Case ID: sc-eq_27/html/0005-01.html
Source: Caselaw Access Project
Author: {"author": "Dunkin, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Brandon & Nethers and others vs. Charles Gowing and others.
    
    A creditor under whose ca. sa. the debtor has been arrested and is an applicant for the benefit of the insolvent debtors’ Act, may join other creditors in filing a creditors’ bill for the purpose of enlarging the fund for the payment of their claims and excluding a fraudulent creditor from any share.
    Where one is arrested under a ca. sa. the lien of the judgment is gone, but not the debt.
    The creditor of an applicant for the benefit of the insolvent debtors’ Act may file a bill for discovery against the debtor as ancillary to the proceedings upon his application.
    
      Before Dunkin, Ch., at Union, June, 1853.
    The bill was filed by James K. Brandon and French T., Nethers, partners trading under the style of Brandon & Nethers, Benjamin H. Rice, executor of Sarah Rice, and John North, survivor, on behalf of themselves and all other judgment creditors of Charles Gowing, who shall come in and contribute to the expenses of the suit: and alleged that the said Sarah P. Rice, in her lifetime, and in the year 1846, recovered two judgments in the Court of Common Pleas against the said Charles Gowing, which judgments remain unsatisfied : that on or about the 19th day of February, 1829, North &. Rowe, of whom the plaintiff, John North, is survivor, recovered a judgment in the same Court, against the said Charles Gowing, for over one thousand dollars, which judgment was revived in 1850, by scire facias, by North, as survivor, and is unsatisfied.
    That in the year 1841, Charles Gowing purchased from John J. Pratt a lot in the village of Union, known as the Tan Yard Lot, together with a large stock of shoes and leather, some tan vats, &c., for about three thousand dollars — to secure the payment of which, mortgages were taken for the premises about the eighth day of February, 1842, and not recorded until .the 26th day of January, 1846, during which time Charles Gowing was making large sums of money; that he paid considerable sums of the purchase money to Pratt; and that in the years 1843 and 1844, the debts were contracted to the said Sarah Rice, for the hire of her boy Eli, a shoe-maker, who worked in the shoe shop of Charles Gowing, and whose earnings were applied in part towards the payment of the mortgage debt.
    That about the first of October, 1849, the whole estate of Charles Gowing was sold under an order of foreclosure and sale, and bought in principally by John J. Pratt, the mortgagee, far below the market value, owing to the uncertainty of title, as plaintiffs believe, in consequence of incumbrances in the nature of mortgages and judgments, which were well calculated to deter strangers from bidding liberally; and the plaintiffs submit that the mortgage of the personal property of Gowing was void, for want of recording in time, and that the plaintiffs’ liens attached in preference.
    That within four days after said sale, to wit: on the 4th October, 1849, Charles Gowing, by a voluntary deed, assigned and conveyed to his son, Rodney Gowing, the whole of his debts, deeds, judgments, booksmf account, and choses in action, to pay certain preferred debts: that amongst his preferred creditors was his son, the said Rodney Gowing, to the amount of over two thousand dollars — first as assignee of James S. Brooks & Co., and second, upon a debt due by Charles Gowing to his son, amounting to above eleven hundred dollars. That the second preferred creditor is John J. Pratt, for about two thousand dollars, which the plaintiffs suppose to be the balance of the mortgage debt, but which they charge has been fully paid and satisfied by the re-sale of the estates of Charles Gowing, by Pratt to Rodney Gowing, under some arrangement, understanding and agreement between Pratt, Charles Gowing and Rodney Gowing, made either before or after said assignment, which agreement, the bill charges, was to the effect that if the said Charles Gowing would pay, or secure to be paid, to Pratt, the balance due or amount preferred under said assignment, Pratt would allow to Charles Gowing the whole and full advantage of his purchase, which was sufficient to pay the said preferred debt to Pratt. ■ That on the 4th day of November, 1849, a re-conveyance of the estates aforesaid was made by Pratt to Rodney Gowing, for the purpose and to the intent that Charles should have the benefit of Pratt’s purchase of his property, which advance did discharge the aforesaid debt. The bill further alleges that the assignment of the judgment of James S. Brooks & Co. is fraudulent and void, as there is no such judgment on record. That the execution set up as evidence of the debt assigned to Rodney Gowing, by the said James S. Brooks & Co., is false and pretensive, and intended to hinder the plaintiffs in the collection of their debts, and that if any money was paid’ for the purchase of the said assignment, the whole or a great part was furnished by Charles Gowing, which did not exceed the amount of two hundred dollars, and that the other preferred debt of Rodney Gowing is without consideration, and that plaintiffs believe that they can shew, from the habits' of Rodney Gowing, that it would be unreasonable he could have bona fide demands against his father to the amount of his preferred debts; and they charge a combination between the said assignor and assignee in this respect, to defraud the creditors of the assignor, and to hinder and defeat them in the collection of their debts. That Rodney Gowing, at the request of Charles Gowing, accepted the said assignment, and took upon himself the execution thereof, and promised to pursue the directions of the said deed, according to the provisions of the Statute in such cases made and provided; and that Rodney Gowing continued to collect, and has collected large sums of money, without the assistance of an agent, and without ever calling the creditors together, or giving them notice of the assignment, that they might appoint an agent, according to the provisions of the Statute ; that Rodney Gowing, instead of paying out the money collected under said assignment, has applied it to the payment nf his own debts. The amount collected is unknown to plaintiffs. They believe it to be' considerable. Nor do they know the amount assigned ; but think it some six or eight thousand dollars. That Charles Gowing is now and has been in the possession of the house and lot, and other articles formerly owned by him, and purchased by Pratt, as hereinbefore stated, ostensibly as the agent of Rodney Gowing, but really as the owner himself. That Rodney Gowing, .for a greater part of his time, since his appointment as assignee, has been absent from the district, leaving his father in possession of the assigned effects, to collect and use as convenience or necessity might require. That Charles Gowing has had the whole management of the assignment, paying his own liabilities, and those of his son, and especially the debt due to Pratt, for the purchase money of the property re-conveyed to Rodney Gowing.
    The bill further alleges that the said Charles Gowing, being in the custody of the Sheriff of Union district, under a capias ad satisfaciendum, at the suit of the plaintiffs, Brandon & Nethers, has filed his schedule with the Clerk of the Court of Common Pleas, with a petition to the said Court, .praying leave. to assign, his said schedule, and be discharged from his confinement under the insolvent debtors’ Act; that all the creditors of said Charles Gowing are summoned, by publication in the Unionville Journal, to shew cause why he should not be discharged ; and that among the judgment creditors of said Charles Gowing, is the said Rodney Gowing as the assignee' of one Hiram Baker, the brother-in-law of the said Charles Gowing— that this debt is in the form of a judgment, confessed some time in the year 1826, and assigned to the said Rodney Gowing, 22nd day of June, 1849, and revived by consent on the seventh of September, 1849. That the said assignment was made without consideration, and at the request of the said Charles Gowing, and that if any money was paid for the said judgment to the said Hiram Baker, it was paid by the said Charles, or out of his money. The bill charges that no money was paid by either of the Gowings — that the assignment is voluntary and fraudulent, and submits that the renewal of said judgment, after a lapse of twenty-two years and upwards, from the time of the rendition, is void as to creditors, and that the lien is lost, except as between the parlies, and that the said Rodney Gowing ought not to be allowed a distributive share of Charles Gowing’s effects with the other creditors, if they should prove insufficient to pay in full all of his debts.
    
      The bill further charges, that if the preferred debts which have been paid off and satisfied, and others to the assignee that are without consideration, shall be postponed, there will be an amount in the hands of the assignee, sufficient to satisfy the plaintiffs’ demands, which will appear if the said assignee will set forth a full account of the amounts collected by him, and the sums to be collected — and the plaintiffs submit that the preferred debts ought to be postponed, and the assignee required to account for the whole of the said assignment, and that the deed should be declared void and set aside, and a receiver appointed to receive all the monies from Rodney Gowing, collected by him, and also all sums due Charles Gowing, comprised in said assignment — and'that an injunction be granted to restrain Rodney Gowing from receiving and collecting and getting in the debts, dues, judgments, dioses in action, &c., mentioned in said deed — and that Charles Gowing may be enjoined from moving his discharge in the Court of Common Pleas, under the insolvent debtors’ Act, until the matters complainéd of shall be heard and determined, and for other and further relief, &c.
    To this bill the defendants demurred.
    Dunkin, Ch. “A demurrer,” says Mr. Justice Story, § 442, “may be to the whole bill, or to a part only of the bill; and the defendant may therefore demur as to a part, plead as to another part, and answer as to the rest of the bill.” Again, § 443, “if a demurrer is too general, that is, if it covers or is applied to the whole bill, when it is good to a part only, it will be overruled.” This is, in the strictest sense, a general demurrer, according to the approved forms. It is not necessary to enquire whether there are not particular parts of this bill, especially as to some of the measures of relief, which are or are not demurrable. This is a demurrer to the whole bill. The Court is of opinion that the demurrer must be overruled, and it is so ordered and decreed. It is further' ordered that the defendants file their answer within thirty days.
    
      The defendants, Charles Gowing and Rodney Gowing, appealed, and now moved this Court to reverse the decree, on the grounds:
    1. Because from the case made by the bill, the demurrer should have been sustained.
    2. Because the demurrer was not decided in open Court, and the decree overruling the demurrer is a nullity.
    
      Herndon, ■ for appellants.
    
      Gadlerry, contra.
   The opinion of the Court was delivered by

Dunkin, Ch.

This is what is technically termed a creditors’ bill. The object is not only to enlarge the fund for the pavment of Charles Gowing’s creditors, but to exclude his son and co-defendant, Rodney Gowing, from the large share which, under various claims, he proposes to appropriate to himself. Other judgment creditors, besides Brandon and Nethers, are plaintiffs in these proceedings. But it is urged that, although the demurrer may have been properly overruled as to the other plaintiffs, yet, as Brandon and Nethers had selected their forum^ they must be confined to the remedy which that proceeding affords. It is true that, in arresting Charles Gowing under a ca. sa., Brandon and Nethers lost the lien of their judgment; but, when their debtor became actor and proposed to assign his effects as a condition of his discharge, Brandon and Nethers were entitled to participate in the assigned fund. This precise point was considered and adjudged in Mairs vs. Smith, 3 McC. 52. The assignment under the Insolvent Debtors’ Act is for the benefit “ of the suitor or suitors at whose instance the defendant stands charged,” and of all others, &c. When the defendant takes the benefit of the Act, the plaintiff’s lien is gone, but not his debt. In the language of Judge Nott, speaking for the Court, “ the Act preserves the debt, but not the lien.

The original jurisdiction of this Court entitles the plaintiffs to a discovery both from Charles Gowing and from Rodney Gow-ing, from which they are not precluded by the arrest of the former, and this proceeding might "very properly be entertained as ancillary to the proceedings now pending at law. The demurrer admits the truth of facts constituting a gross fraud, which these defendants have combined to perpetrate upon the creditors of Charles Gowing, and it is the proper province of this tribunal to defeat such machinations by purging the conscience of those for whose benefit they are contrived.

It is ordered and decreed, that the judgment of the Circuit Court be affirmed, and that the appeal be dismissed.

Johnston and "W ardlaw, CC., concurred.

Appeal dismissed.