Gill v. Henry

• Decision Date: 25 October 1880
• Citation: 95 Pa. 388
• Parties: Gill, for use of Rankin, <I>versus</I> Henry.
• Court: Pennsylvania Supreme Court

95 Pa. 388

Gill, for use of Rankin, versus Henry.

Supreme Court of Pennsylvania.

October 8, 1880.

October 25, 1880.

October 8th 1880.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY, STERRETT and GREEN, JJ.

Error to the Court of Common Pleas, No. 1, of Allegheny county: Of October and November Term 1880, No. 182 A. B. Hay and Slagle & Wiley, for plaintiff in error.—Though we have made a number of assignments of error they are resolvable into one question, which may be briefly stated as follows: The bond and mortgage having been executed and delivered to Gill by Henry for the purpose of hindering, delaying and defrauding creditors, and without any other consideration, can he now set up that fact as a defence to the bond in the hands of the plaintiff to whom it was assigned by Gill?

This case is fully covered by authorities under circumstances which cannot be distinguished from the facts of this case: Sherk v. Endres, 3 W. & S. 255; Killinger v. Reidenhauer, 6 S. & R. 531; Foster v. Waltor, 5 Watts 378; Murphy v. Hubert, 4 Harris 50; Evans v. Dravo, 12 Id. 62; Hendrickson v. Evans, 1 Casey 441; Williams v. Williams, 10 Id. 312; Blystone v. Blystone, 1 P. F. Smith 373. It is apparent from these cases that Gill might have recovered upon the bond for his own use; and it is not suggested in any case we have found that a suit could not be maintained in his name for the use of another. If he could recover, it must be shocking to every sense of justice to hold that a party to whom he had assigned it in payment of his debt could not recover merely because he had not inquired of his accomplice whether the certificate of no defence executed by him, and left in possession of Gill, was a part of a scheme to defeat and delay his creditors, or to enable Gill to impose upon an innocent and confiding client.

DT. Watson and W. B. Rodgers, for defendant in error.—The covinous transfers and conveyances which the law avoids as to creditors and holds good as between the immediate parties, are executed transactions, which, if permitted to stand, would have the noxious effect the statute seeks to avoid. Henry's own story, in the court below, was the sole evidence as to this alleged attempt to defraud. Doubtless it may be true that Gill intended to use the bond and mortgage for his own purposes, but so far as Henry was concerned, believing his counsel, he thought it was true that the bond and mortgage lying in Gill's safe would keep him out of court, and that without any dishonesty on Henry's part. By this transaction did Henry hinder, delay or defraud his creditors? Evidently not, because a bond and mortgage lying in Gill's safe was no more effective to produce such a result than if they had not been signed, and as Henry never agreed to have them taken out of Gill's office, he never did do anything by which Henry's creditors could be delayed, hindered or defrauded. This being so, if Gill in violation of his agreement took the bond out of his safe, and either sued upon it to collect it, or had judgment entered thereon, would the law close Henry's mouth from testifying to the manner in which Gill obtained the bond; for unless it would do so as to Gill, it would not do so as to Rankin, Gill's assignee.

Mr. Justice GREEN delivered the opinion of the court, October 25th 1880.

This was a judgment bond given by the defendant Henry to the legal plaintiff, Gill, for the payment of $8000, dated April 28th 1875. It was accompanied by a mortgage of same date and amount, which was recorded April 30th 1875. On June 1st 1875, Gill assigned the bond and mortgage to the plaintiff, Isaac Rankin, and handed him at the same time a certificate of no defence signed by Henry. The assignment was made in consideration of $5795, which Gill owed Rankin on May 1st 1875, for moneys which Rankin had at various times left with Gill for investment. As between Gill and Rankin, therefore, a good consideration passed for the transfer of these securities. On January 26th 1876, Gill, without the knowledge of Rankin, entered satisfaction of the mortgage, and in the fall of 1877 he fled the country in consequence of discreditable transactions in which he was engaged. When Rankin discovered that Gill had satisfied the mortgage of record he entered judgment on the bond in suit on December 10th 1877. Subsequently, on the application of the defendant, the judgment was opened, and the case was tried before a jury who rendered a verdict for the defendant under instructions from the court, which are now brought before us for review by various assignments of error.

The actual defence set up was that the bond was given without any consideration. The reason why it was given appears in the testimony of the defendant himself. He said on the trial, "I got into trouble with the bank, the Allegheny Trust Company. I came over to Mr. Gill. They were talking of suing, or had. They were commencing to sue, and I didn't want to have any trouble incurred, and I came over to Mr. Gill and asked him what I should do, and he said he could fix it for me, and I asked him how. He said that he could draw up a bond and mortgage, and it could lay in his office, which would keep me out of court; I would have no trouble. I told him I didn't want to avoid payment of the assessments as they became due. I did not want to be sued. I was afraid of being sued by creditors. When I came to him I knew I was liable for all the debts of that concern. It was with that view I made that mortgage; he said it would keep the property safe for me — keep the property safely covered up." This language is so extremely plain that there is no difficulty in understanding it. It proves beyond all question that the bond and mortgage in question were given for the express purpose of hindering, delaying and defrauding the creditors of Alexander Henry, the defendant. No amount of refinement or speculation can clothe it with any other meaning. The plain, blunt truth of the case is that a defendant in a judgment makes defence against it on the express ground that it was given without consideration for the purpose of defrauding his creditors. That such a defence would be absolutely worthless, even against the plaintiff himself, the particeps criminis, has been so many times decided by this and other courts, that it would be a waste of time to cite the authorities. Neither the very able counsel for the defendant, nor the learned judge of the court below, pretends to dispute the doctrine. Yet this defence was permitted to prevail in this case against an innocent third person, who received these securities in consideration of a large sum of money, $5795, which was due him previous to, and at the time of, the assignment from Gill, who was the holder of them. It is not pretended that Rankin had any knowledge whatever of the original transaction. In point of fact he was entirely ignorant of it. How did it happen that the defence was successful? On the trial a very ingenious theory was set up, that it was agreed between Henry and Gill, at the time the bond and mortgage were given, that they should remain in Gill's office. It was...