Bank of Metropolis v. Guttschlick
39 U.S. 19 (1840)

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U.S. Supreme Court

Bank of Metropolis v. Guttschlick, 39 U.S. 14 Pet. 19 19 (1840)

Bank of Metropolis v. Guttschlick

39 U.S. (14 Pet.) 19

Syllabus

Action on an agreement in writing by which Guttschlick had purchased a lot of ground in the City of Washington from the Bank of the Metropolis for which he had paid a part of the purchase money and given a note for the residue. By the contract, the Bank of the Metropolis, through its president and cashier, was pledged to convey the lot in fee simple to Guttschlick when the whole purchase money was paid. The declaration in each count averred the payment of the note and the failure of the bank to convey. To the three special counts in the declaration there was no conclusion; to the fourth count, for money had and received, there was a general conclusion. It was held by the court that whatever might have been the effect of the want of a conclusion to the three counts upon a special demurrer, the thirty-second section of the Judiciary Act of 1989 would cure the defect, if it be admitted to be one.

A corporation may be bound by contracts not executed under its common seal, and by the acts of its officers in the course of their official duties -- when in a declaration it is averred that a bank by its officers agreed to a certain contract, this averment imports everything to make the contract binding.

An allegation that a party made, accepted, endorsed, or delivered a bill of exchange is sufficient although the defendant did not do either of those acts himself, provided he authorized the doing of them.

The averment in a declaration set forth that the plaintiff had been turned out of possession of a lot of ground, but did not state that the eviction was by due course of law. The breach alleged in the count was that the defendant had refused, on demand, to convey the lot. The court held the averment of eviction to be mere surplusage.

The Bank of the Metropolis contracted to deliver a title in fee simple to Guttschlick of a lot of ground, and at the term of the contract they held the lot, by virtue of a sale made under a deed of trust, at which sale they became the purchasers of the property. The same lot had, by a deed of trust executed by the same person, been previously conveyed to another person to indemnify an endorser of his notes, and it was by the trustee, afterwards and after the contract with Guttschlick, sold and purchased by another. Held that at the time of the contract of the bank, they had not a fee simple in the lot which could be conveyed to Guttschlick.

In case of a deed of trust executed to secure a debt, unless in case of some extrinsic matter of equity, a court of equity never interferes to delay or prevent a sale according to the terms of the trust, and the only right of the grantor in the deed is the right to any surplus which may remain of the money for which the property sold.

The action in this case was assumpsit against the bank on a contract under the seals of the president and cashier. Held that the action was well brought, and it makes no difference in an action of assumpsit against a corporation whether the agent was appointed under the seal or not or whether he puts his own seal to a contract which he makes in behalf of the corporation.

It is admissible for the party who sues on a contract to make a title to a lot of ground in fee simple which he had purchased to give in evidence an examination of the records of the office for the recording of deeds by a witness who was searching into the title of the lot, and also a letter giving to the party who made the contract a notice that the lot was about to be sold under a title superior to that under which he held. A deed from the vendor, informally executed and which did not convey the title the vendor agreed to give, was also admissible in evidence in an action against the vendor on the contract.

A paper executed by the president and cashier of a bank, purporting to convey a lot of ground held by the bank, is not the deed of the corporation.

The proceedings in an action against the endorser of a note, by the holder, which gave to a trustee, by the terms of the deed of trust, a right to sell property held for the indemnity of the endorser, were proper evidence in an action on a contract for the sale of the lot, from which the party who had purchased under another title had been evicted by a title

Page 39 U. S. 20

obtained under the deed of trust. No exceptions to the regularity of the proceedings offered in evidence can be taken which should have been properly made in the original action by the party sued on the same.

Whether evidence is admissible or not is a question for the court to decide, but whether it is sufficient or not to support the issue is a question for the jury. The only case in which the court can make inferences from evidence and pass upon its sufficiency is on a demurrer to evidence.

When a trust is created for the benefit of a third party, though without his knowledge at the time, he may affirm the trust and enforce its execution.

Where a deed of trust was executed to secure the payment of certain notes, and a judgment obtained on the notes, the judgment did not operate as an extinguishment of the right of the holders of the note to call for the execution of the trust, although the act of limitations might apply to the judgment.

This action was instituted by the defendant in error against the plaintiff in error on 31 March, 1836. The declaration contained four counts.

1. That on 9 November, 1827, the plaintiff bought of defendant a certain lot of ground in the City of Washington, being lot 5, Square 489, for the sum of eleven hundred and ninety-one dollars and twenty-five cents, and paid the sum of five hundred and ninety-one dollars and twenty-five cents, and gave his promissory note for the balance of the purchase money; that the defendant, in consideration thereof, agreed through the president and cashier that it was pledged, when the note should be paid, to convey said lot to plaintiff, his heirs and assigns; that said note was paid at maturity, with the interest, yet the defendant has not conveyed said lot, but to do so has hitherto wholly refused, &c.

2. That whereas the defendant, by John P. Van Ness, the president of said bank, and Alexander Kerr, the cashier, agents for that purpose, duly authorized by and acting for defendant, did, on 9 November, 1827, bargain and sell to the plaintiff the said lot of ground on the terms mentioned in the first count, and did thereupon put plaintiff in possession of said lot, and the plaintiff avers the authority of Van Ness and Kerr to make said agreement; that plaintiff paid the note and received and continued in possession of the lot, and was obliged to pay, and did pay taxes thereon, from 9 November, 1827, to 30 December, 1835, when he was turned out of possession by the Patriotic Bank, yet defendant, although often requested, has not conveyed the said lot in fee simple to the plaintiff, but hath hitherto wholly neglected and refused.

3. That whereas defendant, on 9 November, 1827, by an agreement of that date, acknowledged to have received from the plaintiff the sum of five hundred and ninety-one dollars and twenty-five cents, and the promissory note of the plaintiff, payable six months after date, with interest, and in consideration thereof put the plaintiff in possession of said lot, and undertook and faithfully

Page 39 U. S. 21

promised the plaintiff, upon the payment of said note, with interest, to convey to plaintiff said lot in fee simple; that the plaintiff did pay said note, with interest, whereby defendant became liable and bound to convey said lot in fee simple, by a good and indefeasible title, free from encumbrances; and being so liable, undertook and promised, &c.; yet plaintiff says that the defendant was not at the time when, &c., or at any other time after seized or possessed of said lot in fee simple, nor did then or at any other time, although often requested to convey, &c. And the plaintiff further avers that being in possession of said lot as aforesaid, he was compelled to pay and did pay the taxes and public dues, amounting to three hundred dollars, whereby, &c.

4. The fourth count was for money had and received, and concluded as follows,

"Yet the said defendants the said sums of money have not paid to the said plaintiff, nor have they paid any part thereof, but the same or any part thereof to pay to the said plaintiff, have hitherto wholly neglected and refused, to the damage of the said plaintiff three thousand dollars, and thereof,"

&c.

There was no conclusion to the three preceding counts in the declaration.

The jury, under the charge of the court, found a general verdict for the plaintiff for eleven hundred and ninety-one dollars and twenty-five cents, with interest from November 9, 1827.

The counsel for the defendant took four exceptions to the charge of the court.

The plaintiff in the circuit court having given in evidence an account made out by the Bank of the Metropolis against him, stating that he had bought a certain lot of ground described in the same, from the bank, for the sum of eleven hundred and ninety-one dollars and twenty-five cents, gives a credit for the sum of five hundred and ninety-one dollars and twenty-five cents as "cash received," and the balance, six hundred dollars, to be due on the bond of the plaintiff, in the following terms,

"Be it known, that on this 9 November, 1827, Ernest Guttschlick, has purchased of the Bank of the Metropolis, lot No. 5, in Square No. 489, as above described, and as laid down on the plat of the City of Washington, for the sum of eleven hundred and ninety-one dollars and twenty-five cents, and that he hath paid on account of the same, the sum of five hundred and ninety-one dollars and twenty-five cents, leaving due the sum of six hundred dollars, for which he hath given his note to the said bank, payable in six months after date with interest from date, which sum of six hundred dollars, when paid, will be in full for the purchase money of said lot."

"The Bank of the Metropolis, through the president and cashier, is hereby pledged, when the above sum shall be paid, to convey the said lot, viz., lot 5, in Square 489, in fee simple, to the said Ernest Guttschlick, his heirs or assigns, forever."

"In testimony whereof, the said president and cashier, by order of

Page 39 U. S. 22

the board of directors, have hereto set their hands and seals this ninth day of November, eighteen hundred and twenty-seven."

"JOHN P. VAN NESS [SEAL]"

"President of the Bank of Metropolis"

"ALEXANDER KERR, Cashier [SEAL]"

"In presence of GEO. THOMAS"

With evidence that he, the plaintiff, had paid the sum of six hundred dollars to the bank, the defendants excepted to the admissibility and competency of the same until some evidence should be given showing the authority of the parties who executed the same to sign said paper.

The court overruled the objection.

The defendant's second bill of exceptions stated that the plaintiff proved that in December, 1835, witness, at the instance of the plaintiff, examined the records of deeds in Washington County for the purpose of tracing the plaintiff's title to the lot in question, and after such examination, wrote for the plaintiff his letter to the bank, dated 17 December, 1835; that when he wrote that letter, a deed, purporting to be executed by John P. Van Ness, president, &c., to the plaintiff, was before him, and is the deed referred to in said letter, having been handed to him by plaintiff. The said deed was duly recorded on 13 May, 1828, and appears to have been delivered in August, 1828. Statements were made by counsel, and the plaintiff offered to read in evidence said deed, which being objected to, the court overruled the objection and defendant excepted.

The third bill of exceptions stated that the plaintiff, in order to maintain the issue on his part, offered in evidence the proceedings of the Circuit Court of the District of Columbia for the County of Washington in a certain suit brought by the Patriotic Bank against Samuel Lane for the purpose of showing that Samuel Lane had been in fact sued upon the note for three thousand dollars, one of the notes mentioned in the deed from B. G. Orr, to Joseph Elgar, dated 21 August, 1818; to the competency and admissibility of the same to prove the said fact the defendant objected, but the court overruled the objection and permitted the same to go to the jury. To the admission of which testimony the defendant, by his counsel excepted. The deed from B. G. Orr, referred to in the exception, was a deed of trust executed on 21 August, 1818, and duly recorded, to Joseph Elgar, by which Orr conveyed to Elgar certain lots of ground in the City of Washington, in trust that if Samuel Lane should be sued or put to any cost, trouble, damage, or expense by reason of his having endorsed certain notes drawn by B. G. Orr, negotiable at the Patriotic Bank, the trustee should sell and dispose of the property conveyed by the same, and out of the proceeds discharge the notes or such as may have been substituted for them, and to indemnify the said Samuel Lane, &c.

The fourth bill of exceptions stated that the plaintiff, to sustain the issue on his part, gave in evidence the articles of agreement

Page 39 U. S. 23

signed by John P. Van Ness, President of the Bank of the Metropolis, and Alexander Kerr, Cashier of the Bank, with the plaintiff, for the sale of the lot, and then, having proved that B. G. Orr was seized in fee of the premises mentioned in the agreement, gave in evidence the deed from Orr to Elgar referred to in the third exception, and then gave in evidence a deed from B. G. Orr to Kerr authorizing the sale of the lot for the purpose of discharging certain notes drawn by Orr and discounted at the Bank of the Metropolis and a deed made by Kerr to the Bank of the Metropolis in pursuance of the trust dated July 1, 1825, under which deed the bank entered into possession of the lot, and then gave in evidence the proceedings in the circuit court, in the case of the Patriotic Bank against Samuel Lane, as stated in the third bill of exceptions, and proved by competent testimony that B. G. Orr had died in 1823 and Samuel Lane in the year 1822, both insolvent, and that in the year 1835, said Elgar, at the instance and request of said Patriotic Bank, advertised the property mentioned in said deed to him for sale in manner following, and that pursuant to said advertisement, he did, on 21 December, 1835, enter on the premises and expose to sale and did sell said lot No. 5, in Square No. 489, and the said Patriotic Bank, by its cashier, became the purchaser, and said Elgar executed to said bank a deed for the same, and that the net proceeds of said sale of said lot was carried on the books of the said Patriotic Bank to the credit of said B. G. Orr's note for three thousand dollars, mentioned in said deed from said Orr to Elgar, still leaving, as appears by the said books, a balance due on the said note, and then gave in evidence a letter addressed by said plaintiff to said defendant, and then proved by competent testimony, that the said lot was vacant and unenclosed and unimproved, and that after said sale and conveyance to said Patriotic Bank, the cashier of said bank went on to said premises, in company with the attorney of said bank, and then and there declared that he took possession of the same, and that in the year 1824 the said lot was assessed on the books of the corporation of Washington as the property of said Orr, and that from the year 1825 to the year 1828, both inclusive, the same was assessed to said defendant, who paid the taxes thereon, and that from the year 1829 to the year 1835, the same was assessed to said plaintiff, who paid the taxes thereon, and continued in possession till the year 1835, and from that time, the same has been assessed to said Patriotic Bank, and further proved that said plaintiff was duly notified by the cashier of said Patriotic Bank of his intention to take possession of said lot in the manner and at the time of his said entry as aforesaid, that that said lot still remains and has constantly remained open, vacant, unimproved, and unenclosed, and further proved that said plaintiff had paid to said defendant the whole consideration money for which said lot was sold to him, and taken up at maturity as part of said purchase money, the note mentioned in the agreement aforesaid, signed by said Van Ness and Kerr, and that the said Orr and Kerr, during their lives, and

Page 39 U. S. 24

the said Elgar, the Bank of the Metropolis, and Patriotic Bank, were all in the City of Washington from 1818 till after 1835.

The defendant moved the court to instruct the jury that upon this evidence the plaintiff was not entitled to recover upon the first, or second, or third, or fourth counts in the declaration, which instructions the court refused to give, to which refusal the defendants excepted.

The defendants presented this writ of error.

Page 39 U. S. 26

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