Court Opinion

ID: 6232364
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:24:51.982646+00
Date Added: 2024-06-11T08:57:55.130108
License: Public Domain

The opinion of the court was delivered, by
Strong J.
— This is not a contest between Stewart, the purchaser at the assignee’s sale, and Tarr, the equitable owner of the judgments of Smith against the assignor. If it were, the payment by Stewart to Smith the assignee, who was also the legal judgment-creditor of the assignor, would be held a payment sufficient to discharge, pro tanto, his liability for the purchase-money of the land. The contest now, however, is between Tarr, a creditor in equity of McKibben the assignor and Smith the assignee. The account is Smith’s account, though presented by his sureties, and it is upon Smith’s liabilities as assignee that we are now to adjudicate. When the assignment was made and accepted, it created a trust in the assignee for the benefit of the assignor’s creditors, of whom Tarr was one. It became a right of the assignor that Tarr rather than Smith should be paid the judgments of which he had become the owner, and whatever Smith received by virtue of the assignment, he necessarily held, stamped with the trust created by that instrument. Now, that Stewart holds his title to the land, bought by him, under the assignment, and that the money he paid for it was proceeds of the assignment, is perfectly plain. The assignee was accountable *345for the whole value of the land. He could only discharge himself by showing that it was taken away from him by liens of creditors who had in law or in equity a right to the fund raised by the sale. It will hardly be pretended that if he had known that any one of the judgments prior to the assignment had boon paid by the assignor, and with, that knowledge had permitted the purchaser to pay it the second time out of the purchase-money, he could have claimed credit for such a second payment. In what better situation is he now ? As between him and his assignor, or him and Tarr, his cestui que trust, there has been no payment of the judgments assigned to Tarr. Even as judgment-creditor he has no right to hold the money which he has in hand, and certainly still less right, if possible, has he to hold it under the assignment. He took no beneficial interest under it. And if not, he is not entitled to a credit in his account for the two sums of $1355.28 and $157.20. The auditor and the court rightly disallowed it.
The sureties stand in no better position than Smith their principal stands in. The measure of his responsibility is the measure of theirs. It is enough, however, for the present that we are now passing upon his account, and determining how far he is liable as trustee.
The decree of the court below is affirmed, with costs.