Allen v. Knowlton

The opinion of the court was delivered by

I. It is a well-recognized principle of law, that a debtor must be just rather than generous; that he will not be allowed to enrich his friends at the expense of his creditors. This principle does not render the making of gifts by a debtor unlawful, or invalid, as against his creditors, provided he retains other property amply sufficient to satisfy the legal demands of those creditors. The defendant asks the court to apply this principle for his protection in the case at bar. The referee has not found that the gift to the plaintiff — a heifer calf not more than a week old — was of greater value than any ordinary calf of that age ; nor that the father’s ability to pay his debts was thereby lessened, to the injury of his creditors. There is no fact reported which *517shows that the father did not retain property amply sufficient to pay his debts, unless it be, that Perry, for whom the defendant attached the heifer, has not as yet collected his debt against the father from other property. If the father did not retain property amply sufficient to pay all his creditors when he gave the plaintiff the calf, we think it would be an unwarrantable application of this just and wholesome principle of law, to allow a creditor to invoke its aid after he has slept on his rights two aud a half years, and after the donee, in good faith, and at considerable expense and risk, has greatly increased the value of the gift, if not entirely created it. Such an application would defeat the end for which the principle was established, and allow the creditor to enrich himself at the expense of the donee, instead of the donee at the expense of the creditor. We find no error in the pro-forma judgment of the county court in this respect.

II. The defendant insists that there had been no such change of possession as would enable the plaintiff to hold the heifer free from attachment by the creditors of the father. It is questionable whether Mrs. Allen’s possession, so long as she lived with her husband, the donor-, although she 'owned in her own right the property where the heifer was kept, could avail the plaintiff in this respect. The husband, while residing with the wife, has such an interest in and control of her separate real estate, that it is at least doubtful whether, under the circumstances reported, her possession was not legally his possession. We have no occasion to decide this question. The referee has found that from November, 1869, to November, 1870, the heifer was in the actual possession of third parties, employed by the plaintiff, directly or indirectly, to keep her for him. During this period, there was an unquestionable change in the possession of the heifer from the father to the plaintiff. The creditors of the father were legally bound to observe that the heifer was in the possession of third parties, and were put upon inquiry in regard to the character of that possession, and were affected with a knowledge of all the facts which by inquiry they could have ascertained. In Flanagan v. Wood et al., in which the question of what amounts, in law, to a change of possession, is fully considered, the court use this language : “ The *518possession by a third party, with notice of the transfer or attachment, thus stands in the place of a visible change of possession, because such possession is notice to the world of some change of ownership, and puts creditors upon inquiry.” Again : “ In cases, therefore, of joint possession of property which, when sold or attached, was in the hands of the vendor or debtor, the creditor is not bound to inquire. It is sufficient if he carefully observes. If the result of such observation is that a third person, and not the debtor or vendor, is in possession, then he fhust understand that there has been a change of possession, and he is affected with a knowledge of all the facts which by inquiry ho could ascertain.” The application of this principle to the facts reported, affects the attaching creditor in whose right the defendant stands, with a knowledge that the heifer had been in the open, visible, continuous possession of the plaintiff for a full year. Could he thereafter safely allow her to go back into the possession of the debtor ? In Dewey v. Thrall et al. 13 Vt. 281, the court says : “ After a sale of personal chattels has become perfected by such visible, notorious, and continued change of possession that the creditors of the vendor may be presumed to have notice of it, the vendee may lend, or let, or employ the vendor to sell, or perform any other service about, the thing, with the same safety he may a stranger. This is fully settled by the case of Farnsworth v. Shepard, 6 Vt. 521.” This language is as applicable to the change of possession necessary to perfect a gift, as to perfect a sale. Lynde v. Melvin, 11 Vt. 683, and Lyndon v. Belden, 14 Vt. 423, are to the same purport. We conclude therefore that there had been a legal change in the possession of the heifer from the debtor to the plaintiff, so that he could hold it against attachment by the creditors of the debtor.

The pro-forma judgment of the county court is affirmed.