Benedict Cramer et al. versus James P. Flint et al. and Trustee, 18 Pick. 140

Shaw C. J. delivered the opinion of the Court. This question must be decided on the trustee’s answers, and in order to charge him, it must appear that he had goods, effects or credits. It seems, under the circumstances of the present case, as disclosed by the answers, to be wholly immaterial, whether the Jacksons had any claim upon Wilson & Co. or not; the single question is, whether the trustee was indebted to Flint & Co., at the time of the attachment, so that they could have maintained an action against him. The Court are of opinion that they could not.

Baker was responsible to Wilson & Co. for the money in his hands, he received as theirs by their order, and in pursuance of a claim of theirs on the insurance company, admitted by them to be valid. Supposing, as is assumed in the argument, that the policy was on property of which Flint & Co. were the general owners, but payable on the face of it to Wilson & Co. in case of loss, and supposing it was intended, as between Flint & Co. and Wilson & Co., to stand as collateral becuritj only, still, as between the insurance company and Wilson & Co., by force of the contract, the whole amount was payable to the latter.

They, on receipt of the money, would become accountable to Flint & Co., and the claim of Flint & Co. for any surplus, was upon them alone. This is in effect in the nature of a lien upon a contract or chose in action, an authority coupled with an interest. It is an authority to collect the debt and to appropriate it to a specific demand, or a general balance.

It is very clear, that before the payment, the insurance company were under no obligation to Flint & Co. for the whole or any part of the money payable ; nor could they have discharged themselves by undertaking to apportion the money, and by paying to Wilson & Co. the amount of their balance. When, therefore, it is said, that Wilson & Co. had only a lien on the money, and that the residue was the property of Flint & Co., the term must be understood as used not with legal strictness, but that they had a claim in nature of lien.

Indeed, it is not contended that the company were not bound to pay the whole amount to Wilson & Co. The trus tee, Baker, was a mere agent to receive the money for Wilson & Co., and a payment to him was in legal effect a payment to them. He had no authority to receive, and did not profess to receive the money, in whole or in part, for the principal defendants. If he was not responsible on the first receipt of the money, did any thing subsequently occur to render him responsible ?

Suppose Baker, as a general agent of Wilson & Co., had full authority to adjust and settle all accounts of his principal with Flint & Co'., and pay over the surplus to them, if on such settlement there was any, still he would not, upon such settlement, become personally liable to an action, till by some act of his own he had made himself responsible. Had he paid them, the payment would have been the act of Wilson & Co., and not his own.

The authority might have been countermanded That an agent may be sometimes responsible in his own capacity, there is no doubt ; as where he has received money under specific directions to pay it over to a particular person, for his use, he tacitly undertakes so to do, and is bound by common principles of good faith to do so ; or where he has received money for his principal, by mistake, that is, money which his principal had no just right to receive, if before he has paid over the money, he has notice of the mistake, he is personally bound to refund. But these principles do not apply.

The trustee had received no orders ever to pay over the money to Flint & Co. ; on the contrary, so far as he had. any intimation, it was to make a different appropriation, namely, to the Jacksons ; but at all events he was to exercise his judgment, and act with sole reference to the duty and the interests of his principals.

Whether Baker would have acted within the scope of his authority or not, in paying the money to the Jacksons, or whether he would have been liable to Wilson & Co., as for a misapplication of their funds, seems not material; the sole legal remedy of Flint & Co. was on Wilson & Co., and not on Baker. It was contended, that as Wilson & Co. claimed only a certain amount of the money in Baker’s hands, he must be responsible to Flint & Co. for the surplus, as the general owners of the property in respect to which the insurance was recovered. But it appears to us, that this view of the case does not vary the result.

Wilson & Co. never disclaimed their legal right to the money. They stated, in their account and letters, what would be due to them to satisfy their balance, and they authorized Baker, in their behalf to dispose of the surplus, as should be proper, that is, according to his views of their duties and responsibilities. But such an authority unexecuted, did not make Baker a debtor either to Flint & Co. or the Jacksons. As between him and his principals, he was to see that the funds were applied as Wilson & Co. were bound to apply them, so that they might be secure.

The money was originally received from the insurance company as the money of Wilson & Co. solely, the trustee was accountable to them only, and nothing occurred afterwards to create a legal liability to Flint & Co., and therefore he was not their debtor, and the moneys in his hands were not liable to be attached by the trustee process, as their property. Trustee discharged.