Williams v. Heard

• Decision Date: 25 May 1891
• Citation: 140 U.S. 529,35 L.Ed. 550,11 S.Ct. 885
• Parties: WILLIAMS v. HEARD et al
• Court: U.S. Supreme Court

140 U.S. 529

11 S.Ct. 885

35 L.Ed. 550

WILLIAMS v. HEARD et al.

May 25, 1891.

This was an action for money had and received, brought in the supreme judicial court of the commonwealth of Massachusetts for the county of Suffolk by John Heard, Augustine Heard, and Albert F. Heard against their assignees in bankruptcy, to recover the amount of an award made by the court of commissioners of Alabama claims, under the act of congress approved June 5, 1882, (22 St. 98,) on account of war premiums of insurance paid by the pain tiffs during the war of the Rebellion, which award had been paid to the assignees by the United States. The case was entered in the full court, where it was tried upon the following agreed statement of facts: 'The plaintiffs, citizens of the United States, were engaged between April 13, 1861, and April 9, 1865, as partners under the firm name of Augustine Heard and Company, in the busi- ness of buying and shipping steamers for China, receiving merchandise from China, and selling the same, and insuring merchandise and vessels. During that period the plaintiffs bore true allegiance to the government of the United States, and, after the sailing of the first Confederate cruiser they made, in the course of their business, certain enhanced payments of insurance, otherwise called payments of premiums for war risks or war premiums, on merchandise and vessels, to an amount exceeding the sum awarded on their account by the court of commissioners of Alabama claims, as hereinafter set forth. On May 31, 1865, the said firm of Augustine Heard and Company was dissolved by the agreement of the members thereof. On August 5, 1875, the plaintiffs were severally adjudicated bankrupts in the United States district court for the district of Massachusetts. On September 11, 1875, assignments in bankruptcy in the usual form were made to the defendants, and on July 20, 1877, the plaintiffs received their discharge in bankruptcy. The said firm and each of the plaintiffs individually were solvent when said firm was dissolved, and all the debts owed by the plaintiffs at the time of their said adjudication in bankruptcy were incurred after said dissolution. The estate of said bankrupts received by the defendants hitherto has been insufficient to pay in full the debts of the bankrupts. In December, 1886, an award was made by the court of commissioners of Alabama claims established under the act of congress approved June 5, 1882, to the defendants as assignees in bankruptcy of the plaintiffs in proceedings in said court to which the plaintiffs in his action were parties, on account of the said payments of war premiums by the plaintiffs, and was in part paid to the defendants by the United States. Of the sum so awarded and paid there remains in the hands of the defendants, after paying the reasonable expenses of prosecuting the claim before said court of commissioners and collecting the award, the sum of thirteen thousand six hundred and twelve and 85-100 ($13,612.85) dollars. The amount of the Geneva award remaining unappropriated was insufficient to pay the war premium awards in full.

The treaty of Washington, between the United States and Great Britain, promulgated July 4, 1871; the decisions rendered by the tribunal of arbitration at Geneva, and the final decision and award made by said tribunal on September 18, 1872; the acts of congress of june 23, 1874, and june 5, 1882, re-spectively, creating and re-establising the court of commiSsioners of alabama claims; the several acts of congress relating to the said courts and the payment of their awards,—are to be treated as facts in this case, and may be referred to at the argument. No controversy or question exists between the parties as to the proportions in which the several plaintiffs are entitled, if at all, to the sum recovered, or as to the distribution of the same; and it is agreed that, if upon the foregoing facts the plaintiffs are entitled to recover, judgment is to be entered for them and the case is to stand for the assessment of damages; otherwise judgment for the defendants. It is further agreed that in either event the expenses of this action and reasonable counsel fees to each party may be paid out of the fund in the defendants' hands.' There was a judgment for the plaintiffs, two of the judges dissenting, (146 Mass. 545, 16 N. E. Rep. 437,) the rescript being entered April 25, 1888. By agreement damages were assessed at $10,000, and in accordance therewith judgment for that amount was entered on the 5th of June, 188. To review that judgment this writ of error was prosecuted. One of the defendants having died and the other having resigned his trust, the present plaintiff in error was appointed assignee, and he thereafter regularly entered his appearance in the case.

Moses Williams and Chas. A. Williams, for plaintiff in error.

H. W. Putnam, for defendants in error.

[Argument of Counsel from pages 531-535 intentionally omitted]

LAMAR, J.

The single question on the merits of the case is whether, at the date of their adjudication in bankruptcy, the claim of the defendants in error for war premiums passed to their assignees in bankruptcy, as a part of their estate. As preliminary to the discussion of the merits of the case, it is urged by the defendants in error that this is not a federal question, and that therefore the writ of error should be dismissed. We do not think, however, that this contention can be sustained. Both parties claim the proceeds of the award, the defendants in error asserting that it did not pass to their assignees in bankruptcy under section 5044 of the Revised Statutes, and the plaintiff in error insisting that the claim was a part of their estate at the date of their adjudication in bankruptcy, and did pass to the assignees under that section of the Revised Statutes. The assignee's claim to the award is based on that section of the statutes, and, as the state court decided against him, this court has jurisdiction under section 709, Rev. St., to review that judgment, for the decision of the state court was against a 'right' or 'title' claimed under a statute of the United States, within the meaning of that section. The case upon the merits is more difficult. There is high authority in the state courts in support of the judgment of the court below. The same general question had arisen in New York, in Maryland, and in Maine, and in each instance the decision has been, like the one we are reviewing, against the assignee. See Taft v. Marsily, 120 N. Y. 474, 24 N. E. Rep. 926; Brooks v. Ahrens, 68 Md. 212, 12 Atl. Rep. 19; and Kingsbury v. Mattocks, 81 Me. 310, 17 Atl. Rep. 126. But as the question is one arising under the bankruptcy statute of the United States, we cannot rest our judgment upon those adjudications alone, however persuasive they may be. By the treaty of Washington, concluded May 8, 1871, between the United States and Great Britain, and proclaimed July 4, 1871, (17 St. 863,) it was provided that, in order to settle the differences which had arisen between the United States and Great Britain respecting claims growing out of depredations committed by the Alabama and other designated vessels which had sailed from British ports upon the commerce and navy of the United States, which were generically known as the 'Alabama Claims,' those claims should be submitted to a tribunal of arbitration called to meet at Geneva, in Switzerland. The claims presented to that tribunal on the part of the representatives of the United States included those arising out of damages committed by those cruisers, and also indirect claims of several descriptions, and among them claims for enhanced premiums of insurance, or 'war risks,' as they were sometimes called. As respects the claims for enhanced premiums for war risks and certain other indirect claims objection was made by Great Britain to their consideration by the tribunal, as not having been included in the purview of the treaty; and, as no agreement could be reached upon this point between the representatives of the respective governments, the arbitrators, without expressing any opinion upon the point of difference as to the interpretation of the treaty, stated that, 'after the most careful perusal of all that has been urged on the part of the government of the United States in respect of these claims, they have arrived, individually and collectively, at the conclusion that these claims do not constitute, upon the principles of international law applicable to such cases, good foundation for an award of compensation of computation of damages between nations, and should upon such principles be wholly excluded from the consideration of the tribunal in making its award, evn i f there were no disagreement between the two governments as to the competency of the tribunal to decide thereon.' Messages and Documents, Department of State, vol. 4, pt. 2, 1872-73, p. 20. This declaration of the tribunal was accepted by the president of the United States as determinative of their judgment upon the question of public law involved, and accordingly those indirect claims were not insisted upon before the tribunal, and were not in fact taken into consideration in making their award. Id. p. 21. The tribunal finally awarded to the United States $15,500,000 as indemnity for losses sustained by citizens of this country by reason of the acts of the aforesaid cruisers, and that sum was paid over by Great Britain. It was held in U. S. v. Weld, 127 U. S. 51, 8 Sup. Ct. Rep. 1000, that this award was made to the United States as a nation. The fund was, at all events, a national fund, to be distributed by congress as it saw fit. True, as citizens of the United States had suffered in person and property by reason of the acts of the Confederate cruisers, and as justice demanded that such losses should be made good by the government of Great Britain, the most natural disposition of the fund that could be made by congre...