Case ID: tenn_52/html/0256-01.html
Source: Caselaw Access Project
Author: {"author": "TuRNEY, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James O. Gardner v. Smith, Hurt, et als.
    
    1. Assignment. Assignment of part of chose in action redid. The assignment of part of a note then in suit in the Circuit Court against the makers, is a good and valid assignment, and will not be vitiated by a similar assignment of the remainder of the note to other parties, and the suit at law may be prosecuted in the name of the assignor.
    2. Same. Pleading. Parlies at law. But one suit at law can be brought in such a ease for the benefit of all the assignees, and this upon the entire instrument.
    3. Same. Pleading and parlies in equity. This rule requiring all the assignees to bring joint suit when part owners of chose in action, does not apply to courts of equity, and if one part owner shall desire to enforce collection and another should not desire to do so, the first may file his bill in Chancery to enforce his own rights as part assignee of the note.
    4. Witness. Assignor competent. The assignor of a note is a competent witness for his assignees, although the suit is pending in his own name against the makers.
    EEOM MADISON.
    Appeal by attaching creditors from decree of the Chancellor, in favor of the assignees, and perpetually enjoining attachment suit of creditors against them and the makers of the note. T. C. Mdse, Ch.
    The facts in this case are not stated in the opinion but are substantially as follows: Smith & Hurt gave their note to Joseph H. Gardner for $9,600, dated September 20, 1860. On this note there was a credit of $3,000. Suit was brought on this note by said Joseph H. Gardner, against Smith & Hurt,, in the Circuit Court of Madison County. This suit had been pending several years, when certain creditors of said Joseph H. Gardner, viz.: Meals, McHany and Boon, believing that Joseph H. Gardner was concealing his property and putting it out of the reach of his creditors, issued their attachments against him, and enjoined Smith & Hurt from paying over to him, and prayed for a decree to satisfy their debts. The next step in this complicated litigation was, that Joseph H. Gardner filed bills in the names of his brothers, ’William F. Gardner and James O. Gardner (Joseph H. swearing to the bills), in which the makers of the note and the plaintiffs in the attachment bills were all made defendants. These bills charge that Joseph H. Gardner, after he had brought the suit at law on the note, had made assignments or transfers to three separate parties of three separate interests in said note. To McKinny he had made an assignment of $2,000. To his brother Wm. F. Gardner he had assigned $2,500, and to his brother James O. Gardner he had assigned $4,032. These transfers were not on the note, but on separate papers, given to each one separately. The amounts stated make up about the amount due on the note, after deducting the credits that had been entered on it. The deposition of Joseph H. Gardner was taken and read at the hearing by assignees, although objected to by defendants.
    M. Bullock, for complainants.
    Milton Beown for defendants,
    the attaching creditors, who said: The question here is between the attaching creditors and those to whom these assignments ■of individual interests in the note are made. McKinny never accepted the assignment to him, and he is not in this controversy. And. it may be further remarked, that defendants Smith & Hurt are mere stakeholders, .and have the money to pay no matter which way it is decided.
    The attaching creditors contend that the alledged assignment of this chose in action was not complete, and that their attachments hold equitable priority on this fund in the hands of Smith & Hurt.
    1. To make an assignment of a chose in action, vest any right in the assignee, full notice must be given to the debtor by the assignee. This notice must not be information derived merely from other sources, it must be from the assignee and amount to evidence that he has accepted the transfer, and holds the debtor liable. It is on the principle of notice of the dishonor of a bill of exchange, it must come from the party in interest and holding the bill: Byles on Bills, top page, 223. No such notice was given and the sup_posed assignment is void as against these attaching creditors: 2 Story’s Eq., s. 1047.
    2. A chose in action can not be divided or “split up,” and parceled out among different assignees. A party who is a debtor to one person can not without a new contract and his express agreement, become the •debtor of more than one. The assignment of a part of a chose in action is void, and notice to the debtor • does not give it any validity: 1 Parsons on Contracts, 229. See also 1 Parsons on Notes and Bills, in note •on page 334, where it is said, “In Mandeville v. Welch, 
      5 Wheat., it is laid down that an order for a part of a fund does not amount to an assignment.”
    Mr. Justice Story, in the case of Mandeville v. Welch, 5 Wheat., 277, Cond. Pep., 647, after laying down the principle that an assignment of part of a fund or chose in action transfers nothing, says: “The reason of this principle is plain. A creditor shall not be permitted to split up a single cause 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 on the singleness of his original contract, and to decline any legal or equitable assignment by which it may be broken into fragments. When he undertakes to pay an integral sum to his creditor, it is no part of his contract that he shall be obliged to pay in fragments to any other persons.” See also 2 Kent, 532, and Gibson v. Go oh, 20 Pickering, 15. See also Henan v. Jaclcson, 5 Peters, 580-597, where the case of Mandeville v. Welch is re-affirmed. These principles and authorities fully establish that the pretended assignments of portions of the note — a part to Wm. E. Gardner and a part to James O. Gardner — conferred on them no right in law or equity to enforce such assignments, even if the transaction was entirely fair and honest. Courts of equity no more than courts of law will give validity to a transfer of a part of a chose in action. The same unanswerable reasons against it equally prevail in both Courts.
    3. These pretended assignments were not bona fide. The parties have shown ingenuity in setting up plausible pretences, but the prominent facts show the bad faith of the transaction. The brothers to whom the assignments were made were absent and took no part in it. The bills are sworn to by Joseph H. Gardner, who made the pretended assignments; and two reasons are assigned for this — that the parties themselves were absent, and because Joseph H. Gardner best knew the facts of the case. This of itself shows that Joseph’ H. Gardner conducted and arranged the whole affair. Add to this, the fact that a large estate is suddenly-transferred — all of it to his brothers and sisters and mother — and the consideration set up is, pre-existing indebtedness to them.
    On these and other grounds it seems clear that the attaching creditors are entitled to satisfaction of their debts out of the fund in question.
    It will be observed that the cases of 'Mandeville v. Wehh and Gibson v. Gooh, above referred to, were suits in the names of the party holding the legal title for the use of the party to whom the assignments were made. The simple question in both cases was, can any equitable interest pass by an assignment of a part of a chose in action? It was held that none would pass.
    In the case before the Court, the payee of the note could bring but one action himself, and it follows that he could not transfer to others the right to bring more than one.
   TuRNEY, J.,

delivered the opinion of the Court.

The words — “For value received, I assign, transfer, and set over to James O. Gardner four thousand and thirty-two dollars of a note executed to me at Jackson, Tennessee, on 20th of September, 1860, by Smith & Hurt, and Robert B. Hurt security, for nine thousand and six hundred dollars, payable ninety days after date, upon which suit is now pending in the Circuit Court of Madison County, this 30th day of October, 1865. Jos. H. Gardner” — is a good assignment, not vitiated by similar assignments of the remainder due on the note • to other creditors, and the suit at law may be prosecuted in the name of the assignor.

By the assignments he constitutes himself trustee for the assignees, the assignees having the right to control their respective interests; and if it shall turn out that one may desire the collection by law of the note, and the other should not, the first may resort to a Court of Equity for the enforcement of his rights acquired by the assignment.

The debtor could not be subjected to various suits at the instance of the several assignees; and if suit is brought at law, it must be on the entire instrument, and in the case at bar that would be on the note.

The maxim that choses in action can not be divided or “split up” — that a debtor cannot, without a new contract and his express agreement, become a debtor of more than one, is applicable alone to Courts of Law, and is not meant to interfere with Courts of Chancery in the exercise of their general and peculiar jurisdiction in matters of trust and equitable assignment.

The testimony of Jos. H. Gardner and of Major Bullock shows that notice had been given to one of the makers of the note of the assignment before the filing of the attachment bills, and that Jos. H. was the attorney in fact of his brother, James O. Jos. H. Gardner was a competent witness.

Affirm the decree. The costs of the suit at law will be paid by Smith & Hurt and R. B. Hurt, the other costs will be paid by the attaching creditors.