Peck v. Trustees of Randall

Kent, C. J. The first question is whether the defendants are liable to be prosecuted in this action ? The court in which the proceedings under the absconding debtor act are pending, has an equitable jurisdiction over all claims between the trustees on the one hand and the debt- or and creditors on the other. This jurisdiction is given by the 29th section of the act (Laws of N. Y. vol. 1,244) which makes “ the trustees subject to such order for the more effectual execution of the act, as shall' be made in the court of which the person appointing them is judge.” It was in pursuance of this power that the court ruled in the case of — 174 — Cascaden (October Term 1800) that trustees were liable to account on the application of either debtor or creditor, and in the case of the trustees of Cowenhoven (January Term 1803J that they were entitled to apply for advice as to making dividends, on due notice being given to the creditor whose account was in question. The trustees very much resemble commissioners under the English bankrupt laws, since they are to liquidate all demands, and declare, as well as pay dividends ; and the practice in England is for the creditor to apply to the court of chancery for assistance in obtaining his dividend.—1 Atk. 90. The only instance, perhaps, in which a suit at law has been sustained even against the assignees of a bankrupt, is where the creditor’s debt has been proved and a dividend declared by the commissioners, and a refusal on the part of the assignees to pay it. In that case the dividend has been considered as so much money in the hands of the assignees for the use of the creditor, and an action at law was sustained for it. Brown v. Buller, Doug. 407. But the present is an action against the trustees before the demand has been adjusted, and without proof of any dividend having been declared. I am induced to think that the plaintiff has mistaken his remedy, and that he ought to have applied by petition to the equitable powers of this court to coerce the defendant into an adjustment of his demand and to account. The special provisions in the statute are inconsistent with a right to sustain the present action, and it would derange the whole order and system of those provisions.—■ Demands not yet due are proveable and payable upon are-bate of interest, and debts not proved at the two meetings appointed by the trustees for that purpose are barred from the benefit of a dividend. Other difficulties may be suggested which would embarrass a general right in the creditor to proceed against the trustees by the common law process, all of which may be avoided by confining the creditor to the remedy prescribed by the act. But the next question is whether we ought not now to proceed to give our advice and direction upon the case as before us ? We have the merits of the plaintiff’s claim, and we have a verdict ascertaining the matters of fact, and the — 175 — defendants have at this very term applied to us by petition " e ^ for direction in respect to their trust. I see no difficulty m taking up the case and making such order as the nature of it shall require. A point then that arises is, how far the statute of limitatirns is a bar to the plaintiff’s demand ? The defendants have thought proper to insist upon it, and I see no reason why they may not avail themselves of it equally as if their principal was himself the defendant.—In the case of the Assignees of England v. England, 5 Burr. 2628,* it was admitted that the bankrupt might object that the petitioning creditor’s debt was above six years old, though after the commission granted, a third person could not raise such an objection to defeat the commission. The trustees succeed. to the rights of their principal and consequently to his means of defence. The demands of the plaintiff arising on the second voyage are clearly not affected by this plea, as the debtor has not been within this state since those demands accrued. The right of action for demands existing prior to August 1796, was placed under the operation of the statute of limitations, as the parties were then within this state. It does not appear when Randall received payment from the French government of the bills of exchange drawn upon it in the summer of 1796, for the 20 barrels of flour belonging to the plaintiff. As the plaintiff and Randall were then together, and acting together in a joint concern, it may be presumed, that the flour was sold and the bills of exchange received in payment by Randall with the knowledge and consent of the plaintiff, and unless those bills were paid before the August following, there is no colour for the plea on any ground, because at that time no money had been received to the use of the plaintiff. This money may, or may not have been received, and I think it was incumbent on the trustees to have shown affirmatively, that the money was received before that time and in the hands of their principal. They set up the statute, and they must shew that it applies. The plaintiff calls upon them to account for the proceeds of these 20 barrels of flour, and to protect themselves under — 176 — the statute, they must show that Randall had the money in 7 J J August 1796, when he was last at New-Tork. They have not done this, and the facts in the case are not such as to require us to presume that the money had been received, as - early as at that period. The services 'of the plaintiff upon the first voyage stand upon a different ground. They had been rendered before August 1790, and for any thing that ap, pears to the contrary, the plaintiff was then entitled to payment for them. The general rule is that when the statute of limitations once begins to run, it continues to run notwithstanding any subsequent disability. The exhibition of the plaintiff’s claim to the trustees in December 1802, may be considered as equivalent to the commencement of a suit, and so it ought to be since an action at law will not lie against the trustees. The six years had however expired in August 1802, unless something had previously occurred to arrest the progress of the statute, and I know of nothing that could do it. The plaintiff was not prevented by any disability from suing Randall in August 1796, and the statute consequently then commenced to run, and the absence-of the debtor afterwards would not impede it. The plaintiff was always at liberty to sue out process against the debtor and continue it down on the roll. According to the established exposition of the statute of limitation, I am of opinion that the demand of the plaintiff as to his services for the first voyage was barred by the statute when he exhibited his claim in December 1802. Another question in the case is respecting the demand for salvage. This is a grave question considering the circumstances under which it is presented. Here was a rescue by force, not from an enemy, but from a friendly power. Randall the owner of the vessel and cargo took the law into his own hands, and violated his neutral duty, for he was bound to have submitted to a judicial inquiry. He would have been entitled to costs and damages if the seizure and detention had been unjust. Whether they were so or not, Í ;am not now to inquire. In judgment of law, such a rescue' — 177 — was not beneficial but injurious to the property, as it exposed it to condemnation from the very act of rescue. The general rule of maritime law is, that salvage is not due on recapture of neutral property, and the rule is founded on the supposition that no service is rendered, and on the presumption that a neutral carried in by a belligerent for examination, being in no danger, receives no benefit from recapture. (1 Cranch 36.*) This rule was relaxed by the British court of admiralty during the last war in respect to neutrals captured by French vessels, on the ground that a signal benefit was conferred on the neutral by rescuing him from the irregular and rapacious decrees of the French tribunals. In the present war, however, the exception seems to be abandoned and the general rule of the law of nations acquiesced in and enforced. (The Carlotta, 5 Rob. 54.) Whatever reason there might have been for the exception in the instance referred to, there existed no sufficient reason in the autumn of 1796, in respect to a British capture to withhold the application of the general rule. If therefore RandalVs vessel and cargo had been lawfully recaptured from the British, he tvould have been entitled to restitution without payment of salvage, but being unlawful and tortious, there is not, under any circumstances, a just ground or claim for salvage. The illegality of the rescue will not be questioned, for that would be to deny the right of visitation and search, and to justify resistance to it: it would be to deny the right of carrying into port for inquiry and examination, and to justify resistance to that act also. Right and duty are reciprocal in this case. The right to search and the right to carry in, necessarily imply the correspondent duty to submit. If was justifiable in his rescue, then it would have been lawful for any other American vessel that should have met him, to have rendered him assistance, a proposition leading directly to public hostilities, and too untenable to admit of a serious consideration; If the rescue was unlawful, no claim for salvage can be deduced from it, and for this we have the authority of the supreme court of the United States, in the case of Talbot v. Seeman. (1 Cranch, 28.) — 178 — “ To support the claim for salvage,” says the-chief justice, giving the opinion of the court, “the takingmust be lawful, for no claim can be maintained, in a court: of justice, founded on an act in itself tortious. On a recapture, made by a neutral power, no claim for salvage can arise, because the act of retaking is a hostile act, not justified by the situation of the nation to which the vessel making the r ecapture belongs, in relation to that from the possession of which such recaptured vessel was taken. No right can accrue from an act in itself unlawful.” The plaintiff was uparticeps crhninis with Randall in the rescue, and the law will not raise an assumption in'his favour. There is nothing in Randall's letter annexed to the case that contains .any recognition of his services in respect to the rescue ; and if it had contained any promise of compensation for that service, I should be inclined against its validity as being founded on an illegal consideration. I am accordingly of opinion, that the plaintiff’s claim for salvage and for his services as master on the first voyage ought not to be allowed, and that his claim for the proceeds of the 20 barrels of flour, together with interest on the same from the receipt of the money by Randall, and his claim for services on the second voyage, but without interest on such' claim as the same was an unliquidated demand, ought to be admitted. Each party ought to bear his own costs'arising on the suit, as it was a case of mutual mistake ; by the plaintiff in commencing the suit, and by the defendants in suffering it to proceed under a plea to the merits. Having thus settled the questions between the parties, if any difficulty should arise as to the liquidation and payment of the sum due -to the plaintiff, further application must be made to the court. Thompson, J. and Spencer, J. concurred. Footnotes [*] S. C. 2 Black. 702. [*] Talbot v. Seeman.