Case ID: dc_8/html/0522-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Humphreys Mr. Justice Olin,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

STEPHEN TALTY vs. FREEDMAN’S TRUST COMPANY.
    At Law.
    No. 9470.
    I. A claim against the late corporation of Washington, commonly called a voucher, consisting of a bill for work performed by plaintiff for the corporation, together with certificates of the proper officers that, it was duly approved and allowed for the sum of $6,096.75, is not strictly a commercial instrument; hut where it has been indorsed in blank by the plaintiff and delivered to a broker as security to raise money, and no mark put on it to designate a wish to control it, or to restrict the indorsement, and as paper of this kind is extensively used for the purpose of borrowing money: Held, that the plaintiff could not maintain replevin to recover the voucher from an innocent bona-fide holder for a valuable consideration, without tendering him the amount paid therefor.
    H. Where the plaintiff made his promissory note for $3,000, payable to his own order, and indorsed it and delivered it to a broker to get discounted, giving him the voucher as security, and the note was discounted and the proceeds paid plaintiff, and the broker claimed that the voucher was given upon an agreement that he might sell and dispose of it at any time for 90 cents on the dollar, and the plaintiff claimed that he was not to sell it until after maturity and non-payment of the note, and the broker sold it to the defendant before such maturity, for a valuable consideration, and without any notice or knowledge of such arrangement: Held, upon this state of facts it was proper for the justice who tried the case below to instruct the jury to return a verdict for defendant, as there was no proof of tender before suit brought.
    STATEMENT OE THE CASE.
    This is an action of replevin to recover the possession of a claim consisting of .an evidence of indebtedness due the plaintiff from the corporation of Washington, and commonly called a voucher. On the trial the plaintiff proved that the voucher had been replevied and delivered to him, and that on January 6, 1872, he owned it. The bill of exceptions sets it out in the words and figures following:
    
      “ Surveyor’s Office of the District of Columbia,
    Washington, D. C., Deo. 9,1871.
    The corporation of Washington, to Stephen Talty, Dr.
    To grading and graveling I street north, from 7th east to the eastern boundary of the city, in accordance with an act of the corporation approved January 22,1870, and the contract dated January 3, 1871, viz: 21,099 cubic yards, at 17 cents per yard ...................................$3,586 83
    13,944 square yards gravel, at 18 cents per square yard...................................... 2,509 92
    6,096 75
    Duplicate.
    WM. FORSYTH,
    
      Surveyor of the District of Columbia.”
    Endorsed : “ Stephen Talty.”
    “ Office of the Auditing Commission, appointed under the act of the legislative assembly approved June 16, A. D. 1871.”
    “Washington, D. C., 1871.
    Received of Stephen Talty, of Washington, a claim against the corporation of Washington, contract completed, together with one voucher register, No. 605; amount, $6,096.75. Stamped, Auditing Commission.
    ED. M. FAETZ, for ClerlcP
    
    Endorsed: “Stephen Talty.”
    “ Claim No. 605, in favor of Stephen Talty, for $6,096.75 (six thousand and ninety-six dollars and seventy-five cents,) has been examined and approved by the commission to audit the same.
    A. S. PRATT,
    
      Ch’rm. GomrnP
    
    “ January 4,1872.”
    The plaintiff was examined as a witness on his own behalf, and swore, in substance :
    “ That on the said 6th day of January he employed one M. H. N. Kendig to borrow for him the sum of $3,000 for sixty days, and at the suggestion of the said Kendig delivered to hint the papers aforesaid as collateral security for the payment of a promissory note, in the words following, but erroneously dated A. D. 1871 instead of A. D. 1872.
    
      "$3,000.] “ Washington, D. C., Jmmary 6,1871.
    Sixty days after date I promise to pay to the order of myself, (voucher $6,096.75, coll.,) three thousand dollars, at the First National Bank of Washington, D. C., value received, with ten per cent. int.
    “ STEPHEN TALTY.”
    Endorsed: “ Stephen Talty.”
    “ That said Kendig took the said note and the said collateral away with him, and shortly thereafter, on the same day with the date of said note, returned and paid over to the plaintiff the amount of the said note, less the discount thereon, at the rate of ten per centum per annum; that the express understanding and agreement betioeen the plaintiff and the said Kendig was that, if the plaintiff fatted to pay his said note at its maturity, the said Kendig should have the right to buy said collateral at the rate of ninety cents on the dollar, if he so desired; that before the said note had matured, the plaintiff ascertained that said Kendig had taken up his said note; and a day or two before it matured the plaintiff, to pay his note and obtain his collaterals, called to see said Kendig and offered to pay said note and demanded its surrender, together with the said collaterals, but the said Kendig would not accept such payment, and refused to deliver said note or said collaterals; that the plaintiff further ascertained that said Kendig had, without his, the plaintiff’s, knowledge or •authority, sold said collaterals to D. L. Eaton, now deceased, the then actuary of the defendant, for ninety-six cents on the dollar, on or about the 26th day of January, A. JD. 1872, and said Kendig had taken up said note on the said 1st day of February, A. D. 1872, and still held the same; that said actuary had presented said collaterals to the chairman of the committee of indebtedness of the house of delegates, D. C., on said 26th day of January, and received from him said ■claim, No. 605.
    
      “ That he caused his duly-authorized agent to demand of the said actuary the surrender of his said claim to him, which demand was refused by the said actuary, and thereupon the plaintiff brought this suit; that subsequently he, the plaintiff, collected the whole amount of his claim, and executed a receipt therefor.” And there rested his case.
    The defendant in its behalf gave evidence to the jury tending to show that when the said collateral voucher was pledged by said plaintiff to said Kendig, it was agreed by and between said Kendig and said plaintiff that said Kendig might, if he should so elect, sell or take the said voucher at ninety cents on the dollar, at any time before the maturity of the said note; and that said Kendig did elect to sell the said collateral voucher, and out of the proceeds of such sale took up said note, and afterward offered to pay the balance of the proceeds of the voucher, computed as aforesaid at ninety cents on the dollar, to said plaintiff, before the maturity of said note; and that said plaintiff refused to take or accept the said money; and the said Kendig also testified as follows:
    “ Q. The only transaction between yourself, as you claim it, was a transaction between yourself aud the Freedman’s Bank, was simply the sale of the collateral ?
    A. Yes, sir.
    Q. You claim to be its owner ?
    A. Yes, sir.
    Q. Did you say anything to Colonel Eaton about your transaction with Mr. Talty 7
    A. No, sir; not that I know of.
    Q. You did not tell him how you came by it, from whom you got it, or what you paid for it, or what you had to do with it ?
    A. No sir; 1 certainly never told him what I paid for it.”
    And that no tender of any kind was made by the plaintiff to the defendant before the commencement of this suit; and that said Kendig was a broker and negotiator of loans at the time of the pledge to him; and that it was understood at the time by said plaintiff that he, said Kendig, did not have the money himself, but must procure the same for said plaintiff on the note and said collateral security, from some other person ; and that said Kendig received no commission or compensation from the plaintiff for his services, but relied for his compensation upon the option given to him by the plaintiff to sell or take said voucher at ninety ceuts as aforesaid, thus getting the benefit of the rise in the market, if any should occur. That he sold the said voucher to the defendant at ninety-six cents on the dollar, and afterward, and before the maturity of the said note, the said Kendig told the plaintiff he had so sold said voucher, and offered to account with him therefor at ninety cents on the dollar, which offer the plaintiff rejected.
    And after all the evidence in the cause had closed, the court charged the jury as follows:
    “ Gentlemen of the jury, you may render your verdict for the defendant in this cause. The verdict will be that the defendant is entitled to a return of the property replevied, or its full value; and you will assess its value at what you think has been proved to be its value in the market;” to which charge and each and every part thereof the plaintiff excepts, and the case is now here upon this exception.
    
      Joseph H. Bradley, jr., for plaintiff, with whom was A. G. Riddle, made the points following:
    1st. The issue in this case was eminently a question of fact, namely: What were the terms of the contract made between the plaintiff and the witness, M. H. N. Kendig, under whom the defendant claims title?
    It is the exclusive province of the jury to judge of the weight of the evidence; and it is error to charge that the plaintiff cannot recover, if by any possible construction the testimony will support the action. Bank of Washington vs. Triplett, 1 Pet., 25; S. P. Jewell vs. Jewell, 1 How., 219; Walter vs. Alexander, 2 Gill, 204; Grove vs. Brien, 1 Md., 438; Cole vs. Hebb, 7 G. and J., 28, et seq.
    
    2d. It was error to charge the jury “ to return a verdict for the defendant,” inasmuch as—
    
      a. The chattel replevied was a mere chose in action, and possessed none of the attributes of negotiable paper, and was not assigned by the plaintiff to defendant’s vendor.
    
      b. Kendig, the broker, took no equitable title by its delivery into his possession, if the plaintiff’s proofs are true, which was a question for the jury.
    c. Nor had he authority, express or implied, to sell the collateral; certainly not before the note matured and was not paid.
    
      Enoch Totten, for defendant, relied upon the following points:
    1. That the indorsement in blank and delivery of the voucher by the plaintiff to a broker for the purpose of being negotiated, and the sale of the voucher by the broker to the defendant, vested in the defendant a perfect title to the security, whether there was a verbal agreement between plaintiff and the broker that a sale should be made or not. Baldwin vs. Ely, 9 How., 570.
    2. If the voucher was given as a pledge or pawn only, then it is clear that the defendant took all the interest the broker or pawnee possessed, and was entitled, at least, to all the broker’s rights at the time of the sale. And to enable the plaintiff to maintain replevin, it was necessary that he should first have made a tender to the defendant of the amount due from him on his note. Without such tender he had no right to the possession of the voucher. Demainbroy vs. Metcalf, 2 Vernon, 691; Little vs. Baker, Hoff. Ch., 487; Jarvis vs. Rogers, 15 Mass., 408; Baldwin vs. Ely, 9 How., 580; 3 Parsons on Con., 274; Story on Bailments, § 327; Lewis vs. Mott, 36 N. Y., 395; Donald vs. Suckling, Law Rep., 1 Q. B., 585; Johnson vs. Stear, 15 C. B. (N. S.,) 330.
   Mr. Justice Humphreys

delivered the opinion of the court:

Replevin was instituted by plaintiff to recover a claim against the corporation of Washington, duly approved, passed upon and allowed, in amount six thousand ninety-six dollars and seventy-five cents. Plaintiff was anxious-to have money in the early part of 1.871, and prevailed on M. H. N. Kendig to raise the sum of three thousand dollars. He executed his note, payable to the order of himself, dated January 6,1872, at the First National Bank of Washington, D. C., for three "thousand dollars, interest ten per cent., sixty days after date, indorsed said note, and at the same time delivered and indorsed to said Kendig, as collateral security, a paper denominated a voucher, signed by proper officers, evidencing a claim of plaintiff against the corporation of Washington for six thousand ninety-six dollars and seventy-five cents, the consideration of which was shown by another paper to be for work done by said Talty, and which he had indorsed.

On January 26,1872, said Kendig sold said claim or voucher to the defendant, a banking corporation in the city, for ninety-six cents on the dollar.

It is not pretended or claimed that the bank, or any of its officers controlling negotiations, knew of any understanding or arrangement, if any was made, between Talty and Kendig, other than the indorsement, which was in full and unrestricted. The plaintiff now claims that it was agreed between him and Kendig that if “ plaintiff, failed to pay his note at maturity, the said Kendig should have the right to buy the collateral at the rate of ninety cents on the dollar, if he so desired.” This is his own statement in evidence. He further states that he offered to pay Kendig the amount of the note a day or two before its maturity, but Kendig refused to receive such payment, or to deliver to him the note which he (Kendig) had taken up, or the said collateral.

There was no mark or memorandum on the voucher indicating that it was a mere deposit as collateral, but the indorsement was in blank. When demand was made on defendant to surrender the voucher, no tender was made of any money. Defendant gave evidence tending to show that it was agreed between plaintiff and Kendig that said Kendig might, if he elected, sell or take the said voucher at ninety cents on the dollar at any time before the maturity of the note; and that, after Kendig sold the voucher and took up the note, he offered to pay plaintiff the balance of proceeds of the voucher at ninety cents, to be computed, deducting the amount of the note, which plaintiff declined to accept. The circuit court charged the jury to retiirn a verdict for defendant ; and to that plaintiff excepted.

On the plaintiff’s own evidence, what was there for a jury to pass upon? Here was an indorsement in blank of a paper, the character of which, in all towns, is used upon which to raise money. This class of evidences of debt may not in strictness be denominated commercial instruments, but they have certainly assumed somewhat of a negotiable character, or at least they so far enter into the facilities of obtaining and borrowing money that no court will be found to cast the burden of litigating as to the equities between the parties upon an innocent bona-fide holder for a fair valuable consideration.

The questions which might arise between Talty and Ken-dig certainly cannot all arise in this suit. Persons who put forth paper upon which they wish to raise money should always mark it, designate it, if they wish to control it. And when they do this, how much money could be raised on a ten-thousand-dollar security in three months ?

Hard, unconscionable bargains may be relieved against, and the party who is guilty may be controlled. But no rule authorizes the visitation of a man’s , own error upon a, bonafide third one. In this case a fair price was paid by the bank for the property in the paper. Plaintiff has not offered to return any part of the money which was given by defendant for the evidence of debt. On the plaintiff’s evidence alone, we are bound to find full authority in his broker, Kendig, to sell and dispose of the vouchers. If this be so, the court would have been too liberal to have sent the jury out to consider.

Every rule with which we are acquainted, as sustained by justice and the rigidness of legal technicalities, demand an -- approval and affirmation of the judgment of the circuit court, and the affirmance of that judgment is hereby ordered.

Mr. Justice Olin,

after stating the case, delivered the following dissenting opinion:

It will be seen that, upon this recital of facts, a most material discrepancy appears from the record as to what the nature of the arrangement was under which this collateral was delivered to Kendig. The testimony on the part of the plaintiff is that this certificate of indebtedness was simply delivered over to Kendig as collateral security for the payment of the $3,000 note. The testimony for the defendant is, on the contrary, explicit to show that this certificate of indebtedness was delivered to him upon condition that he was at liberty to sell and dispose of it, at any time he might elect, at a price not less than ninety cents on the dollar.

If the true version of this transaction is that claimed on the part of the plaintiff, and which his evidence tends strongly to prove,' then I think the judge erred in directing a verdict of the jury for the defendant. If the true transaction was such as the evidence on the part of the defendant tended to show it, the verdict was right. According to that, said Kendig was authorized to sell said voucher or certificate of indebtedness at any time, even before the maturity of the note.

It is agreed that the sale of the voucher was actually made before the maturity of the note.

I understand that the cause was decided in the court below against the plaintiff; that no legal tender strictly in conformity with the rules of common law was made, before suit brought, of the amount of the note.

If the transaction between the plaintiff and Kendig was as the plaintiff’s testimony tends to show; no tender of any kind was a necessary condition to maintain a suit to recover possession of this certificate of indebtedness; and to show this I will only cite a case of Wilson vs. Little and others, 2 Comstock, 443; a case precisely in point, unless the defendant got a better title to this certificate of indebtedness, or chose in action, than Kendig had, which will scarcely be pretended, as the vendor of the personal chattel can give to the vendee no better title than he himself possessed.

The error of the court was, I think, therefore, in taking the cause from the jury, and not submitting to them the question whether the testimony on the part of the plaintiff was the true version of the agreement between the plaintiff and Ken. dig in reference to the delivery of this certificate of indebtedness. Had I been sitting as a juror, quite likely I might have come to the conclusion that the arrangement between Talty and Kendig was such as the testimony on the part of the defendant tended strongly to prove; but this was an action at law, and the facts in the case were to be found by the jury.