Tiernan v. Jackson
Annotate this Case
30 U.S. 580 (1831)
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U.S. Supreme Court
Tiernan v. Jackson, 30 U.S. 5 Pet. 580 580 (1831)
Tiernan v. Jackson
30 U.S. (5 Pet.) 580
Whatever may be the inaccuracy of expression or the inaptness of the words used in an instrument in a legal view, if the intention to pass the legal title to property can be clearly discovered, the court will give effect to it and construe the words accordingly.
A shipment of tobacco was made at New Orleans by the agent of the owner, consigned to a house in Baltimore, the shipment being for the account and risk of the owner, he being at the time indebted to the consignees for a balance of account. The owner of the shipment drew two bills on the consignees, and on the same day made an assignment on the back of a duplicate invoice of the tobacco in the following words:
"I assign to James Jackson [the drawee of the bills] so much of the proceeds of the tobacco alluded to in the within invoice as will amount to $2,400 [the amount of the two bills] to I. and L. $600, &c., and Messrs. Tiernan & Sons [the consignees] will hold the net proceeds of the within invoice subject to the order of the persons above named as directed above."
The bills were dishonored. This assignment, by its terms, was not intended to pass the legal title in the tobacco or its proceeds to the parties, but to create an equitable title or interest only in the proceeds of the sale for the benefit of the assignees, and they cannot maintain an action against the consignees in their own name for the same. The receipt of the consignment by the consignees did not create a contract, express or implied, on the part of the consignees with the assignees to hold the proceeds for their use so as to authorize them to sue for the same.
The general principle of law is that choses in action are not at law assignable. But if assigned, and the debtor promise to pay the debt to the assignee, the latter may maintain an action against the debtor as money received to his use.
In Mandeville v. Welsh, 5 Wheat. 277, 18 U. S. 286, it was said by this Court that in cases where an order is drawn for the whole of a particular fund, it amounts to an equitable assignment of that fund, and after notice to the drawer, it binds that fund in his hands. But where the order is drawn either on a general or a particular fund for a part only, it does not amount to an assignment of that part or give a lien as against the drawee unless he consents to the appropriation by an acceptance of the draft or an obligation to accept may be fairly implied from the custom of trade, or the course of business between the parties, as a part of their contract. The Court was there speaking in a case where the suit was not brought by the assignee, but in the name of the original assignor for his use, against the debtor, and it was therefore unnecessary to consider whether the remedy, if any, for the assignee was at law or in equity.
Until the parties receiving a consignment or a remittance under such circumstances as those in this case had done some act recognizing the appropriation of it to the particular purposes specified and the persons claiming
had signified their acceptance of it so as to create a privity between them, the property and its proceeds remained at the risk, and on the account of the remitter or owner.
James Jackson, the defendant in error, on 30 April, 1824, instituted in the circuit court an action of assumpsit against the plaintiffs in error, Luke Tiernan & Sons, Merchants of Baltimore.
The declaration was for money had and received; the defendants pleaded nonassumpsit, and issue being joined, the cause was tried in December, 1828, and a verdict and judgment rendered for the plaintiff for the whole amount of his claim under instructions given to the jury by the court, to which instructions the defendants excepted and thereupon prosecuted this writ of error.
The circumstances of the case were the following:
Luke Tiernan & Sons were in 1819 the creditors of Thomas H. Fletcher, a merchant of Nashville, in the State of Tennessee, for a balance of account current, admitted to amount to $4,906.83. Mr. Fletcher was at the same time largely indebted to Luke Tiernan & Co., of which firm Luke Tiernan was the surviving partner, and other merchants in Baltimore, Philadelphia, and elsewhere.
In consequence of the failure of a house in Nashville and of other heavy losses in business, Mr. Fletcher became unable to meet his engagements, and on 10 April, 1819, through Messrs. Tiernan & Sons, he made a statement of his affairs to his creditors in Baltimore and proposed an arrangement for the satisfaction of their claims in these terms:
"I hold a very large amount of good paper of the most unquestionable kind, the greater part of it now due. The drawers are merchants to whom I have sold goods. It is not payable at bank. I wish to give you paper of this description for your claims against me. This arrangement will at once free me from my present difficulties and at the same time enable you to get your money much sooner than I could possibly pay you. This plan will also save me from being
harassed and also put my creditors to much less trouble. In the above proposition, I ask no abatement in amount. I offer unquestionable paper for my own. The only injury you sustain by the arrangement is that you will not get your money quite as soon as was expected originally. I will also endorse the notes I transfer to you, thus making myself still liable."
"I therefore wish you to forward your claims against me to this place without delay, that I may pay them in the way above pointed out. I wish you all to forward your claims to the same person, as I can settle much easier with one person than with a dozen. I propose that you all forward your claims by mail immediately to Mr. Ephraim H. Foster, attorney at law, of this place. He is a man of integrity and high standing both as a man and as an attorney, and is withal a gentleman of large fortune, free from all embarrassment and unconnected with trade, and bound for no person. In his hands your money will be safe and your business ably attended to."
These propositions were on 3 May following accepted by Messrs. Tiernan & Sons and by Mr. Luke Tiernan for Luke Tiernan & Co., and on 21 May, 1819, Mr. Fletcher paid the whole amount of their claims on him in promissory notes delivered to Mr. Foster as their agent, and took the receipts of Mr. Foster for the same.
Soon after this adjustment, Mr. Charles Tiernan, one of the plaintiffs in error, arrived in Nashville, and on his arrival was dissatisfied with it. But, as it had been made by Mr. Foster in conformity with directions from his father, Mr. Luke Tiernan, before he left Nashville, he expressed his approbation of it.
In the letter of Mr. Fletcher to his creditors in Baltimore, dated Nashville, April 10, 1819, containing the proposition for the adjustment of their claims, he informed them:
"My cotton and tobacco at Orleans have all been sold or shipped and advances had on it, and I have received the money arising from the sales and shipments, but that money I am in honor bound to apply to the payment of my notes at bank here with the view of preventing injury to my endorsers, as I cannot reconcile it to my feelings to permit a friend to suffer who endorses my paper from motives of friendship. "
By the evidence of Mr. Fletcher, it appeared that in April, 1819, Jouett F. Fletcher, his agent in New Orleans, shipped per the schooner Mary to Luke Tiernan & Sons ninety-five hogsheads of tobacco for the account of T. H. Fletcher, and drew on them against this shipment, two bills, one for $2,000, the other for $2,600. These bills were endorsed by Bernard McKeirnan at the instance of Mr. Thomas H. Fletcher, and fearing that this tobacco would be attached for his debts in Baltimore, Mr. Fletcher, on the same day he procured the endorsement, assigned the shipment on the back of the invoice in favor of Mr. McKeirnan for the proceeds thereof. This assignment was not communicated to Mr. McKeirnan, but was filed away by Mr. Fletcher.
Jouett F. Fletcher, as the agent of Thomas H. Fletcher, drew another bill for $2,000 against the shipment of the tobacco per the Mary in favor of Joseph Fowler on Luke Tiernan & Sons. This bill was accepted and paid by the Messrs. Tiernan & Sons; the two bills endorsed by Mr. McKeirnan were not paid.
When the adjustment of the claims of Tiernan & Co. and Tiernan & Sons was made through Mr. Foster, they were not informed of the particular shipment of tobacco by the Mary or a shipment made to them by the brig Struggle.
On being informed of the dishonor of the bills endorsed by Mr. McKeirnan, Mr. Fletcher consulted counsel in Baltimore on the effect of the assignment to McKeirnan, and then for the first time made the same public.
After this, Tiernan & Sons wrote to Mr. Foster and to Mr. Thomas H. Fletcher, urging that the settlement and payment in notes should be cancelled with a view to enable them to hold the proceeds of the tobacco, and a conditional arrangement was entered into, subject to the rejection or acceptance of the defendants, and the notes which Mr. Foster had received were placed in the hands of R. C. Foster, there to remain until they should make known their determination in relation to the arrangements; this was on 19 July, 1819, and under date of 4 September, 1819, they accepted of the new arrangement, and the receipts which Mr. Foster had given to Mr. Fletcher were returned to him and he returned all the notes except one for $2,000 on
Thomas D. Crabb, which he retained on behalf of Tiernan & Sons, as was supposed for their ultimate security.
On 8 May, 1819, Jouett F. Fletcher, as the agent of Thomas H. Fletcher, shipped on board the brig Struggle from New Orleans for Baltimore 81 hogsheads of tobacco, amounting, per invoice, to $6,065.67. The invoice stated the same to be
"Shipped by McNeil, Fiske & Rutherford on board the brig Struggle, Nathan Stone, master, bound for Baltimore by order of Thomas H. Fletcher, through his agent Jouett F. Fletcher, consigned to Luke Tiernan & Sons."
The bill of lading stated the shipment and consignment to be for the account of Thomas H. Fletcher, Esq., of Nashville.
Mr. Fletcher stated in his evidence that upon this consignment on 21 May, 1819, he drew two bills upon the consignees, one in favor of James Jackson, the defendant in error, for $2,400, and another bill for $600 in favor of Ingram & Lloyd. On 26 May, 1819, he made the following assignment on the back of a duplicate invoice, and on the same day acknowledged it before a notary and delivered it to Mr. Jackson.
"Nashville, May 21, 1819"
"I assign to James Jackson so much of the proceeds of the sale of the tobacco alluded to in the within invoice as will amount to $2,400; to Ingram & Lloyd, as above, $600; and the balance, whatever it may be, to G. G. Washington and Co., and Messrs. L. Tiernan & Sons will hold the net proceeds of the within invoice subject to the order of the persons above named as directed above."
"THOMAS H. FLETCHER"
In reference to his transactions with Mr. Jackson, to the bill for $2,400 in favor of Mr. Jackson, and to this assignment, Mr. Fletcher also stated that in the fall of 1818, he had sold to Mr. Jackson a bill of exchange for $5,000, drawn by him on his agent in Philadelphia, which was protested for nonpayment; on its return he liquidated it by his notes, which he paid. Mr. Jackson required no security against the bill for $2,400,
as he showed him Mr. Foster's receipts that he owed Luke Tiernan & Sons nothing, and he satisfied him he had actually made the consignment. When he sold the bill for $2,400 to Mr. Jackson, he was greatly embarrassed, but did not consider himself insolvent, because he had made large shipments of tobacco to Europe and hoped they would turn out well. He did not know what opinion Mr. Jackson entertained of his circumstances, but in the month of May, 1819, he voluntarily endorsed his, Mr. Fletcher's, note for $10,000 without having any interest in the transaction.
Messrs. Tiernan & Sons refused to accept or pay the bill for $2,400, and it was regularly protested.
The tobacco per brig Struggle arrived in Baltimore on 7 June, 1819, and was sold by the consignees, the net sales amounting to $4,335.35, for which sum they were in cash on 11 February, 1820.
Soon after the arrival of the tobacco by the brig Struggle, the plaintiffs in error and Luke Tiernan sued out a foreign attachment in the Baltimore County Court against Thomas H. Fletcher and attached the tobacco in their own hands. In these suits, judgments were obtained at March term, 1821, for the debts due by him to Luke Tiernan & Sons and to Luke Tiernan & Co.
At the trial in the circuit court, the defendants by their counsel prayed the court to instruct the jury,
"1. That the assignment made by Thomas H. Fletcher, dated May 21, 1819, and acknowledged and delivered on 26 May, 1819, and endorsed on the copy of the invoice, as stated in the evidence, did not pass such a legal title to any part of the proceeds of the tobacco shipped by the brig Struggle as will enable the plaintiff to support this action in his own name."
Which instruction the court refused to give, but instructed the jury that such an assignment, connected with the character of the consignment of the cargo of the Struggle to the defendants was sufficient to enable the plaintiff to support this action in his own name.
"2. That the invoice, letter of advice, and bill of lading, taken together, do not constitute such a special appropriation of this cargo of the brig Struggle or of the proceeds thereof to the order of Thomas H. Fletcher as will enable his assignee in this case to maintain this action in his own name upon the assignment of May 21, 1819, which instruction the court refused to give."
"3. That unless the jury finds from the evidence that Jouett F. Fletcher ordered the said cargo or the proceeds thereof to be paid to the order of Thomas H. Fletcher or in some other manner authorized the defendants to deliver the cargo or the proceeds thereof to him, the said Thomas H. Fletcher, that then the assignment of the said Thomas H. Fletcher to the plaintiff dated May 21, 1819, does not pass such an interest to the plaintiff as will enable him to maintain the present action in his own name."
Which instruction the court refused to give, as it appeared on the face of the documents accompanying the consignment, with the bill of lading, invoice, and letter of instructions, that the tobacco was the exclusive property of Thomas H. Fletcher, and that Jouett F. Fletcher was merely the agent of Thomas H. Fletcher.
The defendants by their counsel prayed the court to instruct the jury:
"1. If the jury finds from the evidence that by the terms of the settlement between Thomas H. Fletcher and Ephraim H. Foster, the agent of the defendants, the said Fletcher was to continue still liable to the defendants for the money due to them from the said Fletcher, that then the assignment of the notes and the receipts mentioned by the said Fletcher in his deposition did not extinguish the original debt due from him to the defendants on account of which the said notes were assigned. Which instruction the court accordingly gave."
"2. That if the jury find that at the time the cargo of the brig Struggle came to the possession of the defendants in the manner stated in the evidence, Thomas H. Fletcher, on whose account the said shipment was made, upon a balance of accounts was indebted to the defendants in a sum exceeding the value of the whole cargo for advances made and liabilities incurred
by the defendants, as the factors and agents of the said Thomas H. Fletcher, that then the said defendants had a lien upon, and were entitled to retain the proceeds of the said cargo for the balance due them as aforesaid, notwithstanding the assignment made by the said Fletcher to the plaintiff on 21 May, 1819, as stated in the evidence."
Which instruction the court refused to give.
"3. That upon the whole evidence offered, the plaintiff is not entitled to recover in this suit."
Which instruction the court refused to give.