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the property it was by a purchase; if it could pur- Here the mortgage was executed to enable the corpochase, the bondholders could sell, and the mortgage ration to resume the exercise of its charter powers and was the consideration of the purchase and sale.
fulfill the purposes for which it was originally created. The primary questions theu are: First, whether No precedent has been found denying to a corporation upon the purchase of property, the corporation could the power to execute a mortgage of every thing it acmortgage what it acquired, to secure the purchase- quired by a purchase, when the mortgage is a condition money; and second, whether section 9 of the charter of making a purchase; and there seems to be no reason has any application to such a transaction. It is to be in a case like the present for denyiug the power when observed that the complainant does not question its the purchase of the mortgagor includes the franchise own power to acquire the money conveyed to it. It and the whole property of the corporation. caunot do this while it holds on to the property and Section 9 of the charter is not a restriction upon the seeks to remove the lien of the mortgage. If it could implied power of the corporation to incur such obligalegitimately purchase, why could it not, like an indictions as are necessary to enable it to carry on its busividual purchaser, mortgage to secure the price? A ness. It is a provision which would seem to be incorporation, in order to attain its legitimate objects, tended to enlarge rather than to restrict the power of may deal precisely as can an individual who seeks to the corporation in this regard. Its purpose is to authorize accomplish the same ends, unless it is prohibited by an increase of capital to an extent commensurate with law to incur obligations as a borrower of money. the necessities of the corporation in any of the modes “Corporations having the power to borrow money usually adopted by corporations for raising moneymay mortgage their property as security. Although it provision which was necessary in view of section 4 of the was at one time a question whether express legislative charter, which limited the amount of increase. As a consent was not required in order to authorize a mort- corporation has no implied authority to alter the gage of any corporate property, as for example iu amount of its capital stock when the charter has defiSteiner's Appeal, 27 Penn. St. 313, yet the rule now is uitely prescribed the limit, this permission was necesthat a general right to borrow mouey implies the sary. The purchase of property by the corporation for power to mortgage all corporate property except fran- cash or ou credit is not an increase of its capital. chises, unless restrained by express prohibition in the There is another ground however upon which the act of incorporation or by some general statute." decision of the case may rest more satisfactorily. As. Green's Brice's Ultra Vires (2d ed.), 223, 224.
suming that the complainant transcended its charter In the late case of Philadelphia & R. R. Co. v. Stick- powers in creating the mortgage bonds in question, it ler, 21 Am. Law Reg. 713, the Supreme Court of Penn- cannot be permitted to retain the benefits of its pursylvania considered the question, and Paxson, J., de- chase and at the same time repudiate its liability for livering the opinion of the court, said:
the purchase price. The rule is thus stated by a re“So far as the mere borrowing of money is con- cent commentator: cerned it is not necessary to look into the charter of “The law founded on public policy requires that a the company for a grant of express powers. It exists contract made by a corporation in excess of its charby necessary implication.
The reason is tered powers be voidable by either party while a replain. Such corporations are organized for the pur- scission can be effected without injustice. But after a poses of trade and business, and the borrowing of contract of this character has been formed by either of money and issuing obligations therefor are not only the parties the requirements of public policy can best germane to the objects of their organization, but nec- be satisfied by compelling the other party to make essary to carry such objects into effect."
compensation for a failure to perform on his side." In Platt v. Union Pacific R. Co., 99 U. S. 48-56, Mr. Morawitz Corp., $ 100. Justice Strong, speaking for the court, says:
It is to be observed that in the present case there is “Railroad corporations are not usually empowered no express statutory or charter prohibition upon the to hold lands other than those needed for roadways corporation to purchase the property or mortgage it and stations or water privileges. But when they are for the purchase money. At most its acts were ultra authorized to acquire and hold lands separate from vires, because outside the restricted permission of the their roads the authority must include the ordinary charter. It is not necessary therefore to consider the incidents of ownership—the right to sell or to mort- distinction made by some of the adjudications begage."
tween the two classes of cases. Hitchcock v. GalvesThe right of mortgaging follows as a necessary inci-ton, 96 U. S. 341. The decided weight of modern au. dent to the right of managing the business of a corpo- thority favors the conclusion that neither party to & ration, according to the usual methods of business transaction ultra vires will be permitted to allege its men. The right of a corportion to mortgage its fran- in validity while retaining its fruits. The question has chises, or the property which is essential to enable it frequently been considered in cases where a corporato perform its functions, is generally denied by the au- tion, suing to recover upon a contract which has been thorities. But does the reason upon which this denial performed on its side, is met with the defense that the rests have any application to a case like the presenta contract was ultra vires, or prohibited by the organic The foundation of the doctrine is that such a mort- law of the corporation. Whitney Arms Co. v. Barlow, gage tends to defeat the purposes for which the corpo- 63 N. Y. 62; Oil Creek & A. R. Co. v. Penn. Transp. ration was chartered, and the implied undertaking of Co., 83 Penn. St. 160; Bly v. Second Nat. Bank, 79 id. those who obtained the charter to construct and main- | 453; Gold Min. Co. v. Nat. Bank, 96 U. S. 640; Nat. tain the public work and exercise the franchises for Bunk v. Matthews, 98 id. 621. The latter case is a forcithe public benefit. Some judicial opinion is found to ble illustration of the rule generally adopted. There a the effect that there is no good reason for denying the national banking association was proceeding to enforce right to make such a mortgage without legislative a deed of trust given to secure a loan on real estate consent, because the transfer of the franchise to new made by the association in contravention of sechands through a foreclosure is in fact a change no tion 5136, Revised Statutes, prohibiting by implication greater than may take place within the original corpo- such an association from loaning on real estate, and ration, and the publio interests are as safe in such new the maker of the trust deed sought to enjoin the prohands as they were in those of the original corpora- ceeding upon that ground. tors. Shepley v. Atl. & St. L. R. Co., 55 Me. 395-407; The court, speaking through Mr. Justice Swayne, Kennebec & P. R. Co. v. Portland & K. R. Co., 59 id. oite with approval Sedg. St. & Const. Law, 73, in which 9-23; Miller v. Rutland & W. R. Co., 36 Vt. 452-492. the author states that the party who has had the bene
at of the agreement will not be permitted to question William Bernshouse bought of one Joseph E. P. Abits validity when the question is one of power con- bott two car-loads of cedar siding. The lumber was ferred by a charter.
delivered to Bernbouse according to contract, accomAnother class of cases is where the corporation itselt panied by bills for the price of the same, in the name attempts to set up its own want of power, in order to of said Joseph E. P. Abbott. Bernshouse was the defeat an agreement or transaction which is an exe- holder for value of three promissory notes of said cuted one as to the other party, and from which the Joseph E. P. Abbott, amounting to about the price of corporation has derived all that it was entitled to. the lumber, and tendered them in payment of AbSuch cases were Parish v. Wheeler, 22 N. Y. 494; Bis- bott's bill. Joseph E. P. Abbott then wrote to Bernssell v. H. S. & N I R. Co., id. 258; Hays v. Galion house, stating that in disposing of the lumber he had Gas Co., 29 Ohio St. 330-340; Attleborough Bank v. acted as the agent of another person. This suit was Rogers, 125 Mass. 339; McCluer v. Manchester R. Co., brought against Bernshouse for the price of the lumber. 13 Gray, 124; Bradley v. Ballard, 55 Ill. 418; Rutland The plaintiff is John C. Abbott, the father of Joseph & B. R. Co. v. Proctor, 29 Vt. 93. In the first of these E. P. Abbott. The declaration consists of the comcases the court say:
mon counts, with bill of particulars. The defendant, “ It is now very well settled that a corporation can- Bernshouse, pleaded the general issue, and a special not avail itself of the defense of ultra vires when the plea of set-off of the debt of the agent to the demand contract has been in good faith fully performed by the of the plaintiff, to which the plaintiff replied by traother party, and the corporation has bad the full bene- versing the matters of fact, and on the issues so joined fit of the performance and of the contract. If an ac- the parties went to trial. At the trial the court overtion cannot be brought directly upon the agreement, ruled a motion to nonsuit, and at the conclusion of either equity will grant relief, or an action in some the case ordered a verdict for the plaintiff without other form will prevail."
permitting the case to go to the jury. The present case is phenomenal in the audacity of The matters assigned for error arose both upon the the attempt to induce a court of equity to assist a cor- motion for nonsuit and the charge of the court. poration in repudiating its obligations to its creditors DEPUE, J. The transaction was a sale of personal without offering to return the property it acquired by property by an agent who had authority to sell, and its unauthorized contract with them. The fundamen- who sold in his own name without disclosing his tal maxim is that he who seeks equity must do equity. agency to a purchaser who bought in good faith, beEvery stockholder of the corporation when he ac- lieving that the agent was the owner; and the inquiry quired his stock took it with notice explicitly embod- is, under what circumstances such a purchaser, in an ied in his certificate that his interest as a stockholder action by the principal for the contract price, is entiwas subordinate to the rights of the holders of the tled to set-off a debt due him from the agent. mortgage bonds. It is now contended that if there is The son, when he negotiated the sale, bad neither any obligation on the part of the corporation to pay the possession of the property nor any muniment of for the property it purchased, it is not to pay what it title to it in himself. He sold it in his own name, agreed to, but to pay a less consideration, because the without any authority from his father to sell it in that property was not worth the price agreed to be paid. way. The court will not compel the bondholders to enter The two leading cases on the subject of the right of a upon any such inquiry. They are entitled to set their purchaser of personal property to set-off a debt due to own value on their own property. When the com- him from the agent through whom the sale was made, plainant offers to reconvey the property in considera- where an action has been brought by the principal to tion of which it created its mortgage bonds it will have recover the contract price are Rathbone v. Wiltaken the first step toward reaching a position which linms, reported in a note to George v. Claggitt, 7 T. R. may entitle it to be heard.
359, and Baring v. Corrie, 2 B. & Ald. 137. In RathIt may be said, in conclusion, that there would be no bone v. Williams the action was for the value of goods difficulty on well recognized principles in protecting sold. The sale was made through Rathbone, Sr., & the bondholders against the destruction of their claims Co., who were the plaintiff's factors, and had sold the upon the theory of a vendor's lien for the purchase-goods in their own names as principals, without dismoney. The taking of a mortgage by their trustees, closing their agency. The purchaser, in an action by so far from evidencing an intention to waive the lien, the principal for the contract price, was allowed to is conclusive evidence to the contrary.
set off a debt due to to him from the factors. In BaThe bill is dismissed with costs.
ring v. Corrie the sale was made by a broker, who did not disclose his principal; and the purchaser, in an ac
tion for goods sold, brought by the principal, was not PURCHASE ROM AGENT-SET-OFF AGAINST allowed to set off a debt he had against the broker. PRINCIPAL.
The distinction between these two cases is explained
by Abbott, C. J., in his opinion in Baring v. Corrie. NEW JERSEY COURT OF ERRORS AND APPEALS. He says: “The distinction between a broker and a NOVEMBER TERM, 1883.*
factor is not merely nominal, for they differ in many
important particulars. A factor is a person to whom BERNSHOUSE V. ABBOTT.
goods are consigned for sale,
* and he usuA purchaser from an agent having authority to sell, and sell-ally sells in his own name, without disclosing that
ing in his own name, without disclosing his principal, is of his principal. The latter therefore with a full not entitled in an action by the principal for the contract knowledge of these circumstances, trusts him with the price, to set-off a debt due to him from the agent, where
actual possession of the goods andgives him authority the agent had neither the possession nor the indicia of
to sell in his own name. But the broker is in a differproperty in himself.
ent situation. He is not trusted with the possession of the goods, and he ought not to sell in his own name.
The principal therefore who trusts a broker has a right Garrison, French and Casselman, for plaintiff in
to expect that he will not sell in his own name." And
referring to the cases cited in which the set-off had D. J. Pancoast, for defendant in error.
been allowed, including Rathbone v. Williams, the
chief justice said that "in all the cases cited the fac* 45 N. J. (16 Vroom) 531.
tor was in actual possession of the goods, and the pur
ON error to the Supreme Court.
chaser could not know whether they belonged to him UNITED STATES SUPREME COURT ABor not, and at all events they knew that he had a right
STRACT. to sell the goods.” In Baring v. Corrie, where the claim of set-off was disallowed, the property sold was DEED CREDITORS FORECLOSING TRUST-DEVISE ON not in the possession of the broker who negotiated the
ANNUITY CHARGE ON LAND - LIEN – sale. It was lying in the West India docks, from which it could not be obtained without a delivery or- TRIBUTIVE SHARE-ALLOWANCES FOR IMPROVEMENTS. der countersigned by the plaintiff's custom house The plaintiffs, as creditors, whose debts were secured clerk; and, as was said by Bailey, J., “the plaintiffs by a deed of trust on land in Mississippi, having did not trust the broker with either the muniments of brought a suit in equity to enforce the trust and to sell their title or the possession of the goods, as was done the land, joined as defendants, by a supplemental bill, both in the case of Rathbone v. Williams and that of persons in possession, who claimed to own the land George v. Claggitt.”
under a title founded on a sale made under & judg. The language of Abbott, C. J., and Bailey, J., quoted ment recovered prior to the execution of the deed of from Baring v. Corrie, is quoted with approval by trust, but which judgment had been held by this court, Cresswell, J., in Fish v. Kempton, 7 C. B. 687, 693. in the same suit (Bank v. Partee, 99 U. S. 325), before And the distinction between a factor having the pos- the filing of the supplemental bill, to be void, as against session of the goods with power to sell, under the the plaintiffs. The defendants in possession set up a usages of trade, and a broker or other agent who has claim to be allowed for the amount they had paid in not such possession, has been adopted as settled law in discharge of a lien or charge on the land created by a cases where the right to set off has arisen-the right to will devising the land to the original grantor in the a set-off being recognized only where the sale was deed of trust, and for taxes paid, and for improvemade by a factor. Carr v. Hinchliff, 4 B. & C. 547; ments. These claims were allowed. (2) A devise of Purchell v. Salter, 1 Q. B. 197; Semenza v. Brinsley, 18 land was made by a will, upon specified conditions, ('. B. (N. S.) 467, 477, per Willes, J.; Ex parte Dixon, “under the penalty, in case of non-compliance, of loss 4 Ch. Div. 133; 19 Eng. R. 734; Borries v. Imperial of the above property," the conditions being to pay Bank, L. R., 9 C. P.38; 7 Eng. R. 138; Hogan v. Shorb, certain money legacies, and a life annuity in money. 24 Wend. 458, 462; 2 Kent, 633.
Then other legacies in money were given. Then there Ramozetli v. Bowring, 7 C. B. (N. S.) 851, is also an was a provision, “that all the legacies which I have important case in this line of decision. The action given in money and not charged upon any particular was brought for a bill of wine sold and deli red to the fund” should not be payable for two years “after my defendants. The plaintiff carried ou the business of a decease," followed by a provision as to the payment wine merchant, under the name of the Continental by the devisee of interest on the first-named money Wine Company. The business was conducted by one legacies after she should come into possession of the Nixon, the plaintiff's son-in-law. Nixon, representing land devised. No other money legacies were given himself to be the proprietor of the Continental Wine payable by any person on conditions, and there were Company, induced the defendants to take the goods in no other legacies in money which could answer the question in part satisfaction of his debt to them. The description of legacies in money charged on a particudefendants contended that the goods having been sold | lar fund. Held, that the life annuity was a charge on by Nixon, the agent, without disclosing his principal, the land devised. Birdsall v. Hewlett, 1 Paige, 32; the contract could not be enforced by the latter, dis- Harris v. Fly, 7 id. 421; Loder v. Hatfield, 71 N, Y. 92, charged of the defendants' right of set-off. The com- 97. (3) The statute of Mississippi (Revised Code of mon serjeant left it to the jury to say whether the 1857, chap. 57, art. 15, p. 401), which provides that "no plaintiff or Nixon was the real owner of the business, judgment or decree rendered in any court held within telling them to find for the defendants if they were of this State shall be a lien on the property of the deopinion that Nixon was the owner; but if they fendaut therein for a longer period than seven years thought the plaintiff was owner they must find for from the rendition thereof," does not apply to a dehim. The court in banc held this to be a misdirection, cree of a Court of Chancery in Mississippi, establishand that the proper question was whether the plaintiff ing the arrears due on such life annuity as a specifio had so conducted himself as to enable Nixon to hold lien on such land by virtue of such will, in a suit in himself out as the proprietor, and whether the defend chancery brought by the life annuitant. (4) The will ants dealt with him on that footing.
being proved and recorded in the county where the Mr. Chitty, with characteristic exactness, states the land was situated, it was not necessary, in such suit in principle to be that “where a principal permits one chancery by the life annuitart, to make as defendant who is not known to be an agent to sell as apparent the trustee in a deed of trust made by the devisee uuprincipal, and afterward intervenes, the buyer is enti- der the will, provided, in a suit to enforce the deed of tled to be placed in the same situation at the time of trust, brought by the beneficiaries under it, they were the disclosure of the actual principal as if the agent given the right to contest the validity of the lien had been the real contracting party; and he is entitled claimed by the life annuitant and to redeem the land to the same defense against the principal, whether it from such lien, when established. (5) The defendants be by common law or by statute, as he was entitled to claiming title under the devisee, and she being entiat that time against the agent, the apparent principal. tled to a distributive share of the entire estate of the Accordingly if in such a case the defendant has ac- life annuitant, who died during the pendency of such quired a set-off against the agent before the principal suit in chancery, it is not proper to abate from the has interposed, the latter will be bound by the set-off. allowance to the defendants of the amount paid by But,” he adds, “this doctrine does not apply where them to discharge the decree in such suit, any sum on the agent is a mere broker, and has not the possession account of the distributive share of such devisee in of or is not intrusted with the indicia of property in the amount so paid. (6) The defendants having acthe goods.' Chitty on Cont. 306.
quired their title under a deed of trust executed after In the case now before the court the sou had neither the original bill in this suit was filed, and before the the possession nor the indiciu of property. He grantor in such deed was served with process in this was an agent with a naked power to sell. The judge suit, it was held that they, being in fact purchasers in properly denied the defendant's claim to set-off the son's debt, and the judgment should be
good faith, were not chargeable with notice of the in
Affirmed. tention of the plaintiffs to bring this suit, within the [See 30 Eng. R. 667; 29 id. 192.-Ed.]
provisions of the Revised Code of Mississippi of 1871,
(chap. 17, art. 4, $ 1557), in regard to allowances for im- ESTOPPEL — LESSEE DENYING LESSOR'S TITLE _ACT provements on land to purchasers in good faith, until OF MARCH 3, 1877 -- COMMISSIONERS' CONSTRUCTION OF they were served with process on the supplemental LAW REVIEWABLE — TRUSTEE.- Lessees and their asbill. (7) The meaning of the words “good faith" in signees, having knowledge of a lease under a claimant the statute, and as applicable to this case, defined. or occupant, and holding the property for him, are Cole v. Jobuson, 53 Miss. 94; Green v. Biddle, 8 Wheat. | bound by a stipulation to surrender it on the termina1, 79. (8) The amount allowed by the Circuit Court, tion of the lease, and are estopped from claiming a for improvements, upheld as proper, under the special right paramount and adverse to his, their possession circumstances. The present case has an analogy to being his possession. Blight's Lessees v. Rochester, that of a purchaser at a foreclosure sale, who makes 7 Wheat. 533. (2) Under the provision of the act of valuable improvements in the belief that he has ac- March 3, 1877, in relation to the tract of land known quired an absolute title. He is entitled to be paid for as the Hot Springs Mountain, the action of the comthem if the premises are redeemed. 2 Jones on Mort- missioners therein provided for is final, on matters gages, $ 428. Where a party lawfully in possession un- depending upon conflicting evidence as to the extent der a defective title makes permanent improvements, of occupation and the value of improvements; but if relief is asked in equity by the true owner, he will upon the construction of law, and as to the equities of be compelled to allow for such improvements. 2 Story third persons arising from contracts or fiduciary relaEq. Jur., $ 1237, note 1; Bright v. Boyd, 1 Story, 478; tions between them and the person to whom the com2 id. 605; Putnam v. Ritchie, 6 Paige, 390; Williams missioners may adjudge the right to purchase, their V. Gibbes, 20 How. 538. Canal Bank v. Hudson. action may be reviewed and corrected by the courts. Opinion by Blatchford, J.
This question was very fully and thoughtfully consid[Decided March 24, 1884.]
ered in Johnson v. Towsely, reported in 13 Wallace.
In that case the direct question was as to the effect to INSURANCE-LIFE-ELECTION AS TO POLICIES-SUR- be given to the tenth section of the act of June 12, RENDER — ASSIGNMENT BY COMPANY - FUND DEPOS- 1858, which declared that appeals in cases of contest ITED WITH TREASURER — POLICY-HOLDER NOT BOUND between different settlers for the right of pre-emption BY – DAMAGES.—(1) The holder of a policy of life in- sbould thereafter be decided by the commissioner of surance, who is entitled, in case of default in payment the general land office, “whose decision shall be final of his premiums, to exchange bis policy for a paid-up unless appeal therefrom be taken to the secretary of policy instead of forfeiting it, is at liberty to elect at the Interior.” It was held that the finality there deany time to consider himself in default, and to de- clared bad reference only to the supervisory action of maud a paid-up policy. (2) Where a policy-holder was the land department; that after the title had passed entitled in case of default to have his policy commuted from ths government, and the question had become to a paid-up policy for the amount of premiums actu- one of private right, the jurisdictiou of courts of ally paid, but both he and the agent of the company equity might be invoked to ascertain if the patentees supposed him entitled to a paid-up policy of such did not hold in trust for other parties; and if it apamount as the premiums paid would have purchased peared that the party claiming the equity had estabhad they been paid all at once for that purpose, and lished his right to the land upon a true construction of the insured surrendered his policy to the agent upon the acts of Congress, and by an erroneous construction that understanding, held, that the company was bound the patent had been issued to another, the court would to return the policy unchanged, if so required, and had correct the mistake. This case is a leading one in this no right to alter it to a paid-up policy for the sum to branch of the law and has been uniformly followed. which he was iu fact entitled. (3) Where an insolvent The decision aptly expresses the settled doctrine of insurance company transfers its assets, under order of this court with reference to tbe action of officers of court, to another company, the holder of a policy can- the land department, that when the legal title has not be required to continue his insurance with the as- passed from the United States to auy party, when in signee, but may treat the assignment as a rescission of equity, and in good conscience, and by the laws of the contract with the assignor, and recover from it Congress, it ought to go to another, a court of equity whatever is justly due. Of this we think there can be will convert the holder into a trustee of the true owuer, no doubt. Where one party to an executory contract and compel him to convey the legal title. This docprevents the performance of it, or puts it out of his trine extends to the action of all officers having charge own power to perform it, the other party may regard of proceedings for the alienation of any portion of the it as terminated and demand whatever damage he has public domain. The parties actually entitled under sustained thereby. We had occasion to examine this the law caunot, because of its misconstruction by subject in the recent case of United States v. Behan, those officers, be deprived of their rights. Shepley v. 4 Sup. Ct. Rep. 81, to which we refer. (4) The meas- Cowan, 91 U. S. 330; Moore v. Robbins, 96 id. 530; ure of damages in such a case is not the amount of the Quimby v. Coulan, 104 id. 420; Smelting Company v. premiums actually paid, but only the value of the Kemp, id. 636. Rector v. Gibbon et al. Opinion by policy at the time of its surrender. (5) An assigu- Field, J. ment by an insolvent insurance company to a company (Decided April 7, 1884.] in another State does not carry a fund deposited with the treasurer of the State where the assignor was organized to secure citizens of that State from loss.
UNITED STATES CIRCUIT COURT ABSuch a fund remains subject to attachment by citizens
STRACT.* of the State in suits against the company. To this fund the complainant, being a citizen of Tennessee, REMOVAL OF CAUSE — BY ASSIGNEE. — Though the had a right to resort. The object of the laws of Ten- assignee of a chose in action cannot sue originally in nessee in requiring the fund to be placed on deposit the Federal courts unless his assignor could have done with the treasurer was to protect and indemnify its so, he can accomplish the same result by bringing his own citizens in their dealings with the company. The action in the State court and removing it thence to the assignment to the new company in Missouri did not Federal court. Berger v. Com’rs, 2 MoCrary, 483; 5 deprive them of the right to this indemnity. Lovell Fed. Rep. 23; Miller v. C. B. & Q. R. Co., 3 McCrary, v. Insurance Co. Opinion by Bradley, J.
460; 17 Fed. Rep. 97; City of Lexington v. Butler, 14 (Decided April 7, 1884.)
*19 Fed. Rep.
Wall. 282; Bushnell v. Kennedy, 9 id. 387. Cir. Ct., of business, and to associate others with him in such N. D. Iowa, January, 1884. Bell v. Noonan (see 3 Sup. use, is not assignable. Rubber Co. v. Goodyear, 9 Ct. Rep. 507). Opinion by Shiras, J.
Wall. 788; Troy Fact. v. Corning, 14 How. 193; Searis INJUNCTION REFUSED TO RESTRAIN EXERCISE OF
v. Bouton, 12 Fed. Rep. 140. Cir. Ct. N. D. New York, MUNICIPAL POWERS — ADEQUATE REMEDY AT LAW.
Feb. 1, 1884. Gibbs v. Hoefner. Opinion by Coxe, J. Courts of equity often interdict the unlawful exercise by municipal corporations of their powers; and possibly, cases of such peculiar hardship from the enforce
NEW JERSEY SUPREME COURT ABSTRACT* ment of a void ordinance in restraint of trade might arise, that a court of equity would feel moved to inter- DAMAGES — LIQUIDATED OR PENALTY — (1) It is s pose by injunction, even before its illegality had been general rule of construction, that the sum agreed upon established at law. But such cases would be excep- by the parties to a contract, to be paid for breach of tional. . Dill. Mun. Corp., $ 727; Ewing v. City of St. covevant by the non-performing party to the other, Louis, 5 Wall. 413; High, Inj., $$ 1242, 1244. The ordi- will be treated as a penalty, unless it is payable for an nary remedy for an injury from the operation of an injury of uucertain amount and extent; or if payable unlawful municipal ordinance is by an action at law, for more than one breach, unless the damages which for complete redress in damages is generally thus at
arise from each of them are of uncertain amount. tainable. (2) A borough ordinance forbids any person (2) Where a contract contains several stipulatious, and to convey or have, etc., within the borough limits, any the damages resulting from not complying with part of nitro-glycerine, (except enough to “shoot” any oil
them are capable of being measured, the sum fixed well within the borough, and this upon payment of a
upon will be treated as a penalty. 1 Ad. on Cont., $ license fee), under a penalty of not less than $50, nor
496; Astley v. Wilson, 2 B. & P. 346, 353; Tayloe v. more than $100, for each offense, upon conviction be- Sandiford, 7 Wheat. 13; 2 Pars. on Cont. (4th ed.) 438. fore the burgess or a justice of the peace. Plaintiff's
(3) The sum named cannet be regarded as a penalty as works for the manufacture of nitro-glycerine are nine to part of the provisions of the contract, and as liqui. miles from the borough, and a magazine for its stor
dated damages as to the other part; if it be not liquiage is one mile from the borough, on the opposite dated damages as to one of the covenants, it cannot be side. Plaintiff's employees conveying nitro-glycerine
so as to the others. Whitfield v. Levy, 6 Vroom, 149, from its works to the magazine along public high.
156. (4) The intention of the parties is to be derived ways, through the borough limits, were arrested and
from the whole contract; and whenever it be doubtfined, but these judicial proceedings were removed
ful whether the sum named is intended by the parties into the proper county court, and are there pending.
as penalty or as liquidated damages, it will be conThe plaintiff, alleging that the ordinance is unreason
strued as a penalty. Cheddick's Ex'r v. Marsh, 1 Zab. able, unauthorized and void, aud injurious to its busi
463; Crisdee v. Bolton, 3 C. & P. 240. Lansing v. Dodd. ness, filed a bill in equity against the borough to re
Opinion by Parker, J. (See 29 Alb. L. J. 373; 21 Eng. strain the enforcement thereof, etc. Held, that the
R. 685.- ED.] case was not one for equitable relief, and on this CONSTITUTIONAL LAW - POWER OF LEGISLATURE ground, a preliminary injunction refused. The case
OF ACT. -(1) The Legislature, in a grant of of Butler's Appeal, 73 Penn. St.448, is not an authority, powers to municipal governments, may include in one it seems to me, for the proposition that an injunction act provisions for licensing hacks, and also power to is a proper remedy for the injury of which the plaint- license, regulate and prohibit the manufacture or sale iff complains. That was a case of a clearly illegal ex- of liquor, if the title prefixed to the act be so framed ercise by city councils of the taxing power. I have as to comply with the constitutional requirement, been referred to no precedent, nor have I been able to State v. Town of Union, 4 Vroom, 351; Payne v. Mafind any, where a court of equity in such a case as the hon, 15 id. 213; People v. Briggs. 50 N. Y. 553. (2) The present has granted the relief the plaintiff seeks. But Legislature may make the title of an act as restrictive in several analogous cases such redress has been de- as it pleases, and may so frame the title as to preclude nied, and the aggrieved party turned over to his legal many matters being included in the act which otherremedies. Burnett v. Craig, 30 Ala. 135; Gaertner v. wise might have been included in one act. The ConCity of Fon du Lao, 34 Wis. 497 ; Cohen v. Goldsboro, stitution has made the title the conclusive index to 77 N. C. 2; Brown v. Catlettsburg, 11 Bush, 435. the legislative intent; and it is no answer to say that Here the plaintiff's legal remedies are, I think, ample. the title might have been made more comprehensive, One of these has already been invoked ; for by certio- if the legislature have not seen fit to make it so. rari or appeal the proceedings against the plaintiff's Cooley on Const. Lim. 149, 179. The precedents in this employees for violation of the ordinance bave been re- State are in accordance with this view. Rader v. moved into the proper State court, and are there pend- Township of Union, 10 Vroom, 509-512; Evernham v. ing. It does not appear to me that the plaintiff is
Hulit, 45 N. J. 53. In each of these cases an act of the likely to sustain any injury which may not be fully legislature which contained subjects the legislature and adequately compensated by an action for damages,
might have embraced in one act was held to be unconshould it be adjudged that the ordinance is invalid. stitutional as to one subject, because the title of the Cir. Ct. W. D. Penn., Jan'y 21, 1884. Torpedo Co. v. act was so framed as not to embrace it. No particular Borough of Clarendon. Opinion by Acheson, J. form has been framed for the expression of the legisPATENT
lative purpose in the title of an act. As was said by UTILITY-LICENSE NOT ASSIGNABLE. (1) A patent will not be declared void for inutility if
Mr. Justice Miller, " the constitutional provision reit possesses any utility whatever, even the slightest.
ferred to does not require that the title should be exact Lowell v. Lewis, 1 Mason, 183, 186: Earle v. Sawyer,
and precise in all respects; it is a sufficient compliauce 4 id. 1, 6; Seymour v. Osborne, 11 Wall. 516, 549; Wil
with its terms if this is done fairly and in such a man. bur v. Beecher, 2 Blatchf. 132, 137; Lehnbeuter v.
ner as to convey to the mind an indication of the subHolthaus, 105 U. 8. 94; Bell v. Daniels, 1 Fisher, 375;
ject to which it relates. Matter of App. of Dept. of Shaw v. Lead Co., 11 Fed. Rep. 711; Wheeler v.
Public Parks, 86 N. Y. 437-440; In re Ferdinand Reaper Co., 10 Blatchf. 189; Vance y. Campbell, 1
Mayer, 50 id. 504; Cooley on Const. Lim., 144, 173. But Fisher, 485; Sim. Pat. 92, 93; Walk. Pat. 52, 53. (2) A
the court must see that the language used in the title, license to use a patented process at the licensee's place
*To appear in 45 N. J. L. (16 Vroom).