Court Opinion

ID: 6236964
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:34:49.659589+00
Date Added: 2024-06-11T08:58:04.744314
License: Public Domain

Chief Justice Sharswood
delivered the opinion of the court,
It is well settled that the confession of a judgment to a bona fide creditor, even though it have the effect of giving him a preference over other creditors, is not a fraudulent disposition of an insolvent estate. It was held by this court in Oovanhovan v. Hart, 9 Harris 495, that a conveyance of land by a debtor in *579failing circumstances to a creditor to pay an’existing debt is not fraudulent although the parties contemplate that thereby the claims of other creditors will be defeated. Putting aside, then, all the evidence in this case that the parties confessed the judgment with the very purpose and design of securing for it a priority over the judgment of other creditors impending and about to be entered, the sole question was this: Was the plaintiff a bona fide creditor of the firm of Caughey, Walker & Co., at the time the judgment was confessed? She held the note of the firm. It was unquestionably good as against the firm. They could not have impeached it for fraud or want of consideration. It is certainly true that if there was no debt due from the firm to the plaintiff at the time of the giving of the note— if they had never received any consideration, they had no right create a debt by voluntarily assuming the debt of one of the members so as to be good against their creditors. But there were facts in the case which showed that they were morally bound for the debt. They had received the money. It had entered into the business of the firm, made their purchases, paid.their debts, and in equity and good conscience the plaintiff stood upon as fair a platform as other creditors who had sold them goods or advanced them money. They might undoubtedly have repudiated it as a debt of the firm. We think the learned judge below erred in his charge as complained of in the third specification of error. . He held, and so charged, that “ the money that was put into the firm by W. M. Caughey was credited to him on the books of the firm: it had become his money by loan from Mrs. Walker: there was no privity between the plaintiff, Mrs. Walker, and the firm, and hence it is, we think it a mistake to say that the firm had the use of her money. It was the money of W. M. Caughey that they had the use of.” We think there was error in making this fact conclusive, as the charge did. The mere form of book-keeping could not change the facts of the case or alter the result. That it was not noted on the book, that the money was a debt by the individual member to whom it was credited to the plaintiff, that it was a loan from her to him, merely, ought not to conclude the question. All the partners knew of the fact that she held her father’s note for the money, though they did not consider it a debt of the firm, as certainly it was not. It was expressly held by this court, in Siegel v. Chidsey, 4 Casey 279, that when money was obtained on the personal credit of a member of the firm, and the money went into the firm and was used for its exclusive benefit, though this would not make the firm liable to the creditor, yet it would be a good consideration to support the subsequent promise of the firm to pay the debt; and a judgment confessed on such assumption was not fraudulent as to creditors. We cannot dis*580tinguish-in any material point between that case and the one now before us.
No exception was taken in the court below to the order directing the feigned issue. It is not our intention to award a venire facias do novo — because we are of the opinion that the issue should not have been ordered. There was no fund in court which rendered a decision of the question raised by the issue necessary. Such necessity might never arise. W e are informed, indeed, that there was a fund in the Circuit Court of the United States for this district for distribution among creditors. It was for that court to direct an issue. It is plain that the court having ultimately to decide should have the settling, control and supervision of the issue. They should have the power to order a new trial if they should think the instructions of the court to the jury or their rulings upon questions of evidence erroneous, or the verdict against the weight of the testimony. It is their conscience which is to be informed. They understand the nature of the fund which they are required to distribute. If, for example, that fund was raised by a sale of the separate estate of W. M. Caughey, the main question in this case could not arise, for it w.as beyond all doubt that the judgment was confessed for a bona fide debt owing by him. The entry of the judgment against the firm did not change its character. He and his separate property were still bound by it, for the judgment was several as well as joint, as all judgments against partners are. Teton the verdict and judgment in the court below, the defendants might go into the circuit court and insist that this finding is conclusive against the plaintiff’s clear right to a priority of payment out of her father’s separate property. Courts do not sit to decide hypothetical cases. It is not enough for a party invoking their decision to show that he may be interested in the question at some future time. He must have a present interest. I know of but one exception to this rule. When a party is in peaceable possession of land he may file a bill in , equity quia timet to remove a cloud on his title which renders it unmarketable.
In Maynard v. Esher, 5 Harris 222, there was an amicable action to try in the District Court of Philadelphia a question arising on a proceeding in the Common Pleas of that county. There was no exception to the action nor assignment of error, but Lowrie, J. said: “ When issues of fact arise and a jury is demanded, the court should oversee the framing of the issues, and order them to be tried by its own jury, and then proceed itself to determine the rights of the parties found and admitted.....The District Court might very properly ha^e refused to try this wager in aid of a court that could do its own business; and we have had some hesitation in allowing it to *581be heard before us.” In Rowland’s Estate, 7 Penn. Law Journal 312, 4 Clark 199, upon a petition ordered by the Court of Common Pleas, the District Court of Philadelphia held, that it it is not competent for the court, upon the application of a third person, to vacate and annul a judgment between other parties who ask uo action and attempt by the process of the court no injury to his rights, and which judgment, though fraudulent and inoperative as to him, is perfectly good as to all the world beside. There may be no impropriety in my saying that the learned president of the Court of Common Pleas — Judge King ■ — -who had directed the application to be made to the District Court, assured me afterwards that he thought the refusal of that court to entertain the case was entirely right. 1
Judgment reversed..