St. John v. Camp

Church, J. The defendant’s plea in bar and his avowry, presented the same and only one question to the jury; whether the property described in the declaration, and which had been attached by the defendant, as deputy-sheriff, was the estate of the plaintiff, or belonged to Daniel W. Bouton ? St. John claimed title to it, by his bill of sale, dated March, 1, 1842. And if this was not fraudulent, or otherwise ineffectual against the creditors of Bouton, his title was good. He immediately assumed the possession and controul of the property; so that there is no question of constructive fraud growing out of the retention of possession by the vendor. And the question whether the sale was fraudulent in fact, has been submitted to the jury, with all the facts claimed by the defendant to constitute badges of fraud; and a fraudulent intent has been negatived : so that nothing remains to be decided, but whether the sale was void, for want of consideration, or was fraudulent per se? The first claim made by the defendant, was, that a part of the expressed consideration of the bill of sale was deceptive, or that the particulars of which it was in fact made up, did not constitute a good and legal consideration. It appears from the motion, that promissory notes to the amount of 980 dollars, 25 cents, had been obtained by Bou-ton, payable to himself or order. These notes having been indorsed by Bouton, were also, at his request and for his-exclusive benefit, indorsed by St. John, and discounted at the Fairfield County Bank, for Bouton’s accommodation. They had not yet become due, and the makers had all become insolvent, and the duty of providing for the notes had fallen upon Bouton, the first indorser. Under these circumstances^ St. John, who was ultimately responsible, assumed the payment of these notes when they should become payable, for which he received in part the articles contained in this bill of sale. The claim is, that, as Bouton had not been charged as in-dorser, by a notice of non-payment, and possibly never would be, although the makers of the notes were known to be in [229] solvent, here was only a contingent liability upon Bouton, and the amount of these unpaid notes could not make up a part of the consideration of the bill of sale. It is true, Bouton was not yet legally fixed as indorser, because the notes were • not then due. The makers were insolvent and could not pay; and the only contingency in the case, was, whether the bank would give due notice of non-payment, when the notes came to maturity. That such notice would be given, though not quite as certain as the operation of the laws of nature, yet was next to it; and so certain as that, not to foresee and provide for it, would be considered as gross negligence in business men. Bouton had received the money upon these notes from the bank, and as the makers were insolvent, he was under the strongest moral obligation to pay them, even if not charged by notice. Tie had a right to pa)’ them, if not legally bound to do it. May not a man provide for the payment of an usurious debt, or a demand barred by the statute of limitations ! This can hardly be considered a case of contingent liability, on the part of Bouton. It was a duty imperative upon him to provide funds for the payment of these notes, and save harmless Ids indorser. But what removes all doubt from this feature of the case, is, that St. John, as a part of the consideration of this sale, assumed the payment of these notes, and did in truth pay them, as they fell due. Little v. Little, 13 Pick. 426. Ayres v. Husted, 15 Conn. R. 504. But let it be conceded for this purpose, that the amount of these notes did not constitute, pro tanto, a valid consideration for the sale. What then? Here was still a consideration of more than 2000 dollars, undisputed and undoubted, for the sale in question. This would support it as a valid and legal bargain. And all that can be said in regard to it, is, that the bill of sale was made upon an inadequate consideration — i. e. the goods were sold for less than their value. This may be evidence conducive to prove fraud, and frequently, when connected with other proof, is very persuasive evidence for this purpose. But it is not fraud per se, and may, as in the present case, consist with entire purity of intention. As evidence of fraud, the defendant has already had the benefit of this inadequacy of price, and the jury have passed upon it. [230] The defendant appeared to stand, in this part of his de- - fence, entirely upon what he supposed this court had recently decided, in the case of Ayres v. Husted, 15 Conn. R. 504. and the cases of Sanford v. Wheeler, and North v. Belden, which preceded it. We do not think the defendant derives any aid from the authority of these cases. All of them were cases, where the object was, to secure debts, either by mortgage or attachment, in which it was holden, that the real nature of the transaction should be disclosed ; and that the security would hold good no further, in a court of equity, than the truth had been told. The two last of these cases arose under mortgages, and in which the policy of our recording system was chiefly considered, and upon which the decisions were based. It was properly determined, that a creditor, who looks to the public records to learn the condition of titles, ought to find the truth there. Those were all decisions in equity, and where it was competent for the court to distinguish between the different parts which entered into the consideration of the securities. A court of equity has often interfered with mortgages and other conveyances, where the deed was not affected with actual fraud, but where the consideration was inadequate, or where the amount apparently secured, was not, all of it, in truth a debt; and has, in such cases, and in many others, set them aside, or confirmed them pro tanto, as the principles of equity, or the rights of others, demanded. But a court of law cannot do this. On the contrary, in a court of law, if the consideration be valuable, and no part of it illegal, the entire deed will be supported. Green v. Watt, 2 Sch. & Lefroy, 492. How v. Weldon, 2 Ves. 516. Sands v. Codwise, 4 Johns. R. 530. 598. Boyd v. Dunlap, 1 Johns. Ch. R. 478. If ceden v. Hawes, 10 Conn. R. 50. It is true, in an action upon a promissory note or other simple contract, if there is a partial want or a failure of consideration, a court of law will measure the damages to be recovered, by the actual consideration received, in many cases. But the defendant here cannot have the benefit of this principle. This is an action of re-plevin, in which the plea in bar and the avowry are entire, and reach alike all the property described in the declaration, and in the bill of sale ; and under which there can be no [231] judgment for a separation or apportionment. There can be no judgment for a return pro tanto. It was upon the principle of the authorities last cited, that we decided the case of Ayres v. Husted, upon which the ' defendant so much relies. In that case, the court does not say, that the contingent liabilities included in Crissey's note to Husted, rendered that note void ; on the contrary, we decided, “ that there is no principle on which a note, the consideration of which consists of claims, some of which are valid and others invalid, can be held, in the absence of fraud, to be wholly void.” And in that case, also, the principle is fully recognized, that a promise, by a surety, to assume the debt of the principal, or to indemnify him from it, constitutes a valid consideration. When it is recollected also, that this is the case of an absolute sale, and not a mere pledge or security into which third persons have a right to enquire, we are at a loss to discover how the case of Ayres v. Husted and the other cases referred to in equity courts, can be brought to sustain the defendant in the claim he now makes, that this bill of sale is void in loto. A distinct ground of objection to the validity of this sale, was, that there was proof of a secret trust between the parties to it, for the benefit of the vendor ; and thus it was constructively fraudulent, if not actually so. This objection was founded upon what Bouton testified upon his cross-examination : “ That if any thing remained of the property embraced in said bill of sale, after payment of the debts therein mentioned, such surplus was to be returned to him.” We here remark, that between the debts which constituted the consideration of the sale and the inventoried value of the articles sold, the difference was only 32 dollars, 48 cents, in an amount of more than 3000 dollars ; and the real value could only be determined, by an actual sale, as provided for, in the instrument. If the purpose and intention of the parties was, by withdrawing these effects from the reach of creditors, thus to provide a secret fund for the vendor, it would have been a trust which the law would not sanction. Such was the case of Pettibone v. Stevens, 15 Conn. R. 19. in which this court say, that “ every attempt to draw property from the creditor, with a view to prevent or hinder its being taken, by attachment or [232] executi°n5 ⅛, in effect, an attempt to defeat the law.” The principle is the prominent one in Stutson v. Brown, 7 Cowen 732. and in all the cases cited by the defendant, except the case of Goodrich v. Downs, 6 Hill 438. Fraud, say the courts, is the judgment of law upon facts and intents. Of course, the intent is the controuling feature in all these transactions. The decision in the case of Goodrich v. Downs, was placed, by the court, upon the peculiarity of the statute of the state of New-York on that subject; and the court say, under that statute, neither the court nor the jury has any thing to do with the question of intent. This introduces a new principle, never before recognized by the courts, where possession accompanied the sale. If a man were to pay a debt of 90 dollars, by the delivery of a horse worth 100 dollars, no body would suspect fraud, if the vendee stipulated, as an honest man should, to repay the difference, as soon as the horse should be sold. It would, on the contrary, afford a reasonable ground of suspicion, if the stipulation had been, that the vendee should retain the difference from the vendor and his creditors. In the present case, .there was hardly a possibility that the avails of a .sale would exceed the debts ; but if they should, every principle of fair dealing required St. John to repay to Bouton such balance as might remain after a full indemnity; and an agreement to do this, without any intention to delay creditors, was not chargeable with fraud, either actual or constructive. So far as this circumstance might have influence, as being a badge of fraud, the defendant has availed himself of it, on the trial. New-England Marine Insurance Company v. Chander, 16 Mass. R. 275. Forbes v. Marsh, 15 Conn. R. 384. Calkins v. Lockwood, 16 Conn. R. 276. Wilkes & al. v. Ferris, 5 Johns. R. 344. A new trial must, therefore, be denied. In this opinion the other Judges concurred, except Storks, J., who came into court after the case was partly argued, and declined to give any opinion, (a) New trial not to be granted.