Clement Hunt, Appellant v. Christopher Rhodes, William Ennis, and Richard Randolph, Administrators of Lewis Rousmaniere, Deceased Appellees

Decision Date01 January 1828
Citation26 U.S. 1,7 L.Ed. 27,1 Pet. 1
CourtU.S. Supreme Court

THE appellant filed a bill on the Chancery side of the Circuit Court of the United States, for the district of Rhode Island, setting forth, that, in January 1820, Lewis Rousmaniere obtained from him two loans of money, amounting, together, to 2150 dollars; and, at the time the first loan was made, Rousmaniere offered to give, in addition to his notes, a bill of sale, or mortgage of his interest, in the brig Nereus, then at sea, as a collateral security for the repayment of the money. A few days after the delivery of the first note, dated 11th of January 1820, he executed a power of attorney, authorizing the plaintiff to make and execute a bill of sale, of three-fourths of the Nereus, to himself, or to any other person; and in the event of the loss of the vessel, to collect the money which should become due, on a policy, by which the vessel and freight were insured. In the power of attorney it was recited, that it was given as collateral security for the payment of the notes, and was to be void on their payment; on the failure of which, the plaintiff was to pay the amount and all expenses, and to return the residue to Rousmaniere. On the 21st of March 1821, an additional sum of 700 dollars was loaned, for which a note was taken, and similar power of attorney given, to sell his interest in the schooner Industry; this vessel being also still at sea.

On the 6th of May 1820, Rousmaniere died intestate and insolvent, having paid 200 dollars on account of the notes; and the plaintiff gave notice of his claim, to the Commissioners of Insolvency, appointed under the authority of the Insolvent Law of Rhode Island. The plaintiff in his bill alleged, that, on the return of the Nereus and Industry, he took possession of them, and offered the interest of the intestate in them, for sale; and the defendants having forbade the sale, this bill was brought to compel them to join in it.

To this bill the defendants demurred; and their demurrer was sustained in the Circuit Court; but leave was given to the plaintiff to amend. An amended bill was then filed, in which it was stated, that it was expressly agreed between the parties, that Rousmaniere was to give specific security on the Nereus and Industry, and that he offered to execute a mortgage on them. Counsel was consulted on the subject, who advised that the power of attorney, which was actually executed, should be taken in preference to a mortgage, because it was equally valid and effectual as a security, and would prevent the necessity of changing the papers of the vessels, or of taking possession of them on their return to port. These securities were, it was alleged, executed with a full belief that they would, and with intention that they should, give to the plaintiff, as full and perfect as security, as would be given by a mortgage.

The defendants having also demurred to the amended bill, the Circuit Court decided in favour of the demurrer, and dismissed the bill; and an appeal was entered to this Court.—At the February session, 1823, this Court considered that the appellant might be entitled to the relief prayed for in Equity, but the respondents were permitted to withdraw their demurrer, and to file an answer in the Court below. 8 Wheat. 174. The answer of the defendants admits the loans of money, and the delivery of the promissory notes, and that but two hundred dollars were paid before the death of the intestate. The execution of the powers of attorney was also admitted, but it was denied that possession of the vessels was taken by the appellant; and they alleged their resistance of the attempt to take possession of them.

The answer also asserts ignorance of any agreement for a specific lien on the vessels, except that imported by the language of the powers of attorney; that they had heard and believed that the appellant meant to be concerned, as a partner, in the voyage of one of the vessels, which was relinquished, and that afterwards he offered to loan the money on security; upon which the intestate offered to give a mortgage, but the appellant preferred taking the powers of attorney, to avoid inconvenience, and took the powers of attorney, by advice of counsel. The answer also states, that a bill of sale of the vessels, dated the day before the death of the intestate, by which the vessels were intended to be conveyed to one Bateman, and which the respondents state they had heard, and believed was intended to be executed on the evening of that day. The answer also alleges the insolvency of Rousmaniere and that it existed a long time before his death; which they assert must have been known to the appellant, and that the intestate resorted to improper modes to keep up his credit.

The evidence taken in the case, consisted of the deposition of Mr. Hazard, the counsel who drew the papers, and in which he stated, that they were intended by both parties to have the effect of a specific lien or mortgage, and he advised them they would have that effect; and also the deposition of Mr. Merchant, to show that the appellant admitted that the motive by which he was induced to make the loan, was to compensate Rousmaniere for the disappointment sustained by his not uniting with him in a voyage of one of his vessels; and, accordingly, an agreement was made, by which the appellant was to let Rousmaniere have a sum of money, and that he was to give a bill of sale of a certain vessel; but that afterwards he refused to take the same, on account of the inconvenience and difficulties which might attend the same; and that he had consulted with Mr. Hazard, upon the subject, who told him, that he could or would draw an irrevocable power of attorney to sell, which would do as well, or words to that effect; and which was accordingly done.

The Circuit Court pronounced a decree, declaring, that the appellant had no specific lien or security upon either of the vessels, and no equity to be relieved respecting them, and dismissing the bill, with costs; from which decree, an appeal was entered to this Court.

On the part of the appellants, it was contended, that the decree ought to be reversed, and a decree entered for the appellant.

That the answers to the bill do not respond to the only material facts in the cause; it being fully proved, that the powers of attorney were intended to have the effect of a specific lien, the appellant is entitled to the relief he seeks, upon the principles laid down in the former decisions of this Court.

The case was argued by Mr. Kimball and Mr. Webster, for the appellant, and by Mr. Wirt, Attorney General, and Mr. Robbins, for the appellees.

For the appellant——

The Court, in concluding their opinion in the former case between these parties, as reported in 8 Wheat. 174, use this language:—'We find no case which we think precisely in point, and are unwilling, where the effect of the instrument, the power of attorney, is acknowledged to have been entirely misunderstood by both parties, to say, that a Court of Equity will not grant relief.' In the opinion of the Court, the plaintiff having been, in equity, entitled to the relief he prayed for, the principal question now is, one of fact.

It is insisted, that no essential averment in the bill, is contradicted by the answer.

The only real difference between them, relates to the possession of the vessels.

It is not denied, that it was the express agreement and deliberate intention of the parties, that the plaintiff should have a specific security; the defendants only say they are ignorant of this fact.

The testimony of the plaintiff, then, is sufficient to entitle him to a decree, unless the defendants have introduced other facts, that are clearly inconsistent with it.

Admitting the origin of the loan to the intestate, to be such as the appellees say they have heard, and believe it to be; this may be reconciled with the alleged intention of the parties, that one should give, and the other receive, a specific security.

If the appellant did assign the reasons which the defendants say they have heard, and believe, he assigned, for not taking a bill of sale, that circumstance does not contradict the testimony of the plaintiff's witness. A refusal to take a specific legal security, surely, does not necessarily exclude an agreement for a specific equitable security. The fact mentioned in the answer, may import simply a reference to a legal right, as those stated by the plaintiff's witness, manifestly do to an equitable right. There is, then, no contradiction apparent. As to the bill of sale, found among Rousmaniere's papers, it obviously discloses a design to commit a fraud.

None of the distinct averments contained in the answer, are in opposition to the allegations of the bill; and none of them, with the exception of the bill of sale, are derived from the personal knowledge of the defendants.

The general rule of equity, therefore, that declares the testimony of a single witness against a positive averment of the answer, to be insufficient for a decree in favour of the plaintiff, does not comprehend the present case. It does not apply, where the answer contains no direct denial, nor where the facts stated, are not, or cannot, be within the defendants' own knowledge. But if it did embrace this cause, the answer ought not to prevail against this bill.

Where a single witness, in support of the bill, is corroborated by circumstances, it is sufficient for a decree in favour of the plaintiff; and this is the fact in this case. 9 Cranch, 160. Clarke's Ex'rs. vs. Van Reymsdyk, Cooth vs. Jackson. 6 Ves. 40. Heffer vs. Miller, 2 Munf. 43. Walton vs. Hobbs. 2 Atk. 19, case 17, Hunt vs. Ten Eyck. 2 John. Ch. R. 92.

The power of attorney was a part of plaintiff's security; and a letter of attorney, that is part of a...

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