15 Conn. 504 | Conn. | 1843
This is a bill of interpleader, brought for the purpose of settling the conflicting claims of the defendants to a fund in the hands of the plaintiff. The fund consists of the avails of certain personal property, which was attached by the several defendants, successively, in suits brought by them against one Crissey, and which was, in pursuance of an agreement between them, placed in the hands of the plaintiff, to be by him sold, and the proceeds applied to the judgments to be obtained in said suits, in the same manner as they by law would be, on the executions thereon. Judgments having been obtained, the question is, how the avails of said property shall be appropriated among the defendants.
The validity of the judgments obtained by Raymond Co, and Bowton, the second and third attaching creditors, is not disputed. They, however, claim, that the judgment of Husted, the first attaching creditor, is, as to them, invalid, in whole or in part; and that, therefore, he is entitled to no part of the avails of the property held by the plaintiff, or, if to any, to less than the amount of his judgment.
The suit, on which Husted’s judgment was rendered, was brought on a note executed by Crissey to him, for the sum of 1125 dollars, payable on demand. Crissey being indebted to Husted, and Husted having indorsed a note for the accommodation of Crissey, which was negotiated and not due, said note for 1125 dollars was given For the purpose of enabling Husted to secure himself for such indebtedness and indorse-,, ment, by a suit to be immediately instituted, by attachment, on said note ; on which all the property of Crissey, including that of which the plaintiff holds the avails, was to be attached, which was accordingly done; and the last-mentioned property was subsequently attached, by the other defendants, on suits by them successively brought against Crissey, on confessedly valid claims. This arrangement between Husted and Cris-sey was made without any fraudulent intent, on the part of either ; but there was no express agreement by Husted, to pay the note he had so indorsed for Crissey, or to indemnify Crissey against it; nor any implied promise to that effect, excepting so far as the law would imply such a promise from said facts.
Raymond <f- Co. and Bowton claim, in the first place, that the circumstances under which the note for 1125 dollars was
We think, that the judgment is clearly valid, so far as it respecfs the amount of such indebtedness. The consideration of the judgment is divisible ; and that part of it, which consists of the debt to Husted, is easily capable of ascertainment. The parties to the note are exonerated from any fraudulent intent in the arrangement which led to its execution. That part of the consideration which consists of such debt, is sound; and we see no reason why for that the note should not be sustained. There is no principle on which a note, the consideration of which consists of claims, some of which are valid and others invalid, can be held, in the absence of fraud, to be wholly void. In the case of Sanford v. Wheeler, 13 Conn. R. 165. this court held, that a mortgage executed by the maker to secure an unconditional note, payable on demand, made up of a debt due from the mortgagor, and also of a liability of the mortgagee for the mortgagor as surety, was valid as against the creditors of the latter, for the amount of the debt, although it was set aside for the remainder. That case is perhaps, in some respects, not so strong as the present, and settles this point.
But for that part of the note which consists of the liability of Husted as indorser for Crissey, we think, that, as against Raymond Co. and Bowt-on, the subsequent attaching creditors, the judgment cannot be supported. In support of this conclusion, the cases of Sanford v. Wheeler and North v. Belden, 13 Conn. R. 165. 376. are relied on ; in which it was held, that a mortgage predicated on a note like the present, was invalid, against the creditors of the mortgagor, as to the amount of such liability, although valid as to the hona fide indebtedness embraced in the note. It may be said, and perhaps with propriety, that these decisions proceeded on the ground that the mortgages there in question were, so far as they were set aside, deemed to be opposed to the provisions and policy of our recording laws as to conveyances of real
It is obvious, that the tendency of an absolute, unconditional note, given merely for the security of one who has assumed only a conditional liability for the maker, is directly to delude the creditors of the maker, and to mislead them as to his resources for the payment of his debts. It is also obvious, that it may be resorted to, as a most easy and convenient mode by which his property may be withdrawn from his possession, and become ostensibly that of the surety. The transaction on its face speaks an entirely different language from the real one ; and such transactions are always viewed by the law with the highest degree of distrust and disapprobation. It has always been considered a most important principle of public policy, especially as it regards the rights of creditors, that the form in which contracts and conveyances are made and expressed, by which only persons other than the parties to them are or can be usually governed, should correspond with and be adapted to the real intention and object of the parties. Hence it is, that the continued possession of the vendor of personal property, in pursuance of an agreement to that effect, itself invalidates the sale as to his creditors, except in the few cases where the law, for reasons the most cogent, dispenses with a change of possession. And this has been justly said to be a rule, not of evidence merely, but of policy. Mills v. Camp, 14 Conn. R. 219. So, also,
We think, therefore, that the note, and consequently the judgment recovered on it by Husted, cannot, as against Raymond Co, and Bowton, be upheld as to the amount for which he was liable as the indorser of Crissey.
It is next claimed by Raymond éf Co. and Bowton, that the said note and all the proceedings on it, are void, under the act against fraudulent conveyances, and also under the act in addition thereto, passed in 1828, prohibiting conveyances by insolvent debtors of their property in trust, unless for the benefit of all their creditors. It is found, that, when said note was given, it was agreed between Crissey and Husted, that if the latter could find property to attach sufficient to secure him for Crissey’s indebtedness to him, and his liability as in-dorser, and also to pay a certain outstanding note due by Crissey to one Slosson, Husted should assume the payment of that note, and its amount should be allowed on the note given by Crissey to Husted. It appears, however, that the amount of Slosson’s note was not embraced in the judgment obtained by Husted. To the claim that this is affected by the general act against fraudulent conveyances, it is sufficient to say, that Husted is entirely exonerated from any fraudulent intent in the arrangement made between him and Crissey; and we are not aware of any principle of law, which pronounces it fraudulent. Nor, in our judgment, is this transaction Within the act of 1828. A bona fide agreement between Husted and Crissey, by which the farmer was, in a certain event, to pay the debt due to Slosson by Crissey, and reimburse himself out of the property of the latter, is not, in any sense, a conveyance or agreement in trust, either for the benefit of Slosson or Husted; and it is neither against the letter nor spirit of that act. Bates & al. v. Coe, 10 Conn. R. 283.
Raymond dr Co. and Bowton further claim, that Husted should be ordered to sell the estate conveyed to him by Cris-sey and his wife, and apply the avails to his judgment, before appropriating to the payment of said judgment any portion of the fund in the plaintiff’s hands. This claim is founded on the doctrine which is supposed to prevail in courts of equity, on the subject of marshalling securities. It appears to be well established, that where one creditor has security on two
He accordingly refused relief where the creditors of four
Applying these just and equitable principles to the present case, the objections to the claim we are considering, are insuperable. In the first place, the property constituting the two funds did not wholly belong to Crissey. One portion of it was his, and the other that of his wife. It is now sought to appropriate the latter, in preference to the former, to the payment of his debt to Hasted. As between Crissey and his wife, she appears to stand in the relation of surety in the transaction before us. Her property is conveyed only collaterally for the payment of certain of his debts, and was never primarily liable for them. To appropriate her property, in the first instance, rather than his, to the payment of his debts, would, therefore, be most unjust and inequitable in itself, as well as manifestly contrary to her intentions, especially respecting the debt due to Johnson and Ayres, as is apparent on the face of the agreement executed by Hasted. It would seem, that, as between her and those setting up this claim, her equity is decidedly the strongest. At all events, if in any case, a court of equity would compel one creditor, for the relief of another, to resort to a fund not the property of the common debtor, in preference to his, it would first require the creditor asking it to show a state of facts which would raise a decided equity in his favour, which is not done in the present case; nor would the court them so interfere, without affording the owner of the property an opportunity to be heard. But, in the next place, as to the property conveyed by Mrs. Crissey,
The plaintiff is entitled to retain out of the fund in his hands the sum found to be due to him for his trouble and expenses in relation to the property attached, and also to his reasonable expenses in this suit.
The superior court is advised to pass a decree in conformity with the foregoing views.