Augustus John Cuthbert Hare.

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a rule, it becomes an irrevocable option, provided in-
corporation according to the terms of the offer is
perfected vrithin a reasonable time. Thi8>would coiy

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stitute the offerer in substance a stockholder. So, if
an offer, which has no valuable consideration to rest
on, be permitted to stand until it is accepted by in-
corporation acoordiuR to its terms, this, it seems,
would be an irrevocable subscription of stock.

1 Mor. Priv. Corp. i 47 et seq; Music flail Co. v. Carey,
116 Mass. 471; Road Co. v. Lancaster, 79 Ky. 552;
Land Co. v. Aldrich, 86 HI. 504; Publishing Co. v.
Jack, 6 Pac. Eep. 20; Ferry Co. v. Balch, 8, Gray,
808; 2 Wat. Corp. i 184; 1 Mor. Priv. Corp. 9 128.

To authorize the application of this principle, how-
ever, the corporation, both in its frame and objects,
must correspond with the terms of the agreement. If
there be a material departure in the character or pur-
pose of the corporation from that which was contem-
plated in the agreement or ofler« this absolves from all
obligation to comply, unless the party sought to be
charged has agreed to the charge, or has done some
act by which he estopped himself from setting it up as
a defense. 8o if, between the time of the agreement
and the grant of the charter, the law be so changed as
that the objects of the agreement as made cannot be
carried into effect, this destroys the obligation. No
one can be sued for the breach of an agreement the
obsenpance of which would be a violation of the law.

2 Wat. Corp. S 178; Mercer Co. v. Railroad Co., 27 Pa.
St. 889; Thrasher v. Railroad Co., 25 HI. 898. It
will be remembered that the agreement which this
bill seeks to enforce was entered into May, 1887. At
that time stock in such corporation could be made
payable 'Un money, or in labor or property at Its
money value.'' Code 1876, f 1805. The charter or act
of incorporation of the Chlldersburg Land Company
was applied for and obtained In January, 1888. The
Code of 1886 became the law of the State, December
25, 1887. By that Code, f 1662, it was declared that
''all subscriptions to or for the capital stock fof cor-
porations like the present one] must be payable in
money." True, It was added, that *'the commission-
ers may receive subscriptions payable in money, the
subscriber having the privilege of discharging the
same by the rendition of stipulated necessary services,
or the performance of stipulated necessary labor for
the corporation, at the reasonable value of such
services or labor, or in property at the reasonable
value thereof, [such as] the corporation has capacity
to acquire and hold." One difference between tne
two systems Is that by the latter statute, requiring
money subscriptions, the exact amount of the capital
stock subscribed can be known ; by the former, it de-
pended on the value of the services or property, to be
ascertained afterwards. Under the one system, the
subscriptions per 0e show the amount and value of
the stock taken, and furnish a basis for incor-
poration. Code 1886, f 1660. Under the other
they would not. The one may be,' and generally
is, a completed contract of subscription. The
other is, at most, an agreement to subscribe.
We need not, however, enter upon an inquiry as to the
reasons for the change. Enough for us that the legis-
lature made it, and we have no option but to obey Its
will. And the fact that the agreement to form and In-
corporate the company was entered Into before the law
was changed can exert no influence in the decision of
the question we are discussing. Until Incorporation
was applied for and obtained, the agreement was, at
most, an unaccepted offer. Before the acceptance, or
attempt to accept, the offer had become Illegal by force
of the statute, and the power to accept was thereby
taken away.



TRANSACTIONS BETWEEN HUSBAND
AND WIFE.



iTdroductory.—The law of married women
is constantly undergoing change. It has been
the tendency of legislation to remove the
common law disability of coverture, until
now it may be said that disability of cover-
ture is the exception and ability the rule.^
The principal exception is the disability
which still exists against the feme covert in
regard to dealings directly with her husband,
and it is with this class of transactions, show-
ing the rights and duties arising therefrom,
and the manner in which they may be en-
forced, that this article will treat.

Common Law Bule. — By the inflexible
rule of cominon law, contracts between hus-
band and wife are void in toto. For reasons
of public policy, the husband and wife are
regarded as one flesh, and since it requires
two competent persons to enter into a valid
contract, all contracts between them are nul-
lities, as no person can contract with himself.'
A contract between husband and wife cannot
be the basis of any legal procedure. Where
a note given by the husband to the wife is in-
dorsed by the latter to a third party, the in-
dorsee has no right of action against the hus-
band on the note,' even though he be a bona
fide holder for value.^ On account of this
incapacity to contract with each other, the
wife cannot be the immediate grantee of her
husband, but she may take an ' estate from
him through the intervention of a trustee.*

Exceptions. — A husband can make a valid
gift causa mortis to his wife, for the gift is not
completed until the death of the husband,
which ipso facto terminates the coverture.*
He may also make a devise, or bequest to
her for the same reason,^ and a wife may be
the agent of her husband, since she acts in
that capacity for him and does not bind her-
self personaUy.^

In Equity. — "A contract between hus-

1 Elliot V. Gregory, 14 West, 880.

s Campbell y. Oalbreath, 12 Bush (Ky.), 460.

9 Woodward v. Spurr, 2 N. E. Rep. 282; Morrison v.
Thistle, 67 Mo. 601.

* Ellsworth v. Hopkins, 2 N. E. Bep. 798.

< Ohadboume v. Oilman, 5 N. E. Rep. 66; Warlick
T. White, 88 N. C. 189.

6 Marshall v. Jaquith, 184 Mass. 188.

r 2 Kent's Com. 129.

« Oulick V. Groom, 2 Vroom. 182; Goodman v. Kelly,
42 Barb. 194.



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band and wife will be held good in
equity, as a general role, when it would
be valid and binding at law if made
with the trustees of the wife for her benefit,
and in equity the intervention of trustees is
not an indispensable prerequisite to the valid-
ity of the contract."' They may sue and be
sued, contract and be contracted with, and
become the creditor or debtor of each other
with like effect, so far as regards equitable
contemplation and rights, as if they had never
become one flesh ;^® but the doctrine of equity,
allowing the wife to enter into engagements
with her husband, was never extended to en-
force her obligations under them beyond the
separate estate to which they referred. ^^

Grantor and Orantee. — Since, in contem-
plation of equity, the husband and wife are
regarded as distinct persons, and may have
separate possessions, the husband may make
a valid conveyance of real or personal prop-
perty to his wife,^* without the intervention
of a trustee,^' and the estate conveyed be-
comes her separate property, as if purchased
with money obtained before marriage. ^^ It is
not necessary that such conveyance should be
expressed to be for the sole and separate use
of the wife. It will be presumed that such
was the intention of the parties.^^ Convey-
ances from husband to wife will be set aside
at the instance of his creditors, unless made
in good faith and for a valuable considera-
tion.^* An extravagant gift is fraudulent as
to creditors, and will not be sustained against
them.^^ On account of the frequency with which

• Tennlson v. Tennison, 46 Mo. 81; 2 Story £q. Jur.,
SS 1868, 1872-4; Barron v. Barron, 24 Vt. 875; Wallings-
lordT. Allen, 10 Pet. 688; Kenny v. Kenny, 5 Johns.
Ch. 468; Betor t. Besor, 9 Ind. 847; Yalensin v. Valen-
tin, 28 Fed. Bep. 599; Bamett t. flarsbarger, 5 N. E.
Bep. 718; Clark v. Hezekiah, 24 Fed. Bep. 668;
McClure t. Lancaster, 24 S. C. 278; Lawrence v. Law-
rence, 14 Oreg. 77.

1* Morrison ▼. Thistle, 67 Mo. 601; Gardner v.
Gardner, 7 Paige, 112; Willard's Bq. Jur. 684 and fl.

n Jenne v. Marble, 87 Mich. 819, 7 Cent. L. J. 282.

u Chadboume v. Gilman, 10 Atl. Bep. 701; Putnam
T.BickneU,18^Wls.888; Smithy. Dean, 15 Neb. 482;
Craig ▼. Chandler, 6 Colo. 548.

» Farrow ▼. Athey, 21 Neb. 671.

^ Wing T. Goodman, 75 111. 159; Indiana, etc B. Co.
▼. McLaughlin, 77 HI. 275.

» Smith ▼. Seiberling, 85 Fed. Bep. 681; Sims v.
Bicketo,85Ind.l81.

» Fisher ▼. WUUams, 56 Yt. 586; Warliok t. White,
86 N. C. 189; Woodwbrth v. Tanner, 7 S. W. Bep. 104;
Dull ▼. MerriU. 86 N. W. Bep. 677; Myers v. King, 42
Md.65.

^ Warllck ▼. White, supra.



such conveyances have been made the covers
for fraud, they are scrutinized very closely,
and if in the slightest degree tainted with
fraud, will be set aside.^^. As the husband
may make a deed of realty or gift of person-
alty to his wife, so vice versa, the latter may
make a conveyance or gift of her separate
property to her husband. In those States
where the husband must join with his wife in
an alienation of the latter' s statutory separate
estate, a deed from wife to husband of such
statutory separate estate is void, but good if
her equitable separate estate is transferred.^

Evidence of Gfift to Husband. — The gift
from wife to husband must be shown by the
clearest evidence not to have been tainted by
the influence growing out of the trust relation,
and one that was prudent and that a trustee
could conscientiously have madQ if made to
another for whom the wife entertained af-
fection.*^ The law presumes that the wife's
money, even in the possession of the husband,
remains her own, and there must be the
strongest evidence of an intention to make a
gift.*^ The mere receipt of money or prop-
erty by the husband is but slight if any evi-
dence of a gift on account of the confidential
relations existing between the two." In some
States, under late acts, the same evidence is
required to prove the transfer of property by
the wife to her husband as husband to wif e,^
and where by statute she has power to con-
tract with him, she will not be supposed in
such cases to act under the marital influence,
but will be affected by the rules applicable to
to other persons.**

Creditor and Debtor. — ^It has been repeat-
edly held that husband and wife may become
the creditor and debtor of each other in
equity,^ and when a wife loans to her hus-
band money which is her separate property,
upon his promise to repay, it creates an
equity in her favor which a court of equity
will enforce in the absence of fraud. ^ Such

^ Thomas v. Mackay, 5 Cent. L. J. 258.

» Morrow y. Turner (Mo.), 16 West, 250; Breit v.
Teaton, 101 111. 242.

10 Smyley v. Beese, 58 Ala. 89.

SI Hileman v. HUeman, 85 Ind. 1.

tt McNaUy v. Weld, 80 Minn. 209.

» Houston v. Clark, 50 N. H. 479.

M Bencher v. Wynne, 86 N. C. 268.

»Batterfield ▼. Stanton, 44 Miss. 15; Hyde v.
PoweU, 47 Mich. 156; Murphy v. Carpenter, 22 Hun,
15; McCampbeU v. Wliite, 81 Am. Bep. 628; Schouler
on Husband and Wife, i 895.

MPUlowv. Sentelle, 5 S. W. Bep. 788; Thoms v.



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equity will be enforced not only against
him but as well against his represen-
tatives, including his assignee in bankruptcy.^
The I'urisdiction of equity to enforce the ob-
ligation of the husband in such cases is
founded upon the protection of the separate
property rights of the wife.^

Bequisites of Relation of Creditor and
Debtor. — Every loan of money by the wife to
her husband does not create the relation of
creditor and debtor between them. It must
be money loaned from her separate equitable
estate,^ and there must be an express prom-
ise by the husband at the time to repay,
clearly sliown in any of the modes known to
the law.^ If she allows him to use her prop-
erty without exacting from him a promise to
repay, no such promise will be presumed by
the law.^^ On account of the relation of the
parties a gift will sometimes be presumed.^
Mere expectation of the wife at the time of
the loan to him that he will repay is not suffi-
cient ;^ nor testimony of the parties to a gen-
eral understanding that he should be account-
able to her.^ Where he uses her income for
their common benefit, a gift will be presumed,
and she cannot afterwards come in as a cred-
itor of the husband.^

Husband may be Wife's Creditor, — ^Where
a married woman, having a separate estate or
business, employs her husband to manage the
same, and agrees to pay him a stated com-
pensation for his services, a chose in action
in his favor against her is created, which, on
her failure to pay, can be reached by a judg-
ment creditor of the husband.^

Mortgagor and Mortgagee, — Since the rela-
tion of creditor and debtor may exist between
husband and wife, and conveyances may be

Tbom8,45 Miss. 268; Rowland v. Plummer, 60 Ala.
182; George v. High, 85 N. C. 99; Woodworth y. Sweet,
51 N. T. 8; Logan v. Hall, 19 Iowa, 491.

» Jaycox V. Caldwell, 51 N. Y. 895; Taggard v. Tal-
cott, 2 Bdw. Cb. 628; Marsh v. Marsh, 43 Ala. 677;
Clark V. Hezekiah, 24 Fed. Rep. 664.

» Clark V. Hezekiah, 24 Fed. Rep. 664.

si^Medsker v. Bonebrake, 108 U. S. 66; Terry v.
Wilson, 63 Mo. 493.

» Clark V. Clark, 86 Mo. 114; Farmers', etc. Bank v.
Jenkins, 8 Cent. Rep. 710.

SI Knowlton v. Mish, 17 Fed. Rep. 198.

« Patterson v. HUl, 61 Iowa, 584.

S8 Levi V. RothsobUd, 12 Cent. Rep. 861.

84 Farmers', etc. Bank y. Jenkins, 8 Cent. Rep. 710.

^ Re Jones, 6 Biss. 68.

» Kingman v. Frank, 19 Cent. L. J. 470; Hanford y.
Bockee, 20 N. J. Eq. 101; Alward y. Alward, 2 N. T.
842.



made directly from one to the other, either of
the parties may make an assignment of prop-
erty to the other in payment of a debt,*' or
execute a mortgage to secure its payment.^
To support such conveyances against the
claims of attacking creditors, the indebted-
ness must have been made in good faith and
for a valuable consideration.'^

Trustee and Cestui que trust, — A promise of
the husband to the wife is often enforced in
equity through the medium of a trust. Where
the husband invests the wife's money in land,
but takes the title in his own name, he will be
considered as holding the same in trust for
her, and will be compelled to convey the land
to her or restore the money.^ Where he re-
ceives her money for investment, but fails to
so use it, he will be compelled to account to
her for it.^^ If the purchase money for land
conveyed to the husband is paid by the wife,
she has an equity to have a trust declared and
enforced against him to the extent of her
payment. When^ on the other hand, the con-
sideration is paid by the husband and the deed
taken to the wife, it is presumed to be a gift by
him and no trust arises in his favor, unless he
overcome the presumption by evidence of a
different intention.^ Such a conveyance is
held to be an advancement.^

Principal and Surety, — The relation of
principal and surety may exist between hus-
.band and wife, and when such a relation is
established, the law is well settled that the
wife may as readily avail herself of all the
beneficial rights and remedies conferred there-
by, as any other surety whatsoever.^

^ Rowland v. Plummer, 50 Ala. 182.

» Booker y. Worrill, 55 Ga. 832; Kauflman y.
Whitney, 50 Miss. 182; Miller y. Erueger, 18 Pac. Rep.
641; Cloughy. Russell, 55 N. H. 279; Chadboume y.
Oilman, 5 New £ng. Rep. 65.

89 Bronson y. Maxwell, 20 Cent. L. J. 862; Terry y.
VTilson, 63Mo. 499; 1 Bisb. Law Married Women, S 720;
Huber y. Huberts Admr., 10 Ohio, 871; Wood y.
Warden's Admr., 20 Ohio, 518; Denning y. Williams,
26 Conn. 226.

^ Cade y. Davis, 96 N. C. 189; Heberd y. Wines, 2
West. Rep. 754; Fresch y. Wirtz, 84 N. J. Eq. 124;
Derry y. Derry,19 Cent. L. J. 498; Bangerty.Bangert,
18 Mo. App. 144; Payne y. Twyman, 68 Mo. 889;
Martin y. Colbern, 88 Mo. 229; City Nat. Bank y.
Hamilton, 84 N. J. Eq. 158; Eidwell y. Eirkpatrick, 70
Mo. 216.

« Walker y. Walker, 9 Wall. 748.

« Eline v. Ragland, 47 Ark. 111.

« Darrier y Darrier, 58 Mo. 222.

** WUcoz y. Oibbs, 64 Mo. 888; Niemcewicz y. Gahn,
8 Paige, 614; John y. Reardon, 11 Md. 465; Wright y.
Austin, 56 Barb. 18.



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Principal and Agent. — ^The wife may be the
agent of her husband,^ and the husband the
agent of his wife when he acts with reference
to her separate estate.^ A married woman
having separate property may carry on busi-
ness through her husband, as her agent, and
he may bind her separate property by acts
done in connection with the business, in like
manner as though the relation of husband
and wife did not exist.^^ To establish an
agency for the wife on the part of the hus-
band, the evidence must be cogent and strong,
and more satisfactory than would be required
between persons occupying different rela-
tions.^ It must be shown : First, That the
act of the husband was within the power del-
egated to him by his wife : and second, that
it was a transaction and for a considera-
tion, in respect to which she was at liberty to
contract and bind her separate estate.^

Partnership. — With respect to the separate
property of a married woman, under her sole
control, she may form a valid partnership,
even with her husband.^ Where the husband
furnishes only a portion of the labor and
skill, or capital and credit, used in carrying
on business, the wife will be entitled, even as
against his creditors, to such portion of the
profits as will compensate her for what she
has contributed to the business, either in the
shape of capital or trade.^^ A married
woman who has no separate estate cannot,
save in a few excepted cases, make a valid
partnership contract.*^

Landlord and Tenant. — ^Where it appears
that a wife who holds the estate in a
farm to her sole and separate use, lives upon
it with her husband, and he manages and con-
trols it, as if he were the absolute owner, it
is to be presumed in the absence of any evi-
dence to the contrary, that he holds and oc-

tf Gulick ▼. Groom, 2 Yroom. 182; Goodman v.
KeUey, 42 Barb. 194.

M Keating v. Eorfhage, 88 Mo. 588; Walker v. Car-
rington,74 HI. 446; Vail v. Meyer, 71 Ind. 159; V7ood
v. V7ood, 88 N. Y. 575; Harper v. Dail, 92 N. C. 894;
Kansas City Planing Mill Go. v. Brundagee« 25 Mo.
App. 268.

^ Louisville Coffin Co. v. Stokes, 78 Ala. 372.

« Eyster v. Capelle, 61 Mo. 580; Rowell v. Klein, 44
Ind. 291: McClaren v. Hall, 26 Iowa, 297.

« Nash V. Mitchell, 6 Cent. L. J. 167.

» Dunifer Y. Jecko, 87 Mo. 282; In re Klnkead, 8
Biss. 405; Contra^ Fairlee v. Bloomingdale, 67 How.
Pr. 292; Haas v. Shaw, 91 Ind. 384.

« Penn V. Whitehead, 17 Gratt. 503; Contra, Nat.
Baak V. Sprage, 20 N. J. £q. 18.

^ Lindley on Partnership, 84.



cupies it with her consent, as her tenant under
some lease, verbal or written, rather than that
he manages the farm for her in the capacity
of servant or hired man.^

Confession of Judgment. — The rule has
been established in some of the States that
where a husband is honestly indebted to his
wife, he may confess a judgment in her favor,
and execution thereon may issue in her name.
Since he may make a valid transfer of real
or personal estate to secure a debt owing to
her, so he may confess a judgment in her
favor, and his property may be taken on exe-
cution to satisfy the judgment.^ Such in-
debtedness must be clearly established, and
not contracted for a fraudulent purpose.^ A
confession of judgment by the husband to
the wife may be made without the interven-
tion of a trustee.^

Enabling Statute. — In some of the States
the unity of the wife and husband with refer-
ence to contracts between them, has been
abrogated by statute.^^ But unless the stat-
ute expressly provides that husband and wife
may contract with or sue each other, the rule
remains as at common law that contracts be-
tween them are void. Such statutes are in
derogation of the common law, and are not to
be extended by construction.^

Davtd Plessneb.



M Albin V. Lord, 39 N. H. 205.

M Einkade v. Cunningham, 15 All. Bep. 905; Bron-
son V. Maxwell, 20 Cent. L. J. 362; Contra, County v.
Markling, 30 Ark. 17.

» Thomas v. Mueller, 106 111. 36.

M Rose V. Latshaw, 90 Pa. St. 238.

07 V^ilson V. V^ilson, 86 Cal. 447; May v. May, 9 Neb.
16; HallY. Hall,52Tex. 294; Thoms v. MueUer, 106
111.86; Alexander ▼. Alexander, L. A. B. 125; Clark
V. Clark, 56 N. H. 105.

» Lord v. Parker, 3 Allen, 127; Bamett v. Harsh -
berger, 3 Cent. Bep. 750.



STOCK EXCHANGES — BOARDS OP TRADE -
SEATS AND MEMBERSHIPS — LIABILITY
THEREOF FOR OWNERS DEBTS.



HABENICHT V. LISSAK.
Supreme Court of CdUfomia, March 8^ 1669.

1. A seat in a stock exchange is liable for its owners
debts.

2. In such a case the appointment of a receiver to
sell the seat, and an order directing its owner to assign
his Interest therein to the purchaser, is the proper
method to follow.



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Patebson, J., delivered the opinion of the
eourt:

In March, 1884, theplaintiif recovered judgment
against defendant for several thousand dollars.
About a year later a writ of execution was issued
on the judgment, and placed in the hands of the
sheriff, by whom it was afterwards returned wholly
unsatisfied. In June, 1885, the proceedings to be
reviewed herein — proceedings supplemetary to
execution— were instituted hj the plaintiff upon
the unsatisfied judgment in his favor. Upon the
examination of the judgment debtor, it was dis-
closed that he owned a seat or membership in the
San Francisco Stock and Exchange Board, and
another seat or membership in the San Francisco
Produce Exchange. In September, 1885, upon due
notice given, plaintiff made a motion for the ap-
pointment of a receiver of the two seats above
named, with power to sell the same, and apply
the proceeds thereof in satisfaction of the judg-
ment. The motion was accompanied by an affi-
davit setting forth the facts above stated, and the
additional facts that defendant had refused to
apply the seats in satisfaction of the judgment,
and that each of said seats exceeded in value the
sum of f 1,000. Upon the hearing of the motion,
the defendant filed affidavits, in one of which the
constitution and by-laws of the two boards were
fully set forth. It appears from the oonstitution
and by-laws of the San Francisco Stock and Ex-
change Board that the legal title and ownership
of the property of the association is vested in cer-
tain officers ^*in trust for the benefit and enjoy-
ment of its members ;'' that ^^no member, under
any circumstances, shall be deemed to have, or
claim, or possess any individual right, title or in-
terest in the property or assets of the association,
except when the same shall be finally dissolved,
and its affairs wound up by its then remaining
members;^' that every application for member-
ship is subjected to the scrutiny of a committee,
whose report, if favorable, entitles the applicant
to be balloted for, and, whether favorable or un-
favorable, the applicant may be rejected by twenty
negative votes; that if a member of the associa-
tion join any similar organization in this State he
may be immediately expelled; that it is ^^dis-
tinctly understood and agreed between the board
and each member thereof that the board reserves
the right to reject any nominee. ^^

The constitutions and by-laws of the two boards
are, so far as the questions before us are con-
cerned, similar in charactei ; and so far as the
rights, duties, and interests of the members are
concerned, the laws of the two boards are essen-
tially the same as those of other stock and produce
exchanges in New York and other States of the
Union.

After the hearing upon the motion, the court
below made an order appointing 0. K. Bonestell,
Esq., a receiver of both seats, with power to sell
the same and apply the proceeds thereof, after
payment of the exi>en8es, to the satisfaction of the
judgment, and requhring the defendant to execute



any assignment or other instrument necessary for
the purpose of vesting his title to the seats in
such person or persons as might become pur-
chasers thereor from the receiver, and might be
qualified to hold the same under the rules of the



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