Dixon v. Hill

5 Mich. 404, 1858 Mich. LEXIS 52

• Court: Michigan Supreme Court
• Decided: July 15, 1858
• Status: Published

Opinion

Campbell J.:

The plaintiff in error, who was defendant in the Court below, acting as sheriff of Calhoun" county, levied a Avrit of attachment upon certain- goods, in a suit against one Arza Loavís, as a fraudulent debtor. LeAvis had made a general assignment, including these goods, to George H. French. French made an arrangement to sell the assigned property on credit to the defendants in error, who took possession and went on soiling under the arrangement Avhile the inventory was still incomplete. Before the inventory Ayas finished, and before they had paid or secured any portion of the price, the attachment was levied on the goods, and the defendants in error replevied them. Judgment being given in their favor, the case comes into this Court uj>on writ of error, exceptions having been taken to the rulings on the trial.

The Court below, having decided that the assignment Avas void upon its face as against creditors, proceeded to charge the jury that it was nevertheless unnecessary that the defendants in error should have either paid or secured to be paid any portion of the purchase-money of the goods, in order to protect their title against the attachment, and that a verbal promise to pay Avas a sufficient consideration for that purpose..

No one but a purchaser for a valuable consideration can claim title to property which has been fraudulently assigned, against the action of an attaching creditor. Such purchasers are protected upon the equitable principle that they should not be deprived of that which they have honestly, and without notice of any fraud, bought and paid for in fair dealing with the person holding the legal title. But the consideration must, in all cases, be actually passed before notice. Unless payment has been actually made in some shape, the authorities are quite clear that the purchase will not be upheld. In equity, a purchaser is protected to the extent of the payments actually made, and no further, even where future payments are provided for, unless those are secured in such a manner that the purchaser can not be relieved against them. This could only happen where he gives negotiable paper; for upon a debt not negotiable, the failure of title would exonerate him. It is unnecessary to decide whether in a court of law a purchase can be assailed or apportioned where there has been a partial'payment. In the case before us, no consideration whatever had been paid or secured. Such a purchase can not avail, either at law or in equity, against the remedies of creditors. The Court erred in charging the jury in favor of its validity.

As this disposes of the merits of the case, we deem it unnecessary to decide the other points raised by the bill of exceptions. The judgment below must be reversed, with costs, and a new trial granted.

All the Justices concurred.