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23 Wend. 528

Sears v. Patrick

New York Supreme Court

Decided May 15, 1840

New York Supreme Court · decided 1840-05-15

This was an action of assumpsit, tried at the Saratoga circuit in June, 1838, before the Hon. John Willard, one of the circuit judges. William C. Grassie and David Caldwell had been partners under the firm of W. C. Grassie & Co. The partnership was dissolved in November, 1831, when Grassie took all the notes and accounts, and agreed to pay all the debts of the firm.

Good law ✅— No negative treatment on recordhow we know

Decided 1840-05-15

How this case has been cited

Cited by 32 later decisions (1 by the Supreme Court) — most recently March 1960 · most notably The State of Pennsylvania v. The Wheeling and Belmont Brideg Company William Otterson and George Croft (1851), People v. North River Sugar Refining Co. (1890)

27 state decisions — followed in 11 states

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Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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Bronson, J.

¶1By the Court, The pleadings do not appear, but as no objection was made to the form of the action, it may be presumed that the declaration contained the money counts. Independent of the question of set off, the enquiry is, whether the balance of the money received by the defendants after satisfying their note against Grassie, may be regarded, in law, and so much money had and received to the plaintiff’s use. The money was received by the defendants *after Grassie had [ *530 ] made a general assignment to the plaintiff, and if notice of that transfer had been given to the defendants, this action for money had and received to the plaintiff’s use, could, I think, have been supported. It is, in principle, much like the cases of Weston v. Barker, 12 Johns. R. 276, and Taylor v. Bates, 5 Cowen, 376. Although the assignee of a chose in action cannot, in general, sue in his own name, without showing an express promise, upon sufficient consideration, to pay him, yet under certain? circumstances the law will imply a promise to pay over moneys received, to the assignee of the person originally entitled. But I do not see how a promise can be implied to pay the assignee, until the debtor has notice of the assignment.

¶2When the action is upon a negotiable note or bill of exchange, the endorsee or bearer need not show that notice of his title was given before suit brought. There is a privity of contract between him and the debtor. The promise is to pay any person into whose hands the bill or note may pass. But when the contract is not negotiable, there is not and cannot be any privity of contract between the assignee and the debtor, until the latter has notice of the assignment. A promise will sometimes bo implied, although it may be quite clear that none was in fact made, as where the defendant has received money which in equity and good conscience belongs to the plaintiff. But the defendant must know that the plaintiff is the person entitled to the money, before the law will imply a promise to pay him. If this is not universally true, it is at least the proper rule where the plaintiff claims as as*530signee. It would be pushing this equitable action quite too far to imply a promise to pay the assignee, and subject the debtor to an action before he has been advised of the plaintiff’s claim.

¶3II. We think, also, that there should have been a demand. In relation to the surplus money after satisfying Grassie’s debt, the defendants were trustees, and if they had done no act amounting to a violation of their trust, they should have been put in the wrong by showing a request to pay or remit before suit brought. Ferris v. Paris, 10 Johns. R. 285. [ *531 ] Taylor v. Bates, 5 Cowen, 376. Jefferies v. Sheppard, *3 Barn. & Ald. 696. Cooley v. Betts, decided the present term.

¶4III. The set off was properly rejected. Although the Eellows note, on which the money, was received, was payable to Grassie & Co., it had been transferred to and was the individual property of Grassie at the time he delivered it to the defendants. They received the surplus money to the use of Grassie, and could not retain it, without his consent to pay the debt of Grassie & Co. ; and besides, the case is not within the statute of set offs. 2 R. S. 354, § 18.

¶5The verdict was taken subject to the opinion of the court on a case; and although, in strictness, the defendants are entitled to judgment, we think there should be a new trial.

¶6New trial granted.

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