James Madison Papers

To James Madison from Levi Lincoln, 1 December 1804

From Levi Lincoln

Washington Decr 1. 1804.


In examining the submitted case of Charles Massey & others assignees of Ambrose Vasse,1 the result is less satisfactory than I had expected. Assignees unlike executors, Administrators or partners in business, do not appear generally to possess a joint and several power of receiving and discharging the debts due from the debtors of the Bankrupt. Nor do they appear to be considered, in law, as being vested with the powers incident to companies, or incorporated bodies, where the acts of the majority are constructively the acts of the rest, and binding on them. Assignees of a bankrupt’s estate, having committed to them a joint trust for the benefit of creditors, or third persons, seem to resemble the trustees created by a will for the benefit of a legatee or devisee, all of whom must joint [sic] in a valid exercise of their power, unless it is otherwise expressly provided in the will. In a modern compilation of the law Mercht. by a Gentleman of reputation in the State of New York, the above principles under the operation of our Statute of bankruptcy is questioned. Enquiring how far a payment to one assignee would be good, the Author says, “but I presume under the words of our act it would be held a sufficient discharge”: for the directions are, “that entries shall be made of all the monies which he or they shall receive. But if the receipt of one be expressly dissented to by the other, it will not be valid.”2 This last position if correct, & supported by authorities, would strongly imply that a payment to one assignee, the others not dissenting, would be good. But it is not seen, in examining the authorities cited in the margin of the work containing the position, that they do support it. Indeed, if a coassignee is present, when money is paid to his fellow & he does not dissent, the payment may be considered as made in fact to both. But such is not the case, implied in the general position, or the one under consideration. Nor is it seen, how the payment to, & discharge by one Assignee are inferred to be sufficient “under the words of our act.” A payment to all the Assignees, whether the monies so paid were entered in a book according to the directions of our act or not would be good; therefore its validity does not depend on the entry, which is an act subsequent to a valid payment, & may indeed be an evidence of it, but cannot make it such. Nor will the words “he or they” used in “our act” justify the inference; for the act authorizing the appointment of one, or more assignees, the direction to make an entry of the money received, is general, accommodated to all cases of bankruptcy, applicable to each case consisting of one, or more assignees as the case may be. The construction of the act is, or fairly may be, that ‘he’ in cases where there shall be but one assignee, & ‘they,’ in cases where there shall be more, shall make an entry &c. Considering the question, as a mere legal one, independant of any explanation given by our Statute, or of the practice under it (for I do not know what that has been) It seems to have been decided by Ld. Hardwicke’s opinion. In giving his reasons for a decision in 1749, he says, “he never knew any determination that a debtor to a bankrupt’s estate, paying the debt to one assignee and taking his receipt, would be a discharge; but if the assignee did not bring this money to account, and was insolvent, he doubted whether the debtor to the bankrupt’s estate would not be liable to pay it over again; for the payment to one Executor is good, because they have each a power over the whole estate of the testator, and considered as distinct persons, yet assignees of bankrupts are in the nature of trustees, and unless the debtor to bankrupt’s estate had taken a receipt from the Coassignee, it is not an absolute discharge.”3 From the authority of this case, which I do not find to have been questioned by more modern opinions, and from general principles applicable to cases of a joint trust, I am inclined to think that a payment, and a discharge by two assignees only, where there is a third, is not, in strictness, a discharge in law; yet if they should pay the money over, or should not become insolvent themselves, the payment would be ultimately safe. To avoid the consequences of a protest, a suit, and the possible damages of an unfavorable decision, it may have been best to have incurred the trifling hazard of a second demand. But I should think it would be expedient, to obtain, from all the assignees, an acknowled[g]ement of the payment which had been made, and to advise them of the necessity of joining in their application for what remains due. I have the honor to be, Sir, most respectfully your most obt Hume Sevt

Levi Lincoln

RC (DNA: RG 59, LOAG). Docketed by Wagner as received 12 Dec., with his notation: “That all the assignees of a bankrupt must join.”

1No letter from JM to Lincoln referring to this case has been found. Ambrose Vasse (ca. 1746–1831), a native of Languedoc, France, who came to America near the close of the American Revolution, went bankrupt in Philadelphia (Daily National Intelligencer, 27 Oct. 1831; Philadelphia United States’ Gazette, 14 Jan. 1805).

2Lincoln quoted from George Caines’s An Enquiry into the Law Merchant of the United States; Or, Lex Mercatoria Americana, on Several Heads of Commercial Importance (2 vols.; New York, 1802; Shaw and Shoemaker description begins R. R. Shaw and R. H. Shoemaker, comps., American Bibliography: A Preliminary Checklist for 1801–1819 (22 vols.; New York, 1958–66). description ends 1978), 1:560–61.

3The decision was rendered in Can v. Read, 1 June 1749 (John Tracy Atkyns, Reports of Cases Argued and Determined in the High Court of Chancery, in the Time of Lord Chancellor Hardwicke, ed. Francis Williams Sanders [3 vols.; New York, 1825], 3:695).

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