Baker v. Bartol

| Cal. | Jul 1, 1856

Mr. Justice Heydenfeldt delivered the opinion of the Court.

Mr. Justice Terry concurred.

The first point made in this case is upon the pleadings. The complainant commenced his suit to enforce the trust created by the assignment, in his favor, as a simple contract creditor. Supposing the conduct of the parties to have been fair, he ascertains a certain amount of trust funds in the hands of the assignee, and therefore files a creditor’s bill to obtain a distribution. In such a case, it was not necessary that he should have been a judgment creditor, no more than it is to be a judgment creditor before filing a bill to foreclose a mortgage; and because a specific sum or property is dedicated to the payment of the debt, and he is entitled to that by contract, and to seek it in the only form he can obtain it, even if he could, after judgment at law, have obtained satisfaction by levy and sale of other property, under execution ; for it would then be simply the case of having two remedies instead of one.

The supplemental bill was filed after lfc became á judgment creditor. This attacks the assignment for fraud, and prays that it may be set aside; ascertains a large amount of the assigned property which went into the hands of the assignee, seeks satisfaction out of it as an equitable fund, and prays the payment of the whole debt.

It is objected to this, that it changes the character of the original bill, prays for a different relief, and fails to bring in all the creditors, who, as is urged in the defence, are entitled to ratable distribution.

It is true that in some aspects, the character of the case is altered by the supplemental bill, and so it must be in every case where an amended or supplemental bill is filed. Every additional and pertinent fact either enlarges or limits the right to relief, or affects the nature of it; but there is no such change effected here as makes the case objectionable to the charge of multifariousness. The subject matter which is the gravamen of both bills, is the debt due to the plaintiff, and the trust fund, out of which he seeks payment; and the only difference between the two is that in the first he thought the transaction fair, and then only asked a distributive share, while in the latter he has discovered that the assignment being fraudulent, he has no right to claim under it, but must seek satisfaction out of the property in the hands of the assignee, as an open, equitable fund, liable to be attached by any creditor. Nor was he obliged to have the other creditors brought in to share with them the fruits of his superior diligence. Prior in tempore, potior est injure.

It is urged, however, on behalf of Bartol, the assignee, that the facts do not convict him of being a participant in the fraud of his assignors. This may be true, and yet will not relieve him from liability. He received, it appears, thirty or forty thousand dollars of the goods of the assignors for the benefit of their creditors. If he supposed the assignment to be valid, and was not himself a party to the fraud with which it appears that instrument was infected, then he is liable for the misplaced confidence and negligence in allowing his assignors to be his agents, and to sell the goods and pocket the proceeds under his very eyes. His duty was to husband and protect the assigned estate, and administer it fairly and faithfully, in the spirit of honesty with which he undertook the charge. If, on the other hand, he was in complicity with the fraudulent conduct of his assignors, engaged with them and aiding them as an instrument to defeat the just rights of their creditors, and to make them the beneficiaries of the fund by a process of dealing which is undistinguishable from larceny, then the question of his liability requires no argument whatever.

In whatever light, therefore, we regard this case, aside from some technical informalities which require no consideration, the decree of the Court below is substantially Correct, and is affirmed.