Baker v. Wood,
157 U.S. 212 (1895)

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U.S. Supreme Court

Baker v. Wood, 157 U.S. 212 (1895)

Baker v. Wood

No. 162

Argued January 21, 1895

Decided March 18, 1895

157 U.S. 212


In determining whether the judgment plaintiff and real owner of an assigned judgment is estopped to assert his ownership as against a second assignee on the ground that the second assignee occupies the position of a purchaser for value in good faith and without notice and in reliance on the apparent ownership, the amount of the consideration paid by him is an important fact.

When such amount is greatly disproportionate to the true value of the judgment, that fact may authorize the inference that the claim to have paid value is a pretence, and it is further important as bearing on the questions of notice and of good faith.

In such case, the interest of the second assignee of the judgment, if recognized, should be limited to the amount he actually paid, and the measure of the estoppel also limited accordingly.

This was a bill filed in the Circuit Court of the United States for the District of Colorado on October 23, 1886, by Lucien Baker against E. M. Hulburd, Daniel E. Parks, N. P. Seeley, and Samuel N. Wood, praying that defendants Seeley,

Page 157 U. S. 213

Wood, and Parks be restrained from in any manner selling, transferring, or disposing of a certain judgment recovered by Baker against the Board of County Commissioners of Lake county, Colorado, and from demanding payment of the same from the board until the final hearing of the cause, and that, upon final hearing, an assignment of the judgment by Hulburd to Wood, and also an assignment by Baker to Hulburd, be cancelled, and for general relief. It appeared that on November 12, 1883, Baker recovered a judgment in the Circuit Court of the United States for the District of Colorado against the County of Lake for the sum of $16,054. In this suit, Hulburd was attorney for plaintiff and Parks attorney for the County of Lake. Sometime thereafter, Baker instituted proceedings in the circuit court to compel payment of the judgment, but, on account of the amount of taxes that had already been levied in that county, the court refused to order the county to levy a tax, and the judgment stood unsatisfied and in full force and effect against the County of Lake until about May 20, 1886. It is charged in the bill that defendants Parks and Hulburd about this time combined to procure the assignment of the judgment to some other person who, it was contended by them, could effect a settlement and collection thereof. Hulburd thereupon applied to one Higginbotham, residing in Colorado, who was then and at all times had been the agent of Baker in the prosecution of the suit, to obtain an assignment by Baker to Hulburd, on the theory that Hulburd, with the aid of Parks, could procure the levy of a tax to pay the judgment. And Baker, on the recommendation of Higginbotham, executed an assignment of the judgment to Hulburd, couched in the following terms:

"Leavenworth, Kansas, May 25th, 1886"

"For value received I hereby sell, assign, transfer, and set over to E. M. Hulburd all my right, title, interest, claim, and demand of, in, and to the within-described judgment, and the money due and to become due thereon, and authorize him to sue for and collect the same at his own proper cost and expense."

"Lucien Baker"

Page 157 U. S. 214

This Baker forwarded to Higginbotham with a declaration of trust to be executed and delivered by Hulburd to Higginbotham for Baker on the delivery to him of the assignment, which declaration was in the words and figures following:

"Whereas, Lucien Baker has this 25th day of May, 1886, executed and acknowledged and delivered to me an assignment of his judgment against Lake County Board of County Commissioners, Colorado, Gen. No. 1279, which said judgment was rendered and recovered against the said board of county commissioners of County of Lake, in the State of Colorado, in the Circuit Court of the United States for the District of Colorado, on the 12th day of November, 1883, for $16,054.00, and whereas such assignment is so made to me for convenience in the collection of the same, and whereas said Lucien Baker still retains, as heretofore, the ownership and control of said judgment, now therefore in consideration of the premises, I do hereby acknowledge the receipt of such judgment as aforesaid this 28th day of May, 1886."

Hulburd executed and delivered this instrument, and Higginbotham delivered Baker's assignment to Hulburd. Thereupon Hulburd delivered the assignment to Parks, who procured the same to be filed with the papers in Baker's suit in the circuit court on June 11, 1886, and the assignment was noted upon the judgment docket of the court. About June 19th, defendant Seeley, acting for himself and defendant Wood, obtained from Hulburd an assignment of the judgment from Hulburd to Wood for the sum of $2,500, then paid therefor. Hulburd took the money, and within a few days disappeared from the state. The assignment was as follows:

"For value received, I do hereby sell, assign, transfer, and set over unto S. N. Wood, of Denver, Colorado, all of the right, title, interest, claim, and demand which the plaintiff, Lucien Baker, or I, have of, in, and to the said judgment above described, a transcript of which is hereto annexed, and authorize and empower him, the said assignee, to collect the same at his own proper cost and expense."

"E. M. Hulburd"

Page 157 U. S. 215

At the same time, Hulburd executed and delivered to Seeley a receipt in these words:

"Leadville, Colo. June 19th, 1886"

"Received of N. P. Seeley, for S. N. Wood, twenty-five hundred dollars in full payment of sum paid for judgment of Lucien Baker against County of Lake, which judgment I hold and own under an assignment from said Baker to me."

"E. M. Hulburd"

It was conceded that the sale of the judgment by Hulburd to Seeley and Wood was a fraud upon Baker, and Baker contended that Wood and Seeley had notice of the fraud, and were, in fact parties to the transaction.

When Baker was informed of the alleged sale of the judgment, and about August 5th, he called upon Wood, and told him that Hulburd had no right to sell the judgment, that it was not his, and was only in his hands for collection. Wood refused to talk with him about it, saying that he had bought the judgment after having taken legal advice, that it was his, that plaintiff could not get it without a law suit, and that if he wanted a law suit to pitch in. On October 22, 1886, the board of county commissioners passed an order accepting the offer of Wood, assignee of the judgment, to discount from the face of the same twenty-five percent, in consideration that the county should levy an annual tax of two mills on the dollar to apply on account until the judgment was paid, and directing the levy and collection of such tax, and the payment of the judgment to the extent of seventy-five percent thereof. Before this date, the board had been notified by Baker that the judgment still belonged to him.

The bill charged a combination between Wood, Seeley, Parks, and Hulburd to defraud Baker of his judgment.

On hearing, the circuit court dismissed the bill on the ground, as is stated, that Baker, having clothed Hulburd with the apparent ownership of the judgment, was estopped from asserting any interest therein as against Wood and Seeley, who

Page 157 U. S. 216

occupied the position of bona fide purchasers for value without notice.

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