Where the agent, on behalf of his principal, performs an unauthorized act—yet if the principal has put the agent in a position to mislead innocent parties, he is responsible to them.
And a subsequent general power from the principal to the agent, to sue for all sums due the principal, and to execute all instruments necessary to carry the power into full effect, will, as to innocent third parties, bind the principal for obligations incurred in the collection of a loan, which was unauthorized as between the principal and agent.
An indemnity bond to the sheriff to retain property seized under attachment, is an instrument necessary to carry the power to sue into effect.
A ratification*of the unauthorized acts of an agent, can only operate after full knowledge of those acts.
Where property was seized under two attachments, and the property was claimed by a third party, whereupon both attaching-creditors indemnified the sheriff, who went on and sold it, and paid the proceeds to the first attaching creditor, the amount not equaling his judgment—and afterwards, the party claiming the property, obtained judgment against the sheriff for the value of the property : Held, that the recourse must be had against the first attaching-creditor, for whose benefit the property was sold.
In such case, the attaching-creditors do not stand in the position of joint trespassers, the seizure of the second being subject to the first.
The sheriff was the separate agent of both attaching-creditors, but in the order stated, and as he disposed of the property to the benefit of the first alone, he must look to him, and not the second attaching-creditor.
A judgment-record is only conclusive between the parties and their privies, except in some cases for specific purposes.
When a judgment-record is used in evidence, it can only be considered as conclusive evidence, where its operation is mutual, and concludes both parties.
Where property attached is claimed by a third person, the sheriff may protect himself before a j ury of six persons, and if the verdict be in favor of the claimant, he may relinquish the levy, unless indemnified. If he gives the bond of indemnity, it will only enure to the benefit of the owner of the property, so far as the consequences which result from his own acts are concerned.
When the sheriff attaches property of the defendant, he does it as the officer of the law. If it is not the property of the defendant, he is the agent of the attaching creditor.
Opinion — Burnett
At the July Term, Burnett, J., after stating the facts, delivered the opinion of the Court. In this case the defendants submit:
[2441]. That in the Meiggs loan, McPherson acted without authority from Dallas, who never ratified it, and that, therefore, said debt from Meiggs was never, in fact, owing to Dallas; and said suit was, therefore, not authorized under the power.
2. The power of attorney does not authorize the execution of the bond of indemnity for Dallas, and that his sureties, executing the bond as Ms bond, and the condition failing, are not bound.
3. There is no proof of damage within the recitals and condition of the bond, and therefore no breach, nor consequent damage, nor liability proved.
In reference to the first point made by the defendants, it seems that the twenty thousand dollars received by McPherson in the month of August, 1854, was remitted by Dallas for a specified purpose only. Dallas held subsequent mortgages upon certain real estate; and one Ricketson held a prior mortgage upon the same property. The object of Dallas was to protect himself by the purchase of this prior mortgage. The money remitted was intended to accomplish a given end, and was specially dedicated to that purpose. So far, then, as the agency of McPherson regarded this particular fund, it was special. Whatever may or may not have been his powers as to other funds, and other matters, his agency here was special. His agency being special, he could not exceed it. “ The acts of a special agent do not bind the principal unless strictly within the authority conferred.” Rossiter v. Rossiter, 8 Wend., 494.
The loan of a part of this money to Meiggs, when it was intended by Dallas for another and a different purpose, was without authority on the part of McPherson, and did not bind Dallas. It was not the debt of Dallas, unless he afterwards adopted and made it his by ratification. Dallas had the power to ratify the loan or not, at his pleasure. If he ratifies it, the debt then becomes a debt due from Meiggs to him. But until ratification, as the act was in the beginning without authority, it must be presumed that he would not ratify. So long as the debt remained without ratification it was in contemplation of law a debt due from Meiggs to McPherson. And in order to make a ratification binding, it was held by this Court in the case of Billings v. Morrow, January Term, 1857, “ that a principal, who ratifies the acts of his agent, must be made acquainted with the character of those acts, and unless all the circumstances are made known to him, the ratification is void.”
The acts of an agent beyond his authority, are as the acts of a stranger; and before the principal can be bound he must know what has been done, so that he may advisedly exercise his own judgment upon the circumstances in the same way as if he had originally made the contract himself.
In this case it is clear that Dallas, at the time the bond was executed, could not have ratified this act of McPherson. Dallas [245]resided in Scotland, and the loans to Meiggs were made 'September eighteenth, and October third, 1854, and the indemnity bond executed December twenty-third, 1854. The time was so short that it would have been hardly possible to hear from Dallas before the date of the bond. And not only so, but the onus of proving a ratification by Dallas is thrown upon the plaintiff, who, in this case alleges the affirmative of the proposition. There is no proof of any ratification by any act of Dallas done after a full knowledge of the circumstances.
It would seem clear that McPherson, under the general power of attorney, received by him October 25, 1854, could not ratify his own unauthorised act. As between himself and his principal he could do no act that would affect Dallas. “A person cannot act as agent in buying for another goods belonging to himself.” Story on Agency, § 9.
Another position which seems to be clear and undoubted, is-this: that the power of attorney received by McPherson, only authorised him to bring suits upon the contracts of Dallas. The debt from Meiggs being the debt of McPherson, he had no right to sue in the name of Dallas. However broad and general we-may construe the language of the power to be, it will only embrace matters appertaining to Dallas.
In answer to those views, the learned counsel for the plaintiff insists that “ any original want of authority is undoubtedly cured by the record of the suit of Dallas v. Meiggs;” and they maintain that “judicial records for all the purposes for which they can be used, are absolutely conclusive of the facts which they assert.”
In the case of Field v. Gibbs and others (1 Peters C. C. R., " 157,) Judge Washington says: “The general rule of law, to' which I know no exception, is, that nothing can be assigned for error; nor can any averment be admitted which contradicts a record.” “A record,” says Lord Coke, “imparts in itself such in controllable credit and verity, that it admits of no averment, plea, or proof, to the contrary, for otherwise there would never be an end of the controversy.”
In that case it was hold, that in an action upon a judgment against Joel and Martin Gibbs, in which it appears that they defended the former suit by their attorney John P. Ripley, the defendant Martin Gibbs, was not allowed to plead; that the attorney had no authority to appear and plead for him, as the record was conclusive of the fact, whether true or not. So, in the case of Smith v. Bowditch, (7 Pick., 136,) it was held that .the signature of the attorney was matter of record, and could not be disputed. And the Court said: “ The defendant had no right to look to the record; and if the person whose name is there as attorney, acted without authority, and the plaintiff is thereby injured, the remedy is by an action for damages,”
[246]So, in the ease of the People v. Bradt, (7 John., 539,) the same doctrine was laid down.
This is certainly a very stern and rigid rule, sometimes placing parties in the complete power of others, which nothing but the most imperious necessity could justify, and for that reason the rule should not be extended beyond the reasons of necessity and policy upon which it is based. It will be seen, that in the above cases, cited by counsel for plaintiff, the questions all come up between 'parties to the suit. And in his work on Evidence, Professor Greenleaf says: “ But to prevent this rule from working injustice, it is held essential that its operation be mutual. Both the litigants must be alike concluded, or the proceedings cannot be set up as conclusive upon either.” § 524.
In the case of Dallas v. Meiggs, Gorham was not a party, and the record was not conclusive upon him, and cannot be conclusive as between him and Dallas. Conceding, for the sake of the argument, that McPherson had no authority to bring that suit,
. would the simple fact that he did nevertheless bring it in the name of Dallas, be conclusive.upon Gorham as to the question of McPherson’s authority ? Suppose Gorham had refused the bond of indemnity, executed by McPherson, upon the ground that the alleged agent had no authority, could Dallas have held Gorham responsible? Could not the sheriff have shown that the bond was issued without the authority of Dallas, and, therefore, he, as sheriff, was not bound to receive it as the bond of plaintiff in that suit? It is apprehended that Gorham was not bound to recognize McPherson, as the agent of Dallas, from the simple fact alone that the record showed him to be such. The record could not then bo conclusive upon parties and privies, except in some cases for specific purposes.
This view seems to bo clearly laid down in Greenleaf on Evidence : “A record,” he says, “may be admitted in evidence in favor of a stranger, against one of the parties, as containing a solemn admission, or judicial declaration, by such party in regard to a certain fact. But in that case, it is admitted, not as a judgment conclusively establishing the fact, but as the deliberate declaration of the party himself, that the fact was so. It is, therefore, to be treated according to the principles governing admis-. sions, to which class of evidence it properly belongs.” § 527 a; see also § 538.
And the rule upon this subject, is concisely and accurately stated by Lord Chief Justice De Guy, in the Duchess of Kingsston's case, “that the judgment of a Court of concurrent jurisdiction, directly upon the point is, as a plea, a bar, or as evidence, conclusive between the same parties, upon the same matter, directly in question, in another Court.”
But conceding the position to be true, that as between Dallas and McPherson, the loan to Meiggs, and the bringing of the [247]suit, was unauthorized by Dallas, a very important inquiry arises, whether under the circumstances of this case, Dallas had not, by his own acts, placed McPherson in such a position as innocently to mislead Gorham as to the authority of the agent to bring the suit. It was certainly the duty of Gorham to use due diligence in ascertaining the facts, and to know the law. But if, after the use of such diligence, he was still unable to ascertain the facts relative to this particular fund, and was misled by reason of the conduct of Dallas, and his agent, then it is apprehended the injury should fall upon Dallas, who committed the error. It is true, that “it is the duty-of persons dealing with an agent, to make inquiries as to the nature and extent of such authority and to examine it.” Story on Agency.
What, then, had the sheriff to do ? He had to ascertain two facts : 1. That McPherson had power "to sue and execute bonds upon the contracts of Dallas: 2. That the suit brought,-was upon a contract of Dallas.
Whether the first fact existed or not, could be ascertained by an inspection of the power of attorney. As to the second alleged fact, one of the learned counsel for the defendants insists that its truth could be ascertained by an “ inspection of the note sued on, because this was a note payable to McPherson, and by him endorsed to Dallas, which the sheriff was bound to know the former had nó right to do.”
The truth of this position will depend upon the question, whether the notes, or either of them, as set forth in the complaint, in the case of Dallas v. Meiggs, were, upon their face, in legal effect, the property of McPherson, or of Dallas. As we have seen, one was payable to “McPherson, agent, or order,” and the other to “ McPherson, agent of A. G. Dallasj or order.” It was clear upon the face of the notes, that the consideration for which they were given came from McPherson, in his capacity of agent, and did not move from him in his personal right. In one case it was clear that the consideration came from Dallas. In the other, it was not disclosed from whom the consideration flowed: but the fact that McPherson was but an agent, is seen on the face of the paper. The note payable to “ McPherson, agent of A. G. Dallas, or order,” upon its face, was the property of Dallas. Sayer v. Nichols, April Term, 1857; Story on Agency, § 160 a. And the question as to whether McPherson had the right to endorse the other note to Dallas, depended upon the two facts, whether the consideration for which the note was given, flowed from Dallas or not, and whether the agent had a right to make the loan to Meiggs. If the money was the money of Dallas, and McPherson, so far as Gorham, had the means of knowing, had authority to loan it to Meiggs, then McPherson had the right to endorse this note to Dallas. Suppose that McPherson had the right in fact to loan this particular fund, the note would [248]have been virtually, to say the least, the property of Dallas, and Dallas could not have made McPherson responsible to him for a conversion of the money; provided, McPherson would endorse the note to Dallas. Upon an endorsement of the note by the agent to the principal, the latter would have been in as good a condition as if the note had been taken payable directly to him in the first instance. This endorsement the agent had a right to make, at any time, with or without the consent of the principal, if we concede the authority to make the loan itself. The formal error of McPherson, in making the note payable to him, as agent, without disclosing, the name of his principal, he had the right to care by endorsement.
The question then arises, whether McPherson had the au- • thority, not as between him and Dallas, but as between Dallas and the sheriff, to make the loan to Meiggs.
The testimony of McPherson, as set forth in the record, is the only evidence upon this point. It appears that the indemnity bond was executed at the sheriff's office in the presence of Brady, the clerk and deputy of Gorham. The witness then assured one of the sureties, Falkner, “'that Mr. Dallas would protect him.” “ He, Falkner, put the question frequently, whether it was Mr. Dallas’ bond. I told him that I was representing Mr. Dallas, and that he w.ould protect him.” It is clear that the representations made to Falkner were made in the presence of the deputy of Gorham. It also appears that Dallas had then a large property in this State, a h.ouse in San Francisco, mill property on the Albion Rancho, and mortgages- to the amount of from thirty-five to forty thousand dollars. And the witness said, “I consid- ’ ered this as Dallas’ debt, when the suit was brought. I had invested other money for Dallas before this.”
■ It is not absolutely certain, from the testimony, as to whether McPherson or others had made these investments for Dallas, but from the facts stated by McPherson, taken in connection with the power of attorney, the conclusion is almost irresistible that McPhérson- had been the general agent of Dallas in making them.
From all the testimony of McPherson it appears that he had been the general agent of Dallas, in' making investments and loans of money, that he received this particular fund for a, particular purpose; but, that he could not at the time use it for the purpose intended, and therefore made the loan in-question; and that he did not disclose the fact to Gdrham, or to his deputy, that he had received this particular fund for the special purpose intended, but that all his representations to the sheriff, as well as to the sureties, went to conceal that fact. Suppose the sureties upon, the representations of the agent, and an inspection of the papers in the suit of Dallas v. Meiggs, and the power of attorney, (conceding for the present, that the power [249]itself was sufficient,) had executed the bond without Dallas, but for his benefit, and suppose they had paid the amount to the sheriff, could not they have their recourse upon Dallas ? It would seem clear that they could. Dallas had first employed McPherson, as his agent, to make investments and loans, and then followed tliis up with a power of attorney, so general and comprehensive in its terms, as not to put others upon inquiry as to his particular instructions in reference to the special fund, in question. Uo one, hearing the representations of McPherson, and knowing his general previous acts, as the agent of Dallas, and looking at the power of attorney, would have thought of inquiring as to this particular transaction. They would only inquire of the agent, “ was this Dallas’ debt That the agent answered in the affirmative, there would seem to be no question. And although there would seem to be no doubt as to the innocent intention of the agent, yet that could not affect the rights of the sheriff, or of the sureties.
If these views be correct, it follows that while, as between the agent and his principal, the loan to Meiggs was unauthorized, yet Dallas is bound by the act of his agent, for the reason that lie placed McPherson in such a position as to mislead innocent parties. And from this it seems clear, that as between Dallas and the sheriff, the loan to Meiggs was authorized, and the debt due from Meiggs to Dallas. Story on Agency, § 443: 7 John., 390; 13 Wend., 521.
We will now proceed to consider the second point made by the defendants.
“ Formal instruments of this sort are ordinarily subjected to a strict interpretation, and tho authority is never extended beyond that, which is given in terms, or which is necessary and proper for carrying the authority so given into full effect.” Story on Agency, § 68.
In this case it must also be assumed that as Dallas made the power of attorney to be executed in this State, he did so with a full knowledge of the law as it existed here at the time. Id., § 86.
The learned counsel for tho defendants insist that “ the power to execute deeds must bo confirmed to the last antecedents, to arbitrate, compromise or amicably settle,” which construction is assisted by the fact that deeds are technically proper, as matters of law for those purposes, and are inapplicable in law to the antecedent powers to sue, collect, and recover.” This construction is disputed by the learned counsel for the plaintiff, who insist; that the power to execute deeds, applies as well to the power to “ sue,” as to the power to “ arbitrate.” In the printed brief of the plaintiff there is a mistake in the punctuation, in putting a semicolon after the words “United States,” instead of a comma; [250]and upon this • mistake a portion of their argument is predicated.
It will be seen upon inspection, that there are four clauses in the power of attorney, in each of which separate,and distinct specified powers are given : 1, To take possession of property; 2, To recover debts; 3, To arbitrate all questions; 4, To sell real and personal property. These clauses are separated from each other by a semicolon, while the only point used within each clause is a comma.
It would seem", at first view, that it was the aim of the person who drew the power of attorney to separate the subjects of the power into four distinct classes; to include one class in each separate clause; and also to specify within each clause the means intended to be stated to carry out the powers conferred in the clause itself. And this view is strengthened by the fact that 'the word “ deed” is mentioned in two different clauses, which would have been unnecessary had the word as used in the third or fourth clause been intended to apply to all the precedent powers. •
But this view seems to be entirely rebutted by the language of the fourth clause of the power of attorney, which seems not to have been observed by the counsel on either side. The language is this: “ and to grant all necessary deeds -and acquittances to carry these powers into full effect.” The power con-_ ferred by the fourth clause is the power to “ sell and dispose of said real and personal estate.” The power to “ sell or dispose of,” is substantially the same, and the terms, “these powers,” must also refer to powers granted in other clauses. This view is confirmed by the use of the word “ acquittances” in the fourth clause, which could properly have no application to the power to sell, but must refer to the power to sue and compromise conferred in the second and third clauses. If the word “acquittances” refers to all the powers previously mentioned, and to which, in its nature, it could properly apply, then the word “ deeds,” connected with it, would equally apply to all the preceding powers, in all cases to which it was necessary as a means to carry them out.
If these views be correct, it was the intention of Dallas to confer upon his attorney the power to execute deeds and other instruments in all the cases previously mentioned, where they were “ necessary to carry these powers into full effect." And we think this view so clear that we deem it unnecessary to cite the authorities referred to. We may remark, however, that after a careful examination of them, we do not find them applicable under the view we have taken.
The question then arises, whether the power to execute the bond of indemnity was a “ necessary means” of executing'the power to sue with “ full effect.” And to answer this question correctly, we must remember that Dallas intended the power to [251]be executed within this' State, and made it with a view to the law as it then existed. It is substantially conceded by the counsel for the defendants, that “ the execution of an attachment-bond would be within the power to sue,” upon the ground that it is “ an inherent element of the case, which a principal would contemplate in every case coming within the requirements of the attachment law.”
There would seem to be no doubt as to the correctness of this position. It has 'been held that the power “ to recover and receive a debt will authorize the attorney to arrest the debtor.” Story on Agency, § 58.
If, then, the attorney of Dallas had authority to execute an undertaking in an attachment-suit, had he not equal authority to execute an indemnity-bond, under proper circumstances ? In this case, the property had been attached, and a third party claimed it. This presented a case in which an indemnity-bond would be proper, under the laws of this State. As to the question whether the property would ultimately turn out to be the property of Davidson, it was the right of the agent to determine, conceding that he had the power to execute such a. bond in any case. So far as the sheriff was concerned, the suit had been properly brought; and when the property attached was claimed by Davidson, the agent had to determine whether he would at once give up the levy and lose the debt, or whether he would take a trial before a sheriff’s jury, or indemnify the officer without such trial. And if he had a right to determine the propriety of indemnifying the sheriff after a verdict of the jury in favor of the claimant, he had equally the right to waive that trial, and thereby avoid the risk of the costs necessarily to be incurred. As McPherson had the right to decide as to the expediency of issuing an attachment in an attachment case, so he had the same right to determine the expediency of executing the indemnity-bond. The same discretion was reposed in him in reference to both cases, if reposed in him at all.
It must be conceded, that a greater risk is ordinarily incurred in case of indemnity than in the case of attachment. But it must also be conceded that both are equally necessary in proper cases. And whether an indemnity-bond be a necessary means to collect a debt in the particular case—who shall determine, the agent or the sheriff? There are many means usual and necessary to accomplish the same end. Under one set of circumstances, one means may be necessary and another not. An indemnity-bond, under our system, is a necessary means, in a certain state of case. The agent must determine for his principal, and not the sheriff, as to whether it is expedient in a case where allowed by law. "When the property attached is claimed by a third party, it presents a case proper for indemnity, and in [252]such a case an indemnity-bond is an ordinary and necessary means under our system of practice.
From these views, it follows that McPherson, so far as the sheriff and sureties are concerned, had authority to execute the indemnity-bond for Dallas.
We proceed now tQ the third and last point made by the defendants. In considering this point, it must be conceded that the plaintiff can only claim what Gorham could claim had he brought this suit.
In the case of Jones v. Atherton, 7 Taunton, 56, cited by the .counsel of plaintiff, it was held that “if a second fieri facias be delivered to a sheriff after he has the defendant’s goods in possession under the prior fieri facias of another, the goods are bound by the second execution, subject to the first execution.” . And in the case of Goldsmidt v. Hamlet, (6 Manning & Granger, 187,) also cited by them, it was decided, that where A and B, issued separate executions, and both were levied upon the same property at different times, and the prior execution of A was set aside, B was entitled to be paid as if he had been the sole execution creditor. And in the case of Wyntle v. Freeman, (11 Ad. & Ell. 539,) it was settled that when a second execution was levied upon certain goods, and the proceeds were afterwards exhausted by the first execution, the sheriff’s return of nulla bona upon the, second execution was proper.
It would seem that these cases lay down the correct doctrine, and the only question that can arise, is in reference to the ap-' plication of the principles settled, to the facts of the present case.
It appears that Gorham had first levied the attachment in the case of Gilson v. Meiggs, and afterwards levied the writ in the case of Dallas, upon the same property. He also took a separate bond of indemnity from both Gilson and Dallas, each for the full value of the property attached. As the property could not be divided, he was compelled to seize and detain it entire, under .both attachments. The seizure under Gilson’s attachment being prior in point of time, was absolute, and that under Dallas’ attachment, being subsequent, was subject to the first. As the sheriff could not foresee whose levy would ultimately prevail, it was his right and his duty to take full indemnity from each, so that he would be secure in any event.
As between Davidson and the sheriff, it was a matter of indifference to the former, under what authority the.“ Underwriter” was taken. It was not the business of Davidson to inquire. But. as between the sheriff and those for whom he acted, the question assumes a very different shape. As between him and them it was a matter of contract. In making these contracts each party must be held to have known the law; and the terms of the law therefore enter into and form a part of them without [253]any express stipulation to that effect. The parties must also be held to have contracted with a knowledge of the facts so jar as they were shown by the proceedings.
In detaining the vessel under each attachment, the sheriff acted as the agent of both Gilson and Dallas; but his agency for Gil-son was primary, while it was secondary for Dallas. It was conditional as to both. If the sheriff ultimately incurred no liability, he could recover nothing. And if he did incur liability, must he not recover in the order in which he levied ? And of each plaintiff, in proportion to the liability ultimately incurred for Mm ? The ultimate liability of the indemnitors was not fixed by the execution of the bonds, but depended upon subsequent events; and as both the fact of liability at all, and also its amount, were dependent upon subsequent events, why should not the fact, as to which plaintiff should be liable, and in what proportion, and in what order, be equally dependent upon the result of the proceedings in the two attachment-suits 1 If the sheriff did his duty in taking full indemnity from each creditor, (and if he did not, it was his own error,) then he was protected in any event. If the attachment of Gilson was defeated, and that of Dallas sustained, then Dallas would be held as the sole attaching-creditor, under the authority of one of the cases before cited, and be subject to the ultimate sole liability.
It is true, Gorham detained the whole vessel for Dallas, but he detained it subject to the prior attachment of Gilson. The vessel could not.be divided, and the detention of the sheriff for each creditor was in the order mentioned, and the liability to him for this detention must be in the same order. If this order be subject to be changed or disturbed by the result of the suits, then the order of liability is equally subject to the same contingency. And so in reference to the proportion of damages for which each party may become liable.
It is conceded, that in a case of joint trespass, the party injured may sue one or all of the trespassers, and each one will be liable for the whole damages, but a satisfaction made by any one of them, will be a discharge of all. But in this case, as between the sheriff and his indemnitors, the same rule cannot apply. He does not bear towards them the same relation that the injured party does towards joint trespassers. As between Gorham and the attaching creditors, their liability to him arises under contracts allowed by law. In these contracts, there were mutual covenants. He bound himself to detain the property, first, for Gilson, and second, for Dallas, with the condition that this order was subject to be changed by the ultimate result of the suits.
From the principles of the cases referred to, and the provisions of our Practice Act, these conclusions would seem to follow :
1. If the attachments were ultimately sustained, and the whole proceeds of the property absorbed by the debt of Gilson, then [254]he would have been solely responsible to the sheriff for the entire liability incurred by him. to Davidson.
2. If the levy of Gilson had been defeated, and that of Dallas sustained, then Dallas would have been solely responsible for the entire amount.
3. If both attachments had been sustained, and the property sold for more than sufficient to pay Gilson, then Gilson and Dallas would have been responsible in proportion to the amounts paid to each by the sheriff.
4. If both the attachments had been defeated by Meiggs, or if the suits of Gorham against the indemnitors had been commenced before the determination of the attachment-suits against Meiggs, then the separate responsibility of Gilson and Dallas, would have been in proportion to the amounts of their respective attachments, except in case the whole amount for which both attachments were levied, had exceeded the value of the property as settled in the suit against the sheriff, in which case the prior attaching-ereditor would have been responsible to the amount of his attachment, and the subsequent attaching-ereditor for the remainder. For example, if the first creditor attach for ten thousand dollars, the second, for twenty thousand, and the value of the property be twenty thousand, they would each be responsible to the sheriff for ten thousand dollars. Upon the rendition of the judgment against the sheriff, the title of the property vests in him for the several indemnitors, who have each an interest in proportion to their respective liability to the sheriff. As the attaching-creditors had obtained no judgment against the debtor at the time, they should each relinquish his levy upon the property. The debtor has no right to ask that the property should be sold, and the proceeds appropriated to his debt. The property never having been his, he has no right to the proceeds.
In opposition to this view of the case, it is insisted that, “A Court of Law cannot apportion the amount of recovery between Gilson and Dallas." .But this objection does not seem to be well founded. That the sheriff is entitled to full indemnity is conceded; but what proportion he shall recover from one, and what from the other, is a matter that affects the quantum of damages in each case only. It is conceded, by the counsel for plaintiff, that a satisfaction of the bond of Gilson would discharge Dallas. In other words, Gorham could not collect the full amount from each party. If a full payment by Gilson would discharge Dallas, then a partial payment by Gilson would be pro tanto a discharge of Dallas. And if partial payments made by Gilson could be proven by Dallas, to lessen his responsibility, it is not perceived why he could not be permitted to show either the entire or partial separate responsibility of Gilson to Gorham, in order to produce the same result. It would seem to be as easy for a Court of Law to ascertain the proportionate liability of each in[255]demnitor, as to ascertain the partial payments made by each. The criterion which settles the proportionate responsibility of Gilson and Dallas is found in the records of the two cases, and the practical application of it, is a matter of calculation readily made.
The theory of the plaintiff, in subtance, is this: Gorham had a right to demand a separate indemnity from Gilson and Dallas, 'for the full value of the property; and, in the event of his becoming liable to Davidson, he could sue either of them, at his election, and recover from the party sued the entire amount of his liability to Davidsony if within the penalty df the bond, and this without any regard to the rights of Gilson and Dallas, as between themselves. But this theory would seem to be incorrect, and to lead to very unjust results. The legal effect of a judgment for the full value of property converted by a party, operates as a change of the title, which at once vests in the defendant. 2 Tucker’s Com., 90; Starkie, 1281,1507.
As Gorham took the property for Gilson and Dallas, the property vested in him for their benefit. The law gave Gorham the property for the judgment, and if he relied upon the indemnity-bonds, in the place of the property, he should look to the party who received the proceeds. As Gorham first took the property for Gilson, and afterwards disposed of it for him, he should look to Gilson, and not to Dallas. He was the separate agent for both parties, but in the order stated; and, as he disposed of the property for one only, he should look to him alone. And it is no answer to this view, that the disposition of the property made by Gorham was not voluntary on his part, but was compelled by the law. The law afforded him ample protection. If he did his duty, he had full indemnity from each party, and any disposition the law might make of the property would not, in the contemplation of the view we have taken, materially injure him. His remedy, upon the bond of the proper party, was ample. It mattered not to him which party was made liable. His rights were equally protected in either case, because he had taken good bonds in both. If not, it was his own error.
If we take the theory of the plaintiff to be correct, for the sake of the argument, it would certainly place a subsequent attachment or execution-creditor in a very perilous condition. We will take the facts of this case as an illustration. The debt of Dallas was twelve thousand five hundred and forty-two dollars, and Gilson’s of thirty-five thousand dollars. The property was claimed by Davidson, and could not be divided. Dallas was compelled to indemnify, or give up the lien of his attachment. If he indemnified, he incurred a risk to the amount of one hundred thousand dollars, for the chances of making twelve thousand five hundred and forty-two dollars. As Gorham had the [256]right to sue either Gilson or Dallas for the entire amount, Dallas was at the caprice of the sheriff, whose motive for suing him in preference to Gilson, he could not inquire into. Under such a .theory, would any prudent subsequent creditor ever think of giving an indemnity-bond ?
This brings us to consider the effect of the agreement between Gilson and Dallas. In that agreement, it was stipulated in substance, that if the decision should be that the vessel was the property of Meiggs, and it should not sell for a sufficient amount to satisfy both demands, that then the proceeds should be divided in proportion to the debts. But in case the decision was adverse to them, then they were to pay the necessary expenses in the same proportion. There is nothing in the agreement that gives any part of the proceeds of the vessel to Dallas, in the event that it was decided to be the property of Davidson. In reference to that matter the agreement is silent, and leaves the parties to rest upon their legal rights, as if no agreement had been made. The event contemplated by them, and to which the agreement refers, did not happen.
This view disposes of the case without the necessity of- deciding several other points mentioned in the briefs of counsel.
The judgment of the Court below should be reversed, a new trial ordered, and the cause remanded for further proceedings.
Concurrence — Murray
Murray, C. J. I concur in the judgment.
A re-hearing having been prayed for at this term, Burnett, J., delivered the opinion of the Court—Terry, C. J., concurring.
This case was decided at the present term, and a petition filed by plaintiff for a re-hearing. The importance of the case renders it proper that some additional reasons should be given.
The learned counsel for the plaintiff, in their petition for a rehearing, have referred us to the case of Watmaugh v. Francis, 7 Penn. R., 206, as an authority against the position we have taken. The facts of that case were substantially and concisely these: Baldwin had a prior and Francis a subsequent execution against Morris. Both executions were levied upon certain property, which was claimed by Thompson. Baldwin did not indemnify the sheriff, but Francis did. The sheriff proceeded and sold the property under both executions, and paid over the entire proceeds to Baldwin. Thompson sued the sheriff and obtained judgment against him, for the value of the property, and then the sheriff sued Francis upon his bond, and it was held by the Supreme Court of Pennsylvania, that the sheriff could recover.
The statutes of that State contain a provision regarding indemnity-bonds given to sheriffs. Laws of Pennsylvania, fróm 1700 to 1849, by Dunlap. But, according to the practice in that State, when property attached, or levied upon, by an officer, is [257]claimed by a third party, the Court, upon application, will enlarge the time for making the return. In the opinion of the Court, Rogers, J., holds this language:
“ As he is bound to execute the writ at his peril, where there is reasonable doubt whether the goods are liable to be taken on the ft. fa., he may apply to the Court from which the writ issues, and in a proper case, the Court will enlarge the time for making the return to the writ until the right he tried, or a sufficient indemnity he given. But when he has received, or tendered an indemnity, it is his duty to proceed, on the pain of being attached or fixed for the debt.”
From this, it seems clear, that where indemnity is offered the officer .must proceed, but when it is not offered, he cannot relinquish the levy except at his peril, but may apply to the Court to enlarge the time for making the return, “until the right he tried, or until sufficient indemnity he given.”
In reference to another point, the same learned Judge proceeds to say :
“ Under the circumstances in which he was placed, what was the sheriff to do ? On the tender of indemnity, he was bound to execute the writ; so say all the authorities. It is also clear, that the Court will not stay the proceedings on the allegation, simply, that he has another execution in his hands against which he is not indemnified. The answer to such an allegation would be, that is nothing to you—you have a sufficient bond of indemnity, and it matters not by whom it is given, whether by the first or second execution-creditor. You arc not entitled to two indemnities. You cannot execute one writ without executing the other; the levy and sale on one, is the levy and sale on both.”
It will be seen upon a careful examination of the able opinion of Mr. Justice Rogers, that the decision was mainly predicated upon the grounds indicated in the extracts given. As the sheriff could not relinquish the levy, except at his peril, there was no necessity for Francis to indemnify. If Francis, as well as Baldwin, had refused to indemnify the sheriff, then the latter would have applied to the Court, and then the right to the property would have been tried, and the same question finally settled, that was afterwards settled in the case of Thompson against the sheriff. Under such a practice, no risk was necessary on the part of either execution-creditor. But hs Francis chose voluntarily to incur the risk, when unnecessary, he was held to incur it for the other execution, as well as for his own; and the sheriff was only allowed to take one indemnity; and as he was allowed to take but one bond, he was allowed to recover on that. And the whole theory of that opinion substantially rests upon these grounds:
1. That the creditors were not bound to incur any risk.
[2582]. That if they did so voluntarily, the sheriff could take hut one bond of indemnity.
3. That if the bond was given, the sheriff must proceed upon all the executions.
But the provisions of the one hundred and thirty-first and two hundred and eighteenth sections of our Practice Act, have most materially changed the rule upon this subject. Under our system, if the property be claimed by a third person, the sheriff may protect himself by a trial before a jury of six ; and if the verdict be in favor of the claimant, the sheriff may relinquish the levy unless indemnified. Here the creditor is either compelled to abide the verdict of a sheriff’s jury, or he must give the indemnity. He cannot, as in Pennsylvania, have a regular and final trial before a competent Court, without risk, but he must either submit to the decision of six men, unaided by the instructions of a competent Court, or lose his debt. And the hardship of the creditor would be increased beyond endurance, if we hold that the sheriff could take but one indemnity bond, and that such indemnity, when given, either "by the prior or subsequent creditor, would enure to the benefit of all the writs that might come into the hands of the officer, and be levied upon the same prop- " erty. For, as I understand the principle settled in that case, if Baldwin had given the indemnity instead of Francis, then the sheriff would have been still competent to proceed under both executions; and if the proceeds had been more than sufficient to satisfy Baldwin’s execution, then the surplus would have been applied to the execution of Francis. And if there had been several other subsequent executions, and the property had brought enough to have satisfied them, in whole or in part, the result would have been the same. The indemnifying creditor, whether first, intermediate, or last, took all the responsibility, and all the others shared the benefit of his indemnity in the order of the priority of their several executions.
But it cannot be so under our statute. If Gilson had refused to indemnify, and Dallas had done so, then the sheriff should have released the levy of Gilson), and Dallas would have shared all the responsibility and all the benefit.
And the game rule would apply to any subsequent creditor who refused to indemnify. The object of the statute is to make responsibility and benefit go together. And this being true, it' is apprehended that there can be no other theory but the one we have adopted, that will legitimately carry out this intent of the statute, and do equal and exact justice to all parties.
It is only upon the ground that our statute makes responsibility and benefit go together, that Gorham had the right to take separate bonds, (each for the full value of the property,) both from Gilson and Dallas. If the protection of the sheriff had been the sole object, without regard to the rights of each [259]creditors, as between themselves, then only one bond could have been taken. l
The protection of the sheriff would have been amply secured by one, and there could have been no necessity for more. But as each creditor was compelled to indemnify, or relinquish his levy, the sheriff had the right to take separate bonds from each. And the object of these separate bonds was to protect the rights of the indemnitors, as between themselves. And while it was the object of the statute to give tbe sheriff protection, it was also its object to give creditors a fair opportunity to assert their rights, without placing them in such a position as to force them, either to lose their debts, or to incur extraordinary risks, entirely disproportionate to the necessities of the case.
If the theory we have adopted be fairly carried out, and practically applied, it will be found to afford the sheriff ample protection, and yet, at the same time, not do injustice to creditors. It will not place the creditor in such a position that he must choose between two severe alternatives.
It is impossible, within the limits of an opinion, to anticipate and answer all the objections and misconceptions of counsel. But I apprehend that, upon a careful examination of the former opinion in this case, it will be found perfectly consistent with itself, and that no such consequences legitimately flow from it, as has been supposed by counsel. The four cases mentioned are all based upon the same principle, and are entirely consistent with each other. The principles laid down in these four points, it is conceived, will include "every case that can arise. The language of the fourth point, may be made more full, by saying “ defeated or dismissed,” in place of “ defeated by Meiggs.”
In the opinion, we said that “ in detaining the vessel under each attachment, the sheriff acted as-the agent of both Gilson and Dallas, but his agency for Glison was primary, while it was secondary for Dallas. It was conditional as to both.”
What was meant by the expressions primary and secondary, would seem to be sufficiently explained in the opinion itself.
As to the sentence, “it was conditional as to both.” Where an officer attaches the property of the defendant, he does not act as the agent of the plaintiff, but as the officer of the law. But when he attaches property that does not belong to the defendant, he goes beyond the command of the writ, and acts as the agent of the party at whose instance he does the act. As it was unknown whether the Underwriter was the property of Meiggs, or not, the sheriff's agency at that time was but conditional, and depended upon the result of subsequent proceedings. If it turned out to be the property of Davidson, then the sheriff acted as the agent of Gilson and Dallas; if otherwise, he detained the property as the officer of the law.
[260]After the most careful consideration of the subject, I can see no sufficient reason-for changing the former opinion.
Petition denied.
AI Brief
AI-generated · verify before citing
Holding. The court held that while an agent's unauthorized acts do not bind a principal, a principal may be bound if their conduct places the agent in a position that misleads innocent third parties. Furthermore, the court determined that a general power of attorney authorizing an agent to sue includes the authority to execute necessary indemnity bonds to carry out that power.
Issues
Whether an agent's unauthorized loan and subsequent suit in the principal's name bind the principal to an indemnity bond executed for the sheriff.
Whether a power of attorney authorizing an agent to sue and recover debts includes the authority to execute an indemnity bond.
Whether a sheriff, having taken separate indemnity bonds from two creditors for the same property, may recover damages from them based on the priority and outcome of their respective attachments.
Disposition. remanded
Quotations verified verbatim against the opinion
“The acts of an agent beyond his authority, are as the acts of a stranger; and before the principal can be bound he must know what has been done”
“it was the intention of Dallas to confer upon his attorney the power to execute deeds and other instruments in all the cases previously mentioned, where they were “ necessary to carry these powers into full effect.”