Baldwin v. Ely,
50 U.S. 580 (1850)

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U.S. Supreme Court

Baldwin v. Ely, 50 U.S. 9 How. 580 580 (1850)

Baldwin v. Ely

50 U.S. (9 How.) 580


Certificates were issued by the Treasury Department under a treaty with Mexico which were payable to a claimant or his assigns upon presentation at the department.

These certificates being legally assignable under an act of Congress, an endorsement in blank by the original payee was always considered sufficient evidence of title in the holder to enable him to receive the amount of the certificate when presented to the Treasury Department for payment.

The possession of them with a blank endorsement is prima facie evidence of ownership.

Where a complainant in chancery alleged that they had been purloined from him, and the defendant alleged that he had received them from a third person in the regular course of business, the claim of the complainant, who furnished no proof that they had been purloined, to have them restored to him unconditionally could not be maintained.

The bill was one of discovery, and the defendant, in his answer, alleged that he had received them from the third person as security for money loaned.

The complainant was entitled to have them restored to him upon his refunding to the holder the amount of the loan for which they had been deposited as security. It was error, therefore, in the court below to dismiss his bill.

But as the complainant did not offer to redeem the certificates, but insisted upon their unconditional restoration, the defendant below is entitled to costs in the circuit court. But the plaintiff below, who was the appellant here, is entitled to his costs in this Court.

Page 50 U. S. 581

The facts were these.

The matters in controversy arose out of three certificates, No. 989, No. 990, No. 991, for $1,000 each, bearing interest at the rate of eight percent per year, issued from the Department of the Treasury of the United States to the appellant in pursuance of the convention of 11 April, 1839, between the United States and the Mexican Republic, and two Acts of the Congress of the United States to carry into effect that convention, passed June 12, 1840, and September 1, 1841.

Articles 1, 2, 3, 4, and 5 of that convention, 8 Stat. 526 to 533, provided for a commission to hear and determine the claims of the citizens of the United States upon the Mexican government.

By article sixth, it was agreed that if it should not be convenient for the Mexican government to pay at once in money the amount found due by the board of commissioners, it should be at liberty to pay in Treasury notes, to bear interest at the rate of eight percent per annum from the date of the award, receivable at the maritime custom houses of the republic.

By the seventh section of the Act of June 12, 1840 5 Stat. 383, the Secretary of the Treasury was required to issue certificates

"showing the amount or proportion of compensation to which each person, in whose favor award shall have been made by said commissioners or umpire, may be entitled as against the Mexican government, on account of the claims provided for by said convention."

By sections eighth, ninth, and tenth, the Secretary of the Treasury was required, if the Mexican government should pay any moneys towards satisfying the said awards, to distribute the same ratably among the claimants; or, if the Mexican government should see fit to issue Treasury notes, then to cause the same to be delivered

"to the persons who shall be respectively entitled thereto in virtue of the awards, and the certificates issued, first deduction such sums of money, if any, as may be due the United States from persons in whose favor awards shall have been made under said convention."

By the Act of 1 September, 1841 5 Stat. 452, the Secretary of the Treasury was required to issue certificates to the persons authorized to receive the sums awarded, "their legal representatives and assigns," in the manner directed by the seventh section of the Act of Congress of June 12, 1840, for such portions of the sums awarded as may be convenient for the claimants, and to be subject to the deductions provided for by the tenth section of said act,

"provided that nothing in this act shall be construed to give any rights to the

Page 50 U. S. 582

claimants that are not conferred by said convention, and the act of June 12, 1840, and that the substance of this proviso be inserted in the certificates may be issued."

The appellant, John Baldwin obtained two awards from said commission for large sums of money, the one award bearing date 18 December, 1841, the other, 25 February, 1842, and therefor obtained various certificates from the Treasury Department for $1,000 each, bearing interest at the rate of eight percent per year from the respective dates of said awards, whereof the aforesaid certificates, No. 989, No. 990, and No. 991, are parts and parcels.

Subsequent to the date of these certificates, another convention was signed at the City of Mexico on 30 January, 1843, and finally ratified on 29 March and promulgated on 30 March, 1843, 8 Stat. 578, by which it was agreed that the Mexican government should pay, on 30 April, 1843, all the interest which should be then due on the awards in favor of claimants and that the principal, and the interest thereof accruing thereon, should be paid "in five years, in equal installments every three months," the said term of five years to commence on 30 April, 1843, the payments to be made in the city of Mexico, in gold or silver, to such person as the United States should authorize to receive them.

Such were the effects, conditions, and obligations arising against the United States out of the aforementioned certificates.

In March, 1844, the appellant exhibited his bill in equity against the appellee, stating in substance, that, being the lawful proprietor of said three certificates, No. 989, No. 990, and No. 991, to him issued in pursuance of the awards in his favor, he wrote his name on the back thereof,

"without any words of transfer or assignment, and still continued to hold the same as the lawful owner thereof, and that, while the same were thus held by him, the said three certificates, No. 989, No. 990, and No. 991, each for the sum of $1,000, were either casually lost by him, or, as he verily believes, clandestinely stolen from his rightful possession."

That upon the discovery of said abduction, the complainant immediately gave notice to the Treasury Department, by letter of 12 February, 1843, with a request that payment of those certificates might be stopped.

That the complainant was unable to find where those certificates were, until, by letter of 29 January, 1844, from the Secretary of the Treasury, he was notified they were held

Page 50 U. S. 583

and claimed by the defendant, and had been presented at the Treasury Department in the defendant's name. He sought a discovery of Ely's right to them, and prayed that Ely should be required to prove how the said certificates were procured from the complainant, and for what consideration, and when and where; that he be decreed to deliver up the same, and to desist from all demand of payment on account of the same, or to assign or transfer them to any other person or party; for an injunction to restrain him for demanding payment of them until the further order of the court, and for such other and further relief in the premises as might be agreeable to equity and good conscience.

The injunction was granted. Ely answered. He admits that the said certificates were issued and made payable to complainant or his assigns, and were his sole and exclusive property. He states that in the month of April, 1842, one Perry G. Gardiner, of the City of New York, applied to him for a loan of money, and offered as security three certificates of the Mexican indemnity, similar to those referred to in the bill, issued to complainant, and endorsed by him, but he does not recollect the numbers, and upon these certificates he advanced to Gardiner at different times various sums of money, to 8 August, 1842, amounting to $1,220, Gardiner promising to place further securities in his hand. On 13 August, 1842, Gardiner brought to him three other certificates for $1,000 each, payable to Baldwin and endorsed by him, the numbers of which he does not recollect, to be held as security for the sums already advanced, and such new loans as he might thereafter make. And he did afterwards, to 16 December, 1842, lend him other sums amounting to $857, making in the whole $2,077. That as to the first three certificates, they were, as he believes, the property of Gardiner, and as to the last, Gardiner, at the time of the deposit, informed him he had full control and right to sell, pledge, or hypothecate them, and he did verily believe that Gardiner was the true bona fide owner thereof, by regular assignment from Baldwin and he took the same as he had taken the three previously given him, without any knowledge or suspicion of any fact or circumstance that could affect or invalidate the title of Gardiner to them. He further states on information and belief that Baldwin did in fact endorse the said three last-mentioned certificates in the presence of Gardiner, and hand them to Gardiner, with the express purpose and design that Gardiner should go into the market and negotiate the same, and apply the proceeds to his own use, in payment of moneys due and payable by Baldwin to him, and

Page 50 U. S. 584

he charges the fact to be that Baldwin endorsed them with the express design and intention of passing, by such endorsement, a perfect title to Gardiner or to any person to whom Gardiner might transfer them, and thus he gave this defendant the legal right to write over Baldwin's endorsement any words of assignment necessary to give him a perfect title to them; that sometime in the month of December, 1842, Gardiner represented to him that the certificates had greatly increased in value and that three of them would be sufficient security for him, and requested him to give up three of the six. He did so without observing how they were numbered, and sometime after Gardiner again applied to him to exchange the three certificates which he had so given up to him for the other three, and he, knowing no difference therein, received them back, and these three last are now in his possession and are numbered 989, 990, 991. He denies all fraud, and claims them as his own.

To this answer the plaintiff filed a general replication.

A commission was issued to take testimony, and under it the evidence of James Bolton and George W. Riggs was taken for the complainant, and that of Perry G. Gardiner for the defendant.

The depositions of Bolton and Riggs need not be further mentioned, as they related chiefly to the exchange of certificates.

Gardiner states that Baldwin had passed to him in payment of a debt several certificates similar to these, three of which he had hypothecated with the defendant, for a loan of money made by defendant to him. And in August, 1842, Baldwin gave him the three certificates mentioned in the bill for the express purpose of raising money, or by hypothecation to pay him Gardiner for services rendered by him to Baldwin; that Baldwin took them out of his portfolio and endorsed them in his presence, and delivered them to him, and told him to get the money as soon as possible; that he took them directly to Mr. Ely, got some money on them, and he agreed to advance further sums, which he afterwards did advance; that he told Mr. Baldwin he had raised the money on these certificates. He states further that in the month of December, 1842, he obtained from Mr. Ely the first three certificates, leaving the three mentioned in the bill in the hands of Mr. Ely, and sold them to Perkins Nicholls, a broker, and afterwards, 14 June, 1843, got them from E. Riggs, to whom Nicholls had sold them, and returned them to Ely. That Baldwin had advertised these three certificates as having been stolen from him, and witness called on him and asked him the meaning of it. He said it was to

Page 50 U. S. 585

frighten Mr. Sayre and Mr. Allen, who held the five other certificates mentioned in the advertisement; that he would, as soon as he could raise the money, pay off Ely's advances and take up the three certificates in controversy. Ely never has been paid.

The cause was set for hearing by consent on the bill, answer, exhibits, depositions, and general replication, and on 25 May, 1846, the circuit court passed the following decree:

"This cause coming on to be heard on the bill, answer, and exhibits filed therein, and the complainant, by his counsel, objecting to the admissibility of the evidence of Perry G. Gardiner, whose deposition was taken in the said cause, and this Court having heard the argument of counsel, and considered the said cause, the said objection to the admissibility of the said evidence is hereby overruled, and it is this 25 May, 1846, ordered, adjudged, and decreed by the court that the said bill be, and the same is hereby, dismissed, and that the complainant do pay to the said defendant his costs herein, to be taxed by the clerk of this Court."

From this decree the complainant appealed to this Court.

Page 50 U. S. 598

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