Eels v. Finch

5 Johns. 193

• Court: New York Supreme Court
• Decided: November 15, 1809
• Status: Published

Opinion

Yates, J.

delivered the opinion of the court. The question here is, whether this receipt ought, under the circumstances disclosed in this cause, to be deemed such an absolute payment on the bond, as to bar a recovery, on the count for goods sold and delivered.

It is a settled principle, that a court of law will regard the assignment of a chose in action, and protect the interest of an assignee, against any person having notice, or who is bound to take notice of it. The power of the original owner is so far at an end, immediately after an assignment and notice, that no subsequent payments made to him will avail; and consequently no release or discharge from him can operate to the disadvantage of the assignee, for whom he is considered a mere trustee or nominal person, to recover the debt only ; and any personal interference on his part is deemed void, on the ground of fraud.

* But, in this case, it is contended, ° < ’ ’ ’ that by the instrument itself, the amount was appropriated -r for a specific purpose, and that therefore it could not be assigned. This would be the legal operation of this paper, if the parties by their own acts'had not subsequently manifested a different intent, and had not by such acts, revoked or changed that appropriation. The defendant declared that he had sold the bond, and could get the indorsement made. From this acknowledgment the inference is warranted, that it never had been done. Besides, if it had been indorsed, he ought to have shown it at the trial, as it would have been a proper defencei But it is said that this omission alone could not justify the recovery, as the assignee of the bond and mortgage took it subject to all the equity existing ; and though not indorsed, it might still have been enforced. This reagoning would have been correct, had not the plaintiff * also virtually assented to the arrangement made, by an actual sale of the receipt; and thus the destination of the property specified in this receipt was changed by consent of both parties, who, by these acts, have ren* dered the application of the amount, according to • the original intent, utterly impossible; and have left both the debts assignable, as if no such appropriation had been mentioned in the receipt.

The subsequent interference of the plaintiff must be deemed fraudulent. His settlement with the defendant, consequently, cannot be received as a valid transaction. The only ground of defence, then, without countenancing fraud, was to prove the indorsement of the amount of the receipt on the bond and mortgage, before it was assigned. This was not done, and the verdict, therefore, was properly given for the plaintiff. The court, consequently, are of opinion, that the motion for a new trial must be denied. _

Rule refused.

Johns. Cas. 52. 54. 411. 1 Johns. Rep. 531. 3 Johns. Rep. 425.