Court Opinion

ID: 6581963
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:39:01.213115+00
Date Added: 2024-06-11T15:56:57.068527
License: Public Domain

Pardee, J.
The Farmers and Mechanics’ Association of Waterbury voted to construct a park for fairs. The money for that purpose was obtained as follows:—Its president, secretary and treasurer made a note for $3,000, dated May 18th, 1880, payable to it on demand with interest semi-annually. The defendants, Jacques, Parsons and Hall, with about eighty other persons, signed the following writing upon the back of the note: “We, the undersigned, *521hereby guarantee the payment of sixty dollars upon the above note until the same is paid in full.” Upon this note Root, the president, borrowed $3,000 of one Dr. Shove, and placed the same in the hands of the treasurer. Subsequently a committee appointed by the association made a contract in its behalf with Thomas Martin for the construction of a trotting course, to be completed on or before August 10th, 1880, to the acceptance of the committee. Martin performed work upon his contract, but has not completed it to their acceptance. On December 7th, 1880, the committee reported to the association his non-performance of contract; also that inasmuch as the borrowed money was drawing interest, it would be best to repay it and borrow again when necessary. Neither the association nor the executive committee passed any vote upon the subject of repayment. About ten days thereafter Hall, the secretary of the association, drew an order for $3,000 upon Parsons, the treasurer, in favor of Jacques, not a member of the association, but of the committee appointed to procure the construction of the track. These persons are made defendants. The treasurer paid the money to Jacques, and he caused it to be returned to the lender.
In April, 1881, the association became indebted to A. L. Peck in the sum of about $800 for lumber for a fence, and to G. Tracy in the sum of about $400 for labor in erecting it.
Since September, 1881, the association has been in insolvency, and the plaintiff is its trustee. He complains substantially as follows: “ The plaintiff says that he needs said fund so raised as aforesaid, together with the other moneys of the said association, for the purpose of paying said Martin, Peck and Tracy. That on or about the 18th day of December, 1880, the defendants fraudulently and wrongfully combined, conspired and agreed together to convey away the above mentioned funds so raised as aforesaid for the purpose of paying for said track and fence, together with the other money in said association’s treasury; and for the purpose aforesaid fraudulently and wrongfully, *522and without any authority of said association, or from its proper committee or officers, drew a certain order on the said association’s treasurer, pretending and purporting to be the order of the said association for the sum of $3,000; and then and there, on or about said 18th day of December, 1880, with the said order so fraudulently drawn and issued as aforesaid, procured from said treasurer said above mentioned money, and then and there converted and disposed of the same to their own use.”
The defendants had judgment. The plaintiff appeals for reasons substantially as follows:—“ That the court erred in deciding that said $3,000 borrowed was not a special fund raised for the construction of said park; and in further deciding that the said fund could be taken and used for the purpose of paying other debts of said association than those contracted for the construction of said park, at least until after said park expenses were first paid. Also in deciding that three members of the executive committee of said association could appropriate said $3,000 to the payment of said claims to Dr. Shove, provided they acted in good faith in so doing. Also in deciding that three members of the executive committee, each one of whom was personally and individually liable as guarantor on said $3,000 note, had the power to appropriate the said $3,000 so in the treasury to the payment of said note on which they were guarantors, and that where they had a personal interest they were qualified to act.”
If we should concede that when the treasurer of the association paid its debt for borrowed money it also was indebted to Martin, the plaintiff would remain without cause of action. Although the payment of the debt due from the association was made by the custodian of its money without any special direction from it, yet the act gave neither to it, nor to its trustee in insolvency as the agent of its creditors, any right of action against him. For it is the legal duty of a debtor to pay matured obligations, and his right to pay such as have not matured with the creditor’s assent; the investment is absolutely safe; pre*523sumptively it is to the advantage of a debtor to free himself from debt; presumptively the agent who applies his principal’s money upon the principal’s debt benefits him; and there is no finding that the payment injured this association. The fact that the treasurer and his co-defendants were guarantors of the debt discharged does not vary the case; the legal significance of that fact, if it has any, is exhausted upon the question of good faith; and the finding is that the payment was made in good faith, upon the belief that it would be for the benefit of the association. Upon the facts the money of the association in the hands of its treasurer was at its absolute disposal, subject only to the interposition of creditors under the insolvent law within sixty days after a payment to a preferred creditor; and it was none the less so that its debts equalled its assets. No matter how confidently a creditor may rely upon the fact that his debtor has money sufficient to pay him; no matter, indeed, what promises the debtor may make as to payment; he thereby obtains no lien upon the money; no trust to the exclusion of other creditors is stamped upon it in his favor, of which either law or equity will take cognizance. As a matter of law it is exposed to seizure by another creditor more vigilant, or reception by one more favored. The law does not lift any creditor to a place of preference who simply trusts his debtor.
There is no error in the judgment complained of.
In this opinion the other judges concurred.