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5 Mich. 404

Dixon v. Hill

Michigan Supreme Court

Decided July 15, 1858

Michigan Supreme Court · decided 1858-07-15

The facts in the case, so far as they are material to present the question passed upon by the Court, are as follows: On the 2d day of August, 1856, Arza Lewis, being largely indebted and greatly embarrassed, made a general assignment for the benefit of creditors to one George H. French, which assignment was conceded on the trial to be fraudulent upon its face, as it authorized a sale of the assigned property on credit.

Key passage — most relied on by later courts

““In equity, a purchaser is protected to the extent of the payments actually made (without notice of any fraud) and no further, even where future payments are provided for, unless those are secured in such a manner that the purchaser cannot be relieved against them.””

quoted by 1 later decision, including Spencer v. Correll

Good law ✅— No negative treatment on recordhow we know

Decided 1858-07-15

How this case has been cited

Cited by 23 later decisions (2 by the Supreme Court) — most recently July 1953

18 state decisions

6018581860187018801890190019101920193019401950decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

View the full empirical analysis of this case →

Campbell J.:

¶1The plaintiff in error, who was defendant in the Court below, acting as sheriff of Calhoun" county, levied a Avrit of attachment upon certain- goods, in a suit against one Arza Loavís, as a fraudulent debtor. LeAvis had made a general assignment, including these goods, to George H. French. French made an arrangement to sell the assigned property on credit to the defendants in error, who took possession and went on soiling under the arrangement Avhile the inventory was still incomplete. Before the inventory Ayas finished, and before they had paid or secured any portion of the price, the attachment was levied on the goods, and the defendants in error replevied them. Judgment being given in their favor, the case comes into this Court uj>on writ of error, exceptions having been taken to the rulings on the trial.

¶2The Court below, having decided that the assignment Avas void upon its face as against creditors, proceeded to charge the jury that it was nevertheless unnecessary that the defendants in error should have either paid or secured to be paid any portion of the purchase-money of the goods, in order to protect their title against the attachment, and that a verbal promise to pay Avas a sufficient consideration for that purpose..

¶3No one but a purchaser for a valuable consideration can claim title to property which has been fraudulently assigned, against the action of an attaching creditor. Such purchasers are protected upon the equitable principle that they should not be deprived of that which they have honestly, and with*409out notice of any fraud, bought and paid for in fair dealing with the person holding the legal title. But the consideration must, in all cases, be actually passed before notice. Unless payment has been actually made in some shape, the authorities are quite clear that the purchase will not be upheld. In equity, a purchaser is protected to the extent of the payments actually made, and no further, even where future payments are provided for, unless those are secured in such a manner that the purchaser can not be relieved against them. This could only happen where he gives negotiable paper; for upon a debt not negotiable, the failure of title would exonerate him. It is unnecessary to decide whether in a court of law a purchase can be assailed or apportioned where there has been a partial'payment. In the case before us, no consideration whatever had been paid or secured. Such a purchase can not avail, either at law or in equity, against the remedies of creditors. The Court erred in charging the jury in favor of its validity.

¶4As this disposes of the merits of the case, we deem it unnecessary to decide the other points raised by the bill of exceptions. The judgment below must be reversed, with costs, and a new trial granted.

All the Justices concurred.
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