Connecticut. Supreme Court of Errors.

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upon them is very slight. It was not claimed upon the
hearing before the committee that public convenience and
necessity required the proposed road except for the accom-
modation of the travel from North Salem to Danbury ; and
the only way in which it was claimed that public convenience
would be promoted by the lay-out was, that if the lane and
connecting highway were put and kept in first class traveling
condition and the proposed road was laid out as it was claimed.

Vol. l.— 38



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6W FAIRFIELD COUNTY.

Howe V. Town of Blilgpilii Ul

a portion of the travelers frota North Salem to Danbury
would take that route in preference to the one now used ;
and there was no claim made that any considerable portion
of these travelers would take that route unless the lane and
connecting highway were put in first class condition. The.
respondents claimed, and offered evidence to prove, that in
order to put the lane and highway in such condition it
would be necessary for the town to expend a large sum of
money in widening and repairing them, which need not
otherwise be expended for that purpose ; that it was not neces-
sary to work the lane and highway as first class roads at
present ; that if the proposed road was laid out and used by
travelers it would still be necessary to keep the former high-
way in first class condition, in order to accommodate travel
from portions of Ridgefield to Danbury, and that it would
be ver}' expensive to keep both highways in first class con-
dition. It was claimed by the petitioners that the lane and
connecting highway being public highways, it was the duty
of the town to keep them in first class condition irrespect-
ive of the amount of travel passing over them, and whether
the proposed road was laid out or not ; and that in deter-
mining the question of the propriety of the lay-out, the
committee ought not to consider at all the expense of widen-
ing and repairing and keeping in repair the lane and con-,
necting highway. And the committee so held as matter of
law, and ruled adversely to the claims of the respondents,
and refused to consider the expense of widening and repair-
ing the lane and highway.'*

The plaintifis demurred specially to this remonstrance,
and the court sustained the demurrer, and adjudged it in-
sufficient. In this we think the court erred.

It was said by this court in the case of Perkins v. Toum
of Andover^ 31 Conn., 603, that "the expense incident to
the establishment of a new highway is always an element
which enters into the question of its convenience and neces-
sity. To justify the committee in laying out a new high-
way, no doubt they should be satisfied that it is of common
-eonvenience and necessity when considered in reference to



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MARCH TERM, 1888. 595

Howe 0. Town of Ridgefleld.

the expense of building it." In Hoadley v. Totm of Water-
buri/y 84 Conn., 88, it is said that " on a trial to determine
the question whether a proposed highway woiild be of com-
mon convenience and necessity, the expense of constructing
the road, and of keeping it in good and sufficient repair,
undoubtedly are proper subjects of consideration." The
following cases are to the same effect. Townsend v. Hoyle^
20 Conn., 1 ; Bristol v. Town of Bradford, 42 id., 821.

It appears by the remonstrance that the committee were
of the opinion, and so decided as a matter of law, that in
determining the question whether the way prayed for would
be of common convenience and necessity they had no right
to consider the expense of widening, and putting the con-
necting lane and highway, described in the remonstrance,
in such a state of repair as the new highway would clearly
require in order to make it convenient. It was apparent
that such repairs would have to be made if the road prayed
for was laid out, and they decided the case precisely as they
would have done if such repairs had already been made. If
at the time of the hearing the connecting lane and highway
were simply not in such a state of repair as their location
and the amount of public travel thereon required, so that a
proper state of repair would render it unnecessary that addi-
tional repairs should be made in consequence of the laying
out of the new highway, then the decision of the committee
would be sound. But if the new highway, if laid. out, by
reason of the increase of public travel which it would bring
to the connecting lane and highway would require that ad-
ditional expenditures should be made upon them to put
them in proper condition for the increased travel, then such
additional expenses should be considered by the committee
in determining the question whether the highway prayed
for would be of common convenience and necessity. These
expenses were as much to be considered as those of con-
structing the new highway itself; for it is manifest that
these additional expenses would be the inevitable result of
the laying out of the highway. The error of the committee
and of the court below consisted in not making the proper



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696 FAIRFIELD COUNTY.

Howe V. Town of Bldgefield.

discrimination. Whether a highway is or is not in a proper
condition and sufficient state of repair, depends upon a
variety of circumstances — such as its location, the amount
of public travel on it, the ability of the town to bear the
expense, and perhaps other considerations. In the case of •
Congdon v. City of Norwich^ 37 Conn., 414, the court said
that " a better and safer condition of roads may reasonably
be expected and required in the summer than in spring and
winter, and in populous cities than in unfrequented dis-
tricts." The proper condition of a road has ever been
regarded as depending to a great degree upon the amount
of public travel over it. A thoroughfare in the vicinity of
a city, where there are thousands of carriages and teams of
every description passing and repassing daily, should be in
far better condition than a mountain road, in a spai-sely
inhabited region, where only an occasional traveler can be
seen. Such a traveler can afford to be inconvenienced once
in a long time to enable the town to keep in better condition
other roads over which he has occasion to pass many times
a day. It would bankrupt any town to keep all its roads in
the same condition that would be required in cities. Hence
discrimination must be made in making expenditures, so
that the public generally can receive the greatest possible
benefit from them. If one dollar's expenditure would bene-
fit fifty persons in one case, and but one in another, and
each in an equal degree, reason and justice would require
that the fifty should receive the benefit instead of the one.
Now it is stated in the remonstrance that the laying out
of the highway prayed for in this case would require the
expenditure of a large sum of money to put the connect-
ing lane and highway in such condition as the amount of
public travel over them would require ; which would othe^
wise be unnecessary. We think it is therefore clear that
such expenses should have been considered by the com-
mittee as well as the expenses of constructing the new
highway itself.
Por these reasons we think there is error in the judg-



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MARCH TERM, 1888. 687

Hopson V. JStna Axle and Spring Oo.

ment appealed from, and it is therefore reversed, and a
new trial ordered.

In this opinion the other judges concurred.



George Hopson and akothbr vs. The jEtna Axle ani>
Spbing Company.

The defendant a manufacturing corporation, made its note for $40,000, pay-
able to its own order, and the plafntUEs, with thx^e others, all directors of
the company, guaranteed its payment; the company making a mortgage
to the guarantors of nearly all its property as security for their liability.
The object was to raise money to pay the floating indebtedness of the
company and enable it to go on with its business. Held that the direc-
tors had power to borrow money for this purpose and to give necessaiy
security; and that the mortgage was therefore valid, although it conveyed
all or nearly all the property of the company.

And that it did hot alter the case that the directors themselves were the
guarantors for whose security the mortgage was taken.

The company, having received the money borrowed and used it in paying
its debts, would seem not to be in a position to claim that the mortgage
was invalid.

A savings bank, which was the holder of the guaranteed note, requirlag
payment of the guarantors, they paid $20,000 in ^ash and gave a note for
the balance, leaving the original $40,000 note as collateral security for the
new note. Held that the question whether the transaction was a pay-
ment of the original note or a purchase of it, was one of fact, and there-
fore not properly a question for this court; but tftiat, upon a reiisonable
interpretation of the finding, it was to be regarded as a payment by the
guarantors as such.

And held that, if the guarantors paid the note as such, they were not to be
fegarded as having paid when they were dischaiged from their liability hf
reason of the holder not having used due diligence to collect the note
of the maker. The company, being itself the maker, could not make
this objection. The rule being one for the protection of the guarantors,
l^y could waive the benefit of it.

The note being payable to the compan3^s own order, and endorsed in blank
by the company for the purpose of raising money upon it, the guarantee
was to be regarded as intended for any holder of the note, and, at least
in equity, followed the note into the hands of every holder.

The delivery of an ^dorsed note as eoBateral security does not cK^est the
party delivering it of his equitable interest in the note, and he may prop-
erly bring a suit for the foreclosure of a mortgage given to secure it. A



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698 . FAIRFIELD COUNTY.

Hopaon v, MUia Axle and Spring Co.

court of equity would not dismiss such a suit, but would require the
party holding the note to be brought in as a party before passing a decree.
And where, during the pendency of a suit so brought, the note was re-
turned to the plaintiff, there was no longer any reason for making the
former holder of it a party.

Petition for the foreclosure of a mortgage ; brought to
the Superior Court. Facts found by a committee and
decree passed (^Stoddard^ J.') Appeal by the defendants.
The case is sufficiently stated in the opinion.

B. JE. JDeForest and V. B. C. Oiddings^ for the appellants*

A. S. Treat and JT. S. Sanford^ for the appellees.

Cabpbntbb, J. This is a petition to foreclose a mort-
gage given by the respondents to the petitioners and J. M.
Bullock, Samuel Wilmot and Henry Buckingham, dated
October 30th, 1872. The condition, so far as it is material,
is as follows : — " Whereas J. M. Bullock, Samuel Wilmot,
Henry Buckingham, George Hopson and George B. Waller
have this day jointly endorsed a certain promissory note,
bearing even date herewith, made and signed by the grantor
in this deed, in and by which the said grantor promised to
pay to its own order on demand the sum of forty thousand
dollars, with interest at the rate of seven per cent, payable
semi'-annually in advance, to be used by said grantor in
obtaining a loan of money of the amount specified in said
note ; * * and whereas the said grantor did, when said
several endorsements were made, promise the said joint
endorsers of said note of forty thousand dollars, and the
said several endorsers of said several notes by them en-
dorsed, to indemnify and save them harmless against all
. loss and damage which should arise from said endorsements,
and pay each and all of said notes to the several holders
thereof, and all notes which may be made in renewal there-
of: — Now therefore, if the said grantor shall well and truly
indemnify and save harmless each and all of said endorsers
against all loss and damage which shall arise from said



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MARCH TERM, 1883. 699

Hopson 9. JBtna Axle and Spring Co.

endorsements, and pay each and all of said notes to the
several holders thereof, and all notes which may be made in
renewal thereof, when requested by the holders thereof,
or by any of said endorsers, then said deed shall be
void."

The note was discounted for the benefit of the respond-
ents by the City National Bank of Bridgeport. It was
afterwards transferred to the City Savings Bank. The
savings bank demanded payment of Hopson, Waller and
Wilmot, who were then directors of the respondent corpora-
tion; Hopson being also its president. Hopson, Waller,
Wilmot, and one Clark, paid the note. Afterwards Clark
and Wilmot assigned all their interest in the note to Hop-
son and Waller, the petitioners. This was in January,
1876. Early in March following the respondents paid on
the note upwards of twenty-six thousand dollars, leaving
due thereon upwards of thirteen thousand dollars.

The payment to the savings bank was made as follows: —
Cash $20,000, and a note payable to the savings bank
signed by Hopson, Waller, Wilmot and Clark, for $20,700—
the $700 being for interest. After the note for $40,000 was
paid Hopson and Waller erased the names of Bullock, Wil-
mot, Hopson and Waller as guarantors. In April Hopson
and Waller gave to the savings bank the note for $40,000
as collateral security for the note for $20,700, and that was
the condition of things when this petition was brought.

Upon these facts the Superior Court expressed the opin-
ion that a decree of foreclosure should not be granted so
long as the note in question was held as collateral security
in the hands of parties not parties to this proceeding. Sub-
sequently, upon evidence offered by the petitioners and
objected to by the respondents, the court found that the
City Savings Bank had no title to or interest in the note
and that it had been returned to the petitioners. There-
upon a decree of foreclosure was granted and the respond-
ents appealed.

We will firat consider the claim that the mortgage is
invalid for the reason that it was not authorized by a vote



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600 FAIRFIELD COUNTY.

HopBon V. ^tna Axle and Spring Co.

of the stockholders, and that it was a conyeyance of all or
nearly all the property of the corporation, and subversive
of its object and purposes, and therefore contrary to public
policy. We readily concede that a sale of all the property
of a corporation which practically winds up its affairs must
be authorized by the stockholders. The statute provides
for dissolving a corporation, and when that is the ob-
ject the statutory mode should be resorted to. But this
transaction was of a different character. The design was
Aot to stop business, but to continue it — ^not to sell the
property but to raise money to pay debts. Now, if we con-
cede to the directors the power to borrow money for legiti-
mate purposes, and we suppose that that must be conceded,
then it follows that they have power to give security.
This transaction was borrowing money on a mortgage
security. The money borrowed was used to pay the float-
ing debts of the company to enable it to pursue its ordi-
nary business with less embarrassment. And it does not
alter the case that the directors who are the mortgagees
were liable as endorsers. It still remains true that the com-
pany had the money. Having received and used the money
raised upon the credit of the security, we hardly think the
company is in a condition to claim that the security is void
as being unauthorized.

Another claim is, that the petitioners did not pay the
note as guarantors but as purchasers ; and that the breach of
the condition as alleged in the petition is the failure of the
company to indemnify the petitioners as guarantors. This
objection is technical and does not involve the real merits of
the case. The report of the committee is ambiguous on
this point. An inference may be drawn from the circum-
stances, and especially from the fact that the note was kept
alive as a continuing obligation, that they purchased the
note ; but that is an inference of fact and not of law. It is
ttot for this court to draw inferences of fact, and we are not
inclined to do so for the purpose of reversing a judgment
^vidently just.

Notwithstanding some apparent inconsistencies we think



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MARCH TERM, 1883. 601

Hopson V. ^tna Axle and Spring Co.

the judgmeafc may be sustained by interpreting the report
as finding in effect that the not6 was paid by the petitioners
as guarantors. The expression in the report is that they
"paid said note to said Savings Bank and took up the
same." Again, in the supplemental report, that " said note
was paid to said City Savings Bank by said Waller, &e., in
the following manner." The word "pay" indicates the
discharge of an obligation rather than an investment of
money.

When we consider the situation of the parties at the time
we cannot doubt that they paid the note to the bank, be-
cause of their names being on it as guarantors, and that
they intended to discharge an obligation and did not in-
tend a mere purchase of the note.

They next object that the guarantors were not liable as
such for the reason that the holder of the note made no
effort to collect it when due of the makers. We do not
think that the makers can make this objection. Their duty
to pay the note was absolute, not contingent. The liability
of a guarantor is ordinarily contingent upon the use of due
diligence by the holder, and in a suit against the guarantor
he may set up the want of such diligence as a defense. He
is aggrieved by the omission. But the maker is not ag-
grieved. His liability does not depend upon due diligence.
It is not for him to complain that he has not been sued and
his property attached. Due diligence being required for
the benefit of the guarantors, they had a right to waive it.
They had a right to become the holders of the note by pur-
chase independently of the guarantee, and the liability of
the makers is essentially the same whether the guarantors
purchased it or paid it as guarantors.

It is next claimed that the guarantee was not negotiable,
and that the savings bank as holder of the note had no
claim on the guarantors. It may be that the guarantee was
not negotiable in the sense that the holder of the note, who
is not the payee, may maintain a suit thereon in his own
name ; but it does not follow that he may iiot maintain a
suit in the name of the payee. Th6 guarantee in this case



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602 FAIRFIELD COUNTY.

Hopson 9. ^tna Axle and Spring Co.

was clearly intended for the benefit of the holder and not
of the payee. The payee is the maker, and it would be
absurd to hold that it was only for the benefit of the payee
and would not enure to the benefit of the holder as the
parties intended it ; and it would be equally absurd to hold
that it was limited to the first holder. The note itself was
negotiable, and the guarantee was intended as security for
the note. The security, in equity at leasts attached to the
note, and was available to the holder whoever he might be.
The question of negotiability affects only the form of the
remedy and not the substance.

The respondents also insist that the court erred in admit-
ting the evidence of the release to the petitioners by the
savings bank of its interest in the note in suit ; that when
the petition was brought, and during the entire time of
the trial, they had a good defense, and were entitled to a
decree dismissing the bill.

The view we have taken of the case makes this question
of little importance. If the petitioners paid the note as
guarantors, as we think they did, the note was discharged,
and after that was not of itself evidence of a debt ; it was
not an obligation, but simply a voucher. The transfer of a
mere voucher did not operate as an assignment of a chose
in action. But this was not an assignment of a voucher
even ; it was simply a pledge. Ordinarily a pledge conveys
no title to the pledgee. He has a possessory right only, the
title remaining in the pledgor. The pledge of a voucher,
which was only evidence tending to prove the petitioners'
claim, did not divest the petitioners of their interest in the
claim itself. It was still competent for them to bring the peti-
tion. Even if the claim itself had been pledged, and in the
form as it was of an indorsed note, we think that the petition
would not have been dismissed. The petitioners still owned
the claim in equity and were the parties principally inter-
ested in enforcing it. The savings bank had such an interest
that a court of equity would require it to be made a party
before passing a decree ; but the court would not for that
cause dismiss the bill. We think that the surrender of the



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MARCH TERM, 1883. 608

Hopson 9. iEtna Axle and Spring Co,

pledge operated to divest the savings bank of all its inter-
est in the subject matter, so that the court might properly
render judgment without making it a party. That being
so in respect to the claim, it must clearly be so in respect to
a voucher which is but evidence of a claim.

There is no error in the judgment complained of.

In this opinion the other judges concurred.



^an



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APPENDIX.



OBITUARY NOTICE OF RICHARD D. HUBBARD.

Richard Dudley Hubbabd, the acknowledged head of the bar of
the state, died at his residence in Hartford on the 28th of February,
1884, in the sixty-sixth year of his &ge. He was bom in Berlin in this
state on the 7th of September, 1818, and was early left an orphan,
with means barely sufficient for his education. He graduated at Yale
College in 1839, and immediately after commenced the study of law
with the late William Hungerford, and was admitted to the Hartford
County bar in 1842. In 1846 he was appointed State's Attorney for
the county, which office he held, with the exception of two years, until
1868. During the war of the rebellion, whfch occurred during this
period, he was an earnest supporter of the Government. In 1867 he
was elected to Congress by the Democratic party, but found political
life at Washington very little to his taste, and at the end of his term
declined a renomination. In 1876 he was elected by the same party
(jovemor of the state, being the first to serve under the two-years
tei-m. To the discharge of the duties of this office he brought great
intelligence, an earnest desire to promote the public welfare and an
absence of partisan feeling. In his first message he called the atten-
tion of the legislature in very strong language to tlie injuFtice done
to women by the antiquated law governing their property rights in
maiTiage, and under his supervision the act of 1877, making a radical
change in the property relations of husband and wife, and based upon
the principle of equality, was drafted and passed.

It was however in the field of the law that he won his great success.
Here he became a foremost figure in the public eye. He was not only
the first lawyer in the state, but its greatest orator. His superiority as
a lawyer was owing less to a laborious study of books, though he was
always a diligent student and very thorough in the preparation of his
cases, than to his perfect comprehension of legal principles. He had
obtained a complete mastery of the science of law. He would detect
the slightest swerving from its harmony as a fine ear would detect the
least discord in music. He had strong common sense, by which he
tested everything. But with the soundest of judgments he united the
greatest quickness of apprehension and brilliancy of imagination;
with an apparently unlimited grasp of mind, a rare fineness of dis-
crimination. He was however never led astray by a f oqdness for legal
casuistry, and he had no relish and but little respect, while yet fully
understanding them, for the mere technicalities of the law. His mind
was eminently a philosophical one, and found recreation in the study

(604)



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APPENDIX. 605



Obituary Notice of Richard D. Hubbard.



of philosophical systems and abstract speculation ; nothing interesting
him more tlian the great mysteries and baffling questions of life.

As an orator he was best known to the general public. His success
here was of course attributable in large measure to great natural pow-
ers ; but he had improved these by a good classical education and by
the superadded scholarly culture of a lifelong familiarity witih the
ancient and modem classics. Indeed it was this culture that gave to



Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 50 → online text (page 53 of 61)