U.S. Supreme Court
Gill v. Oliver's Executors, 52 U.S. 11 How. 529 529 (1850)
Gill v. Oliver's Executors
52 U.S. (11 How.) 529
In 1839, a treaty was made between the United States and Mexico providing for the "adjustment of claims of citizens of the United States on the Mexican Republic." Under this treaty, a sum of money was awarded to be paid to the members of the Baltimore Mexican Company, who had subscribed money to fit out an expedition against Mexico under General Mina in 1816.
The proceeds of one of the shares of this company were claimed by two parties, one as being the permanent trustee of the insolvent owner of the share, and the other as being the assignee of the provisional trustee and afterwards the assignee of the insolvent himself.
The judgment of the Court of Appeals of Maryland that the latter claimant is entitled to the money is not reviewable by this Court under the twenty-fifth section of the Judiciary Act.
This case was argued at last term on a motion to dismiss for want of jurisdiction. But the court reserved the point till final hearing. On the hearing at this term, the question of jurisdiction continued to be the most important question in the case, and that on which it was decided by the Court.
A brief history of the facts connected with the case and of the pleadings will be sufficient to exhibit the questions involved.
In the year 1816, General Xavier Mina, who was at that time connected with the revolutionary party in Mexico in opposition to the authority of Spain, came to the City of Baltimore, chanroblesvirtualawlibrary
and there entered into a contract with certain gentlemen of that place, who associated themselves under the name of the "Baltimore Mexican Company," for the purchase of a quantity of arms, ammunition &c., to fit out an expedition against the then government of Mexico. On account of the risk attending their delivery and the uncertainty of the payment, it was agreed that Mina should pay one hundred percent on the cost of the articles, and interest. The goods were shipped for Mexico and delivered according to contract, but were not paid for by General Mina, as he was soon after taken prisoner and shot.
From this time till 1825, the recovery of the claim was considered hopeless.
In 1825, Mexico had achieved her independence, and after much solicitation the government was persuaded to acknowledge the justice of this claim, and assume the payment of it by an act of Congress passed to pay the debts of Mina. But notwithstanding the recognition of this claim as a debt, its payment was delayed for many years, and seemed almost hopeless.
Many and larger claims were held by citizens of the United States against Mexico of which the government had been urging the payment, and finally, on 11 April, 1839, a convention was concluded between the Secretary of State of the United States and the Mexican Minister "for the adjustment of claims of citizens of the United States of America upon the government of the Mexican Republic." By this treaty, all claims by citizens of the United States upon the Mexican government &c., were referred to four commissioners, "who were authorized to decide upon the justice of said claims, and the amount of compensation due from the Mexican government in each case."
As the claim of the "Baltimore Mexican Company" had been recognized as a debt of the Mexican government by a solemn act of their Congress, its justice could not well be denied. It was accordingly allowed by the commissioners on proof of its correctness and exhibition of the original contract with Mina.
David M. Perrine and John Glenn, who claimed to be assignees in trust of eight of the nine shares into which the stock of the company had been divided, received the amount of the award, and according to agreement with their cestui que trusts, deposited the money in the Mechanics' Bank of Baltimore, to be distributed according to the respective rights of the parties claiming it.
Soon after this was done, Philip E. Thomas and John chanroblesvirtualawlibrary
White filed their bill in chancery against said Perrine and Glenn, claiming the share of _____ Smith, and praying the intervention and assistance of a court of equity, in order to the just distribution of the proceeds of the award in the hands of the trustees.
The defendants, Perrine and Glenn, came into court and submitted
"that they are willing and desirous that the proceeds of the award may be distributed among the parties under the direction of the court &c., and join in praying an early reference to an auditor for that purpose."
The money being thus in court for distribution, all persons who laid any claim to it intervened by bill or petition against the trustees and opposing claimants. Among others, the plaintiff in error, George M. Gill filed his bill, claiming the share and interest of Lyde Goodwin, who was one of the original nine or ten persons who were partners or members of the "Baltimore Mexican Company."
The bill alleges that this company was formed in 1816; that Lyde Goodwin owned one ninth part of the property; that in February, 1817, Lyde Goodwin applied to the court for the benefit of the insolvent laws of Maryland, which he duly received; that the complainant was appointed permanent trustee, and gave the proper bond for faithful performance of the trust. The bill goes on to state the convention with Mexico in 1839, the award of the commissioners, the receipt of the share of Lyde Goodwin by Glenn and Perrine, under a power of attorney from Oliver's executors, who claimed title to the same under a pretended assignment from George J. Brown, the provisional trustee of said Goodwin, and finally prays that the executors of Oliver, the claimant of the share, and said trustees, may answer, account, and bring the certificates in which payment was made into court, that they may be delivered over to complainant.
The complainant filed also another bill against the trustees and all other claimants, for the sum of five percent on the whole amount, as due to Lyde Goodwin for services rendered to the company, by contract with them.
The complainant founded his claim to the money in both cases on the allegation "that all Lyde Goodwin's interest in said property and claims had become vested in the petitioner by virtue of his application and the laws of the state."
The answers of the defendants admit the application of Lyde Goodwin for the benefit of the insolvent laws and his discharge, but state that the complainant, Gill was not appointed permanent trustee till March, 1837; that on 26 February, 1817, George J. Brown was duly appointed by the court provisional trustee, and gave bond and security, and chanroblesvirtualawlibrary
that the debtor, Lyde Goodwin, on the same day executed to said trustee a deed of assignment of all his property. That in 1825 said Brown conveyed to Robert Oliver, and afterwards, on 30 May, 1829, Lyde Goodwin assigned and conveyed to said Oliver all his title and interest in the claim of the company on Mexico. The defendants allege and plead, that by these assignments the title to the share of Lyde Goodwin vested in Robert Oliver in his lifetime, who is now represented by his executors.
There was no dispute on the facts of this case, and the only questions of law involved in it are whether, by the insolvent laws of Maryland, the title of Gill as permanent trustee, to the money in court, was better than the previous assignment by the provisional trustee and Lyde Goodwin himself. On the one side it was contended that by the insolvent act of Maryland passed in 1805, all the property and estate of the insolvent which he held at the time of his discharge vested in his permanent trustee whensoever he should thereafter be appointed, and that the deed from the provisional trustee, George J. Brown, conveyed no title to Oliver under the insolvent laws. Nor did the deed of Goodwin himself convey any title, because by his insolvent proceedings, all his right, title, and interest in this claim became divested.
On the contrary, the executors of Oliver contended that until the recognition of this claim by Mexico in 1825, it did not constitute such property as would pass by the insolvent assignment. That after, by the labors of Goodwin and other agents of the company, this claim was assumed by Mexico and acknowledged as a debt, it vested in Goodwin as a new acquisition, which he might convey. And of this opinion was the Court of Appeals of Maryland.
The judgment of the Court of Appeals of Maryland was as follows:
"The appeal in this case coming on for hearing, and having been fully argued by the solicitors of the respective parties, has been since fully considered by the court, and it appearing to the court that that part of the decree appealed from of the court below, which directed any portion of the fund in controversy to be transferred or paid to the appellee, George M. Gill as permanent trustee of Lyde Goodwin, was erroneous and should be reversed, and it also appearing to the court that said portion of said fund should be paid over and transferred to the appellants, Charles Oliver, Robert M. Gibbs, and Thomas Oliver, as executors of Robert Oliver in the proceedings mentioned, together with all accumulations of interest or dividends since accruing upon the same: "
"It is thereupon by this Court and the authority thereof on this 23d day of June in the year 1849 adjudged, ordered, and decreed that the said decree of the court below, so far as the same adjudged and decreed any portion of the fund in controversy to be transferred or paid to the said George M. Gill as permanent trustee of Lyde Goodwin, be and the same is reversed and annulled, and this Court, proceeding to pass such decree in the premises as they are of opinion should have been passed by the court below, do further adjudge and decree that all and every part of such portion of said fund so by the court below decreed to be transferred or paid to said George M. Gill as trustee aforesaid be by the trustees in the proceedings mentioned, David M. Perrine and John Glenn, transferred or paid over to the appellants, Charles Oliver, Robert M. Gibbs, and Thomas Oliver, as executors of Robert Oliver, together with all and every accumulation of interest or dividends or investments of the same made or accruing in and upon such part or portion of said fund, and it is further by this Court and its authority adjudged and decreed that all other portions of the decree of the court below except such as is hereby reversed be and the same is hereby affirmed; it is further adjudged and decreed that the reversal of the decree of the court below be without costs."
The opinion of the said Court of Appeals was as follows:
"The majority of this Court who sat in the trial of this cause and by which was decreed the reversal of the decree of the county court, at the instance of the solicitors of the appellees, briefly state the following as their reasons for such reversal. They are of opinion that the entire contract, upon which the claim of the appellees is founded is so fraught with illegality and turpitude as to be utterly null and void and conferring no rights or obligations upon any of the contracting parties which can be sustained or countenanced by any court of law or equity in this state or of the United States; that it has no legal or moral obligation to support it, and that therefore, under the insolvent laws of Maryland such a claim does not pass to or vest in the trustee of an insolvent petitioner. It forms no part of his property or estate within the meaning of the legislative enactments constituting our insolvent system. It bears no analogy to the cases, decided in Maryland and elsewhere, of claims not recoverable in a court of justice, which nevertheless have been held to vest in the trustees of an insolvent or the assignees of a bankrupt. In the case referred to, the claims, as concerned those asserting them, were on their part tainted by no principle of illegality or immorality; on the
contrary, were sustained by every principle of national law and natural justice, and nothing was wanting to render them recuperable but a judicial tribunal competent to take cognizance thereof. Wholly dissimilar is the claim before us. Such is its character, that it cannot be presented to a court of justice but by a disclosure of its impurities, and if anything is conclusively settled or ought to be so regarded, it is that a claim thus imbued with illegality and corruption will never be sanctioned or enforced by a court either of law or equity."
"Entertaining this view of the case, it is unnecessary to examine the various minor points which were raised in the argument before us."
To review the judgment of the Court of Appeals, Gill sued out a writ of error, and brought the case up to this Court. chanroblesvirtualawlibrary