Selleck v. Phelps

By the Court, Paine, J. Peter W. T. Selleck made an assignment of a stock of goods to Isaac Selleck, the respondent, for the benefit of his creditors. The assignee went into possession, and afterwards the property was attached under a writ of attachment in favor of Green & Button to secure a debt claimed of f704,23. Isaac Selleck replevied it, and gave the necessary undertaking to obtain possession and the property was re-delivered to him. It was subsequently levied on by the defendant under an execution against P. W. T. Selleck in favor of David S. Moore, and sold to Moore, the plaintiff claiming an interest in the property by virtue — 384 — of the undertaking given in the replevin suit, and forbidding the sale. Judgment was afterwards recovered in the replevin suit against the plaintiff on the ground that the assignment was void, and execution was issued, and a return not being had, the bail of the plaintiff paid the execution in full. This suit was then brought against the sheriff for taking and sell* ing the property on the execution in favor of Moore, the respondent claiming that by giving his undertaking in the re-plevin suit, and paying the judgment of Green & Button, he was entitled to be subrogated to the lien acquired by their attachment. The circuit court held that he was so entitled, and gave judgment for the amount of the Green and Button judgment deducting an amount received by the plaintiff on sales before the levy under the execution. The question presented is whether this ruling was correct ? The counsel for the appellant concedes that the position is sustained by the case of Acker vs. White, 25 Wend,, 614, but he assails the doctrine of that case as unsound and certainly inapplicable to a case where, as in this the whole value of the property replevied much exceeded the debt for which it had been attached. But we have carefully considered the rule established by that decision, and have come to the conclusion that it is the only one that could have have been established consistently with the due administration of justice. Although a man may have purchased property under such circumstances as make the sale void as to the creditors of the vendor, that fact ought not to give the creditors any more than the right to take the property or its value once, and apply it in payment of the vendor’s debts. That is all they could have done if the sale had not been made at all. That is all they could do if they should attach or levy upon it in the hands of the vendee, he not choosing to replevy it. The effect of the void sale is that it leaves the property liable to be taken by creditors. But beyond this the purchaser is not held re — 385 — sponsible either by the policy of the law, or the requirements of justice. If then he chooses to assert the validity of the sale and to test it legally, replevies the property, and obtains possession of it by giving such security as the law deems adequate, the security then stands in the place of the property so far as the creditor who has seized it is concerned, and the person giving the security ought in justice to stand in the place of such creditor so far as the property is concerned. And this seems obvious from the great injustice of the contrary doctrine. For if this was not so, although the purchaser who had replevied had on losing his suit paid the full value of the property to one of the vendor’s creditors, it would still be liable in his hands to be taken by another, and so be made to pay the vendor’s debts indefinitely, if the purchaser should continue to replevy it. Now that there is nothing in the law which would sanction such a result, seems evident from the well known rule in favor of an ackowledged wrong doer. Thus if a trespasser has taken property and is sued for the trespass, and pays the judgment recovered, that vests the title in him. And the law does not say that because he is a wrong doer, he must pay the judgment, and that the creditors of the orginal owner may take the property as often as he chooses to replevy it, and apply it on their claims. Neither the favor of the law for the payment of just debts, nor its disfavor for unjust trespasses, have induced it to disable the wrong doer from atoning by the full payment once of the value of the property. The counsel suggests that the analogy between this rule and the doctrine of Acker vs. White, vs "fanciful and remote.” But it seems to us clear and direct. And if the rule as to the trespasser is correct, a fortiori the doctrine of Acker vs. White, is correct. For a purchaser, or assignee, under such circumstances, cannot be in any worse position than a willful wrong doer. Many times, certainly, they are not as — 386 — bad. For it is well known that the rales of law in relation to the sales of property to hinder and delay “creditors, are justly of a stringent character, and if a vendor sells with such intent, and the vendee had notice of it, the property is liable to be taken in his hands, even though he paid the full value for it. Many times, also, assignments are held invalid for non-compliance with some statutory permission, or on account of some provision in the instrument, although the parties, and particularly the assignee, may have acted in entire good faith. It seems to us clear, therefore, that a purchaser or assignee of this kind, who insists upon the validity of his purchase, and after bringing his action and failing, pays for the property, ought to have as much protection as an acknowl-ed trespasser. But it was contended that, even if the doctrine was proper in a case like that of Acker vs. White, where the party re-plevying paid the full value of the property, still it could not be applied where, as in this case, the amount of the debt on which it was first attached, was much less than the value. It was said that in such case, by virtue of his replevin, the party would obtain possession of the goods, a large interest in which was still liable to be taken for the debts of the vendor, and that he ought not to be allowed to hold such interest beyond their reach until the determination of the first suit. With respect to the justice of the matter, however, it is obvious that it is the same, whether the party pay the whole value, or only a part. -If on paying the whole he ought to be entitled to the whole property, by the same reasoning, on paying a part, he ought to be entitled to an interest equal to the amount paid. And we can see nothing in the recognition of this right inconsistent with the protection of the rights of other creditors, to apply the interest still remaining in their debtor in payment of their claims. They certainly would be in no worse position than in any ordinary pledge — 387 — or mortgage of chattels, where the interest of the mortgagor or pledgor is liable to be taken to satisfy his debts. As to the pledge of property, the statute expressly provides that the interest of the pledgor may be sold, and that the purchaser will be entitled to the possession on complying with the terms and conditions of the pledge. R. S., 1858, chap. 134, § 21. And this evidently contemplates that property so situated may be levied on, and sold without actual possession taken by the officer. So, also, in Cotton vs. Marsh, 3 Wis., 241-2, it was held that the creditor of the mortgagor may attach the property in the hands of the mortgagee, subject to the right of the latter. The inconvenience of proceeding against property subject to a prior lien or right, is one to which creditors are frequently subjected. And the fact that such inconvenience might result from the application of the doctrine of Acker vs. Smith, to a case like this, where the property re-plevied is of greater value than the debt on which it is attached, we do not deem a sufficient reason for rejecting a rule, the denial of which would work such manifest injustice. It is true the actual interest of the party replevying, as well as of the orginal vendor, would remain unsettled, depending upon the result of the attachment suit. But they would be equally so if the property had not been replevied, but left in the hands of the officer first attaching. The rights of subsequent attaching creditors, would still depend on the same contingency. They would get only what was left, after satisfying the first debt. And although, if the property is replev-ied, the interest acquired by such attachment is recognized to exist in the party replevying and giving security, and although the remedy of creditors to reach any remaining interest of the debtor, may not be so convenient, as if the property should remain with the officer, yet we think their remedy is sufficiently certain to do away with all reason for refusing to — 388 — apply the equitable tule of Acker vs. White, although the property was of greater value than the attachment debt. And it would certainly be very extraordinary, if, where a party had so replevied property and given an undertaking to return it or pay for it, as he was permitted to do by the law, that very law would then forcibly take it from his possession to pay other debts of the same debtor, recognizing in him no right to keep it, and return it according to his undertaking, and no interest by virtue of giving that undertaking, and then, afterwards require him to pay .for the default, which itself had forced upon him. The injustice of such a rule is too apparent to require argument. Unless the rule of Acker vs. White be applied in such cases, then no subsequent levy should be allowed at all, for the remarks of the supreme court of the United States, in Hagan vs. Lucas, 10 Pet., 404, are then applicable in their full force. That court says: <e If the property be liable to execution, a levy must always produce a forfeiture of the condition of the bond. For a levy takes the property out of the possession of the claimant, and renders the performance of his bond impossible. Can a result so repugnant to equity and propriety as this be sanctioned ? Is the law so inconsistent as tojauthorize the means by/which the discharge of a legal obligation is defeated, and at the same time exact a penalty for the failure? This would indeed be a reproach to the law and to justice. The maxim of the law is, that it injures no man, and can never produce injustice.” We think, therefore, that the ruling of the circuit court upon this point was right; also, that it properly disregarded the stipulation for a settlement'by Selleck. His bail were the real parties in interest. They had paid the attachment debt and he was liable to them for it. He agreed with them, as appears by the affidavits, that they might bring this suit in — 389 — his name for their benefit. And we think that this was an agreement that should be enforced under the peculiar circumstances disclosed by the affidavits in this case. The judgment is affirmed with costs, in each of the cases between these parties, both depending on the same questions.