Court Opinion

ID: 6144296
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:55:52.195216+00
Date Added: 2024-06-11T08:54:47.934259
License: Public Domain

Monell, J.
No claim is made against the defendants in this case, founded upon any representation alleged to have been made by them in respect to the validity or value of the bonds. If any such claim was made, the representations stated -to have been made by the defendants would, I think, fall far short of being sufficient to sustain a cause of action. They were merely expressive of an opinion of and a belief in the validity and value of the bonds, and contain no evidences of and fraudulent purpose on the part of the defendants.
*267Nor is there any question properly involved, in respect to the bona fide ownership of the bonds by the plaintiffs. .For the purposes of the action, and upon the proofs betore me, it appears that they made advances upon the security of the bonds, which were of the genuine issue of the Peruvian and Chilian governments, without any notice that they had been, as is now alleged, misappropriated or misapplied by some functionary or agent of those governments. Having received the bonds under such circumstances, it is not probable that the mere wrongful putting in circulation of genuine bonds payable to bearer, and transferable by delivering, by an agent of the obligors, having them in his custody would invalidate the title of a purchaser for value and without notice. This is upon the principle applicable to the diversion of notes or the wrongful issue of stock. (Merchants' Bunk agt. N. Y. & N. H. R. R. Co., 13 N. Y. R., 599, 611), and is carried much further in respect to stolen bonds of a similar character.
Nor do I conceive that any inquiry into the sufficiency or insufficiency of the reasons assigned by the defendants for the non-payment of the January interest, is legitimately involved in the motion now before me. I am bound perhaps, to assume that such reasons were in fact sufficient, or were at least regarded as sufficient, by the Peruvian and Chilian governments, to authorize their withholding payment. At any rate, the defendants, the agents of, and acting under instructions from those governments would violate their trust and duty, if they disregarded or disobeyed such instructions ; and they had no right either in respect to the interests of creditors or otherwise, to inquire into or question the sufficiency or propriety of the reasons assigned by their principals, or any direction they might see fit to make respecting the agency; nor indeed to require any reasons whatever.
The sole question then is, have the plaintiffs stated facts which in their legal effect, $re sufficient to authorize the in*268terference by a court of equity, to compel the-payment of money in the hands of an agent of a foreign government,to creditors of such government:
No action can be sustained by these plaintiffs against the Peruvian and Chilian governments. Our courts have no jurisdiction over foreign powers, and disputes or claims arising between or in favor of our own government or the citizens of our government and a foreign power can be settled only by treaty or by war.
Nor am I aware of any law under which the moneys in the defendants’ hands can be impounded or attached at the suit of a creditor; or can in any other way be reached or applied to the payment of debts existing here against their foreign principals; and it is therefore probable, that the plaintiffs are without remedy, beyond such as is provided in the bond, or such as they may induce the government of the United States to resort to in their behalf. The only jurisdiction which by aiiy pretense a court of equity could exercise in a case like this, is in exerting - its restraining power to prevent, pending the litigation, a disposition of the fund provided for the payment of interest, which might deprive the plaintiffs of the benefit of such judgment as they might obtain. So far as any other relief is concerned, the remedies at law,would, if the plaintiffs have any remedy, be quite adequate.
But courts of equity, while they recognize and protect rights and redress wrongs, their jurisdiction over these subjects is confined to such rights or wrongs only, as are exclusively and exactly distinguished .from that portion of remedial justice which is exclusively administered by courts of common law. And while courts of equity administer remedies for rights which are not,, recognized by courts of common law, the foundation which sustains the jurisdiction of either court is the same; and the cause of action must be such that the court can take hold of it and apply approate remedies and give appropriate redress.
*269There is no principle of equity which will sanction its assuming jurisdiction merely because at law there is no remedy, unless the facts are such as make up a case exclusively for equitable relief. In other words, there must be a cause of action, whether resort is had to the one forum or the other.
In this case it seems quite clear that the plaintiffs have not made out a claim for the equitable relief they seek to obrain. As before remarked, our courts have no power over the foreign principals, under whose authority and control the defendants can alone rightfully act. And being without jurisdiction over the parties, we cannot assert an authority over the property of such parties, notwithstanding such property is within our territorial limits. The fund in question, is the property of the Peruvian or Chilian governments, and not the property of the defendants, and there is no proceeding in rent, unless in actions over whose parties we have acquired or can acquire jurisdiction.
I cannot therefore discover any ground upon which this action can stand. I have endeavored to find some'anology in principle applicable to equitable assignments or equitable liens, but without success. The plaintiffs cannot reach the fund,because they cannot reach its owners. It is a misfortune, it may be a wrong, but our courts are without power, and the plaintiffs must be left to pursue such other course as may be open to them. If this act of repudiation is without justifiable reason, it should perhaps be (if not a causus belli), the subject of diplomatic negotiation between these foreign powers and the government of the United States.
The injunction must be dissolved with the usual motion costs.