Opinion
04-19-1871
SEGAR & al. v. PARRISH & als.
Ould & Carrington, for the appellants. John Howard and A. H. Sands, for the appellees.
1. A, B and C are the heirs of W, and also heirs of M, and D and E are heirs of M. They all appoint S an agent to collect and sell land scrip due to W, and also scrip due to M. The scrip is obtained and sold, but the agent does not pay over the proceeds. All the heirs unite in a suit for the recovery, and call for a discovery. The bill is not demurrable, either for multifariousness or because the plaintiffs have a complete remedy at law.
2. S having failed for twelve years to pay over the proceeds of the sale, or to give the parties any information on the subject, he has forfeited the compensation which, by the original agreement, he was to receive.
3. S having stated in his answer, and also in his deposition, that he sold the scrip for 91 cents per acre, and there being no other evidence on this point in the cause, he is to be charged at that price, with interest upon it; and not at the legal price of public lands.
4. S having sold the scrip bona fide to F, and received the money for it, before the scrip was issued, he may substitute F as attorney for the principal, to enable F to obtain the scrip; and this being the mode recognized at the land office, F does not become liable to the principals, as their agent, for the purchase money.
This is a bill filed in the Circuit court of the city of Richmond by the heirs of William Parrish and Mark Parrish, who were pilots in the State navy during the war of the revolution, against Joseph Segar and Hamilton G. Fant, to recover the price of land scrip issued to the said heirs for the services of their ancestors under the act of congress of August 31st, 1852. Some of the plaintiffs were the heirs of both the Parrishes, others were heirs only of one of them. The bill set out that under the laws of Virginia and the act of congresss, the heirs of William Parrish were entitled to receive 2,666 2/3 acres of land, and the heirs of Mark Parrish were entitled to receive the same quantity of land. That about the year 1858 the plaintiffs executed to Joseph Segar letters of attorney to receive the said scrip from the government of the United States, and to assign the same, with power to substitute one or more persons as attorney in his place; copies of which they file. That Segar thereafter substituted Hamilton G. Fant in his own stead, with like powers. That by virtue of these powers, Fant received the said certificates from the government, in the names and on account of the plaintiffs; he signing himself as their attorney. Copies of his receipts are also filed.
The plaintiffs charge that Fant afterwards sold the scrip so received at from $1 20 to $1 25 per acre for the land represented thereby. They do not know how much of this money was handed over to Segar; but they are informed, believe and charge, that the market value, if not the actual proceeds of the sales of said scrip, was enjoyed between them. Between the two they got the whole of the money realized, and each of them well knew the rights of the plaintiffs in the premises. And they charge that both of them are jointly and severally bound, for what they received, to the plaintiffs. But neither of them has ever paid anything to the plaintiffs on account of said scrip. Indeed the fact that it, or any part of it, had been received and sold was concealed from the plaintiffs, and was only discovered a short time before the late war, when suit was brought against Segar; but the maturity of the suit was prevented by the events of the war, and on the 3d of April, 1865, the papers in the cause were destroyed. They call upon Segar and Fant to disclose and state what amount of said scrip was received and sold as aforesaid, and what sums of money were realized by them respectively for the same, and that they be required to pay the proceeds, with interest, into court; that the fund so paid in may be distributed among the parties entitled; and for general relief.
Segar and Fant appeared and demurred to the bill, and also answered. The demurrer is as follows: " This respondent says, that the bill of the plaintiffs is not sufficient in law." Segar, in his answer, admits the right of William and Mark Parrish as stated in the bill, and that he was employed by the plaintiffs to prosecute the claim, with authority to recover, receive, assign and sell the said scrip. His compensation was to be one-third of the scrip. He says that as soon as the right to scrip was recognized by the proper officers in the general land office, it was saleable in the market and had its market value, just as stocks and other securities had. In such cases the purchaser received from the vendor the power to draw the scrip from the office, when it was ready for issue, its issue being only a question of time; and when such power was properly executed so as to ensure the delivery of the scrip, the sale was as readily effected as though the scrip had been already issued.
Having obtained from the land office the recognition of the claim to the scrip, he proceeded to sell it, and some time early in the year 1858, he sold the said scrip to Sweeny, Rittenhouse, Fant & Co., bankers and brokers in Washington city, for ninety-one cents per acre, amounting to $4,853 33 1/3. This was then the current market rate.
He further says, that the sale being made, he, solely for the purpose of effectually closing it, substituted Fant's name in the power of attorney aforesaid, to enable him to transfer the scrip; his name was used only because he was the member of the firm who generally attended to this business. The purchase money of said scrip was paid to this defendant; and he does not deny his responsibility for two-thirds of it to the heirs of William and Mark Parrish; but it is not true that he has paid none of the parties. He paid to Thomas Peek (one of the plaintiffs) a sum on account of his interest, which defendant cannot now state, but which he believes was the whole amount due him. He also paid to several parties in the State of North Carolina sums on account of their interest. All books, papers and accounts of respondent were burnt in the year 1861, and he was thus deprived of the evidence of his payments. He fully admits, however, that the greater portion of the sum so received remains unpaid.
Fant, in his answer says, in January and February, 1858, he was one of the firm of Sweeney, Rittenhouse, Fant & Co., located in Washington, and engaged in business as bankers and brokers. As a part of their regular business, they dealt in land scrip, which was constantly on the market, and had a market value just as bank stock and other securities had. In January, 1858, Segar came to the office of Sweeney, Rittenhouse, Fant & Co., and offered for sale the land scrip mentioned in the bill. It was ascertained that Segar did not have the scrip; but enquiry at the general land office, and inspection of the papers produced by Segar, satisfied the said firm that the scrip would be issued on the order of said Segar, as attorney in fact, and that as such he had a right to sell the same. Said firm of Sweeney, Rittenhouse, Fant & Co. thereupon, about the latter part of January or the first of February, 1858, purchased from said Segar, as attorney in fact, the scrip which was to be issued for the services of William Parrish and Mark Parrish, which amounted to 2,666 2/3 acres each, and by such purchase became the owners. The said firm has settled in full with Segar for the purchase money; the sale was bona fide, made in the usual course of trade and at a fair market rate. As the scrip had not been issued, it became necessary to secure its issuance to the purchasers; and for this purpose, and only for this purpose, the defendant Fant was substituted as attorney for Segar: His name was used because he was the member of the firm who generally attended to this business. He cannot state the exact amount of the purchase money paid by the firm to Segar. This may be obtained from the books of the firm, which are in the city of Washington, and, as soon as he can satisfy himself of the amount, he will file a statement of the same with his answer: his recollection is, it was between one dollar and one dollar and twenty cents per acre.
Segar was examined as a witness for Fant. He says that he sold the scrip, under the powers of attorney given to him, to the firm of Sweeney, Rittenhouse, Fant & Co., of which the defendant Fant was a member, at the price of ninety-one cents an acre; and conveyed to Fant by substituting him in his place in the power of attorney; that being the usual mode at the land office. He was paid by Fant, at the rate stated, immediately after the execution of the substituted power to him; as witness understood, on account of the firm. He had sold at various times large amounts of scrip to the firm, Mr. Fant usually attending to the scrip portion of the business of the firm. He explained the manner in which scrip was transferred to the purchaser; which is similar to the mode pursued in this case.
Upon cross examination, the witness was asked: " If you received any money from Fant or said firm on account of said scrip, in cash or otherwise, what did you do with it?" To which he answered: " I disposed of it according to my sovereign will and pleasure." When this answer was afterwards read to him, he added to it the following: " As any gentleman, believing himself solvent, would use funds under his control." This evidence was excepted to by the plaintiffs, so far as it went to effect the construction of the powers of attorney to Fant.
The powers of attorney given to Segar authorize him to receive, sell and assign the scrip, and to substitute another person in his place as attorney, with like powers; and stated on their face that he was to receive one-third part of what scrip he might recover. And his endorsement on these powers, as well as a separate general power, given to Fant, are dated the 28th day of January, 1858. And the scrip seems to have been assigned by Fant to various parties in March of that year.
The cause came on to be heard on the 10th of August, 1869, when the court overruled the demurrers. And being of opinion that Segar had failed to perform his duty as a faithful agent, and was entitled to no compensation for his alleged services, but had wholly forfeited all claim thereto: And being further of opinion that, by reason of the course of dealings by and between Segar and Fant, they were equally and jointly liable to the plaintiffs for the full value of the scrip, with interest thereon from the day of sale and assignment of the scrip to Fant: And it appearing to the court, by the several acts of congress touching such scrip, that the legal and public value thereof is estimated at $1 25 per acre; and the said Segar and Fant having failed to disclose and state, in response to said bill, for what price the said scrip was sold by said Fant, and there being nothing in the cause to shew that less was realized for it than the legal and public value thereof, as aforesaid: And it appearing further that the bulk of said scrip was sold and assigned by Fant early in March, 1858, it was decreed that the said Segar and Fant do, within sixty days from the date of this decree, pay into the Planters' National Bank of Richmond, to the credit of the court in this cause, the sum of six thousand six hundred and sixty-six dollars and sixty-six cents (being for the value of said scrip for 5,333 1/3 acres of land at one dollar and twenty-five cents per acre), with interest thereon at the rate of six per cent. per annum from the 31st of March, 1858, till paid.
And a commissioner of the court was directed to enquire and report to the court in what proportion the plaintiffs are entitled to share in the fund.
From this decree Segar and Fant appealed to this court for an appeal; which was allowed.
Ould & Carrington, for the appellants.
John Howard and A. H. Sands, for the appellees.
STAPLES, J.
The first error assigned relates to the pleadings. It is objected that the bill is multifarious in uniting as plaintiffs the heirs and representatives of Wm. Parrish, and the heirs and representatives of Mark Parrish, having separate and distinct interests. It appears by the powers of attorney filed as exhibits with the bill, that all the plaintiffs claim as heirs of Mark Parrish. A part of them also claim as heirs of Wm. Parrish. All are interested in one subject of controversy, though all are not interested in the entire subject of controversy.
Had the plaintiffs, who are descendants of William Parrish, instituted suit against the defendants, to recover in that character, they clearly would have had the right to embrace in such suit their claim for what was due them as representatives of Mark Parrish's estate. The defendants could not object, because they acted under a joint letter of attorney relating to both estates.
Had the descendants of Mark Parrish instituted suit to recover what was due them in that character, they would have been required to make parties the heirs of Wm. Parrish, who were jointly interested with them in the funds of Mark Parrish's estate. And in each case the same inquiries would have been proper--the same accounts necessary, in order to a final and complete adjudication of the rights of all the parties. After much unnecessary delay and confusion, the result would have been a consolidation of the two causes.
The courts have found it impracticable to lay down any fixed rule in regard to the incorporation of separate and distinct matters in the same bill. They seek rather to ascertain what is just and convenient in the particular case, than to declare any general rule, applicable to all cases. In Knye v. Moore, 1 Sim. & Stu. R. 61, a mother joined with her children as co-plaintiffs in a bill, the object of which was to establish two distinct claims, arising under separate instruments; the mother claiming an annuity under one, and the mother and children claiming the benefit of a settlement under the other. It was held the bill was not multifarious, upon the ground that the whole case of the mother being properly the subject of one bill, the suit did not become multifarious, because all the plaintiffs were not interested to the same extent.
In Story Eq. Plea, sec. 271, a, the rule is thus expressed: " So, it is not indispensable that all the parties should have an interest in all the matters contained in the suit; it will be sufficient if each has an interest in some matters in the suit, and they are connected with the others." In this case it was proper and convenient, in the administration of justice, to litigate and dispose of all the matters in controversy in one suit. It is difficult to perceive how the defendant can be prejudiced by this mode of proceeding. If he is subjected to any inconvenience or embarrassment in making his defence, he has failed to disclose or even to suggest it. I think, therefore, the court did right in overruling this objection.
The second ground of error is, that the plaintiffs have ample remedy by action at law.
It is true that the mere relation of principal and agent does not justify the interposition of a court of equity where the principal has complete and adequate redress by suit in the common law courts. But this relation being generally one of great personal confidence and trust, the principal is seldom able to ascertain the true state of the accounts, the disposition of his property, and the profits realized, except by an appeal to the conscience of the agent, and an examination of his books and vouchers. Upon well-settled principles, the court having acquired jurisdiction by means of a bill of discovery, will finally adjudicate the matters in controversy and grant such relief as may be just and proper.
In this case the defendant Segar, more than twelve years ago, was appointed plaintiff's agent to receive and sell the scrip, to which they were entitled from the government of the United States. So far as this record discloses, he has not only retained the funds during all this period, but he has failed to give his principals any information touching the execution of the trust confided to him; whether he had received the scrip, and if so, what disposition he has made of it, and upon what terms he sold it. Upon all these points the plaintiffs may properly invoke the aid of a court of equity to compel a full and explicit discovery of all matters appertaining to his execution of the agency. The jurisdiction of a court of equity in such cases is not taken away, because the statutes now authorize the examination of the adverse party as a witness.
The plaintiffs were also entitled to resort to a court of equity to avoid multiplicity of actions; but it is unnecessary to enlarge upon this view, as the equitable jurisdiction is clear upon the first ground.
The third ground of error assigned is, that the court improperly charged the defendant Segar with one dollar and twenty-five cents as the price per acre of the scrip.
Segar, in his answer, states, and his deposition is to the same effect, that he sold the scrip at 91 cents per acre. There is not a scintilla of evidence in the case contradictory of these statements. It is true that the defendant Fant, in his answer, states that he paid Segar between $1 and $1 20 per acre; but he does not profess to be exact or positive. Besides upon well settled principles, the answer of Fant is, in no view of the case, evidence against Segar. If the plaintiffs desired the benefit of Fant's statement of the transaction, it was their right, as it was their duty, to take his deposition, and thereby afford his co-defendant an opportunity of cross-examination.
The fourth ground of error is the refusal of the court to allow the defendant Segar the compensation of one-third of the scrip, to which he was entitled under the contract. What was the contract? Not merely, I imagine, to recover the scrip and sell it, but to pay over the proceeds to his principals. It may be fairly presumed they were willing to allow him a compensation of one-third in consideration of receiving the other two-thirds in a reasonable time. The defendant has, however, not accounted for any part of the funds. When called upon to say what he had done with the plaintiffs' money, he repels the enquiry somewhat indignantly, by saying that he had disposed of it according to his sovereign will and pleasure. His subsequent explanation, " that he had disposed of the money as any gentleman believing himself solvent would use funds under his control," does not materially improve his claim to compensation.
However solvent agents and trustees may be, or however honest may be their intentions, if they deliberately retain trust funds in their own hands, appropriate them to their own private use, and refuse or fail for years to render any account to their principals, they should be held to forfeit all claim for compensation. Any other rule is a premium for negligence and an encouragement to persons occupying relations of trust and confidence, to retain money not their own.
The fifth ground of error is the failure of the Circuit court to allow any credit for the payments made by the defendant Segar. His answer states that he has paid some of the parties, but no receipts or vouchers are filed, or evidence adduced establishing the existence of such payments. I think the court did not err in disregarding this claim.
Sixth assignment, that the court erred in rendering a decree against the defendant Fant. The plaintiffs claim that Fant was their substituted agent, and as such responsible to them. To sustain this view they rely upon letters of attorney to Segar, and Segar's appointment of Fant as agent by substitution. On the other hand Fant insists that the firm of Sweeney, Rittenhouse, Fant & Co., of which he was a member, purchased the scrip from Segar, and settled with him in full for the purchase money; that the sale was a fair and bona fide one, made in the usual course of trade, and at a fair market rate; that his own name was substituted as the attorney because he was the member of the firm who usually attended to such business; that as the scrip had not been issued the substitution was necessary to enable him, as the purchaser and owner, to draw the scrip from the general land office, according to a well known usage and custom of the department at Washington. This statement is fully sustained by the testimony of the defendant Segar.
The plaintiffs have adduced no evidence contradicting the statement, either as regards the purchase of the scrip by Fant, or the usage at Washington. Such purchase and such usage must, therefore, be regarded as established facts in the case. Now, if Fant is estopped by reason of this substitution, to deny the agency, it is clear the departments at Washington have adopted a custom which converts every purchaser of scrip, not already issued, into an agent; and imposes upon him all the responsibilities and duties incident to that relation. The injustice of this proceeding is too manifest to require comment. The agent informs the purchaser of the scrip that this substitution is the regular and recognized mode of effecting the sale: the purchaser acts upon the information thus imparted, accepts the power of attorney, and nominally the position of substituted agent. Is the principal to be permitted to repudiate the acts and declarations of his agent, upon the faith of which the purchaser has acted, and to insist that the purchaser occupies the double relation of purchaser and agent?
The plaintiffs must be presumed to know the usage at Washington, and in executing the power of attorney in the mode observed, they no doubt intended to conform to that usage. It is manifestly unjust for them now to insist that they were ignorant of it; that they did not intend their business should be conducted according to the well established mode universally recognized; and the purchaser must at his peril see to it that their own agent properly executed his trust. If Fant bona fide purchased and paid for the scrip, what interest have the plaintiffs in the subsequent arrangements between him and Segar, in no manner affecting their interests. It was a transaction between Segar and Fant, and not between the plaintiffs and Fant. As between the plaintiffs and Segar, there was nothing to be done but the payment of the money. The failure to receive it only tends to shew that the plaintiffs were unfortunate in the selection of an agent. The case would be very different if it appeared there was a fraudulent combination between Segar and Fant. In the absence of evidence establishing that fact, I think it is clear no decree should have been rendered against Fant. The doctrine of estoppel, so elaborately discussed by the counsel for the appellee, has, in my judgment, no application to the case.
The other judges concurred in the opinion of Staples, J.
The decree was as follows:
The court is of opinion, for reasons stated in writing and filed with the record, that the Circuit court erred in not dismissing the bill as to the defendant Hamilton G. Fant. The court is further of opinion, that the Circuit court erred in charging the defendant Joseph Segar with one dollar and twenty-five cents per acre as the value of the scrip in the bill and proceedings mentioned, instead of ninety-one cents per acre, with which he is properly chargeable: and that there is no other error in said decree. It is therefore decreed and ordered, that the said decree be reversed and annulled, so far as it is herein declared erroneous; and in all other respects affirmed. And it is further decreed and ordered, that the appellee Martha Skinner, executrix of Thomas Skinner, deceased, out of the assets in her hands to be administered, and the other appellees out of their own estates, pay to the appellants their costs by them expended in the prosecution of their appeal here. And this court, proceeding to render such decree as the said Circuit court ought to have rendered, it is further decreed and ordered, that the bill of the complainants be dismissed as to the said appellee Fant; and that they pay to him, that is to say, the said Martha Skinner, executrix of Thomas Skinner, out of the assets in her hands to be administered, and the other appellees out of their own estates, his costs by him expended about his defence in the said Circuit court.
And it is further decreed and ordered, that the appellees recover against the appellant Segar the sum of four thousand eight hundred and fifty-three 34/100 dollars, with interest thereon from the 31st day of March, 1858, till paid; and their costs by them about their said suit in the said Circuit court expended.
Which is ordered to be certified to the Chancery court for the city of Richmond.
DECREE REVERSED.