Seth Spring v. South Carolina Insurance Company, Gray Pindar, William Lindsay John Haslett

• Decision Date: 21 February 1823
• Citation: 5 L.Ed. 614,8 Wheat. 268,21 U.S. 268
• Parties: SETH SPRING and Sons, Appellants, v. The SOUTH CAROLINA INSURANCE COMPANY, GRAY & PINDAR, WILLIAM LINDSAY, and JOHN HASLETT, Respondents
• Court: U.S. Supreme Court

21 U.S. 268

5 L.Ed. 614

8 Wheat. 268

SETH SPRING and Sons, Appellants, v. The SOUTH CAROLINA INSURANCE COMPANY, GRAY & PINDAR, WILLIAM LINDSAY, and JOHN HASLETT, Respondents.

February 21, 1823

APPEAL from the Circuit Court of South Carolina.

This was a bill of interpleader, filed by the South Carolina Insurance Company in the Court below, on the 25th of April, 1816, against the appellants, and Gray & Pindar, William Lindsay, and John Haslett, praying, that they might file their answers, and interplead, so that it might be determined to whom the proceeds of a certain policy of insurance should be paid. It appeared by the pleadings, and the evidence in the cause, that this policy had been made on the 6th of May, 1811, by the respondents, the South Carolina Insurance Company, upon a vessel called the Abigail Ann, then lying at Savannah, on a voyage to Dublin, or a port in St. George's Channel, for account of John H. Dearborne, and the respondents, Gray & Pindar, the latter of whom were merchants residing at Charleston, South Carolina, and at that time part owners of the ship, but, on the 27th of May, 1811, sold their interest therein to Dearborne. On the 5th of July, 1811, the vessel sailed on the voyage insured. It appeared, that the respondent, Lindsay, as the agent of the parties, had procured this policy to be underwritten. It also appeared, that Lindsay had delivered the policy to Gray & Pindar, for the use of Gray & Pindar, and Dearborne, without at the same time expressly claiming any lien upon it.

After the sailing of the Abigail Ann, Dearborne, and Gray & Pindar, jointly purchased and loaded another ship, called the Levi Dearborne, of which vessel and cargo Dearborne owned two thirds, and Gray & Pindar one third. In September, 1811, this vessel sailed from Savannah for Europe, and Dearborne went in her. Before sailing, D. had drawn bills on England, some of which were endorsed and negotiated by Lindsay, which were returned protested for non-acceptance, and Lindsay was compelled to pay them. Haslett also made advances to Dearborne, and took his bills on England, secured by a bottomry bond on the ship Levi Dearborne. These bills also returned protested.

Before Dearborne left Savannah, certain misunderstanding arose between him and Gray & Pindar, which it was agreed should be referred to arbitrators. On the 21st of September, 1811, the arbitrators, and one Harford, as umpire, awarded that Gray & Pindar should execute a bill of sale of the ship Abigail Ann to Dearborne, and deliver to him the policy of insurance thereon, without unnecessary delay. Before he sailed, Dearborne directed Harford to transmit to his wife, in the District of Maine, to the care of Seth Spring & Sons, the bill of sale, and policy of insurance, which had been thus awarded to him. The policy was subsequently sent by Harford to Lindsay, to be put in suit against the South Carolina Insurance Company.

The ship Levi Dearborne was obliged to put into New-York by stress of weather, and there Dearborne, on the 28th of October, 1811, made an assignment of the Abigail Ann, and of his interest in the ship Levi Dearborne, and of the policies upon both vessels, to S. Spring & Sons, to secure the payment of a debt due by Dearborne to them, amounting to about 16,000 dollars. The handwriting of Dearborne, and of the subscribing witness to the deed of assignment, were both proved; and one Maria Teubner, who testified to that of the subscribing witness, swore that she was one of his creditors, and had taken pains to obtain information of where he was, but without success. The last account of him was, that he had entered on board of an American privateer, during the last war, and had not been heard of for four years. The assignment was made subject to pay out of the cargo of the Abigail Ann, if it reached the hands of his correspondents in England, certain bills which he had drawn on them, in the confidence that they would be paid out of the cargo of the Levi Dearborne. Nothing was realized from that vessel and cargo, and the Abigail Ann was lost at sea. An action was brought upon the policy on the Abigail Ann, in the names of Dearborne, and Gray & Pindar against the South Carolina Insurance Company, and judgment obtained against the latter, in 1815, for the sum of 9,800 dollars. Dearborne died in March, 1813. On the 24th of February, 1812, Lindsay, on the return of the bills endorsed by him, issued an attachment under the laws of South Carolina, against Dearborne, who was then absent from that state, and served a copy upon the South Carolina Insurance Company. On the 21st of May, 1812, Haslett also issued an attachment against Dearborne, and served a copy on the South Carolina Insurance Company. No appearance was entered for Dearborne in these attachment suits, and judgment was obtained on Lindsay's on the 19th of April, 1813, and on Haslett's on the 10th of June, 1815.

At the hearing in the Court below, after the depositions, and regularly proved exhibits in the cause had been read, an order signed by Harford, as agent for Dearborne, and S. Spring & Sons, on Lindsay, in favour of Haslett, was read in evidence, without notice to the appellants, or an order for its being read at the hearing.

The Circuit Court decreed, that the demand of Lindsay should be first satisfied, and paid out of the fund; that of Gray & Pindar next; that of S. Spring & Sons next; that Haslett was entitled to the surplus, if any; and that S. Spring & Sons should account, and prove their claims against Dearborne, either by filing a cross-bill, or by answering upon interrogatories.

From this decree an appeal was taken by S. Spring & Company to this Court. Feb. 13th.

Mr. Wheaton, for the appellants, stated, 1. That he would first clear the case of all extraneous matters, and for this purpose would throw out of it both Haslett's and Lindsay's claim. The former was justly postponed to that of S. Spring & Sons, by the Court below; he has not appealed, and could have no claim under the attachment suits, for Dearborne died before his suit was even commenced. The claim of Lindsay, (so as it arises from his attachment,) must also be rejected on two grounds: 1st. The policy of insurance on the Abigail Ann had been transferred long before his suit. 2d. It was abated by the death of Dearborne. This was understood to be the local law, as established by the decisions of the Courts of South Carolina. Crocker v. Radcliffe, 3 Brev. 23. The order, dated the 23d of May, 1813, and signed by Harford, as Dearborne's agent, and read in evidence as an exhibit, must also be excluded from the cause. There is no evidence that he was the agent of Dearborne for this purpose; and even if he had been, the paper was irregularly introduced. It is the settled practice of the Court of Chancery, wherever any thing like a regular practice prevails, that no exhibit can be proved at the hearing, without satisfactory reasons why it was not proved in the usual way, before the examiner; and if proved at the hearing, a cross-examination of the witnesses is always allowed. And an order must be previously obtained, or, at least, notice given. Consequa v. Fanning, 2 Johns. Ch. 481, and the cases there cited.

2. The decree below seems to be mainly founded on Harford's order, thus irregularly interpolated into the cause. Before the pretended liens of Gray & Pindar, and of Lindsay, had attached, the assignment had vested the property in the appellants, S. Spring & Sons. Lindsay, after he had delivered up the policy, and an intermediate transfer of it to bonae fidei purchasers, could not, by again obtaining possession of it, without the consent of such purchasers, regain his lien, even if he ever had one. His possession was wrongful; and if rightful, he had no right to retain for a general balance. The lien of a policy broker is confined to his general balance on policy transactions, and does not extend to other debts. Olive v. Smith, 5 Taunt. 57. Properly speaking, there is no such thing as a lien by contract. Liens are created by the law, and pledges by contract. But no express pledge is proved in this case. Neither can the analogy of the law of stoppage, in transitu, be applied, where the property has already been transferred to a creditor or other bonae fidei purchaser.

3. In a bill of interpleader, all the parties are actors. Each party states his own claim, and the admission of no one is evidence against another. The appellants are not bound by the admission of the other co-defendants. They do not admit any such liens as are set up by the other parties, and no evidence is produced of their existence, except the order of Harford, which cannot be admitted. Non constat when that order was executed. It might have been at the very moment before the hearing; and the bare possibility of this shows the danger of permitting it to be read in evidence without notice, and without cross-examination.

4. There are, besides, several formal objections. The plaintiffs below do not offer to bring the money into Court, nor is there any affidavit accompanying the bill, and showing that it was filed without collusion. The want of this was a ground of demurrer, and they are clearly not entitled to their costs out of the fund. 1 Madd. Ch. 174, 181. The appellants are the only parties who, in answering, insist on their rights; the others merely pray to be dismissed.

Mr. Cheves, contra, stated, that there were four claims in this case.

1. That of Haslett.

2. That of Lindsay.

3. That of Gray & Pindar.

4. That of the appellants, S. Spring & Sons.

1. The decree adjudges the surplus, if any, to Haslett, after payment of the other claims. But he has no claim upon the fund in controversy, unless it arises under his attachment. The case of Crocker v. Radcliffe, referred to on the other side, is not before the Court in a shape in which the precise point decided can be known. The point said to have been ruled in that case, appears...