Court Opinion

ID: 8632698
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:40:06.986716+00
Date Added: 2024-06-11T16:55:49.582874
License: Public Domain

STORY, Circuit Justice.
This cause has been again argued upon the amended bill, .and now stands for judgment Some doubt has been thrown out in argument as to the authority of the court to allow an amendment of the bill, after the cause had been decided in favour of the demurrer. I should be sorry, that any doubt of the propriety of such a practice should prevail in any case, where the court should be of opinion, that it was called for by the real merits and justice of the case. If there were a stubborn rule of practice against it, it might induce one to pause. But I know of no such rule; and as far as cases go, they only shew, that the court will exercise its discretion cautiously on applications of this nature. The authority of the court upon general principles seems unquestionable; and if it needed support, it falls within the express language of the judicial act of 1789, c. 20, § 32 [1 Stat 91], which declares, that the courts of the United States “may at any time permit either of the parties to amend any defect in the process or pleadings, upon such conditions as the courts respectively shall in their discretion and by their rules prescribe.”
The substance of the bill remains untouched by the amendment; and the only material fact now added, is, that the parties executed the powers 0f attorney in the case, under the advice of counsel, that they were as good security as a bill of sale, or mortgage of the property; Here, then, there was no mistake as to the intention of the parties; they did not execute one instrument supposing it to be another; they did not execute a power of attorney, supposing it to be a mortgage or a bill of sale. The papers are exactly what the parties intended; and they expressly waived the execution of any other or farther security. There was, then, no mistake in. fact, nor in intention. The only mistake was a mistake in law, in supposing, that a defeasible security was indefeasible, and a letter of attorney irrevocable by the party was perpetual in its obligatory force, and irrevocable in point of law. The question, then, comes shortly to this, whether the court can grant relief in equity, where a security becomes ineffectual, not by the fraud of the parties, or by acci*947■dent, or because it is not what it was Intend-' ed to be. but because the parties have innocently mistaken the law. No case has been cited at the argument, which supports such a doctrine; and the existence of such a case is not to be presumed. It would, I imagine, be a new head in equity, that, because the se, -curity chosen by the party turned out in the •event to be ineffectual without fraud, therefore a court of equity would substitute a new .security, and give the party the same benefit as he might have had, if he had been more vigilant, or had been better instructed in the law. The cases, where relief has been granted upon the ground of mistake, are in general upon mistake as to facts, or where the instrument is not, what the parties in point of fact intended. Bishop v. Church, 2 Ves. Sr. 100; Id. 371; Thomas v. Frazer, 3 Ves. 399; Burn v. Burn, Id. 573; Gray v. Chiswell, 9 Ves. 118, 125; Underhill v. Horwood, 10 Ves. 209, 227, 228; Devaynes v. Noble (Sleech’s Case) 1 Mer. 539, 564; Sumner v. Powell, 2 Mer. 30, 36; Ramsbottom v. Gosden, 1 Ves. & B. 165; Jalabert v. Duke of Chandos, 1 Eden, 372; Henkle v. Royal Exchange Assur. Co., 1 Ves. Sr. 317. Lord Eldon in Underhill v. Horwood (10 Ves. 209, 227) said: “I know •both in causes, and in bankruptcy, where there is a joint bond, the court has sometimes inferred from the nature of the condition and the transaction, that it was made joint by mistake. But that turns upon this, that the-instrument, though joint only, was intended: to be both joint and several, and therefore; the court will make it what it was intended to be. But I never understood, that though upon the ground of mistake this court would' xeform the instrument, therefore it would bold, that the instrument has a different effect from that, which belongs to it at law”. Lord Thurlow in Irnham v. Child (1 Brown, Ch. 92) refused to add a new term to an Agreement upon the ground, that it was omit-; ted intentionally upon a mistake of the law;' ••and the master of the rolls adhered to that in • a subsequent determination. Lord Portmore v. Morris, 2 Brown, Ch. 219. Lord Eldon in -.the Marquis of Townshend v. Stangroom (6 es. 328, 332) said: “Lord Irnham v. Child went upon an indisputably dear principle, that the parties did not mean to insert in the Agreement a provision for redemption, (of an-Annuity) because they were all of one mind, ■that it would be usurious; and they desired the court, not to do what they intended, for the insertion of that provision was directly contrary to their intention; but they desired to be put into the same situation, as if they had been better informed, and consequently-had a contrary intention.” This language is strongly applicable to the case before the •court Here the parties did not intend to ex•ecute a mortgage, for that was waived; but the plaintiff took just such a security as he ■thought sufficient, upon his own notion of the 'law; and he now in effect asks the court to .give him the same rights, as if he elected a mortgage. Mr. Chancellor Kent has pointedly stated the doctrine, that “courts do not undertake to relieve parties from their acts and deeds fairly done on a full knowledge of facts, though under a mistake of the law. Every man is to be charged at his peril with a knowledge of the law. There is no other principle, which is safe and practicable in the common intercourse of mankind.’’ Lyon v. Richmond, 2 Johns. Ch. 51, 60.
[NOTE. An appeal was then taken by the plaintiff to the supreme court, where the -decree was reversed in an opinion by Mr. Chief Justice Marshall, who said: “We find no case which we think precisely in point, and are unwilling, where the effect of the instrument is acknowledged to have been entirely misunderstood by both parties, to say that a court of equity is incapable of affording relief.” The case, however, being one in -which creditors were concerned, the court, instead of giving a final decree for the plaintiff, directed the cause to be remanded so that defendants might withdraw their demurrer and file an answer. As to what is meant by “a power coupled with an interest,” it was held that the interest, which ■ will protect a power after the death of the person creating it is one in the thing itself, and not in that which is produced by the exercise of the ■power. 8" Wheat. (21 U. S.) 174. See, also, Cases Nos. 6,889 and 6,897.] .
In every view which I have been able to take of this case, I can perceive no .ground for the interference of a court of equity. Here was no mistake in the execution of the instruments. They expressed exactly, what the parties intended they should express. The security was the choice of the plaintiff. In the evei^t it has turned out unproductive; but this is his misfortune, and affords no ground to give him a preference over other creditors. I am of opinion, that the demurrer is well taken, and that the bill ought to be dismissed. BUI dismissed with costs,