Boyle v. Zacharie (31 U.S. 635)/Opinion of the Court

This is an appeal from a decree in equity to the circuit court for the district of Maryland, dismissing the bill of the plaintiff, now appellant.

The material circumstances are as follows. Zacharie and Turner are, and at the time of the transactions hereafter to be stated were, resident merchants at New Orleans, and Boyle a resident merchant at Baltimore. In the year 1818, Boyle being the owner of the brig Fabius, sent her on a voyage to New Orleans, consigned to Zacharie and Turner, where she arrived and landed her cargo, and Zacharie and Turner procured a freight for her to Liverpool. After the cargo was put on board, and the brig was ready to sail, she was attached by process of law, at the suit of Messrs Vincent, Nolte and Co. of New Orleans, as the property of Boyle, for a debt due by him to them. Zacharie and Turner, with one Richard Relff, with a view to benefit Boyle, and enable the brig to perform her voyage, became security for Boyle upon the attachment, and thus procured the release of the brig. Upon information of the facts, Boyle approved of their conduct, and promised to mdemnify them for any loss they indemnify them for any loss they Messrs Vincent, Nolte and Co. recovered judgment in their suit, and Zacharie and Turner were compelled to pay the debt and expenses, amounting to three thousand one hundred and thirteen dollars and thirty cents; and afterwards, on the 23d of December 1819, they instituted a suit against Boyle for the recovery of the same, in the circuit court of Maryland. On the 31st of the same month of December 1819, Boyle made application for the benefit of the insolvent act of Maryland, of 1816, ch. 228, and eventually received a discharge under the same. On the 1st of May 1821, judgment by confession was rendered in the suit, in favour of Zacharie and Turner, for the sum of three thousand one hundred and thirteen dollars and eighty cents, with interest from the 15th of November 1819, and costs of suit; and a memorandum was entered of record, by consent of the parties, as follows, 'this judgment subject to the legal operation of the defendant's discharge under the insolvent laws of Maryland.' The judgment having remained unexecuted for more than a year, it was revived by a scire facias; and writs of fieri facias were issued, and renewed from time to time, until the 12th of December 1827, when a fieri facias was delivered to the marshal, who levied it on the ship General Smith, belonging to Boyle, on the 31st of March 1828; and returned it to the May term of the circuit court of the same year.

The bill of the plaintiff was filed on the 7th of April 1828, and stated most of the preceding facts; and prayed for an injunction to the further proceedings to enforce the execution of the judgment, and for general relief. The grounds relied on by the plaintiff, for this purpose, were first, that his property is exempted from the levy, by his discharge under the insolvent act; secondly, that he is entitled to credit for certain commissions accruing to him for certain business done for Zacharie since the judgment, and agreed to be deducted therefrom; and thirdly, for the amount of losses sustained by the plaintiff in consequence of Zacharie and Turner having caused certain attachments for the same debt to be issued in Louisiana against the property of the plaintiff in the hands of certain debtors of the plaintiff in that state. An injunction issued on the bill, on the 8th of the same April.

The answer of the defendants (now appellees) having come in, the cause was set down for a hearing on the bill and answer (by which the facts stated in the answer must be taken to be true); and it was decreed by the court that the injunction be dissolved, and the bill dismissed without costs. From that decree the present appeal has been taken to this court.

The first point presented for argument, and indeed that which was the principal ground of the appeal, is as to the effect of the discharge under the insolvent act. This question is of course at rest, so far as it is covered by the antecedent decisions made by this court. The ultimate opinion delivered by Mr Justice Johnson in the case of Ogden v. Saunders, 12 Wheat. 213, 358, was concurred in and adopted by the three judges, who were in the minority upon the general question of the constitutionality of state insolvent laws, so largely discussed in that case. It is proper to make this remark, in order to remove an erroneous impression of the bar, that it was his single opinion, and not of the three other judges who concurred in the judgment. So far then, as decisions upon the subject of state insolvent laws have been made by this court, they are to be deemed final and conclusive.

It has been suggested that the memorandum of agreement accompanying the judgment, that it should be 'subject to the legal operation of the insolvent laws of Maryland,' ought to be deemed an acquiescence on the part of Zacharie and Turner, in the validity of that discharge, or at least a waiver of any claim in repugnance to it. We do not think so. The sole effect of that agreement is to save to the party whatever rights he may claim from the legal operation of those laws. It neither admits their validity, nor waives any rights of Zacharie and Turner, if they are unconstitutional.

It has in the next place been argued, that the contract upon which the judgment is founded, is, in contemplation of law, a Maryland contract; and not a Louisiana contract; that Boyle undertook to pay the money in the place where he resided, and not in the place where Zacharie and Turner resided. Our opinion is, that this argument cannot be maintained. We do not admit, that the original undertaking of Zacharie and Turner in giving security in behalf of Boyle, was an unauthorised act, and beyond the scope of their just authority, as consignees of the Fabius. It was an act obviously done for the benefit of Boyle, and indispensable to enable the vessel to perform her voyage; and naturally implied from the relation of the parties, as owner and consignees. It must have been intended by the owner, that the consignees were to be at liberty to do any act for his benefit, which was or might be required in order to despatch the vessel on the voyage. And Boyle himself seems to have admitted this to be true; for in the answer of Zacharie and Turner (which is evidence in the cause), it is expressly stated that Boyle, 'so far from disapproving of the acts of these defendants, as above stated, thanked them for their prompt and correct management of his business, and undertook and promised to indemnify them from any loss which they might sustain on his account.' Now that could scarcely be deemed a prompt and correct management of the business of the principal, which was wholly beyond the scope of the authority delegated to the agents. In this view of the matter, the contract of indemnity would clearly refer for its execution to Louisiana; as much so as if Boyle had authorised Zacharie and Turner to advance money there on his account, for which he would repay them. Such a contract would be understood by all parties to be a contract made in the place where the advance was to be made; and the payment, unless otherwise stipulated, would also be understood to be made there. The case would, in this aspect, fall directly within the authority of Lanusse v. Barker, 3 Wheat. Rep. 101, 146; see also Coolidge v. Poor, 15 Mass. Rep. 427; Consequa v. Fanning, 3 Johns. Ch. Rep. 587.

But if the contract had been unauthorized, and beyond the agency, still the subsequent ratification of the transaction by Boyle would have the same operation, according to the well known maxim, that subsequent ratification is equivalent to a prior order; and when made, it has relation back to the time of the original transaction, and gives it as full a sanction as if it had been done under an original authority. The ratification of this contract by Boyle was complete and perfect; and he treated it as a Louisiana contract of indemnity, for his benefit, by which he was bound, and which he ought to discharge in that state.

As to the credit for commissions, that is no longer relied on; for the defendant's answer asserts distinctly that the amount has been already credited.

As to the attachments, it is not very easy to ascertain the grounds upon which Boyle attempts in his bill to assert an equity. Assuming that a bill would lie to have an equitable offset for unliquidated damages, occasioned by the misconduct of the creditors in not prosecuting such attachments with due diligence, where the debt has been lost by the insolvency of the garnishee in the intermediate period (on which we desire to be understood as expressing no opinion); still, there must be sufficient facts alleged in the bill to justify a presumption of loss. Now, in the present bill, there is no allegation whatsoever of any insolvency of the garnishees. The allegation as to one attachment is, 'whereby your orator has been deprived of the benefit of any part of the debt, now due by the said Nelson (the garnishee), being somewhere about the sum of fifteen hundred dollars, besides interest thereon, from the said year, when the attachment aforesaid was laid, and which sum is as completely lost to your orator, as if it had been paid over to the said Zacharie and Turner; who, for aught your orator knows, may have actually recovered the whole of it in virtue of said attachment, and may have refused to give credit for the same.' And as to the other attachment, the allegation is, 'that they also attached property belonging to your orator, which was in the hands of Messrs Breedlove and Bradford (the garnishees), for which your orator has never received any credit, although it has been thus far completely lost to him, amounting, as he verily believes, to the sum of, &c. &c.' So that the whole gravamen is, that the attachments have hitherto prevented him from receiving the debts and interest due from the garnishees. Under such circumstances, where Boyle might at any time have relieved himself from the effects of the attachment, by the payment of the debt due to Zacharie and Turner; and where he has himself acquiesced in the delay, without in any manner attempting to speed the suits; and where no connivance or indulgence is pretended to have existed in concert with the garnishees; and where there is no allegation in the bill itself, of any undue delay in prosecuting the attachments by the creditor, it is difficult to perceive any foundation on which to rest a claim for equitable relief. But the answer of the defendants shows still more forcible objections against the bill. This answer explicitly avers, that in both of the attachments the garnishees denied having any funds of Boyle in their possession, Nelson generally, and Breedlove, Bradford & Co. with the qualification, any funds liable to the attachment; and the suits were dismissed accordingly. Copies of the proceedings are annexed to the answer, which demonstrate (if it had been necessary), the result of the averment; but it must be taken to be true, as the hearing was upon bill and answer.

It is added in the answer that the suit against Breedlove, Bradford & Co. was commenced upon the information and at the request of Boyle; so that it was not in invitum; but was an arrest of his funds, upon his own suggestion, and with his own consent. Surely a suit in chancery cannot be maintained in a case so naked of all real equity. But it is said that the answer of the garnishees, Breedlove, Bradford & Co. admits that they are indebted to the plaintiff. But we must take that answer according to its terms and import; and if so, then the admission is qualified. It is as follows: 'we do not consider ourselves in debt to Hugh Boyle, or to Hugh Boyle & Co.; we received of Hugh Boyle & Co. some property, which has been sold, and the proceeds, say twelve or thirteen hundred dollars, placed to their credit on our books; but one of the house holds a claim against Hugh Boyle & Co. for upwards of twenty-five hundred dollars, which amount he refused to admit as a credit to our partner, but was willing to close Hugh Boyle & Co.'s account, by charging him and crediting the partner with the balance due said Boyle, and in this way said balance was held to pay the claim.' They add, in an answer to another interrogatory, 'we have no property of the defendants in this case, nor do we know of any.' Now, it has not been shown at the argument, that in a process of this sort, under the local laws of Louisiana, the debt due to one partner might not be a good defence for the garnishees; and certainly the court cannot presume it. And, upon general principles, there can be little doubt, that in a court of equity, in a suit by Boyle seeking relief, such a counter claim would or might, under circumstances, furnish a good defence, if not to the firm, at least to the creditor partner, to rebut the claim of Boyle against him. Where there is an express denial by the garnishees, setting up an equity of any property in their hands liable to the attachment, that allegation ought to be presumed to be supported by the local law applicable to the facts, until the contrary is explicitly established. But the decisive answer is, that as this suit was commenced at the request of Boyle, and as the garnishees did not admit that they had property liable to the attachment, the onus is on Boyle, to show, that, nevertheless, by the local law the attachment might have been enforced. He has failed to establish any such proposition.

Upon the whole, it is the opinion of the court, that the decree of the circuit court ought to be affirmed, with costs.

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 whereof, it is ordered and decreed by this Court, that the decree of the said circuit court in this cause be, and the same is hereby affirmed, with costs.