II. The Opinion of Thomas Jefferson
June 3. 1790.
The accounts of the souldiers of Virginia and North Carolina having been examined by the proper officer of government, the balances due to each individual ascertained, and a list of these balances made out, this list became known to certain persons before the souldiers themselves had information of it, and those persons, by unfair means, as is said, and for very inadequate considerations obtained assignments from many of the souldiers1 of whatever sum should be due to them from the public without specifying the amount. The legislature, to defeat this fraud, passed resolutions on the 21st. of May 1790. directing that, where paiment had not been made to the original claimant in person, or his representatives, it shall be made to him or them personally, or to their attorney producing a power for that purpose, attested by two justices of the county where he resides, and specifying the certain sum he is to recieve.
It has been objected to these resolutions that they annul transfers of property which were good by the laws under which they were made; that they take from the assignees their lawful property; are contrary to the principles of the constitution, which condemn retrospective laws; and are therefore not worthy of the President’s approbation.
I agree in an almost unlimited condemnation of retrospective laws. The few instances of wrong which they redress are so overweighed by the insecurity they draw over all property, and even over life itself, and by the atrocious violations of both to which they lead, that it is better to live under the evil than the remedy. The only question I shall make is Whether these resolutions annul acts which were valid when they were done?
This question respects the laws of Virginia and North Carolina only. On the latter I am not qualified to decide, and therefore beg leave to confine myself to the former.
By the Common law of England (adopted in Virginia) the conveyance of a right to a debt or other thing, whereof the party is not in possession, is not only void, but severely punisheable under the names of Maintenance and champerty. The Lawmerchant however, which is permitted to have course between merchants, allows the assignment of a bill of exchange, for the convenience of commerce. This therefore forms one exception to the general rule that a mere right, or thing in action, is not assigneable. A 2d. exception has been formed by an English statute (copied into the laws of Virginia) permitting Promisory notes to be assigned. The laws of Virginia have gone yet further than the statute, and have allowed, as a 3d. exception, that a bond should be assigned, which cannot be done even at this day in England. So that in Virginia, when a debt has been settled between the parties, and put into the form of a bill of exchange, promisory note, or bond, the law admits it to be transferred by assignment. In all other cases, the assignment of a debt is void. The debts from the U.S. to the souldiers of Virginia not having been put into either of these forms, the assignments of them were void in law.
A creditor may give an order on his debtor in favor of another. But if the debtor does not accept it, he must be sued in the creditor’s name: which shews that the order does not transfer the property of the debt.—So the creditor may appoint another to be his attorney to recieve and recover his debt; and he may covenant that when recieved, the attorney may apply it to his own use. But he must sue as attorney to the original proprietor, and not in his own right. This proves that a power of attorney, with such a covenant, does not transfer the property of the debt.2—A further proof in both cases is that the original creditor may, at any time before paiment, or acceptance,3 revoke either his order, or his power of attorney. In that event, the person in whose favor they were given has recourse to a court of equity. When there, asking equity, the judge examines whether he has done equity. If he finds his transaction has been a fair one, he gives him aid: if he finds it has been otherwise, not permitting his court to be made a handmaid to fraud, he leaves him without remedy in equity, as he was in law. The assignments in the present case therefore, if unfairly obtained, as seems to be admitted, are as void in equity as they are in law. And they derive their nullity from the laws under which they were made, not from the new resolutions of Congress. These are not retrospective: they only direct their treasurer not to give validity to an assignment which had it not before, by paiment to the assignee, until he in whom the legal property still is, shall order it in such a form as to shew he is apprised of the sum he is to part with, and it’s readiness to be paid into his or any other hands and that he chuses notwithstanding to acquiesce under the fraud which has been practised on him. In that case he has only to execute, before two justices, a power of attorney to the same person, expressing the specific sum of his demand, and it is to be complied with. Actual paiment, in this case, is an important act. If made to the assignee, it would put the burthen of proof and process on the original owner. If made to that owner, it puts it on the assignee, who must then come forward and shew that his transaction has been that of an honest man. Government seems to be doing in this what every individual, I think, would feel himself bound to do in the case of his own debt. For being free in law to pay to the one or the other, he would certainly give the advantage to the party, who has suffered wrong, rather than to him who had committed it. It is not honorable to take a mere legal advantage when it happens to be contrary to justice. But it is honorable to enforce a salutary principle of law, when a relinquishment of it is sollicited only to support a fraud.
I think the resolutions therefore merit approbation.
I have before professed my incompetence to say what are the laws of North Carolina on this subject. They, like Virginia, adopted the English laws in the gross. These laws forbid in general the buying and selling of debts, and their policy in this is so wise, that I should presume they had not changed it, till the contrary be shewn.
MS (CSmH); entirely in TJ’s hand, except for the following endorsement in an unidentified hand: “Resolutions respecting the pay of the Virga. & No. Carola. Soldiers. June 3d. 1790.” PrC (DLC). FC (DNA: RG 59, SDC); varies from MS in spelling, capitalization, and punctuation, also in those parts note below. On the date of the resolutions, see note to Document I.
1. At this point in MS, TJ deleted the words “on general terms.”
2. The preceding three sentences are not in FC.
3. The preceding two words are not in FC.