Luke Tiernan, David Williamson, Jun and Charles Tiernan, Plaintiffs In Error v. James Jackson, Defendant In Error

Decision Date01 January 1831
Citation30 U.S. 580,5 Pet. 580,8 L.Ed. 234
CourtU.S. Supreme Court

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

James Jackson, the defendant in error, on the 30th of April 1824, instituted, in the circuit court, an action of assumpsit against the plaintiffs in error, Luke Tiernan and Sons, Merchants of Baltimore.

The declaration was for money had and received; the defendants pleaded non assumpsit, and issue being joined, the cause was tried in December 1828, and a verdict and judgment rendered for the plaintiff, for the whole amount of his claim, under instructions given to the jury by the court, to which instructions the defendants excepted, and thereupon prosecuted this writ of error.

The circumstances of the case were the following:

Luke Tiernan and Sons were in 1819 the creditors of Thomas H. Fletcher, a merchant of Nashville, in the state of Tennessee, for a balance of account current, admitted to amount to four thousand nine hundred and six dollars and eighty-three cents. Mr Fletcher was at the same time largely indebted to Luke Tiernan and Co. of which firm Luke Tiernan was the surviving partner, and other merchants in Baltimore, Philadelphia, and elsewhere.

In consequence of the failure of a house in Nashville, and of other heavy losses in business, Mr Fletcher became unable to meet his engagements; and on the 10th of April 1819, through Messrs Tiernan and Sons, he made a statement of his affairs to his creditors in Baltimore; and proposed an arrangement for the satisfaction of their claims in these terms:

'I hold a very large amount of good paper, of the most unquestionable kind, the greater part of it now due. The drawers are merchants to whom I have sold goods. It is not payable at bank. I wish to give you paper of this description for your claims against me. This arrangement will at once free me from my present difficulties, and at the same time enable you to get your money much sooner than I could possibly pay you. This plan will also save me from being harassed, and also put my creditors to much less trouble. In the above proposition I ask no abatement in amount. I offer unquestionable paper for my own. The only injury you sustain by the arrangement is, that you will not get your money quite as soon as was expected originally. I will also indorse the notes I transfer to you, thus making myself still liable.'

I therefore wish you to forward your claims against me to this place, without delay; that I may pay them in the way above pointed out. I wish you all to forward your claims to the same person, as I can settle much easier with one person than with a dozen. I propose that you all forward your claims, by mail, immediately, to Mr Ephraim H. Foster, attorney at law, of this place. He is a man of integrity and high standing, both as a man and as an attorney, and is withal a gentleman of large fortune, free from all embarrassment and unconnected with trade, and bound for no person. In his hands your money will be safe, and your business ably attended to.

These propositions were on the 3d of May following accepted by Messrs Tiernan and Sons, and by Mr Luke Tiernan for Luke Tiernan and Co.; and on the 21st of May, 1819, Mr Fletcher paid the whole amount of their claims on him in promissory notes, delivered to Mr Foster as their agent, and took the receipts of Mr Foster for the same.

Soon after this adjustment, Mr Charles Tiernan, one of the plaintiffs in error, arrived in Nashville; and on his arrival was dissatisfied with it. But, as it had been made by Mr Foster in conformity with directions from his father; Mr Luke Tiernan; before he left Nashville he expressed his approbation of it.

In the letter of Mr Fletcher to his creditors in Baltimore, dated Nashville, April 10th, 1819, containing the proposition for the adjustment of their claims, he informed them: 'My cotton and tobacco at Orleans have all been sold or shipped, and advances had on it, and I have received the money arising from the sales and shipments; but that money I am in honour bound to apply to the payment of my notes at bank here, with the view of preventing injury to my indorsers, as I cannot reconcile it to my feelings to permit a friend to suffer who indorses my paper from motives of friendship.'- By the evidence of Mr Fletcher it appeared that in April 1819, Jouett F. Fletcher, his agent in New Orleans, shipped per the schooner Mary, to Luke Tiernan and Sons, ninety-five hogsheads of tobacco for the account of T. H. Fletcher, and drew on them against this shipment, two bills, one for two thousand dollars, the other for two thousand six hundred dollars. These bills were indorsed by Bernard M'Keirnan, at the instance of Mr Thomas H. Fletcher: and fearing that this tobacco would be attached for his debts in Baltimore, Mr Fletcher, on the same day he procured the indorsement, assigned the shipment on the back of the invoice, in favour of Mr M'Keirnan for the proceeds thereof. This assignment was not communicated to Mr M'Keirnan; but was filed away by Mr Fletcher.

Jouett F. Fletcher, as the agent of Thomas H. Fletcher, drew another bill for two thousand dollars against the shipment of the tobacco per the Mary, in favour of Joseph Fowler, on Luke Tiernan and Sons. This bill was accepted and paid by the Messrs Tiernan and Sons: the two bills indorsed by Mr M'Keirnan were not paid.

When the adjustment of the claims of Tiernan and Co. and Tierman and Sons was made, through Mr Foster, they were not informed of the particular shipment of tobacco by the Mary, or a shipment made to them by the brig Struggle.

On being informed of the dishonour of the bills indorsed by Mr M'Keirnan, Mr Fletcher consulted counsel in Baltimore on the effect of the assignment to M'Keirnan; and then for the first time made the same public.

After this, Tiernan and Sons wrote to Mr Foster and to Mr Thomas H. Fletcher, urging that the settlement and payment in notes should be cancelled, with a view to enable them to hold the proceeds of the tobacco; and a conditional arrangement was entered into, subject to the rejection or acceptance of the defendants; and the notes which Mr Foster had received were placed in the hands of R. C. Foster, there to remain until they should make known their determination in relation to the arrangements: this was on the 19th of July 1819; and under date of 4th of September 1819 they accepted of the new arrangement, and the receipts which Mr Foster had given to Mr Fletcher were returned to him, and he returned all the notes except one for two thousand dollars on Thomas D. Crabb, which he retained on behalf of Tiernan and Sons, as was supposed for their ultimate security.

On the 8th of May 1819, Jouett F. Fletcher, as the agent of Thomas H. Fletcher, shipped on board the brig Struggle from New Orleans for Baltimore, eighty-one hogsheads of tobacco, amounting, per invoice, to six thousand and sixty-five dollars and sixty-seven cents. The invoice stated the same to be 'Shipped by M'Neil, Fiske and Rutherford, on board the brig Struggle, Nathan Stone, master, bound for Baltimore, by order of Thomas H. Fletcher, through his agent Jouett F. Fletcher, consigned to Luke Tiernan and Sons.' The bill of loading stated the shipment and consignment to be for the account of Thomas H. Fletcher, Esq. of Nashville.

Mr Fletcher stated in his evidence, that upon this consignment on the 21st of May 1819, he drew two bills upon the consignees, one in favour of James Jackson, the defendant in error, for two thousand four hundred dollars, and another bill for six hundred dollars, in favour of Ingram and Lloyd. On the 26th of May 1819, he made the following assignment on the back of a duplicate invoice, and on the same day acknowledged it before a notary, and delivered it to Mr Jackson.

Nashville, May 21st, 1819.

I assign to James Jackson so much of the proceeds of the sale of the tobacco, alluded to in the within invoice, as will amount to two thousand four hundred dollars; to Ingram and Lloyd, as above, six hundred dollars; and the balance, whatever it may be, to G. G. Washington and Co.; and Messrs L. Tiernan and Sons will hold the nett proceeds of the within invoice, subject to the order of the persons above named as directed above.


In reference to his transactions with Mr Jackson, to the bill for two thousand four hundred dollars in favour of Mr Jackson, and to this assignment; Mr Fletcher also stated that in the fall of 1818 he had sold to Mr Jackson a bill of exchange for five thousand dollars, drawn by him on his agent in Philadelphia, which was protested for non-payment; on its return he liquidated it by his notes, which he paid. Mr Jackson required no security against the bill for two thousand four hundred dollars, as he showed him Mr Foster's receipts that he owed Luke Tiernan and Sons nothing; and he satisfied him he had actually made the consignment. When he sold the bill for two thousand four hundred dollars to Mr Jackson, he was greatly embarrassed, but did not consider himself insolvent; because he had made large shipments of tobacco to Europe, and hoped they would turn out well. He did not know what opinion Mr Jackson entertained of his circumstances; but in the month of May 1819, he voluntarily indorsed his, Mr Fletcher's, note for ten thousand dollars, without having any interest in the transaction.

Messrs Tiernan and Sons refused to accept or pay the bill for two thousand four hundred dollars, and it was regularly protested.

The tobacco per brig Struggle arrived in Baltimore on the 7th of June 1819, and was sold by the consignees; the nett sales amounting to four thousand three hundred and thirty-five dollars and thirty-five cents, for which sum they were in cash on the 11th of February 1820.

Soon after the arrival of the tobacco by the brig Struggle, the...

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