41 Mass. 89 | Mass. | 1832
delivered the opinion of the Court. The defence is, that the original debtors were not the owners of the chattels at the time of the attachment. This defence it is competent for the defendant to make, and if ..established it will defeat the action. Although he returned that he attached the goods as the property of the original defendants, yet he is not thereby estopped from showing that they had no property in them.
The goods were formerly the property of the original debtors, and unless the sale of them which was made to Hunt before the plaintiffs’ attachment, was a valid one, they then remained theirs, were duly attached, and ought to have been holden and applied to the satisfaction of the" plaintiffs’ execution. This sale was made for a valuable consideration, and was in every respect bond fide. The charge of $ 150 for the service of writs, appears large, but is shown to be perfectly fair. The agreement to refer the amount to the determination of a disinterested and impartial arbitrator, furnishes a strong, if not conclusive inference, that there was no collusion or fraud in this charge.
We are then to examine this sale as a fair transaction, wholly exempt from any fraudulent taint. The objections, and there are several of them, all grow out of.the relation of the parties to the transaction and to each other.
1. The sale was made by one of two partners. And the first objection is, that one, in the absence of the other, had no authority to make this salé. It is said, that although he might sell the whole partnership stock by retail, yet that it was not according to the ordinary course of business, and so not within the scope of his authority, to sell the whole at once by a single contract. We have no evidence of the terms of association between these partners; but there is no reason to suppose that- either member of the firm had any different authority than what was derived from the relation subsisting between them. Doubtless the ordinary business of the company was to purchase goods by the large quantity and to sell them in small quantities. But this cannot restrain the general power to buy and sell. The validity of a purchase
2. But it is contended by the plaintiffs’ counsel, that if one partner had the power to sell the goods, yet he could not do it in payment of his own private debt. It does not appear that in the contract of sale, the mode of payment was established. It was immaterial to the purchaser how or to whom he paid the price. If a portion went to pay a private debt of one of the firm, it would not invalidate the sale and defeat the transfer of the goods. Whether it would be deemed a legal payment pro tanto, as against the creditors of the firm, is a question with which we have nothing to do. So if the partnership stock had been taken in satisfaction of a private debt due from one of the partners to the purchaser, it might have been deemed fraudulent as to the creditors of the company But such was not this case. The purchaser had no interest in the appropriation, and gained nothing by the mode of payment which w'as adopted. He made a bond fide contract for the goods ; paid an adequate consideration for them ; and we can yet perceive no legal objection to the validity of the sale.
3. It is further contended for the plaintiffs, that before the sale the partnership had been dissolved ; that the owners had become mere tenants in common, and that neither had power to sell the whole. There is no pretence that the partners intended to dissolve the partnership. If it wras done at all by them, it was the effect of their acts against their intentions. The insolvency of one or both the partners we think would not
In England, bankruptcy, and in some of our States where insolvent laws exist, legal insolvency may produce a dissolution. Wherever the one or the other operates to vest ill bankrupt’s or insolvent’s property in assignees or other minis ters of the law, it would produce that effect. Probably a voluntary-assignment by a partner, of all his property, would do the same. In such cases the partner, being divested of his property, and rendered unable to perform the duties of a partner, would of course cease to be one. And his assignees coming in as tenants in common and not partners, the partnership would be dissolved. Watson on Partn. 242, 302 ; Gow on Partn. 285 ; Fox v. Hanbury, Cowp. 445 ; Crispe v. Perritt, Willes, 467 ; S. C. 1 Atk. 133 ; Hague v. Rolleston, 4 Burr. 2174 ; Smith v. Stokes, 1 East, 363; Smith v. Oriell, 1 East, 368 ; Ex parte Williams, 11 Ves. 5; Wilson v. Greenwood, 1 Swanst. 482 ; Harvey v. Crickett, 5 Maule & Selw. 336; Barker v. Goodair, 11 Ves. 78 ; Dutton v. Morrison, 17 Ves. 193 ; 3 Kent’s Comm. (3d ed.) 53 ; Marquand v. New York Manuf. Co. 17 Johns. R. 529.
4. Nor will the voluntary absence of one of the partners from the State, produce a dissolution. Some of the dicta in Whitman v. Leonard, 3 Pick. 179, certainly favor the plaintiff’s position. But they were not necessary to the decision of the case, and if they were, must be taken in connexion with the circumstances of that case. There were facts enough to show the note to be grossly fraudulent, without relying upon the absconding of one of the partners. The chief justice says, “ here was an absconding of one partner, which dissolved the partnership.” The absence was longer in that case than this, and attended with many circumstances to distinguish it from this. It well might be that there was such an absconding as would amount to a dissolution, and yet the temporary absence in this not produce the same effect. In England the absconding would be an act of bankruptcy, and he bankruptcy, when
The objections to the power of one partner to make the sale, and to the manner in which that power was executed, having been overruled, it only remains to inquire whether the purchaser was competent to buy.
5. The goods were under attachment at the time of the sale. If the cause of action had not accrued when the writ and attachment were made, it will not affect the present question. The officer has no right to inquire whether the action can be maintained or not. He has a valid writ, which will justify him in taking and holding the goods. And so far as the officer is concerned, the defendant named in it cannot object to the attachment. The sale was made subject to this attachment, and whether it was enforced or abandoned cannot affect the validity of the sale. An attachment constitutes a mere lien upon the property. And the general owner may as well sell subject to that lien as any other. The effect of the sale will be to pass the general property incumbered by the attachment. If that be extinguished by the settlement or the failure of the suit, or the neglect to levy an execution in thirty days after judgment, the sale of the property will become absolute and the purchaser will hold it free of the incumbrance. If a part of it be taken to satisfy the judgment, he will hold the remainder. But if the whole be needed on the execution, he will acquire nothing by his purchase. These principles apply to both real and personal estate. It never was doubted that real estate under attachment might be conveyed as well as if unincumbered. And we know of no rule or principle which will prevent the transfer of chattels under attachment, any more than real estate. There may be some practical difficulty in making a delivery, as the officer and not the owner is supposed to have the possession. But such a delivery as the owner might be able to make, whether- actual or symbolical, would be effectual to consummate a contract of sale. In the case at bar there could be
6. And this- presents the last question which we have to consider. The plaintiffs’ counsel contend that the officer having an attachment on property, stands in such a relation to the defendant and to the property, as to render him incompetent to become the purchaser of it. It is called a fiduciary relation, and is compared to that of a trustee to a cestui que trust. There is no doubt of the soundness and wisdom of the principies advanced, but the doubt is of their application. vxA guardian cannot purchase the property of his ward ; an executor or administrator cannot purchase the estate which they represent; nor can an agent or trustee, of any description, with power to sell, become the purchaser.
The same rule applies to auctioneers, and in equity is sometimes extended to attorney and client. Paley on Princ. & Agent, 32; Ex parte James, 8 Ves. 337; Hatch v. Hatch, 9 Ves. 292; Ex parte Bennett, 10 Ves. 381 ; Newman v. Payne, 2 Ves. jun. 199 ; Wallington's Estate, Ashmead, 307 ; Dawes v. Boylston, 9 Mass. R. 353 ; Copeland v. Mercantile Ins. Co. 6 Pick. 204 ; Church v. Marine Ins. Co. 1 Mason, 341 ; Barker v. Marine Ins. Co. 2 Mason, 369.
^ This wise and salutary rule, designed to protect the weak and incompetent from the encroachments and overreachings of the artful and the powerful, is founded upon two principles. The one is, that the trustee has no right to derive any benefit or advantage from the trust fund ; but all his skill and labor in the management of it must be directed to the advancement of the interest of his cestui que trust. The other is, that the character of buyer and seller are incompatible, and can never be united in the same person, in whatever different capacities he may act. The agency of adverse interests is the surest guaranty of fidelity and equality in negotiations of this kind. The assent of two minds is essential to the contract of sale, as well as to every other contract. Hence the action of one person can never change the ownership of property. There may be formal sales made by an executor, administrator, guardian, or trustee, to themselves, or to others for them, but the legal property will still remain unchanged and chargeable with
But while we recognise, and with great care and pleasure cherish these principles, we cannot discover their applicability to the question before us. The property attached bears very little resemblance to a trust fund. And the sheriff cannot be considered as sustaining the relation of agent or trustee, in any sense, to the defendant in the attachment. He is the officer of the law, and as such holds the property attached. It may be considered in the custody of the law. His duties are prescribed by law, and he is bound to execute them according to its directions, without favoritism or partiality to either party. The debtor is not considered to be under the control or influence of the officer, nor in any degree incapacitated from acting for himself and assisting and maintaining his own rights. There is no such fiduciary relation between them as to form any obstacle to their contracting with each other. Their interest is adverse. And there exist the ordinary securities for fair dealing and equal terms in their negotiations.
There may be something in the situation of the debtor and the power of the officer, which should induce a close scrutiny into their dealings, to see that there is no fraud or oppression in their contracts ; but nothing which is so much to be feared as to inhibit all contracts between them. The attaching creditor has quite as much power over the debtor as the officer employed by him, and yet there is nothing in their relative situation which will prevent them from buying and selling with each other. If either the creditor or the officer, by extortion or taking advantage of the necessities of the debtor, should obtain from him an unconscionable bargain, the law would set it aside. But we can see nothing in the situation of the property
x Judgment, on the verdict.
