U.S. Supreme Court
Looney v. District of Columbia, 113 U.S. 258 (1885)
Looney v. District of Columbia
Submitted January 9, 1885
Decided January 26, 1885
113 U.S. 258
A creditor who receives from his debtor a certificate in writing, not negotiable, of the amount of his debt, and sells the certificate to a third person for value less than its nominal amount, thereby authorizes the purchaser to receive the amount from the debtor, and cannot, after the debtor has paid it to the purchaser, maintain any action against the debtor.
A creditor who receives from his debtor a negotiable instrument of the debtor for the amount of his debt and sells it for its market value to a third person cannot sue the debtor on the original debt.
This suit, as appeared by the facts found by the Court of Claims, was upon a contract in writing made September 11, 1872, between the petitioner and the Board of Public Works of the District of Columbia by which he agreed to furnish materials and labor, and in a good and substantial manner to grade and gravel Fourteenth Street East between B Street South and Boundary, in the City of Washington, at prices specified, and, among other things, agreed to punctually pay in cash the workmen employed by him, and the Board of Public Works agreed to pay him, in lawful money of the United States, the amount which might be found to be due to him from time to time according to the contract. He performed his part of the contract according to its terms. Upon measurements made and accounts stated during the progress and at the completion of the work, there appeared to be due to him $27,364.75 (which, by a mistake of addition unknown to either party, was $500 too much), for which he received certificates of the Auditor of the Board of Public Works, issued in accordance with the usual course of business as conducted by that Board with its creditors, in different sums and in the following form:
"No. 2, 179 OFFICE OF AUDITOR, BOARD OF PUBLIC WORKS"
"WASHINGTON, D.C. July 11, 1873"
"I hereby certify that I have this day audited and allowed
the account of Dennis Looney for work on Fourteenth Street East from B Street South to Boundary, amounting to one thousand dollars."
"$1,000 J. C. LAY, Auditor"
The Court of Claims, in addition to the facts above stated, found the following facts:
"The certificates so received by the claimant, amounting in all to $27,864.75, were disposed of by him as follows:"
"He collected of the Board, in cash, $744. One certificate of $1,000 was endorsed and sold by him at its market value, sixty-five cents on a dollar, and was redeemed by the Board from his assignee at its face value in payment of special taxes due to the district. Three certificates (less cash received), of the face value of $9,100, he exchanged at par for 'sewer certificates,' so called, bearing interest at eight percent per annum, and other interest-bearing securities of the District of Columbia, all payable on time. The interest-bearing securities he sold at their market value, sixty-five cents on a dollar. Five certificates, of the face value of $16,520.75, he endorsed and sold at about their market value, seventy cents on a dollar, and they were funded by his assignee into District of Columbia three-sixty-five bonds issued under the Act of June 20, 1874, c. 337, 18 Stat. 116."
"Before selling his interest-bearing securities, for which he had exchanged his auditor's certificates, the claimant asked the treasurer what they were worth, and where he could sell them at par, and the treasurer replied: 'I do not know where you can get par for them; do as others are doing, and sell them the best way that you can.'"
Upon the foregoing findings of fact, the Court of Claims decided, as conclusions of law, as follows:
"1. The claimant has no cause of action, and is not entitled to recover on the demands sued upon."
"2. The defendant is entitled to recover $500 from the claimant, as set up in the counterclaim, for overpayment made through an error in adding the account, upon a final settlement of which he was overpaid that sum."
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Judgment was rendered accordingly, and the claimant appealed to this Court.