De Valengin's Administrators v. Duffy

IN error to the Circuit Court of the United States for the District of Maryland.

In the Circuit Court of Maryland, John H. Duffy, the defendant in error, instituted a suit against the administrators of Albert P. De Valengin, for the recovery of a sum of money which he claimed to belong to him, being a portion of the indemnity paid by the government of Brazil, for the capture and loss of the brig President Adams, by a Brazilian cruiser, in 1828.

John H. Duffy, a citizen of the United States, domiciled at Buenos Ayres, in 1828, shipped a quantity of hides, and other articles of merchandise, in 1828, on board the brig President Adams, commanded and part owned by Albert P. De Valengin, a citizen of Baltimore, for Gibraltar. The government of Brazil, and that of Buenos Ayres were then at war.

For the better security of the property from Brazilian capture, the property was shipped in the name of De Valengin, and soon after she sailed she was captured by an armed vessel of Brazil, and carried into Monte Video. There, both vessel and cargo were totally lost.

Under an agreement between John H. Duffy and Captain De Valengin, a claim for the cargo as well as the vessel was made by him on the government of Brazil, for indemnity. The ownership of John H. Duffy was concealed in this application; as his property was liable to capture by the cruisers of Brazil; he being domiciled at Buenos Ayres. Captain De Valengin died before any thing was recovered from the government of Brazil for the President Adams and cargo; and a certain James Neale, who had become his administrator, under letters of administration granted in Maryland, prosecuted the claim as the representative of De Valengin; and was, at length, paid the indemnity in Baltimore, by the aid of Mr. James Birkhead, of Rio de Janeiro; who remitted it to him from that place. The proceeds of the property remitted by Mr. Birkhead, were returned in an inventory filed by Mr. Neale, as administrator, in the Orphans Court, at Baltimore, as the estate of De Valengin.

A suit for the recovery of the amount claimed by John H. Duffy, was instituted in the Circuit Court of the United States against James Neale, as the administrator of De Valengin; and he having died before the trial of the cause, and the plaintiffs in error having taken out letters of administration, de bonis non, to the estate of De Valengin, they were summoned, and they appeared and took defence in the action.

In the declaration in the action, the only court applicable to the controversy between the parties to the suit, was that for money had and received by James Neale, the administrator of De Valengin, for the use of the plaintiff. On the issues of non assumpsit and plene administravit, the jury found for the plaintiff on the first, and for the defendants on the second count. The Circuit Court entered a judgment on the first plea for the amount found by the jury, fourteen thousand and thirteen dollars and sixty-seven cents: the judgment to bind assets.

From this judgment the defendants prosecuted this writ of error.

On the trial of the cause in the Circuit Court, the defendants took a bill of exceptions to the decisions of the Court, on six different propositions or prayers, submitted by their counsel for the opinion of the Court. The bill of exceptions contains the whole evidence in the cause. All the prayers of the counsel for the defendants were refused by the Court.

The opinion of the Supreme Court on the matters presented under the writ of error, was given on two propositions; into which all those submitted in the Circuit Court were considered to be resolved.

'1. That the agreement between Captain De Valengin and John H. Duffy, under which De Valengin was to claim remuneration from the Brazilian government, for the loss of the brig President Adams and her cargo, on the ground of its being neutral property; when, in truth, the cargo was the property of John H. Duffy, and therefore belligerent, and liable to capture by the laws of nations; was fraudulent and immoral: and that the Courts of Justice of the United States will not assist a party to recover money due on such agreement.'

'2. That if the money belonged to John H. Duffy, the action would not lie against Neale, as administrator, nor the money be assets in his hands of De Valengin's estate; that his return to the Orphans Court cannot alter the character of the transaction: and that this suit ought to have been continued against Neale's administrator, and not against the representatives of De Valengin.'

The case was submitted to the Court on printed arguments, by Mr. M'Mahon and Mr. Johnson, for the plaintiffs in error; and by Mr. Williams, for the defendant in error.

On the first proposition, as stated the Circuit Court in its opinion: the counsel for the plaintiffs in error contended, that the alleged agreement between John H. Duffy, the defendant in error, and Captain De Valengin, by which the latter was to prosecute the claim on the Brazilian government, for indemnity for the loss of the brig President Adams and her cargo, representing the whole property to belong to him, and, as such, not liable to capture; proposes nothing more or less than the case of two persons conspiring to cheat a third party out of his property.

The object of the agreement was merely to extract money from the third party; and this was to be accomplished by conspiring to make a false and fraudulent repreentation of an injury done to one of them, who, in fact, had sustained no injury; and this falsely alleged injury is made the sole basis of the payment by the third party. The verdict of the jury admits that the payment was made only in consequence of the false and concerted misrepresentations; and would not have been made, if the truth had not been suppressed by the conspiracy.

It is contended, that such an agreement will be held fraudulent everywhere; and that, in such a case, the fraud has no locality.

If two individuals were to conspire, in a foreign country, to obtain money from a third party, either by highway robbery or theft, or by cheating of any description; and under the conspiracy, one of them were to obtain the money of the third party; it would scarcely be contended, that under such an agreement, the other could claim from his associate in the conspiracy a share of the plunder, through the instrumentality of a Court of justice. It is contended that there is no difference between such a case, and a conspiracy to cheat a government: and that such a conspiracy is essentially different as it regards its validity in our Courts, from contracts made for the purpose of evading the revenue laws, or the mere commercial regulations of a foreign country; when to invalidate such a contract would be substantially to enforce such laws and regulations.

It is contended, also, that not only was such an agreement void; and that thereby the principal fact on which the Court instructed the jury in favour of the plaintiff in the Circuit Court was removed from the case; but that the existence of such an agreement necessarily prevented a recovery from the plaintiffs in error: as it would have precluded a recovery against De Valengin, if he had obtained the money from the Brazilian government.

The case put on the whole of the proof of the defendant in error, established this fraudulent agreement, and showed that the money had been obtained by false documents, furnished by John H. Duffy, or obtained by his aid and with his privity.

The property thus coming into the possession of the administrator, the effect of this action was and is to repudiate the plaintiff's own fraudulent documents, evidencing title in De Valengin; and to reclaim the property by force of the agreement to pay over the money to him when recovered. The action could only be maintained upon the agreement to pay over the money when received; he having parted with the title for the fraudulent purpose: this agreement to pay over was a part and parcel of the corrupt and fraudulent agreement, which could not be severed from the latter, nor established without proof of it. The case, therefore, fell within the scope of the well established principle, 'that when recovery cannot be had except by proof of the illegal or corrupt agreement, or through the medium of it, it cannot be had at all.'

The counsel for the plaintiffs in error also contended, that the proof of the fraudulent agreement showed conclusiviely that the defendant in error had no title to the money sought to be recovered: that by his own showing, the title to it was in the Brazilian government; that the money sought to be recovered was not, and never had been his property or the proceeds of his property: but was, on the contrary, a sum of money originally belonging to the Brazilian government, and obtained by fraud from it; and the proof of the fraud furnished by himself, and shown in the agreement supposed by the prayer, established that the title was still in the said government, and not in the defendant in error.

Upon the second proposition, as stated in the opinion of the Court, that the action would not lie against Neale as administrator, nor the money be assets in his hands, of the estate of De Valengin; that the return of Neale to the Orphans Court cannot change the character of the transaction; and that the action should have been continued against Neale's administrator, and not against the plaintiffs in error: the counsel for the plaintiffs in error contended:

The only pretence of claim against the estate of De Valengin and the plaintiffs in error, as administrators de bonis non of his estate, is founded on the allegation that Neale, in his lifetime, received the proceeds of property which did not belong to De Valengin, but in fact belonged to the defendant in error, John H. Duffy; and had wrongfully carried it into the estate of which he was administrator.

The administrator could not, by a wrongful receipt or conversion of property which did not belong to the intestate, create a debt against the intestate, or charge against the estate of the intestate, which enables the owner of the property to come in as a general creditor against the estate. The administrator alone is personally liable for such wrongful receipt or conversion; even where the property has gone to the benefit of the estate.

This is established by numerous and uncontradicted decisions, which settle it beyond controversy, that upon a count for money had and received by an administrator, no other judgment can be rendered than the judgment de bonis propriis; and that such a count cannot be joined with any counts on an indebtedness of the intestate, or with any indebtedness of the administrator; as such; such as money paid for the use of the estate, &c., which does create a debt against the estate. Cited, Jennings vs. Newman, 4 D. and East, 348. Bridges vs. Parker, 2 Bos. and Pull. 424. Powell vs. Graham, 7 Taunt. 580, (2 S. and Low. 223.) Ashley vs. Ashely, 7 B. and Cres. 444, (14 S. and Low. 771.) 1 Chitt. Precedents, 46, note. Reynolds vs. Reynolds, 3 Wend. 240. Sumner vs. Williams, 8 Mass. Rep. 198.

Even if there was any remedy against the estate in such a case, it would be found only in the right to follow and reclaim the specific property so wrongfully carried into the estate, by a proceeding for the specific recovery of it, or by a special claim against the estate founded on the allegation that the property had been carried into the estate and appropriated to its uses: and this, even if the recovery could not be had against the estate, through the medium of the mere common count for money had and received by the administrator.

There was no foundation for any such claim against the estate, as it was conceded that Neale died after having sold the property and received the proceeds, and that no part of the said proceeds had ever been paid over to the plaintiffs in error, or accounted for to them either by Neale in his lifetime, or by his administrators since his death: and the plaintiff had therefore an ample remedy against Neale's administrators for the recovery of the money. It was insisted that the mere return of it in an inventory by Neale, could vary the question; not only because he could not by his mere act of charging himself with it to the estate, make the estate a debtor therefor to the owners: but also because the recovery by title paramount, in an action by Duffy against Neale, or his administrators, would have been a full protection against any claim founded on the mere return in the inventory. There is nothing in the Maryland act of 1820, ch. 174, to change the common law rules on this subject, (as was supposed in the Court below,) or even to bring it within the operation of that act as expounded by the Courts of Maryland, in Sibley vs. Williams, 3 Gill and Johnson, 63, 64: and that there was no evidence in the cause to show that the money received by Neale on the sales was in such a predicament, that the plaintiffs in error or administrators de bonis non could have pursued and recovered the money, according to the construction of that act in the case just referred to: and that the plaintiff's remedy as to assets, in such a predicament, was against Neale's estate, or on his bond.

Mr. Williams, for the defendant in error.

By the laws of Maryland, administrators de bonis non are entitled, and their duty requires them to demand from the legal representatives of the former administrator, the delivery over to them of all bonds, notes, accounts, and evidences of debt, and to require the payment over of all money, belonging to the original estate. And such bonds, &c. and money are assets in the hands of the administrators de bonis non. Laws of Maryland, 1798, ch. 101, sub ch. 14, sec. 2; 1820, ch. 174, sec. 3-5.

It is, accordingly, not only the right, but the duty of the plaintiffs in error, to demand from Neale's representatives the money and property, admitted by him in his lifetime to be in his hands, as the estate of De Valengin. The representatives of Neale cannot claim this property as a part of his estate. Nor can the new administrators of De Valengin reject it as forming no part of De Valengin's estate.

If the administrators de bonis non have neglected, and are neglecting to perform their duty in not calling on Neale's representatives for a delivery over of the property of their intestate; they can be compelled, by application to the proper tribunal, to discharge their duty in this particular.

In the meantime it cannot be an objection, to be urged by the delinquent parties themselves, that they have failed in their duty. Nor, surely, ought it to work a loss or an injury to Duffy, that he has presumed they have fulfilled, or will fulfil the obligations prescribed by law in this respect.

And, further, if Duffey had the alternative, as he doubtless had, under the circumstances of this case, to treat Neale in his individual character as his debtor; he most clearly had a right to embrace the more disadvantageous alternative of regarding De Valengin's estate as his debtor. In adoption the latter alternative, as has been before remarked, it cannot belong to the plaintiffs in error to falsify Neale's admission; and deny that to be their intestate estate, which the first administrator declares on oath to be such. There is as little grace, as there is law, in placing themselves in such attitude. 2 Will. Ex. 1086. 1 Taunt. 322.

As to the assumption of the counsel for the plaintiffs in error, that the contract between De Valengin and the defendant was fraudulent and immoral, under which the indemnity for the cargo of the President Adams was claimed from the Brazilian government, and therefore cannot be made the subject of a suit in a Court of the United States; the counsel for the defendant in error said, that it assumes that in a Court of the United States, between citizens of the United States, an agreement cannot be enforced, which seeks to guard bona fide American property from seizure by one belligerent power that is at war with another; both of them being at peace with the United States.

The device practised in this case, by placing the property in the name of the captain, is not forbidden either by the laws of nations, the laws of war, or the laws of morality.

The residence of Duffy in Buenos Ayres; which imposes upon him a temporary allegiance to one of the belligerent parties; may subject his property, if captured, to condemnation in the Courts of the other. But if the property is restored or indemnified for, either because the capturing power chooses to waive its right to condemn, or because the residence of its true owner is unknown, it ought clearly to enure to the benefit of the true owner against all the rest of the world. It would be monstrous, and against all law and justice to allow the other contracting party, who has participated in the seizure, to claim that as his own which he admits to be another's; and which he has promised to account for when received. 1 Bos. and Pull. 3. 7 Wheat. 283. 8 Wheat. 294.

The cases relied on by the defendants below, are irrelevant to the points in issue. They chiefly relate to controversies between a neutral and a belligerent: as 2 Dall. 34. 1 Kent's Com. 143. 7 Wheat. App. 27. Story's Confl. L. 214: or to cases of insurance, where there was a concealment of material facts, as 3 Wash. C. C. R. 391. 2 Phil. Ins. 130.

Mr. Chief Justice TANEY delivered the opinion of the Court.