In 1816, an association called the Baltimore Company was
organized in Baltimore for the purpose of furnishing advances and
supplies in fitting out a military expedition under General Mina
against Mexico, then a part of the dominions of the King of Spain.
See 52 U. S. 11 How.
529, and
53 U. S. 12 How.
111.
One of the shareholders having become insolvent in 1819, his
trustee sold the share in 1825. The original transaction being
illegal, the share could not be considered, by the laws of
Maryland, as property passing by the insolvency to the trustee.
Consequently, the sale by the trustee passed nothing to the
assignee. The Court of Appeals of Maryland so decided, and this
Court adopts their construction of their own laws.
An act of the Legislature of Maryland, passed in 1841, made the
sale of 1825 valid, so far only as defects existed for the want of
a bond, by the trustee in insolvency, and the want of a
ratification of the sale by the court. But it did not purport to
cure other defects in the title of the trustee. Nor did the Court
of Appeals decide that it went and further than to cure the two
defects above mentioned.
In 1846, the Baltimore County Court distributed the fund and
awarded the proceeds of the share in question to the executors of
the assignee. This decree was affirmed by the Court of Appeals in
1849. But during this time there was no person authorized to
protect the interest of the insolvent. He had died in 1836, and no
letters of administration upon his estate were taken out until
1852.
In the distribution of a common fund amongst the several parties
interested, an absent party, who had no notice of the proceedings
and who was not guilty of willful laches or unreasonable neglect,
will not be concluded by the decree of distribution from the
assertion of his right by bill or petition against the trustee,
executor, or administrator, or, in case they have distributed the
fund in pursuance of an order of the court against the
distributees.
The English and American cases upon this point examined.
The present claim being made by the administrator of the
insolvent, against the executors of the assignee, it is not
necessary, under the circumstances of the case, to turn the
plaintiff over for his remedy against the distributees.
Page 58 U. S. 240
This appeal was in some respects similar to the preceding case
of
McBlair v.
Gibbes, but it differed from it in the important
point that the original holder of the share, namely, Williams,
never made any assignment of it to Oliver. The title of the latter
was derived exclusively from a purchase made by him from George
Winchester, the trustee of Williams in insolvency.
The Mexican Company consisted originally of ten persons, each
holding one share. One of the parties declining to pay up, the
remaining nine advanced the necessary amount, and thus the company
was reduced to nine persons or firms, namely D'Arcy and Didier,
Hollins and McBlair, Descoves and Mercier, Dennis A. Smith,
Jeremiah Sullivan and John Sullivan, John Gooding, James Williams,
Thomas Sheppard, and Lyde Goodwin.
In 1819, James Williams applied for the benefit of the insolvent
laws of Maryland, and George Winchester was appointed his trustee,
from whom Mr. Oliver purchased the share, in 1825, for $2,000.
Winchester had omitted to give bond or to have the sale ratified by
the court, and an act was afterwards passed by the Legislature of
Maryland to cure these defects.
Williams died in 1836, and no letters of administration were
taken out until 1852, when the present appellant became his
administrator and filed the bill in the present case. The ground
assumed was the same with that taken by McBlair in the preceding
case, namely that if the assignment to Oliver made by the trustee
in insolvency was void, the interest of Williams must remain in his
personal representatives.
On the 4th of October, 1841, a bill was filed on the equity side
of the County Court of the sixth Judicial District of Maryland
(state court) by Philip E. Thomas and John White, trustees of
Dennis A. Smith, against the following persons interested in the
share of Dennis A. Smith, namely: Dennis A. Smith, James W.
McCulloh, administrators; Job Smith, the President and Directors of
the Mechanics' Bank of Baltimore, John Glenn, David M. Perine,
William Gwyn, and James W. McCulloh, trustees; Mrs. Smith, William
Brown, James Brown, John Patterson, Walter Smith, executor; Clement
Smith, George Brown, Herman Perry, Virgil Maxcy, Samuel Nevins,
_____ Nevins, Joshua Lippencott, John S. Smith, Richard Harding,
and A. H. Lawrence, and the President, Directors, and Company of
the Bank of the United States. The bill set forth the deed, the
amount awarded to D. A. Smith, and the whole amount awarded to
Glenn and Perine, the existence of charges and claims affecting in
common their share of the fund and the residue in the hands of
Glenn and Perine, and after suggesting in general terms
Page 58 U. S. 241
that they were advised there were other interests represented by
Glenn and Perine, connected with the claims of Dennis A. Smith, of
the particulars whereof they were not informed, but which Glenn and
Perine could state, and which were proper subjects for distribution
by the court, they pray for a proper distribution of the
certificate &c., growing out of the awards aforesaid, for
allowance of commissions for notice to the persons interested as
aforesaid to present their claims before the auditor, and for
general relief.
Glenn and Perine filed their answers, admitting the facts set
forth in the bill, expressing their willingness to have the
proceeds of the awards therein mentioned distributed under the
direction of the court to the persons entitled thereto, including
the award in favor of those respondents under the agreement in the
bill, and joined in the prayer for a reference to the auditor.
A notice was ordered by the court and published on the 28th of
October, 1841, requiring all persons interested in the claims of D.
A. Smith and the Mexican Company on Mexico to present their
vouchers, properly authenticated, on or before the 1st January,
1842.
The cause was continued from time to time until the 23d of
January, 1842, when Nathaniel Williams intervened as the permanent
trustee of James Williams, appointed in the place of George
Winchester. He claimed the proceeds of the share of James Williams
upon the ground that the assignment to Oliver by Winchester was
irregular and void.
It is not necessary to state the numerous claimants who
presented themselves or the grounds upon which they rested their
claims.
Another order was published on the 5th of September, 1843,
giving notice to all persons having claims on the funds awarded to
the Mexican Company of Baltimore and Dennis A. Smith, to file their
claims, with the vouchers and proofs, on or before the 5th October,
1843, else they might be barred from the benefit of the
distribution of the fund.
On the 5th of December, 1846, the court pronounced its decree
awarding, amongst other things, that the proceeds of the share of
James Williams should be paid to the executors of Oliver, claiming
under the assignment from Winchester, the defects of which were
cured by an act of the legislature.
Upon an appeal from this decree to the Court of Appeals of
Maryland, the decree of the county court in the above respect was
affirmed.
In August, 1852, John S. Williams, as administrator of James
Williams, deceased, filed his bill against the executors of Oliver,
in the Supreme Court of Baltimore City. The executors removed
Page 58 U. S. 242
the cause into the circuit court of the United States upon the
allegation that they were citizens of the State of New York. The
part of the bill which brought up the question in the cause was the
following:
"Your orator further states to Your Honor that the said James
Williams departed this life on or about 20th day of September, in
the year 1836, in Harford County; that no letters of administration
were ever taken out upon his estate until they were in due form of
law granted to your orator by the Orphans' Court for Harford County
on the 15th day of March in the year 1852. That he has given bond,
approved by said court, for the faithful performance of the trust
reposed in him."
"That neither said Williams nor your orator were ever present,
or parties to, or in any manner bound by any proceeding or order or
decree had or passed in the aforesaid suit of
Thomas White v.
Dennis Smith in Baltimore County Court, as a court of equity,
or in any appeal from the doings of said court, to the Court of
Appeals for the Western Shore of Maryland, and that anything done
or enacted in either of said courts was transacted in the absence
of the said Williams and your orator; that the settlement and
adjustment of the amount of the partnership funds of the said
Mexican Company, and of the charges, and commissions, and costs, to
which they were liable
in solido, and the distribution of
the remainder of said funds by the decree of the court, into the
several shares to which each member of said company was entitled,
are in no manner binding upon, or even evidence against the said
Williams or your orator &c."
The respondents answered the bill, setting forth various grounds
of defense, and particularly relying upon the decree of the Court
of Appeals affirming the judgment of the county court. The opinions
of the judges of the Court of Appeals have been published
in
extenso in one of the preceding volumes of Howard's Reports,
and therefore need not be repeated here.
On the 3d of December, 1853, the circuit court dismissed the
complainant's bill, with costs, and the complainant appealed to
this Court.
Page 58 U. S. 249
MR. JUSTICE NELSON delivered the opinion of the Court.
The bill was filed in the court below to recover of the
defendants the proceeds of the share of James Williams, in what is
called the Baltimore Company, which had a claim against the Mexican
government that was allowed under the convention of 1839. The claim
was similar to the one under consideration in the case of the
Administrator of Lyde Goodwin against these defendants, just
disposed of. The proceeds of the share, as charged, amount to
$41,306.41.
The main grounds of defense set up in this case are:
1. The sale of this share in the company to Robert Oliver, for a
valuable consideration, by George Winchester, permanent trustee of
Williams, who had taken the benefit of the insolvent act of
Maryland, in 1819, which was made in pursuance of an order of the
court having jurisdiction in cases of insolvency under that act.
The sale took place on the 2d April, 1825.
2. A decree of the Court of Appeals in Maryland, at the June
term, 1849, affirming a decree of the Baltimore County Court,
which, in the distribution of the fund arising from this claim of
the Baltimore Company, assigned the proceeds of the share in
question to the executors of Oliver.
If the appellees fail to maintain their title to this fund, upon
one or the other of these grounds, then the right to the share of
Williams in the Baltimore Company, for aught that appears, still
belonged to him at the time of his decease in 1836, and passed to
his legal representatives as a part of his estate, and although
originally of no legal value on account of the illegality of the
transaction out of which the contract arose, yet as the illegality
has been waived and the money realized, we have seen, from the
principles stated in the previous case of Lyde Goodwin, it belongs
to Williams' administrator.
As it respects the first ground -- the sale of the share of
Williams, by the provisional trustee to Robert Oliver under the
insolvent act -- we have seen, in the case of Lyde Goodwin, the
Court of Appeals of Maryland held that this contract of the
Baltimore Company with General Mina, being in violation of
Page 58 U. S. 250
the neutrality act of the United States of 1794, was so tainted
with turpitude and illegality it could not be recognized under
their insolvent laws as property, and that no right to or interest
in the share passed to the trustee. And that, this being the
construction of the statute by the highest court of the state, and
which had a right to interpret its own laws, this Court felt bound
by it, without inquiring whether that interpretation was correct or
not, and consequently, as Goodwin's interest in the share did not
pass to the insolvent trustee, it remained in Goodwin himself and
passed to the executors of Oliver by virtue of his assignment to
their testator in 1829.
In this case, the executors of Oliver are obliged to make title
to the share in question, under the insolvent trustee of Williams,
the assignment to Oliver, their testator, having been made by the
trustee, and not by Williams himself. And it is now insisted on
behalf of the executors that the Court of Appeals of Maryland in
this case reversed their opinion delivered in the case of Goodwin,
and held that the interest in the share did pass under the
insolvent laws to the trustee, and consequently that the proceeds
of the share vested in them under his sale and assignment to their
testator in 1825.
Had this been the decision of the Court of Appeals in the case
of the share of Lyde Goodwin, the interest and proceeds would have
passed to Gill the permanent trustee instead of to the executors of
Oliver.
These results, so contradictory and inconsistent, claimed too as
flowing from the judgments of the highest court in a state, should
not be admitted unless compelled after the most careful and
deliberate consideration.
The decision in both cases was made at the same term, June,
1849, the one in the present case subsequent to that in the case of
Goodwin. The court in its opinion states that the grounds upon
which it affirmed the judgment in this case were first for the
reasons assigned by them for its decree in the previous case of
Oliver's executors against Gill, permanent trustee of Goodwin.
The grounds for that decree are stated in the record, and as far
as material are as follows:
"It is of opinion that the entire contract the Mina contract
upon which the claim of the appellee Gill the trustee is founded is
so fraught with illegality and turpitude as to be utterly null and
void, conferring no rights or obligations upon any of the
contracting parties which can be sustained or countenanced by any
court of law or equity in this state; that it has no moral
obligation to support it, and that therefore, under the insolvent
laws of Maryland, such claim does not pass to or vest in the
trustee of an insolvent
Page 58 U. S. 251
petitioner. It forms no part of his property or estate within
the meaning of the legislative enactments constituting our
insolvent laws."
Nothing can be more explicit or decisive against the title of
the insolvent trustee or of those setting up a claim under him to a
share in this Baltimore Company. The court said:
"It has no legal or moral obligation to support it, and that
therefore, under the insolvent laws of Maryland, such a claim does
not pass to or vest in the trustee of an insolvent petitioner. It
forms no part of his property or estate within the meaning of the
legislative enactments constituting our insolvent system."
And this opinion is reaffirmed
ipsisimis verbis in
giving the judgment against the trustee of Williams, then before
the court, and with which we are now dealing, and yet it is gravely
insisted that no such decision was made in this case as was made in
the case of Goodwin, but, on the contrary, the court decided that
the interest in the share of Williams did pass under the insolvent
laws to the trustee, that he became thereby invested with the
title, and was competent to transfer it to Robert Oliver, the
testator of the defendants.
The supposed contradiction and inconsistency of the
determination of the court is founded upon the second paragraph in
the opinion delivered. It is as follows:
"2. Because, under the proceedings based on or originating from
the insolvent petitions of John Gooding and James Williams and the
act of assembly applicable thereto, Robert Oliver acquired a valid
title to all the interest of said James Williams and John Gooding
in the fund in controversy for the reasons assigned by Judge Martin
as the basis of his opinion in those cases."
Judge Martin had dissented from the opinion of the majority of
the court, in the case of Lyde Goodwin, being of opinion that the
interest in his share passed under the insolvent laws to the
trustee, and had maintained the same opinion in respect to the
share of Williams in the case then before the court. And it is
supposed that this opinion was adopted by the other members in the
determination of the case.
We do not agree that this is a proper apprehension of the
judgment given by the two members of the court, but, on the
contrary, are satisfied that the opinion delivered may well warrant
a more natural and consistent interpretation.
The true meaning will be apparent, we think, from the following
explanation. Robert Cliver, as we have seen, had purchased the
share of Williams of the insolvent trustee in 1825, and
consequently, if the interest in his share passed under the
insolvent laws to the trustee, it had become vested in Oliver, and
of course, on his death, in the executors.
Page 58 U. S. 252
The question before the court was between the insolvent trustee
and the executors. The court, after reaffirming its opinion in the
case of Lyde Goodwin, namely that no interest in the share passed
to trustee under the insolvent laws, and therefore that he was
disabled from making out a title to it, go on in substance to say
that if in error as to this, and the opinion of Judge Martin should
be adopted, namely, that the interest did pass to the trustee, it
could make no difference in the result, inasmuch as the executors
of Oliver would then be entitled to the proceeds under his purchase
of the share from the trustee himself in 1825. Therefore, viewing
the case in either aspect,
quacunque via data, the
insolvent trustee had failed in establishing any interest in the
fund.
It appears to us that this is obviously the meaning intended to
be expressed, though we admit the terms used in the expression of
it furnish some plausibility for the criticisms to which it has
been subjected. The two opinions, the one in the case of Goodwin
and the other in the case of Williams, were given at the same term,
and upon the same question, and, if the interpretation of the
defendants is right, are diametrically opposite to each other, and
not only so, as the first opinion is incorporated in the second,
the judgment rendered in the case of Williams is founded upon two
opposite constructions of the same statute in one and the same
opinion.
We prefer the explanation we have given to this extraordinary
and absurd conclusion as it respects the proceedings of a
respectable court, and one possessing the highest jurisdiction in
the state.
The change of opinion upon a question of law, or in the
construction of a statute, is no disparagement to a judge or a
court, however eminent or experienced. The change is oftentimes a
matter of commendation, rather than of reproach. But the case here
presented, and upon which we are asked to turn the decision of the
question, is that two opposite constructions of a statute have been
given by the court in the same cause, leading necessarily to
opposite results, and both relied on as grounds for the judgment
rendered. We have already assigned our reasons for disbelief in any
such conclusion, and shall not again refer to them.
It has been suggested that the statute of Maryland of 1841,
confirming certain defective proceedings in insolvent cases,
operated to confirm the sale of the trustee to Oliver in 1825, and
that the opinion of the Court of Appeals in the case of Williams is
founded upon this statute. Winchester, the permanent trustee at the
time of the sale, had not given a bond, with surety, for the
faithful execution of his duty, as required by the law, and
Page 58 U. S. 253
under the decisions of the courts of Maryland, this omission
disabled him from dealing with the estate of the insolvent.
The act of 1841 was passed to remedy defects of this
description. It provided that all sales and transfers of property
and claims theretofore made by any permanent trustee &c. under
the insolvent laws of the state shall be valid and effectual
notwithstanding such trustee shall not have given a bond with
security &c., and the 3d section provides that the act shall
not be so construed as to cure any other defect in the proceedings
than the failure to give a bond, with security, or the want of any
ratification by the court of any sale made by such trustee.
It is quite apparent from the provisions of the act that it was
not designed to confirm all sales previously made by the trustee
under the insolvent laws and render them valid and effectual, but
simply to confirm, so far as respected any defect arising out of
the omission of the trustee to give the proper security and also as
respected any omission on the part of the court to confirm the
sale. These two defects in any previous proceedings were cured by
the statute, but in all other respects the proceedings were valid
or otherwise independently of it. It is impossible to maintain that
the statute looked to any such informality in the title of the
trustee as that held by the Court of Appeals in the case of Lyde
Goodwin, as well as in the present one. And besides, it is
inconceivable why the court should have reaffirmed their opinion in
the case of Goodwin as a ground for denying the title to the
trustee if they had intended to hold that it passed by force of the
act of 1841. We have no belief that such was the opinion intended
to be expressed.
The decree of the court affirming the judgment of the court
below has been referred to as favoring the view of the decision
contended for by the appellees. This decree adjudges and decrees
that the judgment below awarding the share of Williams to the
executors of Oliver be affirmed, and that Glenn and Perine, the
general trustees of the fund, pay the proceeds of the share to the
said executors.
It will be remembered that the only question before the court
respecting this share was between the executors, on the one side,
and the insolvent trustee of Williams, on the other, and as the
executors were the apparent owners of the fund unless a title could
be maintained by the trustee, so far as respected the parties
before the court, the former exhibited the better title -- at least
the better title to take the possession and charge of the fund in
the distribution among the claimants. The form of the decree,
therefore, was very much a matter of course in the aspect of the
case as then presented.
This view will be more fully appreciated when we refer to
Page 58 U. S. 254
another branch of this case presently to be considered. We will
simply add, in our conclusion upon this part of the case, that the
opinion now expressed was the one entertained by us when the case
involving this share of Williams was formerly before the Court, and
which will be found in
53 U. S. 12 How.
111,
53 U. S.
123.
On page
53 U. S. 123 we
observed
"the counsel for the plaintiff in error sought to distinguish
this case from the previous one, the case of Lyde Goodwin, and to
maintain the jurisdiction of the court upon the ground that the act
of the Legislature of Maryland of 1841, confirming the authority of
Winchester, the permanent trustee, was in contravention of a
provision of the Constitution of the United States as 'a law
impairing the obligation of contracts.'"
But we observed in answer,
"Admitting this to be so, which we do not, still the admission
would not affect the result, for the decision of the Court of
Appeals upon a previous branch of the case denied to the plaintiff
any right to or interest in the fund in question, as claimed under
the insolvent proceedings as permanent trustee, and hence he was
deemed disabled from maintaining any action founded upon that
claim."
"It was of no importance, therefore, as it respected the
plaintiff, in the distribution of the fund whether it was
rightfully or wrongfully awarded to Oliver's executors. He had no
longer any interest in the question."
Our conclusion, therefore, upon this part of the case is that
according to the law of Maryland as expounded by the highest court
of the state, no title to or interest in the share of Williams in
the contract of the Baltimore Company, under General Mina, passed
under the insolvent laws of that state to the insolvent trustee,
and consequently no interest in the same became vested in the
executors of Robert Oliver by force of the assignment from the
trustee to him in 1825.
2. The next question is as to the conclusiveness of the decree
of the Baltimore County Court making a distribution of the fund
among the several claimants, and which was affirmed by the Court of
Appeals, upon the rights of the administrator of Williams to the
proceeds of his share in the fund. The decree in the Baltimore
County Court was rendered in December, 1846, and affirmed June
term, 1849.
Williams died in 1836, and no letters of administration were
taken out upon the estate till 1852. It appears, therefore, that
Williams had been dead ten years when the first decree was made and
thirteen at the date of the second, and no representative was in
existence to whom notice of the proceedings could affect in any way
the interest of the estate in the fund.
Now the principle is well settled in respect to these
proceedings
Page 58 U. S. 255
in chancery for the distribution of a common fund among the
several parties interested, either on the application of the
trustee of the fund, the executor or administrator, legatee, or
next of kin, or on the application of any party in interest, that
an absent party, who had no notice of the proceedings, and not
guilty of willful laches or unreasonable neglect, will not be
concluded by the decree of distribution from the assertion of his
right by bill or petition against the trustee, executor, or
administrator, or, in case they have distributed the fund in
pursuance of an order of the court, against the distributees.
David v. Frowd, 1 Miln. & Keen 200;
Greig v.
Somerville, 1 Russ. & M. 338;
Gillespie v.
Alexander, 3 Russ. 130;
Sawyer v. Bichmore, 1 Keen
391;
Shine v. Gough, 1 Ball. & B. 436;
Finley v. Bank of the United
States, 11 Wheat. 304; Story's Eq.Pl. ยง 106,
Wiswall v.
Sampson, 14 How. 52,
55 U. S. 67.
The general principle governing courts of equity in proceedings
of this description is more clearly stated by Sir John Leach,
Master of the Rolls, in
David v. Frowd, above referred to,
than in any other case that has come under our notice.
That was a case where one of the next of kin, who had no notice
of the administration suit, filed a bill against the administratrix
and distributees to obtain her share of the estate. The bill was
filed some two years after the decree for distribution had been
made and carried into effect.
The Master of the Rolls observed that
"The personal property of an intestate is first to be applied in
payment of his debts and then distributed among his next of kin.
The person who takes out administration to his estate in most cases
cannot know who are his creditors, and may not know who are his
next of kin, and the administration of his estate may be exposed to
great delay and embarrassment. A court of equity exercises a most
wholesome jurisdiction for the prevention of this delay and
embarrassment and for the assistance and protection of the
administrator. Upon the application of any person claiming to be
interested, the court refers it to the master to inquire who are
creditors and who are next of kin, and for that purpose to cause
advertisements to be published in the quarters where creditors and
next of kin are most likely to be found, calling upon such
creditors and next of kin to come in and make their claims before
the master within a reasonable time stated, and when that time is
expired, it is considered that the best possible means having been
taken to ascertain the parties really entitled, the administrator
may reasonably proceed to distribute the estate among those who
have, before the master, established an apparent title. Such
proceedings having been taken, the court will protect the
administrator against any future claim. "
Page 58 U. S. 256
"But it is obvious," he remarks,
"that the notice given by advertisements may, and must in many
cases, not reach the parties really entitled. They may be abroad
and in a different part of the Kingdom from that where the
advertisements are published, or, from a multitude of
circumstances, they may not see or hear of the advertisements, and
it would be the height of injustice that the proceedings of the
court, wisely adopted with a view to general convenience, should
have the absolute effect of conclusively transferring the property
of the true owners to one who has no right to it."
The master of the rolls further observed
"that if a creditor does not happen to discover the proceedings
in the court until after the distribution has been actually made by
the order of the court amongst the parties having, by the master's
report, an apparent title -- although the court will protect the
administrator, who has acted under the orders of the court -- yet,
upon a bill filed by this creditor against the parties to whom the
property has been distributed, the court will, upon proof of no
willful default on the part of such creditor and no want of
reasonable diligence on his part, compel the parties, defendants,
to restore to the creditor that which of right belongs to him."
The master of the rolls then applied this principle to the right
of the next of kin, the complainant in the bill, and observed
"that it had been argued that the case is extremely hard upon
the party who is to refund, for that he has a full right to
consider the money as his own, and may have spent it, and that it
would be against the policy of the law to recall the money, which
the party had obtained by the effect of a judgment upon a litigated
title. But he observed there is here no judgment upon a litigated
title; the party who now claims by a paramount title was absent
from the court, and all that is adjudged is that, upon an inquiry,
in its nature imperfect, parties are found to have a
prima
facie claim subject to be defeated upon better information.
The apparent title, under the master's report, is, in its nature,
defeasible. A party claiming under such circumstances has no great
reason to complain that he is called upon to replace what he has
received against his right."
In the case of
Gillespie v. Alexander, also above
referred to, Lord Eldon observed that although the language of the
decree, where an account of debts is directed, is that those who do
not come in shall be excluded from the benefit of it, yet the
course is to permit a creditor, he paying costs, to prove his debt
as long as their happens to be a residuary fund in court or in the
hands of the executor, and to pay him out of the residue. If the
creditor does not come till after the executor
Page 58 U. S. 257
has paid away the residue, he is not without remedy, though he
is barred the benefit of that decree. If he has a mind to sue the
legatees and bring back the fund, he may do so, but he cannot
affect the legatees, except by suit, and he cannot affect the
executor at all.
These principles are decisive of this branch of the case, as
they establish beyond all controversy the right of the
administrator to assert the title of Williams, the intestate, to
the proceeds of the share in question notwithstanding the decree of
distribution by the Baltimore County Court. There has been no
laches on his part or on the part of those whom he represents.
The cases above referred to relate to the rights of creditors
and next of kin, but the principle is equally applicable to all
parties interested in a common fund brought into a court of equity
for distribution amongst the several claimants.
It is worthy of observation in this connection that the decree,
however conclusive in its terms, in the distribution of the fund
amongst the apparent owners then before the court, possesses no
binding effect upon the rights of the absent party, whose interests
have not been represented on the subject of litigation. The opinion
of the court given, and decree in pursuance thereof, apply only to
interests of those amongst whom the fund is distributed.
These observations furnish an answer to the argument on behalf
of the appellees, drawn from a reference to the terms of the decree
of the Court of Appeals of Maryland, in this case, by which the
fund is adjudged to the executors of Oliver. As between all the
parties then before the court, this adjudication was doubtless
proper and conclusive upon their rights.
It is agreed in the case that but five-eighths of the fund in
controversy is in the hands of the executors, the residue having
been paid over in the administration of the assets of the estate.
If this portion had been paid over by the executors in pursuance of
an order of the court in an administration suit, the defendants
would be protected to that extent, and the complainant compelled to
proceed against the distributees. But no such fact appears in the
case.
Without saying at this time that an executor in all cases may be
compelled to account to a party making title to a portion of the
estate after distribution among the legatees and next of kin,
unless first procuring an order of the court having charge of the
administration, we perceive no reason, under the circumstances of
this case, for exonerating them or turning him round to a bill
against the distributees.
Upon the whole, after the fullest consideration we have been
Page 58 U. S. 258
able to give to this case, we think the decree of the court
below was erroneous, and should be
Reversed.
MR. CHIEF JUSTICE TANEY, MR. JUSTICE McLEAN, and MR. JUSTICE
DANIEL dissented.
"John S. Williams, administrator of"
"James Williams, dec'd, appellant"
"v."
"Robert M. Gibbes and Chas. Oliver,"
"ex'ors of Robert Oliver, deceased "
"and "
"John Gooding, Junior, administrator "
"
de bonis non of John Gooding,"
"deceased, appellant"
"v."
"Robert M. Gibbes and Chas. Oliver,"
"ex'ors of Robert Oliver, deceased"
"
Appeals from the Circuit Court of the United"
"
States for the District of Maryland"
MR. CHIEF JUSTICE TANEY dissenting.
I dissent from the opinion in these two cases, but they are so
intimately connected with the case against Lyde Goodwin's
administrator, just decided, that I shall be better understood by
considering the three together.
When the case of Gill, who was trustee of Goodwin under the
insolvent laws of Maryland, against Oliver's executors was before
the court, I did not concur in the judgment then given, as will be
seen by the report of the case in 11 How.
52 U. S. 529. It
appeared to me unnecessary at that time to do more than simply
express my dissent; but the course which these cases have since
taken and the decisions now given make it may duty to state more
fully my own opinion and the grounds upon which I passed the
decrees that are now before the court.
The history of the controversy is this:
Gooding and Williams were members of the Baltimore Mexican
Company, which made the contract with Mina, in 1816. The character
of that contract is fully stated in the eleventh and twelfth
volumes of Howard's Reports, and also the manner in which it came
before the commissioners under the treaty with Mexico, and their
award upon it.
The commissioners awarded the sum mentioned in their award to
the Mexican Company of Baltimore as due "for arms, vessels,
munitions of war, goods, and money furnished by the company to
General Mina for the service of Mexico in the years 1816 and 1817,"
and gave interest to the company according to
Page 58 U. S. 259
the stipulation in the contract with Mina. I have given the
words of the award because they show that the commissioners
affirmed the validity of this contract and directed the amount due
by its terms to be paid to the trustees therein named for the
benefit of the parties interested in it.
Proceedings were soon after instituted in a Maryland court of
equity against the trustees by persons claiming an interest in the
fund, and the money by order of the court was brought into court to
be distributed among the parties entitled. Many claimants appeared,
presenting conflicting claims for shares in the company.
Goodwin, Gooding, and Williams all became insolvent. Goodwin in
1817, Gooding and Williams in 1819, and their respective trustees
appeared in the Maryland court and claimed the amount due to the
insolvent.
On the other hand, the executors of Oliver claimed these three
shares, Goodwin's under an assignment made to Oliver by Goodwin in
1829, and the other two under assignments made to him in 1825, by
George Winchester, who was the trustee of each of them.
The controversies which arose upon the distribution of this fund
were removed to the Maryland Court of Appeals, which is the highest
court of the state. And in the trial there it was objected that the
contract with Mina was in violation of law, and therefore
fraudulent and void, and vested no rights in the members of the
company which the law would recognize, and consequently that no
right of property in it could vest in the trustee when the party
became insolvent.
It may be proper to remark that under the Maryland insolvent
law, all the property, rights, and credits belonging to the
insolvent at the time of his petition, become vested in his
trustee, and he at the same time executes a deed to the trustee
conveying and assigning to him all his property, rights, and
credits of every description for the benefit of his creditors. And
if the persons above named, at the times of their petitions in 1817
and 1819, had any interest whatever, either legal or equitable,
vested or contingent, under this Mexican contract, it passed to
their trustees.
The Court of Appeals decided that the contract with Mina was
fraudulent and void under our neutrality laws, and therefore vested
no right in the parties which a court of justice in this country
could recognize, and consequently that they had no interest or
property under it which could be transferred to or vest in their
trustees at the time of their insolvency. And upon this ground they
decided against the claim of the trustees and directed the whole
amount of the three shares to be paid to Oliver's executors.
Page 58 U. S. 260
The ground upon which they supported the claim of Oliver's
executors to these shares is not stated fully in the opinion. It
was, I presume, upon the ground that by the terms of the award, the
shares of these three persons were received by the trustees named
in the award, in trust for these executors, and that the trustees
therefore had no right to withhold it from them, as neither they
nor their testator had any participation in the fraudulent contract
out of which it had arisen. And if the court was right in deciding
that neither the trustee of the insolvent nor anyone else could
derive a title to this money under the contract with Mina, perhaps
the language of the award, together with the documents referred to
in it, might justify this decision. But I express no opinion on
this point, and merely suggest it in justice to the Court of
Appeals, in order to show that their opinions in these cases are
not necessarily inconsistent with each other, although the court
may have reasoned erroneously, and decided incorrectly.
These decisions were brought to this Court by the trustees of
the insolvents by writs of error under the 25th section of the act
of 1789. Motions were made in each of them to dismiss for want of
jurisdiction, and the motions were sustained by the majority of the
Court and the cases dismissed, as will appear in the reports
referred to.
I differed in opinion from the Court, but undoubtedly, when the
cases came before me at circuit upon bills filed by the
administrators, it was may duty to conform in the inferior court to
the decision of the superior, as far as that decision applied to
the case presented by these complainants. It is true that in my own
opinion, and according to the views of the subject I had always
entertained, these bills by the administrators of the insolvents
could not be maintained. But I dismissed them not only upon that
ground, but also under the impression that I was bound to do so
upon the principles upon which this Court had decided them in the
suits by the trustees. It appears, however, by the opinion just
delivered that I was mistaken and placed an erroneous construction
on the opinions formerly delivered. It seems, therefore, to be due
to myself to state not only my opinion in the former cases but also
the interpretation I placed upon the language of this Court in
deciding them. And I think it will be found that the language of
the former decisions was fairly susceptible of the construction I
put upon it, although that construction has turned out to be
erroneous. I do not mean to say that the construction which the
majority of the Court puts upon its former decisions now is not the
true one, but that the language used in it might lead even a
careful inquirer to a contrary conclusion.
Page 58 U. S. 261
I proceed, in the first place, to speak of the case of Gill,
trustee of Lyde Goodwin. As I have already said, when that case was
before this Court, I thought, and still think, we had jurisdiction,
and proceed now to state the grounds of that opinion and how it
bore on the decision of the suit by his administrator, which is now
before us.
The money in dispute was claimed under the contract with Mina.
And the amount claimed was awarded to the Mexican Company, or their
legal representatives or assigns, by the commissioners appointed
under the Mexican treaty and the act of Congress passed to carry it
into execution. The commissioners were authorized to ascertain and
determine upon the validity of the claims of American citizens upon
the Mexican government, and for which this government had demanded
reparation. Of course it was their duty not to allow any claim for
services rendered to Mexico or money advanced for its use by
American citizens in violation of their duty to their own country
or in disobedience to its laws. For the government would have been
unmindful of its own duty to the United States if it had used its
power and influence to enforce a claim of that description or had
sanctioned it by treaty. But the board of commissioners were
necessarily the judges of the lawfulness of the contracts and the
validity of the claims presented. They were necessarily to
determine whether they were of the description provided for in the
treaty or not. They may have committed errors of judgment in this
respect, and may have committed an error of judgment in sanctioning
the contract with Mina. But the law under which they acted made
them the exclusive judges on the subject. There was no appeal from
their decision. And if there was no malpractice on the part of the
commissioners and the award was not obtained by fraud and
misrepresentation, it was final and conclusive. It was like the
judgment of any other tribunal having jurisdiction of the subject
matter, and could not be reexamined and impeached for error of
judgment in any other court which had no appellate power over it.
And they decided that the contract of Mina was valid, and
consequently it vested from its date a lawful right to the money in
the member of the Mexican Company.
The objection, therefore, in the Maryland court brought into
question the validity of an authority exercised under the United
States, and as the decision of the state court was against its
validity, it was my opinion that a writ of error did lie under the
25th section of the act of 1789. And regarding the award as final
and conclusive upon other tribunals, there was error in the
judgment of the state court which pronounced it invalid and
fraudulent. It will be observed that this error was the
foundation
Page 58 U. S. 262
of the judgment of the state court. For if the court did not
look behind the award, and had regarded the contract as valid, the
right to Goodwin's interest undoubtedly passed to his trustee in
1817, long before his assignment to Oliver. I therefore thought
this Court had jurisdiction, and that the judgment of the Court of
Appeals ought to be reversed and this money paid to the trustee,
and not to Oliver's executors.
The majority of the Court, however, entertained a different
opinion and dismissed the cases upon the ground, as I understand
the opinion, that the construction of the treaty, or of the act of
Congress, or the validity of the authority exercised under them did
not appear to have been drawn into question in the Court of
Appeals, and that the case appeared to have been decided upon the
effect and operation of their own insolvent law and upon their own
laws regulating contracts and transfers of property and credits
within the state, over which we had no jurisdiction upon the writ
of error, that these matters were exclusively for the decision of
the state tribunals, and their decision final upon the subject.
Some remarks are made in the opinion in relation to grounds upon
which the state court might have decided without impeaching the
award of the commissioners, and among others, the fact that Goodwin
had assigned his right to Oliver in 1829 and that the Mexican
Congress had previously, in 1825, acknowledged its validity. There
is an error in the date, but it is immaterial. The acts of the
Mexican Congress were in 1823 and 1824.
But I did not understand these remarks as intended to affirm
that the share of Goodwin passed to Oliver by this assignment, but
as suggesting grounds upon which the state court might, whether
erroneously or not, have decided in favor of the executors.
Because, as the Court held that it had no jurisdiction in the case,
I supposed that it intended to give no opinion upon the merits. And
I presumed that it did not intend to decide that the acknowledgment
of Mexico that Mina's contract was binding upon the republic could
give any validity to it in the courts of the United States. For the
contract of the Baltimore Company would have been liable to the
same objections if it had been made originally, in 1816, with the
Mexican government instead of General Mina. And if it was void in
1817, and Goodwin then had no interest under it, it was equally
void in 1829, when the assignment to Oliver was made, and it is due
to the Court of Appeals to say that they have not indicated in any
of their opinions that the acts of the Mexican Congress had any
influence on their judgments.
Upon these considerations, I dismissed the bill at circuit
upon
Page 58 U. S. 263
two grounds: 1. my own opinion is that the interest of Goodwin
passed to his trustee, and consequently that the present
complainant his administrator can have no title; 2. this Court
decided, upon a view of the whole case, that it had no appellate
power over this judgment, and that it had been decided by the
Maryland court upon its own construction of its own law. And that
point being adjudged by this Court, I did not see upon what ground
I could, in conformity to this opinion, revise the judgment of the
state court and reverse its decision. It would, in substance, have
been the exercise of an appellate power at circuit over the
decisions of the state courts upon their own laws, which this Court
had refused to exercise on writ of error, and for the reason first
above stated, I now concur in affirming the judgment here in the
case of Goodwin's administrator.
I come now to the cases of the administrators of Gooding and
Williams, which are, in many respects, alike. These writs were also
dismissed for want of jurisdiction when formerly before the Court,
and in dismissing them, the Court said that the title of the
trustees to the shares of Gooding and Williams "involved only a
question of state law, and therefore was not the subject of
revision here, and was conclusive of his rights, and decisive of
the case." I quote the language of the Court. The want of
jurisdiction was therefore the only point decided in these cases,
and they were dismissed on that ground.
It is true that in these cases as well as in that of Goodwin's
trustee, language is used in the opinion of the Court which would
seem to imply that the Court was of opinion that the contract was
void originally, but had afterwards become valid by the events
referred to in the opinion. But I understood these observations, as
I did those made in Goodwin's case, merely as suggesting
considerations which might have led to the decision of the state
court, without impeaching the award of the commissioners, but not
as approving or sanctioning them as sufficient grounds for their
decree. For the Court determined that it had no jurisdiction, and
consequently the merits of the case were not before it, and I
presumed it did not mean to express any opinion concerning the
correctness or incorrectness of the judgment of the state court.
Such I have understood to be the established practice of this
Court, and I was not aware that this case was intended to be an
exception. The only point decided was the conclusiveness of the
judgment of the state court upon the rights of the trustees.
The Court of Appeals assigned two reasons for their decision,
and taking them literally as they stand, they are inconsistent with
each other. But the opinion appears to have been hastily
Page 58 U. S. 264
written and not sufficiently guarded in its words, and it is
evident they meant to say that in the opinion of the court, no
interest vested in the trustee, because there was no legal or
equitable interest acquired by the contract that could vest
anywhere or in any person. But if there was a legal interest, it
passed to his trustee, and by his assignment vested in Oliver. This
mode of decision upon alternative grounds is an ordinary and
familiar one in courts of justice, and will often be found in the
decisions of this Court.
And however the reasoning of the state court may be regarded, it
is clear that with the interest of the intestate before them and
under consideration, they decreed that the shares belonged to
Oliver's executors. Now it is perfectly immaterial whether the
reasons assigned by the court were right or wrong. Here is their
judgment, their decree -- a decree founded altogether on state
laws, as this Court has said in its former decisions, and made by a
court of competent jurisdiction. Upon what principle, then, can a
court of the United States, either at circuit or here, undertake to
revise it or reverse it for error? If we had no appellate power
upon the writ of error and no right to reverse the judgment for
errors supposed to be committed by the state court in interpreting
and administering its own laws, how can this Court or the circuit
court exercise this revising power over the judgment in the form it
now comes before us. It is doing in another way what it is admitted
cannot be done in the prescribed mode of proceeding by writ of
error. And I am not aware of any precedent for this exercise of
power in a court of the United States administering state laws when
the judgment of the highest court of the state is before them upon
the same case upon which the United States court is called on to
decide.
It will be remembered that the appellate and revising power of
the courts of the United States over the judgments of state courts
stands upon very different principles from those which, in England,
govern the relation of superior and inferior tribunals, and they
are not, therefore, always safe guides upon the revising and
reversing power which the courts of the United States may
constitutionally exercise over the judgments of state courts.
I know it is said that the administrators of these insolvents
who have filed these bills were not parties to the former
proceedings, and are not therefore estopped by the decree of the
Court of Appeals. And a good deal of argument has been offered to
maintain that proposition; but that question cannot arise until
other questions which stand before it and control it are first
disposed of. For this Court held, upon the former writs of error,
that these cases were decided by the Court of Appeals exclusively
upon Maryland law, and if that be the case, before we come
Page 58 U. S. 265
to the question of parties, other questions must be decided:
1. Whether in this form of proceeding you can examine into the
validity of the grounds upon which the state court decided them,
and reverse its judgment is you suppose it committed an error in
interpreting and administering its own laws; and, if you are
authorized to do this, them,
2. Did it commit an error in deciding that those shares belonged
to Oliver's executors?
The reasons they may have given for this opinion are altogether
immaterial, and if these two questions are decided in the
affirmative and this Court reverses the judgment upon the ground
that the shares belonged to the insolvents at the times of their
death, and not to Oliver's executors, then the administrators would
undoubtedly have an interest, and are not estopped by the former
decree from claiming their rights. Nobody, I presume, disputes
this. But before you come to this part of the case, you must take
jurisdiction over the judgment of the state court and reverse it
for error. Because if that judgment stands, then the intestates had
nothing at the times of their death that could pass to the
administrators, and there would have been no more propriety in
making them parties than any other stranger who had no interest in
the fund. The administrator of a vendor who has in his lifetime
divested himself of all right to property can hardly be supposed to
be a necessary party in a controversy between purchasers under him
when neither of the claimants has a right to fall back for
indemnity on his estate. The administrators offer no new evidence
of interest in them or their intestates, but present here the
identical case, in all its parts, that was before the Court of
Appeals when it passed its decree.
Indeed, I cannot comprehend how the state court or this Court
can award the fund to the administrators if the contract was
fraudulent and void when the parties became insolvent. They both
died before the award was made; but if, up to that time, the
contract continued open to examination in a court of justice, and
was decided to have been fraudulent and a nullity when made,
nothing afterwards could have given it legal existence.
Nihilum
ex nihilo oriatur is as true in law as in philosophy. If void
at first, it continued to be void and a nullity to the time of the
deaths of the parties, and their administrators could derive no
lawful title from them. To say that a legal or equitable interest
in a fraudulent contract can exist in a party and be transmitted to
his administrator, when used as legal language, is a solecism. And
if from necessity, upon any principle of law or equity, the award
related back, it would seem that those who purchased the interest
in these shares, at their full market value at the time, and paid
for it should have the benefit of the relations.
Page 58 U. S. 266
It may be said, perhaps, that although the acts of Congress of
Mexico, in 1823 and 1824, could not make valid a contract
originally void and a nullity by our laws, yet these acts of the
Mexican legislature constituted a new and original contract which
at that time might lawfully be made by our citizens, and that the
rights of the parties take date from that contract. But this view
of the case would not obviate the legal objections, but, on the
contrary, it would add to them. For it still assumes the principle
that the state court had a right to examine into the testimony not
only to determine the rights of the parties under the award, but to
impeach the award itself. And upon this theory, if they had not
found these acts of the Mexican Congress in the proceedings of the
commissioners, the state court might have held the whole award
erroneous and a nullity, vesting no rights in anyone, because it
sanctioned an illegal contract. As I have already said, a state
court, in my judgment, has no such power.
The commissioners do not refer to the Mexican acts of Congress
nor allow the claims of the company upon a contract made by these
laws. They award expressly upon the contract with Mina, and give
interest according to that contract. And unless their award may be
impeached for error and their decision upon the claim reexamined
and reversed in the state court, the rights of all the claimants
depend upon this contract, and take date from it. According to the
award of the commissioners, it is this contract that gave the
claimants rights, and which must consequently govern the court in
distributing the fund.
It seems to be supposed that the decision of the Court of
Appeals declaring this contract to be fraudulent and void was
founded upon some local law of the state. But that is evidently a
mistake. It was founded on the breach of the neutrality laws of the
United States. They looked behind the award of the commissioners,
behind an authority exercised under the United States, and
impeached its validity.
Besides, no other contract but this was under examination in the
state court. The court speaks of no other in its opinion. The
parties, as appear by the proceedings, all claimed under it, and
the decisions of the court and the distribution of the fund were
founded upon it. Can another and a subsequent contract be set up
here, upon which the state court has passed no judgment and has not
acted and under which none of the parties before it claimed? I
think not. And if its decision is to be set aside for error, it
must, I presume, be for error in deciding upon the contract brought
before it by the parties. And if this Court now reverse these
decrees upon the ground that the original contract with Mina was
void, but became valid by subsequent
Page 58 U. S. 267
events, it reverses upon a new case, upon which the state court
has never decided. Moreover, it unsettles the whole proceedings in
the state court, for the interest of the claimants, in almost every
instance, depended upon the time that a lawful right to this claim
vested in the company.
And if, notwithstanding these objections, this Court may look
into the judgment and reverse it for error, and it finds it to have
been decided upon two principles of law, consistent or inconsistent
with each other, one of which is erroneous and the other sound,
ought not the judgment to be affirmed?
Now as I have already said, the state court committed an error,
in my opinion, in going behind the award, and receiving testimony
to show that a contract was fraudulent and void which a tribunal of
the United States having exclusive jurisdiction over the subject
had decided to be lawful and valid. And if this Court has the power
to revise that judgment, I think it could not be supported on that
ground.
But it puts it upon another, and said that if the original
contract is regarded as valid, then the interest of the insolvents
passed to their trustee, and, by virtue of his assignment, vested
in Robert Oliver.
Now in examining the judgment of an inferior tribunal in a case
of this description, would the appellate court lay hold of the
erroneous principle to reverse the judgment? Would it not affirm it
upon the other alternative, which placed it upon lawful and tenable
grounds? I think nobody would doubt that the judgment would be
affirmed. Ought not the same rule to be applied to the Maryland
judgment which this Court is now revising? And is not this Court
bound, under the award of the commissioners, to regard the original
contract as valid when it has been so decided by a lawful tribunal
of the United States having exclusive jurisdiction over the
subject? If we are so bound, and not authorized to impeach the
judgment of the commissioners, then the judgment of the Maryland
court in the cases of Gooding and Williams is right, and ought to
be affirmed upon the second ground stated in the opinion, even if
we were sitting here as an appellate tribunal.
It is true that the bill in the case of Williams' trustee was
filed in the state chancery court, which, by a change of the law,
represents the court where the fund was originally paid in and
distributed among the claimants, and was removed to the circuit
court of the United States by the appellees, who reside out of the
state. And undoubtedly the circuit court, in that state of the
case, possessed the same power over it, and was bound to decide it
upon the same principles that ought to have governed the state
court in which the bill was filed. But there
Page 58 U. S. 268
was no new evidence, no new fact, no new interest or equity
presented. There is a new name, indeed, but no new interest or
equity disclosed in the bill. And upon that case the Court of
Appeals had passed its decree. That decree was the law of the case
in the inferior court, where this bill was filed. And the Court of
Appeals itself could not reverse its decree, signed and enrolled at
a former term, nor open it merely because a new name was before it
which, according to its former decree, had no interest in the fund,
and consequently ought not to have been made a party in the former
proceedings. And if we now reverse this judgment, we go further
than the Maryland Court of Appeals could have gone and exercise
what is essentially an appellate power over it, correcting the
errors of an inferior court.
But in Gooding's case, this Court goes still further. The bill
in this case was filed originally in the circuit court of the
United States. Yet the fund was never in that court, nor the money
paid to the appellees by its order. If the decree is to be opened
for error after the fund is distributed by order of a court of
competent jurisdiction, ought it not to be done in the court that
passed the decree? And can a circuit court of the United States
compel the appellees to repay money which they hold under the
decree of a court of coordinate jurisdiction, made upon the same
case, with the same evidence before them? I think not.
Besides, Gooding became insolvent again in 1829. All the
property, rights, and credits which he had at that time, vested in
his trustees, who are still living. If Goodwin's interest in 1829
had become so far valid that it could pass by his assignment to
Oliver, why is not Gooding's also lawful and vested in his
trustees? Upon what principle can Goodwin's interest be capable of
assignment in 1829, and Gooding's remain fraudulent until his
death? Yet if it was capable of assignment in 1829, the complainant
is not entitled. It passed to his trustees.
And if, as the Court now says, Goodwin would be estopped from
impeaching his assignment to Oliver on the ground that the original
contract was illegal and fraudulent, why are not Gooding and
Williams and their administrators equally estopped from impeaching
their assignments to their respective trustee? The assignment to
the trustee for the benefit of their creditors was equally
meritorious with Goodwin's assignment to Oliver. And if they had
appeared as parties in the Maryland court, would they have been
permitted to impeach the title of the trustee, who was then
claiming it, and set up a right to the money in themselves upon the
ground that the contract of their respective intestates was
fraudulent? Certainly the principle
Page 58 U. S. 269
is well established in chancery that a party cannot set aside a
contract upon the ground that he himself was guilty of a fraud in
making it. I do not cite cases to prove familiar doctrines. His
administrator is in no better condition. And yet he is allowed, in
this case, to defeat the operation of the intestate's deed to the
trustee upon the ground that the contract, of which the trustee
claims the benefit, was a fraudulent one on the part of his
intestate. And here, in a court of equity, these administrators
support their title and recover this money against their trustees,
as well as Oliver's executors, solely upon the ground that their
intestate was guilty of a fraud in making the contract with Mina,
and incapable, therefore, of assigning it. The party defeats the
operation of his own deed upon the ground that he himself committed
a fraud. This doctrine cannot, I think, be maintained upon
principle or authority in a court of chancery.
We are not dealing with Mexican laws, or inquiring what a
Mexican tribunal or the Mexican government would decide in relation
to this contract, but we are inquiring how it stands in a Maryland
court, and what are the legal rights under it by the laws of
Maryland. And I understand this Court to place its opinion solely
upon the ground that this contract was fraudulent and void by the
laws of Maryland, and that the parties acquired no rights under
it.
It may have been good in Mexico -- a valid, binding obligation.
They may have been willing to reward our citizens for a breach of
duty to their own country. But that could not cleanse it from the
offense against our own law, nor give legal rights to the
administrator when there was no right in the intestate. The courts
of the United States can hardly be authorized to sanction and
enforce what are called honorary obligations of a foreign nation
when those obligations have arisen from temptations offered to our
own citizens to violate the laws of their own country. Nor can I
perceive how the opinion of the Maryland court declaring this
contract to be fraudulent and void can be binding and conclusive
upon this Court, and yet every other decision of the same court in
the same case explaining or qualifying this opinion still be open
to examination and reversed for error. I cannot, for myself, draw
any line of distinction between the relative conclusiveness of the
opinions the state court expressed, when all of them were equally
within its jurisdiction and depended altogether upon the laws of
the state, and all upon points necessarily arising in the case they
are then deciding.
When these two cases were before the Court upon writs of error
brought by the trustees, I entertained the opinions I now express.
I then thought that the Court had jurisdiction upon
Page 58 U. S. 270
the ground that the validity of the act of the Maryland
Legislature of 1841 confirming a certain description of conveyances
made before that time by the trustees of insolvent debtors was
drawn into question as contrary to the Constitution of the United
States, and their decision had been in favor of the validity of the
state law. And I still think so. But at the same time, I was of
opinion that the law in question was valid, and that although we
had jurisdiction, the judgment of the state court in these two
cases ought to be affirmed and the writs of error not dismissed.
For the trustee in whom the shares vested, according to the opinion
I have expressed as to Goodwin's case, had transferred them to
Oliver, and the state court was therefore right in decreeing them
to Oliver's executors. The majority of this Court thought otherwise
and dismissed them for want of jurisdiction. And I did not state my
dissent because, as I then understood the opinion, the dismissal
finally disposed of them.
It was upon the grounds above stated that I decided these cases
at the circuit, and supposed, at the time I was deciding them, in
conformity to the opinion of this Court upon the conclusiveness of
the judgment of the state court. The judgment just pronounced,
however, shows that so far as the shares of Gooding and Williams
are concerned, I misunderstood the opinion of the majority of this
Court. But with all the habitual respect which I feel for the
judgment of my brethren, the opinion I held at the circuit remains
unchanged. And I have the more confidence in it because this Court
now, as heretofore, have said that the questions in dispute depend
altogether on Maryland law, and every judge in Maryland who has
been called upon to hear and decide the cases of Gooding and
Williams of which I am now speaking -- the judge of the court of
original chancery jurisdiction, the judges of the Court of Appeals,
all men of high legal attainments and eminence -- have clearly and
unanimously held, upon the same proofs now before us, that the
executors of Oliver were entitled to these two shares in the
Mexican Company, and decreed that the money should be paid to them.
And no one of these judges deemed it necessary that the
administrators should be parties or called before the court. acting
no doubt upon the established rules of chancery that a person who
has no interest in the fund need not and ought not to be made a
party and that the administrators could have no interest, as the
intestates themselves had none at the times of their respective
deaths. And that if they were before the court, they could not be
allowed to impeach the deed to the trustees by alleging that their
intestate had committed a fraud in making it.
I must therefore adhere to the opinions I entertained when the
cases were before me at circuit, and dissent from the
Page 58 U. S. 271
opinion just pronounced in the cases of Gooding's and Williams'
administrators, and concurring in that of Goodwin's administrator,
for the reasons hereinbefore stated.
"John S. Williams, administrator of"
"James Williams, dec'd, appellant"
"v."
"Robert M. Gibbes and Chas. Oliver,"
"ex'ors of Robert Oliver, deceased "
"and "
"John Gooding, Junior, administrator"
"
de bonis non of John Gooding,"
"deceased, appellant"
"v."
"Robert M. Gibbes and Chas. Oliver,"
"ex'ors of Robert Oliver, deceased"
"
Appeals from the Circuit Court of the United"
"
States for the District of Maryland"
MR. JUSTICE DANIEL dissenting.
When, at a former term, these cases were brought before this
Court in the name of Nathaniel Williams, trustee for the creditors
of James Williams, an insolvent debtor, and for the same Nathaniel
Williams, as trustee for the creditors of John Gooding, an
insolvent debtor, the Court, after argument and upon full
consideration, dismissed them for the want of jurisdiction. The
decision of the Court then pronounced commanded my entire
concurrence. I still concur in that decision, and hold the reasons
on which it was founded as wholly impregnable. Those reasons were
specifically these: that the questions involved in the cases were
purely questions arising upon the construction of the insolvent
laws of Maryland, questions properly determinable, and which had
been determined by the highest tribunal of that state, and such,
therefore, as vested no jurisdiction in this Court.
Such, then, being directly and explicitly the decision of this
Court, as will be seen in the report of its decision in
53 U. S. 12 How.
111,
53 U. S. 125, it
becomes a matter for curious speculation to inquire by what view of
the facts and the law of these cases, by what process of reasoning
upon the same facts and the same law, this Court have now arrived
at a conclusion diametrically opposed to that which had been
formerly reached by them. The parties in interest are essentially
the same, varied only in name, it is the same insolvent law of
Maryland which it is now, as it formerly was, undertaken to
interpret, and it is the identical exposition of the identical
court, formerly examined and sanctioned here, which this tribunal
now assumes the right to reject and condemn.
Page 58 U. S. 272
Indeed the field for discussion and criticism is now much more
narrow than was that which existed when these cases were formerly
before this Court. At that time, there were strenuously urged
grounds for contestation founded upon an alleged construction of
the Mexican treaty and of the acts of the commissioners under that
treaty. At present, the claims of the appellants, and the
impeachment by them of the decision of the state court and of that
of the circuit court of the United States have been rested chiefly,
if not exclusively, upon the fact that the personal representatives
of the insolvent assignors were not made parties to the suits
brought for the distribution of the effects of the insolvents.
It cannot be correctly insisted on as a universal or necessary
rule that in suits by assignees, the assignors from whom they
derive title must be made parties. Cases may occur in which there
may be a propriety of joining the assignors in such suits, but,
without some apparent cause for such a proceeding, the rule and the
practice are otherwise. Indeed, the calling into a controversy or
litigation a person who can have no interest in such litigation
would be discountenanced by the courts, who would dismiss him from
before them at the costs of the person who should have attempted
such an irregularity. And it would seem that if there could be a
case in which such an attempt would be irregular, it would be that
in which the person so made a party had not, and could not have,
any interest in the controversy -- in other words, should be an
insolvent who had transferred upon record every possible interest
he possessed in the matter in controversy. But suppose it be
admitted as the general rule that an assignee should, in the
prosecution of an assigned interest, call in his assignor as a
voucher, or for any other purpose, how will these cases be affected
by such an admission?
The absence of the personal representatives of the insolvent
assignors is the only circumstance imparting a shade or semblance
of difference between the attitude of these cases as formerly
brought before us and that in which they are now presented. Of what
importance, either now or formerly, could be the presence or
absence of the personal representatives of these insolvents, it
might puzzle Oedipus himself to divine. The rights or interests of
the representative can never be broader than are those of the
person represented, and as the persons represented in these cases
are admitted on all sides, and are shown upon record to have
nothing by reason of the transfer to their trustees of all that
they had ever possessed or to which they had any claim -- and that
too by a mode of transfer which declared the inadequacy of their
all for the
Page 58 U. S. 273
liquidation of their debts -- it followed that those who came
forward under these insolvents,
jure representationis
merely, could themselves be entitled to nothing by representation
from their principals nor claim anything in opposition to the
universal and absolute assignments to the trustees of those
debtors.
Had these personal representatives of the insolvents been made
parties to the suits for distribution, it is probable that they
would have been regarded by the court as mere men of straw, used
for the purpose of depriving the purchasers, for valuable
consideration, from the trustees or assignees of the insolvent's
interests, deemed, at the time of the sale by the trustees,
precarious and contingent, but which the progress of events had
subsequently rendered available.
But whatever may be admitted as the general rule applicable to
suits by an assignee; however that rule may be supposed to require
that in such suits the assignor or his representative should be a
party, still we are brought back to the true character of these
cases and of the rule of law peculiarly applicable to them, namely,
that they are controversies depending upon the construction of the
statutes of Maryland which regulate the administration of the
effects of insolvent debtors. That in the construction of those
statutes it has been, by the supreme court of the state, decided
that in suits by the purchasers or assignees from the statutory
trustees of insolvent debtors, the personal representatives of
those insolvent debtors are not necessarily to be made parties, but
that such suits may be prosecuted and decided without participation
or interference on the part of such representatives; that in
conformity with this construction of the statute of Maryland by the
supreme court of the state, the Circuit Court of the United States
for the District of Maryland, and this Court, in the cases herein
mentioned, have concurrently ruled in direct opposition to the
pretensions of the appellants now advanced.
Regarding the decision just pronounced as in conflict with all
that has been heretofore ruled upon the subjects of this
controversy and as transcending the just authority of this Court to
reject the construction of the statute of Maryland proclaimed by
the supreme court of that state, I am constrained to declare my
dissent from the decision of this Court, and my opinion that the
decrees of the circuit court in these cases should be affirmed.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Maryland, and was argued by counsel, on consideration
Page 58 U. S. 274
whereof it is now here ordered, adjudged, and decreed by this
Court that the decree of the said circuit court in this cause be
and the same is hereby reversed with costs, and that this cause be
and the same is hereby remanded to the said circuit court for
further proceedings to be had therein in conformity to the opinion
of this Court.