Larkin v. Hapgood

The opinion of the court was delivered by Boyce, Ch. J. The money which the insolvent debtor paid to the defendant, and which is sought to be recovered in this action, was paid by Sawyer to defendant, as the agent of his sister, who then resided in Massachusetts. It was paid within three months of the filing of the petition in insolvency against Sawyer, and was sent at once by the defendant to his sister. The defendant claimed that inasmuch as he was acting as agent for his sister in the receipt of the money, and that was known to Sawyer, that the action could not be maintained against him; that if the plaintiff had any right of action it was against his sister, the principal for whom he wras acting. The general rule,is, that where one acts for a principal, and the name of the principal is disclosed and the fact that he was acting for such principal is made known to the party with whom he deals, that the principal is alone liable; but where an agent receives money which the law prohibits him from taking, it is no defence to a suit brought by the party from whom it was unlawfully taken, or one who has acquired the right to sue for the benefit of his estate to show that he has paid the money over to his principal. In Townson v. Wilson and others, 1 Campbell, 396, it was said by Lord Ellenborough, if any person gets money into his hands illegally he cannot discharge himself by paying it over to another. Perkins, assignee of Hughes, v. Smith, 1 Wilson, 328, was an action of trover brought to recover the value of goods, which the defendant as a servant of’a creditor of Hughes had received of Hughes after his bankruptcy, and had sold for his master’s use. It was claimed that the action should have been against the master; but the court held that no author [601] ity that he could, derive from his master could excuse him from being liable in the action. The same rule is laid down in Miller v. Airs, cited in note 38, 1 Selw. N. P. 101, and in Smith’s Mercantile Law, 149 and Dunl. Paley Ag. 398 ; so that if the defendant received the money unlawfully, an action can be sustained ag'ainst him in the name 'of the assignee to recover it back. It will be noticed that the statute s. 1860 R. L. which gives the right to recover for payments so made makes the person receiving such payments liable. To render the payment made to the defendant unlawful, Sawyer must have been insolvent at the time he made it. The defendant must have had reasonable cause to believe that he was thus insolvent, and it must have been made with a view to give a preference to a creditor or person having a claim against him. It was admitted that Sawyer was insolvent at the time he made the payment; and as bearing on the question that the defendant knew or had reasonable cause to believe, when he received the money, that he was insolvent, quite a number of witnesses were introduced on both sides as to his financial reputation. The plaintiff introduced Sarel A. Sawyer, George IL Davis, and Albert Simonds as witnessess, and that portion of their evidence which is detailed in the exceptions was received, subject to the exception of the defendant. If the evidence objected to tended to show that the defendant had reasonable cause to believe that Sawyer was insolvent at the time he received the money it was admissible. It was held in Bank of Middlebury v. Rutland, 33 Vt. 414, in Hard v. Brown, 18 Vt. 87, Sherman v. Blodgett, 28 Vt. 149, and in Richardson v. Hitchcock, 28 Vt. 757, that one’s general reputation as to solvency or insolvency was evidence of the fact. The evidence tended to show that Sawyer was in fact insolvent at the times testified to. Such facts as were testified to, and others of a' similar character, make one’s reputation for solvency or insolvency. And if it was competent to find the fact of his insolvency from .such evidence, we are of opinion, that, situated as [602] the defendant was shown to have been, a business man and living and doing business in the immediate vicinity of where the witnesses resided that the evidence was admissible as tending to show that the defendant had reasonable cause to believe that he was insolvent. The weight it was to have was a matter for the jury; and the presumption is that they were properly instructed upon that subject. The notoriety of a fact may furnish evidence upon which a person to be effected by it may be found to have had knowledge of it. It is presumed that .all the members of the community must know more or less of a matter which is one of common knowledge in such community; and the exclusion of such evidence as was here admitted would generally require proof of express knowledge. The exceptions taken to the charge upon the questions as to what in law would constitute insolvency, and the preferring of a creditor, are not sustained. Sec. 35 of the late U. S. B. L. is so like sec. i860 ’ of our insolvent law that the decisions rendered in construing that section are authority upon the construction to be given to sec. 1860. And it will be seen by a reference to Bump’s Law and Practice, of Bankruptcy, 166, and following pages, that the charge was in accordance with the rules established by the U. S. Courts. No demand was necessary before bringing the action. The cases relied upon to sustain that claim are cases where the property sued for o'r the avails of it, came rightfully into the possession of the defendant. The judgment is affirmed.