Case ID: conn_28/html/0203-01.html
Source: Caselaw Access Project
Author: {"author": "Ellsworth, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[ *248 ] *Edwin Palmer, Trustee vs. Daniel J. Woodward.
    A creditor of P factorized W, who was-indebted to P, on the 1st day of January, obtained judgment on the 3d of February, and had legal demand made upon W by an.officer on the execution on the 5th of February. W then paid the money over to the creditor and the officer indorsed it on the execution. At the time of the payment W required of the creditor, and the latter gave him a bond of indemnity, against the. claims of all other persons on the money. On the 25th of February F made an assignment in insolvency, such assignment operating, under the statute, to dissolve all attachments made within sixty days preceding, and all levies of executions founded upon such attachments. In a suit brought by the trustee in insolvency against W, to recover the amount originally owed by him to F, it was held,—1. That the payment by W to the creditor of F, was none the less a payment because he took a bond of indemnity from the creditor. 2. That the payment, though made to the creditor personally, was yet, as demand had been made by the officer, to be regarded as paid upon the execution, and as paid under the coercion of legal process. 3. That the payment, being made under such coercion, and upon proceedings valid at the time and final in their character, and the statute with regard to foreign attachments expressly providing that the payment by the garnishee on the execution shall discharge him from the original claim, was not invalidated by the assignment.
    The provision of the 3d section of the insolvent act of 1853, that assignments in insolvency shall operate to dissolve all attachments made within sixty days preceding,- and all levies of executions under such attachments, would seem to have been intended to apply only to proceedings pending at the time of the assignment, and not to such as are then completed, and under which the rights of third parties have become vested.
    Assumpsit, brought by the plaintiff as trustee in insolvency of the estate of Isaac G. Ford, to recover the amount- of an indebtedness of the defendant to Ford at the time of-his assignment. The defense was that the debt had been attached by process of foreign attachment, by one Prentice, and paid over by the defendant on the execution issued upon the .judgment obtained in the factorizing suit.
    - The factorizing process was- served on Woodward on the 1st day of January, 1857. It was returnable to the superior court at its session in New London county on the third Tuesday of January, 1857, and judgment obtained on the 3d day of February following. An execution was issued on the judgment, upon which demand was duly made by an officer upon Woodward on the 5th day of February, on which *day Woodward paid the amount of the indebted- [ *249 ] ness to Prentice on the-execution, on paying which ha required and received from- Prentice an indemnity against the claim of all other persons upon him therefor. The amount thus paid was indorsed by the officer on the execution as having been received by him from Woodward on that day, upon the demand which he made upon him, and was applied in part payment of the execution.
    On the 25th of February, 1857, Ford made an assignment of all his property to the plaintiff, as trustee for his creditors, under the insolvent act, and the plaintiff accepted the trust and proceeded with the settlement of the estate under the provisions of that act. By that act all attachments made within sixty days preceding such an assignment are dissolved, and the property attached vests in the trustee free from the attachments.
    Upon these facts the case was reserved for the advice of this court.
    
      Halsey and Crocker, (with whom was Wait,) for the plaintiff.
    1. The original lien created by the attachment was dissolved by the assignment, by the express terms of the insolvent act. Rev. Stat., (Comp. 1854,) 514, § 3. The original attachment being dissolved, all intermediate proceedings under that attachment are equally annulled. The levy of an execution founded upon an attachment that is thus-vacated, is itself vacated by an express provision of the act. The statute is- a remedial one, and should be liberally construed, in furtherance of its object. That object was to prevent a single creditor securing for his own-exclusive.benefit a part of the property of a failing debtor, and to compel a division of the effects of the debtor among all the creditors, in proportion to their respective claims. Such a construction of the statute as would allow the proceedings under the execution in the present case to stand good, would defeat and not further this object. Wolcott v. Pond, 19 Conn., 597. 1 Swift Dig., 11. No argument in favor of such a con- [ *250 ] struction can be drawn *from the inconvenience that would result from the setting aside of such proceedings, since such an argument has no weight against the plain language and intent of a statute. Smith’s Com. on Stat. and Const. Law, 694. Putnam v. Longly, 11 Pick., 490. But Woodward especially can make no such claim, as he holds a bond of indemnity from Prentice, and Prentice can not, since he voluntarily assumed the risk.
    2. The payment made by Woodward to Prentice was not a compulsory payment, but a voluntary one, on a written guaranty given to him by Prentice, without which he refused to pay the money. The payment was made therefore under a private arrangement between Woodward and Prentice, and not upon the compulsion of legal process. To sustain such á proceeding, to the injury of other creditors, would be contrary to both law and equity.
    3. There was no payment in fact. The arrangement between Woodward and Prentice was a mere contrivance to make the transaction a payment or not, just as circumstances should after-wards require. Such a transaction will not be upheld as a payment, especially to the injury of other parties, Drake on Attach., § 674. Wetter v. Rucker, 1 Brod. & Bing., 490.
    
      E. Perkins, for the defendant.
    1. Such a construction ought not to be given to the insolvent law as to make it vacate entirely all proceedings founded upon an attachment of the property made within sixty days before the assignment. Proceedings on an execution, which are -final, should stand good, as where property is sold on an execution, and the trustee should follow the proceeds of the sale in the hands of the levying creditor. Here, the trustee may resort to Prentice, who has received the money which he claims should have been paid to him. Woodward ought not to be compelled to pay it over again, as he has paid it under legal and compulsory proceedings which were of unquestionable validity at the time, and by the express provision of the statute with regard to *foreign attachments, (Rev. Stat. tit. 1. [ *251 ] § 232,) such a payment by a garnishee discharges him from all liability to his creditor. Culver v. Hall, 20 Conn., 409. The insolvent act can not have been intended to repeal this provision.
    2. It can make no difference that the money was paid under an indemnity from Prentice. It was none the less a payment. It was the legal duty of Woodward to pay the money when demanded on the execution, and the payment was in discharge of this legal duty. If he had refused, he would have been liable to a suit of scire facias, and, if sued, it would have been no defense that he was waiting for sixty days to expire to see whether Ford would make an assignment. And the payment, though made to Prentice personally, was yet in law made to the officer. It was after a demand by the officer on the execution, and consequently after his liability liad become fixed, and the payment was indorsed by the officer on the execution as a payment thereon.
   Ellsworth, J.

We think there is no room for doubt, upon the facts, that the debt which the defendant owed Ford, which had been attached by Prentice on the first day of January, 1857, was duly demanded and paid on the execution, on the 5th day of-February thereafter. It was paid under legal coercion. ■ The circumstance that the money was handed to the officer having the-execution, by or through the agency of -Prentice, is -quite unimportant, and so is the fact that the defendant required' and received-indemnity from Prentiee before he paid'the money. It was his duty to pay it. He had no. choice on the' subject, and-, when paid,- he is entitled to the benefit of its being1 a coercive payment, such. an one as is, by our statute regulating foreign attachments, made a complete bar to any future claim by the creditor or his assignee in insolvency. Rev. Stat., tit. 1, § 232.- - -

The case of Wetter v. Rucker, 1 Brod. & Bing., 490, cited by the plaintiff’s counsel, to show that the payment relied upon in this instance was not real nor coercive, makes nothing in their favor, for the decision is placed on the ground [ *252 ] *that no execution was taken-out, and the'money not paid under legal constraint,' nor in reality paid at all. The plaintiff’s counsel do not seem seriously to claim that, if it be true that Woodward paid his money to an 'officer of the law of necessity, he can be forced to pay the second time. This would savor too much of oppression to ‘be allowed. ‘Heneé, they insist that there was in fact no payment proved; and that what is called such is so in pretense: only, leaving- the relation of debtor and creditor substantially as it was before.- We have already expressed our views to the contrary of this, and-therefore, in our judgment, this ground of argument fails.

It has been intimated that, even if we allow that there was in truth a payment by Woodward-, yet, by the very words of the statute, it was voidable, and has been avoided, by the subsequent'assignment of Ford on the 25th day -of February, and that therefore the debt remains unpaid. The argument is that the statute expressly and absolutely declares, that all attachments and levies made within sixty days before the assignment shall be dissolved. We are quite satisfied that no such consequence follows from the assignment in a case situated as this is. The language of the statute is that the attachment shall be avoided; which implies that a process is pending, or in other words a remedy is being pursued which can be consistently arrested. Though we have no occasion in this case to go further than to hold that the payment by Woodward was good in Jaw, yet we think there is force in the claim,.that the statute has no application to-an attachment or levy-not pending at the time of the assignment, but executed and exhausted; It may well be urged that if the creditor is only pursuing a remedy, to obtain satisfaction, and as yet has obtained none, he -mav be> arrested in the process without violating the principles of natural justice and equity which are applicable to vested and fixed interests, while the doctrine may not be carried further, without gross and manifest injustice,—that this statute professedly applies to remedies as such, and not to remedies which have been made the means of'acquiring property which has become fixed and * vested in one who was a creditor. We [ *258 ] suppose it is true as a general principle, that, property acquired according to the law as it was at the time of the acquisition, is not to be devested by matter ex post facto. In this case it may well be said that the property had ceased to belong to the assignor in insolvency, and hence did not fall within the language of the assignment.

If these views, or any of them, are correct, it follows that judgment should be rendered for the defendant, and so we advise the superior court.

In this opinion the other judges concurred;

Judgment for defendant advised.