United States v. Clark.

The right of priority, therefore, is put on the ground that this is a general assignment.

As to the insolvency of Gilbert Stuart at the date of the assignment, it is abundantly proved, and is not in fact disputed.

When then did this priority take effect, as regards the present defendant?

It has been contended on his part, that it takes effect only on obtaining judgment against himself, or at most, from the time of suit brought against him. As to this point, the act is entirely silent. It is to be put, therefore, on the general principles of law relative to the liability of trustees. They are not liable until notice. And if there had been no notice until after the bringing of this suit, the defendant would not, in this action, have been liable at all.

Had then the defendant that notice of the debt of Gilbert Stuart to the United States which would charge him, and when had he such notice? In all cases of this kind, to protect a trustee, he must act bona fide in disposing of the property; and when such circumstances come to his knowledge, as should reasonably put a prudent man on inquiry, this is all the notice which is required. It has been said here that no notice would be available unless it came from the United States, they being the creditors. This is not correct. It is enough if the trustee be in possession of such facts as that a faithful and fair discharge of his duty would put him on inquiry.

It appears in evidence, that at the time of the assignment, the defendant was informed by Gilbert Stuart that he was surety for Joseph B. Stuart in a bond to the United States, and that he believed the bond was broken. This was sufficient notice, and he is from that time chargeable with the duty which the law imposed on him, to give a preference to the United States in the distribution of Gilbert Stuart's property. It was his duty to make inquiry at the proper office, to see what the debt was,

United States v. Clark.

and to pay it. It has been said that this would be imposing on the defendant great risk and hardship; that if he had been called into a Court of Chancery by the creditors, provided for in the assignment, he would not have been excused by reason of this bond, from accounting for all the funds he had in his hands. But this I apprehend is a mistake. The defendant would by presenting the circumstances before the Court of Chancery, have been protected by it until the actual amount of the debt could have been ascertained and paid. He was in this respect in no jeopardy.

As to the objection urged on behalf of the defendant, that until judgment against Gilbert Stuart the surety, the defendant could not know the amount for which Gilbert Stuart would be liable, as the amount might be reduced by Gilbert Stuart on the trial; the defendant in this action may now have the same benefit. He might, if he could, show the debt of the United States reduced to any extent, in the same manner as Gilbert Stuart could have done in the action against him.

The amount of the recovery is a question resting with you, under the rules of law heretofore stated, and such as may be hereafter laid down. The liability of the defendant to the priority of the United States, arose, as I have already decided, at the time he had notice of Gilbert Stuart's debt; and such notice was given at the time the assignment was made. He was therefore from that time bound to apply to the debt of the United States the whole of what he should receive under the assignment, until the debt was paid. He was bound to pay the proceeds of the assigned property as the law directs. He comes under this obligation by assuming the trust, and is legally bound to pay over the money he receives to those by law entitled to it. In the present case the United States were so entitled. Whenever the money was received by the defendant, he received it to the use of the United States.

United States v. Clark.

This being an action for money had and received, it is necessary for the plaintiffs to show that the defendant has in fact received money to which they are entitled, or such facts must be proved as to afford a fair and reasonable presumption that money has been received. From the evidence in this case it appears, that certain furniture which had been assigned by Gilbert Stuart to the defendant, was sold under his direction, at public auction, for two thousand three hundred and fifty-six dollars; and it is not unreasonable to presume, that he has received the money. It is at least enough, prima facie, and throws on the defendant the burthen of rebutting this presumption, by proof on his part: And unless he has done so to your satisfaction, that amount, deducting the commissions and auction duties, is recoverable in this action.

With respect to a part of this money, the proof is very satisfactory, that it has in fact been received by the defendant; and he has also had credit upon his bond to Gilbert Stuart for another part. Whatever you think the evidence will warrant you in concluding that he has received, or had the benefit of in paying his own debt, he is responsible for.

The defendant claims that he is entitled to a deduction of six hundred and twenty-one dollars, for expenses incurred by him in the preservation of the property assigned to him, and in the discharge of his trust: and this seems to have been conceded on the part of the plaintiff: Had it not been, I should entertain some doubt whether he was entitled to such deduction. If the recovery in this case could reach all the proceeds of the assigned property, it would seem reasonable that the expenses necessarily incurred in and about the preservation of the property should be first paid, and perhaps the priority of the United States would not overreach such expenses. But as it appears that the defendant has funds that cannot be reached in this action, I should have inclined to the opinion, that the expenses incurred in the execution of the trust, should

United States v. Clark.

fall on such funds. If, however, this is yielded on the part of the plaintiff, you can make the deduction.

It is claimed, on the part of the United States, that they have a right to receive the full amount of their debt out of the bond given by the defendant to Gilbert Stuart in September, 1819, for seven thousand four hundred dollars.

Whether the defendant in this action, for money had and received, can be made responsible for any part of this bond, is a question by no means free from difficulty. The circumstances in relation to this bond are involved in considerable obscurity. Whether it was given for a real debt due from the defendant to Gilbert Stuart, may be doubtful from the evidence. If given for such debt, it is a part of the trust fund, and for which the defendant might be made accountable in equity: Whether in this action, or not, will depend on the question, whether it was given for money which the defendant had in his hands at the time of the assignment, belonging to the estate of Gilbert Stuart, or whether it grew out of some unsettled partnership concerns. If the latter, I should think it could not be reached in the present action. Of this you

will judge from the evidence, and render your verdict accordingly.

The jury found a verdict for plaintiffs for 1760 dollars 81

cents.

United States v. Nicoll et al.

THE UNITED STATES V. FRANCIS H. NICOLL ET AL.

Under the 3d section of the 4th article of the constitution of the United States, no property belonging to the United States can be disposed of except by the authority of an act of Congress.

The War Department has no authority, express or implied, to sell the public property put under its management and superintendence; nor is any such power vested in the Treasury Department.

A commandant of an arsenal of the United States sold a quantity of lead, belonging to the United States and placed in the arsenal, to the defendants, but afterwards, by a fraudulent collusion with the defendants, converted the sale into a loan of the lead to a third person, who was in a few months to return it to the arsenal, the defendants guaranteeing its return: On a suit by the United States for the price of the lead, held,—that the commandant was a mere agent for safe keeping, and that the sale by him was a tortious act, and the subsequent loan void; but that as no agent or Department of the United States had power to sell originally, they could have no power to waive the tort and affirm the sale for the United States, as in cases of individuals ; and that as the Treasury Department had no such authority to sell, their directing the suit to be commenced was not an affirmance of the sale.

THOMPSON, J. THIS is an action of assumpsit for goods sold and delivered. Upon the trial of the cause several exceptions were taken, on the part of the defendants, to the charge of the Court to the jury, and a bill of exceptions was duly sealed. A verdict was found for the plaintiffs. No judgment, however, has been entered upon the verdict, and a motion is now made for a new trial, considering the bill of exceptions in the nature of a case made for that purpose.

In the view which I have taken of the present motion, it will be unnecessary for me to notice very particularly the facts which appeared upon the trial. It is sufficient to state, generally, that the property in question consisted of a quantity of lead, belonging to the United States, and placed in the arsenal in this city, then being under the command of captain Edward Tyler. In August, 1815, captain Tyler sold the lead