Case Name: The commissioners of public accounts vs. Hugh Rose, Adam Tunno, William Tunno and A. Moultrie
Court: Court of Chancery of South Carolina
Jurisdiction: South Carolina
Decision Date: 1795-10
Citations: 1 Des. Eq. 461
Docket Number: 
Parties: The commissioners of public accounts vs. Hugh Rose, Adam Tunno, William Tunno and A. Moultrie.
Judges: Present — Chancellors Mathews and Rutledge.
Reporter: South Carolina Equity Reports
Volume: 1
Pages: 461–471

Head Matter:
Present — Chancellors Mathews and Rutledge.
The commissioners of public accounts vs. Hugh Rose, Adam Tunno, William Tunno and A. Moultrie.
CASE OTIIL
DECREE BOOK, vol. ii. p. 14.
An attorney general acting for the state, suing for a bond put in his hands lor recovery, settles the debt with the agent of the debtor, by receiving house.-;,merchan-dises, &c. which he applied to his own use; and did not pay over the proceeds to die slave, but he debited himself in the account. He was then very greatly embarrassed. Uis releasing the debt, and giving up the bond and mortgage to the debtor, does not release the debtor, foche h;;d no right m> releasethe debt without actual payment to him. The oi'iginal debtor was decreed to pay the debt, though he was ignorant of all these transactions, having furnished his agent witlx funds to purchase indents, and pay the debt.
This was a bill filed on behalf of the state, to recover a debt originally due by Hugh Rose. The bill charged that Hugh Rose wa3 bound, together with J. B. Ton, as his security, in a bond bearing date the 17th December, 1783, in the penal sum o" 49,2001. 10s. with condition for the payment of the sum of 24,600i. 5s. in specie or indents, With interest, to the commissioners of the treasury, for the. use of the state, on or before the 17th day of December, 1788: and that the said Hugh Rose to secure the payment thereof, mortgaged several tracts of land to the said commissioners. That the said debt being unpaid, the. said bond was placed sometime in April, 1789, in the hands of A. Moultrie, the attorney general, to sue for and recover the principal and interest due on said bond, according to the condition thereof $ but that Ite did not pursue any measures at law or in equity to recover the said debt. That the commissioners requiring an account from him, he rendered in an account, by which he debited hhuseüf in the cum of 26,0001. on account of the said bond, and as assumed by him. That the commissioners required and obtained from the said A. Moultrie, according to the custom of the office, the original bond and mortgage, but the seals and signatures of the parties were torn off, and the following receipts endorsed. “ Received 9th June, 1790, 6,4001. in indents in part of this bond, (signed) A., Moultrie.” “ Received 26th July, 1790, 13,0001. in indents in part of the within bond, (signed) A. Moultrie.” That not being satisfied on this subject, the commissioners questioned the said A. Moultrie as to the mode of settlement of said bond, and of the cancelling thereof; and he candidly disclosed to them such particulars, as satisfied them, upon the advice of the present attorney general, that the cancelling the said bond, and the entry of satisfaction on the mortgage, would not under the circumstances attending the transaction, be deemed sufficient in a court of equity to release the parties therefrom, or bar the state of its right to revive and set up the same in full force. The MU charges that the defendant Hugh Rose, employed A. and W. Tunno as his agents, and supplied them with funds, to purchase indents, then in a state of depreciation, and to apply the same to the payment of his said bond, and that the said agents in pursuance thereof purchased large sums in indents (said to be to the amount of 31,0001.) on account of the said Hugh Rose, to be applied to pay said bond. But that indents rising in value rapidly on the assumption of the state debts by congress, the said agents were induced to fund or dispose af the said indents, at a great profit, and to resort to some other method of settling said bond. That no paid; of the payment of 6,4001. expressed in the receipt of the Dth June, 1790, was actually paid in indents; but was made up by discounting debts of the said A. Moultrie, or some other way. That of the sum of 13,000, expressed iu the receipt of the 25th July, 1790, no part was paid in indents. But that two houses in Charleston were accepted by the said A. Moultrie, in lieu of the said indents, nt a certain rate and valuation; and the agents paid 5,5481. in unfundable indents; and finally gave their bond for 13,0001. the computed balance due on said bond of Hugh Rose, to the said A. Moultrie; and prevailed on the said A. Moultrie to give them a written receipt in full discharge of the said H. Rose, against his said bond, which was cancelled, and to enter satisfaction on the mortgage. That the said agents in their account with the said H. Rose charged him with the amount, as paid in indents at a certain rate. And the said agents aftcr-wards took up their said bond of 12,0001. by paying some indents, and by settling sundry debts due by the said A. Moultrie, at a discount; and by delivering him sundry-goods, wares and merchandizes, which were applied to his own uses, and of which the said agents could not be ignorant, as they well knew he was in a state of embarrassment. That the commissioners of public accounts not considering such a mode of settlement at all binding or obligatory on the state, applied to the said H. Rose and A. Tunno, to satisfy and settle the said bond debt, according to law. But they having refused to do so, the complainants pray relief on behalf of the state: and that the said bond and mortgage should be revived and set up, and the defendants obliged to satisfy the same.
OCTOBER, 1795.
The defendant Hugh Rose in his answer admitted the execution of the bond and mortgage as stated in'the bill; and that he appointed A. and W. Tunno, merchants in Charleston, to purchase indents for him, in order to pay off the said debt, for which he was to furnish funds. That some time after, A. Tunno, after various previous communications, informed the defendant that he had purchased indents for him to the amount of 31,000Z. and hoped shortly to procure the balance, They were then selling at seven or eight for one. After some time he de~ delivered to the defendant, Ms own and his surety’s names taken from the bond, and the attorney general’s receipt, dated 18th July, 1790, for 35,936l. 17s. 2d. in principal indents, in full of Mr. Hugh Rose’s and J. B. I’on’s bond to the state, and satisfaction was also entered on the mortgage. That soon after A. Tunno furnished this defendant with his indent account, in which he charges him for 35,936l. 17s. 2d. in indents, purchased on account s»f the defendant; 4,5591. 1 Os. sterling (payable in paper medium,) and the defendant solemnly declared that lie believed that the attorney general had actually received in satisfaction That he had no information that indents had not been paid him, and that he never knew that Ms indents to the amount of 35,9361. 17s. 2d, « . ¶ , 7 , ^ SSid tuebt: bond had not been paid off in indents, till he received a letter from the commissioners informing him of it. The defendant submitted that he could not be implicated in the transactions that took place between the said Adam Tunno, and the attorney general, and he pleads his discharge, fairly obtained by him.
The answer of Adam Tunno admits that Hugh Rose gave the bond stated in the bill: which was put in suit by A. Moultrie the attorney general, and upon payment of the principal and interest, the said bond was cancelled, and satisfaction entered on the mortgage, by A. Moul-trie the attorney general, acting on behalf of the state. That this defendant made the payments to the said A. Moultrie with good faith; and they could as well have been made in indents as in any other way: and that the said A. Moultrie, having received the payments, was alone accountable to the state; and the legislature directed suit to be brought against said Moultrie, on which he confessed judgment and is accountable. That defendant meant no fraud against the state, but supposed that the said A. Moultrie was fully authorised to make the settlement he did. That the defendant Hugh Rose was entirely unacquainted with the mode of settlement made by this defendant with A. Moultrie, and this defendant admits that the said A. Moultrie took off the seals and signatures of the debtors, and gave the receipts and entered the satisfaction stated; which the defendant relies upon as a full and sufficient discharge. That defendant was employed by Hugh Rose to purchase indents to pay off his bond, and advanced some funds for that purpose, hut not sufficient to enable him to pay off the bond. That he settled the debt partly in indents, and partly in other ways satisfactory to the said Moultrie; and he sold part of the indents, but never funded any. That he settled with said Á. Moultrie by paying some of his debts, at bis particular request, at the current rate of indents, and without any gain to defendant; being satisfied that the said A. Moultrie had full power to represent the state, and give sufficient .discharges. That some of the other payments were made by goods furnished said A. Moul-trie at his desire, at fair cash prices, and receipts given for indents at the current price of eight for one. That the settlement for the other sums receipted took place by the sale of houses in the same way; the houses being worth the sums allowed for them in indents, at the instance of the said A. Moultrie. This defendant admits that he and his brother William gave their bond to the said Alexander on account of the state for the balance due on H. Nose’s bond, which he thought was perfectly fair and just; and he afterwards took up the said bond, by payments according to law; and never paid by taking up any of said Moultrie’s debts at a discount. Defendant denies that he knew that it was not in A. Moultrie’s power to settle the amount of this debt to the public; and this defendant never informed said H. Nose of his mode of settling with A. Moultrie; and this defendant avers he made no profit by these transactions, but was an actual loser, as appears by his statement. That the state would not have been benefited by the payment of the whole debt in indents, as the sums actually paid the attorney general • in indents were applied by him to his own use, and not accounted for.
The defendant A. Moultrie admitted that A. Tunno, acting as the agent of Mr. H. Rose, settled with him the debt due on bond by H. Nose to the public, which he held as attorney general, by various arrangements, partly by the purchase of houses, some merchandizes, &c. and this defendant assumed to pay the debt to the state* according to the tenor of the bond. That all the settlements were with Mr. Tunno, and not at all with Mr. H. Nose. He was much pressed and urged by Mr. Tunno, and finally yielded and made the arrangements desired of him: being fully convinced that his resources would enable him to settle the debt to the public which he had assumed, and in which he has been unhappily disappointed.
At the hearing of this cause Mr. Trezevant argued for the state, that the attorney of the state had no right to settle the debt, and give discharges in the manner he did. That trie principle is a broad and general one. An attorney cannot withdraw the action of his client, but it must be by a retraxit by the client himself. A factor*' cannot pledge the goods of his principal for his own debt. See Wood’s Institutes, 55, 6. 2 Strange, 1164. See 3 Bacon, 562. Salk. 442. Raym. 928. 2 Shower, 139. 8 Co. 58. It was decided in the case of Sarrazin vs. Nelson that neither the plaintiff’s attorney, nor the sheriff have a right to discharge the debtor, unless the money is actually paid to one or the other. Tunno must have known the situation of Moultrie, as there were many judgments and mortgages on his property; and Moultrie must be considered the agent of Tunno, for as he paid Moultrie no indents, he trusted to him to procure them and satisfy the public demand, which could be satisfied in no other way, and the discharge was of no validity, till the debt was effectually paid.
Mr. Marshall, for defendants,
insisted that the court could not set aside such a release, unless shewn to have been obtained by fraud, and there was no proof of that, He cited 4 Burr. 2046. Strange, 1182, Cowp. 255.
General C. C. Pinckney and Mr. Edward Rutledge for defendants.
The legislature having directed a suit to be instituted against Moultrie for his default, and having recovered a verdict against him, cannot have a double remedy; especially against Mr. Rose, who has had no share in these transactions, and who furnished the funds necessary to purchase the indents to pay the bond. Tunno might have sold his houses for indents, and paid them to Moultrie; If he had done so there would have been an end of the business, as tp Tunno and Rose, even-jf Moultrie had never paid over the indents to the state* His transferring the houses and other articles direct to Moultrie cannot make any difference. Moultrie assumed the debt on himself, cancelled the bond and mortgage, and made himself debtor to the state; which should look to Mm. If .the bond was illegally cancelled there was a remo- dy at law, according to a decision of lord Mansfield, reported in Durnford and East; and the suit should have been brought at law. Cases quoted, 3 Bacon, 698. 3 Wilson, 345. 2 Bla. rep. 866. 3 Wilson, 374. 1 Salk. 86.
Mr Pringle, (attorney general) for. complainants.
When the bond and mortgage were cancelled, not a cent of money or indents had been paid on the bond. The payments were in merchandizes and houses, delivered and conveyed to Moultrie himself, who applied them to his own use. For the balance Tunno gave his bond,, and that had been settled and taken up chiefly in the same way. Tunno could not be allowed the benefit of the commutation act: for whoever claimed that, was required by law to take an oath that he had not the indents previous to the passing the law: and Tunno admits by his answer that he had purchased indents for Rose to pay the bond to the amount of 21,000/. Had Tunno paid money to Moultrie equivalent to the current price of indents, this might have answered, and the release of the bond might have been supported. But having paid neither money nor indents, according to the tenor of the bond, but lands and goods, it must he considered as no payment. If Tuuno trusted to Moultrie to satisfy the public, and he has not done so, he must look to Moultrie, but the public must he paid by their original debtors: For as attorney for the state, Moultrie had no more right to release the public debt, but in consideration of actual payment, than a common attorney had to release the debt of his client without payment. Tunno must have known that Moultrie was deeply involved; It was notorious: and that the kind of settlements he was making with him put the public debt in jeopardy. What is done by the agent is virtually the. act of the principal, and he is liable: If therefore Tunno has acted improperly as the agent of Rose, the latter must be accountable At the time the state ordered a suit against Moultrie and recovered a verdict against him, the legislature and its public officers knew nothing of the mode in which this debt had been settled; but it was supposed that the debt of Rosé liad been paid in indents, as it ought to have bee»?. and as it was represented by Moultrie, who debited himself-in his account for indents. Therefore no inference can be drawn of the state intending to waive its claim against Bose and Tunno. Quoted 1 Burr. 128. 3 Viner, 303. 1 Durnford and East, 757.
J)ecree

Opinion:
After the court had deliberated, it delivered the following decree:
The importance of this case is occasioned more by the magnitude of the debt, than any real difficulty or intricacy in the subject. — It must be determined on two points:
"Whether the defendant Hugh Rose has complied with the conditions of his bond, which was to pay 24,600?. 5s. with interest, in specie or indents, to the commissioners of flie. treasury, or their successors in office, in trust for the use of the state, on the 17th December 1788 ?
If he did not, whether the defendant Moultrie, in whose hands the bond was placed by the commissioners for the purpose of sueing the same, and recovering' the debt, could legally cancel and release it without actually l'eceiving payment in specie or indents, according to the condition thereof?
That the condition of the bond was not complied with cannot he denied: however, there is no fraud, imputable to the defendant Mr. Rose in the transaction, liis conduct was fair and upright in every point of view. He positively swears, that when lie received his own and his security's name, which had been torn off the bond by the defendant Mr. Moultrie, and was sent him by his agent the defendant Mr. Tunno, he conscientiously believed the debt had been actually paid in indents, and that the account which he afterwards received and settled With Tunno confirmed him in his belief. The defendants Tunno and Moultrie both acknowledge that only a small part of the debt was .paid in indents, and that the remainder was satisfied by his (Timno's) assuming payment of a number of demands against Moultrie; by the sale of two houses to him, and in various other ways.
The first point being thus disposed of, the second remains only to be determined, via. Whether the defendant Moultrie, who acted as an attorney at law to sue for the debt, could legally release it without actual receipt of the indents or specie ? The cases of master and servant, &c. cited by the counsel for the state, although in some degree similar, are not immediately applicable to the present. Nor does the case of persons, appointed by letter of aetorncy, apply altogether, because they are generally vested with power to receive, compound, or compromise with debtors; but the authority of an attorney at law is materially different: and we cannot consider the attorney general in any other point of view, when suing for the debts due the state. Ife is to sue for and recover a debt. After judgment and execution his authority wan at an end. The judgment and execution evince it: the latter directing the sheriff to bring the money into court at a certain day, to be paid to the plaintiff; and it was formerly doubted whether payment to the attorney, was payment to the party; though it is now settled to be so. The cases in Salkeld and Blacksionc, cited by defendant's counsel, are certainly good law, but they arc confined merely to the acts of the attorney iu the course of the proceedings in the cause, and do not relate to his receipt of his client's debt. And in a case in Salkeld, 88, it is expressly declared by the court, that if an attorney suffer a judgment against his client, and he is not responsible, which means of ability to satisfy his client in damages, if the judgment be irregular; the court will set aside the judgment; for otherwise the defendant would have no remedy, and any one might be undone by that means. From the whole train of authorities, it is evident that he must actually receive the money, and that an ideal payment, or the receipt of any thing else in lieu of it, will not bind liis client. It cannot bo supposed that the defendant Turnio, on a moment's reflection, could have imagined the defendant Moultrie was authorized to settle the debt in the manner he proposed anil did settle it; or that he could totally alter the state of the debt, and become the obligor instead of Rose: the idea is too absurd. Turnio, it is plain, was not authorised to make the nc-gociation he did; it was an unwarrantable speculation. between Mm and Moultrie, on Rose and the state. Sup-p0ge y, was a caso between two individuals, it is reduced then to thi3 single point, on whom in justice and equity ol,Sht the loss to fall ? On the plaintiff, whose attorney released the debt without recovering the money? Or the defendant Rose, whose agent was in possession of funds to pay the debt; hut instead thereof speculated with them for his own advantage, and settled the debt in a manner which he was not authorized to do by his principal? Most certainly the loss must be the defendant Rose's, according to the maxim which invariably prevails in courts Of law as well as equity, that the principal is civilly responsible for the acts of his agent: And though there is not any fraud imputed to the defendant Tunno, his irregular conduct must affect his principal. In the case of Latham .and Sarrazin, lately determined in the court of common pleas, it was clearly settled, that an attorney ¿an do no act incompatible with the nature and cud of Ids authority: and that if he was to give a discharge or remit the debt without receiving it, Ins client would not he hound by it. The defendant Tunno having acted contrary to the trust or confidence reposed in him, the defendant Rose must seek redress against him, for whatever damages he may sustain. And as on. the one hand, the state would have been bound by the defendant Moultrie's act, if he had actually received the specie or indents for Rose's debt; so on the other hand, as he has not received the specie or indents, Rose shall not he released from payment, although his bond has been cancelled. Creditors would be placed in a perilous situation indeed, if by the combination of an attorney with the debtor or his agent, a receipt without payment of the money should be deemed sufficiently valid to discharge the debtor from his obligation. It is undoubtedly a hard case on the defendant Rose; but it is a hardship which every one is liable to, who reposes so unlimited a confidence in another as he did in the defendant Tunno; who though a party h\ this suit, yet as there was no privity of contract between the state and hirm, emmet be decreed to pay the debt.
It is therefore ordered and decreed, that it he referred to the master to ascertain the sum either in indents or specie that has been actually paid to the defendant Moul-trie on account of the defendant Rose's bond, and to report the balance which is still owing and unpaid: That the bond notwithstanding the receipts thereon, shall be considered a subsisting contract, and the defendant and. his security still liable for the payment of what shall be reported due. Also, that the mortgage given by the said defendant Rose as an additional security he deemed an&held as still binding, notwithstanding the acknowledgement of satisfaction thereof, the same having been ills* gaily vacated, without a valuable consideration. And lastly, that the defendant H. Rose do pay the costs of complainant, and the costs of the defendants shall be paid by them respectively..