Case ID: mass_26/html/0179-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Parker C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John G. Prince versus Michael Shepard and William Ropes.
    Where a debtor assigns property to a creditor in payment of a debt, with a covenant of general warranty, and the same property is attached by another creditor, the debtor is a competent witness to support the title of the assignee, in an action between him and the attaching creditor, the witness standing neutral in regard to interest.
    Where a point in a cause is clearly proved by competent evidence and found by the jury, a new trial will not be granted because of the incidental admission of improper and not very important evidence tending to prove the same point.
    Where property is assigned by a debtor to two persons by one instrument, to u hold to them respectively in the proportions which the deb'ts due to them respectively bear to eacli other,” and the assignment is proved to be fraudulent and void ag to one of the assignees, it is nevertheless valid in respect to the other who is innocent of the fraud; their interest in the fund being several, though if the instrument were valid in the whole they would take as tenants in common.
    As the bond fide assignee in such case takes only an undivided portion of the prop erty, he cannot maintain trespass, trover, or replevin, against an officer who attaches the property on a writ against the assignor, but the officer can legally sell on execution only the part which was fraudulently assigned, and the bond fide assignee will hold as tenant in common with the purchaser : or if the whole shall be sold and such assignee elects to affirm the sale, he will be entitled to a share of the proceeds, having given notice to the officer before they have been paid over.
    But where it was agreed by such assignee and the attaching creditor, that a third po son should take possession of the property and sell it, and retain the proceeds subject to the legal rights of all persons interested therein, and should pay over the same to such persons and in such proportions as it should be decided judicially they were entitled to, and the property was sold accordingly, it was held, that such assignee might maintain an action against such third person to recover his share of the proceeds.
    This was an action of assumpsit for the proceeds of part of the brig Ann and cargo, formerly the property of Henry Prince and Henry Prince junior, the father and brother of the plaintiff, which the plaintiff claimed under an assignment from Henry Prince, dated August 18th, 1826. A trial was had before Wilde J.
    
      The assignment was an indenture between Hemy Prince of the one part, and George Hodges and the plaintiff of the other part. After a recital that Henry Prince is indebted to Hodges in the sum of $3000 and to the plaintiff in the sum of $4000, according to a schedule annexed, Henry Prince assigns to Hodges and the plaintiff one half of the brigantine Ann with her appurtenances, “being now at sea,” with the part of her cargo, and the proceeds thereof, belonging to him, to have and to hold to them respectively in the proportions which the sums of money due to them respectively bear to each other; and Henry Prince covenants with them respectively, that he is the lawful owner of the bargained premises, that he has good right to sell the same, and that he will warrant and defend the same to Hodges and the plaintiff against the lawful claims and de mands of all persons ; and he constitutes Hodges and the plain tiff jointly and severally his attorneys and attorney in the premises, to receive the property and settle all accounts, matters and things relative thereto, as they shall judge expedient; provided, that if Henry Prince shall pay the sums mentioned in the schedule, the indenture shall be void ; and Hodges and the plaintiff, for themselves respectively, covenant that so soon as the sums respectively due to them shall be paid, they will execute a reconveyance of the property assigned.
    The nominal defendants held the proceeds of the property assigned, under an agreement with divers creditors of Henry Prince, dated May 17th, 1827. The real defendants were the Oriental Insurance Company, claiming the vessel and cargo under an attachment made on May 10th, 1827, in an action upon a premium note given by Henry Prince.
    By the agreement last mentioned, between the attaching creditors, — the shippers of that part of the cargo which did not belong to Henry Prince and Henry Prince junior,— the assignees (including the plaintiff) of Henry Prince and Henry Prince junior, — the holders of a respondentia bond given by Henry Prince and Henry Prince junior, — and Shepard and Ropes, the nominal defendants,—it is provided, that Shepard and Ropes shall take possession of the brig and cargo and sell the same, as agents for all concerned and claiming any interest in the same, and from the proceeds shall first pay all charges upon the brig and cargo and all claims not disputed by the attaching creditors, and shall retain such part of the proceeds as those creditors shall allege to be the property of Henry Prince and Henry Prince junior, for the use of such persons as are legally entitled thereto ; that this arrangement and sale shall be without prejudice to the respective rights of any or either of the parties now existing by attachment, assignment, as shippers, or otherwise ; and Shepard and Ropes agree to pay over the net proceeds to such persons of the other parties, in such proportions as it shall be decided judicially they are entitled to, or as by any voluntary agreement, between the parties claiming and the attaching creditors, it shall be agreed to divide the same.
    The plaintiff produced the assignment first mentioned, and other evidence, in support of his claim, and then offered Henry Prince as a witness ; who was objected to, and in that stage of the cause rejected, on the ground of his liability under the covenants in the assignment.
    The defendants produced evidence for the purpose of showing that the debt of the defendant was not bona fide.
    
    The plaintiff then, to rebut the presumption of fraud and to prove the consideration of the assignment, again called Henry Prince, and he was admitted to testify ; and on his cross-examination, the defendants were allowed to inquire of him as to the consideration of Hodges’s demand, and he disclosed that the provision for Hodges, in the assignment, was to secure a note for $ 3000, given without consideration and for the benefit of the witness, but that the plaintiff knew nothing of this; that he had never paid the plaintiff any thing on account of his services in the Ann, which services were performed as stated in an account in the case, and that when the assignment was made he supposed there was something due to the plaintiff, besides the amount of a note dated March 26th, 1826, for $3568 on demand with interest, given by the witness and Henry Prince junior to the plaintiff, for the balance of his account for services and commissions in the brig Ann.
    Joseph H. Prince, an attorney at law, testified, that before he drew up the assignment, he had, by request of the plaintiff, made an attachment against Henry Prince and Henry Prince junior to secure the plaintiff’s debt, which the plaintiff stated t0 be about $ 4000 ; that he understood from the plaintiff, when he was requested to make the assignment, that his claim consisted of the abovementioned demand for services and commissions, and also some money of the plaintiff in the hands of D. L. Pickman, N. and Z. F. Silsbee and R. Stone.
    Pickman testified, that he and the Silsbees and Stone were shippers in the brig Ann ; that they had paid their part of the commissions to Henry Prince junior as agent, he having had the management of the business of the voyage ; that at the time of the assignment there was a sum due to the plaintiff and Millet, the master of the Ann, on account of a shipment of tin at Java in an invoice of theirs, in which the plaintiff and Millet were interested, which, with part profits, amounted to $337, the account concerning which was settled with the plaintiff and Millet in August 1827 and paid to them.
    It did not appear that there was any particular reason whj the plaintiff’s commissions should be paid by Pickman and others to Henry Prince junior in the first instance, otherwise than that it was their practice, and Henry Prince junior’transacted the business of the Ann. Nor did it appear, otherwise than by such practice and the other evidence before stated, that money thus paid to Henry Prince junior had ever been considered as received by him and Henry Prince as partners or jointly, nor that they ever had jointly paid or received any such money, or otherwise ; but it did appear that Henry Prince junior was the agent for the owers of the vessel.
    Joseph H. Prince, who was again called by consent, after the argument of the defendants’ counsel, said that Hodges requested him to draw an assignment ; that his father, Henry Prince, afterwards wished him to secure the plaintiff; that he had before attached real estate for the plaintiff, at his request, on a writ against Henry Prince and Henry Prince junior for $ 4000 ; that the assignment was executed first by his father, then by Hodges, then by the plaintiff; that he did not know any thing about the consideration of Hodges’s note ; that Hodges and the plaintiff were never at his office together ; that when the writ was filled up, no account was before him, but the plaintiff said that about $4000 was the amount due ; that the plaintiff had been much in want of money, and he had lent him some himself, and had borrowed money to pay his expenses to Baltimore, where he now resided ; and he stated, but not in answer to any interrogatories to that point, that the plaintiff had often complained, before the lime of making the writ, that his father and brother were indebted to him. After the witness stated this, the defendants’ counsel objected to it, but the judge overruled the objection.
    The defendants’ counsel contended that this action could not ue maintained, because it was not brought by the plaintiff as survivor of Hodges.
    The jury were instructed, that the action in the present form would lie ; and they were directed to consider, whether the transaction on the part of the plaintiff was fraudulent in the whole or in part; that if a part of his demand was fraudulent, it would avoid the whole transaction ; that the assignment to Hodges was fraudulent in law and void, but that a distinction was to be made in cases of an assignment for the benefit of several parties, for it might be good as to one party and void as to another ; that the circumstance of the want of consideration in the case of Hodges, would have a tendency to throw suspicion upon the plaintiff’s demand, but that if it was proved that the plaintiff had not any knowledge of it, it should not affect his claim ; that the strongest circumstance was, that the sum mentioned in the assignment was about $ 400 more than the note, which if the plaintiff knew it not to be due, would avoid the whole, but if it was included in the assignment by any mistake merely, it was not fraudulent; that the jury should take all the circumstances into consideration, and if they were satisfied there was fraud, the plaintiff could not recover ; that if they believed the transaction to be honest, they should consider what was really due to the plaintiff, and return a verdict for such a proportion of the amount in the hands of the defendants as the amount due to him would entitle him to.
    The jury returned a verdict for the plaintiff.
    The defendants moved for a new trial : —
    1. Because Henry Prince was admitted to testify in behalf of the plaintiff, being incompetent from interest in the event of the suit.
    
      2. Because the judge instructed the jury, that unless the plaintiff was privy to the transaction with Hodges, it ought not in any manner to operate against the plaintiff’s claim.
    3. Because the plaintiff and Hodges, by the assignment, take as tenants in common, and ought to have been joined in an action for the property conveyed by it or the proceeds thereof, and the same matter which is a defence as to both, is a defence as to either.
    4. Because the plaintiff sues, in point of law, as the survivor of Hodges, and the same matter which would be a defence to an action brought by both, is a defence to this action.
    5. Because Joseph H. Prince was admitted to testify in behalf of the plaintiff, to conversations between him and the plaintiff, in which the plaintiff stated that Henry Prince and Henry Prince junior were indebted to him, and in which the witness, upon these statements, advised the plaintiff to commence an action, the same conversations having been had, not at the time of making the plaintiff’s writ, but at other times, long before.
    6. Because the verdict is against the weight of the evidence, upon the point of the excess of the debt. mentioned in the assignment over that attempted to be proved.
    
      Choate and Huntington, for the defendants.
    Henry Prince was interested in the event of the suit, for if the Oriental Insurance Company prevail, he is liable to the plaintiff on his warranty ; and in an action upon the warranty he will be liable to the costs of this suit, so that his interest is not balanced. Jackson v. Hallenback, 2 Johns. R. 394 ; Swift v. Dean, 6 Johns. R. 523 ; Heermance v. Vernoy, ibid. 5 ; Smith v. Chambers, 4 Esp. R. 164 ; Sumner v. Williams, 8 Mass. R. 222 ; Phil. Ev. (2d ed.) 54, 56 ; Jones v. Brooke, 4 Taunt 464 ; 2 Stark. Ev. 752 ; Townend v. Downing, 14 East, 567.
    The plaintiff and Hodges were tenants in common under the assignment, so that the plaintiff should have sued as the survivor. 1 Chit. Pl. 5, 12 ; 1 Wms’s Saund. 294. The agreement with the defendants saves all legal rights of all parties. The deputy-sheriff then being in possession, the plaintiff and Hodges must have sued him in replevin, trespass, or trover. Suppose replevin to be brought; the deputy says that the property is in Henry Prince and Henry Prince junior ; the plaintiffs reply that it is in themselves ; and the deputy shows that the assignment is fraudulent as to Hodges. This would avoid the assignment. So here the action should have been brought by the plaintiff as the survivor, and we should then have shown the assignment fraudulent as to one, and so void as to both. 1 Wms’s Saund. 28 ; Moors v. Parker, 3 Mass. R. 310 ; Marsteller v. M'Lean, 7 Cranch. 158 ; Chit. Pl. 3, 10, 11 ; Peters v. Davis, 7 Mass. R. 257; Co. Lit. 198 ; Ruddock's case, 6 Co. 26.
    But on another ground the action is improperly brought against the defendants. It should have been trespass, trover, or replevin against the attaching officer. The agreement contains no provision that these defendants shall pay any one until his right shall be judicially determined, unless by the assent of all parties. Jones v. Hoar, 5 Pick. 285.
    The declaration of the plaintiff at other times than vrhen in consultation with Joseph H. Prince respecting the writ or assignment, were improperly admitted, not being part of the res gestee. Mon constat that they were not the cause of the verdict’s being in favor of the plaintiff.
    J. Pickering and Saltonstall, for the plaintiff,
    cited, as to the competency of Henry Prince, 1 Phil. Ev. (2d ed.) 54 ; Ward v. Wilkinson, 4 Barn. St Ald. 410.
    The declarations of the plaintiff, as stated by Joseph H. Prince, were part of the res gestm; Pool v. Bridges, 4 Pick. 378 ; Phil. Ev. (2d ed.) 202, 203 ; but if any of the declarations were inadmissible, those came out incidentally and do not furnish a ground for granting a new trial. Aveson v. Ld. Kinnaird, 6 East, 197.
    As to the form of the action, they contended that the rights of Hodges and the plaintiff under the assignment were several. Ernst v. Bartle, 1 Johns. Cas. 327 ; Jackson v. Robinson, 3 Mason, 138 ; Withers v. Bircham, 3 Barn. St Cressw. 254 ; James v. Emery, 8 Taunt. 245 ; Ludlow v. M'Crea, 1 Wendell, 228. And if not, the subsequent agreement by which :he property was put into the hands of the defendants, operated severance.
   Parker C. J.

drew up the opinion of the Court. We are not aware °f any sufficient reason for determining that Henry í>r*nce was not a competent witness. He stands as other debtors do, who have assigned their effects to a favored creditor; if his assignment stands, it pays his debt, but leaves him indebted to the party attaching ; if it is avoided, he is still indebted ; it only changes the creditor. His covenant is nothing more than the implied covenant in all transfers of personal property, viz. that it is his to sell; nor is his liability to costs greater or other than in the usual case of transfer of property by failing debtors. There is no direct liability on his part for costs, and his covenant in the indenture cannot make him liable in damages beyond the amount of his debt ; for which he was liable without the covenant, if the property intended to secure it was taken away by a superior legal title.

And in regard to the testimony of Joseph H. Prince relative to declarations of the plaintiff, that the assignor was indebted to him, this seems to have fallen from the witness incidentally, without any fault of the plaintiff or his counsel, and it was considered, in the order in which it was introduced, as part of the res gestee ; as a complaint made to an attorney in the course of business. This may admit of doubt, but if the evidence was not strictly competent, still it was not material, and could have no improper influence with the jury ; for the plaintiff’s proof of his debt, to a certain amount, is perfectly satisfactory, and a verdict ought not to be set aside for a slight slip, when the verdict is clearly right.

The great questions in the case are, what is the legal effect of the assignment of Henry Prince to the plaintiff, and has the plaintiff a right to support this action, under the circumstances proved in the case.

We consider the question made at the trial, of fraud in the assignment, so far as regards the present plaintiff, as settled by the verdict; and rightly settled, so far at least as to deprive us of the power or wish to interfere with it. The only questionable part of the transaction arises from the apparent surplus intended to be secured by the assignment beyond the amount o' the note to the plaintiff; but that was a matter explainable by evidence, and the jury were rightly instructed respecting it.

It being apparent that the assignment, in relation to the intended interest of Hodges in it, was fraudulent and void, it is a question of some nicety, whether it can be upheld in relation to the plaintiff, who did not participate in the fraud. It is insisted, that as the debt to the plaintiff was attempted to be secured in the same instrument as the feigned debt to Hodges, the assignment is void in the whole, so that the plaintiff can claim nothing under it. This must depend upon the nature of the transaction, and of the instrument by which the assignment was made, and the connexion of the parties to whom the property is conveyed.

Without doubt, property may be conveyed in one and the same instrument, to several persons independent of each other, so as to be available for the benefit of one and not of another. In the common case of assignments to trustees for the use of creditors who shall become parties, it has never been supposed, that if one of the parties should by collusion with the debtor sign for a fictitious debt, the conveyance to the others would be defeated. Such a transaction might avoid the release of all the creditors, it being a fraud upon them, but their interest in the property would not be impaired.

The deed of assignment in this case, though made to the plaintiff and Hodges jointly, so as to make them tenants in common of the property assigned, if the deed were valid in the whole, most clearly shows a separate interest in the fund, and in its whole tenor it regards them as separate and not as joint creditors. The property is conveyed to them respectively in proportion to their respective debts, and in a schedule annexed the amount of the debt and the interest of each is specified. Certainly this would have been a good conveyance to the plaintiff, if made to him separately, notwithstanding another similar conveyance had been made to Hodges, which was fraudulent Why then should the conveyance of the plaintiff be defeated, because it is contained in the same instrument ? The deed itself is not void, for against Henry Prince it was valid in favor of both of the assignees. If fraudulent, the property does not pass by it to the prejudice of creditors. There is no reason that we can discern, nor have we discovered any authority, which requires us to pronounce it void in its effect in toto. On the contrary, by analogy to cases somewhat similar we are warranted in pronouncing the conveyance valid in regard to the plaintiff, though void in regard to Hodges.

There are cases where a deed even to one grantee has been held to be void in part and good in part; indeed this is laid down as a principle of the common law, that where one subject of the conveyance is void as being affected by an illegal consideration, another subject of the same deed not so affected is good. Chit. on Contr. 229, [4th Am. ed. 537, 538.]

It is only where the deed is made void by statute, that the contrary principle prevails. But even in the latter case a distinction is recognized between the several subjécts of a deed, some of which are declared void by statute. By Brit. St. 9 Geo. 2, c. 37, conveyances to charitable uses, under certain circumstances, are declared to be null and void to all intents and purposes. Yet in the case of Doe v. Pitcher, 6 Taunt. 369, a conveyance of several parcels of estate,- some of which were to charitable uses and others not, was good and valid to pass the estate of the grantor in those parcels which were not appropriated to the prohibited use.

We also consider this deed of assignment as capable of being construed a several conveyance to each of the grantees, in proportion to his debt; like the case of covenants, which, though drawn in terms which import a joint interest in the covenantees, may be taken distributively if their interest was several, and each may maintain his separate action upon them. This is most distinctly settled in 1 Saund. 153 ; 3 Barn. & Cressw. 254 ; 8 Taunt. 245 ; 1 Wendell, 228. Indeed it is familiar doctrine.

But still the case is not free from all difficulty, for the plaintiff became, by virtue of the assignment, owner of only an undivided portion of the property conveyed ; so that he could not maintain replevin or trespass or trover against the attaching officer, who had a right to attach, as belonging to the debtors, so much of the property as was fraudulently assigned to Hodges, that being still, in regard to the creditors, left in the Princes. Certainly such action could not be maintained, but the plaintiff’s property is not thereby lost to him. The attaching officer could legally sell on execution only the part which belonged to the Princes, and the purchaser would become tenant m common with the plaintiff. Or if the whole were sold, the plaintiff might legally claim his proportional share of the proceeds, if he chose to affirm the sale, giving the officer notice before he paid over.

But we think all difficulty is cured by the disposition of the property agreed to be made by all parties interested in it by attachment, assignment, or otherwise. They are to share the net proceeds according to their legal rights, and the legal right of the plaintiff is the proportion which his debt bears to the interest of Henry Prince in the proceeds of the vessel and cargo 
      
       See Buchnam v. Goddard., 21 Pick. 71; Long on Sales, (Rand’s ed ) 20l ; Mockbee v. Gardner, 2 Har. & Gill, 176 ; Sweet v. Colgate, 20 Johns. R. 203, 204; Vibbard v. Johnson, 19 Johns. R 77; Rew v. Barker, 2 Cowen, 408 But see Chitty on Contr. (4th Am. ed.) 352 to 355, where it is held that no such implied covenant exists. See also Early v. Garrett, 9 Barn. & Cressw. 932.
     
      
       See Ellis v. Short, 21 Pick. 144; Buddington v. Shearer, 22 Pick. 427; Hamblett v. Hamblett, 6 N. Hamp. R. 342; Jewett v. Stevens, 6 N. Hamp. R 80; Norris v. Badger, 6 Cowen, 445; Doe v. Tyler, 6 Bingh. 561; M'Lanahan v. Universal Ins. Co. 1 Peters, 183; Wiggin v. Damrell,4 N. Hamp. R. 69
     
      
       See Carthrene v. Brown, 3 Leigh, 98; Walker v. Webber, 3 Fairfield, 60, 67; Catlin r. Barnard, 1 Aiken, 9.