Morton v. Ludlow

1 Edw. Ch. 639

• Court: New York Court of Chancery
• Decided: June 25, 1833
• Status: Published

Opinion

Tub Vice-Chancellor.

The most important of these exceptions are the first and second. But the questions embraced by them has lately been decided by me in the case of Jones v. Moore and others, (see page 632. ante.) I there ruled in favor of such a claim as the exceptant here sets up; and against a master’s report which, like the present, disallowed the debtor’s claim of set-off upon debentures. I considered, that, although custom-house bonds lay over and judgments were obtained upon them, yet the debtor was entitledto set-off upon debentures connected with such bonds from the time they were due and the interest was only to run from that period upon the balance. This opinion, I see no reason to change: and, therefore, and until I am better instructed, I shall adhere to it.

But there are other questions. Mr. Western owed bonds for duties besides the above and which he paid with interest in the year one thousand eight hundred and twenty-five. He held debenture certificates connected with those bonds at this time ; and required to be allowed interest upon them; which was not granted. The collector, acting under instructions from ■the comptroller of the treasurer, disallowed it. Mr. Western paid the full amount of the bonds, with interest, handing in the last mentioned debenture certificates and being allowed, in the payment, for the mere face of them. I must look upon this as a voluntary payment. Although he urged his claim to be allowed interest on the certificates, and the collector refused, still, it must be looked upon as a voluntary payment. The rule upon the subject has been clearly laid down in cases occurring within our own courts. Thus, in Clark v. Dutcher, 9 Cow. 674, it was decided, that where money is paid with a full knowledge of the facts and circumstances upon which it is demanded or with the means of such knowledge, it cannot be recovered back upon the ground that the party supposed he was bound in law to pay it, when in truth he was not. He shall not be permitted to allege his ignorance of the law ; and it shall be considered a voluntary payment. The same is to be found in the prior case of Waite v. Leggett, 8 Cow. 195. Now, the facts here were well known to Mr. Western ; and he was not ignorant of the law.

It has been said, that there was no set-off at law and the defendant could only obtain it in equity. Upon looking at the late case of Ex parte Davenport, 6 Peters, 661, I think it not so clear but what he might have had this defence there. It appears in Exparle Davenport that Congress never meant to bar a party from any good defence against a suit founded upon real and substantial merits ; and that such an intention ought not, in common justice, to be presumed without the most express declarations. But whether the courts of the United States are bound to allow a trial of such a set-off or not Mr. Western is pot precluded from inquiring into the judgments' and opening them so far as may be necessary to ascertain the amount legally and equitably due Upon the bonds. This results as well from the circumstance that the United States come into this court asking for equity, (and, therefore, are obliged to do equity,) as from the wording of the order of reference which was entered by consent and upon the motion of their attorney.

I think the general question as to what is due upon the judgments is fairly before me.

There is another point to be decided : as to the claim of interest against the United States upon the money in this court. I am not inclined to give it in Mr. Western’s favor. Although the money has been paid into court to the credit of the United States, yet they have received no benefit from it. If a proper application had been made, the amount might have been invested and'Mr. Western could have made the application: but this has not been done ; and the delay in procuring the master’s report and obtaining a decision of the question rests as much with him as with the attorney of the United States.

An order must be entered referring this cause back to the master to correct his report, by deducting the amount of the debentures from the principal of the bonds and computing interest on the balance only.