Stimpson v. Poole

• Citation: 141 Mass. 502,6 N.E. 705
• Parties: STIMPSON, Assignee v. POOLE.
• Decision Date: 06 May 1886
• Court: United States State Supreme Judicial Court of Massachusetts

141 Mass. 502

6 N.E. 705

STIMPSON, Assignee v. POOLE.

Supreme Judicial Court of Massachusetts, Suffolk.

May 6, 1886

COUNSEL

L.L. Stimpson, for plaintiff.

C.W Cushing, for defendant.

OPINION

C ALLEN, J.

The injury of which the plaintiff complains consists in the transfer, by way of mortgage, of the property of Noyes to Dorman. If Dorman had merely indorsed the note of Noyes to Poole, and afterwards paid it, taking no property from Noyes as security, the other creditors of Noyes would have sustained no injury, and the plaintiff would have had no right of action against either Dorman or Poole. It is the withdrawal of property of Noyes from the assets of his estate which alone gives the right of action against either. The plaintiff contends that for this act an action would lie against Dorman if he had reasonable cause to believe the debtor insolvent; or, even if Dorman had no such reasonable cause, that an action would lie against Poole, if, at the time of this arrangement for his benefit, he had such reasonable cause of belief. Let this be assumed to be so. Upon this assumption, if the assignee, upon entering upon his duties, had found that Dorman held and claimed title under a mortgage given under the circumstances stated in the agreed facts, three courses would have been open to him: (1) To take possession of the property, if he could sell it, in disregard of the mortgage; (2) to bring an action against Dorman; (3) to bring an action against Poole as the person preferred or to be benefited by the transaction. In either case his ground of claim and cause of action would be the withdrawal of the property from the estate of Noyes.

The first course was the one adopted. The property itself was taken, sold with the property of the debtor, not by the assignee in person, but by the messenger, and the proceeds of the sale were paid over to the assignee. By receiving these proceeds, the legal position of the assignee in respect to the matters now in controversy became the same as if he had made the sale in person. It sufficiently appears in the agreed facts that Dorman thereupon asserted a claim against the assignee for the taking of the mortgaged property. It is not stated in terms that an action was brought by Dorman, and this is immaterial, but he received the sum of $128 from the assignee as a compromise of his claim under the mortgage. This sum was less than the amount of the liability which Dorman had incurred for Noyes upon the note, and was less than the amount which the assignee had received from the messenger. The compromise was the result of a mutual concession between the parties. The statement of agreed facts does not show whether Dorman had or had not reasonable cause to believe Noyes insolvent. This was never ascertained. It was probably in controversy. Dorman must have contended that he did not have such reasonable cause of belief. The assignee must have contended the contrary. Neither party yielded to the other in full, but a compromise was entered into, implying that each conceded something. The legal effect of this compromise must be exactly the same as if, instead of the messenger's taking and selling the property in disregard of the mortgage, the assignee had assented to a claim or brought an action against...