46 Vt. 22 | Vt. | 1873

The opinion of the court was delivered by

Ross, J.

The Gen. Sts., ch. 34, §47, provides: “All negotiable paper, whether under or over due, may be attached by, and the same is subject to the operation of, the trustee process, unless it shall appear that the same had been negotiated, and notice thereof given to the maker or indorser before the service of the trustee process on him.” By the language and scope of this statute, the payee of a negotiable promissory note is to be treated as the owner thereof, and the debt evidenced by the note is subject to attachment by the trustee process as his property, until the payee has negotiated the note, and the purchaser has given the maker notice' of such purchase. Such has been the construction of this statute by numerous decisions of this *26court. If the purchaser fail to give the requisite notice of the purchase before the service of the trustee process on the maker, the note and the indebtedness evidenced by it, is lost to the purchaser, by his neglect to give the notice. If the purchaser gives the requisite notice, the maker at that moment ceases to be the debtor of the payee, and at once becomes the debtor of the purchaser. The trustee process can no longer reach any indebtedness of the maker to the payee, because he is no longer a debtor of the payee. By the statute the notice is to be given by the purchaser to the maker or indorser of the note, that is, to the debtor, the one subject to the trustee process. Hence, as the law places him, the maker of a note always has knowledge of the person to whom he is indebted. When served with the trustee process, by his disclosure he can always state whether he is indebted to the defendant in the suit or not. It may not always be easy for him to determine whether his indebtedness evidenced by his negotiable paper, has been honestly negotiated or not, and also, whether the notice he has received of its transfer, is, in law, sufficient or insufficient. In such a case, the statute has provided that the claimant may voluntarily appear ; or if he refuse to appear voluntarily, he may be cited in, and compelled to have his rights to the indebtedness in the trustee’s hands determined in a manner which will bind all the parties interested in the debt owed by the trustee. If the trustee fail fully to discharge the duty which the law imposes on him in regard to making his disclosure, and therein setting forth all the facts within his knowledge which would affect his liability to be held as trustee in the suit, he might be adjudged the trustee of the payee of the note, and such judgment not be a protection against the collection of the indebtedness in a suit in favor of the transferee of the note. But it will be, not because the law has not provided him with a shield with which he might protect himself, but because, by neglect, he has failed to avail himself of the protection of that shield. If he is adjudged the trustee of the payee of the note by a court having jurisdiction, after having disclosed according to his legal duty, such judgment and the payment thereof, ought, and we think, would be a perfect pro*27tection to him when sued by such transferee. Although this latter point was not fully before the court in Seward v. Heflin, 20 Vt. 144, and Marsh v. Davis, 24 Vt. 363, yet the court intimate that the law is as before stated. In the suit in favor of T. J. Hubbard v. Ainsworth and the orator as his trustee, it has been determined that as between Hubbard and the orator, at the time of the service of the trustee process on the orator, the indebtedness evidenced by the orator’s promissory note to Ainsworth, was the property of Ainsworth. By that judgment, the status of the orator’s indebtedness, as evidenced by the note in question, was determined and fixed between the parties to that suit. Woodruff v. Taylor, 20 Vt. 65. Whether it has been so determined as to bind Cook, or iiis representative, Clark, will depend upon whether the orator, in that suit, and in the matter of his disclosure, fairly discharged towards Cook the full measure of duty which the law imposed upon him.

If the orator did not disclose fully, or did not fully discharge his duty to Cook in that proceeding, then, although the orator is liable to pay the amount of his note given to Ainsworth, to Hubbard, because in Hubbard’s suit it has been determined that it was the property of Ainsworth, he may also be liable to pay it to Clark as the representative of Cook; not because of any failure in the statute to make provision for the orator’s protection, but because the orator has, through his own neglect, failed to avail himself of the provisions of the statute. The court of chancery cannot relieve the orator from the consequences of his own neglect or forgetfulness. Warren v. Conant, 24 Vt. 351. In the case cited, the orator was summoned as the trustee of a party whom he did not owe, but forgot' the day of court, and was adjudged trustee, and came to the court of chancery to be relieved from that judgment. The court held it could furnish him no relief from the consequences of his own neglect. By the orator’s bill, he asks to have Hubbard enjoined from collecting this judgment against the orator as the trasteé of Ainsworth, if it shall be found by the interpleading of Hubbard and Clark that as between Hubbard and Clark, the latter is entitled to have the note paid to him; that is, he asks to have Hubbard’s right to that debt as established at law in the trustee suit between Hub*28bard and the orator, set aside and annulled by the court of chancery. The court of chancery sometimes affords a party relief against a judgment at law which has been procured by the fraud of the opposite party, or to which the party has been, without fault on his part, prevented from making his defense at law, by inevitable accident or mistake. Earl of Oxford’s Case, 3 Lead. Cas. Eq. 167; Emerson v. Udall, 13 Vt. 477; Day v. Cummings, 19 Vt. 496 ; Burton v. Wiley, 26 Vt. 430 ; Dunham, et al. v. Downer et al. 31 Vt. 249. The orator, by his bill, does not bring himself within any of these grounds for relief against the judgment against him in favor of Hubbard. In a proper bill of interpleader the orator should stand in such a relation to the fund and the defendants that upon paying the fund into court, he is entitled to withdraw from the suit, and leave the defendants to establish their respective rights to the fund between themselves. This might be the orator’s condition if' Hubbard and Clark were each claiming a payment of the note to himself by an assignment from Ainsworth, and the orator was in doubt as to which assignment was valid, and to whom he was legally bound to pay the note. The orator does not stand in this relation to the defendants. By his own act and disclosure in the suit, at law, he has helped determine his liability to pay the note to Hubbard. He has thus become an interested, if not a necessary, party in the determination and settlement of the respective rights of the defendants to the amount due from him on the note. He, in order to be relieved, must either establish that his disclosure in the trustee suit was true, and for that reason he is not indebted to Clark on the note, in which case he can successfully defend at law against Clark’s suit; or-he must show that he failed to procure his discharge as the trustee of Ainsworth, through the fraud of Hubbard, or through some inevitable accident or mistake, without his fault, in which case Clark is an unnecessary party to this suit. In a bill of interpleader the right of either defendant to the fund, should not have been determined in a suit at law. 2 Story Eq. Jur. §806. From any view of the case, we think the decree of the court of chancery dismissing the bill was correct, and that decree is affirmed, and the cause is remanded, to have ¿hat decree perfected.

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