Streeper v. Eckart

IN ERROR. 1. A sale and transfer of personal property, made for the purpose of preventing a creditor from obtaining execution of his judgment, is mala fide, and void against such creditor. 2. A party claiming against such creditor is bound to remove all doubt of the fairness of the transaction, even if possession has accompanied the transfer. 3. A transfer of personal property unaccompanied by a corresponding change of possession, is void as against creditors.

This was a writ of error to the District Court for the City and County of Philadplphia, to remove the record of an action of trespass vi et armis, de bonis asportatis, &c. brought by John Streeper against i hristian Eckart and W. B. Freeston. The circumstances, which led to the action, were as follows:—■ On the 17th of August 1832, Christian Eckart obtained a judgment before a magistrate against one Thomas Jefferies for the sum of $70 55. On the 30th of August following, Thomas Jefferies executed a bill of sale to John Streeper of three horses and five' carts for the price or sum of $375. An execution issued in the suit of Eckart v. Jefferies on the 11th of September, and was levied on the horses and carts which were then in the possession of Jefferies. Streeper, the alleged vendee, gave notice to the constable on the 25th of September, that the horses and carts belonged to him; and that they would be claimed from any person who might be possessed of them. The constable nevertheless proceeded ro sell them; and .Streeper brought this action against him and Eckart to recover damages for the taking. On the trial before Pettit, President, the plaintiff proved the bill of sale, and an article of agreement entered into between him and Jefferies on the 31st of August 1832, as follows: “Article of agreement, .made and concluded between John Streeper and Thomas Jefferies, of the Northern Liberties, (carter,) -—To wit: the said John Streeper agrees to let to the said Thomas his three horses, two of which are bays and one a spotted horse. Being the same three horses which the said John, Streeper bpught of the said Thomas on the 30th inst. Likewise, five carts, on snares. That is, the said Thomas is to have the use of the said horses and carts to work with; and the said John is to find feed for the horses sufficient, and keep the carts pi'repair; and to receive the one-half of what the said Thomas may earn by the use of the said horses and carts. And he, the said Thomas, is to keep them in profitable employ. If not, the said John is at liberty to take them, and deprive the said Thomas of the use of all, or either. Witness their hands, August 31st,. 1832.” The plaintiff also examined several witnesses to prove, that Jefferies was indebted to him prior to the 30th of August 1832, and had agreed to transfer the horses and carts to him in consideration thereof; and that the horses and carts were actually his property, and merely hired to Jefferies. The defendant’s counsel produced the judgment and execution against Jefferies, under which the property was sold. The learned Judge charged the jury as follows:— “ Pettit, Pres’t.—The amount of property in question in this case, is not large; but the principles involved are of some importance. Christian Eckart, the defendant, is charged in this action of trespass with having illegally taken certain horses and carts, claimed as belonging to John Streeper, the plaintiff. It is not disputed that the property was taken on an execution, but of the hands of one Jefferies. Eckart’s case is substantially this. He obtained a judgment against Jefferies, before a justice of the peace, on the 17th of August 1832, when Jefferies was the undisputed owner and possessor of the property, which became the subject of dispute. Execution was issued on the 11th of September 1832, and this property was found in the actual possession of Jefferies, and levied on. Streeper says that between the date of the judgment, and the day of the levy, he took possession of the property as a purchaser, and hired it again to Jefferies; and he asserts, that in this he did what was lawful. Now, here the plaintiff is met by a principle of law, viz.: that after .a judgment has been obtained, a transfer by the defendant, of his goods and chattels, is looked upon as wearing a deep complexion of fraud, and . as subjecting to a very jealous examination the conduct of both alienor and alienee; and that even where there is a full consideration, if the possession remain with the debtor, the act is void, as against creditors. 10 Sei-g. <§■ Ramie, 424. A party claiming against the creditors, would be bound to remove all doubt of the fairness of the transaction, even if possession accompanied the transfer. With this preliminary caution, of which the defendant has the advantage, the jury will look at the plaintiff’s cage ; for if it is not shown that he was a creditor of Jefferies’s, there is an end of the controversy. The plaintiff alleges, that he was a creditor; the defendant denies it; and the point is for the jury, as a question of fact. (The Judge here repeated some of the testimony, and noticed some of the arguments ; and under the above remarks, left the question of fact for the decision of the jury.) But suppose the jury are satisfied that Streeper was a creditor of Jefferies, then the question presents itself: was there such a transfer of property as the law will sustain 1 As a general proposition, it is certainly competent to a debtor to make a bona fide sale of personal property, notwithstanding there is a judgment against him. As a general proposition, it is equally true that horses and carts may be lawfully hired out by the owner of them, to another person. The effort here, I understand to be, by a combination of these two principles, each true by itself, to control and defeat, or rather to escape from the effect of another general proposition, which must be admitted to be true, to wit: that possession must accompany the transfer of personal property, or it is void- against creditors. This brings us to the inquiry, what kind of possession does the law require ? The answer is, that the possession must be absolute and exclusive. There must be nothing colourable about it. I refer of course to property capable of delivery, as this was. So far as the alienor is concerned, the possession must be substantial and continuing in its character. No device or contrivance which the wit of man could suggest, short of an open and unequivocal possession, would be allowed to defeat the rule of law. The putting a third person in charge with the alienor, is but a concurrent possession, and would be inoperative. The taking possession of horses and carts for a single night, followed by a restoration of them in the morning, on an alleged contract of hiring, when the design that they should be restored, existed at the time of the taking possession, would be a device in fraud of the law, and would not be permitted to prevail. Where'the object of the whole arrangement is a mere security on the goods, and the former owner is allowed to retain them, or after a formal and temporary possession, intended so to be, is suffered to obtain them again with all the visible marks of ownership, the arrangement is void as against creditors. Any mere temporary possession taken with a vieVv of evading the rule of law relative to unequivocal possession, but which is followed by placing the party and the property visibly in the face of the world, just where they were before the alleged transfer, would be fraudulent. In thus stating the law, I do but carry out the principles of the decisions of the Supreme Court. If the rule which those decisions have recognised, not as new, but as old and previously well established law, could be so readily eluded, they would have been pronounced to but little purpose. The rule certainly has vigour enough for self-protection. Then what is the case here ? Mrs. Jefferies and Mr. Shaw both say, that the object was to secure Mr* Streeper. Mr. Shaw suggested the sale of the 30th of August, the delivery of temporary possession, and the return of the property under a contract of hiring as manifested by the paper-dated the 31st of August. The plaintiff’s counsel have fairly met this point, and treated the two papers of the 30th and 31st of August, as having been executed in pursuance of an original purpose existing before the date of the first of them. If Streeper .took the articles on the 30th of August with-an understanding existing at the moment, that he was to restore them the next day on a contract of hiring; and Jefferies the next day accordingly re-took them into his own use and possession, the transaction was fraudulent in law, and void as against Eckart’s execution. Another point was suggested by the defendant’s counsel, namely, that Eckart was not liable in this suit, even supposing Streeper to have a legal claim upon the property. The case is Tree from legal difficulty on this head. If Eckart knew of the levy, and after receiving notice of Streeper’s claim, approved of the proceedings of the constable; if he attended at and gave his sanction to the sale under his own execution, he is liable; for the trespass, if any was committed.” The plaintiff’s counsel excepted to the charge; and the jury having found for the defendants, he took a writ of error from this court. The following specifications were filed- 1st. “ The judge erred in charging the jury that a conveyance - by an individual of his goods and chattels after a judgment is obtained against him, wears a deep complexion of fraud, and that even where there is a full consideration, if the possession remain with the debtor, the act is void against creditors. 2d. The judge erred in charging the jury that there was not such a transfer of property as the law will sustain; because the possession of personal property must be exclusive and continuing in the person to whom it is transferred. 3d. The judge erred in not charging the jury that inasmuch as horses and carts and so forth are the subject of ordinary hiring, that suffering the alienor to take possession - of them after a transfer for a full consideration to be uséd for the benefit of the alienee. That the_ alienee has such a property in them as will enable him to maintain an action against any person who may take them. 4th. The judge erred in not charging the jury, that from the evidence there was a full consideration paid for the horses and cans, and possession taken of them under a bona fide sale; and that the plaintiff was entitled to a verdict. 5th. The judge erred in charging the jury, that a party claiming against the creditors would be bound to remove all doubt of the fairness of the transaction, even if possession accompanied the transfer. 6th. The judge erred in charging, that “the taking possession of horses and carts for a- single night, followed by a restoration of them in the morning, on an alleged contract of hiring, when the design that they should be restored, existed at the time of the taking possession, would be a device in fraud of the law, and would not be permitted to, prevail. . ■' 7th. The judge erred in charging, that “ if Streeper, the plaintiff, took these articles on the 30th of August with an understanding existing at the moment, that he was to restore them the next day on a contract of hiring, and Jefferies the next day accordingly re-took them into his own use and possession, the transaction was fraudulent in law, and void against Eckart’s execution.” The case was submitted without argument.