Case ID: mass_63/html/0209-01.html
Source: Caselaw Access Project
Author: {"author": "Metcalf, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Elbridge Brown vs. George D. Dutton & others.
    A. debtor of the defendants and also of the plaintiff gave the plaintiff a chattel mortgage to secure both debts. The plaintiff afterwards authorized the defendants to take possession of the mortgaged property, and convert it into money, for their joint benefit. On the same day the defendants covenanted with the plaintiff “ to pay him $1,000, to his sole use as soon as the cash should be realized from the sale and disposition of the mortgaged property/’ The defendants then sold most of the mortgaged property, partly for cash, and partly for notes, all which they kept. They also retained the balance of the property which was unsold, except a portion which was redelivered to the mortgagor and he was discharged. The plaintiff brought his action upon the covenant to pay him the $1,000 before that sum had been actually received by the defendanis; held, that the action could not be maintained.
    This was an action of covenant broken, commenced on the 15th of August, 1849, against George D. Dutton, Ormond Dutton, George C. Richardson, and Charles W. Pierce, composing the firm of Dutton, Richardson & Co.; and Augustus Brown and Joseph Dix, composing the firm of Augustus Brown & Co., upon their joint and several covenant, reciting that “whereas Augustus L. Welles has made to Elbridge Brown a certain chattel mortgage for the purposes therein expressed, and whereas the said Elbridge Brown has consented to take possession and dispose of the said mortgaged property, and for that purpose hath appointed the said Augustus Brown and George C. Richardson, jointly and severally, his lawful attorneys: now these presents witness, that in consideration of the premises, and of ten dollars to us paid, we, the said Dutton, Richardson & Co., and Augustus Brown & Co., do hereby, jointly and severally, covenant and agree with the said Elbridge Brown, and his assigns, as follows, viz: that the said firm of Dutton, Richardson & Co., so soon as the cash shall be realized by the sale and disposition of the said mortgaged property, shall pay to the said Elbridge Brown the sum of five hundred dollars to his sole use; that the said firm of Augustus Brown & Co., so soon as the cash shall be realized by the sale and disposition of the said mortgaged property, shall pay to the said Elbridge Brown the further sum of five hundred dollars to his sole use.”
    
      The plaintiff alleged, in his declaration, “ that the cash has been realized by the sale and disposition of said mortgaged property, in the manner contemplated by the said deed ; yet that neither the said firm of Dutton, Richardson and company, nor the said firm of Augustus Brown and company, nor any of the persons composing either of those firms, have or hath paid either of the said several sums of five hundred dollars, so as aforesaid to be paid to the said plaintiff, or any part thereof, but wholly neglect and refuse so to do, though thereto requested since the cash was realized, as aforesaid ; nor have the said defendants, or either of them, paid the same to the plaintiff, since the neglect and refusal of the said firms so to do ; and so the plaintiff says that the said defendants their covenants aforesaid have not kept, but have broken the same.”
    Augustus Brown and Joseph Dix were defaulted.. The other defendants pleaded the general issue.
    At the trial before Bigelow., J., in this court, it appeared that Augustus L. Welles of Detroit, on the 21st of March, 1848, mortgaged personal property to the plaintiff, to secure payment of $10,973, in equal instalments of three, six, and nine months. Eleven hundred and fifty dollars of this sum were due to the plaintiff; $4,043.65 were due to Augustus Brown & Co.; $4,779.35 to Dutton, Richardson & Co.; and $1,000 to Bramhall, Fairbanks & Co.- The condition of the mortgage was thus: “ In case default shall be made in the payment of said sums, or any part thereof, at the times above limited, or in case the said Brown,” (the plaintiff,) “ who herein represents the interests of Augustus Brown & Co., and Dutton, Richardson & Co., as well as his own, or, in case of his decease, Augustus Brown & Co. shall deem it for the interest of all concerned, then it shall be lawful for the said Brown, (the plaintiff,) his executors, administrators, or assigns, or his or their authorized agents, to enter upon the premises of the said Welles, or any place or places where said goods or chattels, or any part of them, may be, and take possession thereof, and sell and dispose of the same, at the best prices which can be obtained therefor, at private sale or public auo tion, as he may deem meet and best, and ont of the money arising therefrom to pay and retain the said sum of money above mentioned, and all charges of said sale, (if so much there shall be,) rendering the surplus moneys, if any, to said Augustus L. 'Welles.”
    It also appeared that, on the 5th of April, 1848, the plaintiff (mortgagee) gave a power of attorney to Augustus Brown and George C. Richardson, one of them being a member of the firm of Augustus Brown & Co., and the other of the firm of Dutton, Richardson & Co., (whose debts, as well as that of the plaintiff and that of Bramhall, Fairbanks & Co., the mortgage was given to secure,) authorizing them, in his name and behalf, to take possession, manage and dispose of, and convert into money, the property mortgaged as before stated, and the proceeds to distribute and divide, to and among the several persons mentioned and provided for in the mortgage, at their risk and expense, without any charge for personal services. The plaintiff also, in the power of attorney, authorized his attorneys to substitute one or more attorneys under them. And they afterwards substituted Joseph F. Dickinson.
    It further appeared, that on the same day on which the power of attorney was made to Augustus Brown and George C. Richardson, the individual members of the two firms of Augustus Brown & Co., and of Dutton, Richardson & Co., executed the instrument, above set forth, and on which this action was brought.
    It also appeared from the testimony of Joseph F. Dickinson, the substituted attorney, that he went to Detroit, in April, 1848, and took possession of the property mortgaged by Welles to the plaintiff, and sold most of it to Lyon, Farnsworth & Co. and others, partly for cash and partly for their notes, payable at different times; the last of the notes being payable in November, 1849. That he gave up to Welles the residue of the property, worth from $1,000 to $1,200, and discharged the mortgage; that the amount of the proceeds of the property, which he disposed of, was $9,795.76, of which between $3,000 and $4,000 he paid in expenses and. in discharge of prior mortgages on the same property ; that on the 3d of July, 1848, he delivered to Dutton, Richardson & Co. notes taken for the property so sold by him, (which notes were secured by mortgage,) to the amount of $3,575.48, and goods, part of the mortgaged property which was not sold, worth $325; and to Augustus Brown & Co. notes, taken for goods sold, to the amount of $2,899.56.
    It did not appear that either or all of the defendants had received $1,000 in cash, from the sale and disposition of the mortgaged property, before the commencement of this action. Six or seven hundred dollars only were shown to have been so received; although it was in evidence that, at the time of the trial, much more than $1,000, in cash, had been so received by the defendants.
    The case was taken from the jury, by consent of the parties, with an agreement that if the whole court should be of opinion that the plaintiff, on the foregoing evidence, is entitled to recover, the four defendants, who pleaded to issue, should be defaulted; otherwise, that the plaintiff should become nonsuit so far as relates to those defendants.
    
      A. H. Fiske, for the plaintiff.
    
      W. Brigham, for the defendants.
   Metcalf, J.

This is an action on a joint and several covenant made by the individual members of two firms. A debtor of these firms, who owed one of them $4,779.35, and the other $4,043.65, and who also owed the plaintiff $1,150, gave the plaintiff a mortgage of personal property to secure these several debts. Before breach of the condition of this mortgage, the plaintiff, at the instance of the defendants, empowered them to take possession of the mortgaged property, and convert it into money. The defendants, thereupon, covenanted with him, that as soon as the cash should be realized by the sale and disposition of the mortgaged property, each of said firms should pay him five hundred dollars, to his sole use. For an alleged breach of this covenant, the members of these two firms are now sued jointly.

We incline to the opinion, that the plaintiff is right in his construction of this covenant • to wit, that the words, as soon as the cash shall be realized,” mean, not the whole proceeds of the mortgaged property, but the cash which the defendants covenanted to pay to the plaintiff; and that the true interpretation of the covenant is, that as soon as $1,000 are realized in cash, from the sale and disposition of the mortgaged property, each of said firms shall pay $500 to the plaintiff.

The plaintiff then takes this position: “ That the defendants, in point of law, have received, in cash, $1,000, or what is equivalent to money.” And he relies on the cases in which actions for money had and received, and for money paid, have been maintained, where one has received the amount of another’s debt, or has satisfied another’s debt, in money’s worth, instead of money itself. But these are cases in which a defendant’s liability is imposed by law, or principles of equity, without reference to any special contract of the parties. Thus a party, whose duty it is to receive money, on the sale of another’s property, but who receives notes or goods, is held liable to the claimant in an action for money had and received; being estopped to deny that he has received the money. So a surety, whose land is set off on execution to satisfy the debt of the principal, is entitled to indemnity; and as his land has satisfied that debt, the principal is held liable to him in an action for money paid. And so of many similar cases. The present action, however, is brought on a special contract, in which the defendants covenanted to pay the plaintiff $1,000, “ so soon as the cash ” should “ be realized from the sale and disposition ” of certain property. Notes on time, taken for the property sold, are not cash, within the meaning of this covenant. Still less is the mortgaged property itself, part of which the defendants took, to be deemed cash. And there was an obvious reason why the defendants should desire, and the plaintiff consent, that payment to the plaintiff should be deferred, till the cash should be realized. The property was at Detroit, and was to be sold. And sales to any considerable amount are generally on a credit, longer or shorter. The parties evidently had reference to these facts; and fhe defend* ants did not mean to advance money to the plaintiff, but to pay him from the cash receipts of the sale.

It was suggested for the plaintiff, in the argument, that the defendants may be considered as having received the cash, and to have invested it in the notes which they took; or that, as Welles, the mortgagor, has been discharged from the plaintiff’s claims, by the defendants, they may be charged as for money had and received. But the court cannot adopt either of these suggestions.

.There are cases, in which defendants have been charged m actions for money had and received, when they have received notes for another’s dues or property, and nothing further appears after a considerable lapse of time beyond that at which the notes were made payable. The legal presumption is, ip such cases, in the absence of proof to the contrary, that the defendants have collected the notes. But in this case there is no such presumption.

If the defendants had so managed the matter, as never to have received any cash for the mortgaged property; if they had given it all up to the mortgagor, for the purpose of evading their contract with the plaintiff; he might doubtless have a remedy against them, of some kind. And so, if they have discharged his claims against the mortgagor, as the plaintiff, in argument, alleges that they have, they may be liable to him for that act; but not on this covenant to pay him when the cash should be realized from the sale.

As the defendants had not received $1,000 in cash, when this action was commenced, the action cannot be maintained.

The agreement of the parties at the trial was, that if the court should be of the opinion now announced, the plaintiff should be nonsuit, so far as relates to the defendants, who have appeared and pleaded. But the counsel for the plaintiff will consider whether, as the writ and declaration now are, he can safely take judgment as against the defendants who have been defaulted. Tuttle v. Cooper, 10 Pick. 281; Rev. Sts. c. 100, §§ 6, 7. Plaintiff nonsuit.