Court Opinion

ID: 8046465
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:59:55.180338+00
Date Added: 2024-06-11T16:37:30.833549
License: Public Domain

Eastman, J.
Although there was no intent on the part of the principal and trustee to defraud the creditors of the former, by the sale of the goods as set forth in the disclosure, yet it is quite apparent that the goods could be taken by the creditors of the vendor as his property, and that a jury, under the instructions of the court, would pronounce the sale to be fraudulent as to creditors. Kendall v. Fitts, 22 N. H. (2 Fost.) 1; Coburn v. Pickering, 3 N. H. 415; Trask v. Bowers, 4 N. H. 309; Clark v. Morse, 10 N. H. 236.
But for the purposes of this decision it is immaterial, in the view which we have taken of the case, whether this sale was a valid one or not. If it was fraudulent, then the plaintiffs have, by their attachment, taken from the possession of the trustee the goods of the principal which were in the hands of the trustee, and on account of which he was to be charged. If the sale was not fraudulent, either in law or by intent, then the plaintiffs have taken from the trustee the property which went to make up the consideration of the note, and of the indebtedness of the trustee to the principal. Having thus taken the goods from the trustee’s hands, can the plaintiffs in either view charge the trustee ?
Eoreign attachment is an equitable proceeding, and in arriving at a decision, the equities between the parties are to be considered. Leland v. Sabin, 27 N. H. (7 Fost.) 74; Boardman v. Cushing, 12 N. H. 114. If this sale were a fraudulent one, the trustee would be chargeable for the *439goods of the principal in the trustee’s possession; but those goods the plaintiffs, by legal process, have taken from his hands, and in the eye of the law have applied the same to the payment of their own debt against the principal. They thus take from the trustee the very property on account of which he is to be charged, if at all, and apply that property to their own advantage. Under such circumstances there could be no equity in charging the trustee upon that ground.
It is no answer to this position that, upon the sale of the goods by the officer, a sufficient sum was not realized to satisfy the first attachment. The plaintiffs knew of this attachment; they knew the amount of the debt upon which it was founded, and the quantity of the goods taken and their cost; and they made their attachment with full means of knowledge of all the facts connected with the business. By their attachment all of the goods were, in law, as effectually taken as by the first attachment; and had that failed, or the debt been settled, or the goods sold for a larger amount, the plaintiffs might have had their debt satisfied out of the goods. The course pursued by them in attaching the goods took from the trustee all personal control over the property. The officer returns that he has attached the goods in the schedule, &c., subject to the former attachment. He held the goods by both attachments, and the trustee was as effectually deprived of all power over them by the last attachment as by the first. He was driven to the alternative, either to surrender his claim to the goods, or bring an action of trespass against the officer for taking them. He chose the former course ; and in this aspect of the character of the original sale the plaintiffs cannot complain of his choice, for the trustee has acquiesced in their position, and yielded up the goods, as those of the principal, to their control. He cannot be required to prosecute the officer as a trespasser for taking the goods, that the avails, if a recovery *440should be had, might go to the plaintiffs ; for the officer was but the servant of the plaintiffs, and made the attachment by their direction, and they must be held to have taken the goods at their own risk. By the attachment they took from the trustee all power or control over the goods, and thereby discharged him from all liability to them on that account.
If the sale is to be treated as a valid, bona fide transfer of the»property from the principal to the trustee, then the goods formed the sole consideration of the note given by the trustee to the principal. The plaintiffs by their attachment took the goods from the trustee, and, as between them and the trustee, destroyed the consideration of the note. If the trustee is to be charged in this aspect of the case, it is because of his indebtedness to the principal; but how can he in equity be charged for the benefit of the plaintiffs on account of this indebtedness, when they themselves have taken away its consideration ?
In Goddard v. Hapgood, 25 Vt. 351, it was held that a trustee is not liable for property, as trustee, taken out of his hands by the creditor, by virtue of an execution in the same suit against the principal debtor, though the execution should turn out to be premature and void, and the officer a trespasser.
In that case the learned chief justice Hedfield says : “It is claimed that the execution, being premature, is void, and so the officer a trespasser, and, therefore, the transaction is to be wholly disregarded. Ye are satisfied the ti'ustee should xxot be held liable for property taken out of his hands under these circumstances. If the execution was ix’regular or void, the party will still have his redress for the actual damages ; but he cannot be thus held liable for property which this same expeditor has already taken from him, upon the ground that he may recover its value. This would be to encourage circuity of actions, which coux’ts will not do.”
*441In State v. Johnson, 33 N. H. (2 Fogg) 463, the court say: “In the same suit the creditor, after summoning the trustee, might, it would seem, attach the property of the principal defendant in his hands, and hold it. The attachment taking the property out of the trustee’s hands, would be regarded as the act of the plaintiff, and discharge the trustee pro tanto, and the property would be held tinder the attachment.”
That was not the point of the decision in that case, but the dictum of the chief justice is directly in point here. The case from Vermont also sustains the principle, and such, we are satisfied, must be the law. A party cannot take from the hands of a trustee the property on account of which he seeks to charge him, without discharging him from all liability as trustee, by reason of such property, or any indebtedness founded upon it. He may elect which ground to take, either to attach the property or summon the trustee, but, so far as the same property is to be considered, he cannot hold it in both ways at the same time.
Had the plaintiff's chosen to rely upon the good faith of the sale from the principal to the trustee, its validity could have been tested by an action against the officer who made the Quint attachment; and had the sale proved valid, the trustee would have been charged in this suit: but, having attached the property, and thereby taken it from the hands of the trustee, they must be held to have abandoned the trustee process, so far as thie goods are to be regarded; and there being no other ground, except the goods and the indebtedness growing out of them, by which to hold the trustee, he must be discharged.