Housel v. Cremer

• Decision Date: 08 December 1882
• Citation: 14 N.W. 398,13 Neb. 298
• Parties: C. C. HOUSEL, PLAINTIFF IN ERROR, v. H. W. CREMER, DEFENDANT IN ERROR
• Court: Nebraska Supreme Court

14 N.W. 398

13 Neb. 298

C. C. HOUSEL, PLAINTIFF IN ERROR, v. H. W. CREMER, DEFENDANT IN ERROR

Supreme Court of Nebraska

December 8, 1882

ERROR to the district court for Douglas county. The action was replevin by Housel who claimed title as mortgagee under chattel mortgage. The defendant, Cremer, claimed title by virtue of a voluntary assignment made by Agnes M. McKelligon mortgagor of the property. The assignment was made subsequent to the mortgage. Before the trial Agnes died, and at the trial Housel was not permitted to testify as a witness. Testimony was introduced on the part of the defendant tending to show that these mortgages were fraudulent as to the creditors of Agnes. The court also gave instructions to the jury based on the hypothesis that it was a proper defense to show that the mortgages were fraudulent as against these creditors. Verdict and judgment for Cremer.

REVERSED AND REMANDED.

Webster & Gaylord, for plaintiffs in error. The creditors were not parties to the suit. If this had been an action on the part of the creditors to set aside the mortgage, or if the creditors had commenced suit against McKelligon and attached this property and Housel had replevied from the officer, such testimony might have been admissible. An assignee, however under a voluntary assignment, cannot defend against a prior conveyance of his assignor on the ground that the conveyance was fraudulent as to creditors. The assignee in this respect is clothed with no greater powers than the assignor, and the assignor could not have made defense that she had executed this mortgage to defraud her creditors. Such is the common law, and there is no provision of the Nebraska statutes to change it. Wakeman v. Barrows, 41 Mich. 363. Van Heusen et al. v. Radcliff, 17 New York, 580. Estabrook v. Messersmith, 18 Wis. 546. Brownell v. Curtis, 10 Paige, 210. Leach v. Kelsey, 7 Barb. 466. Pillsbury v. Kingon, 31 N.J.Eq. 619. Heinrichs v. Woods, 7 Mo. App., 236. Flower v. Cornish, 25 Minn. 473.

John D. Howe and Groff & Montgomery, for defendant in error, on question of Housel's competency as a witness, cited Wamsley v. Crook, 3 Neb. 344. On question of attacking mortgage for fraud, said that intent of statute is to invest the assignee with the character of a trustee for creditors. Comp. Stat., 60. See also, Hoagland v. Trask, 48 New York, 686. Lininger v. Raymond, 9 Neb. 40. S. C., 12 Id., 167. Hallowell v. Bayliss, 10 Ohio St. 540. Thomas v. Talmadge, 16 Id., 434.

OPINION

LAKE, CH. J.

We will consider the points relied on for a reversal of the judgment, in the order of their presentation by counsel in their brief. The first of these is that Housel, who offered himself as a witness in his own behalf, was not permitted to testify, the court holding him to be disqualified by section 329 of the code of civil procedure, which provides that: "No person having a direct legal interest in the result of any civil cause or proceeding, shall be a competent witness therein, when the adverse party is an executor, administrator, or legal representative of a deceased person," etc. This ruling was correct. It is true that Cremer was neither an executor nor administrator, but he was the assignee of Agnes M. McKelligon, and within the contemplation of the statute, her "legal representative." He had, by the deed of assignment, been entrusted with the property in controversy for the purpose of selling it and paying off her debts. This done, if there should happen to be a surplus it would belong to her estate. In view, therefore, of the language of this section, "executors, administrators and legal representatives," the construction given to it in Wamsley v. Crook, 3 Neb. 344, is clearly correct. The principle applied to the defendants in that case is applicable here, and makes Housel incompetent to testify. Magenau v. Bell, ante p. 247.

Several of the rulings complained of were based upon the assumption that Cremer, the assignee, could make the same defense to the mortgage that the creditors of Mrs. McKelligon might do, viz., that as to them it was fraudulent. This was an erroneous view of the law, and may have been induced to some extent by the remark in the last clause of the opinion in Lininger v. Raymond, 12 Neb. 167, 10 N.W. 716, that "the assignee is a trustee for the creditors." That the very reverse of this is the correct rule in the case of a voluntary assignment, is shown by an almost unbroken line of decisions in the courts of this country as well as of England. And even in Pennsylvania, where decisions have been made which support the rulings of the court below, Chief Justice Gibson, in one case, sad: "The assignee is the debtor's instrument for distribution, and stands in relation to the property as stood the debtor himself." * * * "As he stands in no privity to the creditors he cannot arrogate to himself any of their attributes and rights." Vandyke v. Christ, 7 Watts & Serg. 373.

And in Pillsbury v. Kingon, 31 N.J.Eq. 619, it is said "The important...