York v. Conde

• Decision Date: 26 November 1895
• Citation: 147 N.Y. 486,42 N.E. 193
• Parties: YORK et al. v. CONDE et al.
• Court: New York Court of Appeals Court of Appeals

147 N.Y. 486

42 N.E. 193

YORK et al.

v.CONDE et al.

Court of Appeals of New York.

Nov. 26, 1895.

Appeal from supreme court, general term, Fourth department.

Action by Anson E. York and another against William W. Conde and another for money due under an assignment. From a judgment of the general term (24 N. Y. Supp. 1149) affirming a judgment for plaintiffs, defendants appeal. Affirmed.

Elon R. Brown, for appellants.

Henry Purcell, for respondents.

ANDREWS, C. J.

The determination of this appeal depends upon the true construction of section 3477 of the Revised Statutes of the United States. The general facts may be briefly stated: The firm of Witherby & Gaffney were contractors with the United States for building barracks at Sacket's Harbor. The plaintiffs constituted the firm of York & Starkweather, and furnished to the contractors lumber and materials for the work of the value of $3,000 and upwards, which were used in the construction. During the progress of the work, and before its completion, and on the 27th day of March, 1890, Witherby & Gaffney made a written assignment to York & Starkweather of $3,000 ‘of the money due and to become due’ to the assignors from the government on their contract, to apply on their indebtedness to the assignees for the lumber and materials so furnished, and authorized the disbursing agent of the government, through whom the payments on the contract were made, to pay the plaintiffs $500 from the next estimate thereafter, and $2,500 on the completion of the contract, and when the balance coming to the assignors should become payable to them. Witherby & Gaffney paid the plaintiffs $500, but no further payment has been made to them. On May 15, 1890, the contract having been completed, the disbursing officer delivered to Gaffney, one of the contractors, a draft for $4,400, in payment of the amount unpaid on the contract, which he delivered on the same day to the defendants to secure them for liabilities, as indorsers and otherwise, previously incurred for the benefit of Witherby & Gaffney. The defendants, before they had parted with the draft, were notified by the plaintiffs of their claim, and of the terms of the assignment to them, and they demanded that the defendants should pay them out of said draft the sum of $2,500,-the amount remaining unpaid to them from Witherby & Gaffney,-which the defendants refused to do. This action was thereupon brought to recover said sum. The claim set up by the defendants in their answer, that, prior to the assignment to the plaintiffs, Witherby & Gaffney had verbally assigned to them the money to become due on the contract, as security for their indorsements, was tried before the jury, and found against them, and need not be further considered. There can be no doubt that under the general rule of law prevailing in this state the plaintiffs, under the assignment of March 27, 1890, acquired an equitable, if not a legal, title to the money payable on the contract of Witherby & Gaffney with the government, to the extent of $3,000, and that the defendants, having acquired possession of the draft for the final payment on the contract, by delivery from Witherby & Gaffney, to secure an antecedent liability, on being notified of the claim of the plaintiffs, held the draft and the fund it represented, as trustee of the plaintiffs, to the extent of their claim. Field v. Mayor, etc., 6 N. Y. 179;Devlin v. Mayor, etc., 63 N. Y. 8.But the contention is that the plaintiffs took nothing under the assignment to them, because, as is claimed, the transaction was void under section 3477 of the Revised Statutes of the United States, to which reference has been made. That section is as follows: ‘All transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor, and all powers of attorney, orders or other authorities for receiving payment of any such claim, or of any part or share thereof, shall be absolutely null and void, unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof. Such transfers, assignments, and powers of attorney must recite the warrant for payment, and must be acknowledged by the person making them, before an officer having authority to take acknowledgments of deeds, and shall be certified by the officer; and it must appear by the certificate that the officer, at the time of the acknowledgment, read and fully explained the transfer, assignment or warrant of attorney to the person acknowledging the same.’

This section has been considered in several cases by the supreme court of the United States. If that court has construed the section so as to determine the point involved in this case, we should deem it our duty to follow its decision. The judgment we shall render will not, we suppose, be subject to review by the supreme court. We do not question the validity of the section in question, nor will our decision affect any right of the defendants based thereon. Their right, if any, rests upon the transfer of the debt after it came to the hands of Witherby & Gaffney. They seek to defeat the right of the plaintiffs under their prior assignment of a portion of the fund, and invoke section 3477 to establish that the assignment was void and conferred no right. But on a question of statutory construction of an act of congress which has been determined by the supreme court of the United States, subsequentlyarising in this court, we should feel bound to adopt and follow the construction of that tribunal, on the principle of comity, although in a case where the ultimate jurisdiction is vested in this court. This principle is especially important to be observed in such a case, in view of the relation between the federal and state courts, not exercising in all cases a co-ordinate jurisdiction, but engaged in the administration of justice, to a great extent, between persons who are citizens both of a state and of the United States. The decisions of the tribunals of a state as to the true construction of the statutes of its own sovereignty are followed by the federal courts, and it would be most unseemly, and produce great...