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<J8
36
P38
Wing V.
Wilson V. Northampton Ry
Winchester v. Knight
Fairhaven .
V. Harvey
Winnipiseogee Lake Co
Worster
Winslow V. Cummings
Woltbrd V. Ilerrington
Womb well o. Hanrott.
Wood V. Dixie . . .
Woodliouse r. Meredith
Woodward v. Bullock.
Woodworth y. I'aige .
Woolridge i'. Woolridge
Wortman v. Skinner .
Wi-ight V. Vanderplank
V. Walker . .
■ V. Wood . .
Wrigley v. Swainson .
Wykham v. Wykham .
Y.
PAGh
y.Co
105
, ,
267
^ ,
302
. •
108
. V.
.298
300
1!)
." GO
212
107
. .
130
. 42
150
217
.' ib'o,
181
.
259
. ,
154
.
156
.
189
,
184
.
100
, ,
25
Yeates v. Pryor . . .
, 215, 232
Yonge V. Furse . . .
. . 81
York y. Pilkington . .
. . 294
Yost V. Shaffer . . .
. . 215
Young V. McCiown . .
. . 177
V. Paul . . .
. . 205
ELEMENTS OF EQUITY.
ELEMENTS OF EQUITY.
CHAPTER I.
THE COURT OF CHANCERY.
A COURT called the Coui*t of Chancery has existed for
nearly six centuries in England, and now exists in many
of the States of the American Union, in which a S3'stem
of law is administered differing largely from that admin-
istered in other courts. In not a few of the American
States, this peculiar system of law is administered in the
common-law courts ; that is, in courts which have cogni-
zance of actions ex contractu and ex delicto, and of crimes ;
chancery jurisdiction having been annexed to such courts
b}' statute. And this is now true in England also. The
system of law referred to is called equit}-.
In the Anglo-Saxon period of English history, rights
and remedies such as would now be termed equitable were
occasionally administered in the Great Court and Legisla-
ture of the kingdom, called the Witenagemot, or Assembly
of the Wise, and also in the ordinary com'ts of justice.
There was, however, no Court of Chancery at that time.
The King himself probably possessed no independent, orig-
inal, judicial power.^
1 Essays in Anglo-Saxon Law, p. 24.
4 RISE OF [Chap. I
"With the Norman Conquest, anno 1066, appears a new
feature in the history of the Enghsh law. For more than
two centuries, William the Conqueror and his successors
claimed and exercised the right of personally administering
justice in their capacity of Kings, apart and distinct from
the action of the ordinary tribunals. The King considered
himself, and was in fact, the fountain of justice. All judi-
cial authority emanated from him, or existed with his rev-
ocable permission.
Until the first promulgation of Magna Charta, anno
1215, and to a large degree for more than fort}- j-ears
afterwards, this right, or rather prerogative, of the King
to administer justice independently" of the courts was a
general one, limited only by the will of the sovereign. It
not only embraced authorit}' to determine extraordinary
questions, and to give redress where all the ordinary
courts, except the King's Court, were powerless ; but it
included, also, matters of everj'-day jurisdiction in the
judicial tribunals.^
It is to this prerogati\'e of the King that the Court of
Chancer}' and tlie system of equit}- jurisprudence ultimately
owe their origin. And it is probably owing to the fact
that the King claimed and exercised a prerogative as ex-
tensive as the entire law, and not limited to what in modern
times has been called equity, that at first the Court of
Chancer}', or rather the chancellor (since he began to act
in a judicial capacity before the Court of Chancer^' b}'
name existed) , exercised a much wider jurisdiction than
bas attached to the court in recent times. The King took
cognizance of all matters of redress, so far as he chose,
or sent them, as business accumulated in his hands, to his
chancellor for action.
Jealousy, however, of the extensive powers assumed or
exercised b}' the chancellor gradually arose as the commons
^ See riacita Anglo-Normannica, Introduction, p. 31.
Chap. I.] THE COURT OF CHANCERY. 5
acquired influence in Parliament ; and tlie result after a
long and fluctuating contest, in which the common-law
courts took an active part against the chancery, was that
the jurisdiction of the Court of Chancery was (with some
exceptions as to which its hold was too strong to be dis-
lodged), flnally cut down to cases over which the com-
mon-law courts had no adequate means of granting relief.^
Indeed, long before the final settlement of the general
Umit of chancery jurisdiction, if not from the first, this
principle lay at the foundation of resort to the King or
chancellor. The only adequate reason that can be as-
signed for calling upon the King for relief or redress must
have been that the ordinary tribunals were unable, or not
disposed, to grant the desked protection or aid. How-
ever, it is perfectly clear that this right to call upon the
King or chancellor was too much favored by the sovereign,
and that it was often abused. Hence it became necessary
to hmit the chancellor's jurisdiction.^
The King's prerogative was, then, the ultimate source
of equity jurisdiction, and the desire to obtain a more
adequate, speedy, and certain redress or relief, the motive
for resorting to the aid of that prerogative. But, soon
after the middle of the thirteenth century, there arose a
very special need for the exercise of some judicial author-
ity which should be unfettered by the procedure which
prevailed in the common-law courts. By the Provisions
of Oxford, anno 1258, the right of the King, or rather
of his chancellor, to issue writs was abridged ; and from
that time the chancellor was sworn to issue no writs
1 See 1 Spence, Equity, 343-345, 348, 349.
'•^ It would be out of place in a purely elementary work to present
in detail the history of the limitation and settlement of the chancel-
lor's jurisdiction. If the Ftudent wishes to pursue the subject, let
him consult part 2 of the 1st vol. of Spence's Equity, or the shorter
summary in Bispham's Equity, ch. 1.
6 RISE OF ICuAP. 1
except writs of course (that is, such writs as were in
common use and established form) , except on consent of
the King's council. Now as all suits in the common-law
courts, at that time as well as at present, must have been
instituted b}^ writ, it followed that when a part}-- presented
a case for which none of the existing writs were suited,
he must either obtain a writ from the council (a thing
often impossible, and alwa^'s burdensome), or he must
go without redress, unless the King would grant him jus-
tice. The King was generally quite willing to give relief,
or to direct his chancellor to do so, if the facts justified,
since the profits of the administration of justice would fall
into the royal treasury.
This may be presumed to have been one of the chief
sources for suppl3-ing the chancellor with judicial business :
it certainly was the strongest justification for the exercise
of chancery jurisdiction. The Provisions of Oxford were,
indeed, in force only six years ; but the particular clause
above mentioned appears to have continued to be acted
upon, and the inconveniepce at length became so great
that, notwithstanding the exercise of jurisdiction by the
chancellor, it became necessary in the thirteenth yeav of
the reign of Edward I., anno 1285, to pass an act whereby
suits in the common-law courts might be facilitated. This
act, known as the Statute of Westminster 2, c. 24, author-
ized the clerks in chancery to frame new writs to suit meri-
torious cases for which the old writs were inadequate ; the
new writs to be framed on the model, as far as possible,
of the old. This statute thus gave rise to actions on the
case ; and suitors now resorted again to the courts from
which they had been cut off for nearly thirty years, for the
redress of injuries which, in the mean time, must have been
brought before the King or his chancellor, or permitted to
slumber unrelieved.
But the Statute of Westminster 2, was not sufficient to
Chap, I.] THE COUKT OF CHANCERY. 7
give the common-law courts jurisdiction of all just causes
of relief. The new wiits which it authorized were to be
" in consimili casu" to those already in existence, which
was naturally and properly intei*preted to mean that they
should be framed upon the model of the old writs ; and
this construction has ever since prevailed in the common-
law courts not possessing equity powers. Cases, however,
frequently arose in which a remedy or relief was needed
for which the old writs were not only inadequate, but were
wholly useless as models. Something radically different
was necessar}'. There was, for instance, no writ which
bj^ possibihty could serve as a model for a case requiring
specific performance, or the reform of a defective instru-
ment, or the setting aside of a fraudulent conveyance.
Besides calls of this kind for the interference of tVie
ro3-al prerogative, the circumstances of the times in the
twelfth and thirteenth centuries, and later, required that
some extraordinar}' powers should be exercised to prevent
obstructions to the course of justice, even in cases wheve
the law was sufficient, if properly administered, to afford
a complete remed}', — a necessity quite as urgent as that
which arose from the deficiencies in the common-law pro-
cedure. This fact gave rise to certain special heads of
equit}^ jurisdiction,^ such as {inter alia) bills of peace. ^
In the reign of Edward III., the Court of Chancery ap-
pears as a distinct court for giving relief in cases which
1 1 Spence, Equity, 326.
2 All the machinery of equity, however, was in use in the ordinary
courts until the middle of the thirteenth century ; and though it is
true, as is often stated, that equity is distinguished from common
law in that it looks to direct coercion in personam, tliis is accidental.
It merely happened that the Provisions of Oxford cut off jurisdiction
of matters now called equitable from the ordinary courts. Had the
writs "of course " been more numerous, the case would have been
diff'jrent. Equity was never founded upon any such distinction as
that suggested ; indeed, it was never founded at all
8 RISE OF fCHAi-. 1
required extraordinary remedies. The King, unable to at-
tend to the numerous petitions which were now presented
to him, in the twent3'-second year of his reign, by a writ
or ordinance, referred all such matters as were of grace to
the chancellor or the keeper of the Privy Seal. The es-
tablishment of the Court of Chancery, as a court f<;r ad-
ministering extraordinary relief, is generally considered to
have been mainl}- attributable to this or some similar ordi-
nance. This ordinance, it will be observed, conferred a
general authorit}' to give relief in all matters requiring the
exercise of the prerogative of grace, differing in this re-
spect from the authorit}' upon which the jurisdiction of the
common-law courts was founded. In those courts, juris-
diction was obtained in each particular case by virtue of
the particular writ b}' which suit was begun ; and such
writs could be issued only in cases provided for by positive
law.-'
From this short sketch of the rise of the Court of
Chancery, it will readily and correctly be inferred that at
first there was no system of^equit}' jurisprudence, and that
the court was governed by, or at least followed, no settled
rules of law ; and this fact will account for the apparently
strange definitions of equity given in the old books. But,
at the present day, equity is bound by settled rules as
complete!}' as a court of common law. The Court of
Chancery itself now declares that there are certain fixed
principles upon which equity proceeds. It decides new
cases as they arise, by the application of principles upon
which former cases have been decided, and is bound by
su(;h principles equally with the other tribunals of justice.'"'
It is sometimes supposed, on the other hand, that it is
pecuUar to equity to proceed according to the spirit of the
law, rather than according to its letter. But this is true,
1 1 Spence, Equity, 337, 338.
« See Bond v. Hopkins, 1 Schoales & L. 428 ; 3 Black. Com. 4J'2.
Chap. LI THE COUKT OF CHANCERY. 9
under the same circumstances, of the common-law courts.
Both courts of law and courts of equity profess to inter-
pret the laws according to the true intent of the legislature.
There is no rule of interpretation that is not used alike in
both courts.^ The Court of Chancery may have diverged,
it is true, from the courts of law in the interpretation of a
particular statute ; but that is not because equity adopts a
diflfereiit mode of interpretation. It is due merely to the
fact of a disagreement as to the results of applying the
same tests of intention to a doubtful passage.
It is still true, however, that there is often an opposition
between legal rights and equitable rights. A trustee, for
mstance, holds the legal title to property ; and that title is
the only one which a strictly common-law court will recog-
nize. The real, the beneficial title, is that of the cestui que
trusty for whom the trustee holds. This title is an equita-
ble one, recognized only in courts of equity or courts pos-
sessed of equit}' powers.^
The result is, that the jurisdiction of courts of chancery
now extends to all civil cases proper, in good conscience
and honesty, for relief or aid, as to which the procedure of
the common-law courts is unsuited to give an adequate
remed}-, or as to which the common-law courts, when able
to extend their aid, have refused to do so.^
1 Snell, Equity, 5.
2 The chancellor's jurisdiction over trusts was at first entirely out-
side of the law. See 2 Sanders, Uses, 43 et seq. ; 1 Spence, Equity,
431, 442, 443.
■^ The common-law courts refused entirely to recognize trusts be-
fore the Statute of Uses, though there was no reason for this in i\ie
natui'e of the common-law procedure.
10 PROPERTY IN EQUITY. [Chap. H.
I. PROPERTY IN EQUITY.
CHAPTER U.
TRUSTS.
Whekever it becomes desirable in the transfer of
propert}^, whether by gift, grant, or will, to separate the
possession and management of the estate from the en-
joyment of the profits arising therefrom, a deed or in-
strument of trust is commonly executed, by which the
possession, management, and legal title are given to one
or more persons in trust, to hand over to another the
profits accruing from such management.
Trusts in lands were for a considerable time treated as
unlawful by the common-law courts, though the court of
chancery, acting upon the conscience of the trustee, alwa^ys
enforced them. While this state of things prevailed, it
became necessary for Parliament to pass an act (or rather
several acts) intended to prevent the accumulation of
property in the hands of religious houses ; and for this
purpose the mortmain statutes were enacted, which made
conve^-ances of lands to religious houses illegal. In order
to circumvent the effect of these laws, trusts were resorted
to,^ by which the conveyance was made to a particular
person, to hold the land "to the use" of the intended
1 It is probable that the mortmain acts did not originate trusts ;
but they greatly stimulated them. The notion of trusts certainly
prevailed centuries before the mortmain acts, in tlie wardships of tlie
feudal age.
UuiP. n.| TRUSTS 11
bod}'. Trusts, under the name of uses, now became
common ; and the intended operation of the mortmain
acts was wholly frustrated. This fact, in connection
with other evils that attended such convej'aiices, caused
Parliament to interfere again, to put an end, if possible,
to transfers of land made in this way. For this purpose,
the Statute of Uses was passed in the reign of Henry
VIII., b}' which it was in effect provided that the person
to whom the use was given should be treated as the legal
owner of the land. Thus the estate of the trustee, or
rather, person seised to the use, was to be destro^'ed.
But this statute also failed of its purpose. Its onl}- effect
was to require the feoffor or grantor to add another party
to his conveyance. He now gave to A. to the use of B.,
to hold in trust to the use of C. The common-law courts,
consistently with their former position concerning uses,
declared that a use upon a use was void ; while the chan-
cer}-, with equal consistency', declared that in conscience
the intermediate part}^ ought to hold to the use of the party
really intended. And this position was always maintained ;
and uses, under the name of trusts, have ever since been
supported in equity. The onl}' change that has taken
place is in dispensing with the necessity of the third party
or second usee. All that is required at the present time
is, that the grantor should manifest a clear intention of
his purpose to have the legal grantee hold in trust for the
real beneficiary.
With regard to trusts of personalty, not fraudulent,
no legislation was ever directed against them ; and hence
no such devices as those resorted to to create trusts
in realty were necessary. Still, the common-law courts
never fully recognized them, but for the most part have
taken cognizance of the legal title only ; leaving to courts
of equity the duty to enforce and protect the rights of the
cestui que trust.
12 PROPERTY IN EQUITY. IChap. IL
But the trusts here referred to are not the onlj' ones rec-
ognized by courts of equit3\ Trusts may be divided into
two classes, into the first of which the foregoing will fall.
First, express trusts, and, secondl}-, trusts arising by im-
plication of law. The first class embraces all trusts cre-
ated by direct volition ; the second class embraces all
other trusts, being trusts that are created, or rather for-
mulated, for the purpose of carrymg out a presumed in-
tention, or of satisfying the requirements of honesty and
fair dealing.
This division is one not of convenience merely, but is
required by that provision of the Statute of Frauds which
exempts trusts arising b}' implication pf law from its opera-
tion, and also by a provision of the (English) Statute of
Limitations which exempts express trusts from its opera-
lion.
S l.| EXPRESS TRUSTS. 13
CHAPTER in.
EXPRESS TRUSTS.
§ 1. Of the Trust Estate.
Express trusts, or trusts by direct volition, arise where
propert}' has actual!}', or in contemplation of law, been
conferred upon and accepted by one person on the terms
of using it for the benefit of another. The former person
is the legal owner, and is called the trustee ; the latter
IS the equitable owner, and is called the cestui que trust.
And the trustee, being the admitted owner at law, may
deal with the property at law as his own ; while the equit-
able ownership, or right to compel performance of the
trust, is cognizable only in equit3\
The equitable title is, in strictness, a mere right to sue
out a subpoena against the trustee ; but in courts of equity,
or courts having equit}- powers, it is considered as the
estate itself, and is generally regulated b}' principles cor-
responding with those which apply to an estate at law.
Indeed, the distinction between a trustee's legal ownership
and the beneficial interest of a cestui que trust is in some
instances recognized at law. Where the trust is created
by will, the character of the duties involved, and the nat-
ure of the estate required for the performance of them, are
allowed to affect the construction of the devise, at law as
well as in equity, in reference both to the passing of any
estate, and also to the extent and duration of the estate
passed. But in so far as a legal ownership is conferred,
it invests the trustee, as has already been said, with abso-
14 PROPERTY IN EQUITY. ICiiap. m.
late dominion at law, and the equitable ownersliip, so far
as the light to compel performance of the trust is con-
cerned, is cognizable only in equity.
The declaration of a trust by the parties is not, inde-
pendently of the Statute of Frauds, required to Idc made
or evidenced in any particular way. Previously to the
passage of that statute, a trust, whether of real or of per-
sonal property, might be declared either by deed, by writ-
ing not under seal, or by mere word of mouth ; and this is
still true of trusts in personalty.^ With regard to real
estate, the rule as to express trusts has been altered by
the statute mentioned. By the English statute, it is pro-
vided that all declarations or creations of trusts or confi-
dences of any lands, tenements, or hereditaments shall be
manifested and proved by some writing, signed by the party
who is b}' law enabled to declare such trust, or by his last
will in writing, or else they shall be utterly void and of no
effect. It is also provided that all grants and assignments
of any trust or confidence shall likewise be in writing,
signed by the party granting or assigning the same, or by
his last will. And these provisions are in substance re
enacted in most of the States of the Union.
The Statute of Frauds, it will be observed, does not
require that the trust shall be declared in writing, but only
that it shall be manifested and proved l)y writing. Hence,
if the existence of a trust, together with its terms and
subject-matter, can be proved from any subsequent ac
knowledgment, written and sighed by the trustee, as by a
letter, memorandum, or recital in a deed, that will be
enough. 2 The consequence is that, though a declaration
of trust in lands be made by mere word of moutli, a sub-
sequent acknowledgment by the trustee in writing, it
1 Lord V. Lo\^ry, Bail. Eq. 510 ; Gordon v. Green, 10 Ga. 534
Benbow v. Tovvnsend, 1 Myhie & K. 506.
« Adams, Equity, 28.
§1.| EXPRESS TRUSTS. 15
matters not how long afterwards, will, bj' relation, enable
the cestui que trust to treat him as trustee, with all the re-
sponsibilities attaching to the position, from the time the
trust was created.^ In some of the States, however, the
Statute of Frauds provides that trusts in lands must be
created and declared in writing.^
It is important to observe that in all cases of ex-
press trusts, whether the trust be created by parol or by
writing, the intention to create it must be declared or
CA^denced with certaintj'. There must also be a certain
declaration of its terms ; that is, of the property upon
which it is to attach, the part}' for whom the benefit is
meant, and, where there are several beneficiaries, the in-
terests which they respectively are to take.^ Certaintj' in
the manner in which the trust is to be executed appears also
to be essential.*
This rule as to certaint}', however, does not require that
a trusl estate should be directlj^ and immediate^ granted
by the instrument or act which creates the trust. The
ti'ust may equally be created in the form of a power given
the trustee, enabling him to give the estate to the party
interested ; or it may be created b}' the use of precatory
or recommendatory words, provided their import appear
on the whole to be mandator}', though not couched in
mandatory terms.® On the other hand, it does not nec-
essarily follow from the use of words, apt to create a
trust, that a trust is created, since it may appear from
the context, or from attendant words or circumstances
when the act is verbal, that the donor had a different in-
1 Ambrose v. Ambrose, 1 P. Wms. 322. 2 Hill, Trustees, 56.
' Steere v. Steere, 5 Johns. Ch. 1 ; Knight v. Boughton, 11 Clark
& F 513 ; Smith v. Matthews, 3 DeG. F. & J. 139.
* Reeves i*. Baker, 18 Beav. 372 ; I^ight v. Boughton, supra.
* As to precatory words, there is great lack of harmony among
the authorities. See post pp. 21-23.
16 PROPERTY IN EQUITY. [Chap. III.
tention from that which the words of trust alone would
convey. In such cases, as, indeed, in almcst all others,
the question is, What was the intention of the donor? ^
Trusts in the form of powers are created where, without
au}^ positive direction that the trustee shall hold for the
parties interested, he is authorized to give them an interest
in such manner or extent as he shall deem best. In such
a case as this, the execution itself is impliedly mandator}-,
though the terms thereof are discretionar}'. If in such a
case, the trustee ncolect or refuse to cai-rv out the direc-
tion, the court will to a certain extent discharge the duty
for him. But inasmuch as a discretion in the manner of
executing the trust has been given the trustee, it becomes
a delicate matter for the court to determine how to give
the beneficiary the intended benefit. The court will not
assume an arbitrary discretion, nor will it attempt to
determine how the trustee might be likely to act if he
chose to carry out the direction. On the contrary-, it
will act upon some established rule of law concerning the
devolution of estates, when such a course would be appli-
cable to the case. 2 And this is true when the failure of
the trustee to act was by reason of neglect or refusal to
perform his duty, or was the result of mistake.^
If the act or instrument creating the trust, though itself
indefinite, refer to a document or other writing which
shows what was meant by the donor, that will be sufficient ;
and further than this, as to cases within the Statute of
Frauds, where there is a writing signed so as prima facie
to satisf}' the requirements of the statute, then if the terms
of the trust do not sufficiently appear upon the face of it,
. 1 See Richardson v. Inglesby, I3 Rich. Eq. 69.
2 Salusbury v. Denton, 3 Kay & J. 529 ; Smith v. Bowen, 35 N. Y.
83 ; Adams, Equity, 104.
8 Brown v. Higgs, 8 Ves. 561 ; Grant v. Lynam, 4 Russ. 292. See.
fm-ther, Gibbs v. Marsh, 2 Met. 243; Miller v. Meetch, 8 Barr, 417
§ 1.] EXPRESS TRUSTS. 17
evidence may be given of the position in which the party
stood when he wrote and signed the document, the circum-
stances b3' which, to his knowledge, he was surrounded,
and the degree of weight and credit which may (apart
from construction) belong to the document so signed. If
so assisted, the judge can collect that the parties intended
to create a positive trust, and the objects thereof are plain,
ho will enforce it.^
In case there appear to be a plain intention to create a
trust, and property is convened to the trustee for that pur-
pose, but the trust is uncertain or indefinite, the trustee
will not be allowed to retain the propert}^ but the court
will give it to the party, whether the donor himself, his
heir at law, or next of kin, or other claimant, who would
have been entitled to it, if there had been no attempted
trust. And the same is true, when the trust, though cer-
tain, is for other reasons void or has become incapable of
taking effect.^ Where, however, there is an absolute
devise to a person, not as trustee, but (for any thing that
appears to the contrary) beneficially, and an imperfect or
inefficient trust is then attempted, the property will re-
main in the donee ; for there is an absolute gift, and, the
subsequent act being without force, there is nothing to
impair the eflTect of the gift.^
The fact that a gift by will to charitable uses is uncer-
tain and indefinite does not in England render the clause
making the gift inoperative so as to raise a resulting trust
in favor of the heir or next of kin. A peculiar jurisdic-
tion appertains in that country to such cases, whereby the
King by sign-manual is authorized to appoint an object or
objects of tne gift. Indeed, charitable gifts have been so
far favored in England that the Court of Chancery has
1 Morton v. Tewart, 2 Younge & C, C. C. 67, 80, 81 ; 2 Spence,
Equity, 22.
2 2 Spence, Equity, 22. 3 n,. 23 ; Gibbs v. Rumsey, 2 Ves. & B. 294
2
18 PROPERTY IN EQUITY. [Chap. Ill
itself frequently supplied an object of the testator's bounty
wholl}' different from that expressed b}' the testator, when
the object expressed b}' him was incapable of taking, oi
the gift was otherwise illegal. This has been done by
vutue of what has been termed the cy-pres doctrine ;
whereb}' if the donor's intent cannot for any reason be
carried out as expressed, a disposition of the intended
bounty will be made as near as ma}' be to such intent.^
The cy-pres doctrine as maintained in England is, as may
be inferred from what has just been said, divided into two
branches ; to wit, one branch arising upon the exercise of
the King's sign-manual, aud the other arising upon assumed
notions of equit}', and carried into exercise b}' the Court
of Chancery in its own judicial capacit}'. The distinction
between the two has sometimes been lost sis;ht of in this
couutr}' ; and there is in consequence some lack of har-
raou}' among the authorities. The distinction between the
two branches has, however, been enforced in some of the
later and better decisions, and is now generall}' recog-
nized. ^
That branch of the doctrine which is expressed in the
exercise of the King's sign-manual does not properl}' pi'e-
vail in tliis country. The King exercises his prerogative
bj' the sign-manual in charitable gifts of two kinds : first,
in the case of bequests to particular uses, charitable iu
their nature, but illegal, as for a form of religion not per-
mitted b}' law ; secondl}', in the case of gifts of property
to charit}' generall}-, without any trust interposed or a^^-
poiutment provided for or exercised. ^
Tliis power of disposition b}' the sign-manual is often
exercised without regard to the expressed intention, and
is properly regarded as prerogative right, and not as judi-
cial. The other branch of the cy-pris doctrine is judicial,
1 Sec 2 Story, Equity, § 1108.
■^ Jackson v. Phillips, 14 Allen, 539, 574, Gray, J.
§ 1.] EXPRESS TRUSTS. 19
and prevails in this country, though within much narrower
limits than those attending it in England. Courts of equity
in this country, according to the better rule, will not en-
force a charitable trust, unless there is a trust the terms of
which are sufflcientl}^ definite on the face of the instrument
creating it to be understood. The}' will not substitute their
own will for that of the testator. If the gift is not on its
face, or by documents there referred to, inteUigible, it will
fail.i
When, however, the gift is clearly defined, or when the
means of ascertainment are given, the bount}' may be en-
forced, even though the mode provided by the donor for its
execution fail, whether by reason of inadequacy or unlaw-
fulness.^ In such a case, equity will substitute another
mode, so that the substantial intention may not be made
to depend upon a minor intention.' So, also, if no trustee
is appointed, equity will appoint one.
But, further, there are cases in which the charitable trust
could not be executed as directed by the will, over which
equity exercises a jurisdiction — in some of the States at
least — wliich it would not exercise in the case of a non--
charitable trust. Thus, it has been decided that bequests
to a particular Bible society b}' name, whether a corpora-
tion established b}' law or a voluntary association which
had ceased to exist, may be sustained and appUed to the
distribution of Bibles through a trustee appointed bj' the
court for the purpose* But this probably carries the rule
to its present limits. The rule in the courts which main-
tain the gift in such cases is, that whenever it appears that
a general object of charity, sufficiently defined, is intended,
1 Moore v. More, 4 Dana, 354, 366 ; Jackson v. Phillips, 14 Allen,
439, 680.
2 Philadelphia v. Girard, 45 Penn. St. 9, 27. « lb.
* Jackson v. Phillips, s^ipra ; Winslow v. Cummings, 3 Cush. 358 •
Bliss I . America I. Bible Society, 2 Allen, 334.
20 PROPERTY IN EQUITY. [Chap, m
and the purpose is not unlawful or void, the right of the
heir is divested. ^
It should be added that the law of charities in England,
and largel}' in this countr}', is regulated in its general fea-
tures b}' the statute of 43 Elizabeth ; though that statute
did not originate jurisdiction in equity as to charities. Bui
in some of the States of the Union the whole subject is
governed b}^ special legislative enactment.'^
In creating an express trust, a person need only make
his meaning clear as to the interest he intends to give,
without regard to the technical terms of the common law
in the limitation of legal estates. An equitable fee may
be created without the word " heirs," provided words be
used which, though not technical, are j'et equivalent in
common understanding to that term, or the intention
otherwise sufficientl}' appear on the face of the instru-
ment.
The extent of estate given a cestui que trust maj'^, in
certain cases, be determined solely upon the estate given
the trustee. If an estatp be devised to the use of a man
and his heirs, upon trust for another, without any words
of limitation, the cestui que trust takes the equitable fee.
The whole estate passed to the trustee, and whatever in-
terest he took is considered in equity to have become the
interest of the beneficiar}*.^ But, if an estate be conve^-ed
by deed to a man and his heirs in trust for the grantor for
life, and after his death uj)on trust for his children, without
adding " and their heirs," the children take for life onl}-.*
All trusts created by direct volition of the donor have
i American Academy v. Harvard College, 12 Gray, 582.
2 As in New York. See Bascom v. Albertson, 34 N. Y. 684.
8 Moore i;. Cleghorn, 10 Beav. 423; s. c. 12 Jur. 691; Knight v.
Selby, o Man. & G. 02 ; Lowin, Trusts, 9G (6th Eng. rd.).
< Ilolliday v. Overton, 14 Bcav. 4(37 ; Tatham v. Vernon, 29 Beav
604.
SL'i EXPRESS TEUSTS. 21
been called direct trusts,^ But it is sometimes difficult to
determine whether the donor has exercised a direct volition
in the way of a trust. The only question is, however, Has
he done so ? The difficulty suggested by the question arises
in cases of the use by the testator of words of recommenda-
tion, desire, entreat}', or the like ; or, in technical language,
of the use of precatory' words. When do such words indi-
cate volition in the way of a trust ?
In the first place, it should be answered that the mere
fact that the donor uses the word " wish" or " desire," or
an}' other term not necessarily importing of itself a com-
mand, instead of the word " will," or other word of com-
mand, does not in the least indicate an absence of ample
volition on his part. Indeed, gifts are most frequently made
by the use of the words " wish" or "desire," and unless
there be such accompanying language as clearly indicates
that the donor intends to give a discretion to the testator
or trustee as to carrying out the bounty, or as shows that
the purpose cannot be enforced, the wish or desire is man-
datory. In other words, the expression "I wish" or "I
desire " import prima facie will or volition.
The difficulty arises when words of less decided import
are emplo^'ed, — words expressive of confidence or of trust
(not in a technical sense), or of hope or of recommendation
or of entreat}'. The real question, however, in all cases
is (to put it in another form from that supra), whether the
wish or desire or recommendation expressed by the testa-
tor or donor is meant to govern the conduct of the party
to whom it is addressed, or whether it is a mere indication
of that which he thinks would be a reasonable exercise of
the discretion of such party, leaving, however, to the party
the right to exercise his own discretion. ^
1 Ante, p. 12.
2 Williams v. Williams, 1 Sim. n. s. 358 ; 2 Story, Equity, §§ 1068
et seq.
22 PROPERTY IN EQUITY [Chap. Ill
It appears to be unnecessary to the creation of a preca-
tory trust that a certain subject and a certain object should
be named, though the contrary has been stated ; ^ at al)
events, it is not necessary that the objects should be stated
with precise certaint}'. It is enough that the donor had
the objects in contemplation. Still, if the trust be too in-
definite for the courts to ascertain the object intended, the
result will be to defeat the trust, and carry the fund into
the residuum of the estate, though that maj^ have been
given to the same person who had been expressly excluded
from it in a prior part of the will.'^
The general rule upon the subject of the last paragraph
appears to be, that a trust is created in those cases onl}' in
which the donor points out the objects, the property', and
the way in which he intends it to go.^ The question of
certaint}- will then be reasonable upon the principles above
stated. The' rule rests upon the ground that precatory
words must fail of creating a trust, if it be impracticable
for the court to deal with the supposed gift as a trust.
Thus, if a testator should 'devise a house to his wife, and
express a wish that his sister should live with the devisee,
the wdsli, not being enforceable by the courts, fails to create
a trust.* So, if the amount of property to which the trust
is to attach is not sufficiently defined, the trust must fail,*
since the court has no right to declare how much shall be
devoted to the object.
The authorities are extremely numerous upon this sub-
ject of precatory trusts, and few subjects in the law have
been attended with gi'eater lack of harmony. The diffi-
culty, however, has related to the applications of the rules
1 Briggs V. Penny, 3 Macn. & G. 546.
2 Williams v. Williams, 1 Sim. n. s. 358.
8 Malim v. Keigliley, 2 Yes. jun. 333, Lord Alvanley; Lewin, 116.
« Graves v. Graves, 13 Irish Ch. 182.
» Lecbmere v. Lavie, 2 Mylne & K. 197.
§1] EXPRESS TRUSTS. 23
of law rather than to the existence of particular rules.
The leading doctrines of law, operating as tests, are well
settled as above set forth. But it should be stated that
a strong disposition has in recent times been manifested
against extending the doctrine of precatory' trusts to cases
not clearly requiring the construction of a command. The
words of the donor are not to be forced into a construction
which creates a trust ; but are rather to be taken in their
natural and ordinary non-peremptory^ sense, unless it is
clear that the donor intended a command.'
"Whenever a trust is created, a legal estate sufficient for
the execution of it is, if possible, implied. Courts of
equity have, indeed, in some instances supplied the equi-
table estate in toto ; as where a testator devised to a feme
covert the issues and profits of certain lands, to be paid
b}' his executors. In such a case, it is considered that
the land itself was devised to the executors in trust to
receive the rents and profits, and apply them to the use
of the feme.'^
In other cases, equit}' has extended the estate ; as where
a devise is made to three trustees, and the survivor of them,
and to the executors and administrators of such survivor,
upon trust to pay certain annuities for lives. In such a
case, it has been considered that the trustees ought to take
an estate for the several lives of the annuitants.^
In like manner, if land be devised to a man without the
word "heirs," and a trust be declared which can be sat-
isfied in no other way than by the trustee taking an in-
heritance, it is considered that a fee passes.* A trust to
sell, even upon a contingency, confers a fee-simple as
indispensable to the execution of the trust ; and the con-
struction is the same where the need of a sale is implied,
as where a devise is made upon trust to discharge, out of
1 2 Story, Equity, § 1069. 2 Lewin, Trusts, 189 (6th Eng. ed.).
8 lb. ■* Villiers v Villiers, 2 Atk. 72, Lord Hardwickr
24 TROPERTY IN EQUITY. [Chap. la
the rents and profits of an estate, certain legacies paj-able
at a day inconsistent with the application of the annual
profits only.^
A power of selling, however, will not be implied by a
limitation to a trustee, or to a trustee, his executors, and
administrators, for and until payment of debts and legacies
generally, or for raising a sum of money out of the rents
and profits ; and therefore, in such cases, at common law,
where nothing in the context of the instrument creating
the trust implies a fee, a chattel interest only would pass.
But if a greater estate be limited expressly, as by a devise
to a man and his heirs, upon trust to pa-y debts, equity
has no power to cut down the estate to a chattel inter-
est ; though if a chattel interest be carved out of the fee,
and be so hmited, the word "heirs" maybe rejected as
inconsistent with the estate. For example : Lands are
devised to trustees "and their heirs" until an infant
arrives at majorit}', and then to the infant in fee. The
quoted words may be rejected if the infant come of age
in the lifetime of the trustees.^
But while a legal estate sufficient for the execution of
the trust will, if possible, be implied ; on the other hand,
as ma}' be inferred from what has been said, the legal
estate conferred upon the trustee will not be carried fur-
ther than is required for the due execution of the trust.
For example : An estate is devised to the defendant and
his heirs to permit the plaintiff to receive the rents during
the plaintiff's life, and on his death to convey to another.
The trustee, during the life of the plaintiflT, has a merely
passive function. Only after the plaintiff's death has the
trustee an act to perform. He therefore takes a remainder
onl}- in the estate, upon the termination of the life-estate
in the plaintiff.**
' Gibson V. Montfort, 1 Vcs. sen. 485 ; Lewin, 190.
• 2 Goodtitle v. Whitby, 1 Burr. 228; Lowin, h< sw/jra.
3 Doe d. Noble v. Bolton, 11 Ad. & E. 188.
§1.] EXPKESS TRUSTS. 25
Upon the same principle as that illustrated by the ex-
ample, if, on the other hand, an estate be devised to a
man and his heirs in trust to pay the rents to a third
person for his life, and, upon his death, the estate is to
pass to a fourth in fee, here the legal estate for the life
of the intermediate party is in the trustee, and the legal
estate of the remainder is in the last person.^ In the case
of a deed, however, the rules of construction, as has been
intimated, are more in accordance with the letter ; and at
common law, it is probable that a limitation to trustees
and their heirs, upon trust to pa}* an annuit}' for life onl}',
with remainder over, would give the trustee a trust in fee-
simple.^
In accordance, also, with the rule that the trustee's
estate is no greater than the trust requires, if a testator
devise to one for life, and to trustees and their heirs to
preserve contingent remainders from the acts of the life
tenant, omitting the words "during the life of" the de-
visee, with remainders over, the trustees take not a fee-
simple, but an estate for the life of the devisee.^ But in
the case of a like provision by deed, a fee-simple trust
would pass, unless it should clearly appear upon the face
of the deed that the words " during the life of" the
devisee were omitted by inadvertence.^ In the construc-
tion of a deed, the common-law rule, at law and in equity,
requires the language to be taken as it stands, if it con-
veys a clear meaning and is complete in itself.
All persons who take through the trustee, except pur-
chasers for value without notice of the trust, are liable to
the trust. On the death of the trustee, his heir, executor,
or administrator becomes the legal owner of the property,
1 Adams v. Adams, 6 Q. B. 860.
2 Wykham v. Wykham, 11 East, 458 ; s. c. 18 Ves. 419; Lewin, 192
8 Doe d. Compere v. Hicks, 7 T. R. 4.33.
♦ Beaumont v. Salisbury, 19 Beav. 198.
26 PEOPERTY IN EQUITY. [Chap III
iu the absence of provision in the instrument creating the
trust ; but as such person is a mere representative of the
decedent, he is bound by the same equity. In like man-
ner, if a trustee devise the estate, supposing that he may
do so, the devisee takes subject to the trust. And the
same is true of express assigns of the trustee (if they be
not purchasers for value, without notice).^
At common law, assigns b}' operation of law are invested
with the character of trustees. If a trustee marry, the
wife is at law entitled to dower ; and if a female trustee
many, the husband may become at law entitled to curtesy.
In equit}', however, the dowress and the tenant b}' the
curtes}' may be compelled to recognize the rights of the
cestui que trustJ^
Persons who claim the legal estate b}' actual disseisin,
without collusion with the trustee, are not bound by the
trust. A disseisor is not an assign of the trustee : he
does not claim through the trustee, but holds by a wrong-
ful title of his own, adversely' to the trust. Hence, if a
person oust a trustee, and 9. claim is not made in due time,
both the trustee and the cestui que trust will be barred ;
and this, too, though the disseisor had notice of the trust.'
§ 2. Of Executed and Executory Trusts.
A trust is said to be executed when no act is to be done
to give effect to it, the limitation being originally complete ;
as where an estate is conveyed or debased unto and to the
use of A. and his heirs in trust for B. and the heirs of his
body. A trust is said to be executor}' when some further
act must be done, either bj' the author of the trust or by
the trustee, to give effect to it ; as in the case of a will
where property is vested in trustees in trust to convey in a
more perfect and specific manner.*
1 Lewin, 215. 2 Hj. 8 Gilbert, Uses, 249 (Sugden's ed.).
* Lead. Cas. in Eq., note to Glenorchy v. Bosville.
§2] EXPRESS TRUSTS. 27
lu cases of executed trusts, it is well settled that equity
will construe the limitation in the same manner in which
it would be construed at law. If, for instance, an estate
is vested in trustees and- their heirs for A. duriug life, with
remainder to the heirs of A.'s body, A. will be deemed in
equity as well as at law to have taken an estate tail ; tlie
ti'ust being executed by the instrument which created it.
In cases of executory trusts, however, where the instiu-
ment creating the trust provides for something indeter-
minate yet to be done, equitj' is not bound to interpret
technical expressions in accordance with legal rules : it
will, on the contrary, look to the true intention of the
part}^ who has created the trust, and mould the execution
accordingly.
A mere direction to convey, upon certain trusts, will
not render the trust executory, if the author of the trust
has taken upon himself to be his own conve3'ancer, so to
speak, and, instead of leaving an}' thing to be done beyond
the mere execution of a conveyance, has defined what the
trust is to be, in sufficientl}' accurate terms. All trusts, it
has been truly observed, are in a sense executory, because
a trust cannot be executed except b}' conve3-ance ; and
tlierefore there is always something to be done. But that
is not the sense in which equity understands the term
"executory trust." Equity considers an executory trust
as distinguished from a trust which executes itself, dis-
tinguishing them in this manner : Has the testator made
liimself his own conveyancer? that is, has he left it to
the court to make out, from general expressions, what his
intention is, or has he so defined that intention that
nothing is to be done but to take the limitations he has
laid out and convert them into legal estates ? ^
Ev(!n though the instrument creating the trust, as, foi
1 Egerton v. Brownlow, 4 H. L. Cas. 210, Lord St. Leonards; Lead
Cas. in Eq., note to Glenorchy v. Bosville.
28 PROPERTY IN EQUITY. [Chap. IIL
instance, a will, contain a direction that the trustee shall
correct an}- defect or inaccurate expression, and to form a
settlement from what appears to be his meaning, this will
not permit an}' alteration of the limitation" as they would
be construed at law.^
There is some difference of interpretation even between
different classes of executor}^ trusts ; though executory
trusts under marriage articles and executory trusts in wills
appear to furnish the only instances. When the object is
to make a provision, by the settlement of an estate, for
the issue of a marriage, it is not to be presumed that the
parties meant to put it in the power of the father to defeat
the purpose and appropriate the estate to himself. If^
therefore, the agreement be to limit an estate for life, with
remainder to heirs of the body, the court will decree a
strict settlement in conformity to the presumable intention ;
but if a will direct a limitation for life with remainder to
heu-s of the body, the court has no right to decree a strict
settlement.^
In explanation of this^ if is said that a testator gives ar-
bitrarily what estate he thinks fit ; there is no presumption
that he means one quantity of interest rather than an-
other, — an estate for life rather than in tail or in fee.
The subject being mere bounty, the intended extent of
that bounty can be known only from the words in which it
is given. But in the case of marriage articles, the plain
object is the issue of the marriage ; and this consideration
will be allowed its proper effect.^ Further than this, how-
ever, there is no difference between the two classes of
trusts ; and even as to executory trusts in a will if it can
be clearly ascertained from the whole will that the testator
dirt not mean to use technical expressions in their strict
1 Stanley v. Stanley, 16 Ves. 491, 611.
2 Blackburn v. Stables, 2 Ves. & B. 367, Sir William Grant
. 8 lb.
^2-1 EXPRESS TRUSTS. 29
technical sense, equity in enforcing the trust will depart
from his words to execute his intention.^
Such, at least, is the English doctrine. It is said that
the American courts have never undertaken to decree a
strict settlement upon a mere general intention either in
marriage articles or in executory trusts, to make provision
for children. The distinction, however, between executed
and executor}' trusts has in this country gone to the same
extent in cutting down the rule in Shelley's case, so far as
that is apphcable to executor}' trusts, whenever the inten-
tion of the party creating the trust indicates that that
should be done.^
For this purpose, a trust in the United States will be
considered as executory whenever a conveyance is to be
made by the trustee ; or, in case of personal property,
whenever a delivery is to be made by the trustee at suc-
cessive periods of time to the persons respectively entitled
under the will or articles. And the rule in regard to such
executory trusts is, that, wherever the intention appears
to be that the first taker should have only an estate for
life, the remainder-men will take as purchasers, unless the
instrument contain something at variance with this con-
struction.^
With regard to marriage articles, it is laid down that if,
for the purpose of making a settlement of real estate be-
longing to either the intended husband or wife, it is agreed
that the same shall be settled upon the heirs of the body of
them or either of them, in such terms as would, if con-
strued with common-law strictness, give either of them an
estate tail, and enable either to defeat the provision for
their issue, equity, considering the object of the articles —
to make provision for the issue — will accordingly decree
1 Blackburn v. Stables, 2 Ves. & B. 367, Sir William Grant.
2 Lead. Cas. in Eq., note to Glenorchy v. Bosville (Am. ed.).
« lb. ; Saunder v. Edwards, 2 Jones, Ea- 134.
30 PROPERTY IN EQUITY. [Chap. Ill
a settlement to be made upon the husband or wife for life
only, with remainder to the issue of the marriage.^
The principle upon which, in cases of this kind, equity
decrees a strict settlement (for such it is called, when the
decree is thus moulded to the intention) is, as has been
said, that of giving etfect to the presumed intention of the
parties to the articles, to make such a provision for the
issue of the marriage as could not be defeated by either
parent. Where, however, articles are so framed that the
concurrence of both parents is required in order to defeat
the provision for the issue, the same principle does not
apply ; since it might have been the intention that the
husband and wife jointl}' should have such'a power. ^
In like manner, where it appears on the face of the
articles that the parties knew and made the distinction
between limitations in strict settlement, and limitations
which leave it in the power of one of the parents to bar
the issue, a strict settlement will not be decreed.^
Where by a post-nuptial agreement a settlement is di-
rected to be made upon a son of the marriage and his
issue, the same considerations do not apply, it is said, as
in the case of a similar limitation to an intended husband
or wife, and issue b}' articles executed before marriage.*
As to executory trusts in wills, the intention of the tes-
tator must show on the face of the will that he used the
prima facte technical words, such as " heirs of the body,"
as words of purchase, so as to give the remainder-man an
actual estate directly from himself, the testator ; otherwise
equity will direct a settlement in accordance with the legal
purport of the words. If, for instance, a testator give
land to a trustee in trust to convey to A. for life, and,
1 Trevor v. Trevor, 1 P. Wms. G22 ; 8. c. 5 Brown, P. C. 122 (Toml.).
2 Ilowel V. Hovvel, 2 Ves. sen. 358 ; Highway i-. Banner, 1 Brown,
c. c. 584 ; Lead. Cas. in Eq. itt supra. ^ lb.
♦ Lead. Cas. in Eq., supra ; Dillon v. Blake, 16 Irish Ch. 24.
§3.j EXPEESS TRUSTS. 31
after bis decease, totlie heirs of his bod}', it is clear that
there is no certain indication of intention that the heirs of
A.'s bod}' shall take as purchasers. The rule of legal
construction will therefore applj', and A. will take an
estate tail, and not a mere estate for life.-^
There is, however, no little confusion in the authorities
concerning the precise application of this rule ; and the
rule itself has been variously modified by statute in many
of the States.
§ 3. Of the Trustee, and his Duties.
A trustee who has accepted the trust cannot, except by
virtue of the terms of the trust, afterwards renounce it,
without the ccmsent of the cestui que trust, or of a court of
equit}'. It is said to be a rule without exception that
a person who has once undertaken the office, either by
actual or constructive acceptance cannot discharge him-
self from liability by a subsequent renunciation. The onl}*
mode by which he can obtain a release is under the au-
thoi'ity of a court of equit}', or b}' virtue of a special power
in the instrument creating the trust, or wath the consent of
all the parties, sui juris, interested in the estate.^ If the
trustee without one of these modes should attempt to re-
nounce, and another should take his place without consent
of the parties, the trustee would be liable for the latter's
acts.^
Further, the office of trustee, being one of personal con-
fidence, cannot be delegated. Trustees, therefore, who
attempt to put upon others the responsibilities of their
office cannot complain if the cestui que trust decline to rec-
ognize the validity of such acts, and treat the estate as
still in the management of the persons named as trustees
in the instrument creating the trust.
This principle, however, is subject to an exception aris-
1 Sweetapple v. Bindon, 2 Vern. 536. 2 Lewin, 221. 3 ib.
82 PROPERTY IN EQUITY. [Chap. IIL
ing from necessit}'. It has been said that there are two
sorts of necessity, a legal and a moral. In regard to the
former, where two executors join in giving a discharge for
mone}', and only one of them receives it, they are both
answerable for it, because there is no necessity for both to
join in the discharge, the receipt of either being sufficient.
But if two trustees join in giving a discharge, and only one
receive the money, the other is not answerable, because
his joining in the discharge was necessary.^ The other
(moral) necessity is considered to arise from the usage of
mankind. Necessity which includes the regular course of
business will exonerate from liability. For example : An
executor in New York has debts to pay in Albany, and
remits mone}- in the usual way to his co-executor to pay
those debts. He is considered to do this of necessity, and
is not liable for its loss."^
Where lands are devised to trustees in fee upon trust or
with powers which in their execution require the exercise
of judgment and discretion, and the trustees disclaim the
devise, so that the legal estate descends to the heir at law
of the devisor, such powers or trusts cannot be exercised
or carried into execution by the heir, though he holds the
estate subject to the trusts of the will.^
A trust, however, which gives the trustee no other duty
to discharge than simply to clothe the equitable ownership
with the legal estate may be performed by the heir.
Whether, indeed, a trust niay be performed or a trust
power exercised by the heir at law, when the trust is
obUgatory upon the trustee, depends upon the question
whether any thing must be supplied by the judgment,
knowledge, and discretion of the person acting, in the exer-
cise of such trust or power.*
As soon as is practicable after the trustee has obtained
1 Post, pp. 35-39. 2 Joy v. Campbell, 1 Schoales & L. 328, 341
8 Robson V. Flight, 4 DeG., J. & S. COS. * lb.
§ 3.j EXPRESS TRUSTS. 83
full possession of a trust fund consisting of mone}' or of
property which from its perishable nature ought to be, and
has been, converted into money, he must invest the same ;
conforming to the terms of the Instrument creating the
trust, if this contain any express instructions in the mat-
ter. In the absence of such instructions, the trustee must
act in accordance with the general rules of the court and
statutes of the State within whose jurisdiction he resides.
And it is said that, if all these fail to supply a course of
action for him in a particular case, he must be governed
by sound discretion and good faith. ^ It is apprehended,
however, that he could alwa3'S ask for instructions in such
cases from a court of equity ; and that would doubtless be
the safer thing to do.
The trustee will never be justified, except by the terms
of the trust, in emplojing the trust funds in ti'ade or spec-
ulation.^ However tempting such an investment may ap-
pear, if the trustee use the funds in that way, he will be
compelled to make good an}' losses that the cestui que trust
may sustain b}' reason of his action. A trustee cannot
employ the trust funds as he would his own, however care-
ful a man he may be.^
The safe and proper course, according to the English
doctrine, is for the trustee to invest the fund in govern-
ment securities or in first-class mortgages of real estate.
In England, trustees cannot invest the trust fund in the
stock or shares of any bank or private corporation ; for, it
is said, the capital depends upon the management of the
directors and is subject to losses.*
The English rule prevails in some of our States ; while
in other States it is held that trustees raaj- invest in bank
stocks as sufficiently safe and free from fluctuation.^ In-
1 1 Perry, Trusts, § 452. 2 King v. Talbot, 40 N. Y. 76, 96
* See Perry, § 454. * Di. § 455.
* Harvard College v. Amory, 9 Pick. 446.
3
34 PROPERTY IN EQUITY. [Chap. HI
deed, in some States it is permitted trustees to make in-
vestment in the shares of manufacturing and insurance
companies, and in the notes of individuals secured by such
shares.^ This, however, seems to be dangerous ground.
A trust vohmtaril}' assumed is none the less binding and
complete because the trustee acts without promise oi ex-
[)ectation of compensation for his services.^
Nor will the good faith and honest intentions of the
trustee protect him from the consequences of a failure
to comph' with the plain terms of the trust, except in ex-
traordinary emergencies. Hence, a trustee who sells at an
improper time, or without conforming to the conditions of
his powers, will be Uable for any deficiency of the proceeds
of sale, though his intentions were good. And it is said
that he will be held to the highest value the property can be
shown to have had, and be ordered to account for the
difference.^ .
It is the duty of a trustee to protect the trust estate
from an}' misfeasance by his co-trustee, upon being made
aware of an impropQr, /contemplated act, by obtaining
an injunction against him ; and if the wrongful act has
already been committed, to take measures, by suit or
otherwise, to compel the restitution of the property, and
its application in the manner required b}^ the trust.*
Without such action, he would himself be liable, notwith-
standing the existence of an indemnit}' clause in the instru-
ment creating the trust, whicli declares that neither of the
trustees shall be liable for the acts, omissions, or defaults
of the other, in which they shall not jointly participate, or
of which they shall not be jointly guilty, and limits theii
liability respectively to cases in which loss has occurred by
1 Lovell V. Minot, 20 Pick. 116.
2 Tlialraan v. Canon, 24 N. J. Eq. 127.
» Mclick V. Voorhocs, 24 N. J. Eq. 305.
* Crane v. Hearn, 26 N. J. Eq. 378.
§3.] EXPRESS TRUSTS. 35
failure of the trustees to exercise ordinar}- care, diligence,
and fidelit}'.!
In the case of co-trustees, the office is a joint one. All
the trustees must act in the performance of the trust. If
any one refuse, or be incapable to act, the others may not
proceed without him : the administration of the trust then
devolves upon the court. One trustee, however, may act
upon the sanction and approval of the other : ^ he cannot
act without it. Hence, receipts for money should have the
signature of all the trustees, and'not of a majority merely ; '
and, if a debtor to the trust should become bankrupt, all
the trustees should join in the proof.
This rule of law ma}', however, be governed by the
terms of the trust ; and where it is not, it is usual to obtain
an order of court to facilitate the conduct of the business
in this particular. And where the trust is of a public
character, the act of a majority of the trustees is held to be
the act of all.*
On the death of one of several trustees, the joint office
generally survives. This proceeds upon the ancient rule
of law that a bare authority committed to several is
determined by the death of any one of them ; but if coupled
with an interest, it passes to the survivor.^ And the rule
with regard to trustees is limited accordingly. The com-
mittee of a lunatic's estate are regarded as mere bailiffs,
without interest ; and hence, if one of them die, the office is
extinguished. But the office of executor or administrator
is coupled with an interest, and survives.^ And the same
is true of co-trustees strictly so called ; otherwise, as has
been observed, the greater precaution a person should take
1 Crane v. Hearn, 26 N. J. Eq. 378.
2 Messeena v. Carr, Law Rep. Eq. 260.
5 Lee V. Sankey, Law Rep. 15 Eq. 204 ; ante, p. 32 ; post, pp. 36, 37
4 Wilkinson v. Malin, 2 Tyrw. 544, 572.
6 Coke, Litt. 113 a, 181 b. « Lewin, 230.
36 PROPERTY IN EQUITY. [Chap. Ill
by increasing the number of the trustees, the greater would
be the chance of the abrupt termination of the trust by
death. ^ Nor will the doctrine of survivorship be affected
by the circumstance that the deed of trust contains a power
of filling vacancies caused by death ; unless a clear pur-
pose is manifested to the contrary.^
One of several co-trustees, not guilty of negligence, is
not lial'ile for the acts of the rest in which he has not par-
ticipated. In the view of the law, co-trustees are in the
situation of joint-tenants or tenants in common. Each is
entitled to manage the estate and to receive the profits,
unless distinct duties be assigned them by the deed of
trust. Hence, where lands or leases are bonveyed to two
or more in trust, and one of them receives all or the
greater part of the profits, and dies, his co-trustees are
not chargeable for the money's which he received, unless
they participated in his action.^ And, as has already been
stated, this is true, though the non-acting trustees join in
the receipt of the one guilty of violating his trust.
With regard to joiijt receipts, however, it has been said
that such are conclusive at law that the monej^ went into
the hands of all the trustees.^ This, however, is not true
in equity.^ But, though it is proper for one of several
trustees to receive the trust mone3's, the rest will not be
justified in allowing it to remain in his hands for a longer
period than the circumstances of the case reasonably re-
quire.^ The non-acting co-ti'ustees must inquire into the
use made of the money ; nor are they relieved by simply
1 Lewin, 230; Lane v. Debenham, 11 Hare, 188.
2 Lewin, 231.
' Townley v. Sherborne, Bridg. 35, a leading case.
* Westlcy V. Clarke, 1 Eden, .356 s-f qncvre.
* Harden v. Parsons, 1 Eden, 147 ; Wilson v. Keating, 4 DeG. &
J. 588.
6 Brice v. Stokes, 11 Ves. 319.
§3.) EXPKESS TRUSTS. 37
asking their associate what he has done with the fund.
They must find out how he has used it.^
Except in respect of receipts, the law with regard to co-
executors is the same as that relating to co-trustees. Each
is Hable for his own acts only, or for those which he has in
some wa}^ authorized.^ But by joining in receipts (an un-
necessary act, as has already been observed) , a co-executor
ma}', it is said, become liable for his associate's breach of
trust in respect of it.* A distinction, however, prevails
with regard to such receipts. If a receipt be given for the
purpose of form, the signing will not now charge the non-
receiving trustee ; but if it be given under circumstances
purporting that the mone}', though not actuall}^ received by
both executors, was under the control of both, it is said
that the receipt will charge both. And the true question
is considered to be whether the money was understood to
have gone into the hands or control of both executors.
If it was so considered b}' the person paying the money,
the joining in the receipt by the non-receiving executor is
deemed to amount to a direction to pay the same to his co-
executor. By this reasoning, the one is held liable for the
act of the other.* It is clear, then, that the joining alone
is not sufficient ; there must be something tantamount to
or capable of being construed as an acting.^
There is a distinction, however, between the rigfits of
creditors and the rights of legatees in this particular.
Legatees are bound by the will, but creditors are not ; and
it is accordingly laid down that, if the testator direct his
executors to collect the assets of the estate, and pay the
proceeds into the hands of one of their number named, and
1 Thompson v. Fincli, 22 Beav. 316 ; Mendes v. Guedella, 2 Johns,
& 11. 259. 2 Lewin, 236. 3 it.
* Joy V. Campbell, 1 Schoales & L. 341, Lord Redesdale ; Doyle v
Blake, 2 Schoales & L. 229. 242.
s Walker v. Symonds, 3 Swanst. 64, Lord Eldon.
S8 PROPERTY IN EQUITY. [CHi.p. III.
this is done, and the receiving legatee fails, an unpaid
creditor may claim against the other executors ; but lega-
tees, being bound bj the will, cannot.^
An executor, further, is Uable for any act by which
he reduces any part of the testator's property into the sole
possession of his associate executor, within the limits
suggested by the preceding paragraph. Such a case oc-
curs where an executor joins in drawing ^ or indorsing *
a bill, or where he is otherwise instrumental in giving
to his co-executor the possession of any of the testator's
property.*
But special circumstances may exist requiring a joining
by the executors, and whenever this is necessary, the non-
receiving executor is exonerated from liability for the sole
acts of his associate. For example : A bill of exchange is
remitted to two agents, payable to them personally, and
they, on the death of their principal, are made as his ex-
ecutors. A joint indorsement being now necessary for the
collection of the bill, the joining is not deemed an order
to the receiving executor by the other to take and hold the
money. ^
Even when the joining becomes necessary, the law
requires the non-receiving executor to observe faithfully
and carefully the nature and terms of the trust, and see
that the act done conforms to the due execution of the
same. He cannot safely rely upon the representations of
his associate, but must exercise reasonable diligence in the
matter ; ^ the measure of which will be determinable by
the special situation at the time.
The non-acting executor will be equally Uable, whethet
the money left in the hands of his associate consists of prop
1 Doyle I'. Blake, supra. 2 Sadler v. Hobbs, 2 Brown, C. C. 114.
8 Hovey v. Blakeman, 4 Ves. 696, 608.
* Clough V. Dixon, 3 Mylne & C. 490 ; Candler v. Tillett, 22 Beat
857, 265. 6 Hovey v. Blakeman, supra. 6 Lewin, 241.
§3., EXPRESS TRUSTS. 39
erty received by him or of a debt owed by him to the testa*
tor. For example : A testator appoints three persons as his
executors, all of whom qualify ; but one of them becomes
sole actina; executor. He is indebted to the estate of the
deceased, and taking the assets collected by him absconds ;
the other executors having made no attempt to collect the
debt due by their defaulting associate. They are liable for
the loss.^
Though it was at one time supposed that co-administra-
tors stood upon a different footing, resembling co-trustees,
it is now considered that no difference exists between them
and co-executors.^
Courts of equity' watch with great concern the interests
of cestuis que trust in transactions between them and their
trustees. Such transactions are not, indeed, prohibited ;
but they must be effected with the utmost fairness and open
conduct on the part of the trustees. It is the dut}' of trus-
tees to see that their cestuis que trust in such cases are prop-
erly and full}' advised as to their rights. And this rule
often requires independent and disinterested advice. Nor
is it enough, in all cases, if in any case, that counsel acted
for the beneficiaries. The advice must have come from
independent counsel ; and such counsel must have been
authorized by the cestuis que trust to act for them. Other-
wise the transaction with the trustee is liable to impeach-
ment in equity. For example : Two ladies, entitled to a
trust fund, which had been improperly loaned b}' the trus-
tees to J., are, on coming of age, induced by J. to execute
releases to the trustees. No direct communication takes
place between the ladies and the trustees ; but the ladies
are represented in the transaction b}^ Gr. , a solicitor, known
by the ti'ustees to have been for years the confidential ad-
viser of J. G. has never been authorized by the ladies to
1 Styles V. Guy, 1 Macn. & G. 422.
2 Lewin, 242.
40 PROPERTY IN EQUITY. [Chap. Ill
act for tbem, but was called for tliem by J. The releasea
are not binding in equity.^
It may not be necessary for the trustee, in order to sus-
tain the validity of the transaction (for the law casts the
burden upon him of establishing the validity of all con-
tracts between him and the cestui que trust affecting the
trust), in all cases to show that the cestui que trust has
had the benefit of proper legal advice : the transaction
may be a plain one, not requiring advice. But it alwa3'S
devolves upon the trustee to show that he gave, or at
least that the beneficiary had, all information of fact
necessar}' to enable him to act intelligently in the matter.
An afl^rmative duty is laid upon the trustee : he must see
that his cestui que trust is in a situation to act with perfect
confidence, so far as it is possible for the trustee to enable
him to do so.
A trustee is not permitted, against the will of the bene-
ficiary, to unite in himself the opposite characters of buyer
and seller, in deahngs with the trust estate. If he at-
tempt to do so, the cestui que trust, unless upon the fullest
disclosure of the facts "he elect to confirm the act of the
trustee, may repudiate it, or he may charge the profits
made by the trustee with an implied trust for his benefit.^
But the rule that a trustee cannot act in the double
capacity of seller and bu3"er of the trust propert}' does
not necessarily apply to all dealings with the person for
whom he holds it, and towards whom he bears the relation
of trustee. He may purchase the trust propert}' of such
person, but only upon showing that the whole transaction
and the circumstances attending it were fair and open,
and no advantage was taken by him, whether b}' positive
concealment or misrepresentation, or by the omission to
1 Lloyd V. Attwood, 8 DeG. & J. 614.
2 Parker v. Nickerson, 112 Mass. 195; Michoud v. Girod, 4 How
603.
§3.] EXPRESS TRUSTS. 41
state any important fact, and that no undue influence was
exercised by him, and that the cestui que trust understood
what he was doing. ^
While as a rule a trustee cannot become both seller and
bu5'er of the trust estate, still if in buying he has acted
without moral turpitude, equity will protect him so far as
to give him a lien upon the property for any advances
of a reasonable kind which he may have made : ^ it will
not permit the cestui que trust to obtain an unconscionable
position. Hence, if the trustee put reasonable improve-
ments upon the trust property which he has purchased,
he will be allowed therefor.^
When the title to which a trust attaches fails entirely,
the trustee, in the absence of fraud or unfair advantage,
or dealings arising out of the relation entered into with the
intended cestui que trust, may purchase and hold for his
own benefit. The usual disability imposed upon the trus-
tee does not arise where there is no title whatever in the
supposed cestui que trusts
A trustee may come to an agreement with his cestici
que trust that they shall no longer stand in the existing
fiduciary relation. And if the trustee prove that, through
the medium of such agreement, he had, previously to a
purchase of the trust property, clearly, distinctly, and fully
removed himself from the position of trustee, his purchase
may be sustained. But though the trust relation may
have been dissolved, still the trustee cannot use, against
the interests of the cestui que trust, any information he may
have derived while in the trust relation, unless such infor-
mation has been fully imparted to the cestui que trust;
and this is also true of like transactions immediately oi
1 Brown v. Cowell, 116 Mass. 461 ; Perry, Trusts, § 195.
2 Mulford V Minch, 3 Stockt. Ch. 16.
8 See Mason v. Martin, 4 Md. 124. * Price v. Evans, 26 Mo. 30.
5 Ex parte Lacey, 6 Ves. 625; Coles v. Trecotliick, 9 Ves. 234,248
s
42 PKOPEKTY IN EQUITY. [Chap. IIL
soon after the termination of the trust by limitation or by
the act of the law. And in such cases the trustee must
purchase openly for himself, and not through a nominal
purchaser,^ unless indeed such a purchase can be very
satisfactorily explained.
When trustees depart from the rule of conduct which
tlie law thus prescribes, they and those claiming under
ihem (not being bona fide purchasers for value) are liable
to be called to an account b}^ the beneficiaries, even
though the latter have sustained no actual damage in the
matter." Generally speaking, proof of damage necessary
to maintain an action for fraud as between parties stand-
ing upon an equality, is not required of parties complaining
of the abuse of a confidential relation by the managing
actor therein.
A general rule obtains in respect of trustees of every
description, and of tenants for life, that if, from being in
possession, they have and improve an opportunity of
renewing a leasehold interest, such renewal will be treated
as a graft upon the old lease. They cannot detach it, and
obtain a reversionary interest for their own use.^ What-
ever advantages they obtain by such means they must hold
in trust.* Still, where there has been nc contrivance in
fraud of those who were interested in the old lease, and
where such old lease and all the trusts relating to it are
absolutely determined, and there is neither any remnant
of the old lease, nor any tenant-right of renewal upon
which a new lease can be considered a graft, then the
part}' who was trustee is quoad hoc no longer in that situa-
tion. The fiduciary relation has terminated for want of
an object ; and there is no ground for excluding the quon-
1 Woodhouse i;. Meredith, 1 Jac. & W. 204, 222.
2 Bigolow, Fraud, 239.
3 Pickering v. Vowles, 1 Brown, C. C. 198 ; Randall v. Kussell,
3 MlT. 190, 196. ■» Nesbitt v. Tredennick, 1 Ball & B. 29, 40.
§3.] EXPRESS TRUSTS. 43
dam trustee from becoming a purchaser of the property for
his own benefit.^
Lilvcwise, where a trustee, even during the existence of
a trust as to the household interest, purchases the reversion
in fee, though by this means he may debar the cestui que
(rust of a fair chance of renewal, yet this fact alone is not
of sufficient weight to convert the purchase into a graft
upon the leasehold interest.^
Acquiescence alone by the cestui que trust in a purchase
made by the trustee is not usually sufficient to bar the
former's rights. It is otherwise, however, of acquiescence
with full knowledge of the facts ; and the same is true,
perhaps, where the acquiescence has been long continued,
even without knowledge of all the facts, if full value was
paid by the trustee at the time of the purchase, and his
conduct was free from objection in morals. For example :
A trustee sells bonds of his cestui que trust at public sale,
and buys them in himself at their full value at that
time. Twelve years afterwards, the cestui que trust,
who knew of the purchase when it was made, seeks to
call the trustee to account for enhanced value. He can-
not succeed.^
It is, however, settled law that, to render an alleged rat-
ification of a purchase made by a trustee of trust property
for himself effective and binding, apart from long acquies-
cence, the cestui que trusty if sui Juris, must at the time of
the ratification have been fully aware of every material
fact, and his ratification must be an independent, substan-
tive act ; and he must not only have been aware of the
1 Stokes V. Clarke, Colles, P. C. 192.
2 Randall v. Russell, 3 Mer. 190. The figure is highly objection-
able, in speaking of grafting a greater upon a less body ; but it is
th( language of the law.
^ Marsh v. Whitmore, 21 Wall. 178. This was a case of attorney
and client, but the principle is the same.
44 PROPERTY IN EQUITY. [Chap. III.
facts, but a} prised of the law as to how those tacts would
be dealt with, if brought before a court of equity. ^
Besides those who are trustees eo nomine, the law treats
many others as in the position of quasi trustees, and sub-
ject to duties and disabilities similar to those above con-
sidered.
The officers and directors of a corporate body are re-
garded as trustees of the stockholders, and cannot secure
to themselves advantages not common to the latter.^ For
example : A corporation instructs its officers to effect a
loan of money, and they proceed to secure claims of their
own against the company. This is a breach of trust, and
the transaction is void as against the stockholders.^
While, however, the officers of a corporation cannot
make a personal profit out of the business of the company',
still, as in other cases of fiduciary relations, transactions
for the individual benefit of the directors when free from
fraud are supported where the fiduciary relation has ceased
to exist before the particular transaction, or where they
were entered into with the^ consent of the stockholders, or
where by sufficient acquiescence they have precluded them-
selves from objecting.'*
Property transactions between guardian and ward, with
the exception of gifts and bequests by the guardian to the
ward, stand upon a similar footing, being regarded as
prima facie fraudulent as against the guardian, because of
his peculiar relation and situation towards the ward. But
the guardian is entitled to show, if he can by the clearest
evidence, that he dealt with the ward exactly as with
a stranger, taking no advantage of his presumed influence
over him, or of his superior knowledge in relation to the
1 Cumberland Coal Co. v. Sherman, 20 Md. 117, 1?4.
2 Jackson c Ludeling, 21 Wall. 616.
8 Koehler v. Black River Iron Co., 2 Black, 715.
* Ashhurst's Appeal, 60 Penn. St. 290.
/'
§3.] EXPRESS TRUSTS. 45
subject-matter of the transaction, and that the ward's act
was the result of his own free volition, upon full delibera-
tion and (in cases demanding it) legal advice.
A guardian has the power to sell his ward's personal
estate, but he has no right to use his power for his own
benefit. If he appropriate his ward's property, or the pro-
ceeds of a sale of it, to pa}^ his own debts, he has com-
mitted a fraud upon his ward,^ which no offer to make
good the situation will condone. And without going over
ground a second time, it is sufficient to saj* that the rules
governing the conduct of trustees in transactions with
theu' cestuis que trust appl}', as far as the nature of the case
permits, to transactions between guardian and ward.
Agents also occupy a relation of trust, with peculiar
opportunities for fraud upon their principals ; and the rules
of law in respect of transactions between them concerning
the trust interests are equally severe with those above
stated. There is, however, no greater severity, and the
law permits of dealings concerning the trust interests as in
other cases. But the presumptions, upon the impeach-
ment of a contract, are all on the side of the principal. If
an agent seek to enforce a transaction between himself and
his principal, 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 property or interest in question, and
that the principal knew with whom he was dealing and
made no objection, and flnall}' that the consideration was
fair and just.^
The position of an agent corresponds further with that of
a trustee in that it appears to be unnecessary for the prin-
1 Hunter v. Lawrence, 11 Gratt. 111.
• Bigelow, Fraud, 222, 22.3, and cases cited.
46 PROPERTY IN EQUITY. FChap. III.
cipal to sliow that he has suffered damage in order to
impeach a transaction between himself and agent. A
principal selling to his agent is entitled to set aside the
sale, whatever may have been the price paid if the rule
above stated be not observed by the agent.-'
An agent, like a trustee, must look alone to the interests
of his principal : he can do no act, valid as between him-
self and his principal, which requires him to take an an-
tagonistic position to the latter, except upon the fullest
disclosure to him. Hence, if an agent discover a defect
in the title to his principal's land, in the course of his
agency relating to the same, equity will not permit him to
avail himself of the discovery to acquire a title against his
principal.^ So, an agent employed to sell a reversionai;y
legac}' is not permitted to become the purchaser thereof
for himself, without the consent of the principal acting
intelligently. , Nor will any thing amount to a confiiTaation
of such a transaction until the vendor is fully apprised
that he might be relieved against the transaction if he
should choose to questior| it.^
The rule forbidding the abuse of confidence applies as
strongly against those who have gratuitously or officiouslj'
undertaken the management of another's property or in-
terests as to those who are retained or appointed for that
purpose and paid for it.'* Hence, if a person, of his own
will alone, become a gratuitous agent of another to negoti
ate 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
1 Murphy v. O'Shea, 2 Jones & L. 422, 425 ; Gillett v. Peppercorne,
3 Beav. 78.
2 Rogers v. Lockett, 28 Ark. 290; Ringo v. Burns, 10 Peters, 269.
3 Crowe V. Ballard, 2 Cox, 253.
< Rankin v. Porter, 7 Watts, 387 ; Doorman v. Jenkins, 2 Ad. & E.
256.
§3.! EXPRESS TRUSTS. 47
agent becomes liable to the vendor for the loss .sustained
by the breach of confidence.^
The rule that an agent cannot make himself an adverse
party to his principal while the agency lasts applies only
to such agents as are relied upon for counsel and dii\jc-
tion, — whose emplo3'ment is a trust as well as a service.
It does not apply to those who are employed merely as in-
struments in the performance of some appointed service.^
A foHiori, it does not apply to one who is compelled to
assert his rights in the law in the name of another. lie
does not thereby become the trustee of the latter. For
example : The defendant, claiming an equitable interest in
property by an assignment from the father of certain in-
fants, of whom the plaintiff is one, brings suit in the name
of the infants, styling himself their next friend, to recovei
the land and succeeds. The recovery is his, in his own
right, and not in that of the infants.^
1 Hunsaker v. Sturgis, 29 Cal. 142.
2 Deep River Mining Co. v. Fox, 4 Ired. Eq. 61.
• Michael v. Micliael, 4 Ired. Eq. 349.
48 PROPERTY IN EQUITY. [Chap. IV
CHAPTER IV.
TRUSTS BY IMPLICATION" OF LAW.
Trusts b}' implication of law are those which the law
formulates (1) for the purpose of carr^'ing out a presumed
intention of the settlor, (2) for the purpose of satisf^-ing
the requirements of honest}' and fair dealing.
§ 1. Of Trusts arising bt Presumed Intention.
If the donor of a power express a definite intention in
favor of an individual or of a class, to be carried out b}'
the donee of the power, and the intention fail by not being
carried out by the donee of the power, the Court of Chan-
cery will presume that the donor intended that the trust
should be carried into execution, even though the donee
failed of taking action, and will fix a trust upon the estate
granted, and will settle its terms in accordance with the
best light it may have.^
A trust also arises b}' presumed intention, when prop-
erty has been given upon trusts which fail, whether by rea-
son of a failure of the intended objects or of the illegality
of the trusts or otherwise, or where the trusts are com-
pletel}' and finally fulfilled without exhausting all the prop-
erty out of which the trust was to be executed. In such
cases, a trust results of such propert}-, or of so much thereof
as remains, to the person who created the trust or to his
legal representatives, unless there be suflScient evidence of
a different intention, or unless the trust is charitable. '^
But where there is an absolute, and, for any thing that
1 Comp. 2 Spence, Equity, 82. 2 Smith, Equity, 170 il2th ed.).
§ 1.] TRUSTS BY DirLICATION OF LAW. 49
appears to the eontrar}', a beneficial gift, with an ineffectual
or partial trust annexed to it, the property, or so much as
remains after the execution of the partial trust, belongs to
the donee. ^ And where there is an absolute gift with an
illegal condition, the condition is void, and the donee may
retain the whole. There is no presumed intention of a
trust in such a case.-
An impUed trust also arises where a person pai'ts with
or limits a particular estate onl}', leaving the residue undis-
posed of. The heir will take as personal estate the benefit
of the surplus interest in a term or other particular estate
carved out of the inheritance for a special purpose, the
accomplishment of which does not require the whole,
where the devisee takes onlv what remains after the par-
ticular estate so given is carved out.^
A legac}' to the heir or next of kin will not alone pre-
clude a claim to the surplus undisposed of. Nor will a
bare intention to exclude, however expressed, even though
with negative words, be sufficient to exclude the heir in
respect of the beneficial interest in real estate undisposed
of, or the next of kin in respect of personalty, unless it be
either specifically or as part of a fund effectuall}' devised
or bequeathed to some one else.*
This, however, proceeds, not upon the intention of the
testator (it maj- be directly contrar}' to his intention) , but
upon an established rule of law that the person upon whom
property would devolve by the act of law can only be de-
prived of the right which the law would confer upon him
by an actual disposition of the estate in question.
] n the case of real estate directed by a testator to be
sold for certain purposes, which fail in whole or in part,
the heir's right seems to depend upon the question whether
the testator meant to give to the produce of the real es-
1 lb. ; 1 Spence, Equity, 510. - 2 Spence, 229.
» 2 Spence, Equity, 230, * lb. 2-32 ; Smith, 173.
4
50 PROPEKTY IN EQUITY. ^'Chap. IV
tate the quality of personalty to all intents, or onty so far as
resijected the particular purposes of the will. Unless the
testator has sufficiently declared his intention not only thai
the realty shall be converted into personalty- for the puj
poses of the will, but, further, that the produce of the real
estate shall be taken as personalt}', whether such purposes
take effect or not ; so much of the real estate, or the prod
uce thereof, as is not eflectuall^* disposed of by the will at
the testator's death will result to the heir.^
In the absence of statute, if a testator make no express
disposition of the residue of his personal estate, the execu
tors become the legal owners of the residue. In equity,
however, the executors are considered entitled to retain
such residue to their own use only in the absence of any
thing in the will indicating an intention to excluding them
from the beneficial interest. Equity la3's hold of any thing
in the will which aj^pears to rebut an intention of gift to
the executors, and readily converts them into trustees for
the persons who would have been entitled to such residue
had the testator died intestate. ^ This subject, however,
has been regulated by statute in England, and in some of
the American States, — in the direction, it may be added,
of fas'oring those who would be entitled under the intes-
tate laws.
As in the case of the failure of a trust, so if a testator
direct that real estate be sold for a particular purpose, and
do not effectually dispose of the entire estate and produce
thereof, whether from silence or from the inefficac}^ of the
will, or from subsequent lapse, this undisposed-of estate
results to the heir, unless the testator has made an effec-
tual conversion of it into personalty. If, in such a case
(supposing no conversion to have been made) , a sale lias
1 Lewin, Trusts, 232 ; Smith, Equity, 173.
2 Ellcock V. Mapp, 3 H. L. Cas. 492 ; Underwood v. Wing, 4 DcG
M. & G. 633, 656.
^ l.J TRUSTS BY IMPLICATION OF LAW. 61
been made, the undisposed-of surplus goes to the heir as
personalty or as realty, according as the sale was necessaiy
or unnecessary.^ But a definite conversion of the realty
into personalty for all purposes gives such estate to the
next of kin.^
Where a testator creates from real estate and personalty
a mixed and general fund, and directs the whole of thai
fund to be applied for particular purposes, as for the pa}'-
ment of debts and legacies, he in effect dii'ects that the
real and personal estate which have been converted into
that fund shall answer the stated purposes •pro rata, accord-
ing to their respective values. And, if an}' of those pur-
poses fail, then the part of the fund which, according to
the intention of the testator, would otherwise have been
applicable to those purposes is undisposed of. As far as
this part of the fund has been composed of real estate, the
heir is to have the benefit of it as so much real estate,
whether the estate be eventually sold or not ; and as far as
this part of the fund has been composed of personal estate,
it results to the next of kin as personal estate, as has al-
ready been intimated.^ But this supposes that there is no
effectual disposition of such fund.
When mone}" is given by will to be laid out in land, the
same principle applies as where land is to be converted into
money. The conversion will operate onl}' so far as the
will disposes of the land into which it is to be converted.
Hence, if the land is devised for a Hmited estate only, the
pi'oduce of the fund, or the fund itself, if unconverted,
beyond the interest so given, will result to the testator's
next of kin, unless it be given to some other person.*
When the interest of a mixed fund, consisting of the
proceeds of real and personal estate, is directed to be
1 Smith, Equity, 175 ; Taylor v. Taylor, S DeG. M. & G. 190.
2 2 Spence, Equity, 237. 3 lb. 235.
* lb., where some conflict upon this point is noticed.
52 PROPERTY IN EQUITY. [Chap. IV
accumulated for a period longer than tliat allowed by law
(usually a period of twent^'-one years and nine months
after lives in being at the testator's death), so that the
accumulation for a portion of the time is unlawful ; the
interest of the mixed fund accruing after the time allowed
by law will result to the heir at law and next of kin in the
proportion in which the mixed fund is constituted of real
and of persona] estate, unless there be some other person
W'ho would be entitled to the rent or interest directed to
be accumulated but for such provision.^
A mere direction that the proceeds of the real estate
shall be deemed part of the personal estate, or shall be
a fund of personal and not of real estate' is not sufficient
to give the surplus to the next of kin ; nor will a refer-
ence to a mixed fund, composed of personal estate and
the proceeds of real estate directed to be sold at a specified
time after the testator's death, b}' the name of " personal
estate " be sufficient to show that tlie entire fund must be
treated for all purposes as personalty.^ Any purpose, it
is said, however limited^ apparent upon the face of the
will, with reference to which the conversion might have
been directed, will be sufficient to save the rights of the
heir as against the next of kin. And this is true, though
a clear intention be expressed in the will to exclude the
heir, but without a disposition of the interest in question.
For example : A testatrix declares that her trustees shall
stand possessed of the proceeds to arise from the sale
of real estate as a fund of personalt}' and not of realt}^ ;
adding, ' ' for w^hich purpose I declare that such proceeds
or any part thereof, shall not in any event lapse or result
for tlie benefit of my heir at law." She then directs the
payment of the legacies after-mentioned out of such pro-
ceeds, and indicates a purpose to make provision as to the
1 2 Spence, Equity, 235.
2 Johnson v. Woods, 2 Beav. 414; 2 Spence, Equity, 238.
§ 1.1 TRUSTS BY IMPLICATION OF LAW. 63
residue by codicil ; which, however, she does not cany out.
The heir at law is entitled to the surplus not required for
the specific piu'poses of the will, in preference to the next
ofkin.i
The example given is to be explained, on the ground
that the surplus estate of the testatrix was to devolve
upon somebody. It could not be held by the trustees
for themselves, for she had expressed a purpose to make
special provision of the residue by codicil ; and it could
not be assumed that she would have given it to them.
Hence, inasmuch as there was no "out and out" conver-
sion (to use the language of the books) of the realty, the
surplus must be given to the heir at law ; and for him the
trustees must hold by way of resulting trust.
The question who shall have such a surplus arises more
frequent!}-, however, between the heir at law and the re
siduary legatee. But the principle is much the same.
In order to bar the heir under a residuary bequest, there
must have been a conversion of the realty for all purposes.
However, it is not necessary that precise words should be
used, expressing such an intention. Though the testator
has not in express terms provided that the produce of his
real estate shall "for all purposes" (which would include
the purposes of the residuary bequest) have the quality
of personalty upon his death, yet such intention may be
collected from the tenor of the will ; and, in such cases,
the heii" will be excluded from an}' portion of a lapsed or
ftiiling legacy as against the residuary legatee.^
Even when the real estate is converted for all the
purposes of the will, a question may arise whether the
residuary clause is such as will carry it. The word
" residue," in its largest and general sense, comprehends
whatever, in the events which happen, turns out to be
undisposed of; which is founded upon this ground, not
' riteli f. Weber, G Hare, 145, 153. 2 2 Spence, Equity, 240.
54 PROPERTY IN EQUITY. [Cuap. IV
that it directly effects the intention of the testator, but
that the testator is presumed to have given it away from
the residuary legatee only for the sake of the particular
legatee ; so that, upon failure of the particular intent, the
court gives effect to the general intent manifested in the
residuary gift. If, however, it appear that the word
"residue" has been used in a more restricted sense, the
court will construe the will accordingly ; ^ for, generally
speaking, the intention of the testator must prevail.
If a portion of the residue itself lapses or becomes un-
disposed of, it will go to the heir or next of kin, according
to the nature of the property, unless there be a gift of it,
express or implied, to some one else.^
If it be the intention of a testator to convert real estate
into personal for all the purposes of the will, and some
only of such purposes fail, the proceeds of the failing
object as between the heir and personal representative
result to the former, notwithstanding their character of
personalt}'.^
In the cases of gifts to (Charities, the law is not so ready
as in other cases to allow the purpose of the testator to fail,
and thus to give aid to the next of kin or residuary legatee
by way of resulting trust. Charities are favored by the
courts quite as much as are the kin of a decedent ; and
the rule is, that where there is an available charity to an
identified or ascertainable object, and a particular mode,
inadequate, illegal, or inappropriate ; or which, for other
reason relating to the mode of execution or to the person
of the trustee, happens to fail, has been prescribed, equity
may substitute or sanction any other mode that may be law-
ful and suitable so as to carry out the testator's intention.^
1 Spence, Equity, 241 ; Easum v. Appleford, 5 Mylne & C. 56, 62.
« lb. 3 lb.
* Moore v. Moore, 4 Dana, 354, .360 ; Jackson v. Phillips, 14 Alk^n,
639, 5b9.
§2.] TRUSTS BY IMPLICATION OF LAW. 55
But the oourts of this country will not act arbitrarily and
in the dark, assuming to express the testator's intention
as to the gift itself, when he himself has failed to express
it intelligibly. In cases of this kind, the gift fails, and
the fund is to be held in trust for the person entitled in
such an event. ^
§ 2. Of Trusts raised by Law for the purpose of
SATISFYING THE REQUIREMENTS OF HONESTY AND FaIR
Dealing.
A trust results by presumption of law where the legal
title to property has been taken in the name of one person,
in fraud of the rights of another entitled to it. Such a
trust, though relating to real estate, is exempted from the
terms of the Statute of Frauds.
In accordance with this definition, where one person
advances the purchase-mone}' for laud and a deed is
taken in the name of another, a trust results b}' operation
of law in favor of the party who advanced the money, and
parol evidence may be given to prove the facts. ^ A bill
to set aside a conveyance obtained from a third person,
or to compel the defendant to convey the title acquired
from such person, will, upon the same principle, be upheld
where it appears that the title acquired b}' the defendant
was in fraud of the plaintiff's rights, and contrary to the
duty owed the plaintiff b}' the defendant.^ For example :
The defendant assigns to the plaintiff for value a contract
for the purchase of land from a railroad company'. Sub-
seqr.eutl}", by false representations that he has not parted
with his rights under this contract, the -defendant obtains
a conveyance of the land from the railroad company. The
plaintiff now files a bill prating that the conversance be set
1 Tlie English courts go much further in support of an intended
charity than the American. See ante, pp. 17-19.
' Hays V. HolUs, 8 GUI, 357. 3 Blakeslee v. Starring, 34 Wis. 538
66 PKOrERTY IN EQUITY. IChap. IV
aside, or that the defendant be compelled to convey to
him ; and the bill on demurrer is sustained.'
The ground of the doctrine of resulting trusts of this
kind in the piu'chase of real propertj' is that the party in
whose favor such trust arises has paid his mone^' for the
property in question, and an attempt is made to defraud
liim of the fruits of it. If, therefore, the party who claims
the resulting trust made no pa3-ment, he is not permitted
to show by parol evidence that the purchase was made for
his benefit or on his account. Nor would a subsequent
advance of money to the purchaser, after the purchase is
complete, alter the case.^ But it has been suggested that
the case ma}' be different when a verbal agreement is clearly
proved between two persons to make a joint purchase,
though no part of the price be actually paid at the time by
him whose name is not in the articles or deed, but subse-
quent payment is made. In such a case, it is possible that
the fulfilment of the terms as to the joint purchase will
have relation back to the original agreement, and raise u
trust. ^
But no resulting trust can arise where there is no a^ree-
ment or understanding between the parties to the sale and
him whose money is used, that the purchase is to be made
for the latter ; and a fortiori is this true where such pur-
chaser uses part of his own monej' in the transaction.'*
In order to raise such a trust, the mone}' of the princi-
pal, or alleged cestui que trust, must have been -used, as has
been intimated, at the time of the purchase. After the
legal title has been-conve3'ed to one who agreed to buy for
another, the application of the latter's mone}' to pay notes
for the purchase-mone}' creates no resulting trust in favor
1 Blakcslce v. Starring, 34 Wis. 5-38.
2 Botsford V. Burr, 2 Johns. Cli. 405; Nixon's Appeal, 63 Pena
St. 279.
* Nixon's Appeal, supra. * Coppage v. Barnett, 34 Miss. 621.
g 2.J TRUSTS BY IMPLICATION OF LAW. 57
of the other. The trust must attach, if ever, at the time
of the conveyance.^
If only part of the purchase-mone}' be paid b}' the alleged
trustee, there may still result a trust enforceable jpro tanto
in his favor. The trust need not extend to the entire prop-
erty'. For example : Land is conveyed to the defendant
by a third person in consideration of funds belonging
jointly to the defendant and the plaintiff. The propertj' is
held in trust for the latter to the extent of his part of the
funds. ^
The doctrine, however, that a trust ma}- result upon
payment of part of the purchase price prevails only when
the part payment was made for some specific part or dis-
tinct interest in the estate ; that is, for a specific share or
estate, as a tenanc}' in common, or a joint tenancy of one-
half, one-quarter, or other particular fraction of the whole,
or a life-estate or tenancy for 3-ears, or remainder in the
whole. A general contribution, without designation or
understanding as to the particular part-interest to which it
is to apply, is insufficient.^
A trust will, however, result in favor of one for whom
the actual purchaser agreed to buy and hold, though the
money paid for the property was loaned by the trustee
to the cestui que trust for the purpose of the purchase.
And, upon a dispute between the two as to whose money
w^as used in effecting the purchase, the cestui que trust may
show by parol that though the monej^ or part of it, was
paid over to the grantor by the grantee, the sum so paid
was paid upon a loan for the cestui que trust.*
1 Botsford V. Burr, 2 Johns. Ch. 405; White v. Carpenter, 2 Paige,
217; McCarroU v. Alexander, 48 Miss. 128; WaUer v. Klock, 55 111.
302. 2 Buck V. Swazey, 35 Maine, 41.
2 McGowan v. McGowan, 14 Gray, 119 (doubting Jenkins v. Eld-
ridge, 8 Story, 181) ; Buck r. Warren, lb. 122, note ; Sayre v. Town
Eend, 15 Wend. 647; Baker r. Vining, 80 Maine, 121.
* McDonough v. O'Niel, 1 13 Mass, 92 ; Kendall v. Mann, 1 1 Allen, 1 5
58 PROPERTY m EQUITY. [Chap. IV
The presumption of a trust does not arise where the title
is taken in the name of the wife or child of the person who
pays the monej', or where such person stands, or assumes
to stand, in loco parentis to the grantee. The presumption
in such a case is that, in pacing for the land to be granted
to the child so situated, the grant is intended as a donation
or as an advancement ; ^ and the burden will rest upon the
person seeking to establish the trust to overcome the pre-
sumption in favor of the legal title by other evidence than
proof of the paj^ment of the money, ^ — w^hich would be
sufficient in other cases. So, also, a wife who contributes
of her own means to the purchase of land by her husband,
the title to which is taken in his name, without an}' under-
standing for repayment or convej'ance to the wife, will be
presumed to have intended a gift to her husband ; and the
presumption will become conclusive, it is held, upon the
husband's death. ^
The principle of resulting trusts is not confined to the
class of cases above considered. If a person hold out in-
ducement to another whose estate is largely incumbered
that he will furnish the means for him to redeem, and there-
by prevent him from looking elsewhere, and in the mean-
time purchase such incumbrance himself, and cut off the
redemption, he will not be allowed to retain his advantage.'*
So, likewise, if a party whose property is sold under a
right of redemption within a certain time, be prevented
from redeeming within the time b^' the fraud or artifice of
the purchaser, a court of equity will grant him the right to
redeem.^
Upon a similar pTinciple, when a sale under a mortgage
1 Waterman v. Seeley, 28 Mich. 77.
2 Livingston v. Livingston, 2 Johns. Ch. 537, 540; Cotton v. Wood,
25 Iowa, 43.
3 Campbell v. Campbell, 21 Mich. 438.
* Wilson V. Egglcston, 27 Mich. 257.
6 Guinn v. Locke. 1 Head, 110.
§2.J TRUSTS BY IMPLICATION OF LAW. 59
or deed of trust made to secure paj'ment of a debt is
effected by the creditor's lulling the debtor into a feeling
of securit}' through a promise not to sell without first mak-
ing demand of paj-ment, equity will set aside the sale as
ag-ainst the creditor and purchasers with notice of such
promise, and permit the debtor to redeem even in those
cases for which the statute law makes no pro\nsion of
redemption.^ Indeed, it appears to be a general principle,
that where the person setting up the trust akeady had
a legal or equitable interest in the property purchased by
the alleged trustee, the agreement of the latter to act for
the former in the premises will raise the trust, though the
latter furnish the entire purchase price.
Such a case as this stands upon as just a footing as the
case of a purchase by an agent, of propert}' for himself out
of money furnished by the principal, when the principal
had no previous interest in the property. In either case,
a different rule would permit the agent to make use of his
employer's propert}', in order to get, dishonestly, a title to
property with little or no outlay of his own. In the one
case, the agent would be permitted to seize upon and
retain to his own use the property of his principal (that is,
his prior interest in the estate bought) , against the latter's
will : in the other case, he merely converts the principal's
money to his own use. Upon such grounds, it is held that
if a purchaser under a foreclosure of mortgage undertake
to purchase for the benefit of the mortgagor, and, purchas-
ing, thus acquire the title, he will be deemed trustee of the
mortgagor ; and on tender by the latter to him of the pur-
chase-price paid, with interest, he will be compelled to con-
ve}^ the property to him for whom he undertook to purchase,
though the undertaking was oral.^
1 Clarkson v. Creely, 40 Mo. 114 ; a. c. 35 Mo*. 95.
2 Ryan ;;. Dox, 34 N. Y. 307; Levy v. Brush, 45 N. Y. 589, 596;
Glass V. Hulbert, 102 Mass. 24, 39.
60 PROPERTY IN EQUITY. IChaf. IV
It has, however, been laid down that if one of two
contracting parties insist upon a certain ytipulation, and
desire it to be made part of the written agreement, and
the other, hj his promise to conform to it as if inserted in
tlie written agreement, prevent its insertion, this alone is
a fraud, and chancerj" will enforce the agreement as if the
stipulation had been inserted.^ On the other hand, it had
been held by the court of the same State in which this
doctrine is enunciated that, where there is nothing more in
the transaction than is implied from the violation of a
parol agreement, equity would not decree the purchaser a
trustee. =^ It is said in explanation of the decisions to this
effect that there was wanting from them the element of a
promise at the time to execute a declaration in writing,
upon the faith of which the main promise was made.^
The doctrine of these authorities, then, appears to be
that the breach of a parol promise must be made contem-
poraneously with the execution of a contract of which it is
intended to be a part, and to which it is a principal induce-
ment, in order to constitute such a fraud as will justify a
court of equity in decreeing performance of such an agree-
ment, but that it is sufficient to raise the trust that there
is a breach of the oral agreement thus" made. That is,
according to this doctrine, a mere breach of an oral agree-
ment concerning the purchase of land between the buyer
and the party in whose name the title is to be taken is
fraudulent in the view of a court of equity, and relief upon
the terms of the agreement will be granted.
This doctrine, however, is not generally accepted. The
more general, and, it is apprehended, the better rule is
1 Overton v. Tracey, 14 Serg. & R. 311, 326; Oliver v. Oliver, 4
Rawle, 141 ; Wolford r. Horrington, 74 Penn. St. 311.
2 Jackman v. Ringland, 4 Watts & S. 149; Barret v. Doughertj
32 Penn. St. 371.
3 Wolford V. Ilerrington, supra.
§2.] TRUSTS BY IMPLICATION OF LAW. 61
that where the party claiming the existence of a trust had
no interest, cognizable at law or in equit}', either in the
property purchased or in the funds with which it was pur-
chased, the mere breach of a verbal agreement cannot be
regarded as a fraud such as will take the case out of the
Statute of Frauds.'^
If the rule were otherwise, and were then carried to its
legitimate result, one of the consequences would be that
the salutary rule against the admission of parol evidence
to vary the terms of a written contract would, in gi'eat
measure, be overturned. Fraud in one of the parties to a
contract is everywhere recognized as ground for opening
the terms of a written agreement to parol proof, even
when not wholly defeating the existence or binding force
of the agreement. But, under the above rule, it would
only be necessary for one of the parties to prove the exist-
ence of a contemporaneous parol agreement which was one
of the inducements to the written contract, and then the
breach of such parol agreement, to make out a case of f\'aud
sufficient to overturn or modify" the written instrument.
It is true that where a gift or bequest to a volunteer has
been procured through a promise to hold the premises in
whole or in part for a third person, whom the giver desires
to benefit, a trust will arise if the promise be not fulfilled. ^
But this rule rests upon a different gi'ound. The grantee
or devisee is charged with the trust, not by reason merely
of the oral promise which he made, but because, by means
of. such promise, he has induced the gift or transfer ol
property to himself, which otherwise would not have been
made.
1 Merritt v. Brown, 6 C. E. Green, 401 ; Marshman v. Conklin, lb
546 ; Eogers v. Simmons, 55 111. 76; Blodgctt v. Ilildreth, 103 Mass.
484.
2 Russell V. Jackson, 10 Hare, 204 ; Jones v. Badley, Law Rep. 3
Ch. 362; McCormick v. Grogan, Law Rep. 4 H. L. 82 ; Glass v. Hul
bert. 102 Mass. 24 ; Hooker v. Axf ord, 33 Mich. 453.
62 PEOPEKTY IN EQUITY. [Chap. IV
Again, if a person be entitled to receive a conveyance
of land, and employ another to obtain it for him, and such
other take it in his own name, that is sufficient to raise a
trust. ^ But the true ground upon which this rule rests
appears to be that the cestui que trust had an equitable
right to the property before the trustee obtained the deed.
He had performed all that was necessary to entitle him to
a deed, and could have compelled its execution.
The authorities relating to secret trusts in favor of char-
ities have established the rule that if an absolute estate be
devised, but upon a secret trust assented to by the devisee,
either expresslj' or impliedly, by knowledge and silence
before the death of the testator, a court of equity will
fasten a trust upon him upon the ground of^fraud. But if
the devisee have no part in the devise, and no knowledge
of it until after the death of the testator, there is no
ground upon which equity- can fasten a trust upon him,
even though, after the intention of the testator comes to
his knowledge, he should express a determination to carry
it out.'^
It has also been held by most of the courts of this
country that parol evidence is admissible to show that an
absolute conveyance was in realit}' intended as a security
for a sum of mone}" loaned, or other obligation incurred
or due at the time the deed was executed ; and that equity
will compel the grantee to respect this intention, and to
reconvey the premises upon tender of the amount of the
d<!bt.* And it is immaterial by some of the authorities
whether the omission to have the deed show the true
nature of the grantee's right was by fraud on his part, or
was l)y design on the part of the grantor, upon confidence
1 Smith 0. "Wright, 49 HI. 403.
2 Schutz's Appeal, 80 Penn. St. .396.
8 Hodges V. Tenn. Ins. Co., 8 N. Y. 416; Despard v. Walbridge,
15 N. Y. 374; 4 Kent, Comm. 143.
§2.] TRUSTS BY IMPLICATION OF LAW. 68
reposed in the grantee's fidelity.^ But this latter posiiion
has not been accepted throughout the countr}'. It is held
in several of the States that in order to convert a pur-
chaser who takes a deed absolute upon its face into a
trustee for another, and to convert the conveyance into
a mere security for mone}' loaned or the hke, it must be
alleged and proved that the clause of redemption was
omitted b}^ reason of ignorance, mistake, fraud, or undue
advantage.^
The trust will follow the estate into the hands of all
purchasers with notice, and of volunteers or persons taking
by gift or descent from the trustees.^ For example : A
father makes a gift to his daughter, and afterwards seeks
to defeat the same, and to this end has his propert}^ levied
upon and sold for his own debts. The property is bought
in by his agent, and, under the father's direction, is con-
vej'ed to other children of his. Such children are deemed
trustees for the daughter.*
1 Taylor v. Luther, 2 Sum. 228.
2 Glisson V. Hill, 2 Jones, Eq. 256; Brothers v. Harrill, lb. 209,
Cook V. Gudger, lb. 172; Sowell v. Barrett, Busb. Eq. 50; Thomas
V. McCormack, 9 Dana, 108.
3 Brown v. Dwelley, 45 Maine, 52 ; Uzzle v. Wood, 1 Jones, Eq.
226.
* Uzzle V. Wood, mpra.
64 PROPERTY IN EQUITY. [Chai-. V
CHAPTER V.
MORTGAGES.
§ ] . Of Mortgages Proper.
A MORTGAGE proper is defined to be a debt b}' specialt}',
secured b}" a pledge of lands or goods, of which the legal
ownership is vested in the creditor, but of which in equity
the debtor and those claiming under him remain the actual
owners, until debarred by law.^
By the old common law, as it prevailed from the four-
teenth centur}-, if not from an earher time, a mortgage of
land was strictl}* an estate upon condition. A feoffment
(that is, a cdnvej'ance in fee by liver}- of seisin) was made
to the creditor, with a condition in the deed of feoffment,
if a deed thereof were executed, or in a deed of defeasance
executed at the same time," by which it was provided that,
on payment by the mortgagor (feoffor) , of a given sum at
a time and place certain, it should be lawful for him to re-
enter. Immediately on the liver}', the mortgagee (feoffee)
became the legal owner of the land, and in him the legal
estate vested, subject to the condition. If the condition
was performed, the mortgagor re-entered and was in of his
old estate, paramount to all charges and incumbrances of
the feoffee. If the condition was broken, the mortgagee's
estate became absolute and indefeasible. But until breach
of condition, possession of the land was not in general
given, — a proviso being commonly inserted in the deed
1 Coote, Mortgage, 1.
2 A feoffment could not be defeated by matter subsequent.
5 1.] MORTGAGES. 65
of feofl'ment or defeasance that, until breach of condition,
the mortgagor might hold the estate.^
In the view of the Court of Chancer}', this absolute for-
feiture of the estate of the debtor was regarded as great
injustice, though it was founded upon agreement of the
parties ; and that coui't earl}' attempted to moderate the
severit}' with which the common law followed the breach
of condition. Equity, did not, indeed, make the attempt
to alter the legal effect of the forfeiture as treated in the
courts of law. It could not, if it would, have declared
that the conveyance should, notwithstanding the forfeiture
committed, cease on pa^'ment of the debt at any time be-
fore foreclosure. But leaving the forfeiture to its legal
consequences, equit}' operated upon the conscience of the
mortgagee, and declared it unreasonable that he should
retain for his own benefit what was intended as a mere
pledge. The Court of Chancery accordingly adjudged that
the breach of the condition was in the nature of a penalty,
which deserved to be relieved against, and that the mort-
gagor had a right in equit}' and good conscience to redeem
on payment of the principal, interest, and costs, notwith-
standing the forfeiture at law.^
Against this doctrine the common-law judges set them-
selves, but without success. The Court of Chancery
succeeded in establishing its jurisdiction to modif}^ the
harshness of the rule at law, and has retained that juris-
diction to this day. The result has been to turn over to the
courts of equity nearl}' all questions that arise on the law of
mortgage.^
No sooner, however, was this equitable principle estab-
lished than the cupidity of creditors induced them to at-
tempt its evasion b}' exacting an engagement to forego the
privilege of redeeming given in equity ; but this device
was met by a decision in chancery that the debtor cculd
1 Coote. Mortgage, 11, 12. « lb. 19, 20. » lb.
5
6l) PROPERTY IN EQUITY. [Chap. V.
not, even by the most solemn engagement, preclude him-
self from the right to redeem. The Court of Chancery,
disregarding the defences by which the creditor attempted
to protect his legal position, laid down, as a plain and un-
deviating principle, that it was inequitable that the creditor
should obtain an undue advantage through the necessities
of his debtor. It established as principles not to be de-
parted from that " once a mortgage, always a mortgage ; "
that an estate could not at one time be a mortgage, and at
another time cease to be so by one and the same deed ;
that a mortgage could no more be irredeemable than a dis-
tress could be irrepleviable ; and that, whatever clause or
covenant there might be in a conveyance, yet if, upon the
whole, it appear to have been the intention of the parties
til at such conveyance should be a mortgage, equity would
alwa3'S hold it to be redeemable.^
Acting on these principles, it was decided that no con-
dition could- be valid restricting the right of redemption
within a given or limited, or confining it to a particular,
line or class of heirs. ^ Nor would the omission of a bond
or covenant, creating a personal obligation upon the mort-
gagor, make any difference, for every loan implied a debt ;
and the right to redeem proceeded, and still proceeds, upon
the principle that the creditor is entitled to nothing mote
than his principal, interest, and costs. The bond or cove-
nant may tend to explain a transaction, and show the in-
tention of the parties in a doubtful case ; but neither of
them is necessar}' to a mortgage.^ And, in the absence of
an}' thing in the deed to indicate that it was intended as a
mortgage security, parol evidence to prove it such is ad-
missible.
There is, however, even in equity, a difference between
a mortgage and a sale with the right of repurchase, in re-
gard to redemption. In the case of a sale upon liberty to
1 Coote. 21. 22. ^ n^. 3 j^. 24,
§ 1.] MORTGAGES. 67
repurchase, the time limited ought to be precisely observed,
othermse the grantor loses the right of redemption. Ie
such a case, equit}' cannot afford relief. The leading dis-
tinction between the two kinds of conveyances consists in
this, that a mortgage-deed is a security for a debt pre-
viously" existing or then created, as in the case of a present
loan of money ; while a convej'ance with right of repur-
chase is made upon a sale or exchange. In the one case,
the grantor is the debtor of the grantee ; in the otuer, he
is not.
It maj" often be difficult to establish the precise nature of
the transaction ; but evidence is alwaj's admissible for that
purpose, and the result will finally turn upon the question
whether in reality a loan was made b}' the creditor or a
sale was made to him. If the money paid b}' the grantee
was grossly inadequate for the absolute purchase of the
estate ; if the grantee was not let into possession ; if he
accounted for the rents to the grantor, and only retained
an amount equal to the interest, — these circumstances will
be considered as evidence showing, with more or less force,
that the conve^'ance was intended as a mortgage.^
The general rule, as has been stated, is that nothing can
bar the mortgagor or his heirs and assigns from the right
in equitj' to redeem. This, however, is to be understood
of cases not controlled by statutory provision. The right
of redemption has been generally, if not universally, regu-
lated by statute in this country, — a specific time being
named within which the right must be exercised, if at all.
No statute, it is believed, has ever cut off the right of re-
demption altogether, or limited the right, except in respect
of time.
There are cases of mortgage, however, in which courts
of equity have themselves admitted a limitation upon the
1 Bi ioke V. Garrod, 2 DeG, & J. 62 ; Williams v. Owen, 5 Mylne &
C. 303 ; Snell, Equity, 296 (4th ed.).
68 PEOPEETY IN EQUITY. [Chap. V
general rule , the only object of the allowing a right to
redeem being to protect the mortgagor when his necessities
ma}' have placed him at the mercj' of the mortgagee. The
rule ceases of application where there is evidence in the
nature of the transaction that the mortgagor intended to
provide for some branch of his family. In such a case,
the mortgagor may restrict the equity of redemption (as
this right to redeem is commonly called), probabl}' as he
will. He can, at all events, cut off the equity from his heir.
For example : A man mortgages lauds to his brother for full
value, intending by the deed to give the property to him,
and confines the right to redeem to himself. The mort-
gagor is a bachelor, and has inserted the clause of redemp-
tion merel}' to save the right in case he should marry and
have issue. The mortgagor dies without redeeming, and
the heir seeks to exercise the right. The court will refuse
to allow him to do so.^
A subsequent release of the equity of redemption may
he made to the mortgagee. The transaction will, how-
ever, be closely scrutinized, so as to prevent anj- oppres-
sion of the debtor. A_ release to the mortgagee will not
be inferred from equivocal circumstances and loose expres-
sions. It must appear by a writing importing in terms a
transfer of the mortgagor's interest, or such facts must be
shown as will operate to estop him from asserting any
interest in the premises. The release must also be for an
adequate consideration ; that is to say, it must be for a
consideration which would be deemed reasonable if the
transaction were between other parties dealing in similar
property in its vicinit}'. Any marked undervaluation of
the property in the price paid will vitiate the proceeding. ^
Generally speaking, when a mortgagee purchases tlie
equit}' of redemption, his mortgage interest is merged and
1 Newcomb v. Bonliam, Coote, Mortgages, 35.
2 Peugh V. Davis, 90 U. S. 332.
§ 1.] MORTGAGES. 69
extinguished ; the two interests coalescing and forming
one perfect estate. But this is not alwa^'s true. Merger
is not favored in equit}', and is never deemed to have
occurred, unless for special reasons and to promote the
intention of the parties.^ Wi.ere the equities of the parties
are better subserved by keeping the mortgage alive, and
no injury is thereby done, the mortgage is deemed to be
still in force. ^
In accordance with the rule in equity' that the mortgagor
is treated as the real owner of the estate, and the mort-
gagee as only a quasi pledgee, it should follow that the
mortgagor has in equity an actual estate as well as a right ;
and this is, in fact, the doctrine of the courts of chancery.
An equit}' of redemption is in equity the old estate in the
land without change of ownership. It is a title inherent
in the land, and hence binding upon all persons, except
bona fide purchasers for value ; and it descends to the
heir, in accordance with the law governing real propert}'
generally.^ It may be devised, settled, or conveyed in
the same manner as other estates are dealt with ; or it
may be transferred to a new claimant by mere length of
enjo3Tnent.^ And it follows that the parties making title
by these or other legal means to the mortgagor's estate
have the same right that he had to sue for redemption.
If there be several persons, all claiming under the mort-
gagor, they will be entitled to redeem successively, accord-
ing to their priorities.®
The effect of redeeming a mortgage by a subsequent
incumbrancer should be noticed. The exercise of the right
to redeem a prior mortgage by a subsequent incumbrancer
is the exercise of a legal right ; and as against the mort-
gagor and all holding under him and subsequent to the partj
who redeems, the redemption does not extinguish the re-
1 Clos V. Boppe, 23 N J. Eq. 270. 2 ib
« Coote, 42, 4(j. < Adams, Equitv, 113. - Ih.
70 PROPERTY IN EQUITY. [Chap. V
deemed mortgage : that remains still in force. The part;y
redeeming does not pay the mone}', as does the mortgagor,
to remove the incumbrance from the land, but only to sus-
pend its operation as against himself, and thus to prevent
its rendering his own useless.^
The mortgagor cannot, then, in such a case, say to the
person who has redeemed the mortgage, " You have paid
my debt so far as the mortgage is concerned ; you have
redeemed an incumbrance from mj' land ; by so doing
your claim becomes a mere personal demand against me, —
it does not exist against my land." On the contrary, it does
remain a lien upon the land till paid by the mortgagor, or
by him who, as the last owner of an interest in the equity
of redemption, stands in the place' of the mortgagor.^
Upon a like principle if a first mortgagee convert his
fii'st mortgage into a rent charge for ever, wath power of
distress and entr}', he has not thereby deprived himself
of the security afforded him by the mortgage, as against a
second mortgagee.-' Still, there may be cases where, by
reason of carelessness on the part of a conve3'ancer, a first
incumbrancer, in changing the situation in his own inter-
est, ma}' have let in before him a later incumbrancer.*
One of the results of the rule which treats the equity of
redemption as a continuance of the old estate is that, so
long as the mortgagor is left in possession, he is consid-
ered to hold as owner. If there be an express agreement
that a mortgagor shall have possession for a specified
period, he is a termor at law for that period ; if thei'e be
no express agreement, or if he continue to hold after the
end of the specified period, he is at law merely an occupant
b}' pel-mission, and may be ejected at any moment by the
1 Chander v. Dyer, 37 Vt. 345, 354, Aklis, J. '^ lb.
3 Stevens v. Mid-Hants Ry. Co., Law Rep. 8 Ch. 1004.
* See lb., referring to several cases of this sort, the doctrine of
which was, however, somewhat doubtful.
§ 1.1 MORTGAGES. 71
mortgagee. So long, however, as the mortgagee does not
exert his legal right, the mortgagor is considered in equity
to hold as owner, and is entitled to the rents in that char-
acter. He cannot be made liable for bj^-gone rents. ^ But
if the security be insufficient, he ma}- be restrained, at the
instance of the mortgagee, from cutting timber on the
mortgaged premises.^
If the possession of the mortgagor continue for twenty
years, the mortgagee ma}', under the circumstances, be
altogether barred of his right. The effect of such posses-
sion at common law, without demand of possession by the
mortgagee, or receipt or demand of principal or interest,
was to raise a presumption that the debt was satisfied.^
If the mortgagee take possession of the estate, he is
treated in equit}' as holding in respect of his security, and
must deal with the estate in conformity- with that char-
acter. He is bound to keep the premises in proper repair ;
and he is bound to account for all the moneys which he in
fact has received, or which, without wilful default or neg-
ligence, he might have received, though he is not bound to
make the most of the propert}-. He is entitled to receive any
incidental benefit, provided it be of a pecuniary nature, and
applicable in liquidation of the debt ; if it be not of that
nature, the mortgagor must have it as the real owner. ^
A mortgagee in possession assumes in fact the duty of
treating the property as a provident owner would treat it.^
He must attend to the interests of the mortgagor, and
exercise reasonable diligence in making profits out of the
estate ; for by these the interest-money is kept down,^ and
then the principal, if the profits exceed the interest.'^ The
1 Adams, Equity, 114. 2 ib. ; King v. Smith, 2 Hare, 239.
3 Adams, ut supra. * lb.
5 ShaefEer v. Chambers, 2 Halst. Ch. 548.
6 Saunders v. Frost, 5 Pick. 260.
1 Mahone v. Williams, 39 Ala. 202.
72 PROPERTY IN EQUITY. [Chap. V
mortgagee of a farm, for instance, is not at liberty to let
it lie untilled, though the mortgagor may not have pro-
vided a tenant. And he should not only see that the land
is tilled, but that good husbandr^-^ is practised ; and he will
be charged for the profits which good husbandr}' woald
have derived from it.-^ If, however, it become unprofit-
able from causes beyond his control, he cannot be charged
bej'ond its actual return.
The estate of the mortgagee being treated in equit}' as
a mere security for the debt, it follows the nature of the
debt in the course of descent. That is to say, though a
mortgage be made in fee so that the legal estate must,
in accordance with general principles of law, descend to
the heir, still in equity' the interest is deemed a chattel,
and belongs to the personal representative.^ It is only
upon this ground that the established rule can proceed,
that an assignment of the debt b}- the mortgagee carries
with it in equit}', as an incident, the interest of the mort-
gagee in the mortgaged property, in the absence of a
stipulation to the contrar}'.*
It is not necessary to the validit}' of a mortgage that it
should trul}' state the debt it is intended to secure ; but it
will stand as a security for the real, equitable claims of
the mortgagees, whether the}' existed at the date of the
mortgage or arose afterwards upon the faith of the mort-
gage, before notice of the defendant's equit}'.*
§ 2. Of IRREGm^AR OR INCOMPLETE MORTGAGES AND LlENS.
In addition to regular or perfect mortgages, such as
those heretofore under consideration, which convey the
legal estate to the mortgagee, and specif}' a day of for-
^ SliaeiTcr v. Chambers, supra. '^ 2 Story, Equity, § 1016.
8 lb. ; Wheeler v. Wheeler, 9 Cbwen, 34 ; Wiiittemore v. Gibbs,
24 N. H. 48-1 ; Hyman v. Devereux, 63 N. C. 624.
* Rhirras v. Caig, 7 Cranch, 34 ; Robinson v. Williams. 22 N. Y. 380
§2.1 MORTGAGES. 73
feiture at law, there are other secni-rties of a similar natiire-
but defective in one or both of these particulars.
Mortgages of a trust or equit}' of redemption, and equi-
table mortgages bj^ imperfect conveyance, or by a contract
lo convey, are of this nature. In the case of a mortgage
of a trust or of an equity of redemption, the legal estate
is outstanding in the trustee or prior mortgagee, and
cannot be transferred to the new incumbrancer wilhout
the act of such legal owner. The second mortgagee is
disabled, therefore, from obtaining possession ; but in
consequence of this disabilitj' he is entitled, in certain
cases, to have a receiver appointed in equity, by whom
thi rents of the estate ma}- be collected and applied in
satio ^action of his mortgage. A receiver, however, will
not be appointed, if a prior legal incumbrancer is in
possession, unless the applicant will paj^ off his claim. If
the prior incumbrancer be not in possession, the appoint-
ment ma}^ be made, without prejudice to his right to apply
for possession upon arrearage of interest by the debtor.^
Mortgages effected by imperfect conveyances, or by
uncompleted contracts to convey, entitle the mortgagee
to claim specific performance, and sometimes the execu-
tion of a legal mortgage. In the mean time, thej^ stand
upon the same footing as mortgages of a trust or of an
equity of redemption, entitling the equitable mortgagee to
have a receiver of the rents appointed.^ It has often been
decided in this country, that an}' agreement in writing
to give a mortgage, or any imperfect attempt to create a
mortgage, or to appropriate specific property in discharge
of a particular debt, will be treated in equity as a mort-
gage, or a specific lien having precedence over subsequent
judgment creditors.^
> 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<el
of laud, and, by a mistake of both parties, has conveyed
another parcel to the grantee, equity will reform the deed
according to the intention of the parties, and, by decree,
protect the interests of such persons as may legally
claim to hold the correct premises through and under the
grantee. Such a result will be accomplished by a decree
reforming the original deed, and requiring the grantor to
convey anew to the grantee, and through him to any per-,
sons legally holding the premises under the grantee ; the
grantee releasing to the grantor the premises convej-ed by
mistake.^
Where an instrument has been executed to carry out a
pre-existing trust, and it has, whether by accident, mistake,
or intention, been executed in a manner inconsistent with
the requkements of the trust, equity will reform it in such
a way as to carr^' into effect the pm-pose of the person who
created the trust. ^
In like manner where an instrument purports to carry
into execution an agreement which it recites, and in its
terms fails to do so, equity will rectify' the discrepancy.^
So, too, where there is a clear agreement for the execution
of an instrument in a particular form, and the instrument
is drawn in another form materially different, equity
will give relief upon the footing of the instrument agreed
upon.*
Another instance of the exercise of equity' jurisdiction
1 Burr V. Hutchinson, 61 Maine, 514.
2 Adams, Equity, 169. 3 ib.
* CoUett r. Morrison, 9 Hare, 162 ; Firemen's Ins. Co. v. Powell,
13 B. Mon. 311. It should be remarked that, though the rule by
which parol evidence is held inadmissible to vary the terms of a
written contract is a rule of equity as well as of law, it has no appli-
cation to proceedings for the reform of instruments. The rule ap-
plies only to actions brought upon written contracts to enforce them
hi their existing form
174 GROUNDS OF BELIEF IN EQUITY. [Cuap. X.
for the alteration of an instrument occurs where an obliga-
tion for a joint and several debt has been framed so as to
be payable as a joint obligation only. Indeed, it was for-
merly considered that, without any evidence to show that
tlie obhgation had been executed in mistake, equity would
presume that a several as well as joint undertaking was in-
tended ; but this doctrine has well been doubted.'' Though
it ma}' be 'probable that there was a mistake, that proba-
bility should hardly be sufficient alone to change the fonn
of a solemn instrument, especially if contrary to the asser-
tions of a part}' to it.
The principle on which courts of equity rectif}- an
instrument, so as to enlarge its operation, or to convey or
enforce rights not found in the writing itself, and make it
conform to the agreement as proved b}' parol evidence', on
the gi'ound of an omission, by mutual mistake, in the
reduction of the agreement to writing, is that in equit}' the
previous oral agreement is held to subsist as a binding
contract, notwithstanding the attempt to put it in writing ;
and upon clear proof of its tenns the court compels the in-
corporation of the omitted clause, or the modification of
that which is inserted, so that the whole agreement, as
actuallj' intended to be made, shall be truly expressed and
executed."^
A common case for the interference of equit}^ arises
where releases or compromises have been made affecting
rii^hts the existence of which was unknown or the character
of which was mistaken by the part}' executing the release
or compromise. There are three forms in which such a case
may appear: (1) where the release or compromise refers
to other matters, and the facts originating the particular
right are unknown lo the parties, or are mistaken by them ;
1 Jones V. Beach, 2 ])eG., M. & G. 886.
2 Glass V. Hulbert, 102 Mass. 24; Hunt v. Rousmaniere, 1 Pet. 1
Oliver V. Mutual Com. Lis Co., 2 Curtis, C. C. 277.
Chap X.] ACCIDENT AND MISTAKE. 175
(2) wliere there is uucertaint}' either as to the law or
the facts within the mind of the parties, and they intend to
compromise their rights ; and (3) where the facts are
known, but there is mistake as to the law.
Equity- will grant relief in the first class of cases except
in matters of family settlements. These, it is said, may
be enforced, if honest!}' made, though the}' were not
intended as a compromise of doubts, and have proceeded
upon a mistake or ignorance shared by all the parties as
to the nature of their several rights.^
Equit}' will not relieve against releases and compromises
of the second class, for it was the ver}' intention of the
parties to alia}' frnther dispute concerning the doubtful
matters ; and this intention is one to be respected and
encouraged. The mere fact that one of the parties mis-
calculated his chances will give him no standing in equity
or at law.^
As to the jurisdiction of equit}' in the third class of cases,
there has been a conflict of authorit}'. It is one of the
commonest statements that mistake of law is of no avail. ^
And it is not to be doubted that though the most usual,
if not the most appropriate, place for the use of this doc-
trine is found in the criminal law, it has often been applied
hi civil cases. Thus, it is laid down that money paid with
knowledge of all the facts cannot be recovered back on the
ground that it was paid in mistake of the law.'*
It is equally clear that in some cases equit}' will gran>:
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 In<iuiry, 180-188.
purchasers with notice of fraud or other infirmity, 180.
two kinds of notice, actual and constructive, 180.
tlie general rule as to constructive notice, 180.
purchasers when affected with such notice, 181.
INDEX. 835
NOTICE, — continued.
notice of unrecorded lien, 181.
designedly abstaining from knowledge of facts, 181.
statutory notice, 181.
advertisements in newspapers, 182.
definite facts necessary to establish notice, 182.
rumors, 182.
general reputation, 182.
notice may come from a stranger, 182, 183.
w'hen notice to agent or attorney not notice to principal or
client, 183, 18i.
notice by possession, 184-186.
notice of tenancy, 184.
possession must be open and exclusive, 184, 185.
possession by husband and wife of wife's land, 185.
vendor remaining in possession, 185.
adverse possession, 185.
possession by tenants in common, 186.
lands held by partners, 186.
want of possession by one who ought to have it, 187.
purchase from executor or trustee at inadequate price, 187.
purchase from executor of bonds payable to testator, 187.
note payable to guardian as such, 188.
paper of firm taken in payment of private debt, 188
Lis pendens, 188-190.
general rule as to, 188, 189.
limitation of the rule, 189.
ground of the doctrine, 189.
the doctrine relates to facts of record at the time ot the
action in question, 189, 190.
service of subpoena or summons not lis pendens, 190.
doctrine not to be made an instrument of injustice, 190
Registration of Instruments, 190-193.
general rule as to notice by, 190.
sometimes carried to an extreme, 190, 191.
index of the registry, 191.
deeds defectively acknowledged, 191.
facts dehors the deed, 191.
to whom such notice extends, 191.
336 INDEX.
NOTICE, — continued.
limitation of the doctrine in cases of misrepresentation, 191,
192.
registration of instrument in fraud, 192.
kind of notice necessary, 192.
pui'chaser without notice, conveyance by, to another having
notice. 192, 193.
NUISANCE,
when enjoined, 300.
public nuisances, 300.
private nuisances, 300, 301.
most common cases of, 301.
principle of granting injunction in such cases, 301, 302.
what the court takes into consideration, 302.
obstructions in the highway, 302, 303.
trespasses, 303.
0.
OXFORD, PROVISIONS OF,
effect of on royal prerogative, 5, 6.
P.
PARENT AND CHILD, • "
gifts by child to parent, 155.
gifts by pareiit to child, 156, 157.
special trust reposed in child, 157.
PARTNERSHIP,
fraud between and by partners, 109-114.
specific performance as to agreements to form partnership,
198.
conversion arising on dissolution of, 245.
account in partnership dealings, 269-277.
'receivers of, 276, 277.
the court looks to a dissolution in granting a receiver, 277-
PATENTS AND COPYRIGHTS,
injunction as to infringements of, 303.
PEACE, BILLS OF,
injunction as to, 311, 312.
INDEX. 387
PENALTIES AND FOr.FEITURES,
injunction as to an enforcement of, 308, 309.
PHYSICIAN AND PATIENT,
gifts by latter to former, 157, 158.
POWERS,
fi-audon, 103-107.
{See Fraud, Actual.)
PRECATORY ^YORDS,
when they create a trust, 15, 21-23.
PRINCIPAL AND AGENT,
account against agent, 268, 269.
transactions between, 146-149.
{See Fraud, Presumptive.)
PROBATE SUIT,
receiver pending, 276.
PROVISIONS OF OXFORD,
effect of on King's prerogative, 5, 6.
R.
recf:ivers,
who is a receiver, and of what, 272.
what bound to do, 272.
an officer of the court, 272.
appointment matter of discretion, 272, 273.
frequently appointed over equitable estates, 273.
general rule as to such cases, 273.
rights of prior pai'ties not disturbed, 273, 274.
such may object to receiver, how, 274.
receiver seldom granted, where prior incumbrancer is in
possession, 274.
out he must have possession by virtue of his incumbrance,
274.
receivers in mortgage cases allowed with caution, 274, 275.
receiver appointed where the legal title is itself in dispute,
275.
danger to the fund in question, 275, 276.
poverty of executor ground for receiver, when, 276.
misconduct or insolvency of trustee, 276.
receiver pending probate suit, 276.
22
338 INDEX.
RECEIVERS, — continued.
in partnership cases, 276, 277.
the court looks to a dissolution in such cases, 277.
REDEMPTION,
(See Mortgages.)
REGISTRATION,
of what it constitutes notice, 190-193.
RELEASES AND COMPROMISES,
effected in mistake, 174, 175.
RESCISSION AND CANCELLATION,
Nature and Grounds of Remedy of Rescission, 213-219.
general principle of rescission, 213.
commonly sought for fraud, 213.
damage, 213, 214.
notice of repudiation, 214.
defective title, 214.
offer to make good title, 214.
misrepresentation, when ground of rescission, 214, 215.
no eviction or warranty necessary, 215.
fraud in kind of payment, 215.
goods purchased by fraud, 216.
levy upon, 216.
equity may set aside judicial sale, 216, 217.
when jurisdiction refused, 217.
consequences of surreptitious dealing, 217, 218.
right to rescind determinable by facts at time of the tans
action, 218.
vague charges of fraud, 218.
inadequacy and suspicions of fraud, 218.
damages allowed, when, 218, 219.
Tender of Perforinance and Return of Consideration, 219-230
general principle of tender, 219, 220.
married women must offer to return consideration, 220.
infants, also, 220.
every thing of value to be returned, 220.
rescission of subscription to stock, 221.
perishable property, 221.
securities become barred by time, 221.
putting opposite parties in statu quo, 222, 223.
INDEX. 339
RESCISSION AND CAXCELLATION, — coniinuerf.
indivisible contracts, 223, 224.
rescission in cases of sales of personalty, 225.
in cases of realty, 225.
cases in, where tender is unnecessary, 226, 227.
return of notes, 227, 228.
distinction between cases of actual and of constructive
fraud as to return of consideration, 228-230.
fraudulent payments, 230.
Waiver of Right to rescind, 230-234.
what necessary to constitute a waiver, 230, 231.
knowledge of facts and law, 231.
confirmations, 232.
only one election, 233.
effect of suing in trover, 233, 234.
s.
SAILORS,
protection of in equity, 161.
SALES,
equity will set aside, when, 213-219.
injunctions against, 305.
SET-OFF,
injunction in cases of, 294, 295.
SPECIFIC PERFORMAXCE,
Nature and Application of Remedy, 194-209.
frequent inadequacy of relief by compensation, 194.
original mode of relief, 194.
specific performance where damages could not be recovered,
194.
indefinite agreements, 195.
in cases of realty, 195.
in cases of personalty, 195, 196.
application addressed to discretion of the court, 196, 197.
contract must be certain, 197.
defendant not compelled to accept doubtful title, 197.
contracts for the performance of services, 197, 198.
agreements to form partnerships, 198.
340 INDEX.
SPECIFIC PERFORMANCE, — continued.
covenants for lease or renewal of lease, 19S.
contract to insure against fire, 198.
sale of good-will, 198.
building contracts, 198.
executory contract for sale of land, 1^9.
the case must be free from deception, 199.
imposition upon weak-minded or illiterate persons, 139,
200.
inadequacy of consideration, 200.
hard or unreasonable agreements, 200.
family arrangements, 201.
property received by will on promise to make certain dispo-
sitions, 201.
innocent lessees, 201, 202.
acts of remainderman, 202.
misrepresentation by vendor of land, made in ignorance cf
fact, 202, 203.
agreements in fraud of the law or policy of the land, 203.
cases of plain fraud, 203.
misconduct of agent, 203, 204.
agi'eement to grant lease ajtd breach thereof by lessee, 204.
mortgages of after-acquired property, 205.
compensation in lieu of performance, 205, 206.
covenant for indemnity not decreed, when, 205, 206.
impossibility of specific performance, 206.
time as a question of the essence of contracts, 207.
agreements for arbitration, 207, 208.
where all matters have not been passed upon, 208.
contracts for sale of lands in foreign jurisdiction, 208, 209.
Part Performance, 209-212,
Statute of Frauds, 209.
what deemed pai-t performance, 209, 210.
must be substantial, 210.
payments of money, 210, 211.
what things specially required to constitute, 211.
rule as to further stated, 212.
STOCK,
mj unction against alienation of, 304.
DJDEX. 341
SUBROGATIOX,
meaning of the term, 281 .
general doctrine of as to sureties, 281.
does not depend on contract, 281.
privity not necessary to, 281.
surety may require creditor to sue principal debtor, 282.
surety must pay the entire debt, 282.
payment of specialty by surety, 282, 283.
how to proceed according to some authorities, 283.
payment of judgment by surety, 283, 281.
after-acquired securities, 281.
to what present securities subrogation applies, 281, 285.
when subrogation allowed as of course, 285.
payment of another's debt in accordance with an agreement,
285, 286.
SURETIES,
(See Contribution and Exoneration; Subrogation.)
SURRENDER OF INSTRUMENTS,
(See Cancellation and Surrender.)
SURVIVORSHIP,
on death of one of several trustees, 35, 36.
T.
TACKING,
meaning of the term, 278.
doctrine of regretted, 278.
generally repudiated in this country, 279.
doctrine not extended beyond purchasers, 279.
illustrations of the doctrine, 279.
securities must be held in the same right, 279, 280.
TENDER,
(See Rescission and Cancellation.)
TRADE-MARKS,
injunctions for violation of, 810.
right of trade-mark defined, 310.
false representations by party claiming violation of, 310, 311
fraud in defendant unnecessary to injunction, 311.
geographical term for, 311.
342 INDEX.
TRESPASSES,
when commission of enjoined, 303.
TROVER,
effect of, in respect to election in cases of fraud, 233, 234.
TRUSTEES,
{See Fkaud, Presumptive; Trusts.)
TRUSTS,
object of a trust, 10.
trusts at first treated as imlawful by law courts, 10.
mortmain acts, 10.
trusts under the name of uses, 10.
Statute of Uses, 11.
fails of its object, 11.
effect of, 11.
trusts of personalty always permitted, 11,
U'usts divided into two classes, 11, 12.
The Trust Estate, 13-26.
how jurisdiction as to, arises, 13.
the trustee, 13.
the cestui que trust, 13.
the equitable title the substantial title in equity, 13.
distinction between the equitable and the legal title, 13, 14,
declaration of ti'ust, how made, 14.
Statute of Frauds as to ti-usts, 14.
trust need not be declared in writing, 14.
subsequent acknowledgment in writing sufficient, 14, 15.
certainty as to the intention to create a trust, 1-5.
trust may be created in the form of a power, 15.
or by precatory words, 15.
the whole instrument or cii'cumstances to be consulted, 15, 16.
trusts in the form of powers, how sometimes created, 16.
discretionary powers, 16.
neglect or refusal of trustee to cai'ry out such powers, 16.
the court executes the power, 16.
on what principle it acts, 16.
reference to another document to determine the extent or
nature of the trust, 16, 17.
explanation of written terms of trust by parol evidence,
16, 17.
INDEX. 843
TRUSTS, — continued.
uncertainty of the trust, 17.
•who entitled to propei-ty on failure for uncertainty, 17.
whether the trustee can take, 17.
uncertainty in gifts to charity, 17.
King's prerogative by sign-manual in such cases, 17, 13.
the cy-pres doctrine, 18.
distinction between execution by sign-manual and cy-pres, 18
the former does not prevail in America, 18.
failure of the mode of execution, 19.
peculiar rules of execution of charitable trusts, 19, 20.
subject of charities regulated by statute, 20.
use of technical terms unnecessaiy to create a trust, 20.
word " heirs," 20.
extent of the estate, 20.
difference between devise and deed, 20.
trusts by precatory words, 21.
criterion as to, 21.
certainty in such cases, 22.
lack of harmony in authorities, 22, 23.
tendency to narrow the construction favoring such trusts, 23
legal estate implied sufficient for the trust, 23.
legal estate sometimes extended, 23.
power of selling, when implied, 21.
limitation of the legal estate, 24, 25.
difference between devise and deed, 25.
persons acquiring title under trustee, 25, 26.
purchasers, 25, 26.
devisees, 26.
assigns, 26.
persons claiming by disseisin, 26.
Executed and Executory Trusts, 26-31.
when a trust is executed, 26.
when executory, 26, 27.
construction of executed trusts, 27.
technical expressions, 27.
criterion as to executory trust, 27.
difference between construction at law and in equity, 27, 28
differences of interpretation in different classes, 28.
344 INDEX.
TRUSTS, — continued.
marriage settlements, 28, 29.
strict settlement, when decreed, 29, 30.
post-nuptial agreement for settlement, 30.
use of technical words, 30, 31.
The Trustee^s Duties, 31.
renunciation after acceptance of duties, 31.
an office of personal confidence, 31.
cannot be delegated, 31.
exception arising from necessity, 31, 32.
legal necessity, 32.
moral necessity, 32.
renunciation before acceptance, 32.
the heir cannot act, 32.
exception, 32.
duty of trustee to invest fund, 33.
employing fund in trade or speculation, 33.
in what investment should be made, 32, 33.
trust assumed without compensation, 33.
effect of failure to comply with terms of trust, 33.
acts of co-trustees, 34.
act of all necessary, 35.
receipts to be signed by all, 35.
terms of trust may change the rule, 35.
death of one of the trustees, 35.
survivorship, 35, 36.
liability for each other's acts, 36.
joint receipts, 36, 37.
non-acting trustee liable, how far, 36, 37.
co-executors, 37.
joining in receipts, 37, 38.
difference between rights of creditors and of legatees, 37, 38
non-acting executor, how far liable, 38, 39.
co-administrators stand on footing of co-executors, 39.
transactions between cestui que trust and trustee, 39.
narrowly scrutinized in the interest of the cestui que trust, 39
duty of trustee in such transactions, 39.
furnishing proper advice, 39, 40.
trustee cannot be seller and buyer of trust- fund, 40.
INDEX 345
TIRU STS, —continued.
limitation of this rule, 40, 41.
how far equity will protect the trustee in such cases, 41.
trustee may purchase on failure or termination of trust,
41, 42.
required to account, 42.
proof of damage done not necessary, 42.
renewal of leasehold, 42, 43.
acquiescence in trustee's purchase, 43.
full knowledge of facts, 43, 44.
and of the law applicable, 44.
officers and directors of corporations are trustees, 44.
cannot make a personal profit, 44.
transactions between guardian and ward, 44, 45.
agents under a like disqualification, 45, 46.
dealings with their principals, 45, 46.
volunteers, 46.
agents employed as mere instruments, 47.
trusts by implication of law, 48.
Trusts arising by presumed Intention, 48-55.
failure of donee of power to carry out donor's intention, 48.
trusts failing by failure of the objects or by illegality, 48.
unexhausted trust-fund, 48.
when the donee entitled to such fund, 48, 49.
leaving an undisposed-of residue after the trust, 49.
right of the heir thereto, 49.
of the devisee, 49.
of the next of kin, 49.
legacy to heir or next of kin, 49.
what will exclude the heir as to such surplus, 49.
what the next of kin, 49.
conversion by testator, 49, 50.
residue of personalty undisposed of, 50.
when executor entitled, 50.
intention of gift to executor rebutted, how, 50.
statutory changes of the law, 50.
direction to sell land without disposing of produce, 50, 51.
creation of mixed and general fund, 51.
failure of purposes, 51.
346 INDEX.
TRUSTS, — continued.
money converted into land, 51.
accumulation of interest of mixed fund, 51, 52.
what constitutes conversion, 52.
"out and out " conversion, 53.
question of right between heir and residuary legatee, 53
the word "residue," 53, 54.
questions between heir and personal representative, 54.
gifts to charities favored, 54.
failure of, 55.
Trusts to satisfy Honesty and Fair Dealing, 55-63.
title taken in one person in fraud of another's rights, 55
ground of trust in cases of this kind, 56.
no payment made by party claiming trust, 56.
payment made by him after the purchase, 56.
payment by him of but part of purchase price, 57.
title taken in name of wife or child, 58.
purchase of incumbrance by fraud upon the debtor, 58.
debtor prevented by fraud from redeeming, 58.
lulling debtor into security, 59.
other cases of resulting trusts, 59.
omission of a stipulation from written contract, 60.
the mere breach of a parol promise generally held insuffi-
cient to raise trust, 60, 61.
secus by some courts, 60.
apparent exceptions to general rule explained, 61, 62.
secret trusts in favor of charities, 62.
absolute conveyance cut down by parol evidence, 62, 63.
trust follows the estate, when, 63.
U.
UNCOXSCIOXABLE STIPULATIONS,
penalties to secure performance of contracts, 164.
interfei'ence of equity against, 164.
compensation in lieu of, 164.
interest generally sufficient compensation, 165.
interest exceeding penalty allowed, when, 165.
equity will not relieve against liquidated damages, 168.
ground of refusal to interfere, 166.
INDEX. 347
UNCONSCIONABLE STIPULATIONS, —co?i?jnued.
limitation of the rule of non-interference, 166.
relief not granted against breach of conditions precedent,
167.
conditions subsequent, 167, 168.
equity will not enforce a penalty or forfeiture, 167, 1G8.
forfeiture from breach of covenant as to collateral acts, 168.
USES, STATUTE OF,
effect of, on trusts, 11.
V.
VENDOR'S LIEN,
how it arises, 78.
available by way of charge, 78, 79.
effect of postponement of time of payment, 87, 88.
W.
WAIVER,
{See Fraud, Actual; Rescission and Cancellation.)
WASTE,
when mortgagor in possession may be restrained from com-
mitting, 71.
account as to, 267.
as ground for injunction, 297, 298.
waste in equitable estates, 298.
equitable waste, 299, 300.
WELSH MORTGAGE,
what it is, 78.
University Press : John Wilson & Son, Cambridge.
THE STUDENTS' SERIES.
CAREFULLY PREPARED TREATISES
COVERING SUBJECTS TAUGHT IN DISTINCT COURSES IN THE
LEADING LAW SCHOOLS.
AMONG the authors who have prepared volumes for this important series
are Melville M. Bigelow, LL.D., the distinguished law •nTiter,
and lecturer at Boston University. Northwestern University, and
Michigan University; Prof. Eugene Wambaugh, late of Iowa" State
University, now of the Law Department of Harvard University; Prof.
William' C. Robinson, of Yale College, now head of the Law" Depart-
ment of the Catholic University, Washington, and author of " The Law of
Patents" : Hon. Thomas M. Cooley, the eminent author of "Constitu-
tional Limitations"; Edwin E. Bryant, Dean of the Law Department of
the State University of Wisconsin; Marshall D. Ewell, LL D., M.D.,
of the Kent College of Law, Chicago; the late Benjamin R. Curtis, Justice
of the United States Supreme Court, and lecturer at Harvard University;
Prof. Edward Avery Hareiman, of the Northwestern University Law
School; Prof. Ernest W. Huffcut, of Cornell University School of Law;
Prof. Francis M. Burdick, of the Law School of Columbia University;
Arthur G. Sedgwick, the well-known writer; William Wirt Howe,
formerly Chief Justice of Louisiana ; the late Judge John Wilder Mat, etc.
VOLUHES ALREADY ISSUED IN "THE STUDENTS' SERIES."
I. Bigelow's Elements of the Law of Bills, Notes, and Cheques.
II. Bigelow's Elements of Equity.
III. Bigelow's Elements of the Law of Torts.
IV. Bigelow's Law of Wills for Students.
V. Bryant's Principles of Code Pleading.
VI. Burdicks Law of Sales.
VII. Burdick's Law of Partnership.
VIII. Cooley' s General Principles of Constitutional Law in the United
States of America.
IX. Curtis's Jurisdiction, Practice, and Peculiar Jurisprudence of
the Courts of the United States.
X. Ewell's Manual of Medical Jurisprudence for the Use of Stu-
dents at Law and of Medicine.
XI. Harriman's Elements of the Law of Contracts.
XII. Heard's Principles of Civil Pleading.
XIII. Heard's Principles of Criminal Pleading.
XIV. Howe's Studies in the Civil Law.
XV. Huffcut's Elements of the Law of Agency.
XVI. May on the Law of Crimes.
XVII. Robinson's Elementary Law.
XVIII. Robinsons Forensic Oratory : A Manual for Advocates.
XIX. Sedgwick's Handbook of the Law of Damages.
XX. Stephen's Digest of the Law of Evidence.
XXI. Stimson's Glossary of Technical Terms, Phrases, and Maxims,
of the Common Law.
XXII. Wambaugh on the Study of Cases.
XXIII. Beale on Criminal Pleading.
The Volumes are of 12mo size, containing from 300 to 400 closely printed
pages. Price per Volume : cloth, .$2.50 net ; law sheep, §3.00 net.
E^" See also list of " Cases " on next page.
1
THE STUDENTS' SERIES.
CASES TO ACCOnPANY "THE STUDENTS' SERIES."
Beale's Cases on the Law of Damages.
Bigelow's Cases on the Law of Bills, Notes, and Cheques.
Bigelow's Cases on the Law of Torts.
Burdick's Cases on Partnership (8vo. $4.50 net).
Burdick's Cases on Sales i8vo. $4.50 net).
Chaplin's Cases on Criminal Law.
Hult'cut's Cases on Agency.
Wambaugh's Cases for Analysis.
TJie Volmnt'S of Cases are bound in cloth onlt/, and iinless oilier-
tvise stated, the size is small 8vo, and the price $3.00 net.
In planning and developing the Students' Series, five objects have been
constantly sought : —
First. That each subject should be treated by a man speciallj' fitted
through study, training, and experience.
Second. That the arrangement should be logical, and the treatment
concise, clear, and comprehensive.
Third. That the principles of the law of each subject, the real founda-
tion and framework, should be so carefull}' and clearly presented and
explained that the student could grasp the facts and the reasons for them,
and feel with these tirmly in mind that he would be able to handle success-
fully the variations which may come later.
Fourth. That the cases cited and commented on should be those on
which the law rests, and which most clearly show how and why the law
became what it is. Not quantity of citations, but quality and strength,
have been sought.
Fifth. Tliat the cost of the volumes should be kept as low as possible,
consistent with the highest standards, bc^h of authors' text and quality of
manufacture.
Teachers and students alike understand the advantage of having books
prepared for them by men who are specialists, and who devote themselves
to the subjects on which tliej' write. With such requirements books cannot
be written to order in three or four months, and several years have been
spent in building up the Students' Series to its present size, while a num-
ber of works on other important subjects are now in careful preparation.
The volumes of the Students' Series are in use as text-books in leading
law schools throughout the United States. Of them, one of the most learned
teachers of law in America, the late Prof. William G. Hammond, of St.
Louis, said : —
" In planning this series of law books for students you have rendered a very
great service, not only to the students themselves, but also to the profession.
There has been no greater obstacle to all efforts for a higher standard of legal
education than the lack of such books."
And this testimony as to the plan has been repeated as to execution, by
numbers of prominent teachers in letters to the authors and publishers, and
by the more valuable testimony of introduction and use with their classes.
^^ See subsequent pages for full information regarding each work.
2
THE STUDENTS' SERIES.
BEALE ON CRIMINAL PLEADING.
The Law of Criminal Pleading. By Joseph H. Beale, Jr., LL B.,
Professor of Law in Harvard Universitj. 12mo. Cloth, §2.50
net; sheep, S3.00 net.
Professor Beale's design is to treat of Criminal Pleading and Procedure
in this volume clearly, and at sufficient length for all the purposes of the
Law School.
The cases cited as authorities are drawn freelv from the various States.
BIGELOW ON BILLS AND NOTES.
Elements of the Law of Bills, Notes, and Cheques, for Students. By
Melville M. Bigelow, Ph.D., author of " Elements of the Law
of Torts," etc. 12mo. Cloth, S2.50 net; law sheep, S3.00 net.
Mr. Bigelow's reputation as a clear, logical, and strong student and in-
structor in the law is establii=hed by his standard treatises no less than by
the masterly ''Elements of Torts," so well known to and extensively used
by teachers and students of Law.
It bears evidence of the conciseness and power of accurate statement which
characterize the other work of the author, and I am convinced that it wUl prove
a very satisfactory book for class use. — Emlcj McLain, Chancellor Law Depart-
ment, Iowa State University.
I believe it to be decidedly the best student's book upon the subject that has
yet appeared. — Prof F. R. Mechem, Law Department, Michigan State University.
To accompany the above : —
Cases on the Law of Bills, Notes, and Cheques. Edited by Melville
M. BiGELOW. Crown 8vo. Clotii, §3.00 net.
BIGELOW ON EQUITY.
Elements of Equity for the Use of Students. By Melville M.
BiGELOw, Ph.D., lecturer in the School of Law, Boston University,
author of " Elements of the Law of Torts," etc. 12mo. Cloth,
S2.50 net ; law sheep, .^S.OO net.
It is to be commended for its clearness and conciseness of statement. I regard
the first chapter as a model. The doctrines of Tacking, Subrogation, and Marshal-
ling, found in Chapters 14, 19, and 20, are more easily comprehended than in any
other work on those subjects that I have seen. — Hon. J. H. Carpenter, Dean oj
Law Faculty, University of Wisconsin.
BIGELOW ON TORTS.
Elements of the Law of Torts for the Use of Students. By Melville
M. Bigelo-w, Ph.D., author of "A Treatise on the Law of Estop,
pel," " A Treatise on the Law of Fraud," etc. Sixth edition, re-
vised and enlarged. 12mo. Cloth, -$2. 50 /ief; law sheep, $3.00 ?iet
3
THE STUDENTS' SERIES.
In the sixtli edition of this well-known text-book the author has devoted
much time and care to the development of the general doctrine of " Torts "
as an introduction to the stud}' of "Specific Torts." This work, done with
his usual thoroughness and clearness, does away with the one criticism made
on the work, that it plunged the student into the stud}' of specific torts
without instructing him in the general law of the subject. The whole book
has been carefully revised, and many passages rewritten. The book is now
theoretically and practically complete and logical.
It seems to me admirably adapted to the purpose for which it is written. Mr.
Bigelow is very happy in his statement of legal principles, and nowhere so much so,
I think, as iu this book. — Hon. Thomas M. Cooley.
I have examined Bigelow on Torts, and find it to be an excellent text-book for
students. The author is plainly a master of his subject, and not merely a good
compiler. . . . The work is, in my judgment, a model "Institute." — R. McP.
Smith, Vanderhilt University.
A clear and compact treatise, well fitted to be a manual of a student of law. —
Hon. John Bascom, University of Wisconsin.
To accompany the above : —
Cases on the Law of Torts. Edited by Melville M. Bigelow.
Crown 8vo. Cloth, $3.00 net.
BIGELOW'S LAW OF WILLS.
The Law of Wills. For Students. By Melville M. Bigelow, Ph.D.,
author of " Elements of the Law of Torts," etc., editor of " Sixth
American Edition of Jarman on Wills," etc. 12mo. Cloth,
$2.50 net ; sheep, $3.00 net. ^ -
No teacher of law in America is more familiar with the theory of the
Law of Wills tlian Mr. Bigelow, and students everywhere are to be con-
gratulated on the publication of a new work on this subject by an author
so experienced and so learned.
BRYANT'S CODE PLEADING.
The Principles of Code Pleading for the Use of Students. By Edwin
E. Bryant, Dean of the Law Department of the State University
of Wisconsin, and late Assistant Attorney-General of the United
States. Second edition, revised. 12rao. Cloth, $2.60 7iet ; law
sheep, $3.00 net.
The science of code pleading being a development of the last fifty years,
and getting its shape and form gradually from the decisions of the courts as
well as from the enactments of the law-making bodies, has only within a few
years been treated in any satisfactory way by text writers.
Many instructors feel, however, that too much time is needed for the
student to get the elementary principles from the larger books ; and this
book is written to bring within easy reach, in condensed and clear form,
4
THE STUDENTS' SERIES.
the true elements of the subject ; to give the student sufficient knowledge
of the old common law pleading for a foundation for the less formal, but
not necessarily less exact, pleading under the code, and to put in orderly
array the principles of this branch of the law, which have too frequently
been considered, by students, at least, as of little importance.
The principles are presented lu a clear, satisfactory manner, and the Code
References are a valuable addition. In short, it exactly supplies a want as a
text-book for students, whether in oflSces or law schools, wherever the reformed
procedure prevails or is largest. — Charles M. Campbell, Law Department,
Colorado Slate University.
BURDICK ON SALES.
The Law of Sales of Personal Property. By Fkancis M. Burdick,
of the Law School of Columbia University. 12nio. Cloth, $2.50
net; law sheep, $3.00 net.
In this work by an author and teacher of reputation and experience,
questions are discussed with a fulness proportioned to the trouble they give
to the student, or to his aptness to misapprehend the principles thej' involve.
The essential terms of the "sale contract" are classified and distinguished
from agreements merely collateral to it, to bring order out of the judicial
and text-book chaos of "conditions and warranties."
The provisions of the Statute of Frauds bearing upon the sale of goods
are treated in connection with the common law topics to which they relate.
This method is novel, avoiding much repetition, and giving economy of
space and equal economy of time and perplexity to the student.
It is a small magazine of learning. — New York Nation.
It is a most admirable treatise. — James B. Scott, Los Angeles Law School,
Los Angeles, Cal.
To accompany the above : —
Selected Cases on the Law of Sales of Personal Property. By Fkancis
M. BuEDicK. 8vo. Cloth, $4.50 net.
BURDICK ON PARTNERSHIP.
The Law of Partnership, including Limited Partnerships. By Francis
M. BuRDiCK, Dwight Professor of Law in Columbia University.
12mo. Cloth, $2.50 net; law sheep, $3.00 net.
In this work the principles of Partnership Law are stated with an especial
view to the needs of the student, as these have revealed themselves to the
writer during his experience in the lecture-room. It is a branch of the law
which has never proved particularly simple or easy for students, but the
author has tried to point out the chief sources of difficulty and to save the
student from needless perplexity.
To accompany the above : —
Selected Cases on the Law of Partnership, including Limited Partner-
ships. By Francis M. Burdick. 8vo. Cloth, $4.50 net.
5
THE STUDENTS' SERIES.
COOLEY ON CONSTITUTIONAL LAW.
The General Principles of Constitutional Law in the United States
of America. By Thomas M. Cooley, author of " A Treatise
on Constitutional Limitations," etc. Third edition, bj A. C.
McLaughlin, of the University of Michigan. 12mo. Cloth, $2.50
net ; law sheep, §3.00 net.
No volume of the " Students' Series " is better known or has received
a wider indorsement than Judge Cooley's admirable exposition of the prin-
ciples of Constitutional Law in the United States.
In the new edition large additions have been made, and the topics sug-
gested bj' the increasing number of points of contact and interferences
between State and Federal Constitutions are particularlv amplified.
Since the last edition appeared, the Supreme Court has jtassed for the
first time on the citizenship of a Chinaman born of alien parents in this
country, on the constitutionality of eight-hour laws, etc, while the decisions
affecting the control of interstate commerce have been highly important.
I have, since the first publication of the work, been familiar with the book, and
I regard it as among the best of the distinguished author's works. Its simi^le but
perfect and logical arrangement, and clear and concise treatment of subjects, with
the citations of the leading decisions for the support of the text, make it the best
and most complete hand-book, for the use of students on the subject of Constitu-
tional law, of which I have any knowledge. — Hon. R. H. Alvey, Court of Appeals
of the District of Columbia.
CURTIS ON UNITED STATES COURTS.
/urisdiction. Practice, and Peculiar Jurisprudence of the Courts of the
United States. By Benjamin E. Curtis, LL.D., late Associate
Justice of tlie Supreme Court of the United States. Edited by
George Ticknor Curtis and Bentjamin R. Curtis. Second
edition, by H. C. Mertvin, Law Department of Boston University.
12mo. Cloth, .'B2.50 net ; law sheep, §3.00 net.
These lectures were delivered by the late Judge Curtis to a class of stu-
dents in the Harvard Law School, in the academic year 1872-73, and were
edited and prepared for the press by his son and brother, both lawj-ers
of prominence. Mr. Merwin has devoted much time to the consideration of
the recent clianges and developments in the practice of the Federal Courts;
and his additions, in the second edition, are thought by those who have
examined them to deserve the words of commendation bestowed upon
Judge Curtis's original text.
A work of the highest standard on the subject treated. — Boston Post.
Cannot fail to be of great service to the student in the prosecution of his
legal studies. — Chicago Legal News.
It is by far the best epitome of that extensive subject ; and the clearness of the
style and orderly arrangement of the learned author will especially recommend
it to students. — Hon. Edmund H. Bennett, Dean of School of Law, Boston
University.
6
THE STUDENTS' SERIES.
SWELL'S MEDICAL JURISPRUDENCE.
A Manual of Medical Jurisprudence for the Use of Students at Law
and of Medicine. By Marshall D. Ewell, M.D., LL.D., of the
Union College of Law, Chicago. 12mo. Cloth, $2.50 net; law
sheep, §3.00 ne?.
Mr. Ewell has endeavored to produce a work which, within a moderate
connmss, states all the leading facts and principles of the science concisely
and yet clearly. In it will be found the substance of all the principles staled
in the more voluminous and expensive works.
It is excellently done. I wish it might be read by every student of law as well
as by every student of medicine. —Prof. Henry Wade Rogers, u-hen at Universily
of Michigan.
I can safely say that for use as a text-book, either in a medical college or law
school, it is preferable to any book of my acquaintance. In his chapter on Mal-
practice, Professor Ewell has succeeded, within the compass of eighteen pages, in
Betting forth the general doctrine of the law so comprehensively as to make it
highly usef id for the practitioner as well as the student. — Henry H. Ingersoll,
Dean Law Department, Universily of Tennessee.
HARRIMAN ON CONTRACTS.
Elements of the Law of Contracts. By Edward Avert Harriman.
Professor of Law in the Northwestern University Law School.
12mo. Cloth, $2.50 «e<; law sheep, §3.00 He<.
The justification of this book is . . . that it is an attempt to explain
the rules of positive contract law in accordance with the actual historical
development of those rules, and to classify and arrange those rules as far as
possible in a scientific manner.
The cases cited and referred to have been selected with the greatest care,
as best illustrating and explaining the rules and doctrines of the law of
contracts.
A most admirable summary of the subject. — B. J. Ramage, Dean Law Depart'
ment, University of the South.
A superior and original work. — William Trickett, Dean Dickinson School
of Laiv.
It is certainly a departure from the usual method of dealing with the subject,
and I am inclined to think a departure in the direction of a clearer and better
understanding of the law. — C. P. Norton, Buffalo Laic School,
HEARD ON CIVIL PLEADING.
The Principles of Pleading in Civil Actions. By Franklin FIske
Heard. 12mo. Cloth, $2.50 net; law sheep, $3.00 net.
Under whatever system of statutory procedure a law student may design tc
practise, he will find it equally necessary to become familiar with the principles ot
common law pleading. Mr. Heard's work is a plain and clear guide to these. —
'Bod. Simbon E. Baldwin, Laiv Department of Yale College.
7
THE STUDENTS' SERIES.
HEARD ON CRIMINAL PLEADING.
The Principles of Criminal Pleading. By Frankli>t 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.
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