An admitted or clearly established misapprehension of law in the
making of a contract creates a basis for the interference of a
court of equity resting on its discretion, and to be exercised only
in unquestionable and flagrant cases.
Whether laches is to he imputed to a party seeking the aid of a
court of equity depends upon the circumstances of the particular
case.
In this case, it is held on the evidence that the bond given by
Griswold in the
ne exeat proceeding conditioned that the
defendant in that proceeding should "abide and perform the orders
and decrees" of the court was executed by him under such an
apprehension of the obligations in law assumed by him in executing
and delivering it as to make it the duty of a court of equity to
reform it so as to make him liable for the penal sum named only in
the event that the principal fail to appear and become subject to
the orders and decrees of the court, but that, the defendant in the
suit in which the
ne exeat was issued having died, and
such a decree being therefore inappropriate, and Griswold being
guilty of no laches, a decree should be entered perpetually
enjoining the prosecution of any action, suit or proceeding to make
him liable in any sum on or by reason of said bond.
In the action at law upon the bond given in the
ne
exeat proceedings (No. 53), the court erred in ordering the
amended pleas to be stricken from the files.
D. was sued in the Supreme Court of Rhode Island by stockholders
in the Credit Mobilier for an accounting and payment of what might
be found
Page 141 U. S. 261
due on the accounting for securities and moneys coming into his
hands as President of the Credit Mobilier. The receiver of that
company in Pennsylvania released him from such liability. The
Supreme Court of Rhode Island would not allow that release to be
interposed as a defense.
Held that the error, if any, in
this respect could not be corrected by bill in equity filed by a
surety on a bond given to release D. when arrested on
ne
exeat proceedings in that Rhode Island suit.
A pleading presenting only a question of error in a judgment of
a state court does not go to the jurisdiction.
The first of the above suits was brought by Griswold, a citizen
of New York, against the appellees, citizens of Rhode Island, to
obtain a decree cancelling or (if relief of that character could
not be granted) reforming a certain bond for the sum of $53,735
executed by Thomas C. Durant as principal and Griswold and S. D.
Bradford as his sureties. It was heard upon bill, answer, and
proofs, and the bill was dismissed.
The action at law, No. 53, was brought by the appellees against
Griswold upon the above bond in one of the courts of Rhode Island,
and was removed upon his petition to the Circuit Court of the
United States for the District of Rhode Island, where a judgment
was rendered against him for the sum of $66,470.
The other two cases, Nos. 51 and 52, were suits in equity
brought by Griswold, pending the action at law in the circuit
court, to obtain an injunction against its further prosecution. The
relief asked in each of those suits was denied and the bills were
dismissed.
All of the cases have their origin in a suit in equity brought
August 22, 1868, in the Supreme Court of Rhode Island, by Isaac P.
Hazard, of that state, against Thomas C. Durant, Oliver Ames,
Benjamin E. Bates, John Duff, Cornelius S. Bushnell, Sidney Dillon,
Henry S. McComb, the Credit Mobilier of America, a Pennsylvania
corporation, and the Union Pacific Railroad Company, a corporation
created by acts of Congress. Hazard sued on behalf of himself and
all other stockholders in the first-named corporation who should
become parties to his bill. Durant, from an early date in 1864
until May 18, 1867, was President of the Credit Mobilier of
America, having, it
Page 141 U. S. 262
was alleged, to a great extent the management of its affairs and
the confidence of its directors and trustees as well as the control
of its finances and disbursements and of its treasurer, clerks, and
servants. The theory of the bill was that he had acquired a large
amount of the stock of the Credit Mobilier of America upon which
dividends had been paid in money and in the stock and bonds of the
Union Pacific Railroad Company, the amount of such bonds exceeding,
it was alleged, $700,000, and the amount of such stock of the
last-named corporation being nearly $2,000,000, and that the shares
of stock, bonds, and moneys, so received by him, belonged equitably
to the Credit Mobilier of America and its stockholders.
The bill alleged that Durant's pecuniary condition was
precarious; that he was, and for a long time had been, largely
engaged in hazardous speculations and financial operations,
sustaining thereby heavy losses, and liable to sustain others; that
any recovery against him, it was feared, could not be enforced by
execution or the ordinary process of law. that he was "about to
depart out of the state, and out of the jurisdiction of this
Court," and that the defendants -- the individual defendants being
sued as trustees in a certain contract with the Union Pacific
Railroad Company, the profits of which belonged to the Credit
Mobilier of America and its stockholders -- "though requested so to
do," had wholly neglected and refused to take any steps to compel
him to account for said moneys, stocks, and bonds, so received and
improperly appropriated.
The principal relief asked was that Durant be required to pay
over and deliver to the Credit Mobilier of America and the
plaintiff Hazard such sums of money and shares of stock as should
appear upon an accounting to be justly due or belonging to that
corporation and to Hazard, and to make such transfer of the stock
and bonds as would fully protect its and his rights in the
premises; that the amounts ascertained to be due be adjudged a lien
upon the shares in the stock of each of said corporations owned or
held by or standing in the name of Durant, as well as upon the
above contract assigned to the
Page 141 U. S. 263
defendant trustees and the dividends, earnings, stocks, and
bonds received or to be received by virtue of that contract, to the
extent of the shares to which Durant might be entitled under it,
and that, on default in the payment and delivery of the moneys,
stocks, and bonds so found due, all such stocks and bonds be sold
under the direction of the court or otherwise transferred and
apportioned equitably among the rightful owners and claimants
thereof, and that such stock, bonds, moneys, interest, and rights,
so procured by Durant, be deemed and taken as the rightful property
of the Credit Mobilier of America and its stockholders. The bill
prayed that Durant be restrained from departing out of the state
and out of the jurisdiction of the court by writ of
ne
exeat issued under its seal and by its order.
A writ of
ne exeat was ordered to be issued, August 22,
1868, for $53,735. It was in these words:
"Whereas, it is represented to our supreme court, sitting in
equity, on the part of Isaac P. Hazard and others, complainants,
against Thomas C. Durant and others, defendants, that said Thomas
C. Durant is greatly indebted to the said complainant, and designs
quickly to go into other parts beyond this state (as by oath made
in that behalf appears), which tends to the great prejudice and
damage of the said complainants: therefore, in order to prevent
this injustice, we hereby command you that you do, without delay,
cause the said Thomas C. Durant to come before you and give
sufficient bail or security, in the sum of fifty-three thousand
seven hundred and thirty-five dollars, that he, said Thomas C.
Durant, will not go, or attempt to go, into parts beyond this state
without the leave of our said court, and in case the said Thomas C.
Durant shall refuse to give such bail or security, then you are to
commit him, the said Durant, to our county jail, in your precinct,
there to be kept in safe custody until he shall do it of his own
accord, and when you shall have taken such security you are
forthwith to make and return a certificate thereof to our said
court, distinctly and plainly, under your hand, together with this
writ."
Durant was arrested under this writ on the night of August
Page 141 U. S. 264
22, 1868, and on the 24th he executed, with Griswold and
Bradford, as his sureties, the following bond, drawn by one of
Hazard's attorneys:
"Know all men that we, Thomas C. Durant, as principal, and John
N. A. Griswold and S. Dexter Bradford, as sureties, are firmly
bound to Isaac P. Hazard, Rowland Hazard, Rowland G. Hazard,
Elizabeth Hazard, Elizabeth Hazard, trustee, Anna Hazard, Mary P.
Hazard, Lydia Torrey, Sophia Vernon, and Anna Horner in the sum of
fifty-three thousand seven hundred and thirty-five dollars, to be
paid said obligees, their executors, administrators, or assigns; to
which payment we bind ourselves, our several and respective heirs,
executors, and administrators, jointly and severally, hereby."
"Sealed with our seals and dated this 24th day of August, A.D.
1868."
"The condition of this obligation is that said Thomas C. Durant
shall on his part abide and perform the orders and decrees of the
Supreme Court of the State of Rhode Island in the suit in equity of
Isaac P. Hazard and others against said Thomas C. Durant and
others, now pending in said court within and for the County of
Newport."
This is the the bond above referred to.
Under the latter date, and presumably before the execution of
that bond, the attorneys of Hazard and Durant signed the following
agreement:
"In the above entitled case it is agreed that said Thomas C.
Durant shall file a bond, with surety in the penalty marked in the
writ of
ne exeat therein, to abide and perform the orders
and decrees of the court in said cause, and that thereupon the writ
of
ne exeat aforesaid shall be discharged, and that the
court may enter decree accordingly."
The court, under the same date, entered the following order:
"Thomas C. Durant, one of the defendants in this suit, having
executed and filed a bond, with sureties, to abide and perform the
orders and decrees of the court made in this suit, it is now, by
consent, ordered that the writ of
ne exeat heretofore
issued be discharged."
For some reason not explained, the writ of
ne exeat was
not returned to the clerk's office and filed until October 21,
1868. The sheriff made this return on the
Page 141 U. S. 265
writ:
"Newport, August 24, 1868. I caused the within-named Thomas C.
Durant personally to come before me, as within commanded, on the
22d day of this month, and now the writ is discharged by order of
court."
On the 2d day of December, 1882, more than fourteen years after
the commencement of Hazard's suit, it was ordered, adjudged, and
decreed in that suit, among other things, as follows:
"Second. That the defendant Thomas C. Durant is accountable for
and do, within 90 days from the date hereof, pay the sum of
$16,071,659.97, with interest from this date, the said sum, with
interest thereon, to be deposited in the registry of this court, or
be paid, in the first instance, to Rowland Hazard, of South
Kingston, in said state, and Henry Martin, of Brooklyn, in the
State of New York, who are hereby appointed special commissioners,
with authority, jointly and severally, to collect and receive the
same, and with power to take such steps to collect the same as may
be necessary and according to law, and said fund, or so much
thereof as may be collected by process or otherwise, is hereby
directed to be paid and deposited in the registry of this court to
the credit of this cause."
"Third. Of the aforesaid total sum of $16,071,659.97, the
defendant Thomas C. Durant is hereby allowed and is decreed to be
entitled to pay and discharge $8,816,232.93, or any part thereof
pro tanto, by transferring and delivering stock of the
Union Pacific Railroad Company and first mortgage and sinking fund
bonds of said company, as per statement 'G,' now exhibited to the
court, and directed to be filed in this cause, with all dividends
which may have been collected or received by said defendant or his
assigns after the date of this decree, together with interest on
the same to the date of payment thereof by said defendant, the
certificates of said stock, with transfers thereof, and the said
bonds to be delivered to the said Rowland Hazard and Henry Martin,
who are hereby appointed special commissioners to receive the same,
and who are hereby authorized and directed to sell the same, or
such portions thereof as may be delivered to them from time to
Page 141 U. S. 266
time as they are secured at public auction, and receive the
proceeds thereof, and, after deducting the costs and charges of
such sales, deposit the same in the registry of this court to the
credit of this cause:
provided, however, that the said
privilege herein granted to the said defendant Thomas C. Durant to
transfer and deliver said stocks and bonds in partial discharge and
payment of the sum hereinbefore decreed to be paid by him be
exercised by him within thirty days from the date of the entering
this decree, and that, in default of such transfer and delivery or
of the transfer and delivery of the entire amount of said stock and
bonds within the said thirty days, the obligation of the defendant
Thomas C. Durant to pay the said proportion of the said sum or of
the residue of the same, after deducting the amount of such stocks
and bonds as may be delivered, as aforesaid at their face value,
shall become, and is hereby declared to be, absolute,
and
provided further, nevertheless, that the said option or
privilege of the said Thomas C. Durant shall not interfere in any
manner with any order or decree in the cause touching the transfer,
delivery, sale, or other disposition of said stock and bonds."
"Fourth. The defendant Thomas C. Durant is likewise ordered and
directed to transfer and deliver, within thirty days from the date
hereof, five thousand seven hundred and seven 45/100 (5,707 45/100)
shares of the stock of the Credit Mobilier of America, which stock
has been found by the master to have been purchased with the funds
of the Credit Mobilier and which stock, with any dividends or
profits accrued or to accrue on the same, is hereby declared to be
the property of said corporation, subject to the decrees and orders
in this cause, with any interest, dividends, rights, benefits, and
profits which may have accrued to the said Thomas C. Durant as the
holder of the said 5,707 45/100 shares of stock, or any part
thereof, and not hereinbefore charged against him, said transfer
and delivery to be made to the said Rowland Hazard and Henry
Martin, or either of them, as special commissioners, with power,
which is hereby granted to said commissioners, forthwith to take
such measures, by suit or suits in their own names, or
Page 141 U. S. 267
otherwise, as they may be advised is lawful and necessary to
enforce such transfer, collection, or delivery, and said stocks to
be held by said commissioners subject to the further order of the
court in this cause."
"Fifth. All interlocutory injunctions heretofore made in this
cause, so far as consistent with this decree, are declared to be
and are hereby made perpetual, and the further consideration of the
cause, and particularly as to allowances to the complainants for
costs, expenses, and services, and as to the distribution of the
funds that may be deposited in the registry of the court to the
credit of the cause, and also the consideration of any order or
decree which may be necessary in the premises against the defendant
Thomas C. Durant by reason of any default which may be made by him
touching any portion of this decree, and also the consideration of
any other and further decree herein against or concerning the
defendants other than the said Thomas C. Durant, be, and they
hereby are, directed to stand over, with leave to any party in
interest, save parties in contempt or parties who may appear to be
for any other cause disqualified, to apply at any time for further
orders and directions."
The bill in case No. 50 was filed September 13, 1881. That suit
proceeds upon these grounds: that the bond of August 24, 1868,
whereby Griswold became bound as one of the sureties of Durant that
the latter should
"on his part abide and perform the orders and decrees of the
Supreme Court of the State of Rhode Island in the suit in equity of
Isaac P. Hazard and others against said Thomas C. Durant and
others, now [then] pending in said court,"
was obtained by fraud, and by concealment from him of facts he
was entitled to have communicated to him before he assumed the
obligations imposed by that instrument; that he intended to sign,
and believed at the time, that he signed, a bond which simply bound
him for the appearance of Durant, so that he should be personally
amenable to the process and orders of the court in the suit brought
by Hazard; that the execution of the bond in question was the
result of mistake; that the agreement whereby, upon the execution
by Durant of a bond, the writ of
Page 141 U. S. 268
ne exeat was to be discharged, was made without his
knowledge or consent, as was also the order of court in pursuance
of such agreement, and was in derogation of his rights; that his
purpose to become surety only for Durant's appearance to answer the
process of the court was well known at the time to the plaintiff
and his attorneys, who prepared, and supervised the execution of,
the bond, and that the writ of
ne exeat was sued out upon
the ground that Durant was about to depart from the state, when in
fact he only contemplated coming to the state.
Protesting that the legal effect of the bond was that he should
be responsible only for the appearance of Durant so as to be
subject to the process of the court in the Hazard suit, and
averring his willingness to execute a proper
ne exeat
bond, he prayed that the bond in question be set aside as having
been obtained by fraud, imposition, and mistake, or reformed, as
indicated, and that the defendants be restrained by injunction from
enforcing it in its present shape.
The answers of the defendants put in issue the material
allegations of the bill. The plaintiff filed a replication, and
proofs being taken, and the cause heard, the bill, as already
stated, was dismissed. 26 F. 135.
The action at law, being case No. 53, was commenced March 3,
1883, in one of the courts of Rhode Island, and was removed, upon
Griswold's application, to the circuit court of the United States.
The declaration set out the bond of August 24, 1868, alleged that
Bradford, one of the sureties thereon, was dead, and that Durant
had not kept its condition, in that he had not performed the above
decree of December 2, 1882, in the equity suit brought by Hazard,
whereby the plaintiffs Rowland Hazard, Rowland G. Hazard, Anna
Hazard, and Lydia Torry were entitled to have and demand of him the
amount of said bond, $53,735. A copy of that decree was made an
exhibit in the declaration. The defendant Griswold filed ten pleas,
each of which was in bar of the action. One of the pleas ma e a
copy of the proceedings in Hazard's suit a part of it. Demurrers
and replications were filed to the
Page 141 U. S. 269
pleas, those to the second, third, fourth, fifth, and seventh
pleas being special demurrers. By an order entered July 1, 1884,
the demurrers were sustained to the second, third, fourth, fifth,
and seventh pleas, the opinion of the court being delivered by MR.
JUSTICE GRAY. 21 F. 178.
Pursuant to a stipulation of counsel, dated November 26, 1883,
that the plaintiff might demur specially to the second, third,
fourth, fifth, and seventh pleas, and, in case the demurrers were
overruled, reply to those pleas as if no demurrers had been filed,
and that amended pleas, if desired, might be filed by the
defendant, and in obedience to the order of court requiring the
amended pleas to be filed on or before October 15, 1884, the
defendant, on the 14th of October, 1884, filed amended third,
fourth, fifth, and seventh pleas. The case was subsequently heard
on a motion by plaintiff, made November 19, 1884, that the amended
pleas be stricken out, and on the 30th of March, 1885, this order
was made: "Plaintiff's motion to strike amended pleas from the
files is granted." Certain stipulations were made between counsel;
among others, one to the effect
"that the plaintiffs were able to prove under the decree of the
Supreme Court of Rhode Island, in the equity suit brought by
Hazard, an amount of damage in excess of the penal sum of the bond
declared on in this suit."
A jury having been waived in writing, the court gave judgment,
as of February 12, 1887, against Griswold, for $66,470.
The suit in equity No. 51 was brought June 12, 1885. The bill in
that case, after referring to the suit in equity brought by Isaac
P. Hazard in 1868, showed that, on the 17th of November, 1875,
Rowland G. Hazard commenced a suit in equity in one of the courts
of Pennsylvania, against the Credit Mobilier of America and others,
which was subsequently removed to the Circuit Court of the United
States for the Eastern District of Pennsylvania, that being the
domicile of the corporation; that in such suit Oliver Ames was
appointed receiver of all the goods, chattels, rights, and effects
of the corporation, and was authorized by the court in Pennsylvania
to deliver to Durant a deed of release from all actions, causes of
action, suits, bills, bonds, writings obligatory, debts, dues,
duties, reckonings, accounts, sums of money, judgments,
executions,
Page 141 U. S. 270
extents, quarrels, controversies, trespasses, damages, and
demands whatever, both in law or equity, which the Credit Mobilier
of America then had or might at any time thereafter have, claim,
allege, or demand, against said Durant, for or by reason or means
of any matter, cause, or thing whatever; that afterwards, on the
27th day of October, 1881, Ames, under the said authority, and in
consideration of the execution by Durant of a deed conveying the
title to certain lands mentioned in the order of court authorizing
the release, delivered to the latter a deed of release, of the kind
above indicated, of all sums of money then due or owing to, or
thereafter to become due to, said corporation; that the above
equity suit in the Supreme Court of Rhode Island was, and had been,
wholly controlled by Rowland G. Hazard; that notwithstanding the
delivery of the above deed to Durant, the latter suit was proceeded
with, and the Supreme Court of Rhode Island rendered a decree
refusing to allow him to set it up as a bar to the entering of such
decree on the ground that he was in contempt of that court for
violation of one of its decrees rendered therein, and that after
the delivery of the deed of release to Durant, the plaintiff
requested the defendants to surrender the bond of August 24, 1868,
and to abstain from suing him thereon, but they refused to comply
with that request. The relief asked was an injunction restraining
the defendants from further proceeding in the action at law. Upon a
hearing before Judges Colt and Carpenter, a demurred to the bill
was sustained, and the bill dismissed, October 28, 1886, Judge
Carpenter delivering the opinion of the court. 28 F. 597.
The bill in case No. 52 was filed June 12, 1885. It assailed the
jurisdiction of the Supreme Court of Rhode Island over the subject
matter of the suit in equity brought by Hazard upon the ground that
before bringing it, neither the plaintiff therein, Isaac P. Hazard,
nor any other stockholder of the Credit Mobilier of America,
requested the managing committee of the board of directors or the
stockholders of that corporation to begin legal or equitable
proceedings against Durant. The cause was heard upon demurrer
before Judges Colt and
Page 141 U. S. 271
Carpenter. The demurrer was sustained and the bill dismissed,
the opinion of the circuit court being delivered by Judge
Carpenter. 28 F. 578.
Page 141 U. S. 274
MR. JUSTICE HARLAN, after stating the facts in the foregoing
language, delivered the opinion of the Court.
Page 141 U. S. 275
These four cases are so closely connected in their facts, as
well as in the questions of law presented for determination, that
it is convenient to dispose of them by one opinion.
Our attention will be directed first to case No. 50, in which a
decree is sought to cancel, or, in the alternative, to reform, the
bond of August 24, 1868, executed by Durant as principal, and by
Griswold and Bradford as sureties, and to restrain the defendants
from suing upon it in its present form. The granting or refusing of
such a decree depends, of course, upon the inquiry whether the
plaintiff Griswold has, by evidence sufficiently clear and
convincing, manifested his right to the relief asked.
While in respect to some matters there is a conflict among the
witnesses, certain facts and circumstances are clearly established,
and may be summarized as follows: Durant, in August, 1868, was a
citizen and resident of New York. He went to New port for a brief
stay, and was there on the morning of Saturday, August 22. About
noon of that day, the suit in which the writ of
ne exeat
issued was commenced against him. He was then sailing, with several
friends, in his yacht on the high seas. The yacht landed at the
Newport wharf shortly before eleven o'clock at night. Upon his
stepping ashore, he was notified by two officers, who had kept
continuous watch for him at the wharf during the afternoon, that
they had a writ for his arrest -- meaning the above writ of
ne
exeat -- and that he must go to jail. He accompanied them to
that place, one of the counsel of Hazard, Mr. Peckham, following on
foot to the sheriff's office. Information of the arrest having been
communicated to Mr. H. W. Gray, also a citizen of New York,
temporarily at Newport, that gentleman went to Griswold, who was
his uncle, and begged the latter to go to the jail and become bail
for Durant's appearance. Griswold had only a slight acquaintance
with Durant, never having met him until the spring of 1868, and
held no personal or business relations of any kind with him. To
oblige his nephew, who was Durant's friend , and merely as an act
of kindness and courtesy to a stranger -- Griswold then resided in
Newport -- he acceded to the request to become bail for Durant's
appearance in court,
Page 141 U. S. 276
and for that purpose only went to the jail. Hazard learned a
little before eleven o'clock that Durant had been arrested as he
landed from his yacht, and that owing to the lateness of the hour,
the sheriff had taken him directly to jail instead of his own
office, "as had been previously arranged." He went immediately to
the lodgings of one of his attorneys, Mr. Bradley, and caused him
"to go and see what could be done to prevent Durant from remaining
in jail over Sunday," authorizing his attorney to use his name
"for the purpose of releasing said Durant from jail until
Monday, it being regarded as very doubtful whether Durant in the
short time then remaining before Sunday, would be able to provide
the necessary bonds."
Shortly after Griswold, accompanied by Gray reached the jail,
the two counsel of Hazard, namely, Bradley and Peckham, arrived
there, and a few moments later Governor Van Zandt came in obedience
to a message from Durant, conveyed by Bradford, to act as his
counsel. Hazard, it seems, did not accompany his counsel to the
jail. It was now nearly twelve o'clock. All who were at the jail
agree that they were there only because of the arrest of Durant
under a writ commanding the sheriff to take bail from him, in the
sum of $53,735, that he would not go or attempt to go into parts
beyond the state without the leave of the court, and, if such bail
were not given, to commit him to and keep him in jail until he gave
bail of his own accord; and, such security being taken, the officer
was required by the writ to return a certificate thereof to the
court. There is no claim that anyone present was ignorant of the
terms of the writ or of the extent of the authority of the officer
charged with its execution. It is further agreed by all the
witnesses that there was a conversation at the jail between the
lawyers and Durant as to what could be done in order to effect the
latter's release. But in this discussion or conversation Griswold
took no part whatever. That much is distinctly stated by Peckham,
one of Hazard's attorneys who drew the bond and supervised the
execution of the writ of
ne exeat, although he says that
the sureties could not "help hearing, if they paid any attention."
It is equally beyond dispute that
Page 141 U. S. 277
the object of Griswold's presence at the jail was well known to
Hazard's attorneys.
Just here arises the difference among the witnesses as to what
took place at the jail. Detailing what occurred according to his
recollection at that place, Peckham says:
"When I got to the jail, I found there Judge Bradley, who had
only preceded me there by a minute or two; Mr. Durant; Charles C.
Van Zandt, his counsel; Mr. Griswold; Dexter Bradford, and a
stranger, who was, I presume, Mr. Gray. Mr. Van Zandt and Judge
Bradley were already talking about the release of Mr. Durant from
custody. Judge Bradley said: 'That is a simple matter. Let him give
the bond called for by the writ.' The nature of that bond was
briefly explained. Mr. Durant said that it was out of the question
for him to give it; that he couldn't remain any longer in Rhode
Island; that his presence was absolutely demanded outside of the
state, and forthwith, and that he must leave here Monday morning.
It was suggested that he might file his answer, and apply for the
discharge of the writ immediately, but he said, 'I know what
proceedings in court are, and I can't remain here at all.' It was
then proposed that he should give a bond in the same amount marked
in the two writs in the two cases, conditioned to abide and perform
whatever decrees the court might make against him in those suits.
The nature of these proposed bonds was freely discussed by Judge
Bradley, Mr. Van Zandt, and Mr. Durant, and the fact that they were
bonds which would hold the principal and sureties liable to pay
money in case Durant should not perform any decree made by the
court was commented on by Mr. Van Zandt and Mr. Durant. During all
this interview, Judge Bradley did all the talking for the
complainants, and Mr. Van Zandt and Mr. Durant spoke about equally
for their side."
The same witness states:
"Mr. Van Zandt having conferred with Mr. Durant, and those two
having conferred with the sureties -- I mean Mr. Griswold and Mr.
Bradford -- Mr. Van Zandt then announced that they would give the
bonds proposed. As it was then very late, it was further agreed
that all should meet at my office on the following Monday morning,
soon after midnight,
Page 141 U. S. 278
and execute the papers. Besides these bonds, it was also agreed
that the respective counsel should sign an agreement that upon the
bonds' being executed, the writs of
ne exeat should be
absolutely discharged. Just at the close of the interview, Judge
Bradley addressed himself to all present, saying that he wished to
make sure that all understood the arrangement alike, and he stated
that Mr. Durant was to give bonds, with Mr. Griswold and Mr.
Bradford as sureties, in the sums marked in the writs, to abide and
perform all the decrees of the court in the suit; that counsel
should sign agreements for the discharge of the writs; that all
should meet at my office soon after midnight Monday morning and
sign the papers; that in the meantime Mr. Durant would go free from
custody upon his word of honor, and he appealed to the sureties,
saying: 'We rely upon you, gentlemen, to see that he attends.' We
then separated. I prepared the papers, and had them lying upon my
table when we met, pursuant to the arrangement. They were read. Mr.
Griswold took an active part at this meeting, and, I think, read
the papers for himself. The papers were signed without any
objection or discussion at that time. Probably we were not together
at my office more than ten minutes."
Referring to the interview at the jail, Bradley testified that
nothing was said, to the best of his recollection and belief, by
anyone conveying the idea that the complainants were to obtain from
the defendant only a bail bond for his appearance, and that
"the terms of the bond were expressed so as to exclude the idea
that it was merely a bail for appearance, and to provide that it
should be a bond to abide and perform the order of the court."
He further said that the bond "was to be a security," and it was
so announced. In all material respects, his evidence was in accord
with the recollection of Peckham.
But there was other evidence which precludes our accepting the
version of the affair given by those gentlemen. Gray, Griswold,
Durant, and Van Zandt, with more or less distinctness, but all
emphatically, state that neither at the jail Saturday night nor at
the meeting before daylight on Monday morning was there a hint,
suggestion, or proposition in any
Page 141 U. S. 279
form that Durant should give bond, with sureties, conditioned
that he would abide and
perform the decrees that might be
rendered in the Hazard suit, or that any bond was talked of except
one that would make the sureties responsible simply for his
appearance in the state, so as to be subject to the orders and
process of the court. Gov. Van Zandt testifies, touching the
meeting at the jail:
"It was proposed by Judge Bradley that Dr. Durant should give
bond, with two sureties, which should be substituted for the writ
and the writ withdrawn. I then understood from the conversation
that the bond was in the nature of a bail bond, and that when the
sureties delivered Dr. Durant into the custody of the court, to
either perform its orders and decrees personally or to suffer such
penalties personally as the court might impose, they would comply
with the conditions of the bond. Nothing was said in my presence by
any person inconsistent with these views."
Again, referring to what took place at the time the bond was
actually signed, the same witness says:
"A bond, prepared by Messrs. Peckham and Bradley, was handed to
me as counsel for Mr. Durant; there was some little discussion as
to whether it should be made to the sheriff of Newport County or to
the complainants in the then suit. Judge Bradley preferred the
latter, and it was so done. I told Mr. Durant that in my opinion it
was a proper bond to secure his appearance in the suit, and the
bond was then executed. . . . I heard nothing said by Judge Bradley
or Mr. Peckham except what I have already stated; I myself told Mr.
Durant that in my opinion, the instrument was in effect a bail
bond."
Further:
"There was nothing said or intimated by any person in my
presence or hearing on that occasion to indicate that the bond was
a security instead of a surety."
The statements of Gov. Van Zandt are fully sustained by the
depositions of Gray Griswold, and Durant.
In view of this great preponderance of evidence upon the side of
the plaintiff as to what occurred at the jail before the separation
of the parties to meet Monday morning for the consummation of the
business, the court is not at liberty to accept the account given
by the defendants' attorneys of
Page 141 U. S. 280
the interview of Saturday night. And we have a strong conviction
that the recollection of Griswold, Gray, Durant, and Van Zandt, as
to that interview is sustained by all the inherent probabilities of
the case. And in saying this we would not be understood as
reflecting upon the integrity of Hazard's attorneys. The difference
in the recollection of gentlemen in respect to transactions in
which they took part often happens without any reason to suspect
that any of them would intentionally deviate from the line of
absolute truth. Such differences existing, the Court can only be
guided by the weight of the evidence where the witnesses are
intelligent, of equal credibility, and had equal opportunities to
know what occurred. In the first place, it is not at all probable
that Griswold would have executed the bond in question as surety if
he had been informed or believed that it bound him absolutely,
within the amount specified in such bond, for the payment of any
sum adjudged against Durant -- almost an entire stranger to him. In
the next place, we cannot suppose that the counsel who went to the
jail to represent the interests of Hazard had any other purpose in
going there except to see that that was substantially accomplished
which the writ of
ne exeat authorized -- namely the
obtaining of bail that would prevent Durant's departure from the
state without the leave of the court, and thus have him at all
times, pending Hazard's suit, subject to its rightful power in
respect to any decree to be rendered. That was evidently Bradley's
purpose, for, according to Peckham's evidence, he suggested that
Durant could effect his release by executing the bond specified in
the writ. But when the nature of such a bond was explained and it
appeared that the necessity for Durant's being out of the state on
Monday rendered that course entirely impracticable, the latter was
then informed -- according to the evidence of Peckham -- that he
could file an answer and apply for the discharge of the writ
immediately. What was meant by this suggestion? It could have meant
but one thing -- namely that it was in the power of Durant to
obtain, without objection, if not of right, a discharge of the
writ, after answering, by executing a bond of some kind. A party
arrested
Page 141 U. S. 281
upon
ne exeat may obtain the discharge of the writ,
upon motion or petition, and after notice, and according to some
authorities,
"it is a matter of course to order the
ne exeat to be
discharged upon the defendant's giving security to answer the
complainant's bill and to render himself amenable to the process of
the court pending the litigation and to such process as may be
issued to compel a performance of the final decree. . . . Or, where
the defendant cannot procure such security as will satisfy the
sheriff, or if he wishes to leave the state before the termination
of the suit, he may apply to the court to discharge the
ne
exeat upon his giving proper security to answer and be
amenable to process, and upon such application the court will take
such security as it may deem sufficient, and will discharge the
sheriff from liability."
2 Barb.Pr. 655-656;
Mitchell v. Bunch, 2 Paige 606,
621;
Brayton v. Smith, 6 Paige 489, 491;
McNamara v.
Dwyer, 7 Paige 239, 244.
See also Jacob's Law Dict.
Title "Ne Exeat Regno;"
Johnson v. Clendenin, 5 G. &
J. 463, 481. In
In re Griswold, 13 R.I. 126, determined
September 20, 1880, Griswold, by petition, sought to be discharged
from the bond in question on his principal's placing himself within
the jurisdiction of the court and subject to its orders and
decrees. He seems to have proceeded in that case upon the ground
that he was entitled of right to the order of discharge asked. But
the Supreme Court of Rhode Island did not accept that view,
observing that it could not regard "a bond to abide and perform the
decree as equivalent merely to a bond to abide the event of the
suit." To do so, the court said, would be to ignore wholly the word
"perform" contained in the bond, which, upon its face, appeared to
be given by agreement of the parties. While it was there said, and
properly, that the court may require as a condition of the
discharge of a writ of
ne exeat that the respondent give
security to perform the decree, citing
Robertson v.
Wilkie, Amb. 177, and
Atkinson v. Leonard, 3 Bro.C.C.
218, it was conceded that "courts will generally discharge a writ
of
ne exeat upon the respondents giving security to abide
the decree on the hearing of the suit." If Durant had remained in
Newport, and, upon filing his answer, had applied
Page 141 U. S. 282
for the discharge of the writ of
ne exeat upon his
giving bond with security simply to abide the decree, and place
himself, when required, within the jurisdiction of the court, it is
inconceivable that the state court would, under the circumstances,
have denied his application. But it was further said in that case
-- and this is quite significant in its bearing upon another
question to be presently adverted to -- that
"even if the bond in question was to be considered as having no
other effect than a bond to abide the decree made upon hearing the
cause, the petition could not be granted in the present stage of
the proceedings. No final decree in the cause has yet been
reached."
As, therefore, Durant could have filed his answer, and,
conformably to the general rule, have obtained a discharge of the
writ upon giving bond, with surety, that he would be amenable to
the orders and process of the court, as he could not, consistently
with his engagements, remain in Rhode Island long enough to have an
answer prepared, and to move for the discharge of the writ, upon
sufficient bond to be by him given, and as Hazard and his counsel
expressed a desire that Durant should not be held in custody over
Sunday, what more natural and equitable than that the parties
should, by consent, bring about that which Durant must have
understood from Bradley that he could accomplish, through the
orders of the court -- namely have a bond executed with surety
compelling his presence in the state when required by the orders of
the court, or subjecting his sureties to personal liability if he
did not render himself amenable to its process. If the suggestion
that Durant could file his answer and apply to the court for the
discharge of the writ -- of course, upon bond securing his
amenability to the process of the court -- had been adopted, the
plaintiff would not have obtained a bond making the surety
absolutely responsible, within the penal sum named in the writ and
bond, for a money decree against Durant. It is therefore
unreasonable to suppose that the parties separated Saturday night
under an agreement that Hazard should have from Durant a bond that
would subject his sureties to a larger responsibility than was
involved in the suggestion made that
Page 141 U. S. 283
Durant could obtain an order of court for the discharge of the
writ. On the contrary, it is more reasonable to suppose that the
bond which, on Saturday night, was agreed to be executed on the
next Monday morning, was one that would accomplish, by agreement of
parties, precisely what Hazard's attorney suggested that Durant
might accomplish by an order of court. The agreement of the parties
was thus made to take the place of an order of court, because
Durant assured Hazard's attorneys that he could not remain in
Newport long enough to make a formal application for the discharge
of the writ upon a proper bond.
We are of opinion that although the condition of the bond in
question was that Durant should "abide and perform the orders and
decrees" of the court in suit in which it was given, all the
parties, according to the decided preponderance of evidence,
intended to at the time, as an instrument binding the sureties for
the appearance of the principal so as to be amenable to the process
and decrees of the court, upon default in which, and not before,
were they to be liable to pay the penalty. If the bond means, in
law, more than that -- and counsel in this Court agree that it does
-- the case is one of a mutual mistake, clearly established, as to
the legal effect of the instrument. There was no mistake as to the
mere words of the bond, for it was drawn by one of Hazard's
attorneys, and was read by Griswold before signing it. But
according to the great weight of the evidence, there was a mistake
on both sides as to the legal import of the terms employed to give
effect to the mutual agreement. In short, the instrument does not
express the thought and intention which the parties had at the time
of its execution. And this mistake was attended by circumstances
that render it inequitable for the obligees in the bond to take
advantage of it. The instrument was drawn by one of Hazard's
attorneys, and was present and accepted as embodying the agreement
previously reached. Griswold was unskilled in the law, and took the
word "perform" as implying performance in the sense of Durant's
becoming amenable to the process of the court. He had no reason --
unless the recollection of Gray Durant, Van
Page 141 U. S. 284
Zandt, and himself as to what occurred is wholly at fault -- to
doubt that the bond expressed the real agreement, especially if he
heard Van Zandt's statement to Durant, when the latter was about to
sign the bond, that it "was, in effect, a bail bond." A court of
equity ought not to allow that mistake, satisfactorily established
and thus caused, to stand uncorrected, and thereby subject a surety
to liability he did not intend to assume, and which, according to
the decided preponderance of the evidence, there was at the time no
purpose to impose upon him. While it is laid down that "a mere
mistake of law, stripped of all other circumstances, constitutes no
ground for the reformation of written contracts," yet
"the rule that an admitted or clearly established
misapprehension of the law does create a basis for the interference
of courts of equity, resting on discretion and to be exercised only
in the most unquestionable and flagrant cases, is certainly more in
consonance with the best-considered and best-reasoned cases upon
this point both English and American."
Snell v. Insurance Co., 98 U. S.
85,
98 U. S. 90-92; 1
Story, Eq.Jur. (Redf. ed.) §§ 138e, 138f;
Stockbridge Iron Co.
v. Hudson Iron Co., 102 Mass. 45, 48;
Underwood v.
Brockman, 4 Dana 309, 316;
Jones v. Clifford, 3 Ch.D.
779, 791-792;
Canedy v. Marcy, 13 Gray 373, 377;
Green
v. Morris & Essex Railroad Co., 12 N.J.Eq. 165, 170,
Beardsley v. Knight, 10 Vt. 185, 190;
State v.
Paup, 13 Ark. 129; 2 Leading Cases in Eq. pt. 1, 979-984; 2
Pomeroy's Eq. Jur. §§ 843-847.
The conclusion reached upon this branch of the case is the only
one consistent with fair dealing toward those who were willing to
become sureties for the appearance of Durant. If it be not
justified upon the ground of mistake as to the mutual agreement,
superinduced by the conduct of the party seeking now to take
advantage of it, there could be no escape from the conclusion that
the taking of a bond that made Griswold absolutely liable as
surety, or any amount adjudged to be due from Durant, and not
greater than the penal sum named, was, under all the circumstances
disclosed, a fraud in law upon him. If the attorneys of Hazard
intended to obtain, by means of a bond, more than he was entitled
to by such a bond as the writ
Page 141 U. S. 285
of
ne exeat called for, and more than the court would
ordinarily have given them, upon Durant's application to discharge
the writ; if they intended to secure a bond that would make
Griswold personally liable, within the penal sum, for any money
decree passed against Durant, then a fraud was perpetrated upon him
which entitles him to relief, for, according to the decided
preponderance of the evidence, it must be assumed that Hazard's
attorneys knew that he signed the bond in the belief that, pursuant
to the previous understanding, it was one to secure Durant's
appearance, nothing more, and yet they failed to inform him at the
time, that it was drawn so as to impose upon him a much larger
responsibility. Their silence upon that question was, under the
circumstances, equivalent to a direct affirmation that the bond
meant what Griswold supposed it did. In view of what passed at the
jail on Saturday night, their duty was by sufficient explanation to
correct the misapprehension under which he evidently labored.
Besides, there can be no doubt under the evidence that the
agreement to discharge the writ was reached without consultation
with Griswold. No one of the witnesses states that he was consulted
about that matter, or that he was informed as to the legal result
of an agreement or order to discharge the writ. He testifies that
he knew nothing of any such agreement. So that while Hazard's
attorney, according to his evidence, was preparing a bond that
would bind Griswold absolutely to pay any decree, not in excess of
$53,735, that might be rendered against one who was almost a
stranger to him, and who, Hazard stated in his bill, was then
engaged in hazardous speculations, and was in a precarious
condition pecuniarily, he was, as the representative of Hazard,
under an agreement with Durant, of which Griswold had no knowledge,
that the writ of
ne exeat should be discharged, thus
compelling the surety to risk the insolvency of the principal and,
putting it out of his power, for his own protection, to surrender
the principal and obtain the cancellation of the bond, as, in that
case, the surety might have been done, if the bond had been, as he
supposed it was, one simply for the appearance of Durant. The
concealment of this agreement from Griswold
Page 141 U. S. 286
was, under the circumstances, a wrong to him. "The contract of
suretyship," says Mr. Story,
"imports entire good faith and confidence between the parties in
regard to the whole transaction. Any concealment of material facts,
or any express or implied misrepresentation of such facts, or any
undue advantage taken of the surety by the creditor, either by
surprise or by withholding proper information, will undoubtedly
furnish a sufficient ground to invalidate the contract."
Again:
"If a party taking a guaranty from a surety conceals from him
facts which go to increase his risk, and suffers him to enter into
the contract under false impressions as to the real state of the
facts, such a concealment will amount to a fraud, because the party
is bound to make the disclosure."
1 Story's Eq.Jur. §§ 324, 215. To the same effect are
Franklin Bank v. Cooper, 36 Me. 180, 196;
Smith v.
Bank of Scotland, 1 Dow, 272, 292;
Railton v.
Mathews, 10 Cl. & F. 934, 943;
Small v. Currie, 2
Drew. 102, 114;
Phillips v. Foxall, L.R. 7 Q.B. 666, 672;
Pidcock v. Bishop, 3 B. & C. 605; Adams' Equity 179.
But we do not rest our decision upon any ground of fraud in law or
fraud in fact. We acquit the attorneys of Hazard of any desire or
purpose to do injustice to Griswold or to commit a fraud upon him.
But we are constrained, by the settled rules of evidence, to hold,
as already indicated, that their recollection of the circumstances
under which the bond of August 24 was executed is materially at
fault, and that the alleged mistake is established by convincing
proof.
But it is said that Griswold was guilty of such laches in
seeking the relief now asked that he is not entitled to the aid of
a court of equity. This position is based principally upon what
Peckham says occurred between him and Griswold in the fall of the
year after the execution of the bond. Peckham testifies:
"About the last of October or the 1st of November, 1868, along
that time, I met Mr. Griswold on Thames Street, in Newport, near my
office. He spoke of this bond as if it were a bail bond. I
said,"
"No; it is a bond upon which you may be liable to pay money. If,
for example, the court should find a judgment against Durant for
any sum of money
Page 141 U. S. 287
and he did not pay it, you could be held for the amount named in
these bonds."
"He said, 'Well, I guess you are right, but I must see Durant
about it. He must do something about it.' I asked him, 'Why, he is
rich enough, isn't he?' and Mr. Griswold said, 'Yes; he is rich
enough, but he is reckless, and there is no telling how long such a
man may stay rich, and he must give me security.' I would like to
add here that I mentioned this to Mr. Honey last winter. Mr. Honey
said that he was confidant, from conversations he had had with his
client, Mr. Griswold, that Mr. Griswold had no recollection of any
such conversation with me, and I replied that if Mr. Griswold did
not recollect it, I should hesitate about swearing to it, and that
I did not think I would swear to it under those circumstances, and
that certainly I would not like to do so. Still I have felt bound
to state it here, upon further reflection, with these
explanations."
If this be a correct statement of what passed between Peckham
and Griswold upon the occasion referred to, it is significant as
showing that months after the bond was executed, Griswold spoke of
it as a bail bond. His declaration, after Peckham's explanation of
its terms, "I guess you are right," naturally meant no more than a
courteous acquiescence, without discussion, in the opinion
expressed by one learned in the law. Griswold, while recalling the
fact that he expressed to Peckham his belief that it was a bail
bond, denies explicitly that he, on that or any other occasion,
ever admitted that it was other than a bail bond.
Besides, there was no absolute necessity for Griswold's moving
in the matter until after some decree was passed against Durant and
until an attempt was made to hold him personally responsible for
the amount of the bond. He made an effort in
In re
Griswold, 13 R.I. 125, to be discharged from his bond upon the
principal's placing himself within the jurisdiction of the court.
But, as we have seen, the court, after declining to discharge the
bond, said that even if the bond in question was to be considered
as having no other effect than a bond to abide the decree made upon
hearing the cause, the petition for its discharge would not be
considered by it until a final decree was passed. The judgment in
that case
Page 141 U. S. 288
was passed September 30, 1880. Notwithstanding this
announcement, and doubtless because of the intimation that the bond
meant more in law than he supposed, Griswold commenced the present
suit
more than a year before the decree was rendered against
Durant, and before the action at law was brought on the bond.
Under the peculiar circumstances of this case, we think the defense
of laches is without substantial merit. Whether laches is to be
imputed to a party seeking the aid of a court of equity depends
upon the circumstances of the particular case. There are no
circumstances here that would justify a refusal to grant the relief
asked because of Griswold's delay in instituting suit to have the
bond cancelled or reformed.
In the view the court takes of this case, the proper decree to
make, if Durant were living, would be one reforming the bond of
August 24, 1868, so as to make Griswold liable for the penal sum
named only in the event that the principal failed to appear and
become subject to the orders and decrees of the court in the suit
in which the writ of
ne exeat was issued. But such a
decree would not now be appropriate. Under the circumstances, the
only decree that will accomplish the ends of substantial justice is
one perpetually enjoining the prosecution of any action, suit, or
proceeding to make him liable in any sum on or by reason of said
bond.
We come now to the action at law No. 53, in which there was a
judgment against Griswold on the bond of August 24, 1868, for the
sum of $66,470. It is assigned for error that the court sustained
the demurrers to the original second, third, fourth, and fifth
pleas, ordered the amended third, fourth, and fifth pleas to be
stricken from the files, and denied the defendant's motions at the
trial, for judgment on his eighth and ninth pleas. It has been
assumed in argument that the record in this case substantially
presents, among other questions, the following: 1. Whether the bond
of August 24, 1868, was not obtained by such fraud and concealment
as rendered it void as against Griswold. 2. Whether upon the face
of the record of the equity suit in which the order or decree of
December 2, 1882, was rendered the court was not without
Page 141 U. S. 289
jurisdiction of the subject matter of that suit, the essential
object of which, it is argued, was to administer the affairs, and
distribute the assets, of a Pennsylvania corporation by means of
decrees and orders of a court in Rhode Island. 3. Whether simple
duress operating only on the principal in the bond could be taken
advantage of by the surety. 4. Whether the plaintiffs,
notwithstanding the stipulation of Griswold's counsel at the trial
that they were able to prove, under the decree of December 2, 1882,
"an amount of damage in excess of the penal sum of the bond
declared on," could maintain an action on the bond for that or any
other sum, until it was ascertained and adjudged in Hazard's equity
suit, what distinct part, if any, of the $16,071,659.97 for which
Durant was adjudged by the Supreme Court of Rhode Island to be
accountable to the Credit Mobilier of America, actually belonged,
or would be ultimately awarded, to the obligees in the bond.
These questions have been argued by the counsel of the
respective parties with signal ability, and their importance is
recognized. But in view of the present condition of the record of
this case, it is not deemed best now to discuss them. The ground
upon which the court below ordered the amended pleas to be stricken
from the files does not appear. It may be that the motion was
treated as a formal demurrer,
Slocomb v. Powers, 10 R.I.
255, or was granted because, in the judgment of the court, the
amended pleas did not materially change the defense as presented in
the pleas to which special demurrers were sustained, and were not
therefore fairly embraced by the stipulation made by counsel for
their being filed. But in our judgment the amended pleas were much
broader, as well as more specific in their averments, than were the
original pleas, and the questions arising upon them could have been
more appropriately raised by demurrer.
Smith v. Carroll,
17 R.I., July 19, 1890. We are the more willing to make this
disposition of the case, because of the decision in case No. 50 in
respect to Griswold's liability upon the bond sued on. In view of
what has been there said, the discussion of the above questions
would seem to be unnecessary.
The demurrer to the bill in No. 51 was properly sustained.
Page 141 U. S. 290
The error, if any, committed by the Supreme Court of Rhode
Island in not allowing the release, executed to Durant by the
receiver in the Pennsylvania court of the Credit Mobilier of
America, to be interposed as a defense in the suit brought by
Hazard against Durant and others could not be corrected by bill in
equity filed by a surety on the bond of August 24th for the reason,
if there were no other, that the release was delivered prior to the
judgment in the state court constituting the basis of the action at
law on the bond.
The demurrer to the bill in case No. 52 was also properly
sustained. In that case, the validity of the proceedings in the
Supreme Court of Rhode Island, by Hazard against Durant and others,
was assailed upon the ground that the bill in that suit did not
sufficiently show that any effort had been made by Hazard, the
plaintiff therein, and who sued as stockholder, to procure
corporate action against Durant by the Credit Mobilier of America.
It is only necessary to say that this ground presents only a
question of mere error in the judgment of the state court, and does
not affect its jurisdiction.
The decree in suit No. 50 must be reversed, with directions
to enter a new decree perpetually enjoining the defendants therein,
and each of them, from prosecuting any suit, action, or proceeding,
against Griswold on the bond executed by him on the 24th of August,
1868, as one of the sureties of Thomas C. Durant; the decrees in
cases Nos. 51 and 52 must be affirmed, and the judgment in the
action at law No. 53 must be reversed with directions for further
proceedings not inconsistent with this opinion. Griswold is
entitled to his costs in this Court in cases 50 and 53, and the
appellees in the other cases are entitled titled to their costs
here as against Griswold. It is so ordered.
MR. JUSTICE BROWN, dissenting in No. 50.
I should have no hesitation in announcing my concurrence in the
opinion of the Court in this case did it not seem to me to involve
a disturbance of legal principles which I had supposed to be well
settled and confirmed by repeated decisions of this Court.
Page 141 U. S. 291
To entitle the plaintiff to a decree, he is bound to show either
mistake or fraud. I think he has failed to show either. There was
nothing unprecedented -- scarcely anything which could be called
unusual -- in the character of the obligation he assumed. The bond
was such a one as is proper to be given to obtain the discharge of
a defendant held upon a writ of
ne exeat. In treating of
this remedy, it is said in Daniel's Chancery Practice that
"by the terms of the writ, the sheriff is to cause the party,
personally, to come before him, and give sufficient bail or
security in the sum endorsed on the writ that he will not go, or
attempt to go, into parts beyond the seas without leave of the
court, and on his refusal he is to commit him to the next
prison."
It is also said that
"the court will discharge the writ upon merits whenever it
appears by the circumstances of the case, as disclosed by the
affidavits upon which it was granted and the answer of the
defendant either that the plaintiff has no case, or that the
defendant is not going out of the jurisdiction, and this it will do
either absolutely or conditionally -- that is, upon the defendant's
giving security to abide by and perform the decree of the
court."
3d Am. ed. 1814, 1817.
Howden v. Rogers, 1 Ves. &
Beames 129;
Atkinson v. Leonard, 3 Bro.C.C. 218;
Roddam v. Hetherington, 5 Ves. 92;
Parker v.
Parker, 12 N.J.Eq. 105;
McDonough v. Gaynor, 18
N.J.Eq. 249.
In New York, it seems also to be the proper practice to
discharge the writ upon the defendant's giving security to answer
the plaintiff's bill and to render himself amenable to the process
of the court pending the litigation.
Mitchell v. Bunch, 2
Paige 606;
McNamara v. Dwyer, 7 Paige 239.
The writ in this case required Durant to give sufficient bail or
security, in the sum of $53,735, "that he the said Thomas C.
Durant, will not go, of attempt to go, into parts beyond this
state, without the leave of our said court." Durant was unwilling
to give this security, because, as he said, it was imperatively
necessary for him to leave the state and be in New York on the next
Monday. It was therefore stipulated between his solicitor and that
of the plaintiff Hazard that he
Page 141 U. S. 292
should file a bond, with surety, in the penalty marked in the
writ of
ne exeat, "to abide by and perform the orders and
decrees of the court in said cause," and thereupon the writ of
ne exeat should be discharged. These are the exact terms
of the bond that was prepared and signed by the plaintiff. There is
some conflict as to what took place upon the interview on Saturday
night at which it was agreed that the bond should be given.
Plaintiff's witnesses assert that it was understood that a bond was
to be given for his appearance before the court when wanted. Upon
the other hand, defendant's witnesses, Judge Bradley and Mr.
Peckham, who, although outnumbered by the plaintiff's witnesses,
were men of the highest character, members of the legal profession,
and understanding thoroughly what they were about, swore that the
nature of the proposed bond was freely discussed by Judge Bradley,
Mr. Van Zandt, and Mr. Durant, and the fact that they were bonds
which would hold the principal and sureties liable to pay money in
case Durant should not perform any decree made by the court, was
commented upon by them, Judge Bradley speaking for the
complainants, and Mr. Van Zandt and Mr. Durant for themselves. The
sureties were present, although it is not claimed that they took
part in the discussion. I do not care, however, to attempt to
reconcile this testimony or to determine exactly where the truth
lies. Griswold himself admits that when the bond was prepared and
submitted for his signature, he read it, and noticed the terms,
"abide by and perform the decrees of the court," but in the absence
of any explanation, he inferred that it meant that Durant should
appear and render himself subject to the processes of court. He
does not complain that its contents or its legal effect were
misstated to him, or that Judge Bradley or Mr. Peckham, who
represented the plaintiff in the suit, misled him by any false
representations as to its tenor or purport. He apparently refrained
from asking any explanation of its meaning, but assumed himself to
construe it, and gave it a different meaning from that which the
law gave it. This, it seems to me, is a mistake of law against
which equity will give no relief.
In re Griswold, 13 R.I.
125;
Hunt v.
Rousmaniere, 1 Pet.
Page 141 U. S. 293
1,
26 U. S. 15;
United States v. Ames, 99 U. S. 35,
99 U. S. 46;
Hart v. Hart, 18 Ch.D. 670;
Snell v. Insurance
Co., 98 U. S. 85; 2
Pomeroy Equity Juris. sec. 843.
In
Powell v. Smith, L.R. 14 Eq. 85, 90, the defendant
endeavored to defeat the enforcement of an agreement to give a
lease upon the ground that he was mistaken as to the legal meaning
and effect of an important provision. The Master of Rolls, in
overruling the defense, said:
"All those cases which have been cited during the argument are
cases where there was either a dispute and doubt as to the thing
sold, or where the words of the agreement expressed certain things
in an ambiguous manner, which might be misunderstood by one of the
parties. In all those cases, the court has held that it must look
at the evidence, and that, if the mistake is sufficiently proved,
the court will then set aside the agreement. But here the words of
the agreement are quite certain, and the only thing that was not
understood was the legal effect of certain words which it
contained. Now that is no ground of mistake at all. It is a
question upon the construction of an agreement agreed to by
everybody concerned."
In
Eaton v. Bennett, 34 Beav. 196, a marriage
settlement was drawn, as the intended husband alleged, in a manner
contrary to the agreement, but before the marriage he knew its
contents, and executed it under protest, and reserved his right to
set it aside. It was held that he could not, after the marriage,
sustain a suit to rectify the settlement. The Master of Rolls
observed that
"The court, in such cases as these, only rectifies a settlement
when both parties have executed it under a mistake, and have done
what they neither of them intended. Here, the plaintiff examined
the draft and the settlement prior to its execution, and was
perfectly aware of its purport. I think that he cannot set it aside
or alter it in this court."
Indeed, it is a doctrine familiar to this Court that in order to
set aside an instrument for mistake, it must appear that the
mistake was mutual, and that one party is desirous of taking
advantage of an error into which he himself, in common with the
other party, has fallen.
Hearne v. Marine Ins.
Co., 20 Wall. 488,
87 U. S. 490;
Stockbridge Iron Co. v. Hudson Iron Co., 102 Mass.
Page 141 U. S. 294
45, 48;
Sawyer v. Hovey, 3 Allen 332;
German-American Ins. Co. v. Davis, 131 Mass. 316.
In view of the stipulation that was entered into between the
solicitors for the respective parties to this suit, I do not see
how it can be claimed that there was any mistake upon the part of
Bradley or Peckham as to the purport of the bond, and, as before
observed, unless they were parties to such mistake, there is no
equity in reforming the instrument upon that ground. In addition to
this, the evidence must be such as to leave no reasonable doubt in
the mind of the court as to the existence of such mistake, and in
my view, without discussing it at length, the testimony in this
case falls far short of the requisite certainty.
Again, it seems to me that the defense of laches is complete in
this case. This bond was executed in August, 1868. It is shown that
as early as October or November of the same year, in a conversation
between Mr. Peckham and the plaintiff in Newport, the character of
this bond as being distinct from a mere bail bond was called to Mr.
Griswold's attention by Mr. Peckham, who told him it was a bond
upon which he might be liable to pay money. In Mr. Peckham's own
words, he said:
"If, for example, the court should find a judgment against
Durant for any sum of money, and he did not pay it, you could be
held for the amount named in these bonds. He said, 'Well, I guess
you are right, but I must see Durant about it. He must do something
about it.' I asked him, 'Why, he is rich enough, isn't he?' And Mr.
Griswold said, 'Yes, he is rich enough, but he is reckless, and
there is no telling how long such a man may stay rich, and he must
give me security.'"
It appears, then, from this testimony, which is practically
uncontradicted, that within three months after the bond was given,
the plaintiff was distinctly apprised that it was a bond for the
payment of money. He appears to have done nothing about it,
however, for twelve years, when he filed a petition in the Supreme
Court of Rhode Island asking permission to surrender Durant into
the custody of the court and be relieved from the bond, a petition
which the court refused to grant. In this petition there was "no
suggestion of any fraud, imposition, or
Page 141 U. S. 295
unfairness in obtaining it, practiced by the complainants on the
defendant or his sureties."
In re Griswold, 13 R.I. 125,
126.
It was not until after this petition had been denied and an
opinion intimated that he might be bound to pay the penalty of the
bond in the event of a decree against Durant that he filed this
bill and for the first time set up that he had been imposed upon in
the execution of the bond. In the meantime, Durant has died and
Hazard has lost whatever advantage he might have had in the
surrender of his body in compliance with the bond which plaintiff
says he understood was to be given in discharge of the writ.
I cannot avoid the impression that the present defense is an
afterthought. In any view of the case, I think the plaintiff failed
to exercise that degree of diligence which this Court said, in
Grymes v. Sanders, 93 U. S. 55, was
necessary to entitle a party to rescind upon the ground of mistake
or fraud.
I think the decree of the court below is right, and should be
affirmed.
MR. JUSTICE BRADLEY and MR. JUSTICE BREWER did not participate
in the decision of this case.
