Cooke v. Town of Orange

48 Conn. 401 | Conn. | 1880

Park, C. J.

The only real question in this case is, in regard to the capacity of the plaintiff to maintain the suit; and this question has been substantially determined by the cases of Pond v. Cooke, 45 Conn., 126, and Blake Crusher Co. v. Town of New Haven, 46 Conn., 473.

In the case of Pond v. Cooke it appeared that the Watson Manufacturing Company, a corporation located in the state of New Jersey, made a contract. with the towns of New Haven and Orange for the construction of an iron bridge over West River, a stream of water dividing the-two towns; that after the contract was made and before any thing was done under it the company became insolvent, and Watts Cooke was appointed a receiver by the proper court in the state of New Jersey, to settle the estate of the company, and distribute its effects pro rata among its creditors; that the receiver and the creditors of the estate were of opinion that it would be for the best interest of all concerned that the contract of the company with the towns named should be performed; that the receiver so informed the towns, and that they assented; that he then purchased materials for the construction of the bridge, using for the purpose the funds of the estate, and brought the same into this state prepared for use in the erection - of the bridge; and that these materials were attached by the Blake Crusher Company, a corporation located in this state, and a creditor of the Watson Manufacturing Company.

On these facts it was holden by this court that the attachment of the Blake Crusher Company was of no avail; that the property was in the hands of the receiver to be disposed of in the settlement of the estate according to the law of the state of New Jersey.

In the case of Blake Crusher Company v. Town of New Haven, it appeared that after the receiver had erected the bridge under the contract with the towns, for the benefit of all the creditors, using the funds of the estate for the purpose, the Blake Crusher Company attached, by a factorizing process, the debt due from the town of New Haven, and again it was holden by this court that the attachment was of no avail; that if the property itself could not be holden by the attachment in the first suit, the debt growing out of the disposition of the same property could not be held by the attachment.

The debt owed by the defendants in this suit grew out of the same transaction, and stands precisely like the debt in the last named case in all respects whatsoever; and if the Blake Crusher Company were unable to take from the present plaintiff the debt in that case, how can they prevent him from recovering the debt now under consideration?

But it is said that the cases of Riley v. Riley, 3 Day, 74, Upton v. Hubbard, 28 Conn., 285, and Hedenberg v. Hedenberg, 46 Conn., 37, hold that a foreign receiver or assignee cannot maintain a suit in this state for a debt which has been attached by a creditor of the foreign insolvent, and especially if such creditor is a citizen of this state. The distinction between those cases and the present was fully considered in the former cases growing out of the same transaction, and further comment is unnecessaiy. We will remark, however, that if the plaintiff cannot enforce payment of the indebtedness in question, it is difficult to see by whom it can be done. The former cases hold that no creditor of the Watson Manufacturing Company can do it, and it is clear that the company itself cannot move in the matter, because they never owned the property out of which the debt arose. It was purchased by the receiver with the funds of the estate after all the assets of the company had gone into his hands. The receiver held the property in trust for all the creditors; and when it was transformed into a debt its original character attached to the indebtedness. The property was simply changed from one form into another.

It is said however by the defendants that, as the contract under which the bridge was built was the contract of the Watson Manufacturing Company and not of Watts Cooke as receiver, and as no new contract was made but all that was done by the receiver was done under that contract, it follows that the money due for the performance of the contract was due to the company and not to the receiver. There is an utter fallacy in this reasoning. Whatever rights the company had under this contract had passed .to the receiver by the assignment. It is not necessary to consider the effect of this assignment as against creditors here, as there was nothing due the company from the towns. The rights of the company were not to receive money, but to go on and build the bridge and earn the money. On the failure of the company this right, in the condition of the company, was practically of little or no value as an asset. Clearly it was of no value as an asset which creditors in this state could get the benefit of by attachment. In this state of things the receiver, having obtained legal authority to go on as receiver and build the bridge, conferred fully with the committees of the two towns, so that all the facts were fully understood by them; and it is found “that they were willing and consented to have the receiver go on and finish the same, and understood that the contract was being performed by the receiver for the benefit of the creditors.” Surely, upon these facts it can not be seriously contended that the contract price for the construetion of the bridge was not to go to the receiver, but was open to the attachment of creditors of the insolvent company.

It is further claimed by the defendants that as they paid the debt to the officer upon the execution, they were thereby discharged from all further liability, under the statute, Gen. Statutes, p. 465, sec. 53. That statute is as follows:—“The taking of any effects or debt, by judgment of law, out of the hands of an agent, trustee or debtor of the owner thereof, by process of foreign attachment, shall forever discharge such garnishee.” But this statute has reference solely to a discharge of the claim of the judgment debtor. The judgment debtor was the Watson Manufacturing Company, and that company is making no claim on these defendants. If it should do so undoubtedly the defendants could take advantage of this statute in their defence. The debt was factorized as a debt due that company. It was really a debt due the present plaintiff. The garnishee must have been factorized as the trustee or debtor of the “owner.” That owner was Watts Cooke as receiver. His rights could not be affected by the proceeding.

It is again claimed- that the plaintiff is estopped from asserting his rights as owner by his neglect to notify the defendants not to pay the money to the factorizing creditor. But there could be no legal obligation to give this notice, whatever it might have been fair or courteous for him to do. The law does not require every person to be on the alert to notice and warn people against claims made by others on his property. This court had already declared his right as receiver to hold against the creditors of the insolvent company the material which he had purchased as receiver for the construction of the bridge, and this of course involved his right in the same capacity to demand and receive the price which was to be paid by the towns for which it was constructed. It is almost incredible that the committees of the towns, with whom he had so much to do in the matter, and with whom he had conferred fully as to his going on as receiver to build the bridge, and who had given their assent to his doing it, should have been ignorant that he even claimed these adjudicated rights or even in any doubt about it.' I£ they desired to be entirely safe they could have taken a bond of indemnity from the creditor to whom the money was paid, or, under the provisions of a statute intended to meet this precise case, (Gen. Statutes, p. 464, sec. 45,) they could, when sued in an action of scire facias, have cited in the present plaintiff to defend his claim, in which case he would have been concluded by the judgment. There is nothing in this claim.

There is no error in the judgment complained of.

In this opinion the other judges concurred.