FEBRUARY 1813

#### Archibald Jamieson, assignee of Roderick and John Young *vs.*Forbes, Walker and others.

TM*wní¡.

a person to a bond IS ílSS> ÍT'ttíd ñotinhis own as or assignee of óferet .a satisfy or se-he does,the tran-be^e? aside* ani th® bo?<1 or s nal des-,

{Tried before Chancellor Desaussure,

February 1813.]

'THE complainant states the sale of certain property l),y tlio master in equity under a decree of this Court ■ the suit of the complainant, and that Alexander Forbes, one of the defendants, pretending to act as complainant’s attorney, obtained possession of the bond and mortgage Ordered to be taken by the master to secure the payment of the price of the property sold ; and that the said Alexander Forbes, without any authority or power whatsoever, pretended to transfer the said bond and grge to Robert Walker, another of the defendants, as a collateral security for a debt due or pretended to he due by the said Alexander Forbes to the said Robert Walker. Complainant further states, that the said Alexander Forbes had possessed himself of various debts books of account, the property of complainant as as-signee as aforesaid-, for which the said Alexander refuses to account. And further complainant states, that William L, Smith and Thomas Bennet, junior, the per*, sons interested in the said bond and mortgage had refused to promise that they would not pay over the money due upon the said bond to any other person than the complainant. Complainant prays relief.

The defendant, Robert Walker, states in his answer that he has heard of the sale of the property mentioned by complainant, and that it had been secured by bond and mortgage ;' but the mortgage he had hever seen* that the bond was in the possession of Alexander Forbes, who was considerably indebted to this defendant ; that he believed the said Alexander Forbes has full power over the said bond *;*and that this defendant took an assignment of the said bond in payment of his said debt* pledging himself to refund the surplus to the said Alex. *530Portes : that this defendant applied to the master of this *J*x A court, who told him that the said A. Fortes might do what lie pleased with the said bond : and that abalance of five hundred and fifteen dollars, forty-five cents, still remains due by the said A. Forbes to this defendant $ that a suit has *been*instituted by this defendant against Thomas Bennet, junior, and Eliza Smith Fraser on the sahl bond. This defendant insists that the whole transaction on his part was bona fide $ denies all confederacy, and prays to be dismissed, and so forth.

The bill is taken pro confesso against A. Forbes.

The answer of William Lougton Smith was filed, but he hath since departed this life.

Mr. Bennett has answered. He and Mr. Smith only, ask that the Court would protect and direct them in the payment of their debts on the bond in question.

On the trial of the cause the bond was produced, and it appears to have been made payable to Mr, Win. H. Globes and his successors in office, for a much larger Sum than the amount said to be due by Forbes to Walker *;*and an endorsement appears on the back *of*it by which Mr. W. H. Gibbes, as master in equity, assigns it to Alexander Forbes, attorney to the concern of Ro.-derick Young, and assignee of the same by order of the court of equity. There is an endorsement in blank by A. Forbes, under which Mr. Walker claims.

The order of court under which the master assigned the bond to A. Forbes, is in these words : *“*Archibald Jamieson, assignee of Roderick Young, and joint as-signee of John Young : Ordered that the cash and bonds bf the purchasers of lots on Harleston’s Green, made at sales by the master as directed by the court, after ■ discharging the costs, be by him paid over to Alexander Forbes, the attorney of said A. Jamieson, and D. Eminent, joint assignees of John Young, paying to the representatives of each estate the share to which such estate is entitled, to be by them applied according to law/’

The master was examined by the defendant Walker, to prove what he had said and done respecting this trail-*531¿action. He stated that he had made the assignment to A. Forbes which appears on the back of the bond, & Forbes gave him a receipt on. the 28th April, 1808, for the bond, and signed himself as attorney for the assignee of Young. Some time after Mr ..Walker applied to him for informa•tion relative to the same.. He did not recollect what passed, but thinks he told him that. Forbes had control over the bond..

Mr. King, for complainant.

The decree being taken pro confesso against Mr. Forbes, is an admission on his part that he had no power of attorney, and still less any power to sell. He was iv^peifiTot the attorney of Roderick Young.. Forbq§..Jrera'the custody of the bond, hut no power of assigning or transfering.. There was enough on the face of the bond to put Mr. Walker on, his guard. If the attorney should assign, a bond, he must do it in his character as attorney.. But he does not assign it as attorney,. He assigns it in his own name $ assignment not made for the benefit of the estate he represented,, but assigned or pledged for payment of his own debt. Complainant is assignee under the court •of common pleas for the benefit of creditors : 1 Com. on contracts, 237. An agent or factor cannot pledge or , assign the property of his principal to secure his own debt : 2 vol. decrees of this court, p. 14,

Walker should have called for the power of attorney, under which A, Forbes acted : 1 Campbell. Agent acting under general powers must conform to the usage. It is agreed that the master said to Walker that Forbes had a right to do what he pleased with the bond.

.Mr. Gibbes, the master, was called upon to prove the declaration he made to Walker. lie said he did not remember exactly the language he held to Walker ; but thinks that he told him that Forbes had the control of the bond.

Forbes gave receipt on the 28th April, 1808, for the very bond in question, and signed as attorney for the assignees. Receipt was produced.

*532Mr. Hayne, for defendant.

The defendant has acted honestly. He made enquiry of the master, whether Forbes had authority to assign the bond, and the evident re* *s with him. The claim is not for the whole of the debt. It was giren as a security for a debt, and there is a balance coming to the complainant. Relying on this bond, Walker has not pursued his legal remedy against his debtor, and he has become insolvent. Commercial principles apply to this case ; the case of innocent in-dorsees. The case of bonds, as decided in our own country, is similar : See the cases in Bay’s reports, .Kennedy’s case, Bay and Fraser, 1 Bay, 63.

The assignment made by the master is to Forbes as attorney of Roderick Young and assignee, and his assignment is in blank ; he therefore assigned in his character of attorney, and he had the right to assign.

Walker had a right to receive it to secure himself *t*Montague on set off, p. 31 $ the doctrine of sale of personal property.

Ad mi)/that Walker taking this bond as a security *is*not so strong as if he had sold him goods, or taken it as a *payment;*but still he had a right to do either. The principal suffers by the act of his agent, Forbes $ and he who trusts most, should suffer most.

Where the equity is equal, melior est conditio deferi-dentis. The case of commissioners of public accounts y. Moultrie andTunno, differs from the one beforé the court, in four particulars :

1. The bond was not negotiated in that case j it was not used for commercial purposes.

2. Tunno knew that Moultrie had no right to settle the debt as he did. (See words of decree.)

3. That was a debt due to the public, and not a subject of assignment.

4. It was the case of an attorney at law, which differs from the case of a general attorney, who generally has power to compromise and discharge the debtor. And the decree decides that Rose should sustain the loss, because of the misconduct of his agent.

*533Dscns*;

Mr. King, for complainant.

The master’s testimony is not very *strong;*merely that (possibly he said,) Mr. Forbes, as attorney of Mr. Jamieson, had power over the bond. But the power had been ed. There is no positive proof of this. But Walker’s silence, his pot answering the allegations of the bill, mits his power at an end : 4 Dallas, 234. A party making a promise under mistake of law or fact, is not bound.

It is conclusive from the pleadings, &c. that Walker Knew Forbes held the bond as an attorney.

Factor sells goods for his principal, and fails, his assignees are not at liberty to recover the money due. It did not belong to him, but to his principal.

Walker was the person who trusted most ; he should have enquired the extent of Forbes’s, powers. If he had he woidd have found he had no authority to transfer it on his own account. If he did not enquire, it was his own fault. He trusted that he had greater powers than he had. The transaction originated in this court, and the complainant is entitled to the protection of this court.

There does not appear to me to be much difficulty in this case. The attorney of an assignee, and joint attorney of another assignee, gets possession of a. bond, under the order of this court, directing the application of the money to the payment of a debt partly to the estate of R. Young, and partly to the estate of A. Young. Instead of applying the bond in this way, he makes a blank assignment of the bond to Mr. Walker, as a pledge for the payment of a private debt of his own to Mr. Walker. This conduct is utterly unjustifiable and, unwarranted. It does not appear whether this power of attorney was revoked at the time he made the assignment *;*but this makes no difference in the case. . Suppose the power of attorney to have been in full force ?■ It must be taken to have been an ordinary power, which .authorises him to receive the money for the use of his principal, and that principal himself was only an as-signee for the benefit of others. It was a gross depar-*534from a such a power to assign it in payment, or as as pledge for his own private debt. He did what he had no authority to do, and what was not implied in any power. The defendant, Mr. Waiker, in accepting the assign-, ment to himself, saw on the face of the transfer by the master to Forbes that it was an assignment to him as an; attorney to others, and not in his own right.. He therefore took the assignment with a knowledge that Forbes had no interest in it, and could not apply it to his own, purposes *;*but that it was applicable to other-purposes. It is relied on for defendant, Walker, that he consulted the master who told him that Forbes had control over-the bond. Admit this to the extent, it could only mean,' that Forbes had control over it, as expressed on, the face of the assignment, to wit, as attorney for the assignee,.- and for particular uses. If however it had been muck stronger, and the master had actually informed Walker that Forbes was owner of the bond, and could apply it to his own purposes, it would not have altered the rights of the parties. It would have been a misinformation,, not binding on the party whose interests ’were affected by it. The defendant, Walker, was bound when he saw on the face of the assignment, that the master had assigned the bond to Forbes, as an attorney for the benefit of others, to have required the production of the power-of attorney, and to have seen whether Forbes had any authority to apply the bond to his own purposes, before he accepted it as a pledge from Forbes, in payment of his own debt. The cases cited from Bay’s reports have no application to this case. The doctrine has been well settled, and the principles both of law and justice are entirely against the defendant.'* I must therefore decide against him. It is ordered and decreed that the defendant do deliver up the bond to the coinplai-*535aant, and that the defendants, the obligors in the hondj, be restrained from paying the money due on the bond to any other person than the complainant, or some person Regally authorised by him to receive the same.

Henry 'Wimiam Desaussttue'.

*

 This caso comes within the principle of the decision of this court ¡n the case of the commissioners of public accounts v. Rose, Tunno and Moultrie ; for the doctrine laid down in that case is as applicable to cases between individuals, as between the public and individuals ; and io the conduct of attornies in fact as well as of attornies at law.