Court Opinion

ID: 6576978
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:35:10.807551+00
Date Added: 2024-06-11T15:57:08.064514
License: Public Domain

Pierpoint, J.
The plaintiff seeks to make the trustee chargeable for a horse, wagon and other peisonal property named in the exceptions, which the trustee had in his hands and which the plaintiff claims is the property of the principal debtor.
The case shows that the property once belonged to the debtor ; that while he owned it, Walter Carpenter, the claimant, was liable to Blodgett and Bailey as surety for the principal debtor, on notes which he had signed with him to them. To make this properly available as security to Carpenter against this liability, by agreement between the debtor and Carpenter, it was attached upon the Blodgett and Bailey debts, and sold upon execution. The creditors took no interest in the matter, but relied upon Carpenter for their pay ; those who bid off the property were not required to pay for it, but it was permitted to go back into the debt- or’s possession, and was called Carpenter’s property. The effect of this transaction upon the title to the property, it is not necessary for us now to inquire into, inasmuch as the defendant became alarmed lest the property should be attached as his,,and for the purpose of rendering it more certainly available as a security to Carpenter, agreed with him that Carpenter should sell the property to the trustee and take his note for it, and hold that as security for the liability he was under to Blodgett and Bailey, which was done, and Carpenter took and now holds the note for the property, and the trustee took the property and held, used and appropriated the gum, to his own purposes.”
*131The Blodgett and Bailey debts were afterwards paid by the principal debtor out of the proceeds of Carpenter’s property, and in a subsequent settlement between the claimant and the principal debtor, the former retained this note against the trustee as his own property Under these circumstances the plaintiff commences his suit and seeks to make the trustee chargeable by reason of his holding the property.
The county court having found that all these transactions were done in good faith, without any intent to defraud creditors, but for the honest and legal purpose of securing Carpenter, it becomes incumbent on the plaintiff in order to sustain his claim, to establish the fact that the title to this property never vested in the trustee, but still remains in.the principal debtor. The plaintiff does not claim to make the trustee chargeable in consequence of the note he gave to Carpenter, but solely as the holder of the property.
Conceding that up to the time of the transaction that resulted in the sale of the property to the trustee, and the execution of the note to Carpenter, the legal title to the property was in the principal debtor, what was the effect of that transaction as between the parties themselves ? Carpenter sells the property and takes a note for it to himself, but he does it at the desire and with the consent of the debtor and for the very purpose of securing to Carpenter the proceeds. Could the debtor thereafter set up any claim to this property ? Clearly not, neither could any creditor of his acquire any lien upon it by attachment. The transaction being bona fide, it transferred the title to the purchaser, both as against the debtor and his creditors, as perfectly as though the debtor himself had signed the bill of sale. Under these circumstances it is difficult to see upon what principle it is that the purchaser shall be declared the trustee of the debtor ; he became the absolute owner of the property,- and if the debtor could be said to have any contingent interest in the note, that, the case shows, was extinguished long before the service of the trustee process.
But it is asked why should Carpenter object to a judgment against the trustee, inasmuch as he does not object, and such a judgment would not prejudice Carpenter’s right to collect the note ?
*132Is it clear that a judgment against the trustee in this suit, would not prejudice Carpenter’s right to collect the note ? We have already seen that a judgment against the trustee can be rendered only on the ground, that the debtor is the owner of the property, and that the trustee derived no title by the bill of sale from Carpenter, and of course in such case there would be an entire failure of consideration for the note. Carpenter having been cited in and made a party as claimant, and having come in to assert and maintain his claim, not to the property, but to the proceeds of it, which is substantially the same thing, and to defend the title he conveyed to the trustee, all the parties to, and the facts connected with, the transaction are therefore before ns. We are inclined to the opinion that a judgment here that the trustee is liable for that property would be somewhat embarassing to Carpenter, when set up as a defence to that note.
We think, therefore, that justice to all parties requires that the judgment of the county court should be reversed, and judgment rendered that the trustee be discharged without cost, and that the claimant be allowed full cost from the time he was cited in as claimant.
This view of the case renders an examination of the other questions unnecessary.