Shaw v. Clark

The opinion of the court was delivered by Collamer, J. — The first question is, was the furnishing the money by the debtor, and procuring therewith a purchase of his debt, in the name and by the agency of a third person, such a fraud on the creditor as rendered the sale void. Without taking much time with this question, it at least is obvious that when a debtor furnishes the funds to a third person in his own name, to buy up the debts at a discount, it is so far fraudulent as would render the sale voidable, if the creditor chose to avoid it, as he did in this case, and offered to return the money. This is not, however, the view on which we place this case. As’ the sum paid was really the money of the debtor, and paid over by his agent, it is the same as if paid by himself. This presents the main question in the case, to wit: is a payment of a part- of a debt then due by the debtor, any satisfaction of the of the whole, even if so received by the creditor ? This ques [509] tion is to be decided unembarrassed with any question of estop-pel or technical release. This question has been long and repeatedly and fully decided. — (See Chitty on Con. 277, 287, and the authorities there collected.) This is otherwise, if the money was paid before the debt was due, or if paid by a third person out of his own money, ■; for it would be a fraud on such third person for the creditor to collect the whole debt. So too is the case of receiving part in full satisfaction on a composition deed. The case (Lewis vs. Jones, 4 Barn. & Cress. 506) cited by the defendant, is precisely on this ground. The security taken for the balance was a fraud on others. A dictum is found from Ho-broyd, J., (2 Barn. & Cress., transcribed into 2 Sand. Plea. & Ev. 233,) that under certain circumstances the balance might be holden a gift to the debtor. This, if law, could no$ apply to this case, for the creditor was kept in ignorance that the debt was to be given up to the defendant. Judgment affirmed.