Koehler v. the Black River Falls Iron Company
| Decision Date | 01 December 1862 |
| Citation | 2 Black 715,67 U.S. 715,17 L.Ed. 339 |
| Parties | KOEHLER v. THE BLACK RIVER FALLS IRON COMPANY |
| Court | U.S. Supreme Court |
Appeal from the District Court of the United States for the District of Wisconsin.
Mr. Carlisle of Washington City for appellant.
Mr. Doolittle of Wisconsin. Contra.
This was a bill in chancery, brought in the District Court of Wisconsin by Jacob Koehler, Daniel Koehler, and Harry Pfiffner against the 'Black River Falls Iron Company,' to forclose a mortgage.
The bill alleges that, on the 13th of August, 1858, at La Crosse, in Wisconsin, the 'Black River Falls Iron Company'—a corporation created by the laws of Wisconsin—executed and delivered their promissory note to Daniel Koehler and Caspar Bircher for $15,000, payable in nine month, to secure which a mortgage of even date, under the corporate seal, was also executed and delivered—which mortgage was witnessed, acknowledged, and recorded; that on the 21st day of September, 1858, Casper Bircher, by an instrument of writing under seal, for the consideration of $7,000, transferred to Jacob Koehler and Henry Pfiffner his interest in said note and mortgage, which was also witnessed, acknowledged, and recorded; and that the note and mortgage being over due and unpaid, the aid of the Court is asked to decree a foreclosure.
William M. Hubby, having filed his petition stating that he was a stockholder, and that in his opinion the directors did not intend to make defence, was allowed to appear and defend. Leave was given to the complainants to amend their bill so as to make Julius W. Haas and others, junior mortgagees, party defendants. Answers and replications were filed, proofs taken, and the cause was heard at the October Term, 1860. The Court dismissed the bill without prejudice and the complainants appealed.
The answers deny that the 'Black River Falls Iron Company' ever executed under its corporate seal this mortgage, which denial, if sustained by the evidence, is decisive of this case. If the seal of the corporation was not affixed to the instrument by proper authority, but was surreptitiously obtained, then the deed is not the deed of the corporation, was not duly executed as the bill charges, and is not a legal mortgage, and cannot be fore closed as such.
The mere fact that a deed has the corporate seal attached, does not make it the act of the corporation, unless the seal was placed to it by some one duly authorized. Jackson vs. Compbell, (5 Wendell, 572); Damon vs. Granby, (2 Pick., 345, 353); Bank of Ireland vs. Evan, (32 Eng. L. & E., 23); (Angell and Ames on Corporations, Sec. 223).
This mortgage had the corporate seal attached, and the presumption was that it was there rightfully, and the Court properly admitted it to be read in evidence; but the presumption thus raised was not conclusive, and parol evidence was admissible to overthrow it. St. Mary's Church, (7 Serg. & R., 530); Berks & Dauphin Turnpike vs. Myers, (6 Serg. & R., 16.)
The evidence is conclusive that the corporate seal was affixed to the mortgage wrongfully.
The mortgage purports to have been executed on the 13th of August, 1858, and signed by Charles Hauser, president, and J. M. Levy, Secretary pro tem., who both swear that the corporate seal was not present, that they did not then, nor did they ever place the seal to the instrument, and have no knowledge how it came to be sealed. It was recorded shortly after being given, and no seal was to it.
Henry Richter, the secretary of the company, was the custodian of the seal, and testifies that he was not present when the mortgage was given, that he had the seal in his possession, and did not then, or at any time afterwards, affix the seal or authorize any one to do it for him.
When the defendants proved that neither the President nor the Secretary pro tem., who signed the mortgage, nor the regular Secretary, who was the rightful custodian of the seal, had any knowledge of the way in which the mortgage became sealed, then the burden of proof was thrown on the complainants to show the circumstances under which the instrument was in fact sealed, and that it was rightfully a d properly done.
Failing to do so, the conclusion is irresistible, that the seal was fraudulently abstracted from the lawful custodian of it, and wrongfully affixed to the mortgage.
The Revised Statutes of Wisconsin of 1849 were in force when this mortgage was given, and section 1 of chapter 59 prescribes the manner in which conveyances of real can be made, and it is as follows:
'Conveyances of lands or of any estate or interest therein may be made by deed, signed and sealed by the person from whom the estate or interest is intended to pass, being of lawful age, or by his lawful agent or attorney, and acknowledged or proved and recorded as directed in this chapter, without any other ceremony whatever.'
Section 30 of this same chapter defines what is meant by conveyances as thus used, and is as follows:
'The term conveyance, as used in this chapter, shall be construed to embrace every instrument in writing by which any estate or interest in real estate is created, aliened, mortgaged or assigned, or by which the title to any real estate may be affected in law or equity, except wills, leases for a term not exceeding three years, and executory contracts for the sale or purchase of lands.'
This mortgage, not having been sealed by the Iron Company or under its authority, was not executed in conformity with law, and is therefore invalid and of no force and effect as a legal mortgage.
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