Hunt v. Rousmanier's Adm'rs - 21 U.S. (8 Wheat.) 174 (1823)

Rule:

As the power of one man to act for another, depends on the will and license of that other, the power ceases when the will, or this permission, is withdrawn. The general rule, therefore, is, that a letter of attorney may, at any time, be revoked by the party who makes it; and is revoked by his death. But this general rule, which results from the nature of the act, has sustained some modification. Where a letter of attorney forms a part of a contract, and is a security for money, or for the performance of any act which is deemed valuable, it is generally made irrevocable in terms, or if not so, is deemed irrevocable in law. Although a letter of attorney depends, from its nature, on the will of the person making it, and may, in general, be recalled at his will; yet, if he binds himself for a consideration, in terms, or by the nature of his contract, not to change his will, the law will not permit him to change it. A power of attorney, though irrevocable during the life of the party, becomes extinct by his death.

Facts:

The creditor loaned the debtor sums of money. In exchange, the creditor was given notes and an irrevocable power of attorney to dispose of the debtor's interests in the vessels. Subsequently, the debtor died intestate, having paid back only a small portion of the loans. The creditor gave notice of his claim, took possession of the vessels, and offered them for sale. He then filed a bill to compel the administrators to join in the sale. The administrators demurred and the bill was dismissed. The creditor filed an amended bill, which was also dismissed after the administrators' demurrer was sustained. The creditor appealed. 

Issue:

Could the power of attorney still be enforced, notwithstanding the death of the debtor? 

Answer:

No.

Conclusion:

The Supreme Court held that the circuit Court erred in sustaining the administrators' demurrer. The Court found that, even though the power of attorney was irrevocable during the debtor's life, it became extinct by his death. This was because it was a naked power, and not a power coupled with an interest. A mistake of law was made as to the nature of the power of attorney. Because the effect of the instrument was acknowledged to have been entirely misunderstood by both parties, the Court was unwilling to say that a court of equity was incapable of affording relief.