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JOHN S. WILLIAMS, ADMINISTRATOR OF JAMES WILLIAMS, DECEASED, APPELLANT, v. ROBERT M. GIBBES AND CHARLES OLIVER

December 1, 1854

JOHN S. WILLIAMS, ADMINISTRATOR OF JAMES WILLIAMS, DECEASED, APPELLANT,
v.
ROBERT M. GIBBES AND CHARLES OLIVER, EXECUTORS OF ROBERT OLIVER, DECEASED.



THIS was an appeal from the circuit court of the United States for the district of Maryland.

It was, in some respects, similar to the preceding case of McBlair, administrator of Goodwin v. Oliver's executors; but it differed from it in the important point that the original holder of the share, namely, Williams, never made any assignment of it to Oliver. The title of the latter was derived exclusively from a purchase made by him from George Winchester, the trustee of Williams in insolvency.

The Mexican Company consisted originally of ten persons, each holding one share. One of the parties declining to pay up, the remaining nine advanced the necessary amount, and thus the company was reduced to nine persons or firms, namely, D'Arcy and Didier, Hollins and McBlair, Descoves and Mercier, Dennis A. Smith, Jeremiah Sullivan and John Sullivan, John Gooding, James Williams, Thomas Sheppard, and Lyde Goodwin.

In 1819, James Williams applied for the benefit of the insolvent laws of Maryland, and George Winchester was appointed his trustee, from whom Mr. Oliver purchased the share, in 1825, for $2,000. Winchester had omitted to give bond or to have the sale ratified by the court, and an act was afterwards passed by the legislature of Maryland, to cure these defects.

Williams died in 1836, and no letters of administration were taken out until 1852, when the present appellant became his administrator, and filed the bill in the present case. The ground assumed was the same with that taken by McBlair, in the preceding case, namely, that if the assignment to Oliver made by the trustee in insolvency was void, the interest of Williams must remain in his personal representatives.

On the 4th of October, 1841, a bill was filed on the equity side of the county court of the sixth judicial district of Maryland state court, by Philip E. Thomas and John White, trustees of Dennis A. Smith, against the following persons interested in the share of Dennis A. Smith, namely: Dennis A. Smith, James W. McCulloh, administrators; Job Smith, the President and Directors of the Mechanics' Bank of Baltimore, John Glenn, David M. Perine, William Gwyn, and James W. McCulloh, trustees; Mrs. Smith, William Brown, James Brown, John Patterson, Walter Smith, executor; Clement Smith, George Brown, Herman Perry, Virgil Maxcy, Samuel Nevins, _____ Nevins, Joshua Lippencott, John S. Smith, Richard Harding, and A. H. Lawrence, and the President, Directors, and Company of the Bank of the United States. The bill set forth the deed, the amount awarded to D. A. Smith, and the whole amount awarded to Glenn and Perine, the existence of charges and claims affecting in common their share of the fund and the residue in the hands of Glenn and Perine; and after suggesting, in general terms, that they were advised there were other interests represented by Glenn and Perine, connected with the claims of Dennis A. Smith, of the particulars whereof they were not informed, but which Glenn and Perine could state, and which were proper subjects for distribution by the court, they pray for a proper distribution of the certificate, &c., growing out of the awards aforesaid, for allowance of commissions for notice to the persons interested as aforesaid to present their claims before the auditor, and for general relief.

Glenn and Perine filed their answers, admitting the facts set forth in the bill; expressing their willingness to have the proceeds of the awards therein mentioned distributed under the direction of the court to the persons entitled thereto, including the award in favor of those respondents under the agreement in the bill; and joined in the prayer for a reference to the auditor.

A notice was ordered by the court, and published on the 28th of October, 1841, requiring all persons interested in the claims of D. A. Smith and the Mexican Company, on Mexico, to present their vouchers, properly authenticated, on or before the 1st January, 1842.

The cause was continued, from time to time, until the 23d of January, 1842, when Nathaniel Williams intervened, as the permanent trustee of James Williams, appointed in the place of George Winchester. He claimed the proceeds of the share of James Williams, upon the ground that the assignment to Oliver, by Winchester, was irregular and void.

It is not necessary to state the numerous claimants who presented themselves, or the grounds upon which they rested their claims.

Another order was published on the 5th of September, 1843, giving notice to all persons having claims on the funds awarded to the Mexican Company of Baltimore and Dennis A. Smith, to file their claims, with the vouchers and proofs, on or before the 5th October, 1843, else they might be barred from the benefit of the distribution of the fund.

On the 5th of December, 1846, the court pronounced its decree, awarding, amongst other things, that the proceeds of the share of James Williams should be paid to the executors of Oliver, claiming under the assignment from Winchester, the defects of which were cured by an act of the legislature.

Upon an appeal from this decree to the court of appeals of Maryland, the decree of the county court, in the above respect, was affirmed.

In August, 1852, John S. Williams, as administrator of James Williams, deceased, filed his bill against the executors of Oliver, in the supreme court of Baltimore city. The executors removed the cause into the circuit court of the United States, upon the allegation that they were citizens of the State of New York. The part of the bill which brought up the question in the cause was the following:––

Your orator further states to your Honor, that the said James Williams departed this life on or about 20th day of September, in the year 1836, in Harford county; that no letters of administration were ever taken out upon his estate, until they were in due form of law granted to your orator by the orphans' court for Harford county, on the 15th day of March, in the year 1852. That he has given bond, approved by said court, for the faithful performance of the trust reposed in him.

That neither said Williams nor your orator were ever present, or parties to, or in any manner bound by any proceeding, or order, or decree, had or passed in the aforesaid suit of Thomas White v. Dennis Smith and others, in Baltimore county court, as a court of equity, or in any appeal from the doings of said court, to the court of appeals for the western shore of Maryland, and that any thing done or enacted in either of said courts was transacted in the absence of the said Williams and your orator; that the settlement and adjustment of the amount of the partnership funds of the said Mexican Company, and of the charges, and commissions, and costs, to which they were liable in solido, and the distribution of the remainder of said funds by the decree of the court, into the several shares to which each member of said company was entitled, are in no manner binding upon, or even evidence against the said Williams or your orator, &c., &c.

The respondents answered the bill, setting forth various grounds of defence, and particularly relying upon the decree of the court of appeals, affirming the judgment of the county court. The opinions of the judges of the court of appeals have been published, in extenso, in one of the preceding volumes of Howard's Reports, and therefore need not be repeated here.

On the 3d of December, 1853, the circuit court dismissed the complainant's bill, with costs, and the complainant appealed to this court.

It was argued by Mr. Davis, and Mr. Dulany, with whom was Mr. Martin, for the appellant, and by Mr. Campbell, and Mr. Johnson, for the appellees.

Only such of the arguments of counsel can be reported as related to the point upon which the decision of the court turned.

The counsel for the appellant contended:––

II. The decree of the court of appeals is not a bar.

1. It is no estoppel, as res adjudicata. For Gooding and Williams were not parties named in the bill, nor petitioners under the decree; and no notice, actual or constructive, of the pendency of the suit is shown or averred. Hollingsworth v. Barbour, 4 Pet. 475; Aspden v. Nixon, 4 How. 467, 497, 498.

2. Both Williams and Gooding were dead before the suit was instituted; and no administration existed till after final decree.

The decree, therefore, cannot bind them as either parties or privies.

3. The title decided on was different. The title of Gooding and Williams was never in issue. The only issue on the record was, the validity of an assignment of a prior insolvent trustee, questioned by a subsequent insolvent trustee.

No matter what the court might have thought or said, on such an issue the decree could not conclude a title paramount to both the litigants. For our title originated in the award subsequent to the insolvent assignment.

III. The decree does not bar the complainants as a final disposition of a fund in court for distribution, by reason of their failure to intervene. For,

1. The suit did not profess to be on behalf of all the claimants of the Mexican Company's fund.

It contains no description of the fund, of the parties entitled, or of the Mexican Company; and no prayer for the administration of the fund.

Its allegations and averments look to the administration of the share and private fund of D. A. Smith, under the deed to Thomas and White, among the creditors of D. A. Smith, who are parties; and to have included in that suit the allegations requisite to enable the court to administer the whole fund of the Mexican Company among the members, would have made the bill multifarious and demurrable. Only a few loose phrases allude to any thing outside the trusts of the deed to Thomas and White.

Thus Williams and Gooding were neither bound nor entitled to come in under the decree. The Mary, 9 Cranch, 126; Good v. Blewitt, 13 Ves. 397; Ib. 19 Ves. 336; Hays v. Miles, 9 G. and J. 193, 197, 198; Chalmers v. Chambers, 6 H. and J. 29, 30.

2. Had the bill been expressed to be by a few on behalf of all the claimants of the fund, yet

(a) It is not a case where a few could sue for all; for the members of the company were only nine, were all known, and could and should have been made parties by name or by their representatives.

(b) But even if it were a case where a few may sue for all, and the bill properly framed, yet the decree in a suit by a few for distribution of a fund among all interested is not ever, in itself, a bar to one who did not come in.

(c) Its only effect is to protect the trustee, and shift the remedy from him or the fund against the party to whom it was awarded. Gillespie v. Alexander, 3 Russ. 130; David v. Frowd, 1 Myl. and Keene, 200; Greig v. Somerville, 1 Russ. and Myl. 338.

(d) It has never been held conclusive upon the right of a party, unless the failure to intervene has been wilful, after actual notice, and without adequate reason; and even then the delay after the decree and distribution was the main ground of exclusion; and the only case going so far was reversed on appeal. 2 Danl. C. P. 1453; Sawyer v. Birchmore, 1 Keen, 391, 825.

But in these cases,

(a) Both parties were dead before the suit was brought, and so could be in no default.

(b) No administration existed on the estate of either, till after final decree.

(c) No notice is shown to have been brought home to any one creditor or distributee, interested in either estate.

IV. The decision of the court of appeals is not such an authority of a local tribunal, on a local law, as compels the supreme court, irrespective of its own opinion, to hold Oliver's title better than that of the complainants. For

1. The opinion does not declare the title of Oliver to be good, but really pronounces it invalid.

It decides the claim to be so corrupt as to be utterly void, and that, therefore, it will not pass to an insolvent trustee. Rec. Williams v. Oliver, 307, 308.

This is decisive, that Winchester never had any interest in the fund at all; and, consequently, could assign none.

The court then say, in consideration of the peculiar nature of the contest between two trustees of the same party, hypothetically, if we are wrong in supposing the claim never vested, in that event, if it could vest, it was assignable; and, being so, it passed to Oliver by the first trustee's assignment.

But they expressly declare it did not vest in him at all; and merely add this subsidiary and hypothetical ground to show that the complainant, on his own hypothesis, had not the best title before the court. Rec. Williams v. Oliver, 82-84. The supreme court have so construed this opinion. Williams v. Oliver, 12 How. 111.

If it be argued,

2. That the court, in the face of this opinion, awarded the fund to Oliver, we reply:––(a.) The question now relating merely to matter of authority, such a decision, if it really were tenable on no other hypothesis than an affirmance of the validity of Winchester's assignment, would so contradict the opinion, as to destroy all weight of either as authority. It makes the court say one thing, and do its diametrical opposite.

(b.) But the question is not what might have been, but in fact was not held, but what, in point of fact, was the opinion of the court about Oliver's title; nothing shows that they did hold Oliver's title good. For,

They may have decreed Glenn and Perine to convey to Oliver, in the absence of a better title, on their confession of a trust for them, and the language of the award, which, in the absence of any one else appearing to be concerned, declared them trustees for Oliver's executors.

It would seem demonstrable that, whatever may be thought of its correctness, this was the only ground on which the court did, in fact, rest their decree.

For, if the court considered the question of title at all, they must be presumed to have confined themselves to those titles which alone appear on the pleadings.

Those titles are:––

1. The award and deed of trust and confession of Glenn and Perine, that they hold in trust for Oliver's executors, not for Oliver.

2. The title of Oliver, under the assignment of Winchester, first insolvent trustee.

3. The title of Williams, second insolvent trustee.

The court, therefore, in making the decree, must have held, either

1. That the question lay between two insolvent trustees of the same man; and the fund being in the hands of trustees, confessing a trust for that trustee who had the better right of the two, the court would not take it from a better, and give it to a worse title.

This court has countenanced this view, and it is consistent with the opinion of the court of appeals.

2. That a title vested in Winchester, which passed to Oliver by his assignment.

But this could be only on one of two grounds:––

(a.) That the Mexican claim was assignable in 1819, and passed to Winchester, on the insolvency of Gooding and Williams.

But this they have expressly declared not to be the law. Or,

They held that the treaty related back, and made valid what before was invalid; and the treaty and act of ...


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