Caulfield v. Van Brunt

Opinion by Mr. Justice Dean, John L. Bogert, a citizen of New York, was a debtor, by judgment, of Caulfield, a citizen of Pennsylvania, plaintiff, in sum of $248. On this debt the plaintiff issued a writ of foreign attachment and levied it on a turret engine lath machine in the possession of Moore & White, of Philadelphia, averring the machine to be the property of Bogert. The machine was claimed by Yan Brunt, this defendant, who was permitted to interplead. [431] The garnishees, Moore & White, at the suggestion of Yan Brunt, pleaded, nulla bona, and the issue thus framed came on for trial in the court below. From the answers of garnishees to the interrogatories and other evidence, defendant claimed the following facts were established: Bogert, in 1890, was a manu-, facturer of machinery at Flushing, New York; Yan Brunt was a resident of New York city, and had advanced to Bogert, prior to January 17, 1890, at different times money to the amount of $5,425. To secure payment of these advances Bogert executed and delivered to Yan Brunt a chattel mortgage on twelve machines, six of which were in a store in New York city, and six, among them that in dispute, remained in Bogert’s possession. This mortgage, under the laws of New York, was good if recorded, even as against creditors; it was not, however, recorded. The mortgaged machines were sometimes sold by Yan Brunt and sometimes by Bogert, the latter making bills of sale in Ms owu name, but generally with the consent and approval of Yan Brunt. On June 21, 1893, Bogert sold one of the mortgaged machines m Ms possession to Moore & White at the price of $800, payment to be made by note at four months, dated September 1, 1893, bearing interest thirty days after sMpment of machine. If, however, the purchasers, before September 1, should decide the machine was not satisfactory, Bogert was to retake it into his possession. Moore & White received the machine in June, 1893, and a bill of sale was rendered them by Bogert in Ms name. At this time about $3,400 of Yan Brunt’s debt secured by the mortgage had been paid him, leaving $2,000 still unpaid. On July 18, 1893, an obligation of Bogert to Yan Brunt, amountmg to over $1,000, part of the money secured by the mortgage, was about to mature; Bogert agreed with Yan Brunt, that the purchase money of the Moore & White machine should be appropriated towards payment of the $1,000, and forwarded a note to Moore & WMte in sum of $850, to be signed by them, and wMch in the letter inclosing it he said was to be transferred to Van Brunt; the next day, Yan Brunt wrote Moore & WMte, statmg Bogert had assigned to him the purchase money, and requesting them to send to him the note. To this, Moore & WMte replied to Van Brunt, that as soon as they had accepted the machine they would notify him. On September 7, Yan Brunt agam wrote Moore & White requesting them to [432] forward the note; to this they replied, the machine was not satisfactory; that they would not accept it, and would return it to Bogert; to this Van Brunt replied, the machine was subject to his order by virtue of his agreement with Bogert; to this Moore & White replied, the machine had been attached by Caulfield, the plaintiff in this suit. On these facts, of which there was evidence, the learned judge of the court fielow peremptorily directed a verdict for plaintiff; no charge or opinion is filed. It was argued, not without reason, that no collusion between Bogert and Van Brunt, or intention on part of either to defraud creditors, was proven; therefore, we assume that under the authority of Clow v. Woods, 5 S. & R. 275, and the long line of cases which follow it, the court was of opinion the transaction was constructively fraudulent as to creditors. But was it ? From the evidence the jury could have found the transaction between Bogert and Van Brunt was not tainted by actual fraud. True, the mortgage had not been recorded, and was not valid as against New York creditors for that reason ; but it was good as between the parties, and as between them the legal title to the machine was in Van Brunt. With the presumed consent of the latter the machine is placed in the possession of Moore and White on an optional sale. By arrangement between Bogert and Van Brunt there is an equitable assignment of the purchase money to the latter, of which Moore & White had notice. If believed, this clearly carried with it to Van Brunt the right to possession of the machine when Moore & White declined to consummate the purchase. The actual possession of the machine ceased to be in Bogert when he put it in possession of Moore & White ; the right to the possession, when they refused to keep it, had passed to Van Brunt by the assignment of the purchase money and notice of the assignment to Moore- & White; there was no longer a right in Bogert to demand possession as against his assignee, Van Brunt. It is not important that under the optional sale the payment was not of a thing in esse; the machine itself was existent; one or the other passed to Van Brunt, defendant, on the contingency of acceptance by Moore & White. Equity will support assignments of contingent and expected payments, where the agreements are fairly entered into, and it would not be against public policy to [433] enforce them: Story’s Equity, sec. 1040; Field v. The Mayor, 6 N. Y. 179. And anything which shows an intent to assign on one side and receive on the other will operate as an equitable assignment: 3 L. C. in Eq. 307. As between Bogert and his creditors his actual continued possession of the machine under an unrecorded mortgage would have been constructively fraudulent, but when he transferred the actual possession to Moore & White, and then by the assignment to Van Brunt relinquished the right to reclaim possession, and Van Brunt asserted his right by notice to Moore & White, the elements of constructive fraud under the statute of 13th Elizabeth are absent. Moore & White then were mere bailees of Van Brunt if the facts be established as defendant avers them. If in their possession as bailees, the machine was not subject to seizure at the suit of Bogert’s creditors. This is the decision in Linton v. Butz, 7 Pa. 89, where it is held that if the chattel sold be in the actual possession of the bailee of the debtor, and the vendor does not retake possession, the sale is good as against creditors. In determining the questions involved in a transaction of this nature, where the actual possession of the personal goods is not in the debtor at the time of the seizure by the creditor, much depends on the intent or good faith of the parties. Clow v. Woods, supra, is based on the apparent want of change in the situation after the sale or transfer; that must not seem to be which is not; the retention of possession by the debtor of that which he has sold misleads his creditors, and therefore is constructively fraudulent as to creditors. But where the chattel is in the actual physical possession of another than the debtor at the time of transfer no creditor can be misled to his hurt. We think the case was one for the jury. It was for them to find from the evidence, whether the transaction between Bogert and Van Brunt was collusive and fraudulent as to creditors. If it was not, there was no such possession or right of possession in Bogert as renders it constructively fraudulent as to this plaintiff. The judgment is reversed and a v. f. d. n. awarded.