The purchasers at the foreclosure sale sustained a twofold relation to the junior mortgage: First, as having acquired the legal title of the mortgagor; and second, as having become in equity, the assignees of the debt secured by the first mortgage, or at least so much thereof as was satisfied by the foreclosure sale. In either capacity, if they should select to discharge the debt secured by the junior mortgage, the most that they could claim, if entitled to any relief of that character, would be the right to be subrogated to such rights as the junior mortgagee had at the time of the payment. As assignees in equity of the debt secured by the prior mortgage, they would be under no obligation or necessity to discharge the junior mortgage for the protection of their rights, inasmuch as the first mortgage, by operation of law, had priority over the second; and therefore, if they voluntarily discharged the second mortgage, being under no necessity to do so, they would be simply removing an incumbrance, which could not impair or affect their rights as assignees of the prior mortgage debt; and subrogation is only allowed as a matter of right in such cases, when a party is forced, for the protection of his own interests, to discharge an incumbrance which might otherwise jeopardize them. It is evident that, as having succeeded to the legal title of the mortgagor, they would not be entitled to subrogation on payment of the junior mortgage. On acquiring the title of the mortgagor, they took it cum onere, and as his successors in interest, whether by a voluntary conveyance or at a forced sale, they took the property subject to the incumbrance of the junior mortgage, and, so far as their rights are derived from the mortgagor by means of the foreclosure sale, they stand in his shoes; that is to say, the legal estate acquired from the mortgagor remains in their hands, subject to the junior mortgage, precisely as it was before; and if they have any right of subrogation, it proceeds, not from the fact that they have succeeded to the rights of the mortgagor, but that they are the assignees in equity of the debt secured by the first mortgage, which is kept alive for their protection.

Points decided.

But, as we have already seen, as such assignees, if they would be entitled to subrogation at all, on which point I express no opinion, it would only be to such rights as the junior mortgagee had at the time of the payment of his mortgage debt. I do not, therefore, deem it material whether or not the plaintiff had released Brenham from his personal liability.

The defendants insist that the mortgage to the plaintiff is void, because, as they claim, the proofs show that no promissory note was ever executed or delivered by Brenham to Catherine Hayes, as recited in the mortgage, but I deem it useless to discuss that question, inasmuch as the cause is pending in the Court below, and that Court, since the new trial was granted, has not passed upon this point. The same remark will apply as to the question raised in respect to the necessity of having all the parties in interest before the Court before any decree can be rendered for a sale of the mortgaged premises, which question is yet pending and undecided in the Court below.

The order granting a new trial is affirmed.

WALLACE, J., having been of counsel in the Court below, did not sit in this case.

SPRAGUE, J., expressed no opinion.

No. 2,467.

JAMES A. DUFFY, RESPONDENT, v. JOHN E. HOBSON, APPELLANT.

STATUTORY CONSTRUCTION. ACT OF CONGRESS REQUIRING STAMPS ON WRITTEN INSTRUMENTS.—The Act of Congress to provide Internal Revenue, passed June 30th, 1864, which provides that certain instruments, unless stamped in the manner therein required, shall not be "recorded, or admitted, or used as evidence, in any Court," etc., embraces only proceedings had, and acts done in public offices and Courts established under the Constitution of the United States, and by authority of Acts of Congress framed in pursuance thereof.

Argument for Appellant.

CONSTITUTIONAL CONSTRUCTION.- RULES OF EVIDENCE IN STATE COURTS. Congress has no constitutional authority to legislate concerning the rules of evidence administered in the Courts of the State, nor to affix conditions or limitations upon which those rules are to be applied and enforced.

INTERNAL REVENUE STAMP ON WRITTEN INSTRUMENTS.- OMISSION OF.The omission of a United States revenue stamp cannot, under any circumstances, be set up as a defence in a State Court, to an action upon a contract. The case of Hallock v. Jaudin, (34 Cal. 172) overruled on this point.

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POWER OF AGENT.- CONTRACT OF SALE.— EXECUTION OF, UNDER VERBAL AUTHORITY TO SELL. A verbal authority to an agent to sell real estate, is not sufficient to authorize the agent to execute a contract of sale in the name of his principal, or to sign the name of the latter to such contract.

IDEM.- VERBAL AUTHORITY TO EXECUTE.- A power to sign the name of a principal to a contract of sale, may be given verbally; but the words sed for that purpose must be so distinct and clear is their meaning and Import, as to manifest with the requisite degree of certainty, the in. tention of the principal.

APPEAL from the District Court of the Sixth District, Sacramento County.

Action to enforce performance of a written contract of sale of certain lots in the city of Sacramento, executed by the agent of the defendant, in the name of his principal under a verbal authority to sell, and for damages for failure to perform the contract. Judgment was for plaintiff. Defendant moved for a new trial, which was denied; and from the judgment and the order denying defendant's motion for a new trial, this appeal is taken.

The other facts are stated in the opinion.

Haymond & Stratton and L. J. Ashford, for Appellant.

The Court erred in admitting in evidence the contract made by Atkins in Hobson's name, with Duffy, for the sale of the lots in question.

1st. It was not stamped according to law. (13 U. S. Statutes at Large, Sec. 170, p. 298.)

2d. There was no testimony tending to prove Atkins' au thority to make the contract given in evidence. (Coleman v. Garsequez, 18 Barb. 60; Vanhorn v. Frick, 6 Serg. and R. 90; Clark v. Graham, 6 Wheat. 577.)

VOL. XL. 16.

Argument for Respondent.

Coffroth & Spaulding, for Respondent.

The provisions of the United States statute in relation to stamps, do not apply to the Courts of the several States.

The language of the enactment is only that no instruments or documents not duly stamped, "shall be admitted or used as evidence in any Court until the requisite stamp shall be affixed." This provision can have full operation and effect, if construed as intended to apply to those Courts only which have been established under the Constitution of the United States and by Acts of Congress, over which the Federal Legislature can legitimately exercise control, and to which they can properly prescribe rules regulating the course of justice and the mode of administering justice. (Carpenter et al. v. Snelling, 77 Mass. 457-8, and note at bottom of page.)

The doctrine is now firmly established in Massachusetts that no stamp is required for the introduction of any paper or document in any of the Courts of that State; and we respectfully suggest that if such is the law it should be at once promulgated in this State.

In other States, Courts have held that an objection to a contract or other instrument that it is not stamped as required by the Revenue Laws is unavailing, unless the party objecting proves that the stamp was omitted with the intent to evade the Act of Congress. (Garland v. Lane, 46 N. H. 245; Fifield v. Close, 15 Mich. 505; Trull v. Morton, 12 Allen, 369; Hitchcock v. Sawyer, 39 Vt. 412; Bebee v. Hutton, 47 Barb. 187; New Haven and Northampton Co. v. Quintard, 5 Abbott Pr. N. S. 128.)

Upon the question of damages for breach of contracts of this character, we refer the Court to: Hopkins v. Lee, (6 Wheaton, 109, 118;) Hill v. Hobart, (16 Maine, 164;) Warren v. Wheeler, (21 Maine, 484;) Baldwin v. Munn, (2 Wend. 400); Ahrens v. Adler, (33 Cal. 608.)

WALLACE, J., delivered the opinion of the Court, CROCKETT, J., TEMPLE, J., and SPRAGUE, J., concurring:

Opinion of the Court- Wallace, J.

On the trial in the District Court, the plaintiff offered in evidence a written contract, by the terms of which he claimed that the defendant had sold and agreed to convey to him certain lots in the city of Sacramento. This contract was not stamped with United States revenue stamps, denoting the payment of tax to the Federal Government; and upon that ground the defendant objected to its introduction as evidence, and has renewed the objection here. We think the objection not well taken. The Act of Congress cited in its support provides that such a contract as the one now under consideration, unless stamped in the manner therein required, shall not be "recorded or admitted or used as evidence in any Court," etc. The Act, however, does not in terms extend to proceedings had under the laws of the State, and does not, on its face, import any interference with those laws.

Upon the settled rules of interpretation, it must be construed to embrace only proceedings had, and acts done, in public offices and Courts established under the Constitution of the United States, and by authority of Acts of Congress framed in pursuance thereof.

But, if the Act of Congress under consideration had in terms embraced the State Courts within its provisions, and had enacted that upon a trial had in one of those Courts, a contract or other instrument of evidence, otherwise admissible, should not be admitted in evidence except upon compliance with its provisions, it would be our duty to declare its provisions in that respect null and void.

Congress has no constitutional authority to legislate concerning the rules of evidence administered in the Courts of this State, nor to affix conditions or limitations upon which those rules are to be applied and enforced; nor can it rightfully convert those Courts into tax gatherers for the benefit of the Federal Government, nor charge them with the duty of inquiring whether or not the revenue laws of the United States have been observed, or of investigating into the motives of parties in omitting to affix revenue stamps to the contracts they may have made. The case of Hallock