Newtown Savings Bank v. Lawrence

41 A. 1054, 71 Conn. 358, 1899 Conn. LEXIS 4
CourtSupreme Court of Connecticut
DecidedJanuary 4, 1899
StatusPublished
Cited by13 cases

This text of 41 A. 1054 (Newtown Savings Bank v. Lawrence) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Newtown Savings Bank v. Lawrence, 41 A. 1054, 71 Conn. 358, 1899 Conn. LEXIS 4 (Colo. 1899).

Opinions

Hall, J.

Neither of the defendants admitted the allegation of the complaint that Hart was appointed trustee under a voluntarily assignment of Lawrence. Both defendants admitted that he was duly appointed trustee. Further, as to his appointment, the defendant Kelly alleged that he had no information sufficient to form a belief; while the defendant Hart, himself the trustee, alleged that he was so appointed upon the petition of a creditor of Lawrence. Under these pleadings the burden was upon the plaintiff to prove that the proceedings in insolvency were voluntary, had that alleged fact been a material one. Practice Book, p. 16, Rule IY., § 4. In the absence of any evidence upon that point, it could not properly be assumed that the assignment was voluntary. From the fact that no proof was offered it would rather appear that the plaintiff was satisfied to accept the statement in the trustee’s answer, that his appointment was under compulsory proceedings in insolvency.

But we do not regard it as material to the rights of the [363]*363parties in this case whether the proceedings in insolvency were voluntary or compulsory. The alleged voluntary assignment of Lawrence was “of all his property including the real estate so mortgaged to the plaintiff.” A voluntary assignment in insolvency must, under the statute, embrace all the property of the assignor, with certain exceptions not material to this case. General Statutes, § 501. By § 507 of the General Statutes the trustee is appointed “ to take possession of, manage, and dispose of ” all the debtor’s property, with certain exceptions, and all the property owned by the debtor “ at the time of filing such petition,’’with said exceptions, vests in such trustee.

If under a voluntary assignment the title of the trustee is by force of the common law, and in involuntary insolvency by force of the statute, he takes in either case the same title to the same estate. In neither case is the power of the trustee to take or recover as a part of the insolvent’s estate, personal or real property, held or claimed by others, limited by the power of the debtor over such property. Preferences, sales and conveyances actually or constructively fraudulent, and which could not be avoided by the insolvent, may be set aside by the trustee appointed under voluntary or involuntary proceedings. Shipman v. Ætna Ins. Co., 29 Conn. 245; Gaylor v. Harding, 37 id. 508. In case of a voluntary assignment in insolvency the right to reclaim property fraudulently sold is conveyed to the trustee by an assignment to him of all the debtor’s property. Filley v. King, 49 Conn. 211. There seems to be no difference in principle, between the power of the trustee in such a case and that of a trustee under a general assignment in insolvency who is seeking to hold land claimed by the debtor’s grantee under an unrecorded deed, provided such deed is invalid as against such trustee. Whether we regard him as an agent of the debtor, of the creditors, or of the law, we think the trustee in this case is clothed with the same power and charged with the same duty by our insolvent law, to take and dispose of the land in question for the benefit of the creditors of Lawrence, if the [364]*364assignment was voluntary, as in the case of compulsory insolvency.

Has the plaintiff under the §3,000 mortgage a valid title to the land in question, as against the trustee in insolvency ? It is conceded that the defendant Kelly has no greater right than the trustee.

The facts are not those showing an attempt hy the plaintiff to establish an equitable mortgage, or to enforce an equitable right. The plaintiff’s only claim of title is by deed duly executed, and which it claims is valid under the statute against a trustee in insolvency. Its validity as against the grantor is not questioned. Whether it is also valid as against the trustee in insolvency, depends upon the construction to be placed upon our statute concerning unrecorded deeds, and the interpretation of our law regarding the powers of such trustee and his relation to the insolvent and his creditors. The right of the plaintiff to a judgment of foreclosure depends entirely upon the question of whether, as against this trustee, the mortgage in question is valid in law.

Section 2961 of the General Statutes provides that “ no conveyance shall be effectual to hold lands against any other person but the grantor and his heirs, unless recorded on the records of the town in which the lands lie.” The mortgage deed in question was executed in 1892 and, through the negligence of the plaintiff’s agents, it has never been recorded, and has become lost. The defendant Hart was appointed trustee in 1894, and soon after his appointment was informed that in addition to the §7,000 mortgage, the real estate of the insolvent was incumbered by mortgage to tbe amount of §3,000. It does not appear that any of the creditors had notice of the existence of the §3,000 mortgage.

Though differing from the rule in some of our States, it is the law of Connecticut that the lien acquired by the attachment of a creditor of the grantor of a deed not recorded within a reasonable time, is superior to the title of the grantee of such deed, in the absence of notice to the attaching creditors of the existence of such deed. Moor v. Watson, 1 Root, 388, 389; Welch v. Gould, 2 id. 287; Carter v. Champion, [365]*3658 Conn. *549-559; Wheaton v. Dyer, 15 id. 307; Hill v. Meeker, 24 id. 211; Barnum v. Landon, 25 id. *137; Bissell v. Nooney, 33 id. 411; Theall v. Disbrow, 39 id. 318; Pond v. Skidmore, 40 id. 213; Goodsell v. Sullivan, ibid. 83. The creditors of Lawrence are creditors without notice, notwithstanding the notice given to the trustee after his appointment. National Cash Register Co. v. Woodbury, 70’ Conn. 321.

Had there been no proceedings in insolvency, the creditors of Lawrence could have attached this land and by levy of execution appropriated it to the payment of their respective claims. This right of creditors to so avail themselves of this-property has been suspended by the appointment of a trustee in insolvency. New Haven Wire Co. Cases, 57 Conn. 352, 387. By the proceedings hi insolvency the creditors of Lawrence have not only been deprived of this right of attachment, but “ all attachments and all levies of executions not completed made within sixty days next preceding ” the commencement of such proceedings, if any such have been made, have been dissolved. General Statutes, § 523.

It was not the purpose of our insolvent law that the appointment of a trustee should place beyond the reach of creditors property of the debtor, which, in the absence of insolvency proceedings, could have been lawfully appropriated by attachment and execution to the payment of his debts. The liens by attachment and execution are dissolved, to prevent one creditor or class of creditors from gaining an undue advantage over others, and from thereby defeating the real object of the present insolvent law, namely, the equal distribution of the estate of the debtor among all of his creditors. By the process of attachment and of execution, that part of the debtor’s property attached is appropriated to the payment of the claim of the attaching creditor. By the process of insolvency all the property of the debtor is sequestered for the payment of the claims of all the creditors.

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Cite This Page — Counsel Stack

Bluebook (online)
41 A. 1054, 71 Conn. 358, 1899 Conn. LEXIS 4, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newtown-savings-bank-v-lawrence-conn-1899.