Stebbins v. Niles

Mr. Chief Justice Smith delivered the opinion of the court. This bill was filed by Thomas N. Niles, in the vice-chancery court at Holly Springs, against Russell Stebbins and others, the members of an association formed for the purpose of speculating in lands situated in the territory then recently acquired from the Chickasaws. The objects of the bill were to obtain payment of a claim, alleged to be a stated account arising under a contract between the said association and Niles ; to recover his proportion of the profits of the said speculation ; and to subject to the payment of these demands the unsold lands and the assets of the company. In 1844, a controversy having arisen between Niles and the defendants, growing out of the said speculation, Niles, who was then on a visit at New York, entered into a compromise, by which all of his claims against the defendants were adjusted. By this compromise it was settled, that Niles should surrender the notes and securities then in his possession, for lands of the association which had been sold, and all his interest in the same, and accept in lieu of all his claim, of whatever character, — 336 — to the lands and effects of the association, seven sections of the land which then remained unsold. These seven sections to be designated by lot, and to be conveyed by defendants to Niles on conditions specified, but which, at this stage of our investigation, it is unnecessary to state. The defendants, in their answer, set up this compromise, and rely upon it in bar of the relief prayed for by Niles in his bill. On the other hand, it is contended by Niles, that the circumstances under which the compromise was entered into, render it entirely inoperative and void. A material question hence arises. And as the construction to be put upon the contract between Niles and the defendants, with reference to his claim to be reimbursed from the proceeds of the sales of the land, the expenses incurred by him in making the locations and surveys, may materially influence our decision of that question. It is proper, therefore, and most in order, that we should direct our attention in the first place to that subject. No formal contract was drawn out and executed. To ascertain what its stipulations are, recourse is necessary to the correspondence of the parties, in which propositions were mutually made, and modifications proposed and accepted. The first letter in this correspondence bears date at Mobile, January 23, 1835, and was addressed by Niles to Samuel Steb-bins, who afterwards became a member of the association. Niles in this letter says : “ Referring to the conversation of last evening, I would remark that I hold fifty sections, or thirty-two thousand acres, in the recently acquired country of the Chickasaws. My investments are made at $1,000 the section, (six hundred and forty acres). I shall be compelled to make the balance of my payments within four months, and being under the necessity of raising the money for the balance unpaid, (I) would be willing to dispose of such proportion as would enable me to meet my engagements at $5 the acre; but would, by all means, prefer giving an interest of one third of the whole speculation to any party who would advance the cost of the lands, as I am convinced it would be more to my interest than to part with an acre at the price named ; the expenses attend — 337 — ing locations, sales to be borne pro rater, my own services gratis. I value none of the lands at less than $10 the acre, and much of it at a still greater price, at which I believe it may be closed in less than eighteen months. This done, I should wish to hold the balance for a still better price. The security to the party would be the money advanced, placed in your hands, and to be paid on the government titles at the rate of $1,000 as handed over. I have thrown these remarks hastily together at your suggestion.” This letter was sent by Samuel Stebbins, who afterwards became the agent in the negotiation of the contract, and also in its execution, to defendants at New York. They replied, under date of the first of April following. In this reply, which was addressed to Stebbins, they say: “ Inclosed you will find an agreement entered into hy the same individuals who subscribe this letter of instructions, by which you will perceive that the fifty thousand dollars, necessary to meet Mr. Niles’s proposition for fifty sections of land, is made up; and you can, therefore, close the matter with Mr. Niles on the following terms : — 1. “ Mr. Niles to attend to the location and sale of the said fifty sections of land, and take the warrants or titles in your own name, in trust for the parties concerned; and you are to pay to said Niles $1,000 for each title or warrant for six hundred and forty acres, so received by you, to the extent of fifty sections and no more. 2. “ Niles is to attend to the business of selling said lands in behalf of all parties interested, under your authority and instructions ; and all moneys received on account of sales made to be received by you at the time of conveyance, and to be applied to the repayment of the $50,000 hereby advanced with interest on same, until the whole be refunded; and all the proceeds which may arise from the sale of said lands, over and above the said $50,000 and interest thereon, to be divided, say one third to said Niles, and two thirds to the parties to this agreement, pro rata, according to the amounts advanced by each respectively. 3. “ If you close the above arrangement with said Niles, you are hereby authorized to draw pro rata on each of the parties — 338 — to this letter of instructions, and the agreement herewith, at not less than thirty days’ sight, as fast as the money is wanted, until the whole fifty thousand dollars is received by you for the fulfilment of your contract with Niles. 4. “ You will understand that it is the wish and intention of the parties to this contract, to sell so much of the land as will command a sum sufficient to repay the $50,000 advanced, with interest on the same, whenever, and as soon, as it can be done, at a price not less than $5 per acre. When the capital is thus secured and reimbursed, we will hold the remaining land at a higher rate, say $10 or $15 per acre, according to their respective value, and what may then be deemed most for the interest of all by a majority of those concerned.” Within a short time after its reception, this letter, with the exception of the third article, was communicated to Niles by Samuel Stebbins. The agreement between the parties in New York contains the following clauses explanatory of the objects of the association, to wit: “ Whereas, it has been proposed by Thomas N. Niles to make a purchase of fifty sections of land in the Chickasaw country, at the rate of $1,000 for each section, containing six hundred and forty acres each; which fifty sections have been contracted for by said Niles.” “ The parties whose names are hereto subscribed have associated for the purpose aforesaid,” — “ and do hereby constitute the said Samuel Stebbins, Jr., agent,” — “ and authorize him to apply the money to be advanced to ¡the making of said purchase, and to take the title or warrant to said property as trustee for all' the parties.” Niles made no reply to the proposition contained in the letter of instructions, until the 22d of May, when he was urged to give a positive answer. In his letter of that date, he says: “ In reply to your note of present instant, this moment received, I would remark that necessity, growing out of circumstances with which you are familiar, compels me to accede to the proposition of Mr. Mead and associates, rather than forego the speculation, with a full confidence in the liberality of the parties when they shall have become convinced of the magnitude of the operation. If Mr. Stebbins will be pleased to furnish — 339 — me with copies of correspondence, so far as consistent with the interests of those he represents, I will .reply fully, that all doubt in relation to the future may be removed.” In a subsequent communication, addressed to Samuel Steb-bins, Niles says: “ Referring to and confirming my note of Friday last on the subject of Chickasaw lands, I would remark, that the terms acceded to by me are strictly in accordance with instructions received! by you, as far as I had an opportunity of judging from your extracts as furnished; ” “ the probable necessity of prompt action compels me to make the sacrifice.” These extracts constitute the material portions of the correspondence ; and from them the terms of the contract must be aácertained. But as to what parts of this correspondence constitute the contract, and consequently as to its terms, the parties are at issue. On the side of the defendants, it is insisted, that the contract consists of the letter of instructions addressed by defendants to Samuel Stebbins, and Niles’s letter of acceptance. This position excludes, as forming no part of it, Niles’s letter of the 23d January, containing the original proposition. . ' Insuperable objections oppose this view of the subject. Disconnected with the other parts of the correspondence, it is impossible, out of the letter of instructions and the note of acceptance, to construct a valid contract. Its terms would contain no description of the subject-matter. It would refer to no locality, and would apply as well to land in Florida or Texas as to Indian reservations under the Chickasaw treaty. Such a contract would be void for uncertainty. We are compelled hence to look'beyond these documents, and necessarily and naturally refer back to Niles’s letter of the 23d of January. In that document and the letter of instructions, beyond all doubt, is to be found the actual contract. The letter of instructions having been unqualifiedly accepted, whatever it stipulates for must stand; consequently, nothing remains in force of the original proposition, which is inconsistent with or repugnant to its terms. In reference to the question'which we are considering, Niles — 340 — says, “ the expenses attendant upon the locations and surveys to be borne pro rata.” Was this offer declined by the defendants ? In other words, do the terms of the letter of instructions, by implication or otherwise, exclude the stipulation by which Niles would be entitled to reimbursement pro rata, of his expenses incurred in making the locations and surveys ? Not one word is said in the letter of instructions about the expenses. But that this offer was declined is manifest, as it is contended, from the following considerations. 1st. Because, the defendants say, “ Mr. Niles (is) to attend to the location and survey of the said fifty sections of land, and take the titles or warrants in your own name in trust for'the parties concerned; and you are to pay said Niles $1,000 for each title or warrant for six hundred and forty acres, so received by you, to the extent of fifty sections, and no more; ” but do not say that any sum beyond the thousand dollars per section is to be paid to Niles for any purpose, or under any circumstances whatever. 2d. Because, they say, that “ all moneys received on account of sales made, to be received by you at the time of conveyance, and to be applied to the repayment of the $50,000 hereby advanced, with interest on the same, until the whole be refunded; and all the proceeds which may arise from the said lands, over and above the said. $50,000 and interest thereon, to be divided — say one third to said Niles, and two thirds to the parties to this agreement; ” and again, make no provision for the payment to Niles of any amount beyOnd the $50,000 to be paid out on the delivery of the titles or warrants. And 3d. Because, in a series of instructions which appear to have been cautiously framed, we might expect that the item of expenses would not have been omitted, if the agreement had been, that they were to be paid by the defendants. These reasons are plausible, and certainly render the question at least a debatable one. But from a full and careful view of the whole transaction, we have been led to a different conclusion. Niles had contracted with Indians entitled to reservations under the late treaty with the Chickasaws for fifty sections of land. His contracts were made at the rate of $1,000 per sec — 341 — tion. On these contracts he had made a nominal payment, and would be compelled to complete his payments within a limited time, or forfeit his contracts. Not having the funds necessary for that purpose, he proposed to dispose “ of such proportion (of the land) as would enable him to meet his engagements at $5 the acre,” or to give to any one who would advance $50,000, the sum required for that purpose, “ an interest of one third of the whole speculation.” The defehdants, having been informed of this offer on the part of Niles, determined tó meet the second or alternative proposition, but upon terms by which it would be materially modified. A careful consideration of the documents connected with the transaction will leave little doubt as to the light in which they regarded the agreement which was afterwards closed between them and Niles.. In the agreement entered into by them for the purpose of meeting Niles’s proposition, it is recited that, “ whereas it had been proposed by Niles to make a purchase of fifty sections of land in the Chickasaw country at the rate of $1,000 for each section containing six hundred and forty acres, which said fifty sections had been contracted for by said Niles,” the parties whose names were subscribed thereto had “ associated for that purpose;” that Samuel Stebbins, Jr., had been appointed agent for all the parties concerned, and was authorized “to apply the money to be advanced to the making of the said purchase, and to take the title or warrant to said property as trustee of the parties” to the agréement. In the letter of instructions to their agent thus appointed, they say: “ Mr. Niles to attend to-the location and survey of the said fifty sections of land, and take the warrants or titles in your own name in trust for the parties concerned.” It seems clear from this, that the defendants designed in effect to take the place of Niles in regard to his contracts for the fifty sections of land, and did not regard it so much a purchase from Niles as from the Indians. - ’ Niles was to attend to making the locations and surveys,-and to take warrants or titles, not in his name, but in the name of Samuel Stebbins, their agent. It is true that Stebbins, as their agent, was to pay — 342 — Niles $1,000 for every warrant or title for six hundred and forty acres thus received by him. But that does not alter the essential character of the transaction. Niles could not “ take the warrants or titles ” in the name of Stebbins, or of any one else, unless he had the money to pay upon each contract. The payment of $1,000 for each section was intended for the purpose, and for no other, of enabling Niles to comply with his engagements, and by that means to have the warrants or titles made directly to the agent. Niles in this was to act for all the parties interested in the speculation. It follows, if this view of the transaction is the correct one, and the one which the defendants themselves took of it, that the expenses attendant upon the location and survey of the land/did not, properly speaking, constitute a part of the price or purchase-money to be paid by the defendants upon the delivery of the warrants or titles to the agent. These expenses were an incidental charge; the amount of which could not then be known, and which naturally and properly would be defrayed out of the proceeds of the land when sold, or contributed by the parties as they might occur. This will appear more evident when it is borne in mind, that the main object was to secure the profits expected to arise from the speculation. This could not be done without the requisite amount of money. $50,000, or $1,000 per section, were indispensable in order to enable Niles to meet his engagements. But it was not at all necessary that Niles’s expenses, incurred and to be incurred in making the locations and surveys, should be paid before the warrants or titles could be obtained from the government or the Indians. We think, therefore, that Niles’s proposition to divide the expenses of locations and surveys was not virtually rejected by the directions contained in the letter of instructions' by which Stebbins was required to pay $1,000 per section, upon warrant or title therefor being made to him. If it were assumed, that the proposition in relation to the expenses attendant upon the locations and surveys was acceded to by the defendants, it would follow of course, that so soon as expenses had arisen from that source, and were paid by Niles, — 343 — his right to reimbm-sement would attach. And it would follow hence, if the proportion of the expenses to the reimbursement of which he was entitled, was not paid, before a sale of the lands, that the proceeds would be chargeable with the repayment. Several very material modifications were made in Niles’s original proposition; but, as we have seen, the,letter of instructions is perfectly silent in regard to the items of expenses. It is highly probable, that in a series of instructions, drawn up with care, if the defendants did design to reject that part of the proposition, that express language would have been employed, manifesting such intention. The stipulation in the letter of instructions, that all moneys received by the agent on account of sales were to be applied first to the repayment of the $50,000 advanced by defendants, with interest on the same; and that all the proceeds of the land which might arise over and above that sum, and the interest thereon, should be divided, one third to Niles, and two thirds to the defendants, cannot be held to have that effect. For if it were conceded, that this stipulation was intended to apply to the gross amount of the proceeds of the land, and not to the net profits after deducting the expenses incurred in making the locations and surveys, it would not necessarily conflict with the proposition, that these expenses should be borne pro rata. This is clear. For if the offer in regard to the expenses was acceded to, Niles’s right to repayment would accrue before an acre of the land could be sold. But we do not'think that this stipulation was intended to have application to the gross amount of proceeds arising after the sums advanced by defendants, with the interest, had been refunded. It was only designed to lay down the rule for the distribution of the profits. This appears not to admit of doubt; for if otherwise understood, it would include within its operation the expenses which would occur after the locations and surveys had been completed, as well as those which had previously arisen. It will certainly not be contended, that Niles was not entitled to repayment of his expenses necessarily incurred in making sale of the land. But such would be the — 344 — result, if the expenses were not to be deducted before the division of the proceeds. Regarding the construction which we have put upon the contract as the true one, we will proceed to the consideration of another point, which should properly precede an examination of the questions arising upon the compromise entered into by the parties in the autumn of 1844. That point is, whether the account of Niles against the defendants, for expenses under the agreement, exhibited in 1838, has by their acquiescence or their acts acquired the character of a stated account. Niles in his bill alleges, that the account was received by defendants in the summer of 1838, and held by them without objection until 1844. The defendants say there was no acquiescence; on the contrary, they aver that the account was objected to. They say said account was presented in person by Niles, at a meeting of the association held in New York in September, 1838, and withdrawn by him upon perceiving the little favor which it met-with, and the determination of the association to disallow it. This statement is sustained by one witness, Samuel Stebbins, who, as we have seen, was the agent of the company, and, at the time of the transactions deposed to, a member. This witness says he recollected the claim of $8,829.30. Other accounts were received by him; but when precisely he could not say. He did not remember making specific objections; but thinks that he told Mr. Niles it was extraordinary. He further says, Mr. Niles, at the meeting in the fall of 1838, of the association, presented a claim which I find was for $8,829.30. Surprise was expressed at the charge, and he withdrew the account. This was all the evidence adduced by defendants in support of the answer in reference to this question. The deposition of Stebbins, which contains this testimony, was taken in 1847. In 1842, five years before that time, Stebbins wrote to Niles as follows: “ 1 have no distinct recollection of any specific understanding, that the expenses of the association were to be paid before the parties were to be reimbursed. "We may have talked this matter over, and it may have been agitated at the meeting at the National Hotel, but I cannot say positively that such is — 345 — the fact.” Here we perceive a manifest discrepancy between the deposition of this witness and his statements previously made; which shows, at least, a very defective memory, and must, upon principle, detract materially from the weight of his testimony. On the other side, the defendants admit that Niles, in the summer of 1838, rendered an invoice of the lands purchased for the association ; which shows the cost of the same, including the expenses; the whole amount of which is stated on the invoice to be $13,242.18. In that invoice, the company are charged with their proportion of the expenses at $8,829.30, as per account rendered. From the answer and the proofs, we conclude that the defendants were in possession of the account containing the separate items of the aggregate charge fqr expenses incurred before the meeting of the company, which took place at the National Hotel in New York, September 10th, 1838. It appears from the minutes of that meeting, which are made an exhibit to their answer, that Niles made a general statement of his operations in behalf of the company, as regarded his purchases, character of titles, &c.; and explaining such matters as required elucidation, which was considered satisfactory by those present. Samuel Stebbins was directed, by a resolution of the meeting, to execute a power of attorney to Niles, authorizing him to effect sales of the lands agreeably to the instructions of the company, and to give bonds for titles to the purchasers. Stebbins executed the letter of attorney as directed on the 14th; and attached thereto the invoice, showing the cost of the lands to be $58,829.30. The invoice is referred to in the instrument, as the “schedule hereto annexed,” at the foot of which is written, “ Pro rata proportion of expenses as per expense account herewith handed.” Stebbins at that time stood in the double relation of a member of the company and its agent. These facts, we think, outweigh the answer, sustained as it is by the doubtful testimony of. one witness. There is no rational mode of accounting for the conduct of the meeting, unless we suppose that Niles’s account was satisfactory to the association. If the claim for expenses was not authorized by — 346 — the agreement, the company could have looked upon it in no other light than as an impudent and fraudulent attempt at imposition. A charge of that character, which amounted to near one fifth of the entire investment, could not have escaped observation. It was a matter which required elucidation, and it gravely admits of doubt, that unless a satisfactory explanation had been given, the proceedings of the meeting would have borne unmistakable evidence of dissatisfaction. The act of Samuel Stebbins in attaching the invoice to the power of attorney, was an implied recognition of the justice of the account. The supposition is not to be entertained, that if Stebbins thought it extraordinary, knew it to be unauthorized, and that the company had determined to disallow it, he would thus have recognized its validity. Upon a full view of the transaction, we conclude that this account was received without objection. It is not pretended that any objection was afterwards made to this or to any other account, and communicated to Niles before December, 1843. At that time, as stated by defendants, Daniel Low, a member of the company, told Niles, that there were objectionable and inadmissible items in his account, particularly the charge for expenses of ¡§8,829.30. Previously, however, in August, 1842, Niles had, in compliance with the wishes of the company, conveyed through their secretary, rendered another account current, which brought down his transactions to the 1st of June, (1842.) By .that account, he claimed a balance in his favor of §>12,312.29. The objectionable item of §8,829.30 was inserted; and defendants admit that no objections were made to it, when received, and not a word of dissatisfaction is heard for the following fifteen months. This silence is reasonably accounted for upon the supposition, that the account was satisfactory to the defendants. They, however, explain their silence in a different way. They say they made no objections, because they were apprehensive, that if they objected to Niles’s account, he might become indisposed to visit New York. But how does this reason,- for not making objection to the account, comport with their statement, that Low, in December, 1843, objected pointedly to Niles’s account, and particularly to the expense item of §8,829.30 ? They were — 347 — certainly as desirous in December, 1843, that Niles should go to New York, as they had been‘at any previous time. How can it be supposed that the defendants, from September, 1842, to the December of the following year, were restrained from objecting to an account which they assert to be unauthorized and unjust, by the apprehension, that if objections were made to it, Niles for that reason might refuse to visit New York? and yet at the very time they are urging him to go there, they inform him that his account was unjust, and that one particular item, which constituted more than one half of his claim, would not be allowed by the company ? It is said, however, that this statement in the answer is sustained by other evidence. Stor-row is the only witness; he testified that he had been told by Daniel Low, that Niles’s charges were disapproved of by him, and that he had so stated to Niles at Pontotoc in 1843. But Walter Jagger swears, that he had a conversation in February, 1844, with John Brown, one of the defendants, who informed him, that Low had returned from Pontotoc, and reported that Niles had conducted, and was conducting matters in Mississippi to his entire satisfaction. Storrow’s testimony, therefore, adds little strength to, the assertion, that Daniel Low, in 1843, while at Pontotoc, made objections to the account. The supposition that Low, whilst in Mississippi, made the objections imputed to him, to Niles’s account of 1842, is irreconcilable with the previous silence of the defendants upon any ground, and particularly so upon the reason assigned in the answer. Nor is that supposition more in harmony with the tenor and manifest object of Low’s letter to Niles of 2d March, 1844, or with the request contained in the letter to Orne of the 4th. In that correspondence, there is not the least hint, that the writer, Or the defendants were dissatisfied with the account of Niles; rather the contrary; and the great anxiety that he should speedily visit New York is not disguised. For these considerations, we cannot doubt, that whatever were the objections, if any, which were privately entertained by the defendants to Niles’s accounts, they were never made known prior to the summer of 1844. The defendants, then, held Niles’s accounts, the first from 1$38, and the second from — 348 — 1842 until 1844, without objection. What was the result? Did these accounts become stated accounts in 1844? What shall constitute, according to the understanding of a court of equity, a stated account, is in some measure dependent upon the circumstances of the case. It is not essential, in any case, to the validity of a stated account, that it should be signed by the parties. Willis v. Jernegan, 2 Atk. 252. But a stated account properly exists only where accounts have been examined, and the balance admitted as the true balance between the parties, without having been paid. It is said by this court, in Davis v. Tiernan & Co., 2 How. 804, that a stated account is an agreement between both parties that all the articles' are true. But this agreement, or the admission of the party against whom the account is rendered, may be implied from circumstances. As in the case of merchants residing in different countries; if an account be transmitted from one to the other, and no objection is made after several opportunities of writing has occurred, an admission of the correctness of the account may be presumed. The retention of the account, in such cases, without objection, is evidence of the admission of the party against whom it is rendered of its justness. Hence the rule as laid down by Judge Story, “that an account rendered shall be deemed an account stated, from the presumed approbation or acquiescence of the parties, unless an objection is made thereto within a reasonable time.” Applying this rule to the facts before us, we cannot doubt that Niles’s accounts, from the approbation and acquiescence of the defendants, became stated accounts in 1844. In the order which we have proposed, the next subject of examination is the question, whether the compromise set up by the defendants in bar of the relief prayed for in the bill, was a valid adjustment of the matters embraced by its terms. The defendants were residents of the city of New York, at which place Niles was on a visit. During his stay there they caused him to be arrested in a suit in chancery. Bail was demanded in the sum of $50,000. This bail he was unable to give. The arrest was made in the forenoon of the 15th October, 1844, and at about 5 o’clock, p. m. Niles accompanied the — 349 — officer to the house of William Stebbins, where he'met Russell Stebbins, the president of the- association, and their solicitor, George B. Butler. This interview continued until near 9 o’clock, p. m., when Niles having-signed the agreement, he was discharged from custody. Niles was not furnished with ,a copy or abstract of the bill which was filed against him. There is, however, no evidence that he desired to see the bill, or requested to be furnished with an abstract of it. During the interview several propositions were made, discussed, and declined. The persons present were William Stebbins, Russell Stebbins, Samuel Stebbins, the solicitor of -the company, and the officer who held Niles in custody. Niles was very desirous that the settlement should be postponed until the following day. A request to that effect was declined by Russell Stebbins, who assigned as a reason for refusing, “ that every thing was then known which could be known.” These were the immediate circumstances connected with the compromise which was then entered into, and by which Niles agreed to surrender the notes and securities then in his hands for lands which had been sold, and all his interest therein, and to accept seven of the'thirty-nine Sections which then remained unsold, “ in lieu of all claims, compensation, charges, disbursements, services, and interest in the property, assets, securities, or sales of said company.” ' These seven sections were to be selected by lot, and conveyed to Niles as soon as it could be ascertained that “ thirty-nine sections of the original fifty remained unsold and free from incumbrances had or suffered by him, and were still vested in Samuel Stebbins.” It was said in argument, that Niles was illegally arrested; that the fiat awarding the process, which was a writ of ne exeat, required the defendants to give bond before it issued, but that no bond was given. The evidence in support of this position, is, perhaps, insufficient; ancj we.will proceed to inquire,whether upon the law applicable to contracts made by a party while under imprisonment, this compromise should be enforced. It is no objection to the validity of a contract fairly entered into, where no advantage was sought or taken by the party, that, at the time of entering into it, he was under arrest. But — 350 — all contracts made by parties in that condition, are watched with great jealousy by courts of equity. Upon settled principle, where legal process has been used as a means of oppression, and to extort disadvantageous terms from a party in custody, instruments so obtained will be set aside. Nicholls v. Nicholls, 1 Atk. 409; Roy v. Beaufort, 2 Ib. 190; Watkins v. Baird, 6 Mass. 506; Foshay v. Ferguson, 5 Hill, 154; Kelsey v. Hobby, 16 Pet. 269. Applying this test to the transaction, we think that the compromise should not be enforced. It is evident to us, upon the construction which we have placed upon the original contract for the purchase of the fifty sections of land, and the light in which we regard the accounts of Niles rendered in 1838 and 1842, that flagrant injustice was done to him in that settlement. At the date of the compromise, eleven sections of the land had been sold for the aggregate amount of $50,788.30. Of that sum, Niles had received in cash $21,983.53. Notes amounting to $28,804.73, taken on account of the sales, were in his hands. From the cash received, Niles had paid to defendants $12,500. The sums paid out by him on account of expenses, amounted in the aggregate to $14,112.05. Two thirds of this sum, with interest,' was properly chargeable to them. Charging Niles with interest upon the amounts received and not paid over to defendants, and debiting them with interest on the $12,500, Niles was entitled to a balance of $7,235.90. It cannot be said with propriety that Niles was debtor to the company for the uncollected notes then in his possession. In them he was interested to the extent of one third of their amount. He held them as the agent of the defendants, who could have put an end to his authority to collect them by a revocation of his power of attorney. So' in regard to the original sum advanced for the purchase of the land, Niles with less reason could be said to be the debtor of the company. The lands had been paid for, and conveyed to Samuel Stebbins as trustee for the parties interested. The title to the unsold lands was still in him; and Niles could exercise no control over them except as his agent. — 351 — In this condition of things Niles visited New York, without, as we have seen, an intimation that his accounts previously rendered would be contested by the defendants. That visit was made after repeated and pressing invitations. His object, according to the statement of one of the defendants, was “to settle the affairs of the company, without delay, by a division of the lands, notes, cash,” &c.' He was, as we have seen, arrested; and bail in the sum of $50,000 was demanded of him. Not being able to give the bail required, he was held in custody until he signed the agreement, which we will proceed to show was grossly unequal and unjust. The unpaid balance of the expense account, the payment of which Niles had a right to demand at the date of the compromise, amounted to $7,235. The defendants had received $12,500; and there were notes on hand taken for the land then sold, amounting to upwards of $28,800. Deduct from these amounts Niles’s balance of $7,235, and the remainder, together with the proceeds of the unsold land, should be applied first to the reimbursement of the $50,000 advanced by defendants, with interest thereon, and, in the second place, should be distributed between the parties, in the proportion of one third to Niles and two thirds to the defendants. After payment of Niles’s balance, cash and notes amounting to about $35,000 would remain -in the hands of the company. Estimating the value of the thirty-nine sections.remaining unsold according to sales made of twenty-four of the fifty sections, they were worth $150,652; which amount, with the balance of cash and notes on hand at the date of the compromise, makes the sum of about $186,000. Deduct from this amount the principal advanced, with interest thereon, to the date of the compromise, which amounts to about $84,750, and we ascertain that the probable value of Niles’á interest in the property of the association was about $35,000. By the compromise, Niles gave up that interest and the balance of his expense account, which, in the aggregate, amounted to about $42,250; and was to receive in lieu thereof seven sections of the unsold land. These sections, at their estimated value, would be worth $27,000, which was less by $15,000 than — 352 — his interest and claims. This sacrifice was too great, the injustice too manifest, to permit us to doubt that Niles would not have consented to the arrangement, if he could by any other means have avoided imprisonment. But it is said Niles, by subsequent acts, ratified the compromise, and should not now be heard' to question its validity. The acts relied on as amounting to circumstances of recognition are, that Niles, after the agreement had been entered into and the assets turned over to the company, expressed himself satisfied with the settlement, and to an offer, made by Russell Stebbins, to open the settlement, if he preferred, and to go on with the suit, he declined ; that on the day on which the land allotted to Niles was selected, he surrendered to defendants certain securities which had been previously overlooked; and that he acquiesced in the settlement for more than a year. It was in proof, that Niles was detained in New York, by business, until the latter part of the November following the settlement; that he was confident the whole proceeding was illegal, and felt assured, that upon his return to Mississippi he could obtain a rescission of the settlement, which he averred was obtained by unfair means. It appears, that while he remained in New York, attending to his business, he was in constant apprehension of further detention, or of being again arrested, and for that reason avoided going into public. There is no reason to doubt his conviction as to the illegality of the agreement, and his determination to have it annulled, if practicable, on his return to this State. It is possible that his conduct in New York immediately following the settlement, and which has been construed into acts of recognition, was dictated by his apprehension of again being arrested. It must be admitted, however, that if the compromise were of doubtful illegality, we would be warranted in holding him bound by it. But the true point of inquiry here, is not, whether the compromise shall be presumed fair and equitable from these acts of recognition, — for of its invalidity we are sufficiently convinced, — but whether the rights of the defendants have not been so affected by the acts of Niles, that it would be unjust and fraudulent in him now to seek a rescission of the settlement. — 353 — Hence, if we deny the relief prayed for, it will not be on the ground, that no unjust advantage was taken of Niles in arranging the terms of the compromise, but for the reason, that he had placed himself in an attitude in which he was not entitled to invoke the aid of a court of equity. But we apprehend that there is no pretence for saying, that such is bis position. We think, therefore, that the vice-chancellor was correct in ordering the settlement to be set aside. By the terms of the original contract, the “warrants or titles ” to the fifty sections of land were to be taken by Niles to Samuel Stebbins, as trustee for the parties. Some change appears to have been made in this part of the agreement. At least it was not observed. The Indian deeds were riot, in the first place, made to Stebbins, but to Niles. Why this was done, or whether it was done by the authority of the company, does not. appear, from any thing contained in the record. Niles after-wards conveyed the lands, with covenants of general warranty, to Samuel Stebbins. All of the deeds to Stebbins were executed before the 10th of September, 1838. On that day a meeting of the company was .held in New York. Niles was present; he made a general statement of his operation in their behalf; exhibited his titles, .and explained such 'matters as required elucidation, which was regarded as satisfactory by all present. A resolution was thereupon passed, to the effect, that the deeds should remain as they, then stood in the name of Samuel Stebbins as transferred to him by said Niles; that said Stebbins should execute to Niles a power of attorney, authorizing him to effect sales of the lahd and give bonds for titles, and that said Stebbins should execute conveyances to the purchasers on the fulfilment of. their contracts; and that said Stebbins should be indemnified against any loss that he might sustain, by reason of any conveyance of the lands which he might effect by deeds with covenants of general warranty of title. The titles to seven of the sections of land which fell to the defendants, by the division under the compromise, were after-wards ascertained to be imperfect. The deeds for these sections, made by the Indians to Nilefe, were not approved by the — 354 — president according to the stipulations of the treaty with the Chickasaws. The defendants allege in their answer, by way of cross-bill, that Niles was bound, by his contract, to furnish perfect titles, and insist that he-shall be compelled to have the titles to said sections perfected, or to refund the money advanced by them, in payment for the same with interest. On the other hand, it is contended for Niles, that he was bound only to furnish the deeds of Indians entitled to reservations under the treaty, which had been located in accordance with its provisions; bearing the certificate of two of the chiefs named in the fourth article, that the Indian vendor was “ competent ; ” and the further certificate of the agent, that the certificate of the chiefs was true, and that a fair consideration had been paid for the land by the vendee. And further, that if Niles were in fact bound by his original contract for perfect titles, or was liable on his covenants of title contained in the deeds to Samuel Stebbins, it is insisted, that he was released from all liability by the bond of indemnity executed by said Stebbins and the defendants. That bond, we presume, was made pursuant to the resolution of the company, adopted at the meeting of the 10th of September'. It was executed on the 14th of September, and was made to Niles as well as Stebbins; the latter occupying the double capacity of obligor and obligee. If it should be held, that this bond relieved Niles from all obligation in regard to the titles, it will become unnecessary to examine the first proposition. It is recited in the bond of indemnity, that the obligors were equally interested in the purchase of fifty sections of land “ designated by deeds from said Niles to said Stebbins-; ” “that the transfers were made at the instance of the obligors;” that they, having confidence in the Indian titles acquired through said Niles, and being desirous of saving harmless the obligees, bound themselves “to protect and defend' any. and all such warrantee deeds as now are or may be issued by the parties of the second part, predicated on Indian titles; ” and “ in the event of difficulty in or with any one of said titles,” to indemnify them for “ all expense or loss ” occasioned thereby. — 355 — It is our duty to place that construction upon the indemnity ■which will best accord with the intention of the parties. To arrive with certainty at that interpretation, we must direct our attention to the condition and relative position of the parties, as well as the language of the instrument. Samuel Stebbins was the holder of the legal title to the land. It was indispensable, therefore, that all titles should proceed from him. In all transfers.he would be personally responsible upon the covenants for title contained in his deeds. Hence, it was important to him; that he should have indemnity against such responsibilities. Niles stood in a very different attitude. If bound at all, he was bound by the covenants in his deeds to Stebbins. A covenant of warranty of title inserted in a deed executed by Stebbins, would neither add to nor diminish his obligations. As the agent or attorney of Stebbins in effecting sales, he incurred no personal responsibility to the vendees. He could transfer the legal title, which was in Stebbins, and might bind him by covenants. It could not, therefore, have been the object of the obligors in the bond to secure Niles against any future liability. His liability arose either under the original agreement, or upon his covenants to Stebbins. That was a past liability. We are compelled to understand the bond as referring to that liability and to no other, so far as Niles was concerned. Any other interpretation would deprive definite and express terms' of all meaning. The obligors bound themselves to ‘f defend and protect any and all such warrantee deeds” as were then issued by the obligees, predicated on Indian titles. To what deeds could this language have reference, if not to the' deeds of Niles conveying the land to Stebbins, who then had made no transfers ? It is important to observe, that the bond is several and not joint as to Niles and Stebbins. We are satisjiec!, that it was the intention of the company to indemnify Niles against any loss or damage which might arise from his deeds to Stebbins; and Stebbins from the consequences of future warranties. Holding this view of the subject, our next inquiry is as to the light in which we are to regard the indemnity. Shall we give to it the effect and operation of a release, by which Niles — 356 — was discharged from all bis obligations arising from his previous covenants of warranty? We do not doubt, if at the suit of third.persons Niles were made liable upon his covenants in the deeds to Stebbins, that Niles could recover, in an action against the obligors, all the damages previously assessed against him. It is equally clear, that Samuel Stebbins could not, in the face of his covenant to save Niles harmless against all liability on his warranties,' for a breach of those warranties, maintain an action at law against Niles. It is in effect, therefore, a covenant not to sue. No formal words are necessary to constitute a release, where the intention of the parties is manifest. A covenant, therefore, not to sue, must, we think, in the very nature of things, amount to a release. We have examined the different objections urged to the decree, and after a careful consideration of the whole subject, we are satisfied that there was no error in it. Decree affirmed. The plaintiffs in error, by their attorneys, filed a petition for a reargument, which was refused by the court.