U.S. Supreme Court Lawrason v. Mason, 7 U.S. 3 Cranch 492 492 (1806)
Lawrason v. Mason
7 U.S. (3 Cranch) 492
ERROR TO THE CIRCUIT COURT
OF THE DISTRICT OF COLUMBIA
A letter from the defendants to J. M. saying that they would be his security for 130 barrels of corn, payable in 12 months, will maintain an action of assumpsit against the defendants by any person who, upon the faith of the letter, shall have given credit to J. M. for the corn.
If money be delivered by A to B to be paid over to C, although no promise is made by B to C, yet C may recover the money from B by an action of assumpsit.
This was an action of assumpsit, brought by Mason against Lawrason, surviving partner of the firm of Lawrason & Smoot, upon the following note:
"Alexandria, 28 November, 1800"
"Mr. James McPherson,"
"We will become your security for one hundred and thirty barrels of corn, payable in twelve months."
"LAWRASON & SMOOT"
The declaration contained several counts laying the assumpsit in different forms, but the substance of each was that the plaintiff, relying on and placing confidence in the promise of the defendants, and at their instance and request, sold and delivered the corn to McPherson, at the price of three dollars a barrel, who, although requested, never paid the plaintiff therefor, of which the defendants had notice, whereby the defendants became liable, and, in consideration thereof, promised to pay. The defendants pleaded the general issue, and at the trial a verdict was taken for the plaintiff, subject to the opinion of the court upon a demurrer to evidence, which stated in substance that the defendants signed and delivered the said note to McPherson -- that he applied to the agent of the plaintiff for the corn, and offered three dollars a barrel, payable in twelve months -- that the agent consulted the plaintiff, who agreed that McPherson should have the corn on those terms, if he would give security -- that McPherson then offered as his security, Lawrason & Smoot. The agent agreed to take them if they would give their assumption in writing. In a few days afterwards, McPherson sent to the agent the said note of Lawrason & Smoot. Before the corn was delivered, the agent informed the plaintiff what had passed between himself and McPherson relative to the corn, and also showed him the note and asked him whether it would do, to which he replied he supposed it would. But they called upon Lawrason and asked him if he was content to be McPherson's security for this corn. He hesitated at first, but said he must be so, as he had promised; or, as his word was out, he would, or words to that effect; whereupon the plaintiff suffered McPherson to take the corn
at the price of three dollars per barrel, which he agreed to give. That there was another debt due to the plaintiff from McPherson, about 1 January, 1801, which he was unable to pay.
That about 1 January, 1800, McPherson gave his promissory note for the amount due for the corn, payable to Lawrason & Smoot, with intent that they should endorse it, but, upon its being presented to Smoot, he refused, saying, that McPherson had failed to furnish them with meal, which he had agreed to deliver to them for their endorsement; he therefore would not become security; but upon being shown the note 28 November, he acknowledged that it had been given by them.
The plaintiff also produced the certificate of discharge of McPherson, under the bankrupt law, dated 15 September, 1802, and proved by witnesses that he became insolvent in the year 1800.
Upon this demurrer, the judgment of the court below was for the plaintiff.
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court to the following effect:
This action is grounded upon a note in writing which was certainly intended by the defendants to give a credit to McPherson. They are bound by every principle of moral rectitude and good faith to fulfill those expectations which they thus raised, and which induced the plaintiff to part with his property. The evidence was clear that the credit was given upon the faith of the letter.
Unless, therefore, there is some plain and positive rule of law against it, the action ought to be supported.
In the case cited from Espinasse, the rule is laid down too broadly. If compared with analogous cases, it will be found to be considerably modified.
Thus, if money be delivered by A. to B. to be paid over to C., although no promise is made by B. to C., yet C. may recover the money from B. by an action of assumpsit.
If it be said that in such a case the law raises the assumpsit from the facts, and if the facts do not imply
an assumpsit, no action will lay, it may be answered that in the present case there is an actual assumpsit to all the world, and any person who trusts in consequence of that promise has a right of action.
It has been suggested by the counsel for the defendants that, although an action of assumpsit will not lie, yet possibly the plaintiff might support an action for the deceit. But an action for the deceit must be grounded upon the breach of the promise. And if an action will lie in any form, the present seems to be at least as proper as any other.