Walter Freeman in error, vs. Saml. Holliday

Walter Freeman in error, vs. Saml. Holliday. The transfer of an absolute property is not necessary to constitute-a valuable consideration, The acquisition of a probable and eusiomary advantage is sufficient for this purpose. It was one of the general customs of this territory that improvements secured the possession of the laud till the fee simple was acquired of the United States. Illegality qfi consideration must be specially pleaded. A contract for the sale of improvements on-the public lands is not void for illegality. The court below erred m not instructing the jury that if they believe from the evidence that the note in controversy was given prior to October 1S36, in consideration of a valuable improvement on the public lands of the United States, that such improvement is not a good consideration for said note.. Action of debt on promissory note brought by Holliday vs. Freeman, plea geni, issue and also special pleas of want of consideration and failure of consideration — verdict for plaintiff — and the case brought up to this court by the defendant below on the following assignment of errors, viz: Grant, for plaintiff in error. Lowe, for dft. in error. Grant, for the plaintiff, contended that prior to any legislative action, a sale of improvements on the public lands, or of claims to such lands, did not constitute a good consideration for a contract. In 1836 an act was passed by Wisconsin making such sales legal. And at the first session of the Iowa Legislature a similar law was passed. Such has been for years the law of Illinois. There must have been therefore a generally reeeived opinion that such a contract was not valid before a legislative provision to that effect. An opposite decision would be contrary to the act of Congress prohibiting the occupancy of the public lands. But I am told that this law of Congress is obsolete, and that Congress have from time to timé passed pre-emption laws in favor of settlers. Now the preemption laws are retrospective in their operation, they amount to a pardon for a past offence, not a promise of future reward. The two last laws prohibit sales of improvements by depriving both buyer and seller of a right of preemption. The law of Congress prohibiting entries on the public lands is neither repealed nor a dead letter. This principle that public lands or improvements constitute a good consideration for a contract, is contrary to judicial decisions. 1 Blackf. R. p. 19. — Decisions oj III. Dec. 1833, p. 78, p. 117, p. 294°. The improvements belong to the land, whoever is the owner of the land is the owner of the improvements. Lowe, for dft. contended that the decisions referred to were based upon a different state of facts, and they contain no dicta that would deny to a person the right to recover the value of his labor and money expended on the public lands, when that labor and money was expended and the avails thereof sold and purchased by defendant long before such land was offered by the government for sale. We know of no law prohibiting the sale of a man's labor and improvements, and although the note was given prior to the statute of Wisconsin, yet such contract not being interdicted by law, but supported by a moral obligation and equity, and by the general usage of the country, will not the court enforce it. The law cited by the other side does not fit the pleadings ánd the issue. They are relied upon for the purpose of showing the illegality of the consideration. It is not competent for them to impeach the legal consideration of the note without a plea going to its legality. [MAJORITY — Mason, Ch. Jus.] By the Court. Mason, Ch. Jus. This was an action on a promissory note. The error alleged is that the court refused to instruct the jury that if they believed that the note in controversy was given prior to October 1836 in consideration of a .valuable improvement on the public lands of the United States, that such improvement is not a good consideration for said note. The whole question is as to whether the sale of an improvement on the public lands does independent of statute constitute a legal consideration. The consideration for a promissory note is always deemed sufficient whenever in consequence of the contract the maker has derived a benefit or the payee suffered detriment. The case of a purchaser of lands belonging to the United States who executes a promissory note for improvements previously made thereon, is in neither of these predicaments.' The title to the improvements would have vested in the purchaser previous to the execution of the note. No-benefit would accrue to him, or injury to the payee, in consequence of the contract for the improvements. The cases cited from the reports of Indiana and Illinois are of this character, and are clearly correct. But the case at bar is different from these. The purchaser of the improvements was not previously the owner of the freehold, and consequently was not, as in those cases, purchasing his own property. If he acquired any thing by the purchase, there was a sufficient consideration. The owner of the freehold is also the owner of all improvements made thereon. As against the United States therefore the seller in this case had no rights which he could enforce. It does not follow, however, that he had no valuable transferable interest. The physician or the school-master who sells out what is termed his good will, sells nothing to which he has an absolute right. The purchaser in that case cannot compel the patrons of his predecessor to employ him. Still the probabilities are jn his favor. By making the purchase and removing the former incumbent out of the way, his chances of success are increased — to what extent he must be the judge. For the estimated value of his new acquisition he executed his promissory note. It can doubtless be collected. The transfer of an absolute property is not therefore necessary to constitute a valuable consideration. The acquisition of a probable and customary advantage is sufficient for this purpose. We think such was the case in regard to the sale of improvements on public lands. These constituted our only titles at the date of the note on which this suit was brought. These titles secured to the possessor the undisturbed possession of the land until the fee simple was acquired from the United States. This has been one of our general customs, coeval with our political existence,. coextensive with our territorial limits — one, therefore, which the courts may lawfully recognize. The purchaser knew what he was buying — supposed he could derive advantage from the. purchase equivalent to the price to be paid, and gave his note for the amount. We think in honor, in equity, and in law, he is bound to pay it. As to tlje illegality of the consideration contended for by the plaintiff in error, the state of the pleadings does not seem to be such as to let in this defence were it valid. The ease of Hill vs. Smith however, decided at this term of the court, settles that question, so far as the decision of this court can go, in favor of the legality of the consideration. We entertain no doubts of the correctness of that decision. The judgment of the court below will therefore be affirmed.