United States v. Cutts.

authorize and empower the said Thomas Sheafe, in person or by substitute in his name, to sell, assign, and transfer, unto any person or persons, as much of said stock as may be necessary to pay whatever may be due on said note, together with the necesssary expenses attending the same. In witness whereof I have hereunto set my hand and seal, the first day of July, A. D. 1828. NATHANIEL LYDE. (Seal.)

"Sealed, &c. in the presence of

RICHARD R. WALDRON,

W. B. PARKER.'

"And the said Sheafe, at that time, made to said Lyde a receipt in the following words: 'Portsmouth, N. H., July 1st, 1828. I acknowledge to have received of Nathaniel Lyde, Esq., a certificate of United States five per cent. stock for nineteen hundred and sixty dollars, as collateral security for a note of said Lyde to me for that sum, which certificate is to be returned to said Lyde, also the assignment of said stock, whenever said note is paid.

THOMAS SHEAFE.'

"The said Lyde died on the 7th of July, 1828. After the said note became payable, the said Sheafe applied at the office of discount and deposit of the Bank of the United States at Boston, to make a transfer of the same, which was refused at said office on account of the death of the said Lyde; and on the 15th of January, 1829, the said Cutts, as administrator as aforesaid, on said Sheafe's giving a bond to indemnify him, transferred the said stock on the books of said office, to said Sheafe, in payment of said note and interest, and nine dollars and eighty cents, which sum constituted part of the money paid by the said Cutts to the United States. The said Sheafe allowed the current price at Boston, for stock of that denomination. The circumstances and amount of said Lyde's estate were not known at the time of the transfer. His estate has since been represented insolvent.

United States v. Cutts.

equity upon such a contract of pledge over other creditors. That could not be pretended, unless his contract created a lien on the very stock; or an assignment, which should in equity be deemed an appropriation of the fund.2

In regard to the lien, that seems to have been relied on at the argument, as arising from the delivery of the certificate, according to the intention of the parties, and from some supposed analogy to the lien recognised in equity, in cases of a deposit of title deeds, which is held to amount to an equitable mortgage. And it has been said, that no transfer of the stock would be allowed, but upon a surrender of the old certificate. That is probably true in point of practice. I am not aware, however, that it is strictly required by law. There may doubtless be a pledge of a certificate of stock, which shall operate merely as a pledge of the instrument, and not of the stock; but ordinarily the deposit of the certificate as an exposition of the intention of the parties, covers also a pledge of the stock. Formerly, indeed, upon a mere deposit of title deeds, the party took an interest in the deeds only, and not in the estate. The first case the other way, seems to have been Russell v. Russell, (1 Bro. Ch. Cas. 269.) In the present case, however, there is no doubt, that the parties intended a lien, or equitable mortgage, not merely upon the certificate, but upon the stock. If the analogy of a deposit of title deeds should, therefore, hold good, it would apply with great cogency to the present case; for it has been decided, that the equitable lien by a deposit of title deeds, is good against

4

1 See Hunt v. Rousmanière's Administrators, 3 Mason R. 294. S. C. 1 Peters R. 1.

2 Lepard v. Vernon, 2 Ves. and Beames R. 51.

3 See 3 Coventry's Powell on Mortgages, ch. 23, pp. 1049-1061; Mandeville v. Welch, 5 Wheat. 277, 284.

4 Ex parte Whithead, 19 Ves. 208–211.

United States v. Cutts.

"If the Court are of opinion, that the said stock, under the foregoing circumstances, constituted assets in the hands of the said Cutts, as administrator, the defendant is to be defaulted, and judgment rendered for the sum of $ 1664.33, debt, and costs, in common form, and execution to issue. If otherwise, judgment is to be rendered in favor of the plaintiffs for the same sum, to be levied on the goods and chattels, which were of the said Lyde, and which shall hereafter come to the hands of the said Cutts, as administrator as aforesaid, to be administered. It is understood, that the defendant is not to be prejudiced by the foregoing statement from claiming further allowances, which he claims to be equitably due from the United States to the estate of said Lyde."

The cause was argued at the last October Term at Exeter, (N. H.,) in the absence of the District Judge, by Mason and Durell for the plaintiffs, and by E. Cutts and Bartlett for the defendant.

For the plaintiffs it was contended, that there was no legal transfer to Sheafe by the instrument stated in the case, in the lifetime of Lyde. The transfer by the Act of 4th of August, 1790, ch. 61, (1 U. S. L. 112,) could be made only on the books of the Treasury, by the party or his attorney; and this provision extended to all subsequent acts respecting the transfer of the public debt. The certificates of the public debt on their face purport "to be transferable only at the bank," by the party or his attorney. If this be so, then, by the death of Lyde, the transfer was extinguished; and, Lyde's estate being insolvent, the United States were entitled to the statute priority given to the government by law, and the administrator had no right, as against creditors, to make the transfer for the benefit of Sheafe. The instrument of agreement did not make any transfer of the stock, or show an intention to make any immediate transfer. The words

United States v. Cutts.

are, that Lyde has agreed to transfer, not that he has transferred. No transfer was to be made, until after the note became due, and was unpaid. And so the receipt of Sheafe purports. If these positions are correct, then Sheafe had no lien on the stock. The delivery of the certificate would not make any difference, or give any len on the stock; and the power given in the instrument was a mere verbal power, not coupled with any interest. There was no mistake, no fraud, and no error. The parties did exactly what they intended. The case, then, falls directly within the authority of Hunt v. Rousmanière's Administrator, (2 Mason R. 244, 342; S. C. 3 Mason R. 294; S. C. 8 Wheaton R. 174; and 1 Peters R. 1.) Against other creditors, in a case of insolvency, a Court of Equity would not give any relief. So it was held in Hunt v. Rousmanière. It would not overrule the express provisions of the statute, as to the mode of transfer.

For the defendant it was argued, that the instrument was not a mere power of attorney. In the beginning, it is true, it is stated, that Lyde had agreed to pledge, &c. ; but afterwards it is expressly stated, that he does thereby assign the stock. It is a power, then, coupled with an interest in the stock. It is true, that it was not a transfer at law, but it was in equity, and transferred Lyde's interest in the stock; and so the power was irrevocable, and survived the death of Lyde. A trust coupled with a power or interest survives. (4 Dane's Abidg. ch. 135, art. 6, § 4. 8.) The intention was to give Sheafe a complete lien on the stock. The certificate was delivered to Sheafe, and no transfer could be made on the books of the bank without delivering it up. Hunt v. Rousmanière was a case of a mere naked power. The intestate remained in possession of the vessel. The loan officer, after Lyde's death, might properly have allowed Sheafe to trans