City of Louisville v. Bank of United States

• Citation: 42 Ky. 138
• Parties: The City of Louisville v. Bank United States et al. John Rowan v. Bank United States et al.
• Decision Date: 11 October 1842
• Court: Kentucky Court of Appeals

42 Ky. 138

The City of Louisville v. Bank United States et al.

John Rowan v. Bank United States et al.

Court of Appeals of Kentucky.

October 11, 1842

Construction of contracts. Bank United States. Boundary

WRITS OF ERROR TO THE LOUISVILLE CHANCERY COURT.

Loughborough for plaintiffs

Pirtle, Duncan, Owsley & Goodloe for defendants.

OPINION

ROBERTSON CHIEF JUSTICE:

THIS is a very interesting suit in Chancery, involving many points of controversy arising from a contract between John Rowan and the trustees of the former town. now city of Louisville, respecting the ground between water street in said city and low water mark on the Ohio river.

Origin of Louisville and the character of this controversy.

In 1780 the Legislature of Virginia authorized the location of Louisville on 1000 acres of escheated land which had been granted to Dr. John Connelly in 1773 by George the 3rd. The boundary of Connelly's patent mathematically defined according to the literal import of its calls, embraces a portion of the Ohio river as far as a hole in a rock in Corn Island shoal: and the town, as authorized and actually located, would seem to be co-extensive with the actual boundary of the said 1000 acres. In 1784 the Legislature of Virginia authorized certain Commissioners to sell the unappropriated grounds in the town as laid off under previous enactments. And, in 1787 those Commissioners sold and conveyed to John Campbell the slip between Water street, near and parallel with the Ohio and the river boundary, as designated in Connelly's grant. By intermediate conveyances, Campbell's interest, as thus acquired, was transmitted to various persons, among whom John Rowan had acquired his title to most of the slip from Gray's wharf, near the mouth of Bear Grass, to the lower end of the town. In June, 1825, the said Rowan and the trustees of Louisville executed a deed, inter partes, whereby he conveyed to them and their successors, corporate or unincorporate, all his interest in the said slip between Water street and low water mark, on considerations, conditions, and stipulations, substantially as follows:

1. The trustees were, " as dispatchfully as (might) be convenient, to wharf and pave the said slip," (with the permission to take rock for that purpose from the bed of the river)--and were also " to levy tolls on the wharfs, shores, and landing places, and after paying the expenses of collecting the toll," were to pay to Rowan or his representatives, " in all time to come, one-half thereof" semi-annually.

The stipulations between John Rowan and the trustees of Louisville.

2nd. The trustees having previously, for $700, bought from one Pearce, his claim to 420 feet on the river between 7th and 8th streets, agreed to " bring " it " into joint stock, " wharf and pave it, and divide " the profits" equally, deducting from Rowan's share of profits the said $700, which he agreed thus to refund to them on account of their said purchase:

3rd. " The remainder of the said slip not owned by either party, (was) to be purchased, wharfed, and paved at joint expense, and the profits equally divided after paying the purchase money, and expense of wharfing and paving, and of collecting" tolls--Rowan's portion of cost and expense " to be deducted out of his moiety of the profits as they (should) become due:"

4th. The trustees or their successors might, whenever they should deem it expedient, " purchase Gray's wharf at joint expense" --" the money collected as tolls from any or all of the wharfs to be appropriated to the payment of the purchase money, and the tolls from said wharf to be equally divided, first paying the expenses of collection."

5th. If Rowan should ever " desire to sell his equal interest in the aforesaid slip and wharfs, or any part or parts thereof, he should give the trustees or their successors " the refusal at the sum asked:"

6th. That the trustees and their successors should " have the right of making wharfs with stone or wood, or both, as they (might) think most expedient, and at such time as (might) be convenient and requisite so as to meet the demand for them, as well as the exclusive previlege of assessing, levying, and collecting the tolls on all boats, rafts, & c. To deepen the river or basin in front of said slip and wharfs, when erected, and to keep the harbor clear of all obstructions, so as to afford, at all stages of the water, a safe and commodious anchorage for vessels of every kind, and to do and perform such other things as shall be necessary for the interest of both parties. "

7th. Should the trustees or their successors ever purchase the residue of the slip to the upper boundary of the town, on the Ohio or Bear Grass, or both, the purchase was to be at the joint expense and to enure to the joint benefit of the parties to the deed of 1825, " agreeably to the foregoing agreement and stipulations. "

8th. If the trustees or their successors should ever make any other than the stipulated use of the ground or any portion thereof, conveyed by Rowan, he was to have " one half of the advantage and profit thereon. "

9th. The trustees were to furnish Rowan, semi-annually, if he should require it, with a full, fair, and correct " account of the expense and profits of the premises. "

On the 10th of January, 1826, John Rowan, by his attorney in fact, James Guthrie, sold and conveyed to the Canal company, a site for the Louisville and Portland Canal, from the Ohio river below 9th street, to Portland.

Rowan's conveyance of a site for the Portland Canal.

Prior to August, 1831, the city of Louisville had purchased the entire slip of ground not previously conveyed to the trustees by Rowan, on the Ohio river and Bear Grass, within the limits of the old town of Louisville.

Purchase by the city of the ground Below Bear Grass, not conveyed by Rowan

On the 23d of August, 1831, Rowan mortgaged to the Bank of the United States, as a security for $25,000, all his interest in the wharf from the upper end of the Canal to the upper line of Louisville, and described that interest as " an undivided moity of said wharf. " Afterwards, October 12, 1831, by a conveyance purporting to be a gift, he conveyed one half of his said interest to Lytle and others, children of his deceased brother-in-law, Gen. Wm. Lytle, subject to the said mortgage: and, on the 22nd of February, 1838, these last alienees, (Lytle, & c.) conveyed the same interest to the city of Louisville, subject expressly to one moiety of said incumbrance.

Rowan's mortgage to the Bank U.S. and conveyance to Lytle's heirs.

Neither Rowan nor the Bank having received from the city any money on account of profits, otherwise than indirectly, in appropriations, to incidental expenses, and to purchases as stipulated for in the deed of 1825.

The Bank, in 1836, filed a bill in Chancery against Rowan and the city, for a foreclosure of its mortgage, and a sale for making its debt.

Bill and object

And Rowan filed a cross bill against the city, concurring in the Bank's prayer for relief.

Rowan's answe?? and cross bill.

The City creisted any decree against it, insisting: 1. That the slip claimed and conveyed by Rowan, being originally dedicated as public ground, was not vendible when conveyed to Campbell in 1787, and it being therefore the property of the city and not of Rowan when he attempted to convey it in 1825, nothing of value passed by that conveyance to the city, and consequently a Court of Equity should not enforce any of the stipulations in the said contract of 1825--and 2nd, That no profits had accrued beyond the amount of the legal charges that had occurred under the deed of 1825.

Answer of the city

But the Chancellor decided that upwards of $32,000 remained due from the city to Rowan and the Bank, and foreclosed the mortgage, and virtually decreed the absolute sale of the city's interest in the entire slip of ground embraced in the contract of 1825.

Decree of the Chancellor.

But the city and Rowan seek the reversal of that decree, which we will now revise on such of the multitude of points urged in argument on each side, as we deem worthy of grave consideration.

The right of the Bank to maintain its suit is a preliminary question which meets us at the threshold. That right is denied on two grounds--1st, The expiration of the prologed charter of the Bank in 1838--and 2nd, The alleged non-assignability of the interest mortgaged and sought to be enforced. The first ground is unsustainable for three reasons:--1st, The expiration of the corporate being, could not have destroyed the beneficial interests and rights of the natural persons who had, for convenience merely, been constituted one legal person with a single name: and consequently, as the expiration of the charter could have affected the form of remedy only, and not the essence of the right, and as this suit was pending in the corporate name when the corporation ceased to have legal existence, a Court of Equity ought not to have abated the suit for the impracticable purpose of a formal new suit or revivor in the individual names of the multitudinous corporators. 2nd, An act of Congress of the 2nd of March, 1838, one day before the expiration of the prolonged charter, provided that suits in the name of the Bank of the United States then pending should not abate in consequence of the legal death of the corporation:--And, as that enactment was only a virtual continuation of the corporate existence for the purpose of prosecuting all pending suits, its constitutionality and effectual operation ought not to have been doubted. And 3rd Rowan's cross bill, praying for a decree in favor of the Bank as his mortgagee, authorized any decree in its favor to which he himself could have been entitled, to...