Paul R. George versus John Kimball, 24 Pick. 234

Morton J. delivered the judgment of the Court. The present is a question of property. The plaintiff claims the goods replevied, by virtue of a sale from the assignees of Ambrose, as whose property the defendant attached them. To defeat the plaintiff’s title the defendant must show that the assignment was fraudulent, and that the plaintiff purchased with a knowledge of the fraud. Even if the assignment was fraudulent, yet an innocent purchaser would hold the, property purged of the fraud.

Under the instructions which were given to the jury, they necessarily found, either that the assignment was bond fide, or that the plaintiff was a fair purchaser, without notice of any prior taint. A fraudulent conveyance of real estate is valid and passes the estate, and can only be impeached by creditors or purchasers of the grantor. 3 Mass. R. 575 ; Drinkwater v. Drinkwater, 4 Mass. R. 354 ; Ricker v. Ham, 14 Mass, R. 137 ; Goodwin v. Hubbard, 15 Mass. R. 210. And if a fraudulent grantee convey to a purchaser who is ignorant of the infirmity of the conveyance, he will hold the estate purged of the fraud.

Gore v. Brazier, 3 Mass. R. 541 ; Inhab. of Worcester v. Eaton, 11 Mass. R. 368; Hills v. Elliot, 12 Mass. R. 26 ; State of Connecticut v. Bradish, 14 Mass. R. 296 ; Trull v. Bigelow, 16 Mass. R. 416. The same doctrine governs the sale of personal property. Brown on Sales, 396 ; Parker v. Patrick, 5 T. R. 175; Hollingsworth v. Napier, 3 Caines’s R. 186 ; Mowrey v. Walsh, 8 Cowen, 238 ; Fletcher v. Peck, 6 Cranch, 133 : Hussey v. Thornton, 4 Mass. R. 405 ; Gibbs v. Chase, 10 Mass. R. 125; Buffington v. Gerrish, 15 Mass. R. 156 ; Smith v. Dennie, 6 Pick. 266 ; Rowley v. Bigelow, 12 Pick. 312; Boyd v.

Brown, 17 Pick. 453. These unquestioned principles are decisive of this case. The assignment was not invalidated because the value of the property exceeded the amount of the debts presented under it. Inadequacy of consideration, though indicative of fraud, is not conclusive evidence of it. And in cases of assignment it can have but little weight, because the assignees are bound to account for the surplus, after the purposes of the trust have been accomplished. The property, if the assignment was bond fide, all vested in the assignees.

The conveyance of a mass of property, consisting of a great variety of chattels, all owned by the vendor, could not be effectual to transfer a part, and not the whole. It must be wholly good or wholly bad. What articles shall pass to the assignees and what remain the property of the assignors ? Who shall determine ? And will its effective power increase as new creditors become parties, so that from time to time new articles will pass ? Suppose the assignment to consist of one or two very valuable articles, a ship for instance, how will the principle operate upon such a conveyance?

It is very clear, therefore, that if the assignment was valid none of the property remained in such a situation that it could be specifically attached as the property of the assignor. If there was a surplus, the proper and the only mode of reaching it was by the trustee procees. And this would not interfere with the sale to the plaintiff, but would apply as well afterward as before. As the property vested in the assignees, though in trust, for particular purposes which might not require the whole, they might lawfully sell the whole.

It might be impossible to know whether the whole would be needed or not; and probably the assignees would have a discretion when all is not needed, to sell the whole or a part, as they might judge most beneficial to all interested. And all that could be required of them, would be fidelity and ordinary diligence and discretion in the execution of the trust. But whether they sold the whole or a part, a purchaser from them would get a valid title to whatever he bought. After a sale by the assignees, the absurdity of the principle becomes more obvious and palpable. The sale might be made to several.

And in such case whose purchase should be valid and whose liable to be defeated by an attachment ? Must each of the creditors attach pro rata, or might the whole be taken from one purchaser ? But the defendant did right in attaching all the property assigned. If he can hold any, most clearly he can hold the whole. If any part of it vested in-the plaintiff, all of it did.

But the defendant’s counsel, without controverting the general doctrine which we have stated, have, with great learning and ingenuity, endeavoured to take the case out of it by the introduction of a principle of equity, a principle which is perfectly sound and has been adopted in law as well as chancery, and which has some seeming analogy, but no real application to the case before us. They contend, that as the plaintiff has never paid for the goods which he purchased, the sale may be avoided and the property taken from him ; that this would do him no injustice.

The principle upon which they rely, and which may be found in the cases cited by them from Johnson, Wendell, Paige, Mason, Sumner, Wheaton, Peters and 15 Mass. R. 156, (Buffington v. Gerrish,) requires only to be plainly stated, to show its total inapplicability. It is merely this.

Where goods are sold upon a condition, which is never performed, or are obtained from the owner by fraud and imposition, so that there is but the form of a sale, without its essential elements, the innocent vendor may reclaim the goods, not only in the hands of' the pretended vendee, but also in the possession of his creditors and purchasers. And the only exception to the rule is in favor of purchasers who have actually paid for the goods. They shall hold them.

But if they have only given security for them or discharged an old debt by the purchase, they may be reclaimed by the owner, and when reclaimed the security becomes void and the old debt revives. In such sales the property does or does not pass, at the election of the vendor. It remains in the former owner if he chooses to annul the contract, and he may retake his own wherever he can find it. The rule is clear and sensible, and the only difficulty is to support the exception.

How goods which never vested in the vendee, can be transferred by him, so as to give the purchaser a good title, is not easily explained on any legal principle. It must rest upon the equitable principle, that where one of two innocent persons must suffer from a fraud, the loss should fall on him through whose fault or negligence the fraud was committed, or who, by misplaced confidence or otherwise, enabled the fraudulent party to perpetrate the fraud. This principle does not apply with very great force, but may be considered sufficient for the purpose.

It is somewhat analogous to the doctrine of the rescission of contracts. They cannot be rescinded by either party without replacing the other in as good a condition as he was in before the contract was made. So in these cases, the owner cannot reclaim his goods, when the innocent purchaser of them cannot be left in as good a situation as if he had not bought them. In the case of a fraudulent conveyance, both parties are in pari delicto and the property actually and immediately vests in the purchaser. He has a valid title which he can transmit to others.

Its only infirmity is its liability to be impeached by a certain description of persons. As to all others it is perfect. And when it has passed into the hands of innocent holders, even this infirmity is cured, and the title becomes sound and indefeasible. To return to the positions with which we commenced. We are satisfied that the instructions were correct; and the jury having found, either that the arrangement was bond fide, or that the plaintiff purchased without notice of any fraud, he must have judgment.

We are also of opinion, that Wilson was rightfully rejected He caused the goods to be attached and this action brought. He is now responsible to the officer for the result of this suit and incurs the expense of carrying it on. He is in fact the real though not the nominal party. And although he acts a? trustee, yet his interest is such as to disqualify him. Judgment on the verdict.