source: Caselaw Access Project

author: - Mr. Chief Justice Taney

license: Public Domain

text:
    Albert P. De Valengin’s Administrators, Plaintiffs in error, vs. John H. Duffy, Defendant in error.
    It has been frequently held, that the device of covering properly as neutral, when in truth it was belligerent) is not contrary to the laws of war or of nations. Contracts made with underwriters in relation to property thus covered, have always been enforced in the Courts of a neutral country, where the true character of the property, and the means taken to protect it from capture have been fairly represented to the insurers-. The same doctrine has always been held where false papers have been used to cover the property, provided the underwriter knew, or was bound to know, that such stratagems weré.always resorted to by the persons engaged in that trade. If such means may be used to prevent 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. 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.
    Whatever property or money is lawfully recovered by the executor or, admirnscrator, 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.' The want of knowledge, or the possession of knowledge on the part of the administrator, as to the rights and claims of other persons upon the money thus received, cannot alter the rights of the party to whom it ultimately belongs.
    The- owner of ■property or of money received by an administrator, may resort to the administrator in his personal character, and charge him, de bonis propriis, with the amount thus received. He may do this, or proceed against him as executor or administrator, at his election.' But whenever an executor or administrator, in his representative character, lawfully receives money or property, he may bfe compelled to respond to the party ‘ entitled, in that character; and shall not be permitted' to throw it oif after he has received the money, in order to defeat the plaintiif’s action.
    In thje case of a factor who sells the goods of his principal in his own name, upon a credit, anti dies before the money is received, if it ds afterwards paid to the administrator in his representative character, the creditor would be entitled to consider it as assets in his hands; and to charge him in the same character in which he received it. The debtor^ that is to say, tile party who purchased from the factor without any knowledge of the true owner, and who paid the money to the administrator under the belief that the goods belonged to the factor, is unquestionably discharged by this payment; yet he cannot be discharged unless he pays it to one lawfully authorized to receive it, except only in his representative character.
    IN error to the Circuit Court of the United States for thé-District of Maryland.
    ■ In the-Circuit Court pf 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 cápture and loss of the btig President Adams, by a Brazilian cruiser, in 1828.
    JohiljH. 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 Nealé, 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, d.e 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 count 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 thp 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 by 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 prope’rty to belong to him, ánd, 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 representation 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 ho 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 á 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 governmentand 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 regulatiotis 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 ha'd 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, thajt the proof of the fraudulent agreement showed conclusively 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 opinión of the Court, that the action would not lie against Neale as administrator, nor the money be assets in his’ hands, of the estate o'f 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 oiily pretence of claim against the estate óf 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 tó 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 uhcontradicted 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 propriisyand that such a count cannot be joined with any counts on an indebtedness of the intestate, or with any indebtedness of the administrator; gs such; such as money paid for the use of the estate,' &c., which, does create a debt against the estate. Cited, Jennings m. '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. Ashley,- 7 B. and Cres. 444, (14 S¡ and Low. 771.), ' 1 Chitt. Precedents, -46, nóte. 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 ah 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 Nettle’s estate, of on his bond.
    Mr. Williams, for the defendant in' error.
    By the laws of Maryland, administrators de bonismon 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 originál estate. And such bonds, &c. qnd money are assets in the hands of thb administrators de bonis non. Laws of Maryland, 1798, ch. 101, sub ch. 14, sec. 2; 1S20, 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 mon|ey and property, admitted by him in his lifetime to be in his hands, as the estate of De Valengin. The representatives o.f Neale cannot claimi this property as a part of his estate. N<Sr can the new administrators of De Valengin reject it as forming no part of Dé Vafengin’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.
    Iu 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 mos't clearly had a right, to embrace thé more disadvantageous alternative, of regarding De V.álengin’s estate as his debtor.'' In adopting the laUer altérnative, as has been before remarked, it cannot belong to the plaintiff's 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 plaintiff's 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; bothof 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 rejate to controversies between a-neutral and a belligerent: as 2 Dali. 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. .

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, snipped 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 iri relation to it, were made out. in his name.. The, brig was, however, captured on her voyage by á Brazilian cruiser, and was wrecked ; and the vesseLand 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 froria the Brazilian government. The money was paid to Neale’s agent at Rio de Janeiro, arid invested in coffee, and shipped to him to Baltimorewhere he received and took possession of it as property belonging to.De;Valengin’s estate, and as his administrator. It was duly appraise*! 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 peril-, ing; and after his death, process was issued against the present plaintiffs in error; whb 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 appearanee 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, ripon which issues were joined; and the jury four 1 for the plaintiff on the first issue,.arid for the. defendants on the second; arid 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 riot 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 pérsoñs 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 eách other. There are,, doubtless, decisions Which countenance the doctrine that' no action will lie against-an executor or administrator, in'his representative character, except, upon éome claim or demand which existed against the testator or intestate in his lifetime; and that if the daim 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 lawfully 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 acredit, 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 noté 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 exécütor 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 whs 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 -me money, admitted that the debt was justly due to him on account ot 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 jn his representative charácter, 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 mquestionably 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.


author: Mr. Justice Baldwin

text:
    Guy C. Irvine, for the use of The Lumberman’s Bank at Warren, vs. Nathaniel A. Lowry.
    An action was brouglit by toreign attachment, in the Court of Common Pleas of Warren county, Pennsylvania, in the.name of a citizen of Pennsylvania, for the use of the Lumberman’s Bank, at Warren, Pennsylvania, against a citizen óf New York. The suit was on a note given by the defendant to the plaintiff, to be paid “in the office notes of the Lumberman’s Bank at Warren.” Some of the stockholders of .the Lumberman’s Bank at Warren, were citizens of the state of New York. ' The defendant appeared to the action, by counsel, and having given bond with surety to theCourt of Common Pleas, removed the cause to the Circuit Court of the United States for the Western District of Pennsylvania. A motion was made in the Circuit Court to remand the cause to the Court of Common Pleas of Warrén county, the Circuit Court having no jurisdiction of the cause on the ground that the real party in the suit was the Lumberman’s Bank at Warren, ■ an aggregate corporation, some of the stockholders of the bank being citizens of the state •of New York. It was held, that the .Circuit Court had jurisdiction of the case.,
    The decisions of the Supreme Court have been uniform, and as'declared at the present term in the case of The Commercial and Rail Road Bank of Vicksburglos. Slocomb et al., that the Courts of the United States cannot exercise jurisdiction when some, of .the stockholders . in a corporation established,in one state are citizens of another state,_of which the'party sued by the corporation is acitizen.
    A note to be paid “ in the office notes of a bank,” is not negotiable, by the usage or custom • of merchants. Not,being a promissory "note by the law merchant, the statute of Anne, or the kindred act of Assembly of Pennsylvania, it is' hot negotiable by endorsement; and not being under seal, it is not assignable; by the act of Assembly of Pennsylvania on that subject, relating to bonds. No suit could be brought upon it, in the name of the endorser. The legal interest in the instrument continues in the person In whose favour it has been drawn, whatever equity another may have to claim the sum due on the same; and he only is the party to a suit at law oitthe instrument.
    GN a certificate of division from the Circuit Court of the United States for the Western District of Pennsylvania
    On the 6th of May, 1839, a writ of foreign attachment was issued out of the Court of Common Pleas of Warren county, Pennsylvania, in the name of Guy C. Irvine, for the use of the Lumberman’s Bank at Warren, against Nathaniel A. Lowry, requiring bail in eighty thousand dollars. The action was founded on a promissory note, in the following terms :
    “ @53,000. Warren, Pa,. Sept. 6, ’37.
    “Three months after dáte I promise to pay to the order of G,uy C; Irvine,, Esq. fifty-three thousand dollars, in office dotes of the Lumberman’s Bank at Warren, and payable at their banking house in Warren. . N. A. Lowrt.”
    Endorsed on side, “ Gut C. Irvine.”
    The sheriff of Warren county attached certain real estate in the. county; and also returned that he had attached the goods and. chattels of Nathaniel A. Lowry, in the hands of certain persons named in the return. Among the garnishees was Guy C. Irvine.

      On the 24th of October, 1839, Nathaniel A. Lowry, the defendant, presented a petition to the Court of Common Pleas of Warren county, stating that he- was at the commencement of the action, and at the time of filing the petition, a resident arid citizen of the state of New York; and that Guy C. Irvine, the plaintiff in the suit, is, and was at the commencement of the suit, a citizen of the state of Pennsylvania; and asking the Court to accept the security offered for enter-: ing his appearance in the Circuit Court of the United States, .and in all things complying: with the acts of Congress in such cases made and provided; he prayed the Court to proceed no further in the cause, and to allow the removal of the cause to the Circuit Court of the United States for the Western District of Pennsylvania.
    . The Court of Common Pleas granted leave for the removal of the cause to' the Circuit Court; and the defendant gave a bond with security, for the entry of the cause in t.he Circuit Court.
    On the same day on which the petition of Nathaniel A. Lowry was presented to the Court of Common Pléas of Warren county, the affidavits of Robert Falconer, President of the Lumberman’s Bank at Warren, and of Walter W. Hodges, were filed.
    The affidavit of Mr. Falconer stated, that at the date of the note on which the action was founded, he was President of the bank, and the note was received from the defendant at the time it bears date, as a security (for his previous indebtedness to the institution; ■ and 'that.-Guy C. Irvine had not then, or at any time since, any interest in the said note, except as guarantor for the payment of the-Same, and the solvency and sufficiency of the drawer of the note. •
    The affidavit of Mr. Hodges - stated, that William Hall, Vine Elderken, Brown and Buckland,' Starkweather and Brown, and sundry other persons, were stockholders in the Lumberman’s Bank at Warren ;-andat the time of the institution of the suit were citizens of the state of New York, residing.in that state.
    The case being in the Circuit Court of the United States for the Western District of Pennsylvania, .at the November sessions of the Court, Mr. Biddle, for the plaintiff, moved to remand the cause to the Court of Common' Pleas of Warren county, for want of -jurisdiction.
    On the hearing of this motion before the Circuit Court, Mr. M Landless, the counsel for the Lumberman’s Bank at Warren, produced to the Court an act of the Assembly of Pennsylvania, passed the 28th of February, 1834, for chartering the bank; also ah act of Assembly of Pennsylvania, of 21st- March, 1813, entitled, An act to recharter certain Banks: and it was admitted that the bank commenced the business of banking at Warren, in Pennsylvania, having been organized under, the act of 1B24¡ The counsel for the bank also produced the note on which the suit had been brought.
    The counsel for the bank stated, and the defendant’s counsel admitted, tha.t this suit wgs founded on the note.
    “ Whereupon, it appealing to the Court that this suit is founded on the note aforesaid, -dated 6th Sept., 1837; that Guy C. Irvine was, at the date of the institution of this suit, a citizen of Pennsylvania, and that N. A. Lowry was, at the same date, a citizen of the state of New Y.ork; that said bank was erected, and duly organized at Warren, in Pennsylvania, under the act'of February 28th, 1834, aforesaid; and that six persons mentioned in the record, and sundry other' stockholders thereof, were, at the date of said suit, citizens of the state of .New York; and due • consideration being had of the premises, the Court are divided in opinion; one of the judges thereof, being of opinion that this Court has no jurisdiction of the case; that the rule, granted as aforesaid, be made absolute; and the record of tíiis suit remanded t<? the Court of Common Pleas of the county of Warren. The other.judge being of opinion, that the Court has jurisdiction of the case; and that the rule granted as aforesaid be denied.”
    The judges of the Circuit Court certified this division of opinion to the Supreme Court of the United States.
    The case was argued by Mr. M‘Candless, for the plaintiff; and by Mr. Marvin, for the defendant.
    Mr. M'Candless contended, that Guy C. Irvine is a mere nominal party in the suit, except as guarantor of the sufficiency of Lowry, the defendant. He is one of the gárriishees in the attachment; and he is a competent witness in the cause, under the decisions of the Courts of Pennsylvania. The nominal plaintiff, who assigns an obligation, is a competent witness in an action against the obligor; 9 Serg. and Raw. Rep. 20; 2 Brown’s Rep. 171. The Courts of Pennsylvania, even after suit brought, allow a party on the record «to assign the action, depositing with the clerk enough to cover the costs of the suit. 3 Binney’s Rep. 306.
    The reason 'of this rule is, that in Pennsylvania there - are no Courts of Chancery; and the assignee of a chose in action, is therefore compelled to bring his suit in the name of the assignor. So also a' bankrupt, who has .obtained his certificate, and released his claim to the surplus of his estate, may be a witness. 4 Dali. 137. 2-Dali. 172. Cited also, 7 Serg. and Raw. Rep.’116. 3 Rawle’s Rep. 407. 1 Peters’ C. C. R. 308.
    This Court have decided the question now .depending before it. In Brown vs. Strode, 5 Cranch, 903, it was held, that the Courts of the United States have jurisdiction in a case between citizens of the same, when the plaintiffs are only nominal, for the use of an alien.
    Whp is the real party in this cause? It is not Guy C. Irvine, but the Lumberman’s Bank, at Warren. This Court have said they would look at the real parties in the cause. In Wormley vs. Wormley, 8 Wheat. 421, Mr. Justice Story says, “This Court will not suffer its jurisdiction to be ousted by the mere joinder, or nonjoinder of formal parties.” The converse of the proposition is equally true.
    It has been incontestably shown, 1. That Guy C. Irvine is. not a party, or if a party, is only nominal. 2. That the Lumberman’s Bank ‘is the real party.. 3. That this Court will look at .the real parties, for the purpose of entertaining or excluding jurisdiction.' '
    - This is the case of a corporation aggregate, parthf whose, stockholders live in the same state as the defendant.
    This Court has decided that a corporation aggregate cannpt be a. citizen, and'cannot litigate,in the Courts of the United States; unless in consequence of the characters of the individuals who .compose a body politic. Hope Insurance Company vs. Boardman, 5 Cranch, 57. Bank of the United- States vs. Deveaux, 5 Cranch, 61. 'Breithaupt vs. The Bank of Georgia, 1 Paters, 238. . Paine’s C. C. R. 410. Corporation of New Orleans vs. Winter, 1 Wheat. -91. 1 Wash. C, C. R. 146. Bank of Augusta vs. Earle, 13 Peters, 519. 1 Kent’s Com. 324 — -'326. . 3 Cranch, 267. Commercial and Rail Road Bank of Vicksburg vs. Slócomb et al., decided at this term.
    Another question arises in this case. ■
    This was a foreign attachment; a proceeding in veta... Do the provisions of the Judiciary Act extend to any actions but those, in personam?. 1.Story’s Laws, ri. 1.-57.
    ^ The act of Congress gives jurisdiction to the-Courts of the United States, in cases where “ thé defendant is an inhabitant,'or when he shall-be.foupd-in the district at the time of.‘serving the process.”Lowry .was not an inhabitant of the Western District, of Pennsylvania; nor found there at the time of serving the writ. -.He was at the' time the writ-issued, and afterwards, residing in the' state of Néw York.
    What.is-the object of the foreign attachment? It is a proceeding agaíhst the lands'or goods-of a defendant, to compel his appearance. Can- a'party plaintiff compel the appearance of a deferidan.' in the Circuit Court, by issuing a foreign attachment. It has been decided that this cannot be: done. 2 Dali. 369. Sergeant on Attachments, 42..
    If a Circuit Court of the United States cannot have jurisdiction originally, can it have by the removal of a cause from a state Court.
    It was not intended by the' twelfth section of the Judiciary Act of 1789, to'extend the jurisdiction,of the. Courts offthe United States over causes brought -,before them on removal, beyond the limits prescribed to- them originally. -. Conklin’s Treatise, 78.' No suit can be removed to the national Court, which might not, by the Constitution; have been’originally commenced in those Courts.
    AS to . the construction of. the note 'on which the action was brought, the counsel cited, 1 Peters, 489; '3 Chitty on Commercial and Maritime Law, 107.
    Mr. Marvin, for the defendant.
    The, question ráised in this'case has never yet been decided.Four questions have been présente! in the argument for the plaintiff; but one only is depending.. Has the Circuit of the Western-District bf. Pennsylvania jurisdiction of-the cause?
    Is the Lumberman’s Bank, at Warrén, the'plaintiff in the. caüse, or is Guy C. Iivine the plaintiff? On the decision of this point, the case must be decided. Guy C. Irvine is a citizen of Pennsylvania, and-Nathaniel A. Lowry is a citizen and'.resident of the state of New.York; and those,are the parties on the record.' .This brings the, case within the provisions of the Constitution of the United States.
    Biit, it is said, the Court will go beyond the parties named in the suit, and inquire who is beneficially interested. That it is not. the party to the record, which will give or exclude jurisdiction; but the party really interested, and he only is in the contemplation of the" act óf Congress. In this case, it is said, the action is brought for the bank, because this is so stated on. the record. But the act of 'Congress' looks only to the parties on the record.
    Pennsylvania is the only state hr the' Union in which actions in this form are brought. In New York, no such form of proceeding is known. Would, the Court in a- case brought here, from New York, and standing on the record between parties subject to the jurisdiction of the Court, inquire who are the persons really interested in the controversy ?
    Was it necessary in this case to state for whose use the action was brought; and if it was, could issue be taken upon it ? If this could be, a collateral issue would be raised'; the regular inquiry in the cause would not be pursued. In all other states, the Courts will take care that the party really interested has the money which may be recovered. .This will be done by the equitable powers of the Courts..
    The legal party in the suit is Guy C. Irvine; and the Circuit Court, on its law side, will look only to the legal party. The note is not assignable by endorsement, for it is not a negotiable instrument. It is not given for the payment of money, but for the office notes, of the Lumberman’s Bank. It is not, therefore, within the statutes which ttiake^promissory notes negotiable.
    It is said, that Guy C. Irvine is not a party in this cause, because he may be a witness. But if he can be a witness, which is denied, it does not follow that he is not a party. Does the jurisdiction of the Court of the United States depend on the legislature, or on the decisions of the Courts of the states? In many of the states a party is a witness to an account; and according to the rule now set up, this would deprive the Courts of the United States of jurisdiction in a case .between citizens of different states, when'an account was the subject of contestation.
    . The cases cited by the coúnsel for the plaintiff, go on the principle that the party has no interest in the cause, the costs having been paid, and his interest assigned. But in all these cases, he still continues the plaintiff in the cause. The law is not, however, as stated by the plaintiff’s counsel. It has been decided by this Court, that a party who is a plaintiff in a cause, cannot,’ by an assignment of the action, and the payment of the cbsts, become a witness; and the decision of. the Circuit Court of Pennsylvania has been solemnly overruled. Scott vs. Lloyd, 12 Peters, 151.
    The cáse cited from 8 Wheat. Wormley zw. Wormley, was a case in equity. And it rested .on its special circumstances. The case cited from 5 Cranch;:303, wás one iii which the bond sued upon was taken officially, for the use of creditors; the bond had been given to a public officer, for the use of creditors. This was, no doubt, averred in the declaration. The real character of the parties was thus apparent on the record. The real party was the creditor. ■
    . As to the removal of the cause to the Circuit Court, it being a foreign attachment, the counsel for the defendant contended that there is no limitation imposed in the Constitution. The act of Congress protects'suits by parties not citizens of the same state, or found in the state in which the action, of whatever kind it may- be, shall be brought. - Act of Congress of 1789, section twelve. - Conklin’s Treatise, 78, 79. Suits cannot be removed which are not within ' the constitutional provision.
    The .affidavits .made in the Court of Common Pleas .of Warren county, were improperly admitted by that Court, and should not be. regarded here; nothing in the case can be tried by affidavits of this character.
   Mr. Justice Baldwin

delivered the opinion of the Court.

This suit was instituted, in the Court of Common Pleas of Warren county, Pennsylvania, whence it was removed to the Circuit Court for the western district of that state, pursuant to' the provisions of the Judiciary Act of 1789, section twelve; and comes before this Court on a certificate of division of opinion between the, judges of that Court* pn a motion to remand the cause for want of jurisdiction.

Irvine, in whose name the suit is brought, is a citizen of Pennsylvania; the Lumberman’s Bank of Warren, is a corporation chartered, by a law of that state, and located at Warren; part of the stockholders are citizens of New York, of which state the defendant is also 'a citizen. The suit is brought upon a paper, of which the following is a copy:

“ $53,000, Warren, Pa., 6 September, ’37.

“ Three months after date, I promise to pay to the order of Guy C. Irvine, Esq., fifty-three thousand dollars, in the office notes of the Lumberman’s Bank at Warren, and payable, at their banking house in Warren, Pa.” N. A. Lowar.”

Endorsed on side, “ Guv C. Irvine.”

The suit was commenced by the process of foreign attachment,, agreeably to the law of Pennsylvania; the property of the défendant was attached according to its provisions: whereupon he appeared, and, by, his counsel, moved for the removal of the cause; and having complied with the requisitiohs of the Judiciary Act, the cause was ordered to be removed to the Circuit Court.

By thus approving and submitting to the process of attachment, the defendant waived any privilege to which he was entitled by the section of the Judiciary Act, as held by this Court in Toland vs. Sprague, 12 Peters, 330, 331: so that on his appearance and entry of bail, the attachment was dissolved, and the cause will thenceforth proceed, as if it had commenced by the ordinary process of the Court, served'on the defendant within the district. The commencement of the action in the Common Pleas, by attachment, being, expressly provided for in the twelfth section of the Judiciary Act; it must be considered, when removed into the Circuit Court, as an originhl one.

This brings us to the question raised in the argument of the plaintiff’s counsel, whether that Court can exercise any jurisdiction over the case, on the ground that the defendant, and some of the stockholders of the-bank, are citizens of New York; which would be a fatal objection to the jurisdiction, if the corporation is to be considered as the plaintiff and sole party in interest. On this subject, the decisions of the Court have been uniform,' and, as declared in the present term, in the Vicksburg Bank vs. Slocomb, have settled this point decisively; nothing then remains but to ascertain from the record, as certified, whether the bank is the real plaintiff; for if they are not, then, as Irvine is admitted to be a citizen of Pennsylvania, and Lowry of New York, the jurisdiction is undoubted.

The paper' on which the suit is brought, is not negotiable by the usage or custom of merchants; it is payable to order; the promise is to pay so many dollars, but not to pay any certain sum of money; it is a promise to pay the amount “ in the office notes of the Lumberman’s Bank at Warren,” which are not money, and at most a'chattel. Not being a promissory note, either by the law merchant, the statute of Anne, or the kindred act of Assembly of Pennsylvania, it is not negotiable.by endorsement; and not being under seal, it is not-assignable by the act of Assembly on that subject relating to bonds. The bank, therefore, cannot sue in their own name, in virtue of the endorsement of Irvine in blank; nor could they so sue if it was specially endorsed to - them; because the legal right of action would still remain in Irvine, though the equitable interest in the thing promised may have passed to the-bank. This case, however, is not of that description; the only evidence of any transfer of the contents of the note is the blank endorsement of Irvine, and the affidavit of the President, of the bank; in the latter of which it is stated, that the note was received by the bank from the defendant, at the time it bears date, as a' security for his previous indebtedness thereto; and that Irvine had not then or since any interest in said note, except as a guarantor for its payment, and the solvency and sufficiency of the drawer.

In referring to the affidavit, we are not to be understood that whatever may be its contents, they would influence our decision; yet, assuming the^ case to be as there stated, the legal,right of action is in Irvine ; the paper is not the evidence' of an original debt, contracted by a discount thereof; or its reception as payment of a pre-existing debt due the bank: it is only a collateral security, by adding the name of Irvine as endorser. Standing as such to the bank, their rights are derivative through him; and as the endorsement passes only an equity, the legal interest is in him; he is the real plaintiff in a Court of Law, in which legal rights alone can bé recognised. This consideration points to the true line of discrimination between this and the case of Brown vs. Strode, 5 Cranch, 303; which was. a suit against an executor on his administration bond, given to the justices of the peace of the county where the testator died, and who were citizens of the state of Virginia, as well as the defendant. The jurisdiction of the Circuit Court was Sustained, on the ground that though the plaintiffs and defendants were citizens of the same state, the former were mere nominal parties, without any interest or responsibility; and made by the law of Virginia,the mere instruments or conduits through whom the legal right of the real plaintiff could be asserted; as such their names must be used, for the bond must be given to them in their official capacity; but as the person to whom the debt was due. was a British subject, he was properly considered as the only party plaintiff in the action. Whatever right of action existed in virtue of the bond, passed by the operation of the law of Virginia directly to the person for whose, benefit it was given, through the conduit appointed for that purpose. -. For such; and kindred cases, the person or. officer thus selected by the law as its agent, is not a party to-the suit; and no transfer of the bond or other security to the person intrusted is necessary to invest him with' a complete legal interest or right of action but cases of this description cannot be applied to actions like the present, in which the interest and responsibility of the parties to the paper depends on their contract; and the law neither dissolves or transfers any legal right of action, on or to the party who accepts it as security for payment of a pre-existing debt.

We are therefore of opinion that the Circuit Court has jurisdiction' of the case, and direct that it be so certified.

This cause came On to be heard on the transcript of the record from the Circuit Court of the United States for the Westerp District of Pennsylvania, and on the point andquestion on which the judges of. tjie said Circuit Court were opposed, in opinion, and which was certified to this Court for: its opinion, agreeably to the act of Congress in such cases made and provided, and was argued by counsel, On consideration .whereof, it is .the opinion of this Ccurt that the said Circuit Court has jurisdiction of the case. Whereupon it is ordered and adjudged that it be so certified to the said Circuit Court accordingly..