Yates v. Arden

30 F. Cas. 787, 5 D.C. 526, 5 Cranch 526

• Court: U.S. Circuit Court for the District of District of Columbia
• Decided: November 15, 1838
• Status: Published

Opinion

Cranch, C. J.,

delivered the opinion of the Court.

The facts which it is incumbent on Yates & Melntire to prove, in order to justify a decree in their favor, to the extent of their prayer for relief, are

1. That the intestate,' D. D. Arden, was their agent for the sale of their lottery tickets, upon commission.

2. That, as such agent he received a large number of tickets which he sold for their account, and that he was indebted to them in a large amount at the time of his death, and that, on the 1st of June, 1836, there remained due to them, the sum of $31,074.10.

3. That D. D. Arden died seized or possessed of real estate, as alleged in their bill, the whole, or a large part of which, was purchased by the deceased, with the funds of the plaintiffs, Yates & Melntire. That if any part thereof was purchased and paid for with the separate and individual funds of the deceased, it is so mingled with the part purchased with the funds of the plaintiffs, Yates & Melntire, that it cannot be discriminated by the plaintiffs.

4. That, so far as the plaintiffs, Yates & McIntyre, seek to charge the real estate, if any, which was purchased with the separate funds of the deceased, they must show that his personal estate was insufficient to pay his debts.

None of these facts were denied in the cross-bill of the heirs, which is received as their answer to this bill; and they are all proved by the answer of Mi\ Maury, which is received by consent as his deposition in this suit..

Theobald, in his treatise on Principal and Agent, p. 369, says, “and this principle will be found to be established, by many authorities, as a settled rule in equity, that if an agent, whose duty it is to keep the property of his employer separate, mix it with his own, it lies upon him to distinguish them ; and if he cannot distinguish what is his own, the whole is to be considered as belonging to the other.” And in page 371, he says, “ every sort of profit or advantage, clandestinely derived by an agent, from dealing or speculating with his principal’s effects, is the property of the latter, and must be accounted for.” Malyne, 154. See Lord Chadworth v. Edwards, 8 Ves. 48; Lupton v. White, and Panton v. Panton, 15 Ves. 436.

These plaintiffs, therefore, have a right to consider the whole real estate of the deceased in this district as belonging to them, and either to have it specifically conveyed, they paying any balances of the purchase-money which may be due ; or, to have it sold, and the proceeds of the sales, after paying such balances,if any there are, to be appropriated to the extinguishment of their claim against the deceased.

It has been suggested, that after the Bank of the United States, and M. and H. C. Carey, other creditors of the deceased, had come in, according to the invitation of the bill, the plaintiffs had no right to amend it so as to exclude those creditors who had come in under the invitation of the original plaintiffs, Yates and Mclntire.

The Bank of the United States, and the Messrs. Carey, had by their petition prayed to come in, not to aid the original plaintiffs, but to controvert the plaintiffs’ claim to the property purchased by their agent with their funds, and to be admitted to the benefit of so much of the bill as seeks to promote the common interest; at the same time averring the bill to be incongruous, and liable to be defeated upon demurrer. In order to avoid this objection, the original plaintiffs amended their bill, by striking out the invitation, and leaving the bank and the Messrs. Carey to pursue their own course; and the question now is, whether they had a right so to do.

We think they had; but they must pay the petitioners their costs.

The plaintiffs having shown that a large part of the real estate was purchased by the deceased with their funds, and the defendants having failed to show what part, if any, was purchased with the separate funds of the deceased, the CouRT will order the whole to be sold, and the proceeds to be brought into court to be disposed of as the Court shall direct,