Harrison v. Sterry and Others

• Decision Date: 01 February 1809
• Parties: HARRISON v. STERRY AND OTHERS
• Court: U.S. Supreme Court

9 U.S. 289

5 Cranch 289

3 L.Ed. 104

HARRISON v. STERRY AND OTHERS.

February Term, 1809

THIS was an appeal from a decree of the circuit court for the district of South Carolina, in a suit in equity, in which Richard Harrison was complainant, and the following parties defendants, viz. 1. The United States. 2. Sterry and others, assignees of H. M. Bird and Benjamin Savage under a British commission of bankruptcy. 3. Aspinwall and others, assignees of Robert Bird, under an American commission of bankruptcy. 4. Several American creditors who had attached the effects of Bird, Savage & Bird, in South Carolina. 5. Several British creditors who had also attached the same effects. And, 6. Thomas Parker, who, by consent of the creditors, had been appointed by the court of common pleas in South Carolina, an agent for all the parties concerned, to collect and receive the debts due to Bird, Savage & Bird, which had been attach and when

received, to hold the same till the further order of the court.

The question was, how those attached effects should be distributed.

Harrison, the complainant, claimed them as a trustee for the benefit of certain creditors of the house of Robert Bird & Co. which was the name of the firm by which the house of Bird, Savage & Bird of London, carried on merchandise at New-York. Robert Bird, desirous of aiding and supporting the credit of the house of Bird, Savage & Bird, by raising funds, upon the security of the cargo of the East-India ship Semiramis, and certain debts to a large amount due to them in South Carolina, made a deed of trust on the 3d of December, 1802, intending thereby to assign that cargo and those debts to the complainant. The deed purported to be signed and sealed by H. M. Bird and Benjamin Savage, by Robert Bird, their attorney; and by Robert Bird, in his own right. It recited that, 'whereas H. M. Bird, Benjamin Savage and Robert Bird, being copartners in trade under the several firms of Bird, Savage & Bird, and Robert Bird & Co. have in consequence of disappointments been obliged to borrow money from the bank of England, and under the firm of Robert Bird & Co. to purchase bills of exchange, public and bank stocks and goods, upon credit in America, in order to furnish means of more effectually supporting the credit of the said Bird, Savage & Bird of London. And whereas it may be necessary for the purpose aforesaid, that the said Robert Bird & Co. should continue to make such purchases until the present difficulties may be removed; and security having been already given to the persons bound as sureties to the bank of England, for their responsibilities, the said H. M. Bird, Benjamin Savage and Robert Bird, are desirous to secure all persons from whom purchases have been or may be made as aforesaid, for the purpose of aiding the said house or firm of Bird, Savage & Bird. Now, therefore, know ye, that the said Henry M. Bird, Benjamin

Savage and Robert Bird, for the purpose above expressed,' &c. The trust expressed was 'to apply the same and every part thereof for the equal security and indemnification, in proportion to their just demands, of all persons from whom the said Robert Bird & Co. shall, before the end of the year 1803, have made any such purchases of goods, stocks or bills, or who before that time shall be holders of any bills of exchange drawn or negotiated by the said Robert Bird & Co. for the purpose of giving support to the house of Bird, Savage & Bird, as aforesaid.'

Another ground of Harrison's claim was a similar instrument of writing, dated the 31st of January, 1803, not under seal, but signed, 'Bird, Savage & Bird,' and 'Robert Bird & Co.' which signatures were in the hand-writing of Robert Bird.

The bill of complaint stated that Robert Bird & Co. before and after the 3d of December, 1802, and before the end of the year 1803, made various purchases of stocks, goods and bills of exchange, and became indebted for bills drawn and negotiated by them for the purpose of giving support to the house of Bird, Savage & Bird, which debts remain unpaid. There was a letter of attorney from Henry M. Bird and Benjamin Savage, to Robert Bird, but it did not authorize him to execute deeds in their names generally.

The claim of the United States rested upon the priority given by the act of congress of the 3d of March, 1797. Vol. 3. p. 423. § 5.

The attaching creditors relied upon their attachments under the laws of South Carolina.

The assignees under the several commissions of bankruptcy relied upon the British and American bankrupt laws.

The United States had proved their claim under the American commission, and had voted in the

choice of assignees. They had also attached the effects in South Carolina, under the laws of that state, and had arrested Robert Bird, and held him to bail in New York.

The court below decided that the United States were entitled to priority of payment. That after satisfaction of that claim Harrison would be entitled, under the assignment, to Robert Bird's third part or share of the property mentioned in the deed, and the attaching creditors to the other two thirds. That the assignees under the British commission could take nothing; and that the assignees under the American commission could take nothing but the surplus after all the other classes of creditors were satisfied.

From this decree all the parties, excepting the United States, appealed.

C. Lee, in behalf of the attaching creditors, admitted the priority of the United States, but contended that his clients were entitled to the whole of the surplus after satisfaction to the United States. They have a legal priority by means of their attachments, and they have equal equity. The statutes of South Carolina gives them as good a title at law as if goods were taken under a fieri facias.

Robert Bird's letter of attorney did not authorize him to make deeds of conveyance or assignment in the names of his partners; nor did his power as one of the firm extend to sealing deeds in their names, nor to assigning the partnership effects without seal. But a more solid objection to Harrison's deed is, that it was made to cover the property from the other creditors; and was made in contemplation of bankruptcy. It was not to pay a debt to Harrison, but to support the credit of Bird, Savage & Bird. It does not name the creditors, nor mention any sum which it was intended to secure. It could not convey more than an equitable title to Harrison in the choses in action, but the creditors who attached

gained the legal title, without notice of Harrison's claim. Equity will not deprive them of this legal title. 2 Eq. Cas. Abr. 85. Nor will equity protect an assignment of a chose in action except for a precedent debt.

The assignees under the British commission must yield to the attaching creditors. If they have any right, it can only be from the date of the assignment, which was subsequent to the attachments. Doug. 170. Le Chevalier v. Lynch. 2 H. Bla. Hunter v. Potts. 1 H. Bla. 665. Sill v. Worswick. 1 East, 6.Smith v. Buchannan.

This case differs from that of the United States v. Hooe, 3 Cranch, 73. That was an assignment of real estate; this is only of a chose in action.

It does not appear when the acts of bankruptcy were committed. The commission against Bird & Savage issued on the 12th of June, 1803; that against Robert Bird on the 5th of December, 1803, and as the act of bankruptcy must be within six months before issuing the commission, it must have been subsequent to the 5th of June, 1803, long subsequent to the attachments.

There is no distinction between the rights of the British and the American attaching creditors. They all come in according to the dates of their attachments.

MARSHALL, Ch. J. Does the law of South Carolina create a lien from the time of the attachment without power to release the attached effects?

Harper, for the assignees under the British and American commissions.

The attachment may be dissolved by bail; but if no bail is given, and judgment of condemnation be had, it relates back to the time of the attachment...