Court Opinion

ID: 6591173
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:57:36.329491+00
Date Added: 2024-06-11T15:57:39.451679
License: Public Domain

Bericshire, P.
The first, secohd, and third errors assigned for reversing the decree are, in substance, the same: being objections to the bill for not making Whitely & McConkey parties, and also for improperly making McOonhey & Co. parties. For which reasons, it was insisted, the bill should liave been dismissed upon the demurrer taken to it. In the charging part of the bill, the firm of Whitely & McConkey is enumerated, among others, as one of the creditors of the late firm of John Highland & Co. It the prayer of the bill, however, the same creditors that are named in the charging part, are prayed to be made parties defendant, except that instead of Whitely & McConkey, they are described as McConkey & Co. In the first part of the final decree, they are styled McConkey & Co., and as one of the foreign creditors of the late firm of John Highland & Co. (all of whom waived process and consented to the hearing of the cause), and again in the latter part of the same decree, as Whitely & McConkey; and throughout the record they are indifferently designated as “ Whitely & McConkey,” “ McConkey & Co,” and “ Whitely, McConkey & Co.” It is quite apparent, therefore, that they are one and the same party, and consequently there was no error in not sustaining the demurrer on this account. And, moreover, it could not be error to the prejudice of the appellants, or either of them. The next objection urged is, that the court proceeded to final decree without having Philander S. Austin, the administrator, of John Highland, before it. As the final decree recites that .the cause was heard, by consent, as to the non-resident'defendants (who waived process), and process duly served on the resident defendants who .had not filed answers, I think it is conclusive of the question, even if it were competent for the appellants to make such *67objection here for the first time, as to which, however, it is unnecessary to express an opinion. It' was further argued, that it was error to charge the debts due from John Highland & Co., upon which'the judgments were had, to the appellant, Nathaniel Gr. Highland, or against the land in controversy. And it was also insisted that the appellee stood on the footing ■of a volunteer as to Jacob Highland in paying the debts aforesaid. I do not propose to review the evidence found in the record, but from it I think it is made quite manifest, that the •transaction between Jacob and N. Gr. Highland, his son, in ■the purchase and conveyance from James Lynch of the tract of land in controversy was grossly fraudulent, as 'between them and the creditors of the former. In the bill, the appel-lee claims the right to subject the land in dispute to his ■claim, both as assignee of the debt originally due from Jacob to John Highland for the stock of goods formerly owned by John Highland & Co., and also by way of substitution to the rights and liens of the judgment creditors of said firm. It appears that all the judgments paid by the appellee were rendered against him and the said Jacob and John Highland, ■except the one in favor of Obrien, Grafflin and Frick .(which ■debt was originally due from said firm), which was rendered against the appellee, John Highland and Richard Perine. It is also clear that all the debts paid by him were firm 'debts, and were among the debts he became liable for as the surety, nominally, of John Highland, who represented the late firm, which debts Jacob Highland was also pre-eminentlyliable to pay; and I think, thérefore, he ought, in equity, to stand in the relation of a surety to the late firm, and be’entitled to be subrogated to all the rights of the creditors of such firm. He is also a creditor at large of Jacob Highland, by reason of said assignment,' and as such, had a right to file his bill to impeach the deed from James Lynch to N. G. Highland, for fraud, &c. This assignment bears date prior to the submission to, and award of, Waldo P. Goff; and there being no evidence to show his assent, as to the application or disposition made by the award, of the sum found due from Jacob to JohnHighland for said stock of goods, he was not bound by it, and’ was entitled to the whole amount so awarded to Johti Highland.- And being so entitled, the judgment obtained in John’s name *68against Jacob Highland for the amount of the first installment of said award, enured also to the benefit of the appellee, and he was accordingly entitled to have it charged on the land in controversy, it appearing that the amount of said judgment and the amount of the judgments paid by him, aggregated, do not exceed the amount of Jacob’s indebtedness to him on account of said assignment. It was further assigned as error, and insisted on, that the court erred in-rejecting the claim of Hiram J. Lynch for the residue of the purchase money alleged to be due him from the appellant, N. G. Highland, and not holding a lien on the land in dispute for the amount of the same. This presents a grave and-material question, and its solution must depend on the fact, whether James Lynch, the vendor, had notice of the fraud contemplated by Jacob and N G. Highland at the time of the conveyance by him to the latter, of the land now in controversy. For if this is not made to appear clearly by the testimony, his assignee, H. J. Lynch, even though he were affected-with such notice himself, could not thereby be placed in a worse condition with reference to the payment of the purchase money than his vendor, and must therefore be protected. 2 Tuck. Comn., 450; Garland vs. Rives, 3 Mun., 282; Curtis vs. Jones, Exor., 6 Mun., 42. The enquiry, therefore, now is, does it satisfactorily appear from the record, that Lynch, the vendor, had such notice? The bill charges that the purchase money for said tract was in fact paid by Jacob and the deed taken to. his son, Nathaniel G. Highland, in order to hinder- and defraud the creditors of the former, and that the transaction as between them and the creditors was fraudulent, &c., said Jacob being in truth the real owner of the property, &c. But it is not alleged in the bill that James Lynch was privy to or had knowledge of the fraudulent purpose of the father and son; nor is there any positive evidence found on the record of such knowledge-on the part of said Lynch. If, therefore, such notice can be brought home to him, it must be deduced from the facts and circumstances of - the case. Without now adverting to them in detail, a careful examination and consideration of the whole case has not satisfied me that said Lynch’s conduct in the premises was wholly incompatible with a bona fide purpose and transaction on his part. *69But while there is certainly enough in the evidence to awaken suspicion against him, I am still- not prepared to say that such a knowledge of the contemplated fraud between the father and son is fixed upon him, as would involve him in its consequences. I am of opinion, therefore, that he was entitled, at the time of the conveyance, to the residue of the purchase money then actually due him for the land in controversy; and that Hiram J. Lynch, his assignee, is also entitled to the same. It is very manifest, however, that the amount claimed to be due on the purchase money, at the time of the execution of the deed from -James Lynch to N. G. Highland, was not in fact due, and the effort to secure more than was really due is not accounted for, nor is it free from suspicion, though I do not think we would be justified in concluding that the conduct of Lynch, in this respect, was irreconcilable with an honest intention on his part. In the deed from him to N. G. Highland, the consideration is correctly stated at one thousand five hundred and seventy-seven dollars and forty-one cents; but the payment of only seven hundred and sixty-seven dollars and sixty-four cents is admitted, and the balance claimed to be due is eight hundred and nine dollars and seventy-seven cents, for which the vendee executed his obligation, and a lien was reserved in the deed for this amount. Now this is a manifest error, and it is distinctly shown by the testimony of Lynch himself. In his evidence, taken in the cause, he admits that one thousand two hundred and thirty dollars was paid on the parchase money, all which, except thirty dollars, was actually credited, as he states, and as is shown by the original obligation for one thousand five hundred and seventy-seven dollars and forty-one cents, which is filed in the cause, with the endorsements thereon. These payments, therefore, were applied by the parties themselves at the time they were made, to the payment of this purchase money, and it was not competent for them afterwards to apply the money elsewhere to the prejudice of the creditors of Jacob Highland. Applying these payments to the purchase money, and allowing interest on it from the time it fell due to .the date of the deed aforesaid, it will be found that, instead of the amount claimed and secured in the deed being really due on the purchase money, there was in truth, less than six *70hundred dollars then due on it to Lynch. And this amount, so actually due after applying the whole of the one thousand two hundred and thirty dollars shown to have been paid on the purchase money, and no more, as we have seen, Hiram J. Lynch, as assignee of James Lynch, is entitled to out of the proceeds of the land in controversy; and it appears to me, therefore, the court erred in excluding the whole of his claim, and holding that he had no lien on the said land for any part of said purchase money. In the respect herein indicated, I think the decree is erroneous, and should be reversed, with costs, and the cause remanded to the circuit court for further proceedings.
Moore, J., concurred.
Decree Reversed.