Seward v. Garlin

33 Vt. 583

Opinion

Poland, Ch. J.

The substance of the claimant’s allegation upon which the issue was joined and the case tried, was that the note signed by the trustees, and which the plaintiff sought to hold by his trustee attachment, was never so transferred or delivered by him to his son Andrew, the principal debtor, as to make the note his property, and liable to be attached by his creditors. Under the issue thus formed we think the plaintiff might justly have claimed that it was not competent for the claimant to claim or prove that he had in fact sold or given the note to his son, so that the same became his sole property, and liable to attachment on his debts, but that, before the trustee attachment, the note had been re-conveyed and re-delivered to him by his son ; and upon such claim by the plaintiff it would have been the duty of the court to have confined the claimant to the single issue, of whether the note had ever been transferred to, and become the property of, the son. But it does not appear from the exceptions that the plaintiff asked to have the case so confined, and in the trial and charge the case was treated as if the issue made by the allegations was broad enough to sustain the claimant upon either of these grounds.

It is now insisted by the plaintiff that if the county court erred in the charge to the jury, in relation to necessity of notice by the claimant to the trustees of such re-transfer, in order to prevent the attachment of the note by the creditors of the son, the judgment should not for that cause be reversed, because it was really outside the issue formed by the allegations. We should hesitate, however, to limit the case here to ground so much narrower than that upon which it was tried in the county court, for if the plaintiff had there insisted upon confining the trial to the strict issue made by the allegation, the claimant might have moved the court for leave to amend his allegations, and it would clearly have been within the power of the court to allow such amendment, and thus have relieved the claimant from any difficulty by reason of his allegations not meeting or covering the case made by his proof. We are, therefore, disposed to examine the correctness of the charge upon the ground, on which the case was really put to the jury.

The main ground upon which the claimant insists the court below erred, is in holding that if the note was really sold and delivered to the son, and became his property, and of which fact the maker was duly notified by the son, the debt continued liable to trustee attachment by the creditors of the son, until the maker was notified that the note had been negotiated by the son.

This question depends upon the true meaning and construction of the act of 1841, now forming sec. 45 of chap. 32 Comp. Stat. That statute provides that “ All negotiable paper, whether under or over due, may be attached by, and the same shall be subject to, the operation of the trustee process, unless it shall appear that the same had been negotiated, and notice thereof given to the maker or endorser before the service of the trustee process on him.”

The claimant insists that the notice required to be given of a negotiation or assignment of a negotiable note or bill in order to protect it from trustee attachment, only applies to the negotiation of it by the original holder, the payee, or drawee, and not to a transfer of it by a second, or any subsequent holder, and that such subsequent assignee is under no necessity to give notice, in order to protect the debt from attachment by the creditors of his immediate assignor.

In order more clearly to see the object and purpose of the statute, it may be well to recur a moment to the history of our legislation upon this subject. The act of 1798, Slade’s Stat. 144, allowing endorsers of negotiable notes or bills to sue in their own names, contained a provision that in such actions the defendant might set up any offset which he had against the original payee, before notice of the endorsement, and also might set up any other defence which would be good against the payee. Under this act it was held that until notice of such endorsement to the maker, the debt could be attached by trustee process by creditors of the payee.

In 1836 this proviso to the act of 1798 was repealed, and it was then held that negotiable paper was governed only by the established principles of the law merchant, and that a current negotiable note or bill could not be attached by trustee process against the holder, though it were shown affirmatively that the same had not been negotiated when the trustee attachment was made, and this was held upon the ground that he might still transfer the note to a bona fide purchaser, while current, who by the principles of mercantile law would take it unaffected with any defences which could be made to it, if sued by the original holder. The result was that negotiable paper was effectually beyond the reach of the trustee process. This continued till 1841, when the present statute was enacted. The object and purpose of the statute is clearly expressed, to make negotiable paper subject to trustee attachment, and its provisions will clearly allow it to he sometimes attached and held as the property of one person, when in point of fact it has been transferred to and is the property of another. It is not now claimed in argument that the liability of negotiable paper to trustee attachment is limited to attachment against the original holder, but it is expressly admitted that it may be attached on process against any subsequent holder, provided that he is in fact the owner and holder when the attachment is made. This admission we think is one that could not well be avoided, as the language of the statute is most general and unlimited, and could not be restricted to cases where the paper still remains in the original holder’s hands, or to suits against him, without the greatest violence to its terms. The great purpose of the statute, too, to subject every man’s property to the payment of his debts, in whatever shape or form it may be, equally requires it to extend to all holders of such paper. The provision of the stat-. ute that such, right to attach shall continue until notice of a transfer is given, is undoubtedly founded more in policy than in principle, for the purpose of preventing fraudulent and pretended transfers by debtors who desire to avoid payment, of their debts, and also to furnish the creditor some means by which he can ascertain before attachment whether the debt he wishes to attach belongs to his debtor or not. Ordinarily a creditor who is seeking information on the subject of securing a debt by trustee attachment, must obtain it either from his debtor or the person owing the debt he designs to attach. Inquiry of his debtor ordinarily would defeat the very purpose and object of it, and the statute intended, so far as trustee attachments are concerned, that trustees should be so informed in relation to the ownership of debts owing by them, that they might give certain information if applied to. The principle is much the same as that requiring a visible change of the possession of personal property to accompany a sale, to make it effectual against the creditors of the vendor. If, then, the legislature intended to allow such paper to be attached at all after one transfer and notice, as the property of some subsequent holder, why should not the other provisions of the statute as to the notice he carried along with it ? Is there not just the same danger of fraudulent transfers in one case as the other ? And if the debt is really attached while held by a subsequent holder, has he not the same facilities for making a pretended earlier assignment as the original holder could have ? And is there not just the same necessity for furnishing the creditor with some means of determining with certainty and safety when he can attach in the one case as the other ? It seems to us that there is nothing in the language of the statute or in its reason and spirit that would authorize us to say that notice is not equally necessary in a second assignment of such paper as upon the first, to protect it from trustee attachment.

It is urged that this construction will operate as a clog upon the circulation and negotiability of such paper, and this no doubt is true. It is equally true of the notice which the counsel concede is required on the first transfer, but this objection was supposed to be more than balanced by the additional advantages afforded creditors to collect their honest debts, and the overthrow of a most convenient-mode of avoiding payment by any debtor so disposed.

Is it any more trouble for the second purchaser to make enquiry before hand, to see if there has been a trustee attachment, than for the first one, and is it any greater hardship to require one to give notice than the other ? It is not apparent to us. We are quite unable to make the distinction between the first transfer and a subsequent one, which the claimant does. It seems to us not warranted by the language or spirit of the statute. The claimant, to support his view of this subject, relies mainly on the case of Britton v. Preston and Trustee, 9 Vt. 257, in which it was held that after a negotiable note had been once assigned, notice of any subsequent transfer was not necessary in order to protect it against trustee attachments against such subsequent assignor.

This decision was made under the act of 1798, which is entirely different from our present statute. That act only gave to the defendant, in an action by the endorsee, the right to set up any defence which he might have against the payee before notice of transfer, but not against any subsequent intermediate holder. The allowing it to be attached by trustee process before notice only came in as one of the defences against the payee.

But, as we have already seen, the present act makes negotiable paper subject to attachment generally, -without limitation, until notice of transfer has been given. The ease we think has really very little application to the ¡ present statute, and furnishes no guide to its proper construction.

That the evidence of notice from the principal debtor to Wait, the principal in the note, that he held it, was sufficient to authorize the court to submit it to the jury ; that the instructions on that point were proper ; and that notice to the principal was sufficient, without notifying the sureties, are all propositions sufficiently obvious not to justify any effort to make them clearer.

It only remains to notice an objection the claimant makes to the charge of the court, as to the effect of his not calling on his son to testify as to the transfer of the note to him. The great question litigated before the jury was whether the claimant had transferred the note absolutely to his son as his property, or whether he had only placed it in his hands to hold conditionally for him.

The plaintiff’s evidence tended to establish that the transfer was absolute and unconditional, and most of the plaintiff’s evidence seems to have consisted of admissions of the claimant. The claimant testified that it was only conditional, and endeavored to support himself by the evidence. In this state of the case he called his son (the other party to the transaction, and who must know equally with himself the terms of the transfer,) as a witness, and examined him on another point, but omitted to inquire of him at all upon the great turning point in the case. The legal presumption is that every witness called will be more favorable to the party calling him than to the opposite. Hence the rules of evidence that a party shall not put leading questions to his own witness, but may to those of his adversary ; that a party shall not be allowed to impeach a witness called by him, because by putting him forward as a witness, he produces him as a person of truth and credit. Now under such circumstances, when a party had a witness in court by whom he could support his own testimony upon the most material point in the case, and when his testimony conflicted with that on the other side, and especially when the witness had the further inducement to friendship of near relationship, what would be the ordinary and natural course we should expect of such a party ? Clearly nothing else than that he should call such witness to give his testimony in corroboration of his own. Any failure to do this could hardly happen without some motive, and in the absence of any other being shown, the almost irresistible conclusion would be that he feared at least the witness would not support his other testimony, and thus have the effect to create more or less doubt and discredit of such party’s case.

How much effect such a circumstance would be entitled to would depend upon all the surroundings of the case,.but when wholly unexplained, we think it a proper matter for the jury to consider and give such effect to it as they should deem it entitled to. We understand it was thus left to the jury in this case. A failure to produce proof, when in the power of the party, is recog nized even in criminal cases as proper to be considered by the jury. When property which has been stolen is afterward found in the possession of one who claims to have obtained it by honest purchase, but fails to produce proof of it when clearly in his power, this fact has always been regarded as proper evidence to be weighed against him. So in many cases where a party has conducted in a manner different from the natural and usual course consistent with his theory and evidence in his case, it may be shown against him.

So where a party has been guilty of any wrong course relative to his cause, like endeavoring to keep his adversary’s witnesses away, or endeavoring himself to procure witnesses to testify falsely for him, all such acts are admissible in evidence to be weighed against him, though they prove nothing directly as to the fact in issue.

In short, any act or omission of a party unnatural and inconsistent with what he claims to be true, may properly be weighed against him.

The foundation upon which such evidence stands is that truth is always consistent, and usually natural and reasonable, and acts or omissions of a party in a cause which are not so, are evidence that his ease is not true and honest.

We find no error in the record, and the judgment is affirmed.