Curtisl v. Innerarity

THIS was an appeal from the Court of Appeals for the Territory of Florida.

All the material facts in the case are set forth in the opinion of the court.

The case was argued at the preceding term by Mr. Webster and Mr. Berrien, for the appellants, and by Mr. Westcott and Mr. Jones, for the appellees.

Mr. Webster opened the case, on the part of the appellants, by stating all the circumstances of it. He then contended that the appellants were not properly chargeable with interest during the interval between the death of John Forbes in 1822, in Cuba, and there being a personal representative of his estate in the United States. There was nobody to whom a payment could rightfully have been made. Moreover, the purchasers did not come into possession until 1835, when a decree of this court confirmed their title. Previously to that, both the commissioners and courts in Florida had rejected it. By the rules of the civil and Spanish law, the land when sold was warranted, and when this is the case, and the purchaser cannot get possession, no interest is payable. 1 Domat, 399, §§ 3, 4, 5, 75, 76, 79; 2 Wash. C. C. 204.

Under such circumstances, if notes are given for the purchase, chancery will restrain the vendor from collecting the notes until the encumbrances are cleared away. Of course, interest would not run during this time. 2 Johns. Ch. R. 546; Colin Mitchell's case, 9 Peters, 711.

We are entitled to a credit for the money paid to Blount under his power of attorney. The power was ample to receive money. If he went beyond it, it is an affair between his principal and himself. But the power extended to the receipt of the money which we paid. If what he did beyond his power can be separated from what he did within it, then the latter is good pro tanto. If it cannot be separated, perhaps the whole act is void. It is for the court to say whether the payment on our part of a specific sum of money cannot be distinguished from the releases which he gave. Story on Agency, 204, § 170.

If he had power to receive money on behalf of the mortgagee, he had power also to state an account and to give a receipt. So far his acts must be good, because a line can be drawn between them and his other acts.

Mr. Westcott, for the appellees, said that some of the facts stated by the opposite counsel did not appear upon the record. He therefore recapitulated the circumstances of the case as they were exhibited by the record. The instalments were all payable in London according to the contract, and in deciding that they were not, the court below erred, for the acts of the parties and the terms of the contract showed the contrary. The mortgage was made in consequence of a settlement between Forbes and Mitchell for money then due. All prior payments were presumed to be adjusted and taken into the account. It was given for the last two instalments, and the time extended. The interest upon this extension would amount to a large sum, and the parties must be presumed to have had it in their minds. But it is said that we are not entitled to interest, because the contract was executed in Florida, and by the civil law no interest accrues until the vendee is placed in possession. Also, because there was no person legally authorized to receive the interest. With regard to the first point, where is the evidence, in this record, of any difficulty in obtaining possession? The record of a former case tried in this court shows that these parties then said they had been in undisturbed possession. The petitioners in that case were the assignees of Colin Mitchell.

It is said, also, that by the civil law a sale implies a warranty, and Domat is cited. But Domat does not give the laws of Spain which prevailed in Florida. It might be admitted that the civil law implies a warranty where there is a sale of personal property. But it is not the rule as to sales of property where deeds are required. The French law is not the same with the Spanish. For example, Domat says it is not necessary that the vendee must be ousted, to entitle him to bring an action against the vendor. This may, perhaps, have been Roman law, but it is not Spanish. Johnson's Laws of Spain, 216, 217; in brackets, 195.

The Spaniards seem to have derived their law from the same source from which the common law of England came. In both, there must be an actual eviction. But in this case, the appellants say that they were disturbed in their possession by the United States, when the decision of this court shows that the United States had no title.

The contract is said to have been for the purchase and sale of wild lands which yielded no fruits. 1 Domat, book 3, sec. 14, p. 422, enumerates four classes of cases where interest is chargeable. One is when it depends on the agreement. It is true that in our case nothing is expressly said about interest, either in the contract or mortgage. But the intention of the parties must be the guide, and that can be gathered from the contract. The civil and common law agree in this. If the time of payment was fixed by the mortgage, new security taken and the time extended, these circumstances take the case out of the rule respecting wild lands, because they supervene upon the original contract. It was executed after the treaty with Spain was concluded. The change of flags took place in July, 1821. But in February, 1820, it was known that a treaty was concluded. Mitchell's purchase was in anticipation of the treaty. Is it a case, then, to be governed by the civil law, contrary to the intention of the parties and to the equity of the case? The court below allowed five per cent. interest. But in August, 1822, the laws of Florida (p. 48) gave six per cent. The case cited from Wash. C. C. Rep. 250 is not in point. I refer to the same book, p. 253. On the general subject of interest, all the cases are cited in 2 Fonblanque, 423; in brackets, 425.

But another reason given for not being charged with interest is, that there was no person authorized to receive the money. It is true that Forbes had no administrator in Florida until 1837; but he had an executor in Havana, and the contract was made there. The law is, that the party must show that he was willing and ready to pay before he can be excused. 3 Leigh, 619; Powell on Mortg. 367, 368; 2 Tomlins's Law Dict. 247; 1 Ves. 222; Burge's Com. 754.

In the record, the appellants admit their liability to pay interest, and in the settlement with Forbes they actually pay five per cent. interest. If they put it upon the ground of a tender, we reply that a tender must be strictly made, so that the tender of a less sum is no bar to interest. Powell on Mort. above; 3 Kent's Com. 450; 6 Randolph, 465.

Payments must first be applied to interest. 1 Halsted, 408; 1 Dall. 124.

As to Blount's power of attorney, he had only authority to receive money on account. He is prohibited in six different places from giving a release in full. Such powers must be strictly construed. Story on Agency, 63.

The appellants knew that we claimed $57,000, and yet took a release in full for $13,000. What did good faith require of them? Certainly, to notify Innerarity; and yet, although the money was paid in October, 1839, he did not know it until May, 1840. As soon as he knew it, be disavowed it. The appellants purposely concealed it. (Mr. Westcott here examined many parts of the record to show this.)

With respect to the number of instalments of 375 each which ought to be deducted, the appellants never claimed more than one in their answer, and yet the court allowed them two.

Mr. Jones, on the same side, said that most of the original parties were dead. The affirmative of the questions raised had to be proved by the appellants. They were sued below on a plain question of mortgage, and ought to have presented their defence long ago. Persons and documents were then existing, to clear up things which are now dark. The contract was made in 1817 between Forbes and Mitchell, both residing in the same jurisdiction. The first instalment was provided for, leaving a balance of $50,000. Two years afterwards, a mortgage was made, and now the appellants wish to go behind the contract and mortgage too. Their claim is against strong presumption, and requires strict proof.

Mr. Berrien, in reply and conclusion, said that the evidence in the cause is very defective; but it is not the fault of the appellants. It is owing to the prosecution of a stale demand by the other side, after the evidence to resist it has in a great degree perished. The pleadings, also, are very irregular, and the record is strangely arranged; but the questions at issue can be discovered and fairly represented. The bill of Innerarity to foreclose, the answer of Curtis, the amended bill of John Innerarity, and the answer to it, are sufficient, without the proceedings upon the cross-bill, to make the questions intelligible. These proceedings show that it is a bill to foreclose a mortgage by John Innerarity, as the administrator of Forbes, claiming $76,000; this claim is then reduced to $67,000, and subsequently to $28,000. In this last, we say there is error in the following points, and that the decree ought to be reversed: -

1st. Because interest is calculated on each instalment from the respective days of payment, when it ought only to have been allowed from the time of the demand made by filing the bill of foreclosure, or, at most, from the grant of letters of administration on the estate of John Forbes to John Innerarity, one of the complainants.

2d. Because the balance alleged to be due on an unpaid bill of exchange, given by Colin Mitchell, which was not secured by the mortgage, together with damages and interest, are allowed in the decree.

3d. Because the court refused to allow a deduction of 375 to be made from the amount due on the mortgage, notwithstanding the written acknowledgment of John Forbes that such deduction should be made.

4th. Because the court refused to allow, as a payment on the mortgage, the sum of thirteen thousand three hundred and fifty-seven dollars and seventy-three cents, received from the appellants by Thomas M. Blount, the agent and attorney of John Innerarity.

5th. Because costs are decreed against the appellants.

The date of the letters of administration is not in the record, but it must have been between 1835 and 1837.

1. Interest upon the two instalments.

The condition of the property was and is notorious. It was wild land, inhabited by Indians, and the record shows it. In the former case, which has been referred to, it is true that there was an averment that the parties had been in undisputed possession, but it was inserted merely to give the court jurisdiction, and is contradicted by the evidence. The Indians were quiet whilst the Spanish government lasted, but became turbulent as soon as the change took place. The purchasers could not get possession of the property. By the civil law, interest is not payable, although a term be fixed for payment, which term has expired, unless the purchaser is put into possession, or the thing purchased is capable of producing fruits. 1 Domat, p. 397, 2d ed., tit. 5, sec. 1, art. 3.

The Spanish law must govern the case. But the same doctrine is maintained in our country. 2 Wash. C. C. Rep. 253.

In Domat, p. 398, art. 5, it is said that if the cause produces no revenue, interest is due only where there is a demand. This court will officially take notice of acts of Congress and treaties, and these prohibit any exercise of ownership by claimants until the title is settled. It has been said that there was no warranty in the deed. But by the civil law a warranty is implied. 1 Domat, p. 75, tit. 2, sec. 10; ibid. p. 76.

By our own law, any disturbance would be a ground for an injunction to stay the collection of the purchase-money. 2 Johns. Ch. R. 546.

Interest is given for money which is due and payable. But if it is not payable, according to the above case in Johnson, then no interest can be charged.

In the next place, interest cannot be claimed because from 1822 to the grant of letters of administration (say in 1837) there was no person legally entitled to receive a payment or to release the mortgage. Forbes's executor in Cuba must be excepted from this remark; but an offer of payment was made to that executor and refused. The refusal is alleged in the bill, and admitted in the answer. How can the debtor be charged with interest, when, if he sought to pay his debt, there was no one to whom he could pay it who could give him a legal receipt? It is said that the debtor must give notice to the creditor that he had the money ready. But in the cases referred to, there was some person authorized to receive such a notice; but here there was not. It is also said that we did pay interest, and therefore acknowledged our liability to pay. It is true that interest was paid, but by whom, and when? It was only when letters were taken out, and was not paid by the mortgagor, but by the drawer of a bill of exchange,-by Colin Mitchell; the mortgagor never paid any, and Colin Mitchell had no legal title. If interest is due, therefore, it can only be due from 1837.

2d point. As to the bill of exchange.

The bill was not produced in the court below, but the court say that payment was made by the parties. But the payment was made by Colin Mitchell, and not the parties in the case. The judge therefore erred in a matter of fact. Payment of the bill could not have been enforced in a suit to foreclose the mortgage. It was given for the first instalment due upon the mortgage, and must have been received either as payment or as collateral security. If as payment, then a lesser security than the mortgage has been accepted, and it is just as if we had paid in cash. If it was taken as collateral security, the bill should have been returned when not paid. Under a bill to foreclose the mortgage, it is impossible to collect damages on a protested bill of exchange. They should have sued the drawer, Colin Mitchell, at law upon the bill.

3d point. As to the 375.

The court below say that we claim two allowances of 375, whereas we formerly claimed only one.

(Mr. Berrien here entered into many calculations upon this matter.)

4th point. As to Blount's authority.

The true rule upon this subject has been quoted by Mr. Webster from Story on Agency, §§ 166, 170. Where the acts of the agent within his authority are distinguishable from those beyond it, the former are good, and the latter only are void.

We say, 1st. That the authority was substantially executed.

2d. That the acts within the power are distinguishable from those beyond it.

The power which Blount had necessarily included a power to state an account and show what balance was due; and the receipt of $13,000 was clearly within the scope of his authority. The court below say that the payment was clogged with a condition which Innerarity could not accept, and therefore he was not bound to bear the loss. But there is nothing in the record to sustain this. Blount was president of a bank, was Innerarity's solicitor in the case, and his bosom friend. Innerarity says he did not know of this transaction until 1840, and the counsel on the other side complain that we were guilty of a fraud in not giving notice. But why should we give notice? The presumption was that the agent would report to his principal. We paid the money, and took a receipt. It was not our duty to give notice of it to the principal.

Mr. Justice GRIER delivered the opinion of the court.