Court Opinion

ID: 6581112
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:38:21.800796+00
Date Added: 2024-06-11T15:57:16.207501
License: Public Domain

The opinion of the court was delivered by
Ross J.
The defendant, July 25, 1875, sold, transferred, and assigned to the trustees, Nichols and Eisk, all money due him from the trustee, the Central Vermont Railroad Company, to secure them for what he owed them, or either of them, or should thereafter owe them, and to pay the debts therein specified to the Northfield Savings Bank and to Thayer. It gave them “ full control and management of said money”, and the use of the defendant’s name in suit or suits for the same. Of this the railroad company were duly notified. .No question is made but that this was a valid assignment of this claim as between the parties thereto, and that it gave Nichols and Eisk the right to recover the entire claim from the railroad company in the name of the defendant. Whether it was so far an assignment for the benefit of creditors, in being made for the benefit of the savings bank and Thayer, as to be obnoxious to the provisions of chapter 67, Gen. Sts., relating to assignments, is immaterial to consider, under the facts found by the commissioner ; for, if originally subject to the provisions of chapter 67, it was valid between the parties thereto, and only inoperative against the creditors of Kimball. His creditors did not intervene *12until after the relations of Nichols and Fisk to the savings bank and Thayer debts, as created by the assignment, had become entirely changed, and they had become personally obligated to pay those debts, if the money received by them on the claim' should prove sufficient to enable them to do so. Hence, if originally for the benefit of creditors, Nichols and Fisk had ceased to hold the debt assigned for that purpose when the plaintiff and other creditors of Kimball attempted to attach it by bringing trustee suits. At the time this and the other trustee suits were brought, Nichols and Fisk, so far as they held the debt against the railroad company by virtue of the assignment, were holding it for their own protection against liabilities which they were under for the defendant at the time the assignment was made, and which they had assumed subsequently thereto. On the facts found, they had assumed the payment of the debts in favor of Thayer and of the savings bank, and of the order in favor of J. O. Houghton, provided the assigned debt proved sufficient to pay these claims after discharging their liabilities for Kimball antecedently incurred. The assigned debt did prove sufficient to discharge these with the claims antecedently incurred by them, so that they have become personally liable for their payment. Nichols and Fisk could lawfully hold the assigned debt for the discharge of all the liabilities which the defendant was under to them personally, jointly, or severally, and which they had incurred for him ; and, although such holding of the assigned debt for the latter class of liabilities, remotely and secondarily operated to the benefit of certain creditors of the defendant, the assignment did not for that reason fall within the operation of the provisions of chapter 67, Gen. Sts. Noyes v. Brown, 33 Vt. 431; McGregor v. Chase, 37 Vt. 225. Although the assignment of July 25, 1875, conveyed to Nichols and Fisk the entire assigned debt, and they had the right to collect the whole of it from the railroad company, yet, the balance of it, above so much-thereof as was necessary to discharge all the defendant’s liabilities to them jointly or severally, and the liabilities which they had incurred for him, they held for the benefit of the defendant so far as they held such balance by force of that assignment. Such balance, if nothing further had been done by *13the defendant, in regard thereto, the plaintiffs could have reached by trusteeing the railroad company. Fay v. Smith, 25 Vt. 610; Downer v. Tarbell, 32 Vt. 22; Perrin v. Russell, 33 Vt. 44. But the plaintiff could thus reach it, not because the assignment of the claim made July 25, 1875, was obnoxious to the provisions of the statute relating to assignments for the benefit of creditors, but because the statute allowing such debts to be attached and factorized by the trustee process, subrogated the plaintiff to the rights of the defendant as between him, the railroad company as his debtor, and Nichols and Fisk his assignees. It is only by taking the place, and coming into the rights, of the defendant in regard to such balance that the plaintiffs in the trustee suits can avail themselves of such balance as would be left coming to the defendant by virtue of the assignment of July 25, 1875, and of what had been done by the assignees under it before the trustee suits were brought. On the facts reported by the commissioner, the defendant Kimball, by orders m favor of other creditors drawn on Nichols and Eisk, and of which they had been duly notified, had effectually assigned and appropriated, so far as he was concerned, all such balance of the assigned debt as Nichols and Eisk would have held for his benefit, if it it had not been for such orders. Such orders, with notice thereof to the assignees, Nichols and Fisk, operated as an equitable assignment of such balance. Noyes v. Brown, supra; Hutchins v. Watts, 85 Vt. 360; Spafford v. Page, 15 Vt. 490. Hence, when the plaintiff’s trustee writ with others, was served on the trustees, the railroad company, and Nichols and Fisk, there was not a dollar of the assigned debt which the defendant Kimball could have enforced against the railroad company, or against Nichols and Fisk. Kimball at that time had parted with all his interest in the assigned debt to Nichols and Fisk and to the persons to whom he had given orders on them. So far as Nichols and Fisk were holding the assigned debt for the benefit of persons holding Kimball’s orders on them unaccepted with notice to them thereof, they were holding the same for the benefit of the creditors of Kimball, but not by virtue of the assignment of July 25, 1875, but by virtue of the orders. That assignment would not, therefore, by its own force and scope, *14be for the benefit of creditors, and so not obnoxious to the provisions of the statute relating to assignments for the benefit of creditors. When the plaintiff takes the place of Kimball in regard to the balance of the assigned debt appropriated by the orders, there is nothing left in the hands of any of the trustees for the trustee process to attach or operate upon.
Judgment affirmed.