Mr. Justice Gray, in delivering the opinion of the court, says (page 666, 146 U. S., page 227, 13 Sup. Ct. Rep., and page 1127, 36 L. Ed.): 'In order to determine this question, it will be necessary, in the first place, to consider the true scope of the fundamental maxim of international law stated by Chief Justice Marshall in the fewest possible words: "The courts of no country execute the penal laws of another." The Antelope, 10 Wheat. 66, 123, 6 L. Ed. 268. In interpreting this maxim, there is danger of being misled by the different shades of meaning allowed to the word "penal" in our language. In the municipal law of England and America, the words "penal" and "penalty" have been used in various senses. Strictly and primarily, they denote punishment, whether corporal or pecuniary, imposed and enforced by the state for a crime or offense against its laws. U. S. v. Reisinger, 128 U. S. 398, 402, 9 Sup. Ct. Rep. 99, 32 L. Ed. 480; U. S. v. Chouteau, 102 U. S. 611, 26 L. Ed. 246. But they are also commonly used as including any extraordinary liablity to which the law subjects a wrongdoer in favor of the person wronged, not limited to the damages suffered. They are so elastic in meaning as even to be familiarly applied to cases of private contracts wholly independent of statutes, as when we speak of the "penal sum" or "penalty" of a bond. In the words of Chief Justice Marshall: "In general, a sum of money in gross, to be paid for the non-performance of an agreement, is considered as a penalty, the legal operation of which is to cover the damages which the party in whose favor the stipulation is made may have sustained from the breach of contract by the opposite party." Tayloe v. Sandiford, 7 Wheat. 13, 17, 5 L. Ed. 384. Penal laws, strictly and properly, are those imposing punishment for an offense committed against the state, and which by the English and American constitutions the executive of the state has the power to pardon. Statutes giving a private action against a wrongdoer are sometimes spoken of as penal in their nature, but in such cases it has been pointed out that neither the liability imposed nor the remedy given is strictly penal.' The statute of limitations we are considering is very clearly applicable only to 'penal actions,' strictly and properly so called, and does not affect the present action. The statute here applicable is that which allows 20 years for bringing an action of debt on a specialty. Gen. Laws, ch. 234, § 4; Atwood v. Bank, 1 R. I. 376. It need hardly be said that this construction of chapter 288 is not a decision that the provisions of chapter 555, Pub. Laws 1876, imposing special liabilities upon stockholders and officers of manufacturing corporations, in cases of non-performance of statutory duties, are not of a penal char. acter. Chase v. Curtis, 113 U. S. 452, 5 Sup. Ct. Rep. 554, 28 L. Ed. 1038; Bank v. Remsen, 158 U. S. 337, 15 Sup. Ct. Rep. 891, 39 L. Ed. 1008; and Rhode Island cases cited above." CONTRACTS - WHEN SEVERAL CONTEMPORANEOUS CONTRACTS ARE CONSTRUED TOGETHER - EFFECT UPON NEGOTIABILITY OF PROMISSORY NOTES. It is not the purpose of the writer to discuss this question in all its phases; the limit of this article forbids this. Inquiry will be directed chiefly to the consideration of two questions, viz.: 1. The nature and scope of the rule that: "Two or more instruments executed contemporaneously by the same parties in reference to the same subject-matter constitute one contract." 2. What effect has this rule upon the negotiability of promissory notes, executed contemporaneously with other writings in relation to the same subject? 1. The general rule above quoted has been applied in many cases; but it is deemed important only to cite part of the more recent ones, showing how the rule has been followed in different states and by the federal courts.1 In the application of the rule a variety of circumstances may arise. Sometimes the several writings refer in intelligible terms to one another. Sometimes their connection can be ascertained only by examination of the subjectmatter of the contract. Again, sometimes the connection can be established only by parol evidence. 2 When there is a reference in the several writings to one another, all are to be construed together as one instrument. Where a railroad company entered into a contract to issue a certain number of its bonds, secured by first mortgage, the contract should be read as though the bond and mortgage were set out 1 Bailey v. Han. & St. J. R. R. Co., 84 U. S. 96; Woodward v. Jewel, 25 Fed. Rep. 689; Pierce v. Tidwell, 81 Atl. Rep. 299, 2 South. Rep. 15; O'Reilley v. Burns (Colo.), 22 Pac. Rep. 1090; Gardt v. Brown, 113 Ill. 475, 55 Am. Rep. 434; Martin v. Murphy, 129 Ind. 464, 28 N. E. Rep. 1118. Parks v. Cook, 66 Ky. 168; Ahern v. White, 39 Md. 409; Hunt v. Frost, 58 Mass. 54; Keagle v. Pessel (Mich.), 52 N. W. Rep. 58; Brack. ett v. Edgerton (Minn.), 100 Am. Dec. 211; Waples v. Jones, 62 Mo. 440; Hill v. Huntress, 43 N. H. 480; Owens v. Owens, 23 N. J. Eq. 60; Meriden Britannia Co. v. Zingsen, 48 N. Y. 248, 8 Am. Rep. 549; Kitchen v. Gandy, 101 N. Car. 86, 7 S. E. Rep. 663; White v. Brocaw, 14 Ohio Stat. 339; Dean v. Lawham, 7 Oreg. 442; Atchinson v. Hutchinson, 51 Tex. 223; Reed v. Field, 15 Vt. 672; Hagerty v. White (Wis.), 34 N. W. Rep. 92. 2 Bradstreet v. Rich, 74 Me. 303; In re Board of Com. of Wash. Park, 52 N. Y. 131; Miller v. Edgerton (Kan.), 15 Pac. Rep. 894; Sawyer v. Hammet, 15 Me. 40. 6 therein. Sometimes a contract may grow out of a previous one between the same parties and reference is made in the later one to the first, which may have been fulfilled. In such case the terms of the first become part of the second so far as not in conflict therewith. The reference to a former, or other, writing must be clear and unambiguous. A postscript, though below the signatures, may become part of the contract, with the aid of parol testimony. Likewise as to a memorandum attached to the contract, when signed by the parties, though the principal contract was under seal and the memorandum was not. Where the separate writings contain no reference to each other, yet if their terms or subject-matter show a relationship they will be construed together. Where a contract is supported on one side by a bond with sureties, in a suit against the principal contractor and his sureties, any contract made with the sureties relating to the matter will be used in construing the principal contract. Parol evidence may be introduced to show that separate writings are part of the same contract, 10 and this may be done although the parol evidence adds materially to the written contract." (So held in this case, though a very questionable proposition.) Incidentally it may be noted that two or more instruments, relating to the same subjectmatter and executed at different dates may be construed together. They may be considered contemporaneous although not so in point of time, paradoxical as this may seem.12 Also sometimes separate instruments executed at different times between parties not identical in all respects may be construed together. 18 2. The rule is applicable to negotiable paper, executed in connection with other Galena V. S. W. R. R. Co. v. Barrett, 95 Ill. 467. 4 Bronson v. Green, Walk. Ch. 56. Stocker v. Partridge, 25 N. Y. Super. Ct. 193. 6 Close v. Clark, 9 N. Y. Supp. 538. McArthur v. Ladd, 5 Ohio, 514. 13 Pillow v. Brown, 26 Ark. 240; Bradley v. Marshall, 54 Ill. 173; Bobbitt v. Globe Ins. Co., 66 N. Car. 70. 9 Williams v. Markland (Ind.), 44 N. E. Rep. 562. 10 Dillingham v. Estill, 33 Ky. 23; Cornell v. Todd, 2 Denio. 130. 11 Ruggles v. Swanwick, 6 Minn. 526. 12 Stacy v. Randall, 17 Ill. 467; Johnson v. Wood, 48 Mo. 489; Thompson v. McClenachan, 17 Serg. & R. 110; Richardson v. Single, 42 Wis. 40. 13 Logan v. Tibbett, 4 G. Greene, 389; Mo. Pac. R. Co. v. Levy, 17 Mo. App. 501; McDonald v. Wolff, 40 Mo. App. 302; Rogers v. Kneeland, 10 Wend. 218. instruments; as, for instance, a promissory note secured by a real estate mortgage. This, perhaps, is the most important application of the rule because of the effect it may have upon commercial paper. A prom. issory note, drawn in usual negotiable form, must be construed in connection with a real estate mortgage given to secure it.1 A note and trust deed, given to secure it, must be construed together.15 In the case above cited of Brooke v. Struthers, the mortgage contained an agreement to pay taxes, and the condition that if the mortgagor failed to pay the taxes for 30 days such taxes and the whole principal and interest should become payable at once. The Michigan court says: "A mortgage executed simultaneously with a note is part of the contract and they are to be construed together. This is but the recognition of a rule of general application that applies to all contemporaneous writings. And where a note is secured by a mortgage and there is a provision in the mortgage not contained in the note, it will control. The case of Goodenough v. Curtis, 33 Mich. 505, is a case depending upon this principle. A defense of fraudulent alteration on the part of a promissory note by the insertion of the words or bearer' was interposed. Ordinarily such alteration would invalidate the instrument, but it was held that it did not, because it did not change the effect of the note in any material particular, inasmuch as by the terms of the mortgage, to which the note referred, certain conditions which might excuse payment, or change and fix the time of maturity, took away any negotiable character the note might otherwise possess. also Humphrey v. Beckwith, 48 Mich. 151, 12 N. W. Rep. 28; Elmore v. Hoffman, ₺ Wis. 71; Norton v. Kearney, 10 Wis. 443; Goodwin v. Nickerson, 51 Cal. 169; McCroskey v. Ladd, 96 Cal. 455, 31 Pac. Rep. 558. * See also Brownlee v. Arnold, See 60 Mo. 79; Railway Co. v. Atkinson, 17 Mo. App. 494. On the other hand, there are cases where the contemporaneous 141 Jones on Mort. sec. 71 (4th Ed.), and cases cited; Dan. Neg. Inst. secs. 156, 835; Goodenough v. Curtis, 33 Mich. 505; Brooks v. Struthers (Mich.), 68 N. W. Rep. 272. 15 Waples v. Jones, 62 Mo. 440; Noell v. Gaines, 68 Mo. 649. writing is invoked to make the note certain and therefore negotiable. Elliott v. Deason, 64 Ga. 67. See also Muzzey v. Knight, 8 Kan. 4546; Meyer v. Greyber, 19 Kan. 165; Dobbins v. Parker, 46 Iowa, 356; Winchell v. Coney, 54 Conn. 24, 5 Atl. Rep. 354; Parke v. Cooke, 3 Bush, 173; Hill v. Huntress, 43 N. H. 480; Rogers v. Broadnax, 24 Tex. 538; Manfg. Co. v. Howard, 28 Fed. Rep. 741." Then follows in the opinion a lengthy discussion of the question of what would be necessary to charge the indorsee of the note secured with notice of the terms of the mortgage that render the note non-negotiable, and citing other decisions, among them the leading case of McClelland v. Railroad Co., 110 N. Y. 469, 18 N. E. Rep. 238. This was a case where coupons annexed to a bond were clipped therefrom and sold. They were payable to bearer. The bond from which they were clipped referred to a trust deed which secured it. The court held that the question of the negotiability of the coupons was determined by the terms of the trust deed; citing Ror. R. R. 250; Everston v. Bank, 66 N. Y. 14; Thompson v. Lee Co., 3 Wall. 327; Commissioner v. Aspinwall, 21 How. 539, to the general proposition that such coupons were negotiable generally, unless their negotiability was taken away by particular provisions in the security. The same rule is found in several other cases, so that the doctrine seems to be fully established. 16 Where the mortgage securing the note contains an agreement to pay taxes or insurance premiums, or both, as is often the case, the rule applies for the conclusive reason that whenever the mortgagor fails to comply with these conditions and the mortgagee pays the taxes or the insurance premiums, the amount paid by him is at once added to the amount of the debt secured by the mortgage.17 It is clear that if, by the application of this rule, 16 Walker v. Thompson (Mich.), 66 N. W. Rep. 584; Donaldson v. Nelson (Utah), 49 Pac. Rep. 779; McClure v. Oxford, 94 U. S. 429; City v. Lamson, 9 Wall. 478; Clark v. Iowa City, 20 Wall. 583; Bank v. McMahon, 38 Fed. Rep. 283; Sigel v. Bank (Ill.), 23 N. E. Rep. 417; Hegeler v. Comstock (S. D.), 45 N. W. Rep. 331; Wright v. Traver (Mich.), 41 N. W. Rep. 517. 17 Southard v. Dorrington (Neb.), 4 N.W. Rep. 935; Mix v. Hotchkiss, 14 Conn. 32; Williams v. Hilton, 35 Me. 354; Page v. Foster, 7 N. H. 392; Cartwright v. Cady, 23 Barb. 497; Brown v. Simmons, 44 N. H. 475; White v. Atlas Lbr. Co. (Neb.), 68 N. W. Rep. 359. the agreement in the mortgage to pay the taxes and insurance premiums becomes a part of the note, the amount to fall due upon the note becomes uncertain, and hence the note is rendered non-negotiable.18 In the cases just cited the agreement to pay taxes was in the note, but the notes were held non-negotiable as a consequence. It can make no difference, however, whether such agreement be in the note or in the mortgage, inasmuch as the terms of the mortgage in respect of amount to fall due, time of payment, etc., become part of the note. But in the two Michigan cases, Brooks v. Struther and Walker v. Thompson, and in the Utah case, Donaldson v. Grant, the agreement to pay taxes was in the mortgage and the notes were rendered non-negotiable thereby. By way of addenda it may be added that the same rule of construction applies to chattel mortgages and contracts relating thereto.19 In this case there was a schedule of the property attached to the mortgage, at the foot of which there was a further memorandum of the terms and conditions of the mortgage, which memorandum was not signed; yet it was held to be part of the mortgage. In the case of First National Bank v. Turnbull 20 A made a deed of trust to B of a cotton factory to secure a loan. Afterwards a second contract was entered into whereby B was to make advances to A to buy cotton to use in the factory and A was to deliver the manufactured goods to B and not sell any of them to others without B's written authority. C levied an execution on the manufactured goods as A's; but in a contest between him and B it was held that the lien of the trust deed extended to the manufactured goods by virtue of the second agreement and gave Ba first lien thereon. So it was held by the Wisconsin Supreme Court that a chattel mortgage and a written agreement relating to the same subject-matter, of same date, should be construed together as one contract, although the agreement was not filed for record.21 WILLIS L. HAND. Kearney, Neb. 18 Farquhar v. Fidelity Ins. Co., Fed. Case No. 4676; Same v. Same, 13 Phil. 473; Howell v. Todd, Fed. Case No. 6783; Walker v. Thompson, 108 Mich 686, 66 N. W. Rep. 584. 10 Edgell v. Hart, 13 Barb. 380. 21 Blakeslee v. Rossman, 43 Wis. 116. SEPARABLE CONTROVERSY. What is a separable controversy, within the meaning of the decisions of the United States, as a condition of jurisdiction of the United States courts? A master and a servant cannot be joined in an action for a tort, and therefore the controversy between each of them and the plaintiff is a separate controversy. Some states have a statutory or constitutional provision authorizing joint actions for such a tort caused by a master and a servant growing out of the same act. Further, as said in Chesapeake & Ohio Railway Company v. Dixon:2 * Many courts have * * held the identification of master and servant to be so complete that the liability of both may be enforced in the same action, although other courts have reached the opposite conclusion." This case of Chesapeake & Ohio Railway Company v. Dixon, further states: "In respect of the removal of actions of tort on the ground of separable controversy, certain matters must be regarded as not open to dispute. In Powers v. Chesapeake & Ohio Ry. Co., 169 U. S. 92, it was said: 'It is well settled that an action of tort which might have been brought against many persons or against any one or more of them, and which is brought in a state court against all jointly, contains no separate controversy which will authorize its removal by some of the defendants into the circuit court of the United States, even if they file separate answers and set up different defenses from the other defendants, and allege that they are not jointly liable with them, and that their own controversy with the plaintiff is a sepa rate one.' ." "To entitle a defendant to a removal on account of the separability of a controversy from the rest of the case, there must exist a separate cause of action on which a separate suit could be brought and complete relief afforded distinct from the rest of the case, and of which all the parties on one side are citizens of different states from all the parties on the other."'3 "Mr. Justice Blatchford expressed the opinion that it was proper for the federal courts to follow the decisions of the state courts 1 Powers v. C. & O. Ry. Co., 169 U. S. 92. 2179 U. S. 131. 3 Foster's Federal Practice, vol. 2, par. 384, pp. 813 and 814, and cases cited. 4 Connell v. Utica, U. & E. R. Co., 13 Fed. Rep. 241. ** that a cause of action was entire." In the case of Chesapeake & Ohio Railway Company v. Dixon, the United States Supreme Court further say: "In Powers v. Chesapeake & Ohio Ry. Co., plaintiff subsequently discontinued the action as to all the defendants, except the company, and the company again made application to remove. This was denied by the state court, but granted by the circuit court, and the judgment of the latter was affirmed by this court, the question of separable controversy being necessarily not passed on here." In the case of Whitcomb v. Smithson3 the Supreme Court of the United States say: "The record shows that the circuit court granted the motion to remand on the authority of Thompson v. Chicago, St. P. & K. C. R. Co., 60 Fed. Rep. 773, in which case it was ruled that there was no separable controversy; and its judgment covered the question of fact as to the good faith of the joinder. The contention here is that when the trial court determined to direct a verdict in favor of the Chicago, Great Western Railway Company, the result was that the case stood as if the receivers had been sole defendants, and that they then acquired a right of removal which was not concluded by the previous action of the circuit court. This might have been so if, when the cause was called for trial in the state court, plaintiff had discontinued his action against the railway company, and thereby elected to prosecute it against the receivers solely, instead of prosecuting it on the joint cause of action set up in the complaint against all the defendants. Powers v. Chesapeake & Ohio Ry. Co., 169 U. S. 92. But that is not this case. The joint liability was insisted on here to the close of the trial, and the non-liability of the railway company was ruled in invitum.” In the foregoing action the Chicago, Great Western Railway Company answered the complaint, and the receivers filed a petition for the removal of the cause into the circuit court of the United States for the district of Minnesota, setting up diverse citizenship, and that they were officers of the United States courts; that the controversy was separable; and that the railway company was fraudulently made a party for the sole purpose of preventing the re 5 175 U. S. 635. moval of the cause. "A controversy is not separable when a defendant, who would otherwise be entitled to remove the suit, is charged as jointly liable with another defendant, who is a fellow-servant of the plaintiff.' "It has been held that after a removal on the ground of a separable controversy the plaintiff may discontinue as to the defendant who removed the suit, and then move to remand; but that his motion to remand will not be granted if the record still shows a controversy between citizens of different states. The removal takes the entire suit, not merely the separate controversy into the federal court." A controversy which is separable, under the rules of the state court, can be removed to the federal courts, where the other essential elements of federal jurisdiction exist. Supreme Court of Washington, April 24, 1901. 1. The statutes in aid of executions issued on judgments at law do not abolish the right of a judgment creditor to maintain a creditors' bill to enforce pay. ment of a judgment from land fraudulently conveyed. 2. The fact that a judgment is a lien on real estate before a fraudulent conveyance thereof does not prevent the judgment ereditor from maintaining a creditors' bill to enforce its payment from such real estate, on the ground that there is an adequate remedy at law by sale of the property under execution, since such remedies are concurrent. ANDERS, J.: This is an action, in the nature of a creditors' bill to set aside certain conveyances alleged to have been made in fraud of creditors, and to subject the real estate described in the complaint to the payment of a judgment. Briefly stated, the facts, as alleged in the complaint, are that John W. Sprague died on December 24, 1893, in Pierce county, Wash., leaving a will which was probated on December 29, 1893, and by which Otis Sprague and James R. Hayden were appointed executors; that at the time of his death the said John W. Sprague was the owner in fee of three certain parcels of real estate, all of which are specifically described, situated in said Pierce county, of the value of $300,000, and money and personal property of the value of about $60,000 all of which money and personal property has been applied by the executors in payment of debts and legacies, which debts 'and legacies together did not exceed the sum of $60,000; that the said Otis Sprague is a son of the said decedent, and to him was devised by the will an undivided one-fourth interest in and to all the real estate owned by the said John W. Sprague at the time of his death, and that the said Otis Sprague on the 24th day of December, 1893, became the owner in fee of an undivided one-fourth of all of said real estate; that the will provided that the real estate might be sold if necessary for the purpose of paying the debts of the testator; that on January 24, 1894, judgment was recovered by the Tacoma National Bank, in the superior court of Pierce county, against the said Otis Sprague 'for the sum of $4,730, which judgment upon its entry became a lien upon certain of the real property belonging to said Otis Sprague, and which is particularly described in the complaint, and that no transfer of the interest of said Otis Sprague in the property devised to him by the said decedent, or incumbrance thereon, had been made by him prior to the giving of said judgment and the existence of said judgment lien; that the judgment was duly assigned to the plaintiff on November 15, 1897, and that executions were issued thereon and returned wholly unsatisfied, and that no part of said judgment has been paid; that the executors on August 21, 1894, executed a deed to Charles Sprague, a son of the decedent, and one of the devisees named in the will, purporting to convey to him a portion of the real estate in question for the consideration of $120,000, with the understanding between the said executors, the said Charles Sprague, and the defendant, the Provident Life & Trust Company, that Charles Sprague would execute to said company a mortgage on the premises for $55,000 and turn the money so received over to the executors, and then reconvey the estate so incumbered to said executors, and that the said agreement was accordingly carried out and performed; that on September 5, 1895, upon a similar agreement and understanding with the said Charles Sprague and the Provident Life & Trust Company, said executors executed a deed purporting to convey to said Charles Sprague another portion of said real estate, expressing a consideration of $90,000, which real estate was mortgaged by said grantee to said Provident Life & Trust Company for $30,000, and then conveyed to said executors, and that both of said deeds and mortgages were recorded in the office of the county auditor of Pierce county; that said executors had no right, power, or authority to incumber said real estate, nor any of the real estate of the deceased, or to mortgage the same; that Charles Sprague paid no consideration for the premises described in said deeds; that the defendant company took said mortgages from said Charles Sprague with full knowledge of the facts, and consented to and advised the doing of said acts, and that the whole transaction was a fraudulent scheme to dispose of Otis Sprague's interest in said premises, and thereby |