William Broadhead & Sons v. Cornman, Appeal, No. 1

Appeal, No. 1 | Pa. | Oct 7, 1895

Opinion by

Mr. Justice Mitchell,

The ground on which a senior may be postponed to a junior levy is that it is not being used in good faith for its legal purpose, but in fraud of the rights of other creditors. The rule is thus stated in Corliss v. Stanbridge, 5 Rawle 286" court="Pa." date_filed="1835-04-16" href="https://app.midpage.ai/document/corlies--co-v-stanbridge-6314593?utm_source=webapp" opinion_id="6314593">5 R. 286, “ If the plaintiff delivers an execution to the sheriff with direction not to levy at all, or not till further orders, it creates no lien on the defendant’s personal property as against a creditor issuing and proceeding with a subsequent execution. The rule is the same if there is a levy accompanied with instructions to stay proceedings. In both cases the plaintiff’s object is considered to be to obtain security not satisfaction for his debt, and the employment of an execution for this purpose is a perversion of its design, and a fraud against third persons.” This rule has undoubtedly been enforced with strictness. The presumptions are all against a levy under such conditions. And similarly where the sheriff has by the plaintiff’s direction or with his concurrence permitted the defendant or his clerks to sell at private sale, a long line of cases might be cited in which the levy has been postponed. Of these the severest probably is Parys & Co.’s Appeal, 41 Pa. 273" court="Pa." date_filed="1862-01-06" href="https://app.midpage.ai/document/parys--cos-appeal-6231688?utm_source=webapp" opinion_id="6231688">41 Pa. 273, where it was said by Thompson, C. J., “possession and control remaining after levy, as'before; and private sales, are both in contravention of the law, and when they result from arrangements made by the execution creditor he will be postponed to a junior execution. Such arrangements are so evidently for the benefit of the debtor, rather than a means of collecting the debt according to law and the exigence of the writ, and they present such strong temptation to do wrong, not only in making sales, but to carry off and conceal the property, that the law forbids them altogether, not alone for fraud in fact but as being a fraud in law.”

But notwithstanding the generality of the language of that case, though the rule has been strictly enforced it has not been pushed beyond its reason, nor allowed to become a conclusive presumption of fraud, juris et de jure, regardless of its actual character. Thus the mere act of the sheriff in not taking manual possession and removing the goods from the custody of the defendant is not as in England a badge of fraud, and it is said by Rogers, J., in Com. v. Stremback, 3 Rawle 341" court="Pa." date_filed="1832-02-02" href="https://app.midpage.ai/document/commonwealth-ex-rel-reynolds-v-stremback-6314466?utm_source=webapp" opinion_id="6314466">3 R. 341, though regretting the latitude to which the practice had run, “ there is no certain rule how long the goods may with safety to the execution creditor be permitted to remain in the possession of the debtor. The cases have varied from one day to upwards of two years,” (citing them.) In general however any direction by plaintiff to stay proceedings, etc. will postpone him. But even this rule will not always be enforced where the absence of fraudulent or illegal intent is affirmatively shown. Thus in Landis v. Evans, 113 Pa. 332" court="Pa." date_filed="1886-10-04" href="https://app.midpage.ai/document/landis-v-evans-6238411?utm_source=webapp" opinion_id="6238411">113 Pa. 332, where the plaintiff had directed' the sheriff not to go to defendant’s house that day, and the next day told him again that as the ladies were cleaning up he had better not go till afternoon, and in the meantime another execution had come into the sheriff’s hands, it was held that the plaintiff was not postponed, the present chief justice saying in the opinion, the facts “ show nothing more than a disposition on the part of the plaintiff to treat the family of defendant in the execution with due consideration by not subjecting them to unnecessary inconvenience or annoyance.”

In the same line of view,, having regard to the basis of the rule, and the real intent of plaintiff’s action, there is a class of eases which stand a little apart, and that is where an assignee for the benefit of creditors has intervened, and by arrangement with the sheriff and the first execution creditor, has been permitted to take possession and make sale of the goods. To such cases the reasons so forcibly stated by Chief Justice Thompson, supra, do not apply. The assignee is an officer of the law, subject to the supervision and control of the court, and having presumably no interest but to get the most out of the property for the benefit of those entitled by law. Such arrangements have accordingly been sustained in Kent & Co.’s Appeal, 87 Pa. 165" court="Pa." date_filed="1878-06-17" href="https://app.midpage.ai/document/kent-santee--cos-appeal-6235820?utm_source=webapp" opinion_id="6235820">87 Pa. 165 ; Mathew’s Estate, 144 Pa. 139" court="None" date_filed="1891-10-05" href="https://app.midpage.ai/document/assigned-estate-of-mathews-9320036?utm_source=webapp" opinion_id="9320036">144 Pa. 139 ; and Leidich’s. Estate 161 Pa. 451" court="Pa." date_filed="1894-05-07" href="https://app.midpage.ai/document/assigned-estate-of-leidich--birnie-6242246?utm_source=webapp" opinion_id="6242246">161 Pa. 451.

The present case belongs to this class. The- facts, do. not justify any suspicion that the appellant’s design was merely to get security, or hinder other creditors, but on the contrary to realize as nearly as possible the full value of the goods levied on, by means of sales by the assignee, for the satisfaction first of his own execution, and the benefit, secondly, if there should be any surplus, of those entitled under the assignment. Under such arrangements, if at any time there should be ground to suspect that in fact there was a fraudulent or collusive use of the execution, or undue delay or action of any kind by the assignee to the hindrance or injury of other creditors, there is always ample power in the court haying control of the execution and of the assignee, to apply a remedy, but it would be a perversion of a rule, itself founded in equity, to apply it as an unyielding formality, to a case not within the mischief it was intended to cure.

Judgment reversed, and judgment directed to be entered for the defendant in the case stated, with costs.