Caldwell v. Hartupee & Co.

The opinion of the court was delivered, May 13th 1872, by Read, J. On the 24th day of March 1868, Henry T. Dexter being the owner of a one-third interest in the steamboat “ Quickstep,” purchased the remaining two-thirds from Hartupee & Co., the then owners thereof, for $15,000, which, as the boat was in debt in that amount to various persons, and to secure the payment of the same, said Dexter made and executed a deed, dated the same day, for said boat to William A. Caldwell and George W. Coffin, in trust for her lien-creditors, a list of whom is given in said deed. The said $15,000 were to be paid to said trustees with interest from the date of the deed, in manner following, viz.: one promissory note for the sum of $5000, with interest, six months after this date, and two similar notes of the same amounts, payable respectively at 12 and 16 months after date. These notes were all paid at maturity. The last on the list of creditors was D. W. C. Carroll, assignee, which, as the assignment was inoperative, he having declined to accept, was really Hartupee & Co., to whom it belonged, as was [78] admitted on the trial. The payments as received were to be applied first to the payment of the creditors above named, excluding Morrow and Barnhill, next to the claim of said Morrow and Barn-hill, and the balance really to Hartupee & Co., who were creditors to the amount of $5349.36. In April 1868, W. A. Caldwell, acting assignee, accepted and paid two orders, drawn by Hartupee & Co. against their interest, as creditors in said deed, amounting to $3920.40. On the 10th October 1868, Hartupee & Co., being the owners, of the balance of the debt due them under the deed of trust, drew the following order on W. A. Caldwell:— “ Dear Sir: Please pay Mr. John Cuthbert $1500 out of the proceeds of the last note coming to us from the steamer ‘ Quickstep,’ with interest from date of said note. “ Pittsburg, October 10th 1868. “Hartupee & Co.” This order on the same day was taken by Cuthbert to Caldwell, one of the trustees,'who refused to accept it, and told him Hartupee & Co. were indebted to his firm in a sum exceeding the amount coming to them under the trust deed, and he intended to appropriate whatever they might be entitled to, to the payment of that debt. This order was an equitable assignment of so much of the money which Hartupee & Co. were entitled to receive from the trustees under the deed of trust out of the proceeds of the last note which they had the full power to make. The order was properly admitted in evidence by the court, and it was proved by Cuthbert that he went bail for Hartupee & Co. on a judgment held by A. H. Miller, Esq., and when it came due John Morrow raised and paid the money to Miller, and this order which had been given as collateral for the judgment was then assigned to John Morrow, who paid the money. It was, therefore, not simply an assignment, but an assignment for a valuable consideration, and John Morrow was entitled to receive the money. This suit was brought on the 21st August 1869, and was tried on the 9th June 1870, and in the course of it John Caldwell, Jr., a partner in the firm of Caldwell & Bro., was examined by the defendant, and two notes offered in evidence were shown witness. “ I am willing,” said he, “ as a partner, that my brother, W. A. Caldwell, should use the amount of each note as an offset in this case against the claim of plaintiffs in this case against W. A. Caldwell; I am content he should so appropriate.” Under this state of facts the plaintiffs were entitled to the full amount of the order, with interest, and whatever balance remained [79] of Hartupee & Co.’s interest under the deed of trust belonged to the defendant under his offset of the two notes above stated. This really practically answers Mandeville v. Welch, which was in a court of common law, and the same assignment would have been held good on the equity side of the same. In Pennsylvania, in the present liberal state of the law, as to equitable assignments, there can be no hesitation in recognising this assignment in a common-law form of action, and in saying in such a case it is not necessary to resort to a court of equity. Judgment affirmed.