Adams v. Lewis
Adams v. Lewis
Opinion of the Court
The defendant in this case -was factorized on the 7th of February, 1860, as the debtor of an insolvent, against whom proceedings were commenced in January, 1859, but the trustee was not appointed until February, 1861, after twenty-one adjournments, most of which were had by the mutual consent of the applicants and the insolvent. The factorizing creditor had no actual knowledge of the application to the court of probate until he had obtained judgment in the original suit. When the defendant was factorized he had knowledge of the application, and he knew that the case was pending when demand was made on him on the execution in favor of the factorizing creditor. He, however, took security of the creditor and paid the money on the execution.
The defendant’s counsel have tided to convince us that the debt due from the defendant never passed to the trustee, and that the trustee could take only such property as belonged to the insolvent when he was appointed. But we are clearly of the opinion that the statute on the subject is too explicit to admit of any such construction. The language of the statute is, “ All the property of such debtor or debtors, both real and personal, of every kind and description and wheresoever found, (except as above excepted,) shall at once upon said appointment become vested in said trustee, in as full and ample a manner as if the same had been voluntarily assigned or conveyed by such debtor or debtors, to such trustee, at the time of the application to the court of probate for the appointment of such trustee.” Stat., Comp. 1854, p. 513. We can not doubt that the intention of the legislature was that the change of title should be considered as having taken place when the application was made. Any other construction would enable an insolvent to dispose of all his property before a trustee should be appointed. But the statute evidently contemplated the appointment of the trustee within a short period of time.
Although we hold to this doctrine of relation as applicable to this statute, we ought to take into consideration at the same time other statutes of equal force.
The statute regarding foreign attachment provides that the factorizing creditor, on praying out an execution, “ may direct the officer serving the same to make demand of such attorney, agent, factor, trustee, or debtor, of any debt due to the defendant, and it shall be the duty of said debtor to pay the same.” Also that “ if such debtor shall not .pay to the officer, when demanded, the debt due to the defendant at the time the copy of the writ was left with him, such attorney, agent, factor, trustee, or debtor, shall be liable to satisfy such judgment out of his own estate.”
When a demand was made upon the defendant in this case he owed a debt to the insolvent. That debt might or might not be subsequently transferred by the proceedings in insolvency and the transfer relate back. What could the defendant do to relieve himself? How could he excuse himself for
This view of the subject would dispose of this case, but would leave the question open whether the creditor could re tain the money against the trustee.
We all concur in the opinion, although with some hesitation on the part of some of the members of the court, that on another ground judgment should be rendered for the defendants.
All the goods and effects of the insolvent were suffered to remain in his possession and subject to his control for more than a year after the application was made before the factorizing suit was brought. It appears that the factorizing creditor did not even know that such an application had been made. If he is chargeable with notice at all, it is by the doctrine of Us pendens. It would be carrying that doctrine very far to charge him with constructive notice of that application, when he has never made himself a party to the proceedings by prov
The policy of the law imperatively requires, as a general rule, that the possession of personal property should accompany the title. The trustee in this case represents those creditors of the insolvent who chose to present their claims to the commissioners. Before his appointment the applicants to the court of probate undertook to represent these creditors. The principal creditors individually had a right to make themselves parties to the proceeding. Now it appears that all the parties to the application voluntarily allowed it to rest, and the property to remain in possession of the insolvent, for more than two years, and until after the factorizing creditor had brought his suit, kept it in coxxrt about a year, obtained judgment, made a demand on the execution, and obtained the money. The difficulty has all arisen from this voluntary delay on the part of the creditors and those who represented them. In addition to this it appears that one of the applicants was notified of this factorizing suit, and agreed with the garnishee to take care of it. Now we think that no reasonable excuse has been shown for this long retention of possession by the insolvent; that the creditors and those who represented them, by procuring this delay, and allowing the insolvent to treat the property, including the debts, as his own, gave the defendant reason to believe that he could safely pay the money to the officer, and that they ought not now to be allowed to recover it from the garnishee.
But it is strongly insisted on the part of the plaintiff that we are not at liberty to put the case on this ground, because the superior court has found that “ the adjournments of the coxrrt of probate were obtained for reasons presented to and approved by the court of probate, and were by said court deemed necessary and proper for the interests of said Litchfield Bank (the applicant) and the creditors of the insolvent,” and the sxxperior court finds that all said adjournments were for good and substantial reasons. What these reasons were we have no means of judging, as none are stated. We can conceive of no reasons that would justify such a delay of taking possession, in itself considered. We are bound to presume that there were
We advise judgment for the defendants.
In this opinion the other judges concurred.
Reference
- Full Case Name
- Charles Adams, Judge v. Algernon S. Lewis and another
- Status
- Published