Gibbs v. Neely

The opinion of the Court was delivered by Rogers, J. The plaintiffs in replevin claim title to the property by virtue of a purchase at a sheriff’s sale on executions issued on two judgments in their name against a certain Jesse Carman. The defendant, who was a subsequent execution creditor, denies the plaintiffs’title on three grou'nds: 1. That there was fraud and collusion between the plaintiffs and Carman to hinder, delay and defraud creditors; 2. That the judgments were paid ; and 3. That the property was sold on five days’ notice, without his consent. To sustain the two first allegations, certain testimony was offered which was rejected by the court. Of this the defendant complains. The first and third bills depend on the same principle. It appears in evidence that the property was suffered to remain in the possession of the debtor until Gibbs issued his execution and was about to sell in satisfaction of his debt. That then Carman applied to Neely’s agent to issue a venditioni, which was done; and by agreement of the parties, the property was sold by the sheriff on five days’ notice, with the evident design to anticipate the sale of the goods on the execution of Gibbs. Before the sale, the goods on which the levy was made were used and disposed of by Carman, with, there is reason [307] to believe, the knowledge and approbation of Neely; and that after the sale he retained the possession at least of some of the property purchased by the plaintiff at the sheriff’s sale. With the previous proof before the jury, from which fraud might be inferred, it was competent for the defendant, in further proof of the design to hinder, delay and defraud creditors, to show that the day the venditioni exponas was issued the debtor conveyed a tract of land to the creditor, or to his agent, whose acts he afterwards adopted, worth, as the subsequent sale and the parol testimony showed, 1300 dollars, upon the paltry consideration of 100 dollars expressed in the deed, not one dollar of which was paid at the time, or at any time afterwards, so far as we have been informed. The evidence tends to show a general understanding or combination to defraud creditors, and particularly Gibbs, of which this transaction forms a part, and comes within the principle decided in M’Kinley v. M’Gregor, 3 Whart. 370. It is possible that it may be perfect^ fair and honest, but the evidence serves to cast a shade of suspicion on the parties, and at least requires explanation. But it was not only proper for that reason, but as evidence of payment. It is not enough that the judgments were had for money really due ; if they were afterwards paid for, as was held in Hoffman v. Strohecker, ante 86, a sale of property to the plaintiffs in the execution on a satisfied judgment is void. If the real estate was conveyed without any consideration whatever, with a fraudulent purpose, it would be equitable to apply the value of it in discharge of the debt, so as to avoid the sale in the hands of the purchaser. The subsequent sale and parol testimony are evidence of the value of the property conveyed by Carman to the plaintiffs. We are of opinion there was error in rejecting the evidence contained in the second and fourth bills. The least degree of concert or collusion between parties to an illegal transaction makes the act of one the act of all; and the acts and declarations of one may be given in evidence to affect the others. Rogers v. Hall, 4 Watts 359. A concert of action for a fraudulent purpose was shown, at least some evidence was given which tended to prove it; and this makes Carman’s acts and declarations evidence against Neely, so as to make it the duty of the court to refer the whole matter to the jury. Besides, in the fourth bill, the question was put to Carman himself, who was examined as a witness for the plaintiff, as to what he had said in relation to the execution on which the sheriff had levied, and what had become of the clock sold at the sheriff’s sale. We cannot anticipate what would have been his reply, but if he had said that he still retained them after the sale, this would have been corroborative evidence of a fraudulent combination between him and the plaintiff. But the third point is still more material. The facts are undisputed that the plaintiff and defendant had liens on the property by virtue of their respective executions. The property was sold at five days’ notice, with the assent of the debtor, but [308] without the assent of Gibbs, who had the younger lien. The act directs that before making sale on a fieri facias, notice, &c. shall be given by the sheriff during at least six days, by not fewer than six handbills, to be put up at such places as he shall deem best calculated to give information to the public of such sale. It is very important that notice should not be dispensed with; for if the debtor and one of the creditors can combine together, without the express consent of the other, to sell on five days’ notice, there is nothing to prevent them doing the same on five hours’ notice, or without any notice whatever; and would manifestly be utter destruction to the rights of other creditors. The intention is that notice should be given to the public, that the highest price may be got for the property, not only for the benefit of one of the creditors and the debtor, but for the advantage of all who are interested in the proceeds. When all who have an interest in the sale agree to it, their consent will remove every obstacle; but not so where the sale is held in opposition to, and without the assent of all who have liens on the goods thus seized in execution. Nor will the presence of the creditor at the sale, as was erroneously supposed, vary the principle. He neither had nor could he have had six days’ notice of the sale; and if he had, this would not alter the case, as the notice was intended not for his information, but it was designed that the public should have notice. And in this case, if the requirements of the sale had been complied with, it is impossible to say whether the goods, at a fair sale, would have brought as much as would have paid both executions. Of this chance he is defrauded by the contrivance of the plaintiff and the debtor, which of itself is evidence of fraud. The creditor is not bound to purchase; so that his presence at the sale cannot legalize that which otherwise is void. It, perhaps, did not suit his convenience, or it was possibly beyond his means, to raise the money which would be required to pay the prior execution. Here it must be remembered that the plaintiffs are the purchasers, and cannot be considered in the light of bona fide purchasers without notice. As, then, the plaintiff has no title t.o the property for which the replevin is brought, we are of opinion the judgment should be reversed. Judgment reversed.