and part of a fifth, the whole amounting to $28,932.

A destructive fire about the 4th day of Jan., 1858, swept away the buildings erected by the appellants on the property, and thus compelled them to erect others of like description and value.

The value of the ground rent of the premises, while in possession of the appellants, did not exceed $1,500 per annum.

From various circumstances, the contract became so onerous that in November, 1859, the appellants proposed to abandon the same; unless it should be modified and made less rigorous. But the appellee requested them not to abandon the contract, and said if they would pay certain taxes and assessments on the property and interest then accrued, the whole amounting to $10,000, that he would until a revival of trade in Chicago, receive the net income of the premises above taxes and insurance in lieu of interest on the purchase money. The appellants accepted the proposition and paid taxes and assessments and interest accrued, to the amount of $10,000. But the appellee wholly failed to keep his promise; and the bill expressly charges that he made it with the fraudulent design of inducing the appellants to pay him such $10,000, he all the while intending to declare a forfeiture of the contract on the first practicable occasion.

The bill also charges usury to a considerable amount.

On the 10th day of April, 1861, the appellee filed a bill in the state circuit court of Cook county, on the chancery side thereof, against the appellants, to prevent the removal of the improvements previously mentioned, and obtain possession of the premises; as well as for the relief. Afterwards, a decree was rendered in said state court, declaring that the said improvements had become fixtures to the realty, and adjudging the possession of the premises to the appellee, and that the said contract of Jan. 29, 1857, should be of no effect and void, both as to the said appellee and appellants.

Subsequently, the appellants filed their original bill in the circuit court of the United States, which was dismissed on demurrer, as before stated, and an appeal made to this court. Mr. A. W. Arrington, for appellants: The equity of the appellants rests upon the definite rule of law and justice, which prescribes that the parties upon the rescission of a contract shall be replaced in statu quo ante pactionem.

2 Pars. Cont, 192, 193; Hunt v. Silk, 5 East, 449; Norton v. Young, 3 Me. 30; Buchenau v. Horney, 12 Пl. 338; Jennings v. Gage, 13 Ill. 613.

The appellee seeks to escape from this legal and equitable rule, by interposing that monstrous provision of the contract which authorized him, upon declaring a forfeiture of the agreement, "to retain the money previously paid."

To this objection we answer:

The provision for the retention of the payments made previously to the forfeiture, is strictly a penalty.

2 Story, Eq. Jur. §§ 1314, et seq.; Sloman v. Walters, 3 Eq. L. Cas. 907 (1 Bro. Ch. 418), Tayloe v. Sandiford, 7 Wheat. 17.

Even if the provision in question had specified that the money should be retained as "liquidated damages," it would be, in contemplation of law, a penalty and nothing more.

Broom, Com. 439; Kemble v. Farren, 6 Bing. 141.

That equity will relieve against penalties, is an axiom as old as the court of chancery.

2 Eq. Lead. Cas. part 2, p. 472; 2 Story, Eq. Jur. § 1316, 1318, 1320; Clark v. Lyons, 25 Ill. 107; Hackett v. Alcock, 1 Call, 535; Glover v. Fisher, 11 Ill. 677.

When an agreement has been rescinded by any party, he can never more set it up in a court of justice.

Ford v. Smith, 25 Ga. 679.

Hence, as the case stands, the appellee received this money upon a consideration which has failed, and he must restore it.

2 Poth. by Evans, 349.

The second question relates to the $10,000 which the appellee obtained from the appellants by means of fraud and fraudulent promises and pretenses. He is, therefore, estopped from saying that he received it under the contract. He received the $10,000, in fact, under a new agreement resting in parol, and therefore void by the statute of frauds; and hence, according to all the authorities, he must refund the money thus obtained under a void contract, as well as by false pretenses.

Rice v. Peet, 15 Johns. 503; Burlingame v. Burlingame, 7 Cow. 92; King v. Brown, 2 Hill. 485; Hellman v. Strauss, 2 Hilt. 11 and 12.

The following authorities show that this is a proper case for the interposition of a court of equity.

1 Eq. Lead. Cas. 527; Johnson v. Glancy, 4 Blackf. 94, 99; Anthony v. Leftwich, 3 Rand. 238, 256; Payne v. Graves, 5 Leigh, 561; Kelly v. Bradford, 3 Bibb, 317; Phillips v. Thompson, 1 Johns. Ch. 132, 150; Parkhurst v. Van Cortlandt, 1 Johns. Ch. 264, 286; Payne v. Graves, 5 Leigh. 561.

The appellants have an equitable right to compensation for the additional value conferred upon the premises by their money and labor, the rents and profits being at the same time deducted.

Story, Eq. Jur. §§ 388, 799, B.; Bright v. Boyd, 1 Story, 478; Inst, lib. 11, tit. 1, Law, 30: Dig. lib. 4, tit. 1, Laws, 38 and 48.

The improvements were erected with the appellee's knowledge and consent, and under an agreement which he himself has rescinded. Hence, according to all the cases, since the appellee has chosen to rescind the contract, he must restore whatever he has received under it.

An objection is urged on the other side, "that the decree of the state court must be regarded as bar to this part of our bill.”

As to this, our answer is conclusive. That decree did not touch the question of payment for the improvements at all. That question was not in issue; and hence could not be determined by the decree.

2 Sm. Lead. Cas. 504.

As to the claim of payment for the improvements, it is perfectly clear that no remedy could be had at law.

Anthony v. Leftwich, 3 Rand. 256, 259, 265. As to usury, this is specifically charged in the bill and admitted by the demurrer. The

appellants are entitled to recover the sum paid as usury in a court of equity.

Story, Eq. Jur. §§ 302, 304. Messrs. Thomas Hoyne and John A. Wills, for appellee:

The claim made to recover money paid in part performance of executory agreement by appellants while in default themselves and refusing to preform, is altogether untenable.

Haynes v. Hart, 42 Barb. 58.

Chancery takes no cognizance of suits for damages only, founded on contract.

Kempshall v. Stone, 5 Johns. Ch. 193; Morse v. Emmendorf, 11 Paige, 277; Hatch v. Cobb, 4 Johns. Cn. 559; Mayne v. Griswold, 3 Sandf. 463.

It is also held that a bill for the purpose obtaining a compensation for a fraud in damages merely, will not lie when the objection is raised at the proper time by a demurrer or answer.

1 Bib. 212; Litt. Sel. Cas. 374; 4 Dana, 195; 7 Cranch, 69; 13 Price, 479; 1 Barb. 125; 3 Barb. 127; 1 Paige, 333; Russell v. Clark's Executor, 7 Cranch, 89.

The decree of the state court in Cook county between the same parties, determining their rights under the same identical contract, and in which as matter of fact the same matters were litigated (or could have been litigated), must be regarded as forever putting an end to further controversy.

Le Guen v. Gouverneur, 1 Johns. Cas. 492; Gray v. Gillilan, 15 Ill. 456; Dalton v. Bentley, 15 Ill. 421; Hopkins v. Lee, 6 Wheat. U. S. 110. Other cases without numbers may be cited on the general principle, "Interest rei publicae ut sit finis litium."

Voorhees v. U. S. Bank, 10 Pet. 474; Neafie v. Neafie, 7 Johns. Ch. 1; Perrine v. Dunn, 4 Ibid. 140; Mitford, Ch. Pl. 237; Marriot v. Hampton, 7 D. & D. 265; also, 12 Wend. 399; 4 Cow. 559; 7 Cranch, 557; 4 Vt. 616; 1 Wheat. 309; 1 Mo. 282; 4 Watts, 183; 1 Pick. 62; 3 Cow. 120; 3 Johns. 20; 4 Day, 274; 4 Bibb. 508; 6 Cranch, 286; 2 A. K. Marsh, 353; 1 Root, 436.

The appellants in the prayer of their bill, claim relief against a forfeiture.

The true foundation of the relief in equity as laid down by Judge Story and all the great equity judges in these cases is, that, as the penalty of forfeiture is designed as a mere security, if the party obtains his money or his damages, he gets all he is entitled to.

Story, Eq. Jur. § 1316; Skinner v. Dayton, 2 Johns. Ch. 535.

In every such case the true test generally by which to ascertain whether relief can or cannot be had in equity, is to consider whether compensation can be made or not. If it cannot be made, courts of equity will not interfere.

Story, Eq. Jur. §§ 1314, 1320, 1323. Courts of equity will never interfere in cases of forfeiture for the breach of covenant and condition, where there cannot be any just compensation decreed for the breach.

Skinner v. Dayton, 2 Johns. Ch. 535; Sanders v. Pope, 12 Ves. 290; Robinson v. Cropsey, 2 Edw. Ch. 148; Stinson v. Dousman, 20 How. 466, 15 L. ed. 969.

No contract can be rescinded by one of the parties, unless both can be restored to the same condition in which they were before the contract was made.

2 Pars. Cont. 679; Silk v. Hunt, 5 East, 249. The cases are numerous and authentic in which the questions arising under the statute of frauds, as in case of parol agreements concerning land-and the statute of limitations as a bar to proceedings in equity—have been expressly raised and decided only upon a general demurrer, and the bill dismissed for want of equity.

Story, Eq. Pl. § 503; Humbert v. Rector, etc. 7 Paige, 195; 24 Wend. 604; Van Hook v. Whitlock, 7 Paige, 373; Hevenden v. Lamerley, 2 Sch. & L. 637; Homer v. Peck, 6 Simonds, 51.

Under the law of 1857, to which the counsel refers as in force to govern the terms of the contract, the courts of Illinois decide that "it is the set law of this state that usury voluntarily paid, under the law of 1857, cannot be

Ramsey v. Pearley, 34 Ill. 508; Hadden v. Inness, 24 Ill. 381; Dooley v. Stepp, 26 Ill. 86; Lucas v. Spencer, 27 Ill. 15; Tompkins v. Hill, 28 Ill. 519; Perkins v. Clement, 29 Ill. 194.

cases:

Brashier v. Gratz, 6 Wheat. 533; Anderson v. Frye, 18 Ill. 94; Bishop v. Newton, 20 Ibid. 178; Brown v. Cannon, 5 Gilm. 180; Morgan v. Herrick, 21 Ill. 496; Stone v. Pratt, 25 Ill. 35; 13 Ill. 577; Morgan v. Smith, 11 Ill. 201; Andrews v. Sullivan, 2 Gilm. 327; Broadwell v. Broadwell, 1 Gilm. 600; Doyle v. Teas, 4 Scam. 265; Seymour v. Delancy, 3 Cow. 505; Colson v. Thompson, 2 Wheat. 336; Hepburn v. Auld, 5 Cranch, 262; Hepburn v. Dunlop, 1 Wheat. 179; Wells v. Smith, 7 Paige, 24.

Mr. Justice Nelson delivered the opinion of the court:

This is an appeal from a decree of the circuit court of the United States for the northern district of Illinois.

The bill was filed in the court below by the plaintiffs, to recover back moneys paid upon a contract, dated 28th January, 1857, for the purchase, by them, of several lots of land in the city of Chicago, and also for the value of improvements made on the same, on the ground that the contract had been rescinded by the defendant.

The purchase money amounted to $93,000, to be paid on the 29th April, 1861, some four years and three months from date, together with semi-annual interest at the rate of ten per cent per annum. After erecting improvements on the premises of the value of $18,000, and paying the interest for two years, the plaintiffs

becoming embarrassed or dissatisfied with their contract, were desirous of surrendering it, but were pursuaded by the defendant to remain and pay the interest for another year, 1859. After that no further payments were made, and on the 21st April, 1861, the defendant filed a bill in chancery in the state court, to prevent the removal of the buildings from the premises, and to get possession of the same, and on the 23d August, 1862, a decree was entered to this effect, and the defendant put into the posses sion.

It will be seen from this statement that the plaintiffs were in default on account of the nonpayment of the interest for more than a year, and also that the principal fell due a few days after the filing of the bill, on account of this default in the payments. The contract was a very stringent one. Time was, in terms, made the essence of it, in respect to the payments; and, further, in case of a default in any one payment, for thirty days, the agreement was to be null and void, and no longer binding, at the option of the vendor, and all payments that had been made were to be forfeited to him; and also, in case of default in any of the payments, it was agreed that the contract, at the election of the vendor, was to be at the end, and the purchasers deemed to be in possession as tenants at will, liable for a rent equal to the amount of interest of the purchase money. The decree founded on this contract in the suit in chancery, and which is made a part of the bill in the case before us, and which suit was litigated between these parties, restrained the defendants, the purchasers, from removing the buildings from the premises, and declared them to be fixtures; and for the default in the payment of the purchase money, the plaintiff the vendor, was put into possession and all the tenants were required to attorn to him; and, further, it declared that he was entitled to the estate and interest in the lots the same as before the contract, and to remove any doubt in the title by reason of the contract and the default in the payments, it declared that the premises shall be discharged from any incumbrance or charge in respect to the contract of sale; or that the purchasers, or anyone claiming through them, be forever debarred from having any estate or interest or right of possession in the premises, having lost the same by wilful default; and the articles of agreement are to be held in relation to the title and possession as of no effect and void as it respects the vendor and all claiming under or through him.

Now this is the decree that is relied on as having rescinded the contract at the instance of the defendant, by reason of which the plaintiffs have become entitled to recover back the purchase money paid, together with the value of the improvements. The position is that there is no longer a subsisting contract, as an end has been put to it by the vendor, and he has in consequence resumed the possession, and claims to hold the estate the same as if no contract had ever existed, and that in such case the purchaser, upon settled principles of law and equity, is at liberty to recover back the consideration paid and the value of the improvements. But the difficulty is, that the vendor has only availed himself of a provision of the contract, which entitled him to proceed in a

*

court of chancery, by reason of the default of the purchaser in making his payments, to put an end to it and be restored to the possession. It is a proceeding in affirmance, not in rescission of it, by enforcing a remedy expressly reserved in it. Indeed, without such clause [*506 or reservation, the remedy would have been equally available to him. It is a right growing out of the default of the purchaser, as the law will not permit him both to withhold the purchase money and keep possession and enjoy the rents and profits of the estate; nor will it subject the vendor to the return of the purchase money if he is obliged to go into a court of equity to be restored to the possession.

In case of a default in the payments, there are several remedies open to the vendor. He may sue on the contract and recover judgment for the purchase money, and take out execution against the property of the defendant, and among other property, the lands sold; or he may bring ejectment, and recover back the possession; but in that case, the purchaser, by going into a court of equity within a reasonable time and offering payment of the purchase money, together with costs, is entitled to a performance of the contract; or the vendor may go in the first instance into a court of equity, as in the present case, and call on the purchaser to come forward and pay the money due, or be forever thereafter foreclosed from setting up any claim against the estate. In these contracts for the sale of real estate the vendor holds the legal title as a security for the payment of the purchase money, and in case of a persistent default, his better remedy, and under some circumstances his only safe remedy, is to institute proceedings in the proper court to foreclose the equity of the purchaser where partial payments or valuable improvements have been made. The court will usually give him a day, if he desires it, to raise the money, longer or shorter, depending on the particular circumstances of the case, and to perform his part of the agreement.

This mode of selling real estate in the United States is a very common and favorite one, and the principles governing the contract, both in law and equity, are more fully and perfectly settled than in England or any other country. The books of reports are full of cases arising out of it, and every phase of the litigation repeatedly considered and adjudged. And no rule in respect to the contract is better settled than this: that the party who has advanced money, or done an *act in part performance of [*507 the agreement, and then stops short and refuses to proceed to its ultimate conclusion, the other party being ready and willing to proceed and fulfil all his stipulations according to the contract, will not be permitted to recover back what has thus been advanced or done. Green v. Green, 9 Cow. 46; Ketchum v. Evertson, 13 Johns. 364; Leonard v. Morgan, 6 Gray, 412; Haynes v. Hart, 42 Barb. 58.

The same doctrine has been repeatedly applied by the courts of Illinois, the state in which this case arose. Chrisman v. Miller, 21 Ill. 236, and cases referred to in the argument.

This principle would, of itself have defeated the plaintiffs in this suit, independently of the decree foreclosing their equity in the contract. It appears in the case that the parties agreed

tiffs *themselves had been in the posses- [*509 sion and enjoyment of the premises for a period exceeding that for which the interest on the purchase money had been paid, which, at least, must be regarded as an equivalent for the money thus paid.

We should add, it is not admitted by the defendant that this arrangement had the effect to make the contract usurious; and would not, according to the case of Beete v. Bidgood, 7 B. & C. 453 if the excess of interest stipulated for was in fact a part of the purchase money.

After the default of the purchasers, and when they were disposed to surrender the contract, the vendor proposed to them, if they would abandon the idea, and pay up the taxes in arrears and interest that had accrued, he would indulge them, and to that end, and until a revival of business in Chicago, he would be satisfied with the net income from the property over and above the taxes and insurance; and it 508*] is *averred that they agreed to the propositions and paid the taxes and interest, but that the vendor declined to carry out the agreement and enforced the contract, though there had not been any considerable increase of income from the property or revival of trade and business in Chicago. This provisional arrangement is very loosely stated in the bill, but is, of course, admitted by the demurrer. It admits the revival of business, to some extent, before the enforcement of the contract. There is great difficulty, however, in determining the extent of increase contemplated by the arrangements from the statement in the bill.

It was entered into in November, 1859, and this suit was not instituted till August, 1862, some two years and nine months afterwards.

But the true answer to this part of the case is, that the arrangement was not in writing, nor any consideration passing between the parties that could give validity to it. The promise by the purchasers was but in affirmation of what they were bound to perform by their written agreement, and all that was done was but in fulfillment of it.

We have thus gone carefully over the case as presented, and considered every ground set up on the part of the plaintiffs for the relief prayed for; but, with every disposition to temper the sternness of the law as applicable to them, we are compelled to say that, according to the settled principles both of law and equity, a case for relief has not been established.

The truth of the case is, that these plaintiffs improvidently entered into a purchase beyond their means, and, doubtless, relied very much upon the rise of the value of the estate, and of the income, to meet the payments and expenditures laid out upon it. Their anticipations failed them, and a heavy debt was the consequence, beyond their ability to meet. Of the $93,000 purchase money, they have paid only $10,000. Of interest, some $28,000. They expended for improvements $18,000. There still remained due against them $83,000 purchase money and over $20,000 interest, at the time the vendor went into possession. The plain

Decree of the court below affirmed.

PANY, Plff. in Err.,

บ.

Where a part-owner of property effects an insur ance for himself and others, without previous authority, the act is sufficiently ratified, where suit is brought on the policy in their names.

Any one having any legal interest in property can insure it as his own, and in his own name, without specifying the nature of his interest. The insurance company cannot complain that the character of the interest was not incorporated in the policy, unless, if described, it would have had an influence on it, not to underwrite at all or

not to underwrite except at a higher premium. One trustee, with the assent of the other trustees, can insure the trust estate in his own name and that the insurance money is to be paid to a creditor of the trustee so insuring furnishes no defense to the underwriters.

The case is stated by the court. Messrs. Fessenden and Butler, for plaintiff in error:

There is a fatal variance between the alle gation of interest in the declaration and the proof.

The allegation is that William Chase was the owner and possessor in trust.

The proof offered was that William Chase was one of the five trustees.

The defendant's counsel requested the court to instruct the jury that this variance between the allegation of interest and proof was fatal. This request was refused. This instruction should have been given. An averment of an entire interest is not supported by proof of a joint interest.

Graves v. Boston Mar. Ins. Co. 2 Cranch, 419; 2 Phil. Ins. 3d ed. §§ 20, 21 p. 614; Bell v. Ansley, 16 East, 141; Cohen v. Harman, 5 Taunt. 101; Catlett v. Pacif. Ins. Co. 1 Paine, 594; Burgher v. Col. Ins. Co. 17 Barb. 274.

Regarding the insurance as "for the parish," the plaintiff is limited by the proof of the interest of William Chase as trustee, viz., one fifth, as he was only one of five trustees.

1. Because he had no other interest.

NOTE. How far an undivided interest in property is a complete or full ownership for the pur. poses of insurance-see note, 18 L. R. A. 481.

Phil. Ins. § 380; Dumas v. Jones, 4 Mass. 647; Pearson v. Lord, 6 Mass. 81; Finney v. Warren Ins. Co. 1 Met. 16; Finney v. Bedford Ins. Co. 8 Met. 348; Turner v. Burrows, 5 Wend. 541.

3. The proof shows that William Chase, having no other interest than as trustee in fact, insured the property for his individual benefit, and not for the parish.

The court was requested to instruct the jury that if William Chase had no other interest than as trustee, and insured the property in terms for his individual benefit, he could not recover, which requests were refused.

Such insurance is void, either with or without notice to insurers, because insurance is simply a contract of indemnity, and the insured had no personal interest for the loss of which he could be indemnified; and because, if with out notice to insurers, it is a fraud upon them. One of the first elements entering into the question of risk is the interest of the insured to protect the property.

Whether with or without notice, such insurance is void, because against public policy, tending to create an interest in the destruction of the property, and adverse to the interests of the cestui que trust.

Mr. John Rand, for defendant in error: That William Chase, in his capacity of trustee, had a legal interest in the property, we presume will not be questioned; and that, having such legal interest, he had an insurable interest, is, as we understand, perfectly well settled. Phil. Ins., ch. 3, § 4; Hill, Trust. 392 (2d Amer. ed.); Carruthers v. Sheddon, 6 Taunt. 15; Crowley v. Cohen, 3 B. & Ad. 478; Bartlet Walter, 13 Mass. 267; Finney v. Warren Ins. Co. 1 Met. 16; King v. S. M. Ins. Co. 7 Cush. 1 (13); Tyler v. Etna Ins. Co. 12 Wend. 512, Affirmed in 16 Wend. 385.

V.

In reference to a disclosure by the assured of the peculiar nature of his interest, in addition to the cases already cited, we refer to:

Locke v. N. A. Ins. Co. 13 Mass. 61; Bixby v. Franklin Ins. Co. 8 Pick. 86; Curry v. Commonwealth Ins. Co. 10 Pick. 535.

It follows from the above principles that one of several trustees-such one having, as we think we have already shown, a legal interest in the whole estate, and not merely an interest in a fractional part-may effect a valid insurance upon the whole property in his own name; and such an insurance would be for the benefit of all the trustees or proprietors.

1 Phil. Ins. 166, ch. 3, § 4, art. 288. And we apprehend that it would necessarily follow, that he may effect such insurance, if for the benefit of the estate (as it would under all ordinary circumstances be presumed to be), even without the assent of his cotrustees.

The instruction of the court below, "That the omission to describe the character in which he acted, and the nature of the interest, will not affect the policy, unless material to the risk of which the jury will determine," is in ac

company made no inquiry; and on the part of the assured, there was a mere omission to disclose a matter, about which the insurance company asked no questions. It is one of the commonest principles of the law of insurance, that such an omission does not affect the policy, unless the omitted matter be material to the risk-and of that materiality it is the province of the jury to decide. This whole subject is fully considered and discussed in Angell on Life Insurance, §§ 151, 152, 175, 176, 183, and the numerous cases cited.

Nor does the case of Col. Ins. Co. v. Lawrence, decided by this court and reported in 2 Pet. 25 (understood to be relied upon by plaintiff in error), conflict with these principles and decisions, and the instruction, of the court below.

Mr. Justice Davis delivered the opinion of the court.

This controversy arises on a policy of insurance. The underwriter admits the loss by fire, but denies the obligation to pay, chiefly because the party insured had not an insurable interest in the property which was destroyed.

The case is this: William Chase, Sewall C. Chase, Josiah F. Day, John Yeaton, and John W. Munger were the trustees of the congregational church, on Congress street, in Portland, and held the legal title to it in trust for the society. Munger, one of the trustees, was also the agent at Portland of two insurance companies, created by the laws of Massachusettsthe Howard and Springfield. On the 25th of November, 1859, he took fire risks for each company to the amount of $5,000 on the church property-the assured in the Springfield company being the proprietors of the church; in the Howard, William Chase-with a provision in case of loss that payment should be made to Grenville M. Chase. Each policy contained a statement of the several sums for which the property was insured in the different companies.

Prior to these contracts of insurance, the Continental Insurance Company of New York had insured the church for an equal amount in the name of the proprietors; but the policy, although dated in 1857, recites the risks taken by the Springfield and Ohio companies in 1859. The reasonable explanation of this is that, when the policy was afterwards renewed, these additional risks were incorporated into it.

William Chase, the assured in the Howard policy, was the treasurer of the parish for several years, and paid the premiums on the policies and the renewals of them. The premiums of the Springfield and Continental policies were charged to the parish; the Howard premiums were not, but were paid out of his private means on account of the parish, which was done with the assent of the trustees. The Society was indebted to William Chase in the sum of $15,000, but not to G. M. Chase. William Chase was, however, indebted to G. M. Chase, and obtained the Howard policy to secure him. The church was badly damaged by fire. on