Court Opinion

ID: 6311863
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:16:31.26068+00
Date Added: 2024-06-11T08:59:06.220671
License: Public Domain

The opinion of the Court was delivered by
Gibson, C. J.
This is a case in which one of two innocent men must suffer a loss occasioned by neither ; and it is necessarily a hard one. The title of the assignor to a moiety of the judgment was a legal one ; and it would require a clear equity to prevail against it. To affect, himself, an equity would spring from his embezzlement of the money it was given to secure ; but might it be asserted against his innocent assignee? Were a judgment assignable at law, it certainly might not; for a legal assignee holds discharged of secret trusts arising, as in this case, ex maleficio. But the plaintiff is only an equitable assignee ; and standing as the purchaser of an imperfect title, on principles of equity applicable to purchasers in general, he would, as a cestui que trust, be posterior in time, and consequently posterior in equity. But another principle, springing from the nature of the property at the origin of the transaction, is decisive in his favour. In contemplation of law, the defendant’s money was received from Mahon and Duncan, and subsequently invested in the judgment in question ; and thus it was deprived of its earmark. It would not have been more so had it been counted down for them by Johnston & Lyon, and returned to the latter on receiving their cognovit for it. The transaction was strictly a loan, which the defendant has affirmed by grasping at the fruit of it in the plaintiff’s hands ; and it is entirely clear that money cannot be followed into hands that received it, or its produce, in good faith. That principle was established by Clarke v. Shee, Cowp. 197; and it has become a familiar one. The money of a principal, paid by an agent in discharge of his proper debt, cannot be recovered of an innocent receiver ; nor, ci fortiori, can property procured with it be demanded of an innocent purchaser. Here the defendant attempts to follow his money through an embezzlement, a loan, a judgment taken for it as a security, and an assignment of it, though the judgment had stood as the assignor’s property unchallenged on the records of the court for two years, and with nothing on its face to warn the public *163of an adverse right to it. The assignee was bound on no principle of precaution to inquire of the other legal part owner whether he were not the equitable owner of the whole. There was nothing to breed a suspicion of it. If negligence is imputable to any one, it is to the defendant, who might have been led to the transaction by the return to his execution ; or if none were made, by inquiring of the sheriff into the cause of the delay. Disaffirming the unauthorised act of his attorney, he might perhaps have procured the sale to be set aside by proof of collusion ; but affirming it, he might have pursued the delinquent attorney personally, with the advantage of having him declared a trustee of any security taken for investment. The personal demerit of his fraud, which turns a wrong doer into a trustee, would in that case have prevented him from availing himself of the rule that he who affirms an act in part shall not disaffirm it in part. Here there is no demerit in the plaintiff on that or any other score; and equity would follow the money into the hands of the attorney himself only for the personal demerit of his fraudulent conversion. The direction, therefore, was essentially wrong.
Judgment reversed and a venire de novo awarded.