Smith v. Schenck
Smith v. Schenck
Opinion of the Court
.delivered the opinion of the Court.
Parker, of New Albany, Indiana,'being indebted to Clute & Meade, of New York, they forwarded their claim to H. Smith, of Louisville, for collection, who, regarding the debt as unsafe, because of Parker’s pecuniary condition, divided the amount into two notes, and received security on e.ach. One of these for the sum of $535 29, and which forms the basis of the present controversy, was drawn payable to Smith, for the use of Clute & Meade, and became due 4th May, 1839. Being unpaid at maturity, Clute & Meade forwarded it to Smith for collection, and he being a general collector over an extensive territory, and having necessarily to employ attornies or sub-agents, sent this note to Crawford, a lawyer in Indiana, where the obligors resided. . Crawford immediately commenced operations by law to collect the debt. Although Moore, the security of Parker, was (no doubt truly) represented and believed by Smith to be entirely solvent, yet in consequence of the laws at that time in force in Indiana, great hindrances were thrown in the way of collecting debts, and the anxious creditor suffered the ills and anxieties incident to “the law’s delay.” On the 1st of May, 1840, Clute & Meade transferred the demand to Schenck, of which assignment or transfer Smith was duly notified, by their letter, dated 15th July, 1840, and by the letter of Schenck, dated two days afterwards. To Schenck’s letter Smith responded on the 23d July, 1840, accepting the terms of the transfer, and stated that he had on his books passed the debt to the crédit of' Schenck, free from all charges, save on account of services for collecting; that it was then in progress of collection, and he supposed execution had been stayed
Upon 'this state of facts, and other evidence which will px-esently be noticed, various questions have been made in the ai’gument, and Smith’s liability is resisted : Fii’st, on the gx’ound that the action being indebitatis assumpsit, the proof does not sustain it, and various decisions of this and other Courts referred to, to show that nothing hut money actually received, will support a count for money had and received. That as a general proposition, is true, but is subject to the exception of cases whei’e the defendant is estopped to deny that he has received money — as when a Sheriff returns that he has collected money, when in fact he has received a hoi'se for his own use: (3 B. Monroe, 477 ;) or where any thing equivalent to money is paid by one party, and received by the other as money: (4 Dana, 207.) In this case, however, the charge in the third count of the declaration, and as to which it'is ui-ged that the Court erred in their instructions, is, that Smith received from the Sheriff the amount of the debt, and thereby became liable, and being so liable, promised, &c. The receipt in the record sustains the charge. It shows that the debt was satisfied by the payment to Smith or Crawford, the attorney. They were the purchasers, not according to the record, as agents or attox-nies forSchenck, or for Clute & Meade, but for themselves, and for their own use. As purchasers, they were bound to pay the money to the-Sheriff. Had Smith done so, and then as attorney received it back, and thus discharged the Sheriff and debtors, from the debt, thei-e could be no doubt of his liability. Here he was the purchaser, and did not think it worth while to go through the idle and useless form of paying by one hand and receiving by the other, but at once, as attorney, receipted for money due from him as purchaser. Not only the third, but the other counts, are sustained by the px’oof, and the plaintiff was entitled to recover, unless upon one other ground Smith is excused from liability. It is insisted, that as attorney at law, and agent, he had discretionary power to do with the demand on Parker and Moore, as he could have done with his own, sons to secure the debt. If one'attorney or agent, employ another, the
As a collector, his duty extended no further than to secure and collect debts in money. Instructions from his clients, or an authority from them to act as in his discretion he might deem to be their interest, would, however, have aujprized him to receive property; and perhaps circumstances may sometimes occur, which even without instructions or permission from his client, would excuse an attorney in the reception of property instead of money. No such state of facts is shown here. Smith repeatedly stated in his con’espondence, that the debt was safe, and that when bidders could be had, the money would be made. He ought not, because ''he was “tired” of the delay, to have purchased land without his client’s knowledge or consent. He however proves by the members composing the firm of Cíate, &c., that although no special authority was given in this case, they would have been content with any arrangement or purchase Smith might have made. These indulgent creditors, who manifest so much confidence in the integrity, fidelity and discretion of Smith, had ceased to have any right to interfere in the matter. Their rights had long since passed into the hands of Schenck, and he ought to have been consulted, and his consent obtained to the purchase before it was made. This was not done. But it is said that he sanctioned the purchase after it was made. It is true, that while he remained ignorant of facts, and as to them was led into error by Smith, he did not disclaim it, although he preferred having his money to the valuable land three fourths of a mile from the city of Albany, and worth $60 or $70, and that preference existed when he supposed, from Smith’s information, that the tract contained ■seventeen acres, and that the purchase was made for him in his own name. There is no proof that the land was worth any thing. The purchase was in Smith’s name and that of Crawford, and for their own use,
Wie.are also of opinion, that the Court did not err in refusing to continue the eause at his instance. The ¡usage he desired to prove by the witness, if admissible, could well have been proven by others. The knowledge of a general custom -cannot be confined to the knowledge of only-one individual. If we are correct in these deductions, then it follows that the jury did not •err .in giving interest against Smith. The circumstances and facts of the case authorized them to do so. He ¡had by his acta, caused the judgment to be satisfied, refused to pay over the money, and in good conscience ought to pay interest.
The judgment of the Court below is therefore affiamed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.