Anderson v. Van Alen — 12 Johns. 343

Majority

p. 343

Anderson and others against Van Alen.

Headnote

Courts óf la# take notice ofj assignments ofi choses iii action4 and will protect the rights of a cestuy qite trust) against any person having pptice of the trust; and ac tual notice of the assignment or trust nee(i not be shown; but ft is enough if the party acts with a knowledge of such facts and circumstances as ought to put him on inquiry.

THIS was an action of assumpsit, for goods sold and delivered. The defendant pleaded non assumpsit, with notice of a set-off» The goods were sold to the defendant in May, or June, 1814, to"the amount of 553 dollars and 92 cents».

The defendant, on the 26th of September, 1814* purchased of W. D. S' Sons, of Amsterdam, in Montgomery county, two notes* drawn by the plaintiffs on the 17th of June, 1814* one for 500 dollars, payable in 90 days, and the other for 31 dollars and 25 cents, payable at the same time; for which the defendant gave to W. D. Sr Sons, his two notes for 250 dollars each, payable at 9 and 12 months; and the defendant, at the same time* gave to, W. £>..<§• Sons a receipt, specifying that he had received of them the two notes above mentioned of the plaintiffs, in exchange for his two notes above specified, and promising to' return the said notes of the plaintiffs to W. D» Sr Sons, at any time within two months, in exchange for his said two notes, or for other notes of the plaintiffs to that amount. On the 20th of November, 1814, the defendant returned to W. D. Sr Sons the note of the plaintiffs above mentioned ; and they endorsed and delivered to him another note drawn by the plaintiffs* dated: April 9,1814* by which they promised to pay to D. Sr Sons, - or order, six months after date, 453 dollars and 18 cents, which was the note mentioned in the notice- of set-off, and the only one offered, under the notice, at the trial.

The plaintiffs proved, that the defendant, in a conversation with their attorney, in January last, admitted that he obtained.the note offered as a set-off, after he had heard of the plaintiffs’failure; that he was in.Albany on the 22d of September, 1814, when he learned that the plaintiffs had failed, and become insolvent, and saw their goods sold by the sheriff on that day;- and that, some days after his return from Albany,, he obtained ■the notes of W. D. Sf Sons.

The plaintiffs then produced an assignment, executed by them on the 26th-of September, 1814, to James Gourlay, assigning over all the debts due the plaintiffs, specified in a schedule annexed* among which was the note due from the defendant/ in trust, to

p. 344

pay the debts due from the plaintiffs to- certain creditors- meii« tioiied in another schedule -annexed to the said assignment, and tQ pay over the surplus to all the other creditors of the plaintiffs, not named in-tlife said schedule, without distinction.,

On the 7th of October, 1814, the plaintiffs executed an assignment to In Bingham, and two, others,., of the .eitypf New-York, their creditors, ’of ail their notes ánd accounts,- in trust, for the payment of themselves and. other-confidential'creditors,'and-'then in trust for all the other creditors of the ■ plaintiffs* Qouduy having' agreed to give- up-to the said assignees the assignnient made to -him, of the 26th- of September, 1814,. on- their-engagingto payout of the first moneys'they .should receive under the assignment to -them, the -.debts due- to- the persons- named i® the Schedule annexed to the first assignment,.'but which, it appeared, was' not, in fact, .annexed,, though expressed and in-, tended so to be by the parties. . . .’ .... ,

, AnOtjcO, dated-the iBth of October^ ,1814, was- published in two newspapers, in Albany, and the publication continued for three months, which stated that the plaintiffs had assigned all-their debts, :&c.> to Bingham and others,- to whom 'payment was--requested to be made : and, on the 20th of October, the attar-. neys. of the plaintiffs wrote a letter to the .defendant, addressed to him. át Amsterdam, where he resided, which- was put into the-. post office at Albany, informing him of the assignment, .and requesting-him to make payment to the assignees. This letter the,defendant did not receive from- thepost office'.at Amsterdam*. until the latter part of December', or the -beginning of January * last,- though ■ the letter had lain in the- post office there from. October to that time.. , ' - . -

. Á verdict was taken -for the plaintiffs, subject to the opinion of the court, on a case containing the facts above stated ; and which was submitted'to the court without argument. .

delivered the opinion of the court. The-plaintiffs having made an .assignment of the demand on. which / the, present suit is founded,. : for the - benefit of their creditors,they are only nominal parties- upon 'the record, a-nd the real-question is between their creditors and the defendant; • and the-right of set-off will depend upon, the fact how far the' defendant; is chargeable with, notice of the assignment. It is a well-settled principle-, that courts of law will notice the assignment of a 'oho$&

p. 345

in action, and protect the interest of a bestuy que trust against every person who has notice of the trust. And it seems, also, to be pretty well settled, that actual notice is not necessary. If a party acts in the face of facts and circumstances which were sufficient to put him upon inquiry, he acts contrary to good faith, and at his peril. These are principles fully recognised by this court in the c&se of Johnson v. Bloodgood, ( 1 Johns. Cas. 51 .) and if applied to the case before us, will very satisfactorily show that the set-off cannot be allowed.

I lay out of view the first assignment to Gourlay, and notice only that made to Bingham and others, on the 7th day of October, 1814. The note offered as a set-off, bears date the 9th day of April, 1814, payable six months after date, and was not transferred to the defendant until the 20th of November in the same, year, which was some time after it fell due. This has always been considered a circumstance of suspicion, and enough to put the endorsee upon inquiry. There is no direct and positive proof that this note was purchased for the express purpose of setting it off against the present demand; but the facts in the case afford an almost irresistible conclusion that such was the object. The defendant, as appears by his own Confessions, was, some time before he purchased the note, fully apprized of the failure of the plaintiffs; was present at the sale of their goods by the sheriff; and it is hardly conceivable, that, with a knowledge of this fact, he would have purchased the note in question, unless it had been with some such view. About the middle of October, notice of the assignment was given in two of the public newspapers printed in the city of Albany, and continued for three months; and about the 2.0th of the same month, a letter was written to the defendant, giving him notice of the assignment. This letter, it is true, did not come to the defendant’s hands until some time in December or January; but the very circumstance of its lying in the post office, in the very town where he resided, from some time in October, bears strongly the appearance that there was some suspicion as to its contents, and that" the notice ifi the newspapers had been seen. These are strong grounds for believing a speculation was intended, to the prejudice of the other creditors who were interested in the assignment, and are sufficient to áfford a well-grounded belief, if not an irresistible convictiop, that the defendant had notice

p. 346

of the assignment when he purchased the note. The opinion of the court, therefore, is, that the set-off ought not to be allowed^ anc[ t]iat vie plaintiffs have judgment for 553 dollars and 92 cents. '

Judgment for the plaintiffs..

Cases cited

Johnson v. Bloodgood 1 Johns. Cas. 51 N.Y. Sup. Ct. p. 345