2 U.S. 151
2 Dall. 151
1 L.Ed. 327
Supreme Court of Pennsylvania
March Term, 1792
The circumstances of this case were as follow: Henry Banks, of Virginia, wishing to remit a sum of money to James Barr, the plaintiff, requested the defendant (then in Virginia, and to whom Banks was also indebted, in partnership with Preeson Boudoin) to take a charge of an order for L 800 on Mease & Caldwell, of Philadelphia, upon the terms specified in the subjoined receipt, which the defendant gave upon the occasion.
'Received, Richmond, 21st January, 1783, of Henry Banks an order of Daniel Clarke, Esq. on Mease & Caldwell, for the sum of L 800 Virginia currency, on an insurance policy of the schooner General Wayne; which I promise to return him in ten weeks, or to account with Preeson Boudoin, for one half, and James Barr of Philadelphia, for the other.'
Signed, 'James Craig, Sen'r.'
By virtue of this order the defendant, on the 4th of June, 1784, received L 771 7 0: and the present action was brought to recover one half of that sum, with interest, as money had and received to the use of the plaintiff. But, besides a general count for that purpose, the declaration contained a special count, setting forth the particulars of the case, the order, and the receipt of the money. It, likewise, appeared, that the plaintiff having sued Henry Banks, Standish Forde became his bail, and as a means of indemnifying Forde, Banks deposited with him a certificate for 8000 dollars. In relation to that action, an agreement was afterwards made, on the 24th of October, 1789, between Philip Barber, the attorney in fact of Henry Banks, (who had also an assignment) and the plaintiff, to this effect; 'that judgment should be entered in favor of the plaintiff for the whole amount of the debt; but that he should only receive L 500; that he should thereupon discharge Forde from his obligation as bail; and, as to the residue of his demand, he should wait the issue of a suit against the defendant, Craig, and divide whatever might be recovered from him, with P. Barber, Bank's attorney.' This agreement was made after Barr's attorney had discovered, that the cause of action was a joint debt due to James and Robert Barr, though the action was instituted in the name of James Barr only. But judgment was, accordingly, confessed in April Term, 1790, for the whole sum claimed by Barr, to wit, L 1358 17 8; a Ca. Sa. thereupon issued; and Forde, the special bail, having then sold the certificate deposited with him by Banks, paid the full amount of the judgment, with interest and costs, to the sheriff, reserving the balance to answer some other claim-against Banks; the sheriff on the 31st of July, 1792, paid it over to the plaintiff, Barr: But Barr, on the same day, after deducting L 500, paid the balance L 887 15 2 to P. Barber, in compliance with the terms of the agreement, on which the judgment had been confessed. It further appeared, that Banks & Boudoin were indebted to Craig, in a sum exceeding the amount received under the order upon Mease & Caldwell; and that in September Term, 1788, Craig had issued a foreign attachment against Banks & Boudoin, which was served upon Forde, as garnishee; and in which judgment had been obtained, but no Scire Facias had issued.
The cause was tried, on the general issue, at the Nisi Prius in March, 1792, before the Chief Justice, Shippen, and Bradford, Justices,; when Mr. Levy and Ingersoll argued for the plaintiff; Randolph and Lewis, for the defendant.
The defence rested on three propositions: 1st. That Henry Banks was to be considered as the person really entitled to receive the money: 2nd. That the defendant had a right to retain it in satisfaction of the judgment on the foreign attachment: And 3rd. That the action was not supported by the evidence; in-as-much as the only proof of the plaintiff's interest is the receipt given by the defendant for the order on Mease & Caldwell, which is not actually set forth in the special count; and affording an action of a higher nature, is no evidence on the general count for money had and received. Bull. N. P. 145. 131. Nor could any person bring this action, who was not a party to the assumpsit. Esp. 105. Cro. E. 369.
The plaintiff's counsel, on the other hand, contended, 1st. That the money received by Craig, was the money of Barr's and the moment it was received, it was held in trust for Barr's use: to retain it, is contrary to Craig's own promise, and to the principles of equity; and a promise to account, is tantamount to a promise to pay. 1 Esp. 23. 1 Stra. 264. 626. 2nd. That a partnership debt cannot be set off against a separate debt; and, therefore, as Craig was the creditor of Banks and Boudoin, he could not discount his demand from the separate property of Banks; which was the present case. 3rd. That there was nothing collusive or fradulent between Banks and Barr, in relation to the judgment. The latter, finding that his action was erroneously instituted, was obliged to make use of some address even to secure immediate payment of a part of an honest debt; but the right and the remedy for the balance were clearly left open. 4th. That the action is well brought, and ought to be sustained. Yelv. 23. 4. 1 Vent. 318. 332. Bull. 133. Doug. 139. Cowp. 443. 2 Bl. Rep. 1269. L. Ray. 303.
The Chief Justice delivered the following charge to the Jury, after stating the evidence on both sides of the cause.
M'Kean, Chief Justice:
The plaintiff had, unquestionably, a good cause of action, at the time of instituting his suit: But, it appears that at that time also, the defendant had a good cause of action against Henry Banks; and, accordingly, attached certain monies belonging to Banks, in the hands of Forde, who was the special bail of Banks, in another action, brought against him by James Barr, the present plaintiff. Judgment being entered, and a Ca. Sa. issued in this last mentioned action, the bail became liable for the debt; and, accordingly, we find, that Forde paid the amount, with costs, to the sheriff; who paid it over to the plaintiff, and took a receipt in full. This, then, appears to be complete satisfaction; and the plaintiff apparently ought never to recover more even from Banks; unless, perhaps, the costs accrued in the action now trying, before the payment by Forde in the other action; as in the case of several suits against the drawer and indorsors of the same promissory note.
But, after such proceedings, what reasonable ground can be alledged, why Barr should recover the money in question from Craig, to whom Banks was justly indebted? It is said, that the arrangement permitted Barr to take no more than L 500 out of the deposit in Forde's hands: But, surely, the act of Barr cannot prejudice the right of Craig; and Craig, by virtue of the foreign attachment, was entitled to all the property belonging to Banks in Forde's hands, beyond what was necessary to satisfy the judgment for which Forde was bound, and his own bona fide claim. Craig had a lien upon the whole money: It was, in effect, his own. Since, therefore, Barr took the whole amount out of Forde's hands by virtue of his judgment, and so discharged Forde from his obligation as garnishee in Craig's Foreign attachment, it is consonant with every principle of law and equity, that the receipt of Barr should avail Craig, as a full discharge from the present demand. Either Barr received all the money for himself, or he did not: In the former case, this action cannot be supported; and in the latter he has withdrawn, under colour of his judgment, a portion of Craig's funds, for which he must be answerable, in an independent suit; or the amount may be set off against the present demand. I impute no fraud to the plaintiff; but his secret agreement with Barber, however honest, cannot affect the defendant. It appears, indeed, that four creditors were striving, with legal vigilance, to obtain a legal advantage; and the only question is, who has succeeded? In the opinion of the Court, the plaintiff must, on this occasion, be considered as having received the whole debt that was due to him from Banks; and the original consideration of the debt, on account of which the order was given, is extinguished in the judgment.
If the plaintiff recovers, I think it must be upon the count for money had and received: And it appears to me, that the plaintiff had a good cause of action at the commencement of the suit. He received this money under an engagement to apply it to the payment of the debt due to Barr. He was merely a trustee; and while the debt was unsatisfied, the interest continued. But, I conceive, that as soon as Barr's demand is extinguished the trust ceases: And in such case Barr, in his own name and for his own use, has no longer a demand on this money. This is an equitable action; the defendant under the general issue may go into all the equity of the case; and unless it appears, that he cannot in conscience and equity retain the money, unless, ex equo et bono, he is bound to refund it; the verdict must be for him. Considering that Banks is insolvent, and that he is indebted to Craig, I cannot say that it would be unconscionable to retain this money after Barr's debt is satisfied.
Now, it appears, that all Barr's demands against Banks were liquidated and included in the judgement confessed in 1790; that judgment is satisfied, and it is legally discharged on record: The whole amount of the debt and costs was actually paid into Barr's hands.
But, it is said, this judgment was, by a previous agreement, to operate in Barr's favour, to the amount of no more than L 500; the balance was paid to Bank's attorney; and, therefore, Banks is still indebted to Barr. This may be true between the parties; but how does it operate as between Forde and Craig? For, the law will not suffer Barr to give this transaction one operation upon Craig, as to himself; and another as to Forde. Here the money in Forde's hands was attached, and judgment obtained. If Craig proceeds against Forde, the garnishee, Forde, will shew the judgment at Barr's suit, and that he was legally compelled to pay above L 1400, by virtue of that proceeding. This will be an answer to Craig's demand: And why? Because it is a payment and discharge of a regular judgment. Now, if the garnishee can hold up this to Craig as a real satisfaction and payment of a just debt, Craig can hold it up as such to Barr. No man will be allowed to blow hot and cold. If Barr received this money, on account of his judgment, he had a right so to do; but then his debt is extinguished. If he did not receive it on this account, then he had no right to it at all; L 887, on which Craig had a lien, was wrongfully received; and Craig may consider it as money received to his use, and set it off in this action. Suppose Craig had sued Barr for this L 887, how could he defend himself? By insisting that there was a bona fide debt due from Banks; and that he received it in payment and discharge of the judgment. Then, in this action, he shall not be allowed to deny, what he must affirm in that. If only L 500 had been all that was due to Barr, and yet, for the purpose of protecting the money from the attachment, a judgment for L 1,300 had been confessed and the money received, I think Craig could have recovered it from Barr; and yet, has the case, as the plaintiff represents, this very aspect. Here is an action, in which judgment could never have been recovered; judgment is confessed for L 1,300; though L 500 is really to be paid to Barr, the residue is withdrawn from Craig, and paid to Banks. Upon the whole, the plaintiff is reduced to this dilemma: Either it is a full payment and discharge of his debt; or he has unconscionably received L 887, on which Craig had a lien, and for which he is accountable to him. In the first case, his cause of action is extinguished; in the latter, Craig's demand against Barr, exceeds Barr's demand against him. In either case, the defendant ought to have a verdict.
Verdict for the Defendant.
Nisi Prius, before the Chief Justice; Shippen and Bradford, Justices.
By the Court: The form of the action need not be laboured by the plaintiff's counsel.
Last modified: September 29, 2009