## Facts

- In January 1820, Rousmanier, a shipowner, borrowed $1,450 from Hunt and gave notes for repayment.
- To secure the debt, Rousmanier executed a power of attorney authorizing Hunt to sell Rousmanier’s interest in the brig *Nereus* (and to collect insurance proceeds if the vessel or freight were lost), with proceeds to satisfy the debt and any remainder returned to Rousmanier.
- In March 1820, Hunt loaned an additional $700; Rousmanier executed a similar power of attorney regarding his interest in the schooner *Industry*.
- The parties alleged they intended these instruments to provide specific security equivalent to a mortgage, and they used powers of attorney after legal advice that this form would be as effective as a mortgage without changing vessel papers or taking possession upon arrival.
- Rousmanier died insolvent in May 1820, having paid only $200 on the notes.
- After the vessels returned, Hunt took possession and attempted to sell the interests, but the estate administrators forbade the sale.
- Hunt filed a bill in equity to compel the administrators to permit sale and application of proceeds to his debt; the lower court sustained demurrers and dismissed, leading to Supreme Court review.

## Issues

1. Whether a power of attorney granted as collateral security is a “power coupled with an interest” that survives the principal’s death and permits execution after death.
2. Whether equity may enforce the parties’ intended mortgage-like security by reforming or specifically enforcing the transaction when the chosen instrument is legally ineffective due to a mistake of law.

## Decision

- The Court held that a power of attorney is generally revoked by the principal’s death.
- The powers of attorney here were not “powers coupled with an interest” because Hunt held no present proprietary interest in the vessels themselves, only an interest in exercising the powers to obtain payment.
- As a result, the powers could not authorize a post-death sale as against the estate at law.
- The Court indicated that equitable relief might depend on whether equity could compel execution of the intended security arrangement, and the matter required fuller consideration beyond demurrer.
- In later proceedings (after remand), the Court ultimately rejected equitable reformation that would effectively convert the arrangement into a mortgage, treating the problem as a pure mistake of law and denying relief that would prejudice other creditors of an insolvent estate.

## Legal Principles

- A power of attorney, even if treated as irrevocable during the principal’s life when given as security, is extinguished by the principal’s death unless it is a power coupled with an interest.
- A “power coupled with an interest” requires a present interest in the subject property itself, not merely an interest in the proceeds or in the execution of the power.
- Equity may grant relief for fraud or for mistake where an instrument fails to express the parties’ agreement, but it generally will not rewrite a deliberately chosen instrument solely to correct a misunderstanding of its legal consequences.
- Courts are especially reluctant to impose a new lien or priority after the fact where doing so would impair the rights of other creditors.

## Conclusion

The Court treated the security-related powers of attorney as terminated by the debtor’s death because they were not coupled with a present property interest, and it refused to have equity transform the parties’ intentional choice of instrument into a mortgage-like lien based only on a mistake about the law.


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