Difference between revisions of "Hylton v. Hunter"

Revision as of 09:42, 26 June 2014

First page of the opinion Hylton v. Hunter, in Decisions of Cases in Virginia by the High Court of Chancery, with Remarks upon Decrees by the Court of Appeals, Reversing Some of Those Decisions, by George Wythe. 2nd ed. (Richmond: J. W. Randolph, 1852).

Hylton v. Hunter, Wythe 195 (1793),^[1] involved a dispute over the sale of a debt.

Background

James Hunter loaned Jamaican resident John Dixon money, which Dixon agreed to repay in fifteen installments. Dixon would send the payment to his attorneys, Hibbert and Jackson, who would forward the payment to Hunter. Hunter received the first five payments, but no more, even though Dixon had given Hibbert and Jackson payment for the full sixth installment (originally due August 1, 1775) and part of the seventh (originally due August 1, 1776).

By April 25, 1785, James Hunter was dead, and the executors for his estate, Adam Hunter and Abner Vernon, sold the loan to Daniel and William Hylton for £5500 in Virginia money, to be paid in three installments of £1833: one payment due six months after the rights to the Dixon loan transferred to the Hyltons, the next due 15 months after the rights transferred; and the final payment due 27 months after the rights transferred. The agreement also said that any payments that had been made to Hibbert and Jackson but not yet sent to Hunter would be forwarded to the Hyltons. When they finalized the agreement, Hunter's executors said that the loan was worth £7347 and that the Hyltons would get the loan and "the interest accruing thereon, (that) still remained due and unpaid".

On June 21, 1785, the Hyltons filed a document that formalized their part of the agreement. This document also said that the Hyltons understood the risk in trying to collect on the loan and would not have any recourse against Hunter's estate. That same day, Hunter's executors signed a statement that the loan was worth £9561.

On August 1, 1785, Daniel Hylton executed three bonds that would be the Hyltons' payments to Hunter's estate. The bonds said the first payment would be due on February 16, 1786; the second on November 16, 1786; and the last one on November 16, 1787.

William Hylton demanded that Hibbert pay interest on the money Hibbert and Jackson had received from Dixon. Hibbert sent a reply letter dated November 19, 1785. In the letter, Hibbert said that he would send the £920 Dixon originally gave Hibbert and Jackson, but no interest, as he had always been ready to send that money. If anything, Hibbert thought that he should be compensated for keeping the money safe through five hurricanes. Hibbert also sent William Hylton a statement that the outstanding loan was worth £7815, including principal and interest. So, at this point, the total value of the loan was £8735 in Jamaican currency.

On February 27, 1787, one of the Hyltons told Adam Hunter about the discrepancy between Hunter's June 21, 1785, accounting and Hibbert's statement of the loan's value. Hylton mistakenly told Hunter that the difference was £1055, so Hunter reduced his payment due by £1055 to compensate. Hunter later discovered the error and mentioned it to Daniel Hylton. Daniel sent a letter to Hunter on September 18, 1788, saying that "every mistake should be rectified", but apparently he did not follow through to Hunter's satisfaction. Hunter sent the issue of correcting the mistake to three sets of arbitrators: first Henry Banks and William Hay; next, Jerman Baker and John Marshall; and finally, George Weir. The arbitrator(s) then issued a report with their proposed solution.^[2]

After the arbitrators issued their report, but several days before the Hyltons' last payment would become due, Hunter's estate filed suit in Henrico County Court to collect the £5500 the Hyltons owed Hunter's estate. Daniel Hylton did not oppose a judgment for Hunter and did not claim the £1055 in credit the Hyltons had asked for earlier.

Around this time, Hylton argued that when Hunter's estate created a set of documents giving Hunter's Jamiacan attorneys the power to transfer the Dixon loan to Hylton, there was a flaw in the document to that the initial assignment of power to the attorneys was no good. Hunter's estate drew up a second set of documents to validate the power of attorney.

After the Henrico County Court entered its judgment for Hunter's estate, Daniel Hylton filed a bill in equity with the chancery side of the Henrico County Court asking it to enjoin the judgment for Hunter's estate.

Hylton's request was granted, and Hunter's estate appealed the case to the High Court of Chancery.

The Court's Decision

On May 25, 1793, Wythe awarded Hunter's estate £2781 plus interest. Wythe also ordered Hylton to pay the court costs for Hunter's estate in both the county court and the High Court of Chancery due to Hylton's pointless delay tactics.

Hylton's request for a £1055 credit

Wythe rejected Hylton's request to reduce the amount he owed by £1055 because Hunter's estate had performed all its required duties under the agreement. The total value of the loan Hunter's estate transferred to Hylton, no matter whose calculation was used, was more than the £7347 described in the original agreement. The money that had been paid to Hibbert and Jackson for the sixth and seventh payment was forwarded to Hylton.

Hylton claimed that he should have received credit for the interest Hibbert and Jackson had refused to pay. Hylton said that Adam Hunter and Vernon's April 27, 1785 bond giving Hylton the rights to the bonds and "the interest accruing thereon, (that) still remained due and unpaid" gave Hylton the right to interest on the money that had been sitting in Hibbert and Jackson's office, so under the agreement Hunter's estate was required to reimburse him for the missing interest.

Wythe rejected Hylton's reading of this clause as inconsistent with the April 25, 1785 agreement. Wythe read the clause to mean that Hylton was entitled to collect interest on any bonds that remained unpaid by Hibbert and Jackson, acting as Dixon's agent. If Hibbert and Jackson did not give Hylton all the money they had received from Dixon, then Wythe agreed that the contract required Hunter's estate to compensate Hylton. Wythe refused to infer, however, that the contract also required Hunter's estate to compensate Hylton for interest that Hibbert and Jackson did not get from Dixon and refused to pay themselves to Hylton.

Hylton also claimed that Adam Hunter's and Vernon's statement on June 21, 1785, that the Dixon bonds were worth £9561 was a guarantee of the bonds' value. Wythe rejected this argument, saying it was only an accounting, not a binding guarantee. There was no language in Hunter and Vernon's June 21 statement creating a warranty of value or altering the original deal.

Expenses for authenticating assignment of power documents

Hylton asked the court to award him credit for the costs he incurred authenticating the second document Hunter's estate created to assign power to their Jamaican attorneys. Hunter's estate applied for credit for the costs it incurred getting a copy of that same document.

Wythe rejected Hylton's request and approved the request by Hunter's estate. Wythe said that he already determined that there was no proof that the first assignment of powers to Hunter's Jamaican attorneys was ineffective, so there was no need to authenticate the second assignment. Therefore, Hylton had no need to authenticate the second assignment of powers, and should not be able to get reimbursed for it. By the same token, Hunter's estate should not have been burdened with the need to come up with the second assignment of powers, so it should be reimbursed.

Hylton's court costs

Hylton asked the Chancery Court to reimburse his court costs because Hunter's estate filed the suit a few days before the final payment was due on November 16, 1787. Wythe rejected Hylton's request, saying that he waived any objection when he did not plead it at the beginning of the suit. In addition, as Wythe established earlier, the money on the third bond was already due under the contract on November 1, 1787, because that was 27 months after Hunter's estate performed its end of the bargain. The date on the payment bond itself did not override the date set in the initial contract.

Wythe's Puzzling Math

Hylton v. Hunter is a long opinion for its time - 15 pages - and yet Wythe seems to be leaving out important information. Throughout his opinion, Wythe makes it clear that he does not think Hylton was entitled to a discount on his purchase of the bonds. And yet, when it comes to the actual decision, Wythe permanently enjoins Hunter's estate from collecting a judgment awarding it the £1833 on Hylton's first payment bond, and only lets Hunter's estate collect £948 from Hylton's second payment bond. Had Hunter's estate already collected the money on these bonds? Is this what the arbitrators recommended earlier? Wythe doesn't say. The most reasonable inference from reading Wythe's opinion is that Wythe was following the recommendation of the arbitrators who had heard the disputer earlier - Wythe refers to "disallowing the plaintiffs exceptions to the report, and approving the same report corrected".^[3] Wythe does not say what exactly the arbitrators' report recommended, or whether Hylton had actually paid the money due on the bonds he gave to Hunter's estate, so it is unclear why Wythe ruled the way he did.

At the Supreme Court of Appeals of Virginia

Hylton appealed to the Supreme Court of Appeals, which issued an unpublished decision that Wythe reproduced in the text of his opinion.

The Supreme Court reversed Wythe on the issue of whether there was a discrepancy between Hunter's estimated value and the actual value of the Dixon bonds. The Supreme Court said that there was a £1435 shortfall in the Dixon bonds' actual value from the value Hunter's estate promised to Hylton.^[4] The Supreme Court subtracted the £920 Hylton received from Hibbert and arrived at a balance of £515, plus interest from April 1, 1785, that Hylton could credit against his payments to Hunter's estate. The Supreme Court said that the £515 did not have to be adjusted to a proportional amount of the £5500 payment as Wythe said it should, and that Wythe's use of the rule of proportion would effectively increase or decrease the award and shift the loss onto one party or the other.

The Supreme Court said that Wythe should have allowed both Hunter's estate and Hylton to be reimbursed for their expenses related to the second document Hunter created to assign power to his Jamaican attorneys. Both parties were equally at fault in creating the problem with the first delegation of power to Hunter's attorneys, so each party should equally bear the costs.

The court held that Hylton should be reimbursed for his court costs in the chancery side of the Henrico County Court and the High Court of Chancery, since Hylton was ultimately more victorious than under Wythe's decision.

The Supreme Court upheld the other parts of Wythe's verdict, and ordered Hunter's estate to pay Hylton's costs of appealing the case to the Supreme Court.

Wythe's Discussion

Wythe offered the Supreme Court a backhanded compliment on the "oeconomical" efficiency of their opinion.^[5] Instead of using Wythe's careful discussion of whether Hylton was entitled to reimbursement for the interest Hibbert refused to pay, the Supreme Court simply said that Hylton had received £1435 from the deal than the Supreme Court thought he was entitled to. Such a bare-bones statement cannot be dissected or refuted.

Wythe defended his use of the rule of proportion, saying that it was mainly used to illustrate that Hylton's claim of £1055 was baseless.

Wythe also defended the part of his order that reimbursed Hunter's estate for its expenses in getting a copy of the second document that assigned powers to their Jamaican attorneys and denied Hylton reimbursement for his expenses in authenticating that second document. Wythe noted that no one had actually proven that the first document was defective. At any rate, the purchaser (here, Hylton) is usually the person who draws up such documents, and if Hylton originally accepted the document and submitted his payment, then Hylton should be the one to bear the expense if he determines later that the document was defective.

Finally, Wythe sounded a note of caution over the idea that a plaintiff could recover all their costs at chancery court even if he only won a partial victory. Wythe readily agreed, however, that Hylton was entitled to recover his court costs to the extent that the court granted him relief.

References

1. ↑ George Wythe, Decisions of Cases in Virginia by the High Court of Chancery with Remarks upon Decrees by the Court of Appeals, Reversing Some of Those Decisions, 2nd ed., ed. B.B. Minor (Richmond: J.W. Randolph, 1852): 195.
2. ↑ Wythe does not say which arbitrators issued the report - from the context it seems a logical guess that the report was a compilation of the different arbitrators' decisions.
3. ↑ Wythe 207.
4. ↑ How did the Supreme Court arrive at this number? Who knows? The Supreme Court did not say, and it does not seem as if any of the numbers thrown around in this case can be put together to get a difference of £1435.
5. ↑ Wythe 209.