Stover v. Eycleshimer

By the Court.

Bocees, J.

[After stating facts].—The question then is, who had the better right, the appellant, who claimed as an attaching judgment creditor, or the respondent, who claimed as an equitable purchaser or assignee, holding the position of Caroline M. Sherman, whose rights he had acquired.

In • point of time, the latter had the priority, for at the decease of the intestate, June 10, 1861, Caroline M. Sherman held the instrument which was the basis of the respondent’s right. The warrant of attachment was not levied until August 6 thereafter.

The question is, therefore, whether the instrument executed to Caroline M. Sherman took effect on the decease of the intestate, either as a legal or equitable transfer of the estate which descended to the heir at law.

It is undoubtedly true that John L. D. Eycleshimer had no vested interest in his father’s estate at the time he executed the instrument, only a bare possibility, which, of course, was not the subject of a grant, nor did the instrument contain a warranty which could be made to operate as an estoppel; and it may, I think, be ass|S88d in ti$i|cas% that the instrument did ; nqt effect an absolute óf the legal title, and yet uphold the respondent’s claim. If it was such an instrument as a *312court of equity would enforce on the decease of the ancestor, it was effectual for the respondent’s purpose. That it was such, seems to me undeniable. The plain object which the parties had in view was to transfer the expectancy of an heir as a security for the payment of a just debt. In Fonblanque’s Equity (218) it is said, that although a grant of a possibility is not good in law, yet it may be assigned; and Judge Story lays it down (§ 1040) that even the naked possibility or expectancy of an heir to his ancestor’s estate may become the subject of a contract of sale or settlement, and in such case, if made bona fide for valuable consideration, it will be enforced in equity after the death of the ancestor, not indeed as a trust attaching to the estate, but as a right of contract. So too it is laid down in Spence’s Equitable Jurisdiction, that an expectancy or contingent interest may be sold, and the court of chancery, after the event has happened, will enforce the sale. Vol. 2, 865. It is true, Judge Cowen remarks, in Munsell v. Lewis, 4 Hill, 635, 642, that he was of the opinion that a simple expectancy, in which the assignor had no interest and which is unpurchaseable, can neither be assigned, nor would a contract for future assignment be valid; and so Judge Willard has said in general terms, that a bare possibility of an uncertain interest is not assignable.. Will. Eq. Jur. 461. These remarks, however, without qualification, can hardly be deemed sound law at the present day, for in Field v. Mayor, &c. of N. Y., 6 N. Y. 179, it was held that an assignment for a valuable consideration, of demands, having at the time no actual existence, but which rest in expectancy merely, is valid in equity as an agreement, and takes effect as an assignment when the demands intended to be assigned are subsequently brought into existence. The learned judge who gave expression to the views of this court, in that case, says: “ There ivas indeed no present, actual potential existence of the thing to which the assignment or grant related, and therefore it could not and did not operate eo instanti to pass the claim which was expected thereafter to accrue to Bell against the corporation; hut it did, nevertheless, create an equity which would sieze upon those claims as they should arise, and would continue so to operate until the object of the agreement was accomplished. *313On this principle an assignment of freight to he earned in future will be upheld and enforced against the party from whom it becomes due; ” and he adds, “ whatever doubts may have existed heretofore on this subject, the better opinion I think now is, that courts of equity will support assignments, not only of cliosgs in action, but of contingent interests and expectations, and of things which have no present actual existence, but rest in possibility only, provided the agreements are fairly entered into, and it would not be against public policy to uphold them. Authorities may be found which seem to incline the other way, but they will be found, on examination, to have been overruled or to have turned upon the question of public policy.”

This decision by this court seems directly in point, and is conclusive of the case before us on this appeal.

It may be well, perhaps, here to refer to the decision in Milliman v. Neher, 20 Barb. 37, and the cases there cited. It was there held that a chattel mortgage could only operate upon property in actual existence at the time of its execution. In that case the question arose in regard to the legal title to the property, and the decision should be construed with reference to that fact. Otherwise, the case is in conflict with numerous later decisions, where it has been held that such mortgage would be enforced in equity whenever the property should be obtained or should be brought into existence. .

The instrument under which the respondent claims was evidently intended to be, and by its terms was, more than a mere power of attorney. It was intended to vest in Miss Sherman an interest in the property as a security for the payment of John L. D. Eycleshimer’s debt to her. With other rights conferred on her thereby, she was to receive the proceeds and avails of the property “and of all my interest and estate therein, 'and all my estate, property and effects aforesaid, and apply the same respectively to the payment and discharge of the ” debt which he therein declared he justly owed her. Mow here was a clear appropriation by John L. D. E. of his expectation as heir at law in his father’s estate, in effect a transfer thereof as security, equivalent in all essentials to a mortgage in exact and legal phrase.

*314The instrument could undoubtedly have been enforced against John L. D. E., on his father’s decease, according to its . plain import and purpose. He could not have resisted its just effect as a claim or lien on the property. If not, it follows of course that his creditor could not acquire a superior right either by attachment or othep proceeding. A creditor could only obtain his position and rights.

It is objected that the consideration of the instrument was a precedent debt, and consequently that Miss Sherman could not have insisted on her equity against the claims of an attaching and judgment creditor.

It is not suggested that the debt was not a just one, nor is it intimated that the instrument was not given in entire good faith. Eegarding the instrument as an equitable security for the satisfaction of a just debt, the consideration was abundant and bona fide. This precise point was considered by Judge Selden in Seymour v. Wilson, 19 N. Y. 417, 421. The learned judge there shows that a transfer directly to a creditor in payment of or as security' for an honest debt, in the absence of meditated fraud, is good against the claims of both existing and future creditors of the vendor. He says: “It is not necessary in such a case, that the vendee, in order to protect himself from a claim by the other creditors, should show any new consideration paid.” He adds: “ There is no doubt that the debt paid or secured by the transfer must, in such case, be regarded as a ‘ valuable consideration’ within the section which saves the rights of bona fide purchasers; so that if the creditor acts in good faith, and for the mere purpose of obtaining satisfaction of his own debt in accepting the transfer, he will acquire a valid title. There being no equity prior to his own to be overcome, the necessity which calls for proof of a new consideration, in other cases, does not exist.” ' The objection that” the instrument is not supported by a valid consideration, is not well taken.

The case then comes to this: that Miss Sherman held, as security for the payment and satisfaction of a debt due her, a yalid equitable claim on the estate of John L. D. Eycleshimer, which came to 'him by descent, on the decease of his father intestate, June 10, 1861, which claim then became a vested right *315in her, capable of equitable enforcement; and that the respondent on this appeal acquired her position and succeeded to her rights. The appellant’s proceedings and judgment were subsequent thereto, the warrant of attachment having been levied on August 6,1861, and the judgment entered in October following. The claim of the respondent to the fund in controversy was therefore paramount to fiat of the appellant, and the judgment of the supreme court to that effect should be affirmed.

All the judges concurred.

Judgment affirmed, with costs.