Murray & Murray v. Toland & Meade , 3 Johns. Ch. 569 ( 1818 )

The cause stood over for consideration until this day.

The Chancellor.

The bill was filed to stay the suit at law brought by the present defendant, Toland, to recover the proceeds of the goods which he had committed to the plaintiffs to sell.

1. The first point which arises for discussion is, whether the plaintiffs can retain those proceeds, or any part of them, against Toland, in consequence of a demand which one of the plaintiffs advances against Meade, who had an interest in those goods.

The goods belonged to Meade fy Toland, in nearly equal proportions, and were sent from Cadis, in Spain, by Meade, consigned to Toland, and the invoice mentioned that they were shipped on account of Meade Toland, in the proportions therein stated. When the goods arrived at Mew-York, the invoice and bill of lading were sent by Toland to the plaintiffs, with instructions to sell the goods. The plaintiffs state in their bill, that the goods arrived at Mew-York, on the 27th of March, 1813, and that about that time Toland sent them the invoice and bill of lading, with in-' structions to sell, and that on the 20th of May following, they informed Toland that one of the plaintiffs would retain the proceeds, in part satisfaction of his claim against Meade. I presume that the goods were then sold, and the question is, whether a court of equity will aid a claim advanced under these circumstances.

against * each du7to“ndLm eapacity.

It cannot be denied that Toland was entitled to demand and receive those proceeds, and to bring an action at law in his own name. There was a privity of contract between the parties. A factor, according to the case of Drinkwater v. Goodwin, (Cowper, 251.) who receives, and is authorized to sell goods, may bring an action to compel the buyer to pay, and “ it would be no defence to the buyer, in that action, to say, that as between him and the principal, he ought to have the money.” The factor has a lien on the price of the goods in the hands of the buyer, for the balance of his account, and for his acceptances made upon the faith of the consignment.

In this case Toland was part owner of the goods, and he held the residue as agent or factor of Meade. He dealt with the plaintiffs jointly, as a commercial house, and there was no privity between him and one of the plaintiffs, individually considered, if there could be any set-off allowed in this case, it ought to be of a joint demand of the plaintiffs, and not of the separate demand of one of them. The plaintiffs assumed, and are responsible for those proceeds in their joint capacity. This fact is of it-self sive against the alleged right to retain. The debt demanded, and the delit to set off, must be mutual, i. e. they must ke ¿ue to an(¡ £.om the same persons, in the same capacity. But it does not appear to me to be fit, even upon more general grounds, for this court to aid such a defence; and the plaintiffs ought to be left to their defence at law, if any they have. The defendant Toland disclosed his rights, and the capacity in which he dealt, when he sent the docu-f ments and instructions to the plaintiffs, and the plaintiffs accepted of the agency conferred by T. without notice of any dormant claim against Meade, and they dealt with him as their principal. This claim was kept concealed for two months, before either of them, even verbally, made any pretension. They accepted of the trust as agents of Toland, and good faith requires that they should fully account to him, and to him only. It was for Tolandds principal to interfere, if he had so chosen, to protect himself against To-land. The plaintiffs had no right to put Toland aside, against his consent, and to challenge a controversy with his principal. This court ought not to lend its assistance to a proceeding so repugnant to that candor which the parties had a right to require of each other, and to the confidence which was reposed.

2. This ground is quite sufficient to .justify a dismissal of the bill, as against Toland. But if we go into the examination of the claim set up against Meade, there appears to be a decisive objection to it, arising from the settlement made on the 28th of October, 1808, between Meade and Lyle, who acted as the authorized agent of the plaintiff, who advances the claim.

There was an account current stated and admitted, Lyle acted upon a full knowledge of all the facts. There is no pretence of any fraud or imposition practised upon him, or that he had not a perfect freedom of action in discussing and settling the account. It was founded upon mutual concessions. If a person will enter, even into a hard bargain, with his eyes open, observes Lord Hardwicke (2 Atk. 251.) equity will not relieve him, unless he can show fraud, or some undue means used. At the foot of this stated account, Lyle receives and gives a receipt for an order on Gordon $/ Co., for the balance of the account; and though he afterwards gives a receipt to Gordon, in full of the order, as though it was only “ part payment of the balance of accounts,” yet this being an act of bis own, long after the acknowledged settlement, it cannot have any effect upon it. The pretence of coercion, or undue influence, exerted over Lyle, is without a shadow of proof. He had applied to the judicial tribunals of Spain for relief; and, then, without waiting for any decision, and without any undue cause, he “ finally concluded,” as he says, to receive from Meade the balance as stated, “ as a measure of prudence,” because Meade was considered in insolvent circumstances. There is no evidence of such insolvency existing; and it is most reasonable that the plaintiff, J. B. JVJ., should be bound by the measure of prudence adopted by his agent, especially, as no objection appears to have been made, and transmitted to Meade, by the plaintiff from the date of the settlement in October, 1808, to the time he resolved to appropriate the proceeds in question, in May, 1813. It has been often held, that if a party receives a stated account from abroad,' and keeps it by him for any length of time, (one case says two years,) without objection, he shall be bound by it. (Willis v. Jernegan, 2 Atk. 251. Tickel v. Short, 2 Vesey, 239.) Chancery will not decree an account to be taken after such a lapse of time, but will leave the party to his remedy at law.

3. If this settlement was not in the way, yet the claims of one of the plaintiffs would not be a proper subject of set-off, for they are founded upon the alleged negligence and misconduct of Meade, and these are matters of tort, sounding in unliquidated damages. Such misconduct is properly to be inquired into, in a distinct suit for that purpose, and so it was decided in Winchester v. Hackley, (2 Cranch, 342.) It is, also, a subject of legal, and not of equity jurisdiction.

Considerable stress was laid by the counsel for the plaintiffs, upon what was said by Lord Hardwicke, in Shish v. Foster. (1 Vesey, 86.) The doctrine, in that case, was considered as being applicable to this, because the plaintiffs might have difficulty in obtaining satisfaction from Meade, who resides in Spain, if the proceeds belonging to him, in this case, were taken out of their hands.

But that case is not analogous. The plaintiff there had filed a bill against his former guardian, to set. aside a stated account, on the ground of fraud; and the defendant filed a cross bill for the specific performance of an -agreement for an estate in possession of the plaintiff. The Chancellor suspended the decree for a specific performance, until the account was taken, as the plaintiff would have been in danger of losing his demand, if the estate had been taken from him, for the defendant had frequently absconded. The cross bill, in that case, was for equitable aid; and under the circumstances of the case, the court applied the rule, that he who would have equity must do it. Whether the rule was properly applied in that case, is at present immaterial, for it is a sufficient objection to the application of the case, that Meade is not now a plaintiff before this court asking for relief.

But Lord Hardvdcke, in delivering his opinion, cited the case of “ Jacobson v. Hans Towns, or merchants of Mmaign.” From the imperfect note which he gives of the case, it would appear, that Jacobson had been a lessee of an estate belonging to the defendants, and the lease having expired, an ejectment had been brought against him at law to recover possession. He filed a bill in Chancery, on the ground, that he was a credited in a long account, and that the estate ought not to be taken from him, until he had received satisfaction of his demand. And though he had no real lien on the estate, an icjunction was granted by Lord Macclesfield, and continued by Lord King, because of “ the difficulty of his getting satisfaction, if the estate was taken from him, as they (the defendants) were a corporation residing beyond sea.”

This case requires every kind of explanation, and I am not willing to consider it as an authority, as it now stands. It is not to be found elsewhere; it is contrary to the principles of the court, which measures out the same justice to foreigners and citizens; and it is contrary to the established doctrine in respect to set-offs. It is altogether new, that an unsettled account can be set off against an ejectment to recover possession of land, to which the lessor, in the ejectment, has an undoubted title. The only case in which an ejectment has been stayed, until an account was taken, is the case of an ejectment for nonpayment of rent, and where the dealings between the landlord and tenant were too complicated for law. The interference of the court, in that special case, was requisite to determine whether there was any foundation for the ejectment. (O’Connor v. Spaight, 1 Sch. & Lef. 305.) But to enjoin a party residing out of the jurisdiction of the court, from covering possession of land to which he has a title, because the tenant in possession has some personal demand against him totally unconnected with a right to the land, would be extraordinary. The ground taken in the case stated, was, that it would be inconvenient or difficult for the tenant to obtain his demand from the party residing abroad. Is the court, then, to hold the land, by way of mortgage, for an uncertain demand sounding in contract or tort, when the parties have created no such lien ?- I cannot venture to act upon such a case without more authority. If that was the law or usage of the court, we should have had better evidence of it than this obscure and solitary allusion to the case of Jacobson v. Hans Towns. Such a principle would check all suits at law, and extend the doctrine of set-off to every possible case, if it g0 happened that the plaintiff at law was not within the jurisdisction of the court. The inconvenience of following a party to his place of residence abroad, does not appear to me to be, of itself, a sufficient ground for departing from the settled doctrines of the court. The court cannot be governed by the mere question of comparative convenience. What would be proper, if the party resided in a country where there was no regular law or justice, or where he was absolutely inaccessible, is not a point before me. A residence at Cadiz is, surely, not such a case ; nor is Spain, with all her infirmity, to be put out of the pale of civilized nations.

I shall not enter into the discussion of the charge of misconduct in Meade, and which occupies so large a part of the pleadings and proofs in this case. Either of the three grounds I have taken are sufficient to destroy the equity of the bill as against Toland, and the two last of them, as against Meade.

The injunction must, accordingly, be dissolved, and the ■hill dismissed, with costs.

Decree accordingly.