The opinion of the Court was delivered by
Sergeant, J.
Who after stating the facts, proceeded as follows: •The defendants contend in the first place, that by the assignment of the 30th'October, 1822, the property in the coffee was transferred to the plaintiffs, and received by them in full satisfaction and discharge of their debt from Folwell, so that the debt was extinguished. The sale of the coffee to Adams was on the plaintiffs' [171] own account and at their risk, and they have no claim to a dividend on the funds assigned by Folwell. But on considering the previous transactions between the parties, the tenor of the assignment itself, and the rights and obligations it created, it would seem that the property was transferred mei’ely as a collateral security, and being disposed of fairly and in the course of business, and a loss incurred without the fault of the plaintiffs, the original debtor remained liable for the balance unpaid. The general principle is, that property placed by the debtor in the hands of the creditor is not to be construed as received in full discharge of the debt, unless that plainly appears to have been the intention of the parties. In Charles v. Scott, 1 Serg. & Rawle, 296, certain engravings were placed in the hands of the defendant, by agreement under seal. The late Chief Justice Tilghman says, “the. justice of the case would require that the plaintiff should receive the amount of the debt and no more, unless the contrary was the agreement of the parties; and the court, in a doubtful case, should construe the writing so as to produce justice.” Leas v. James, 10 Serg. & Rawle, 314, is another case in which the question was, whether a bond assigned was received as absolute payment, or only as a collatrai security; and the Chief Justice says, “ in cases where a chose in action is assigned by the debtor to the creditor, I think the presumption is that it was not intended as an absolute payment unless it is so expressed. The .reason of such presumption is, that such assignment is not, in its nature, a payment. It puts no money in the hands of the creditor, but only gives him the means of collecting money from another. If these means fail, therefore, without the fault of the creditor, there is no reason why the original debtor should be discharged.”
In the present instance we find Folwell previously borrowing the plaintiffs’ note, engaging in confidential terms to provide for it if not paid out of funds shipped to Gibraltar. When this note of one thousand dollars was originally obtained, the security of goods by the Medora is expressly declared to be a collateral. The assignment of the 30th October was but a substitute, without any reason, so far as we can perceive, for changing the nature of the security. It is true a writing under seal was adopted in lieu of the loose receipt before employed. But Folwell’s approaching general assignment, by which the control of his property would pass into the hands of strangers, might be thought to require a more formal arrangement than the slight evidence previously given, without presuming that any change was contemplated it its operation.
The assignment recites that Folwell was desirous of securing to Perit & Cabot the full amount of their note, and transfers the property to them “ to have and to hold for the payment of the debt.” It comprehends, not as has been suggested, merely coffee, a specific article in possession, for the coffee had not then arrived; it is a gen[172] eral transfer of merchandize consigned to Correy & Co., and its proceeds, and of coffee or other goods shipped by them: an executory contract; á chose in action. All this property was then distant or afloat; the bills of lading not come to hand, its quantity or value not ascertained; whether it exceeded the debt or fell short of it was uncertain. It is therefore, not to be supposed, that either party could mean it to be satisfaction of the debt at all events. And it is sufficiently plain, from the latter part of the assignment, that Folwell still meant to retain an interest in the property transferred. It is there stipulated, that whatever sum may remain in the hands of Perit & Cabot from the nett proceeds of the coffee or other merchandize, over and above the payment of the one thousand-dollars, is to be returned to Folwell or his assigns. The plaintiffs were not to be the absolute owners; they were to account to Folwell or his assigns for any proceeds that might accrue beyond their debt. But how was the value of the merchandize to be fixed, so that the nett proceeds could be ascertained ? The parties obviously contemplated a sale for the purpose, and under this reservation the plaintiffs in fulfilment of the trust they had undertaken, were not only authorised but bound to sell such merchandize in a reasonable time, and account to the principal for the proceeds. They could not treat the property as exclusively their own. They could not legally use it or destroy it. Folwell and his assigns had an interest in the result of a sale; they had a qualified property in all merchandize that arrived ; and I see no reason why, if they had chosen, they might not, before sale, have tendered to the plaintiffs the amount due to them for their debt and charges, and demanded the coffee; and if the article were rising rapidly in price, it might have been their interest to do so. A view of the whole transaction presents the case of a transfer of an interest in general merchandize as a collateral security, settling with sufficient precision the respective rights of the parties, constituting the assignee not the sole, but the qualified owner, bound to sell the merchandize when received and account to the assignor for its proceeds. The relation of debtor and creditor still continued between them; and the assignee, having sold fairly, on the assignor’s account, and a loss happening without his fault, the debt to him remains, and no more of it is cancelled than the amount of money received from the estate of the vendee.
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The opinion of the Court was delivered by
Sergeant, J.
Who after stating the facts, proceeded as follows: •The defendants contend in the first place, that by the assignment of the 30th'October, 1822, the property in the coffee was transferred to the plaintiffs, and received by them in full satisfaction and discharge of their debt from Folwell, so that the debt was extinguished. The sale of the coffee to Adams was on the plaintiffs' [171] own account and at their risk, and they have no claim to a dividend on the funds assigned by Folwell. But on considering the previous transactions between the parties, the tenor of the assignment itself, and the rights and obligations it created, it would seem that the property was transferred mei’ely as a collateral security, and being disposed of fairly and in the course of business, and a loss incurred without the fault of the plaintiffs, the original debtor remained liable for the balance unpaid. The general principle is, that property placed by the debtor in the hands of the creditor is not to be construed as received in full discharge of the debt, unless that plainly appears to have been the intention of the parties. In Charles v. Scott, 1 Serg. & Rawle, 296, certain engravings were placed in the hands of the defendant, by agreement under seal. The late Chief Justice Tilghman says, “the. justice of the case would require that the plaintiff should receive the amount of the debt and no more, unless the contrary was the agreement of the parties; and the court, in a doubtful case, should construe the writing so as to produce justice.” Leas v. James, 10 Serg. & Rawle, 314, is another case in which the question was, whether a bond assigned was received as absolute payment, or only as a collatrai security; and the Chief Justice says, “ in cases where a chose in action is assigned by the debtor to the creditor, I think the presumption is that it was not intended as an absolute payment unless it is so expressed. The .reason of such presumption is, that such assignment is not, in its nature, a payment. It puts no money in the hands of the creditor, but only gives him the means of collecting money from another. If these means fail, therefore, without the fault of the creditor, there is no reason why the original debtor should be discharged.”
In the present instance we find Folwell previously borrowing the plaintiffs’ note, engaging in confidential terms to provide for it if not paid out of funds shipped to Gibraltar. When this note of one thousand dollars was originally obtained, the security of goods by the Medora is expressly declared to be a collateral. The assignment of the 30th October was but a substitute, without any reason, so far as we can perceive, for changing the nature of the security. It is true a writing under seal was adopted in lieu of the loose receipt before employed. But Folwell’s approaching general assignment, by which the control of his property would pass into the hands of strangers, might be thought to require a more formal arrangement than the slight evidence previously given, without presuming that any change was contemplated it its operation.
The assignment recites that Folwell was desirous of securing to Perit & Cabot the full amount of their note, and transfers the property to them “ to have and to hold for the payment of the debt.” It comprehends, not as has been suggested, merely coffee, a specific article in possession, for the coffee had not then arrived; it is a gen[172] eral transfer of merchandize consigned to Correy & Co., and its proceeds, and of coffee or other goods shipped by them: an executory contract; á chose in action. All this property was then distant or afloat; the bills of lading not come to hand, its quantity or value not ascertained; whether it exceeded the debt or fell short of it was uncertain. It is therefore, not to be supposed, that either party could mean it to be satisfaction of the debt at all events. And it is sufficiently plain, from the latter part of the assignment, that Folwell still meant to retain an interest in the property transferred. It is there stipulated, that whatever sum may remain in the hands of Perit & Cabot from the nett proceeds of the coffee or other merchandize, over and above the payment of the one thousand-dollars, is to be returned to Folwell or his assigns. The plaintiffs were not to be the absolute owners; they were to account to Folwell or his assigns for any proceeds that might accrue beyond their debt. But how was the value of the merchandize to be fixed, so that the nett proceeds could be ascertained ? The parties obviously contemplated a sale for the purpose, and under this reservation the plaintiffs in fulfilment of the trust they had undertaken, were not only authorised but bound to sell such merchandize in a reasonable time, and account to the principal for the proceeds. They could not treat the property as exclusively their own. They could not legally use it or destroy it. Folwell and his assigns had an interest in the result of a sale; they had a qualified property in all merchandize that arrived ; and I see no reason why, if they had chosen, they might not, before sale, have tendered to the plaintiffs the amount due to them for their debt and charges, and demanded the coffee; and if the article were rising rapidly in price, it might have been their interest to do so. A view of the whole transaction presents the case of a transfer of an interest in general merchandize as a collateral security, settling with sufficient precision the respective rights of the parties, constituting the assignee not the sole, but the qualified owner, bound to sell the merchandize when received and account to the assignor for its proceeds. The relation of debtor and creditor still continued between them; and the assignee, having sold fairly, on the assignor’s account, and a loss happening without his fault, the debt to him remains, and no more of it is cancelled than the amount of money received from the estate of the vendee.
It is further contended by the defendants, that even if the debt still subsisted, after the assignment of the 30th October, it was discharged by the compromise of the 9th March, 1824, made by the plaintiffs with Adams, by which they agreed to receive ari additional thirty per cent, and release him from the residue. How far these acts if done without the concurrence of the plaintiffs W'ould have the effect contended for, it is unnecessary to inquire, because there are other circumstances to be taken into view in deciding this case. The letter of Adams shows, that the plaintiffs at the time of agreeing' [173] to the compromise, intimated that Folwell’s assignees were interested, and that thb plaintiffs could act only with their concurrence. It was perhaps, for that reason the notes which by that arrangement Adams was to deliver, were not delivered to the plaintiffs, but the thirty per cent was paid to them in money in April 1825, some time after the defendants had executed to Adams a release of the debt, so fcir as they were concerned in it. It would seem, therefore, that the arrangement of March, 1824, between the plaintiffs and Adams, was contingent, depending upon the assent of the defendants, and before it was carried into effect that assent was fully given. All parties probably considered it best to save something from the wreck of Adams’s estate by coming in with his other creditors, and releasing, rather than risk the loss of the whole : and all deemed the assent of the defendants an indispensable preliminary to the completion of the compromise. It is doubtful whether it would have been completed by the plaintiffs without such assent. I look upon the receipt of the money by the plaintiffs in April 1825, as authorised by the respective parties to this suit, and the defendants therefore, cannot now aver it to be a discharge of the estate of Folwell from liability for the difference remaining due on the note.
In relation to the sum on which the dividends claimed in this suit should be calculated, the rule has been recently laid down by this court in the case of the Bank of Pennsylvania v. M'Calmont, that when more than one of the persons liable to the payment of a note have made voluntary assignments for the payment of their debts, the amount actually due at the times respectively when the dividends are declared, is to be taken as the sum on which the percentage is to be estimated. This rule seems to apply to the dividends now sued for. Thus, on the 16th April, 1823, when Folwell’s first dividend was declared, the debt, (with the charges incurred by the plaintiffs,) was one thousand and eighty-four dollars and sixty-three Cents; deduct the twenty-five per cent dividend then declared, two hundred and seventy-one dollars and fifteen cents, leaves eight hundred and thirteen dollars and forty eight cents: on the 5th of August, 1823, Adams paid one hundred and ninety-two dollars and eighteen cents: this being deducted leaves six hundred and twenty-one dollars and thirty cents. Folwell’s second dividend of the 28th December, 1824, seven and a half per cent on this sum, forty-six dollars and fifty-nine cents, being deducted, leaves five hundred and seventy-four dollars and seventy-one cents. Adams paid a second dividend 12th April, 1825, which leaves two hundred and eighty-six dollars and forty-three cents, then due to the plaintiffs, without calculating interest on the dividends now claimed. This must be added from the time they were declared, and for that amount judgment be entered for the plaintiffs.
Judgment for plaintiffs.