Spofford v. Kirk

• Decision Date: 01 October 1878
• Citation: 97 U.S. 484,24 L.Ed. 1032
• Parties: SPOFFORD v. KIRK
• Court: U.S. Supreme Court

97 U.S. 484

24 L.Ed. 1032

SPOFFORD v. KIRK.

October Term, 1878

APPEAL from the Supreme Court of the District of Columbia.

James B. Kirk employed Hosmer & Co. to prosecute his claim for $12,000 against the United States, for supplies furnished to the army during the war of the rebellion, and for damages sustained by reason of the military occupation of his property. Before the allowance of the claim, he drew upon that firm the following orders:——

'CULPEPER COURT-HOUSE, VA.,

'Jan. 14, 1873.

'Messrs. Hosmer & Co., of Washington City, D. C., will please pay to J. S. Wharton, or order, six hundred ($600) dollars out of whatever moneys may be coming into your hands for me, for supplies furnished and damages sustained by the United States army during the war.

'JAMES B. KIRK.'

'CULPEPER COURT-HOUSE, VA.,

'Jan. 14, 1873.

'Messrs. Hosmer & Co., of Washington City, D. C., will please pay to E. R. Taylor, or order, six hundred ($600) dollars out of whatever moneys may be coming into your hands for me, for supplies furnished and damages sustained by the United States army during the war.

'JAMES B. KIRK.'

Which were thereupon severally accepted by the drawees, by writing across the face of the first, as follows:——-

'WASHINGTON, Jan. 24, 1873.

'Accepted: payment to be made out of any moneys received by us from the United States on the claim of said James B. Kirk, and remaining in our hands, after deduction and payment of attorney's fees in the case.

'HOSMER & CO.'

And of the second, as follows:——

'Accepted: payment to be made out of any moneys received by us from the United States on the claim of said James B. Kirk, and remaining after deduction and payment of our attorney's fees in the case, and also our acceptance of a similar order for the same amount in favor of Dr. J. S. Wharton.

'HOSMER & CO.

'Jan. 25, 1873.'

The orders bearing said acceptances, and indorsed by the respective payees, were, in February, 1873, offered for sale to Ainsworth R. Spofford, who, on the written assurance of the drawees that Kirk had been allowed by the government something over $9,000, became the assignee or holder of both for value and in entire good faith.

Upon the issue of the treasury warrant for the sum awarded to Kirk, Spofford made demand upon Hosmer & Co. for the payment of the orders. Kirk having refused to indorse the warrant or to admit the validity of the orders, Spofford filed this bill to enforce compliance with said orders and acceptances, and to enjoin Hosmer & Co. from surrendering and Kirk from receiving said warrant.

The court below dismissed the bill, whereupon Spofford appealed here.

Mr. T. A. Lambert for the appellant.

As the orders furnish no evidence of a purpose on the part of Kirk to assign his claim against the United States, they were not drawn in derogation of the act of Feb. 26, 1853, and are not affected by it.

They were designed to clothe the respective payees with the badge of absolute ownership of the amount thereby severally appropriated to them or their assigns, 'out of whatever moneys might be coming into the hands of the drawees for the drawer for supplies furnished and damages sustained by the United States army during the war.' The fund thus designated had but a potential existence, and was wholly unaffected by the orders, until it actually or constructively reached the hands of the drawees. From the moment, however, it came to their possession, they, by reason of their previous acceptance, became clothed with a trust to administer it agreeably to the directions contained in the orders. In other words, the orders, when drawn and accepted, created in equity an absolute and irrevocable appropriation of their contents when collected by the drawees from the drawer's claim against the government, and the sums named were held by Hosmer & Co. in trust for the payees or their assignees. Story, Eq. Jur., sects. 1040-1047; Mandeville v. Welch, 5 Wheat. 227; Tiernan et al. v. Jackson, 5 Pet. 580; Croser v. Craig, 1 Wash. 424; Mnemony et al., Assignees, v. Ferrers, 3 Johns. (N. Y.) 71; Weston v. Barker, 12 id. 276; Morton v. Nailor, 1 Hill (N. Y.), 585; Burn v. Carvalho, 4 Myl. & Cr. 702, 703; Row v. Dawson, 1 Ves. 331; L'Estrange v. L'Estrange, 13 Beav. 284; 2 Spence, Eq. Jur. 855, 860, 861, 907.

The accepted orders constitute a contract which a court of equity will enforce by way of specific performance, and their operation upon the fund attached as soon as the drawees became possessed of the treasury warrant. 2 Spence, Eq. Jur. 852, 854, 865, 866, 896; Story, Eq. Jur., sects. 783, 1040 b, 1040 c, 1044, 1055; Wright v. Wright, 1 Ves. 411; Beckley v. Newland, 2 P. W. 182; Sydney v. Sydney, 3 id. 276; Legard v. Hodges, 1 Ves. Jr. 478.

Mr. L. L. Lewis, contra.

1. The orders drawn by Kirk created no lien on the fund subsequently appropriated by Congress for the payment of his claim, and a court of equity was, therefore, without jurisdiction in the case. Trist v. Child, 21 Wall. 441.

2. So far from being contracts to be specifically executed, they were absolutely null and void by the act of Feb. 26, 1853, 10 Stat. 170.

3. If they were valid for any purpose, the complainant had a plain, adequate, and complete remedy at law.

MR. JUSTICE STRONG delivered the opinion of the court.

Whether the orders, drawn as they were upon a designated fund, made payable to order, and accepted by the drawees, are held by the indorsee free from any equities existing between the payees and the drawer, though the indorsee purchased them without any notice of such equities, is a question which the case does not require us to consider. It has been ably and elaborately argued by the counsel for the appellant, and if the orders could have any legal effect, we might be compelled to answer it. But there is a primary question which must be met and determined before we reach the one principally argued. It is, whether the orders are operative for any purpose. The complainants' case rests upon the assumption that, coupled with the acceptance of the drawees, they created an equitable lien upon the debt due from the United States to the drawer. If they did not, it is plain that the court below had no jurisdiction in equity to grant the relief asked for by the bill. The complainant's only remedy was at law. If they did, it must be because the orders and acceptances amounted to an equitable assignment, pro tanto, of the claim of the drawer against the government. The ingenious argument for the appellant is that the orders clothed the respective payees with absolute ownership of the several sums mentioned therein, out of whatever moneys might be coming into the hands of the drawees from the United States for the drawer; and it is said that the fund thus specified was unaffected by the orders, and had only a potential existence in the drawees' hands until it was received by them, but that from the moment of possession they assumed a trust to administer the fund in accordance with the directions given by the orders, having previously accepted them.

Another formal statement of the argument is, that the orders drawn by Kirk upon Hosmer & Co., and accepted by them, created in equity an absolute and irrevocable...