Smith et al. v. Kernochen.

tribunals jurisdiction to determine on the rights of citizens residing in the same State, unless the subject-matter was of admiralty jurisdiction, and where citizens of the same State held grants to the same land from different States.

A deed, therefore, which is merely intended to give jurisdiction to this court, and is not for the purpose of transferring the right to the thing to the vendee, but as between vendor and vendee the interest and right is [*203 still with the vendor, contravenes the spirit and intention of the Constitution; shall it be effectual for this purpose? If so, it appears to me that the framers of the Constitution ought to have added, or rather that we now add to the Constitution, after the words, "between citizens of different States," "and between citizens of the same State where one of the parties has transferred his right to a citizen of another State, with the view to give jurisdiction to the Federal courts."

Justice Washington, in 1 Washington's Circuit Court Reports, 82, decided that a deed for such a purpose was void, and could not effect its object. I think that this court came to the same conclusion in the case of McDonald v. Smalley, 1 Pet., 558; in concluding the opinion, Chief Justice Marshall uses this language:-"The case, we think, depends on the question, whether the transaction between McArthur and McDonald was real or fictitious; but there being nothing in the record from which the court could pronounce it was fictitious, the deed was maintained. But suppose the evidence had shown that the deed was fictitious, that McDonald was suing merely for McArthur, what would have been the decision? It seems to me, from the whole case, that the deed would have been pronounced void,-a fiction merely; and, therefore, it could not have given title so as to effectuate the very fictitious design for which it was intended; that is, to coerce the adjudication of the title in the Federal courts."

The District Court seemed to think it was matter in abatement; now Kernochen was a citizen of the State of New York, the plaintiff in error, of Alabama; the Circuit Court, therefore, had jurisdiction so far as the parties on the record are concerned. And the only question was, Had the plaintiff the better title? He had the title the mortgage gave him, if the transfer was valid in law; if it was not valid in law, he had no title, and the question was therefore properly raised in bar. True it is, that, in 1 Pet., the question seems to have arisen on a question of jurisdiction to the court; but the court will perceive that the question still must have been,

Smith et al. v. Kernochen.

Did the deed from McArthur to McDonald give title to McDonald? If it did give title, as McDonald resided in Alabama, the jurisdiction was perfect; if it gave no title, McDonald could not recover; therefore the question was, did the transfer of the mortgage, for the purpose of prosecuting the suit for the Alabama Life Insurance and Trust Company, being intended to give fraudulent jurisdiction to the court, convey to him any title, or such a title as this court would enforce?

*Deeds given for illegal purposes are void, and *204] courts will not execute the purpose. This transfer was made to enable the Alabama Life Insurance and Trust Company, a corporation of Alabama, to litigate its rights with citizens of Alabama in the Federal courts.

The company was prevented by the Constitution from doing this. They try by this deed to do it, and for this purpose they make it; will the court execute the purpose, or declare the deed void? If void, no title passed, none at least that this court would enforce; for, if it did, it would be carrying out, or permitting the Alabama Life Insurance and Trust Company to carry out, their illegal purpose.

The whole testimony fully authorized the request asked. A decision had been rendered on the case in the Supreme Court of the State, pronouncing the mortgage void. The company never had had any transaction with the plaintiff. The secretary admitted that the object was to enable the company to try the question in the Federal courts; only a thousand dollars was received. It might well have been left to the jury to say, Is this not all a fiction, a design and trick between Kernochen and the company? and if so, I think this court will establish the rule, that such a transaction will not convey such a title as this court will enforce.

2d. The consideration of the mortgage is illegal. The Supreme Court of the State of Alabama has decided, on this very same mortgage, that the consideration was illegal, and not authorized by the charter of the company; and this decision was made directly, when the validity of the mortgage was put in issue, and the decision depended on the construction of the charter and its amendments.

The rule is fully recognized in this court, that the decision of the State courts, construing a statute of their own State, is conclusive on this court. That is, whether the construction be right or not, it will be adopted as a rule of decision. So strongly has this court adhered to this rule, that, in a case from Tennessee, where the Supreme Court of Tennessee had reversed a former decision on the construction of the statute

Smith et al. v. Kernochen.

of limitations, this court adopted the last decision as conclusive, although they believed the former decision was correct. See, also, Greever v. Neal, 6 Pet., 291. It may be well to inquire why this court has adopted this rule of decision. The answer is, that the jurisdiction or sovereignty, as it may be called, has an unquestionable right to construe its own statutes, and that its own courts and its own people understand its own laws, and that no other people or government can or ought of right to construe those laws for them. Now, *I would submit that, in construing an act of the legislature creating a corporation, we could not adopt a [*205 different rule; if so, every charter granted by the States must come before this court for its final construction, and we should deny to the sovereignty that created the being the right to judge of its powers and capacities.

But, if I am wrong in this view, the decision of the Supreme Court, as delivered by Justice Ormond, will clearly show, I think, that the company had no right to issue their bonds, and thus deal in an exchange of credits. If they had the right to issue the bonds described in the bill of exceptions, their contracts to the same purport would have been valid without their seal, and their obligations could have as well been payable on demand as at a future day; as well in the shape of a bank-note, as in any form; and thus, by construction, they would have fairly been entitled to banking privileges, which was certainly never designed or contemplated by the charter. Whether, therefore, this court will construe the charter, or adopt the construction of the Supreme Court of Alabama as correct, the result will be the same, that the consideration of the mortgage is illegal.

Then comes the question, Can we show by parol proof that the consideration is illegal, when the consideration expressed in the mortgage is legal, and different from the consideration shown by the proof, which is recited to be seven thousand four hundred dollars in cash? To hold that this recital precludes proof of the illegality of consideration would set the whole law at defiance, so far as contracts are concerned, and would be saying, however immoral or vicious the consideration of a contract may be, you may preclude an inquiry into it by stating a legal consideration on its face.

The rule of evidence is, that parol evidence shall not be received to vary or contradict a deed or other written evidence. This rule, however, can only apply when the evidence seeks to contradict or vary the terms or legal effect of a deed; not seeking, however, to destroy the deed altogether as a legal instrument or contract; for the rule is well settled,

Smith et al. v. Kernochen.

that fraud or illegality of consideration may be given in evidence to defeat a deed, that is, to show the deed is a nullity.

This is the doctrine laid down in 4 Kent, 465, 466; Greenl. Ev., § 284; 1 Smith, Lead. Cas., 154; 2 Wils., 347; 9 East, 408; 5 Mass., 61. Indeed, a different rule would destroy all law by the form of the contract.

I therefore submit, that the language of the deed cannot preclude the plaintiffs in error from showing that the consideration was illegal; and being illegal, the mortgage is void; and therefore the court erred in refusing the

*

*206] charge asked, and in charging as it did as to the

validity of the deed.

Another question is, Could the Alabama Life Insurance and Trust Company transfer a title, after Smith had denied the validity of the mortgage, and held the possession adverse to the company? Could the company make a deed that would be valid as against the adverse possessor? At common law he could not, for livery of seizin could not be given. See 2 Co. Litt. by Thomas, 409, and note (Y). And this is the rule recognized by the Supreme Court of Alabama. See Allen and Dexter v. Nelson, 6 Ala., 68. True it is, that the mortgagor cannot deny the title of the mortgagee, and he is considered as the tenant of the mortgagee. But the principle of this doctrine is, that where there is a valid mortgage, the mortgagor shall not set up a paramount title to the mortgage; but here the validity of the mortgage was denied. The possession was adverse to the mortgage. Does not the rule of the common law apply?

Mr. Sergeant, for the defendant in error.

The facts of this case appear in the record, as fully, and at the same time as succinctly, as they could be presented here. To the record the court is respectfully referred for the general view of them, and the questions they give rise to, saving the right of stating particular facts, as they may become material in the course of the discussion of the matters of law involved in the case.

From the printed argument submitted by the learned counsel of the plaintiffs in error, it appears that they rely upon two principal objections to the judgment below, and one that is subordinate, and, seemingly, not much confided in. These are all the assigned errors, therefore, before the court, and to these answers will now be given, without further introduction.

I. "The court erred in refusing to charge the jury, that, if

Smith et al. v. Kernochen.

they believed the transfer to Kernochen was made with the view to enable the Alabama Life Insurance and Trust Company to litigate their claim in this court, the transfer was void, and could give no title that this court would enforce. The response of the court to this request, as will be seen by the charge given, was, that this fact could have no influence after the general issue had been pleaded. That, if it was true, it was but matter in abatement. This is the substance of the charge given."

The first of these differs, in one particular, from the printed argument, namely, in requiring the judge to leave to the *jury whether the lessor of the plaintiff was "privy to his intention."

[*207 The second differs, it is thought, materially from the charge actually given, as will be presently seen.

To this error, thus assigned, there are several answers.

1. There was no evidence whatever of any privity of the lessor of the plaintiff. The only witness examined on the point said, "He did not know whether Kernochen was informed of the motive; that he never had any intercourse with him on the subject, nor had the company ever had any other transaction with him." As a matter of fact, it thus stood without any proof. It is respectfully submitted, that the court cannot be required to give a charge upon what is not in evidence. If a fact is important to the party, it is for him to substantiate it by proof; but where there is absolutely no proof at all, he cannot require the judge to charge the jury as to its effect, and there is no error in the judge declining to do so. The learned counsel for the plaintiffs in error seems to be of the same opinion, for in his argument, as has been seen, he omits the matter of privity altogether. By and by it will be seen whether the fact itself, if proved, would have been of any consequence. It is submitted that it would not.

2. The judge was required to charge the jury, that, upon the hypothesis presented, without any color of support from the evidence, the assignment of the mortgage was void, and could give the lessor of the plaintiff no title which the court would enforce. The grounds in law upon which the judge could be asked to declare the deed void, and to decide that it could give no title which the court could enforce, are nowhere exhibited in the argument, unless they are supposed to be somehow involved in the general question of jurisdiction, which will be considered presently. The prayer is simply that the court will charge the jury that the assignment is void, and therefore that one link is wanting in the