Case ID: va_29/html/0239-01.html
Source: Caselaw Access Project
Author: {"author": "*BROOKE, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Clayton v. Fawcett’s Adm’rs.
    February, 1830.
    (Absent Coalter and Green, J.)
    Equitable Assignment — What Constitutes — Case at Bar. — A. bolding abond of B., places in C.’s bands, to collect tbe money for bim when due, and if not paid, to put it in an attorney’s hands to collect by suit; tbe money was not paid when due, and C. put tbe bond in attorney’s bands for collection: then A. addressed a letter to C.. telling bim be owed D. about $200 out of tbe money B. owed bim; and desiring 0., when he collected the money from B., if A. himself should not happen to be present, to pay tbe whole to D.; and this letter being presented by D. to C., C. without accepting the order therein contained, only told that B.’s bond was in the attorney’s hand: the amount of B.’s bond to A. exceeded the amount due from A. to D.
    Held, the letter of A. to C. was neither an equitable assignment by A. to D. of so much of B.’s debt to A., nor a security given by A. to D. for the debt he owed him.
    Clayton in the autumn of 1818, sold Fawcett a parcel of fatted cattle, for 900 dollars. Fawcett drove the cattle to Richmond, and there sold them to Samuel Car-lisle, and took his bond for the price or part of it, which he left in the hands of Martin Baker of Richmond, with instructions to collect the money if he could, if not, to place the bond in the hands of an attorney for collection. Fawcett made several payments to Clayton, which reduced the debt of 900 dollars he owed him, to about 200 dollars; and this balance remaining- due, he addressed a letter or order to Baker, dated October 1, 1820, and delivered it to Clayton, in these words: “Sir, When you collect the money from Mr. Carlisle of me, and I should not happen with you, you will please pay the same to W. Clayton, as I am indebted to him about 200 dollars of the money due to me from Carlisle; and oblige your friend &c. (Signed) B. Fawcett.” Meanwhile, Baker had put Carlisle’s bond into the hands of Shepherd, an attorney at law, to collect by suit. On the 1st December 1820, Clayton presented Fawcett’s letter to Baker, who informed him that Carlisle’s bond was in Shepherd’s hands for collection: there was no acceptance by Baker, of the order for the payment of the 'x'money to Clayton, contained in the letter. On the 21st December 1820, Fawcett died, in insolvent circumstances. And in February 1821, Clayton applied to Shepherd, who told him, that he had collected the money due from Carlisle; but, that he would not undertake to determine, whether Clayton was entitled to receive it on the strength of Fawcett’s letter to Baker, or the representatives of Fawcett; and that he should deposit the money in bank, till the right to it should be decided.
    Clayton then exhibited a bill in the superior court of chancery of Greenbrier, against Fawcett’s administrators and Shepherd, setting forth the facts as above stated; insisting, that Fawcett’s letter to Baker, of the 1st October 1820, was, in effect as it was in design, an assignment of Carlisle’s bond to him; and praying, that Shepherd might be decreed to pay him the amount due to him from Fawcett, out of the amount in his hands collected of Carlisle; and general relief.
    The administrators of Fawcett, in their answer, contested Clayton’s right to the money, and stated that Fawcett’s estate being inadequate to his debts, this money ought to be paid to his creditors in due course of administration.
    Shepherd, being a mere stakeholder, did not answer.
    The chancellor dismissed the bill; and Clayton appealed to this court.
    Johnson, for the appellant.
    Fawcett’s letter to Baker of October 1820, was an equitable assignment of Carlisle’s bond to Clayton, or an order for the payment of the proceeds thereof to him. The letter shews that Fawcett considered Baker as having complete authority and control over the collection, and that he owed Clayton 200 dollars of this very money; therefore, he directed Baker to pay the money to Clayton. It may be objected, that those words of the letter, and I should not happen to be with you, evince that he meant to retain the power to receive the money himself. Suppose he did, he only meant to retain *the right to receive it, on condition that he should be present; and that condition not having happened, then by the terms of the letter, the right to receive it was given to Clayton. But Fawcett honestly intended this money for Clayton, and if he himself came to Richmond, he meant to receive it for Clayton, and pa3r it to him: this was his reason for inserting those words; and they are not at all inconsistent with the design to transfer the subject to Clayton. If it be objected, that this is an order of Fawcett, not accepted by the drawee, and therefore revoked by the death of Fawcett before acceptance; I answer, that, if I am right as to the construction and effect of the letter, it is an order for paying over the specific fund; an equitable assignment of the fund; and, in that case, the death of the drawer or assignor can have no influence on the rights of the assignee. An order for the payment of money out of a specific fund, is not a bill of exchange, but an assignment of the subject; and even a letter of attorney to receive a debt, if given for a valuable consideration, is not a revocable instrument. Peyton v. Hallett, 1 Caines’ Rep; 379; Bromley v. Holland, 7 Ves. 28; Powell v. Gordon, 2 Esp. 735; Hammonds v. Barclay, 2 East. 227; Cutts v. Perkins, 17 Mass. Rep. 206; Row v. Dawson, 1 Ves. sen. 332; Yeates v. Groves, 1 Ves. jun. 280.
    Wickham, for the appellees.
    The whole question is, What is the just construction and effect of Fawcett’s letter to Baker? is it an assignment to Clayton, of the debt due from Carlisle? or only an instruction by Fawcett to Baker as his agent, for the disposition of the money when collected? If the letter had contained an absolute order for the payment of a specified' sum out of the money collected, it would have presented another question. But the letter directs Baker to pay Clayton, the whole of the money, which he should collect of Carlisle for Fawcett, if Fawcett should not happen to be present to receive it himself, as (he says) he owed Clayton, about 200 dollars out of the money. It is apparent, then, *that the parties knew the debt due by Carlisle to Fawcett exceeded Fawcett’s debt to Clayton. If Fawcett’s letter is a good assignment of any part of Carlisle’s debt to Clayton, it is an assignment of all, so that if Clayton had assigned the order, his assignee would have taken the whole r which, surely, was not the intent of the transaction. The letter contains an authority to Baker to pay the money to Clayton, and an authority to the latter to receive.it, only in case Fawcett should not be present to receive it himself. Notwithstanding the letter, then, Fawcett had the right to demand the money. How can this letter be regarded as an assignment, when it left and reserved to the assignor the right to take the subject? The letter is addressed to Baker, who was himself the mere agent of Fawcett, without any interest in the subject; and this agency of Baker was revocable at Fawcett’s pleasure; nay, it was revoked, by the very terms of its creation, the moment Carlisle’s bond was put into the attorney’s hands for collection ; and if it had not been so revoked, it would' have been revoked by Fawcett’s death. Baker had no authority to receive the money of the attorney, while Fawcett was yet living, much less after his death. In this state of things, the proposition that Fawcett’s letter to Baker is an assignment of this subject to Clayton, is incongruous and hardly intelligible.
    Johnson, in reply.
    Fawcett told Baker, he owed Clayton about 200 dollars out of the money which was due to himself from Carlisle, and which he had trusted Baker to collect. How, if this was only intended as an instruction to Baker, and not as an assignment to Clayton ; as a naked authority to Clayton to receive, without the transfer to him of any interest in the subject; why this acknowledgment of the debt to Clayton, and of a debt payable out of the very money to be collected from Carlisle? The circumstance that the money tobe collected of Carlisle, exceeded Fawcett’s debt to Clayton, cannot affect the question: the assignment operated as a security for the debt Fawcett owed Clayton.
    
      
      Equitable Assignment — What Constitutes. — A mere promise or agreement to pay a debt out of a designated fund when received, does not give an equitable lien upon tbe fund nor operate as an equitable assignment of it. Something more is necessary. To constitute an equitable assignment there must be an assignment or transfer of the fund or some definite portion of it, so that tbe person owing tbe debt or bolding' tbe fund on which tbe order is drawn can safely pay the order, and is compellable to do so, though forbidden by the drawer. Hicks v. Roanoke Brick Co.. 94 Va. 744, 27 S. E. Rep. 596, citing among others the principal case.
      In discussing the question as to what constitutes an equitable assignment, in Eib v. Martin, 5 Heigh 138, 145. Judges Brookenbrough and Brooke, both cite the principal case with evident approval.
      In Brooks v. Hatch, 6 Heigh 538, Judge Brockenbrough said that, in the principal case, the letter of Fawcett would have been adjudged to be an equitable assignment, but for the condition contained in it, that tbe payment was to depend on the drawer’s being absent. To the same effect, see Hulings v. Hulings Lumber Co., 88 W. Va. 380, 18 S. E. Rep. 631.
      And in Brooks v. Hatch, 6 Leigh 543, Tucker, P., said: “When it is clear, that the order or power over the fund is given for satisfaction of a debt or for value, it is inferred that a transfer was intended; the transaction is looked upon and treated as a contract; it is irrevocable; and thus constitutes a complete equitable assignment. But where the drawer retains a power over the fund, — where the transaction shows he had no design to part absolutely with that power. — it is looked upon as no equitable assignment, however valuable the consideration may be which moved him toils exercise. Thus in Clayton v. Fawcett's Adm'rs, 2 Leigh 19, — A. owing B. about 200 dollars, drew an order on C. desiring him when he collected certain money of D. to pay the whole to B. if A. himself should not happen to be present. The amount to be collected exceeds the sum due to B. and that fact, and the provision that it should be paid to B. ‘if A. should not happen to be present,’were properly held to evince, that the drawer A. did not part with his power over the fund, and so there was no assignment.”
      For further information on this subí ect, see footnote to Eib v. Martin, 5 Leigh 132; foot-note to Brooks v. Hatch, 6 Leigh 534; monographic note on “Assignments” appended to Ragsdale v. Hagy, 9 Gratt. 409.
    
   *BROOKE, P.

As the merits of this case must depend on the construction of the order of the 1st October 1820, drawn by Fawcett on Baker, I shall confine myself to that point only.

It is insisted for the appellant, that this order was an equitable transfer of the money due by Carlisle to Fawcett, or so much thereof as was equal to the amount due by Fawcett to the appellant. Fawcett’s administrators claim it, as being still part of his estate, for the benefit of his creditors, to whom it is payable in due course of administration. In examining this question, as there is no pretence of fraud or mistake, the meaning and intention of the parties must be collected from the terms of the order itself. The general rule is,, that a power ceases with the life of the person who gives it. The exception to the ~ule is, that if the power be coupled with an interest, it survives the person giving it. But such an interest to be coupled with the power, must be an interest in the subject, on which the power is to be exercised; not an interest only in that which is produced by the exercise of the power itself; in other words (as is said by the chief justice Marshall in the case of Hunt v. Rousmanier, 8 Wheat. 204) the power must be ingrafted on an estate in the thing. I think it impossible to give to the order before us, a construe!ion that would give the appellant an interest in the money due by Carlisle, in exclusion of the rights of the drawer Fawcett in his lifetime, or of his representatives since his death. It contains no words cf transfer or assignment. The word pay, in the order, though generally a word of transfer, was not used in that sense; for if it was, it would assign over the whole of the money due by Carlisle to Fawcett, which was certainly not intended. Those words of the order, “if I should not happen with you,” limited the power both of Baker to pay, and of the appellant to receive, to the case of Fawcett’s being absent. Nor did this condition affect any right of the appellant to receive the money; it formed no stipulation between the parties to the order; it was merely directory to Baker, and indicated *to him, that the appellant was to supply the place of the drawer, in case he was absent when the money was received from Carlisle, and to receive the money for him (Fawcett) not for himself. The words in the order, “as I am indebted to him about 200 dollars,” do not affect this construction : they only assign the motive of the drawer for substituting the appellant to receive the money in his absence. If any stipulation had been intended, it would have been expressed in other terms: if the order had been intended as a payment, the sum due would have been more accurately ascertained.' That was clearly left to be ascertained after the money should be received by the apjjellant (as the agent, I think, of Fawcett) as was also the surplus cf the money due from Carlisle over and above what should suffice to satisfy the appellant. That the order was not intended as a security for the money due from the drawer to the appellant, is quite manifest; as that idea is inconsistent with the right reserved to the drawer, to receive the money himself, if present. A security that could be thus defeated, would be worthless. The power given to the appellant, to receive not only the amount that might be due to himself, but the excess above that sum due from Carlisle to the drawer, in the event that he was not present to receive it himself, was, I think, a naked power as to the whole subject, and gave to the appellant no lien in equity on the fund on which the order was drawn. He could in no form of action have claimed either the money or any part of it of Baker, or of the attorney in whose hands the bond of Carlisle had been placed for collection. The right of the drawer to receive it himself, by the terms of the order, survived to his representatives. The cases cited by the appellant’s counsel, are intirely consistent with this opinion. Row v. Dawson was a case in which the interest was coupled with the power to receive the money: the order was drawn on a present consideration, in payment for money lent at the time; and though not a bill of exchang-e, was an equitable transfer of its amount, and attached on the fund on which it was *drawn. The case of Yeates v. Groves was an order given on a specific fund, for a foregone consideration ; but the original note for the amount was given up to the drawer. It was a power coupled with an interest in the subject drawn on. T think the decree is correct.

The other judges concurred, and the decree was affirmed.