De Valengin's Administrators v. Duffy/Opinion of the Court

This case comes here, upon a writ of error to the Circuit Court for the District of Maryland.

It appears from the record, that John H. Duffy, an American citizen, being engaged in commerce and domiciled at Buenos Ayres, shipped a cargo of hides and lard to Gibraltar, on board the brig President Adams, in 1828. Buenos Ayres was then at war with Brazil. The President Adams was an American vessel; and De Valengin, her captain, was a citizen of the United States. He was also part owner of the vessel.

In order to protect the cargo from capture by the Brazilians, it was shipped as the property of De Valengin; and the bill of lading, and other papers in relation to it, were made out in his name. The brig was, however, captured on her voyage by a Brazilian cruiser, and was wrecked; and the vessel and cargo totally lost, near Monte Video, while in possession of the captors; who were endeavouring to carry her into port.

De Valengin being the ostensible owner of the cargo, he, with the consent of Duffy, prosecuted a claim for remuneration from the Brazilian government; insisting that the property belonged to him; that it was neutral property, and therefore, unlawfully captured. De Valengin died before he recovered any thing; and after his death, James Neale took out letters of administration on his estate, in the city of Baltimore, and continued to prosecute the claim upon the ground that the property was De Valengin's; and at length succeeded in obtaining compensation for it from the Brazilian government. The money was paid to Neale's agent at Rio de Janeiro, and invested in coffee, and shipped to him to Baltimore; where he received and took possession of it as property belonging to De Valengin's estate, and as his administrator. It was duly appraised as the property of De Valengin, and returned as such by Neale, to the Orphans Court, in January, 1834; and afterwards was sold by him, and the money received. It does not appear from the evidence, whether Neale had or had not any knowledge of the interest of Duffy in the cargo, while he was prosecuting the claim against the Brazilian government; or when he received the compensation for it.

In March, 1834, Duffy brought suit against Neale for the money he had thus received. The suit was against Neale as administrator of De Valengin. In 1836, Neale died, the suit being still pending; and after his death, process was issued against the present plaintiffs in error; who are the administrators de bonis non of De Valengin; in order to make them defendants to the suit which he had instituted against Neale in his lifetime, as administrator as aforesaid.

The declaration was amended by the plaintiff after the appearance of the administrators de bonis non; and the only count applicable to the case, as it appears in the testimony, was that for money had and received by Neale, as administrator of De Valengin, to and for the use of the plaintiff. The defendants pleaded non assumpsit and plene administravit, upon which issues were joined; and the jury found for the plaintiff on the first issue, and for the defendants on the second; and the judgment was entered for the amount found due by the jury in the usual form, to bind assets when they shall arise.

At the trial, several instructions were asked for by the defendants, which were refused by the Court. They may all, however, be resolved into two. 1. That the agreement between De Valengin and Duffy, to claim remuneration from the Brazilian government, upon the ground that it was neutral property, when in truth it was Duffy's, and therefore, belligerent, and liable to capture by the laws of nations, was fraudulent and immoral; and that the Courts of justice of this country, will not assist a party to recover money due on such an agreement.

2. That if the money belonged to 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 the suit ought to have been continued against Neale's administrator, and not against the representatives of De Valengin.

The first question may be disposed of in a few words. It has been frequently held, that the device practised in this case, of covering the property as neutral when in truth it was belligerent, is not contrary to the laws of war, or the laws of nations. And contracts made with underwriters in relation to property thus covered, have always been enforced in the Courts of a neutral country, when the true character of the property and the means taken to protect it from capture, have been fairly represented to the insurer. The same doctrine has always been held where false papers were used to cover the property; provided the underwriter knew or was bound to know that such stratagems were always resorted to by persons engaged in that trade. And if such means may be used to prevent a capture, there can be no good reason for condemning with more severity, the continuation of the same disguise after capture, in order to prevent the condemnation of the property, or to procure compensation for it, when it has been lost by reason of the capture. It is true the Courts of the capturing nation would never enforce contracts of that description; but they have always been regarded as lawful in the Courts of a neutral country.

The second question is one of more nicety, and the cases are not entirely reconcilable to each other. There are, doubtless, decisions which countenance to doctrine that no action will lie against an executor or administrator, in his representative character, except upon some claim or demand which existed against the testator or intestate in his lifetime; and that if the claim or demand wholly accrued in the time of the executor or administrator, he is liable therefor, only in his personal character. But upon a full consideration of the nature, and of the various decisions on the subject, we are of opinion, that whatever property or money is recovered or received by the executor or administrator, after the death of his testator or intestate in virtue of his representative character, he holds as assets of the estate; and he is liable therefor, in such representative character to the party who has a good title thereto. In our judgment, this, upon principle, must be the true doctrine.

In the case of a factor who sells the goods of his principal in his own name, upon a credit, and dies before the money is received, if it is afterwards paid to the administrator in his representative character; would not the creditor be entitled to consider it as assets in his hands, and to charge him in the same character in which he received it? The want of knowledge, or the possession of knowledge on the part of the administrator, as to the rights or claims of other persons upon the money thus received, cannot alter the rights of the party to whom it is ultimately due. The debtor, that is to say, the party who purchased from the factor without any knowledge of the true owner, and who pays the money to the administrator under the belief that the goods belonged to the factor himself, is unquestionably discharged by this payment. Yet he cannot be discharged unless he pays it to one lawfully authorized to receive it; and the party to whom he pays cannot be lawfully authorized to receive, except only in his representative character. If he is authorized to receive in that character, why should he not be liable in that character?

Again, if a note had been taken by the factor, payable to himself, and after his death his administrator sued upon it in his representative capacity, and recovered the money; would he not be liable to the principal, in the same character in which he had, by the judgment of a Court recovered the money? It would be difficult to reconcile the contrary doctrine to any sound principles of reason, or to find any countenance for it in analogous cases.

We do not mean to say, that the principal may not, in such cases, resort to the administrator in his personal character, and charge him, de bonis propriis, with the amount thus received. We think he may take either course, at his election; but that whenever an executor or administrator, in his representative character, lawfully received money or property, he may be compelled to respond to the party entitled in that character; and shall not be permitted to throw it off after he has received the money, in order to defeat the plaintiff's action.

In this case, De Valengin was the bailee of the goods shipped by Duffy, and had a special property in them; and it was his duty to take all proper measures for their safety and preservation. He had a right to sell and transfer the goods in his own name, and as his own property. The Brazilian government, by agreeing to pay the money, admitted that the debt was justly due to him on account of the destruction of this cargo. Whether that government was deceived or not, is another question; and does not affect the point now to be decided. The admission of the debt as due to De Valengin, places this case upon the same principles with that of a factor before mentioned, who had sold the property of his principal in his own name, and died before the receipt of the money. If the administrator is lawfully entitled to receive it in his representative character, and does so receive it, he is liable, in the same character, to the party entitled. Neale prosecuted the claim, and received the money, as the administrator of De Valengin. He must account for it in the same character.

If this transaction had taken place before the act of Assembly of Maryland, of 1820, ch. 174, the suit must unquestionably have been continued against Neale's representatives, and could not have been sustained against the administrators de bonis non of De Valengin. Because the property which Neale had received as administrator was converted into money in his lifetime, and must therefore have been accounted for by his administrator, and would not have passed to the administrator de bonis non of the former intestate. But by the third section of the act of 1820, ch. 174, the administrator de bonis non, is entitled to the bonds, notes, accounts, and evidences of debt, which the deceased executor or administrator may have taken, and to the money in his hands in his representative character; and he is authorized to recover them in the manner there pointed out. And the money now in controversy being, as we have already said, lawfully in the hands of Neale, in his representative character, the administrators de bonis non are entitled to it; and as they are authorized to recover the fund out of which the money due to Duffy is to be paid, he had a right to make them parties to the suit which he had instituted against the first administrator, and to continue it against them. They are not injured, or in any manner placed in danger by this proceeding. For they are not liable, unless the money is recovered from Neale's representatives or securities; provived there is no negligence or breach of duty on their part.

The motion in arrest of judgment offered in the Circuit Court, if it had not been objectionable upon other grounds, was evidently too late by the rules of the Court; and, on that account, properly overruled.

The judgment of the Circuit Court is therefore affirmed.

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 adjudged by this Court, that the judgment of the said Circuit Court, in this cause be, and the same is hereby, affirmed, with costs and damages, at the rate of six per centum per annum.