Court Opinion

ID: 6142369
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:42:25.697491+00
Date Added: 2024-06-11T08:54:42.015470
License: Public Domain

The Chancellor.
In the view I have taken of this case it. has become unnecessary for me to consider the question, whether the wheat, for the alleged conversón of which this suit was brought, was turned out to the plaintiff as a trustee, to sell the same and apply the proceeds to the payment of the note which he had signed as surety for Houghtaling, or was turned out to him as a security in the nature of a mortgage, to indemnify him against his liability as the surety for Houghtaling upon the note then held by Curtis. There is no faun* *624dation for even a pretence that Ray agreed to take the wheat at its then value, and pay the note himself; and thus to discharge Houghtaling from further liability thereon. ' Houghtaling and Wright both testified that Houghtaling turned out the last as well as the first half of the wheat, to secure Ray as surety on the note. And even after the last half of the wheat had been turned out, Houghtaling offered to turn out to Ray other property which he had subsequently acquired, as he wished to have him fully secured. Upon this state of facts if the wheat had been winter killed or otherwise destroyed before actually sold by Ray, the loss would have fallen upon the" principal debtor; so that Ray would have his remedy over against the latter if he was subsequently compelled to pay the note as surety. On the contrary, if the crop of wheat had been large, so as to have produced upon the sale thereof a much larger sum than was necessary to pay the note, and the expenses of harvesting, &c. the surplus proceeds of the sale would have belonged'to Houghtaling and not to Ray. The plaintiff in this suit, therefore, was not a bona fide purchaser or mortgagee of either half of the wheat, so as to give him a preference over the execution which was previously in the hands of the sheriff, even if there was an immediate delivery of the wheat to Ray, and a continued change of possession previous to the actual levy of the execution thereon.
I had occasion to consider that question in the case of Slade v. Van Vechten, which came before me in the court of chan eery, in April 1844. (11 Paige’s R. 21.) And I then came to the conclusion and decided that a trustee, to whom goods were assigned, to sell the same and apply the proceeds to the payment of antecedent debts merely and without any new consideration for such assignment, was not a bona fide purchaser, within the intent and meaning of the seventeenth section of the article of the revised statutes relative to executions against property, (2 R. S. 366, § 17,) so as to protect liis title from an execution against the assignor which was previously in the hands of the sheriff. There is a difference in this respect between the thirteenth and seventeenth sections of that article. By the common law, the goods of the defendant were' *625bound from the teste of the execution, so as to overreach all sales made by him previous to the delivery of the execution to tlie sheriff. This was subsequently remedied by the’statute, which declared that no execution should bind the properly of the goods of the person against whom'it should be issued but from the time such execution should be delivered to the sheriff to be executed. (1 R. L.of 1813, p. 501, §6.) The same provision, in substance, is incorporated into the revised statutes, in the thirteenth section of the article relative" to" execution's against property.’ (2 R. iS. 365.) That provision is general, and is not restricted to the protection of bona fide purchasers without notice only. Any purchaser, assignee, or mortgagee for a valuable consideration, in security for a pre-existing debt, or otherwise, is therefore entitled to protection under the thirteenth section of that article, to the same extent as he would have been'by the common law, if his right to the property had been acquired previous to the teste of the execution.
Where an execution has been actually delivered to the sheriff to be executed, however, it is a legal lien upon all the "personal property of the judgment debtor, liable to execution, within the bailiwick of the sheriff And to enable a subsequent purchaser or assignee of such property to overreach this prior legal lien of the execution thereon, before levy, and to protect his title under the new provision of the revised statutes on the subject, he must show that he is abona fide purchaser without notice, within the intent and meaning of the seventeenth section before referred to. ■ For the protection of that section only extends to that class of purchasers. (2 R. S. 366, § 17.)
As a general rule, a subsequent purchaser or incumbrancer, who obtains the legal title to property, or a mortgage or lien thereon, merely in payment or satisfaction of a pre-existing indebtedness, is not entitled to protection as a bona fide purchaser, without notice of a prior equity, or lien upon the prop"erty. But the relinquishment of a valid security of lien which he before held for the payment of his debt, and which cannot be revived so as to place him "in the same situation substantially as he was in previous to the" purchase, is undoubtedly *626sufficient to constitute him a bona fide purchaser, where he is not chargeable with notice of the prior equity or lien upon thé property. To constitute a bona fide purchaser who is entitled to protection against a prior legal or equitable right of which he had no notice, such purchaser must have parted with something which was valuable, upon the faith of his purchase and before he had notice of such prior right or equity. (Matter of Howe, 1 Paige's Rep. 125; Lawless v. Kinney, 1 Hud. & Bro. Rep. 400; Churchill v. Grove, 1 Chan. Ca. 35; Jackson v. Rowe, 2 Sim. & Stu. Rep. 472; Jackson v. Campbell, 19 John. Rep. 282; Coddington v. Bay, 20 id. 637.)
. In the case under consideration the 'judgment debtor was aware of the fact that the execution was in the hands of the sheriff, and was therefore a legal lien upon his interest in the wheat at the times when he voluntarily sought the plaintiff Ray and turned the wheat out to him, in fraud of the rights ,a.nd lien of the judgment creditor, and of the sheriff, under the .execution. And as Ray parted with nothing of any value upon the faith of the transfer "of the wheat to him, he is not in a situation to claim the benefit of that fraudulent act of Houghtaling; although he might not have been aware of the existence of the execution against Houghtaling at the time of such" transfer.
By the levy upon Houghtaling’s interest in the wheat on the 19th of September, which levy had relation back to the time when the wheat was first sown, the sheriff was constructively in possession of the other undivided half thereof, by virtue of the execution, the moment Houghtaling acquired an interest therein by purchase of that half, the execution being then in full life. The sheriff, therefore, was authorized to sell the whole of the wheat on the execution. And the defendant in tjys’ suit was entitled to a verdict, without reference to the qu,esfion whether the transfer to Ray was an absolute conveyance, ,o.r was a security in the nature of a mortgage merely; and al.s.o without reference to the question whether there was or was not ,an immediate delivery and a continued change of possession,- A$J errors in the charge of the court upon those *627points, even if such errors existed, could not, therefore prejudice the rights of the plaintiff, as he had none.
' For these reasons, without examining other questions in the cause, I think the judgment was not erroneous and that it should be affirmed.
If the defendant, as the attorney who issued the execution, was a public officer appointed under the authority of this state, as I think he was under the provisions of the revised statutes, this suit was not brought against him for any act done by him by virtue of his office. For it was no part of his duty as attorney in the execution, to direct or control the sheriff in the discharge of his duty under such execution. The client has no right to ask his attorney to subject himself to the risk of an action, by directing the sheriff to levy upon any particular property which is supposed to belong to the defendant in the execution. The defendant is not, therefore, entitled to double costs, under the provisions of the revised statutes on that subject.
Senators Putnam, Spencer, and Van Schoonhoven de livered written opinions in favor of affirmance, concurring in the views of Chief Justice Nelson, in the opinion delivered in the supreme court.
Upon the question ■ being put, “ Shall this judgment be reversed ?” all the members of the court present voted for affirmance, viz.: The President, The Chancellor, and Senators Backus, Barlow, Burnham, Emmons, Lott, Porter, Putnam, Sanford, J. B. Smith, S. Smith, Spencer, Talcott, Van Schoonhoven, Wheeler—16.
Judgment affirmed.