Lightner's Appeal

82 Pa. 301 | Pa. | 1876

Mr. Chief Justice Agnew

delivered the opinion of the court, October 10th 1876.

Erom the report of the master it appears that Erank J. Herr, being indebted to the Eirst National Bank of Strasburg in a sum much larger than the value of his stock in the bank, was required to give additional security to keep his paper afloat. It was agreed between the bank and Herr that he should transfer sixty-three shares of stock in the bank as a collateral security for his indebtedness ; and Mr. Eberman, the cashier, was instructed by the bank to have a power of attorney drawn up and executed by Herr for this purpose. A power was drawn, in which Herr, for value received, irrevocably constituted and appointed Eberman his true and lawful attorney, for him and in his name and behalf, to sell, assign and transfer to the bank or any other person sixty-three shares of the stock of the bank, with power to appoint a substitute. Eberman, the attorney, having died, the question is whether the power given under these circumstances has fallen. We think it has not. It was not only by its own terms irrevocable for value received, but it was so by the legal operation of the agreement which induced it. It is a power coupled with an interest, and was made and executed for the very purpose of carrying the agreement into performance. When a power of attorney is thus adopted by the parties, as the means of carrying out their valid agreement made upon sufficient consideration, its operation must be sustained upon the nature and purpose of the contract to which it is ancillary and which it is intended to effectuate. If the effect of the contract, inter partes, is, as here, to give a right of property or interest in the subject-matter itself of the agreement, to the party for whose benefit the execution of the power is intended, the power follows the estate or interest thus agreed to be transferred, and becomes irrevocable by operation of law. A court of equity will not suffer the main purpose or intent to fall, even though a minor purpose may fail. Thus the power to transfer the stock will stand, though the minor purpose, that the transfer should be made by a particular person, fails by his death. The owner of the stock having, on a sufficient consideration, parted with his stock in equity, has no special interest that his power to carry out his sale should be executed by the person named in the power, who will not be his trustee of the proceeds, as he would be if the stock were not equitably transferred. Here the main intent was the security of the bank by means of the ownership of the stock, with the right to apply it to Herr’s indebtedness. The intent that this should be done through Eberman, who was the known agent of the bank, was but a minor one; and was really for the benefit of the bank. The act of transfer could be done as well by any other person, for the bank being the depository of the stock, is the only one who could object; and she, of course, would not object to a transfer to herself to carry out the agreement. The bank is clearly the party in interest. She was not bound to carry Herr’s debt longer than the tenor of the paper then running called for, and she stipulated for the security of the stock as the consideration of permitting Herr’s paper to keep afloat. Herr having agreed to this, his power was but the contract instrumentality to carry out the stipulation. The agreement operated as an assignment of the stock in equity, which the power was intended to perfect. We see no difficulty, therefore, in supporting the contract and power of attorney against the assignee in bankruptcy, there being no allegation of any fraud upon the bankrupt law being perpetrated. The assignee in bankruptcy rests his claim solely upon the supposed failure of the power by reason of the death of the attorney. But in such a ease actus Dei nemini faeit injuriam. The property being personal, the agreement meets no barrier in the Statute of Frauds by reason of its being by parol. There is nothing to prevent a court of equity from compelling specific performance, if it be refused.

This subject was very thoroughly examined and discussed by Chief Justice Marshall, in the case of Hunt v. Rousmanier, 8 Wheat. 174. We may add Hartley & Minor’s Appeal, 3 P. F. Smith 212; Blackstone v. Buttermore, Id. 266; Smyth v. Craig, 3 W. & S. 20; Bancroft v. Ashhurst, 2 Grant 513; Bank of Commerce’s Appeal, 23 P. F. Smith 59.

The decree, of the Common Pleas dismissing the bill is affirmed, and it is ordered that the appellant pay the costs.