Mandeville v. Welch/Opinion of the Court

Mr. Justice STORY delivered the opinion of the Court.

Two questions arise upon the instruction to the jury: 1. Whether the bills were prima facie evidence that value had been paid for them by Prior to Welch? 2. Whether, under all the circumstances of the case, Prior was an assignee in equity entitled to maintain the present action?

Upon the first point, we are of opinion, that the law was correctly laid down by the Court below. The argument of the defendant's counsel admits, that where a bill imports on its face to be for 'value received,' it is prima facie evidence of that fact between the original parties; but it is stated, that it is not evidence of the fact against third persons. We know of no such distinction. In all cases where the bill can be used as evidence either against the parties, or against third persons, the same legal presumption arises of its having been given for value received, as exists in relation to a deed expressed to be given for a valuable consideration. In this respect, bills of exchange, and negotiable notes, are

The other question requires more consideration, though it does not in our judgment present any intrinsic difficulty. It has been long since settled, that where a chose in action is assigned by the owner, he shall not be permitted fraudulently to interfere and defeat the rights of the assignee in the prosecution of any suit to enforce those rights. And it has not been deemed to make any difference whether the assignment be good at law, or in equity only. This doctrine was fully recognized by this Court when this case was formerly before us.i It was then applied to a case, where the whole chose in action was alleged to have been assigned; and it was certainly then supposed that the doctrine in Courts of law had never been pressed to a greater extent. We are now called upon to press it still farther, so as to embrace cases of partial assignments of choses in action.

It is contended on behalf of the plaintiff, in the first place, that the facts of this case establish by legal inference, that the articles of agreement were entirely assigned in equity to the plaintiff. If this ground fails, it is in the next place contended, that an assignment was made of the debt due by the articles to the extent of 7,500 dollars, the amount of the bills drawn on Mandeville & Jamesson, and that

In support of the first position, it is argued, that the bills being prima facie evidence of an equivalent advance made by Prior, the possession by the latter of the articles of agreement, and the delivery to him of the account signed by Mandeville & Jamesson, afford a legal presumption that the articles and account were delivered to him as security for the payment of such advance, and thereby he acquired a lien on them like that acquired by the delivery of title deeds as security for a debt, which lien has always been deemed to be equivalent to an equitable mortgage. It may be admitted, that according to the course of the authorities in England, and as applicable to the state of land titles there, a deposit of title deeds does, in the cases alluded to, create a lien, which will be recognized as an equitable mortgage, and will entitle the party to call for an assignment of the property included in the title deeds. It may also be admitted, that a deposit of a note not negotiable, as security for a debt, will entitle the creditor, after notice to the maker, to enforce in equity his lien against the depositor, and his assignees in bankruptcy. Such was the case cited at the bar from Atkyn's Reports.j But in cases of this nature, the doctrine proceeds upon the supposition, that the deposit is clearly established to have been made as security for the debt; and not upon the ground that the mere fact of a deposit unexplained affords such proof. In

The ground, then, that there was a deposit of the articles as collateral security, failing, we are next led to examine the position of the defendant's counsel, that there was a partial lien or appropriation of the debt due from Mandeville & Jamesson, under the articles to the extent of the sum due on the bills, which is equivalent to an equitable assignment of so much of the debt. It is said, that a bill of exchange is, in theory, an assignment to the payee of a debt due from the drawee to the drawer. This is undoubtedly true, where the bill has been accepted, whether it be drawn on general funds, or a specific fund, and whether the bill be in its own nature negotiable or not; for in such a case, the acceptor, by his assent, binds, and appropriated the funds for the use of the payee. And to this effect are the authorities cited at the bar.k In cases also 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 drawee it binds the fund in his hand. 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 consent 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 reason of to split up a single cause creditor shall not be permitted 174. of action into many actions, without the assent of his debtor, since it may subject him to many embarrassments and responsibilities not contemplated in his original contract. He has a right to stand upon the singleness of his original contract, and to decline any legal or equitable assignments by which it may be broken

Several other objections have been taken at the bar to the plaintiff's right of recovery, which under other circumstances would have deserved serious consideration; but, as upon the merits of the case, as they are apparent upon the record, the judgment of this Court is decidedly against the plaintiff, it is unnecessary to give any opinion upon those objections.

Judgment reversed.

JUDGMENT. This cause came on to be heard on the transcript of the record of the Circuit Court for the District of Columbia in the county of Alexandria, and was argued by counsel. On consideration whereof, this Court is of opinion that the said Circuit Court erred in instructing the jury, 'that if they should be of opinion, from the evidence, that the said bills were drawn for the full and valuable consideration expressed on the face of them, paid by the said Prior to the said Welch, and if there be no other evidence than what is herein before stated, they ought to infer from the said evidence, that the said Prior was, and is such an assignee of the right of action upon the covenant aforesaid, as authorizes him to sustain the action in the name of the said Welch's administrator for the whole debt due by the said covenant, at the time of the said Welch's delivering the said account to the said Prior.' It is, therefore ADJUDGED AND ORDERED, that the judgment of the said Circuit Court in this case be, and the same is hereby reversed and annulled. And it is further ORDERED, that the said cause be remanded to the the said Circuit Court, with directions to issue a venire facias de novo.