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ation and on the faith of the transfer of this stock. This testimony bore directly upon the controlling issue in the case between the bank and Jacobus.
Whether Jacobus and the administrator of Patterson were com. petent witnesses depends upon the construction of section 858 of the Revised Statutes, which provides that “in the courts of the United States no witness shall be excluded in any action on account of color, or in any civil action because he is a party to or interested in the issue tried : provided, that in actions by or against executors, administrators, or guardians, in which judgment may be rendered for or against them, neither party shall be allowed to testify against the other as to any transaction with or statement by the testator, intestate, or ward, unless called to testify thereto by the opposite party, or required to testify thereto by the court."
*In Potter v. Nat. Bank, 102 U. S. 163, we held that in actions in which judgment may be rendered for or against an executor, administrator, or guardian, it is no objection to the competency of the witness that he is interested in the issue to be tried, because, in such cases, the statute excluded only parties to the record; that is, those who, according to the established rules of pleading and evidence, are parties to the issue. It is now argued by plaintiff in error that Jacobus, as well as the administrator of Alfred Patterson, are parties to the record, and, unless called by the court or the opposite party, are incompetent to testify as to any transactions or statements by the intestate. We are of opinion that they were each competent as a witness on the issue between the bank and Jacobus, as to whether these shares of stock were the property of the latter, and subject to the former's attachment. The liability of Alfred Patterson to the bank had become fixed by the judgment against him for the debt. There can be no judgment against his estate, in this action, by which the amount of the bank's claim can be increased, or whereby Patterson's estate can be released from liability in whole or in part. The real issue was between the bank and Jacobus, and consequently the case is within the first clause of section 858, which provides that “no witness shall be excluded
in any civil action because he is a party to or interested in the issue tried.” Within the meaning and object of the proviso, this is not an action by or against an administrator, on which judgment may be rendered for or against him. We are of opinion that there was no error in admitting Jacobus or the administrator of Patterson to testify on their own motion.
In reference to the merits of the case, we do not perceive that any error was committed by the circuit court. The jury were properly instructed as to the law of the case. The judgment is affirmed.
(109 U. S. 367)
WARNER and another v. CONNECTICUT MOT. LIFE INs. Co.
(November 26, 1883.)
BURETIES AS FAVORITES OF THE LAW-POWER-SUBSTANTIAL EXECUTION SUF.
FICIENT-INTENTION TO EXERCISE INFERRED.
The favor with which the law regards sureties cannot affect the determination of
collateral questions which, though indirectly touching the interests of the
sureties, do not arise out of the contract of suretyship itself. The extension of an outstanding mortgage upon an estate which the person extend
ing the same is by will empowered to “incumber by way of mortgage or otherwise, and renew the same,” is a valid execution of the power, being identical in effect with the literal exercise of the authority by the creation of a new
mortgage in place of the old one. When, from the whole scope of an instrument, which would be valid as the execu
tion of a power, an intention can be gathered to act under the power, the instrument, though not expressly referring to the power, will be deemed an exercise thereof; and if the instrument would have no effect unless made in pursuance thereof, the intention will be inferred, ut res magis valeat quam pereat.
Appeal from the Circuit Court of the United States for the North. ern District of Illinois.
John S. Miller, for appellants.
MATTHEWS, J. This appeal brings into review & decree for the foreclosure of a mortgage of real estate and a sale of the mortgaged premises, and dismissing a cross-bill filed by the appellants praying that the mortgage might be declared not to be a lien on the premises and delivered up to be canceled. The mortgage in question was
. dated February 24, 1869, and was made by Cyrenius Beers and Mary Beers, his wife, to secure payment of a debt due from the husband to the mortgagee, according to the terms of his bond, conditioned for the payment thereof on February 24, 1874, with interest at the rate of 8 per cent. per annum, payable semi-annually. The title to the real estate mortgaged is recited in the mortgage to be in the wife. Mary Beers died, leaving a will, which was duly admitted to probate in March, 1872. It is as follows:
* I, Mary Beers, wife of Cyrenius Beers, of Chicago, of lawful age and sound mind, in view of the uncertainty of human life, do make, publish, and declare this my last will and testament.
“First. I order all of my debts to be paid, including the expenses of my funeral and last illness.
“ Second. I give and bequeath to my busband, Cyrenius Beers, all the estate, both real, personal, and mixed, of which I die seized or possessed, to be held by him in trust for the following uses, purposes, and trusts, and none other; that is to say: To receive the rents, income, and profits thereof during his life, with the remainder to my children, Mary C. Foster, wife of Orrington C. Foster, Rissa J. Beers, and Charles G. Beers, share and share alike, to them, their heirs and assigns, forever. But provided that said Cyrenius Beers may incumber the same by way of mortgage or trust deed or otherwise, and renew the same, for the purpose of raising money to pay off any and all incumbrances now on said property, and which trust deed or mortgage so made shall be as valid as though he held an absolute estate in said property. But provided further, that the said Cyrenius Beers may, in his discretion, during his life, sell and dispose of any or all the real estate of which I may die seized or possessed, as though he held an absolute estate in the same, and out of the proceeds pay any of the incumbrances upon any of the property of which I may die seized and possessed, and the remainder, over and above what may be required to pay the indebtedness upon said property, the same being now incumbered, to reinvest in such way as he may see proper, and from time to time sell and reinvest, such reinvestment to continue to be held in trust the same as the estate of which I may die possessed; that is to say, the said Cyrenius Beers only to have the use during his life of said estate, with the right of sale and to incumber and reinvest, the remainder after his death to go to my children and their heirs forever.
* “ Third. I hereby appoint said Cyrenius Beers executor of this my last will and testament, hereby waiving from him all bail and security, as I have a right to do under the statute in such cases made and provided, as such executor."
Cyrenius Beers qualified and acted as executor, administered the estate fully, and was discharged September 20, 1877.
The appellants are children and devisees of the testatrix, and the only ones interested in the mortgaged premises, as such; a brother, the only other child, Charles G. Beers, having released his interest to them. The life estate of Cyrenius Beers was determined by his death, on or about February 25, 1878. The accruing interest on the mortgage debt had been duly paid by him until the maturity of the principal sum, February 24, 1874, when the appellee and Cyrenius Beers entered into a written agreement whereby the time of payment of the principal of the mortgage debt was extended and postponed until February 24, 1879, in consideration of the agreement of Cyrenius
Beers to pay the same when due, and interest thereon in the mean time at the rate of 9 per cent. per annum, payable semi-annually.
This extension of the time of payment of the mortgage debt was made without any consent thereto on the part of the appellants. It is claimed on their behalf that, as owners of the estate mortgaged by the testatrix to secure the debt of her husband, they are in the position of sureties, and that the extension of time for the payment of the debt, without authority from them, is, in equity, a discharge of the lien of the mortgage. The appellee insists, in reply to this claim, that the agreement by which further time was given for the payment of the debt, during which the mortgage was continued in force, was authorized by the will of Mary Beers and binds her devisees. Whether this be so is the precise question we are required to decide.
We are reminded, at the outset of the argument, by the counsel for the appellants, that, being sureties, they are favorites of the law; that their contract is strictissimi juris; and that nothing is to be taken against them by intendment or construction. It is quite true that "the extent of the liability to be incurred must be expressed by the surety, or necessarily comprised in the terms used in the obligation or contract;" that is, “the obligation is not to be extended to any other subject, to any other person, or to any other period of time than
, is expressed or necessarily included in it.” “In this sense only," continues Mr. Burge, Law Surety, (1st Amer. Ed.) 40, “must be understood the expression that the contract of the surety is to be construed strictly. It is subject to the same rules of construction and interpretation as every other contract.” Besides, the rule of construction applies only to the contract itself, and not to matters collateral and incidental, or which arise in execution of it, which are to be governed by the same rules that apply in like circumstances, whatever the relation of the parties. So that the fact that the appellants occupy the relation of sureties cannot control the determination of the ques. tion whether the agreement extending the time of payment of the mortgage debt, and the continuance of the mortgage as an incumbrance upon the estate, was a valid execution of the powers conferred by the will of the testatrix. That question must be answered according to its own rules.
It is further said, however, on the part of the appellants, that the agreement of February 24, 1874, cannot be sustained in support of a continuation of the mortgage lien, as an execution of the powers conferred by the will of Mary Beers, because it does not appear that it was so intended by Cyrenius Beers, the donee of those powers. It is argued that the agreement of extension makes no reference either to the power or to the property of the testatrix, which is the subject of the power; that every provision contained in it can have its full operation and effect; that is, all that it professes to do or provide for can be done, according to its full tenor, without referring the act to? the power, and by referring it solely to the individual interest of Cyrenius Beers, as the debtor of the appellee. This, however, on an examination of its terms, will appear to be an erroneous view of the true meaning and legal effect of the agreement of extension. It recites the indebtedness of Cyrenius Beers to the appellee as then due and un. paid; that he had applied to them to extend the time for the payment of the principal sum; that Cyrenius Beers and Mary, his wife, had executed and delivered their deed of mortgage to secure the payment thereof. It is thereupon witnessed that the Connecticut Mutual Life Insurance Company doth thereby extend and postpone the time of payment of the principal sum until February 24, 1879, interest to be paid thereon at the rate of 9 per centum per annum; and in consideration thereof Cyrenius Beers agrees to pay the principal sum on the day named therefor, and the interest thereon as stipulated; it being understood that, upon a failure to pay any installment of interest, the whole of the principal sum shall thereupon become due, and may be collected without notice, together with all arrearages of interest. It is also understood and agreed between the parties that nothing in the agreement shall operate to discharge or release Cyrenius Beers from his liability upon the bond originally given for the payment of
the debt, “but it is expressly understood that this instrument is to be taken as collateral and additional security for the payment of said bond.” It is also expressly understood and agreed between the parties that in the event of failure on the part of Cyrenius Beers “to fulfill, keep, and promptly perform, as well in spirit as in letter, the covenants in said mortgage contained, given by said Cyrenius Beers to said company, then, at the election of the said company, “the whole of said principal sum in the condition of said bond mentioned shall thereupon at once become due and payable, and may be collected without notice, together with all accrued interest thereon at said rate of nine per centum per annum, anything herein before contained to the contrary notwithstanding."
Taking the instrument in all its parts, and looking at its entire scope and purpose, it must be admitted that, notwithstanding its omission of any direct and express stipulation of that character, its meaning and legal effect are to continue in force, so far as the parties to it had lawful authority to do so, the covenants and lien of the mortgage as security for the payment of the original debt, with the interest reserved at the increased rate until the expiration of the ex. tended time of payment. This effect was undoubtedly intended by the parties, and this intention could not take effect except by virtue of the powers contained in the will of Mary Beers. Cyrenius Beers, as debtor, had no power to continue the mortgage in force, nor as tenant for life to renew it as a mortgage in fee. This is a demonstration, therefore, that the instrument must be treated as an execution of those powers, because, if it cannot otherwise operate according to the intention of the parties, it must be referred to the power which alone can make it effectual in all its provisions.
The rule applicable in such cases, it is claimed, is that deduced as the doctrine of Sir Edward Clere's Case, 6 Report 176, as stated by 1 Sugd. Powers, (7th London Ed.) 417, that “where the disposition, however general it may be, will be absolutely void if it do not inure as an execution of the power, effect will be given to it by that construction.” Mr. Chance, however, says:
“ There are, indeed, in the case dicta apparently to this effect: that if the instrument refer not to the power, and can have some effect by means of the interest of the party, though not all the effect which the words seem to import, still the instrument shall not operate as an execution of the power, the intention being thus contravened. It appears quite clear, however, at this day, and a reference to the authorities will, it is apprehended, show that it has been considered clear for nearly two centuries, that the rule is not thus confined indeed, it may well be asked why, admitting that the intention can be discovered to pass all, the intention should not prevail in the one case as well as in the other? What rule of law or construction would be thereby vio lated ?” 2 Chance, Powers, (London Ed. 1883) 8 1597, p. 72. * And Sir Edward SUGDEN said:
“And notwithstanding Sir Edward Clere's Case, an intent, apparent upon the face of the instrument, to dispose of all the estate, would be deemed a