Opinion
AUGUST TERM, 1797.
The cause was argued at the last term, upon an issue joined, after an assignment of the general errors, and the plea of in nullo est erratum, by Ingersoll and E. Tilghman, for the Plaintiff in error, and by Lee (the Attorney General) for the United States. It was then alledged in diminution, however, that a rule had been made, by consent, in the court below, which was not transmitted with the record, allowing special counts to be added to the declaration, and agreeing "that no objection should be made to them, by reason of their being of such a nature, as not to be joined with the first or any other counts;" in consequence of which the two special counts above stated had been added. A certiorari was, therefore, awarded, at the instance of the Attorney General, upon the return to which, at the present term, the rule was duly certified.
It became a question, whether the return to a certiorari (which was made in this instance, by the clerk of the Circuit Court under his hand and the seal of the Court) was within the rule established at the last term ( ant. p. 356.) relative to the return of writs of error?
CHASE, Justice. It appears to me, that the cases are embraced by the same principle; and, therefore, that the return of the certiorari ought to be allowed.
IREDELL, Justice. I cannot think, that a regulation respecting writs of error, extends, of course, to writs of certiorari. They are process whose nature and operation, are in some respects widely different. The present case, therefore, seems to require a new rule.
PATERSON, Justice. I will not decide, whether, generally speaking, writs of error will include writs of certiorari; but as to the present object, they are clearly within the principle of the same rule.
CUSHING, Justice. It is enough for the present purpose, that the principle of the rule applies as strongly to the return of a certiorari, as to the return of a writ of error.
ELSWORTH, Justice. By the rule, it was made the duty of the clerk of the Circuit Court, to return the writ of error, and as the writ of error is not returned, unless all the proceedings in the cause accompany it, the return to the present certiorari can only be considered as compleating the duty imposed by the original rule, in pursuance of a supplementary order from this court.
For the Plaintiff in error, it was observed, that the object is to compel Fenemore to pay the full value of a certificate, which the action itself considered as fraudulently obtained, and which, consequently, is a mere nullity. For so much cash as he had actually received on account of interest, and action of assumpsit may be regularly brought; but the remedy as to the certificate is a bill in equity to compel him to surrender it; or, perhaps, an action of deceit might be proper, but assumpsit will not lie. Two questions, however, are suggested by the special verdict; Ist, Whether there has been a payment of the amount by the United States to Fenemore? and 2d, Whether he assumed in the manner and form stated in the declaration? In answering the first question, it is to be remarked, that in a special verdict nothing is to be intended, the promise whether express, or implied, must be expressly found; and as the special verdict finds no consideration for charging Fenemore with the sum of 3,939 70-100 dollars, the certificate of stock, (which is still to be presumed to be in his possession, which is not proved to have been converted into cash, and which is, indeed, of no value on account of the fraud in obtaining it) cannot be presumed to be a payment either in fact or law; and, of course, there is no foundation for a promise either express or implied. In answering the second question, it is not denied, that an express promise (essentially the same in both of the special counts) is laid in the declaration; and it is supposed, that an attempt was made to prove it as laid; but still the finding of the jury does not support either the first or second count; for, though the jury find the promise, it is not found upon the consideration laid in the declaration, which must be the governing principle. By way of supporting the third count, likewise, the jury find all the circumstances of subscribing to the funding system; (which do not amount to a payment) whereas they were bound to find the actual receipt of the money, and the only finding of an actual receipt of money, is the interest of 1025 dollars on the funded stock.
But the facts arising upon the case, as set forth in the Declaration, are inconsistent; the Counts are of a nature so different that they cannot be joined in the same form of action; the Defendant could not be apprised of what he must prepare to try; and he ought not to be entrapped by the generality of the Count for money had and received. The special Counts are in the nature of a deceit; which cannot regularly be united with case upon promises. Again: the first and second counts affirm the transaction, consider the certificates as the lawful property of Fenemore, and bring this action to recover damages for the breach of his engagement; but the third Count dissaffirms the transaction, considers the certificate as a nullity, and brings this action to recover the money paid to Fenemore under color of the certificate, as so much money received by him, for the use of the United States. The verdict and the judgment are affected by the same incongruity; for, both parts of the finding and judgment cannot be true; the first part supposing the transaction valid, and giving damages; while the second part supposing it invalid, adjudges the money to be the property of the United States. Thus, the Plaintiff presented an inconsistent cause of action; the jury mixed the inconsistent ingredients together; and the Court below have unadvisedly given the whole their sanction. But, if the inconsistency appears on the record, this Court cannot undertake to decide, to which part of the finding the jury would have adhered, had the question been seasonably proposed to them; and must, therefore, reverse the whole proceeding. The United States may, perhaps, either affirm, or dissaffirm, the transaction; but they cannot do both; and they must make an election before they institute their action.
CUSHING, Justice. May not the money be considered as part of the damages assessed under the special counts, and so avoid the objection of a disaffirmance?
Tilghman. The finding of the jury negatives that idea. They leave it to the court to decide for whose use the interest money was received, and the court adjudge that it was received for the use of the United States.
The following authorities were cited, in the course of the argument for the Plaintiff in error: 3 T. Rep. 288. 1 T. Rep. 22. 3 Bl. Com. 158. Doug. 39. 1 Esp. 97. Cowp. 414. Doug. 132. 4. 2 T. Rep. 289. 143. Imp. Pr. 55. 3 Wils. 354. 2 Ld. Raym. 825. Cowp. 818. 2 Bl. Rep. 848. 9.
For the Defendant in error, it was premised, that there seemed to be no hesitation in admitting on the part of the opposite Counsel, that every principle of conscience and equity was opposed to the conduct of their client; but they contended (and it must be agreed) that a Court of error can only decide on the record, and the principles of law which are pertinent to it. Considering the case then, in the strictest point of view, the judgment ought to be affirmed. Though the verdict is certainly informal, and appears at first to be imperfect; yet, every material fact is found; and any unnecessary reference to the Court will be disregarded as mere surplusage. The judgment is for both the sums found by the verdict; and without giving both, it is manifest, that justice could not be done to the United States. A contract may be affirmed, or dissaffirmed. The public policy of the Government required, that this contract should be affirmed. The person who committed the fraud ought not, however, to be benefited by it; and, having recovered from him the value of the certificate, he will himself (a fortiori every purchaser) be entitled in future to receive the principal and interest from the United States. The gift, therefore, of the enquiry is, whether it sufficiently appears on the record, that the United States have suffered an injury by the fraudulent conduct of the Plaintiff in error? To this enquiry it is immaterial, whether Fenemore paid, or received, any thing; and even if there had been no express assumpsit laid in the Declaration, or found in the special verdict, the Court were empowered to decide that there was an implied assumpsit, upon the reference of the facts for that purpose, by the jury: The Jury having however, found an express assumpsit; that subsequent reference to the Court must be considered as surplusage. Trials per Pais 269. 270. 169. Hob. 54.
But, it is urged, that the counts are inconsistent, and cannot be joined in the same declaration: to which, it is answered, that wherever there can be the same plea, and the same judgment, different counts may be joined; 1 T. Rep. 257. 2 Wilf. 321. and wherever there has been an express warranty (which extends to all faults known and unknown to the seller) assumpsit is the proper from of action. Doug. 19. There may, however, be different forms of action for the same injury. 4 Co. 92. In 3 Bl. Com. 164. it is stated, that if any one sells one commodity for another, an action on the case lies against him for damages, upon the contract which the law always implies, that every transaction is fair and honest. The same Commentator observes, that an action of deceit also lies in the cases of warranty, before mentioned, and other personal injuries committed contrary to good faith and honesty: But an action on the case for damages, in nature of a writ of deceit, is more usually brought upon these occasions. Ibid. 166. Morg. Esp. 342 to 359.
WRIT of Error to the Circuit Court for the District of New-Jersey. On the return of the Record, it appeared, that a declaration in case had been filed in this action, containing three Counts; the first and second of which, were special Counts for a fraud and deceit, and the third was a general Count, for money had and received by the Defendant to the use of the Plaintiff. The first Count charged the Defendant with an express assumpsit, that in consideration that the Commissioner for settling Continental accounts, would issue a certificate for 4273 dollars 49 ninetieths, he promised his account against the United States was just for that sum, and exhibited certain vouchers to support it; that the account ought to be allowed, and that the vouchers were true and lawful: It averred, that confiding in the said promises, the United States by their said Commissioner, did issue the said certificate: And it assigned as a breach of the said promises, that the Defendant did not regard the same, but craftily deceived the United States in this, that the said certificate ought not to have been issued and delivered, that the account was not, nor was any part of it, for a just debt, but was deceitful, and that the account and vouchers were not true and lawful; whereby the United States had been greatly deceived. — The second Count stated, that whereas the United States had before that time issued and delivered to the Defendant the said certificate, and had accepted and received from him as lawful vouchers for the issuing and delivery thereof, the account aforesaid, together with certain paper writings in the declaration set forth, in consideration thereof he undertook and faithfully promised that the said account was a just and true account, and that the sum mentioned in it was lawfully due from the United States and ought to be so certified, and that the said certain paper writings then and there exhibited as further vouchers for issuing the said certificate, were regular and lawful vouchers: Nevertheless, the Defendant did not regard his said last mentioned promises, inasmuch as the said account was not true, nor was any part thereof due, nor were the said paper writings lawful vouchers, by means whereof the United States were by him deceived and greatly injured. The third count having stated an assumpsit in the usual form, for 8000 dollars received to the Plaintiff's use, concluded that the Defendant not regarding his several promises, for making payment thereof, had not paid the said sum of money, but refused and still refuses to pay the same to the damage of the United States 8000 dollars. The Defendant pleaded non assumpsit, whereupon issue was joined; and on the trial of the cause, the jury found a special verdict of the following tenor: — "The jury find that the commissioner named in the first and second counts, was the lawful officer of the United States, for transacting the business therein mentioned; and that certain regulations were made by Congress, in relation thereto, on the 20th of February, 1782, and the 3d of June, 1784, to which the jury refer. That the Defendant, on the 2d of August 1784, fraudulently exhibited an account, claiming a balance of £. 1602 117 3-4; equal to 4273 49 90 dollars, as due from the United States to him, which account so fraudulently exhibited, and the vouchers therefor, the jury set forth at large. That then and there the Defendant received, through fraud and imposition, from the United States, the said balance, so as aforesaid falsely pretended to be due to him, in a certificate, which the jury set forth in its proper words and figures. That the Defendant gave a receipt for the same, in the words and figures set forth by the jury. That according to law, the Defendant, on the 12th of May, 1791, subscribed and funded the said certificate in the funds of the United States, and beccame a holder of the stock it produced, amounting with the interest, to 4893 8-90 dollars; and that he gave to the United States a receipt for funded debt comprising the said certificate, which was thereupon delivered up and cancelled. BUT whether the said subscription, the subsequent funding of the said 4273 49-90 dollars, with the interest of 619 59-90 dollars, and the stock acquired in virtue thereof as aforesaid, ought to be allowed as payment of the amount of the said certificate by the said United States to the said Defendant, the said jurors know not; and thereupon they pray the advice of the court here in the premifes: And if it ought to be allowed, then they say he was paid the full amount, to wit — 4893 8-90 dollars. AND the jurors further find, that prior to the year 1791, the United States had paid part of the interest due on the said certificate, amounting to 1025 58-90 dollars. That the Defendant on the 2d of August 1784, undertook and promised to the United States, that the said account was just and true; that the sum of 4273 49-90 dollars was justly due to him from the United States, and ought to be so certified; and that the vouchers produced by him in support of the said account were regular and lawful vouchers for issuing and delivering the said certificate to him. That the said account was not just, nor was the sum specified to be due therein, or any part thereof, justly due, but the said account was fraudulent, and the vouchers produced by him in support thereof were not regular and lawful vouchers for issuing and delivering to him the said certificate. AND whether on the whole matter by the jurors so as aforesaid found, the Plaintiff ought to recover against the Defendant, they are ignorant, and pray advice of the court. And if, upon the whole matter, c. it shall appear to the court, that the Defendant did assume in manner and form as the United States complain, then they say he did assume upon himself, c. and they assess the damages by reason of the non-performance of his promises and assumptions aforesaid, 3,939 70-100 dollars, besides costs and charges; and for costs and charges 10 cents: But if it appear to the court that he did not assume, c. then they say he did not assume, c. AND if upon the whole matter aforesaid, by the jurors found in the manner aforesaid, it shall appear to the court that the Defendant did assume as to the sum of 1025 58-90 dollars so as aforesaid paid by the United States, in part of the interest so due on the said certificate, funded as aforesaid, c. then they find he did assume, c. and assess the damages of the United States by reason of the non-performance of the promises within mentioned, besides costs and charges, at 1023 64-100 dollars, and for costs and charges 10 cents: But if upon the whole matter, c. it shall appear to the court that he did not assume, in construction of law, in manner and form as the United States complain, then they say he did not assume as to the said 1025 58-90 dollars,c." Upon this verdict the CIRCUIT COURT rendered the following judgment, on the 2d of April 1795: "That the United States do recover against the said Thomas Fenemore, their damages aforesaid, by the jurors aforesaid, in form aforesaid, assessed at 4,965 34-100 dollars; and, also, 169 43-100 dollars, for their costs and charges, by the court here to the United States, with their assent, of increase adjudged; which said damages in the whole amount to 5,134 77-100 dollars: And the said Thomas in mercy, c."
There seems to be a variance between the sums, but no notice was taken of it in the argument.
On the 7th of August 1787, the Judges delivered their opinions to the following effect:
The judgment of the Circuit Court ought to be affirmed. Here is the case of a plain fraud. A man sets up a claim, exhibits colourable vouchers to support it, deceives the public officer, obtains a certificate that his claim is just, and, finally, converts that certificate into transferable stock. The transaction is rank from the beginning to the end; and the jury have properly found not only the fraud, but the value of the certificate obtained by it. The United States, by adopting the present mode of proceeding, have precluded themselves from ever disputing hereafter, the validity of the certificate; and they will never, perhaps, be able to indemnify themselves against the subsequent payments of interest, unless Fenemore remains solvent, and accessible to legal process. But, surely, it ought never to have been a subject of argument in a court of justice, whether, on stating a manifest fraud practised upon the public credit and treasury, the United States is entitled to recover an equivalent for the pecuniary injury, from the avowed delinquent.
I am clearly of the same opinion. Upon strict technical rules, I had, at first, some doubts, whether the inconsistency of the counts in the declaration would not be fatal: but on the appearance of the rule entered into by consent, for the very purpose of obviating objections on that ground, my mind was perfectly satisfied. The only question, therefore, that remains to be decided, turns upon the right of the United States, to affirm the original transaction; and, if they have that right, it follows, inevitably, that they ought to recover from the Defendant an equivalent for the value of the certificate, which was surreptitiously obtained. I have no difficulty in saying, that the right exists; and that, the public interest, involved in the credit of a public paper medium, required the exercise of the right in a case of this kind. The circulation of the certificate should be unimpaired; but the Defendant ought, at least, to be made responsible in his purse for the fraud. The defence is, indeed, an extraordinary one: it is an atempt to make the very act of fraud, an instrument, or shield, of protection. But, I trust, no man will ever be able to defend himself in an American court of justice upon the ground of his own turpitude. As, therefore, every exception to form has been obviated by consent, and as the special verdict finds every material fact to justify the judgment of the court below, I think that judgment ought to be affirmed.
The cause is susceptible of little doubt. The United States had a right to affirm the original transaction, and to proceed, as they have done, for the recovery of the value of the certificate and the interest.
Giving a reasonable effect to the rule, which the parties themselves have entered into, all objection, as to the form and inconsistencies of the declaration, is obviated. Then, it is to be considered, that the United States had an option, either to affirm, or disaffirm, the original contract; and by the present action they have chosen to affirm it. The special verdict fairly authorised the court below to give judgment for the value of the certificate on the first and second counts, and for the amount of the money received as interest on the third count. With respect, however, to the right of disaffirmance, I with to be understood, as limiting it to the continuance of the certificate in the hands of the original party for, if the certificate had passed into the hands of a bona fide purchaser, even a court of equity would, I think, refuse to invalidate it; and, I am sure, public policy would forbid the attempt.
As I joined in giving the judgment of the Circuit Court, it gives me pleasure to be relieved from the necessity of delivering any opinion on the present occasion. But, though I have no doubt on the case now to be decided, it appears to me to be another, and a great, question, how far a bill in equity would reach all the points involved in the original transaction.
Judgment Affirmed.