True v. Congdon

Any sale, contract or arrangement, entered into with the intent to hinder, delay or defraud creditors, will be void as to such creditors. But if the sale, contract or arrangement is made bona, fide, and without any such fraudulent intent, it will be valid, though its effect may be thus to hinder or delay creditors. In case of an assignment for the benefit of creditors, if the trust be accepted by the assignee, upon condition that he shall be responsible only for his actual receipts and willful defaults, the assignment will be void under our statute, in the same way it would be if it were not an assignment of all the debtor’s property (but what the statute excepts) for the benefit of all his creditors, or if it were not sworn to, as required by law. When an officer sells the entire property in a personal chattel, on execution, the purchaser will hold such property, provided the attaching creditor could do so, as the purchaser will, in that case, stand in the place of such creditor, having all his rights. But if the officer sell only the debtor’s right to or interest in the property, then the purchaser will stand in the place of the debtor, and have only his rights, and not the rights which that debtor’s creditors might have. In all actions of tort brought by one only of two or more joint tenants, parceners, tenants in common, partners, executors, assignees in bankruptcy, and others, who regularly ought to join as plaintiffs, the non-joinder can only be taken advantage of by plea in abatement, or by way of apportionment of damages on the trial, though it is otherwise in actions in form ex contractu.

Trespass, for taking and carrying away a quantity of spruce and pine boards, plank, timber, and shingles, on the 30th day of April, 1858. Plea, the general issue, and a brief statement that the defendant bought the lumber in question at an auction sale of the same, on execution against one Charles Bailey. It appeared in evidence that on the 29th day of January, 1855, the said Charles Bailey and one Roberts were engaged in the lumber business at Guildhall, Yt., under the firm of Bailey & Roberts, where they occupied a saw mill and machinery in the manufacturing of various kinds of lumber and in making sugar boxes; that Charles Bailey lived at Canaan, Yt., forty miles above Guildhall, and the said Roberts lived at Guildhall, and had the charge of the mill; that there was lumber, both manufactured and unmanufactured, at and about said mill, belonging to the said Bailey & Roberts; that the said Charles Bailey had a large amount of spruce and pine timber in his own right,sin the Connecticut River, and on its banks between Mclndoe’s Falls and the head of Hall’s Stream, so called, being the most of it above said Guildhall, and had been drawn in during that winter upon contracts, some of which contracts were not fully completed on said 29th day of January ; that on said day the said Bailey executed the assignment hereto annexed, in the manner in which it purports to be executed. The said Roberts was not present, but afterward assented to it and acted in accordance with it. The said John Bailey was not present, and none of the property involved in this suit was claimed or assigned as his. The interest of said Roberts was in one half of the profits, but nothing in the capital stock. On the day of the assignment the plaintiff went to the mill at Guildhall and took possession of the lumber, notifying the foreman at the mill of the assignment, and marked or caused the lumber to be marked “ T. & "W.,” and made an arrangement with tbe foreman to bold the possession and act for him thereafter. The trustee, "Williams, with True, opened their books and marked some logs, and very soon Williams declined altogether having any thing to do with it. Bailey, soon after the assignment, and before much if any work was done manufacturing lumber (the mill having stopped a day or two), saw the plaintiff, and said to him that the property assigned would more than pay the debts, and being anxious to have the lumber carefully and economically manufactured, desired the plaintiff to make some arrangement with him by which he might move to Guildhall and look after it; the plaintiff was a merchant, doing business at North Stratford, fourteen miles away; whereupon the plaintiff made an arrangement with Bailey to move his family to Guildhall. He was to loot?; after the hands, keep their time and board them, and look after the manufacturing of the lumber. The plaintiff was to furnish supplies to board the help with, and the said Bailey and his wife were to live out of them. Bailey was to give the use of the mill, of which he had a lease, and his own services, and make no charge to the assignment, or the plaintiff therefor, or for the boarding of the help; but the same were to go in for the benefit of the assignment. In accordance therewith, Bailey moved to Guildhall and acted there as the agent of the plaintiff as above; the plaintiff selling most of the lumber sold, and taking the pay therefor himself, being there frequently to look after the business. True testified that at the time of the execution of the deed of assignment, he had no knowledge of Bailey’s contracts to put more lumber into the river, or to have more delivered beside that hauled out at that time; and that Bailey soon after came to him and informed him that he had various contracts of this nature with people on Hall’s Stream, at Pittsburgh, Bloomfield, Columbia, &e., and that he was under obligation by contracts to take such lumber as they could get out during the winter, and insisted that True should furnish means to carry out such contracts. He says, I assented to this proposition, and verbally agreed to receive the timber, and that the same should go into the assignment, and be dealt with and disposed of the same as the assigned lumber and timber, and that the bills paid out by me should all be first paid, and the balance, after deducting my advances, expenses, and something for my time, should go for the benefit of the creditors in the assignment, and the overplus, if any, to Bailey or Bailey & Roberts, the same as the assigned property. There was to be no separation; every thing should go into the assignment with the other lumber in the assignment; but I was to hold on to the lumber as security, and the business to be done in my name alone. Accordingly Bailey went on, other lumber was brought into the concern, commingled together, manufactured together, sold together, without any regard, whether it was cut or hauled out before or after the said 29th day of January, 1855. There was no inventory of the lumber taken, as contained in the assignment, nor of the new lumber afterward introduced, no distinctive mark placed on any of it, except a part of the logs at the Guildhall mills, marked “ T. W.” It appeared that much of the lumber was manufactured into sugar boxes and sent to Portland market. The boxes were marked in True’s name. It also appeared that some new pine lumber was purchased by-Bailey of Messrs. Washburns, with the plaintiff’s consent, that had not been bargained for prior to the assignment, the plaintiff paying principally therefor in money and goods from his store; the balance not paid by the plaintiff remaining still due. A part of this lumber was manufactured into a large boat for freighting lumber, 65 feet long and 13 feet wide. Other portions of this lumber was worked up into sugar boxes, it being suggested that it was wide lumber, and could be profitably employed to help sell the rest. In 1856, Samuel Moore sold to Bailey 30,000 of spruce lumber, taking a wagon of Bailey for payment in part, aud the note of Bailey and True for the balance, $>30, which was afterward paid by Bailey. This wagon was a part of the assigned property, and True testified that Bailey came to him and said that he wanted to exchange some assigned property for this lumber. This went with the other lumber. There were also 75,000 of spruce logs, purchased of Lyman Jordan, for which Bailey had advanced $525, balance of price and transportation, &c., from Columbia, settled for by the plaintiff. This $25 was paid by Bailey to the plaintiff', and credited to Bailey on his books, as he testified. Also, a large lot of lumber, hauled out by Ezra Bigelow, of Hereford, Canada. Bigelow testified that he worked for Bailey in logging on the branches of Hall’s Stream, in January, February, and March, 1855. Had part of the time two ox teams, and eight or ten hands. Most of the lumber was pine, and most of that was got down to Northumberland that spring. Bailey paid me for my labor in money. Had also a lot of land in Canada in part payment of the lumber, &c. There was also a large lot of lumber purchased of Norris & Fletcher and delivered at Pittsburg after the assignment, but contracted for by Bailey before the assignment, for which True testified he paid, and the expense of transportation. Samuel J. Bailey testified that subsequent to the assignment he delivered several thousands of lumber, for which neither Charles Bailey or True had paid him; that this was contracted for in the fall of 1854; though Charles Bailey had paid him something toward some of the labor of the men after the assignment. True testified that it was agreed between him and Bailey, that Bailey should turn his private accounts or balances in payment for labor upon the lumber, or for lumber itself. He testified that he had credited Bailey for some payments, but that he did not know how much Bailey had paid or turned in; that he, Bailey, did more or less custom work at the Guildhall mills. Had heard that he had built a barn, and used lumber and received payment therefor ; and he heard of his selling some small lots of lumber, for which he had rendered no account, and without his assent; that he had advanced money, and goods from his store, and supplies on the order of Bailey, and to Bailey himself to a large amount, which were charged" in his account; that he had gone on through 1855, 1856, and into 1857, in this way, with the lumber falling in price on his hands; sugar boxes falling from 80 cents, in 1855, to 36 cents, in 1857; that a part of the lumber was carried off in the freshet. In the year 1857 pai’t of the remainder had been attached by the creditors of Bailey & Co., and the part in the river he had sold; that as assignee he had never charged or made any account of his services, or for expenses, or time; had never settled his accounts with Bailey; but had advanced in money, and supplies furnished from his store, to Bailey, and for lumber, transportation, labor and otherwise, §6,628.18 And had received from all sources as credit, 4,647.37 —(--- Leaving a balance due the plaintiff of §1,980.81 Had never kept any distinct account of goods, as first assigned. It appeared in evidence that a part of the creditors of Bailey, and Bailey & Roberts, and the other assignors, were present at its execution, and assented thereto. Another portion of them were not present. It did not appear that the attaching creditors, or any other creditors of Bailey, or of Bailey & Roberts, or any party interested in the assignment, were consulted by Bailey & True, or either of them, upon the legality or expediency of the new verbal contract or arrangement whereby the additional lumber was bought and introduced into the property assigned; nor did it appear that they had knowledge or gave consent to the arrangement made with the Messrs. Danforths. It also appeared that in the last of March or first of April, 1855, the plaintiff sold out his mercantile business and goods at North Stratford, to the Messrs. Danforths, and that in April, 1855, when the plaintiff was running this timber down the river, he desired goods and supplies of the Messrs. Danforths on credit, to a large amount. The Danforths not knowing, and being fearful that there might be something wrong or defective in the assignment, declined to let the plaintiff' have supplies, as matters then stood. Thereupon Bailey and the plaintiff' went to them, and Bailey agreed verbally with the plaintiff that if the Danforths would let the plaintiff’ have the supplies, the plaintiff should hold all this lumber which was then in his hands, and the avails of it, when manufactured and sold, till he got his pay for all his advances and expenses on and about the same; when the Danforths, then and in the course of manufacturing and running of the lumber, furnished supplies to the amount of some §1,500 or §1,800, for which the plaintiff has not been paid. The defendant gave in evidence a writ in favor of Moses Rogers against Bailey, dated February 25, 1857; also one in favor of James C. Hall against Bailey, both returnable to the May term of the county court for the county of Essex and State of Vermont, on which writs the property in question was attached. Judgments were rendered thereon at the March term of said court, 1858. The judgment in Hall v. Bailey was rendered by agreement for the full amount declared for in a general count, and for the amount of the "ad damnum in the writ, being $1,700. The main item in the specification was for rent of said saw mill three years, $1,500. The sales on the execution were on the 18th of April, 1858. The returns are in form alike on each execution. So much of the return as is necessary to raise the question of law arising thereon, was made a part of the case. The statutes of Vermont, authorizing sales upon executions, were put in evidence and made a part of the case. It also ajzpeared that the right sold was sold for a sum much less than the full value of the lumber. Rogers, the judgment creditor, testified that he directed the deputy sheriff to attach the property; that he was present at the sheriff’s sale, and ordered the officer to sell all Bailey’s right in the property; that the plaintiff, True, was present, and claimed the property and forbade'the sale. David II. Beattie, the sheriff who made the sale, testified that he made the sale as he made the recofd in his return; that he sold whatever interest Bailey had; that True was present and claimed the lumber and forbade the sale; that he was asked at the sale what Bailey’s interest was, and answered that he could not tell. True testified also that the object he had in view in taking the assignment was to seeui’e a debt of $250 of his own, and more especially to secure a debt for Richey & Danforth, of about $1,000, being a note indorsed by Bailey & Robei’ts, and against one Merrill, who had failed, and which note he, True, advised Richey & Dan-forth to buy. The plaintiff objected to the validity of the sale, for two reasons: 1. That, by the law of Vermont, thez’e is no provision for the sale of any such undefined property as puz’poz’ts to have been sold in this sale. 2. Thez’e never was any notice given of the sale of any such Z’ight or property as the officer’s return shows to have been sold, and the plaintiff to have bought. The interest of Charles Bailey was ziever advertised for sale. The court overruled the objections and received the evideizce, and the plaintiff excepted. The defendant offered evidence tending to show that the contract and course of dealing between the plaintiff' and said Bailey was fraudulent as to bond fide creditors electing to avoid the same. To this the plaintiff objected, on the gz’ound that the defendant did ziot stand in the place of a creditor electing to avoid the contract, but with the right of Bailey sold by a creditor that had elected to affirm it. The court overruled the objection, the plaintiff excepting. The plaintiff claimed and introduced evidence tending to show that the judgment in Hall v. Bailey was fraudulent and collusive, and that the suit was instigated by Bailey hiznself, without the knowledge of Hall, and also that the puz’chase of lumber by the defendant on said execution was fdr said Bailey’s benefit. For the purpose of showing that the assent of Bailey to the judgment was fraudulent, and that he knew it was false, the plaintiff offered to prove that Bailey said, a short time before the suit was commenced, that he did not owe said Hall any thing for the rent of said saw-mill. The court rejected the evidence, and the plaintiff excepted. Charles Bailey was present during the trial, hut was not called as a witness by either party. The court charged the jury among other things as follows : 1. That the assignment was void as to creditors, by reason of the conditions in the same as to the trustees: to wit, “That Clark P. True and George C. Williams agreed to execute said trusts, being responsible only each for his own actual receipts or willful defaults and could only bind such creditors as knowingly gave their assent thereto. 2. That the taking of other lumber pursuant to Bailey’s contracts, and the purchase of other lumber by the plaintiff after the date of the assignment upon the parol agreements between the plaintiff and Bailey, and commingling the same knowingly with the lumber described in the assignment, as under the circumstances detailed, would operate as a fraud, and would not bind the creditors of Bailey ; and if the jury believed the plaintiff intermingled of his own free will his own property, or property in which he had a pecuniary interest, with the property described in the assignment, and without the ability to identify it, then he must suffer the loss. And. if the jury believed that the intent or the effect of the contract or arrangement between Bailey, and True the plaintiff!, was to delay, hinder and defraud the creditors of Bailey, then they would be justified in finding for the defendant. 3. That the sale on the execution, as made, conveyed the entire property to the defendant. To these instructions the plaintiff excepted. The jury having returned their verdict for the defendant, the plaintiff' moved for a new trial, &e.; and the questions arising on the case were reserved and assigned to the law term. COPT 03? ASSIGNMENT. Know all men by these presents, that I, Charles Bailey, of Canaan, in the State of Vermont, for myself, also for John Bailey, of Columbia, in the State of New-Hampshire, as his agent, also for the partnership firm of Charles Bailey and Benjamin Boberts, Jr., in consideration of one dollar, to me paid by Clark P. True and George C. Williams, the former of Stratford, and the latter of Lancaster, N. BE., and of the trusts herein expressed, do grant and assign to said True and Williams all the sawn lumber, or proceeds of sales of sawn lumber by Knights, Poole & Co., also all the sugar-box shooks which are in Portland, in the State of Maine; all the sawn lumber at Northumberland, N. H., or Guildhall, Vt., including the sugar-box shooks, all the aforesaid property belonging to said Boberts and Bailey; also all the logs in the Connecticut and Ammonoosue rivers and on the banks thereof, marked B. B., and belonging to said Boberts and Bailey; also the following described property belonging to John Bailey: namely, one covered passenger wagon, and one covered passenger sleigh, and one nine passenger coach, now at Lancaster, N. H.; also four team horses, four team harnesses, and a four horse wagon, and one four horse sled, now at Northumberland, N. H.; also all the sawn lumber now lying on the line of the Atlantic and St. Lawrence Railroad, between North Stratford and Northumberland depots; all the sawn lumber now lying at the landing near Josiah H. Prichard’s, in Stewartstown, N. H.; also all the pine and spruce timber marked J. B., lying between Mclndoe’s Falls and the head of Hall stream, so called; also the following described property, belonging to Charles Bailey: namely, all the spruce and pine logs in the Connecticut river and on the banks thereof, between Mclndoe’s Falls and the head of Hall stream, so called ; to have and to hold to said True and 'Williams and the survivor of them, and his heirs, in trust, to transport, manufacture, sell and dispose of said property to the best advantage, and convert the same into money, and after deducting from the proceeds of said property the expenses incurred by said trustees in transacting the aforesaid business, and a reasonable compensation for their services, to divide and pay the said proceeds among the following mutual creditors, in equal proportions to their respective claims, as follows: To C. P. True & Co., all his claims against John Bailey, to be paid from out the proceeds of the aforesaid property of John Bailey; also all their claim against Charles Bailey from the property of said Charles Bailey; all of Richey & Danforth’s claim against Charles Bailey, to be paid from aforesaid property of Charles Bailey; and all the claim or demand of Richey & Banforth against Bailey & Roberts, to be paid from said property of Bailey & Roberts, or of said Charles Bailey, if any of said Charles Bailey’s property shall remain after paying the private debts mentioned against said Charles Bailey; also the White Mountain Bank, a corporation at Lancaster, N. II., two promissory notes now held by said bank, one for $1,016, dated May 1, 1854, payable to the order of James Hall, in nine months from date, signed by Benjamin Roberts, Jr., and Charles Bailey, and indorsed by said Hall; and another for $1,000, signed by James L. Merrill, dated November 3, 1854, payable to order of Benjamin Roberts, Jr., and Charles Bailey, and by them indorsed; said notes to be paid out of the proceeds of the said property of Bailey & Roberts, or of said Charles Bailey, if any of said Charles Bailey’s property shall remain after paying the private debts mentioned against said Charles Bailey; also a note of $100 and interest, signed by Charles Bailey, and payable to Mrs. Jane Hall, to be paid from the proceeds of the property of said Charles Bailey; also the balance due from Bailey & Roberts to William Morse, and the balance due from Bailey & Roberts to II. B. Bar-ling, and the balance due to Moses Rogers, to be paid from the said property of Bailey & Roberts; also the balance due said Morse, and the balance due said Barling from Charles Bailey, to be paid from said property of Charles Bailey; also a note signed by Charles Bailey and payable to Charles B. Allen, for $350, to be paid from the property of said Charles Bailey; also H. A. Fletcher and Burns & Fletcher’s demands against John and Charles Bailey; and any balance due to any of the workmen and teamsters, who have been employed for Charles Bailey or for Bailey & Roberts; and for any balance that may be due to William H. Poole, Esq., and William Heywood,Esq., from Charles Bailey or Bailey & Roberts; also the indebtedness of Bailey & Roberts to James A. Smith;, each of .the aforesaid claims or demands to be paid from the proceeds of the property peculiar and liable to the payment of each according to the ownership thereof, the balance, after paying the debts as aforesaid, to revert to the respective owners as aforesaid. Clark P. True and George O. Williams' agree to execute said trust, being responsible only each for his own actual receipts or willful defaults. Witness our hands and seals, this twenty-ninth day of January, A. D. 1855. John Bailey, By Charles Bailey, Charles Bailey, Roberts & Bailey, C. P. True, Geo. C. Williams. Signed and delivered in presence of Chester Schoee. copy oe oeeicer’s return. I took, by virtue of this execution, a quantity of manufactured lumber, consisting of boards, planks, joists, lathes and shingles, and on the same day I advertised at the store of George Hubbard, in Guildhall, that on the 15th day of May, then next, at one o’clock P. M., I would sell the same at public auction, to the highest bidder, to satisfy said execution and the legal fees thereon, at the store aforesaid, and on said 15th day of May, at the request of the debtor and the creditor within named, I adjourned the said sale until the 18th day of May, A. D. 1858, at the hour of 10 o’clock A. M., and on said 18th day of May, the debtor within named having failed to redeem said property by otherwise satisfying this execution, I sold all of the interest which Charles Bailey, the debtor within named, had in and to the following described lots of lumber, to A. J. Congdon, &c.