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Opinion of the Court.

66 now liable," albeit not so absolutely certain in its significance, but only because of the omission of the word "now."

It was the opinion of the Circuit Court that Blake had power to create mortgages up to the appraisement, but not after. We think he had no power to create any after August 10, 1892. The whole instrument shows that it speaks of titles and incumbrances of that date. The parties were "to proceed at once to Minneapolis, Minnesota, and upon arrival there said second party is to furnish list and description of the real estate by lot, block, or subdivision;" "the property is to be pointed out, value determined, titles examined, and conveyances made by good and sufficient warranty deed, as soon as practicable in the ordinary course of business." So it is throughout; the language implies present conditions, not future conditions, and provision is made for speedy removal of defective titles or the immediate substitution of other property without defects. On the other hand, the obligations to be paid by the Iron Mountain company are to be speedily ascertained; if less than the $100,000 "at the date of this agreement," a pro rata share of the real estate is to be reconveyed, and the debts are to be paid" within thirty days," or within that time from future maturity. Everything speaks of accomplished conditions to be immediately adjusted to this agreement, and there is no indication of changing the facts on which the conditions rest by the action of either party. In other words, the contract speaks in præsenti, and takes effect as if the parties had been heard to make the statements of that date, and all that is future is merely administrative, adjunctive, and auxiliary, and not creative. Much stress is laid on the words "shall not exceed," as relating to the incumbrance, the form indicating future action, and thereby creating this "option." But this is not a necessary implication as against all the rest of the document, and even grammatically the word "shall" may be used in the preterit-present sense of "must," of which it is a synonym, and not always, or perhaps not most frequently, in the auxiliary future sense which is now urged here. The Century Dictionary.

The subsequent contract of October 25, 1892, does not change this feature of the other in any sense. Neither party

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Opinion of the Court.

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had carried out the commands of the first contract, no matter for what cause, whether because of the dispute about this option" and Blake's assumption to exercise it by creating a mortgage up to the limit, or otherwise, — and this subsequent contract reserved that dispute for subsequent settlement by litigation; therefore the question wholly depends on the construction of the document of August 10, 1892. We do not say that it might not have been a fair inference from the document itself, interpreted by the light thrown upon the question from the parol proof, that Blake could point out other lots or parcels than those he owned himself on the 10th day of August, 1892; nor that he might not after that date acquire property to bo included; and possibly, when so acquired or used, if incumbrances existed at the date of acquisition, the other side might have been compelled to take them because of the general description of the thing sold and the elasticity of choice of lots to be offered for appraisement; but that would be an altogether different thing from Blake's himself creating a mortgage on the whole offering subsequent to August 10, 1892, merely to reach the utmost limit allowed. So important a privilege as that should have been definitely expressed, and, not being so expressed, cannot be implied.

What is to be the effect of this ruling of the Circuit Court, which we approve, when it comes to making a decree upon that fact that Blake violated the contract by placing the mortgage is a question of greater difficulty than the construction of the contract. Practically it does not seriously involve the decree, since in this proceeding the trust of October 25, 1892, to the Germania Trust Company is not being administered at all. Technically, courts of equity in exercising their power over trusts may construe wills and deeds of trust, but generally not contracts in which there is no element of trust, such as the contract of August 10, 1892, is. Yet the parties seem in the contract of October 25, 1892, to have proceeded upon the theory that there was some such equitable remedy, for in the reservation between them of this dispute from that settlement Blake consents to enter his appearance "to such action" in the chancery court subject to removal to the Federal court. Of course they could not confer the juris

Opinion of the Court.

diction by contract or consent. Technically, again, perhaps, the only remedy to settle the dispute was an action at law by the Pine Mountain company against Blake for a breach of the contract. What would have been the measure of damages is not certain until the developments of fact should show what had resulted in the way of damage; obviously it could not be measured by the lump sum of the mortgage imposed, because the lands might be enough, notwithstanding, to pay the debts, and Blake be entitled to something back under the contract. Under the first of the two contracts there was a stipulation that, if the debts should turn out less than $100,000, Blake was to have lands reconveyed in proportion according to the appraisement, and while the Pine Mountain company took them absolutely, and was to pay the outstanding debts speedily and absolutely, it was subject to this condition, and therefore the amount of the superimposed mortgage would not measure the damage; nor would it under the second of the two contracts when the Germania Trust Company, as trustee, undertook to sell and apply the proceeds to the payment of the debts. Perhaps a court of law could have measured the damage by a process of valuation, and if a court of equity should take charge of the dispute it might have to find the same measure of damage. But that has not been done, and until it has been done the amount Blake is to pay has not been ascertained.

The decree below directs" that J. D. Blake shall forthwith cause to be removed from the property embraced in the deeds executed by him to the Pine Mountain Iron and Coal Company, and referred to in said agreement of October 25, 1892, all incumbrances created by the mortgage of said Blake for $17,290, so that the said property shall stand free and released from any claim by reason of the execution of said mortgage by the said Blake. The said mortgage is the same that was executed by said Blake to the Metropolitan Trust Company, of Minneapolis, Minnesota, dated 29th day of August, 1892." If Blake had been directed to bring the instrument into court to be canceled or to execute some release, or deed, or what not, perhaps the court could have compelled him thus "to remove" the mortgage if it might proceed effectually to decree

Opinion of the Court.

upon titles to land in another State and in the absence of the mortgagee or those holding under him, but it does not do this. It in effect commands Blake to remove the mortgage by paying the mortgage debt.

Undoubtedly the court had power to determine the point of litigation on the bill for rescission and the pleadings in that case as an incident to the granting or denial of that relief, for the Pine Mountain company pleads the wrongful mortgage as a defense to Blake's complaint of its nonperformance. We hold that he has no equity of rescission whether the mortgage be rightful or wrongful, but if there had been grounds for it and this wrongful mortgage did impede performance, as no doubt in its natural effect it would tend to do if the property were close in its margins of value, it would be a defense to the bill, and the court might so declare. The cross bill of the Pine Mountain company asks to have the contract of August 10, 1892, reformed by showing the true agreement in this respect, and, more than this, we think the point is within jurisdictional judgment upon Blake's intervening petition or cross bill asking to have the trust deed to the Germania Trust Company reformed to comply with the stipulations of the contract between him and the Iron Mountain company. In that contract this very dispute was reserved for adjudication in some form appropriate to a court of equity, and while in the strictest technical sense it is possible that the trust created by the deed of trust is disconnected with that dispute, and the trustee could proceed in administration without its settlement, still on the rescission bill we have hold of the question, and on the pleadings otherwise it is in litigation; so we think we need not remit the parties to a court of law, but may, in reforming the trust deed, note this stipulation, and give effect to it by directing a declaration in the trust deed that the imposition of the mortgage was unauthorized; and the trustee is directed in any settlement of his accounts with Blake to proceed on that basis of settlement, leaving the parties free to act as they may be advised to secure any further relief to which they may be entitled in that behalf.

The decree of the Circuit Court will be

Affirmed, with costs to be paid by the appellant.

Syllabus.

LOUISVILLE TRUST COMPANY v. LOUISVILLE

NEW ALBANY AND CHICAGO RAILWAY
COMPANY.

KENTUCKY NATIONAL BANK v. SAME.

NONES v. SAME.

HOLLMAN v. SAME.

LOUISVILLE BANKING COMPANY v. SAME.

HARRIS v. SAME.

WEAVER v. SAME.

SHUTTLEWORTH v. SAME.

LEATHERS v. SAME.

BATE v. SAME.

HUSTON v. SAME.

ROSS v. SAME.

CHARLTON v. SAME.

DUERSON v. SAME.

WHITNEY v. SAME.

WHITNEY v. SAME.

CANNON v. SAME.

DILLINGHAM v. SAME.

SCHWABACHER v. SAME.

APPEALS FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF KENTUCKY.

Nos. 277, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 205 Argued June 6, 1895. - Decided June 22, 1896.

One State may incorporate a corporation of another State as such, and this may be done without any specific provisions for the stock or internal government of the new corporation.

Western and Atlantic Railroad Company v. Roberson, 22 U. S. App. 187, followed.

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