Case Name: John Watt et al. vs. John B. Conger
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1850-01
Citations: 13 S. & M. 412
Docket Number: 
Parties: John Watt et al. vs. John B. Conger.
Judges: 
Reporter: Mississippi Reports
Volume: 21
Pages: 412–421

Head Matter:
John Watt et al. vs. John B. Conger.
C. filed his bill against W. to obtain relief against certain alleged frauds of W., and to compel an account from him. He charged that W. had been for a long time his commission merchant in New Orleans ; had obtained a judgment at law against him in this state, under execution on which W. induced C. to assent to a sale, after the judgment had been paid, of his slaves, under promise that C. should have the possession and reap the advantages of their labor ; but W., by various alleged devices, obtained possession after the sale under execution, and carried the slaves otf; that C. had shipped, after the date of the judgment, various amounts of cotton to W. at different intervals; that W. had charged him usurious interest, and had paid money at different times for him, constituting a running account for several years, upon which, though W. alleged C. was in his debt, yet W. was largely in C.’s debt; W. de rnurred generally to the bill; the court held, that, as to the alleged fraud in reference to the slaves, C. was in pari delicto, and W. was not bound to answer; but, in relation to the account, W. being called upon for a discovery, should have answered fully, as to all matters since the judgment, and to that extent the demurrer should be overruled.
In matters of account, extending over a variety of transactions, the remedy in equity is deemed more ample and complete than at law, and tends to prevent a multiplicity of suits.
■ On appeal from the vice-chancery court at Natchez; Hon. James M. Smiley, vice-chancellor.
John B. Conger filed his bill on the 30th of January, A. D. 1S47, against John Watt, Glendy Burke, and Louis De Saulles, partners, under the style of Watt, Burke & Co., in which he states that, in 1838, a settlement was made between him and Watt, Burke & Co., of accounts which had been running and open for many years, and complainant gave his notes for the balance which was found to be due by him to defendants; charges said notes to have been taken for a larger sum than was actually due, and payable to Burke alone, when his. dealings had been with Watt, Burke & Co., and to have been so taken in order to have suit instituted in the United States circuit court; that suits were accordingly instituted in said court, and, in the fall of 1839, owing to the negligence of complainant’s counsel, judgment by default was taken for $2990.81; that this judgment was enjoined by complainant on the chancery side of said court, and an investigation sought of the accounts, prior to the date of said notes, between the said parties; these matters were compromised, and his bill dismissed in 1840, when an agreement was made between them to this effect, — that this judgment, and also one in favor of Fisk, should not be pressed against complainant, but that complainant should ship his cotton, as before, to defendants; they should transact his business as before, and that the net balances in complainant’s favor should be annually applied by defendants to the payment of said judgments; in consequence of all which, complainant agreed to waive any objections to said judgments, and to pay the same as proposed; that complainant shipped cotton to defendants, and in July, 1S41, had in defendant’s hands $18,320.22; in June, 1842, he had a balance of $26,433.40 in defendant’s hands.
The bill gives statements of the overcharges of defendants in their accounts, by correcting which he insists that this balance of $26,433.40 would be increased. That defendants did not credit the judgment held against him with this balance so due, but only with $6252.51. That since June, 1842, and prior to July, 1844, complainant had shipped to defendants cotton worth $45,000, and this, added to the balance aforesaid, exceeds $70,000. Yet, since July, 1844, defendants have sold, under the judgment aforesaid, rendered in 1839 in the United States circuit court, ninety valuable slaves; charges said sale to have been brought, about by Watt’s agency. That at the date of, and prior to, said sale, complainant was indebted to several creditors in various sums, and from Watt’s representations complainant was induced to believe that some $20,000 were still due on the Burke judgment.
Complainant “ was threatened with coercive steps in relation to various of these claims.” Watt suggested to complainant that he could induce one of complainant’s creditors (Mr. Fisk) to wait, who had a mortgage on land and slaves to secure his claim, and proposed that the marshal should make a levy on some ninety slaves, to satisfy the balance alleged to be due on the Burke judgment; that they should be sold under the judgment and purchased in by Watt; that Watt & Co. would then return them to complainant, “ to remain in his employ, and that thus, by the labor of the negroes, thus secured from levy, to satisfy other claims by this sale, and the labor of those mortgaged to Fisk, complainant would be able to pay the balance due Burke and Fisk, and at the same time secure himself a home.” Confiding in this, complainant assented to the levy. At the sale, thus made, a lot of slaves was struck off to a bystander, when Watt came to complainant and said, “ that it was policy to allow some to be thus disposed of, as it showed that he (Watt) was not compelled to buy them in, and thus the balance would be bought in at $10,000 less than if the bystanders were to suppose they could run them up on said Watt, and, as a con sequence, complainant would have a greater number of hands protected from further annoyance, under the arrangement said Watt had proposed.” During the whole sale complainant was induced to think Watt was acting as his friend, and therefore took no interest in obtaining bidders, or in endeavoring to receive the full value for his said property, and permitted it to be bid off at a price far below its value.
States that said negroes were not returned to • complainant’s plantation after the sale, but that next day, two persons called as agents of defendants, with the information, that, in order to avoid difficulties with other creditors, it was necessary that complainant should leave the plantation, with his family, as Mr. Watt had ascertained that unless he or his agents were in possession of the plantation when the slaves were returned, he would not be able to hold them against other creditors; and therefore proposed that complainant should, for a time, leave the place in charge of defendant’s agents, which complainant did, and went to Kentucky. After his departure, Watt aided and countenanced a sale of the land, &e., under Fisk’s mortgage, which was made at a great sacrifice, under the decree in favor of Fisk; and that defendants took off the negroes so purchased by them, under the fraudulent and delusive pretence that the purchase was intended to put it in complainant’s power to work out of debt.
States that the sacrifice at the marshal’s sale in 1844 was some $20,000, and it would not have taken place but for Watt’s deceit, &c. That said slaves, so purchased by Watt, can only be held by defendants as trustees for complainant. That if the terms of the agreement of September, 1840, had been carried out by defendants, the judgment of Burke would have been paid, or nearly so; and that the admitted balances on hand to complainant’s credit would have extinguished, and, in equity, did extinguish, the judgment, before the sale of July, 1844; and that said sale is void and should be set aside, and the property, so purchased, held as trust property, and should be delivered up, with hire, or paid for.
States that in July, 1844, complainant sold to Mr. Chaplain, Big Black Island, in payment of which, Chaplain gave his note. Said note was indorsed by Watt, and placed in the hands of a third party, until the title should be made. Complainant assigned the note; and after malting the title, his assignee called on the person holding said note therefor, and as he was about to deliver it, Watt forbid it, unless complainant would credit on said note $1612.67, being an alleged account, held by Watt, against complainant, and for which Watt threatened tedious litigation unless said credit was allowed ; and complainant, being obliged to use said note, had to allow this credit, in order to obtain possession thereof; avers that he did not owe to Watt this sum of $1612.57.
Complainant examines the various items-of the account before mentioned, of $1612.57, which he had paid by allowing a credit on said note of Chaplain’s to that amount. States that defendants charged usurious interest on said judgment by compounding the same, as appears by exhibits to the bill, and submits that upon a reference to a commissioner he is entitled to a credit to that extent, with interest thereon. That Watt offered and gave him his draft for $1500, on Watt, Burke & Go., at Natchez, which he stated would be cashed; that this was about the time of the sale of 22d of July, 1844; this draft complainant did not present for some time, and when it was presented by Capt. Pease, to Watt for payment, said Watt took possession of it and kept it, and never did pay it. That the balance shown by defendants to exist in favor of complainant, in June, 1842, and of $40,000 paid in cotton in the two following years, and the proceeds of the sales of the negroes in 1844, all have been absorbed in this judgment, and that though defendants during this time may be entitled to some credits, still such credits could not consume the balance in defendants’ hands, belonging to complainant. That defendants have not carried out the agreement of 1840, crediting the judgment of Burke with the cotton delivered, and allowed him the benefits and advantages, under which defendants induced the acquiescence of complainant in the sale of his said ninety negroes, in July, 1844, and have refused and neglected to place to the credit of complainant, on said judgment, various amounts, &c., heretofore mentioned; and complainant charges, that defendants deny these sums to have been received, and that such amounts were in their hands applicable to said judgment, except the proceeds of said sale of negroes.
After other charges, &c., the bill prays that an account may be taken of all the dealings between complainant and defendants, and defendants be decreed to refund the balance due to him. That the sale of slaves, had under the Burke judgment, may be set aside and taken for naught, and said defendants be decreed to deliver back to your complainant the slaves so sold, Avith a fair hire, and if they shall have sold them, then to pay the value, and that such other and general relief maybe granted.
The subpoena in this case was served on John Watt, only, the ' other defendants being non-residents, and not before the court, the bill alleging their non-residence. To the bill Watt filed a general demurrer, and an answer in aid thereof, denying all fraud; the demurrer was overruled generally, and leave given to answer in sixty days. ■ ■
Evstis, for appellants, insisted,
1. That the portion of the bill Avhich sought to go behind the judgment Avas clearly, beyond all question, demurrable. He cited 2 Daniel’s Practice, 185 ; Story, Eq. PI. § 446, 781; S. & M. Ch. Repi 11U ; French v. Shoiioell, 5 J. C. R. 565 ; 3 S. & M. 439 ; 6 lb. 723 ; 7 Johns. R. 161; Cooper v. Hatton, 12 Price, 462.
2. The complainant is seeking relief against the consequences of his own fraud. His standing by and assenting to a judicial sale under a judgment which he knew was satisfied is the same thing, when its object is thus disclosed, as if he had made of his own act, a voluntary conveyance Avith intent to defraud his creditors. Roberts on Frauds, 646; Osborne v. Williams, 18 Yes. 379; 11 lb. 168; Douglass’ R. 695; 1 Story, Eq.$61, 361; 4 Peters, 189; 16'J. R. 189; 7 lb. 161; 4 Cow. 207; lb. 216; 8 lb. 406; 11 Wheat. 258; 4 Mass. 354; 3 Yes. 612; 1 Burr. 474 ; 5 Binn. 109 ; 2 Yern. 602.
3. Courts of equity will not assist a party to recover an estate conveyed for an illegal purpose, nor will they lend their' aid in favor of a party seeking a discovery in aid of an action which is against public policy. Story, Eq. PI. § 556. The maxim, "in pari delicto potior est conditio possidentis,” applies where an agreement is no longer executory, but executed, and where the transaction is immoral or a violatiou of the general laws of public policy, and not merely an infringement of those laws which are calculated for the protection of the subject against oppression. 2 Kent, 467 ; 4 Phil. Evid. 119; Hoioson v. Hancock, 8 T. R. 576; Burt v. Place, 6 Cow. 431; 1 Story, Eq. Jur. § 298, note; Rider v. Kidder, 10 Ves. 366.
4. This bill is filed by the party himself, not by nor in behalf of his defrauded creditors. Downs, v. Quarles, Lift. Sel. Cases, 489.
5. The specific prayer that this court will set aside a judicial sale under federal court process, asks what is not within the jurisdiction of the state court. White v. Hall, 12 Ves. 324; 2 Story, Eq. Jur. § 900.
6. The specific prayer, that defendant be decreed to hold the property in trust for complainant under the agreement, asks the court to aid in executing a fraudulent and illegal trust.
7. If complainant is not entitled to an account .of the profits of his own fraud, nor to a decree setting aside a sale made by the federal court, nor to an execution of a trust, which he shows was intended as a fraud upon the rights of others, the bill should have been dismissed, because no other relief is sought except in the conjunctive. Pleasants v. Glasscock, 1 S. & M. Oh. 25.
8. The charge, that defendants retain possession of their own acceptance, is not subject-matter of equity jurisdiction. Trover would lie.
9. The account which was paid by a credit on the Chaplain note, has no connection with the other matters of the bill. It stands by itself; complainant allowed the set-off with full knowledge of all the facts and under advice of his counsel. If recoverable at all, assumpsit at law is the remedy.
E. Mason and A. Burwell, on the same side, each made elaborate arguments for appellants.
McMurran, Hewett, and Hailey, for appellees,
Argued the case at length, and cited Story, Eq. PI. 355; l McCord, Ch. Rep. 161 ; 10 Price, 62'; 9 Pick. 212; 1 Madd. Ch. Pr. 76, 262, 267 ; 2 Atk. 592; 1 Fonbl. 115; 3 P. Wm. 315,; 2 Sch. & Lef. 474; 5 Ves. 491-493; Cowp. 200; lb. 702; Doug. 670; Bull. N. P. 132;' Austin v. Winston, 1 Hen. & Munf. 32; Dealty v. Murphy, 3 A. K. Marsh. 475; Gore v. Somersall, 5 Monr. 510; Hough v. Young, 2 Ham. 501.

Opinion:
Mr. Justice Clayton
delivered the opinion of the court.
The bill in this case pertains to a great many important transactions, and does not easily admit of abridgment.
It sets out with stating that the defendants, Watt, Burke' <fc Co., were the commission merchants and agents of the complainant, through a series of years, and that he intrusted his interests to them with unlimited confidence. That this was especially true in regard to Watt, one of the defendants. It also states, that after several years of transactions of this sort, involving a very large amount, he was, upon settlement, found to be in debt to the defendants to the sum of $26,000, for which he executed his note. Suit was afterwards brought upon this in the United States' court, for the southern district of Mississippi, and judgment rendered thereon, in the fall of 1839, for $29,990. That he afterwards enjoined this judgment on the Chancery side of that court, but that the suit was compromised, and the bill dismissed by agreement.
It also states, that, in pursuance of this compromise and agreement, he shipped his subsequent crops of cotton, to the house in New Orleans, with the understanding that the net proceeds, after deducting current expenses, were to be applied to the payment of the judgment. From these shipments the defendants, in June, 1842, owed him a balance of $26,433, and in July, 1844, the balance from the same source had increased to $70,000. Notwithstanding this state of things, the complainant was induced to believe, by Watt, that there was at that time, still due on said judgment some $20,000.
Complainant then owed various other debts, some of which were about to be pressed against him. About this time, Watt proposed to the complainant, that the marshal should levy on some ninety slaves to satisfy the balance which he alleged to be due on said judgment, and agreed that he would buy them in, and after the purchase would return them to the complainant, " to remain in his possession and employment, that by their labor he might pay off his other debts, pay what was due upon this judgment, and thus secure himself a home." Confiding in this agreement, complainant assented to the levy and sale. At the sale, Watt purchased nearly all of the negroes, at a price so inadequate, that the complainant was subjected to a sacrifice of at least $20,000.
• The bill farther states, that the negroes were not immediately returned to the home of the complainant, after the sale, as had been agreed upon, but that Watt prevailed upon him to leave home with his family for Kentucky, so as to leave Watt in possession of the place, to give color and plausibility to the purchase. That he accordingly did so. Watt had the negroes carried to the place; and that, during his absence, the plantation, his homestead, was sold by the contrivance of Watt, under a decree of foreclosure of a mortgage in favor of Alvarez Fisk, and that, after this sale, the slaves purchased by Watt were all carried off by him.
The bill charges, that the defendants failed to comply with the agreement of 1840, to credit the judgment with the amount of cotton delivered by complainant; that, in point of fact, the judgment was satisfied at the time of the sale under it; and that the sale is therefore void. It states that the defendants charged usurious interest, and sets forth various other transactions, about which it seeks an account.
It prays that' the sale of the slaves be set aside, and a decree for their re-delivery to complainant. It also prays for a discovery and account of the cotton delivered under the agreement of 1840, and of the dealings of the parties subsequent to that time, and a decree for such amount as. may be due to complainant upon all these transactions. A general demurrer was filed to the bill, which was overruled in the court below, and the defendants directed to answer within sixty days. From this decree an appeal was taken to this court.
It is a principle of equity subject to very few exceptions, that a party to a fraudulent transaction can, as complainant, obtain no relief in equity against it. Standing in pari delicto, the court will not interfere in his behalf. James v. Bird's Administrator, 8 Leigh, 510; 1 Story, Eq. 296, cases collected in note. This principle precludes the complainant from all relief touching the sale of the negroes. If Watt was guilty of a fraud, the complainant-was a willing party to it, and only objects when his share of the spoil is refused' him. His own conduct has cut him off from all claim upon the interposition of a court of equity. To this extent the decree of the chancellor was correct.
But the matter of account stands on a different basis. If the defendants are indebted in the several sums set forth in the bill, the fraudulent conduct of the complainant, touching the sale, ought not to preclude him from relief in regard to the accounts. But it is said, upon this point, that the remedy is ample and complete at law, and the bill should therefore be dismissed.
Equity has concurrent jurisdiction with courts of law, in reference to numerous and complicated matters of account. The fact that there may be a remedy at law less convenient, and less subservient to the ends of justice, does not deprive the court of chancery of its right to interpose. In matters of account, extending over a variety of transactions, the remedy in equity is deemed more ample and complete, and tends to prevent a multiplicity of suits. 1 Story, Eq. 439. This part of the bill should therefore be answered, especially as the defendants are called upon for a discovery in regard to these matters. This account, however, must be confined to the transactions which took place subsequent to the judgment.
The decree overruling the demurrer is affirmed, and the cause remanded for farther proceedings, in accordance with this opinion.
Decree affirmed.