Case ID: me_10/html/0434-01.html
Source: Caselaw Access Project
Author: {"author": "Mellen C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Trafton vs. Dore.
    The defendant received of the plaintiff by assignment, certain notes of hand against a third person, as collateral security for the payment of a debt due 3 and by contract under seal agreed to reassign them, if the principal debt should be paid, or said collateral notes should be collected, before a certain day. The collateral notes, the amount being greater than the principal debt, were paid, but not until long after the day fixed. JHcZd, that if the plaintiff had any remedy it should be sought in an action of covenant and not in assumpsit — but that, he could maintain no action to recover the excess.
    This was assumpsit for money had and received, and came up to this Court on exceptions taken to the opinion of the presiding Judge in the Court .of Common Pleas.
    The plaintiff, to maintain the action, introduced an agreement under seal, which was in the following words, viz :
    
    
      “Athens, Jan. 12, 1827.
    “Whereas Mark Trafton of Bangor, in the county of Fe- “ nohscot, Esq. has this day given me his note of hand for the “ sum of four hundred and sixty dollars and interest — has also “ assigned to me a mortgage deed and five notes of hand sign- “ ed by William Bacon, Jr. and Henry Bacon, amounting to “Jive hundred arid seven dollars and thirly-lwo cents, all dated “ April 3, 1826, as collateral security, for the payment of the “ said sum of Jour hundred and sixty dollars, I hereby promise “ and agree, that if the said Trafton should pay or cause to be “ paid, the said sum of four hundred and sixty dollars, in one “ year from June next, with interest thereon annually, or if I “ shall collect the same from the said notes, signed by the said “ Bacon and others, by the time last aforesaid, to reassign the “ said Bacon notes and mortgage to the said Trafton, thereaf- “ ter on demand.
    
      Isaiah Dore.” [n.s.]
    The plaintiff also proved by William Bacon, Jr. that he, the witness, paid the whole amount of the notes described in the foregoing instrument to the defendant, Dore. But no part of it was paid within a year from said 12th of January — nor was the sum of $460, paid previous to the first day of July, 1828; all the notes however were paid previous to Oct. 27, 1831.
    It was thereupon contended by the plaintiff that, he was entitled to recover the balance in the hands of the defendant after the payment of the note of hand of $460, mentioned in the foregoing agreement. But Perham, Justice, ruled that on the evidence produced, the action could not be maintained, and directed a nonsuit, to which the counsel for the plaintiff excepted.
    
      Abbott, for the plaintiff',
    relied upon the express declaration in the agreement, that the notes assigned were for “ collateral security” merely. The defendant has received an amount sufficient to satisfy his own debt, and an excess of about $84. This in good conscience he is bound to refund, and for the recovery of which, this action may well be maintained. The action is not brought on the agreement under seal, because the $460 was not paid within the year, but was produced on trial, merely to show that the assignment of the notes and mortgage was not absolute, but conditional and collateral.
    
    contended that assumpsit could not be maintained upon this agreement, it being under seal. Nor could he go out of it and maintain an action for an alleged cause growing out of this agreement. The contract between the parties has been reduced' to writing, and to that should they be confined.
    
      
      Kent, for the defendant,
    
      He argued further, to show that, if no objection had existed to the form of action, it could not have been maintained on the merits, and cited, 5 Dane’s Abr. ch. 154, sec. 7 ; Appleton v. Crowninshield,3 Mass. 443; Pothier on Obligation,part 2, ch. 8, art. 2; Bond v. Richardson, 10 Cro. Elix. 141; Makepeace v. Harvard College, 10 Pick. 298; Stanley v. Stanley, 2 N. H. Rep. 864.
    
   Mellen C. J.

delivered the opinion of the Court.

On the third of April, 1826, William Bacon, Jr. and Henry Bacon gave five' promissory notes, for the sum of five hundred and seven dollars, payable to the plaintiff at different days; and also a mortgage of certain real estate as collateral security. On the 12th of January, 1827, the plaintiff gave his note to the defendant for the sum of four hundred and sixty dollars and interest, and assigned the said mortgage and notes to Dore as collateral security for the payment of his note. It appears, that the full amount’ due on Bacon’s notes was paid to Dore by Bacon, as early as Oct. 27, 1831, and the plaintiff in this action demands the difference between the amount due on the note he gave to Dore, apd' the amount due on the five notes given by Bacon to the plaintiff, and by him assigned to Dore. In deciding this cause, the mortgage and the assignment of it to Dore, may be laid out of the case : it cannot be the subject of claim or consideration in the present action. The above balance is demanded on the principle, that the five notes were assigned to Dore, merely as collateral security for the payment of the note for four hundred and sixty dollars, given by the plaintiff to the defendant, and that of course the balance belongs to him, as his note is overpaid.

If such was the real character of the transaction, and such the agreement of the parties in relation to the assignment of Bacon’s notes, the claim of the plaintiff in an equitable point of yiew, at least, would be well founded. To ascertain its cha» raeter and the plaintiff’s rights more fully, we must ¡look to the terms of the contract of January 12, 1827, under the hand and seal of the defendant, and which was introduced by the plaintiff to the action. By this contract, which is relied on by him, in support, and, of course, assented to by him, it is stated that the mortgage and the five Bacon notes were assigned to Dore as collateral security for the payment of the plaintiff’s note to him : and Dore promised and agreed that, if Trafton should pay, or cause to be paid, the said sum of four hundred and sixty dollars in one year from June then next following; that is, before the first of July, 1828, with interest, or if he should collect the same from Bacon’s notes by the time last mentioned, he would'reassigw the mortgage and the Bacon notes. If, upon the true construction of the agreement, the plaintiff is entitled to recover damages for any breach of it, the remedy must be sought in an action of covenant, and not assumpsit. But has the contract been violated as to the Bacon notes, (for we take no notice of the mortgage,) by the defendant’s omitting to reassign them to the plaintiff, after Bacon had paid them and they were thus Bacon’s property ? It seems to us not to have been. If by a fair construction, then, of the contract, it does not furnish a ground of claim against the defendant upon the contract itself, does it, or does it not, furnish a defence against the present action, brought to recover the balance above-mentioned, now remaining in his hands ? Though the Bacon notes were assigned as collateral security, yet by the terms of the contract, at least so far as respects the notes, the defendant was not bound to do anything, unless the $460 note was paid, or its amount realized out of the Bacon notes before the first of July, 1828; and neither of those events took place. Until that time, the notes were held by the defendant as collateral security : but after that time, by the terms of the contract, they immediately became the absolute property of the defendant; whereas by the assignment or mortgage of them, he acquired only a conditional property. Chancellor Kent, vol. 4, page 132, observes, “ The distinction between a pawn and a mortgage of chattels is equally well settled in the English and in the American law ; and a mortgage of goods differs from a pledge “ or pawn in this, that the former is a conveyance of the title “ upon condition, and it becomes an absolute interest at law, if “ not redeemed by a given time.” See Brown v. Bennett, 8 Johns. R. 96. The Court in their opinion say, “ Here was a “ complete transfer of the title to the goods in question, with a “ condition of defeazance on the payment of $>*120,35 in four- “ teen days. This was a mortgage, not a technical pledge.” The money was not paid according to the condition, and the court decided that the title became absolute in the mortgagee. Homes & al. v. Crane, 2 Pick. 610. In Barrow v. Paxton, 5 Johns. 258, there was an assignment of certain household furniture as collateral security for the payment of rent, by certain specified days. The court say, “ the bill of sale stated in the record, was a mortgage of goods and not a technical pledge.” In the present case, it appears that the Bacon notes were assigned to the defendant, upon the conditions specified in the defendant’s agreement, and in case the condition had been complied with, he would have been bound to re-assign them.

Exceptions overruled; nonsuit confirmed.— Judgment for defendant.