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Representations, to be fraudulent, must rePredictions are matter late to existing facts. of opinion, as to which one party is as competent to judge as the other.

not disposed of by the Commissioners at not less than par, because no money was received for them by the Commissioners, and because they were delivered directly to the Railroad Company. But a delivery to the Railroad Com- Most of the statements, which Prickett claims pany was plainly authorized by the Act of the to be fraudulent representations, were matters Legislature. True, the Commissioners were not of opinion given by citizens of Richmond, not at liberty to dispose of them for less than their agents of the railroad company nor in its empar value, and they did not. Had they done so, ploy. The complainant objected to all testiand had the plaintiff not been a holder-with-mony of statements made at public meetings at out notice and for a valuable consideration- which Prickett was not present, to statements there might have been a defense to the action. made to persons other than Prickett, and to 94] The 3d section, however, *empowered the statements made to Prickett by persons other Commissioners to "dispose of the bonds to such than agents of the company. Nearly all the persons or corporation as they should deem statements will be found to fall within one or most advantageous for the Town, but not for the other of these objections. We are unable less than par." And it required them not to to find, from the testimony, a single material pay over "any money or bonds" to the Railroad representation to Prickett to induce him to subCorporation until certain satisfactory assur- scribe, made by any agent or officer of the comances should be furnished them. Thus it ap- pany. pears that delivery of the bonds to the Railroad Company was contemplated and authorized. There is, therefore, no error in the record, and the judgment is affirmed.

EPHRAIM S. SAWYER, Appt.,

v.

HENRY PRICKETT et al.
(See S. C., 19 Wall., 146-167.)

False representation-promissory statement-
bona fide holder, who is.

1. To make a false representation the subject of an indictment or of an action, two things are generally necessary, viz.: that it should be a statement likely to impose upon one exercising common prudence and caution, and that it should be the statement of an existing fact.

2. A promissory statement is not, ordinarily, the subject either of an indictment or of an action. 3. Allegations of false representations of facts held not sustained by the evidence.

4. It is not necessary to constitute a bona fide holding, that the value should have been paid at the time of receiving the security. A past consid

eration is sufficient.

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The case is stated by the court. Messrs. M. H. Carpenter and Cyrus Bentley, for appellant:

The defendants deny the existence of the railroad company as a corporation.

It is well settled that a person who has dealt with a corporation cannot, when sued upon his contract, change the action from assumpit to quo warranto. The defendants, by giving the note and mortgage, are estopped to deny the legal existence of the corporation.

Ang. & Ames, Corp., 636-640, and cases there cited; also, Anderson v. R. Co., 12 Ind., 376.

The testimony also shows complete organization of the company, and its existence as a corporation when the note and mortgage were given; and that the company had expended over $100,000 in the construction of its road. The defendants allege that the note and mortgage were obtained by fraudulent representations and without valuable consideration.

The representations sworn to are all mere matters of opinion as to the probable increase in value of the defendants' property in case the railroad should be built, and of various matters of that kind, none of which were representations as to an existing fact or state of facts.

Walker v. R. Co., 34 Miss., 245; 12 Ind., 376.

This would be so, even if these representations had been made by the agents of the company. How much stronger a case it is for the appellants when it appears that they came from citizens of Richmond, appointed at a meeting of citizens to obtain subscriptions.

To avoid a subscription on the ground of fraud, it must appear that some material statement or representation was made upon which reliance was placed, and upon the faith of which the subscription was made.

Messrs. T. G. Frost and J. Miller, for appellees:

Upon the evidence in this case and embodied in the record, the appellees insist:

I. That the note and mortgage in suit were procured from the defendants by fraud, and were, therefore, void, and could not be enforced even for the benefit of Sawyer, the assignee, who cannot, upon. the testimony, occupy the position of a bona fide holder for value, and without notice.

II. There was an entire failure of consideration for which the note and mortgage in question were executed.

III. Again; the original bill in this case could not be maintained, for the reason that, in view of the whole case as developed by the evidence, there was not sufficient ground to justify the interposition of a court of equity.

A party asking for equity must do equity. He must come into court innocent of any wrongdoing on his own part. If, in the circumstances, injustice would be occasioned to innocent parties by granting the prayer of the bill, a court of equity will not interfere; and even though where the contract is fully executed, the court would not set aside what has been done, or allow a party to recover what he has paid; still, so long as the contract is so far executory that the aid of a court of equity is essential in order to enforce it, if any equitable considerations appear from the evidence against granting the relief prayed for and injustice would be done by granting it, the court may refuse to interfere.

In fact, the complainant is bound to present to | the court a case in all its features good in conscience and in right, before he can call upon a court of equity for help; and this is not the character of the case disclosed by the record before the court.

1 Story, Eq. Jur., 10th ed., secs. 769, 770; Lockridge v. Foster, 4 Scam., 573; Belknap v. Sealey, 14 N. Y., 144; McArtee v. Engart, 13 Ill., 248; Osgood v. Franklin, 2 Johns. Ch., 1; Low v. Barchard, 8 Ves., 133; Wood v. Abrey, 3 Madd., 417; Naylor v. Winch, 1 Sim. & Stu.,

555.

IV. Complainant had no right to the relief prayed for, for the reason that the premises covered by the mortgage sought to be foreclosed constituted at the time of its execution and for a long time previous thereto, the homestead of the defendants, and this statutory exemption was not released by the mortgage.

Patterson v. Kreig, 29 Ill., 514; Green v. Marks, 25 Ill., 221; Herring v. Quimby, 31 Ill., 153; White v. Clark, 36 Ill., 285; McDonald v. Crandall, 43 Ill., 231.

V. The objections taken to the testimony in the court below by the counsel for the complainant, show no error in the ruling of the court, for the following reasons:

conflict with the provisions and policy of the law or charter of incorporation.

Plank Road Co. v. Payne, 15 N. Y., 583; R. Co. v. Tibbits, 18 Barb., 297.

Where each party is particeps criminis, the court will not aid either as against the other, but will leave them where they found them. Miller v. Marckle, 21 Ill., 152.

The defendants in this case, however, were rather in the position of victims, like parties contracting to pay usurious interest, and this furnishes an additional argument against the enforcement of an illegal security by foreclosure. At all events, the case upon the evidence presents marked features of fraud and oppression upon the rights of the defendants.

Mr. Justice Hunt delivered the opinion of the court:

The action is to foreclose a mortgage given by the defendants, dated on the first day of September, 1857, to the Fox River Valley Railroad Company, to secure the payment of a note for $2,000 at ten years from its date, and by the company assigned to the plaintiff. The court below dismissed the complaint, and from the to this court. The complaint is in the ordinary decree of dismissal the appeal is now brought

form.

the

First. The objections were of too general a character to enable the appellant to assign er- tioned, Henry Prickett, one of the defendants, The answer alleges that, at the date menror upon the rulings of the court in reference thereto. The objection and exception taken gave the promissory note described, to secure should have specifically pointed out the evi- stock of the Fox River Valley Railroad Compayment of a subscription to the capital dence objected to, and distinctly stated the grounds of objection. A general objection to tained by a fraud and deceit, whereby the note pany, which subscription he alleges was obevidence or to the charge of a court, is not avail-and the mortgage given to secure it were void. able to a party upon error.

McNitt v. Turner, 16 Wall., 362, 21 L. ed.,

347.

Second. So far as the objections were intended to be made to the proof of false representations made to other parties about the same time as those made to the defendants and relating to the same subject-matter, they were not tenable. The evidence was competent, and was properly received. The true rule on this point is laid down in the cases of Olmstead v. Hotailing, 1 Hill, 316; Hall v. Naylor, 18 N. Y.,

588.

upon the allegation that Mr. Conover and Wm. The fraud and misrepresentation are based G. Parsons, of Milwaukee, as agents of the Connell, of Richmond, caused it to be undercompany, and John Sibley and Wm. A. Mcstood that a railroad had been incorporated to extend from Richmond to Milwaukee, and "that inducing the property owners in the Town of the said parties above named, for the purpose of Richmond and vicinity to take an interest in stock of said company, resorted to fraudulent said railroad and to subscribe for the capital they caused a subscription book for the taking and deceitful artifices and representations; that pared and opened at said Town of Richmond; of subscriptions to said capital stock to be prethat they caused the said Wm. A. McConnell, citizens and residents of said Town of [*148 a man of large means and one in whom the Richmond and vicinity had confidence

VI. The subscription in this case, and the note and mortgage given to secure it, were accompanied by a written contract on the part of the company, bearing the same date as the note and mortgage, and executed at the same time, to the effect that no interest should be paid upon the note and mortgage, and indemnifying the defendant, Henry Prickett, against the pay-a ment of the same in case of an assignment or transfer of the note and mortgage, which did not fully mature short of ten years.

ence

This agreement, being executed at the same time with the note and mortgage and in referto the same subject-matter, constituted with the note and mortgage one transaction, and is to be construed in precisely the same manner as though the provisions of each separate paper were all embodied in one instruA conditional agreement or subscription for stock, being contrary to the policy of the statute, has been repeatedly held, by courts of high authority, to be void, as in necessary

ment.

as

man of business integrity and good judgment, and of prudent and sagacious business management, to head such subscription list as a subscriber to the capital stock of said company, to the amount of $1,500; that for the purpose aforesaid the said parties caused John Woodell, a citizen of Richmond, and a man at that time of considerable means and of good business reputation, to appear in said subscription list as a subscriber to the capital stock of said company, to the amount of $1,000; and also for the purpose aforesaid, caused to be represented and believed among the residents of said Town of Richmond and vicinity, that John Sib|ley, a person at that time of means and large

influence in that community, and of good business integrity, had subscribed largely to the capital stock of said company; that said railroad, when constructed, would greatly enhance the real estate and other property in said Town of Richmond and vicinity, by furnishing a market in the said City of Milwaukee for the farm products raised in the vicinity of said Town of Richmond, and that the said market, especially for the sale of wheat, would be much more advantageous to the farming community of Richmond than the market afforded at Chicago.

That the said parties publicly represented and caused it to be believed by the residents and property owners of said Town of Richmond and vicinity, that said company would pay large dividends upon its capital stock; that farmers and parties owning real estate could become the owners of so much of said capital stock as they should subscribe for, by giving their notes for the amount so subscribed to said company on long time, and drawing interest at eight per cent. per annum, and securing said notes by mortgage upon their farms or other real estate; that said company would promptly pay all the interest upon said notes so given, as the same should mature, out of the dividends that would, from time to time, be declared upon the capital stock of said company, and that the balance of said dividends, after the payment of said interest, would be amply sufficient to pay the principal of said notes when the same should become due and payable.

That in the manner and by the means afore149*] said, the said parties aroused and caused a great interest and unusual excitement among the citizens, residents and property holders of the said Town of Richmond and vicinity, regarding the said railroad, and large numbers of them, relying upon the flattering representations made, as aforesaid, were prevailed upon to subscribe to the capital stock of said company; that the said defendant, Henry Prickett, was among those who, by the means, in the manner and upon the representations made as aforesaid, became and was interested in said railroad project; and that after he, said Prickett, had thus become informed thereof, and of the general features of said railroad project, as hereinbefore set forth, and had become greatly excited on account thereof, a short time prior to the said first day of September, 1857, the said Conover and Sibley represented to the said defendant that the said company was duly incorporated and fully organized, and that it would construct and equip said road and have the same in full and complete operation within one year from the date last aforesaid; that said railroad, when constructed, would greatly

enhance the value of said defendant's real es

tate, by furnishing better market facilities, as hereinbefore stated; that said defendant, Prickett, would not be required to pay any money for the capital stock so subscribed for by him, but that the said company would take, in lieu of said money, the note of said defendant, Henry Prickett, payable in ten years from date, with interest thereon at eight per cent. per annum, secured by a mortgage of the land owned by said defendants mentioned in said bill of complaint; that said railroad would earn large dividends, and that said company would pay the interest upon said notes as it should ma19 WALL.

ture, and that with the excess of said dividend the said company would be amply able to pay the principal of said note when it should become due.

They aver, also, that they reposed confidence in these flattering statements, and relying upon the promise given, the said Henry subscribed for $2,000 of the capital stock of the said company, and with his wife gave the note and mortgage in suit, to secure the payment of the same. They further aver that the Fox River Valley Railroad Company was never incorporated; that no part of it has ever been built; that it has been given up and abandoned; that McConnell, Woodell and Sibley were not subscribers *for stock, as was represented, or that [*150 their subscriptions were upon a secret agreement that they should stand upon the books for larger sums than were actually subscribed by them; that McConnell, appearing as a subscriber for $1,500, should only be bound for $500; and that Woodell should only be bound for $500 of the $1,000 subscribed by him; and that Sibley never subscribed for any amount of stock, and never gave his note and mortgage as was represented.

It is further alleged that these misrepresentations were made with an intent to defraud; that the plaintiff is not a bona fide holder of the securities, but was himself one of the projectors and managers of the fraudulent contrivance, and well knew all the facts alleged before he became the owner of the bond and mortgage.

The law gives a different effect to a representation of existing facts, from that given to a representation of facts to come into existence. To make a false representation the subject of an indictment, or of an action, two things are generally necessary, viz.: that it should be a statement likely to impose upon one exercising common prudence and caution, and that it should be the statement of an existing fact. A promissory statement is not, ordinarily, the subject either of an indictment or of an action. People v. Williams, 4 Hill, 9; Rosc. Cr. Ev., 362; Ranney v. People, 22 N. Y., 413. The law also gives a different effect to those promissory statements based upon general knowledge, information and judgment, and those representations which, from knowledge peculiarly his own, a party may certainly know will prove to be true or false. It becomes necessary to classify, to some extent, the representations alleged to have been made in the present case.

1. The facts alleged to have been rep- [*161 resented as actually existing, but which it is said did not exist, are the following, viz.: that the Fox River Railroad Company was an organized corporation; that McConnell appeared as a subscriber for stock to the amount of $1,500, when, by secret agreement with the company, he was a subscriber for $500 only; that one Woodell stood in the same position, giving the amounts; that one Sibley had become a subscriber for stock, and given his note and mortgage for the same, the amount not being speci fied; and that Conover represented himself as one of the officers of the company.

2. The promissory representations, as might be expected, cover a larger space. Thus it is said to have been represented, that the farms and lands of the contributors would be greatly enhanced in value; that the wheat market of

Milwaukee was a better market than that of Chicago, and that they would be able to command five cents more per bushel for their wheat after the road should be built; also that the road should be constructed and equipped within one year; also that the company would pay large dividends upon its capital stock; that where farmers and others became subscribers for stock, and gave their mortgages for the same on long time, drawing eight per cent. interest, that the company, from its dividends, would pay the interest on such notes, and that the balance of the dividends, after paying the interest, would be sufficient to pay the principal of the said notes when the same should be come payable; and the defendant testifies that it was represented to his wife that it would be an everlasting benefit to her to sign the mortgage; that the railroad would probably make thirty per cent., and that it would give her and her family $600 a year always.

It is scarcely credible that Prickett should have believed that the persons making representations like these intended to bind themselves to their fulfillment. That Prickett may have believed the prophecies, is possible; that he may have understood the makers to believe them is possible, as it is possible the makers 162*] did believe them. But that Prickett *believed the makers to have undertaken the accomplishment of the results promised, is not to be believed. It is contradicted by all the facts in the case. A man of common intelligence, or of ordinary prudence and caution could not have so believed.

He did not ask that they should enter into such engagements. He did not stipulate that his obligation to pay his note and mortgage should depend upon the realization of the rich promises made to him. On the contrary he made his subscription, gave his note and mortgage to secure its payment, and relied upon the success of the enterprise to indemnify and to enrich him. If there were dividends to pay the interest, he would not be required to pay it. If there were dividends applicable to the pay ment of the principal, the principal would also be discharged. If there were no dividends, or dividends to pay a portion only of his obligation, he must have known and understood that he had pledged his farm to the payment of the residue. If his present theory is correct, instead of giving security to them, Prickett should have required a bond and mortgage from the company, as the actual responsibility for results would rest on the company alone. We are satisfied that such representations, if made, were not relied upon by Prickett; that they did not form the inducement and consideration of his subscription.

This view is sustained by the additional writing made at the time the note and mortgage were executed. That paper recites the execution of the note and mortgage and their receipt in payment of the stock subscription; it stipulates

that so much of the dividends of the stock as

shall be sufficient to pay the interest on the note and mortgage is relinquished to the company, the company agreeing not to demand the interest, but to save Prickett harmless from the same. This would be well enough except for the two agreements immediately following in the same paper, viz.: that Prickett undertakes in any event to pay the principal when it matures,

and that the provision in relation to interest shall not be a defense on the part of Prickett to the payment *of the interest, if the note [*163 or mortgage shall be in the hands of a third party, either as security or otherwise. So long as he bound himself, at all hazards, to pay the principal, and to pay the interest if the company should transfer the note, it is impossible to credit the theory that he relied upon the alleged promises and expectations as statements which the makers bound themselves to make good to him.

It is alleged that the representation was made that the road should be constructed and equipped and in full operation, within one year from the date of the giving of the note and mortgage. Such a promise by parties having the means of knowledge of its falsity, from their position as managers and directors of a railroad, might in law stand upon a different basis. We do not examine this point, as there is no evidence of such statement by any one professing to have knowledge, or that there was knowledge of its falsity, if made. Prickett testifies that Conover stated that the rolling stock would be on in eighteen months. His allegation in the bill and his evidence do not agree. It is not proved that Conover was authorized to make the statement, or that he did not believe it to be true.

It is difficult to see how an action or a defense can be based upon promissory representations of the character we have considered, and we are of the opinion that they were the expressions of hopes, expectations and beliefs, and that neither party understood, or had the right to understand, that they were to be received as statements of facts which any one was bound to make good, or upon which the validity of the subscription should depend.

The alleged representation of existing facts requires consideration.

1. It is stated that it was represented that the railroad in question was duly incorporated and fully organized. The statement, if made, is sustained by the evidence. It appears that the company had a regular charter; that it was organized by the election of directors, the choice of a president and secretary; and that it had expended considerable amounts [*164 of money in grading its road and in purchasing materials for its construction.

2. It is said that the defendants were influenced by, and were deceived and defrauded by, a pretended subscription for $1,500 of the capital stock of the road, made by William A. McConnell, a man of wealth, of prudence and caution, in whose judgment and discretion great confidence was placed, while in truth, by some subscriber for $500 of stock only. secret agreement with the company he was a The attempted proof of this allegation is a failure. It is proved on the other hand by the officers of the company, and by McConnell himself, that McConnell made a subscription for $1,500; that it was a valid, bona fide subscription; that there was no condition, limitation or qualification of it by any agreement, secret or otherwise, and that he settled and arranged it as a subscription for $1,500.

3. It is alleged that one John Woodell subscribed $1,000 upon a similar understanding or agreement. There is no proof to sustain the al

poration.

legation. Prickett says that he has so heard, | or subscribed belong to the creditors of the corbut that he has no knowledge on the subject. 4. It is said that the persons obtaining the subscription caused it to be represented that John Sibley, a man of wealth, of integrity and of influence, had subscribed largely to the capital stock of the company. Prickett testifies that Sibley told him he had mortgaged his house and lot for stock, and that it would be a good thing, and that he and others induced him to sign. In answer to a question by his own counsel, "Would you have become a subscriber to the capital stock of this company, except from the fact that Wm. McConnell became a subscriber and the other parties you have named?" he says: "If they had not represented as they did, and if McConnell and other leading citizens of the town had not subscribed, I certainly should not; but the representation was an inducement to make the farmers subscribe." "See here, you put in $2,000, and you get $600 for life. Is not that enough?" In effect, he says that he should not have subscribed except that McConnell and the others did so, but it is apparent that the controlling influence was 165*] the idea that if he subscribed for $2,000 of the stock he should get a return of $600 for life.

To make this alleged representation a defense to the mortgage, we must believe, first; that it was actually made. Prickett says that it was made. Sibley testifies positively that he never made it, that he had subscribed for $500 of stock in a road of Illinois having the same name, with which this was intended to connect, that he told Prickett of that subscription, but that he had never subscribed to stock in this road, and had never so stated to Prickett or to anyone. If any statement was made, it was more likely to have been made as to the road where he did own stock than to this one. It must be believed, secondly; that Sibley was the agent of the company by whose acts or declarations they would be bound. Sibley denies any agency or authority, in fact or assumed, and there is no reasonable evidence to the contrary. He states that as a citizen, and one desirous to have the road built, he solicited subscriptions, and that he acted in this capacity only.

And lastly, it must be believed that Prickett relied upon the statement, that it was an inducement to him to become a subscriber. This has been sufficiently illustrated by what has already been said. These are all the allegations of misrepresentations in regard to existing facts. The evidence to sustain them is too weak to justify the decree.

The counsel for the defendants insists fur

ther that there has been a failure of consideration, and that a defense on that ground arises. We do not so understand it. The defendant received what he bargained for, to wit: a certificate that he was entitled to twenty shares of the capital stock of the company. He can, so far as the case shows, obtain his formal shares upon presentation of his certificate. The fact that the road is unprofitable, or that it has never been completed, does not entitle one who has paid in his subscription to the capital stock to recover it back, nor does it furnish a justification for a refusal to pay when the subscription has not, in fact, been paid. Moneys so paid

*Nor does a defense arise from the sep- [*166 arate paper in relation to the nonpayment of interest, which has been before referred to. The paper expressly provides that it shall furnish no defense to the payment of interest if the note and mortgage shall be transferred to another party. It is the personal, separate undertaking of the company to save him (Prickett) harmless from the ultimate payment of interest, leaving Prickett to pay the interest if the security shall be transferred, and to resort to the company for re-imbursement. The paper does not require that there should be an absolute transfer of the interest and title to the mortgage, to cut off the defense. A transfer conditionally, or as security, is sufficient. We see no reason, however, to doubt that the plaintiff is a bona fide holder. He paid a portion of the amount of the mortgage in money, and cancelled a valid debt against the company for the residue. He had no notice of any defense to the note, and received the note before its maturity. Under the rulings of this court it is not necessary to constitute a bona fide holding that the value should have been paid at the time of receiving the security. A past consideration is sufficient. Swift v. Tyson, 16 Pet., 1; Goodman v. Simonds, 20 How., 343, 15 L. ed., 934.

We have recently decided that the rule of bona fide holding applies to a case where the proceeding is to foreclose a mortgage accompanying a note, with the same force as when the suit is brought upon the note itself. Carpenter v. Longan, 16 Wall., 271, 21 L. ed., 313.

The plaintiff had not been a director for some time previously to the taking of this mortgage, and had no part in getting up this or the other mortgages. The proof shows a large expenditure in grading and preparing, and in the purchase of materials, after the giving of this mortgage. For what reason the enterprise failed does not appear. There is no evidence of fraud or bad faith.

The defendant's position is an unfortunate one, but we do *not discover any princi- [*167 ple upon which he can justly avoid the payment of his mortgage.

The decree must be reversed, and the cause remanded for further proceedings.

ELIZABETH CROPLEY, Appt.,

v.

WILLIAM COOPER et al. (See S. C., 19 Wall., 167-177.)

Land directed by will to be converted into money, in equity is regarded as money-when legacy or devise vests-construction of will. 1. Where real estate is directed by will to be converted into money, it is in equity regarded as if it were money at the time of the death of the testator. That it was not to be sold until after the termination of the two successive life estates, does not affect the application of the principle.

2. Where a bequest is given by a direction to pay when the legatee attains to a certain age, and the interest of the fund is given to him in the meantime the legacy vests in interest at the death of the testator.

later conveyed by testator-see note, 58 L. R. A. NOTE.-Passing of proceeds of land devised and 719.

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