author: Mr. Justice NELSON

text:
    Daniel L. Grove, Appellant, v. John McP. Brien, Robert Gilmor, William Fowle, William H. Fowle, and George D. Fowle, Trading Under The Firm of William Fowle & Sons, Defendants. Cross Suit. Robert Gilmor, Complainant, v. Daniel L. Grove, John McP. Brien, William Fowle, William H. Fowle, and George D. Fowle, trading under the Firm of William Fowle & Sons, Defendants.
    Where a manufacturer upon the upper waters of the Potomac shipped five hundred kegs of nails to Alexandria, taking from the master of the canal-boat a receipt saying that the nails were “ to be delivered to Bowie and Sons in Alexandria, for the use of Robert Gilmor of Baltimore,” and on the same day sent a letter to the consignees, advising them that the goods were consigned for the use of Gilmor, such delivery and bill of lading operated as a transfer of the legal title to Gilmor, who was in fact the consignor.
    The effect of a consignment of goods, generally, is to vest the property in the consignee ; but if the bill of lading is special to deliver the goods to A for the use of-B, the property vests in B, and the action must be brought in his name in case of loss or damage. .1
    Therefore, the kegs of nails in the hands of Bowie & Sons were not subject to an attachment by the creditors of the manufacturer; nor had Bowie & Sons any valid lien upon them for previous advances to him. The title to the nails had passed to Gilmor before they came into the possession of Bowie & Sons.
    In this case the manufacturer acted bond fide, in the -transfer of the goods, for the purpose of securing a preexisting debt to Gilmor.' This being so, there was no necessity for Gibnor’s expressing his assent to the transfer, in order to the vesting the title. The manufacturer was a competent witness.
    This was an appeal from the Circuit Court of the United States for the District of Columbia and County of Alexandria.
    It was a controversy respecting the right to certain .kegs of nails, which were in the hands of William Fowle & Sons, in Alexandria.
    On the 14th of March, 1843, the following was the position of the several parties who had any concern in the matter.
    John McPherson Brien carried on an extensive iron concern upon the waters'of Antieatam Creek, in Maryland,, near the Potomac River above Harper’s Ferry. He was indebted» to Robert Gilmor of Baltimore, to Daniel L. Grove of Alexandria, and to William Fowle & Sons of the same place. To the last-mentioned house he had been in the habit of sending nails from the foundry, and upon the preceding 21st of February had written the following letter.
    “ Antieatam, February 21, 1843.
    “ Messrs. Wm. Fowle &. Sons : —
    ‘Gentlemen, — Your account of sales, &c., has been examined and found correct, and charges for your commission, &c., made in my books accordingly.
    “ The water I learn will be put into the canal in a day or two, when I shall embrace the first opportunity to forward you the nails you have ordered.
    “ Yours, most respectfully,'
    “Jno. McP. Brien.”
    In this state of affairs, Brien made a shipment by one of the canal-boats, and took the following receipt: —
    “ Received, March 14, 1843, of John McP. Brien, 500 kegs of nails, to be delivered to William Fowle & Sons, Alexandria, D. C., for the use of Robert Gilmor, Esq., Baltimore, in good order.
    “George H. Sharpless,
    For Isaac Sharpless.”
    Upon the same day the following letter was written, which, it appeared by the testimony, was not mailed at Mr-. Brien’s post-office, but brought down the canal by-.the boatman, and mailed at Georgetown, on the 20th. It was received by Fowle <& Sons on the 21st.
    “ To Messrs. Wm. Fowle & Sons : —
    “Gentlemen, — We have this day shipped on board of Capt. Sharpless’ boat, and consigned to you, for the use of Robert Gilmor, Esq., Baltimore, 500 kegs nails, viz. 27 3d., 34 4d., 68 M., 99 8d., 107 lOd, 58 12c?., 22 20d., and 17 30d. nails ; 22 2<i., 7 8d., and 15 10ri. brads; 10 8d. and 12 10d. fencing, which we hope will arrive in good order. You will please pay Capt. Sharpless his freight, and oblige yours, respectfully,
    “Jno. McP. Brien,
    Per Jas, S. Primrose.
    “ March 14,' 1843.”
    Postmarked, “ Georgetown, D. C., March 20.”
    Upon the preceding 23d of January Grove had filed a bill (the origin of all these legal proceedings) against Brien and Fowle & Sons, stating that. Brien was indebted to the complainant in the sum of $ 1089.50, and praying that an attachment might issue against his funds and effects in the hands of Fowle & Sons. As soon as the nails arrived, viz. on the 20th of March, the marshal served the attachment and subpoena.
    It may be here stated, that Gilmor obtained leave of the court to be made a defendant, and afterwards filed his answer and cross-bill.

      It is not necessary to state the progress of the suit through all its details. The parties all answered, and much testimony was taken, including that of Brien, which was objected to by the counsel for Grove. Proper parties were also made in place of some wiio had died.
    Fowle & Sons in their answer set forth their previous dealings with Brien, the letter (above inserted) of the 21stof February, and claimed that Brien was indebted to them on account of prior transactions, for which balance so due they had a lien on the nails.
    The answer of Gilmor, and his cross-bill, state substantially the same facts, and, after referring to the attachment of the nails in controversy. by Grpve, say, —- That John McP. Brien was indebted to Robert Gilmor, (besides other large indebtedness,) in the amount of a draft for $ 4,405.40, which was drawn by Brien on Gilmor and by him accepted, and at maturity paid by Gilmor, at the request and solely for the use of Brien. That previous to the shipment of the said nails, it was agreed between Brien and Gilmor, that Brien should ship to Gilmor the 500 kegs of nails, on account of, and to be applied in part liquidation of, such preexisting debt.
    It then proceeded to state the shipment, and claimed the nails as his property.
    The answer of John McP. Brien to the original and cross-bills neither admits nor denies his indebtedness to Grove, as charged in his original bill, but calls for proof. He states,his indebtedness to Gilmor, as alleged in the cross-bill, and admits that, according to a previous agreement between himself and Gilmor, and in consideration of such preexisting indebtedness, he shipped the 500 kegs of nails in controversy, on the 14th of March, 1843, tó the care of Wm. Fowle & Sons. That by letter dated the 14th of March, 1843, he advised said Wm. Fowle &. Sons, that the said nails, a particular description of which is contained in the letter, were forwarded to them, for the use of Robert Gilmor, of Baltimore, and also inclosed them the receipt or bill of lading of the common carrier, to whom the said nails were delivered, which expressed that the same were shipped for the use of Robert Gilmor, and denies all fraud, combination, &c.
    Grove answered the cross-bill, stating his ignorance generally of the facts, calling for proof, and charging that the consignment for Gilmor’s use, if made, was fraudulent, &c., &c.
    The result of the evidence in the suit may be stated to establish the debt of Brien'to Gilmor, to Grove, and to Fowle & Sons, and the question was Avhich creditor had the preference. The account of the sale of the nails was thus presented by Fowle & Sons.

      It will be perceived that their prior debt is not brought iutc the account.
    “ Sales 500 casks nails, received from the Antieatam IronWorks, for account and risk of whom it may concern. '
    “ Account of the sale of the nails by William Fowle &f Sons.

    1845.
    Nov. 8. R. Crupper, 100 casks, 10,0001bs.
    at $ 4¿, 6 months’credit, . $412.50
    1846.
    Oct. 27. James Green, 400 casks, 40,0001bs.
    at $ 3¿, 6 months’ credit, . 1,400.00
    1,812.50

      Charges.

    1843
    Mar. 18. Paid freight on 500 kegs nails, $ 75.00 Interest on $ 75 till sales are due, 17.54
    Wharfage, $ 5; drayage, $3.75, 8.75
    Storage, at f cents per cask per • month, .... 152.25
    Labor, receiving, piling, and delivering, . . .. . '5.00
    Cooperage, .... 4.25
    Fire insurage, 5.100 per $ 100 a month and policy, $ 1, . . 42.00
    Commission and guarantee, 6 per cent.,......108.75
    413.54
    Net proceeds average cash, February 7-10th, 1847, .
    1,398.96
    E. E.
    “ Wm. Fowle & Sons.
    “Alexandria, October 28th, 1846.”
    On the 31st day of October, 1846, the Circuit Court passed the following decree.

      “ Final Decree.

      “ And now here, at this day, to wit, at a court continued and held for the district and county aforesaid, the 31st day of October, 1846, came the parties aforesaid by their solicitors, and these causes being set for hearing, and coming on to be heard this 31st day of October, 1846, upon the original, amended, and cross-bills, demurrer, answers, general replication, depositions, exceptions, agreements of counsel, interlocutory decrees and orders, and other papers, and it appearing to the court that all the parties defendant to said original, amended, and cross-bills had duly answered the same, and the arguments of counsel being heard, the court doth order, adjudge, and decree, that the amount of sales by the defendants, William Fowle '& Sons, of the nails in controversy, made under an order in these causes of May term,' 1844, not having been excepted to, be and the same is hereby confirmed. And the court proceeding first to decide upon the original bill filed by the complainant, Daniel L. Grove, doth adjudge, order, and decree, that the resident defendants, William Fowle & Sons, had not, at the filing of the said original bill, or at any time since, in their hands any property, effects, or money belonging to the said non-resident defendant, Jno. McP. Brien; and do further adjudge, order, and decree, that said original bill be dismissed, and that the said Daniel L. Grove do pay to the defendants thereto their costs in that behalf expended.
    “ And the court proceeding now to consider arid decide upon the cross-bill, filed by the said Robert Gilmor in this cause, doth adjudge, order, and decree, that the said Robert Gilmor recover of the said John McP. Brien the sum of four thousand four hundred and five dollars and forty cents, the amount of the draft in the said cross-bill mentioned, with interest thereon from the 4th day of March, 1843, till paid; to be credited, however, by the sum of one thousand eight hundred and twelve dollars and fifty cents, as of the 14th day of March, 1843 ; the said sum of $ 1,812.50 being the gross amount of the sales of the said five hundred kegs of nails, as shbwn by the account of sales of the said William Fowle & Sons above mentioned; and the court doth further order and decree, that the said William Fowle & Sons, out of the said one thousand eight hundred and twelve dollars and fifty cents, the proceeds of the sales of said nails in their hands, retain the sum of four hundred and thirteen dollars and fifty-four cents, in discharge and payment of‘ the freight on the shipment of said nails, for storage, insurance, commission on sales, and the other items of charge against the said nails set forth in their said account of sales; and the court doth further adjudge, order, and decree, that the said William Fowle & Sons are not entitled to any lien on the said nails, or their proceeds, for the sum of $ 334.60 claimed by them to be due as a general balance of account on previous transactions between them and the said John McP. Brien. The court doth further adjudge, order, and decree, that William Fowle, William H. Fowle, and George D. Fowle, composing the firm of William Fowle & Sons, pay over to the said Robert Gilmor the sum of one thousand three hundred and ninety-eight dollars and ninety-six cents, being the balance of the sales of the said nails in their hands, after deducting the said sum of $ 413.54 in manner aforesaid. And the court further adjudge, order, and decree, that the said Robert Gilmor recover of the defendants to said cross-bill his cost against them in that behalf expended.
    “ From which decree the complainant, Grove, in the original bill, and a defendant in the cross-bill, prays an appeal to the Supreme Court of the United States, which is granted, upon his giving bond and security in the sum of $ 2,500,. to be approved by the court or one of the judges thereof.”
    Upon this appeal, the case came up to this court.
    It was argued by Mr. Davis, for the appellant, and Mr. Francis L. Smith, and Mr. Meredith, for the appellee.
    The points raised by Mr. Davis, upon which the decision of the court turned, were the following.
    If the deposition of Brien be admitted, still, on consideration of the whole evidence, the case of the answer and cross-bill is not proved.

      (a.) The deposition is silent as to the alleged £: previous agreement ”; nor is any communication with Gilmor prior to the attachment shown.

      (b.) The statement of the consideration is defective, —■ as in the cross-bill, — being merely his drawing on Gilmor, who accepted and paid the draft; “in consideration of which draft and other indebtedness,” &c.
    5. He then states, 1st, that he shipped 500 kegs of nails to Fowle & Sons, for use of Gilmor; 2d, that he took the annexed receipt; 3d, that the letter of March 14, 1843, was written by his authority. What that letter contained does not ap- ■ pear. If it be supposed to be the one produced by Fowle & Sons, then,—
    1. It is not proved, and so cannot be read against any but Fowle & Sons.
    '2. If it be read against the complainants, it did not reach Fowle & Sons till after the attachment, and was not mailed till the day of the attachment.
    It is not shown that the receipt ever left Brien’s possession prior to the attachment or prior to his deposition. 9 Leigh, 181.
    It is submitted that these facts, if believed, dp not amount to a transfer of the title to the nails to Gilmor, prior to the at tachment. Tiernan v. Jackson, 5 Pet. 597 — 599 ; Williams v. Everett, 14 East, 582; Grant v. Austen, 3 Price, 58; Scott et al. v. Porcher, 3 Meriv. 652, 663, 664; Story on Agency, § 377, note 3; The Frances, French’s claim, 8 Cranch, 359, 363; 3 Cond. R. 224; and Dunham and Randolph’s claim, 8 Cranch, 354, 358; 3 Cond. R. 222, 223; The Constantia— Henrickson, 6 Rob. Adm. 321; Abbott on Ship. 328, 329, (5th Am. éd.) § 6; The Venus, 3 Cond. R. 181 (note 2); 2 Kent’s Com. 532, 533, note a (3d ed.); 3B.& A. 321.
    The receipt is not a bill of lading ; or if it be one, the mere taking it does not change the property, nor the mere indorsement, without .delivery of it. Abbott on Ship. 329, 330 ; Mitchel v. Ede, 3 Perry'& D. 513 ; S. C., 11 Adolph. & Ell. 888; 1 Bos. & Pul. 563 ; 1 Pet. 386.
    But, in fact, the deposition shows that these nails were consigned generally to Fowle & Sons on their order; that the consignment for use of Gilmor is an afterthought, to cover the property from attachment, and a device frequently resorted to by Brien for such purposes; and that Brien’s deposition is unworthy of credit.
    The counsel for the appellee, after examining the evidence to prove that the nails were shipped by Brien to pay a preexisting debt to Gilmor, made the following points.
    If, then, as we insist, the evidence just alluded to proves that the nails were shipped under a special contract between Brien and Gilmor, in consideration of a preexisting debt, due from the former to the latter, they became the property of Gilmor, on the 14th day of March, 1843-, and are not liable to the lien of an attaching creditor, and on this 'ground the attachment of Grove must fail. Story’s Com. on Agency (ed. 1839), $ 362, and cases cited in note 2; Weymouth v. Boyer, 1 Ves. jr. 416 ; Coxe et al. v. Harden et al., 4 East, 211; Bum v. Carvalho, 4 Mylne & Craig, 690; Wood v. Roach, 2 Dali. 180; 1 Yeates, 177.
    In view of these positions, we further submit, that immediately upon the receipt of the nails by Sharpless, the common carrier, and his signing the bill of lading, expressing on its face that they were to be delivered to Wm. Fowle & Sons, for the use of Robert Gilmor of Baltimore, the absolute title to the nails vested in Gilmor, and their delivery to Sharpless, the carrier, operated in law as a delivery to Gilmor. The rule is the same whether the goods be sent from one inland place to another, or beyond sea. Holt on Shipping, 359; Story’s Com. on Agency, <§> 361, and cases there cited; 2 Kent’s Com. (ed. 1847), part 5, p. 499; Smith v. Bowles, 2 Esp. Cases, 5781; At-kin v. Barnwick, 1 Stra. 165; Evans v. Martlett, or Martell, 1 Ld. Raym. 271, and also reported in 12 Mod. Rep. 156, and in 3 Salk. 290, which is strongly analogous to the case at bar; Dawes v'. Peck, 8 Term Rep. 330; Allen v. Williams, 12 Pick. 297; Buffington et al, v. Curtis et al., 15 Mass. 528, and cases there cited; Ludlowe v. Bowne, 1 Johns. 15; Potter v. Lansing, Ibid. 215; S'ummeril v. Elder, 1 Bin. 106; Griffith v. Ingledew, 6 Serg. & Rawle, 429; King v. Meredith, 2 Camp. 639; Copeland v. Lewis, 2 Starkie’s N. P. 33; Howland v. Harris, 4 Mason, C. C. 502.
    The letter of advice from Brien to Wm. Fowle & Sons was a declaration of trust, and an irrevocable appropriation of fhe nails for the use of Robert Gilmor. Walter et al. v. Ross et ah, 2 Wash. C. C. 288 ; Sharpless v. Welsh et al., 4 Dali. 279 ; Row v. Dawson, 1 Yes. sen'. 331; Stevenson v. Pemberton, 1 Dali. 4; Corser v. Craig, 1 Wash. C. C. 424; 2 Story’s Eq. Jur. 1044, 1045:
    The letter of advice to Fowle & Sons, the consignees, connected with the execution of the bill of lading and the delivery to the carrier for the use of Gilmor, amounts to such an assignment and transfer of the property in the nails to Gilmor, or to his use, as to protect them effectually against the claims of any attaching creditor. They amount to an order drawn on the whole fund. Mandeville v. Welch, 5 Wheat. 277 - 286; Story’s Conflict of Laws, p. 324, § 396 ; Bac. Abr. (Gwillim’s ed. 1846),-381, and cases there cited; 2 Kent’s Com. (ed. 1847), 548, 549 ; Lickbarrow v. Mason, 2 Term Rep. 63; Nathan v. Giles, 5 Taunt. 558; Meyer v. Sharpe, Ibid, 79; S. C., 1 Marsh. 233; Wright v. Campbell, 4 Burr. 2051; Cuming v. Brown, 9 East, 506 ; Newsom v. Thornton, 6 East, 16; Gardner v. Howland, 2 Pick. 599; Peters v. Ballistier, 3 Pick. 495; Hodges v. Harris, 6 Pick. 359; Rowley v. Bigelow, 12 Pick. 307; Dawes v. Cope, 4 Bin. 258; Chandler v. Belden, 18 Johns. 157; Bholen et al. v. Cleveland et al., 5 Mason, C. C. 174; Wilmshurst v. Bowker, 7 Man. &. Grang. 882; Conard v. Atlantic Ins. Co., 1 Pet. 419; Wakefield v. Martin, 3 Mass. 558; Holt on Shipping, p. 362, § 4, p. 365, $ 8, p. 373, § 15, p. 374, <§> 16, p. 377, $ 19.
    Notice of acceptance by Gilmor was not necessary, the goods having been shipped to pay a precedent debt. Anderson v. Van Alen, 12 Johns. 343; Wheeler v. Wheeler, 9 Cowen, 34; Holland v. Dale, 1 Alabama, 263.
    The attaching creditor can occupy no better footing than the absent defendant. Wilson v. Davisson, 5 Munf. 178; United States v. Vaughan, 3 Bin. 394.
    The rights of parties arising from the shipment of the nails should, we suppose, be governed by the local law of the State of Maryland, where the shipment was made. Story’s Conflict of Laws, <§><§. 397, 398, 399; Black et al. v. Zacharie & Co., 3 How. 483. These cases establish that an assignment of personal property, which is valid by the laws of the country where it is made, is binding everywhere. Adopting the course which was pursued in Black v. Zacharie, the appellee Gilmor took the depositions of Messrs. Glem and Brent, two eminent counsellors, who gave an opinion that the letter of advice from Brien to ffm. Fowle & Sons, and the carrier’s receipt, according to the course of decision of the Court of Appeals of Maryland, vest an absolute right to the nails in controversy in Robert Gilmor. In support of their opinions, they refer to the cases of Powell v. Bradlee, 9 Gill <fc Johns. 220, and 2 Harr. & McHen. 453.
    The claim of ffm. Fowle & Sons cannot be sustained, because no account has' been filed showing the balance claimed by them, and further, that they have only asked relief by their answer. A cross-bill was necessary. Talbot v. McGee, 4 Monroe, 379 ; Pattison «.'Hull, 9 Cowen, 747.
    The nails were not shipped, as ffm. Fowle & Sons suppose, to answer their order of the 21st of February, 1843, but for the benefit of Gilmor, in the manner stated.
    The nails were appropriated, (and the evidence thereof accompanied the property,) by Brien to Gilmor, before they came to the possession of Fowle & Sons, and therefore their lien for a general balance does not attach. Ryberg et al. v. Snell, 2 Wash. C. C. 294; Abbott on Shipping (ed. 1829), 389; Walker v. Birch, 6 Term Rep. 262.
    Being shipped under' a special contract, the nails are not subject to any intervening lien. Story on Agency, § 362; and Weymouth v. Boyer, before cited.
    The bill of lading for the nails, signed by the carrier, being produced by Gilmor, the legal presumption arises that it was delivered to him; either by the carrier or by the consignees, Wm. Fowle & Sons.
    John McP. Brien is a competent witness, he has no interest in the result of the suit, he stands in mutual regard between Grove and Gilmor, and his legal interest is equally balanced. A witness who is liable to both parties is competent for either. Stewart v. Stocker, 1 Watts, 135; Sommer v. Sommer, Ibid'. 303; Bailey v. Chapell, 1 Harring. 449; Eldridge v. Wadley, 3 Fairf. 371-373; Blaisdell v. Cowell, 2 Shepl. 370; Sherron v.. Humphreys, 2 Green, .217; Prince v. Shephard, 9 Pick. 176; Emerson v. The Prov. Man. Co., 12 Mass. 237; Stump v. Roberts, 1 Cook, 440; Harwood v. Murphy, 4 Halst. 215; Nessly v. Swearingen, Addison’s Rep. 144; Evans v. Hettich, 7 Wheat. 453 ; Kirk v. Hodgson, 2 Johns. Ch. 550; Richardson, 268.
    A cross-bill was Gilmor’s proper, indeed only,'remedy. The nails were attached and in the hands of a court of equity, and how else could he claim and litigate his right to the property ? Story’s Eq. PI. from <§> 319 to § 403 inclusive; 1 Smith’s Ch. Pr. 449, 460, 461, 462, 463.
   Mr. Justice NELSON

delivered the opinion of the court.

This is an appeal from a decree of the Circuit Court of this District, in which a bill was filed by the complainant for the purpose of enforcing the collection of a debt due from John McP. Brien, a non-resident, out of goods belonging to him within the District, in the hands of William Fowle <fc Sons, the consignees. It was defended by Fowle & Sons, on the ground that they had a lien upon the goods. They also set up, that the property was claimed by R. Gilmor, a merchant in Baltimore. The bill was afterwards amended, making Gilmor a defendant, who answered, setting uj> his title to the property ; and also filed a cross-bill against the complainant, Fowle & Sons, and'Brien, setting-forth the same title, and praying that the proceeds, the property in the mean time having been sold, might be paid over to him. The defendants put in several answers to the bill; but, upon the view we have taken of the case, it is unnecessary to refer to them particularly.

The facts disclosed which it is material to notice are, that Brien, being indebted to Gilmor, on the 14th of March, 1843, shipped to Fowle & Sons 500 kegs of nails, the property in question, for the purpose of securing such indebtedness, and took from the master of the boat the following receipt or bill of lading: —- “ Received, March 14, 1843, of John McP. Brien 500 kegs of nails, to be delivered to William Fowle & Sons, Alexandria, D. C., for the use of Robert Gilmor, Esq., Baltimore, in good order.” And on the same day sent a letter directed to the consignees, advising them'that the goods were consigned for the use of 'Gilmor; and which was received about the time of the arrival of the goods.

Upon these facts, the court below dismissed the original bill of complainant, with costs, and decreed the proceeds of the property to Gilmor, deducting freight and charges.

The case is here on an appeal by the complainant in the original bill.

We are of opinion, that the decree of the court below was right, and should be affirmed.

The delivery of the goods by Brien to the master, and the bill of lading taken in the name of Gilmor, for the purpose of securing to him an existing indebtedness, operated as a transfer of the legal title; and the shipment, therefore, was not only in fact, but in judgment of law, for and on his account. Gilmor was the consignor.

The effect of a consignment of goods, generally, is to vest the property in the consignee; but if the bill of lading is special to deliver the goods to A for the use of B, the property vests in B, and the action must be brought in his name in case of loss or damage. (3 Salk. 290; 1 Ld. Raym. 271; 3 Barn. & Ald. 382; 1 Binn. 109; Abbott on Ship. 216 and note; Long on Sales, 293, Boston ed.)

If the person to whom the goods are ordered to be delivered, is only ah agent of the shipper, he has no property in them, and cannot maintain an action against the master for not delivering them, (Abbott, 216; 1 Camp. 369,) nor for damage for negligence of the carrier. (3 Barn. & Ald. 382.) And if the goods are shipped at the risk off the consignor, though the freight is payable by the consignee, the property remains in the former. (Abbott, 216; 1 Johns. 229.)

These cases, and others that might be referred to, show that the five hundred kegs of nails in the hands of Fowle & Sons were not subject to the attachment of the complainant for the liabilities of Brien, their debtor, as the title to the property had already passed to the defendant, Gilmor; and, also, that Fowle & Sons had no valid lien upon them as consignees for previous advances to Brien by the delivery to the master; as they were only agents to receive the goods on commission for sale, and were advised by the bill of lading and correspondence, that they were shipped for and on account of Gilmor. Though the goods were delivered by Brien to the master for consignment, they were delivered as the. property of Gilmor, and, under circumstances, as we have seen, that had the effect to invest him with the title. His right, therefore, was prior in point of time to any lien that might have been acquired, either by the complainant or Fowle & Sons, in consequence of Brien’s indebtedness, upon the strictest principles of law; and as to the equities, it was but a race of diligence among the several creditors of a failing debtor to see which should get the first security for their debts.

An objection was made on the argument, that there was no evidence that Gilmor had assented to the transfer of the property to him as security for his demand against Brien, until after the levy of the complainant’s attachment.

The original bill was amended, making him a! defendant, and in his answer he sets up that the transfer was made in pursuance of a previous agreement between him and Brien,-in part liquidation of his indebtedness.

We are inclined to think this part of the answer is responsive to the bill,' and there is no evidence in the case contradicting it in this respect. Though the bill is brief and meagre in the statement of the case which it presents, and has not incorporated in it the amendment making Gilmor a defendant ; yet, from the nature of the charge against him, and ground for making him a party, it would seem necessarily to call upon him to set forth his claim to the property in dispute.

But it is unnecessary'to place the answer to the objection on this ground. In the absence of all evidence to the contrary, in case1 of an absolute assignment of property by a debtor to his creditor .for the purpose of securing a preexisting debt, an assent will be presumed on account of the benefit that he is to derive from it.

This principle was recognized and applied by this court in the case of Tompkins v. Wheeler, 16 Peters, 106, and had been before in Brooks v. Marbury, 11 Wheat. 96. No expression of assent, the court say, of the person for whose benefit the assignment is made, is necessary to the vesting the title, as the creditor is rarely unwilling to receive his debt from any hand that will pay him.

It was also objected, that Brien was an incompetent witness for Gilmor, on the ground of interest; but it is apparent that he had no interest in the suit, for in any event the property would be applied to the discharge of debts against him, and whether in favor of one or the other was, in point of interest, a matter of indifference to him.

In any view, therefore, that can be properly taken of the case, we are of opinion the decree of the court below was right, and should be affirmed.

Order.

This cause came on to be. heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia, holden in and for the County of Alexandria, and was argued by counsel. On consideration whereof, it is now here ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court in this cause be, and the same is hereby, affirmed, with costs.


source: Caselaw Access Project

author: ■ Mr. Justice GRIER

license: Public Domain

text:
    Thomas C. Sheldon and Eleanor Sheldon, his Wife, Appellants, v. William E. Sill, Appellee.
    Courts created by statute can have no jurisdiction but such as the statute confers.
    Therefore, where the third article of the Constitution of the United States says that the judicial flower shall have cognizance over controversies between citizens of different States, but the act of Congress restrains the Circuit Courts from taking cognizance of any suit to recover the contents of a chose in action brought by an assignee, when the original holder could .-not have maintained the suit, this act of Congress is not inconsistent with the Constitution.
    A debt secured by bond and mortgage is a chose in action.
    Therefore, where the mortgagor and mortgagee resided in the same State, and the mortgagee assigned the mortgage to the citizen of another State, this assignee could not file his bill for foreclosure in the Circuit Court of the UAited States.
    This was an appeal from the Circuit Court of the United States for the District of Michigan, sitting in equity.
    The appellee was the- complainant in the court below. The, bill was filed to procure satisfaction of a bond, executed by the appellant, Thomas C. Sheldon, and secured by a mortgage on lands in Michigan, executed by him and Eleanor his wife, the other appellant. The bond and mortgage were dated on the 1st of November, 1838, and were given by the, appellants, then, and.ever since, citizens of the State of Michigan, to Eu-rotas P. Hastings, President of the Bank of Michigan, in trust for the President, Directors, and Company of the Bank of Michigan.
    The said Hastings was then and ever since has been a citizen of the State of Michigan, and the Bank of Michigan was a body corporate in the same State.
    On the 3d day of January, A. D. 1839, Hastings, President of said ban"., under the authority and direction of the Board of Directors, “ sold, assigned, and transferred, by deed duly executed under the seal of the bank, and under his own seal, the said bond and mortgage, and the moneys secured thereby, and the estate thereby created,” to said Sill, the complainant below, 'who was then and still is a citizen of New York.
    These are all the facts which it is necessary to state, for the purpose of raising.the question of jurisdiction.
    The Circuit Court decided in favor of the complainant below, and decreed a sale of the mortgaged premises, Ac.
    From this decree the defendants appealed to this court.
    The case was argued by Mr. Romeyn, for’ the appellants, and Mr. Ashmun (in a printed argument), for the appellee.
    Only so much of the arguments will be given as bear upon the point of jurisdiction.

      Mr. Romeyñ, for the appellants.
    The Circuit Court had no jurisdiction.
    The complainant below claimed as assignee from a mortgagee, who was a citizen of the same State with the defendants, the mortgagors.
    A bond and mortgage, under the laws of the State of Michigan, and in every court of equity, and by the adjudications of this court, on a bill filed to sell mortgaged property, foreclose the equity of redemption, and collect the debt secured by the mortgage, constitute a chose in action, within the intent and meaning of the eleventh section of the Judiciary Act of 1789.
    Before stating the points under this, we beg leave to refer to the case of Dundas et al. v. Bowler, 3 McLean, 205. The opinion in that case was repeated by the court as its opinion in this. It asserts that the eleventh section of the Judiciary Act of 1789 “ is in conflict with the Constitution ” ; that the tight of a citizen of one State to sue the citizen of another State in the Federal courts, in all cases, is given directly by the Constitution; that Congress may not restrict it; that the converse is “a new and most dangerous principle, and cannot be maintained.”

      Points under this Proposition.

    I. The eleventh section of the Judiciary Act of 1789, inhibiting a suit by an assignee of a chose in action, in cases where the assignor could not have sued, if no assignment had been made, is constitutional; because, the disposal of the judicial power, except in a few special cases, belongs to Congress j and the courts cannot exercise jurisdiction in every case to which the judicial power extends, without the. intervention of Congress, who are not bound to ehlarge the jurisdiction of the Federal courts to every subject which the Constitution might warrant. So, again, it has been decided, that Congress have not delegated the exercise of judicial power to the Circuit Courts, but in certain specific cases. Both the Constitution and an act of Congress must concur in conferring power upon the Circuit Courts. A considerable portion of the judicial power, placed at the disposal of Congress by the Constitution, has been intentionally permitted to lie dormant, by not being called into action by law. The eleventh section of the Judiciary "Act of 1789, giving jurisdiction to the Circuit Courts, has not covered the whole ground of the Constitution, and those courts cannot, for instance, issue a mandamus, but in those cases in which it may be necessary to the exercise of their jurisdiction j for, —

      1st. This is the settled, practical construction, which, irrespective of express adjudications on this topic, concludes the question.
    2d. The point itself has been repeatedly and fully discussed and directly settled, on solemn deliberation, and not “ without inquiry as to the validity of the act.”
    We propose to cite some authorities on these propositions, in the above order; and then to notice the authorities cited in the opinion below. •
    First. Cases as to practical construction and its effect,
    (The counsel then cited a number of cases under this head.)
    -Second. Cases to show that this principle has been deliberately settled.
    The general principle for which we contefid is the necessity of legislation to define and vest jurisdiction in the Circuit Court. The opposing principle is, the right and duty of the courts to exercise jurisdiction to the extent of the constitutional limit, by virtue of its provisions and without the authority of Congress. We refer to United States Bank v. Deveaux, 5 Cranch, 61; Osborne v. Bank of United States, 9 Wheaton, 738; 1 Wash. 235; 7 Cranch, 32 ; Ibid. 504; 3 Wheat. 336 ; 12 Pet. 616; also 623, 642; 14 Pet. 75; 2 Howard, 243.
    In Turner v. Bank of America, 4 Dali. 8, the very question arose, and was decided. Cary v. Curtis, 3 Howard, 245; .1 Kent’s Commentaries, 513.
    (The counsel then reviewed the authorities cited to support the opinion in Dundas v. Bowler, and contended that they did not sustain it.)
    II. The statute in question should be construed according to the ordinary and usual acceptation of the terms used in it. Because, —
    1st. It is constitutional.
    2d. If unconstitutional, it should be entirely rejected.
    If sustained at all, it should be subjected to the ordinary rules of interpretation.
    III. The phrase, “ other choses in action,” includes the bond and mortgage in this suit. Because, —
    1st. The statute was not intended to be confined to negotiable instruments, as is intimated in Dundas v. Bowler, 3 McLean, 209. For, —-
    First. If an instrument not negotiable be assigned, the assignee can sue in equity in his own name, and therefore the reason given in Dundas v. Bowler is not sound.
    Second. The exception, in the Judiciary Act, of foreign bills of exchange, will leave nothing of consequence for this language to cover, if it be confined to negotiable instruments.

      Third. This comprehensive meaning of the clause is a matter of express decision, — decisions which have remained for forty years unquestioned. In Sere v. Pitot, 6 Cranch, 332, Chief Justice Marshall' decides that promissory notes were not alone in the contemplation of Congress, and that the “intention was to except from the jurisdiction those' who could sue by. virtue of equitable assignments, as well as those who could do so by virtue of .legal assignments.” “ The term ! other chose in action,’ is broad enough to include either case.”
    2d. The object of the statute was to preserve to the State judicatures the interpretation and enforcement of- contracts made between their own citizens ; and the general nature of a bond and mortgage, and the fact that they affect the realty of the State, render it particularly proper that they should not be considered out of the statute.
    3d. There is greater reason for inhibiting the collection of mortgage debts in the United States courts, by an assignee, than of negotiable instruments, because, in case of the latter, a transfer for the purpose of jurisdiction would defeat the action; while in the case of the former, if the assignment of a mortgage be viewed as the transfer of a title, the consideration cannot be made the subject of inquiry. Briggs v. French, 2 Sumner, 252 ; Smith v. Kernochen, 7 Howard, 216.
    4th. The statute includes every such right as is ordinarily termed a chose in action; by which is meant, not a right which may be sued for, but one which can be realized only by suit; not a claim to property in' specie, which may, if opportunity offer, be exercised by caption or entry, but a right to a' debt, or damages, or money which can be recovered only by action. 1 Chitty’s R. 99.
    A deed of land is not a chose in action. A writer on the jus mariti, after informing his readers that the husband might dispose of his wife’s choses in action, will hardly need to add that this did not include her “deeds for real estate.”
    5th. The transferee of a bond and mortgage is usually termed an assignee, and therefore is within the act.
    We ask an application of the old and familiar rule, that, when words of a fixed legal import are used in a statute, such meaning will be accorded to them in its construction. Chief Justice Marshall applied it to the interpretation of this_ statute in 6 Cranch, 332, when, referring to the reason why the court, in 4 Cranch, held that an alien administrator might sue when the intestate could not, he said, “ The representatives of a deceased person are not usually designated by the term assignee.” So Justice Story at the Circuit and' this Court, on several occasions, in determining that the bearer of a promissory note could sue when the payee could not, said that the plaintiffs title did not rest upon what was generally and commonly known as an assignment, and that the words of the statute were employed in the ordinary popular professional sense.
    6th. Even at law, the mortgage is considered but as a chose in action, and the mortgagor is the real owner.
    (The counsel then cited a number of ..cases to show how a mortgage, even at law, is regarded by the English courts, by American courts generally, and by the Federal courts.)
    Douglas, 610; 1 Powell on Mortgages, 109, 110; 4 Kent, 159, 160; 2 Yernon, 401; 2 Jac. & Walk. 194, note; 4 Conn. 235, 424; 6 Conn. 158 to 164; 18 Johns. 114; 4 Kent’s Comm. 161, note a; 21 Wend. 483; 2 Gallison, 154; 5 Peters,' 483 ; 1 Paine, 534; 9 Wheat. 489.
    7th. Whatever be the doctrine at law, in equity a mortgage is styled and treated; in all its relations and for all purposes, as a chose in action. 2 Jac. & Walk. 185; 1 Hopkins. 594; Story’s Equity, §<§, 1013, 1015, 1016.
    8th. If it be conceded that the complainant might have brought ejectment on the mortgage, it would not affect the character of the action. For, —
    First. This action can be fully sustained by an informal transfer, or even a simple delivery of the mortgage, without writing; while an ejectment would require a formal, regular transfer, with the solemnity of other deeds of realty, in order to pass the legal estate.
    Second. That both proceedings grow out of the same transaction proves nothing; because there may be two remedies for one debt, in one of which the Federal court has jurisdiction, and not in the other.
    The indorsee of a note may sue on a direct promise to him by the maker, when he could not sue as indorsee. 5 Howard, 278.
    The assignment of the mortgage, without an assignment of the debt, is a nullity. 2 Cowen, 23. While an assignment of the debt carries with it the interest in the land. 2 Gall. 155. In this case, an assignee of the bond alone could not sue on it in this court. This proves that an assignment of the debt will not confer jurisdiction.
    If we grant that he could sue in ejectment at law as assignee of the mortgage, the question would still remain, how should he be viewed when suing in equity for his money, and not for the land, and on both the bond and mortgage ?
    Finally, we ask particular attention to the effect upon the-rights of the mortgagee produced by the statute of Michigan, forbidding him to bring -ejectment before foreclosure and sale. How emphatically does it reduce his claim to a chose in action. He has no longer a title, upon which he can even take possession ; but,, according to the only substantial right ever intended to be secured, a claim for money, and the right to an appropriation of the land by suit to make it. And it is no answer to this, that this law, taking away a remedy, does not bind the Federal court. It is equally high evidence of the doctrines of our State, in relation to the nature of the right of a mortgagee.
    The argument of the counsel for the appellee upon the question of jurisdiction was as follows.
    With regard to the first point, the objection is based upon the act of Congress, which provides that the Circuit Court shall not have cognizance.'of any suit to recover the contents of any promissory note or other chose in action, in favor of an assignee, unless such suit might have been prosecuted in such court to recover said contents if no assignment had been made, except in cases of a foreign bill of exchange.
    The Constitution of the United States (sec. 2 of article 3) says the judicial power shall extend to controversies between citizens of different States, and, in section one of the same article, it says that this judicial power shall be vested in one Supreme Court, and such inferior courts as Congress shall from time to time establish.
    Now we would remark, first, that the case before the Circuit Court was a controversy between citizens of different States, and to such a controversy the judicial power of the courts of the United Státes extends by the Constitution, and by the same Constitution that power is vested, except where the Supreme Court has original jurisdiction by the Constitution, in the inferior courts created by Congress. This judicial power, therefore, to take cognizance of this case, is, by the Constitution, vested in the Circuit Court, and the plaintiff claims the constitutional, right to have his controversy with Mr. Sheldon, living in Michigan, decided by that court. . Congress has said, by the provision above referred to, that there are certain controversies between citizens of different States which the United States courts shall not take cognizance of; yet the judicial power of the court extends to them' by the Constitution, and citizens of the different States have the right to have that power exercised in .their controversies.. • Where does Congress get the power or authority to deprive the courts of the United States of the judicial power with which the Constitution has invested them ? Congress may create the courts, but they are clothed with their powers by the Constitution, and we submit that the provision of the act of Congress materially conflicts with the provisions of the Constitution, and is void. It has been settled, that an act of Congress, enlarging the jurisdiction of the .Supreme Court beyond the terms of the Constitution, is void. Marbury v. Madison, 1 Cranch, 137. Can it any more take away a constitutional power than it can confer an unconstitutional one ? We submit that it cannot. The jurisdiction-of this class of controversies is in the Circuit Court. The Constitution makes no such distinction as the act of Congress does, and we respectfully submit, that it is of the utmost importance to citizens of the different States that the whole judicial power granted by the Constitution to the courts of the United States should be exercised. We are aware that in some cases it has been assumed that this act of Congress is valid; but we submit that there has been no decision, of this court to that effect, and even if there had, being erroneous, the court would reverse it.
    But a mortgage is not a promissory note or chose in action, within the meaning of the provisions of the act of Congress. A mortgage is a conveyance of the fee simple of real estate, liable to be defeated subsequently by payment of money, to secure the payment of which it was made. It is in no sense a chose in action, which is a thing in action, a right of action, a thing recoverable in action, a debt, a demand, a promissory note, a right to recover damages. A chose in action was originally a right of action not assignable at law. It was a cause of suit for a debt due or a wrong. The bond with the mortgage may be a chose in action; but the estate conveyed by the mortgage is not. It is a realty. It is real estate conveyed, and at law the estate is absolute, forfeited, perfect. In equity it may be redeemed; but the estate is nevertheless absolute, and redemption is a matter of favor or equity rather than a legal right. How does this partake of a chose in action ? Now what is a foreclosure bill ? It is not a suit upon a bond, but a proceeding in law against property, to cut off the equitable right to redeem within a certain period, and to procure a sale of the real estate. It is not a personal action, — seeks no decree against the person, — but simply asks that certain property conveyed to the plaintiff may be sold, and further right to redeem foreclosed. An ejectment lies upon a mortgage, especially after forfeiture ; the mortgagee may convey the estate, and ejectment lies in favor of his grantee. Will it be said that his grantee, though living in another State, could not maintain an ejectment in this court to recover the property ? Cannot his grantee equally appesil to this court to foreclose the equity to redeem ? This point has been directly passed upon in the Circuit Court for the District of Ohio, in the case of Dundas et al. v. Bowler and others, reported in the first volume of Western Law Journal, and the decision of the court is sustained by the soundest reasoning.. 3 McLean, 205.
   ■ Mr. Justice GRIER

delivered the opinion of the court.

The only question which it will be necessary to notice in this case is, whether the Circuit Court had jurisdiction.

Sill, the complainant below, a- citizen of New York, filed his bill in the Circuit Court of the United States for Michigan, against Sheldon, claiming to recover the amount of a bond and mortgage, which had been assigned to him by Hastings, the President of the Bank of Michigan.-

Sheldon, in his answer, among other things, pleaded that “ the bond and mortgage in controversy, having been originally given by a citizen of Michigan to another citizen of the same State, and the complainant being assignee of them, the Circuit Court had no jurisdiction.” •

The eleventh section of the Judiciary Act, which defines the jurisdiction of the Circuit Courts, restrains them from taking “ cognizance of any suit to recover the contenté of any promissory note or other chose in action, in favor of an assignee, unless a suit might have'been prosecuted in such court to recover the contents, if no assignment had been made, except iñ cases of foreign bills of exchange.”

The third article of the Constitution declares that “ the judicial power of the United States shall be vested in one Supreme Court, and such inferior courts as the Congress may, from time to time, ordain and establish.” The second section of the same article enumerates the cases and controversies of which thfe judicial power shall have cognizance, and, among others, it specifies “controversies between citizens of different Slates.”

It -has been alleged, that this restriction of the Judiciary Act, with regard, to assignees of choses in action, is in conflict with this provision óf the' Constitution, and therefore void.

It must be admitted, that if the Constitution had ordained and established the inferior courts, and distributed to them their respective powers, they could not. be restricted or divested by Congress, But as it has made no such distribution, one. of two consequences must result, —either that each inferior court created by Congress must exercise all the judicial powers not given to the Supreme Court, or that Congress; having the power to establish the courts, must define their respective jurisdictions. The first of these inferences has never been asserted, and could not be defended with any show of reason, and if not, the latter would seem to follow as a necessary consequence. And it would seem to follow, also, that, having a right to prescribe, Congress may withhold from any court of its creation jurisdiction of any of the enumerated controversies. Courts created by statute can-have no jurisdiction but such as the statute confers. No one of them can assert a just claim to jurisdiction exclusively conferred on another, or withheld from all.

The Constitution has defined the limits of the judicial power of the United States, but has not prescribed how much of it shall be exercised by the Circuit Court; consequently, the statute which does prescribe the limits of their jurisdiction, cannot be in conflict with the Constitution, unless it confers powers not enumerated therein.

Such has been the doctrine held by this court since its first establishment. To enumerate all the cases in which it has been either directly advanced or tacitly assumed would be tedious and unnecessary.

In the case of Turner v. Bank of North America, 4 Dall. 10, it was contended, as in this case, that, as it was a controversy between citizens of different States, the Constitution gave the plaintiff a right to sue in the Circuit Court, notwithstanding he was an assignee within the restriction of the eleventh section-of the Judiciary Act. But the court said,— “ The political truth is, that the disposal of the judicial power (except in a few specified instances) belongs to Congress: and Congress is not bound to enlarge the jurisdiction of the Federal courts to every subject, in every form which the Constitution might warrant.” This decision was made in 1799 ; since that time, the same doctrine has been frequently asserted by this court, as may be seen in McIntire v. Wood, 7 Cranch, 506; Kendall v. United States, 12 Peters, 616; Cary v. Curtis, 3 Howard, 245.

The only remaining inquiry is, whether the complainant in this case is the assignee of a chose in action,” within the meaning of the statute. The term “ chose in action ” is one of comprehensive import. It includes the infinite variety of contracts, covenants, and promises, which confer on one party a right to recover a personal chattel or a sum of money from another, by action.

It is truc, a deed or title for land does not come within this description. And it is true, also, that a mortgagee may avail himself of his legal title to recover in ejectment, in a court of law. Yet. even there, he is considered as having but a chattel interest, while the mortgagor is treated as the true owner. The land will descend to the heir of the mortgagor. His widow will be entitled to dower. But on the death of the mortgagee, the debt secured by the mortgage will be assets in the hands of his executor, and although the technical legal estate may descend to his heir, it can be used only for the purpose of obtaining satisfaction of the debt. The heir will be but a trustee for the executor.

In equity, the debt or bond is treated as the principal, and the mortgage as the incident. It passes by the assignment or transfer of the bond, and is .discharged by its payment. It is, in fact, but a special security, or lien on the property mortgaged. The remedy obtained on it in a court of equity is not the recovery of land, but the satisfaction of the debt. It is the pursuit by action of one debt on two instruments or securities, the one general the other special. The decree is, that the mortgaged premises be sold to pay the debt, and if insufficient for that purpose, that the complainant have further remedy, by execution, for the balance.

The complainant in this case is the purchaser and assignee of a sum of money, a debt, a chose in action, not of a tract of land. He seeks to recover by this action a debt assigned to him. He is therefore the “ assignee of a chose in action,” within the letter and spirit of the act of Congress under consideration, and cannot support this action in the Circuit Court of the United States, where his assignor could not.

The judgment of the Circuit Court must therefore be reversed, for want of jurisdiction.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Michigan, and was argued by counsel. On consideration whereof, it is now here ordered and decreed by this court, that this cause be, and the same is hereby, reversed, for the want of jurisdiction in that court, and that this cause be, and the same is hereby, remanded to the said Circuit Court, with directions to dismiss the bill of complaint for the want of jurisdiction.