equity in lieu of per- formance. But compensation will be awarded in any event, onl}' when, in view of all the circumstances of the case, it will subserve the ends of justice and fair dealing. It wiU be denied when, upon a like view, it will produce hardship or injustice to the defendant.^ No inflexible rule can be laid down as applicable to all cases of this kind. Generall}-, however, in the case of sales of laud, compensation will be denied when the party asking it had notice at the time the contract in question was made, that the defendant vendor was agreeing for more than he could convej' ; and the purchaser has not, in consequence of the contract, placed himself in a situation from which he cannot be extricated without loss.^ In cases where a bill in equit}' is brought in good faith^ and the specific relief sought i& defeated by a disability of the defendant to comply with a decree for specific relief, caused after the suit or after the date of the agreement relied on, it is the rule in this country for the court to re- tain the bill and afl'ord relief by way of compelling com- pensation to be made, provided the plaintiff brought his biU without knowledge of the disabilit}^, in good faith seeking equitable relief, supposing, and having reason to suppose, himself entitled to such equitable rehef.^ This rule, with the same quahfications, extends to all cases ' Reilly v. Smith, 25 N. J. Eq. 158; Riesz's Appeal, 73 Penn. St 485. 2 Peeler v. Levy, 26 N. J. Eq. 330. 3 lb. * Tainter v. Cole, 120 Mass. 162. § 1.^ SPECLFIC PERFORMANCE OF CONTRACTS. 207 whei'e a defect of title, right, or capacity in the defendant to fulfil his contract is developed b}- his answer, or in the course of the hearing.'' The doctrine that time is not of the essence of a con- tract is generally applied in equity to stipulations for the payment of money upon an agreement for the sale and purchase of real estate. The principal grounds of the doctrine are, that the rule of the common law requiring performance of every contract at the appointed day, is . often harsh and unjust in its operation ; that although some time of performance b}' each party is usually named in an}' agreement for the sale of land, it is often not re- garded by the parties as one of the essential terms of their contract ; and that a court of chancer}^ has the power of moulding the remedy according to the circumstances of each case, and of making due compensation for dela}', without punishing it by forfeiture of all right to relief.- This equitable doctrine was formerly carried to an un- reasonable extent, and the specific performance of con- tracts enforced after such a lapse of time and change of circumstances as to produce as much injustice as it avoided. In modern times, the doctrine has been more guardedly applied ; and it is now held that time, although not ordi- naril}' of the essence of a contract in equit}', ^et may be made so by clear manifestation of the intent of the parties in the contract itself, by subsequent notice from one party to the other, by laches in the part}' seeking to enforce it, or by change in the value of the land, or other circumstances which would make a decree for the speciiic performance inequitable.^ Man}' if not all of the rules applicable to suits for specific performance of agreements apply to suits for the specific performance of submissions to arbitration. If, 1 Milkman v. Ordway, 106 Mass. 232. 2 Barnard v. Lee, 97 Mass. 92, Gray, J. 3 lb. 208 MODES or RELIEF IN EQUITY. TChab. XII. for instance, it appear that the arbitrator has exceeded the authority which has been given him by the submission, the parties clearlj- have never agreed to be bound by his de- cision to that extent ; and there is no right in equity to require specific performance in respect of the excess.-^ In like manner, if the arbitrator has not finally decided all the matters which b}' the submission he was called upon to decide, the parties have as clearly agi-eed to be bound b^' his judgment and decision upon the entii'e matter, and not upon part of the matter submitted to his consideration ; and specific performance will not be awarded.^ Again, if the pro\asions of the award be such as cannot be can-ied into eflfect consistentl}" with the submission into which the parties have entered, the case resolves itself into this, that the parties, through the decision of the arbitrator, have come to an agi'eement which cannot be worked out in equit}' ; and specific performance must of necessity' be refused.' A court of equit}' ma}' decree the specific perfonnance of a contract for the sale of lands in another State or country', and may compel a eonve^'ance of the land when the person of the defendant is within reach of its process.* Equit}' proceeds in personam and not necessarily in rem^ acting upon the conscience of the defendant. It has even been decided that a non-resident maj' have a bill for spe- cific performance as to lands without the State, the contract itself being not only executory but performable in anothei jurisdiction.^ The defendant in such a case cannot relieve his con- science from the obhgation which his contract has imposed 1 Nickels v. Hancock, 7 DeG., M. & G. 300, 318. 2 n,, 3 jb. < Sutphen v. Fowler, 9 Paige, 280; Brown i-. Desmond, 100 Mass. 267; Cleveland v. Burrill, 25 Barb. 532. * Cleveland v. Burrill, supra. §2.] SPECIFIC PEPiFORMANCE OF CONTRACTS. 209 upon him by departing from the State in which it was made, thus preventing the courts there from obtaining jurisdiction over him.^ § 2. Of Part Performance. B}' the English Statute of Frauds, all parol agreements respecting an}' interest in, or to arise out of, real estate (ex- cept leases for terms not exceeding three years) are declared void. Courts of equity, however, have alwaj-s treated this provision as intended for the guidance of courts of law onl}', and not as designed to prevent equitable interference in cases which in conscience demand it. It was long since decided in England to be against conscience, and therefore contrary' to equit}', to suffer a part}', who had entered and expended his money on the faith of a parol agreement, to be treated as a trespasser, and for the other part}', in fraud of his agreement, though that was verbal, to enjoy the advantage of the money laid out by the purchaser.* This determination, though in the face of the statute, was founded upon principles of natural justice, and has become established law ; being called the doctrine of part per- formance. Nothing, however, is to be considered as part perform- ance so as to take a case out of the operation of the statute, unless the act done puts the party seeking a specific exe- cution into a situation that would make him the subject of a fraud if the agreement were not performed.* What this means may be thus illustrated : If a man were admitted into possession of land upon a parol agi'eement, he would be liable to be treated as a trespasser and ejected after three years (the limit of time for a verbal lease) if not sooner, on demand of the premises by the vendor, unless 1 lb. 2 Lyster v. Foxcroft, Colles, P. C. 108. 3 Clinan v. Cooke, 1 Schoales & L. 22, 41 ; Caton v. Caton, Law Rep. 1 Ch. 137, 148. 14 210 MODES OF RELIEF IN EQUITY. [Chap. XII his possession could be referred to the agreement under which he entered ; but to treat him thus, subjecting him to (what must follow) pa3^^lent for rents and profits for the use of the land, would be fraudulent, Equitj^ there- fore treats the case as taken out of the Statute of Frauds, and enables the person in possession to require perform- ance of the oral agreement to sell and conve}'.-^ It would be a mistake to suppose that verbal agreements as to interest in lands (or indeed written agreements, un- less in all respects certain and definite) are an}^ better in equit}' than at law. They are alwaj'S and ever^^where unenforceable. But courts of equity have general juris- diction to relieve against frauds ; and where a verbal agree- ment relating to lands has been so far parti}' performed that it would be a fraud upon tlie party doing the acts un- less the agreement should be performed by the other party, equity will relieve against such a result, and apply the proper remedy by enforcing execution of the agreement. It is not the agreement which lies at the foundation of the jurisdiction, but the fraud.^ The fact that one who has been a tenant has continued in possession after the expiration of his lease, under a verbal contract for the purchase of the land, is of no avail ; but where a person not previously in possession makes an agreement with the owner of an estate, and enters into possession, such possession is part performance and will avail the party in equit3\^ Payment of money is not of itself considered as part performance ; for the money ma}'' be repaid with interest, and the parties thus restored to their former situation,* a 1 Gregory v. Mighell, 18 Ves. 328, 333. 2 Wheeler v. Reynolds, 06 N. Y. 227. ' Morphett v. Jones, 1 Swanst. 172, 181. * Clinan v. Cooke, 1 Schoales & L. 22, 41 ; Frame v. Dawson, 14 Ves. 386. §2] SPECIFIC PERFORMANCE OF CONTRACTS. 211 result not easily effected after a part}' has gone into pos- session, especially after a considei'able lapse of time. In order to take the case of a verbal agreement to con- vey land out of the Statute of Frauds, on the ground of part performance, two things are necessary. (1) The tenns of the contract must be established b}' clear, definite, and unequivocal evidence ; and (2) the acts relied upon must be exclusivel}' referable to the contract. The absence of cither of these elements is fatal to the redress sought. For example : The plaintiff, asking for specific perfoiin- ance against an alleged breach of trust, relies solely (to prove the agreement) upon a declaration made by the defendant to a third person that he was purchasing for the plaintiff, and upon the immediate taking possession by the defendant and part payment by him of the purchase-money. The plaintiff is deemed not to have brought himself within the rule ; no clear and definite contract ha^dng been proved to show that the defendant was acting as the plaintiff's agent in the transaction.^ It should be observed of this example that it is by no means clear that specific performance of the alleged agent's agree- ment to buy for the plaintiff would have been decreed even had there been definite proof of such a contract and that the agent's act of taking possession was referable solely to the contract. To determine an}^ act or acts to consti- tute part performance, it is essential (so thought the court in the case referred to) that the act or acts should be prejudicial to the party seeking specific performance. The principle upon which the courts order execution of contracts is that of preventing fraud. Though a party, therefore, agree to buy land and hold it for another, the latter cannot call for a specific enforce- ment of the agi'eement, at least by the weight of authority, upon a purchase "made by the former, unless the refusal t<; 1 Wallace v. Brown, 2 Stockt. 308. 212 MODES OF RELIEF IN EQUITY. iChap. XIL award execution would work a fraud upon the plaintiff. The mere non-performance of a verbal agreement has usuall}' been treated as not sufficient, alone, to constitute fraud, or to require the intervention of equity.^ There is no part perfonnance, in an}' true sense of the term, upon a mere breach of contract not du'ectly prejudicial to the plaintiff. In order, then (to state the rule again) , that a delivery of possession to a purchaser of land should amount to such a part performance as to take the case out of the Statute of Frauds, the situation of the parties must be such that a refusal to carr}' out the oral contract of sale will work a fraud upon the purchaser or the person claiming to be the purchaser.^ It is only with a view to protect an innocent party from a consequent fraud that equity- wiU enforce a verbal contract for the purchase of land ; and this is true even in cases where there has been what might be called in common language part performance. When, for instance, the alleged part performance consists in the making of valuable improvements upon the premises, the part}' will not be protected, if it appear that when the}' were made it was known to him that the contract was repudiated by the other party. The improvements must have been made with the expectation that the contract would be performed.' 1 Walker v. Hill, 6 C. E. Green, 191 ; Marlatt v. Warwick, 3 C. E. Green, 108 ; 8. c. 4 C. E. Green, 439 ; Merritt v. Brown, lb. 286 ; s. c. 6 C. E. Green, 401 ; Rogers v. Simmons, 55 111. 76. But see Wolford I'. Hcrrington, 74 Penn. St. 311. The Pennsylvania rule has always been different. 2 White V. Watklns,. 23 Mo. 423. 8 Parke v. Leewright, 20 Mo. 85> 5 1 ] RESCISSION AND CANCELLATION, ETC. 213 CHAPTER XIII. RESCISSION AND CANCELLATION OF INSTRUMENTS. § 1. Of the Nature and Grounds of the Remedy OF Rescission. The reined}^ by rescission of a contract, the reverse of that under consideration in the preceding contract, is, when the subject of the contract is land, to be sought in equit}'. After a conveyance or lease of premises and pos- session given to the grantee or lessee, the grant or demise not being absolutel3' void, the grantor or lessor cannot lawfully expel the grantee or tenant, or bring an ejectment against him b^' way of rescinding the contract of sale or lease. A legal title having passed, courts of law can look no further, but must protect the part}- holding it ; except as he msLj be affected by the institution of an action for deceit by the vendor. The proper proceeding on the part of the seller, if he would reacquire his land, is to make a tender of ever}' thing of value which he has received from the purchaser, and then, upon refusal to rescind, to file a bill for rescission. Rescission is commonlj' sought for fraud ; and when this is the case, the fraud must usually be shown to have influenced the contract. In most cases, fraud must be attended with damage, in order to entitle the person upon whom it was practised to call for relief.^ And the fraud must have been perpetrated at the time the contract was made, or in the negotiations thereto. A bill for the rescission of a contract for fraud perpetrated after the 1 Purdy V. BuUard, 41 Cal. 444. 214 MODES OF BELIEF IN EQUITY. [Chap. XUl contract was made will not be entertained.^ A principal may, however, rescind transactions with his agent, or a cestui que trust transactions with his trustee, without proof of damage.^ Damages cannot be included and recovered for the care of property prior to the rescission of the contract of pur- chase. Until rescission, the property belongs to the pur- chaser,' since fraud does not render a contract absolutely void, but only voidable. The purchaser of land, upon discovering that the vendor has perpetrated a fraud upon him in the contract of sale, may at once give notice of his repudiation either du'cctly or by some act clearly manifesting a repudiation, abandon the premises, and resort to legal means to be restored to his rights. And, where the fraud consists in a want- of title in the vendor, the fact that, after such abandonment, the vendor cured the defect in his right to convey as attempted, or that a third party, the real owner of the land, offered to make a good title upon the payment of the price which had been agreed upon, will not defeat the right of the purchaser to rescind.* But it is said that the rule is otherwise, if there, were no fraud in the transaction. The tender of a good title is considered to be a good answer to a bill for rescission grounded on mere mistake.^ A misrepresentation by the vendor, in regard to a mate- rial fact which operated as an inducement to the purchase, upon which the purchaser had a right to rely, and by which he was actually deceived and injured, is a fraud, and confers upon the purchaser the right to .avoid the contract whether executed or executor}'.^ A defect of title in the quantity 1 Fulton V. Loftis, 63 N. C. 393. 2 Ante, pp. 146, 147, 150. 8 West V. Anderson, 9 Conn. 107. * Dalby v. Pullen, 1 Russ. & M. 296; Blakemore v. Shelby, 8 Humph. 430. ^ lb. ; Frost v. Branson, 6 Yerg. 36. 6 Foster v. Grossett, 29 Ala. 393. S l.J liESCISSION AND CANCELLATION, ETC. 215 of land agreed to be sold may be of such a nature or extent as to entitle the purchaser to a rescission. On the other hand, it may be so small or of such a nature as to atlbrd no valid objection, even to a suit for specific execu- tion ; though such would be an unusual case. There is no general rule as to what constitutes a sufficient misrepresen- tation as to quantity to entitle the purchaser to a rescission. Each case must depend upon its own circumstances.^ But a vendor of land who has misrepresented the quantity con- veyed b}' his deed cannot prevent rescission by ofiering to buy enough adjoining land to make good the deficienc3\^ A purchaser of land can avail himself of the fraud of the vendor in regard to the title, though the conveyance be made without warrant}^, and though the purchaser may not have been evicted. If he can show an outstanding paramount title, and actuall}^ fraudulent misrepresenta- tions b}^ his vendor in relation thereto, he will be entitled to rescission.* This proposition may at first seem at vari- ance with the rule above stated, that fraud must be attended with damage in order that it should aflford ground for rescission. But the conflict is not real ; there is a failure of the consideration paid or secured for the purchase, and this is the damage. The purchaser has parted with his money and acquired nothing marketable in return. A person may be guilty of fraud in respect of the kind of payment tendered. In the absence of agreement to the contrary, pa3'ment for property bought is to be made in cash ; and if a purchaser should secure the delivery to himself of propert}', upon an implied understanding that payment was to be made in cash, and should then tender notes of the vendor in pa^^ment, the vendor, upon showing 1 Yeates v. Pryor,6 Eng. (Ark.) 56. 2 Yost v. Shaffer, 3 Ind. 33L 3 Battle V. Rochester Bank, 5 Barb. 414 , Soper v. Stephens, 14 Maine, 133 j Doyle v. Knapp, 3 Scam. 334. '216 MODES OF RELIEF IN EQUITY. [Ciiap. Xni that the purchaser had not intended to pay cash, would be entitled to a rescission of the contract.^ A sale of goods obtained by fraud on the part of the purchaser works no irrevocable change of property, while the goods remain in the hands of the purchaser or of per- sons claimins: under him who are affected with notice of the fraud. The seller in such a case may revoke the sale and recover the goods ; and if the goods have been sold by the purchaser, the seller may recover from him the proceeds thereof as mone}' had and received to his own use.^ Or if the purchasers took with notice of the fraud, the original owner may follow the goods into then- hands and require rescission. In cases of this kind, inasmuch- as no unimpeachable title has passed to the purchaser, it follows that the goods cannot be levied upon as the goods of the purchaser. The seller may repudiate the sale and take the goods from an officer who has levied upon them any time before the sale.* But after sale by the sheriff to a bo7ia Jide pur- chaser for value, the right of the defrauded owner would be cut off. A court of equit}' has- power to set aside a judicial as well as a private sale ; and the grounds for granting relief are, as nearly as the nature of the case permits, the same as those which govern the right to annul private sales. Fraud will always justify relief.* Jurisdiction ma}^ also be entertained in case of accident.^ So, also, where sur- prise or misapprehension is occasioned by the conduct of the purchaser, or of the officer who makes the sale, to the • Allen V. Hartfield, 76 111. 358. 2 Abbotts V. Barry, 2 Brod. & B. 369. 8 Hitchcock V. Covill, 20 Wend. 167 ; s. c. 23 Wend. 611 ; Acker v Campbell, lb. 372. * Cummings v. Little, 1 C. E. Green, 48. 6 Seaman v. Riggins, 1 Green, Ch. 214. § 1 J RESCISSION AND CANCELLATION, ETC. 217 injury of a person interested, the court will interfere.* And the same has been decided to be true, where an aged person has been misled by a relative, as to the contents of a subpoena served upon him.'-^ This jurisdiction, however, will not be exercised to set aside a judicial sale in behalf of a suitor who seeks to escape from the consequences of his own act induced bj' a mistake of law,^ except perhaps in the strongest cases, such as those in which a party has been purposely misled ' as to the law by an interested part}'. Nor will the court exert its power in favor of a purchaser who seeks to es- cape from a contract on the ground of misapprehension or mistake of /rtc^ where it appears that his error has resulted entirel}' from his own negligence, and that it could have been avoided by the exercise of common prudence.* And, generally speaking, the negligence of counsel will be considered the negligence of his client.^ A purchasei" at judicial sale, who voluntarily abstains from all efibrt to get correct information, and thus deliberately assumes the hazard of making a purchase ignorantl}', must, as a rule, bear the consequences of his own neglect.^ It has been laid down that any surreptitious dealing by one of the parties to a contract against the other, to his damage, entitles the latter to have the contract rescinded, and to refuse altogether to proceed with it.' But the courts have not all been willing to go so far ; and the better opin- ion has been thought to be that the consequence of fraud is, that the court will see that the injured party obtains full 1 Woodward v. Bullock, 12 C. E. Green, 507. 2 Campbell v. Gardner, 3 Stockt. 423. 8 DiUett V. Kemble, 10 C. E. Green, QQ; Mott v. Shreve, lb. 438. 4 Parkhurst i-. Cory, 3 Stockt. 233; Haggerty v. McCanna, 10 C. E, Green, 48. 6 Dillett V. Kemble, supra. ^ Hayes v. Stiger, 29 N. J. Eq. 196. • Panama Tel. Co. v. India Ptubber Co., Law Rep. 10 Ch. 615, James, L. J. 218 MODES OF RELIEF IN EQUITY. [Chap. XIII. redress for the fraud, as far as that can be given. If it can be obtained with the contract, it should be so given ; if not, it must be given without the contract, and rescission must be allowed.^ It is apprehended, however, that the current of authority supports the opinion first stated. The right to rescind in cases of fraud is to be deter- mmed, as has been imphedly stated, by the state of things existing at the time the contract was entered into, and will not be affected by the turn of subsequent events, except in so far as such events ma}' tend to show that there was or was not any ground for rescission from the first. For example : the plaintiff files a bill to rescind a contract for the exchange of lands, on the ground of a fraudulent con- cealment by the defendant of the existence of judgment liens upon the land. The discharge of such liens, after the filing of the bill, will not affect the plaintiff's right of rescission.^ Equity, however, will not set aside a conveyance of property upon vague charges of fraud (except perhaps in cases of abuse of confidence) . The evidence of fraud must be clear and distinct ; ^ but suspicions of fraud on the part of the defendant, coupled with gross inadequacy of price, and the pressure of pecuniary embarrassment on the part of the plaintiff, are deemed sufficient ground for rescinding a sale.* Though a party to the sale of property, obtained by the misrepresentations of the purchaser, may not be entitled to a rescission, he may still be entitled to damages. This will be true, as has already been observed, when the rights of third parties have intervened and become a valid claim upon the property since the sale. It may also be true, i Panama Tel. Co. v. India Rubber Co., Law Rep. 10 Ch. 515, Mellish, L. J. 2 Thomas v. Coultas, 76 111. 493. 8 Christmas v. Spink, 15 Ohio, 600. * Lester v. Mahan, 25 Ala. 445. § 2.J RESCISSION AND CANCELLATION, ETC. 219 though no such rights have intervened, where, through the fault of the defrauded party, rescission would work unnec- essary injury to the purchaser.^ It should be added that the existence of a right of re- scission does not bar an action for damages. The validity of a contract, voidable for fraud, may be affirmed by the injured party, and an action maintained for damages.^ § 2. Of Tender of Performance or Return of Con- sideration. Inasmuch as the part}' defrauded is entitled to rescind the contract, it would be harsh to require him first to offer full performance, where he has not alread}' performed his part ; and the law prescribes no such condition.^ In suits for rescission, on the ground of fraud, the gen- eral principle is, that he who seeks equity must do equity ; which requires that the part}' against whom relief is sought shall be remitted to the position he occupied, as far as may be, before the transaction in question took place. The courts proceed upon the principle that, "as the transaction ought never to have taken place, the parties are to be placed, as far as possible, in the situation in which they would have stood if there had never been any such trans- action.* Hence, though a party, who has been induced by fraud to contract, may elect, under proper circumstances, to rescind the engagement or sale, he can do so only upon the terms of restoring to the wrong-doer the consideration received from him or its value. ^ In like manner, a court of equity, if applied to for an injunction to prevent the wrong-doer from continuing an 1 See Amstead v. Hundley, 7 Gratt. 52. 2 AlHn V. MilUson, 72 111. 201. 3 Thomas v. Coultas, 76 HI. 493. * Neblett v. Maefarland, 92 U. S. 101 ; Savery v. King, 5 H. L. Caa 627 ; Western Bank v. Addie, Law Rep. 1 H. L. Scotch, 145, 162. 6 Clougli V. London Ry. Co., Law Rep. 7 Ex. 26, in Excb. Ch. 220 MODES or RELIEF IN EQUITY. [Chap. Xni action upon the contract, would probabl}' make it a condi- tion that the defendaut in that action should first do equity by paj-ing to the other part}' whatever the latter had paid to him under the contract. And, by analogy, a court of law would probably require the part}' pleading the fraud to bring into court au}" mone}- which the plaintiff had paid to bim.^ Not even a married woman, with all the protection of the common law, can avoid a sale of property made by her without restoring the consid iration given b}- the purchaser, at least if the consideration remain in integro. The privi- lege of coverture does not confer the right to commit fraud.' And the same rule is believed to apply to infants, who, at the time of calling for rescission, still have in their posses- sion and control the consideration received for the sale.' If, however, the consideration has been consumed by the infant, or honest!}' parted with, restoration cannot be in- sisted upon by the other party.* The general principle as to tender is, that when a pur- chaser has received what is valuable, either to himself or to the defrauding seller, and does not offer to return it, he afJh-ms the contract ; and- this he ma}- well do, since it is valid or not at his election.^ A person, therefore, who is sued upon a contract obtained from him by fraud, should prove an offer to return any thing received by him in pur- suance of the contract, unless the same be of no value, or the return of it be, without his fault, impracticable,* In accoidance wiih this principle, where there has been an exchange of propert}^ and a note has been given for the difference in value, the maker, who has taken posses- ^ Clough V. London Ry. Co., supra. 2 Pilcher V. Smith, 2 Head, 208. 8 Bartlett v. Cowles, 15 Gray, 445. * Bartlett v. Drake, 100 Mass. 174; Price v. Furmar, 27 Vt. 2G8. 6 Sanborn ;;. Osgood, 16 N. H. 112. 6 Smith v. Sm th, SO Vt. 139. § 2.] RESCISSION AND CANCELLATION, ETC. 221 Rion of the payee's property, and retained possession of that which he agreed to exchange, cannot refuse to dehver such propert}', on the ground that he has been defrauded by the other part}', unless he will first return the property of such party. ^ But, in an action upon the note, accord- ing to the weight of authority, the defendant (retaining possession, of course, of the property' represented by the note) could give evidence of the fraud, showing the actual value of the property in reduction of the damages.^ Upon the same principle, where a corporation has, by the false representations of its agent, induced a sub- scriber to convey liis land before the condition of his sub- scription has been performed b}' the company', no action for rescission can be maintained against the company, or against purchasers from them with notice, until a tender of the stock certificates has been made to the defendant, conditional upon the reconveyance of the estate.^ It is, however, no objection to a restoration of property received on a fraudulent sale, that it has fallen in value since the date of the transaction.* Nor, if the property is of a perishable nature, is the holder bound to keep it in a state of preservation until the bill for rescission is filed. ^ It is enough that he has exercised over it the care of a prudent man. Nor is a person who seeks to set aside a sale of shares on account of fraud, bound to pay calls upon them after the filing of his bill. He is not then concerned with the question of their forfeiture.^ Nor, indeed, is it an objection to the right of rescission, that the Statute of Limitations has run upon one of the secu- rities to be returned, if the purchaser succeed.'' But the 1 Sanborn v. Osgood, supra. 2 lb. ; Harrington v. Stratton, 22 Pick. 510 ; Perley v. Balch, 23 Pick. 283. s Parks v. Eransville R. Co.. 23 Ind. 567. < Neblett v. Macfarland, 92 U. S. 101. 6 n,. 8 ib. 7 n^ 222 MODES or RELIEF IN EQUITY. [Chap. XHI. suit for rescission should be brought within a reasonable time after the discover}' of the fraud. -^ A contract, then, cannot be rescinded for fraud, gen- erally speaking, if the circumstances be so altered by part execution that the parties cannot be put in statu quo. If rescinded at all, it must (except by consent) be rescinded in toto.'^ Nor can a purchaser rescind a contract obtained from him by false representations after he has disposed of the property purchased, b}' offering to restore to the ven- dor what he (the purchaser) has received of it, though he disposed of it before discovering the fraud. His remedy is by an action for damages, or requiring a reduction from the contract price to the same extent, if the price be yet unpaid.^ But the fact that the parties (or rather, the defendant) cannot be put precisely in statu quo as to the subject-matter of the contract, is never a bar to rescission. If it were, an executed contract could never be rescinded ; for the parties never could be placed thus, either as to time or as to the use of the property as necessary to the discovery of the fraud, or as to the condition of the party practising the . fraud. Some length of time iJlust inevitably elapse before a rescission is possible ; some use of the property may be required to disclose the fraud ; and as to the condition of the wrong-doer, if the right to rescission were to depend upon the ability of the purchaser to put him in the same position he occupied before the sale, save as regards time and the use of the property', the result would be that he could always put it out of the power of the purchaser to rescind, by merely disposing of the consideration of the sale.* All that is required of the injm-ed party in the case 1 Neblett v. Macf arland, 92 U. S. 101 ; Gatling v. Newell, 9 Ind. 572. 2 Potter u.Titcomb, 22 Maine, 300. ? McCrUlis y. Carlton, 37 Vt. 139. < Gatling v. Newell, 9 Ind. 572, 578; Coleson v. Smith, lb. 9; Mas- Bon V. Bovet, 1 Denio. 69. § 2.] RESCISSION AND CANCELLATION, ETC. 223 of an executed contract is, that lie restore whatever of vahie he has received, and, as far as he can, undo what has beerr done in the execution of the conti'act.' In the case of executory contracts, it is often practicable to re- store the exact status, except as to time.^ "When the consideration of a contract is one indivisible thing, no action ex contractu can be maintained to recover back part of the sum paid, upon an allegation that the de- fendant, fraudulentl}' or by mistake, omitted part of the subject of the contract. The rescission in such a case must be complete. The subject of the contract being entire, there can be no partial rescission. Hence, where a grantee has been induced to believe that he has bought, together with other land, under one convej'ance, a ti'act of ten acres, which in fact the conveyance has not given him, he cannot, if the contract is entire, maintain an action ex contracftc to recover that part of the consideration paid which is represented by the ten acres. He should rescind the contract in toto, and tender a reconvej^ance.^ But the plaintiff in such a case might maintain an action of deceit without rescinding ; or, if sued upon the purchase notes, could defend to the extent of the damage sustained by the grantor's fraud.* If, however, the contract be divisible, as where a party agrees to sell and convey two distinct lots of land, each for a specified price, the rule of law is different. In such a case, the injured party may retain the subject of the grant, and sue in contract for the recovery of the consid- eration paid for the distinct subject of sale ; or he may sue in deceit for damages sustained by reason of the gi'antor's fraud. 5 1 lb. 2 Gatling v. Newell, supra. ^ Rand v. Webber, 64 Maine, 191. * lb. ; Herbert v. Ford, 29 Maine, 546 ; Perciyal v. Hichborn, 56 Maine, 575. » Rand v. Webber, 64 Maine, 191 ; Bartlett v. Drake, 100 Mass. 174. 224 MODES OF RELIEF IN EQUITY. [Chap. XIII. In a suit in equity, therefore, for rescission of an entire contract for the sale of land, and also to have a mortgage and notes for the purchase-money released and cancelled, a judgment which does not provide for an absolute rescis- sion of the contract, but treats it as valid in part and void in part, cancelling such notes and mortgages, but permit- ting the purchaser to hold the land, cannot be sustained. The plaintiff in such a case cannot repudiate the contract in so far as it has resulted in damage to him, and accept it in so far as he has received a benefit from it. He must rescind it entirel}' or not at all.^ The doctrine that a man cannot set aside part of a trans- action and insist upon the benefit of the rest, does not apply, however, to transactions to which a party has not assented, where it is impossible for him to insist upou'his rights and at the same time restore every thing to the orig- inal situation.^ Thus, an infant may take the benefit of a redemption made by a guardian who has, without right, usurped the office of guardian, and assumed management of the infant's property without his consent ; and such ac- tion of the infant does not necessarily ratify' the appoint- ment and acts of the guardia-n in the premises.^ No part of a fraudulent agreement can be supported, except where a consideration has been given in consequence of which the parties cannot be replaced in the same situa- tion in which they stood before.* But where there is a partial consideration for a contract, — at least, if it be evi- denced by a bill or note, — it seems that the fact that the agreement is made b}' the fraud of the promisee to cover a larger obligation than is reall}' due, will not necessarily 1 Grant v. Law, 29 Wis. 99. He can retain the benefits of the contract, and sue in deceit for the fraud practised upon liim in its negotiation, since such an action is not a repudiation of the contract. 2 Tong V. Martin, 20 Mich. 35. 8 ib. * Daubeny v. Cockburn, 1 Meriv. 626. § 2.] RESCISSION AND CANCELLATION, ETC. 225 afford ground for rescinding the contract altogether ; but the contract will generally be good to the extent of the actual consideration. Still, if the signature of the party was obtained by fraud, under circumstances such as to show that the instrument was not his contract, it is prob- able that the fact of the existence of an actual considera- tion for the promise would not avail the holder of the note.^ In case of the disaffirmance of a sale of personalty, made in fraud of the purchaser, the title is at once re- vested in the vendor ; ^ though, if the propert}' be of any value, it should be tendered back. If the property con- sist of realt}', a reconveyance should be tendered'; other- wise the legal title would remain in the purchaser.^ It is not enough, then, for a purchaser of land, seeking rescis- sion, to tender the deed by which the propert}' was con- vej'ed to him, since the acceptance thereof would not, except in equit}', revest the title to the land in the grantor. The grantee should tender a reconve3-ance.^ Hence, a fortiori^ a mere offer, in the case of an exchange of lands b}' deeds of conveyance, to " trade back," is not a sufficient rescission.® Where a deed purporting to conve}' an estate has been declared a nxdlity^ it has been considered that no tender of a reconveyance is necessar}'. It is certainl}' oth- erwise if the estate has been conve^'ed to a third person acting as a mere insti'ument, not privy to the fraud, or if the deed is to be set aside upon the pa^-ment of money. 1 Stacy V. Ross, 27 Tex. 3. 2 Heastings v. McGee, 60 Penn. St. 384 ; Whitney v. Allaire, 4 Denio, 654 ; s. c. 1 Comst. 305. 3 Bates V. Graves, 2 Ves. jun. 287, 295. 4 PearsoU v. Chapin, 44 Penn. St. 9. 6 Mitchell V. Moore, 24 Iowa, 394 ; Nicholson v. Halsey, 1 Johns Ch. 417. s Wilbur V. Flood, 16 Mich. 40. 15 226 MODES OF BELIEF IN EQUITY. [Chap. XIII In the latter case, the estate remains in the grantees until pa3"ment.^ If a purchaser who has committed a fraud upon another in a sale obtain in the same fraudulent transaction a sum of mone}- as great as that due for the property, and theu make payment for the property, he cannot insist upon a tender of the sum so paid by him as a condition precedent to the seller's right of rescinding the contract of sale. He has his money already.^ So if a grantor, in fulfilling an agreement to convey a parcel of land for a certain price, be induced by fraud, upon the receipt of that price, to execute a deed conveying another parcel also, he may recover the second parcel without pacing or tenderino- back the consideration, or any part of it, but not the parcel agreed to be conveyed, without such payment -or tender.^ When, again, the friilure to make a tender before the trial is due to the misconduct of the other party, he cannot object to a tender made during the trial.^ For example : At the trial of an action for a personal injury, the defend- ant produces a receipt in full satisfaction of the demand, signed by the plaintiff. , Th« plaiutitf testifies that the receipt was obtained by fraud, that he did not know its contents till it was read in evidence, and that he supposed that the money was paid in satisfaction of another claim. During the argument of tlie cause, the plaintiff tenders back the sum paid by the defendant. This is a sufficient tender.^ And it seems unnecessary that the acts of the wrong- doer should have been done for the purpose of preventing 1 Wilbur V. Flood, 16 Mich. 40. 2 Montgomery v. Pickering, 116 Mass. 227. 8 Bartlett v. Drake, 100 Mass. 174. * Smith V. Ilolyoke, 112 Mass. 517; Martindale v. Harris, 26 Oliio St. 379. 5 Smith v. Holyoke, supra. § 2 J RESCISSION AND CANCELLATION, ETC. 227 restoration. "N^Tiere the party who has practised fraud in a contract has entangled and complicated the subject of the contract in such a manner as to render it impossible that he should be restored to his former position, the party injured, upon restoring or offering to restore what he has received, and doing whatever is in his power to undo what has been done in the execution of the contract, may rescind it and recover what he has advanced.-' This rule that he who seeks to rescind a contract must place the other part}- in as good a situation, as far as pos- sible, as that which he occupied when the contract was made, is also satisfied if the judgment asked for will accomphsh that result. Ko offer to return is necessarj^ in such a case.^ And this is equally true, whether a plaintiff sues for fraud in relation to a contract, or the defendant sets up the fraud in defence of an action upon the contract.' Hence, if an insurance be obtained by fraud and premiums received thereon, it is not necessar}* that the underwriter should tender back the amount paid on discovering the fraud as a condition to the right of setting up the fraud in answer to an action upon the policy. K the premiums cannot actually be retained by the underwi'iter, it will be enough for him to offer judgment for the amount of them.'' If an owner of goods has been induced by fraud to sell them and accept a note on time with worthless securities, the fact that he has passed the note to another for value, and never reclaimed it, will not defeat his right to rescind the sale and recover the goods, unless the note was nego- tiated with knowledge of the fraud, or under such circum- stances as would amount to an affirmance of the sale.* 1 Masson v. Bovet, 1 Denio, 69. 2 Harris v. Equitable Life Ins. Co., 64 N. Y. 196; AUerton v. Aller ton, 50 N. Y. 670. 2 Harris v. Equitable Life Ins. Co., supra. * lb. 6 Manning v. Albee, 14 Allen, 7 ; 8. c. 11 Allen, 520 228 MODES OF RELIEF IN EQUITY. [Ch.vp. XIII. So, if A. obtain goods from B. by false pretences, and give therefor an accepted draft upon C, an accommodation acceptor, B. may rescind the contract ; and it is no defence to an action of replevin against a stranger in whose pos- session the goods are found that the draft had not been returned to A.^ It is no excuse for a failure to return a promissory note given by a third person, in the course of a sale, that tjie maker is insolvent, and the note for this reason of uo value. ^ It is different, however, as to the purchasei's own note ; it is enough if that be produced at the trial.* It is not always sufficient to excuse a failure to make tender that the thing held is of no intrinsic or market value. If it be capable of serving any purpose of advan- tage by the possession or control of it, or if the lossjof it would be an}' disadvantage to the party from whom it was obtained, tender must be made.^ It is laid down by some of the courts that a distinction exists between cases of actual and cases of constructive fraud in sales, as to the right of the defrauding purchaser to insist upon a return of the mone}' laid out by him in the purchase.^ In cases of constructive fraud merely, it is conceded that the purchase-money must be restored. Thus, an attorney who, without his client's consent, buj's a title as to which he has been consulted, may hold it until he is reimbursed what he has paid for it. And the same rule is admitted to apply to all sales which are unob- jectionable, except for the fiduciarj^ relation borne by the 1 Frost V. Lowry, 15 Ohio, 200. 2 Cook v. Oilman, 34 N. H. 556. 8 lb. ; Emerson v. McNamara, 41 Maine, 565 ; Thurston v. Blanch- ard, 22 Pick. 18. * Bassett v. Brown, 105 Mass. 551 ; Morse v. Brackett, 98 Mass. 205; s. c. 104 Mass. 494. 5 McCaskey v. Graff, 23 Penn. St. 321 ; Sands v. Codwise, 4 Johns 636 ; Forniquet v. Forstall, 34 Miss. 87 ; Weeden v. Hawes. 10 Conn. 50. § 2.] RESCISSION AND CANCELLATION, ETC. 229 purchaser to the other claimant. It is also admitted by the same courts that where a party goes into equity against his trustee, agent, or attorne}', or an heir-appa- rent, to be relieved against a hard bargain which has been obtained from him through his folly, weakness, or neces- sities, but which he made with his eyes open and without being influenced by any positive deception of the other party, relief will not be given until he who seeks it sur- renders all the advantage he has derived from the agree- ment. For example: The sum of £1,000 is assigned to an attornej^ for fees bj" a weak and intemperate woman ; but, no proof of deception being made, the attorney is enti- tled to hold the amount of his just claim. ^ Again : One in remainder sells an estate which is to fall in upon the death of a tenant in tail, turned of fiftj' and not likely to marr}', for a sum not greater than a single year's purchase. This, though a " catching bargain" against a necessitous heir, and not binding, cannot be set aside without pay- ment to the defendant of the consideration received.^ But the courts referred to as distinguishing between actual and constructive fraud consider that a title pro- cured by means of actual fraud is so obnoxious to notions of equity that the defrauded party need not ofljer to return the consideration received as a condition to relief; or, in the case of a conveyance of real propert}', that the deed need not stand as a security for the repayment of the money paid by the defrauding purchaser.^ 1 1 may, however, be questioned if an injured man com- ing into court to seek for redress for fraud can be said to come with good grace while he holds in his hands the price of the fraud and refuses to return it. If he will honestly repudiate the fraud, he should do so in toto. He 1 Saunderson v. Glass, 2 Atk. 296. 2 Barnardiston v. Lingood, lb. 13.3. 8 McCaskey v. Graff, 23 Penn. St. 321. 230 MODES OF RELIEF IN EQUITY. [Chap aIII. can tender the mone}' into court, and then, if entitled to damages besides rescission, he can be awarded them out of the fund ; and, if this be not sufficient, have execution for the balance. This does not implj' that the wrong-doer is so far entitled to repaj'ment as to be able to maintain an action for the recovery of the money, in case the parties should rescind the contract in pais. He has indeed paid the money in his own wrong, and has now no right to it which he can enforce by bringing an action at law or in equit}' . But when the defrauded party comes into court seeking equity, he should be willing to do equity ; or, if that be not the proper way to state it, he should clear himself from all imputation of ratifying in an}- degree the fraud of which he complains. To keep the money after rescis- sion might be allowing him far greater damages than he may have sustained ; and he might thus be quite willing to make a profit out of the fraud. Such would be at once a ratification and a repudiation of the transaction. One who attempts to deprive another of the advantage of a right to the purchase of propert}*, by making a frau- dulent pa}Tnent for the same, cannot insist upon repay- ment as a condition to the acquisition of the title b}^ the injured party. ^ Such a person does not stand in the posi- tion of a purchaser against whom a rescission for fraud is asked, who can require the return of what he has paid for the property. § 3. Of Waiver of the Right to Rescind. If a party with full knowledge that he has been defrauded in the purchase of real estate, and knowing his rights,^ pro- ceed to execute the contract on his part by the paj-ment of any part of the purchase-money, he thereby affirais the con- 1 Bleakley's Appeal, 66 Penn. St. 187. 2 Kempson v. Ashbee, Law Rep. 10 Ch. 15; ante,i^. 126. § 3.] RESCISSION AND CANCELLATION, ETC. 231 tract and cannot afterwards bring suit for rescission. ■• Slight acts, however, of an ambiguous nature, are not sufficient to bar the right to rescind. Thus, the use of oxen b}' the purchaser of them for five days after ground of suspecting fraud on the part of the seller will not bar the right to re- scind the sale.^ So, too, though a party who seeks to rescind a contract for concealment of material facts which he was bound to disclose may have confirmed the contract after knowledge acquired of part of the facts concealed ; still if he were not aware of sufficient facts at the time to authoi ize a rescission, such confirmation cannot bar him from an ac- tion to set aside the contract.* But as has elsewhere been observed,* to constitute a binding confirmation, there must be not only full knowl- edge of all the facts including those concerning the fraud or other invalidating matter ; the parties must also have been at arm's length at the time, and there should be knowledge, at the time of the alleged confirmation, of the invalidity in law of the contract.^ Hence the confirmation of a bond obtained by improper means, when the ratifying act is made under pressure (though not duress) , and in ignorance that the contract was not binding as matter of law, is not effectual.^ So if a person agree to give up his claim to property in favor of another, such renunciation of right will not be supported if, at the tune of making it, ho was ignorant of his legal rights and of the value of the property renounced, especially if the party with whom he dealt possessed and kept back from him better information on tlie subject.'' And the injured party must have substantial knowledge of the wrong which has been perpetrated upon him : he will 1 Knuckolls V. Lea, 10 Humph. 577. 2 Matteson v. Holt, 45 Vt. 330, 3 Pratt V. Philbrook, 41 Maine, 132. 4 Ante, p. 126. 5 n,. 8 Kempson v. Ashbee, Law Rep. 10 Ch. 15. McCarthy v. Decaix, 2 Russ. & M. 614. 232 MODES or RELIEF IN EQUITY. |Lfap. XIU. not be bound by a confirmation made wlien he had only suspicions that he had been wronged, at least if these sus- picions were not founded upon verj^ strong facts. ^ Moreover, the confirmation must itself have been fairly obtained. Compromises fraudulently obtained, it has been strongly said, should be broken through, though made over •and over again. ^ Upon this principle, the confirmation of an unconscionable purchase of a seaman's prize-money has been set aside ; the confirmation being no more just than the purchase.' To have eflTect as a confirmation of a contract obtained by fraud, a subsequent transaction must appear to have been entered into with that intention, or that portion of it alleged to be a confirmation must have been with such in- tention, where the party confirming was not under the in- fluence of the previous transaction.* When a confirmation of fraud is relied upon as defence to a suit for relief from fraud clearly established, the confirmation must stand upon the clearest evidence.^ The confirming act must be so connected with the previous transaction as to leave the de- frauded party the complete power of determining, as upon . an original act, whether he will do it or not.® The parties must be at arm's length and stand upon equal terms.'' In suits by purchasers for rescission of contracts of sale, it is said that the fact that the purchaser has remained in possession of the propert}- after tender to the vendor as well as before is a matter merely' addressed to the consci- ence of the chancellor in adjusting the equities of the parties in relation to rents, improvements, interest, or the like. It will not necessarily defeat the suit for rescission,' 1 Baker v. Spencer, 47 N. Y. 562. 2 Taylour v. Rochfort, 2 Ves. sen. 281, Lord Hardwicke. 3 lb * Montgomery v. Pickering, 116 Mass. 227. ^ lb. ^ ib^ ^ Moxon V. Payne, Law Rep. 8 Ch. 881. " Yeates v. Pryor, 6 Eng. (Ark.) 58. ^ 3.] EESCISSION AND CANCELLATION, ETC. 283 in the case of personalty at least, though doubtless a pre- sumption of waiver would arise if, upon a refusal of the tender, the injured party should retain and make use of the property' as his own, and not for mere custody and protec- tion thereof.^ The defrauded party to a contract has but one election to rescind the same. If he once determine his election, it IS determined for ever. Hence if it be shown that he has at an}"^ time after knowledge of the fraud, either by ex- press words or by unequivocal acts, affirmed the contract, his election is irrevocable. But the injured part}' has it not in his power to keep the question open so long as he will. The rule of law upon this point is this : So long as the defrauded person has made no election, he retains the right to determine it either way, provided that, in the in- terval while he is deliberating an innocent third pai'ty has not acquired an interest in the property, or that in conse- quence of his delay the position of the wrong-doer himself has not been substantially affected.^ But the mere fact that the defrauding party has, before the rescission, issued a writ and commenced an action pertaining to the subject- matter of the fraud is not such a change of position as will preclude the defrauded party from exercising his election to rescind. Nor is a declaration to rescind necessary prior to the answer to such action.^ A statement in a plea b}' the injured party in a case, for instance, of a sale of propert}', the price of which the wrong-doer now claims, that he requires a return of the property on the ground that he was induced by fraud to part with it, is a good and valid election ; provided, of course, nothing inconsistent with the plea had previously transpired,^ But it is laid down that the mere commence- 1 McCulloch V. Scott, 13 B. Mon. 172. 2 Clough V. London Ey. Co., Law Eep. 7 Ex. 26 in Exch. Ch. 3 lb. * lb. 234 MODES OF RELIEF IN EQUITY. [Chap. XI II ment of an action of trover for the conversion of goods, which action proceeds upon the ground that the goods came lawfull}' into the possession of the defendant, cannot alone be taken to amount to an election.^ The prosecution of the suit to judgment would, however, doubtless amount to an election. But if it were discontinued, and the record contained no distinct allegation showing an election, the plaiutift' might still, it seems, sue for rescission.^ § 4. Of Cancellation and Surrender. The cases in which a court of equit}' exercises its juris- diction to decree the surrender and cancellation of written instruments are, in general, where the instrument has been obtained by fraud ; whei'e a ■ defence exists which would be cognizable only in a court of equity ; where the instrument is negotiable, and by a transfer the transferee may acquire rights which the present holder does not pos- sess ; and where the instrument is a cloud upon the title of the plaintiff- to real estate.^ Cancelling an executed contract is an exertion of the most extraordinary power of a court of equit}'. The power ought not to be exercised except in a clear case, and never for an alleged fraud, unless the fraud be made clearly to appear ; never for alleged false representations, unless their falsit}^ is clearl}' proved, and unless the com- plainant has been deceived and injured by tliem.^ It ma}^ be stated as settled law that, whenever there is great weakness of mind in a person executing a convey- ance of land, arising from age, sickness, or any other cause., though not amounting to absolute disqualification, and the consideration given for the property is greatly in* 1 Newnham v. Stevenson, 10 Com. B. 713. 2 See Clough v. London Ry. Co., supra, 8 Venice v. Woodruff, 62 N. Y. 462. * Atlantic Delaine Co. v. James, 94 U. S. 207. S 4.J RESCISSION AND CANCELLATION, ETC. 235 adequate, a court of equity will, upon proper and season- able application of the injured party, or his representatives interfere and set the couve^'ance aside.-' In like manner, a deed made by a person while in a state of intoxication will be set aside, if advantage has been taken of his situation, or if his drunkenness was produced by the act or connivance of the person to be benefited by the deed.^ Equit}' has jurisdiction to set aside deeds and other legal instruments, which maj" operate as a cloud upon the legal title of the owner of land. But the plaintiff, to support his bill, must establish the validity of his own title, and show facts which render the defendant's claim invalid.* Hence, where the defendant claims under a bond for title from the plaintiff, the plaintiff must show that the bond has become null by default of payment on the part of the de- fendant, or that for some other reason it has ceased to be of force.* If it appear that a mortgage has been taken, with notice of a valid conveyance, good against the mortgage, but by reason of the recording of the mortgage before the record- ing of the deed, the former seems to be entitled to priority over the latter, equity will relieve the land-owner from the cloud which the mortgage places over his title. But the fact of notice must be well established.'^ One who has a title to land by prescription merelj', may come into equit}^ to have a cloud removed from his title, caused by the assertion of title by one actually in posses- sion.^ The matter of possession has, therefore, nothing to 1 Allore V. Jewell, 94 U. S. 506. 2 O'Conner v. Kempt, 29 N. J. Eq. 156. s Banks v. Evans, 10 Smedes & M. 35 ; Kerr v. Freeman, 33 Miff 292. ■* See Jayne v. Boisgerard, 39 Miss. 796 5 Stolwell V. Shotwell, 24 N. J. Eq. 378. 6 Mars ton v. Rowe. 39 Ala. 722, 236 MODES OF RELIEF IN EQUITY. [Chai«. XIH do with the question of the right to proceed in eqnit}- for such a purpose.^ An apparentl}- good record-title may be removed in equit}' by one having acquired title by adverse possession.^ But the plaintiff must show either a good legal or a complete equitable title. ^ Where the legal title to real estate is vested in one per- son, and the equitable title in another, the situation not arising under a conve^'ance in trust, the holder of the equi- table title ma}', in equit}', compel the owner of the legal title to conve}' to him the legal title upon his removing the incumbrances, if an}- exist.* Equity will also entertain a bill to adjust the claims, or settle the priorities of conflicting claimants, where there is thereb}- created a cloud over the title, which would prevent the sale of the land at a fair market-pince.^ An illegal tax, levied b}" municipal authority, whose charter declares that taxes shall be a lien upon the lands of the citizens, is a cloud upon the title to those lands ; and a bill ma}' be maintained to restrain the collection of the tax ; ^ which proceeding, in effect, removes the cloud. Equity has sometimes refused to remove an alleged cloud from the plaintiff's title, where the plaintiff's supe- riority of right was clear ; ^ but that has perhaps always occurred where the instrument alleged to operate as a cloud was void on its face, or had been adjudged void.* If the instrument be not absolutely void, it is clear that relief will be given. If a levy has been made upon property alleged to have been fraudulently convej'ed by the judg- 1 Branch v. Mitchell, 24 Ark. 431. 2 Arrington v. Liscom, 34 Cal. 365. 8 Toulmin v. Heidelberg, 32 Miss. 268. * Smith V. Orton, 21 How. 241. 5 Anderson v. Hooks, 9 Ala. 704; Lynn v. Hunt, 11 Ala. J05. 6 Scofield V. Lansing, 17 Mich. 437. ^ Hotchkiss V. Elting, 36 Barb. 38. 8 Hartford v. Chipman, 21 Conn. 488. § 4.J RESCISSION AND CANCELLATION, ETC. 237 meut debtor, the plaintiff may come into court to have the conveyance set aside as a cloud upon his title, preventing a sale for the full value, though the propert}' might be sold in its present condition under the lev}- made. ^ It is said, however, that for the purpose of removing a cloud, equity ought not to set aside an instrument origi- nally valid, which has since become ineffectual by reason of subsequent events that have put an end to its operation. And, in accordance with this proposition, it has been de- cided that a deed originally valid as a power in trust, ren- dered ineffectual b}" the death of the person on whose appointment onl}- the power could be exercised, will not be set aside for the purpose of removing a cloud. ^ It is also said that one who has the superior legal title to land by deed from the purchaser at a mortgage sale, and is in undisturbed possession, cannot maintain an action to set aside a conve3'ance made b}- the mortgagee and alleged to be fraudulent.^ B}- other authorities, it has been decided that equity has jurisdiction to remove a cloud from the plaintiff's title by cancelling either a voidable or a void deed or instrument ; and that this jurisdiction will be exercised, whether the character of the deed or other instrument complained of appears upon its face or not.^ In accordance with this rule, it has even been decided that equity will assume jurisdiction to declare against a forged deed, and cancel and remove it as a cloud upon title. ^ Other authorities, however, declare that to induce a court of equity to order a wi'iting to be cancelled or surrendered, as constituting a cloud upon title, it must at least be an instrument which upon its face is, or with the 1 Vasser v. Henderson, 40 Miss. 519. 2 Hotchkiss f. Elting, 36 Barb. 38. 3 Butler v. Viele,44 Barb. 16(x * Almony ;;. Hicks, 3 Head, 39 ; Peirsoll v. Elliott, 6 Peters, 95. 5 Bunco V. Gallagher, 5 Blatchf. 481. 238 MODES or RELIEF IN EQUITY. [Chap. XIII. aid of extrinsic facts may be, some evidence of a right adverse to the plaintift"s.' Equity will decree the surrender of valuable instiniments to a party from whom they are unlawfuU}' withheld. If, for instance, the plaintiff has intrusted a deed to the de- fendant, for the purpose of having certain informalities therein corrected, and the defendant unjustly refuses to surrender it, he will be decreed to execute the trust re- posed in him b}' restoring the deed, or, if he has destroyed it, b}' making another equall}' good convej'ance.^ This doctrine appears to rest on the ground of trust, and does not extend to the entire class of cases in which detinue or replcAdn might be maintained at law. It probably does not extend to cases in which the defendant has borrowed the particular chattel for his own or another's use, but only to cases in which a duty has been imposed upon the de- fendant in the interest of the plaintiff. In the absence of special circumstances, calling for the interposition of a court of equity, an action cannot be maintained to compel the suiTcnder of a promissorj' note past due, upon the ground that it has been paid, but not taken up.^ 1 Nickerson v. Loud, 115 Mass. 94. 2 Albert v. Burbank, 25 N. J. Eq. 404. 8 Fowler v. Palmer, 62 N. Y. 633. § 1.1 adjViinistration of debts and assets. 239 CHAPTER XIV. ADMINISTRATION OF DEBTS AND ASSETS. § 1. Of Marshalling. The equit}' of marshalling arises where a creditor, having a claim ou two or more funds, proceeds against them in a different order from that which the testator intended, or proceeds against some fund which is the only resource of some other creditor. In order, therefore, to preserve the intention of the testator as far as possible, and also as far as possible to provide for the just claims of all creditors, equity will allow in tlie one case the disappointed legatee or devisee, in the other the disappointed creditor, to take the place of the creditor who has caused the disarrange- ment, and stand on his rights.-' The simple contracts of a deceased jjerson are, at com- mon law, prima facie paj'able out of his personal estate onl}' ; while his debts bj' specialt3' are, in case the person- alt}- should be insufficient to paj- them also, payable out of his real estate. To this extent the rules at law and in equit}' agree. A distinction, however, arises in chancery, in the ad- ministration of the assets of a deceased person, out of the peculiar doctrines of that court concerning property, — equitable propert}' giving rise to what are called equitable assets. Legal assets, however, are not entirely confined to property which may be reached at law ; for hy a statute 1 WilUams, Real Assets, 109; ante, pp. 82-84. 240 MODES or RELIEF IN EQUITY. [Chap. XIV, passed in the reign of Charles II., which is probabl}' in force in this country, unless other Icgiskition has taken its place, trust estates in fee-simple permitted to descend to the heir are made legal assets,^ though it may be neces- sary, in order to obtain possession, to resort to a court of equity. If the deceased has devised his real estate upon trust to pa}' his debts, or if he has simply devised the same to his heir or executor for that purpose, or has created a charge on his real estate for the payment thereof, or if he has devised it to a stranger or to his heir, when it was pre- viously charged with debts, such propert}' would constitute equitable assets. And, in short, equitable assets must consist of mere equitable propert}'. In the contemplation of equity, all debts are equal, and the debtor is equally bound to satisfy them all ; and, while the principle is departed from in the case of legal assets, no distinction is made in equity in the administration of equitable assets between debts by simple contract and debts by specialty.'^ Both are satisfied pari passu, without regard to priority.^ It should be observed, however, that estates expresslj' devised for the payment of debts, M^hether by trust or otherwise, are applicable before descended estates ; * while those estates upon which existing mortgages or other in- cumbrances are charged by the debtor himself,^ or, being charged by another, are adopted as his own,® are not an- swerable for the testator's general debts except upon the insufficienc}^ of all other funds left applicable to the pay- ment of his debts. '^ 1 29 Ch. 2, c. 3, § 10. 2 Turner v. Turner, 1 Jac. & W. 39, 45. 3 Plunket V. Penson, 2 Atk. 290, 29i. * Manning v. Spooner, 3 Ves. jun. 114, 118. 5 Lawson v. Hudson, 1 Brown, C. C. 58. 6 Oxford V. Rodney, 14 Ves. 417. ' Ante, p. 83. § 1.1 ADMIXISTltATION OF DEBTS AND ASSETS. 241 It has, thus far, been assumed that the assets of the deceased person are apphcable according to the usual order in which they are administered at law. But this order is hal)Ie to variation in equit}', in some instances, from the disposition of the court to cany into full effect its own peculiar principles of distribution. An instance of this may be seen where the assets are partly legal and parti}' equitable, and a superior creditor has been partly- paid out of the legal assets ; in which case equil}', in administeriug the equitable assets, will postpone him until an equality in satisfaction has been made there- out to tlie inferior creditors.^ Another instance of the same kind arises where one creditor has two funds liable to his claim, and another creditor has a claim upon but one of the funds. In such a case, the latter has a right in equit}' to compel the for- mer to resort to the fund upon whicli he alone has a claim, (if that course be necessarj- for the satisfaction of the claims of both creditors) , so far as this will not operate to the l)rejudice of the creditor entitled to resort to both funds. But this creditor will be allowed to resort to the second fund, if the first be insufficient to satisfy his demand.^ But this equity is, it seems, an equity against the debtor also, or may be so treated by the inferior creditor. If the paramount creditor should proceed to enforce his claim upon the double fund, and should thereb}' exhaust the fund upon which the inferior creditor has a claim, without ex- h.austiug the other fund, the latter creditor could be sub- stituted to the rights of the paramount claimant to the extent of his (the inferior creditor's) demand.^ The debtor will not be permitted to claim the other estate, discharged from all burden. Unless founded upon some special equity, marshalling » Jorcniy, Equity, 528. 2 i story, Equity, § 633. 8 Bank of Kentucky v. Vance, 4 Litt. 108 ; Adams, Equity, 272. 16 242 MODES OF RELIEF IN EQUITY. [Cuap. XIV will not be enforced, except between creditors of the same person, having demands against funds which are property of the same person. If, for instance, a person have a de- mand against A. and B., creditors of A. onlj' cannot com- pel the person having the demand against both to proceed against B. ; unless A. has the right to sa^- that he must do so.^ The application of the doctrine of marshalling further requires, not onl}" that there should be two creditors of the same person, but also that one of them should have two funds belonging to the same person, to which he can resort. Nor is the doctrine applicable unless there are two funds in existence before the question of marshalling is raised.^ It should be added that the rules of equit}' concerning marshalling have been greatly affected by statute in tli« ditierent States ; and the subject must be considered in a particular State with reference to local legislation and judi- cial interpretation thereof. § 2. Of Exoneration.^ The doctrine of exoneration gives a testator the right to invert the order in which, the^ different parts of his estate would otherwise be disposed of in the liquidation of his debts. Thus, the testator may relieve his personal estate from the burden of his simple contract debts, and cast it upon the real estate. This ma}- be done either by express words or by any clear manifestation of intention. It must, however, in general appear that the testator de- signed not merely to subject his realty to such debts, but also to discharge his personal t}' therefrom.* 1 Ex parte Kendall, 17 Yes. 514, 520, Lord Eldon. 2 Li re International Life Assur. Soc, Law Rep. 2 Ch. Div. 476. 3 As to exoneration of another kind, see the next chapter. 4 Walker v. Jackson, 2 Atk. 624; Samwell v. Wake, 1 Brown C. C. 144. §2.] ADMINISTRATION OF DEBTS AND ASSETS. 243 It must be observed, however, that if the secondary fund which is substituted for the primary be insufficient for the satisfaction of the debts to which it is appropri- ated, the surpkis vakie of the primarj' fund bej'ond the amount of the secondarj- will still be applicable to the pay- ment of the debts. Whatever regulations a testator may make between those upon whom he confers his bounty, ^3 to the order in which his assets shall be administered in the liquidation of his debts, he cannot thereby defeat his creditors, or dispose of his estate in a manner inconsistent with justice towards them.^ Legacies given in the ordinary manner are to be paid b}' the legal representative out of the personal assets ; and therefore the ordinary rule and presumption is, that the personal estate is also the primary fund for the pay- ment of legacies. That being so, it has long been settled that if a testator desire to make his real estate, in addi- tion to his personal estate, assets for the payment of debts and legacies, or either of them, the presumption is that the real estate was made an auxiliar}' fund, secondarily liable onl}' after the personalt}', which still would retain its primary liabilit}'.^ In accordance with this doctrine, it has been held neces- sarj', not onl}- to have an expression of oneration of the real estate, but a sufficient expression of exoneration of the personal estate, wholly or partly, before there could be an}' interference with the ordinary' rule for the applica- tion of assets. At first it seems to have been supposed that this should be evidenced by actual expression of oneration and exoneration, but it has since been determined that the entire will may be read, and the intention of the testator gathered therefrom in favor of the application of the doctrine, even in the absence of apt words of onera- tion and exoneration.^ 1 Manning v. Spooner, 3 Yes. jun. 114. 2 Allan 7> Gott. Law Kep. 7 Ch. 439. 442, James, L. J. 8 jb. 244 MODES or RELIEF IN EQUITY. [Chap. XIV Legacies, however, do not stand upon entirely the same footing as debts. The evidence of oneration of tlie realty and exoneration of the personalty should clearly appear in the case of directions as to the payment of debts. But a gift of a legacy may well be made so as not to be capable of charging personalty. A man may give his land at "VVhiteacre, charged with an annuity, or a lump sum of money, in favor of another. In that case, the annuity or the sum of money would never be a legacy in respect of which the personalty could be charged ; and there would be no need of finding an intention to exonerate what had never been oneratcd.^ When a testator creates from real and. personal estate a mixed and general fund, and directs the whole of that fund to be applied for certain stated purposes, he in effect di-^ rects that the realty and personalty which have been con- verted into that fund shall answer the stated purposes, and each of them, pro rata, according to their respective val- ues. If any of those purposes should, for any reason, fail, then the part of the fund which, according to the in- tention of the testator, would otherwise have been appli- cable to those purposes, is undisposed of." § 3. Of Cox^'ersign. The doctrine of conversion, which has already been referred to,' is founded upon the rule of equity that what is properly directed to be done shall be considered as done. By virtue of this doctrine, one may impress upon his per- sonalty the character of real estate, and upon his real estate the character of personalty, in so effectual a manner that the property will thenceforth be treated in equity as of that description into which it is to be converted. 1 Allan V. Gott, supra, James, L. J. 2 lb. ; Roberts v. Walker, 1 Russ. & RI. 752, 767. * Ante, pp. 50-55. § 3.] ADMINISTRATION OF DEBTS AND ASSETS. 245 The subject has been touched upon so full}^ elsewhere, that it need only be stated here that the question whether there has been a conversion is decided upon the intention of the testator as manifested by an examination of the entu'e will. It may be here repeated, that if the property devised be real, and directed to be converted for the gen- eral puii30ses of the will, — as, for instance, to form with the personalty a common fund, — it will be considered an absolute conversion ; while if the purposes be specific, — as to pay the testator's debts, legacies, or other charges, — the property be3ond what is necessary to accompHsh the purpose will be held to retain its original character. But this rule is subject to control by the language of the will. There is another species of conversion, arising upon the dissolution of a partnership. Upon such dissolution, all the property belonging to the partnership must be sold, unless the parties can amicably dispose of it ; and the pro- ceeds of the sale, after the payment of the j)artnership liabiUties, will be divided among the partners, according to their respective shares in the capital. It follows that any real property' which the partnership may have acquired and still hold becomes converted into personalty. And this is true not merety as between partners, but also as between the real and personal representatives of any de- ceased partner.^ 1 Darby v. Darby, 3 Drew. 495, 503. See Steward v. Blakeway, Law Rep. 4 Ch. 603, 609. 246 MODES OF RELIEF IN EQUITY. [Chap. XV CHAPTER XV. CONTRIBUTION AND EXONERATION. The equities of contribution and exoneration ^ arise where several persons are bound b}' a common demand, not aris- ing ex malo^ and the order of their liability has been acci- dentally deranged. If the liabilities be joint, he who has paid more than his share is entitled to contribution from the rest, i.e.^ to a sharing of the common burden. If^ some be liable in priorit}- of the rest {i.e., as principals), the parties secondaril}- hable, if compelled to discharge the claim, are entitled as against those primarily liable to exoneration, that is, exemption from the burden. In order to the existence of these equities, it is neces- sary" that the charge be binding. The voluntary act of one party in expending mone^: for other interested parties creates no right to contribution from them. A co-owner of land, for instance, though bound to pay a mortgage upon the estate, is not bound to make repairs or improve- ments ; and hence he cannot compel his associate to share with him the expense he may have incurred in such things, except by consent, or perhaps by an established custom known to his associate, or which he was bound to know. But there is said to be an exception in favor of houses and mills, so far as necessary repairs are made.^ The equity of contribution does not arise where the ^ Tliere is another kind of exoneration noticed in the preceding chapter, § 2. 2 Coke, Litt. 200 b.; Adams, Equitj, 267. See, also, 4 Kent, Comm. 370. CHAi'. XV.] CONTKIBUTION AND EXONERATION. 247 charge against the several parties arises ex malo, or by acts in defiance of law. It is sometimes said, in general terms, that there can be no contribution between wrong-doers, that is, between tort-feasors jointly liable for an offence. This remark is a common one in the older books.-' But the proposition has been narrowed so much in later times, that in that foim of statement it is misleading. It is question- able' if the rule against contribution between wrong-doers now extends beyond cases in which the parties have been engaged in some offence malum in se, or some directly intended, or actuall}- known, breach of the law. It appears to be well settled that where the tort of one person is the tort of another b}- mere construction of law onl}-, and not b}- reason of an}' common participation in or culpabilit}' in respect of the tort, the non-participating part}', if compelled to answer for the consequences, has a right of contribution against the other parties to the offence.'^ Upon this ground, the rule excluding contribution as be- tween trustees guilty of a technical breach of trust, unat- tended with fraud, does not appl}'. Each trustee will, in such a case, be liable to the cestui que trust for the loss sustained b}' him ; but, as between the trustees themselves, the}' will be bound to share the amount recovered by the injured party. And if any third party has knowingly reaped the benefit of the wrong, the loss may be put upon him by the trustees.* The equities of contribution and exoneration are both exemplified in the contract of suretyship, — the former by the rights of sureties as between themselves ; and the lat- 1 See Merryweather v. Nixan, 8 T. R. 186; s. c. Smith's L. C, on which the statement is generally founded. 2 Bailey v. Bussing, 28 Conn. 455, where the authorities are ex- amined. See, also, Acheson v. Miller, 2 Ohio St. 203; Moore v. Ap pleton, 20 Ala. 633. 3 Seddon v. Connell, 10 Sim. 58, 79, 86. 248 MODES OF RELIEF IN EQUITY. [Chap. XV ter by their rights as against tlie principal. It is to be remembered that contribution signifies a due s/iaring ol the common burden, and exonerative exemption tlierefrom by compensation in full to those upon whom the burden has fallen. It follows that the right of contribution arises between sureties where one has been called on to make good the principal's default, and has been compelled to pa}' more than his share of the entire liabilit}'. Such surety may thereupon call upon his associate, or associates, to make good to him the excess so paid above his share. ^ Prima facie, however, it is the dut}' of a surety who has been compelled to bear more than his share of the burden assumed, to apply first to the principal for reimbursement, from whom (in the absence of anj' different engagement) . he is entitled to full relief. He must be able probably- to show the insolvenc}' of the common principal before he can call for contribution from his associates, or at least be prepared to show due diligence to obtain reimbursement from the principal, unless he can prove that the parties agreed between themselves, for a good consideration, to dispense with this rule. In the absence of express contract, the general rule is, that, where sureties have united in the same contract, they must, as between themselves, share the general burden equally". If, however, their liabilit}' has been created b}' dis- tinct instruments for distinct things, though these be parts of the same general undertaking, each set of sureties must share equally the burden imposed by their respective engagements : ^ they will not be entitled to throw the sev- eral instruments together, in which the}' have united, and then insist upon equality, unless there has been a valid 1 Lytle V. Pope, 11 B. Mon. 297, 309; Rutherford v. Branch Bank, 14 Ala. 92. 2 Adams, Equity, 2G9. Chap. XV.] CONTRIBUTION AND EXONERATION. 249 agreement that such shall be done. Such matters, how- ever, do not change in any respect the prima facie Uabilit}' of the principal to exonerate the sureties from all burden.^ Where, however, several persons or sets of persons enter into suret^'ship engagements, which are the same in legal effect, though at different times and by different instruments, for the same debt, and to the same persons, the right of requiring equality among all b}' contribution prevails.^ One surety has no right to make any special contract changing the nature of his liability without the knowledge of his associates, whether such contract be made with his principal or with one of his co-sureties ; and yet such a contract ma}- be perfectly good between the parties to it. And if a surety should, under an engagement with his principal, unknown to his associates, receive part of the fruits of the undertaking for which the general contract was executed, he would not be entitled to contribution from the other sureties on being compelled to pay the amount of the bond or contract. For example : The plaintiff, a co-surety with the defendant in a bond given for the loan of $1,000, without the knowledge of the defendant, receives, according to previous arrangement with tlie principal, one half of the sum borrowed. He is not entitled, on being compelled to pay the amount of the bond, to require contribution from the defendant.* Fair dealing also requires that if one of several sureties receive a fund to be applied towards payment of the debt, he should be treated as holding for the benefit of all the sureties ; and such is the rule in equity.^ This rule, how- ever, applies only to cases in which the fund has been put 1 lb. ; Deering v. Winchelsea, 2 Bos. & P. 270. '■^ Deering v. Winchelsea, 1 Lead. Cas. in Eq. 78. 8 McPherson v. Talbott, 10 Gill & J. 499. * Agnew V. Bell, 4 Watts. 31. 250 MODES OF RELIEF IN EQUITY. [CnAi- XV into the surety's hands for the sake of indemnification as to this particular engagement of suretyship. The surety has a right to hold to his individual use any security or fund given him, though given at the time of the present con- tract, to indemnify him from loss upon other engagements as well as upon this one,^ unless, perhaps, the security or fund were sufficient to answer all the party's liabihties, including the present engagement. One of several sureties may also, with knowledge by the rest, receive an indemnity from his principal against lia- bility in the present engagement, and hold that to his own use to the extent of his share of the common burden ; and if it be not sufficient for that purpose, he maj' recover the balance, by wa}^ of contribution, from his associates^- but no more. But the rule of equality requires that sure- ties should be equal to each other in situation ; and the taking of such indemnit}' being in contravention of the rule, the consequences thereof can only be avoided by evidence that no wrong has in fact been done to the other sureties. But if one of the sureties take a benefit for his own use fairly, he is entitled to it, in the e^'es of equity, until indemnified. If then a surplus remain, his associates are entitled to that in equal parts. ^ In order to be entitled to contribution, a surety com- pelled to bear more than his proportion of the burden, should be able to show that he has not failed to take the benefit of an}' legal defence available to him upon the contract. If, for instance, he has neglected to avail him self of the Statute of Limitations, he cannot require con- tribution on the part of his associates.* A like equity of contribution arises between underwriters, where the owner of property has effected several insurances on the same risk and interest. The owner is not only not 1 McCunn v. Belt, 45 Mo. 194. 2 Moore v. Moore, 4 Hawks, 358. 8 Fordham v. Wallis, 17 Jur. 228. Chap. XV.] CONTRIBUTION AND EXONERATION. 251 allowed in such a case to reeover more than one full satis- faction of his loss, but if he recover the entire amount of his loss from any one alone of the insurers, that party will be entitled to call upon the other insurers for a ratable contribution towards the loss paid, dependent upon the respective sums insured. The underwriters do not neces- sarily share equally the amount of loss : they share it according to the respective insurances. The complexit}^ of an agreement, and the multiplicity of suits to which it might give rise at law, are grounds upon which a court of equit}' might entertain a bill for the adjust- ment of a contribution called for by the agreement in one suit.-^ In accordance with this principle, a bill in equity b}' insurers against a carrier, disclosing a large number of different contracts of affreightment under which they claim by subrogation, and which the}' seek to enforce, presents a proper ground for relief.'^ The mere fact, however, that the party seeking the in- terposition of equitj' has a multitude of suits to bring against the same person or persons gives him no ground to go into equity : there must be some other matter over which equit}' has jurisdiction.* A creditor may come into equity upon the death of his debtor, and present his claim against the surety upon the bond of the debtor's adminis- trator, or against the administrator himself, with a view to avoiding a considerable number of suits on demands held by him against the debtor ; but this is because equity has general jurisdiction of the administration of estates.* The right to require contribution occurs also where mort- gages or other incumbrances exist, and the property bound by them is not absolutely vested in a single person ; as where different parcels of land are included in the same 1 Black V. Shreeve, 3 Halst. Eq. 440. 2 Garrison v. Memphis Ins. Co., 19 How. 312. 3 Doggett V. Hart, 5 Fla. 215. * Green v. Creighton, 23 How. 90. 252 MODES OF RELIEF IN EQUITY. [Chap. XV mortgages and afterwards sold to diflerent persons. In such cases the burden is to be borne by the parties inter- ested according to the value of their respective interests and the benelit which they may derive from its discharge.^ This rule, however, does not apply, according to the current of authority, where there are several purchasers in succession at diflerent times. If, for instance, there be a judgment against a person owning at the time three acres of land (the judgment being a lien upon lands), and he sell one acre to another, the remaining two acres are first chargeable witli paj'meut of the judgment debt. Then if an- other acre of the parcel should be sold, the remaining acre would first be chargeable with payment of the debt. If that were insufficient, resort must first be made to the acre last sold, before the acre first sold could be subjected. I The same doctrine would apply if the different parts were mortgaged in the same manner.^ The rule, however, would be different in both cases if the subsequent pur- chaser or mortgage took expressly subject to the lien or incumbrance.^ The doctrine of general average affords another illustra- tion of the equity of contribution. This equit}' arises where a ship and cargo are in imminent peril, and a por- tion is intentionally sacrificed for the protection of the rest. This ma}' occur by the throwing of goods overboard, or the cutting away of part of the ship's rigging, or even b}^ stranding the ship itself to save the cargo. The danger requiring such an act being one likely to affect all alike Mb) have an interest in the venture, all must share propor- tionally the loss ; the amount of the several burdens being determined by the proportion existing between the loss and 1 White V. White, 9 Ves. 554 ; Jones v. Jones, 5 Hare, 440. 2 Clowes V. Dickenson, 5 Johns. Ch. 235 ; Cowden's Estate, 1 Barr, 267; Adan>s, Equity, 270 (Am. ed.). But see 2 Story, Equity § 1233 a. 3 Schry ver v. Teller, 9 Paige, 173 ^ Briscoe v. Power 47 111 447 Chat. XV.] CONTRIBUTION AND EXONERATION. 253 the value of the several quantities of goods sacrificed and saved (after deducting freight), at the port of discharge.-' There is no contribution, however, where the sacrifice is not purposely made, but is directl}- caused by the perils of the sea, — the action of the winds, waves, or weather ; and the same is true of sacrifice purposely made if the act be without avail, or if done not to save the cargo but to save the crew and compan}'."^ The equit}' of exoneration arises between surety and principal as soon as the surety has paid any part of the debt. He may then sue the principal at law for reimburse- ment, or he may proceed in equity against the creditor to compel him to transfer any security given by the principal for the payment of the debt ; that is to say, the surety is entitled to be subrogated to the rights of the creditor against the principal debtor, supposing that the creditor has obtained full paj^ment.^ And no assignment to him of the debt is necessary : indeed none could be made, since the debt was extinguished by the pa3'ment.^ This equity of exoneration may also be employed to re- quire the principal to relieve him of liabihty by pa3ing the debt ; * and this, too, though neither party has yet been sued.^ So, also, if the principal debtor should be in in- solvent circumstances, the surety might proceed against him to obtain au}' indemnity within reach, or to subject any assets to be found, not subject to lien, to the payment of the debt.'' And the representative of the principal debtor, upon his decease, is subject to the same remedy.* 1 Adams, Equity, 271. 2 i|j, 8 Clason V. INIorris, 10 Johns. 524 ; Tatum v. Tatum, 1 Ired. Eq. 113 ; Wade v. Green, 3 Humph. 547. See ch. on Subrogation, post. * Hodgson V. Shaw, 3 Myhie & K. 183. 5 Antrobus, Davidson, 3 Mer. 569, 579. ^ Adams, Equity, 270. 7 Polk V. Gallant, 2 Dev. & B. Eq. 395 ; Daniel v. Joyner, 3 Ii ed Eq. 513 ; McConnell v. Scott, 15 Ohio, 401. 8 Steplienson v. Taverners, 9 Gratt. 398. 2n4 MODES OF RELIEF IN EQUITY. [Chap. XVI CHAPTER XVI. ELECTION. A DOCTRINE, called the doctrine of election/ arises where a person takes upon himself to dispose of the actual or an- ticipated property of another, giving him at the same time a benefit in lieu thereof. The question, in a case of this kind, is not whether the legatee or devisee shall receive one of two benefits conferred by the testator, but whether, for the sake of what is given by the" will, he will relinquish the enjoyment of what he is already entitled to hold. The plainest illustration of this doctrine is the one just suggested, to wit, an attempt to dispose of another man's property by giving him other property in lieu thereof. Another illustration is found in the case where a person has an actual or inchoate title, in derogation of the estate of another, such as a charge or an incumbrance thereon, or a prospective right 6f dower, and the latter takes it upon himself to dispose of the whole propert}^ giving to the person so partiall}' interested therein a benefit in lieu of his or her claim. A further instance of the application of this doctrine occurs where the party put to his election had no previous right or title, but has acquired one b3'the default, and con- trary' to the design, of the testator; as where he intended to give his real estate away from his heir, bequeathing to ^ Upon this subject, the reader should consult the learned note to Noys V. Mordaunt, in the Leading Cases in Equity, which has been of great service in the preparation of this chapte~. Chap. XVI.] ELECTION. 255 him. personal property in lieu thereof, and the devise turns out inetFectual.^ It is to be noticed, however, that, though in the first of the above illustrations the intention to put the donee to his election is sufficiently clear from the nature of the disposi- tion, it may not be so in the other cases. In the case of the widow's dower, the intention to put the widow to her election must be clear and positive, or the gift to her must be so inconsistent with her right to dower as to render the intention unequivocal.^ And, in the case of the heir, though, if the testator were to confer upon him the benefit on condition that he should not dispute the will, he would thereby probably put the heir to an election ; still, the mere fact that the execution of the will, for instance, has not been attended with the necessary solemnities to render it eftec- tual in relation to the real estate, though it is good as to the personalt}',^ is not sufficient to put him to an election. In such an event, he is regarded as taking paramount to the will. Where the party put to an election between taking the benefit, and giving up his own estate in accordance with the terms of the will, elects to keep his own, an im- portant question may arise ; to wit, whether he thereby forfeits the estate given him by the will, or can hold it, merely making compensation to the disappointed donee for the value of the estate at the decease of the testator. Af- ter some doubt among the authorities, it has become settled in England that compensation, and not forfeiture, is the lule to be applied to such cases. To put the case as it has been illustrated in the courts : Suppose a testator gives his 1 Pettiward v. Prescott, 7 Ves. 541 ; Hume v. Eundell, 2 Sim. & S. 174; Cumming v. Forrester, 2 Jac. & W. 334. . 2 Ayres v. Willis, 1 Ves. sen. 230. 3 But the distinction as to the execution of wills between realty ftnd personalty has been generally done away. 256 MODES OF RELIEF IN EQUITY. [Chap. XYI. estate to A., and directs that the estate of A., or some part of it, shall be given to B. If the devisee will not comply with the provision of the will, equitj' holds that another condition is to be implied as arising out of the will and the conduct of the devisee, — that, inasmuch as the testator meant that his heir should not take the estate which he gave to A. upon consideration that it would give his own estate to B., if A. refuse to comply', B. shall be compen- sated to the extent of the value of the propert}' intended for him, b}' taking the same out of the amount of the prop- erty devised to A,^ This principle of compensation, instead of forfeiture, has been adopted in this country ; "^ and its operation is generall}' thus worked out : In the event of an election to take against the instrument, courts of equity assume juris- diction to sequester the benefit intended for the refractory- donee, by wa}^ of taking the rents, profits, and issues, in order to secure proper compensation to him whom such election disappoints. The surplus, if any, above the value of the property owned by the electing donee, after com- pensation, does not devolve upon the representative of the testator as undisposed of, but is restored to the donee, the purpose being satisfied for '^N'liich alone the court conti'olled the legal right. ^ And the disappointed donee can never get more than the value of the interest intended for him. But, if the estate devised to the electing donee is obviously less valuable than that owned b}' him, equity will decree a conversance of the estate devised to the first donee, or per- mit the second donee to recover it in ejectment.'* 1 Ker V. Wauchope, 1 Bligli, 125. 2 Stump V. Findlay, 2 Rawle, 1G8; Tiernan v. Roland, 15 Penn. St 430, i51 ; Wilbanks v. Wiibanks, 18 111. 17. 8 Gretton v. Hawaril, 1 Swanst. 409; Sandoe's Appeal, 65 Penn. St. 314. < Lewis 17. Lewis, 18 Penn. St. 79. Chap. XVI.] ELECTION 257 This doctrine of election is never applied, however, ex- cept where, if an election is made contrary to the will, the interest that would pass from the testator by the will can be laid hold of in equity, to compensate the disappointed donee. Some free, disposable property must be given to the electing donee, which can become compensation for what the testator endeavored to take away. ^ The rule requiring election becomes difficult to apply when the testator has a partial interest in the property to be dealt with by the first donee. ^ In such cases, the court wiU incline to a construction which would make him deal only with his own, and thus prevent the necessity of an election.* But, where a testator, entitled to onty a part of an estate, uses words in devising it which clearly show that he intended to pass the entiretj'', the owner of the other part, if he receive a bounty under the will, will be put to his election.* The intention to dispose of particular property by will must appear from the will itself.^ And in accordance with this rule, a mere general devise cannot be shown to have been intended to cover property which did not belong to the testator ; the object of such eWdence being to put the donee to an election.^ But if an intention appear in the will to require an election, that intention must be obe^'ed.' The ordinary doctrine of election ma}' be excluded by an expression of intention by a testator that only one of several gifts to a donee is conditional on his giving up 1 Bristow V. Warde, 2 Ves. jun. 336 ; Box v. Barrett, Law Rep. 3 Eq. 214. 2 Ranclyffe v. Parky ns, 6 Dow, 149, 185. 3 Matldison v. Chapman, 1 Johns. & H. 470. * Padbury v. Clark, 2 Macn. & G. 298; Wilkinson v. Dent, Law Rep. 6 Ch. 339. * Clementson v. Gandy, 1 Keen, 309. « Cavan v. Darlington, 2 "Ves. jun. 544; 8. c. 3 Ves. jun. 384, 621 Pole ^. Somers, 6 Ves. jun. 309, 314. 7 Honywood v. Forster, 30 Beav. 14. 17 258 MODES or relief in equity. [Chap. xvi what the testator attempts to devise awaj- from him. If, for instance, a testator have two sons, the elder being owner of a particular parcel of land, and it should appear to him (the testator) convenient that this parcel should go to the 3^ounger son, along with other property which he is devis- ing to him, and he devises accordingly ; and then, if, among other gifts to his eldest son, he should give him a piece of property which he states in the will to be in lieu of the particular parcel of laud to be given by the elder to the younger son ; the former would be put to an election merely between these two pieces of property', and could hold the other gifts absolutely-. ^ Notwithstanding the common-law doctrine that when a devise confers no more than the law of descent would cast upon an heir, he takes by descent, it is clear that a devisii in such a case may be sufficient to put the heir to his elec- tion, as in other cases. And as in other cases, in contem- plation of equit}' the testator means that if the condition of giving up his (the heir's) estate be not complied with, the disappointed donee shall have, out of the estate over which the testator had power, a benefit corresponding to that of which he is deprived bj' the .action of the heir.'^ The doctrine of election sometimes arises in another form. The testator or other donor ma}' give his own ex- clusive propert}' to another, with certain burdens attaching thereto, upon condition that the donee shall take subject to the burdens. In such a case, the donee must elect whether he will take the propert}' at all or not. If he take it, he must take it cum onere.^ If, however, no such condition be expressed or implied, the donee ma}' elect that part of the bounty which will be of benefit to him, and reject the burdensome part,^ if the two can be separated. 1 Wilkinson v. Dent, Law Rep. 6 Ch. 839, 341. 2 Welby V. Welby, 2 Ves. & B. 187, 190. 8 Talbot V. Radnor, 3 Myhie & K. 252. < Moffott (.-. Bates, 3 Snialu & G. 408. Chap. XVI.] ELECTION. 259 Again, where a man having power to appoint a fund to A., which, in default of appointment, is given to B., exer- cises the power in favor of C, and gives other benefits to B. ; in such a case, though the appointment to C. is void, 3'et, if B. accept the benefits given him, he must conve}' the estate to C. according to the appointment. -"^ So, where a person having power to appoint to two, appoints to one only, and gives a legac}' to the other, a case for election arises.*^ And the same is true where a person having a power of appointment, attempts to delegate the same to another, and by the same instrument makes a gift to the object of the power : such person is put to his election. He cannot retain the benefit and also claim the propertj^ against the execution of the power thus improperly del- egated.' Where an absolute appointment is made by will in favor of a proper object of a power, and that appointment is followed by attempts to modify in an unpermitted manner the interest so appointed, the law will read the will as if all the passages in which such attempts are made were left out of the will, not only so far as the}" attempt to regulate the quantum of interest to be enjoj'ed by the appointee, but also so far as the}' might otherwise have made a case for an election.* A case for election cannot arise in appointments under pov;ers where the donor has given no property absolutely his own to an object of the power out of which, in the event of his not acquiescing in an appointment by the donee to a person not an object of the power, the lat- ter could be compensated.^ But if the donee of a power by the same instruments, contrary to his authorit}', ap- 1 Sugden, Powers, 578 (8th Eng. ed.). ^ ib. 689 ^ Ingram v. Ingram, 2 Atk. 88. * Woolridge v. Woolridge, 1 Johns. (Eng.) 63. * In re Fowler's Trust, 27 Beav. 362. 260 MODES OF EELIEF IN EQUITY. [Chap. XVI. point to a stranger, and confer a benefit out of property absolute!}' his own, upon an object of the power, the latter will be put to his election ; and if he take the benefit con- ferred upon him, he must comply with the directions ; and if he decline to do so, he must give up the benefit so far as may be necessary (to the extent thereof) for compen- sating the person disappointed by his election.^ A widow may in equity be put to an election between taking her dower and a gift conferred upon her ; and this election may be required either by express language to the effect that the gift is to be in lieu of dower, or by mani- fest impUcation of such an intention. If, however, there be any doubt, — if the court cannot say that it was clearly intended that the widow should elect, — it will not be held that the gift is in lieu of dower. The question generally raised is, whether an intention, not expressed in apt words, can be collected from the terms of the instrument. Apart from statute, the instrument must contain some pro- vision inconsistent with the assertion of a right to dower, in order to put the widow to an election.''^ This subject must, however, be examined with reference to the local statutes regulating the law of dower. This doctrine of election apphes not only to interests immediate, but as well to such as are remote or contingent, and this whether the property be personal or real.^ Equity will thus marshal the assets of a testator in favor of creditors as against the heir or specific devisee, and in favor of legatees against the heir or residuary devisee ; and it will afibrd the like benefit to the widow in respect of her rights against the heir, devisee, or legatee.* But 1 See Blacket v. Lamb, 14 Beav. 482. 2 Birmingham v. Kirwan, 2 Schoales & L. 444, 452 ; Higginbotham V. Cornwell, 8 Gratt. 83 ; Tobias v. Ketchum, 82 N. Y. 319 ; Adsit V. Adsit, 2 Jolms. Ch. 448. 8 Jeremy, Equity, 537. * lb. 540. «:uAP. XVI.] ELECTION. 261 it will not do so for the next of kin, even against the heir.^ Election applies equally to wills, deeds, and other in- struments.^ But there must always be a clear intention to put the first donee to his election ; * though it is imma- terial that the donor supposed that he himself owned the propert}' to be handed over by the first donee to the sec- ond.* 1 lb. 541. 2 Bac v. Cosby, 4 DeG. & S. 261. 8 Padbury v. Clark, 2 Macn. & G. 298 ; Wilson v, Arny, 1 Dev. & B. Eq. 376. * Stump V. Findlay, 2 Rawle, 168, 174. 262 MODES OF RELIEF IN EQUITY. [Chap. XVH. CHAPTER XVII. ACCOUNT. Relief is often administered in equity between creditor and debtor by requiring an account. It has sometimes been supposed that equit}' entertains jurisdiction in mat- ters of account, on the ground that the accounting party is to be treated as a trustee ; but the true gi'ound is, that the complaining part}' has not so .direct and adequate a remedy at law as he deserves. A remedy exists at com- mon law by an action of account ; but this remedy is diffi- cult and embarrassed, and has become nearl}', if not quite, obsolete, owing to the more effectual rehef to be obtained in equitj'.-' But although equity has acquired a verj' wide jurisdiction over matters of account, it has not acquired jurisdiction over all cases of the kind. iEquitj', for instance, will not entertain a bill for the pa^'ment of an adjusted balance of mutual accounts, or for the payment of a sum due by account on one side only, that is, on the non-mutual ac- count. And the same is true where there is no allega- tion in the bill of anj' complexitj' or mutuality of charges and credits in the accounts, though the plaintiff maj' be ignorant of the precise amount due. For example : The onl}' allegation of a bill is, that a trading firm has agreed to give the plaintiff a commission on orders obtained by himself, and a commission at a different rate on orders not obtained by him, but given by persons first introduced by him. The plaintiffs remedy upon a refusal of his 1 1 Madd. Chancery, 69. Chap. XVn.] ACCOUNT. 263 rights is at law, notwithstanding the fact that he is igno- rant of the extent o-f the latter class of orders.^ The ordinar}^ case of accounts between a banker and his customer stands upon the same footing. And an account between a banker and his customer, not long or complicated, is not a proper subject for a bill in equity. The relation between a banker and his customer is a sim- ple relation of debtor and ci^editor, with an added obliga- tion to pa}' the customer's drafts. The relation does not- partake of a fiduciar}- character, or bear analogy to the relation existing between principal and factor or agent ; over which cases equity would entertain jurisdiction on grounds of trust. The money deposited becomes the banker's mone}', to be used as the banker thinks proper ; and he simply becomes his customer's debtor.^ As to principal and agent, or principal and factor, equit}' has a plain jurisdiction, because the agent or factor has the character of a trustee. A factor sells the princi- pal's goods, and accounts to him for the mone}'. The goods, however, remain the goods of the principal until the sale takes place, and the moment the monej' is received, that becomes the mone}- of the principal. So it is with regard to an agent dealing with property. He obtains no interest himself in the subject-matter beyond his compensation ; he is dealing throughout for another, and though he is not a trustee according to the latter, he is a quasi trustee for that particular transaction for which he was engaged ; and therefore equity has jurisdiction over his accounts.^ Equity will not, then, at least according to the English rule, assume jurisdiction in account, merel}- on the ground that a party is entitled to a discovery ; the rule is said to he, that where a case is complicated, or where, from other 1 Smith V. Leveaux, 2 DeG., J. & S. 1. 'i Foley V. Hill, 2 H L. Cas. 28. 3 ib. 264 MODES OF RELIEF IN EQUITY. [Chap. XVU circumstances, the remedy at law will not give adequate relief, equity will grant its aid. In other cases, unless there be ground for jurisdiction in the fact that a confidential relation exists between the parties, the defendant being a trustee or quasi trustee, the remedy* to compel adjustment and pa3Tnent is at law.-' Discovery, however, is a substantiA e ground of equity jurisdiction ; and it may be that where the bill is filed for the purpose of discovery, equity, having thus acquired jurisdiction, may proceed, upon a general principle of that court, to adjust the rights of the parties. This appears to be the explanation of the prevailing doctrine of this country ; which is, that when discovery is necessary' equit}- will entertain jurisdiction over matters, of account.^ Upon this ground it is that equity has entertained jurisdiction - when the accounts to be examined were on one side onty.^ But, aside from cases like the foregoing, the ground of equity jurisdiction is the complication of accounts and the inadequacy of relief at law. The result, then, may be thus stated : Where there is no relation of confidence between the parties ; or where (in the absence of such a , relation) there are no mutual demands, but only a single matter on one side ; or where (in the absence of the like relation) no discovery is required ; equity will not entertain jurisdiction. And this is true, though there may be payments on the other side ; for in such a case there is a complete remedy at law, and no need of resort to equity.* In all cases, however, where there is a series of accounts on one hand, and a series of payments on the other, and 1 Foley V. Hill, 2 H. L. Cas. 28. Blackstone, however, puts the jurisdiction of equity on the ground of discovery. 3 Comm. 437. 2 1 Story, Equity, § 450. See,, further, Fowle v. Lawrason, 5 Peters, 495. 3 Post V. Ivimberly, 9 Johns. 470, 473. * 1 Story, Equity, § 458 Chap. XVn.] ACCOUNT. 26,5 not merely one piipnent and one receipt, or tlie like sim- ple transaction, the account may be adjusted, and all proper relief obtained in equity. In accordance with this principle, where there have been various dealings between a landlord and his tenant, so as to produce a complicated account, and the landlord brings an ejectment for non-payment of rent, the tenant ma3' file a bill before judgment for an account, and have any balance due him applied to the payment of the rent claimed.^ And, a fortiori^ will such a bill be proper where besides the existence of a running, complicated account, the tenant pra3's discovery. With regard to the length of time for which, in the absence of statute, an account of rents in respect of a legal right will be given, the rule in ordinary cases is that the period ma}^ extend to six years previous to the filing of the bill, by analog}' to the general rule at law in an action for mesne profits.^ There are, however, instances, as where the plaintifl" has been kept out of the estate by fraud, ^ or where he is an infant,* in which the account will be carried back to the period at which the plaintiff's title accrued. On the other hand, there are cases, as where the plain- tiff has been guilt}' of default or laches,^ or the defendant has been so situated as to reasonably entitle him to the favor of the court,® in which equity will fix upon the time of the institution of the suit for the limitation of the account. And where there is great fault on the part of the plaintiff, so that he could not recover mesne profits at all, equity will refuse an account altogether.' 1 O'Connor v. Spaight, 1 Sclioales & L. 305. '^ Eeade v. Ecade, 5 Ves. 744. 3 Bennet v. Whitehead, 2 P. Wms. 644. * lb. 6 Pettiward v. Prescott, 7 Ves. 541. 6 Attorney-Gen. v. Skinner's Co., 5 Madd. 173. ' Lockey v. Lockey, Prec. Ch. 518. 266 MODES OF RELIEF IN EQUITY. (CiiAr. XVII If an lieir or other person disseised should claim an equi table estate onlj', this fact alone would give the Court of Chancery a right to interfere, and an account would follow as matter of course, in case of a determination in his favor, and in ordinar}- cases would be directed to run back for the period of six years ; though cii'cumstances such as those above mentioned might extend or shorten the period. The rights of a dowi-ess, if she can define the property in respect of which and point out tlie persons against whom she seeks relief, are well ascertained at law ; but sometimes, from ignorance of such circumstances, and more frequently from impediments set in the way of her rights, she may be unable to obtain an adequate remed}' without the interfer- ence of equity. The information necessary to enable her to proceed at law is often confined to the party from whonr she seeks satisfaction ; and, from the difficult}' under which she labors at law in ascertaining in advance whether she can there recover, equity will interfere in her behalf.^ The widow, is, prima facie, entitled to all arrears of dower from the time her title accrued.^ And though at law, by the death of the heir, her right to such arrears is determined,^ xqI in equity, if she filed her bill before that event, but her right has been disputed, and the decision deferred by the fault of the defendant, she (and after her decease, her personal representatives) would be entitled to an account.* And it is to be observed that equity will sometimes take upon itself the dut}- of assigning the dower as well as of giving the account.^ In cases of partition at law the remedy is confined to the division of the estate ; but in equity if it appear that one 1 Pulteney v. Warren, 6 Ves. 73, 89. 2 Oliver v. Richardson, 9 Ves. 222. 3 Curtis V. Curtis, 2 Brown, C. C. 620. 4 lb. 6 Mundy v. Mundy, 4 Brown, C. C. 294; s. c. 2 Ves. jun. 122. Chap. XVn.] ACCOUNT. 267 of the parceners has received more than his share, he will be compelled to account,^ In cases of waste upon a legal estate, if discovery should be necessary, it seems that equity will, as incidental to such discover^', compel an account.^ So, too, though the court win not generally give an account of waste, since the loss ma}' be remedied by an action of waste or trover ; 3'et, where the court is induced to extend its extraordinary reUef b}' injunction, it will upon that ground, to avoid un- necessary litigation, compel an account of waste already committed.' In regard to waste committed b}' the legal owner of an equitable estate, as there is no remed}' at law, and the re- straint upon the legal owner is here considered as founded upon a breach of trust ; and as in aU cases the person committing such an act is answerable for the profit made thereby, he will be compelled in equity to account.* It is further to be observed with regard to waste that a distinction has been taken between waste consisting in the felling of trees, and waste arising in the working of mines. In a case of injur}' of the latter kind, equity will compel an account, though there be no prayer for an injunction or for discovery.^ If the holder of a security upon land insist upon entering into possession of the propert}- for his own protection, he is answerable when the account under the securit}' comes to be taken for keeping the property in the condition in which a person in possession in ordinary cases, as, for in- stance, a tenant, ought to keep it.^ * Lorimer v. Lorimer, 5 Madd. 363. 2 Lee V. Alston, 1 Brown, C. C. 194 ; s. c. 3 Brown, C. C. 38. 3 Grierson v. Eyre, 9 Ves. 341, 346 ; Pulteney v. "Warren, 6 Vee. 73, 89. 4 Ormonde v. Kynersley, 5 Madd. 369. 6 Winchester v. Knight, 1 P. Wms. 406. 6 Pliillips V. SUvester, Law Rep. 8 Ch. 173. 268 MODES OF RELIEF IN EQUITY. [Chap. XVH In like manner a vendor of land, who insists upon con- tinuing in possession of the land over which he has the security of a vendor's lien (supposing the contract to have been one which in the -sdew of equity has changed the title) , is under obligation to keep the premises in proper condition. When the account comes to be taken between him and the purchaser, he will be entitled to a credit for all proper expenditures for the purpose of maintaining the purchaser's property in a suitable condition, as against the account of rents and profits to which he is subject. But he takes and retains possession upon the implied terms of performing the ordinary duties pertaining to possession. He is pro tanto a trustee in possession for the purchaser.^ A mortgagee cannot compel an account by a mort- gagor whom he has allowed to retain possession of the- mortgaged premises ; for the mortgagee was not bound to forego the receipt of the rents and profits. But if the mortgagee should enter upon possession, he would place himself, in tiiQ view of a court of equity, in the position of a trustee towards the mortgagor, and be liable to account for the rents which he has received or might by proper con- duct have received. '^ A receiver stands in a position similar to that of a mort- gagee in possession, and is subject to an account, in the taldng of which the court is particularly strict.^ Similar principles, as has heretofore been intimated, apply to an agent having the control or management of property. Such an agent is bound to keep a regular account of his transactions, and always to be ready with the same ; and he must be willing to render a faithful, diligent, and accurate account, without suppression, con- » Phillips V. Silvester, Law Eep. 8 Ch. 173. 8 Hughes V. Williams, 12 Ves. 493 ; ante, p. 71. » Fletcher v. Dodd, 1 Ves. jun. 85; Potts v. Leighton, 15 Ves. 273 Chap. XVIL] ACCOUNT. 269 cealmeut, or overcharge, when called upon to do so.^ A bill will lie for an account in case of a refusal or of an unsat- isfactory comphance.'^ And it is laid down that if such an agent uegHgently omit to keep a proper account, he will not be allowed a claim for work and labor done in his agency.* Upon the same principle of requiring agents having the management of property to keep an account, it is held that if such a person has mixed the property confided to him with property of his own, so as to render it impossible to take the account with any degree of accuracy, he will be charged with the whole amount. But he may separate that which he can clearly prove to be his own.* A steward is an agent or quasi agent standing in a position of pecuhar disadvantage with reference to matters of account ; since money is frequently paid by such a person to his principal or employer in confidence. And, if the latter should refuse to give him vouchers, he would be unable to prove his payments except by his own accounts. Cases of this kind are for this reason considered with reference to theh' own special circumstances.^ The court, however, will not excuse great negligence in a steward ; and, if he has not kept an account at all, the consequences may be serious to him. In such a case, the court will ex- amine into his transactions with careful scrutiny.® Partnership dealings form a frequent ground of equity jurisdiction. Partners are joint tenants of the stock and effects of the concern, and as such being seised, severally, per my et per tout, neither can set apart certain portions of the stock or accounts as belonging to himself, without 1 Hardwicke v. Vernon, 14 Ves. 504, 510. 2 Mackenzie v. Johnston, 4 Madd. 373. 3 White V. Lincoln, 8 Ves. 363. 4 Hart 0. Ten Eyck, 2 Johns. Ch. 62 ; Stephenson v. Little, 10 Mich 433, 441 ; 2 Kent, Comm. 364. 6 Dinwiddie v. Bailey, 6 Ves. 136, 141. 6 See Middleditch v. Sharland, 5 Ves. 87. 270 MODES OF RELIEF m EQUITY. [Chap. XVIL the consent of the other, aside from some specific agree- ment or purchase. Nothing is considered as belonging to either but his share in the residue after the taking of a proper account ; in which each may claim all that he has advanced or brought into the concern, and charge the other with what he has not brought in, or has taken out, beyond his proper share. ^ Courts of law, in the absence of statute, carry the prin- ciple of the joint tenancj^ of partners to an extreme, giving, upon the death of one of the partners, his share to the other. Equit}', however, regards the survivor as a trustee of the effects and stock of the firm for the representatives of the deceased to the extent of his interest. ^ The immediate consequence of dissolving a partnership is, that the parties who are, or b}' the event become, in- terested in the property, are legal tenants in common thereof. The}' have a community of interest until the affairs are wound up, and are severally entitled to an ac- count, and to have the property disposed of to the best advantage, and the proceeds justly' divided.' Partners are under an implied obhgation to use the joint property for the benefit of all to whom it may belong ; and hence, if after the expiration or other determination of the partnership, a surviving or continuing partner, in possession of the stock, have carried on the business with the propert}', another partner may compel the former to account for the profits.* As to the manner in which the affairs of the partnership are to be wound up after dissolution, it seems that, if there are no articles prescribing the terms, equity will not compel a part}' or his representatives to take the calculated value of a share ; but that, if a sale have ah-eady been 1 West V. Skip, 1 Ves. sen. 239, 242. 2 n,. 8 Crawshay v. Collins, 15 Ves. 218. 229. * Hammond v. Douglas, 5 Ves. 539. Chap. XYII.] ACCOUNT. 271 made by the siuviviug or continuing partner, an account will be decreed ; and, if not, a sale will be dii'ectcd, and an account ordered of the partnership dealings and trans- actions since such dissolution ^ 1 Featherstoiiliaugli v. FeuwicH, 17 Yes. 298. 272 MODES or RELIEF IN EQUITY. [Chap. XVUI. CHAPTER XVIII. RECEIVERS. A RECEIVER is an indifferent person between parties to a litigation, appointed by the Court of Cliancery to receive the rents and profits of real estate, or to take possession of personal estate, pending the suit, where it does not seem reasonable to the court that either party should do it,^ or where a party is incompetent, as in the case of an infant.^ Such a person is bound to account for and pay out what hpi obtains, as the court may direct ; and to more effec- tvall}' secure his doing so, he is commonly required to enter into a recognizance with sureties.^ The person appointed receiver is an officer of the court, not the agent or repre- sentative of either of the parties to the litigation. In his appointment, the comi takes possession of the property which is the subject of the suit, preserves it from waste or destruction, collects and secures the proceeds or profits, and ultimatel}' disposes of them according to the rights and priorities of those entitled to the same.^ The appointment of a receiver is often said to rest in discretion. This proposition, however, does not teach much. A receiver is proper, if the fund be in danger ; otherwise not. The mere fact that the appointment can 1 Booth V. Clark, 17 How. 322; Chase's Case, 1 Bland, 206, 213; High, Receivers, § 1. ■^ 2 Daniell, Chancery Pr. 1715 (4th Am. ed.). « lb. * Beverley v. Brooke, 4 Gratt. 187. See High, Receivers, § 5. Chap. XVIII.] RECEIVERS. 273 do no harm will not authorize a receiver.^ The appoint- ment of a receiver is most frequentlj- called for to prevent fraud, to save the subject of litigation from material in- jur}', or to rescue it from probable destruction. There is said to be no necessit}' for a receiver except for one of these purposes.^ Receivers are frequentlj' appointed in cases in which the suit arises out of claims by parties ha-sdng equitable inter- ests in the property' which is the subject of the litigation. A r<}ceiver is appointed in such cases for the purpose of protecting the property till the question between the par- ties is determined.^ And, in general, it may be taken as a rule that, where the legal estate is vested in a person claiming an interest paramount to that of the litigating parties, so that the litigating parties can have onlj' equita- ble interests, equity will grant the appointment of a re- ceiver ; taking care at the same time not to prejudice the interests of the person having the paramount estate. For example : The plaintiff claims as second mortgagee of land, and is engaged in a contest as such with the mort- gagor, who is in possession. The plaintiff is entitled to a receiver, without prejudice to the right of the first mort- gagee to take possession.^ The rule, indeed, is a general one, applicable to all per- sons having mere equitable rights. Equit}- will, on mo- tion, appoint a receiver for an equitable creditor, or a person having an equitable estate, without prejudice to per- sons having prior estates. It will not prevent such prior persons from obtaining possession, if they think proper. With regard to persons having prior equitable estates, the court will be careful, in appointing a receiver, not to dis- 1 Orphan Asylum v. McCartee, Hopk. 429, 435. 2 Baker v. Backus, 32 111. 79. 8 Cheever v. Rutland & B. R. Co., 39 Vt. 653. * Berney v. Sewell, 1 Jac. & W. 647. 18 274 MODES OF RELIEF IX EQUITY. [Chap. XVIII. turb the equities. In such cases, it will direct inquiries to determine priorities among equitable incumbrancers ; per- mitting legal creditors to act against the estates at law, and settling the priorities of equitable creditors.^ But, though, where there is a prior mortgagee, the court will not, b}' the appointment of a receiver, deprive him of his right to possession ; it will not permit him to object to the appointment of a receiver b}' an}' act short of a per- sonal assertion of his legal right, and taking possession himself.^ And if, after a receiver has been appointed, he does not think proper to avail himself of his legal right (which he may do by appljing to be examined pro inter- €Ssesuo),]x& will not be permitted to have the benefit of the receiver.* Where the prior incumbrancer is Wmself in possession, the court will rarel}' grant a receiver to the later claimant. ' A receiver, however, may be appointed if the holder of the prior estate has been paid ; ^ and the same would prob- ably be true where such part}' is only a nominal incum- brancer, holdirig for the benefit of the owner, by collusion with him to defeat the rights of the owner's creditors. Further, in order to defeat the equitable mortgagee in his demand for a receiver", the prior incumbrancer in pos- session must have possession by virtue of his incumbrance. Possession as tenant, for instance, will not be sufficient.® But receivers in mortgage cases are allowed only with great caution. They will rarely be appointed, except when there is a clear inadequacy of security, or when the rents 1 Davis V. Marlborough, 2 Swanst. 108, 137, Lord Eldon. 2 Silver v. Norwich, 3 Swanst. 112, note; Rhodes v. Mostyn, 17 Jur. 1007, 8 Angel V. Smith, 9 Ves. 335, 338; 2 Daniell, Chancery Pr. 1718 (4th Am. ed.). * 2 Daniell, 1719. 5 Archdeacon v. Bowes, 3 Anstr. 752. See Sea Ins. Co. v. Steb- bins, 8 Paige, 565. Chap. XVm.] RECEIVERS. 275 have been expressly pledged for the debt. The criterion of adequacy or inadequacy of the security in such eases, it. may be remarked, is the rental.^ The disinclination of the court to appoint a receiver where the property is in possession of a party having the legal estate, is felt in those cases only in which the estate of the part}' in possession is prior to that of the parties to the htigation. Where the right to the possession is itself in dispute, and the plaintiff (having the equitable interest) claims the legal estate from the defendant in possession, the court, if it sees clearly that the plaintiff has the right, and that the ultimate decree will be in his favor, will ap- point a receiver pending the suit.^ Thus, a receiver may be appointed, pendente lite, against the vendor (in posses- sion) of land, at the instance of the purchaser, if the court be satisfied that the contract of sale is one which it can enforce.' Equity will also grant a receiver when it clearly appears that the legal party's possession is due to fraud, or has otherwise been wrongfully acquired. But the court inter- feres in this way against the legal estate with reluctance ; and, to induce it to grant a receiver, there must not only be satisfactor}'- evidence of fraud, but it must be morally certain that, upon the hearing of the cause, the party will be turned out of possession, and there must be some dan- ger to the immediate rents and profits.* A receiver, indeed, will be appointed at the instance of an interested party, even where there is no fraud, if it can be satisfactorily established that there is danger to the estafe or fund.^ Thus, if an executor has wasted the eflfects of his estate, or in other respects misconducted him- 1 Shartwell v. Smith, 3 Edw. 588. 2 2 Daniell, 1720. 3 lb. ; Metcalfe v. Pulvertof t, 1 Ves. & B. 180. * Lloyd V. Passingham, 16 Ves. 59, 70, Lord Eldon. 5 Barkley v. Reay, 2 Hare, 306; Bake v. Backus, 32 111. 79. 276 MODES OF BELIEF IN EQUITY. [Ckap. X\ail self, equit}' "will interfere by appointing a receiver^ The povert}' of an executor, however, is not sufficient ground for a receiver ; ^ though it is otherwise if, after his ap- pointment as executor, he become insolvent.' The same grounds which will induce the court to take away an executor's possession by the appointment of a receiver, in case of the executor's misconduct or insolvency, will induce the court to interfere in the case of any part)' clothed with the character of a trustee.* So, too, equity will appoint a receiver where trustees accept new trusts which conflict with their old duties as trustees.® Where there is a dispute arising solely upon a legal title, no equitable title being involved, equity will not gi-ant a receiver unless there is great danger concerning the prop- erty ; because the plaintiff has ah adequate remedy by asserting his title at law, and thus obtaining possession and control for himself. * A receiver may be appointed pending htigation in the Court of Probate, for the purpose of preserving the prop- erty ; and if necessary for such purpose equity will take the property out of the hands of the person claiming to be executor, until the litigation is determined.' In cases of partnership a receiver may be appointed when the plaintiflT appears entitled to a dissolution.^ So, too, a receiver may be appointed at the instance of a part- ner alleging that the firm is insolvent and that his co- 1 Boyd V. Murray, 3 Johns. Ch. 48; Mandeville v. Mandeville, 8 Paige, 475. 2 Hathornthwaite v. Russel, 2 Atk. 126. See 2 Daniell, 1722. 3 Utterson v. Mair, 2 Ves. jun. 95, 98. * 2 Daniell, 1723. 5 Talbot V. Scott, 4 Kay & J. 139. s Knight V. Duplessis, 1 Ves. sen. 324. ^ King V. King, 6 Ves. 172 ; 2 Daniell, 1725. 8 Const V. Harris, Turn. & R. 517 ; Smith v. Jeyes, 4 Beav. 503. ohap.xviili receivers. 'Zll partners are wasting the effects.^ But where the allegation of partnership is disputed, a receiver is generall}' denied.' On the other hand, if the object be to continue and not to dissolve the partnership, equity will also, as a general rule, refuse a receiver.^ Still, where a suit has been insti- tuted to compel a partner to act according to the provi- sions of instruments signed by him, the court will see that the decree shall not be defeated by snaj thing to be done in the mean time ; and to this end will grant a receiver.* In almost all cases, however, of receivers in partnership matters, the court looks to a dissolution in making the appointment. Where a dissolution is intended, or has already taken place, equity will appoint a receiver, provided there has been some breach of dut}^ by the defendant part- ner. Thus, if, in breach of a moral obligation, one partner unjustly take possession, and refuse to give security to his co-partner for his share of the stock, moneys, and secmities ; or if in any respect he behave unrighteously against the interest of the other partner, a receiver will be granted.* 1 Williamson v. Wilson, 1 Bland, 418, 423. 2 Fairburn v. Pearson, 2 Macn. & G. 144. See Cox v. Peters, 2 Beasl. 39. 3 HaU V. Hall, 3 Macn. & G. 79, 88. * Const V. Harris, supra. ^ Blakeney v. Dufaur, 15 Beav. 40. 278 MODES OF KELIEr IN EQUITY. [Chap. XIX CHAPTER XIX. TACKING. Tacking is the uniting of securities given at different times to the same person, so as to prevent an intermediate claimant, having a security upon the same property, pre- ceding in time one of the securities to be tacked, from redeeming or otherwise discharging the prior lien or in- cumbrance without redeeming or discharging the subse- quent lien to be tacked. Thus, if a third mortgagee, without notice of a second mortgage, should purchase the first mortgage, thus acquiring the legal title, the second mortgagee would not be permitted to redeem the first mortgage without redeeming the third also ; the first mort- gage and the third being now united in the same person as though they were but one mortgage.^ And the same would be true of a fii'st mortgagee buying in a third mort- gage without notice of the existence of a second.^ The existence of such a rule as this has often been re- gretted, on the ground that it is in contravention of one of the fundamental principles of equity ; to wit, that where the equities between two parties are, as they appear to be in this case, equal, the law must prevail ; and the legal rule applicable to such cases is, that he who is first in point of time is first in right. In the illustration above put, the second mortgagee is prior in time to the creation of the third mortgage, and his mortgage should there- fore stand before that one.^ And this consideration has 1 1 Story, Equity, § 412, 2 Morret j;. Paske, 2 Atk. 52, 53. 3 lb. ; 4 Kent, Comm. 178. Chap. XIX.] TACKING. 279 generally led to the rejection of the doctrine in this coun- tr}^, when applied to real property. Indeed, the American registry laws would alone have greatly diminished its exer- cise. But in England the doctrine of tacking is still a rule of the equit}- courts. The doctrine, however, is deemed so inconsistent with the general spirit of equity, that even in England it has been restricted within narrow limits, and excluded from application to cases which, as a principle of jurisprudence, it would cover. The doctrine of tacking has not been extended be3-ond purchasers ; a mere judgment creditor, for instance, who, as such, is subsequent to a second mort- gagee or other mesne incumbrancer, cannot, by acquiring the first mortgage, tack to that security the judgment lien, and thus require the mesne incumbrancer to pay that off also, if he will redeem the first mortgage.^ But if the i^erson desiring to tack be a purchaser in re- spect of his remote security (the one to be tacked) , it is not material that the first security which he has now ac- quii'ed was not originall}' eflTected by purchase. Thus, if the illustration above given were reversed, and the judgment creditor were a third mortgagee, and the first security, instead of being a mortgage, were a judgment lien, he would then, upon purchasing the lien, have tlie right to tack to that lien his third mortgage, and thus cut out the intermediate mortgagee.^ The doctrine under consideration applies only to securi- ties held in the same right : where one of the securities acquired attaches upon personal property only, or merely upon the general assets of the debtor, and the other upon real estate, the party later in time is to be treated in equity, as well as at law, as later in right. And this is true even where the personal security is by bond ; for a bond debt is not a charge upon land, except in the admin- 1 1 Story, Equity, § 416. ^ n,. 280 MODES OF RELIEF IN EQUITY. [Chap. XIX. istration of the estate upon the death or insolvency of the debtor. In this latter case, it seems that the securities could be tacked against the heir or assignee.^ Upon this principle, a prior mortgagee who takes an as- signment of a thhxl mortgage as a trustee for another per- son, though without notice of an intermediate incumbrance, cannot tack the two mortgages together : the two mort- gages are not held in the same right, and are not purchased by the same man's money. ^ 1 Morret v. Paske, 2 Atk. 52 ; Powis i'. Corbet, 3 Atk. 556 ; Lowthiau V. Hasel, 3 Brown, C. C. 163. ^ Morret v. Paske, 2 Atk. 52. Chap. XX.] SUBROGATION. 281 CHAPTER XX. SUBROGATION. A VERY important mode of administering relief in equity is b}' subrogation. Tliis term is defined to mean tlie sub- stitution of anotlier person in tlie place of a creditor, to whose rights he succeeds in relation to the debt.' The application of this remedy may arise in various ways ; onl}' one of which will, however, be considered in the present chapter, as being sufficient to illustrate the nature of the subject, — subrogation in favor of a surety. It is a settled principle of equity that a surety will be entitled to everj' remedy which the creditor has against the principal debtor, to enforce every security, and to stand in the place of the creditor and have his securities transferred to him, and to avail himself of those securities against the debtor. This right of the surety stands not upon contract, but upon the same principle of natural justice upon which one surety is entitled to contribution from another.^ Where, for instance, a bond is given by principal and suret}', and at the same time a mortgage is made for securing the debt, the surety, if he pays the bond, has a right to stand in the place of the mortgagee, and as the mortgagor cannot get back his estate again without a con- 1 Dixon, Subrogation, 1. 2 Hayes v. Ward, 4 Johns. Ch. 123. Hence privity is not essential to the ordinary right of subrogation. Burns v. Huntington, 1 Penn 395. It is otherwise where there is no inherent right of subrogation See post_ p. 286, as to conventional subrogation. 282 MODES OF BELIEF IN EQUITY. [Chap. XX veyance, that security' remains a valid and cffecti/al secu- rity, notwithstanding the bond debt is paid.^ Further, it is now considered as a settled rule that a surety ma}- resort to equity, if he apprehends danger from the creditor's delaj', and compel the creditor to sue the principal debtor ; though, probabl}', he must indemnif\ the creditor against the consequences of risk, delay, and expense.^ But neither in law nor in equity can a surety call for an assignment from a creditor, or be clothed, by mere opera- tion of law, with the right of an assignee, unless he had, ^y P^3'i"g the entire debt, wholly satisfied the claim of the creditor.^ The principle of substitution gives to the party substituted the rights of an assignee. The surety, there- fore, cannot compel the creditor to assign the security', unless he first pays all he is bound to pay. If he does not, the creditor still has a right to retain the pledge for his own security and benefit.* According to many authorities, a suret}^ upon a joint sealed obligation cannot, by payment thereof, become sub- rogated, as against the principal debtor, to the creditor's rights ; for pa3'ment of the obligation extinguishes it. In such a case, the surety is onl}- a simple-contract creditor of the principal debtor.* In order to get the benefit of the specialty, the surety should, it is said, put the money into the hands of a friend, to be delivered to the original creditor, with express directions not to pay it in discharge and satisfaction of the obl'gation, but to take an assign- ment thereof. Thus the obhgation will still remain in full 1 Copis V. Middleton/Tum. & R. 224. 2 j^. ' Neptune Ins. Co. v. Dorsey, 3 Md. Ch. 334 ; Kyner v. Kyner, (I Watts, 221 ; Bank of Penn. v. Potius, 10 Watts, 148, 152. < Richardson v. Washington Banli, 3 Met. 536. 5 Copis V. Middleton, Tarn. & R. 224, 231 ; Briley v. Sugg, 1 Dev & B. Eq. 366, 368 ; Foster v. Trustees of Athenaeum, 3 Ala. 302. Uhap. XX.] SUBROGATION. 283 force against the principal debtor. The assignee can then compel paj'ment from him upon the instrument ; and the mone}' collected will be held in trust for the surety. The siu'etj is therefore, in effect, subrogated to the rights of the creditor.^ But in some States the bond surety is deemed to have a right of subrogation, though he has made direct payment of the specialty.^ The objection to this is certainly purely technical. Upon the same technical doctrine, a surety, against whom and the principal debtor a judgment has been obtained, by paying the debt and taking an assignment of the judgment to himself, is considered to have satisfied it, and reduced his claim to a simple contract debt, and hence, on the footing of the judgment, can have no relief in a court of equit}'. The proper course, it has been said, is to have an assignment of it made to a person not a party to the record.^ But the contrary of the fore- going nile is also held.* Payment of a judgment or execution, b}' either of the judgment debtors, will ordinarily discharge the execution, and operate as a satisfaction of the judgment ; and, as a general rule, the same result will follow from a payment made b}' any other person. And any agreement made with the creditor by the party making the pajTnent that the execution shall not be discharged, or returned satisfied, in order that the party paying may collect upon it a part or the whole of the judgment debt from another of the judgment debtors, is deemed entirely nugatory.^ This is clearly true where the person paying is not a suretj'. In accordance with this rule, it is laid down that where 1 Hodges V. Armstrong, 3 Dev. 253. 2 Lathrop's Appeal, 1 Barr, 512 ; Watts v. Kinney, 3 Leigh, 272 ; Powell r. White, 11 Leigh, 309; Lidderdale v. Robmson, 12 Wheat. 694. See 1 Story, Equity, § 499 c. 3 Briley v. Sugg, supra. * Edgerly v. Emerson, 23 N. H. 555 ^ lb. 284 .MODES OE RELIEF IN EQUITY. j Chap. XX a sheriff has paid to the creditor the amount of an execu- tion in his hands, upon an understanding that he was to collect the money on the execution, the execution is deemed discharged by such pa^Tuent, and neither that, nor an alias execution, can be used for such purpose.^ The surety can be absolutely entitled to be subrogated to the rights of the creditor only as to securities which the debtor placed in the hands of the creditor at the time the contract with the surety was effected. There is nothing in the contract of suretyship joer se which requires the creditor to retain, for the benefit of the surety, securities for the debt which he has suhsequently received from the principal debtor; unless, indeed, the surety has called upon the creditor to enforce such securities,, which he (the former) may do. And, hence, the parting with such later securi- ties, not operating to impair any right of the surety, would not have the effect to discharoe him.^ However, though the surety cannot complain, if the creditor has , parted with after-acquired securities, and hence has no absolute right to the benefit thereof, he may, it seems, become entitled to the advantage of such securi- ties while they are still iu th^ hands of the creditor (or of one standing in his shoes) by making payment of the debt upon its maturity. He is entitled to require the creditor to enforce the new securities ; » and this being the case, it should seem that, if the creditor did not do so, the surety, by making payment, would be entitled to enforce them.* The surety may, by contract, also become entitled to after- obtained securities. Again, the rule that a surety who pays a debt has a right of subrogation as to any security which the creditor may hold against the principal debtor, is to be understool 1 Edgerly v. Emerson, 23 N. H. 555. 2 Newton v. Chorlton, 10 Hare, 640. 8 lb. 4 See Dixon Subrogation, 105-107. Thap. XX.] SUBROGATION. 285 as having reference to securities specificallj^ charged to the support of that debt alone. If the same security is held b}' the creditor on account of other debts, the principle ap- plies that the debtor on making a payment ma}^ make ap- plication of the money (and in his default, the creditor) to any existing debt ; and the surety, on paj'ment of the debt for which he is bound, will have no right to require the benefit of a security which has been appropriated to an- other debt.-' Where one of two sureties gives collateral security for the payment of the debt for which he is suret}', his co- surety does not, by paying that debt, become entitled to the benefit of that securit}'.^ It is only in cases where the person advancing money to pay the debt of a third person stands in the situation of a surety, or is compelled to pay the debt to protect his own rights, that a court of equity substitutes him in the place of the creditor, as a matter of course, without any agreement to that effect.^ There is no rule of law or of equity which gives to a stranger, who furnishes money for the payment of a debt, the rights of the creditor who is thus paid. The legal claim belongs alone to him, who, being bound to pay a debt, discharges it.* Equity will, however, substitute in the place of a cred- itor one who has agreed with a debtor to advance monev for discharging a debt which is secured by mortgage, and, in accordance with this agreement, pays the debt and dis- charges the incumbrance.^ In like manner, a person who pays a debt owed by a railroad company, which was incurred under contracts of 1 Dixon, Subrogation, 113. See Richardson v. Washington Bank, 3 Met. 536. 2 Bowditch V. Green, 3 Met. 360. 3 Sanford v. McLean, 3 Paige, 1.17. * Nolte V. Creditors, 19 Mart. 602. 6 Payne v. Hathaway, 3 Vt. 212. 286 MODES OF RELIEF IN EQUITY. [Chap. XX purchase for rolling-stock, whicb, if not paid for, would entail serious loss and embarrassment upon the companj'', the debt being paid under an agreement with the company for security b}' subrogation to the rights of the vendors of the rolling-stock, is entitled to subrogation of their rights to the extent of his advances. Nor is it anj' ob- jection that the whole debt has not been paid by the party claiming subrogation, except as regards the right of the creditor.-^ It is not sufficient that a person paying the debt of an- other, which he was under no obligation to do, should do so merely with the understanding that he should be sub- rogated to the rights of the creditor. Conventional sub- rogation can onl}' result from an express agreement either with the debtor or creditor. ^ 1 New Jersey Ry. Co. v. Wortendyke, 27 N. J. Eq. 668. a lb. c'HAP. XXLJ DISCOVERY. 287 CHAPTER XXI. DISCOVERY. A RIGHT exists in equity to compel a defendant to dis- cover and set forth upon oath all facts within his knowledge material to the plaintiff's case. No such right exists in a common-law court. There the plaintiff must make out his case b}' evidence produced b}- himself, or by the admissions of the defendant. But this right in equity is not one- sided. The defendant has the same right to require from the plaintiff, by a cross-suit, the like discovery on oath of all facts within his knowledge.^ This extraordinary' jurisdiction of requiring a man to testify against himself is, however, guarded with proper restrictions, so as to prevent any unnecessary hardship. The part}' cannot be examined in this manner suddenly and without sufficient time given for deliberation ; he must be infoi-med distinctly what is desired ; and he can refuse to answer questions not pertinent to the main object of the discovery. A part}' cannot be compelled to answer questions tend- ing to criminate himself, or to expose himself to a penalty or forfeiture, further than this may be the result of the suit in which the discovery is sought. As to matters tending to criminate him, he has a right to refuse to answer, not merely as to the broad, leading fact, but also, it is said, to every incidental fact which might fonn a link in the chain of e%'idence upon an indictment.'* 1 Adams, Equity, 1, 2. 2 Short V. Mercier, 3 Macn. & G. 205; Adams, Equity, 2 288 MODES OF RELIEF IN EQUITY. [Chap. XXI The fact, however, that to answer would compel the party to reveal the existence of a fraud, in which he has participated, will not protect him from disco ver3^^ When, for instance, a defendant in equity is charged with having procured a title to property by fraud, and is alleged to be fraudulently setting up that title to defeat the plaintiff, equity will compel him to disclose the fact alleged as a fraud, and all the circumstances attending it, in order that the court may determine whether those circumstances establish the charge. The court will, therefore, compel the defendant in such a case, at the praj'er of the plaintiff, to disclose whether he has purchased the property without notice, or whether he has paid the purchase-price.^ Equit}' will also compel the disclosure of facts leading to the infliction of a penalty, when the penalty has become null in any way, as by lapse of time. The same is true where the plaintiff is entitled to the penaltj', and waives his right to it in the praj'er for discovery. So, also, where what is called a penalty or forfeiture is in realitj^ mere stipulated damages, or onl}' a cessation of interest.^ Parties are at liberty to communicate with their profes- sional advisers with reference to matters which become the subject of litigation, without restriction, and without the liability of being called upon to produce or discover what the}' have communicated. Nor can an attornej' or coun- sellor be compelled to disclose what his client told him with reference to a litigation or dispute.* Nor is it neces- sary to this protection from discovery that the communica- tion should be made during or relating to an actual or even to an expected litigation. It is sufficient if it pass as a strictly professional communication.^ 1 Attwood V. Coe, 4 Sandf. Ch. 412 ; Skinner v. Judson, 8 Conn. 528. 2 Howell V. Ashmore, 1 Stockt. 82. ^ Adams, Equity, 5. * Nias V. Northern Ry. Co., 3 Mylne & C. 355 ; Minet v. Morgan, Law Rep. 8 Ch. 361, 367. * Lawrence v. Campbell, 4 Drew. 485, 490; Minet i>. Morgan, supra. Chap. XXL] DISCOVERY. 289 In accordance with a like willingness to protect confi- dential communications, equity will decline to compel a person to produce confidential correspondence between himself or his predecessors in title and their respective attorneys concerning questions connected with matters in dispute in a suit, though made before any litigation was commenced.^ Equity' will not compel a man to disclose his private ac- counts upon a mere speculation as to how far the result may aid the plaintiff. Thus, where a plaintiff files a bill founded on the alleged agenc}' of the defendant, which is in question in the suit, the defendant will not be compelled to answer interrogatories as to what appears to be his pri- vate transactions.^ Nor will equity compel a person to produce muniments of title which he swears do not, to the best of his knowl- edge, information, and belief, contain any thing impeaching his case or supporting or material to the case of the oppo- site party ; ' unless the nature of the things called for clearl}' indicates the contrary. Although in considering whether the rule that a defend- ant who submits to give discover}- must make full discovery is to be applied, the court does not in general weigh nicely the materiality of the discovery sought ; still if the dis- covery is such as might be used for purposes prejudicial to the defendant irrespective of the suit, the court will look closely to the question whether there is a reasonable pros- pect that it will be of material service to the plaintiff at the hearing.* Equity will not compel public officers to disclose matters 1 Minet v. Morgan, supra. 2 Great Western Colliery Co. v. Tucker, Law Rep. 9 Ch. 376. * Minet v. Morgan, Law Rep. 8 Ch. 361. * Carver v. Leite, Law Rep. 7 Ch. 90. 19 290 MODES OF BELIEF IN EQUITY. [Chap. XXI of State, the publication of which might be prejudicial to the community'. ^ Subject to such exceptions as the foregoing, the defend- ant to a pra3'er of discovery must answer as to all facts material to the plaintiffs case : he must answer to all, and not to part only. He must also answer distinctly, without needless prolixit}^, and to the best of his information and behef.^ A defendant cannot excuse himself from answering full}^ on the ground that making the discovery sought would anticipate the decree, such discovery- being the same as that which would be ordered at the hearing if the plaintiff ob- tained a decree. It is enough that the discover}' is neces- sary for the purposes of the suit.^ The party from whom discovery is sought is also bound, if called upon so to do, to set forth a list of all documents in his possession from which discovery can be obtained ; and if uecessar}- permission must be given the party seek- ing discovery to copy them.* 1 Adams, Equity, 8. 2 ib. * Chkliester r. Donegal, Law Kep. 4 Ch. 410. ■* Adams, Equity, 12, Chap. XXILJ DJJIINCTION. 291 CHAPTER XXII. INJUNCTION. A -WTRiT of injunction is a judicial process whereby a part}' is required to refrain from doing, or required to do, a particular thing, as to which the part}' asking the injunc- tion has a clear right. The right must be clear : an in- junction will not be granted where the alleged right depends upon an unsettled point of law.^ The process is generally preventive rather than restora- tive ; but it may be either. If, for instance, a mill-owner having the right to raise water only to a certain height, should by means of flash-boards placed over his dam propose to raise the water a foot higher than he was en- titled to do, an injured riparian occupant would have the right, under a bill to enjoin the mill-owner from can-jing out his purpose, to require the removal of the flash-boards, where that appeared to be part of the intention of the bill.^ This latter sort of injunction which commands the doing of an act is sometimes called a judicial writ, because it issues after a decree, and is in the nature of an execution to enforce the same. Thus, it may contain a direction to the defendant to }ield up or to continue the possession of land or other property constituting the subject-matter of the decree.' From another point of view injunctions are either pro- 1 Citizens' Coach Co. v. Camden R. Co., 29 N. J. Eq. 299; Long Branch Com. i-. West End R. Co., lb. 566. 2 Knapp V. Douglas Axe Co., 13 AUen, 1. ^ 2 Story, Equity, § 861 292 MODES OF RELIEF IN EQIHTY. [Chap. XXII. visional or perpetual. Provisional injunctions are such as are to continue until a certain specified period, as until the coming in of the answer or the hearing of the cause. Per- petual injunctions are such as form part of the decree made at the hearing, upon the merits, whereby the defendant is finally enjoined from the assertion of a right or the com- mission of an act which would be contrary to equit}" and good conscience. One of the most common uses of injunction is to restrain proceedings in other courts ; but equity will not sta}' pro- ceedings at law unless the complainant has some equitable ground of defence not available at law ; or having a de- fence which might have been set up, has been prevented bj' fraud or accident from availing himself of it, without fault of his own.^ Equity upon this gi'ound often restrains actions at law by creditors after a decree of administration of the assets of a debtor. The court will in such cases restrain the creditor, though he was not a party to the administration proceedings, from suing at law for his debt.^ This is upon the gi'ouud that the administration decree is a judgment for the benefit of all the creditors alike ; and having taken the fund into its own hands, the Court of Chancery will administer it equitably, and not permit the executor or other representative to be harassed by suits at law. Such an injunction, however, is never granted unless there has been a decree giving the creditor absolute right to come in and prove his debt at once : until there is such a decree it is obviousty unjust to restrain proceedings at law.' Still, when the decree has been made, it takes pre- cedence of actions at law previously instituted, if judgment 1 Spaulding v. Backus, 122 Mass. 553. 2 Thompson v. Brown, 4 Johns. Ch. 619, 642 ; Updike v. Doyle, 7 R. I. 446, 460. 3 Hush V. Higgs, 4 Ves. 638, 643. Chap. XXIL] INJUNCTION. 293 has not 3'et been rendered in them.^ If the judgment at law be obtained before the decree, the creditor will not be enjoined from obtaining satisfaction thereunder.^ The action will be restrained though the executor or heir of the part}- whose estate is under administration may Ijave pleaded " full}- administered" or "nothing b}^ de- scent." But the court interferes only to give effect to its own decree by restraining proceedings against the assets, and protecting the persons who have acted in accordance therewith.^ It will not interfere to protect an executor or heir from any liability which he may have personally in- curred in the administration of the estate.* An injunction maj- also be obtained where a plaintiff is proceeding against the defendant, both in equity and at law, at the same time and for the same matter. The result in such cases is usually effected by an order upon the plaintiff compelling him to elect which of the two pro- ceedings he will carry on. Thus, equity will generally compel a plaintiff to elect between a suit in equity for the specific performance of an agreement and an action at law brought in respect of the same agreement.^ The same rule has even been applied where one suit has been brought in the domestic courts and another for the same matter in a foreign jurisdiction.' After the party's election equity will restrain him, if necessary, from acting inconsistent!}' therewith.' This right to require a party to elect, however, apphes only where the plaintiff has not already passed to a decree. 1 Largan v. Bowen, 1 Schoales & L. 296, 299. 2 Lee r. Park, 1 Keen, 714. 3 Kent V. Pickering, 5 Sim. 569; Buries v. Popplewell, 10 Sim. 383. * Kent V. Pickering, supra ; Price v. Evans, 4 Sim. 514. * Ambrose v. Nott, 2 Hare, 649. ^ Pieters v. Tliompson, Coop. 294 ' Rogers v. Vosburgh, 4 Johns. Ch. 84. 294 MODES OF RELIEF IN ii-QUITY. [Chap. XXII, After decree, the right of election is gone ; the plaintiff is considered to have made his election already. The process of injunction cannot be used to stay pro- ceedings in criminal causes.' Eqiiit}' has no jurisdiction to grant an injunction to stay proceedings upon a manda- mus, an indictment, an information, or the like.^ But it is said that this restriction applies onl}' to cases where the parties seeking redress b}- such proceedings are not tiie plaintiffs in equit}' : if they are plaintiffs, they are subject to control by an order personall}' affecting them.^ If, for instance, a suit were to be instituted to establish a right to land and to quiet the possession, and, after filing the bill, the plaintiff should prefer an indictment for a forcible entrj', — a proceeding in England of a double nature, par- taking of a breach of the peace and of a priA'ate right, — equity would stop the proceedings under the indictment.'* An injunction will not be granted to relieve the plaintiff against a judgment at law where the case in equity- pro- ceeds upon a ground which was equall}' available at law, unless the plaintiff can establish some special equitable ground for the relief which he asks. A plaintiff in equity, for instance, who has pleaded a set-off at law and failed, cannot have a bill for an account relating to the same transaction.® In regard to set-off, courts of equity follow the courts of law, except where there is some equitable ground growing out of the transaction or of the relation of the parties, which brings the case within the general jurisdiction of a court of equity, and justifies granting relief be^'ond the rules of 1 Holdei'staffe v. Saunders, 6 Mod. 16. 2 Montague ik Dudman, 2 Yes. sen. 396. 3 2 Daniell, Ch. Pr. 1620 (4tli Am. ed.). The whole chapter on Injunctions in that work has been much used in the preparation of tlie present chapter. * York V. Pilkington, 2 Atk. 302. ' Harrison v. Nettlesiiip, 2 Mylne & K. 423. Chap. XXII.] INJUNCTION. 295 law. The existence of cross demands is not suflicient ground for interference ; the party seeking the benefit of the set-off must show some peculiar equity which entitles him to have protection against his adversary's demand.^ But if a particular defence could not have been made available at law, and tlie party appl3ing for relief be not guilty of laches, equity will interfere by way of injunction.-^ So, too, if a fact material to the merits, which would ren- der the proceedings upon the judgment inequitable, should be discovered after a trial, which could not, by reasonable diligence, have been ascertained before, relief will be granted.' It must be nnderstood, however, that these are but nar- row exceptions to the general and fixed rule that equity will not relieve after a verdict where the defendant at law might have properl}' defended himself, or where there has been a mistake in the pleadings or in the conduct of the cause, or where merely new corroborative evidence has been found.* A legal right acquired by the prosecution of a lawful demand, in a lawful way, will not be enjoined by a court of equity unless some trust, confidence, agreement, or relationship imposing an obligation has been violated.^ Nor will a court of equity restrain a proceeding at law on the mere ground that a pai'ty is there attempting to enforce a hard demand.® It is a general rule that if a party by fraud, accident, mistake, or otherwise, has obtained an advantage in pro- ceeding in a common-law court, which must make that 1 Spaulding v. Backus, 122 Mass. 55-3; Holbrook v. Bliss, 9 AUea 69, 77. 2 Farquharson v. Pitcher, 2 Euss. 81, 89. 8 Jarvis V. Chandler, Turn. & R. 319. * 2 Daniell, Ch. Pr. 1621. ^ McCourtney v. Sloan, 15 Mo. 95. 6 Comp. Burke i'. Murphy, 27 Miss. 167. 296 MODES OF BELIEF IN EQUITY. [Chap. XXII court an instrumeut of injustice, equity will interfere to pre- vent a manifest wrong by restraining the part}' from using the advantage which he has thus obtained.^ Thus, if by fraud, accident, or mistake, a deed be framed contrary to, or differing from, the intention of the parties, and the pro- cedure of the common-law courts will not admit of such an investigation as will enable them to do justice in the case, equity will restrain the party having the advantage from asserting his legal rights under the instrument in those jioints in which it is so framed until the question has been investigated. And if, upon investigation, the complaint prove well founded, a perpetual injunction will be decreed.'' There are also many cases in which the legal defence to a claim set up at law rests either exclusively, or in a great degree, within the knowledge of the part}' advancing the claim ; and as it is deemed to be against conscience that the party should proceed in the assertion of his claim without communicating the information he possesses, equity will frequently grant an injunction against pro- ceeding upon the claim until the discovery is obtained. This ground of injunction (discovery), with the three others above mentioned (fraud, accident, and mistake), makes the principal source of the jurisdiction for granting injunction agamst proceedings at law. The right to an injunction in such cases is not limited to any particular part of the proceedings at law : the injunction may be granted at any stage. ^ Thus an injunc- tion is sometimes granted to stay trial ; ^ sometimes, when 1 Hibbard v. Eastman, 47 N. H. 507 ; Ross v. Harper, 99 Mass. 175. 2 2 Daniell, 1623. Absence of counsel or sickness of witnesses, if complainant failed to ask a postponement or continuance, would not furnish ground for equitable relief. Truly v. Wanzer, 5 How. 141 , Hendrickson v. Hinckley, 17 How. 443; Hungerford v. Sigerson, 20 How. 156. 3 Spurr V. Benedict, 99 Mass. 463, 467. * Holme V. Brown, 9 Hare, 29. Chap. XXII.] INJUNCTION. 297 the parties are in a position to enter up judgment, to restrain such act ; ^ and sometimes it is issued after judg ment, to stay execution, or proceedings (such as a sale) under execution.^ Equit}', however, is very cautious in interfering when the application is made on the eve of the trial at law ; and, after a judgment has been rendered, an injunction will be refused except (1) in those cases where there has been fraud or collusion in obtaining a verdict ; or (2) where the party has been unable to defend himself effectually at law without fault of his own ; or (3) where the plaintiff has possessed himself of something by means of which he has obtained an unconscientious advantage. Proceedings in a suit in equity ma}' also be restrained by injunction obtained in another suit. Where, for instance, there are two claimants to a fund, and one files a bill against a stakeholder without making the other a part}', the stakeholder may file a bill of interpleader, and have the proceedings in the former suit restrained.® A common use of the remed}' afforded by injunction oc- curs in the case of waste, — generall}^ an injurj^ to the in- heritance of lands, committed by the tenant in possession. The legal remedy- has proved so inadequate for such cases as to have become nearl}' obsolete. And there are some cases which an action of waste at law could not reach, as whei-e the estate is equitable. The usual instance of the application for an injunction against waste is by a reversioner or remainder-man against the tenant for years or for life ; for an estate for life as well as for yet.rs is impeachable for waste, unless the contrary'' be stipulated. Injunction will also be granted against waste in the interest of an unborn child,* or in favor of a 1 Williams r. Roberts, 8 Hare, 315. 2 Grant v. Lathrop, 23 N. H. 67. 3 Prudential Assiir. Co. v. Thomas, Law Rep. 3 Ch. 74. * Robinson v. Litton, 3 Atk. 209. 298 MODES OF RELIEF IN EQUITY. [Chap. XXII tenant in common, if tlie co-tenant in possession is doing something destructive of the common propert}'.* As has been intimated, a special case for injunction against waste occurs where the title of either of the parties is equitable. Thus, in the case of mortgages, if the mort- gagor in possession should attempt to cut down timber, the land without the timber being an insufficient or scanty security', equity will restrain him. So it is the duty of trustees of real estate to protect the entire inheritance for the benefit of the cestuis que trust in remainder ; and, as in many cases the value of the inheritance consists as much in the mines and timber as in the mere land, they may have their remedy b}'' injunction to prevent the destruction of the one or the exhaustion of the other.^ In like manner, where persons are contracting for leases or other interests in land, of which the^y are in possession onl}' by virtue of the contract, if the contract be such as will authorize them to call upon a court of equity to clothe them with the legal title, an injunction against waste will be granted.^ An injunction will also be granted in some cases where the parties have both legal titles aud legal remedies, but in which irreparable mischief would be done unless they were entitled to more complete relief than that which they would obtain at law. It has accordingly been granted where the wrong in reality amounted to nothing more than a trespass, and with good reason ; for, if the court would not inter- fere against a trespasser, he might go on with repeated acts to the destruction of all that was valuable in the land.* The principle governing these cases seems to be this ' 1 Arthur v. Lamb, 2 Dru. & S. 428. 2 Pugh 17. Vaughan, 12 Beav. 517. 8 Norway v. Uowe, 19 Ves. 144. * Winnipisoogee Lake Co. v. Worster, 29 N. II. 433, 447. Chap. XXIL] INJUNCTION. . 299 "Where the defendant is in possession, and the plaintiff claiming possession seeks to restrain him from committing acts of trespass or waste, the court will not interfere, un- less the acts are so flagrant as to justify it in departing from the rule of leaving to the law courts the redress of acts sounding in damages. Where the plaintiff is in pos- session, and the person committing the acts complained of is a stranger, claiming under no color of title, the court will hesitate to grant the injunction, except under special, urgent circumstances, as where the act tends to the de- struction of the estate.-^ When the person in possession seeks to restrain one who claims by adverse title, the injunction will generally" be granted, and will alwa3's be granted, it is. apprehended, if the acts tend to destroy the estate.^ Equity will also interfere b}- injunction, where the parties committing the waste, with nothing but temporary and lim- ited interests in the subject-matter, are maliciously and wantonlj' abusing their legal rights to the injury of the re mainder-man. This is commonl}' called equitable waste, which ma}' be thus defined : The commission of such acts as at law would not be deemed to be waste under the cir- cumstances, but which are so deemed in equity, because they are a manifest injury to the inheritance, though they may not be inconsistent with the legal rights of the parties committing them. To illustrate the meaning of this : If a person be tenant of lands for life, without impeachment of waste, he may sever the trees and convert them at his own pleasure, as well as if he owned in fee. It was supposed at first to be the necessary consequence that such a person could not be restrained in an}' case from cutting timber upon the estate ; since to restrain him would be to determine that he should 1 Best V. Drake, 11 Hare, 369. 2 Robinson >■ Byron, 1 Brown, C. C. 588. 300 MODES OF BELIEF LN EQUITY. [Ciiav. XXII not enjo}' what liad been lawfull}' granted liim.^ It was, however, soon found that this extensive power might be wantonly and capriciously abused, to the prejudice of the inheritance ; and upon this ground it was decided that where a tenant, without impeachment of waste, was mak- ing an unconscientious use of that power, equit}' would restrain him by injunction.^ Upon this principle, tenants unimpeachable of waste have been restrained fi-om wantonly cutting down young timber, ti'ees planted for ornament or shade or to shut out the sight of an object.^ In all cases of this kind, it is the improper and abusive exercise of a legal power, to the detriment of those in remainder, which the court interferes to restrain.* Another occasion for equitable interference by injunction arises in the case of nuisances, of which there are two kinds ; to wit, public and private. In cases of public nuisance, or nuisance to the injury of the general public alike, an indictment may be main- tained to abate them and to prosecute the offender ; but an information in equity will also lie to stop the mischief, and to restrain its renewal.^ It is necessar}', however, that the nuisance should be actital and existing, and not merely prospective, however strong the evidence of apprehended mischief.^ As to private nuisances, the court will interfere by in- junction when the mischief is irreparable.'' The interposi- tion of equitj' is not justifiable in every case for which an 1 Aston V. Aston, 2 Ves. sen. 264, 266. 2 See Kane v. Vanderburgh, 1 Johns. Ch. 11 ; Aston v. Aston,supra 8 See 2 Daniell, 1633. * lb. 1634. 6 Attorney-Gen. v. Bradford Canal, Law Rep. 2 Eq. 71 ; Attorney- Gen. V. Forbes, 2 Mylne & C. 123, 129. 6 Ross V. Butler, 4 C. E. Green, 294. ^ Winnipiscogee Lake Co. v. Worster, 29 N. H. 433; Ingraham u Bunnell, 5 Met. 118. Chap. XXII.] INJUNCTION. 301 action at law could be maintained. There must be such an injuiy, or the well-grounded apprehension of it, as fiom its nature is not susceptible of being adequatel}' compen- sated in damages, or such as, from its long continuance, occasions a constantly recurring grievance, which cannot otherwise be sufficiently prevented.^ But when such a case is made to appear, an injunction will be granted. It has accordingly' been laid down that, where the nui- sance operates to destroy' health, or to substantially dimin- ish the comfort of a dwelling, the injured party is entitled to an injunction.^ So, too, though a common trespass, or a slight diminution of the value of premises, without in- jury to health, will not afford ground for an injunction ; ^ still, if the trespass continue so long as to become a nui- sance, or if the diminution of the value of the premises amount to irreparable mischief, an injunction will be granted.* The most common instances of the application of the writ of injunction to the redress of private nuisances occur in the pollution of streams, the diversion of watercourses, the flooding of premises, and the stoppage of private rights of wa}'. In cases of this description, where a party sues in re spect of an alleged injury to his legal rights, it seems that an injunction is granted solel}' upon the principle of pre- serving propert}' until a decision of the legal right can be had. In order to entitle the plaintiff to such an interfer- ence for the purpose of protecting his property', pending the decision of his legal right, he must show a strong prima facie case in support of the title which he asserts, 1 Soltau V. De Held, 2 Sim. n. s. 133. 2 Holsman v. Boiling Spring Bleaching Co., 1 McCarter, 335. 3 Gaunt V. Fynney, Law Rep. 8 Ch. 8. 4 White I'. Cohen, 1 Drew. 312 ; Johnstone v. Hall, 2 Kay & J. 414 Hodgson V. Duce, 2 Jur. n. s. 1014. 302 MODES OF EELIEF IN EQUITY. [Chap. XXIL and also that he has not been guilty of any laches in ap- pl^ing for the interference of the court. ^ The court has then to consider the degree of inconveni- ence and expense to which granting the injunction would subject the defendant, in the event of his proving to be in the right, ^ and, on the other hand, the nature of the injury which the plaintiff may sustain in the event of his com- plaint turning out to be well founded, and the court refus- ing to interfere pending the decision of the legal question. Thus balancing the question between the two parties, the court must exercise its discretion whether the injunction should be granted or withheld.^ Should the court, in the exercise of this discretion, de termine to grant the injunction, it will, if the legal title is disputed, jiut the parties in the position of speedily obtain- ing a decision upon such title ; * and for that purpose, either a trial of the legal title will be directed before the court itself, or an issue will be directed to a court of com- mon law. If there is no danger of irreparable mischief in the mean time, the motion for an injunction will be di- rected to stand over till after the trial of the legal right.* Equity will not interfere by way of injunction against the placing of obstructions- in the highway', where the in- jury is onl}' temporary" and trifling. Before the plaintiff can expect an injunction, he must show that he has sus> tained such a substantial injury by the act of the defend- ant as would at least entitle him to a verdict at law in a » See Delaware & R. Canal Co. v. Raritan & D. R. Co., 1 C. E. Green, 321, 380. 2 See Wing v. Fairhaven, 8 Cush. 363. 3 Wilcox V. Wheeler, 4? N. H. 488 ; Ingraham v. Dunnell, 5 Met. 118. * Burnham v. Kempton, 44 N. H. 78, 97. ^ Eaden v. Firth, 1 Hem. & M. 573. See further, as to nuisance, Bigelow, Torts (Students' Series \ cli. 13. OuAP. XXII.] INJTINCTION. 303 suit for damages.^ It has accordingly- been decided that the disturbance of the pavement of a town bj- a gas com- pan}', without lawful authority, for the purpose of laying down gas pipes, will not afford ground, per se, for inter- ference by injunction, either on the part of individuals or of the public. There must be some substantial and con tinuous damage, such as causing a diversion of trade from a locality'. ^ Equit}' will not interfere to restrain the commission of acts of trespass, except in aggravated cases, tending to' the destruction of the inheritance, or where the mischief would be beyond remedy,^ or where the trespass is of a continuous natm-e, so as to requu-e a multiplicity of suits if not restrained.^ An injunction maj' also be obtained to restrain the in fnngement of a patent or copyright. This interference (apart from statute) is based upon the ground that the law does not give a complete remedy to those whose property is thus invaded. Inventors or authors would be compelled to lose the advantage of their property', unless they would consent to be ruined hy perpetual litigation. The injunction, however, is not obtainable as matter of course. The equitable right flows from the legal title ; and if there be doubt either of the validity of the patent or copyright, or of the alleged infringement, the court will consider the degree of inconvenience to the parties by the granting or refusal of the injunction. It may accordingly either refuse the injunction altogether, refuse it on the terms of the keeping an account, or order the motion to stand over until the legal title is determined.^ 1 Eliiihiist V. Spencer, 2 Macn. & G. 45, 50. 2 Attorney-Gen. v. Cambridge Gas Co., Law Rep. 4 Ch. 71.- 3 Jerome v. Rpss, 7 Johns. Ch. 315; Spofford v. B. R. Co., 66 Maine, 51. 4 Williams v. New York Cen. R. Co.. 16 N. Y. 97, 111. ^ 2 Uanicll, 1642. Concerning tliis subject, see, further, Bigelow, Torts (Students' Series,) ch. 10. 804 MODES OF RELIEF IN EQUITY. [Chap. XXII. Injunctions may also be obtained to restrain corpora- tions and other public bodies from committing acts ultra vires, or from appropriating their property for purposes other than those for which thej- were constituted. Thus, the grant of a franchise to operate a railroad does not confer the right to use upon the road locomotives so con- structed as to throw out burning coals that ma}- set fire to buildings near ; and the Court of Chancery will enjoin the corporation from using such locomotives. ^ Another purpose for which an injunction may be asked is, to prevent the alienation of property-, where such an act would work an irremediable or gross injustice. An in- junction, indeed, is often granted in such a case when the alienation contemplated is strictly legal, if other circum- stances, which could not be noticed at law, would render it improper that the alienation should be made. Thus, if a negotiable bill or note, tainted with fraud, is transferred to a bona Jide holder for value, the latter may recover upon it. For this reason, the person against whose rights the instrument might by transfer be made available is deemed entitled to protection by way of injunction.^ Upon a lilie principle, equity will restrain the transfer of stock, or the pa^^ment of di\idends, or the sale of spe- cific chattels, where, in the first case, the title to the stock is controverted between principal and agent,* or where, in the second case, it is proposed to pa}- the dividends on erroneous principles,^ or, in the third case, where it is necessarj' to protect the enjo3'ment of specific articles, compensation in damages not being practicable or ade- quate.^ Equit}' will also enjoin a party from making alienations 1 King V. Morris & E. R. Co., 3 C E. Green, 397. 2 Espey V. Lake, 10 Hare, 260. * Chedworth v. Edwards, 8 Ves. 46. * Sturge V. Eastern Union Ry. Co., 7 DeG., M. & G. 168. ^ Arundell v. Pliipps, 10 Ves. 139. Chap. XXII. | INJUNCTION. 305 of the subject-matter of the suit pendente lite. It will accordingly restrain a party from convej'ing the legal title to real estate pending a suit for the specific performance of a contract for the sale of that estate.^ But it will not interfere in this manner before the hearing, if there is any serious question whether an}' contract exists between the parties. - In like manner, sales maj' be enjoined in all cases where the}' are inequitable, or ma}' operate as a fraud upon the rights or interests of third persons ; as in cases of trusts or special authorities, where the part}- is abusing his trust or authorit}'.* And where sales have been made to sat- isfy' certain trusts and purposes, and there is danger of a misapplication of the proceeds, equity will restrain the purchaser from pa3'ing over the purchase-money.* So, also, husbands may be I'estrained from transferring prop- erty in fraud of the equitable rights of their wives. * Injunction will also be granted to compel the due ob- servance of agreements where there is no effectual remedy at law. Thus, where certain persons, owning a house near a church, have entered into an agreement to erect a cupola and clock, in consideration that the bell shall not be rung at five o'clock in the morning, to their disturb- ance ; if the agreement be violated, an injunction will be granted to prevent a continuation of the act.® In like manner, if a block of buildings has been erected with particular covenants concerning the enjo3'ment thereof, each owner will be entitled to an injunction to prevent a breach of the covenants.'' So, too, a plaj'-writer who haa 1 EchlifE V. Baldwin, 16 Ves. 267. 2 Iladley v. London Bank, 3 DeG., J. & S. 63. » 2 Uaniell, 1652. * Green v. Lowes, 3 Brown, C. C. 217. 5 Cadogan v. Kennett, 2 Cowp. 432, 436. 6 Martin v. Nutkin, 2 P. Wms. 266. ' Barrow v. Richard, 8 Paige, 351. 20 30G MODES OF RELIEF IN EQUITY. [Chap. XXIL covenanted not to write a dramatic perfoimance for anotlier theatre, may be restrained by injunction Ironi violating the agreement.^ So, also, an author who has sold his copy- right in a work, and covenanted not to publish an}' other to its pi'cjudice, ma}- be enjoined from a violation of his covenant. - Injunctions will also be granted to restrain the erection of buildings in breach of a covenrtnt not to build in a par- ticular manner or on a particular site.* And a restriction of the manner of using gi'anted land, not against public polic}', and beneficial to adjacent land of the grantor, whether inserted as a condition, covenant, or otherwise, may be enforced b}- injunction against the grantee and his assigns with notice.* The Court of Chancery will also enjoin the \nolation of an agreement not to engage in a particular trade in a par- ticular place or county ; though an agreement not to ex- ei'cise the trade anywhere is deemed to be contrar}' to public polic}", and is not enforceable. Injunction has been granted against the violation of an agreement, upon the sale of a printing and pubMshing establishment including the copyright of a book, not to engage in the publishing and sale of the book within the limits of an entire State, where the business sold extended over substantially the whole of the State ; * but this is the limit of the law. An association of carriers or forwarders to regulate the price of freight and passage b}' a uniform scale, to be fixed by themselves, and agreeing to divide the profits with each other, with provisions prohibiting the members from en- gaging in similar business out of the association, has been ' Morris v. Colnian, 18 Vcs. 4^7. 2 Colbum V. Simms, 2 Hare, 543. 8 Rankin v. Husliisson, 4 Sim. 13; Coles v. Sims, 5 DeG., M. & G. 1 * Whitney v. Union Ry. Co., 11 Gray, 359. * Deal V. Chase, 31 Mich. 490. Chap. XXII.] INJUNCTION. 307 thought to be within the mischief of contracts in genera] restraint of trade.* And hence such an agreement wo«ld not be enforced by injunction. It appears formerly to have been a rule of equity not to interfere b}' injunction to restrain the breach of an agreement if it was of such a character that specific per- formance could not be decreed.'^ But it seems that now the court will restrain a person from committing acts in breach of an agreement, though it cannot compel the per- formance of it.^ An injunction is sometimes granted to prevent an ad- joining land owner or occupant from continuing to impose upon the plaintiff's estate a burden to which it was formerly subject, but from which it has now become discharged. Where, for instance, the owner of two tenements sells and convej's one by an absolute title, he is thereby said to have put an end to any relation which he may have created between the tenement sold and the adjoining tenement, and to have discharged the tenement sold from any burden imposed upon it during his occupation of the two. And should the seller or purchaser of the tenement attempt to exercise a right of continuing the burden over the other tenement, he might be restrained b}^ injunction.* If in such a case the grantor desire to retain an}* right over the property granted, or if the purchaser wish a con- tinuation of the right of burden over the adjoining premi- ses, it is deemed to be the dut}' of the former to reserve it, or of the latter to require the continuance of it, in the gi-ant. A purchaser under an unqualified conveyance is not bound to take notice that the seller, who is the adjoining occupant, 1 Stanton v. Allen, 5 Denio, 434; Oregon Steam NaT. Co. v. Win Bor, 20 Wall. 64. 2 Kemble v. Kean, 6 Sim. 333; Kimberley v. Jennings, lb. 340. » Luniley v. Wagner, 6 DeG. & S. 485 ; 8. c. 1 DeG., M. & G. 604 * Suffield V. Brown. 4 DeG., J. & S. 185. 308 MODES OF RELIEF IN EQUITY. [Cha.p. XXH has been accustomed to make a particular use of his (the purchaser's) premises ; nor if he does know the fact, will his absohite estate be cut down.^ The grantor cannot derogate from his own absoUite deed. The case would of course be different if the adjoining occupant were a stranger, and not the grantor or in privity with him. Where, however, there are two tenements, as, for in- stance, two adjoining houses, so constructed as to be mu- tuall}' beneficial to and dependent on each other, neither being capable of standing or being enjoj-ed without the support of the other, an injunction may be maintained after as well as before alienation against an}' attempt on the part of the adjoining occupant to remove the support of the plaintiff's house ; though the plaintiff could not pre- vent the making of alterations or repairs, provided the support of his own house was not endangered. In such cases, the light of support passes upon alienation of either of the premises. But where the right claimed in respect of the tenement retained by the joint owner against the tenement granted b}' him ma}' be sepnmted from the former tenement, it is severed and either passed or extinguished by the grant, according to the terms thereof.^ In general, where the easement in question is necessary to the enjoyment of the' granted premises, as where the premises can be approached onl}- by a right of wa}- over the grantor's land, the easement will pass in the absence of negative language ; but where it is not necessar}', it will not pass, nor can it be reserved, without ex^jress words, ^ The writ of injunction is often emplo3'ed to relieve a party against the consequences of the non-performance of an agreement the breach of which is attended by a penalty or forfeiture. Where a penalty has been inserted merely 1 Suffield r. Brown, 4 DeG., J. & S. 185. But see Pyer v. Carter 1 Hurl. & N. 916. 2 SuflBeld V. Brown, supra. ^ lb. CuAP. XXII.] INJUNCTION. 309 to secure the eujo3nnent of a collateral object, the enjoy- ment of the object is considered to be the principal purpose of the instrument, and the penalt}' is treated as accessory. In such a case equit}- -svill enjoin enforcement of the penalty. But where the parties, instead of securing performance by means of a penalt}', have fixed upon a certain sum as liquidated damages, to be paid in the event of non-perform- ance equit}' generall}' refuses to grant an injunction to re- strain the recovery of the sum stipulated. This doctrine, however, must be taken with some quali- fications ; for it must appear, from the whole contract, that the stipulated sum was to be paid in lieu of the strict per- formance of the agreement, and was an alternative which the part}' making the covenant had the right or option to adopt. ^ It is said that the question in ever}- case is, What is the real meaning of the contract? And if the substance of the agreement is that the party shall not do a particular act, and that is the evident object of the agreement, and it is provided that, if there is a breach of this agreement, the part}' shall pay a stated sum, which does not clearl}' appear to be an alternative that he has the right to adopt, instead of performing his contract, there is no reason wh}' a court of equity should not restrain him from doing the act, and thus carr}- out the intention of the parties. If such appears to be the purpose of the agreement, the fact that the sum to be paid is a stated or stipulated amount, in the nature of hquidated damages, should not oust a court of equit}' of its jurisdiction to compel the party to carry out his agi'eement. In other words, nam- ing a sum to be paid as liquidated damages does not in itself conclusively show that the parties contemplated the 1 Ropes V. Upton, 125 Mass. 258, Endicott, J. 310 MODES OF RELIEF IN EQUITY. [CuiP. XXII riglit to do the act upon paj'ment of the compensation, and make an alternati^ e agi'eement for the benefit of the party who has done what he agreed not to do.^ It is a fraud for a person to set up a business under such a designation as is calculated to lead, and does lead, other people to suppose that his business is that of another per- son ; ^ and such an act would doubtless be restrained by injunction.^ A person who has been a manager or partner in a firm of established reputation has a right, upon setting up an independent business of his own, to make known to the pubhc that he has been with that firm ; but he must do ^o in a way not calculated to lead the pubhc to beheve that he is carrying on the business of the old firm, or is in an}^ way connected with it. If he should act contrary to this rule, the old firm will have a right to enjoin him from fur- ther misleading the public to the detriment of the plain- tiffs." The right to a trade-mark is the right to an exclusive use of some mark, name, or symbol, in connection with a particular manufacture or vendible commodity.® The use of the same mark in connection with a different article is not an infringement of the first trade-mark.® And the right to a ti'ade-mark, obtained under the statutes, appears now to be a right of property. So it is treated in equity, at all events.'' Where the owner of a trade-mark applies for an injunc- tion to restrain the defendant from injuring his property by making false representations to the public, it is neces- sary that the plaintiff should not in his trade-mark, or in 1 Eopes V. Upton, supra. 2 Lee V. Haley, Law Rep. 5 Ch. 155. « lb. * Hookham v. Pottage, Law Rep. 8 Ch. 91. 5 Leather Cloth Co. v. American Leather Cloth Co., 4 DeG., J. & S. 137. e lb T lb. Chaj>. XXIL] INJUNCTION. 311 the business connected with it, be himself guilty of any false or misleading representation.^ And it is no answer on the part of the plaintiff that a false representation thus made by him is so palpable that no one is likely to be de- ceived b}' it.^ Equity, however, will grant relief, though the defendant had no intention of selling his own goods as the goods of the plaintiff, or of practising any fraud, either on the plain- tiff or the pubUc. For example : The defendant adopts a mark in ignorance of the plaintiff's exclusive right to it, and without knowing that the symbols or words so adopted and used are already current as a trade-mark in the market. The plaintiff is entitled to an injunction against the further use of the mark.* Though a word chosen as a trade-mark, which is in fact a geographical designation for a whole tract of country where the raw material is grown, from which a manufac- tured article is produced, cannot be property for all pur- poses ; still, property in the word, as applied by wa}- of stamp upon a particular vendible article, does exist in equit}' the moment the article goes into the market so stamped, and there obtains acceptance and reputation.* Where a large number of persons have similar legal claims against one, he can bj' a bill filed against some of them restrain the proceedings of all, until the question as to the vahdity of the claims has been decided.^ No one, however, can maintain a bill of peace who has not the legal title. Possession under a mere bond for title, there- fore, is insufficient.* Equity has jurisdiction of a bill of peace, when the de- fendant is interfering with the plaintiff's tenants by de- 1 lb. ^ Jb. 8 lb. * McAndrew v. Bassett, 4 DeG., J. & S. 380. 5 Slieffield Waterworks v. Yeomans, Law Kep. 2 Ch. 8. 6 Thomas v. White, 2 Oliio St. 540. 312 MODES OF RELIEF IN EQUITY. [Chap. XXIL manding rent of them, and is casting suspicion on the plaintiff's title, the plaintiff not having been dispossessed.* Possession, however, is not necessary so long as the plaintiff has not been disseised. A remainder-man, for in- stance, who has reason to fear the destruction or removal of the property to come to him, ma}" have a bill quia timet. ^ In like manner, children w^ho are remainder-men, under a marriage settlement, are entitled to a bill quia timet, if there is reasonable fear that their property is being wasted.' » Polk V. Rose, 25 Md. 153. « Gibson v. Jayne, 37 Miss. 164. * Sandeson v. Jones, Fia. 430. INDEX. INDEX. [The Italic lines indicate the titles to sections.] A. ACCIDENT AND MISTAKE, general rule iu regard to relief from consequences of, 169. ground of equity jurisdiction, 1(39. loss or destruction of instruments, 169. lost bonds or negotiable instruments, 169. relief against surety in bond, 169, 170. origin of equity jurisdiction as to lost bonds, 170. profert, 170. origin of jurisdiction as to lost negotiable instruments, 170. construction of covenants, 171. effect of being prevented from performing them by accident or mistake, 171. exact performance generally not of the essence of contracts for purchase, 171. non-payment of rent at time agreed, 171, 172. non-performance of agreement to repair, 172. correcting instruments framed in mistake, 172-174. releases and compromises made in mistake, 174, lit. mistake of fact, 174, 175. family settlements, 175. compromise of doubtful claims, 175. mistake of law, 175, 176. in cases of confidential relations, 175, 176. mere naked mistake of law, 176. mistake as to immaterial fact, 176. mistake arising from negligence, 176, 177. 316 INDEX. ACCIDENT AND MISTAKE, —co»/muerf. the error must be mufcual, when, 177. the right to rescind must be made known as soon as mistake is discovered, 177. effect of Statute of Frauds in cases of deeds, 177, 178. change of position, 178, 179. ACCOUNT, ground of equity jurisdiction as to, 262. limit of jurisdiction, 262. when accounts not a ground of equity jurisdiction, 262, 263. cases between banker and customer, 263. principal and agent oi' factor, 263. discovery as ground for an account, 263, 264. doctrine sunnnarized, 264. when there is a series of accounts and payments, 264, 265 dealings between landlord and tenant, 265. lapse of time, 265. default or laches of plaintiff, 265. account in favor of an heir, when, 266. rights of dowress, 266. what she is entitled to, 266. partition, 266, 267. waste upon legal estate, 267. waste upon equitable estate, 267. account against mortgagee in possession, 267, 265. vendor of land in possession, 268. receiver, 268. agent, 268, 269. steward, 269. partnership dealings, 269, 270. joint tenants, 270. dissolution of partnership, 270, 271. ADMINISTRATION OF DEBTS AND ASSETS. Marshalling, 82-84, 239-242. in cases of mortgages, 82-84. how this equity arises, 239. object of it to secure equality, 239. simple-contract debt payable how, 239 equitable assets, 239, 240. INDEX. 317 ADMINISTRATION OF DEBTS, kc, —continued, legal assets, 239, 240. all debts equal in equity, 240. no distinction between specialty debts and simple-contract debts, 240. estates expressly devised for payment of debts, 240. estates charged by the debtor, 240. assets partly legal and partly equitable, 241. creditor having recourse to double fund, 241. right to compel him to resort to but one of them, 241. an equity against the debtor also, 241. limitation to the rule of marshalling, 241, 242. doctrine controlled by statute to some extent, 242. Exoneration, 242-244. what meant by, 242. express words not necessary, 242. testator cannot defeat rights of creditors, 243. making real estate liable to debts and legacies, 243. oneration and exoneration necessary, 243. legacies not on the same footing with debts, 244. creation of mixed and general fund for special purpose which fails, 244. Conversion, 50-55, 244, 245. principle of, 244. effect of, 244. a question of intention, 245. absolute and partial conversion, 245. conversion arising on dissolution of partnership, 245. AGENT, account against, 268, 269. transactions with principal, 146-149. (See Fraud, Presumptive.) ASSIGNMENT, by the early common law invalid, when, 90. ground of this, 90. equity refused to accept the rule at law, 91. what may be assigned in equity, 91. chance of acquiring an estate, 91. share in future profits of a voyage, 91. 318 INDEX. ASSIGNMENT, — continued. future wages, 91. expectant interest of heir, 91. property must be pointed out, 91. purely litigious rights, 92. champerty and maintenance, 92, 93. assignment of judgment, 93. assignment of part of a claim, 93. consent of debtor, 93, 94. notice to him, 94. notice to agent or trustee, 94. ATTORNEY AND CLIENT, dealings between, 136-146. {See Fraud, Presumptivb.) AVERAGE, GENERAL, contribution in cases of, 252, 253. AWARDS, fraud in cases of, 12.3-125. C. CANCELLATION AND SURRENDER, general rule as to, 234. only in clear cases, 234. in cases of weakness of mind, 234, 235. contract of intoxicated person, 235. cloud upon title, 235-237. instances of, in which equity will interfere, 235-237. where the plaintiff's title is sufficiently clear, 236, 237. forged deed, 237. surrender of instruments, 238. CHARITIES, doctrine of cy-prh as to, 18-20. CLOUD ON TITLE, instances of, in which equity will interfere, 235-237. mortgage taken with notice of a prior conveyance in fee, 235 owner by prescription may have cloud removed, 235. other cases, 236. where the plaintiff's title is sufficiently clear, 236, 237. forged deed, 237. ^ INDEX. . 319 CONFIDENTIAL RELATIONS, (See Fkaud, Presumptive.) CONSTRUCTIVE FRAUD, (See Fraud, Pkesumptive.) CONSTRUCTIVE NOTICE, (See Notice.) CONTRACT, (See Rescission and Cancellation; Subrogation.) CONTRIBUTION AND EXONERATION, how tlie equities of ai'ise, 216. the charge must be binding, 246. where the charge arises ex malo, 24G, 247. contribution between wrong-doers, 247. torts by mere construction of law, 247. non-participating party entitled to contribution, 247. trustees guilty of technical breach of trust, 247. contribution and exoneration in suretyship, 247, 248. wheu right of contribution arises in such cases, 248. co-surety to apply first to principal, 248. what he must show before he can call upon his associate surety to contribute, 248. sureties in the same contract, 248. sureties for distinct things, 248, 249. special contract with particular surety, 249. indemnity fund received by surety, 249, 250. surety failing to avail himself of defence, 250. contribution between underwriters, 250, 251. complexity of agreement and liability of parties to multi- plicity of suits, 251. contribution in cases of mortgage or other incumbrance, 251, 252. general average, 252, 253. sacrifice not purposely made, 25-3. when surety entitled to subrogation, 253. (See Subrogation.) equity of exoneration, 253. CONVERSION, what constitutes, 52. (See Administration of Debts and Assets.) 320 INDEX. CORPORATIONS, officers and directors of are trustees, 44. cannot make personal profit out of the business, 44. acts of majority to the injury of minority, 114, 115. assessments, use of profits, 115. collusive election of directors, 115. fraudulent letting of contracts, 115. fraudulent certificates of stock, 115, 116. secret privileges in subscriptions, IIG. fraud of directors as to subscriptions, 116. injunctions against as to acts ultra vires, 304. COURT OF CHANCERY, has existed for nearly six centuries, 3. its jurisdiction given to the law courts in many States, 3. equity in the Anglo-Saxon period, 3. no court of chancery then, 3. result of the Norman Conquest, 4. the King the fountain of justice, 4. his prerogative in the administration of justice, 4. origin of chancery jm-isdiction in tlie King's prerogative, 4. extent of chancery jurisdiction at first, 4. , jealousy of the chancery, 4, 5. limitation of its jurisdiction, 5. ground of the jurisdiction, 5. The King's prerogative abridged by the Provisions of Ox- ford, 5, 6. . ~ St. of Westminster 2, c. 24, as to actions on the case, 6. this statute insufficient to meet all cases, 7. chancery supplies the want, 7. origin of injunctions and bills of peace, 7. chancery, as a distinct court, as early as Edw. IIT., 7. how, as such, it came into existence, 8. no system of equity at first, 8. equity now governed by settled rules of law, 8. how far equity is at variance with legal rules, 8, 9. present ground of jurisdiction, 9. CREDITORS, fraud on, 126-134. (^Sefi Fraud, Actual.) INDEX. 321 CRIMINAL CASES, injunction as to proceedings in, 294. CY-PRfiS, difference between English and American law as to the doctrine of, 17, 18. the King's sign-manual, 17, 18. D. DECEIT, {See Fraud, Actual.) DISCOVERY, peculiar to equity, 287. defendant has right to require, 287. limitation to right, 287. criminating one's self, 287. revealing existence of fraud, 288. facts leading to penalty, 288. professional advice, 288. confidential communications, 289. private accounts, 289. muniments of title, 289. reasonableness of the discovery, 289. matters of state, 289, 290. defendant must answer fully, 290. party may be required to set forth list of documents foi discovery of facts, 290. DOWER, widow's election as to, 260. account in favor of dowress, 266. E. EASEMENTS, injunction as to, 307, 308. ELECTION, what the doctrine of is, 254. common cases of, 254. intention as to, 255. putting heir or widow to election, 255. 21 322 INDEX. ELECTION, — continued. compensation and not forfeiture in cases of election, 255, 256. how the principle is worked out, 256. limitation to doctrine of election, 257. where the party granting or devising has a partial interest in the thing given, 257. how election excluded, 257, 258. election where party takes by will what he would take by descent, 258. property given subject to burden, 258. election in cases of appointment under powers, 259. widow's election as to dower, 260. election applicable to remote or contingent interests, 260. applies equally to wills, deeds, and other instruments, 261. ESTOPPEL, equitable, 96, note. EXECUTORS AND ADMINISTRATORS, {See FiiAUD, Piiesumptive.) EXONERATION, (5ee Admixistratiox of Dkbts and Assets; Contribu- Tiox AND Exoneration.) EXPECTANT HEIRS, protection of in equity, 158-161. F. FAMILY SETTLEMENTS, mistake in, 175. FORECLOSURE OF MORTGAGE, does not discharge debt, 86, 87. FORFEITURES, {See Unconscionable Stipulations.) FRAUD, ACTUAL, division of law of fraud, 95. Deceit, 9.5-103. elements of redressible deceit, 95, 96. remedy at law, 96. representation may be in acts, 96. INDEX. 328 FRAUD, ACT\JAL, — continued. express statements never necessary, 97. misrepresentation of meaning of words, 97. statement of but part of the truth, 97. representation should be of matter of fact, 98. misrepresentation of law, 98. false representations of value, 98. passive concealment, 98. silence in sales as to latent defects, 98. difference in kind, 99. contract of suretyship obtained by fraud, 99. sureties of fidelity, 99. deceit in antenuptial settlements, 100, 101. conveyances by wife on eve of marriage, 100. meritorious objects thereof, 100. conveyances in fraud of dower, 101. wrong-doer's knowledge of falsity of representation, 101. honest statement of fact, believed true, 101. cases in which parties are bound to know the facts, 101, 102 plaintiff's ignorance of truth, 102. plaintiff prevented from making inquiry, 102. intention to injure, 102, 103. acting upon the representation, 103. damage necessary, 103. plaintiff must act on defendant's misrepresentation, 103. Fraud on Powers, 103-107. on whom committed, 103. how committed^ 103, 101. what appointments void, 101. appointment to benefit of appointor, 101. discretionary trusts, 101. when appointor controlled as to, 101, 105, 107. purchase with notice of breach of trust, 105. limitations on the power of the donor, 105, lOG. purchaser under fraudulent appointment, 106. execution of power void in part only, 106, 107. unequal appointment, 107. Inadequacy of Consideration, lOS, 109. insufficient alone to annul contract, 108. 324 IXDEX. FRAUD, ACTUAL, — continued. what necessary in addition to inadequacy, 108, 109. gross inadequacy, 109. Fraud between and by Partners, Co-tenants, and Joint Pur- chasers, 109-114. fraud in forming partnership, 109. dissolution in such cases, 109, 110. no dissolution for trivial violation of duty, 110. fraudulently concerted petition of bankruptcy against part- ner, 110. duty to refrain from concealment inter se, 110, 111. clandestine bargains by one partner. 111. engaging in other business, 111. diverting funds to secret purpose. 111. secret profits made by one partner, 112. purchase by one partner of his associate's interest, 112. no special relation of confidence between partners in ordi- nary cases, 112, 113. position of co-tenants similar, 113. joint purchasers, 113. fraud on creditors by partners, 113. withdrawal of ostensible partner, 113, 114. of dormant partner, 114. Corporations, 114-116. acts of majority to the injury of minority, 114, 115. assessments, use of profits, 11.5. collusive election of directors, 11.5. fraudulent letting of contract, 115. fraudulent certificates of stock, 115, 116. secret privileges in subscriptions, 116. fraud of directors as to subscriptions, 116. Volunteers, 116, 117. taking advantage of projects communicated by another, 116, 117. Marriage effected by Fraud, 117-119. fraud as a ground for annulling marriage, 117. how fraud established, 117, 118. particular instances of fraud, 118. third persons cannot allege the fraud, 118, 119. INDEX. 325 FRAUD, ACTUAL, — continued. Judgments and awards, 119-125. for what frauds a judgment may be impeached, 119. fraud in obtaining jurisdiction, 119, 120. fraudulent detention of opposite party's witnesses, 120. colhisive litigation, 120. fraud practised upon the court, 120. fraud in concoction of judgment, 120, 121. collusive acts of trustees, guardians, and partners, 121. fraud on third persons, 121, 122. when third persons may interfere, 121, 122. what creditors may object to, 122. impeachment of foreign judgments, 122. judgments of the sister States, 122, 123. impeachment of awards, 123. misconduct of arbitrators, 123, 124. what constitutes evidence of fraud, 124. excessive awards, 124. evidence necessary to impeach awards, 124. restraining the collection of an award, 125. when the whole award need not be disturbed, 125. when arbitrators may open a judgment, 125. Waiver of Fraud, 125, 126. what amounts to waiver, 125, 126. knowledge of facts necessary, 126. and of the law applicable, 126. Fraud on Creditors and Purchasers, 128-134. Statutes of Elizabeth, 126. statute as to creditors, 127. " good consideration " of the statute, 127, 128. voluntary conveyances, 128, 129. doctrine generally stated, 129. amount of debt necessary to make voluntary conveyance invalid, 129. no fraudulent intent necessary, when, 129, 130. conveyance may be fraudulent, though for full value, 130. sales and assignments amounting to a mere preference, 130, 131. statute as to purchasers, 131. 326 INDEX. FRAUD, ACTUAL, — continued. voluntary conveyances, 132. successive grantees under voluntary conveyances, 132. what constitutes a purchaser for value, 133. attaching creditors, 133, 131. FRAUD, PRESUMPTIVE OR COXSTRUCTPVE, Nature of the Subject, 135, 136. how it differs from actual fraud, 135. burden of proof, 135. arises out of confidential relations, 135. what meant by confidential relations, 135, 136. what evidence will overturn the presumption, 136. time no bar to rights during the relation, 136. Attorney and Client, 136-146. gratuities from client, 136, 137. no absolute incapacity in attorney to receive gi-atuity, 137. pending or prospective services, 137. past services, 137. what the attorney must show to hold the gift, 137. bequest in favor of an attorney who writes a will, 138. sales and contracts in favor of attorney, 138. undue influence, 138. consideration for contract, 138, 139. purchase by attorney for speculation, 139. at judicial sales, adversely-to client, 139, 140. effect of confirmation of sale, 140. purchasing outstanding title to property claimed by client, 140. purchase of equitable interests, 140. limitation of right of client in such cases, 141. securities obtained by attorney from client, 141, 142 duty of attorney to advise client, 142. releases and compromises, 142. accounts, 143. how relation of attorney and client established, 143, 144. when relation ceases, 144. quasi attorneys, 144, 145. summary of the law, 145. . termination of the relation, 145, 146. INDEX. 327 FRAUD, PRESUMPTIVE OR CONSTRUCTIVE, — confrf contracts and transactions after, 145, 146. Principal and A gent , 146-149. transactions between, 146. no actual prohibition of, 146. burden of proof, 146. damage not necessary to impeach transaction as against the agent, 146, 147. when agent may buy from his principal, 147. secret action of agent, 147. other misconduct, 148. volunteers, 148, 149. Trustees, 31-47, 149-151. {See Trusts.) dealings between them and their cestuis que trust, 149-151. what duties devolve upon trustees, 149. cannot be buyer and seller except when, 149, 150. such transactions closely scrutinized, 150. cestui que trust need not prove actual damage, 150. in what cases trustee protected, and how far, 151. Guardians, 152, 153. dealings with their wards closely scrutinized, 152. wiU by ward in favor of guardian, 152. when guardian's disability to treat with ward terminates, 152. bounties from wards just of age, 153. volunteer guardians, 153. Executors and Administrators, 153-155. cannot unite opposite character of buyer and seller, 153. extent of disability, 154. purchases by them closely scrutinized, 154. voluntary interference in management of estate, 154, 155. compositions, 155. Parent and Child, 155-157. bounties by children to parents, 155. gift by child just come of age, 156. gift from parent to child, 156, 157. gift from parent in care of child, 157. special trast imposed upon child, 157. 328 INDEX. FRAUD, PRESOIPTIVE OR COXSTRUCTIYE, — con/V. relation between son-in-law and mother-in-law, 157. Physician and Patient, 157, 158. gifts by latter to former, 157, 158. Spiritual Advisers, 158. disability of, 158, Exjicctant Heirs, 158-161. protection of, in equity, 158, 159. sale of reversion by, 159. consideration for the same, 159, 160. when conveyance by heir may stand as security for money paid, 100. what meant by fraud in these cases, 160, 161. usury laws, 161. Sailors, 161. protection of, 161. Feeble, Weak-minded, and Illiterate Persons, 161-163. dealings with, 161. presumption of unfairness sometimes easily overturned, 162. general rule as to contracts of, 162, 163. FRAUDS, STATUTE OF, as to trusts, 14. the statute does not prevent- evidence of mistake in deeds, 177, 178. part performance to take a case of sale of land out of, 209-212. G. GENERAL AVERAGE, contribution in cases of, 252, 253. GENERAL REPUTATION, as notice, 182. GOOD-WILL, sale of, 198. GUARDIANS, dealings with their wards, 152, 153. will by ward in favor of guardian, 152. bounties from wards just of age, 153. volunteer guardians, 153. INDEX. 329 H. EIEIRS, EXPECTANT, protection of in equity, 128-161. T. ILLEGALITY, failure of trusts by reason of, 48. INADEQUACY OF CONSIDERATION, insufficient alone to defeat contracts, 108. what necessary in addition to inadequacy, 108, 109. gross inadequacy, 109. effect of, in bill for specific performance, 200. when a ground for rescission, 218. INJUNCTION, what the writ of is, 291. not granted where the right is doubtful, 291. generally preventive, 291. sometimes restorative, 291. injunctions either provisional or perpetual, 292. the same defined, 292. restraining proceedings at law, 292. at instance of creditors after decree of administration, 292. when refused in such cases, 292, 293. injunction where a party is proceeding both at law and in equity, 293. election required in such cases, 293, 294. injunction as to criminal cases, 294. for ground available at law, 294, 295. in cases of set-off, 294, 295. existence of cross demands, 295. trust, confidence, or agreement as a ground for equity inter- ference, 295. proceedings in equity may be enjoined, 295, 296. effect of fraud, accident, or mistake, 296. discovery as ground of injunction, 296, 297. injunction granted at any stage of legal proceedings, 297. limitation of this rule, 297. waste as ground of injunction, 297, 298. common cases of, 297, 298. 330 INDEX. rXJUNCTION", — continma. waste in equitable estates, 298. cases of irreparable mischief, 298. princijjle governing such cases, 298, 299. equitable waste, 299. when restrained, 299, 300. nuisances, 300. public nuisances, 300. private nuisances, 300, 301. most common cases of, 301. principle of granting injunctions in such cases, 301, 302. what the court takes into consideration, 302. obstructions in the highway, 302, 303. trespasses, 303. infringements of patents and copyrights, 303. principle on which the injunction is granted in such cases, 303. restraining corporations from acts ultra vires, 304. restraining alienation of property, 304, 305. transfer of stock, 304. sales, 305. compelling observance of agreements, 305, 306. erection of buildings, 306.- agreements as to trade, 306, 307. public policy to be regarded, 306. what agreements subject to injunction, 307. easements, 307, 308. penalties and forfeitures, 308, 309. liquidated damages, 309. misleading signs and trade-marks, 310. right of trade-mark defined, 310. false representations by party claiming violation of trade- mark, 310, 311. fraud in defendant not necessary in such cases, 311. geographical term for trade-mark, 311. multiplicity of claims against a single person, 311. biUs of peace, 311, 312. INDEX. 331 J. JOINT PURCHASERS, fraud between, 113. JOINT TENANTS, fraud between, 113. account between, 270. JUDGMENTS AND AWARDS, fraud in cases of, 119-125. {See Fraud, Actual.) JUDICIAL SALES, equity will set aside, when, 216, 217. K. KING'S PREROGATIVE, abridgment of, 4. by sign-manual, 17, 18. L. LANDLORD AND TENANT,- account between, 265. LAPSE OF TIME, effect of, in taking accounts, 265. LIEN, {See Mortgages.) LIQUIDATED DAMAGES, injunction not granted as to, 309. LIS PENDENS, meaning and application of the doctrine of, 188-190 r.OST INSTRUMENTS, relief in cases of, 169, 170. M. MARRIAGE, effected by fraud, 117-119. marriage settlements, 28, 29. MARSHALLING, (5ee Administration of Debts and Assets; Mortgages.; 332 INDEX. INIERGER, not favored in equity, 69. MISTAKE, {See Accident and Mistake.) MORTGAGES, Mortgages Proper 64-72. defined, 64. mortgages by the ancient common law, 64, 65. absolute forfeiture at law on breach of condition, 65. not so in equity, 65. opposition to equity jurisdiction in such cases, 65. jurisdiction upheld, 65. attempted evasion of the right in equity to redeem, 65, this was unsuccessful, 65, 66. right to redeem not to be abandoned to the creditor, 66. " once a mortgage always a mortgage," 66. restricting the right to redeem to particular heirs, 66. parol evidence to show nature of deed absolute, 66, 67. difference between mortgage and sale with right of repur- chase, GQ, 67. statutory changes of law of redemption, 67. cases in which equity admits of limitation of right of I'e- demption, 67, 68. subsequent release of equity, 68. to be cleai-ly shown, 68. for an adequate considera'tion, 68. merger on purchase of equity by mortgagee, 68, 69. not favored in equity, 69. mortgagor has an actual estate, 69. descent of the same, 69. successive rights under mortgagor, 69. redemption by subsequent incumbrancer, 69, 70. does not extinguish redeemed mortgage, 69, 70. conversion of first mortgage into rent-charge, 70. loss of right by changes of form of the security, 70. mortgagor treated as owner, 70, 71. remaining in possession, 70, 71. may be ejected, when, 70, 71. not liable for by-gone r ;nts, 71. INDEX. 333 MORTGAGES, —continued. may be restrained from waste, when, 71. possession by mortgagor for twenty years, 71. mortgagee in possession, 71. bound to keep in repair, 71. bound to account, 71. how he should treat the property, 71. must exercise diligence in making profits, 71. must use good husbandry, 72. descent of the mortgage interest, 72. a chattel interest in equity, 72. untrue statement of the debt secured, 72. Irregular and incomplete Mortgages and Liens, 72-80. mortgages of a trust or equity of redemption, 72. second mortgagee entitled to a receiver, when, 73, 273-27b. mortgages by imperfect conveyance, 73. by uncompleted contracts to convey, 73. agreement to give mortgage, 73. imperfect execution of deed by corporation, 74. principle applicable to these cases, 74. mortgage executed on eve of bankruptcy, when good, 74. necessity of the designation of some particular property, 74, 75. imperfect pledge of one's " real and personal estate," 74, 75. other cases of imperfect mortgage, 75. agreement need not be in writing, when, 75, 76. subsequent performance or part performance, 75, 76. agi'eement to support grantor, in consideration of grant, 76. absolute conveyance given as secmuty for debt, 76. parol evidence admissible, 76. mortgages by deposit of title-deeds, 77. limitation of the rule on tliis point, 77. mortgagee in such case has no legal estate, 78. Welsh mortgage, 78. mortgage by trust-deed, 78. vendor's lien, 78, 79. available by way of charge, 78, 79. purchaser's lien, 79. lien of judgment creditor, 79, 80. 334 INDEX. MORTGAGES, — continued. Exoneration, Contribution, and Marshalling, 80-84. personal estate of debtor primarily liable for simple-contract debts, 80. limitation of rule, 81. act of the debt in exonerating personalty, 81, 82. intention to exonerate, how shown, 82. in whose favor exoneration will operate, 82. the equity of contribution, 82, S3, how it operates, 83. the equity of marshalling, 83, 84, how it operates, 84. Paijment or Discharge, 84. effect of payment or tender, 84. after the day named, 85. necessity of reconveyance, 85. change of form of security, 85, 86. taking a new note from mortgagor, 86. extension of time, 86. foreclosure,. 86, 87. does not discharge debt, 86, 87. filing a bill for redemption in the mean time, 87. sale of the mortgaged premises, 87. postponing time of payment in case of vendor's lien, 87, 88 taking another security in such case, 88. whether lieu is lost, a question of intention, 88, 89. N. NECESSITY, legal, 31. moral, 32. ' . NEGLIGENCE, mistake arising from, 176, 177. NOTICE, Facts suggesting Int Fiskb Heard. 12mo. Clotli, $2.50 net ; law slieep, $3.00 net. It deserves an important position among the text-books in every law school in the country. — William C . Robinson, Dean Law Department, Catholic University oj America. HOWE ON THE CIVIL LAW. Studies in the Civil Law and its Relations to the Law of England and America. By William Wirt Howe, late Justice of tlie Supreme Court of Louisiana. 12mo. Cloth, $2.50 ne<; law sheep, $3.00 net. Tlie book differs in plan from the merely antiquarian and academic treatises on Roman and Civil Law. Tlie author has studied and practised his profession both in the common law States of Missouri and New York and in the civil law State of Louisiana, and has written tliis book in the liglit of large experience. The special feature of the work is found in the presentation of the leading principles of the Roman and Civil Law and the tracing of their development and application in our own jurisprudence to the complications of modern life, thus taking up the comparative study of the Civil Law and of the Law as we have it now. The book will be of practical use, not only in our numerous law schools, but to those members of the bar who maj' wish to investigate the subject. Has every quality which such a book needs, and which, to say the least, most books on Roman Law iu English have not. It is simple, clear, and intelligible, and we can strongly recommend it to the student, or to any one interested in the subject. — The Nation. HUFFCUT ON AGENCY. Elements of the Law of Agency as relating to Contract. By Ernest W. HuFFCUT, Professor of Law in Cornell University School of Law. 12mo. Cloth, $2.50 net; law sheep, $3.00 net. Law schools and law offices obtain in this bock what has long been needed, — a book on Agency written clearly and concisely by a man whose own experience with his classes has taught him what were the fundamental principles of the law, and how best to arrange and present those principles. The citation of authorities for the purpose of illustrating the rules of law is very full and from varied sources. It is not intended as a special digest of the subject, but all the points of law are amply supported by the best authorities. I am particularly impressed by the clear and scientific arrangement. — George E. Beers, Law Department, Yale University. Perhaps the most striking characteristic of the book is the painstaking and accu- rate analysis which the subject has received. ... It is logical in its arrangement, 8 THE STUDENTS' SERIES. accurate in its statement of the law, and discriminating in its citations oi author!, ties. —American Law Register and Revieiv. The work is a very good one indeed. — Charles M. Slack, Dean Hastings Col- lege of Law. '^. have examined with some care Professor Huffcut's treatise on Agency, and am much pleased with it as a text-book for the use of students. — Prof. R. S. Goxjld, Law Department, University of Texas. To accompany " Hiiffcut on Agency" : — Cases on the Law of Agency. By Ernest W. Huffcut. Crown 8vo. Cloth, ^S 00 net. MAY ON CRIMINAL LAW. The Law of Crimes. By J. Wilder May, Chief Justice of the Muni- cipal Court of the City of Boston. Second edition, edited by Joseph Henry Beale, Jr., Assistant Professor of Law in Harvard Univer- sity. 12rao. Cloth, $2.50 »e<; law sheep, §3.00 nei. This new edition of Judge May's deservedly popular work contains large additions. The editor states in the preface that the original plan included no discussion of the subjects of Criminal Pleading and Practice ; but it was found that it would be better adapted to the use of students if these subjects were briefly considered, and this has accordingly been done. Much has also been added to the first chapter, which contains the general principles under- lying the criminal law. It is to be especially commended for its clear and concise definitions, as also for its citations of leading cases directly upon the matter under discussion. — From J. H. Carpenter, Law Faculty, University of Wisconsin. It is not a mere synopsis, but an interesting discussion, quite full enough to give the student a true view of the subject, and minute enough to be a useful handbook to the practitioner. — New York Law Journal, To accompany " May's Criminal Law " .• — Cases on Criminal Law. By H. W. Chaplin. New edition, enlarged. Crown 8vo. Cloth, S3.00 net. ROBINSON'S ELEMENTARY LAW. Elementary Law. By William C. Robinson, LL.D., Professor of Elementary Law in Yale College. 12mo. Cloth, $2.50 net; law sheep, $3.00 net. Contains a statement of the principles, rules, and definitions of American Common Law, both civil and criminal, arranged in logical order, with refer- ences to treatises in which such definitions, rules, and principles are more extensively discussed. This work is intended to serve three purposes : First, to form a text-book for the use of students in law schools, and of others who are under com- petent instruction; second, to guide private students in their investigation 9 THE STUDENTS' SERIES. of the rules and definitions of law; third, to render students familiar with some of tlie leading treatises upon the principal topics of the law. Tlie book is convenient to the instructor who will use it as a text to be amplified in his lectures, and valuable to the student who will consult the references. — Prof. M. F. FoBCB, LL.D., Cincinnati Law School. ROBINSON'S FORENSIC ORATORY. Forensic Oratory : A Manual for Advocates. By William C. Robinson, LL.D., author of "The Law of Patents for Useful Inventions," "Elementary Law," etc. 12mo. Cloth, $2.50 net; law sheep, $3.00 net. A new and suggestive work on the duties and functions of the advocate. The chapters on the Presentation of Ideas by the Production of Evidence in Court, the Qualification and Training of Witnesses, and on Direct, Cross, and Ke-Direct Examination, commend the book especially to the bar as well as to students. The trained lawyer as well as the student will find much tliat is helpful and suggestive in the pages of this volume, especially on the subject of cross examination. It is the result of a long experience and a constant study of the trial of causes. This is a book which no student of law can afford to pass by without a thorough study of it. It is also a work which no practising lawyer who imdertakes the trial of causes, and is not already an acknowledged leader in the courts, can afford not to read and read again. — American Law Review. It touches upon vital points, just such as students of oratory, especially those who are entering upon the practice of law, need to have urged upor them in this forcible way. — Thomas C. Trueblood, Professor of Elocution and Oratory, Depart- ment of Law, Michigan University. _ SEDGWICK'S ELEMENTS OF DAMAGES. Elements of Damages : A Handbook for the Use of Students and Practitioners. By Arthur G. Sedgwick. 12mo. Cloth, $2.50 net; law sheep, $3.00 net. This book is not an abridgment of the work embodied by the author in his edition of the well-known three-volume treatise on the Measure of Dam- ages, b}' Theodore Sedgwick. The entire field has been re-examined, and the whole law of Damages reviewed. Its principles are stated in the form of rules or propositions of law such as a court might lay doion to a jury, and these propositions are illustrated by the cases from which they have been drawn. Wherever local variations from these rules exist, such local differences are stated, and their causes, so far as possible, explained. As a students' book It is very admirable. Probably no one but the author can see how it could be made better than it is. — American Law Review. I can cheerfully recommend the book as an excellent presentation of the elements of the subject. — Emlin McClain, Chancellor Law Department, State University of Town. 10 THE STUDENTS' SERIES. Throughout the volume the references to, as well as the illustrations of, under, lying principles are judicious. It is decidedly a meritorious work. — Prof. Charles M. Campbell, Law Department, University of Colorado. To accompany the foregoing work : — Cases on the Law of Damages. By Joseph H. Beale, Jr., of the Harvard Law School. Crown 8vo. Cloth, $3.00 net. STEPHEN'S DIGEST OF EVIDENCE. A Digest of the Law of Evidence. By Sir James Fitz-James Stephen. From the fourth En<^lish edition. With Notes and Additional Illustrations to the present time, chiefly from American Cases, including those of John Wilder May, late Chief Justice of the Municipal Court of the City of Boston, author of " The Law of Insurance," etc. 12mo. Cloth, $2.50 ne«; law sheep, $3.00 ne<. A full reprint of the fourth English edition, revised by the author, with references to American cases. Short as it is, we believe it will be found to contain practically the whole law of the subject. STIMSON'S LAW GLOSSARY. Glossary of Technical Terms, Phrases, and Maxims of the Common Law. By Frederick Jesup Stimson. 12mo. Cloth, $2.50 ne<; law sheep, $3.00 net. This book is a concise Law Dictionary, giving in common English an explanation of the words and phrases, English as well as Saxcn, Latin, or French, which are of common technical use in the law. The popular and usual acceptation of each phrase is given in much the same general shape as it stands in the mind of the trained lawyer. A very convenient little work, especially useful to students of the law. — Chicago Legal Kews. WAMBAITGH'S STUDY OF CASES. The Study of Cases: A Course of Instruction in Reading and Stating Reported Cases, Composing Kead-Notes and Briefs, Criticising and Comparing Authorities, and Compiling Digests. By Eugene Wambaugh, Professor in the Law Department of Harvard Univer- sity. Second edition. 12mo. Cloth, §2.50 net ; law sheep, $3.00 ne^ The purpose of the work as expressed bj' its author is "to teach the methods by which lawj'ers detect dicta, and determine the weight of reported cases." The full discussion of this introduces many important and interest- mg topics, such as the following: How to write a Head-Note, How to criti- cise Cases, Combining and Preparing Cases, The Growth of Legal Doctrine, 11 THE STUDENTS' SERIES. The Importance of the Unwritten Law, The Respect for Authority, The Preparation of Briefs, How to compose a Digest, etc. A subject of the greatest importance to legal practitioners, and one which, strange to say, has never before engaged the attention of any of our legal writers. We know of no work of greater importance to the student. It should be adopted as a text-book by every law school in the country. — The Green Bag. We commend this book, not merely to students of the law, but to practising lawyers, and even to judges on the bench. It incidentally teaches how to write a decision, as well as how to iind out the doctrine of a decision after it is written. — The American Law Review. Will be found to be of great value to the student or young lawyer when studying by himself, and, if carefully studied, cannot fail to give him ideas which he could get elsewhere only by long experience and from hints found scattered through many volumes. — Prof. O. W. Aldeich, of the Ohio State University. Altogether unique in the way of legal literature. There are very many lawyers old in the practice who will regret that they were not afforded in their student days such discipline as is suggested by tliis book ; and there is no lawyer who cannot read with profit its first eight chapters. — The Chicago Law Journal. Among the most valuable publications for the use of students which have appeared in recent years. The work abounds in fertile suggestions. — The American Law Register and Review.- It is a valuable addition to the Law Students' Series. — E. H. Bennett, Dean School of Law, Boston University. By the same author, to accompany " The Study of Cases " : — Cases for Analysis. By Eugene Wambaugh, Professor in the Law Department of Harvard University. Crown 8vo. Cloth, $3.00 tiet. Among the legal publications of Little, Brown, & Companj- are many other works particularly adapted for the use of students. Among them may be mentioned: Kent's Commentaries on American Law; Walker's Introduction to American Law; Dwight's Law of Persons and Personal Property ; Greenleaf on Evidence ; Parsons on Contracts ; Washburn on Real Property; Schouler on Personal Property, on Bailments, and on Domestic Relations; Story on Equity Pleading, and on the Constitution; etc., etc. Catalogues on application. LITTLE, BROWN, AND COMPANY, PUBLISHERS, 254 Washington Street, BOSTON. LAW LIBRARY UNIVERSITY OF CALIFORNIA LOS ANGELES UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 604 257 6