Case ID: va_34/html/0634-01.html
Source: Caselaw Access Project
Author: {"author": "BROCKENBROUGH, J. CARR, J. CABELL, J. BROOKE, J. TUCKER, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Wilkinson & Co. v. Holloway.
    February, 1836,
    Richmond.
    Attorney — Acceptance of Payment in Property Other Than Money. — An attorney at law employed to collect a debt may receive payment in money, but has no authority to accept any thing else in satisfaction.
    Same — Same—Effect—Case at Bar. — Therefore, where an attorney employed to collect a debt, discounts from it a debt he himself owes the debtor, and takes for the balance the debtor’s assignment of third persons, the creditor is not bound by such arrangement.
    Same — Same—Ratification by Creditor — Case at Bar.— An attorney at law, employed to collect a debt, takes in satisfaction thereof the debtor’s assignment to the creditor, of a bond of third persons held by the debtor, and institutes a suit on the assigned bond against the obligors; the creditor prosecutes the suit, which is long pending, and pays the costs incurred therein : Held, the creditor does not thereby ratify the act of the attorney in commuting the original debt; and the recovery against the obligors in the assigned bond having proved unavailing, the debtor’s original liability still continues : dissentiente Tucker, P.
    Limitation of Actions — Right of Defendant in Another State to Plead-Statute. — A debt is contracted at Petersburg in Virginia, for goods sold there ; the debtor resides at the time, and continues to reside, in North Carolina ; the creditor brings suit in a court of this state against the debtor, who pleads the statute of limitations in bar : Held, by the 14th section of that statute, 1 Rev. Code, ch. 128, p. 491, he is precluded from making such defence : dissentiente Tucker, P.
    This was an attachment in chancery, brought by Wilkinson & Co: against Holloway, in the county court of Brunswick, in November 1828. The bill alleged, that John Holloway being indebted to the plaintiffs 281 dollars for goods sold him by them at their store at Petersburg, on an open account, they sent the claim for collection to W. Ruffin of North Carolina, where Holloway resided; and Ruffin, for some reason unknown to them, without their knowledge or consent, placed the claim in the hands of A. Glenn, an attorney there, for collection : that Ruffin or Glenn ‘ ‘bonded the account;” and Glenn being indebted to Holloway some 60 or 70 dollars, fraudulently agreed to allow Holloway a set-off for the debt *he himself owed Holloway, against the debt which Holloway owed to the plaintiffs, and to receive in discharge of the residue thereof a bond of J. Thompson and W. Scott to Holloway for 215 dollars, which bond Holloway assigned by indorsing it in blank; Glenn filled up the blank assignment to one Young ; and in his name brought a suit on the bond against Thompson and Scott, in North Carolina, recovered judgment, and sued out execution against them; but they proved utterly insolvent: that, in the prosecution of that suit against Thompson and Scott, the plaintiffs here, Wilkinson & Co. had incurred and paid 18 dollars costs: that they had never received any thing from Glenn, or from Holloway, on account of the debt he owed them: and that E. Hicks and J. Tucker, of Brunswick, had money in their hands belonging to Holloway, who was still a non-resident of Virginia. Therefore, the bill made Holloway, the absent debtor, and Hicks and Tucker, as garnishees, defendants; called for a discovery from the garnishees of the money of Holloway in their hands, respectively; and prayed a decree against Holloway for the debt, and that his money in the hands of the garnishees should be attached to satisfy the same.
    There w'as exhibited with the bill, a copy of the record of the suit in North Carolina of Young assignee of Holloway against Thompson and Scott, on their bond to Holloway, which Glenn took from him in part payment of the debt he owed Wilkinson & Co. It appeared by the record, that this proceeding was commenced in May 1819; the judgment was recovered in November 1820; a fieri facias was sued out upon it, returnable to Eebruary 1821, and was returned no effects; then a ca.,sa. was taken out, returnable to Eebruary 1822, and was returned not found; and a scire facias to revive the judgment was afterwards prosecuted, judgment recovered thereon by default, and a fi. fa. again sued out, which was returnable to May 1825, and returned no '“'effects. The costs of the whole proceedings amounted to 18 dollars.
    Holloway appeared and put in his answer, in which he said, he had executed his “note” to Henry Wilkinson (one of the house of Wilkinson & Co.), in person, for the debt of 281 dollars, and it was that “note” which they sent to Ruffin, and which Ruffin put into the hands of Glenn, for collection: that he settled the matter with Glenn, the attorney and agent of Wilkinson & Co. by paying him in part the note of Thompson and Scott, mentioned in the bill, which was considered both by him and Glenn as a final payment and discharge of the plaintiff’s demand: that Thompson and Scott’s bond was indorsed by him in blank, and Glenn, of his own accord, filled the blank with an assignment to Young: and that by the laws of North Carolina, “the note in question” was, to all intents and purposes, a bill of exchange, and Holloway, as the indorser thereof, was entitled to due notice of its non-payment; but such notice had never been given to him, and therefore he was not bound as indorser to pay the debt. He insisted, that the plaintiffs, by their own shewing, had no cause of complaint against him, but only against Glenn, their own agent and attorney; and if they had incurred loss, it was owing to their misfortune in having trusted an'unfaithful agent. And as it appeared by the record exhibited With the bill, that the plaintiff’s right of action did not accrue within five years next before the commencement of this suit, he pleaded the statute of limitations in bar.
    There were exhibited with the answer, exemplifications of two statutes of North Carolina, by which all notes, bills and bonds for money, whether made payable to-order, or expressed to be for value received or not, are made negotiable by indorsement or assignment, and put on the footing of inland bills of exchange; and, therefore, in case of non-payment, must be protested, and due notice of dishonour given to the indorser or assignor.
    *There was no replication to Hollor way’s answer, or to his plea of the statute of limitations.
    The garnishee Hicks had no money in his hands belonging or due to Holloway. The garnishee Tucker, who was the sheriff of Brunswick, stated in his answer, that he had in his hands 276 dollars belonging to Holloway.
    The county court dismissed the bill as to the garnishee Hicks, and decreed, that tne defendant Holloway should pay the plaintiffs 281 dollars, with interest from the 28th April 1819, and 18 dollars (the costs of the suit in North Carolina) and the costs of this suit; and that the garnishee Tucker, in part discharge thereof, should pay the plaintiffs the 276 dollars in his hands belonging to Holloway. Erom this decree Holloway appealed to the superiour court of chancery of Richmond; which reversed the decree, and dismissed the bill as to all parties. And then, Wilkinson & Co. appealed to this court.
    Robinson, for appellant.
    1. The debt due from Holloway to Wilkinson & Co. was not extinguished by the transaction between Holloway and Glenn, their attorney. Though payment to an attorney at law employed to collect a debt, especially if he has the evidence of debt in his possession, is good; Hudson v. Johnson, 1 Wash. 10; Branch v. Burnley, 1 Call 147, yet an attorney at law, without special instruction or assent of his client, has no authority to use the debt due to the client, for the discharge of his own debts, or to commute it with the debtor for other debts due to him. The point has been expressly decided by the general courtSmock v. Dade, 5 Rand. 639. And the reason for the distinction, there given, is plain and irrefragable: when an attorney employed to collect a debt due to his client receives the money, he acts under the authority derived from his client; but when he takes from the debtor an assignment of debts due to him in satisfac-tiou of the debt due *'from him, and undertakes to collect the assigned debts, his authority is derived not from his client at all, but from the debtor; he is, in truth, the debtor’s attorney. A like decision on the point has been made in Massachusetts; Eangdon v. Potter, 13 Mass. Rep. 319, and in South Carolina; Commissioners of accounts v. Rose, 1 Desaus. 461. Mere possession of the bond or other evidence of debt, confers on an attorney employed to collect it, no further authority than the general one of an attorney at law; authority, namely, to receive payment. If it did, the possession of the bond, however or by whomever obtained, would give the holder a legal title to it; which cannot be pretended. Wilson v. Rucker, 1 Call 500. An agent employed to collect, with the evidence of debt put into his possession, has no right to assign or to pawn it; Tonkin v. Puller, 3 Rose. Doug. 300; 26 Eng. C. E. Rep. 117. If he cannot assign or pawn, how can he barter it? A factor employed to sell goods, has no authority to barter them; Guerreiro v. Peile, 3 Barn. & Aid. 616; S Eng. C.' E. Rep. 399. So, where an insurance broker was employed to receive payment from the underwriter, even a custom to set off the general balance due from the broker to the underwriter, was held illegal; Todd v. Reid, 4 Barn. & Aid. 210; 6 Eng. C. E. Rep. ■ 404. For, “the general rule of law is, that if a creditor employs an agent to receive money of a debtor, and the agent receives it, the debtor is discharged as against the principal, but if the agent, instead of receiving it, writes off money due from him to the debtor, the debtor is not discharged;” per Abbott, C. J., in Russell v. Bangley, 4 Barn. & Aid. 395; 6 Eng. C. E. Rep. 460. Here it is not pretended, that Wilkinson & Co. gave any special authority to Glenn, their attorney at law for collection. And if it shall be argued, that they sanctioned Glenn’s dealings with Holloway, by prosecuting a suit on the bond of Thompson and Scott, which Glenn received from him, and defraying the costs of that *suit; the answer is, that it is quite obvious, that Glenn instituted that suit of his own accord; and if Wilkinson & Co. were after-wards active in the prosecution- of the suit, and bore the expense of it, this was, in truth, done for Holloway’s benefit, and was fairly attributable to their willingness to get their money from whomsoever and in whatever manner they honestly could, not to any intention to sanction the irregular conduct of their attorney. And the case of Russell v. Bangley will be found .to be a direct authority in point. Then, 2. if the transaction between Glenn and Holloway did not extinguish the debt of Holloway to Wilkinson & Co. it is useless to examine the statutes of North Carolina, putting assigned bonds or notes upon the footing of inland bills of exchange, for the purpose of seeing whether Holloway was entitled to notice from Wilkinson & Co. of the nonpayment of Thompson and Scott’s bond. 3. As to the plea of the statute of limitations: Wilkinson & Co. allege in their bill that Holloway’s debt to them was “bonded” by Ruffin or by Glenn: Holloway in his answer says, he gave Henry Wilkinson his “note” for it. The words “bond” and “note,” in the common parlance of the country are often used convertibly; Holloway in his answer so uses them; and if this was a note, not a bond, Holloway, pleading the statute of limitations, should and no doubt would have produced he instrument, for it was in his possession; but he did not produce it. The fair inference is, that it was a bond, and then the statute certainly presented no bar. But grant that it was a note, and take Holloway’s account of it: he says he gave the note to Henry Wilkinson. Now he was a merchant and resident of Petersburg, Virginia, and the debt was contracted there. Holloway’s note, then, was made there. But Holloway was resident of North Carolina. And this brings the case within the proviso of the statute of limitations, 1 Rev. Code, ch. 128, $ 14, p. 491. The act-of limitations of North Carolina, could not be pleaded here; Jones’s adm’r v. Hook, 2 Rand. 303.
    *Johnson, for the appellee.
    1. The distinction between the authority of an attorney at law, employed to collect a debt, and having the bond or note for it put into his possession for collection, to receive payment in money, and to receive satisfaction in any other commutable, is an over-nice one. Had not Glenn authority to receive from Holloway a bill of exchange drawn in' North Carolina on Petersburg, for the debt? or to receive bank notes in payment of it? If so, then he had a right to commute the debt due from Holloway to his client for other debts; for bank notes are only evidences of debt. It can make no difference what kind of debt is the commutable received by the attorney. But when a creditor employs an attorney to collect a debt for him, and puts the evidence of the debt in the attorney’s possession, he does give him and intends to give him authority to collect it in the best and easiest way he can. The attorney’s authority to receive payment of the debt, is put by this court, in Hudson v. Johnson, on the ground of the custom of the country: and. the custom of the country goes the length of warranting the attorney to commute the debt due his client for other debts. It is a rule of law, of equity, and of reason, that he who trusts most, shall suffer most, — that he who trusts an agent with unlimited discretion, shall abide any loss from a breach of the trust. Here, the evidence of the debt was put into Glenn’s possession; but for what purpose, was known only to Glenn and his clients. How could Holloway or any stranger know, that Glenn acquired the possession of the bond or note, only for the purpose of collection? that it was not de'iv-ered to him by way of transfer? If Glenn had sold and transferred the debt to a stranger for valuable consideration, without notice of his agency, he would have done what his clients put it in his power to do, and they ought to abide the loss, arising from their own indiscreet selection of their agent, and unlimited confidence reposed *in him. If Glenn had brought suit against Holloway, in the name of Wilkinson & Co. for his own benefit, Holloway (having no notice of the breach of trust) might have set off a debt due to him from Glenn; Winchester v. Hackley, 2 Cranch 342, and when judgment was recovered for the balance, he might have settled with Glenn, and discharged the debt in any waj- they could agree upon. Here, without any suit being brought, Holloway settled the debt with the holder of his note or bond, gave him a valuable consideration for it, and took in his bond. If Glenn committed a breach of trust, or an act of indiscretion, Wilkinson & Co. who constituted him their agent, and gave him unlimited discretion, must bear the loss. But Wilkinson & Co. sanctioned the act of their attorney. They prosecuted the suit on the bond assigned by Holloway to them, or to Glenn for them, against the obligors at their own costs. If they did not mean to sanction Glenn’s conduct, they ought immediately to have disclaimed all right to the assigned bond, and asserted their original claim against Kollo-way. They made no such disclaimer. They failed to get the money from the obligors in the assigned bond as early as 1821; yet they asserted no claim against Holloway, but commenced a new pursuit against Thompson and Scott, which proved unavail-, ing in 182S; and it was not till 1828, that they asserted their original claim against Holloway. There could not be stronger circumstances to show their acquiescence in and sanction of Glenn’s conduct. 2. The statute of limitations was a bar. It was pleaded in Holloway’s answer, and nothing was replied in avoidance of it: so that Wilkinson & Co. cannot here rely on the proviso of the 14th section of the statute, even if the case were within its meaning. Holloway says, he gave a note for his debt to Henry Wilkinson in person. If it was a bond and not a note, they should have proved it; they should, at least, have called on Holloway to produce the instrument: but, without doing *either, and without any replication to the answer, which alleged that it was a note, they set the cause for hearing. This court must take it, that the instrument was a note, not a bond. Then, where was the note made? at Petersburg? or in North Carolina? Holloway says, it was given to Henry Wilkinson in person; but it might have been given to him in North Carolina, as well as at Peters-burg ; and if so, the case was clearly not within the proviso of the 14th section of our statute of limitations. To say the least, the facts touching this point, do not appear in this record with sufficient certainty. But the 14th section of the statute has no application to the case. A citizen of North Carolina, residing at home, cannot, because he does not come to Virginia, be truly said “to abscond or conceal himself, or by removal out of the country or county where he shall reside, obstruct or defeat” his creditor in Virginia from bringing his action against him.
    
      
      Attorneys — Power of Attorney in Collecting Claims. —On this question the principal case is cited in Smith v. Lamberts, 7 Gratt. 144. and foot-note : foot-note to Branch v. Burnley, 1 Call 147; Mann v. Robinson. 19 W. Va. 58; Chalfants v. Martin, 25 W. Va. 398. In Yoakum v. Tilden. 3 W. Va. 170, it is said: “The payment of a judgment or decree to the attorney of record who obtained it, before his authority is revoked, and due notice of such revocation given to the defendant, is valid and binding on the plaintiff so far at least as the defendant is concerned. 2 Greenleaf, sec. 518, and cases there cited in note. 6 Johns. 295; (Wilkinson v. Holloway,) 7 Leigh. 277; 1 Wash. 10; 1 Call 147.”
    
    
      
      Same— Right to Commute Debt in Hands for Collection. — It is settled law that an attorney has no authority to commute a debt in his hands for collection without the assent of his client. Paxton v. Steel, 86 Va. 313, 10 S. E. Rep. 1, citing Smock v. Dade, 5 Rand. 639; Wilkinson v. Holloway, 7 Leigh 277. The principal case is also cited on this point in Wiley v. Mahood, 10 W. Va. 221, 222, 224; Smith v. Lamberts, 7 Gratt. 144. See generally, monographic note on “Attorney and Client” appended to Johnson v. Gibbons, 27 Gratt. 632.
      Statute of Limitations — Note Made in West Virginia by Resident of Another State Who Immediately Departs. — If a person residing in another state, makes his note in this state (W. Va.), and thereafter departs from, and continues to reside out of this state, he will be considered a person, "who before the action accrued resided in this state,” and who by his departure and residence out of the state, has obstructed the payee in the prosecution of his action on such note during such absence from the state. Hefflebower v. Detrick, 27 W. Va. 16, citing and following the principal case at p. 26. For this proposition, the principal case is also cited in Abell v. Penn Mutual Life Ins. Co., 18 W. Va. 418: Ficklin v. Carrington, 31 Gratt. 226; Markle v. Burch, 11 Gratt. 29.
      But in Walsh v. Schilling, 33 W. Va. 108, 10 S. E. Rep. 54, citing Wilkinson v. Holloway. 7 Leigh. 277; Abell v. Penn Mutual Life Ins. Co., 18 W. Va. 400; Hefflebower v. Detrick. 27 W. Va. 16, it is held that the provision of section 18, ch. 104, Code 1887, that when any right of action shall accrue against a person who had before resided in this state, if such person shall, by departing without the same, or by absconding or concealing himself, or by any other indirect ways or means, obstruct the prosecution of such right, the time that such obstruction may have continued shall not be computed as any part of the time within which the said right might or ought to have been prosecuted, does not apply when the defendant, although once a resident of this state, removed therefrom before any right of action accrued against him, and before the transaction occurred out of which the plaintiff’s cause of action arose.
      Same — Burden of Proof. — For the proposition that the burden of proof of the statute of limitations is upon the parti' pleading it, the principal case is cited in Lewis v. Mason, 84 Va. 741. 10 S. E. Rep. 529; Goodell v. Gibbons, 91 Va. 611, 22 S. E. Rep. 504. See monographic note on “Limitation of Actions” appended to Herrington v. Harkins, 1 Rob. 591.
      Sale of Property by One in Possession — Caveat Emptor. — In Brown v. Taylor, 32 Gratt. 138, it is said: “Every consideration that applies the principle of 
        caveat emytor to the case of sales of property by one having' possession 'without title, has additional force in the case of bonds and other chases in action ; and accordingly the courts have uniiormly decided that as to them the rule caveat emytor applies. See opinion of Tucker, P., in Wilkinson & Co. v. Holloway. 7 Leigh 277.”
    
   BROCKENBROUGH, J.

There is nothing in the record to shew, how far by the laws or established usages of North Carolina, an attorney at law who has possession of the specialty of a client, may bind him by a settlement of the debt with the debtor ; nor does the answer of the defendant who had dealt with the plaintiffs in Virginia, suggest any difference between the law of that state and of this, in this respect. I shall therefore inquire, how the common law and our own law stand on this subject. The cases of Hudson v. Johnson, and Branch v. Burnley, establish the proposition, that an attorney at law who has possession of the evidence of debt, or has obtained a judgment for his client, may receive from the debtor payment of the debt, and that the creditor having confided in him not only to sue if necessary, but also to collect and receive the money, is bound by the jjayment. They place the attorney at law on the footing of an agent delegated to receive money. *Now, such an agent cannot vary from his authority, by receiving- a

bill or note, instead of money, or of that which according to the course of trade is current as money. Paley on Agency 220; Ward v. Evans, 2 Ld. Raym. 930; Salk. 442; S. C. Nor can even a general agent, without particular authority, commute the payment by receiving another thing, as a horse &c. in discharge of the debt, unless it be delivered over to the employer who agrees to it. Paley 221. This was also, laid down by the general court in Smock v. Dade; where it is also said, that the attorney at law who gave a receipt or acquittance for the money, represented the debtor and not the creditor. I do not quote this case as authority, but I consider it as a good decision. The modern case of Russell v. Bangley is a strong one to prove, that if the agent, instead of receiving money, gives to the debtor credit for money which he himself owes to the debtor (or, as it is expressed, “writes off money due from him to the debtor”), then the debtor is not discharged.

It is admitted, however, that acquiescence-on the part of the principal will be proof of consent on his part, and that will make the act of the agent the act of the principal. Salk. 442. Then the question is, whether, in this case, there was such acquiescence alleged and proved? I think not. The-plaintiffs have not admitted by their pleadings, nor is there any proof of, actual consent. But it has been inferred that there was such consent, from the circumstance-that the plaintiffs paid some of the costs incurred in the suit brought on the bond which Glenn the attorney took from Holloway in discharge of his bond. It is to be remarked, that the answer of Hollowaj' does not put his defence on the ground of the acquiescence of the plaintiffs, but relies on the authority of the attorney to make the-arrangement which he did make. I do not think that the court ought to supply his deficiencies, and furnish him "with *a weapon which he did not choose to wield. If he had thought proper to rely on acquiescence, the plaintiffs might have given circumstances in evidence,. which would have led irresistibly to the conclusion, that they did not agree to take the bond of Thompson and Scott in satisfaction of Holloway’s debt to them; and that although they were willing to wait to see whether any thing could be made from the suit against those obligors, and for that purpose to pay the costs, yet that they did not ratify the act of Glenn, who in that matter acted rather as the agent and attorney of Holloway, than of themselves.

As to the statute of limitations, I think it will not apply to the present case. It seems sufficiently clear, that the paper which Hollowaj' executed to the plaintiffs was a sealed instrument. The bill says, that the plaintiffs sent to Ruffin an open account claim against the defendant Holloway, and that Ruffin put the claim into the hands of Glenn an attorney, that one of them bonded the account, and that Glenn held the bond. The defendant denies that the account was sent on to Ruffin, and affirms that he himself executed to one of the plaintiffs the note in question, and that the note, instead of the account, was sent to Ruffin. The note in question ought to be understood to mean the bond which the plaintiffs mentioned in their bill; especially as the defendant had possession of the instrument, and if it was a mere note of hand, and not a sealed instrument, might have produced it, and shewn its real character. Again, the defendant describes the paper which he transferred to Glenn as being a note; that paper happens to be in the record, and is clearly a sealed instrument. Hence, I infer, that the other was a sealed instrument likewise; and if so, the act of limitations does not apply. But if it was a note of hand, the 14th section of the statute of limitations will prevent that statute from operating as a bar.

*On the whole I am of opinion, that the decree of the superiour court of chancery should be reversed, and that of the county court affirmed.

CARR, J.

In the view I take of this case, the statutes of North Carolina, putting bonds, notes, &c. on the footing of inland bills of exchange, are wholly unimportant.

As to the statute of limitations, I question whether it would apply to the case, even between citizens of the commonwealth; since I incline to think, that we must take the debt from Holloway to Wilkinson & Co. to have been due by bond. It behooved the pleader of the statute, to make out a case to which it clearly applied; and I think no one could say he has done this, even if this was a case between residents. However, I have not much examined that point; because I think it clear, that the plea cannot be sustained, on another ground. If we may credit the defendant’s answer, (as according to the rules of evidence, we must,) the cause of action acorued in Virginia. He saj's, the plaintiffs did not send their account to Ruffin, but he executed the note in question to the plaintiff Henry Wilkinson in person, and that the note, instead of the account, was sent to Ruffin. This allegation, positive and responsive, and not contradicted by any evidence, is decisive, that the note or bond (whichever it was) was executed here. If so, the proviso of the 14th section of the statute of limitations applied a fortiori to the defendant, who left Virginia as soon as he had executed the instrument, and- resided in North Carolina; thereby obstructing the plaintiffs’ action. Neither could it have been brought when it was, but for the accidental circumstance of the defendant having debts due to him in Virginia. It surely does not lie with persons so situated,1 to avail themselves of the statute; especially in equity, where it is applied not as positive law binding the court, but *by analogy. It was said, that if the plaintiffs meant to rely on the proviso of the 14th section, they ought to have replied the matter in avoidance, specially. But the counsel did not, at the moment, reflect, that special replications, with all their consequences, are now out of use, and the plaintiff is to be relieved according to the form of his bill, whatever new matters may have been introduced by the defendant’s plea or answer; Mitf. Plead. 256, and that now, a decree in equity cannot be reversed for the entire want of a replication to the answer, by our statute of 1827-8; Supp. to Rev. Code, ch. 96, 'i 1, p. 125.

Then the question is, as to the arrangement made by Glenn with the defendant, taking in part discharge of Holloway’s bond to the plaintiffs, a debt due from himself to Holloway, and for the balance, a bond of Thompson and Scott to Holloway. Was this transaction binding on the plaintiffs? I understood the appellee’s counsel in his argument to take the position, that the possession of a bond does, of itself, empower the holder to discharge it by any contract he may choose to make with the obligor. Taken thus broadly, I should think the proposition plainly unsound and mischievous. Considering Glenn, first, as an agent to collect, had he power to bind his principal by the contract he made? The authorities are, to my mind, perfectly clear and decisive, that he had not. The cases of Tonkin v. Fuller, Guerreiro v. Peile, and Russell v. Bangley, cited at the bar, were decided upon principles plainly applicable to the question. [Here, the learned judge stated the particular circumstances of those cases, and the points presented and decided.] To those authorities I shall add a reference to one or two of older date, which are to the same purpose. Thus, in Doct. & Stud. Dial. 2, ch. 42, pp. 237, 8, it is laid down, that even a general agent cannot, without particular authority, commute t{ie payment by receiving another thing, as a horse &c. in discharge *of a debtj unless it be delivered over to the employer, who agrees to it. So, in Evans v. Ward, 2 Ed. Raym. 930; 2 Salk. 442. Ward sent his servant with a note of to his debtor, to receive the money; the debtor went with the servant to Evans’s shop, who indorsed off ^50. from a note of ^100. which he owed the debtor, and gave Ward’s servant a note for ;£50. upon one Wallis, a goldsmith, which was presented the next morning, but payment was refused, and Wallis broke that day; the note was returned to Evans, who refused to pay it, and this action was brought to recover it: the court held, that Ward was not bound by this conduct of his servant; lord Holt saying, that “when a servant is sent to receive money on a bill, he cannot accept a note instead of money, without the particular directions of his master.” All these authorities apply with double force to the case of an attorney at law. When a man has debts outstanding, his first object is to collect them in the quickest and cheapest mode; and he either applies himself, or employs some agent to go around to his debtors, to get the money or money’s worth. If this effort fails, his last resort is to collect them by process of law; and then he goes to the lawyer, and deposits them with him — for what? to commute them for land, or horses, or slaves, or other bonds, or to .pay the lawyer’s own debts? No, so far from it, that the universal understanding is, I believe, that it is not a duty of the lawyer even to apply to the debtor; he tnay and often does do it, from a disposition to be civil; but very often also, he takes them to the clerk’s office, and issues the writ at once. So much was he considered the mere instrument of the law to enforce the payment to the client, that the question in our early cases, was, whether he was authorized to receive the money himself, under any circumstances. But I have never seen a case, nor heard an opinion, that he was clothed with power to use the bond as if his own property, ^exchange it for other property, or pay his own debt with it. Nor can I well conceive, how a debtor can, without actual fraud, deal in this way with an attorney, whose only evidence of power is the possession of the bond. Look at the case of an executor: he is so far the representative of the testator, that he has the legal title to the personalty; yet, because he is a fiduciary, any individual creditor of his own, who receives in discharge of his debt, assets of the estate, knowing them to be such, or whoever deals with the executor for any of the assets, in any way which makes him a party to the breach of trust, must account for such assets to those who are entitled under the will. Graff v. Cas-tleman, 5 Rand. 19S. Here, the defendant in his answer, explicitly states his knowledge that the note was placed in the hands of Glenn for suit or collection : how then could he, without participating in the fraud of Glenn, assist him in abusing his trust so far as to apply a part of that note to the payment of his own debt to the defendant, and to receive from the defendant for the balance, a bond worth (so far as we can judge) not one cent? I say so, because upon a suit brought in good time and diligently prosecuted, the return was no effects. Observe too, how this bond was transferred: there was no assignment to the creditor, but a blank indorsement, to be filled up as the attorney pleased, and in fact filled up to one Young. The property in this bond, then, was never in the creditor. Can a debtor thus discharge an honest debt? Can he, thus knowing, thus aiding, thus taking advantage of, this gross breach of trust, extinguish his obligation? I answer, confidently, no — unless the creditor has, by some unequivocal act, sanctioned the transaction ; some act, shewing that with a full knowledge of the circumstances, he had assented to take in satisfaction of the debt due him from Holloway, the bond of Thompson and Scott, and Glenn’s debt.

*What is the evidence of such assent? The answer does not charge it, but, on the contrary, rests the matter wholly on the power which the possession of the note for suit, gave Glenn over it; adding, that if he has imposed on the plaintiffs, it is their misfortune to have trusted an unfaithful agent. There are no letters from the plaintiffs; no proof of any communication between them and Glenn on the subject. The barter took place in 1819, and in February 1821 (not longer probably than 18 months after) there was a return on the execution for Thompson and Scott’s debt, of nulla bona. Within this time, we do not know that the plaintiffs ever heard of the transaction ; and being in another state, we may well suppose that they did not; especially as the bond was not assigned to them, but to one Young, and the suit in his name. If they had not heard of the exchange before, it is hardly imaginable that, after this return had ascertained the worthlessness of the bond, "they would sanction it, unless (in ignorance of their right) they might believe they had no power to disavow it, and look still to their debtor. But it is said, that the plaintiffs have paid the costs of the suit on the assigned bond, and thereby ratified the exchange and given up their claim on Holloway. It is clear, that this act does not of itself amount to a release of Holloway: it is at best but a fact on which to found an inference. That the plaintiffs did not understand it to be a release, is very evident; for we find no trace of the fact except in their bill; and there it is brought forward as a ground of additional claim against Holloway, not a release of the old claim. But taken in itself, I do not think the isolated fact authorizes the inference, especially when we are to draw it in favour of one who is confessedly a party to the fraud practised on the plaintiffs. But suppose it were in proof, that the plaintiffs had been informed of this unauthorized act of the attorney, and had so far acquiesced as to await the issue of the suit *on the bond: I hold, that even this would not have released the original debtor. For this I might cite several cases; but one will suffice; I mean Russell v. Bangley, before referred to. There, the underwriter settled the loss upon the policy to the broker’s satisfaction, though not by the payment of actual money ; the broker informed the assured of this settlement; and in the account sent, made himself debtor to the assured for the ;£130. the amount of the loss; and the assured so far sanctioned this arrangement that he drew a bill of exchange on the broker at two months, which was accepted; but as the broker failed, soon after it grew due, without paying it, the assured sued the underwriter : and, by the opinion of the whole court, recovered. The opinions shew the ground on which the judges placed this point. Bay ley said — “The fact of the assured taking Savery’s (the broker) bill, was nothing more than an agreement to accept payment in that way, if it should be ultimately available. If the defendant had meant that the money should be paid by bill, he should have sent that bill to the assured, or he should have pledged his own credit in some respect.” Holroydsaid, “In this case, the policy having been placed in the hands of the broker, an account is made out, shewing how much was due from the assured to the broker on one hand, and from the broker to the assured on the other; and in that account the broker states the amount of the loss in question to be a sum due from him to the assured. It was, however, in fact, due from' the underwriter. For the balance of that account, the assured drew a bill on the broker, which was accepted by the latter, but not paid in due course, and that without any default of the assured in endeavouring to obtain payment. This being so, I cannot distinguish this case from those in which it has been decided, that receiving a bill from a third person is not a satisfaction "of a debt, in case the bill be not eventually paid, unless *there be some default in the holder.” Best said, ‘‘The broker was only authorized to receive payment in money. The defendant has settled the loss with the broker; that is, the. amount due to the plaintiff has been ascertained between them, and the broker accepted a bill for the same. Before, however, the giving of a bill of exchange by a third person can discharge an original debtor, it must be shewn that the person taking that bill agreed to accept it in full satisfaction. There is no such agreement in this case.” This case, I think, goes very far beyond that before us.

I am of opinion that the decree of the superiour court of chancery be reversed, and that of the county court affirmed.

CABELL, J.

There is no difficulty nor doubt as to the principles of law applicable to this case. It is perfectly clear, on common law principles, that an attorney at law, as such, has no authority to set off a debt due from himself against a debt due to his client, nor to commute the bond of his client put into his hands for collection, for any other bond. And it would be a work of supererogation to attempt to enforce what has been already said on this subject.

But although the acts of the attorney in relation to the bond in question were not originally binding on the appellants, yet they may have become binding by their subsequent ratification. And the only question in this case is, whether there has been such ratification. This is a question of fact, to be determined by the evidence. I think there is no sufficient evidence to establish the fact. There is no positive proof whatever on the subject; and the only circumstance, that can be relied upon as affording a presumption of the fact, is the payment by the appellants of the costs of the North Carolina suit, on the bond which their attorney Glenn had taken, in lieu of the bond originally entrusted to him. But although *we may fairly infer, from the payment of these costs, that the appellants were willing to make an effort to get payment of their debt by means of that suit; yet it would be unwarrantable to infer a total abandonment of their claim against Holloway, in case that effort should fail. For, the evidence does not disclose one word, nor one act of omission or commission, on the part of the appellants, from which we can justly infer such an abandonment, except the fact of the . payment of the costs: and that fact is satisfactorily accounted for by the consideration before, mentioned.

This view of the subject puts an end to the question as to the statute of limitations. For the claim of the appellants against the appellee is still for their original debt, due by bond, to which the statute is not applicable.

I concur in the opinion to reverse the decree of the chancellor and to affirm that of the county court.

BROOKE, J.

I also approve the decree of the county court. Glenn, the attorney, who derived his authority from Ruffin, and was unknown to the plaintiffs, had no other power but that of collecting the debt due them from Holloway. Glenn held the note (or bond) of Holloway, which Holloway acknowledges in his answer was the evidence of his debt to the plaintiffs, not their open account against him, as is stated in the bill. With them Glenn had no direct-communication; and though, if he had received the money and paid it over to them, there would have been no objection to his-agency, yet until that was done, they might acknowledge him as their agent or not, as suited their own interest. There is nothing to shew any" authority given to-Ruffin, to whom the collection of the debt had been committed, to transfer the collection of it to Glenn. But if there had been, it was a fraud in Glenn to collect a part of it by the payment of his own debt to Holloway, and take the assignment *of Thompson and Scott’s bond for the-balance. Upon principle, Glenn became Hollowaj’-’s agent to collect that assigned debt, not the agent of the plaintiffs. Neither do I think that the plaintiffs, by-stating in their bill the proceedings to recover the assigned debt, and that they had defrayed the costs of that suit, ratified Glenn’s acts, or even adopted him as their agent. They only waited to see whether their money could be got by the suit against Thompson and Scott: but they had no-communication with Holloway on the subject, tending to shew their satisfaction with the arrangement he and Glenn had made. The setting off of Glenn’s debt to Holloway against Holloway’s debt to the plaintiffs, was a fraud in which Holloway participated. The patience of the plaintiffs, in waiting to see whether the money could be made by the suit against Thompson and Scott, cannot be held a ratification by the plaintiffs of Glenn’s arrangement-with Holloway, without denying the correctness of the decision in Russell v. Bangley, which, as my brother Carr has shewn, is a direct authority to the point, and a -stronger case than this. As the debt of Holloway to the plaintiffs was contracted in Virginia, and he soon afterwards went or returned to North Carolina, and has resided there ever since, I cannot see how he can-avail himself of the statute of limitations.

TUCKER, P.

I cannot agree that the-possession of a bond or other documentary evidence of debt, is such an evidence of property as will justify a payment to the holder, without an authority express or implied from the true owner. At common law, the property in these choses in action could not pass, even where they were actually assigned and delivered; an equity only was acquired by such assignment, and of course could never exist except where value was paid. By our law, assignments áre permitted; and a transfer even without assignment, is held to pass the right of property. *But to such a transfer two things are necessary; 1. consideration, and 2. the act of transfer. It is not a mere delivery of the possession without intent to pass the property, that constitutes the transfer. 'There must be an intent to transfer, and if there is no such intent, the holder has no right of property; he has no right to sell; nor has he a right to receive payment from the debtor, unless by authority express or implied. Every consideration that applies the principle of caveat emptor to the case of sales of property by one having possession without title, has additional force in the case of bonds and other choses in action; and, accordingly, the courts have uniformly decided, that as to them the rule caveat emptor applies. An exception, indeed, has been made in respect to money and bank notes, and even bills of exchange payable to bearer, acquired fairly in the course of business, which are universally treated as money, and which it is necessary for the purposes of commerce and the convenience of society should circulate freely and without obstruction. This distinction between money and documentary evidences of debt, is clearly stated in various cases. Myers & Son v. Friend, 1 Rand. 12; Wilson v. Rucker, 1 Call 500; Wookey v. Pole, 4 Barn. & Ald. 1; 6 Eng. C. L. Rep. 323. If, then, the possession of a bond is not such an evidence of property as to make valid a sale by the holder, it is not perceived how a payment to him can be deemed valid, and a satisfaction of the demand, unless upon the express or implied authority of the agent to receive. If a suit be instituted upon a bond not assigned, it must be in the name of the obligee, and the judgment and execution follow the writ. When the • sheriff makes the debt, he must pay it into court, unless he takes the responsibility of paying it to the creditor. If he pays to any other than the obligee, it is on his responsibility also; and if he pays it into court, it never would be ordered to be paid over to any other person that the *obligee himself, unless the court was satisfied of the title of such person to receive it. Neither is the mere possession of a bond sufficient evidence of authoritj' to receive. It is a fact too equivocal in its character, to justify any action upon the strength of it. He who pays to any other than his creditor, ought to be assured by some more unequivocal evidence that payment is authorized. The possession of a bond by an attorney furnishes, indeed, a strong presumption of authority to receive; but that presumption may be contradicted, and if satisfactorily contradicted, the payment will be void. If it was placed in his hands by the obligee for collection, the ordinary course of business, the common custom of the country, will justify a payment to him. But it justifies a payment only, not a, transmutation of the debt for the payment and satisfaction of the attorney’s own debts, or in exchange for property or other documentary evidences of debt. An authority to collect, is not equivalent to an authority to secure a debt in any way the agent may think fit. The former only authorizes the receipt of money, or of what is-considered money. The latter will authorize the taking assigned bonds or other documentary evidences of debt in payment. Such, I am persuaded, has been generally deemed the principle applicable to transactions between attorneys and their clients, with us. The attorney who merely receives a bond for collection, does not consider himself as entitled to receive other paper in discharge of it, unless expressly authorized by his client. If, indeed, he perceives that such an arrangement is essential to his client’s interest, he may enter into it, subject to his ratification or rejection; or he may even enter into it and take the chance of ratification, where the course is plainly and obviously for the client’s advantage. Yet even then, his principal may repudiate his act.

I have said thus much on these topics, because I would be unwilling by si-lence to seem to accede to the *very broad and sweeping propositions advanced in the argument. In my opinion the case itself does not require their aid. The agency of Glenn has been abundantly recognized and confirmed by the plaintiffs. In the first instance, Glenn converted the open account into a specialty; which, by the bye, was, I presume, within his agency. He then discounted a part of the demand, by a debt of his own to the defendant, and received a bond for the residue. Did the plaintiffs know of the arrangement? Their bill proves they did; for they recognized the suit brought for their benefit, and paid off the fee bills which grew out of it; and that voluntarily, for the payment of those fee bills could not have been enforced. Did they suffer the transaction to remain ten years without knowing what had been done? It is not credible. If they did know, did they at once announce to the defendant that they disclaimed the agency? that they would look to him and he must take care of himself? It is not pretended. With what justice, then, can they now throw back upon him the bond which has been prosecuted as their own by their acknowledged attorney? With what justice can they now disavow an arrangement, the benefit of which they would have taken, had it turned out successfully? The agency of their attorney has been ratified by their acquiescence, even if unauthorized at first. For, though the agent exceed his authority, yet his act may be ratified subsequently, and that ratification may be presumed from acquiescence. 4 Bac. Abr. Master and Servant, K. p. 586. As, if a master sends a servant to receive money, and instead of money he receives a bill, the master may as soon as he knows of it dissent, and will not be bound by the payment; but acquiescence, or a small matter, will be proof of the master’s assent, and that makes the act of the servant the act of the master; per Holt, C. J., in Ward v. Evans, 2 Salk. 442; Thorold v. Smith, 11 Mod. 87; 2 Stark. Law Ev. part *4, p. 58. In this case, I think the evidence of acquiescence and ratification full and satisfactory, and, therefore, that the original debt was discharged.

Therefore, the only question now is, whether the defendant is liable as assignor? And on this question, I am of opinion, that due diligence was used by the plaintiffs for the recovery of the amount of the assigned bond, and that upon the return of the execution no effects, a complete right of action accrued to them. Unluckily for them, however, the period at which their right accrued is so remote that their recovery is now barred by our statute of limitations, within none of the exceptions of which have the plaintiffs brought themselves. From the facts appearing in the record, it would seem that the defendant was indeed an inhabitant of North Carolina ; but the cause of action arose in that state, and the defendant resided there, when it arose. Now the statute only saves the right of the plaintiff in an action in our courts, where he himself is a non-resident, and not where the defendant is; for the defendant ought to be sued where he resides. The only exception in the statute founded upon the locality of the defendant, is to be found in the 14th section. But that can have no application here, since there can be no pretence that the defendant has absconded or concealed himself, or defeated the plaintiffs’ action, by removal from the country. The defence of the statute, then, is unanswered.

My own opinion is, that the decree of the superiour court of chancery ought to be affirmed.

Decree of the superiour court of chancery reversed, and decree of the county court affirmed.