« ForrigeFortsett »
hear parol evidence to that effect, on account tain uses, provided that the landsåso settled on of the Statute of Frauds and Perjuries. In the wife should be in lieu of her customary esAndrews v. Andrews, 8 Conn. 80, there was no tate. In Williams v. Chilty, 3 Ves. 545, leaseprovision extending beyond the life of the hold estates assigned in trust for the wife in husband; yet the widow was decreed to be lieu of dower were held to be a good equitable barred. The court say in this case: “There jointure. In Estcourt v. Estcourt, 1 Cox's is, perhaps, no principle better settled than Ch. 20, the wife was held barred of dower by a that any provision which an adult before mar- bond of the husband to the wife's mother, his riage agrees to accept in lieu of dower, intended wife being twenty-five years of age, will amount to a good equitable jointure." conditioned to settle £500 per annum on the Ia Shaw v. Boyd, 5 Serg. & Rawle 310, and wife for life, to be in full satisfaction of her Jones v. Powell, 6 Jobps. Ch. 194, we find a dower. In Tew v. Earl of Winterton, 3 Bro. C. recognition of the doctrine, that acceptance of C. 493, it appears that the court considered the a term of years or a sum of money, or a trust wife barred of her dower by a bond entered into estate, or any other kind of collateral satisfac- by the husband before marriage, to convey tion is a good bar in equity, and in Kennedy v. sufficient estates, in trust, to pay her in case she Mills, 13 Wend. 553, it was said that the wife survived him, an annuity of £600 in lieu of may, by her assent, before marriage, be barred dower. In Corbet v. Corbet, 1 Sim. & Stu. 612, by a pecuniary provision. In McCartee v. the widow was held barred by an indenture of Teller, 2 Paige, 518, the intended wife was an
the husband, before marriage, granting to infant at the time the contract was made. The trustees a yearly rent charge of £100 in bar of Chancellor said: 6. An adult female might in dower. See also Hervey v. Hervey, 1 Atk. 563. equity bind herself by an ante-nuptial agree- The dower is barred, whether the wife was, or ment to receive a simple pecuniary provision, was not, of age at the time of the settlement, although uncertain as to the time of its com- provided it received the assent of the parent or mencement, or as to the extent of its duration. guardian. Earl v. Drury, McCartee v. Teller, The text-books are full of allusions to the same Corbet v. Corbet, supra. effect. 4 Dane's Abr., c. 130. An adult woman 4. It must be in satisfaction of her whole · is said to be barred: By her acceptance of dower, and not of a part of it. Co. Litt. 36 b.; any provision, however small and precarious. Vernon's Case, 4 Co. 1. 1 Cruise Dig. 226: by her acceptance of any 5. It must be so expressed or averred, or by provision. Clancy on Husband and Wife;
necessary implication appear to be so made in by her agreement to accept any provision, satisfaction of dower. Co Litt. 36 b.; Vernon's however inadequate or precarious. 1 Roper Case, 4 Co. 1. on Husband and Wife, 476; by any terms 6. It must be made before marriage. 5 which she may think proper to accept. 1 Johns. Ch. 482. Washb. Real Prop., 319. She may accept, if Of all the conditions which the original legal she pleases, a chance in satisfaction of jointure prescribed, as requisites for barring dower, she agrees to. Williams Real Prop. | dower, only the last three have been retained 226.
as necessary conditions in the execution of a 3. It must be made to herself, and not to
valid ante-nuptial contract. The statutes of another in trust for her. In Vizard v. Long
the various States may have made some modiden, cited in Tinney v. Tinney, 3 Atk. 8, and
cations in these provisions, but they have all Earl v. Drury, 2 Eden, 66, by Lord Hard
substantially enacted similar clauses. wicke, who was counsel in the case, the bar of While it is seen that the courts have departdower was a bond by the husband, previous to
ed far from the requisites essential to constimarriage, agreeing to settle on the wife £14
tute a good legal jointure in the construction per annum for her livelihood and maintenance.
of ante-nuptial contracts, and have given them In Jordan v. Savage, Bac, Abr. Jointure, B 5, a liberal interpretation-Dominick v. Michael, 717, 2 Eq. Ca. Ab. 102, cited in 2 Edens Ch. 66,
4 Sandf. (N. Y. Sup. Ct.) 374 ; Gause v. Hale, and 2 Paige, 557, the wife was held barred of 2 Ired. (N. C.) Eq. 241; Smith v. Maxwell, I her customary free bench by a covenant of the Hill (S. C.) Ch. 101; Hutchins v. Dixon, 11 husband with trustees to settle his land to cer- Md. 29—they have always looked upon them
with the same circumspection as upon agree- what would be revolting to all the better feelments between persons standing in a fiduciary | ings of woman's nature; to have instituted inrelation to each other. They have been none quiries into the property and fortune of the the less guarded than relations existing be- betrothed would have indicated that she was tween parent and child, or guardian and ward, actuated by interested motives. She shrunk and circumstances attaching the least suspi- from the thought of asking a single ques. cion to those relations, will often render them tion. She executed the contract without hesitavoid and of no effect,
tion and without inquiry. She believed that he Did the contract comply with the provisions would propose nothing but what was just, and of the statute? Was it reduced to writing, she had a right to exercise that confidence. She and properly signed? Was it in lieu of dower, lived with him seventeen years, and, no doubt, and expressly stated in the deed? Was there
assisted largely in accumulating the fortune of any fraud or misrepresentation at the time,
fifteen thousand dollars, of which he died poswhich induced the wife to assent to its condi
W. H. W. tions ? These are questions which present themelvesto the consideration of the court, and demand its careful attention. As to the compli- FRANCHISE - MEANING OF TERM, MEMance of the contract with the statute of frauds,
BERSHIP IN BOARD OF TRADE. what will be considered a sufficient part performance, to constitute an exception to the rule
BOARD OF TRADE v. PEOPLE. and take it out of the operation of the statute, is often difficult to determine. In 4 Strobh.
Supreme Court of Nlinois. (S. C.) Eq. 179, it is stated that a parol agree
(Filed at Ottawa, June 21, 1879.) ment in consideration of marriage, if made
The right of membership, in the board of Trade, an and sufficiently proved, will be sustained as an
organization for the transaction of commercial busi. ante-nuptial settlement; but where the only ness, is not a "franchise" in the strict sense in which proof shows that the understanding was made
that term is used in the statute, and therefore an ap
peal does not lie from the circuit court directly to the after marriage, it will not be sustained. In 3
supreme court, in a case where such a right is inCall (Va.) 384, a parol marriage contract, en
volved. tered into before Va. Stat. 1785, requiring marriage contracts to be recorded, was sus
Appeal from Cook County. tained against a subsequent voluntary convey
SCOTT, J., delivered the opinion of the court: ance. See, also, Houghton v. Houghton, 14
The relator having been expelled from the
Board of Trade of the city of Chicago, filed a petiInd. 505 ; Beard v. Griggs, 1 J. J. Marsh tion in the circuit court of Cook county for a (Ky.) 22.
mandamus, to compel that body to restore him to The case of Kline v. Kline, 57 Penn. St.
membership. On the hearing, a peremptory writ 120, is interesting as furnishing an instance of
of mandamus was awarded in accordance with the
prayer of the petition, and respondent brings the what was regarded as a material concealment
case directly to this court on appeal, notwithor fraud in the contract, setting it aside. The standing the law establishing appellate courts was judge of the lower court, in giving judgment,
in force when final judgment was pronounced in
the cause. said: “The woman was bound to exercise
The relator moves to dismiss the ap
peal ou the ground that this court has no jurisdicher own judgment, and take advantage of the tion to hear the errors assigned. opportunity that existed to obtain information; The decision of the motion made involves a conif she did not, it was her own fault. The par
struction of the statute under which the appeal ties were dealing at arms-length. He was not
was taken, that is supposed to confer the right and
which provides as follows: “ Appeals and writs of bound to disclose to her the amount or value
error shall lie from final orders, judgments or deof his property." Judge Sharswood reversed crees of the circuit courts
directly to the judgment, saying: “To say that she was to the Supreme Court in all criminal cases and in bound, when the contract was proposed, to
cases involving a franchise or a freehold or the
validity of a statute.” The practice act upon the exercise her judgment—that she ought to have
same subject provides that “ in all criminal cases taken advantage of the opportunity that ex- and in cases in which a franchise or a freehold or isted to obtain information, and that if she did
the validity of a statute is involved, appeals shall
be taken directly to the Supreme Court, in case not do so, it was her own fault, is to suggest
the party appealing shall so elect, excepting in
chancery cases.” As this is not a chancery suit, societies and associations are incorporated under it is maintained the appeal will lie, because it is general or special laws, but it was never underclaimed a “franchise” is involved.
stood that members of such societies or associaThe Board of Trade is a corporation organized tions possessed or exercised any franchise. That under a special act of the General Assembly, and they obtain what is most appropriately termed is a corporation organized solely for the purpose membership,” which means freedom of the priva of transacting commercial business and for no ileg s it confers, and nothing more.
That is preother purpose whatever. The relator was a mem- cisely the case at bar. Relator had membership ber of the Board and was entitled to all the bene. in this corporation and the freedom of its privilfits of membership. Whether relator was lawfully eges, whatever they were, but in no just sense did or illegally expelled is not a matter that need now he exercise any franchise granted to him or the be considered. The subject of the present litiga- corporation by the General Assembly. It is lawful tion concerns his membership and his right to be for any person or association of persons to transact restored to the enjoyment of its privileges. No commercial business without legislative grant for question is made that in any degree concerns the that purpose. A corporation for such purposes is validity of the corporation, nor has the litigation a mere convenience and nothing more. A member any relation to it. The inquiry, then, must be, of such a corporation exercises no other right in does the membership of the relator come within. the buying or selling of commodities than what the definition of a "franchise," as that term is used any citizen of common right may do; except as in in the statute? Our conclusion is it does not. the present instance, by virtue of his membership, This court in Chicago, &c. R. Co. v. People, 37 he may transact such business in a room belongIll. 547, adopted the definition of a franchise as ing to the corporation, which is a mere privilege given by Blackstone, that "it is a royal privilege or and not a franchise in the sense that term is used branch of the King's prerogative subsisting in the in the statute. One test that might well be applied, hands of the subject, and being derived from the is that in case of the non user or misuser by crown must arise from the King's grant," and the party owning membership in such a corporaadded that " corporate franchises in the American tion, an information would not lie against him at States emanate from the government or sovereign the suit of the people. It is not understood that the power; owe their existence to a grant, or as at people are prosecuting this case further than to common law to prescription, which piesupposes a give the writ which any citizen may invoke as a grant, and are invested in individuals or a body statutory right. Further than that, the people politic.” Precisely the same definition has been lend no aid to this prosecution. So far as the uniformly given of a franchise by text writers and General Assembly has granted a franchise to this courts of the highest authority. Angel & Ames on corporation, it is a matter of no public concern Corp., sccs. 4, 737; Bank of Augusta v. Earle, who owns a membership in the corporation. 13 Pet. 519; Morgan v. Louisiana, 3 Otto, 217; No franchise in the sense that term is used in City of Bridgeport v. New York, &c. R. Co., 36 the statute being involved in this litigation, the Conn. 255; People v. Utica Ins. Co., 15 Johns. motion made must prevail, and the appeal will be 358. In the Bank of Augusta v. Earle, it was said
dismissed. by the court: “ It is essential to the character of a SCHOLFIELD and DICKEY, J.J., dissenting: franchise that it should be a grant from the sover- We do not concur in the opinion. We think eign authority, and in this country no franchise that the word “franchise as used in the consti. can be held which is not derived from a law of tution and in the statute was not used in the strict the State."
technical sense, but in its broader and more popAs was said in City of Bridgeport v. New York,
ular sense. &c. R. Co., “ the term, franchise, has several sig. nifications, and there is some confusion in its use, but when it is used in a statute or elsewhere in the BOND STIPULATION FOR ATTORNEY'S law, it is generally, if not always, understood as FEES IN CASE OF ACTION UPON. a special privilege conferred by grant from the State or sovereign power, as being something not WILSON SEWING MACHINE CO. V. MORENO.
to the citizen of common right.” In Morgan v. Louisiana, the court very justly remarked that much confusion of thought had arisen
United States Circuit Court, District of Oregon,
August, 1879. from attaching a vague and indefinite meaning to the term, franchise." It must have been in this restricted sense
A stipulation in a bond to pay a reasonable attor
ney's fee to the plaintiff, in case a promissory note is “ franchise was used by the General
not paid, or other contract is not performed according Assembly in the statute we are considering and to its terms, and the party entitled to demand such not in that broad sense contended for. No doubt performance is compelled to enforce it by law, is just the word " franchise " is sometimes used as syn
and valid. onymous with privileges and inmunities of a personal character, but in law, its appropriate mean- DEADY, J. ing is understood to be something which the citi- On September 1, 1877, the defendant, Moreno, zen can not enjoy without legislative grant. Many with four others as his sureties, executed and deof our religious, benevolent, literary and scientific livered a bond to the plaintiff in the penal sum of
$1,000, conditioned for the payment of all indebtedness on the part of Moreno to the plaintiff; and on November 23, 1877, said Moreno with two others as his sureties, executed and delivered another bond of like amount and condition to the plaintiff.
These actions are brought upon these two bonds to recover an amount alleged to be due from said Moreno for goods, wares and merchandise sold and delivered to him by the plaintiff, and it is agreed that the amount due the plaintiff on such account is on promissory notes, $741.74, and upon an open account, $629.70; in all, the sum of $1,371.44. Each bond contains a stipulation to the effect, that in case suit is brought upon the same, the obligors therein will pay, in addition to the penalty thereof, the sum of $100 "for attorney's fees.” The plaintiff now moves for judgment upon the complaint for the amount admitted to be due and for an hundred dollars in each action as an attorney's fee therein.
This latter part of the motion the defendant resists upon the ground that the provision in the bond for the payment of such fee, in addition to the penalty thereof, is void.
It appears from the books that the question raised upon this motion is comparatively a new and vexed one. It has mostly arisen in actions upon promissory notes containing a stipulation for the payment of a fixed sum or percentage as an attorney's fee to the plaintiff, in case an action is brought to collect the same. And the objection to the stipulation usually is, that the amount which may be collected upon the note, being thereby rendered uncertain, it is unnegotiable and not valid as against an endorser, or that such stipulation makes it usurious, and therefore void in whole or part.
But in some few instances, the courts have gone farther and held that such a stipulation is absolutely void, as contrary to the policy of the law and tending to the oppression of the debtor.
In Bullock v. Taylor, 7 Cent. L. J. 247, decided by the Supreme Court of Michigan in 1878, a stipulation in a note for the payment of a certain sum as an attorney's fee over and above all taxable costs, in case the same was sued upon, was held void as opposed to the policy of the law upon the subject of attorney's fees, and susceptible of being made the instrument of oppression. In Woods v. North, 84 Pa. St. 409, it was held that a similar stipulation in a note rendered the instrument non-negotiable, and thereby relieved the iudorser from liability thereon. In Witherspoon v. Musselman, 8 Cent. L. J. 75, decided by the Kentucky Court of Appeals n 1878, according to the brief abstract in the CENTRAL LAW JOURNAL, supra, it was held that such a stipulation in a note was void, because it tended to the oppression of the debtor and the encouragement of litigation.
On the contrary, in Smith v. Silvers, 32 Ind. 321, it was held that a stipulation "whereby the debtor agrees to be liable for reasonable attorneys' fees, in the event that his failure to pay the debt shall compel the creditor to resort to legal proceedings to collect his demand, is not only not usurious, but is so eminently just that there should be no hesitation in inforcing it.” In Wyant v. Pottorff, 37 Ind.
512, a stipulation in a note for a reasonable attorney's fee was impliedly sustained, though it was held that there must be proof of what is a reasonable fee. In Nickerson y. Sheldon, 33 Ill. 372, it was held that a stipulation for an attorney's fee did not affect the negotiability of the note, but the fee was not claiined in the action. In Clawson v. Munson, 55 Ill. 394, a stipulation in a mortgage to secure a note for an attorney's fee to be paid as part of the costs of collection was held valid—the court citing Dunn v. Rogers, 43 Id. 260, in which a similar stipulation in a mortgage was enforced-and upon the question of hardship said that the defendants had expressly provided in the mortgage for the consequences in default of payment, which they might have avoided “by paying the notes at maturity." In Gaar v. Louisville Banking Co., 11 Bush 189, it was held that a stipulation in a note for an attorney's fee was not usurious, but an agreement to pay a penalty in default of prompt pay. ment of the notes, and therefore valid.
In Howenstein v. Barnes, 9 Cent. L. J. 48, decided by the United States Circuit court for the District of Kansas, in 1879, it was held that a stipulation for an attorneys' fee is valid; that it did not affect the negotiability of the paper.
The ruling that such a stipulation makes the amount payable upon the note uncertain, and it is, therefore, non-negotiable, is extremely technical, and I think unsound. The principal and interest is the sum due upon the note at maturity, and by the payment thereof it will be fully satisfied. And it is only in case of default in such payment and after the note is overdue, and has therefore lost its character of negotiability, that the penalty or attorney's fee can be claimed or collected at all. In fact the stipulation, although contained in the note, is strictly and properly speaking no part of it, but a distinct contract, collateral thereto, as much as if it was written on a separate piece of paper.
The ruling that such a stipulation makes the note usurious is founded upon the unauthorized assumption of fact, that the sum agreed to be paid as an attorney's fee, in case the note is not paid at maturity, is not what it purports to be, but illegal interest in the disguise thereof. Of course, where it appears that such is the real nature of the transaction it should be treated accordingly. But the fact cannot be assumed any more than that a like sum of the alleged principal is illegal interest in disguise.
Accordingly, the tendency of the decisions hostile to this stipulation is to leave these untenable grounds and hold it void upon the ground that it is a convenient device for usury and tends to the oppression of the debtor. And it may be admitted that this suggestion is not without force, particu. larly in cases where the amourt provided is largely in excess of what such collection could ordinarily be made for. But a court assumes to make the law rather than declare it when it pronounces such a contract void, not because it is prohibited or intrinsically wrong, but because it may be used as a cover for usury and a means of oppressing the debtor.
An agreement by the debtor to pay a reasonable
pense of collecting his debt by law, rests upon the same ground as the right to make any other contract not prohibited by law or contra bonos mores.
Assuming, then, what has not been questioned, and upon which I express no opinion, that $100 is no more than a reasonable fee in each of these cases, the stipulation is both just and valid, and therefore ought to be enforced. There must be judgment accordingly.
PROMISSORY NOTE BONA FIDE PUR
ATLAS NATIONAL BANK V. SAVERY.
Supreme Judicial Court of Massachusetts March
attorney's fee in case his creditor is compelled to incur the expense of an action to collect the debt, is only an agreement to so far reimburse the creditor the loss which he may sustain by reason of the debtor's failure to perform his contract to pay his debt. In justice and fairness it stands on as high ground as the right to recover damages for the non-performance of any contract—as to deliver grain or goods at a certain time and place.
If A loans B $1,000 for the period of one year for the sum of $100, and by reason of the failure of B to perform his contract, A is put to the expense of paying an attorney $50 to collect the same by action, no reason can be given why B should not make good this loss, and if so, why may he not agree to do so in advance? As it is, the law compels B to repay the fees which A is required to pay the officers of the court in the prosecution of his action, including a nominal attorney's fee of not more than $20. SS 824, 983 of the R. S.
The provision in § 824, supra, allowing the prevailing party to tax an attorney's fee of from $5 to $20 is not, in my judgment, exclusive, but only applies in cases where the contract of the parties is silent on the subject. In such cases the law allows the fee prescribed and no more. But this does not prohibit the parties from contracting that a greater or less one shall be paid. A statute which simply provides that a plaintiff may recover interest on money over due, at a certain rate, does not preclude parties from agreeing that a different rate may be recovered under like circumstances. And if the borrower and lender, in the absence of any statute to the contrary, may agree upon any rate of interest for the use or detention of the loan, it is not apparent why they may not agree upon the payment of an attorney's fee in case the latter is required to collect the same by law.
But where the fee is so large as to suggest that it is a mere device to secure illegal interest or some unconscionable advantage, the court should be slow to enforce the payment of it and ought probably, upon slight additional evidence to that effect, to refuse to allow it, or reduce it to a reasonable sum. Borrowers and lenders seldom deal on equal terms, and the necessities of the former often constrain them to accede to terms and conditions which are oppressive, in the vain hope that they will be able to meet their engagements promptly, and thereby avoid the payment of the charges and penalties stipulated for in case
It would, then, be better if these stipulations were not made for a fixed sum or percentage, but rather for such sums as the court, under all the circumstances, might judge reasonable and right, In this way regard might be had to the nature and value of the services actually rendered by the attorney. Where the judgment is obtained without opposition on the part of the debtor, as is often the case, the fee should be less than where it is obtained against such opposition.
But after all, the right of the parties, in the absence of any statute to the contrary, to contract for the payment of a reasonable attorney's fee by the debtor, in case his creditor is put to the ex
1. A, A MEMBER OF THE FIRMS of P & Co. and s & Co., made and signed in his own name three promissory notes, upon which he indorsed, out of the usual course of business of, and in fraud of the firm, and for his own benefit and accommodation, the firm name of S & Co. and also P & Co. These notes were obtained by the plaiutiff in the market from a broker with no evidence that he was not a bona fide holder of said notes for value. Held, that there was no presumption that the broker was the agent of A, nor any presumption as to the ownership, other than that which the possession and power of disposition implies. Held, further, that the mere form of the notes themselves was not sufficient, as matter of law, to charge the plaintiff with notice of the fact that they were accomdation paper; but the jury are to say whether there was anything in the form of the notes, or in the way in which they were signed, which ought to excite the suspicion of a reasonably prudent man; and, if so, whether the plaintiff must have known that they were accommodation paper.
2. A NATIONAL BANK BOUGHT promissory notes in the market, and upon default of the maker brought suit thereon against the indorsers, who requested the court to rule that the plaintiff under its corporate powers had no right to purchase the notes, but the court declined so to rule, and instructed the jury that the bank had the right to purchase notes in the manner in which the notes in suit were purchased. Held, that assuming that a national bank can not purchase notes, the contract of purchase is entirely in Tependent of the executory contract which the plaintiff is seeking to enforce; and whether the plaintiff is holding the notes for itself or for another, is wholly immaterial to the defendant, unless it shall appear that it is holding them for some one who could not enforce them against the defendant.
Action of contract on three promissory notes.
At the trial the following facts appeared in evidence: That the plaintiff bank purchased each of the three notes of a broker at its place of business, before maturity, at the then going rate of discount for first-class business paper; that the notes were signed by Alexander Law, who was a member of the firm of C. F. Parker & Co., and also of the firm of John Savery's Sons, and that the firm name of John Savery's Sons was indorsed upon said notes by said Law, out of the usual course of business of the said firm, in fraud of said firm and for his own