U.S. Supreme Court
Mandeville v. Welch, 18 U.S. 5 Wheat. 277 277 (1820)
Mandeville v. Welch
18 U.S. (5 Wheat.) 277
Bills of exchange and negotiable promissory notes, are distinguished from all other parol contracts by the circumstance that they are prima facie evidence of valuable consideration, both between the original parties, and against third persons.
Where a chose in action is assigned by the owner, he cannot interfere to defeat the rights of the assignee in the prosecution of a suit brought to enforce those rights.
It makes no difference, in this respect, whether the assignment be good at law, or in equity.
A bill of exchange is an assignment to the payee of the debt due from the drawee to the drawer.
But this doctrine only applies to cases where the entire chose in action has been assigned, and not to a partial assignment.
This was an action of covenant brought by the plaintiff, James Welch, for the use of Allen Prior, against the defendant Mandeville, one of the firm of Mandeville & Jamesson, for the breach of certain articles of agreement set forth in the declaration. Several pleas were pleaded by the defendant; but as the opinion of this Court turned altogether upon the fourth set of pleadings, on which issue was joined, and at the trial a bill of exceptions taken, it is unnecessary to state the other pleadings.
The fourth plea alleged a release of the cause of action by the plaintiff before the commencement of the present suit. The plaintiff replied, in substance, that Welch being indebted to Allen Prior, in a sum exceeding $8,707.09, and Mandeville chanrobles.com-red
& Jamesson being indebted to Welch by virtue of the covenant in the declaration mentioned, in the same sum of $8,707.09 cents, Welch did, in the year 1799, appropriate, assign, and transfer to Prior, by a good and sufficient assignment in equity, the same debt due by reason of the same covenant, of which appropriation and assignment to the use and benefit of Prior, Mandeville, afterwards, in 1799, had notice; that the present suit was brought for the sole use and benefit of Prior, and Mandeville, at its commencement, had notice thereof, and knew the same suit was depending for the use and benefit of Prior at the date of the pretended release; that the release was obtained without the knowledge, consent, or approbation of Prior, or of his attorney in court, and that Welch had no authority from Prior or his attorney, to execute the release, which was known to Mandeville at the time of the release, and that the release was made with the intent to defraud Prior, and to deprive him of the benefit of this suit. To this replication there was a rejoinder and issue, upon which the parties went to trial.
At the trial, the plaintiff, to prove that Welch did transfer and assign to Prior, by a good and sufficient assignment in equity, the debt in the replication mentioned, gave in evidence to the jury the articles of agreement in the declaration mentioned, and sundry endorsements of payments thereon, and a memorandum also thereon, dated 1 January, 1798, and signed by Welch, stating that there then remained owing to him, on the articles payable at the times therein mentioned, the sum of $8,707.09. chanrobles.com-red
The plaintiff further offered three bills of exchange drawn by Welch, in favor of Prior, upon Mandeville and Jamesson, dated on 7 September, 1799, each for $2,500, payable to Prior or his order: one on 24 November, 1800, another on the same day and month, 1801, and the third on the same day and month, 1803, being the respective times at which certain installments for like sums would become due on the articles of agreement stated in the declaration. Each of these bills purported to be "for value received" of Prior, and were directed to be charged "to account as advised." The plaintiff further offered in evidence to the jury an account rendered to Welch by Mandeville & Jamesson, dated 31 January, 1798, stating the balance of $8,707.09, due to Welch, and payable by installments in the manner mentioned in the articles of agreement, and proved that this account had been delivered to Prior by Welch.
The defendant then gave in evidence the bill and proceedings in a suit in chancery in Fairfax County, by Prior, against Welch & Mandeville & Jamesson, (excepting the answers of the latter), which suit was brought to recover the amount of the three bills of exchange from Mandeville & Jamesson, as debtors of Welch, and was discontinued by the plaintiff, Prior, after the answer of Welch had come in, denying that Prior was owner of the bills, and asserting that Prior held them merely as his agent, and for his use. And the defendant further proved that Welch had never authorized the present suit to chanrobles.com-red
be brought unless the circumstances above stated would have given Prior authority to institute the same.
The defendant then prayed the court to instruct the jury, that if from the evidence so given, they should be of opinion, that the sums for which the bills were drawn amounted to less than the sums payable by Mandeville & Jamesson to Welch, under the covenant, and were known to be less by Welch, then Prior is not such an assignee of the covenant as would authorize him to sustain this suit in the name of Welch. Which instruction the court gave; but further instructed the jury that if they should be of opinion, from the evidence, that the bills were drawn for the full and valuable consideration expressed on the face of them, paid by Prior to Welch, and if there was no other evidence than what is before stated, they ought to infer from the evidence, that Prior was, and is such an assignee of the right of action upon the covenant as authorized him to sustain this action in the name of Welch's administrator (Welch having died pending the proceedings, and his administrator having been made party to the suit) for the whole debt due by the covenant at the time of Welch's delivering the account above stated to Prior, and further, that the bills were prima facie evidence of such value having been paid by Prion to Welsh. The jury found a verdict for the plaintiff under this instruction; and the cause was brought before this Court by a writ of error, to revise this among other supposed errors assigned upon the record. chanrobles.com-red