Green v. Early

Alvey, J., delivered the opinion of the Court. •By the return to the attachment, Early is made a garnishee with Townshend, whereas, he should have intervened simply as claimant, if he desired to contest the plaintiff’s right of condemnation. He is not the party in whose hands the credits are found, but is the party claiming them to be due from Townshend to himself, and — 228 — therefore he insists that they are not liable to be attached and condemned for the payment of the plaintiff’s judgment against Baden. Townshend, the debtor, is the only proper garnishee, according to the facts of the case, and if the plaintiff be entitled to judgment of condemnation, it must be against Townshend alone. The case was tried before the Court below, without the aid of a jury, and judgment was rendered for the defendants, Early and Townshend, in consequence of a divided Court upon the questions of law as presented by the prayers of the respective parties. And without reciting all the facts, it is sufficient to say, that, if we assume the facts to be true, as stated and conceded, as well by the third prayer of the defendants, as in the first prayer of the plaintiff, the latter would be entitled to judgment of condemnation as against Townshend. Baden, the judgment debtor, had sold his real estate to Townshend, and conveyed it by a joint deed of himself and wife, and at the same time, for balance of purchase money, took from the vendee, Townshend, a mortgage of the same land to the wife, together with certain single bills, payable at different dates, also to the wife'. Three days after this transaction, the mortgage and single bills were all assigned to Early, the assignment on the mortgage being signed by both husband and wife. The mortgage, with the assignment on it, was soon thereafter placed on record by Early. The mortgage states on its face that it was given for balance of purchase money, and refers to the deed as conveying the land embraced by the mortgage. The deed states on its face the derivation of title, and shows plainly that the land sold and conveyed to Townshend was the proper land and estate of Baden, the husband, and not that of his wife, to whom the mortgage and single bills were executed, by the authority and direction of the husband. This being the case, the making of the mortgage and single bills to the wife, was — 229 — plainly an acquisition of property by her from her husband, and consequently is not valid} if it be Ciin prejudice of the rights of his subsisting creditors.” Gode, Art. 45, sec. 1. It is not denied that the plaintiff was a subsisting creditor of the husband at the time of these transactions. It is clear we think that Early must be taken as having had notice of all the facts disclosed by the mortgage, and also by the deed recited in it. For the principle is, that where a party has notice of a deed, or other instrument, as, in this case, of the mortgage, which, from the nature of it, must affect the property, or is otherwise informed at the time that it does affect it, he is considered to have notice of the contents of that deed, and of all other deeds to which it refers; and whatever is sufficient to put a purchaser Upon inquiry is good notice; that is, where a man has sufficient information to lead him to a fact, he is deemed to be conusant of it. Price & Bevans vs. McDonald, 1 Md., 403. The information imparted by the mortgage and deed was, that the land was sold as the estate of the husband, and not the wife, and that the mortgage and single bills had been given as security for part of the purchase money due the husband on the sale, though made, by his direction, to the wife. And now the question is, can the assignee, under the circumstances, taking the mortgage and single bills from and through the. wife, stand in any better predicament, with respect to the husband’s creditors, than the wife herself, if she had not assigned the securities? We think he cannot. Taking the assignment from the wife, with knowledge of her relation, and the manner in which the subject-matter of the assignment was acquired by her, the assignee could acquire no better title than the wife held. The same conditions and infirmities that attached to the title while held by the wife, followed and adhered to it — 230 — in the hands of the assignee ; and as the Code, while allowing a transfer of property from husband to wife, declares that all such transfers shall be invalid, if to the prejudice of the rights of subsisting creditors of the husband, it would seem clearly to follow, that the property in this case assigned by the wife, may be seized and applied by the plaintiif, a subsisting creditor of the husband, if he be prejudiced, as if no transfer of the property had ever been made by the husband to the wife. This results from a plain construction of the statute; and it is not only the plain construction, but the only just and equitable one for the protection of existing creditors, who might otherwise be defrauded of their rights. This case in principle is not unlike that where an assignee takes an assignment with knowledge that his assignor bore a particular relation to the party from whom he acquired the title to the subject-matter assigned. In such case, if the title should be impeached bj1- reason of the existence of such relation, the assignee is required to defend the assignment just as if he himself bore the particular relation or character of.the assignor. Asan instance of this, we may refer to the case of Moloney vs. Kernan, 2 Dru. & War., 31, where it was held by Lord Chancellor SuetDEN, that a party who took an assignment of a lease from the agent of the lessor, with notice of the assignor’s character as agent, had the same liability of sustaining the lease cast upon him that the agent had, and as the lease could not be sustained by the agent, because he could not show that he had imparted full information to his principal, the lessor, so neither could it be supported by the assignee of the agent. So here, the transfer from the husband to the wife'being liable to impeachment by the creditors of the former, by reason of the particular relation of the parties, and the assignee of the wife taking the assignment with knowledge of the relation, and that the title assigned to him was subject — 231 — to such impeachment at the time of the assignment, he is not entitled to occupy a more favorable position in reference to the property than the wife herself, from whom the assignment is taken; and if she could not defend the property against her husband’s creditors, neither can her assignee with notice. But it is urged for the defendants that Early had no notice of the existence of the plaintiff’s debt for which the property assigned is now sought to be made liable, and that the want of such notice should constitute a defence to the attachment. It is clear, however, that such want of notice affords no protection in a case like this. He was bound to know that the property was liable to the husband’s debts, if there was no other sufficient property with which they could be paid ; aud with this knowledge he was put upon inquiry as to the existence and extent of the debts for which the property might be liable. This is well exemplified in the case of a purchase of a devise of a deceased debtor, as in the case of Gibson vs. McCormick, 10 Gill & John., 65. In such case, the purchaser is bound to take notice of the existence of claims against the deceased, and the state of the personal assets. ' He cannot defend his title uponffhe ground that he had no notice of debts, or the insufficiency of the personal estate to pay them. In the case just referred to in 10 Gill & John., 65, in disposing of the defence of a purchaser of part of the deceased’s real estate from his devisee, that the purchase was for value, and without notice of debts, or that the personal estate was insufficient to pay them, the Court said: “On the existence of such protection, abstractedly considered, we mean to express no opinion, but to its existence in the circumstances under which it is here claimed, we cannot yield our assent. It is apparent from the answer of Lloyd, and his conveyance from Fayette Gibson, that at the time of the conveyance, he knew that Fayette Gib — 232 — son acquired title to the land conveyed, as devisee of his deceased father, Jacob Gibson; and whether such fact was actually known to him or not, is immaterial; the law imputes such knowledge as necessarily acquired in the examination of the title to the property conveyed to him, and also imputes to him the knowledge of the provisions of the Act of 1785, ch. 72, sec. 5, which made Jacob Gibson’s real estate chargeable with the payment of his debts in the event of his personal estate proving insufficient therefor. Possessing this knowledge, he was put upon the inquiry; it was his duty to have ascertained whether the personal estate was sufficient for the ^payment of the debts of the deceased.” [Decided 16th January, 1874.] The analogy between the case just cited, and the present, is very strong. In both, the property passed into the hands of the purchaser or assignee subject to the rights of creditors declared by statute, and with reference to which rights, the purchase or assignment must be taken to have been made. We are of opinion, therefore, that the plaintiff’s first prayer should have been sustained; and as this would seem to dispose of the case, we deem it unnecessary to say anything in regard to the plaintiff’s other prayers. We shall reverse the judgment, and award a new trial. Judgment reversed, and new trial aioarded.