Greenleaf v. Perrin

Parker, J. There is no doubt that the trustee has acted improperly, and it is probable that through his means the creditors of Perrin, the principal debtor, may have been defrauded. But he cannot be charged as trustee upon this ground. If at the time of the service of the process he was not, and has not since been, indebted to the principal, and has not had property of his in possession, he must be discharged from this suit. He cannot be charged by reason of the transactions respecting the sale of the real estate at auction, because, according to his disclosure, although he was the highest bidder, he was not in fact a purchaser, and did not become indebted to Perrin upon that occasion. The bidding was at the request of Perrin, for the purpose of raising the price of his property, and the trustee acted for him. No conveyance was made in consequence of this, and of course nothing [275] became due from the trustee to Perrin on that account. The subsequent conveyance to him by Perrin cannot alter the case, as he swears that this was under a new and distinct contract, for a sum which he has in part paid, and for the residue he is responsible to third persons who hold his notes. So in relation to the mortgage of personal property, it was merely a colorable transaction. Had the trustee taken possession of the property he might have been charged, because the mortgage was clearly fraudulent and void as to creditors. But he never received the property or interfered with it, and under these circumstances he cannot be charged as trustee. A false coloring was given to the condition of the property, but this did not withdraw it from the creditors, or charge the mortgagee with the possession. Possession does not necessarily accompany a mortgage of personal property. 5 N. H. Rep. 545, Ash vs. Savage. And in the language of the trustee’s counsel, “ he cannot be compelled to disgorge what he has not swallowed.” Trustee discharged.