« ForrigeFortsett »
could act; that (aside from the instance of a separate estate) a married woman could contract in no way, save that specifically pointed out by statutory regulation-i. e., by deed duly executed and acknowledged; and that as the deed in question, as executed, did not convey the land intended, the matter, so far as concerned reformation of the instrument, was beyond the reach and domain of equitable interposition. And in that case it was remarked: "Aside from the exceptional case above noted, a feme covert is utterly incapable of binding herself by a contract to convey her land, either at law or in equity, except by a compliance with the prescribed statutory forms. attempted contract on her part is not such compliance, nor is her disappointed intention to convey clothed with those forms. deed which Mrs. Shroyer, in conjunction with her husband, acknowledged, could, if possessed of any validity at all, manifestly be effectual in one of two ways-either as a deed or as a contract to convey. If as the former, then its sole effect as to her was to pass whatever of legal title she had to the land therein described, and to none other. If as a contract to convey, then its effectiveness would consist in passing her equitable interest in the land intended to be conveyed, although not mentioned in the instrument which she signed. But as a mere contract to convey, it was utterly ineffectual, by reason of the incapacity before mentioned."
Precisely the same view was taken in Martin v. Hargardine, 46 Ill. 322, where it was said: "The difference between correcting a deed as to the husband, or, if he is dead, as to the heirs and to the wife or widow, is this: As to the husband, the deed is made in execution of a contract between the grantor and grantee, and if it does not properly express the contract as really made, either as to the description of the lands or otherwise, it can be corrected by a court of chancery on the making of satisfactory proof. * * * But the wife is incapable of making a contract which will bind her as to her dower. She can relinquish it to the grantee of her husband, but only in the manner pointed out by the statute. The execution of a deed by signing, sealing and delivering it is not sufficient, much less an agreement to execute a deed. The deed must not only be signed and sealed, but it must be acknowledged in a special manner, before an officer designa
ted by the law, and a certificate must be place by such officer upon the deed, showing such acknowledgment to have been made in the mode required by the statute. The character and effect of this transaction can not be changed by subsequent proof. If the deed describes the north-east quarter instead of the south-east, as was intended, and the wife executes and acknowledges the deed before the mistake is corrected, all that can be said is, that she has relinquished her dower in the lands described in the deed, and in none other, and although she may have agreed to relinquish it in another tract, and may have supposed she was doing so, yet if she has not done so, the court has no power of compelling her. Her agreement does not bind her, and the court can not take her relinquishment of dower in one tract, and apply it to another in which she never has relinquished. This would make for her a new deed."
A similar enunciation is made in Knowles v. McCamly, 10 Paige, Ch. 342. Mr. Justice Story, says: "By the general principles of law, a married woman is, during her coverture, disabled from entering into any contract respecting her real property, either to bind herself or to bind her heirs. And this disability can be overcome only by adopting the precise means allowed by law to dispose of her real estate; as in England by a fine, and in America by a solemn conveyance." 2 Story Eq., § 1391, and cas. cit. And the great current of authority flows in this direction.
Mr. Bishop says: "If there is a defect in the wife's conveyance, rendering it void at law, it is equally so in a court of equity; and the latter tribunal has no jurisdiction to cure it, or compel a conveyance from her in due form. It is so, even though the purchasemoney has been paid." 1 Bishop Law Mar. Wom., § 599, and cas. cit. I have been able to find but two cases, however, in the reports, Shroyer v. Nickell, and Martin v. Hargardine, supra, where the point has been directly decided that equity could not lend its aid where a mistake had been made as to the description of the land intended to be conveyed by a married woman. But if it be true that equity cannot cure a defect in the deed of a feme covert, it certainly cannot matter in what the defect consists. If there is no defect the title has passed by the deed, and equitable interposition is alike impossible:
and unnecessary. If there is a defect, the deed is void at law," and equity cannot cure it. And it must be upon the very and sole ground that the deed is inoperative and valueless at law, that induces a complainant to come into a court of equity for its correction. That a court of equity will not enforce the agreement of a married women to convey her land, is settled by abundant authority. Wooden v. Morris, 2 H. W. Green, 65, and cas. cit.; Lane v. McKeen, 15 Maine, 305, and cas. cit.; Pilcher v. Smith, 2 Head, 208; and it would seem that the same reasons which would prevent equitable interference, by way of specific performance, would also prevent equitable interposition, by way of reformation. For it must be remembered that equity can neither enforce nor reform a contract, unless it has validity. But the contract of a married woman, respecting land held simply in her own right, has no existence while executory, nor validity when executed, unless executed as the statute requires.
A contrary view would require that a court of equity, instead of following the law, should override the plainest statutory provisions, and substitute its decretal compulsion for what the statute has ordained shall be done without any compulsion whatever.
If correctly reported, a recent case in Indiana, Hamer v. Medsker (an abstract of which appeared in the CENTRAL LAW JOURNAL, Vol. 7, No. 4, July 26, 1878), holds that, "when a married woman has attempted to convey her real estate, but the conveyance is defective for want of compliance with the requisites of the statute, a court of equity will not lend its aid. In such a case, the court will not require her to make a conveyance, in accordance with the requirements of the statute. This would not only contravene the policy of the law, but require her to make such a contract as she herself has not made. Nor is there, in such a case, any contract that can be enforced by way of specific performance, because the feme covert is incapable of making such a contract, except in the manner prescribed by statute." statute." But after laying down the premise thus broadly and correctly, the court also holds that where a married woman has received the purchase-money for her land, and has, conjointly with her husband, executed a deed "in all respects in accordance with the statute, and perfect,"
except that it does not describe the land sold, the mistake may be corrected as against her and her heirs. This conclusion does not seem to be at all consistent with, or warranted by the premise. In short, the learned court, while correctly asserting that a valid contract is a sine qua non for a decree for specific performance, has fallen into the grave error of holding that such a contract is altogether immaterial as the basis of a decree for reformation. The motive which prompted the court to reach what was so illogical a conclusion, that of preventing injustice being done, was certainly a worthy one; but the purposes of justice could have been abundantly accomplished, in other modes, ex. gr.: by declaring the purchase-money a lien upon the land. Such a ruling has passed into precedent in the case of Pilcher v. Smith, 2 Head, 208. And that ruling was in full accord with. that familiar principle in equity jurisprudence, which makes purchase-money, prematurely paid, a lien on the land upon which it was paid. Mackreth v. Simmons, 15 Ves. 344, 353; Adam's Eq. 128, and cas. cit.; Burgess v. Wheate, 1 W. Black. 150; s. c., 1 Eden, 211. The mere payment of purchase-money, as is well known, constitutes no valid basis for specific performance, as there is, owing to the statute of frauds, no valid contract; but courts of equity, in order to prevent injustice, will declare the money a lien on the land on which it was prematurely paid. It seems quite evident that such a decree was as far as the court could have consistently gone in the case of Hamer v. Medsker.
until the capital stock is all paid in, and a certificate of that fact made and recorded, as required by that act, and such a stockholder is not relieved from his double liability by the payment to the corporation of the stock subscribed by him.
2. EFFECT OF INCREASING CAPITAL STOCK.-Where an insurance company was operating under a special charter, the increase of its capital stock, in pursuance of the provisions of the general law, was in effect an incorporation under the general law, and all stockholders of the company assenting to such increase are subject to the additional liabilities imposed by the general law.*
3. THE CASE OF BUTLER v. WALKER, 80 Ill. 345, referred to and applied to this case.
Appeal from Cook county.
BREESE, J., delivered the opinion of the court: This was an action of tresspass on the case upon promises, brought to the Supreme Court of Cook county by Charles M. Tibbals and William H. Whitehead, as surviving partners of David Strick, deceased, plaintiffs, and against Washington Libby, defendant. The declaration is in three counts, charging in the first count that the Great Western Insurance Company of Chicago, was in January 17, 1873, a corporation organized and doing business under the general insurance law, entitled "An act to incorporate and govern fire, marine, and inland navigation insurance companies doing business in the State of Illinois," approved March 11, 1869; that this company was indebted to the plaintiffs in the sum of five thousand dollars; that on that day the company accounted with the plaintiffs and found to be in arrear and indebted to plaintiffs in that sum, and that defendant was then and still is a trustee and corporator of that company, and therefore liable to plaintiffs to the amount by him subscribed to and for the capital stock of the company. And they aver that defendant subscribed to that capital stock the sum of ten thousand dollars; and they further aver that the whole amount of the capital stock of that company had not been paid in, and a certificate thereof recorded as required by the act, and being so liable he promised to pay, &c. The second count alleges a reorganization of the company on Aug. 23, 1870, under the General Insurance Law, and its capital increased and did business as such reorganized corporation, and on January 17, 1872, the company was indebted to plaintiff in the sum of five thousand dollars; alleges that defendant is one of the trustees and corporators of the company; that he was a subscriber for the stock to the amount of ten thousand dollars; that no certificate was filed, &c. The third count alleges that this company, on July 28, 1871, made its certain policy of insurance to the plaintiffs by which, for the consideration of fifty dollars, it insured plaintiffs to the amount of five thousand dollars against loss, &c., to the stock, &c., the property of the plaintiffs situated in a building on Lake street and No. 9 Market street, in Chicago,
NOTE.-The provisions of the general incorporation law of 1857, of Illinois, being nearly the same as those of the insurance law of 1869, this decision has a wide application in that state.
for six months. The considerations of the policy are set out, the total destruction of the property by the fire of Oct. 9, 1871, to their loss of twelve thousand dollars, proofs of loss and their acceptance by the company and an accounting with the company on Jan, 17, 1872, and the company found indebted to the plaintiffs in the sum of five thousand dollars. It is then averred that at this time the defendant was a trustee, a corporator, a stockholder, and a director in the company, he having subscribed for ten thousand dollars of the stock of the same, wherefore he became liable, &c.
The general issue was pleaded and submitted to the court for trial. The court found against the plaintiffs and rendered judgment against them for the costs, to reverse which they appeal.
We have stated fully the plaintiffs case as he made it to appear by his declaration, and we cannot perceive any material difference between it and the case of Butler v. Walker, 80 Ill. 345. It was there held that the stockholders of the insurance company, subject to the general law of 1869, are liable for the debts of their company to the full amount of their respective shares of stock when the full amount subscribed has not been paid in, and he is not relieved of his liability by payment of the stock subscribed by him. Until the full capital stock is paid in and a certificate of the fact made and recorded, he is liable to be sued for the debts of the company to the amount of his stock.
Although this company had a special charter, yet the increasing of its capital stock to five million dollars under the general law, was in effect an incorporation under the general law, and subscribers to this stock incurred the liabilities imposed by that law.
We think the proof shows that Libby was a director of this corporation, and as one of the stockholders gave his written assent, and expressed in writing his desire that the capital stock should be increased to five millions of dollars; and as a director of the company, under his deposition that he with others composed a majority of the directors of the company, and that the company has a capital stock of five million dollars, divided into fifty thousand shares of one hundred dollars each; that one million, twelve thousand dollars were actually subscribed, and one hundred and eighty-six thousand, three hundred and thirty-five 93-100 dollars paid in, in cash, by the several stockholders, towards the payment of the shares respectively subscribed, and for no other purpose. In addition to this, it appears the name of defendant is found in the report required by law to be made by the president and secretary of the company to the auditor of public accounts, filed in his office August 23, 1870, as a subscriber for fifty shares of the stock, of the value of five thousand dollars, at which time defendant was a director of the company. The record is replete with evidence that defendant was a stockholder to the amount of five thousand dollars. The defendant denies he was ever a subscriber to the stock or a director of the corporation. We think this denial comes rather too late, when
his name appears in both capacities in all the reports of the company which the law required it to make to the public. It is barely possible that these things could be, and he not a director and stockholder. In the report to the auditor of August 23. 1870, the same is signed by defendant as one of the directors of the company, and the notary public certifies that each of the "subscribers thereto,” of whom defendant was one, swore to and subscribed the same.
The claim of plaintiffs against the insurance company was fully established, and they were in the strictest sense creditors of the company; and the liability of defendant as a stockholder is fixed. We take no note of the bankruptcy proceedings, as they can not affect plaintiffs' rights. Their right to recover against a stockholder is not taken away by the bankruptcy of the corporation of which he was a stockholder; that fact fixes the liability of the stockholders. This opinion has been delayed by reason of an intimation or suggestion from distinguished members of the bar, that the case of Butler v. Walker, supra, was not satisfactory to the profession, and that other cases of like nature would be presented, in order that it might be reviewed and reversed. No case of that kind having occurred, we are disposed to adhere to that opinion, and make this in conformity therewith. The judgment of the superior court is reversed, and the cause remanded for a new trial in conformity to this opinion.
1. ONE CO-TENANT OF REAL PROPERTY CANNOT RECOVER from his co-tenant on account of the appropriation by the latter directly to his own use of the products of the common property, where there is no agreement between the parties making the latter liable to the former on account of such appropriation, and where the latter has not excluded the former from the enjoyment of the common property.
2. TAXES PAID MAY BE SET-OFF.-Where one cotenant recovers of his co-tenant for receiving more than his just proportion of rents and profits of the common property, the latter is entitled to be allowed to off-set in reduction of the amount recovered all sums paid by him within six years for taxes upon the former's share of the estate.
Appeal from order of the District Court of Dakota county, denying defendant's motion for a new trial.
Seagrave Smith, for respondent; Davis, O'Brien & Wilson, for appellant.
BERRY, J., delivered the opinion of the court:
Defendant and the plaintiff's intestate were tenants in common of certain parcels of land, the former owning an undivided two-thirds, the latter the remainder. Defendant cut grass growing upon the land. This action is brought to recover onethird of the value of the same, as rents and profits" of the common property, received by defendant. It is not alleged or shown that defendant sold any of the grass. But the complaint alleges that the grass was cut and taken by him, and that he "converted" it to his own use. As these allegations are not controverted, it may be assumed that the defendant in some way appropriated the grass to his own use, and thus had the benefit of it, though it cannot be assumed that he sold it, or that he received value for it in money or otherwise. The answer denies that the value of the rents and profits was as large as alleged in the complaint, and attempts to set up a counter claim, arising out of the payment by defendant of all the taxes charged upon the whole of the common land. No facts are averred showing that any accounting is necessary in order to determine what share of the rents and profits received by defendant the plaintiff is entitled to recover. But upon the issues as found, if he is entitled to recover anything, he is entitled to recover a share of such rents and profits proportionate to his share in the lands, towit, one-third less the deduction (if any) to which the defendant may be entitled on account of the payment of taxes. In other words, it is upon the issues to be assumed, that the defendant is not entitled to have the plaintiff's one-third of the rents and profits received by defendant abated or reduced on any other account than that of such payment of taxes. Under this state of facts, there is no reason why, if the plaintiff is entitled to recover at all, he should not do so in this action which may properly be regarded as in the nature of assumpsit. Freeman on Co-tenancy, sec. 280284. The main question in the case is, whether one tenant in common can recover anything of his co-tenant for taking and converting to his own use the products of the common land. The question has, of course, no reference to a case of waste, or the receipt of rents or profits from a third perOur statute enacts that “one joint tenant or tenant in common, and his executor or adminis trator, may maintain an action against his co-tenant for receiving more than his just proportion of the rents and profits of the estate owned by them as joint tenants or tenants in common." Gen. Stat. ch. 75, sec. 24.
As respects the ground of the liability of one tenant in common to his co-tenant, this statute is analogous to 4 & 5 Anne, ch. 16, which gives an action of account by one tenant in common against another as his bailiff, "for receiving more than comes to his just share or proportion." Also, to the statute of New York, which gives a like action against a co-tenant "for receiving more than his full proportion." 1 R. S. 750, sec. 9. Also, to the statute of Indiana,which gives a tenant in common an action against his co-tenants, "for receiving more than his just proportion." The statute of Missouri is similar to the New York statute.
In Henderson v. Eason, 17 Ad. & El. N. S. 701, on appeal from the Court of Queen's Bench to the Exchequer Chamber, the passage above quoted from the statute of 4 and 5 Anne, was fully considered, and was held, "to apply only to the cases where the tenant in common receives money or something else, where another person gives or pays it, which the co-tenants are entitled to simply by reason of their being tenants in common, and in proportion to their interests as such, and of which one receives and keeps more than his just share according to that proportion." McMahon v. Burchell, 22 Eng. Ch. 125, is to the same effect. In Woolever v. Knapp, 18 Barb. 265, the statute of New York came under consideration. It was held to be substantially the same as the statute of Anne, and the court followed Henderson v. Eason, supra, holding that one of several tenants in common, who possesses the entire premises, without any agreement with the others as to his possession, or any demand on their part to be allowed to enjoy the premises with him, is not liable to account to his co-tenants for the use and occupation of the premises. This case is approved and followed in Dresser v. Dresser, 40 Barb. 300; in Elwell v. Burnside, 44 Barb. 447: in Wilcox v. Wilcox, 48 Barb. 327; in Scott v. Guernsey, 60 Barb. 163, and has not, so far as we discover, been criticised or disapproved in any of the courts of New York. In Crane v. Waggoner, 27 Ind. 52, the statute of Indiana above referred to was considered, and citing and following Henderson v. Eason, and Woolever v. Knapp, the court held, that the statute applied only to cases "where rent and payment in money or in kind due in respect of the premises is received from a third party by one co-tenant, who retains for his own use the whole, or more than his proportionate share," and that one tenant in common, unless he has been excluded from possession by his co-tenant, cannot maintain an action against the latter for use and occupation. Ragan v. McCoy,29 Mo. 356, is to the same effect. See also Isreal v. Israel, 30 Mo. 120; Izard v. Bodine, 3 Stock. 403; Davidson v. Thomson, 22 N. J. Eq. 83; Pico v. Columbet, 12 Cal. 414; Peck v. Carpenter, 7 Gray 283; Freeman on Co-tenancy and Partition, secs. 258, 270, 275, 276. A different view of the liability of a tenant in common is taken in Thompson v. Bostick, 1 McMullan's Eq. (So. Car.) 75; in Early v. Friend, 16 Gratt. 47; in Shiels v. Stark, 14 Ga. 435; in Hayden v. Merrill, 44 Vt. 348. But we think that Mr. Freeman is warranted in asserting, that "the decided preponderance of the authorities both in England and America affirms the right of each co-tenant to enter upon and hold exclusive possession of the common property, and to make such profi: as he can by proper cultivation, or other usual means of acquiring benefit therefrom, and to retain the whole of such benefits, provided that in having such possession and in making such profits, he has not been guilty of an ouster of his co-tenant, nor hindered the latter from entering upon the premises and enjoying them as he had a right to do. The reasoning upon which these decisions constituting the great bulk of the authorities on this
subject rests is, that as each co-tenant has at all times the right to enter upon and enjoy every part of the common estate, this right can not be impaired by the fact that another of the co-tenants absents himself, or does not choose to claim his right to an equal and common enjoyment; that it would be inequitable to compel a co-tenant in possession to account for the profits realized out of his skill, labor and business enterprise, when he has no right to call upon his co-tenant to contribute anything towards the production of these profits, nor to bear his proportion when, through bad years, failure of crops, or other unavoidable misfortunes, the use made of the estate resulted in a loss instead of a profit to the one in possession." Freeman on Co-tenancy, sec. 258.
It is not alleged in the complaint in this action, that the defendant has been guilty of any ouster of the plaintiff or his intestate, nor that he has in any way hindered them from entering upon the common premises and enjoying the same. Neither does the case disclose any evidence to that effect. If it did, the evidence would be irrelevant for lack of proper allegations in the complaint. The case is simply one in which the defendant has appropriated directly to his own use, products of the common property without, so far as appears, any exclusion of his co-tenant from the enjoyment thereof. In such a state of facts, the plaintiff can not recover. It is proper to add that, upon the evidence in the case, it does not appear that the defendant has appropriated any more than two-thirds of the grass growing upon the common land. This would be no more than the "just proportion which the statute under which this action is brought allows him, for he owns two-thirds of the land, and in this connection it is further to be noticed that, though evidence as to the quantity of grass cut by defendant was received without objection, the complaint, even if sufficient in other respects, is evidently defective in failing to allege a taking by defendant of more than his just proportion." With regard to the matter set up by way of counterclaim, we are of opinion that it was not well pleaded as a counter-claim, neither was the evidence sufficient to warrant its allowance as such. There was not, at the time when the taxes were alleged to have been paid, any provision of law authorizing a tenant in common to recover of his cotenant for taxes paid by the former upon the latter's share of the common estate, unless such payment was made at the latter's express or implied request. Payment without such request would, therefore, be the act of a mere volunteer, and would impose no obligation of reimbursement. But in case one co-tenant recovers of another for receiving more than his just proportion of rents and profits, we are of opinion that the latter should be allowed to offset, in reduction of the amount recovered, all sums paid by him within six years, for taxes upon the former's share of the estate. Hannan v. Osborn, 4 Paige, 343; Freeman on Co-tenancy, sec. 278. The off-set should be allowed, not as a statutory counter-claim, but as an equity under the third subdivision of sec. 79, ch. 66, Gen. Stat. An equity of this kind may well rest upon the justice of re