The complainants hill is founded upon a contract entered into between the parties in the year 1857. The complainant was a broker, transacting business in the city of New York. The defendants are a corporation chartered and conducting railroad operations in the state of Kentucky. In May, 1857, the defendants placed in the hands of the complainant, to be sold, exchanged, or negotiated for their benefit, one hundred and twenty-four bonds of the company, for $1000 each. Dor these bonds the complainant was to account to the company at the rate of sixty-five dollars on the hundred. After satisfying an acceptance for $15,000, made by the
On the fourth of August, 1857, the company, by a letter of attorney of that date, reaffirmed their contract with the complainant, and constituted him their attorney in fact, empowering him, among other things, to exchange their bonds for real estate or other property, to sell, exchange, or mortgage such real estate so as to convert it into cash or on reasonable time, and to control such real estate as agent or trustee of the company.
By virtue of this contract, and as the bill alleges by virtue of instructions given or of authority conferred by the president of the company, the complainant disposed of thirty-nine of said bonds, viz. twenty-three in purchase of a farm at Prospect Plains, with the stock, farming implements, and growing crops, in this state, nine in exchange for real estate in the city of New York, five in purchase of an invoice of marble at San Francisco, one delivered to counsel in payment for his services, leaving one not clearly accounted for. The remaining eighty-five bonds passed into the hands of a receiver, appointed by the Supreme Court of the state of New York upon the application of the company.
In the month of December, 1857, the. letter of attorney to the complainant was revoked, and in January, 1858, by an injunction issued out of the Supreme Court of New York, at the instance of the company, he was restrained from any further sale or disposition of the bonds.
The bill charges that the contract between the parties was violated by the company, and claims that, by virtue of the contract, the complainant is entitled to receive thirty-five per cent, on the par value of the bonds thus
The hill prays that an account may he taken of all the transactions between the parties in respect to their said-agreement, that the company may be decreed to pay to the complainant what is justly due him, and that the defendants may he restrained from proceeding at law against the complainant.
It is admitted by the complainant’s bill, and established by the evidence in the cause, that a suit Was instituted by the company against the complainant in the Supreme Court of Yew York in relation to these bonds, and a judgment therein recovered against the complainant prior to the commencement of this suit. It becomes material, therefore, to inquire how far the judgment in that cause may have concluded the rights of the parties or may affect the complainant’s title to relief in this court.
The railroad company, by their complaint in that cause, after setting out the contract between the parties, claimed from the defendant sixty-five dollars on the one hundred of the amount of the bonds disposed of by Brown, and that he should surrender the residue of the bonds remaining undisposed of, or pay to the company sixty-five dollars on the one hundred on account thereof, The prayer of the complaint was — ^(1) that the defendant should be adjudged to deliver to the company the bonds retained by him, and that in the meantime he should he enjoined from disposing of them; (2) that the property taken by Brown for the bonds disposed of by him should he disposed of under the order of the court, and the proceeds thereof applied to the payment of sixty-five per cent, of the amount of the bonds disposed of; and in case the pro
By his answer to this complaint, Brown, the defendant, set up by way of defence, among other matter's — the powers conferred upon him by the company as their agent and trustee; the exchange of the bonds for real estate in pursuance of the powers conferred; that such investments were made in good faith and with the knowledge and approval of the company; that he had given letters of credit to the company, and had made acceptances for them to a large amount,' which were still outstanding; that he was entitled to hold the bonds placed in his hands for his own profit aud indemnity; that the company had no right, without his assent, to revoke his authority and discontinue his agency until his charges against the company were satisfied; and as a counter claim, the defendant insisted that the plaintiffs were indebted to him in a large amount for services performed, for commissions on said bonds, for outstanding acceptances, and for damages. Very voluminous evidence was taken by the parties, which has also been used by consent in this case. At May term, 1859, it was adjudged by the court that the defendant should, upon five days’ notice, convey to the receiver the farm at Prospect Plains, in this state, with the farming tools, furniture, and personal property purchased by the defendant with the plaintiff’s bonds, and that the same should be sold by the receiver at public auction; that upon a compliance by the defendant with this order, it should be referred to a referee to ascertain and report the amount to be allowed to the defendant for acceptances and advances made by him for the company, and that the receiver, out of the proceeds of the sale, should first pay to the defendant what should be found due him on said account above the sum due
It is evident, from this statement of the pleadings and judgment in the suit between the parties in the Supreme Court of New 'York, that every material matter of equity relied upon by the complainant in this cause was relied upon in that; that every claim presented in this case was urged in that, and that the court virtually decided all the issues made in this cause, so far as the complainant’s right to an account is concerned, and settled the whole equity of the ease.
It is true that that judgment was not carried into execution, and that it has not been pleaded in this case as a bar to the complainant’s suit. It is, nevertheless, the judgment of a court having jurisdiction of the parties and of the subject matter in a suit between the parties in this cause upon the very matters now in issue between them, and the judgment was not carried into execution solely because of the failure of the defendant to comply with the order of the court to convey the property to the receiver. The question was one peculiarly proper for the cognizance of the courts of the state of New York. It grew out of a New York transaction. The contract between the parties was made there — the bonds were negotiated there — the property acquired in New Jersey formed but a part of a veiy extensive transaction, the settlement of which by the courts of that state necessarily involved all the material questions at issue between the parties. Aside, therefore, from all questions as to the conclusive effect of this judgment in New York, I am clear that the
But it is urged, o.n the part of the complainant, that he was prevented, by legal proceedings instituted by, the railroad company in this state, from complying with the order of the Supreme Court of New York, and has thus been deprived of the opportunity of availing himself of the benefits of that decree. Without pausing to investigate the validity of this objection, either in point of law or of faet^-assuming it to be true and well founded, has the defendant any right to an account in this court as against the defendants? He claims to be an agent and trustee of the defendants, and, as such, to have purchased real and personal estate for their benefit, to have expended large sums in its improvement, and to have incurred heavy expenses in its management; that the defendants are seeking by an action at law to recover the bonds paid or exchanged by him for the real estate thus purchased, and that he is entitled to an account and a settlement of all the disbursements and expenses thus made and incurred. A simple statement of the facts disclosed by .the pleadings and the evidence in the case will show the grounds of the complainant’s title to. an account.
In May, 1857, the railroad company placed one hundred and twenty-four mortgage, bonds of the company, for $1000 each, in the hands of the complainant, to raise money to meet the immediate apd pressing- necessities of the corporation, It is obvious, from the whole evidence in the. ease, that the design of the company was to convert them into cash or-available funds as speedily as-possible. To this end the- complainant was authorized to sell or negotiate, the bonds or to purchase real estate and coa
He continued to act as the agent of the corporation, with power to execute the trust reposed in him, from May, 1857, till about the 1st of January, 1858, when his agency was terminated, and eighty-five bonds, then remaining in his hands, were reclaimed by the company. During that period he had sold, exchanged, or otherwise-disposed of, thirty-nine bonds, of the par value of $1000 each, and for which the company was entitled, by virtue of their contract, to receive sixty-five per cent., or $25,350-, It is not pretended that the complainant has ever paid the company the value of a single bond, or that the company have ever realized a dollar from his operations.
Of the thirty-nine bonds disposed of by the complainant nine were invested in real estate in the city of New York, the whole of which, within a few months of making the investment, were sold under previous mortgages, and proved insufficient to satisfy them. Twenty-three of the bonds were, on the 29th of June, 1857, invested in the purchase of the farm at Prospect Plains, in this state, and in the purchase of the furniture, stock, farming utensils.,, and growing crops thereon. The complainant immediately entered into possession of the house and farm thus-furnished and stocked, and has held and enjoyed it as his-own, receiving the rents, issues, and profits from that day to this. In May, 1857, five of the bonds were invested in an invoice of marble in California, which is traced into the bands of the complainant’s brother, but of which no account has been rendered to- the defendants. The remaining two bonds are not pretended to- have been disposed of in pursuance of any authority conferred on the complainant or for the benefit of the defendant. It is-obvious, then, and so it was adjudged by the Supreme Court of New York, that the complainant is lawfully indebted to the defendants, and that he can have under the
The injunction heretofore issued against the defendants must be dissolved and the complainant’s bill dismissed with costs.