Baltimore Steam Packet Co. v. Garrison , 6 Daly 246 ( 1875 )

Charles P. Daly, Chief Justice.

By the agreement, which was in writing, the defendant stipulated that he would deliver the steamer, free and clear of all liens and incumbrances, at the plaintiff’s wharves, in the city of Baltimore, within fifteen days after the ratification of the agreement by the plaintiff. The agreement was ratified on the 13th of August, 1866, whereby the defendant became bound to deliver the steamer at the stipulated place, within the stipulated time, and until he had fulfilled that condition, the agreement was not performed on his part. It in no way affects his obligation to comply with this condition, or his responsibility for his failure to perform it, that before the time of delivery, the plaintiff paid the contract price, and the defendant delivered to it the bill of sale, or muniments of title; for there still remained the unperformed condition on the part of the defendant, which was absolute and unqualified, that he would deliver the steamer at a designated place, within a specified time, free and clear of any lien or incumbrance, and it was for the loss and damage which the plaintiff sustained by reason of the defendant’s failure to perform this condition, that the action was brought. There is, in this feature, no essential difference between this case and Bigler v. Hall (54 N. Y. 167); indeed, the arguments and the chief authorities which are urged upon our consideration here by the appellant’s counsel, are substantially the same as were relied upon there by the judge who delivered the dissenting opinion. The question is not whether the title passed to the plaintiff, whereby it became the owner of the vessel before delivery, but whether this was a subsisting and unperformed covenant, for the non-fulfillment of which the defendant is liable. That the defendant, however, considered himself the owner of the steamboat after the ratification of the agreement, and before her delivery, appears by his own act; for the vessel, having within that period, that is, on the 16th of August, 1866, been attached in Norfolk, in a suit against the defendant, which attachment was quashed, the defendant brought an action for damages against the person at whose instance the attachment was issued, and in the complaint in that action, the defendant averred that at the time of and during the attachment and detention of the steamer, he was the owner of her; that he lost the use and benefit of her for twenty days, and was put to great expense in eniploying counsel, and in other respects to procure her discharge, for which he claimed $30,000 damages, and recovered $2,752.

On the 17th of August, 1866, whilst the vessel was held under the first attachment, a second attachment was issued in the Circuit Court of Norfolk, which was served by a delivery of a copy of the writ to the general agent in charge of the steamer, the vessel then being in the possession of an officer of the court under the first attachment. On the 3d of September, 1866, the steamer was released from the first attachment by the giving of a bond, upon which day, the plaintiff in the second attachment, to enable him to take and hold possession of her, gave the requisite bond under the Virginia statute; but when the officer of the court proceeded to the wharf, she had been cast loose, and was moving down the river on her way to Baltimore, to be delivered to the plaintiff, so that the officer could not take possession of her. The second attachment was in a suit brought against the defendant. The plaintiff in that suit proceeded against the defendant hy the publication of a summons, and at the expiration of the period of publication, the defendant not having appeared in the action, judgment was recovered against him on the 25th of June, 1868, by default, for $53,879 35. The plaintiff, after the recovery of this judgment, instituted proceedings in the same court for the sale of the steamer, and the plaintiff in the present action, upon receiving-notice of the motion for the sale of the steamer, at once took steps to defend its title, and, as it was authorized to do under the Virginia Code, it, on the 29th of January, 1869, presented a petition to the court, disputing the validity of the attachment, claiming title to the steamboat as the owner of it, and simultaneous with this petition it tendered a plea to the jurisdiction of the court, and moved to quash the attachment.

On the 6th day of March, 1869, and while the proceedings, in the court were pending and undetermined, the plaintiff gave notice in writing to the defendant, that proceedings by attachment had been taken against him by the Norfolk and Petersburg Railroad Company, and notifying him that the proceeding was then pending, and that it was to enforce a lien against the steamer to the amount of $50,000, and more; that-it was claimed that the lien was created, and the attachment levied in a suit therefor brought against the defendant in the Circuit Court of Norfolk by the Norfolk and Petersburg Railroad Co.; that the plaintiff in the present action, as purchaser and owner of the steamer, gave him, the defendant, notice of the proceeding, and further notice that it would hold him responsible for all injury, expenses and damages which might result from the alleged lien, if it should be established.. On the 10th of June, 1870, more than ten months after the service of this notice upon the defendant, the motion in the Circuit Court of Norfolk for the sale of the steamer was brought to a hearing, which motion was granted; the court deciding against the plaintiff upon all the points taken by it, and on the 19th of June, 1870, the court made its decree adjudging that the steamer was subject to the lien of the attachment; that one-fourth part of her should he sold,and the proceeds paid to the plaintiff in the attachment; but providing that if the plaintiff or the defendant, should, within thirty •days after the adjournment of the court, pay to the plaintiff in the attachment $12,500, that it should be in full satisfaction of the lien, and that no further proceedings should then be had under the decree.

The defendant took no steps to interpose, or make any defense to the proceeding to compel a sale of the vessel for the satisfaction of the alleged lien, and it is now set up in his behalf, that the written notice served upon him did not give him sufficient information to enable him to appear and defend, and in addition, that it was too late. I have set forth substantially what the notice contained, and, in my judgment, it was amply ¡sufficient to enable him, if he had been so disposed, to appear in that proceeding and defend it (Miner v. Clark, 15 Wend. 425; Riley v. Seymour, 1 Id. 143; Chamberlain v. Preble, 11 Allen, 370); and as to its being too late, it was served upon the defendant ten months before the motion was heard. It is also urged that when the notice was served, judgment had already been rendered against the defendant, and that there was no remedy for him then hut to appeal from the judgment. There is nothing in the case to warrant any such conclusion. On the contrary, it was a judgment by default, in which there had been no personal service of process upon the defendant, but simply the publication of a summons, and by a provision in the Virginia Code, which appears in one of the documents printed in the case, a defendant, against whom a judgment is rendered by the publication of a summons, may, 'within one year after the service of a copy of the judgment or decree, or within five years from the date of the decree or 'judgment, where there has been no such service, petition the court to have the proceedings reheard, and upon giving security for costs, is admitted to make any defense he may have to the judgment. On the 2d of February, 1870, the plaintiff in this action caused a copy of the decree to be served upon the defendant, and on the 9th of the same month, they served him personally with a copy of the provision in the Virginia Code, with a notice that he would see by this provision that he had still an opportunity of making a defense against the judgment, if so advised, and followed it up by the service of another notice on the 1st of March, 1870, advising him that the limitation of time would expire on the 4th of March following, and that unless, by that day, be protected them and the steamer against the decree, that they would be compelled to pay the $12,500 to prevent the sale of one-fourth of the vessel. Notwithstanding all these notices he did nothing, and on the 4th of March, 1870, the plaintiff paid the $12,500, to prevent the sale of the steamboat.

The counsel for the appellant went into an elaborate argument, and cited various authorities to establish that the whole proceeding in the Circuit Court of Norfolk was without jurisdiction and void. The plaintiffs employed counsel, and urged the very objections upon the hearing of the motion for the sale of the vessel, which the counsel for' the appellant has now argued before ns; but the court held that it had jurisdiction, and decreed the sale of the vessel. I do not propose to inquire whether the court was right or wrong in so holding, or to look into the question at all which the counsel' has so elaborately discussed. The defendant was a warrantor who had stipulated to deliver the vessel free and clear from all liens or incumbrances. Upon her return to Norfolk, after she passed into the possession of the plaintiffs, and they had become the owners of her, proceedings were taken there in a judicial tribunal for her sale to enforce and satisfy a lien upon her, alleged to have been created by the institution of judicial proceedings against the defendant whilst the vessel was yet in his possession in Norfolk, and before the delivery of her to the plaintiffs. The defendant, having been notified by the plaintiffs of the alleged lien, and of the proceedings taken to enforce it, and having had ample time, nearly a year, within which to appear and make any defense he might have to the proceeding or the judgment upon which it was founded, is concluded by the decree or final judgment of the Virginia court, and estopped from setting up in this action any defense which he may have had to the judgment or the proceeding (Howe v. The Buffalo N. Y. & Erie R. R. Co. 38 Barb. 126; affi’d in 37 N. Y. 297; Craig v. Ward, 36 Barb. 377; Fake v. Smith, 7 Abb. Pr. N. S. 106; Barney v. Dewey, 13 Johns. 224; Bender v. Fromberger, 4 Dallas, 436 ; .Harris v. Rowland, 23 Ala. 644; Knapp v. Marlboro, 34 Vt. 241; Thurston v. Spratt, 52 Maine, 202 ; Chamberlain, v. Preble, 12 Allen, 370). The application of this rule does not, as the appellant claims, depend upon the question whether the court had or had not jurisdiction ; but is founded upon the equitable principle that a vendor who has covenanted that the property sold is free from incumbrances, is, when duly notified that a claim is made upon it and proceedings instituted to enforce it, bound to interpose for the protection of the vendee, and try the validity of the claim, or the right of the court to enforce it in the action or proceeding brought by the claimant, and should not be permitted to litigate that question in the action brought against him by the vendee for the non-performance of his contract.

The defendant having covenanted to deliver the vessel free from any lien or incumbrance, should, when proceedings were instituted against her, in Norfolk, to enforce a lien alleged to have existed before her delivery to the plaintiffs, have appeared and interposed in that proceeding if he had any defense to it, and having, upon due notice omitted to make any objection, the plaintiffs were justified in paying the amount decreed by the court, as their vessel would otherwise have been sold, and the defendant was bound to restore to them the. amount so paid, having failed to fulfill his contract.

The judgment should be affirmed.

Joseph F. Daly and Loew, JJ., concurred.

Judgment affirmed.