Augustus John Cuthbert Hare.

The Central law journal, Volume 28 online

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mon law, and disturb the equal distribution of the
debtor's estate among his creditors," 2 Kent's Com-
mentaries, *6d6, yet a general Hen does arise in favor
of a bank or banker out of contract expressed, or im-
plied from the usage of the business, in the absence of
anything to show a contrary intention. It does not
arise upon securities accidentally in the possession of
the bank, or not in its possession in the course of its
business as such, nor where the securities are in its
hands under circumstances, or where there is a par-
ticular mode of dealing, inconsistent with such general
lien, Braodao v. Bamett, H. L. 8 C. B. 519, 582;
Ezch. Oh. 6 Man. A Or. 680; Bock v. Oorrissen, 2DeG.
F. A J. 434,443. It was held In re Medewe, 26 Beav.
588, that where a customer's security was speciflcially



stated to be "for the amount which shall or may be
found due on the balance of his accounf it could not
be held for a subsequent floating balance, but only for
the then existing balance. And see Van Durgee v.
Willis, 8 Bro. C. C. 21. **A bankers' lien," said Mr.
Justice Matthews, speaking for the court in National
Bank v. Insurance Co., 104 U.S. 54, 71, '^ordinarily
attaches in favor of the bank upon the securities and
monejs of the customer, deposited in the usual course
of business, for advances which are supposed to be
made upon their credit. It attaches to such securities
and funds, not only against the depositor, but against
the unknown equities of all others in interest, unless
modified or waived by some agreement, express or
implied, or by conduct inconsistent with its assertion.''
In Bank of the Metropolis v. New England Bank, 1
How. 234, 289, Mr. Chief Justice Taney, in delivering
the opinion, referring to the general principle that a
banker who has advanced money to another has a lien
on all paper securities in bis hands for the amount of
his general balance, says: ''We do not perceive any
difference in principle between an advance of money
and a balance suffered to remain upon the faith of
these mutual dealings. In the one case as well as the
other, credit is given upon the paper deposited or ex-
pected to be transmitted in the usual course of the
transactions between the parties." "Here, then," said
Caton, J., in Russell v. Hadduck, 8 Oilman, 888, 288,
*'is the true principle upon which this, as well as all
other bankers' liens must be sustained, if at all. There
must be a credit given upon the credit of the securi-
ties, either in possession or in expectancy," Fourth
National Bank v. aty National Bank, 68 111. 898. In
Duncan v. Brennan, 88 N. T. 487, 491, the language of
the court is: "The general lien which bankers hold
upon bills, notes, and other securities deposited with
them for a balance due on general account, cannot, we
think, exist where the pledge of property is for a spe-
cific sum and not a general pledge;" and in Neponf^et
Bank v. Leland, 5 Metcalf, 259: "The notes were de-
posited under special circumstances; they were not
pledged generally, but specifically; and this negatives
any inference of any general lien, if, in the absence of
such special agreement, the law would imply one; and
in Wyckoff v. Anthony, 90 N. Y. 442, that "where se-
curities are pledged to a banker or broker for the pay-
ment of a particular loan or debt, he has no lien on the
securities for a general balance or for the payment of
other claims." See also Masonic Savings Bank v.
Bang's, administrator, 84 Ky. 135; Bank v. Macalestor,
9 Barr,475; Hathaway v. Fall River Nat. Bank, 131
Ma«8. 14; Biebfnger v. Continental Bank, 99 U. S. 143.



The Supreme Court of Indiana, in Enyeart

V. Kepler, 20 N. E. Rep. 539, hold that a

husband's deed to his wife, 8h3 not joining,

of land held bj them b}' entireties is valid.

They say :

This being the status of the parties, we can :$ee no
good reason why the husband cannot convey title to
real estate to the wife, and the wife receive title from
him. The decisions of this court only go to the effect
that the husband cannot convey his interest in an es-
tate by entirety without the assent of the wife. In the
case of a conveyance by the husband to the wife of bis
interest, and her acceptance of the deed, it operates as
a relinquishment of the husband's right as survivor.
As in this caee the husband conveys the real estate in
question to the wife, and she accepts the deed, and

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435



afterwardf disposes of the real estate by will, this
would constitute such an assent on the part of the
wife, within the meaning of the decisions of this court,
as would make the deed valid, and pass the title to the
wife, if, indeed, it can be said in case of a conveyance
of the husband's interest to the wife any assent is nec-
essary, more than the acceptance of the deed, as such
a conveyance does not attempt to take from, but rather
adds to, her interest in the land. By some of the early
decisions of this court it was held that a deed direct
from the husband to the wife was void in law but
would be upheld In equity. In the discussion of the
validity of a deed direct from the husband to the wife,
in the case of Thompson v. Mills, 88 Ind. 528, we think
the court laid down the proper doctrine. The court
in that case says: **As the fact is recognized that the
husband may, by deed made directly to his wife, con-
vey real estate to her, and the conveyance will be up- ^
held, why not apply to such conveyances the same
rules which are applied to conveyances between other
parties; that is, hold them valid until some legal reason
has been shown for setting them aside?" The deed
from appellant to his wife was valid, and passed all
the interest the husband had in the land to his wife.
Suppose the husband and wife should have Joined in a
deed, and conveyed the land to a third person, and
such third person conveyed the land to the wife. The
legal title would have passed from the husband and
wife, and been received back by the wife; and, if they
could convey title in that manner, as they surely could
have done, there is no sound reason why under bur
laws they could not by agreement pass the title by deed
direct from the husband to the wife, he executing and
she accepting the conveyance. And see Dodge v.
Kinzy, 101 Ind. 102.



As to whether a covenant against incum-
brances is broken by the existence of an
easement over a portion of the land for the
purpose of maintaining a dam, the Court of
Appeals of New York, in Huyck v. Andrews,
20 N. E. Rep. 581, considers in an exhaustive
opinion wherein they hold in the affirmative.
Judge Earl says :

There is in this State one exception to the rule that
the existence of an easement constitutes a breach of
the covenant against incumbrances, and that is in the
ease of a highway. It was held in Whitbeck v. Ck>ok,
15 Johns. 488, that It is not a breach of the covenants j
that the grantor was lawful owner of theland, was well
seised, and had full power to convey; that part of the
land was a public highway, and was used as such; and
that decision has ever since been regarded as the law
in this State. It was based upon the peculiar nature
of highway easements, and the general understanding
with reference to them. Spencer, J., writing the
opinion, said: "It must strike the mind with surprise
that a person who purchases a farm through which a
public road runs at the time of purchase, and had so
run long before, who must be presumed to have known
of the existence of the road, and who chooses to have
it included in his purchase, shall turn around on his
grantor and complain that the general covenants in the
deed have been broken by the existence of what he
saw when he purchased, and what must have enhanced
the value of the farm. It is hazarding little to say that
such an attempt is unjust and inequitable, and con-
trary to the universal understanding of both vendors
and purchasers. If it could succeed, a flood-gate of



litigation would be opened, and for many years to
come this kind of action would abound. These are
serious considerations, and this court ou^ht, if it can
consistently with law, to check the attempt in the
bud." These reasons are not applicable to other ease-
ments, and the rule of that case has not been applied
to any other. • • • McMullin v. Wooley, 2 Laws,
894; Roberts v. Levy, 8 Abb. Pr. (N. S.) 811; Bea v
Minkler, 5 Lans. 196; Buss v. Steele, 40 Yt. 810;
Scriver v. Smith, 8 N. E. Rep. 675; Mitchell v. Warner,
5 Conn. 497; Morgan v. Smith, 11 111. 194; Medlar v.
Hiatt, 8 Ind. 171; Horey v. Newton, 7 Pick. 29; Beach
V. Miller, 51 111. 206; Qerald v. EUey, 45 Iowa, 822; Britt
V. Biife, 78 Ky. 852; Kellog v. Malin, 50 Mo. 496, cited
and approved. To support the contention of the ap-
pellant, his counsel has placed much reliance upon the
oases of Kutz v. McOune, 22 Wis. 628, and Memmert
Y. McKeen, 112 Pa. St. 815, 4 Atl. Bep. 542. In Kutz
Y. McCune it was held that an easement obviously and
notoriously affecting the physical condition of theland
at the time of its sale is not embraced in the general
covenant against incumbrances. In Memmert v.
McKeen it was held that incumbrances are of two
kinds— First, such as affect the title; and, second, such
as affect only the physical condition of the property;
that, where incumbrances of the former class exist,
the covenant is broken the instant it is made, and it is
of no importance that the grantee had notice of them
when he took the title; that where, however, there is
a servitude imposed upon the land which is visible to
the eye, and which affects not the title but the physical
condition of the property, it Is presumed that the
grantee took the property in contemplation of such
condition, and with reference thereto. We do not
yield assent to these authorities. They have no sanc-
tion in any of the cases decided in this State, and have
no adequate foundation in principle or reason. They
open to litigation upon parol evidence, in every action
for the breach of the covenant against incumbrances
caused by the existence of an easement, the question
whether the grantee knew of its existence, and in
every such case the protection of written covenants
can be absolutely taken away by disputed oral evi-
dence. We think the safer rule is to hold that the
covenants in a deed protect the grantee against every
adverse right, interest or dominion over the land, and
that he may rely upon them for his security. If open,
visible, and notorious easements are to be excepted
from the operation of covenants, it should be the duty
of the grantor to except them, and the burden should
not be cast upon the grantee to show that he was not
aware of them. The security of titles demands that a
grant made without fraud or mutual mistake shal
bind the grantor according to its written terms. It
should not be incumbent upon the grantee to take
special and particular covenants against visible and
apparent defects In the title, or incumbrances upon
the land.



The effect of a clause in a policy of insur-
ance that ''this insurance shall not inure to
the benefit of any carrier," was considered
by the Supreme Court of Texas in Insurance
Co. V. Easton, 11 S. W. Rep. 180. This case
is almost the counterpart of Inman v. South
Carolina R. R. Co., 28 Cent. L. J. 230,
wherein the effect of a clause in a bill of lading
stipulating that the carrier shall have the

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THE CENTRAL LAW JOURNAL



No. 20



benefit of any insurance, was considered. In
the present case, the question was whether
the warranty in the policy that the insurance
should not inure to the benefit of the carrier,
is a valid and lawful stipulation in the con-
tract of insurance, whether a violation thereof
forfeits the policy, and whether the warranty
was in restraint of trade and contrary to
public policy. The court, in upholding the
validity of the stipulation, says:

It most now be held that so mach of the clause in
the biU of lading as provided that "the carrier sellable
shall have full benefit of any insurance that may have
been efteoted upon or on account of said cotton," is not
invalid by reason of its contravening any rule based on
public policy. Insurance Co. v. Railway Ck>., 68 Tex.
475; Insurance Co. v. Transportation Ck>., 117 U. S.
812, 6 S. C. Rep. 750, 1176; Inman v. Railway Co., 9 S.
0. Rep. 249; Rintoul v. Railroad Co., 17 Fed. Rep.
905; Piatt v. Railroad Co., 15 N. E. Rep. 898; Jackson
Co. V. Insurance Co., 189 Mais. 506; Tate v. Hyslop,
L. R. 15, Q. B. Div. 868; Jackson Co. v. Ins. Co., 189
Mass. 508. * * * The cases referred to hold: (1)
That contracts, such as contained in the carrier's con-
tract before us, are vaUd as between the carrier and
shipper. (2) That a policy issued with knowledge that
the insured property is in transit, in the absence of in-
quiries as to the terms of shipment, misrepresentation
as to this or other matter material to thp risk, or fraud,
wiU be deemed to have been issued in subordination
to the contract of shipment, which may control the
right of the insurer to subrogation. None of them,
however, hold that a contract of insurance, existing
when a contract of carriage is made, whether the car-
rier have knowledge of the insurance contract or not,
can be controlled by a subsequent contract between
the insured and the carrier, and the insurer's right to
subrogation thus be destroyed, even when there is no
express provision in the policy which forbids this.
• • • The warranty which the insurance company
seeks to assert to avoid liability to the carrier was one
promissory in character, in which the parties con-
tracted '*that this insurance shall not inure to the ben-
efit of any carrier." This, if a valid provision, cats off
any constructiion of the policy whereby it could pos-
sibly be held to confer any right to benefit under it on
a carrier of the property insured, and it deprives the
insured of the power to confer on such carrier any
right to benefit under the policy by contract or other-
wise. By the warranty we understand the parties to
have contracted that the contract of insurance should
be avoided— should cease to be operative— if during
the time specified for its continuance the insured
should so contract with a carrier of the property in-
sured as, between themselves, to give to the carrier
any right to benefit under the policy. The purpose of
this provision evidently was to deny, in terms, to the
insured the right of power to confer on the carrier any
right to benefit through the policy, such as the cases
to which we have referred bold may be conferred on
the carrier by contract with the shipper made before
insurance is obtained. The insurer, in effect, says in
the face of the policy— and to this the insured assents:
"This contract shall be binding on me only so long as
you refrain from contracting with any carrier you may
employ to transport the insured property that he
shall have right to any indemnity from me for lof s oo-
curring, while the property is in his possession as car-



rier, from a cause which, under the rules of law ap-
plicable to the contract of carriage, would give yoo
cause of action against such carrier; and I will not be
longer bound by this contract if you in any manner
release such carrier from that full liability to you and
to me which will exist under a lawful contract of
affreightment for loss of the insured property while in
his bands as carrier." By requiring the carrier's lia-
bility to continue the ultimate liability, the insurer
doubtless intended to make the carrier's own interest
some guaranty against its own negligence or miscon-
duct. In the very act of making the contract through
which the carrier in this case claims, the policy ceased
to be of any affect whatever, as to the particular cotton
at least, and from that lime forward neither the in-
sured nor the carrier could assert a right under It
based on the particular loss, if the warranty was valid.
'The court below held that the warranty was invalid,,
because in restriction of trade, and against pubUc pol-
icy. The insurance company was under no legal obli-
gation to issue a policy at all, but, if it did, it had the
right to place a provision in the policy such as it did,,
and in so doing it neither contravened any public pol-
icy nor restrained trade.



The right of a mother to the possession of
her child was curiously, though correctly
decided by the Supreme Court of Rhode
Island, in Hoxsie v. Potter, 17 AtL
Rep. 129. It was there held, in an action
of habeas corpus by a mother, that the child
should be allowed to remain with her aunt,
with whom she had been placed by the mother
when quite young and remained with her
nine years. It also appeared that the child
was regarded by the aunt as her own, and the
mother had visited her but once. Nothing
appeared against the fitness or ability of the
mother to provide for the child. The court
said:

Upon petition for a writ of habeas corpus^ the court
is bound to free the child from illegal restraint, yet it
is not bound to award the custody to any particular
person. The relations between children and parents
and foster parents are of an intricate and delicate
character, involving the welfare and happiness of all
the parties. Custody of children, therefore, cannot be
awarded by a fixed and inflexible rule, as if it were a
right of property. Recognizing the ordinary rights of
a parent, the courts of this country nevertheless hold
that when these rights cannot properly be exercised^
or when they have been waived by the voluntary
establishment of new relations, then all the circum-
stances must be considered, and that course followed
which, in the Judgment of the court, appears to be best
adapted to the interests, feelings, and rights of the
parties concerned. Primarily the welfare of the child
is to be considered; but when, as in this case, that is
not the controlling consideration, the court may look
beyond it to existing relations. Thus in Pool v. Oott,.
14 Law Bep. 209, where a father sought to recover the
custody of his child from its grandparents, 8haw, C.
J., says: ** Although there is no agreement proved, yet
the conduct of the father, during nearly the whole life
of the child, furnishes reason for supposing that be
surrendered his rights over the child by a taeit under-
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Vol. J8.



THE CENTRAL LAW JOURNAL.



437



Btanding, If not by an express agreement. He has,
for eight years or more, been able to retake the child,
and has made no offer to do so. No demand or offer
has been made on either side that he should contribute
to her support. His present assertion of his right is
in consequence of what he deems an unreasonable re-
fusal of a different request. By his own acquiesoense
he has allowed the affections on both sides to become
engaged in a manner he could not but have anticipated,
and permitted a state of things to arise which cannot
be altered without risking the happiness and interest
of his child. He has allowed the parties to go on for
years in the belief that his legal rights were waived,
and this relation of adoption sanctioned and approved
by him. Under such circumstances I do not think that
the petitioner is in a position to require the interfer-
ence of the court in favor of a controlling legal right
on his part, against the rights, such as they are, the
feelings, and the interests of the other parties." And
see Jones v. Darnell, 108 Ind. 568; Chapsky v. Wood,
26 Kan. 660; Clark v. Boyer, 82 Ohio St. 299; Yerser v.
Ford, 87 Ark. 27; Bonnett v. Bonnett, 61 Iowa, 199.
* * * The case is not without difficulty, but we do
not feel called upon to sunder the ties that have been
permitted to grow up, believing that the happiness of
the boy and the rights and feelings of his foster parents
will be best subserved by leaving the custody where it
now is.



Questions as to removal* of causes uDder
the new act came before the United States
Circuit Court of Tennessee in Huskins v.
Cincinnati, N. O. & T. P. Ry. Co., 37 Fed.
Rep. 504. There it was held that under the
removal act of March 8, 1887, authorizing the
defendant to file his application on the ground
of diverse citizenship in the State court at any
time before he is required to plead or answer
the complaint, where, on the last day of the
term of the State court, and after the time to
answer or plead, the complaint is amended,
demanding $10,000 instead of $2,000, a peti-
tion for removal to the federal court before
the next term of the State court is filed in time,
and that under the clause relating to removal
for ^ 'local prejudice or infiuence," the appli-
cation must be made to the federal court, and
may be made at any time before final hearing
in the State court. Upon the latter point
Judge Key says :

In Lookout Mountain Co. v. Houston, 32 Fed. Rep.
711, in which there was an application for removal be-
cause of local prejudice or influence, it was held that
an application in such case must be filed at the return-
term of the cause, or before. If that be correct, the
application in this suit would be in Ume, if the
positions assumed upon the first ground of removal be
tenable. The weight of opinion, however, so far as
oases have been adjudged, is that such removal may
be made at any time before the final hearing of the
case. Judge Deady, an excellent authority, so holds
inFisk V. Henarie, 82 Fed. Bep. 417. And so does
that eminent Jurist, Judge Jackson, of this circuit, in
Wbelan v. Batlroad Ck>., 86 Fed. Bep. 849-866. A very



able, clear, and well-considered opinion has been
rendered by him in this case; and the case decided by
Judge Jackson is identical with the case in hand in
most of the points of contention raised for determina-
tion. The opinion of the circuit Judge will be accepted
as the law of this case, not only because of the au-
thority of the decision as a Judicial exposition, but
also for the sake of the harmony and agreement that
should prevail, if practicable, in the administration of
the law by different Judges presiding over the same
court. In passing, it may be observed that the words
**local prejudice or influence '^ are used. They are
connected disjunctively. If there be local prejudice,
the cause may be removed, or if no local prejudice ex-
ists, and there be local influence so powerful and
operative as to prevent the defendant from obtaining
Justice, he may remove. If there be prejudice against
the defendant, or if the influence and power of the
plaintiff or any other local influence dominate the
public mind at the place where the suit is instituted,
so that he cannot have Justice, the cause may be re-
moved.



A QUESTION as to the validity of an agree-
ment to take shares in a corporation to be
afterwards formed was considered by the Su-
preme Court of Alabamain Knox v. Childers-
burgLandCo., 5 South. Rep. 578. There,
an agreement was entered into by several
persons to convey designated lands to a
trustee, and to form a land company, to which,
when incorporated, the lands should be con-
veyed by the trustee, and stock issued to each
subscriber to an amount equaling the land
conveyed. At that time stock could be made
payable in money or in property at its money
value. Prior to the incorporation of the com-
pany, by Code 1886, § 1662, it was declared
that all subscriptions to capital stock of such
a corporation must be payable in money. It
was held that, as the agreement to subscribe
had become illegal before it was accepted by
the act of incorporation, it could not be en-
forced. The court said :

An agreement to take shares in a corporation to be
afterwards formed, while it may be :and often is, a
binding contract, for the breach of which an action
may be maintained, is, by force of the mere agreement,
in no sense a subscription of stock. Something more
must be done before it can be affirmed that the sub-
scription is a completed contract. Till a charter is
obtained or incorporation otherwise perfected, such
agreement is a mere offer, or it is an option, revocable
or not as the nature of the agreement may determine.
The terms of the offer, and the consideration it rests
on, may render it binding and irrevocable; or a failure
to withdraw such offer, even when in its nature it is
revocable, until it has been accepted by actual incor-
poration, may so bind the offerer that he cannot after-
wards withdraw it. When it rests on a valuable
consideration, such as a promise for a promise, then, as



Online LibraryAugustus John Cuthbert HareThe Central law journal, Volume 28 → online text (page 117 of 151)