Nixdorff v. Smith. 16 P.

agreement, dated the 9th day of August, 1833, and signed by the parties, was made part of the bill. It is there charged, that the amount of debts paid by Hager and Smith for Nixdorff and Hager, including interest to the first of November, 1837, was $45,992.52; and the amount collected for them, with interest, to the same period, amounted to $39,611.09, showing a balance against Nixdorff and Hager of $6,381.43.

It is further stated in the bill, that the firm of Hager and Smith afterwards purchased of Nixdorff, who was then doing business on his own account, goods and merchandise to the amount of $4,500, for which they gave their promissory notes; that Hager and Smith afterwards failed in business, and Hager removed to the western country, leaving Smith to pay the debts of the firm; that Nixdorff has brought suit against him, on the common law side of the court, upon the promissory notes; and refuses to permit him to set off the above balance of accounts in that suit. He therefore prayed that Nixdorff might be enjoined from proceeding further at law; and that by decree of the court this equitable offset should be allowed. The prayer for the injunction was granted.

Nixdorff, in his answer, denied that any balance was due from Nixdorff and Hager to Hager and Smith; and he also denied that he had ever refused to go into a settlement of the accounts between the two firms.

By order of the court below, the accounts between the parties, as set up in the bill and answer, were referred to an auditor, with many special instructions. By his report, it appears that the amount of debts collected by Hager and Smith for Nixdorff and Hager, under the contract between the parties, amounted to $42,026, including interest, to which he added the amount of goods contained in the inventory, after deducting twelve and a half per cent. from Nixdorff's half, making in all $54,830.26, *to [*134] the credit of Nixdorff and Hager; and he charged them with debts paid under the contract, including interest, the sum of $45,992.52; to which he added the sum of $5,000 paid by Smith to Nixdorff, making in all the amount of debits $50,992.52; showing a balance in favor of Nixdorff and Hager, of $3,837.74.

To this report the complainant filed the following exception: "The auditor has erred in this, that he has charged the complainant with the amount of the whole inventory of the goods of Nixdorff and Hager. Whereas the complainant was purchaser of one half of the goods only, and should have been charged with no more; the other half being the private property of Hager, and as such brought into the capital stock of Hager and Smith." The court

Nixdorff v. Smith. 16 P.

sustained this exception, and directed the auditor to restate the accounts between the parties.

In the reformed report, the auditor charges Nixdorff with $45,992.52, for debts paid by Hager and Smith for Nixdorff and Hager, and adds the $5,000 paid by Smith to Nixdorff; making Nixdorff's debt to Hager and Smith $50,992.52; and he credits Nixdorff by $40,376.60, for debts collected for Nixdorff and Hager, to which he added $5,975.32, for Nixdorff's half of the goods; making the whole amount of credits $46,351.92; leaving a balance due from Nixdorff and Hager to Hager and Smith of $4,640.60. The amount of the debt due from Hager and Smith to Nixdorff, for which Smith was sued, being $4,874.45, the auditor deducted the balance found due from Nixdorff and Hager, from that sum, and reports a balance finally due to Nixdorff of $233.85; and excludes Hager's [*135] half of the goods, included in the inventory, entirely * from the account; on the ground that they were not subject to the debts of Nixdorff and Hager.

To this part of the report the defendant excepted. But the court overruled the exception, confirmed the reformed report of the auditor, and decreed that the injunction should be made perpetual, except for the sum of $233.85, as reported by the auditor.

A very brief examination of the case will test the correctness of this decree. The equity set up in the complainant's bill rests entirely on the assumption that, upon a full and fair settlement of accounts, under the contract referred to, a large balance would be found against Nixdorff; and, upon the apparent establishment of this fact, is the decree founded. If, however, it be shown that instead of Nixdorff being indebted to Hagar and Smith on such settlement, they are largely indebted to him, the bill will be without equity, and the decree of course erroneous. By bringing into the accounts all the effects of Nixdorff and Hager, the auditor's first report shows very satisfactorily a considerable balance in favor of Nixdorff.

But the complainant's counsel seems to have taken up the idea that the $5,000 paid by Smith to Nixdorff applied exclusively to the payment of Nixdorff's half of the goods, and that the legal effect of the payment was to release Hager's half of the goods from liability to the debts of Nixdorff and Hager; and this principle was recognized by the auditor in his reformed report, and by the court in their decree, notwithstanding the allegations in the complainant's bill; and the stipulations of the contract show clearly, that the $5,000 were paid upon the purchase of the whole of Nixdorff's interest. Whether the payment was special or general, is not material to the merits of the case, but it is very material in considering the effect ascribed to it

Nixdorff v. Smith. 16 P.

in the court below. For, if the payment had the power to release Hager's part of the goods from liability, because Nixdorff had sold to Smith his part of them, and received part of the purchase money, it must necessarily have the same effect if it applied to the sale and purchase of the whole of Nixdorff's interest. The fact being that Nixdorff did sell the whole of his interest to Smith, and received the $5,000 in part payment of the whole, to

*

carry out the principle assumed, the whole of Hager's in- [* 136 ] terest in the firm of Nixdorff and Hager was thereby dis

charged from liability to the payment of their debts, and the burden of paying them devolved upon Nixdorff. A course of reasoning leading to conclusions so much at variance with law and justice, is answered by merely stating it.

This singular error originated in charging Nixdorff with the $5,000 paid by Smith on account of the whole purchase, and then refusing to charge Hagar and Smith with the whole amount of the partnership effects in their hands, originally belonging to Nixdorff and Hager. The very moment that Nixdorff was charged with this sum of $5,000, the payment of it by Smith was neutralized, and the transaction between the parties stood as though no payment had been made. The only consideration left, therefore, to support the sale by Nixdorff to Smith, was the undertaking of Hager and Smith, in the written contract, to pay the debts of Nixdorff and Hager. In this aspect of the case, the liability of all their effects in the hands of the former to the payment of the debts of the latter, cannot be doubted. By the first report of the auditor, it appears that he settled the accounts between the parties upon the principles here suggested—that is, by charging Hager and Smith with the whole inventory of the goods, and the money collected for Nixdorff and Hager, and by charging Nixdorff with the money paid by Hager and Smith in discharge of the debts of Nixdorff and Hager, and also with the $5,000 paid to him by Smith. And upon this statement of the accounts, as already shown, a considerable balance appears in favor of Nixdorff and Hager.

But the auditor afterwards, it appears, became a convert to the doctrine of the complainant's counsel, and, in his reformed report, excluded Hager's part of the goods from the settlement altogether, and thereby created a seeming balance in favor of Hager and Smith to nearly the amount of their debt to Nixdorff, on which the suit at law was brought. This statement of the accounts by the auditor in his first report, as far as it has been here examined, is perfectly correct, and ought to have been confirmed by the court. The equity set up in the bill depending entirely on the truth of the allegation that the balance would be in favor of Hager and Smith, upon such set

Randolph v. Barrett. 16 P.

[137] tlement of the accounts, the balance being clearly estab lished against them, and in favor of Nixdorff, extinguishes, therefore, all pretence to any equitable set-off in favor of Smith. The decree of the circuit court is, therefore, reversed, the injunction dissolved, and the bill dismissed.

JOHN H. RANDOLPH, Executor of ALGERNON S. RANDOLPH, deceased, Plaintiff in Error, v. ISRAEL BARRETT, Executor of JOEL F. RANDOLPH, Deceased, defendant in Error.

16 P. 138.

Under the 32d section of the Judiciary Act, (1 Stats. at Large, 91,) the court may, after a plea in abatement, allow a summons and declaration to be amended, by striking out "administrator, &c.," and inserting "executor, &c."

Motion by the plaintiff for leave to amend, after a plea in abatement, and an order granting leave, disposes of the plea, and, as the defendant appeared only to plead in abatement, he is then out of court, and judgment by default against him is regular, if he do not again appear.

THE case is stated in the opinion of the court.

Henderson, for the plaintiff.

No counsel contra.

[ *141 ] * M'KINLEY, J., delivered the opinion of the court. This is a writ of error to the circuit court of the United States for the southern district of Mississippi.

The defendant in the court below was served with a writ of sum mons in an action on the case, and a declaration was filed against him as administrator of all and singular the goods and chattels, &c., of Algernon S. Randolph, deceased, who died intestate, &c. To which the defendant entered an appearance, and filed in person a plea in abatement, averring that he was not administrator of the goods and chattels, &c., which were of the said Algernon S. Randolph, at the time of his death, &c.; but that he, the said John H. Randolph, was the only executor of the last will and testament of the said Algernon S. Randolph, deceased, &c. Whereupon the plaintiff moved for leave to amend the summons and declaration, by striking out the words "administrator of all and singular the goods and chattels, rights and credits, which were of Algernon S. Randolph at the time of his death, who died intestate," and inserting "executor of the last will and testament of Algernon S. Randolph, deccased." The leave was granted, the amendment ordered, and the cause continued. At the next term of the court, judgment by default was rendered against the defendant.

United States v. Breward. 16 P.

To reverse this judgment, the counsel for the plaintiff in error relied on these grounds: First, The circuit court had no authority to order the amendment of the summons and declaration, there being nothing in the record to amend by. Secondly, No judgment could be rendered against the defendant until the plea in abatement was disposed of. Thirdly, Judgment by default could not be taken against the defendant after appearance entered.

The power of the court to authorize amendments where there is any thing on the record to amend by, is undoubted. In this case, the defendant admitted by his plea that he was the person liable to the suit of the plaintiff, but averred that he was executor, and not administrator. Whether he acted in one character or the other, he held the assets of the testator, or intestate, in trust for the creditors; and when his plea was filed, it became part of the record, and furnished matter by which the pleadings might be amended. Mestaer v. Hertz, 3 Maule & Selwyn, 450; Barnes's Notes of Prac- [142] tice, 5; 1 Mass. 433. And, in addition to these authorities, express authority is given by the thirty-second section of the Judiciary Act of 1789 to the courts of the United States to permit either of the parties, at any time, to amend any defect in the process or pleadings upon such conditions as the courts shall, in their discretion, and by their rules prescribe. This amendment is, therefore, not only authorized by the ordinary rules of amendment, but by the statute also.

The object of the defendant in filing the plea was to prove that he was not administrator, and that he was executor, and thereby to abate the plaintiff's writ. The motion of the plaintiff for leave to amend the writ and declaration, so as to charge the defendant as executor, and not as administrator, amounted to a confession of the truth of the plea; but instead of abating the writ, according to the prayer of that plea, the court granted the motion of the plaintiff, and ordered the amendment. This proceeding was a final disposition of that plea in abatement, and, as the defendant appeared for the purpose of pleading in abatement only, the decision of the court upon the plea, put him out of court; and for failing to appear again and plead to the action, judgment by default was properly rendered against him. The judgment of the circuit court is, therefore, affirmed.

THE UNITED STATES, Appellant, v. JOHN BREWARD, Appellee.

16 P. 143.

A survey by the surveyor-general of Florida, made after January 24, 1818, at a different place from that called for by a grant, is inoperative.

But if the grant sufficiently described the land to enable a surveyor to run the lines, it was valid, and a survey will be directed.