Casey v. Pratt

ORMOND, J.

The object of the bill is to give the complainant the benefit of a judgment obtained by D. Casey & Co. against Charles Cullum, upon the ground, that the bill of exchange on which the judgment is founded, passed to the complainant, by a general assignment to him, by D. Casey &■ Co., in May, 1837, of all the effects of the firm, in trust for the creditors of the firm. That the bill of exchange was not included in the schedule of the assets accompanying the deed, but was fraudulently withheld, by Casey, and subsequently sued upon in his own name.

The right to the judgment is also asserted, by the defendant, Bartlett & Waring, who derive title thereto by an assignment of the judgment, by D. Casey &Co.,obtained subsequent to the deed, under which the complainant claims, but in ignorance as they assert, of his title, and after he had disclaimed title to it.

The facts as they now appear, are, that Dennis Casey & Co. were accommodation indorsers for the firm of Brown & Cawly, on certain bills, payable in New York, on the 22d January, 1837, for about #3,700. To indemnify them against responsibility on these Bills, Brown & Cawly, handed to D. Casey & Co., for the purpose of raising money thereon, or as collateral security, a bill for #4,000, on which Charles Cullum, was an accommodation in-dorser. The bills drawn by Brown & Cawly, were not paid promptly, at maturity, but were paid by Ransom & Spellman, partners ofD. Casey & Co. in New York, for the honor of the firm ofD. Casey & Co. Soon afterwards, but when does not distinctly appear, certainly however, before the 22d of April, 1837, Smith & Conklin, the drawers of the bills of Brown & Cawly, repaid to Ransom & Spellman, the amount of the bills of Brown & Cawly, which they had taken up for the honor of D. Casey & Co. On the 14th April, 1837, D. Casey & Co. caused the bill of #4,000, which they had received as collateral security for their indorsement of the first mentioned bills, to be protested.

From this statement it is perfectly clear, that the title of D. Casey & Co. in the bill for #4,000, was extinguished by the payment of the bills, for which it was merely a collateral security. Nevertheless, it appears that D. Casey, about the 30th May, 1837, *242put the bill in suit against C. Cullum, the indorser, and by the neglect of Cullum to make defence, obtained a judgment against him at law, which he afterwards ineffectually attempted to enjoin, in Chancery, and the judgment is now in full force against him.

As between the parties to this judgment, and those in privity with them, the record is doubtless evidence, that such a judgment was pronounced, and it is also conclusive evidence, of the facts on which the judgment is founded. ■ [Duchess of Kingston’s case, 1 Starkie’s Ev. 190.] Cullum, by permitting this judgment to be rendered against him, has precluded himself from denying, that he owed the debt on which it is founded, to D. Casey & Co.; and it may be conceded, that he is placed under the same interdict, as it relates to each of the parties, who claim by assignment from D. Casey & Co., and are therefore invested with all their rights. The case has been strenuously argued, as if the solution of this question settled the difficulty, but that, in truth, is not the question presented on the bill. It is not whether this judgment is valid, or invalid; but it is, whether, conceding the judgment to be valid, the complainant has shown a title to it.

It is not pretended, that the title passed by actual transfer of the bill, or by an equitable assignment, by virtue of the schedule attached to the deed; but, it is insisted, that it passed in equity, because it was the property of D. Casey & Co. at the time the deed was made, and by the deed, all the effects of the firm of D. Casey & Co. were conveyed to the complainant, whether mentioned in the schedule or not. The question then, is resolved into the simple proposition, had D. Casey & Co. any property, legal or equitable, in the bill of exchange, at the time the deed was made. Now, at the time the deed, on which the complainant relies, was made, on the 12th May, 1837, the bill was not the property of D. Casey & Co.; it had, by the payment of the debt, to secure which it was made, become mere waste paper in the hands of D. Casey & Co., and if they had actually transferred it to the complainant, he could have acquired no title to it, because they had none to confer. Can it be contended, that the deed of assignment, gives to the complainant a title, which he can enforce against any one, to all the fraudulent acquisitions of the grantor, merely because the inception of the fraud, dated back to a time anterior to the assignment ? Even that pretension cannot be set *243up in this case, because, before the deed was made, the bill had been discharged, .and D. Casey & Co. had not the right even to the possession of the paper, on which the bill was written.

It may be conceded, that if this controversy was between Casey & Co., and the complainant, the fact, that the bill was dated anterior to the deed, would be conclusive against them, and they would not be permitted to aver the contrary, and rely upon their own fraudulent acquisition, subsequent to the date of the deed of assignment; but that is not the predicament of the case. Casey & Co. have no interest whatever in this controversy, whieh is between the complainant and an assignee of the judgment, who is not compelled to deduce his title, through the fraudulent act of Casey & Co.; but who, it appears, paid a full consideration for it, after the claim had been reduced into a judgment.

We do not, howevei', determine this case upon the comparative merits of the two claims. If the aid of this Court was required to enforce either, it might perhaps be well doubted, whether the Court would lend its aid, to enforce a claim, which, though matured into a judgment, it is now evident was not founded upon an actual existing debt. But Bartlett & Waring, are not asking the aid of this Court. Our interposition is sought by the complainant, who in effect, asks us to deprive Bartlett & Waring of a right, by giving him the benefit of a fraudulent act of D. Casey & Co. In such a scramble, for that which really belongs to another, this Court cannot lend its aid. So far as the parties are protected, and supported by legal presumptions, which cannot be contradicted, this Court may not have the right to interpose, and deprive them of them ; but when they seek our aid,to assist them in enforcing them, the matter assumes a different aspect, and we may then inquire, whether in equity and conscience, they are entitled to the aid of the Court.

This view is decisive of the present case, and renders it unnecessary to consider the other questions argued at the bar. The decree of the Chancellor must be reversed, and a decree be here rendered, dismissing the bill, at the joint costs of the complainant and Bartlett; Waring, as it appears, having no interest in the controversy.

ORMOND, J. — During bhe last term, a petition fora re-hearing was- made in this case, and continued until the present term. *244and upon further reflection, we are satisfied that a modification of the decree formerly rendered is proper.

It is very clear, that Casey & Co. cannot assert a title to the proceeds of the judgment against Cullum, as against Pratt his as-signee, by alledging his own fraud. Yet that will virtually be the effect of dismissing the bill, no other person than Bartlett asserting any title to it; Wiswall, who it appears was made a party to the bill, not having answered it, and asserting no title to the fund. It is therefore ordered, that the decree heretofore made, be set aside — that the Chancellor’s decree be in all things affirmed, except so far as it denies the right of Bartlett & Waring to compensation out of the judgment against Cullum; and a decree will be here rendered, giving to Bartlett, who has succeeded to the rights of Bartlett & Waring, a priority in the payment of his claim, and the residue to Pratt, as assignee of Casey & Co. Let the costs of this Court, and the Court below, be paid out of the fund.