United States v. Clark. owe Gilbert Stuart, to which he answered no, not a dollar. Gilbert Stuart declared the same thing. On the 20th of September, 1819, a settlement took place of certain previous concerns between the defendant and Gilbert Stuart, growing out of a partnership between them, which had ceased long before, the funds of which had been used by defendant in his own business; and on that settlement the sum of 7,400 dollars was found due by defendant to Gilbert Stuart, for which he gave his bond. This bond was afterwards reduced by payments to Gilbert Stuart by the defendant, and allowances by the former to the latter, to 3000 dollars, in April, On this last settlement the bond for 7,400 dollars was given up, and a new obligation given by defendant to Gilbert Stuart for 3000 dollars, in which he had, however, inserted as a condition, that he was to be indemnified against his liability to the creditors under the assignment, for a certain sale to one Joanna Stuart, of furniture of Gilbert Stuart, comprised in the assignment. 1820. The whole amount of property proved to be sold was, furniture 2,556 dollars: a further sum of 90 dollars was received by defendant. In May, 1821, suit was brought by the United States on the bond against Gilbert Stuart, and judgment rendered in the same month for the amount of the bond. It appeared, that at the time the assignment was made, on the 28th of August, 1819, Gilbert Stuart informed the defendant of the bond to the United States, but told him that he, Gilbert Stuart, was not liable, because he had not been duly notified of the default of Joseph B. Stuart. It further It further appeared, that on the 20th of September, 1819, the date of the first settlement, the defendant knew of the bond and of the default of Joseph B. Stuart, but thought Gilbert Stuart not liable. United States v. Clark. R. TILLOTSON, D. A., S. A. FOOTE, and D. LORD for the plaintiffs, contended- That by the indebtedness of Joseph B. Stuart, all accruing before the 15th of June, 1815, the condition of the bond was broken, and Gilbert Stuart was a debtor to the United States, within the meaning of the act, on and before the 28th of August, 1819. That by the concealment of Gilbert Stuart, he being insolvent, an act of legal bankruptcy had been committed within the act of Congress of March 3d, 1797, which entitled the United States to a priority of payment out of Gilbert Stuart's estate. That the assignment of the 28th of August, 1819, was an assignment by the debtor, Gilbert Stuart, of all his property within the meaning of the same act. That the debt of 7400 dollars having been left out of the assignment through mistake or fraud, or not then being ascertained, this circumstance did not prevent the assignment from being a general one, within the meaning of the law. That an action for money had and received would lie, for the proceeds of the assigned property; and also for the amount of the reserved debt; on which the priority was alleged to have attached on the 28th of August, 1819. That no payments after the 28th of August, 1819, or at farthest after the 20th September, 1819, should be allowed to defendant. T. A. EMMET and R. EMMET for the defendant, contended That the condition of the bond not being for the payment of a specific sum of money, the indebtedness of Gilbert Stuart as surety, did not arise until the extent of his liability was ascertained and defined by a judgment on the bond, or, at United States v. Clark. least, until the commencement of a suit upon it; and at all events, that no such indebtedness could have arisen or existed in law prior to the settlement of the paymaster's accounts in December, 1819. That the defendant, as assignee of the surety, could not be charged with notice, nor had the plaintiffs a right to inquire into his acts as assignee previous to the legal existence of the surety's indebtedness to them. That the defendant's knowledge of the paymaster's default, at the time of the assignment, was not sufficiently proved, and even if it had been, that such knowledge and the knowledge of Gilbert Stuart's suretyship, could not bind him, prior to a judgment against Gilbert Stuart as such surety, inasmuch as Gilbert Stuart might have had a good defence, which would have discharged him in an action brought against him as surety. That the assignment was not an assignment of all the debtor's property within the meaning of the law, and even if it were so, that the totality of the assignment and the keeping concealed to avoid arrest, were not circumstances of which the United States could avail themselves to create their priority, unless there was an ascertained and strictly legal indebtedness by Gilbert Stuart to them at the time, which could not be the fact, as the paymaster's accounts were not even finally made up, and his defalcation ascertained, until after Gilbert Stuart had made his assignment and kept himself concealed. That even if the priority of the United States did attach from those circumstances, they had no right to enforce it by That the act of 1797, under an action against the defendant. which the United States claimed priority in this case, creates no personal responsibility of an assignee, nor gives any right of action against him, while the act of 1799, giving a like priority in cases of debt for duties, expressly declares that an assignee who shall pay a debt due to another, before the debt United States v. Clark. for duties to the United States has been paid, shall be answerable in his own person and estate, and that the use of such express words of liability in the latter act, and the omission to use them in the former, shows, that such personal liability of an assignee, to be enforced by an action at law, was not contemplated nor intended in cases like the present. That a preference only being acquired by the act of 1797, the United States must resort to the same mode of proceeding that any common creditor would have to pursue, to get at the property of a debtor, viz. by obtaining a judgment against such debtor, and issuing execution; and in case such judgment and execution should prove ineffectual, owing to an assignment made by the debtor, then by filing a bill in equity against the proper parties, to compel a discovery and production of the property, and to establish their preference in the distribution of it. That in any case an action for money had and received would not lie against an assignee by a creditor not claiming under the assignment, and that for want of such privity between the United States and the defendant it could not be maintained in the present case. That even if the action would lie, it would only be to recover such money as the plaintiff could prove to have been actually in the hands of the defendant as assignee when the suit was brought, but not to make the defendant accountable for any monies which he might have received and paid to other creditors, even although such payments had been made by him with full knowledge of the preference claimed by the United States. That the defendant was at all events entitled to be allowed for all payments made by him before he had notice of the debt due by Gilbert Stuart to the United States, and of its ascertained amount, and that such notice must have been given expressly by the United States themselves. United States v. Clark. THOMPSON, J. charged the jury as follows: SOME observations have been made to you, in relation to the act of Congress under which the United States claim a preference over other creditors of Gilbert Stuart, which are calculated to divert your attention from the matters proper to be submitted to you. It has been treated as a harsh and severe law, and one that is not entitled to the favourable consideration of the Court and jury. With the policy or fitness of this law, we have no concern; it is a valid and constitutional law, and has been so adjudged by the highest tribunal of the country. It is, therefore, binding and obligatory upon us; and must govern the rights of the parties in this case, so far as the question of preference is concerned. Most of the questions which have been agitated in the course of the trial are questions of law, upon which I have already intimated an opinion; but to which exceptions have been taken, and to enable the parties to avail themselves of such exceptions, it may be proper for me again to notice the various questions that have arisen. The first inquiry is, whether Gilbert Stuart was a debtor to the United States, within the meaning of the act of 1797," and at what time he became so indebted. The language of the act is very broad, and applies to all persons thereafter becoming indebted to the United States by bond or otherwise. It appears that on the 10th day of July, 1813, Gilbert Stuart and Moses Willard became bound with Joseph B. Stuart to the United States by a bond in the penalty of seven thousand dollars; conditioned, that Joseph B. Stuart should perform the duty of paymaster in the regiment of the and well and truly account for, and pay a 2 L.. U. S. 595. |