Phelps v. Northup

Mr. Justice McAllister delivered the opinion of the Court: There was sufficient testimony, if believed, to warrant the jury in finding an acceptance, which might be by parol. And there is no such weight or preponderance of evidence the other way as would justify our interference with the verdict. We are to assume, therefore, that the order was accepted. If so, the legal effect was an undertaking on the part of appellants to pay the amount when the note in their possession for collection was collected, and there can be no doubt that, but for their act disabling them from collecting the Struthers note, by transferring it, without appellees’ consent, to Cratty, it would have been collected by appellants, and then their refusal to pay would have been a breach of their undertaking. If they had the power to disable themselves from collecting the note, in violation of the rights of appellees, and thus get rid of then* contract, the law would aid them in the commission of a fraud. The contract itself imports that they would use due diligence to collect the Struthers note. Allowing the note to be withdrawn from their hands, and delivering it over to another, while appellees’ order was in then* hands and accepted by them, was a positive breach of duty, and as much a breach of their contract as if they had collected the note, and then refused to pay appellees. White v. Snell, 9 Pick. 16. In Yeates v. Groves, 1 Ves. Jr. 280, Lord Thublow decided that an order to pay a debt out of a particular fund belonging to the debtor, constituted an equitable assignment of the fund fro tanto, and gave the creditor a specific, equitable lien thereon, although the order had not been accepted by the holder of the fund before the debtor’s bankruptcy. In Israel v. Douglass, 1 H. Black. 239, Lord Loughbobough said, “ This debt is, with the consent of the parties, assigned to the plaintiff (the payee); Douglass (the drawee) has notice of it and assents, by which assent he becomes liable to the plaintiffs.” Ex parte Alderson, 1 Mad. 53; Lett v. Morris, 4 Sim. 607; Weston v. Barker, 12 Johns. 279; Taylor v. Bates, 5 Cow. 376; Wheeler v. Wheeler, 9 id. 34; Bradley v. Root, 5 Paige, 632. It follows, from these authorities, that the order upon appellants, notice to them, and their assent, bound the fund in their hands. Pose had no right to withdraw, nor they to sm*render or, assign it over to Cratty. The surrender and transfer of the Struthers note to Cratty was clearly a fraud upon appellees, a breach of appellants’ contract, and they were, therefore, liable in this action. We have examined the instructions given on behalf of appellees, and such on behalf of appellants as were refused, and find no error in either the giving or refusing of instructions. The judgment of the court helow must he affirmed. Judgment affirmed. Hr. Chief Justice Lawrence, Hr. Justice Thornton, and Hr. Justice Sheldon dissenting.