Robert Brent, Surviving Executor of Robert Brent, Use of the United States, Appellant v. the President and Directors of the Bank of Washington

• Decision Date: 01 January 1836
• Citation: Robert Brent, Surviving Executor of Robert Brent, Use of the United States, Appellant v. the President and Directors of the Bank of Washington, 35 U.S. 596, 10 Pet. 596, 9 L.Ed. 547 (1836)
• Parties: ROBERT Y. BRENT, SURVIVING EXECUTOR OF ROBERT BRENT, USE OF THE UNITED STATES, APPELLANT v. THE PRESIDENT AND DIRECTORS OF THE BANK OF WASHINGTON
• Court: U.S. Supreme Court

35 U.S. 596

10 Pet. 596

9 L.Ed. 547

ROBERT Y. BRENT, SURVIVING EXECUTOR OF ROBERT BRENT, USE

OF THE UNITED STATES, APPELLANT

v.THE PRESIDENT AND DIRECTORS OF THE BANK OF WASHINGTON.

January Term, 1836

APPEAL from the circuit court of the United States for the county of Washington in the District of Columbia.

Robert Brent, a paymaster of the army of the United States, having become indebted to the United States, and being in an infirm state of health; on the 17th of May 1819, executed an assignment, stating the situation of his health, and his earnest desire to satisfy and adjust the claim of the government against him as paymaster as aforesaid, and to do justice to others; and, that the better to secure these objects and purposes, the assignment proceeded in the following terms: 'I have conveyed and assigned, and do by these presents convey and assign, in consideration of the premises, and for the sum of one dollar to me in hand paid, to George Graham, Joseph Pearson and Robert Y. Brent, all my real and personal estate, and property, in whatsoever consisting, and wheresoever situated, to them, the said George Graham, Joseph Pearson and Robert Y. Brent, their executors and administrators, and to the survivor of them, nevertheless, for paying and satisfying all just claim or claims of the government as aforesaid; as well as for satisfying all just claim or claims of all others, as far forth as the said estate and property above conveyed will answer, will full power and authority to them, or the majority of them, to sell and convey, and to make good and sufficient titles to all or any part of the property referred to, in conformity with the intention and purpose of this writing: it being well understood that the said trustees, after satisfying the purposes of the said trust, shall well and fully account with the said Robert Brent, his heirs, executors or administrators, for the execution of the trust aforesaid, and fully restore to the said Robert Brent, his heirs, executors or administrators, any overplus or surplusage that may remain of the estate aforesaid; and, it being also understood, that the said Robert Brent reserves to himself the possession and use of such part of the property aforesaid as may be for his reasonable support and maintenance; and, likewise, the privilege of disposing of any part of the trust estate, with the consent of the trustees, for the objects designated above.'

It was agreed that the assignees refused to accept the assignment, or to act under it.

Robert Brent died on the 7th of September 1819, leaving real and personal estate; and the executors qualified, and took possession of his estate in 1820.At the time of his death he held six hundred and fifty-nine shares of stock in the Bank of Washington; and at that time he was indebted to the bank, as indorser, on two promissory notes: one for 1000 dollars, drawn by Thomas L. Washington, and indorsed by Robert Brent, due and protested on the 22d of May 1819; the other for 667 dollars, also drawn by Mr Washington, and indorsed by Mr Brent, due and protested on the 29th of May 1819: he was also, at the time of his death, indorser of a promissory note drawn by John Cooke for 400 dollars, which became due and was protested on the 19th of November 1819: making, together with the other notes, the sum of 2067 dollars; of which 1667 dollars only were due at his decease.

Some years after the death of Robert Brent, the Bank of Washington instituted a suit against the executors on the note of 400 dollars, and on the note of 667 dollars; and on a plea of the statute of limitations, a verdict and judgment were rendered for the defendants.

The eleventh section of the charter of the Bank of Washington provides, that 'all debts actually due and payable to the bank, (days of grace for payment being passed) by a stockholder requesting a transfer, must be satisfied before such transfer shall be made, unless the president and directors shall direct to the contrary.'

The same section of the charter also declares: 'that the shares of capital stock at any time owned by any individual stockholder, shall be transferable only on the books of the bank, according to such rules as may, conformably to law, be established in that behalf by the president and directors.'

The certificates of stock issued by the bank declare, that 'the shares are to be transferred at the bank by the stockholder, or his attorney, on surrendering the certificate of the same.'There is also a provision in the section, which authorizes the directors to make regulations for the government and transactions of the bank, 'conformable to law.'

The executors of Robert Brent, in the year 1820, called upon the Bank of Washington, and requested to be allowed to transfer the stock held by their testator.This was refused, without the payment of the notes, the bank claiming the same under the provision of the charter: which, it was insisted, gives the bank a right to be so paid.In 1835 the bank had retained dividends on the stock, and had sold a part of it, amounting to 289 dollars and 80 cents.

Bills were filed in the circuit court, by the surviving executor of Robert Brent, for the use of the United States, against the Bank of Washington, claiming a right to transfer the stock for the payment of the debt due to the United States; on the allegation of the right of priority given to the United States by the acts of congress.The Bank of Washington, at the same time, filed a bill claiming to appropriate the stock, by a sale of it, to the payment of the debt due to them; and asserting their right to a lien and to payment under the provisions of the charter.

The following agreement was made in the circuit court between the parties to these suits.

'It is agreed by and between the said parties, that if the court shall be of opinion that the eleventh section of the charter of the Bank of Washington, as follows: 'all debts actually due and payable to the bank, (days of grace for payment being passed) by a stockholder requesting a transfer, must be satisfied before such transfer shall be made, unless the president and directors shall direct to the contrary,' confers upon said bank a specific lien upon the stock held by any stockholder indebted to said bank, the days of grace being passed: then the court may decree that the stock, or a sufficient amount thereof, held by complainant's testate in said bank, shall be sold at public sale, upon such terms as the court may think proper to impose, and by such trustee as they may appoint; and may further direct, that the proceeds thereof, after paying the expenses of the sale, and the costs of this suit, shall be applied to the payment of the notes hereinafter enumerated, and by this agreement admitted to be due and unpaid by the complainant's testate to the defendants; unless the court shall further be of opinion that said lien granted by said charter is overreached, controlled and destroyed by the claims of the United States now made to a priority of payment out of said stock by virtue of the act of congress of 1799, ch. 128, sect. 65, as follows: 'in all cases of insolvency, or where any estate in the hands of executors, administrators and assigns, shall be insufficient to pay all the debts due from the deceased, the debt or debts due to the United States shall be first satisfied.'Or unless the court be further of opinion, that the claims, or debts, or said notes, due to said defendants and hereinafter particularly specified, upon two of which notes of said testate as hereinafter described, it is agreed, suits were instituted by the defendants against the complainants, on the common law side of this court, at the trial of which said suits, the complainants had solely and exclusively, upon the ground of the plea of limitations, a verdict in their favour, were thereby extinguished, and the said lien in consequence of said limitations lost and destroyed; then the court to decree, if the claims of the United States to priority of judgment be allowed, that the proceeds of said sale be applied in payment of the debt due the United States; or unless they shall be of opinion that the said lien is not affected by any such priority, but has been destroyed by the said verdicts in favour of complainants, then the proceeds of such sale to be applied to the payment of the note upon which no such verdict was rendered in favour of complainants.'- The circuit court, on the 26th of January 1826, made the following decree in the two cases.

'These causes coming on to be heard upon the bill, answers and exhibits, and the facts stated in the agreement entered into between the complainants and defendants, it is this 22d day of January, in the year 1836, ordered and decreed by the court, that the stock of Robert Brent deceased, standing in his name, in the Bank of Washington, or so much thereof as may be necessary to satisfy the several notes in the said agreement specified, be sold at public vendue, on the credit of sixty or ninety days, the purchasers to give notes with good indorsers, as the trustee may approve; notice being first given of the day of sale in one of the city newspapers, and that J. Hellen be, and he is hereby appointed a trustee to make said sale, and after paying the expenses of sale and costs of suit to defendants, he shall apply the proceeds of the sale to the payment of all the notes of said Brent, enumerated in the above statement as due to said defendants; and it is further decreed, that the balance of said stock shall be transferred to the United States by said defendants, on the books of said bank.'

The United States prosecuted this appeal.

The case was argued by Mr Butler, attorney-general, for the United States; and by Mr Key, for the appellants; and by Mr Hellen, for the appellee.

For the United States it was contended, that at the time of the execution of the assignment nothing was due by Robert Brent to the Bank of Washington.His...