Case ID: whart_1/html/0223-01.html
Source: Caselaw Access Project
Author: {"author": "Gibson, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Philadelphia,
    February, 1, 1836.]
    HEPPARD against BEYLARD.
    IN ERROR.
    A. the holder of a promissory note, a short time before the failure of the drawer, and in anticipation of that event, sold it to B, who was indebted to the drawer. On the failure of the drawer, his assignees brought an action against B., who set off the promissory note and obtained a.verdiet and judgment; Held, that A. had a right to dis, pose of the note to B. and that the assignees had no cause of action against him.
    Writ of Error to the District Court for the City and Comity of Philadelphia, to remove the record of an action brought in that court by Hezekiah Heppard, assignee of Joseph M. Heppard, and William B. Heppard, against John Beylard.
    .The circumstances under which the suit was brought, were these:
    Joseph M. Heppard,and William B. Heppard, were indebted to the defendant on a promissory note, dated April 15,1823, at six months, in the sum of $357 82; which note fell due on_the 18th day of October, 1823.
    Nathaniel Richardson, of Pittsburg, was indebted .to the said Joseph M. and William B. Heppard, in the sum of $ 295 92, on a book account; with which fact defendant was acquainted before the transfer of the note by him, as hereinafter stated.
    The said J. M. and W. B. Heppard, on the 23d day of August, 1823, became insolvent; and on the same day made an assignment of their estate to the plaintiff, in trust, for the benefit of their creditors. Notice of the assignment was given by publication in the Philadelphia Gazette, on the 25th day of August, 1823.
    The defendant had, previously to the 20th of August, 1823, obtained a discount of th.e note of the 15th April, at the banking-house of Stephen Girard, and received the money thex-efor.
    On the 20th of August, 1823, the defendant in Philadelphia, wrote to his agent, Mr. Dubarry, in Pittsbux'g, informing him that Ixe held the note of the 15th April, and other notes of the Heppards, and expressing his fear lest they should become bankrupt, and instructing him to barter said note -for goods. This letter Dubarry x’eceived on the 25th of August.
    On the 26th of August, 1823, Dubarry, in Pittsbux’g, bartered the note to Richardson for goods, (bees-wax, &c.) to the amount of $ 295 92, (the amount of Richai’dson’s debt to the Heppards,) and by letter dated at Pittsburg, on the 27th day of August, 1823, informed the defendant of the transaction.
    The defendant on the 2d of September, 1823, took up the note from Girard’s Bank, and transmitted it on the same day to Dubaxry, who, after its receipt, delivered it to Richardson. Richai’dson had, previously, by letter dated at Pittsburg, about the 27th of August, informed the Heppards of the transfex’ of the pote to him: and he x’eceived no notice from any source, of the assignment made by them, until some weeks after the barter with Dubarry, and the x-eceipt of the note from him.
    On the 8.th of April, 1824, .the plaintiff, as assignee .of the Heppards, commenced a suit in the court of Common Pleas of Alleghany, couxxty, against Richardson, to recover the amount of the said book account. Richardson pleaded in that suit, axnong other things, a set-off; and on the trial, gave in evidexxce Heppax'd’s note of the 15th of April, 1823, transferred to him; the transfer pf which was antedated by Dubarxy to cox'respond with the date of the letter, in which defendant had authorized hirn to barter it, viz.; August 20th, 1823.
    A verdict was rendered in the said suit, in favour of Richardson, for the sum of $71 13; the set-off of the said note being allowed by the court and jury. Judgment was rendered on that vei’dict, and no proceedings to reverse it were taken by the plaintiff.
    
      The plaintiff then brought this action against Beylard, to recover the sura of money, (viz. the amount of the said note, $ 327 82 and interest), lost to them by the judgment in Pittsburg, through the proceedings of .Beylard, which the plaintiff alleged to be fraudulent in law; and he claimed to recover either the whole amount, or at least the amount of Richardson’s debt to the Heppards.
    The judge below, charged upon the above facts, that the plaintiff could not recover; that the conduct of the defendant was per-. fectly fair and legal; that he had the right to do what he did; that there was no principle of law to support the plaintiff’s action; and that these matters should have been relied upon in the suit between the plaintiff and Richardson.
    A verdict and judgment were rendered for the defendant. The plaintiff took a bill of exceptions to the charge of the judge, and a writ of error, and assigned the following errors.
    “ 1. The court below erred, in charging the jury that there was no principle in law, upon which the action of the plaintiff could be supported.
    2. The court erred, in saying that the defendant had a right to offer in the market the note of the 15th of April, 1823, before he took it up from Girard’s Bank, and to sell it on the 20th or 26th of August, and that in so-doing, he, the defendant, had nothing to dp with Heppard, or with transactions between Richardson and the Heppards, and was not to be affected by them.
    3. The court erred in saying, that there was nothing in the defendant’s conduct, from beginning to end, which the law prohibited.
    4. The court erred, also, in saying, that all in this cause had been previously heard and'tried at Pittsburg.”
    Mr. G. M. Wharton, and D, P. Brown, for the plaintiff in error,
    cited Richter v. Selin, (8 Serg. Sp R. 425.)
    Mr. M’Call., (with whom was Mr. Brashears,)
    referred to Stouffir v. Latshaw, (2 Watts, 165.)
   The opinion of the court was delivered by

Gibson, C. J.

The argument for the plaintiff, is founded on the fallacious assumption, that in gaining a legal advantage over the other creditors, the defendant was guilty of a fraud; which, in turn, is founded on an obiter dictum of the judge who delivered the opinion of the court in Richter v. Selin. 1 am unable to perceive how a measure to obtain such an advantage, when unattended with misrepi’esentation or an abuse of confidence, can be inconsistent with the strictest honour. The creditor may know, that the debtor intends to give a preference to others; and what can be the harm óf hm attempt to prefer himself? It is to be remembered, that the parties are dealing with legal rights, and not principles of generosity in sharing a loss. Placed in a condition of common pferil, which imposes on each the necessity of struggling for his own preservation, good faith requires no more of them than that each should not deceive the other to his prejudice. Whom did the defendant decisive? Not the endorsee of the note; for he recovered it, or, what is the same thing, obtained a credit for the amount by defalcation. Not the assighees or any of the creditors; for he had no transaction with them. By obtaining on the contract of endorsement, more for his note than he could have made of it in his own hands, he deceived no one who placed confidence in him, or had a right , to prescribe to him any particular course of conduct; and I am unable to understand how a creditor who has thus obtained more than his proportion from an insolvent fund, may be compelled to restore it. In all cases of the stamp; a legal advantage is a conscionable advantage. Thus it was held by this court, in Carson v. M’Farland, 2 Rawle, 118, that a creditor who has been paid more than his proportion, by mistake of the executor, can not be compelled to refund it. Monfey can be follow’ed only when it has been received mala fide; whence results a clear and indisputable rule of law, that when •paid by mistáke in discharge of a just debt, it may not be recovered back. Now, to be successful, what would be the gist of an action here? Not deceit; for the defendant deceived no one. Not the gain of a legal advantage; which, as the law allows it, surely cannot be unlawful. It must necessarily be the receipt of money to the plaintiff’s use, for the excess beyond what would have been the defendant’s dividehd. But the money had of the endorsee was not that which was coming to fhe éstate of thé insolvent; it was the price of a chose in action, parted with on terms which the law did not prohibit between the parties; and which did not create a trust for the plaintiff: and be the fancied equity of the case what it may, ■ there is not such privity between the parties as will support an action.

Judgment affirmed: