Call v. Houdlette

Peters, J.

The evidence shows that the plaintiff and H. S. Hagar and another were the owners of the brig Yazoo, Hagar owning the controlling share ; that the brig was let to Cheeseman & Marshall to carry a load of ice, the master of the vessel signing the usual bill of lading ; that an action was commenced by Hagar in his life time, in his own name, against Cheeseman & Marshall, upon an account annexed, one item being for freight and demur-rage for the voyage performed- by the Yazoo ; that an award of referees was made allowing the claim; that before the award was presented to court for acceptance Hagar died, and the defendant was appointed his administrator; that judgment was taken out in defendant’s name as administrator, the execution collected, and the principal part thereof paid for the benefit of one Whitmore, to whom Hagar had assigned the claim before he died. TLis action is against the defendant in his individual capacity, and not as administrator.

The defendant contends that a presumption arises that Hagar was the hirer of the vessel from the other owners and sole owner of the freight, because he recovered therefor in his own name. We think the plaintiff’s ownership is prima facie evidence of his right to a share of the sum recovered for the earnings of the vessel, notwithstanding a recovery in Hagar’s name alone. And we see no legal obstacle in the way of the plaintiff recovering the same of the defendant in his individual capacity, if the facts sustain such a claim. The plaintiff was under no obligation to employ Hagar in his life time as his agent, or to continue the administrator of Hagar in such agency after his death.

But the defendant cannot be personally liable to the plaintiff for money collected in his name as administrator, unless he was notified not to pay it over before he did pay it over, or unless he acted fraudulently in withholding it from the plaintiff. It must be borne in mind that the defendant was not an intermeddler or a trespasser. His possession was in no sense a wrongful one. If a person gets money into his hands illegally he cannot discharge himself by passing it over to another. Here the possession was legal.

Spencer, J., in Hearsey v. Pryn, 7 Johns. 181, says: “The law is well settled, that an action may be sustained against an agent, who has received money to which his principal has no right, if the agent has had notice not to pay it over, and in some cases the action has been sustained where no notice was given, if it appears that the money has not been actually paid over.” In note j, to Adams v. Hopkins, 5 Johns. (2d ed.) 255, where the cases in support of the statement are liberally cited, it is said the action for money in the agent’s hands “should be brought against the principal, unless in special cases, as when notice has been given to the agent not to pay it over or he has acted with mala fidesL In Cox v. Prentiss, 3 M. & G. 348, Lord Ellenborongh says an agent is liable “as long as he stands in his original situation, and until there has been a change of circumstances by paying over the money to his principal, or something equivalent to it.” The following authorities are pertinent: Lafarge v. Patterson, 7 Cow. 456. Morrison v. Currie, 4 Duer, 79. Langley v. Warner, 3 Sandf. 209. Elliot v. Swartwout, 10 Pet. 137, 155. Garland v. Salem Bank, 9 Mass. 408. Fowler v. Shearer, 7 Mass. 14. Lefts v. York, 12 Cush. 196. Thompson v. White, 45 Maine, 445. Smith v. Colby, 67 Maine, 169, and cases. Goodell v. Buck, 67 Maine, 514. Story’s Agency § 300, and eases in note.

If the defendant in good faith paid over the money or allowed it to be appropriated for the benefit of the estate he represented, without notice not to pay it over, he is not personally liable therefor. He cannot be charged with bad faith, there being no notice not to pay over, unless he knew that the money belonged to the plaintiff, and that he was committing a fraud upon the plaintiff by paying it or allowing it to be paid to another person. Nor does it necessarily follow that the defendant had such knowledge, or that he acted with bad faith, because it was known to him that the plaintiff was part owner of the vessel from whicli the earnings accrued. That fact is to be considered and weighed with all other facts and circumstances. For, notwithstanding that fact, he may have believed that the funds belonged to his intestate, because recovered in the name of his intestate ; or that the intestate had a claim or lien upon them, or an offset against them, through his accounts as ship’s husband; or that for other reason he was justified in using the money as part of the property and assets of the estate; and, if honest in his conviction and conduct, however mistaken his conclusion, having had no notice not to pay over the funds, he would not be guilty of defrauding the plaintiff. If the rule were otherwise, there would be too little security to persons engaged in the administration and settlement of estates. See authorities supra.

The defendant contends, that the plaintiff cannot in any event recover more than what his share of the fimds would be after deducting the expenses of obtaining and collecting the judgment. There can be no doubt of that proposition. We cannot perceive why the plaintiff should stand better excluded than if included as a party in the former liti gation. Certainly, the doctrine of recoupment would allow the deduction. Harrington v. Stratton, 22 Pick. 510. Carey v. Guillow, 105 Mass. 18. 2 Pars. Con. 741.

We do not concur in the further position taken by the defense, ■ that the defendant has a right to set off against anything due the plaintiff on this account, any demands that tire estate of Hagar may have against the plaintiff growing out of disbursements expended upon and losses sustained by the same vessel. If all the matters concerning the' vessel are to be settled, resort must be had by the parties seeking such a settlement to a bill in equity, —a remedy which would undoubtedly lie. And the state of the mutual accounts of the owners may be a fact bearing upon the question whether the defendant acted with mala fides or not, as has been before stated. The defendant raises the point that, the claim having been assigned by Hagar to Whitmore, he would not be responsible for any action taken by the attorney who had charge of the suit, unless done with his co-operation and assent. No doubt, that would be so. The defendant would not be liable for any act done by another person without his assent. If the appropriation was made by his direction, or if he assented to the appropriation when he could have prevented it, then he would be liable for tbe act of another as if done by himself. If the money was paid over by the attorney employed (by his intestate), without the authority and assent of the defendant, the liability would rest elsewhere than upon him. He would not be liable therefor.

Exceptions sustained.

Appleton, C. J., Walton, Daneorth and Virgin, JJ., concurred.