POUNDAGE.

See FEES.

POWERS.

[See ESTATES OF DECEDENTS; CONVEYANCES; USES AND TRUSTS.]

SUMMARY - Revocation of power of attorney, §§ 1-3, 5.- Power coupled with an interest, § 4.

§ 1. A letter of attorney may in general be revoked by the party making it, and is revoked by his death. Hunt v. Rousmanier, §§ 6-8.

§ 2. Where a power of attorney forms part of a contract, and is a security for the performance of any act, it is usually made revocable in terms, or, if not so made, is deemed irrevocable in law; but a power of attorney, though irrevocable during the life of the party, becomes, at law, extinct by his death. Ibid.

§3. If a power be coupled with an interest, it survives the person giving it, and may be executed after his death. Ibid.

§ 4. To constitute a power coupled with an interest, there must be an interest in the thing itself, and not merely in the execution of the power. In other words, the power must be engrafted on an estate in the thing. Ibid.

§ 5. The general rule that a power of attorney, though irrevocable by the donor during his life, is extinguished by his death, is not affected by the circumstance that testamentary powers are executed after the death of the testator, as the law, in allowing a testamentary disposition of property, not only permits a will to be considered as a conveyance, but gives it an operation not allowed to deeds, which have their effect during the life of the person who executes them. Ibid.

[NOTES.-See §§ 9-62.]

HUNT v. ROUSMANIER.

(8 Wheaton, 174-217. 1823.)

APPEAL from U. S. Circuit Court for Rhode Island. STATEMENT OF FACTS.- Bill in equity and demurrer. Rousmanier obtained a loan from Hunt. He gave his notes therefor, and as security offered a bill of sale or mortgage of the brig Nereus. On the 15th of January, 1820, a power of attorney, authorizing, in case the loan should not be repaid, the sale of three-fourths of said vessel, was executed. It was stipulated therein, that, in the event of the loss of vessel or cargo, the insurance money might be collected by Hunt. A further sum was loaned to R., and a like security taken on the Industry. Rousmanier died insolvent, in May, 1820, having paid $200 on the above notes. Plaintiff took possession of the ships and offered them for sale. Defendants objected, and this bill is to compel defendants to join in the sale. The court sustained the demurrer. Leave to amend the bill was given. The amended bill set forth, in addition, that specific security on the vessels was to be given, that a mortgage was offered, and that counsel advised that the power of attorney was better than a mortgage. The power was executed with the belief and intention to give Hunt security equal to that of a mortgage. In event of refusal of first prayer, a prayer for a sale of the vessels to pay the debt due plaintiff was added. Defendants demurred; demurrer sustained and amended bill dismissed. Plaintiff appealed. Opinion by MARSHALL, C. J.

The counsel for the appellant objects to the decree of the circuit court on two grounds. He contends, 1. That this power of attorney does, by its own

operation, entitle the plaintiff, for the satisfaction of his debt, to the interest of Rousmanier in the Nereus and the Industry. 2. Or, if this be not so, that a court of chancery will, the conveyance being defective, lend its aid to carry the contract into execution, according to the intention of the parties. will consider, 1. The effect of the power of attorney.

We

§ 6. A simple power, irrevocable during life of donor, extinguished by his death.

This instrument contains no words of conveyance or of assignment, but is a simple power to sell and convey. As the power of one man to act for another depends on the will and license of that other, the power ceases when the will, or this permission, is withdrawn. The general rule, therefore, is that a letter of attorney may, at any time, be revoked by the party who makes it, and is revoked by his death. But this general rule, which results from the nature of the act, has sustained some modification. Where a letter of attorney forms a part of a contract, and is a security for money, or for the performance of any act which is deemed valuable, it is generally made irrevocable in terms, or, if not so, is deemed irrevocable in law. 2 Esp. N. P., 565. Although a letter o attorney depends, from its nature, on the will of the person making it, and may, in general, be recalled at his will, yet if he binds himself for a consideration in terms, or by the nature of his contract, not to change his will, the law will not permit him to change it. Rousmanier, therefore, could not, during his life, by any act of his own, have revoked this letter of attorney. But does it retain its efficacy after his death? We think it does not. We think it well settled that a power of attorney, though irrevocable during the life of the party, becomes extinct by his death.

This principle is asserted in Littleton, section 66, by Lord Coke, in his commentary on that section, 52, b, and in Willes' Reports, 105, note, and 565. The legal reason of the rule is a plain one. It seems founded on the presumption that the substitute acts by virtue of the authority of his principal, existing at the time the act is performed; and on the manner in which he must execute his authority, as stated in Coombes' Case, 9 Co., 766. In that case it was resolved that "when any has authority as attorney to do any act, he ought to do it in his name who gave the authority." The reason of this resolution is obvious. The title can regularly pass out of the person in whom it is vested only by a conveyance in his own name; and this cannot be executed by another for him, when it could not in law be executed by himself. A conveyance in the name of a person who was dead at the time would be a manifest absurdity. This general doctrine, that a power must be executed in the name of a person who gives it, a doctrine founded on the nature of the transaction, is most usually engrafted in the power itself. Its usual language is, that the substitute shall do that which he is empowered to do in the name of his principal. He is put in the place and stead of his principal, and is to act in his name. This accustomed form is observed in the instrument under consideration. Hunt is constituted the attorney, and is authorized to make, and execute, a regular bill of sale in the name of Rousmanier. Now, as an authority must be pursued, in order to make the act of the substitute the act of the principal, it is necessary that this bill of sale should be in the name of Rousmanier; and it would be a gross absurdity, that a deed should purport to be executed by him, even by attorney, after his death; for, the attorney is in the place of the principal, capable of doing that alone which the principal might do.

87. A power to A. to sell, engrafted on an estate conveyed to A., is coupled with an interest and survives donor.

This general rule, that a power ceases with the life of the person giving it, admits of one exception. If a power be coupled with an "interest," it survives the person giving it, and may be executed after his death. As this proposition is laid down too positively in the books to be controverted, it becomes necessary to inquire what is meant by the expression, "a power coupled with an interest." Is it an interest in the subject on which the power is to be exercised, or is it an interest in that which is produced by the exercise of the power? We hold it to be clear that the interest which can protect a power after the death of a person who creates it must be an interest in the thing itself. In other words, the power must be engrafted on an estate in the thing. The words themselves would seem to import this meaning. "A power coupled with an interest" is a power which accompanies or is connected with an interest. The power and the interest are united in the same person. But if we are to understand by the word "interest" an interest in that which is to be produced by the exercise of the power, then they are never united. The power to produce the interest must be exercised, and by its exercise is extinguished. The power ceases when the interest commences, and therefore cannot, in accurate law language, be said to be "coupled " with it.

But the substantial basis of the opinion of the court on this point is found in the legal reason of the principle. The interest or title in the thing being vested in the person who gives the power, remains in him unless it be conveyed with the power, and can pass out of him only by a regular act in his own name. The act of the substitute, therefore, which in such a case is the act of the principal, to be legally effectual must be in his name, must be such an act as the principal himself would be capable of performing, and which would be valid if performed by him. Such a power necessarily ceases with the life of the person making it. But if the interest or estate passes with the power, and vests in the person by whom the power is to be exercised, such person acts in his own name. The estate, being in him, passes from him by a conveyance in his own name. He is no longer a substitute, acting in the place and name of another, but is a principal acting in his own name, in pursuance of powers which limit his estate. The legal reason which limits a power to the life of the person giving it exists no longer, and the rule ceases with the reason on which it is founded. The intention of the instrument may be effected without violating any legal principle.

This idea may be in some degree illustrated by examples of cases in which the law is clear and which are incompatible with any other exposition of the term "power coupled with an interest. If the word "interest" thus used indicated a title to the proceeds of the sale, and not a title to the thing to be sold, then a power to A. to sell for his own benefit would be a power coupled with an interest; but a power to A. to sell for the benefit of B. would be a naked power, which could be executed only in the life of the person who gave it. Yet for this distinction no legal reason can be assigned. Nor is there any reason for it in justice; for a power to A. to sell for the benefit of B. may be as much a part of the contract on which B. advances his money as if the power had been made to himself. If this were the true exposition of the term, then a power to A. to sell for the use of B., inserted in a conveyance to A., of the thing to be sold, would not be a power coupled with an interest, and, consequently, could not be exercised after the death of the person mak

ing it; while a power to A. to sell and pay a debt to himself, though not accompanied with any conveyance which might vest the title in him, would enable him to make the conveyance and to pass a title not in him, even after the vivifying principle of the power had become extinct. But every day's experience teaches us that the law is not as the first case put would suppose. We know that a power to A. to sell for the benefit of B., engrafted on an estate conveyed to A., may be exercised at any time, and is not affected by the death of the person who created it. It is, then, a power coupled with an interest, although the person to whom it is given has no interest in its exercise. His power is coupled with an interest in the thing, which enables him to execute it in his own name, and is, therefore, not dependent on the life of the person who created it.

The general rule that a power of attorney, though irrevocable by the party during his life, is extinguished by his death, is not affected by the circumstance that testamentary powers are executed after the death of the testator. The law, in allowing a testamentary disposition of property, not only permits a will to be considered as a conveyance, but gives it an operation which is not allowed to deeds, which have their effect during the life of the person who executes them. An estate given by will may take effect at a future time or on a future contingency, and, in the meantime, descends to the heir. The power is, necessarily, to be executed after the death of the person who makes it, and cannot exist during his life. It is the intention that it shall be executed after his death. The conveyance made by the person to whom it is given takes effect by virtue of the will, and the purchaser holds his title under it. Every case of a power given in a will is considered in a court of chancery as a trust for the benefit of the person for whose use the power is made, and as a devise or bequest to that person.

It is then deemed perfectly clear that the power given in this case is a naked power, not coupled with an interest, which, though irrevocable by Rousmanier himself, expired on his death.

§ 8. Where effect of an instrument has been misunderstood by the parties thereto, equity will relieve.

It remains to inquire whether the appellant is entitled to the aid of this court to give effect to the intention of the parties, to subject the interest of Rousmanier in the Nereus and Industry to the payment of the money advanced by the plaintiff on the credit of those vessels, the instrument taken for that purpose having totally failed to effect its object. This is the point on which the plaintiff most relies, and is that on which the court has felt most doubt. That the parties intended, the one to give, and the other to receive, an effective security on the two vessels mentioned in the bill, is admitted; and the question is, whether the law of this court will enable it to carry this intent into execution, when the instrument relied on by both parties has failed to accomplish its object.

The respondents insist that there is no defect in the instrument itself; that it contains precisely what it was intended to contain, and is the instrument which was chosen by the parties deliberately, on the advice of counsel, and intended to be the consummation of their agreement. That in such a case the written agreement cannot be varied by parol testimony.

The counsel for the appellant contends, with great force, that the cases in which parol testimony has been rejected are cases in which the agreement itself has been committed to writing, and one of the parties has sought to

contradict, explain or vary it by parol evidence. That in this case the agreement is not reduced to writing. The power of attorney does not profess to be the agreement, but is a collateral instrument to enable the party to have the benefit of it, leaving the agreement still in full force, in its original form. That this parol agreement, not being within the statute of frauds, would be enforced by this court if the power of attorney had not been executed; and not being merged in the power ought now to be executed. That the power being incompetent to its object, the court will enforce the agreement against general creditors.

This argument is entitled to, and has received, very deliberate consideration. The first inquiry respects the fact. Does this power of attorney purport to be the agreement? Is it an instrument collateral to the agreement? Or is it an execution of the agreement itself in the form intended by both the parties?

The bill states an offer on the part of Rousmanier to give a mortgage on the vessels, either in the usual form or in the form of an absolute bill of sale, the vendor taking a defeasance; but does not state any agreement for that particular security. The agreement stated in the bill is, generally, that the plaintiff, in addition to the notes of Rousmanier, should have specific security on the vessels; and it alleges that the parties applied to counsel for advice respecting the most desirable mode of taking this security. On a comparison of the advantages and disadvantages of a mortgage, and an irrevocable power of attorney, counsel advised the latter instrument, and assigned reasons for his advice, the validity of which being admitted by the parties, the power of attorney was prepared and executed, and was received by the plaintiff as full security for his loans.

This is the case made by the amended bill; and it appears to the court to be a case in which the notes and power of attorney are admitted to be a complete consummation of the agreement. The thing stipulated was a collateral security on the Nereus and Industry. On advice of counsel this power of attorney was selected and given as that security. We think it a complete execution of that part of the agreement; as complete, though not as safe, an execution of it as a mortgage would have been.

It is contended that the letter of attorney does not contain all the terms of the agreement. Neither would a bill of sale, nor a deed of mortgage, contain them. Neither instrument constitutes the agreement itself, but is that for which the agreement stipulated. The agreement consisted of a loan of money on the part of Hunt, and of notes for its repayment, and of a collateral security on the Nereus and Industry, on the part of Rousmanier. The money was advanced, the notes were given, and this letter of attorney was, on advice of counsel, executed and received as the collateral security which Hunt required. The letter of attorney is as much an execution of that part of the agreement which stipulated a collateral security, as the notes are an execution of that part which stipulated that notes should be given.

But this power, although a complete security during the life of Rousmanier, has been rendered inoperative by his death. The legal character of the security was misunderstood by the parties. They did not suppose that the power would, in law, expire with Rousmanier. The question for the consideration of the court is this: If money be advanced on a general stipulation to give security for its repayment on a specific article; and the parties deliberately, on advice of counsel, agree on a particular instrument, which is executed, but,