Court Opinion

ID: 7285818
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:26:56.441186+00
Date Added: 2024-06-11T16:19:07.487968
License: Public Domain

The Chancellor.
A partnership composed of Thomas J. Agnew and J. O. Taylor, in the city of New York, was dissolved in January, 1844. T. J. Agnew first took the assets, to settle the affairs of said late firm. He put into a new firm, of Agnew, *61Abbott & Co., of which he became a member, $3,600 worth of the goods of said late firm of Agnew & Taylor. T. J. Agnew met the engagements of the said late firm of Agnew & Taylor as long as tho settlement of their affairs remained in his hands. After a few months, it was agreed between T. J. Agnew and Taylor, that Taylor should take the assets and go on with the settlement of tho affairs of Agnew & Taylor. At or about the time of this change, two accommodation notes made by Andrew Agnew, a brother of said T, J. Agnew, and endorsed by Agnew, Abbott & Co., were obtained, one dated April 1, 1844, for $1,640, at four months, the other dated April 4,1844, for $1,560, at three months, for the purpose of raising money to meet engagements of Agnew & Taylor. The money could not be raised on these notes, though efforts were made to do so. Afterwards, notes bearing the same dates and for the same amounts, and payable at the same times, made by Agnew, Abbott & Co., payable to and endorsed by Andrew Agnew, were procured, to be used instead of tho said two first notes, for the same purpose. A bond and mortgage from T. J. Agnew to Andrew Agnew was made, on tho 16th of April, 1844, without any consideration, for the purpose of raising or aiding in the raising of money to meet the engagements of said Agnew & Taylor, or for the purpose of protecting Andrew Agnew against his said endorsements; the precise purpose for which the bond and mortgage were made, that is, whether for the sole purpose of protecting Andrew Agnew against his said endorsements, or for the purpose of raising money on them as securities haying no connection with the said endorsements is in dispute.
The two notes endorsed by Andrew Agnew and the bond and mortgage went into the hands of E. H. Kimball, a lawyer, and, as it would seem, a kind of broker, in Wail street, New York, for the purpose of raising money on them, to be applied to the payment of debts of Agnew & Taylor. The bond and mortgage were assigned by Andrew Agnew to Kimball, without any consideration therefor, and for the more convenient transferring them, as Kimball says, to any purchaser of them or lender of money on them; Andrew Agnew not residing in New York. Money was advanced by Kimball or raised by Mm on the said *62two notes endorsed by Andrew Agnew. No money was raised on the bond and mortgage, as separate securities disconnected with the notes of Andrew Agnew, except that Kimball says, that while the bond and mortgage were in his hands he let Taylor have money on the faith of other securities and the said bond and mortgage.
After the dissolution of Agnew & Taylor, Taylor went into partnership with a Mr. Olcott, under the name of J. O. Taylor & Co., and this firm became indebted to the complainants for goods sold by the complainants to them, for which they gave their notes to the complainants. The notes of Agnew, Abbott & Co., endorsed by Andrew Agnew, were paid at maturity, or within a few days thereafter; being paid half by Taylor, and half by Thomas J. Agnew, or by Agnew, Abbott & Co., and charged by that firm to T. J. Agnew, who was a member of it. They are exhibited on the part of the defendant. One of them is endorsed by Kimball; the name is now erased ; and the other is endorsed by the complainants.
On the 24th of September, 1844, the bond and mortgage were assigned by Kimball, without any consideration, to the complainants. Kimball says he made the assignment by the direction of Taylor ; and the complainants claim to hold them as securities for goods sold by them, before and after the assignment, to J. O. Taylor & Co.
Before the complainants took the assignment of the bond and mortgage, they called on Kimball, and he stated to them that, as soon as the liabilities incurred by him and his advances had been paid, he would assign the bond and mortgage to whoever Taylor should direct. And, in answer to an Interrogatory exhibited by the defendant to the complainants, the complainants say, that when Taylor offered to have the bond and mortgage assigned to them, by Kimball, he said to them that the bond and mortgage belonged to him, and had been given by the defendant indirectly to him, to enable him to pay off and satisfy certain debts of said late firm of Agnew & Taylor; and that he had used said bond and mortgage and caused them to be transferred to Kimball as security for money which he, Kimball, had advanced to him, Taylor, and which he, Taylor, had used to pay the debts of Ag*63new & Taylor; and that he had repaid Kimball the money so advanced by him, and that Kimball would at his request assign the bond and mortgage to the complainants ; and Kimball says that he and Taylor and the complainants treated the bond and mortgage as belonging to Taylor. The complainants made no inquiry, either of the mortgagor or mortgagee, to ascertain for what purpose they were given, or whether there was any money due on them, or whether Taylor had a right to direct the assignment of them. Taylor & Co. are insolvent.
I have said that it is a matter in dispute, whether the bond and mortgage were given for the specific purpose of protecting Andrew Agnew against his endorsements of said two last notes, or for the general purpose of raising money to meet the engagements of Agnew & Taylor. I am of opinion that the weight of testimony is that they were given for the specific purpose above mentioned; and I think the bond and mortgage were put into Kimball’s hands, with an assignment to him thereon, as an aid or inducement in raising the money on the notes. It is certain that he paid no money for them and raised no money on them as separate securities. If this be so, then, after those notes were paid, the purpose for which the bond and mortgage were given was accomplished, and Kimball had no right to assign them, nor Taylor to direct the assignment of them; and the complainants acquired no interest in them.
If we suppose the bond and mortgage to have had no connection with the notes endorsed by Andrew Agnew, the case would stand thus : A bond and mortgage were made by Thomas J. Agnew to Andrew Agnew, without any consideration paid by Andrew ; were assigned by Andrew to Kimball, without any consideration paid by him, in order that he might raise money thereon for the purposes of the late firm of Agnew & Taylor; no money was raised on them; they were assigned by Kimball to the complainants, at the request of Taylor, as security for goods sold by them to Taylor & Olcott, persons not appearing by the bond and mortgage to have any connection with them; without any inquiry of the mortgagor or of the mortgagee, who assigned them to Kimball; and after receiving the information before stated, in reference to the bond and mortgage and the ob*64ject for which they were given. That information apprised them that Kimball only held them or claimed to hold them for certain liabilities which he claimed to have incurred or for advances made to Taylor. These liabilities or advances were paid to him ; and when Kimball consented to make the assignment the complainants were apprised of that fact; because Kimball refused to make the assignment till his liabilities or advances were paid. They knew, therefore, that when K. became willing to make the assignment he had no right existing in him to do it. The complainants and Kimball, upon the representations of Taylor, treated the bond and mortgage as Taylor’s ; and they were assigned by the direction of Taylor. They took a bond and mortgage made by Thomas J. Agnew to Andrew Agnew, and by Andrew Agnew assigned to Kimball, on the ground that Taylor, a man who did not appear by the papers to have any interest or control over them, claimed a right to them and to direct to whom Kimball should assign them as security for goods sold by the complainants to Taylor & Olcott. The complainants, therefore, knew they could acquire no right to them unless they belonged to Taylor or he had a right to direct the assignment of them for such a purpose. The case, then, turns on the question whether Taylor had such right; and the burden is on the complainants, in this state of the proofs.
But the proof before the Court does not show that the bond and mortgage belonged to Taylor, or that he had any right to direct them to be assigned to the complainants. If the assets of Agnew & Taylor were insufficient to pay the debts of that firm, and Taylor had paid from his own funds debts of that firm to an amount sufficient to make T. J. Agnew his debtor to the amount of the bond and mortgage, it might be that he could be considered as having an equitable interest in the bond and mortgage justifying him in appropriating them to the payment of his own debts ; but it does not appear that any such state of things existed ; and the proper parties are not before the Court to enable the Court to determine whether such a state of things existed.
The new testimony does not alter the case, if Taylor was a competent witness at all, and if he was properly examined a second time, neither of which am I prepared to say. The only *65ground on which the complainants can stand is a possible equity which the Court might be willing to accord to Taylor if, on a settlement of the accounts of Agnew & Taylor, it should appear that Taylor had applied all the assets of that firm to the payment of their debts, and that, after exhausting them, he had paid out of his own funds moneys in discharge of the debts of said firm, for the half of which T. J. Agnew would be equitably bound to him. In such a case the Court might, perhaps, be disposed to permit him to hold the mortgage as a subsisting instrument, as a security for the half of the moneys he had paid out of his own funds, after exhausting the assets of the said firm, in payment of their debts. But it is evident that the accounts of that firm, and the ascertainment of the assets of that firm, and whether they were all exhausted, and how much indebtedness of that firm existed after their assets should be fully applied in payment of the debts, so as to ascertain the amount for which Taylor, or the complainants as entitled to the same equity that he would be entitled to, should be permitted to recover on this bond and mortgage, as the half of the deficiency of the assets of Agnew & Taylor, cannot he gone into and settled in this suit and between these parties only.
It would be strange indeed, if those accounts could be settled in this side way, in a suit to which Taylor is not a party, and upon an affidavit of Taylor as a witness for the persons (the complainants) to whom he undertook to transfer the mortgage as collateral security for the notes of Taylor & Olcott, given for goods bought by them of the complainants. The decree must be for the defendants.
Decree for defendants.