Beers v. Lyon

21 Conn. 604 | Conn. | 1852

Hinman, J.

The defendant, a deputy sheriff, had writs of attachment in his hands, against Julius Sanford, and he attached, as said Sanford’s property, the goods in question. They consisted of hats, and hatting materials, and were found by the officer, at the manufactory where said Julius had been engaged in manufacturing hats: they were claimed however, by Josiah Sanford, the father of Julius, under an assignment made a few days previous to the attachment; and the question is, whether he can hold them against the attaching creditors of his son.

One point in the case is, whether Josiah Sanford’s assignment from his son, was not void, under the statute in reference to the assignment of property, by persons in failing circumstances, passed in 1828. That statute enacts, that all “ assignments of any lands, tenements, goods, chattels, or choses in action, made, directly or indirectly, by any person, in failing circumstances, with a view to his insolvency, to any person or persons, in trust for his creditors, or any of them, shall, as against the creditors of the person making such conveyance or assignment, be deemed and adjudged fraudulent and utterly void, unless the same shall be made in writing, for the benefit of all said creditors, in proportion to their respective claims, and be lodged for record, &c.” Stat. p. 363. The principal object of this statute undoubtedly was, as was said in the case of Bates v. Coe, 10 Conn. R. 280. to provide a responsible trustee, to receive assigned property, and cause it to be equally distributed among the creditors of the assignor. The law became necessary, because under the old system, assignments were frequently made to the confidential friends or connexions of the assignor, and the property kept, by the trustees, sometimes for their own personal use, but more generally for the use of the assignor; and hence it became a convenient way in which debtors in failing circumstances, were enabled to place their property out of the reach of attaching creditors, and at the same time, use it for their own purposes. The difficulty of making even responsible trustees account to the creditors, was so great as usually to prevent their attempting it; and it was, of course, never attempted, in the more common case, where the trustees were not responsible. It was, then, a statute made to prevent fraudulent conveyances; and hence it was passed as an “addition” to the act against such conveyances, as is shown by its title. Statutes of this description, we are told, should be liberally expounded so as, if possible, to answer the design of the legislature. With this principle in view, let us look at this assignment, and at the circumstances attending it, to see if, under this statute, it can be supported.

In the first place, it is not denied, that the bill of sale from Julius Sanford to his father, is embraced within the language of the statute. It is both a conveyance and an assignment of property. It is absolute, unconditional, formal, and precise in its terms—and for the consideration of 1500 dollars, which the assignor acknowledges he has received, it conveys the property, professes to deliver to the assignee the possession of it, and agrees to warrant and defend the title. And although a conveyance of personal property merely, yet it is executed under seal; and thus, in every particular, is about as solemn an instrument as could well be made—quite as solemn as we have ever seen made, for the purpose of conveying a few boxes of hats, some furs, and paper, and a few shop fixtures.

In the next place, the conveyance was made “by a person in failing circumstances, with a view to his insolvency,” This is abundantly shown by the proof. On the same day, and very soon after this conveyance, he made a general assignment of all his other property, excepting only such as was not liable to be taken on execution; and on the settlement of this estate, his creditors generally were paid only 24 cents on the dollar of their claims; and the plaintiff’s witnesses testify, that when the sale to him was made, the general assignment was in contemplation. Indeed, it is a part of the plaintiff’s case, which his proof supports most fully, that a contemplated surplus of the property conveyed to the plaintiff, over the amount of his own debt and the debt due Mr. Beers, was to be paid over to the general assignee. With all this evidence, it would not do to deny, and the plaintiff does not deny, either the contemplated insolvency of the assignor, or that the conveyance was made with a view to such insolvency.

The question then remains, whether the conveyance was an absolute sale for money, as it purports to have been; or whether it was, either in whole or in part, a conveyance in trust for his creditors, or any of them. If the former, it was a valid conveyance ; but if the latter position is true, then it must be admitted to be invalid, or, as the statute has it, “ utterly void,” as against his creditors. Now, it is worthy of observation, that this conveyance did not set forth the true contract between these parties. It can hardly be presumed, that it was intended for any such purpose. Why the parties preferred to take this course, we do not know. A jury might infer, that it was done because they supposed the truth would not answer their purposes; but we have nothing to do with that, in this part of the case. We only allude to it here, for the purpose of showing, that we are driven to look to the other evidence in the case, in order to determine the true nature of the contract, and thus to find whether this was an absolute sale, or a conveyance in trust.

What then was the real contract, which the instrument should have shown, and which the parties intended to carry out? We have seen what was the condition of the assignor,—that he was on the eve of insolvency. He owed his father a note of 556 dollars, and Mr. Beers another of 800 dollars, which his father had signed with him, as surety; and he owed other creditors to a much greater amount than the whole value of his estate. He wished to secure his father; and if that was all, nothing was easier than to have made him a mortgage, and let him take possession under it. They, however, did not choose this course, but chose rather that an absolute bill of sale, for the consideration, as it says, of 1500 dollars, received of the vendee, should be given, when in fact no such consideration was given. Nor, indeed, was there any consideration at all for such a conveyance as this. The plaintiff’s note was not given up; it was not treated as paid, by the conveyance; and they did not so consider it. Nor did the vendee agree with his son to pay the Beers note. The father’s liability to Beers and his own note would have been a good consideration for a mortgage; or, had he given up his own note as satisfied, and agreed with his son to pay the Beers debt, this would have been a consideration for an absolute conveyance of property to the amount of nearly 1500 dollars. But he carefully avoids taking a mortgage, and as carefully treating his debt as paid, and agreeing to pay Beers.

Again, the goods were not valued at 1500 dollars, or, indeed at any sum, excepting only as that in an ideal valuation put into the instrument, for the purpose of showing on paper, a consideration for the sale. On the contrary, the father and both his sons, Julius and Henry, say, that when the bill of sale was given, Julius spoke of the worth of the goods, as they named them; but the vendee did not agree with him, and was not willing to take them at his price; but he did take them, and agree to hand over the balance to the general assignee. And this was done, in order to avoid any difficulty in regard to the price. Henry's explanation of it is, that his father only wanted his pay for the two notes. He says, the goods were assigned to pay those notes; and that the notes were to be paid out of the proceeds of the property, as soon as his father could sell it. This is probably the true exposition of the agreement. The plaintiff’s witnesses, who speak on the subject, all agree in this substantially; and there is nothing to conflict with it.

Upon the plaintiff’s own showing, then, he takes the goods, without any price being fixed which he is to allow for them; he is to sell them, and out of the proceeds pay himself his own note; then, Mr. Beers' note, on which he is liable as surety; and he is to pay over the balance, if there be any, to the general assignee. We think this made him a trustee of these goods for the benefit of Mr. Beers, in the first place, and then as to the surplus, for the benefit of the creditors generally, through the trustee of property thereafter to be assigned for their benefit, and the assignment of which, the witnesses tell us, the parties contemplated.

A trust is an obligation arising out of a confidence reposed in the trustee, or person who has the legal title to property conveyed to him, that he will faithfully apply the property according to the confidence reposed; in other words, according to the wishes of the creator of the trust. This is the technical definition of a trust. 4 Kent’s Com. 304. & seq. There is no mystery in the idea of a trust. In a certain sense, a mere bailee or agent is a trustee; because he has property delivered to him, in the confidence that he will do with it according as he is directed by the bailor; but the word is not used in the statute in this sense. The statute requires, that the property must be conveyed to the trustee. He must take the title: until he takes the title, it remains the property of the bailor, and is liable to attachment for his debts. But where property is conveyed to another, in confidence that he will sell and apply the avails in a particular way, not for his own use, this, it would seem, must be a trust, if anything can be. Suppose the parties, instead of the instrument which they did execute, had reduced their real agreement to writing, what would have been its language? Could it have been anything else than this, in substance? In consideration that I am indebted to my father, in a note, and to Mr. Beers in another note, and to divers other creditors for whose benefit I contemplate assigning the balance of my estate,—I do sell and assign to my father the property, in trust, that he will sell and convert the same into money, and out of the avails pay his own note and also the said note of Mr. Beers; and in further trust, that the balance of said avails, if any remains after paying said two notes, he will pay over to such assignee as I shall hereafter appoint of my other property, to be applied by him as I shall direct in said assignment hereafter to be made. Could any one doubt that such an instrument would create a trust? Would any lawyer hesitate to factorize the vendee, as the trustee of Beers, irrespective of his indebtedness on the note itself? We think not. And we therefore hold, that this property was conveyed to Josiah Sanford in trust; and as it was not a trust for all the creditors equally in proportion to their respective claims; and moreover, was not in writing, and had none of the requisites of a legal trust under the statute, we hold it to be utterly void, as against the defendant, an attaching officer for creditors.

The point which we have been considering, seems to dispose of the case. A new trial must be granted, and on a ground, which, it would seem, must always prevent a recovery on the part of the plaintiff. Still we think a new trial should also be granted, on the ground that the possession of these goods was never changed, but Julius Sanford, the assignor, did always retain the possession of them, substantially. We know, that the witnesses testified, that the key of the shop in which the goods were, was delivered to the father; but it very soon got back into the son’s hands; and when the officer attached, the son not only had the key of the shop, but he was employed, by his father, to superintend the finishing up of the hats, and boxing them up for market. He says himself, that he was to arrange the things, in a proper manner, to be disposed of; that he only had charge of the property, as an agent; that he had the superintendence of getting up the hats; that he had the general superintendence under his father, and helped put the hats in order to be sold. Now, when we consider, that this was all done at the shop, where the assignor had carried on his business; that his father was not, or does not appear to have been, there, more than three or four times between the day of the assignment and the attachment, a period of about eight days; we think the case comes directly within the principle of all our late cases on this subject; and as we have said, in some of those cases, so we say in this, there was just about evidence enough of a change in the possession to satisfy an intelligent mind, that it was intended as a colourable, and not as a real, change. Kirtland v. Snow, 20 Conn. R. 23. Peck v. Whiting, 21 Conn. R. 206. and the cases therein cited.

We therefore advise a new trial, on both the grounds indicated.

In this opinion the other judges concurred, except Church, Ch. J., who was disqualified under the late statute, and Ellsworth, J., who dissented.

New trial granted.