466
FEDERAL REPORTER.
How. 115; Phelps v. Wait, 30 N. Y. 78. All persons procuring or assisting in the commission:oLa tres)?ass are principals. in the transaction, and both the master who commands and the servant who does the act of trespass ma.y be made responsible as principals, and may be sued jointly or severally for dll-mages, as the injured party may elect. Lightner v. Brooka, 2 Cliff. 287. A joint action will lie against the principal and agent. Wright v. Wilcox, 19 Wend. 343. If separate actions are brought against several joint trespassers, the plaintiff may proceed to judgment in all; and the judgment against one is not a bar to a trial and recovery against the others, although there can be but one satisfaction. Li'l)'ingBton v. Bishop, 1 Johns. 289. It follows that the defendants, although they were only the agents or servants of Richard Worthington in doing the wrongful acts sought to be restrained, and for. which damages are claimed, are re,sponsible to the complainant, and the complainant has the right to pursue them,.and obtain the relief prayed for, although he is purs\ling Richll.rd Worthington at the same time in another suit for the same wrongs. The facts alleged in the authorize an by Richard W to stay the prosecution of the suit agajnst him during the pendency of the present suit, but they are insufficient for the purposes of a plea. .
.,
ALLEN and others
1/. G4LLOWAY
another.
(Ci'I'O'Idt Go'U,"t, lY. D. 1'en11.u86e. March IS, 1887.)
Whatever rule may prevail elsewhere, there can be, iD, the equity courts of the United States. norelief from a mistake of law. S. BAHE-'CASE Ui JUDGMENT-PARTNERSHIP AsSETS-APPROIrRU.TION '1'OINDIWherethecreditol' of an individnalpartner appropriated; in part payment orbis claim, .3 balance due from himself to that partner's 1irm,but upon garnishmentWlts compelled to pay the amount so appropriated to a creditor of the firm"luld., that a compromise settlement'lending the garnishment, made in the belief that the appropriation was vali ,would not be set aside on the groundofU),istake, upon the appropriation being afterwardsdelllded invalid, there being ,no element of deception by misrepresentation or other fraud, nor any miatalte 8a to the facts· VIDUAL DEBTS. .
1.
EQUITY-:':MISTJUl:E OF LAW.'
"
' ,
..
,
' . '. .'. Plaintifi'aare factors at "New. Orleans, and derendantswere a .firm of in Tennessee, shipping cotton to them. Plaintiffs owed the defendant firm a balance on During the season, Galloway, <),Jile ". ta, opened an accounp. individuaUy . with plaintiffs, shipping cotton, to secure his margins for speculations in cotton futures. Upon this account he owed a large balance to plaintiffs. Defendants, be-
In Equity..
V. GALLOW/.1.
467
coming insolvent, made an assignment, and thereupon Carter Bros. attached by garnishment the balance due the firm in plaintiffs' hands. After the garnishment was levied, the plaintiffs, on the authority of a letter from the individual partner written in the name of the firm, transferred the balance due the firm as a credit to the individual account, leaving still a balance due from the individual partner to plaintiffs' firm. This letter was written a few weeks before the defendants' assignment; was signed "GALLOWAY & BURNS, per W. H.G.;" and in substance directed plaintiffs to protect his future contracts, saying he had that day shipped them four bales of cotton "as margin," and would ship more soon. The firm afterwards a.cquiesced in this, and did not forbid or object to it, although Bums did not ·know of it until after the failure and the subsequent transactions. The attaching creditors, however, denied the validitY'of the appropriation, and the garnishment was deoided in their favor in the supreme court of Louisiana. While that suit was pending, the defendants, through their assignee, offered in writing terms of compromise to all their creditors at 33t per cent.; the plaintiffs being set dowIi in the writing as creditors of the firm at the sum remaining after the above-mentioned transfer. This compromise Ca'rter Bros. signed, saying in their agreement, "except that part of their debt which is considered secured," and afterwards plaintiffs also accepted, and, being paid, executed a receipt in full of all demands against the firm, or either of them. When plaintiffs' had lost the garnishment suit, and were compelled to pay the balance to Carter Bros., they at first sued the defendants at law in this court upon the balance of the account after crediting the compromise payment, and eliminating the amount paid to Carter Bros. But at the trial they took a nonsuit, and then filed this bill to cancel the settlement and receipt as a mistake concerning the amount due. McCorry Bond, for plaintiffs. Henry O. Towns, for defendants. HAMMOND, J. Whatever rule may prevail elsewhere, there can be, in the equity courts of the United States, no relief from a mistake of law. Hunt v. Rcrusmaniere, 1 Pet. 1, 15; Bank of U. s. v. Daniel, 12 Pet. 32,55; Railroad 00. v. Sautter, 13 Wall. 517, 524; Upton v. Tribilcock, 91 U. S. 45, 50, 51; Lamborn v. Oounty Oom'rs, 97 U. S. 181, 185; 8neU v· .Imurance Co., 98 U. S. 85, 90, 92; U. S', v. Ames, 99 U. S. 35, 46,47. It wa.s distinctly proclaimed in SneU v. Insurance Co., supra, that the ruling in that case was not to be considered as any departure from the general and salutary principle to which the court had always adhered. And most of the above cases will illustrate the application of it to facts like those we have here. In the case just cited the judgment is founded on the fact ora misrepresell,tation of the legal effect of the words used in a policy by the agent of the insurance company, innocently made, no doubt",butnevertheless' operating as a deception of one party to the contract:by;the other, in a cRseiwherethe party misled might reasonably rely
upon the other for a correct selection of the proper form of contract, to accon1plisb their agreement. But in case there is no circumstance like that, or anything approaching it. It. is absolutely bare of' any incident to take the case out of the category of a pure mistake of law, unmixed with any element.of misrepresentation, accident, or frltud upon the part of anybody. It is . 8aid there was a mistake of fact as to the true state of the account, but that is. untenable. It is only another way of saying that Allen believed that he had the right to make the appropriation of the balance due Galloway & BurnE! to the payment of the balance due· from Galloway, individually. .He relied with too much confidence ?pon that opinion Of the law which was overthrown bJ the supreUlecourt of Louisiana. Carter v. GaUoway,36 La. Ann. 473, and Id. 730. In ,he first of tbese the plaintiffs were garnisheeEl,. tbesuit involved these. very transactions, and we hav& tJ;1at record in proof in this case; while in the secon(\l another firm of cr.editors similarly situated, and attempting to. save themselves by process, .weregarnishees; butAhe court,. properly, as we think, if we. may be called on to say.that, did, ;no,t permit the partthe nership .aslletsof the defendaI;lts to be so individual ;qeqts of one of the . But, even ,if the court were wrong in that jUdgIDent, it is impossible now and here, by this proceeding,in equity, toset aside the settlement, any than bY the suit at law upon a newly,statedaccount, as to which plainttffstook a nonsuit. at 1.1< former term. The decision in Louisiana was final as to the law of the transaction, and the plaintiffs cannot thus the loss occasioned to them by any real or supposeq error of the court, and thereby transfer the burden of it to the firm of Galloway & ·Burns,.or to Galloway individually, as they are here attempting to do. They do not show by the proof here, any more than they did in the Louisiana suit, that Burns ever consented to the arrangement by which they undertook to appropriate the firm's assets to the payment of Galloway's losses in futures. Indeed, taking into view only Galloway's own letters. upon which alone Allen acted in m/!-king the appropriation, and it may be doubtful if they fully justify the assumptipn that even he authorized it; but this is immaterial, as we consider the case as if he had given the fullest authority. But it is argued that Allen expected Burns to testify in the suit that he, to(), had given authority and consented to the appropriation, and that Burns "went back on him," to use the expression of the expeptation, for idea in the argument. This was a wholly there is not a particle of proof that Burns encouraged or countenanced it by anything he ever said or did about the matter,-p.ot in the least. 'The most that can be said is that he' was quiescent, as the LqlJisiana court said, and the. proof here is not any 'better ,on that point than it was there. But in the view, of the supreme court of expressed in the opinions cited, it would. possibly have made not the least difference in their judgment if Burns had expressly authorized the appropriation, and had testified to that fact. For it may well be doubted, on the law of
ALLEN V. GALLOWAY.
469
partnership, whether it is competent for all the partners, by any consent or act of theirs, to appropriate the firm assets to the paymentof individual debts, after they have failed and become, insolyent, and far more doubtful-if they could do this, as Allen attempted to do, after creditors have attached the assets. But, aside from this, Allen's attitude at the tiIlle of the compromise settlement cannot be irr.proved by such expectations as that. He made no such conditions in his acceptance of the compromise as that certain proof should be made, or that certain facts should exist. He was master of the situation,-altogether so,-and might have 1laid to his debtor that, if he should lose the suit then pending, the balance due him would be more than if he should win it, and that some provision must be made for that contingency. But he did not. He accepted the offer made on basis of gaining the suit; that is to say, he gave his receipt infull at the figures that would be due if he should win, and either np-ver thought of losing, OJ; was willing to the chances. He relied with abundant confidence, no doubt,by the opinion of counsel, upon his belief .that, as. a, matter of law" he could, notwithstanding the pending attachment, Galloway's instructions,-or Galloway & Bums', if you thebaJance duefrom the firJ;ll to the paynientof the or one of the partners. This was a mistake as it turned out,but he has no one to blame but himself; and to observe, as he on the witness his enthusiastic confidence in his own judgment, to know that he .is the very man to stand fast by his own convictions, and never stop to 40ubt them. Yet, if we remember the real situation as it then existed, this was not an unwise acceptance of the compromise offered. Galloway & Burns, asa fi.,rm, really owed Allen's firm nothing whatever, but the indebtedness was the other way. Anything offered by this bankrupt firm out -of their firm assets in payment of Galloway's individual indebtedness to Allen, West & Bush was, so much clear gain; and the assent of other ,creditors,";'-who might have objected to this appropriation,as they did to that already attempted to be made,-byjoining in the compromise, would m.ake that, atleast, secure as a payment, whatever fate should befall the other. It was like a game inwhich Allen had everything to gain, and nothing to, that was not already lost, if his judgment about the ·Carter Bros.' garnishment should be in fault. True, he might have held to Galloway's liability for the full amount of his gambling losses in futures, Jlllt that was a sorry prospect aUhat time, (it has improved since by his recovery of his credit, etc.,) with the firm insolvent, as it was, and the individual members equally so. To partly pay this gambling debt of Galloway's, were the chances, in the lottery of litigation, that ·he would dJ;aw the prize of a decision in his favor on the 'Carter garnishment, whereby he would receive $335.56 of the' firm as.sets of an insolvent partnership not at aU liable for the debt; and now here comes this same firm" and further offers, and this by consent of -creditora, safe prize of$226.30 more of these, same assets, providedhe:would release both the, firm and Galloway from all claims upon
470
FEDEnAL nEPOn.TEB.
them. If he should win the Carter suit, there were $661.86 paid on It d{'bt of $934 against an insolvent debtor out of assets of a firm which was also insolvent, and compromising at 33t percent., not at all liable for that debt. If he should lose the Carter suit, there were still $226.30 realized on this desperate debt out of these same insolvent assets, not at all liable to pay it. Why should he not have accepted, particularly as Galloway might plead the gambling act, as he subsequently did, when sued at law, and does here? The plea might not avail him, and we do not wish to be understood, by this characterization of the transaction, as casting any odium on the plaintiffs because of its being a debt for losses in futures; but, nevertheless, it added to the desperate condition of the claim, and affor<Js a more abundant justification for the acceptance of the compromise. But, the plaintiffs having lost the Carter suit, there is disappointment in that regard, and the prize drawn in this game of commercial chances is not as large as was expected; yet it is none the less a prize to the extent of the 8226.30 paid on the compromise. If not the oapital, it is an approximation prize, and should not be spurned,': If the account had stood, at the time of the compromise, as it is .claimed that it stands to-day, there would still have been simply a debt cif$934 against Galloway individually, for his losses in futures. Galloway' & Burns, solvent or insolvent, would not have been bound to pay it; and 'whether they would have been to :pay 33t per cent. of the whole sum for Galloway's release or only that per cent. on a less SU111, as they did agree, is altogether a matter of conjecture, and, being purely a. gratuity, anything soobta.ined was so much gained. The case stands no better against Galloway individually. About what fact were the plaintiffs mistaken at the time of the compromise? They had the correspondence in writing, which spoke for itself; and they knew with the utmost accuracy every fact and Circumstance connected with either the of the firm or Galloway. They knew of the failure, knew of the garnishment already levied, knew that the right to make the appropriation was thus challenged, and the precise grounds of the challenge. Kri6wing all this before the appropriation was made, and having a suit pending to test the validity of the transaction as against creditors who had attached the balanl':le before any change was made in the accounts, or the book-keeping relating to them, it is idle to talk about any mistake of fact. Neither did Galloway or Burns, or their assignee in insolvency, who made the compromise,ido anything to mislead" or deceive or misrepresent any fact concernirig the condition of the assets, or that of the partners, or do anything to indU¢6 the plaintiffs to fall into any error of either law or fact. Carter Bros. especially reserved their rights as a condition to their agreement to the compromise; and this, on the face of the paper.. There the condition stood, staring plaintiffs in the face when they signed the compromise agreement, and was in itself a challenge to them to be careful about their action. It has occurred to me that this fact might possibly preclude all relief, upon the ground that here was an by the plaintiffs to take the chances
YORK V. PAStiAIC ROLLING-MILL CO.
471
of that suit in consideration of being permitted to share for an individualdebt in the partnership assets; but we need not go into the complications of that subject. This would seem to dispose of the case, but there is still another considerationthat should be suggested as giving strength, at least, to this judgment. Under the most favorable circumstances, courts of equity do not cancel agreements to correct mistake!;!, except where they can restore the status quo, unless there be a most imperative equity that requires a disregard of that rule. GryrMs v. Sanders, 93 U. S. 55, 62. To place the parties in atatu quo would be a very difficult operation in this case, if it were possible to be done at all. The plaintiffs do not offer, either in the bill-and perhaps that would be fatal on demurrer-or at the hearing, to restore the $226.30 received on the compromise. If the settlement be canceled, that money belongs to the firm of Galloway & Burns, or equitably to their creditors, who were parties to the compromise. Plaintiffs surely cannot play fast and loose by keeping the cop.sideration for the release, and at the same time rescinding it; and yet this is ",hat they ask to. do. They ask a judgment against Galloway, or the firm, for the whole of his individual debt, whiCh the frrm has never prOf.llti8ed to pay. less the amount already received; or, at least, a decree for 33i per cent. of the full amount, and to. take the firm's fflont'!!J as a credit on that, etc. It is useless to pursue the subject under such difficulties, with such a pretense of equity as the plaintiffs show here. Dismil!8 the bill at plaintiffs' costs. So .ordered.
Yon (Oi'I'cuu
1.1. PASSAIC RoLLING-MILL
Co.
(J0'IIA't,
D. New Jffl'BtIJ!. March 50, 1887.)
SPBCn'1C PERFORMANCE-GOOD
F AlTR
OF OoMPLAmANT.
2.
CORPORATIONS-STOcK-DELIVERY OF CERTIlrICATE.
a.
. .·The plaiutiff delayed bringing suit till seven years after the defendant's refusal to give him the stock. Held, too long a delay, DO excuse therefor being , shown.
LACHBS-UNEXPLAINEDDELAY.
PraWn Stevemrm, for complainant. H. A. Williams, for defendant.