John Winship and Others, Plaintiffs In Error v. the Bank of the United States, Defendant In Error

• Citation: 5 Pet. 529,30 U.S. 529,8 L.Ed. 216
• Parties: JOHN WINSHIP AND OTHERS, PLAINTIFFS IN ERROR v. THE BANK OF THE UNITED STATES, DEFENDANT IN ERROR
• Decision Date: 01 January 1831
• Court: United States Supreme Court

30 U.S. 529

5 Pet. 529

8 L.Ed. 216

JOHN WINSHIP AND OTHERS, PLAINTIFFS IN ERROR v. THE BANK OF THE UNITED STATES, DEFENDANT IN ERROR.

January Term, 1831

ERROR to the circuit court of the United States for the district of Massachusetts.

This was an action of assumpsit brought by the defendants in error against John Winship, Amos Binney, and John Binney, the present plaintiffs in error, as co-partners, under the name of John Winship.

The declaration contained seven counts, six of which set forth six different promissory notes, describing them. The notes were of different dates and amounts, drawn by Samuel Jacques, Jun. and payable to, and endorsed by John Winship, Jun.: the declaration alleging the notes to be payable to Amos Binney, John Binney and John Winship, Jun. by the name and description of John Winship, and so endorsed to the Bank of the United States. Demand and notice were alleged to have been duly made. The seventh count was for fourteen thousand dollars, money lent.

The defendants pleaded the general issue. The plaintiffs below offered the testimony of Samuel Jacques, Jun. the drawer of the notes, which evidence was objected to on the following facts: on the 28th day of August 1825, Samuel Jacques, Jun. having failed in business, made an assignment of his property to Samuel Etheridge and Henry Jacques, in trust for the payment of his debts, and among them of the claims which John Winship might have upon him on the promissory notes stated in this declaration. These notes are thus described:

'And among the creditors in this schedule, are also to be included banks and individuals, who are or may become holders of any of the notes in the following list, which have either been made by Samuel Jacques, Jun. as promissor, and John Winship as indorser, or by said Winship as promissor, and said Jacques as indorser; but such banks or holders are to be considered creditors for the purposes of this instrument, only for such part of the contents of such notes as came to said Jacques's use and possession, but for no more; and the assignees are to that extent, to indemnify said Winship for said proportion of said notes pro rata with other creditors of this class and said Winship may execute this instrument as representing his interest in said notes when paid.'

'And accounts between said Samuel Jacques, Jun. and said Winship, touching former transactions, are to be adjusted; and the balance, if in favour of said Jacques, is to go towards the indemnity above provided for said Winship, and if in favour of said Winship, is to be a debt in this second class of debts, as above stated.'

Then follows a schedule of the notes drawn by Samuel Jacques, Jun. in favour of John Winship, amounting to 14,250 dollars, and of three notes drawn by John Winship in favour of Samuel Jacques, Jun. amounting to 4200 dollars.

John Winship was, with other creditors of Jacques, a party to this assignment, and released the assignor in these terms: 'The creditors of the said Samuel Jacques, Jun. do hereby consent to and accept this assignment, and in consideration of the same, and of the covenants of the said Samuel Etheridge and Henry Jacques herein contained, for themselves respectively and their respective heirs, executors, administrators, and assigns, have hereby demised, released, and forever quit claim to the said Samuel Jacques, Jun. his executors and administrators, all claims, demands, and causes of action which they have, or may hereafter have, for, or on account of the several debts and sums of money set opposite to their respective names on schedule, and do hereby acquit and discharge him and them therefrom.'

The court overruled the objection to the admission of Jacques; and he testified, 'that he knew of the existence of a co-partnership between the defendants by general reputation, but had never seen any articles of agreement between them; he considered that the Binneys were concerned with Winship in the soap and candle business, and he knew that it was generally so understood; that Winship did no other business to his knowledge: that he and Winship both lived in Charlestown, and saw each other every day: that he had dealings with Winship soon after the commencement of the partnership, and supplied him with rosin perhaps to the amount of 400 or 500 dollars per year, sometimes more and sometimes less. And that he sometimes gave a note for the balance signed John Winship: that witness always took such notes on the credit of the Binneys, with full confidence that they were interested and were men of property.

'And at some time in the year 1823, and perhaps a little previously, and until 1825, witness and Winship were in the habit of exchanging notes, which were discounted at the different banks; they began at the Manufacturers' Bank; there were none at the Branch Bank till 1824. They began with small notes, and finally exchanged notes for 2000 and 2500 dollars, sometimes signed by one and indorsed by the other, and vice versa. These notes were discounted at the different banks, but that he believed that none were discounted at the United States' Bank, until at later periods; and that Winship usually applied for the discounts. That he, Jacques, indorsed these notes, on the credit of the firm. That Winship always represented them to be for the partnership account, and that witness never understood that they were on his private account.

'The notes in suit were generally presented by Winship for discount, but that witness might have presented some of them.

'There were some notes for his private account, but that he believed those in suit to have been for the firm.

'He could not state what portion of the money obtained on these notes he had received; but that as he and Winship exchanged notes, he could not say that he never received any of it. Some of those notes were given for renewals at this bank, and some to take up notes at other banks.

'It was his impression that some of the money thus obtained went to pay for rosin; and that one of them for 1500 dollars was originally made to take up a note which had been previously given at the Manufacturers' and Mechanics' Bank for rosin, being a material used in defendant's factory. He knew no particulars concerning the appropriation of the moneys obtained upon these notes, and knows of no other which Winship has made, but for the use of the firm.

'The business of the firm required a great capital, and Winship often spoke of buying barilla and tallow for the factory; but that witness does not know that he alluded to these particular notes, nor that the proceeds of them were applied to any other business.

'This business of exchanging notes continued until 1825 when he and Winship stopped payment. Winship kept a little note book, but witness having great confidence in him kept no accurate accounts.

'The particular occasion of witness stopping payment was the non-payment of his acceptance on a draft drawn on him by Winship for barilla, an article such as is used in the factory. He told Mr A. Binney of it, who said he would do nothing about it. He furnished the factory of defendants with rosin, from 1822 to 1825; he sometimes might have received payment in cash, but it was generally in notes. He has endeavoured to trace the origin of the notes in suit, but can trace only two; that of eight hundred dollars and one of eight hundred and six dollars, originally given for rosin, were eventually included in the notes in suit, for one thousand nine hundred dollars, by means of successive renewals. Winship sometimes came to witness, and stated that he wanted his name instead of Amos Binney, because he was absent; and got his name accordingly. He has a memorandum in his note book, of August 15th, 1825, stating that Winship applied to him to take up a note of Amos Binney, of that date, for one thousand five hundred dollars, stating that he was out of town. This note originated 9th of October 1824, and was at first for two thousand dollars, and renewed successively till the 15th of August 1825, when it was reduced to one thousand five hundred dollars; that the original note was Amos Binney's, not the last one.'

Upon cross examination he testified, 'that he had known John Winship about twenty or twenty-five years; that he was in partnership with Messrs Hydes, and that their names were in good credit, before his connexion with Binney, and not in extensive business. There are accommodation notes of this kind, now outstanding, amounting to about twenty-one thousand dollars. No particular agreement ever subsisted between him and Winship, concerning the proceeds of these accommodation notes; they sometimes divided the money and each took a portion. And sometimes he lent his name to Winship, and Winship lent his name to him. And at the conclusion of the whole matter they bundled up all the notes that had been taken up, and agreed to consider them as settled and discharged.

'And as to the outstanding twenty-one thousand dollars, he applied to adjust it with Winship, but he said that the papers were all in Binney's hands. He never applied to him to adjust them. When he went to Winship, the notes and checks were in a mass, and they agreed to consider them cancelled, to bundle them up and to pass receipts; and as to the residue, which were outstanding, that they should be adjusted as well as they could.

'He has checks of Winship's amounting to about one thousand seven hundred, or two thousand dollars, and some notes; and that Messrs Binneys hold notes and checks signed by him, and given to them by Winship.

'He was engaged in an extensive speculation in hops; was indebted and mortgaged his estates in 1824 to Messrs Thomson, for about ten thousand dollars. He never knew any actual use, for the benefit of the firm, for money obtained on the accommodation notes, unless the taking up of the rosin notes, as stated in his testimony, be so considered.

'He understood that Winship was engaged in...