Starr v. Carrington

Hosmer, Ch. J. The general proposition to be established in. support of the decision of the superior court, is this, that at the time the foreign attachment was left in service with the defendant, he was the debtor of John McLean. Four distinct objections have been made, by the defendant. 1. That the money never belonged to John McLean, but to his mother Deborah. 2. That it is the right of Dilly, who has never relinquished it. 3. That it never came into the hands oí the defendant; or if it did, the debt was extinguished by his note. 4. And that it is really the right of John A. McLean. 1. With respect to the first point, that the money never belonged to JoAn, but to Deborah McLean. The objection is so obviously untenable as to require but few observations. When Mrs. McLean paid her son’s execution, unless it was a donation, she became his creditor, and might immediately have sustained a suit against him, on implied contract. Her right to the money advanced was gone forever. There is no foundation ofpretence to any right in Mrs. McLean. 2. Is the money the right of Dilly, who, it is said, has never relinquished it ? John McLean owed Dilly, on a promissory note, which was transmitted to Connecticut for collection. After a suit on the note and judgment, payment was made, and the money sent to one Phelps for the use of Dilly. Before the transmission of the money to Phelps, Dilly had received payment of his note from another source. With knowledge of this fact, the money was retained in the hands of Phelps, until, on the application of John A. McLean, it was remitted to the defendant, in the manner which I shall hereafter mention. Upon these facts, the enquiry recurs, whether the money is the property of Dilly ? On a correct construction of the motion, if it were necessary, an actual relinquishment of the money by Dilly, ought to be presumed. The defendant, at the trial, interposed no claim made by Dilly for the money; nor is there a reasonable pretence, that he has ever made any. The motion, it is to be inferred, has stated every fact requisite for the fair decision of the question before us ; [282] and to go out of it, in quest of possibilities, would lead to infer-rninable conjecture. But let it be admitted, that there has been no actual release of Billy's right ; and then the question arises, what right has he ? The answer may confidently be given, he has none. His debt, the defendant admits, was paid before the money was transmitted to Phelps ; and the right of Billy, which the motion shows to have been extinguished long since, is worse than visionary ; it is known not to exist. There is another ground applicable to this, and the next question equally, which is decisive. The plaintiff in this action legally takes the place of John McLean; and the defendant can make no defence, which he could not equally make, had a suit been instituted against him, by the absconding debt- or. Let us suppose, then, that the money had been transmitted to the defendant, by Phelps, and he had given his promissory note for it to John McLean. This is stating the case fairly, on the principle, which cannot be contravened, that if there has been a fraud against creditors, by John A. McLean, the property is still in his father. Could the defendant sustain any of his objections ? Were he to say the money is Beborah McLean’s, his own act in promising to pay it to John would nullify the pretence. So, if the objection is raised, it belongs to Billy, or to Phelps, the answer is conclusive, u You have, in opposition to this suggestion, promised to pay ,my absconding debtor.” Or, if he should deny his being indebted for the money, his note would estop him. Indeed, the same replies may be made to the facts as they now exist; and it is ineontrovertibly clear, if the money is not paid to the creditor of John McLean, payment of it will be coerced by John A. McLean. The objections proposed for the defendant are fdo de se. Not one of them can be made, if the plaintii’s suit fails, against the legal demand of John A. Me Lean. I view this, therefore, as the'effort of this person, through the mouth of his debtor, to repel the plaintiff’s claim, for his own benefit, and by suggestions in which the defendant has no imaginable interest. 3. As to the third objection made, that the money never came into the hands of the defendant; and if it did, that his note has extinguished the debt; to prove its futility requires only a recurrence to the facts. [283] Phelps, on the request of Ruggles, in behalf of John A. Me, Lean, whb claimed the money as a donation from his father, paid it to him, and Ruggles advanced it for certain taxes. The reason of drawing on the defendant, for the payment of the money thus advanced, does not appear. He either derived benefit from the advancement, or he did not. In the former event, he became indebted for the money, on the advancement ; and in the latter, by the acceptance of the bill of exchange drawn on him by-Ruggles, with a claim upon him for reimbursement. It is no matter in what mode the obligation to pay the money devolved on the defendant. It is sufficient, that it did devolve on him, and that he has promised to pay it. The giving of the note has changed the form of the debt, but, to all substantial purposes, has made no other difference. 4. This brings me to the last question, ..whether really the money demanded is the right of John A. McLean. It must be borne in mind, that the money was obtained from Phelps, by fraud; and that the plaintiff, the creditor of John McLean, stands in his place. In Enos v. Tuttle, ante 27., the money attached was due to Julius Bixby, on a promissory note ; but because in reality it was the debt of Green Bixby, the cover was stripped off; and the security admitted to make no difference. So, in Starr v. Tracy & al. 2 Root, 528., it was determined, that the goods of an absconding debtor, covered by a fraudulent conveyance, were liable to a foreign attachment for his debt. In the case of Enos v. Tuttle, before cited, the court adopted the principle, that the act relating to absconding debtors should receive the most liberal construction ; and that the debts attachable by one of its provisions, were not legal demands merely, but dues, in the broadest and most equitable sense of the term. Casting aside the forms of the transaction, and viewing it as if the money from John McLean had circuitously got into the hands of the defendant, for his use, which, in my opinion, is the truth of the case, the plaintiff has right to it, and the judgment of the court was correct. It has been said, that the creditor can never draw money óut of the hands of the garnishee, which could not be drawn out by the absconding debtor. This principle is manifestly incorrect. In every instance of fraudulent conveyance, the grantor cannot recover, but unquestionably his creditor may. I consider the law of foreign attachment as of great utility, ahd would give it a liberal construction, to effectuate its <⅞. [284] ject. I should regret extremely the adoption of principles, which would narrow the advantages of that act; and, in cases like the present, would give the defendant the benefit of objections in which he has no interést. It would not be very pleasant to stand by, and witness the fraudulent conduct of persons in the predicament of John A. McLean, crowned with success. Peteus, J. The statute, under which this question has arisen, being against fraud, is to be liberally and beneficially expounded; but not so liberally as to embrace those, who are neither parties nor privies to the fraud, who are neither the actors therein, nor the subjects thereof. The plaintiff has acquired all the rights of the absconding debtor, or, in the expressive language of this court, “stands in his shoes,” and is entitled to recover* whatever goods, estate, or effects have been entrusted to the defendant, by the absconding debtor, for his own use, or conveyed fraudulently, which he could not himself recover. .But what fraud has ^ been committed, or effects entrusted ? John McLean, like an honest man, paid his debt in Ohio ; the evidence of that debt being in this state. The attorney of the creditor, not aware of what was done in Ohio, enforces payment here, not from the debtor, but his surety, and remits the money to his agent in Ohio, to be paid over to the creditor, who receives it not. John A. McLean, a son of John McLean, says to his friend in Ohio, “ my father says I may have this money; procure and send it to me.” This friend obtains and uses the money, and draws for the amount on the defendant, till then a stranger to all the parties, and all their acts. He accepts and pays this draft, partly in cash, and partly by a note to the payee; and this, says the plaintiff, constitutes the defendant the trustee of John McLean. But this money never was his. It was advanced, by his surety, by mistake, to pay his debt previously paid by him; and she had a right to reclaim it, or stop it in transitu- Had it returned to her, she might as well have been made trustee as this defendant; and with more propriety may every other person, through whose hands it has passed. This money is either Dilly’s, or Deborah McLean’s. Had it reached Dilly, John McLean could not have reclaimed it; because it never was his ; or, if it were hjs, a debtor, who pays his debt, and afterwards suffers it to pass into judgjnent* [285] and pays it again, can never recover it back, by an original suit, at law or in equity, while that judgment remains in force. Marriot v. Hampton, 7 Term Rep. 269. Moses v. Macferlan, 2 Burr. Rep. 1005. Suppose this money in the hands of Phelps, refused by DUly, and demanded by John McLean and Deborah McLean ; to which would the law raise a promise ? Indebitatus assumpsit is bottomed on equity, and the promise arises ex equo et bono. Or, suppose, with Lord Mansfield, “ an indorsee of a promissory note, having received payment of the maker, sues and recovers the same money of the endorsor, who knew nothing of such payment(a) I know of no principle in law or equity, which would award this money to the maker, on setting aside the judgment. If Dilly has not renounced this money, he may now recover it of Phelps, for whom, its having been taken from him by fraud, .would be no defence. (b) Did John McLean entrust, or fraudulently convey, goods, wares or effects to this defendant ? It does not appear, that they ever saw or heard of each other. Was the money obtained from Phelps, 'by fraud ? If so, by whom ? Not by this defendant, who had no agency in the transaction ; nor by John McLean ; for the motion does not state that he did it, or caused it to be done. The declarations of John A. McLean are not evidence against his father; and fraud is not to be presumed without proof. If Phelps has been defrauded, he has his remedy against the perpetrator; but it would not énure to the benefit of the plaintiff, or to the prejudice of the defendant. This case has no affinity to Enos v. Tuttle. In that case, Green Bixby, tbs absconding debtor, with an intent to defraud his creditors, conveyed his property to Tuttle, and took a note payable to his son, who endorsed it to Guernsey, both being privy to the fraud; and this court, very properly, adjudged Tuttle the trustee of Green Bixby. For these reasons, I am of opinion that the decision of the superior court was incorrect, and that a new trial ought to be granted. Chapman and Bristol, Js. were of the same opinion. Brainard, J. was absent. New trial to be granted. Footnotes [(a)] 2 Burr. Rep. 1009. [(b)] Levy v. Sank of the United States, 4 Dall. 234. Griswold v. Judd, 1 Root, 22.