147 N.Y. 486 | NY | 1895
The determination of this appeal depends upon the true construction of section 3477 of the Revised Statutes of the United States. The general facts may be briefly stated. The firm of Witherby Gaffney were contractors with the United States for building barracks at Sackets Harbor. The plaintiffs constituted the firm of York Starkweather, and furnished to the contractors lumber and materials for the work of the value of $3,000 and upwards, which were used in the construction. During the progress of the work and before its completion, and on the 27th day of March, 1890, Witherby Gaffney made a written assignment to York Starkweather of $3,000 "of the money due, and to become due," to the assignors from the government on their contract, to apply on their indebtedness *489 to the assignees for the lumber and materials so furnished, and authorized the disbursing agent of the government, through whom the payments on the contract were made, to pay the plaintiffs $500 from the next estimate thereafter, and $2,500 on the completion of the contract, and when the balance coming to the assignors should become payable to them. Witherby Gaffney paid the plaintiffs $500, but no further payment has been made. On May 15, 1890, the contract having been completed, the disbursing officer delivered to Gaffney, one of the contractors, a draft for $4,400, in payment of the amount unpaid on the contract, which he delivered on the same day to the defendants to secure them for liabilities, as indorsers and otherwise, previously incurred for the benefit of Witherby Gaffney. The defendants, before they had parted with the draft, were notified by the plaintiffs of their claim and of the terms of the assignment to them, and they demanded that the defendants should pay them out of said draft the sum of $2,500, the amount remaining unpaid to them from Witherby Gaffney, which the defendants refused to do. This action was thereupon brought to recover said sum.
The claim set up by the defendants in their answer, that prior to the assignment to the plaintiffs, Witherby Gaffney had verbally assigned to them the money to become due on the contract, as security for their indorsements, was tried before the jury and found against them and need not be further considered. There can be no doubt that under the general rule of law prevailing in this state the plaintiffs, under the assignment of March 27, 1890, acquired an equitable, if not a legal, title to the money payable on the contract of Witherby Gaffney with the government to the extent of $3,000, and that the defendants, having acquired possession of the draft for the final payment on the contract, by delivery from Witherby Gaffney, to secure an antecedent liability, on being notified of the claim of the plaintiffs, held the draft and the fund it represented, as trustee of the plaintiffs, to the extent of their claim. (Field
v. Mayor, c.,
But the contention is that the plaintiffs took nothing under the assignment to them, because, as is claimed, the transaction was void under section 3477 of the Revised Statutes of the United States, to which reference has been made. That section is as follows: "All transfers and assignments made of any claim upon the United States, or of any part or share thereof, or interest therein, whether absolute or conditional, and whatever may be the consideration therefor, and all powers of attorney, orders or other authorities for receiving payment of any such claim, or of any part or share thereof, shall be absolutely null and void, unless they are freely made and executed in the presence of at least two attesting witnesses, after the allowance of such a claim, the ascertainment of the amount due, and the issuing of a warrant for the payment thereof. Such transfers, assignments, and powers of attorney must recite the warrant for payment, and must be acknowledged by the person making them, before an officer having authority to take acknowledgments of deeds, and shall be certified by the officer; and it must appear by the certificate that the officer, at the time of the acknowledgment, read and fully explained the transfer, assignment or warrant of attorney to the person acknowledging the same."
This section has been considered in several cases by the Supreme Court of the United States. If that court has construed the section so as to determine the point involved in this case we should deem it our duty to follow its decision. The judgment we shall render will not, we suppose, be subject to review by the Supreme Court. We do not question the validity of the section in question, nor will our decision affect any right of the defendants based thereon. Their right, if any, rests upon the transfer of the draft after it came to the hands of Witherby Gaffney. They seek to defeat the right of the plaintiffs under their prior assignment of a portion of the fund, and invoke section 3477 to establish that the assignment was void and conferred no right. But on a question of statutory construction of an act of Congress which has been determined by the Supreme Court of the United States, subsequently *491 arising in this court, we should feel bound to adopt and follow the construction of that tribunal on the principle of comity, although in a case where the ultimate jurisdiction is vested in this court. This principle is especially important to be observed in such a case, in view of the relation between the Federal and State courts, not exercising, in all cases, a co-ordinate jurisdiction, but engaged in the administration of justice to a great extent between persons who are citizens both of a state and of the United States. The decisions of the tribunals of a state as to the true construction of the statutes of its own sovereignty are followed by the Federal courts, and it would be most unseemly and produce great confusion if state courts should refuse to adopt the construction of the Supreme Court of the United States, of Federal statutes.
The section in question was taken from the act of Congress, approved February 26, 1863, entitled "An act to prevent frauds on the treasury of the United States." Its object was to protect the government. It was enacted, as was said by Mr. Justice MILLER inGoodman v. Niblack (
There are two theories of construction of the statute. One is that, which gives the widest meaning to the words and which makes a transfer or assignment of a claim or interest void not only as to the government and its officers, but as to the parties to the transfer or assignment. Upon this theory the money, when paid over to the original claimant, cannot be reached in his hands unless, after the allowance of the claim and the issuing of a warrant for its payment, the provisions of the section were complied with. This theory wholly forbids the acquisition before this has been done of any right in the fund through any transfer or assignment, however formal the instrument or however just and innocent the transaction. The other theory is that the objects of the statute are accomplished by a construction *492 which makes an assignment or transfer made before the allowance of a claim void as between the claimant and the government, but leaves the transferee, after the fund has come to the hands of the claimant, to assert such legal rights against the fund and avail himself of such legal remedies to enforce them, as exist in other cases of transfer.
The Supreme Court has consistently maintained that a transfer or assignment made before the allowance of a claim, was void at the election of the government, and that as against the assignee or transferee, the government may wholly disregard it, and that payment made to the original claimant by the government is a good acquittance of the liability, although it had notice of the transfer at the time. But the court has also decided that the government may recognize such a transfer and that payment to the transferee will protect it against any subsequent claim of the original party. (Bailey v. U.S.,
The Supreme Court of Massachusetts, in Jernegan v. Osborn
(
The judgment should be affirmed.
All concur, except O'BRIEN, J., not sitting.
Judgment affirmed. *495