Southgate v. Montgomery

1 Paige Ch. 42

• Court: New York Court of Chancery
• Decided: May 23, 1828
• Status: Published

Opinion

The Chancellor:—If the expression, “ after deducting your account in the agreement of the 16th May, 1810,” refers to an account of Hancock and McCormick, to whom the draft or agreement appears to be addressed, and not to the account of Montgomery, which was liquidated at the same time, the plaintiffs have nothing to do with the general accounts between the defendants; because Eivers’ half of the fund then in the hands of Hancock and McCormick, which Montgomery afterwards received, together with the 80 puncheons of meal, which he also received from them, as appears from the testimony of Hancock, stated in the plaintiffs’ bill, amounted to 6,634 pieces of eight 5 bits and 3 stivers, (equal to $4,246 21;) a sum nearly double the amount due to the plaintiffs in the bill, independent of the sum of 3,954 pieces of eight and 5 bits, received by Montgomery for the provisions and lumber, sold by his agent Peter Montgomery, one half of which also belonged to Eivers. But if, as I am inclined to believe, the intention of the defendants was, that the amount due to Montgomery on their general accounts, was first to be paid out of the proceeds of the provisions and lumber, there would not be enough to pay both demands. There would still be a deficiency of 6 or 700 dollars, after including in Eivers’ share of the fund one half of the amount received from Peter Montgomery. And Eivers having dealt with Montgomery in relation to the bill of exchange, without any knowledge of the plaintiff’s claim, it would be necessary to go into the general accounts between the defendants, to ascertain which was equitably bound to pay the balance due to the complainants. This being a complicated account, the plaintiffs, in the first instance, would have been entitled to call Eivers into this court, for the purpose of having that account taken here. Whether they could bring both defendants here, and compel them to settle their accounts between themselves, on the principles of a bill of inter-pleader, which I am inclined to think they might under the particular circumstances of this case, is a question not necessary to be decidéd at this time. They also had a right to prosecute Eivers in a court of law, in the name of Montgomery ; and the trial at law, under the decision of the Supreme Court in the first suit, necessarily required an examination of the accounts between Montgomery and Eivers. The court of law had concurrent jurisdiction with the Court of Chancery in examining that account. The plaintiffs elected their forum after the decision of the Supreme Court had apprized them of the necessity of going into these accounts: and having failed to establish their claim in a court of law, under such circumstances, the question now presented is, can they re-examine the same subject here as against the defendant Eivers ?

The judgment against Eivers in favor of Montgomery, in the Island of St. Croix, in 1820, cannot be binding upon Eivers, as between him and the plaintiffs in this suit, for a variety of reasons. It was recovered about two years before the hearing before the referees, and was known to the plaintiffs at the time of such hearing, as it appeared in the depositions used by them on that occasion. It was conclusive as to the state of the accounts, it should have been used and relied on by the plaintiffs for that purpose on that occasion; and they having neglected to insist upon it, they cannot now ask relief in this court on that account. (Foster v. Wood, 6 John. Ch. Rep. 87.) Again, the plaintiffs were not parties to the West India suit, and it was brought long after Eivers was apprized of their equitable interest in the contract respecting the protested bill. The decision of that cause could not, therefore, have been binding upon them; and of course cannot now be relied upon as res adjudicata in their favor. (Paynes v. Coles, 1 Mumf. Rep. 373; and per Roane, J., 1 Hen. and Mumf. 165.) This question has been fully examined and decided in this court, in the case of Dale v. Rosevelt, but a few days since. I have examined the statements in the bill and the admissions in the answer of Eivers, and cannot discover any evidence that the decision of the referees in *the suit at law was not perfectly equitable. I cannot, in the absence of all proof, presume that the referees allowed the wdiole of the credit in the account put in by the attorney of Eivers, when they had before them the depositions of Hancock and Peter Montgomery, showing that it was a partnership transaction; and showing also the actual amount received by Montgomery on account thereof. Neither do I understand from the plaintiff’s bill that they are certain that any injustice was done in that suit; but they wish the defendants now to litigate and settle their accounts between themselves, that the plaintiffs and the court may know whether injustice was done in the suit at law; and if it was not, that Montgomery may pay their debt. The allegation in the bill of fraud in the production of the account before the referees, is fully denied by the answer; and this court cannot now disturb the judgment on the report of the referees. Although the plaintiffs were not nominal parties in that suit, they state in their bill that they were the real parties. They prosecuted in the name of Montgomery, as assignees of the chose in action; and the decision must, therefore, in this court, be considered as binding upon them, as if they had been the nominal as well as the real parties on the record; for this court will judiciously notice the fact, that courts of law recognize and protect the rights of such assignees, suing in the name of the assignor.

The reasoning of Judge Radcliffe, in Leguin v. Governeur and Kemble, (1 John. Ca. 436,) is, to my mind, conclusive to show that the judgment of the Supreme Court, on the report of the referees, ought not to be disturbed by reason of anything that appears in this case. And the principles there laid down by him are expressly sanctioned by Ch. J. Spencer, in Simson v. Hart, in the Court of Errors. (14 John. Rep. 63.) This question was also fully and ably examined by the late Chancellor Kent, in the same case in this court. (1 John. Ch. Rep. 91.)

The plaintiff’s bill, as against the defendant, Elvers, must be dismissed with costs. The other defendant having made default at the hearing, the plaintiffs may take such a decree against him as they can abide by.