CONFLICT OF LAWS-CORPORATIONS.

NORTHWESTERN MUTUAL LIFE INSURANCE

CO. v. OVERHOLT.

United States Circuit Court, District of Colorado. Before Hon. MOSES HALLETT, District Judge.

1. THE RULE THAT A CONTRACT SHALL BE JUDGED by the law of the place in which it is made is not applicable to real estate, which can be conveyed only according to the law of the place in which it is situated.

2. THE STATUTE OF THE LATE TERRITORY OF COLORADO provided that foreign corporations should file a copy of the charter, or other evidence of their incorporation, within thirty days after commencing business in the territory, but contained nothing to indicate that this was a condition on which they might continue in business. But it did provide a penalty against the officers for a failure to file such evidence. Held, that though the complainant had failed to comply with the statute in respect to such filing, it was yet capable of taking a mortgage on real estate in the late territory, and that no prohibition to continue in business could be implied from these enactments.

Frederick W. Pitkin, for complainant; Symes & Decker, for defendants.

Bill to foreclose a mortgage given to plaintiff by defendants, April 14, 1874, to secure a bond for $2,000, given by one Abraham to plaintiff, payable in five years. The bond has become due by reason of a default in the payment of interest. Other facts are in the agreed statement.

HALLETT, J.

The mortgagee is a foreign corporation, which had not at the date of the mortgage filed a copy of its charter in the office of the county clerk, as required by the act of 1868, R. S. 1868, p. 150. The company had then been doing business in the territory for more than thirty days, and the question is whether the omission to comply with the act makes void the mortgage.

Plaintiff claims that the contract was made in Wisconsin, and is for that reason subject only to the law of that state. But the fact is that the bond and mortgage were executed and delivered in this state, and the circumstance that the negotiation for the loan was with the officers of the company in Milwaukee, apparently by mail, is not controlling. The situs of the contract and the place of payment named in the bond are, however, of little weight in determining the question presented, for without capacity in the plaintiff to take and hold real property in this state, the mortgage must be void. The rule that a contract shall be judged by the law of the place in which it is made is not applicable to real estate, which can be conveyed only according to the law of the place in which it is situated. Story's Conflict, § 430. Whether the mortgage was made in Wisconsin or here, the plaintiff can not take any thing by it, if it was incapable of holding real estate under our law. In this particular the contract will be tested by the law of the state, wherever it may have been made, for the plaintiff could do nothing with this property except by the permission of the local government. Paine v. Virginia, 8 Wall. 168. If, then, the statute prohibited the company from doing business in the

territory until the charter of incorporation should be filed, we can not doubt as to the effect of it; but such prohibition should appear with reasonable certainty. It can not be assumed that the legislature intended more than is expressed, and I can not find in the act any prohibitory words whatever. Recognizing the existence of foreign corporations, and their right to do business in the territory, the legislature requires them to file a copy of the charter, or other evidence of incorporation, within a period of thirty days after commencing business; but there is nothing to indicate that this is a condition on which corporations may continue in business. On the contrary, a penalty is given which was probably thought to be sufficient to secure a proper observance of the act. In the possible case, of which this may be an illustration, where a corporation may do business without an officer or agent in the state, the punishment would fail; but this will not authorize the addition of another penalty to that which is prescribed. The language of the act is in marked contrast with others which have been regarded as establishing conditions on which foreign corporations may do

business.

In Oregon, corporations must comply with the act before doing business in the state, and there is no way of enforcing the command, except that of holding contracts made in defiance of the act to be void. In re Comstock, 3 Sawyer, 218; Oregon Investment Co. v. Rathburn, 10 Chicago Legal News 58. In Illinois it is not lawful to make contracts until the act has been obeyed. Cincinnati Mutual Co. v. Rosenthal, 55 Ill. 85.

Our act does not go so far, but merely enjoins a duty and punishes disobedience to its commandnot by avoiding the contracts of the company, but by holding its officers, agents and stockholders liable for such contracts. It is as if the company had been required, under a penalty, to publish a statement of assets or a list of its officers for the information of the public, and had failed therein. No one would contend that the company, by such failure, had become incapable of making contracts, although it had in fact violated the law. The decree must be for the plaintiff.

1. INJUNCTION-WHEN PROPER.-The writ of injunction does not issue of right for every injury threatened or done, but its granting is diseretionary, its pur pose being to prevent irreparable mischief, to stay evils, the consequences of which could not adequately be compensated in damages if suffered to go on.

2. WHEN COURTS WILL INQUIRE INTO PARTY'S MOTIVES IN MAKING A PURCHASE.-Generally, courts have no concern with a party's motives in making a lawful purchase, or in doing any other lawful act; but

where one invokes the aid of equity, averring that, under the peculiar circumstances of his case, the rules of the common law do not afford him adequate redress, it may be inquired how he came to be placed in such circumstances.

3. INJURY TO REAL ESTATE-MOTIVES OF PURCHASER OF AFFECTED PROPERTY.-Where a party bought lands on the banks of a stream, with the sole purpose of forcing their re-purchase at a great advance by the proprietor of a costly quartz mill above, in necessary consequence of the operations of which mill large quantities of sand were continually deposited by the stream on the lands below: Held, that complainant's motive in purchasing might be inquired into, and that instead of granting an injunction which would sacrifice valuable property, the court would leave complainant to his remedy in damages.

Ball & Owen, for complainant and appellant; William D. Williams, for defendant.

COOLEY, J., delivered the opinion of the court: This is an injunction bill, and the facts are very simple. Defendant, at a cost of some sixty thousand dollars, erected a stamp mill on the banks of Hill Creek, in the year 1874, and has since been operating it for copper-mining purposes. As a result of its operations large quantities of sand are carried down by the waters of the stream, and deposited on the bottom lands below. The evidence leads to the belief that it would be impossible to carry on the mining operations of the defendant with profit unless this is permitted. The year following the erection of defendant's mill, complainant purchased a piece of land through which the creek runs, a short distance below the mill, and upon which the mill as operated was depositing sand. The land was not purchased for use or occupation, but as a matter of speculation, and apparently under an expectation of being able to force defendant to buy it at a large advance on the purchase price. It was offered to defendant soon after the purchase, and though no price was named, the valuation which has been put upon it by complainant and his witnesses is from three to five times what it cost him, and this, perhaps, gives some indication what his expectations were. The real value of the land, except as a convenience in the business of the defendant, would seem to have been small. When defendant declined to purchase, this bill was filed. The prayer is that defendant be restrained from 1unning or depositing its stamp sand on complainant's land, and from polluting the waters of the stream by its operation. This is a short statement of so much of the case as is material to what follows. The circuit judge refused the injunction prayed for, but ordered a reference to a jury for an assessment of damages.

There is no doubt that the operations of defendant, whether they inflict any serious injury on complainant or not, amount in effect to an appropriation of that portion of his property upon which sand is being deposited. Ashley v. Port Huron, 35 Mich. 296; Pumpelly v. Green Bay Co., 13 Wall. 166; Armond v. Green Bay Co., 31 Wis. 316; Rowe v. Portsmouth, 56 N. H. 291; Woodward v. Worcester, 121 Mass. 245. It follows and is beyond question that complainant sustains a

legal injury for which he is entitled to suitable redress. The only question on this record is, whether he is entitled to the special redress he seeks, namely, an injunction.

The

An injunction is not a process to be lightly or dered in any case. Where the effect will be to present to the owners of a valuable mill the alternative either to purchase complainant's lands at his own price, or to sacrifice their property, any court having the power to order it ought very carefully to scrutinize the case and make sure that equity requires it. In theory its purpose is to prevent irreparable mischief; it.stays an evil, the consequence of which could not adequately be compensated if it were suffered to go on. Gilbert v. Showerman, 23 Mich. 448; Bemis v. Upham, 13 Pick. 169; Mason v. Sanborn,45 N. H. 169; Cockey v. Carroll, 4 Md. Ch. 344; Nicodemus v. Nicodemus, 41 Md. 528; Burgess v. Kattleman, 41 Mo. 480; Owen v. Ford, 49 Mo. 436; Morris & Co. v. Central R. R. Co., 16 N. J. Eq. 419; Pettibone v. La Crosse & C. R. R. Co., 14 Wis. 443; Hine v. Stephens, 33 Conn. 497; Rhodes v. Dunbar, 57 Penn. St. 274; Richards' Appeal, Ib. 105; Harkinson's Appeal, 78 Ib. 196; State v. Judge, 16 La. Ann. 233; Goodell v. Lassen, 69 Ill. 145. writ "is not ex debito justicia for any injury threatened or done to the estate or rights of a person, but the granting of it must always rest in sound discretion governed by the nature of the case." Enfield Toll Bridge Co. v. Connecticut River Co., 7 Conn. 50. As is said in another case: "Injunetion is not of right but of grace; and to move an upright chancellor to interpose this strongest arm of the law, he must have not a sham case, but a well-grounded complaint, the bona fide of which is unquestioned, or capable of vindication if questioned." Kenton v. Railway Co., 54 Penn. St. 454. "There is no power," says Mr. Justice Baldwin, "the exercise of which is more delicate, which requires greater caution, deliberation and sound discretion, or is more dangerous in a doubtful case, than the issuing of an injunction. It is the strong arm of equity, that never ought to be extended unless to cases of great injury, where courts of law cannot afford an adequate or commensurate remedy in damages." Buonaparte v. Camden & C. R. R. Co., Bald. 218. All the cases referred to show that the court looks beyond the actual injury to contemplate the consequences, and however palpable may be the wrong, it will still balance the inconveniences of awarding or denying the writ, and adjudge as these may incline the judicial mind. Gray v. Ohio, &c., R. R. Co., 1 Grant, 412; Vaney v. Pope, 60 Me. 192; Bosley v. McKim, 7 Har & J. 468. Even in the case of a palpable violation of a public right to the annoyance of an individual, he must show the equity which requires this summary interference as the only adequate means of obtaining justice. Sparhawk v. Union Passenger Railway Co., 54 Penn. St. 401.

What is the irreparable injury which is done or threatened in this case? We can see very plainly what it is in the case of many nuisances, and the equity of this particular remedy is then very manifest. If one man creates intolerable smells near his

neighbor's homestead, or by excavations threatens to undermine his house, or cuts off his access to the street by buildings or ditches, or in any other way destroys the comfortable, peaceful and quiet occupation of his homestead, he injures him irrevocably. No man holds the comfort of his home for sale, and no man is willing to accept in lieu of it an award of damages. If equity could not enjoin such a nuisance, the writ ought to be dispensed with altogether, and the doctrine of irreparable mischief might be dismissed as meaningless. A nuisance which affects one in his business is less in degree, but it may still be irreparable, because it may break up the business, destroy its good will and inflict damages which are incapable of measurement, because the elements of reasonable certainty are not to be obtained for their computation. Even in the case of unoccupied land, a nuisance may threaten irreparable injury, where it is devoted in its purchase to some special use, or where the person causing the nusiance is irresponsible, and in some other cases which need not here be specially mentioned.

The land injured in this case was bought by the complainant with the preconceived purpose to force a sale of it upon the defendant. He did not want it for a homestead or for business property, but for the money he could compel the defendant to pay for it. It may be said that no one is concerned with the motives of another in making a lawful purchase, or in doing any other lawful act; and this is true as a rule, but it is not true universally. Wherever one keeps within the limits of lawful action, he is certainly entitled to the protection of the law, whether his motives are commendable or not; but if he demands more than the strict rules of law can give him, his motives may become important. In general, it must be assumed that the rules of the common law will give adequate redress for any injury; and when the litigant avers that under the circumstances of his particular case they do not, and that, therefore, the gracious ear of equity should incline to hear his complaint, it may not be amiss to inquire how he came to be placed in such circumstances. If a man invites an injury, he may still have his redress in the courts of law; but his prayer for the special interposition of equity, on the ground that what he invited and expected was about to irreparably injure, would not be likely to trouble the judicial conscience very much if it were wholly ignored. The Supreme Court of Connecticut not long since felt compelled, under circumstances very similar to those shown by this record, to look into the motives of a corporation in making a purchase with a view to litigation, and to deny relief upon the ground that an acquisition of land for such a purpose was ultra vires. Occum Co. v. Spague Manufacturing Co., 34 Conn. 539. We cannot say, in this case, that complainant had no right to buy; but we can say as we do, that when he comes demanding strict legal rights, he shall have those, but no more. He is entitled to his rights under the rules of law, but he is entitled to nothing of grace.

The land having been bought to make money from by sale, a legal award of damages for an in

jury to it is in furtherance of the purpose of the purchase, and therefore a suitable and a just redress. Defendant is not alleged to be irresponsible, and a jury, it is supposed, will award all that is reasonable. If complainant wants more than is reasonable, he has a right to obtain it under the rules of law, but he cannot demand the aid of equity in a speculation. If, in speculative language, he has a corner in real estate, there is no greater reason why he should have the assistance of an injunction to aid his schemes than there would be if on the produce exchange he had effected a corner in grain. Without the writ, in either case he may be the sufferer, but he suffers nothing for which damages cannot compensate him. The elements of irreparable injury are entirely wanting to this case.

Our conclusion is, that the circuit court gave the complainant all he was entitled to when the case was sent to a jury.

The decree must therefore be affirmed, with costs.

Graves, J., concurred; Marston, J., did not sit in the case.

CAMPBELL, C. J., dissenting:

It appears, without doubt, in this case, that defendants, without color or claim of right, are keeping up a continuous series of invasions upon complainant's freehold, by using a running stream as a means of transporting sand upon his bottom land in quantities sufficient to bury it. The same course of conduct defiles and silts up the stream, rendering it useless to him for any purpose of business or convenience. It is equivalent in mischief to taking away or destroying his property in the land and his rights in the water.

I cannot concur in the doctrine that any one's rights of this kind are subject to judicial discretion. The rights to equitable relief, where that is the only adequate remedy, are as absolute as to legal relief. The one remedy is no more sacred than the other, and no more capable of lawful denial. If the defendants were to take possession of the land in question by putting a tenant upon it, no power would exist anywhere to deny complainant his possessory remedy. Where the same sort of wrong is done by indirect assumption of possession, so that all the advantages of actual possession are enjoyed by the wrong-doer without going in person upon the soil, there is no reason for denying the only remedy which can secure to complainant the future enjoyment of his own estate, which would not as justly authorize the refusal of a possessory remedy in the other case. And no remedy at law is adequate for such a grievance as is here complained of, because no legal remedy can secure complainant the use of his own property.

It is not claimed, and there is certainly no ground for claiming, the existence of any equitable estoppel. Defendants have never acted on any belief that they had a right to do what they are doing. They have always known they were wrong doers, and have simply presumed on the patience of their neighbors, and neglected to purchase what they could originally have purchased if they had chosen. Neither does the proof show

any very serious difficulty in the way of avoiding the mischief, although I do not regard this as at all essential.

It is not denied by complainant that he purchased for speculative purposes. As every one has a right to do this if he chooses, it can not in any way lessen his claims to protection. It would be, I think, a very dangerous principle to hold that a civil wrong can be lessened by the motives of the party injured, so long as he has done no wrong himself. The property of one man is as much entitled to protection as that of another, not because he bought it, or intended to use it without selfish motives, but because it is property. Any attempt to discriminate would in my opinion leave private interests subject to a discretion which no man could calculate upon, and make the judicial conscience the only arbiter of every one's rights. Some courts may have acted on this notion, but it seems to me that such precedents are unjust, and are not consistent with law or equity as we have received them under our constitutional guaranties of protection to person and property. I thing the court below should have granted a perpetual injunction as prayed.

CHARITABLE TRUSTS.

OULD V. THE WASHINGTON HOSPITAL FOR FOUNDLINGS.

Supreme Court of the United States, October Term,

1877.

A testator in the District of Columbia devised lands to trustees, or the survivor of them, and the heirs, executors and administrators and assignees of such survivor in trust, to hold for a site for a "Hospital for Foundlings," to be erected by an association to be incorporated by an an act of Congress to be passed, such corporation to be appoved by the trustees, their survivor or successors, and the land to be held until a corporation should be created by act of Congress, which should be approved by the trustees. Held, 1. That the validity of charitable endowments and the jurisdiction of courts of equity, never depended on the statute of 43d Eliz. chap. 4. 2. That the devise was not void for uncertainty. 3. That it was not void as creating a perpetuity.

In error to the Supreme Court of the District of Columbia.

Mr. Justice SWAYNE delivered the opinion of the court.

This case was submitted to the court below upon an agreed statement of facts.

This court found for the defendant, and gave judgment accordingly. The plaintiffs thereupon sued out this writ of error. The questions presented for our consideration are questions of law arising upon the will of Joshua Pierce, deceased. The will declares: "I give, devise, and bequeath all those fourteen certain lots (describing fully the premises in controversy) "to my friends, William M. Shuster and William H. Clagett, of the said city of Washington, and the survivor of them, and the heirs, executors, administrators, and assigns of such survivor, in trust, nevertheless, and to and for and upon the uses, in

tents, and purposes following, that is to say: In trust to hold the said fourteen lots of ground, with the appurtenances, as and for a site for the erection of a hospital for foundlings, to be built and erected by any association, society, or institution that may hereafter be incorporated by an act of Congress as and for such hospital, and upon such corporation, upon further trust to grant and convey the said lots of ground and trust-estate to the corporation or institution so incorporated for said purpose of the erection of a hospital, which conveyance shall be absolute and in fee. Provided, nevertheless, that such corporation shall be approved by my said trustees, or the survivor of them, or their successors in trust; and if not so approved, then upon further trust to hold the said lots and trust-estate for the same purpose, until a corporation shall be so created by act of Congress which shall meet the approval of said trustees or the survivor or successors of them, to whom full discretion is given in this behalf, and upon such approval, in trust to convey as aforesaid; and I recommend to my said trustees to select an institution which shall not be under the control of any one religious sect or persuasion, and until such conveyance, 1 direct the taxes, charges and assessments, and all necessary expenses of, for and upon said lots, and every one of them, to be paid by my executors, as they shall from time to time accrue and become due and payable, out of the residue of my estate."

The will was duly proved and admitted to probate in the proper court, in the District of Columbia, on the 22d of June, 1864. On the 22d of April, 1870, Congress passed "An act for incorporating a hospital for foundlings in the city of Washington." 16 Stat. 92. On the 4th of April, 1872, Shuster and Clagett, the trustees, conveyed the property to the defendant in error, the Washington Hospital for Foundlings, so incorporated, pursuant to the directions of the will.

The statute of wills of Maryland, of 1798, which is still in force in the District of Columbia, provides that "no will, testament, or codicil shall be effectual to create any interest or prepetuity or make any limitation or appoint to any uses not now permitted by the constitution or laws of the state." 2d Kilty's Laws of Md., ch. 101.

Our attention has been called in this connection to nothing in the constitution and to nothing else in the laws of the state as requiring consideration. No statute of mortmain or statute like that of 9 George II, ch. 36, is an element in the case. The statute of 43d Elizabeth, chap. 4, was never in force in Maryland. Dashiell v. Attorney-General, 5 H. & J., 392. It is not, therefore, operative in the District of Columbia.

The opinion prevailed extensively in this country for a considerable period that the validity of charitable endowments and the jurisdiction of courts of equity in such cases depended upon that statute. These views were assailed with very great learning and ability in 1833 by Mr. Justice Baldwin in McGill v. Brown. Brightley's Rep. 346. An eminent counsel of New York was the pioneer of the bar in 1835 in a like attack. His

argument in Burr's Executors v. Smith, 7 Vermont 241, was elaborate and brilliant, and, as the authorities then were, exhaustive. He was followed in support of the same view, in 1844, by another counsel no less eminent, in Vidal v. Philadelphia, 2 How. 128. The publication, then recent, of the reports of the British Records Commission enabled the latter gentleman to throw much additional and valuable light into the discussion. The argument was conclusive. In delivering the opinion of the court, Mr. Justice Story, referring to the doctrine thus combated, said: "Whatever doubts might, therefore, properly be entertained upon the subject, when the case of the trustees of the Philadelphia Baptist Association was before the court (1819), those doubts are entirely removed by the later and more satisfactory source of information, to which we have alluded." The former idea was exploded, and has since nearly disappeared from the jurisprudence of the country.

Upon reading the statute carefully, one can not but feel surprised that the doubts thus indicated ever existed. The statute is purely remedial and ancillary. It provided for a commission to examine into the abuses of charities already existing, and to correct such abuses. An appeal lay to the lord chancellor. The statute was silent as to the creation or inhibition of any new charity, and it neither increased nor diminished the pre-existing jurisdiction in equity touching the subject. The object of the statute was to create a cheaper and speedier remedy for existing abuses. The Morpeth Corporation, Duke on Charitable Uses, 242. In the course of time the new remedy fell into entire disuse, and the control of the chancellor became again practically sole and exclusive. The power of the king as parens patria, acting through the chancellor, and the powers of the latter independently of the king, are subjects that need not here be considered. Fountain v. Ravennel, 17 How. 379; 2 Story's Eq., sec. 1190.

It

The learning developed in the three cases mentioned shows clearly that the law as to such uses, and the jurisdiction of the chancellor, and the extent to which it was exercised, before and after the enactment of the statute, were just the same. is, therefore, quite immaterial, in the present case, whether the statute was or was not a part of the law of Maryland. The controversy must be determined upon the general principles of jurisprudence, and the presence or absence of the statute can not affect the result.

Two objections were urged upon our attention in the argument at bar:

1. That there is no specification of the foundlings to be provided for, and that, therefore, the devise is void for uncertainty. In this connection it was suggested, by one of the learned counsel for the plaintiff's in error, that a hospital for foundlings tends to evil, and ought not to be supported.

2. That the devise is void, because it creates a perpetuity.

The statute of Elizabeth, before referred to, names twenty-one distinct charities. They are:

(1) For relief of aged, impotent, and poor people. (2) For maintenance of sick and maimed soldiers. (3) Schools of learning. (4) Free schools. (5) Scholars in universities. (6) Houses of correction. (7) For repairs of bridges. (8) of ports and havens, (9) of causeways, (10) of churches, (11) of seabanks, (12) of highways, (13) For education and preferment of orphans. (14) For marriage of poor maids. (15) For support and help of young tradesmen, (16) of handicraftsmen, (17) of persons decayed. (18) For redemption or relief of prisoners or captives. (19) For ease and aid of poor inhabitants concerning payment of fifteens. (20) Setting out of soldiers, (21) and other taxes.

Upon examining the English statutes, and the early decisions of the courts of law and equity, Mr. Justice Baldwin found forty-six specifications of pious and charitable uses, recognized as within the protection of the law, in which were embraced all that were enumerated in the statute of Elizabeth. McGill v. Brown, supra, 394. It is deemed unnecessary to extend the enumeration beyond those already named.

A charitable use, where neither law nor public policy forbids, may be applied to almost anything that tends to promote the well-doing and wellbeing of social man. Perry on Trusts, sec. 687.

In the Girard Will Case, the leading counsel for the will thus defined charity: "Whatever is given for the love of God, or the love of your neighbor, in the catholic and universal sense-given from these motives and to these ends, free from the stain or taint of every consideration that is personal, private or selfish." Mr. Binney's Argument, p. 41.

The objection of uncertainty in this case, as to the particular foundlings to be received, is without force. The endowment of hospitals for the afflicted and destitute of particular classes, or without any specification of class, is one of the commonest forms of such uses. The hospital being incorporated, nothing beyond its designation as the donee is necessary. Who shall be received, with all other details of management, may well be committed to those to whom its administration is entrusted. This point is so clear that discussion or the citation of authorities is unnecessary. Cases illustrating the subject in this view are largely referred to in Perry on Trusts, sec. 699, and in the note to sec. 1164, 2 Story's Eq. See, also, id., secs. 1164 and 1190, and notes.

Hospitals for foundlings existed in the Roman Empire. They increased when Christianity triumphed. They exist in all the countries of Europe, and they exist in this country. There are no beneficiaries more needing protection, care and kindness, none more blameless, and there are none who have stronger claims than these waifs, helpless and abandoned upon the sea of life.

A perpetuity is a limitation of property which renders it inalienable beyond the period allowed by law. That period is a life or lives in being and twenty-one years more, with a fraction of a year added for the term of gestation, in cases of posthumous birth.