but not evidence of fraud, as there is no allegation that plaintiff knew of, or participated in, the vendor's fraudulent intent.

3. A letter written by a vendor of goods to one of his creditors shortly before the sale is admissible to show that the sale was made in fraud of creditors.

Appeal from district court, Jefferson county.

Action of replevin by Charles R. Seeleman against John A. Hoagland. From a judgment for defendant, plaintiff appeals. Reversed.

The other facts fully appear in the following statement by GODDARD, J.:

Charles R. Seeleman, plaintiff, alleges that on the 17th day of August, 1889, he was the owner, and entitled to the possession, of certain goods and chattels, of the value of $1,500; that on that day the defendant wrongfully took them from his possession. The defendant answered (1) by a general denial, and (2) justified the taking, as sheriff of Jefferson county, under and by virtue of a certain writ of attachment issued in an action wherein C. M. Henderson & Co. are plaintiffs, and Jenkin Edwards is defendant, and also alleged "that said goods, chattels, and personal property were at the time of said levy the goods, chattels, and personal property of the said Jenkin Edwards, and were, as against the creditors of the said Jenkin Edwards, liable to be levied upon for the satisfaction of said debt, as defendant is informed and verily believes," etc. To this answer plaintiff filed a replication. The case was tried to a jury. It appears from the evidence that on the 3d day of August, 1889, Jenkin Edwards was the owner of the property in controversy; that on that day Seeleman purchased it from him for a valuable consideration. The defendant was permitted to attack this sale on the ground of fraud. Upon the conclusion of the evidence, plaintiff requested the court to give the following instruction: "No. 4. The court instructs the jury that there is no question of fraud or bad faith on the part of the plaintiff made by the pleadings in this case; and you have, therefore, nothing to consider as to this. But the important and controlling question is whether the plaintiff was in fact the owner of the property in question at the time of the attachment of the same by the defendant for C. M. Henderson & Co., as alleged in the answer herein, or whether the same was then the property of Jenkin Edwards." Counsel for defendant thereupon asked leave of the court to file the following amendment to his answer, which was allowed, over the objection of counsel for plaintiff: "Says that the said property levied upon was, at the time it was so levied upon, the property of the said Jenkin Edwards, and not the property of the plaintiff. The defendant further says that the title and possession of said property was theretofore, by said Jenkin Edwards, transferred to plaintiff without consideration, and for the purpose of cheating, hindering, de

laying, or defrauding the creditors of the said Jenkin Edwards." Whereupon, the court refused to give the instruction, and proceeded to instruct the jury upon the theory that the question of fraud was involved in the case. Verdict was rendered in favor of defendant for a return of the property, and, in case such return could not be had, assessed the defendant's damages at $1,500. Motion for new trial was overruled. Thereupon, the defendant remitted so much of the amount found as was in excess of the sum of $863.19, and judgment was entered accordingly. To reverse this judgment, plaintiff below brings the case here on appeal.

Joseph Mann and W. A. Dier, for appellant. Lipscomb & Hodges, for appellee.

GODDARD, J., (after stating the facts.) Numerous errors are assigned, but we deem it necessary to notice only those that are predicated upon the refusal of the court to give instruction numbered 4, asked by plaintiff, and the submission of the question to the jury whether the sale of the goods in controversy was fraudulent as to the creditors of Edwards, under the issues presented by the pleadings. Counsel for appellee insist that that question was properly submitted-First, because, in the action in replevin, the plaintiff must recover, if at all, upon the strength of his own title, and under a general denial any state of facts may be shown to defeat such title; and, second, if the correctness of this proposition be de nied, that in their answer, as amended, fraud is sufficiently averred.

While the first proposition finds support in some of the adjudged cases,-among them, the case of Sopris v. Truax, 1 Colo. 89,-recent decisions of this court, under the present practice act, recognize a different rule; and it is now too well settled in this jurisdiction to admit of dispute that if a party desires to subject property held by a vendee, under apparently valid indicia of ownership or muniment of title, to the payment of a debt of his vendor, (in an action of replevin as well as in any other form of action,) he must plead and prove the facts that vitiate such title, whether they constitute fraud or estoppel. Tucker v. Parks, 7 Colo. 62, 1 Pac. 427; De Votie v. McGerr, 15 Colo. 467, 24 Pac. 923. As was stated in the case of Tucker v. Parks: "Fraud must be specially pleaded in an answer as well as in a complaint. There were no facts stated in the answer apprising the plaintiff that his title would be assailed in this manner." This language is particularly pertinent to the case under consideration; that action being also an action in replevin, and the answer therein relied on as being sufficient to admit proof of fraud being almost identical with the original answer in this case. The case of Benesch v. Waggner, 12 Colo. 534, 21 Pac. 706, is cited in support of appellee's contention; but since that case has been so clearly distinguished

from the case of Tucker v. Parks, supra, by Judge Elliott in his opinion in the case of De Votie v. McGerr, supra, its want of analogy to the case under consideration is readily discernible. The general and well-established rule is that fraud is not to be presumed, and, to be available in other forms of action, must be specially pleaded. We can perceive no satisfactory reason why, in an action in replevin, the same rule should not apply. It was essential, therefore, that the facts relied on by defendant as constituting the sale by Edwards to plaintiff fraudulent should have been properly pleaded.

Without expressing any opinion as to whether or not the amendment to the answer was properly allowed, we pass to the consideration of the sufficiency of the answer, as amended, to admit evidence tending to show complicity on the part of plaintiff with Edwards in his alleged fraudulent design. The allegation that the transfer of the property was without consideration was met and answered by the evidence of plaintiff, and it was uncontradicted that he had paid a valuable consideration for the property. "To vitiate the transfer in such case, the grantee, also, must be chargeable with knowledge of the intention of the grantor." Prewit v. Wilson, 103 U. S. 28. Therefore, notwithstanding the averment of a fraudulent design on the part of Edwards, there being no allegation of knowledge or notice on the part of plaintiff of such design, or any complicity therewith or participation therein on his part, the answer is clearly insufficient to admit evidence of such knowledge or conduct; and the only issue presented by the pleadings upon which evidence was admissible, and to which, the finding of the jury should have been confined, was whether the plaintiff was the actual owner of the property in controversy. The instruction asked by plaintiff correctly embodied the law applicable to this issue, and the court erred in refusing to give it, and in submitting the case to the jury upon the theory that the question of fraud was involved.

Since the case must be remanded for a new trial, we think it due to the respective parties to notice the error based upon the admission in evidence of the letter written by Edwards to C. M. Henderson & Co. shortly preceding the sale to Seeleman. That it was inadmissible under the pleadings, as they stood, follows from what we have already stated. Would it be admissible under proper pleading? While there is a seeming conflict in the authorities on this question, the rule as announced in Grimes v. Hill, 15 Colo. 359, 25 Pac. 698, recognizes the right of a party attempting to impeach the validity of a sale on the ground of fraud to introduce in evidence declarations of the vendor, made before the sale, that tend to reveal the character of the transaction. Under this rule, we think the letter in question would be

5. A party accepting and retaining money paid under a void order is estopped to question the validity of the proceedings by which the money was obtained, and this rule may be invoked by a garnishee.

6. A new promise to pay a debt barred by the statute of limitations will not be implied from part payment, where the circumstances of the payment rebut the inference of such promise: and, where the part payment is money realized from assets transferred by the debtor to the creditor, the new promise is not to be implied as of a date later than the transfer. (Syllabus by the Court.)

Error to district court, Lake county.

Proceeding in garnishment by Charles A. Jones, as judgment creditor of the Bank of Leadville, against J. C. Langhorne. Judgment for garnishee. Plaintiff brings error. Affirmed.

The other facts fully appear in the following statement by HAYT, C. J.:

In the years 1881 and 1882 the Bank of Leadville, an incorporation, was doing a general banking business in the city of Leadville, and a copartnership, composed, as it is claimed, of the defendant in error, Langhorne, E. L. Campbell, George R. Fisher, and J. B. Bissell, was transacting a general banking business at the town of Independence, Colo.. under the firm name of the Bank of Pitkin County. On the 25th day of July, 1883, the Bank of Leadville made a general assignment to George W. Trimble, and upon the same date, upon an ex parte proceeding, Trimble was appointed receiver of said bank by the district judge. In November, 1883, plaintiff in error, C. A. Jones, instituted suit

in the district court of Lake county by attachment against the Bank of Leadville. In this suit the attachment was dissolved by the district court because of the receivership, but judgment in favor of plaintiff in error was rendered for $45,242.50, with interest and costs. This judgment bears date on the 16th day of February, 1884. On the 18th day of February, 1884, an execution was issued upon the judgment. This execution was returned unsatisfied. To the judgment dissolving the attachment Jones sued out a writ of error to the supreme court. As a result of this proceeding the appointment of Trimble as receiver was held void, and the judgment dissolving the attachment reversed. Jones v. Bank, 10 Colo. 464, 17 Pac. 272. On the 25th day of August, 1888, another execution was sued out, and levied on sundry property of the Bank of Leadville. Sufficient was realized upon this execution to reduce the judgment to about the sum of $20,000. On November 28, 1888, a third exe cution was issued for this uncollected balance, and process of garnishment thereunder issued against the plaintiff in error, James C. Langhorne. To this proceeding the gar nishee answered, denying any indebtedness. Within the statutory time a reply to this answer was filed by plaintiff in error. In this reply it is alleged that Langhorne and others constituted the firm known as the Bank of Pitkin County; that this bank or copartnership was on the 13th day of December, 1886, indebted to the Bank of LeadIville in the sum of $10,150. It is further alleged that Langhorne paid George W. Trimble, assuming to be the receiver of the Bank of Leadville, $5,000 in settlement of the debt, although that was but a portion of the indebtedness due to the Bank of Leadville from the Bank of Pitkin County. Subsequently the garnishee filed an amendment to his original answer, setting up the defense of the statute of limitations. Upon the trial it was practically conceded that the true amount of indebtedness due to the bank of Leadvilie from the Bank of Pitkin County on the 13th day of December, 1888, was $7,005.60; it being also conceded that the settlement with Trimble was made as alleged; Langhorne's connection as a partner in the banking business being disputed. Plaintiff in error, Jones, sought to obtain judgment against the garnishee for the difference between this sum and the amount paid by Langhorne in settlement of the account, his contention being that an indebtedness of $7,005.60 could not be discharged by the payment of the sum of $5,000. Upon the issues made the case was tried to the court without a jury, the trial resulting in a judgment in favor of the garnishee, Langhorne.

A. F. Gunnell, for plaintiff in error. S. D. Walling, for defendant in error.

HAYT, C. J., (after stating the facts.) As a general rule, a garnishee is only liable where the defendant or judgment debtor might have maintained an action against him. There is an exception to this rule in cases of a fraudulent transfer of property to the garnishee, but the principle upon which the exception is based has no application in this case. It follows that, in order to enable plaintiff in error to maintain this proceeding against Langhorne, the defendant in error, it must appear that the judgment debtor, the Bank of Leadville, could have maintained the action against Langhorne, the garnishce. Drake, in his work on Attachments, § 462, says: "It is an invariable rule that under no circumstances shall a garnishee, by the operation of the proceedings against him, be placed in any worse condition than he would be in if the defendant's claim against him were enforced by the defendant himself."' This principle has been announced in a number of cases in this state. Sauer v. Town of Nevadaville, 14 Colo. 54, 23 Pac. S7; Sickman v. Abernathy, 14 Colo. 174, 23 Pac. 447; Railroad Co. v. Gibson, 15 Colo. 209, 25 Pac. 300; Marks v. Anderson, 1 Colo. App. 1, 27 Pac. 168. Could the judgment debtor, the Bank of Leadville, have maintained an action against the garnishee, Langhorne, for the claim here sought to be enforced? The garnishment proceeding is directed against Langhorne individually, to secure a claim against the Bank of Pitkin County, a partnership composed of the garnishee and three others. The attempt to charge Langhorne grows out of his supposed connection with this copartnership. Neither by pleading nor proof has it been attempted to establish any liability whatsoever against Langhorne, except as such liability is made dependent upon the alleged indebtedness of the Bank of Pitkin County to the Bank of Leadville. It is well settled in this jurisdiction that in an action to enforce a partnership liability all the partners must be joined as defendants. This familiar rule of the common law has been held to be in force in this state in a number of cases. See Bank v. Ford, 7 Colo. 314, 3 Pac. 449; Craig v. Smith, 10 Colo. 220, 15 Pac. 337; Dessauer v. Koppin, (Colo. App.) 32 Pac. 182. See, also, Bowen v. Crow, 16 Neb. 556, 20 N. W. 850. It is no answer to say that when several are joined as defendants, and some are shown liable while others are not, judgment may be rendered against part only. In this case the indebtedness alleged constitutes but a single indivisible claim against the Bank of Pitkin County. The allegations and proof tend to establish a claim against the copartnership, rather than against a part only of those composing the firm. To allow Jones, the plaintiff, to maintain this action against the garnishee, Langhorne, individually, would result in placing the garnishee in a worse condition than if

the defendant was attempting to enforce the claim against the Bank of Pitkin County. This cannot be permitted. Drake, Attachm. (4th Ed.) 561; Huskill v. Johnson, 24 Ga. 625; Atkins v. Prescott, 10 N. H. 120; Ellicott v. Smith, 2 Cranch, C. C. 543; Wellover v. Soule, 30 Mich. 481.

It is contended, however, that this question should have been raised by plea in the court below. Undoubtedly, as a general rule, where a partner is sued individually for a firm debt, he should plead the nonjoinder in order that he may avail himself of this defense, but this general rule can have no application to garnishment proceedings under our Civil Code. This proceeding is purely a creature of statute. The statute provides

that "new matter in the affidavit replying to the answer of the garnishee, shall be taken as denied or avoided without any rejoinder being filed, and the matter thus at issue, without further pleadings shall be tried in the same manner as other issues of like nature. Section 128, Code

1887. The garnishee in this case in the first instance answered the process served upon him by a simple denial of indebtedness. Afterwards, by an amendment to this answer, the defense of the statute of limitations was set up. To this answer a reply was interposed by the plaintiff in error. In this pleading the copartnership of Langhorne, (garnishee herein,) E. L. Campbell, George R. Fisher, and J. B. Bissell, under the firm name and style of the Bank of Pitkin County, and the joint indebtedness to the Bank of Leadville, were first alleged. Under the statute the garnishee had no opportunity to plead to this reply, but without further pleading he could avail himself of any defense he might have to the new matter set up in the affidavit. Section 128, supra. The district court upon the proofs decided that Langhorne was not liable as garnishee, and rendered judgment accordingly. The question before us has reference solely to that judgment. As the conclusion reached upon the failure to join with Langhorne his copartners must necessarily result in an affirmance of the judgment, our opinion upon the other points raised is not material. The judgment of the district court should be affirmed.

On Rehearing.

(Dec. 22, 1893.)

ELLIOTT, J. Upon a re-examination of this case I am of the opinion that the judg ment of affirmance should be adhered to upon other grounds than those stated by the chief justice. The judgment of the trial court was general in favor of the garnishee, the particular ground or grounds for the decision not being specified in the record. The judg ment, therefore, must be upheld, if, upon a fair trial, plaintiff failed to establish his

claim under the issues in the garnishment proceedings. It appears that in July, 1883, the Bank of Leadville, by its corporate name and seal attested by its cashier, executed and delivered to George W. Trimble a deed of assignment of all its property, real, personal, and mixed, of every kind and description, for the benefit of its creditors. At that time Trimble was also appointed receiver of said bank for a similar purpose by the district court of Lake county. While the business and affairs of the bank were thus in the hands of the assignee and receiver, the garnishee herein negotiated with Trible a settlement of the indebtedness of the Pitkin County Bank to the Leadville Bank. In the matter of such settlement Trimble acted under and by the authority and direction of the court, duly entered of record; and Langhorne, by the express order of said court, actually paid to Trimble, as such assignee and receiver, the sum of $5,000 in full settlement of said indebtedness. The conclusion of the transaction is shown by the following receipt, which was admitted in evidence on the trial in this proceeding without objection: "Leadville, Colo., Dec. 14th, 1886. $5,000. Receiv ed from the Bank of Pitkin County, by hand of J. C. Langhorne, the sum of five thousand dollars in full settlement of overdraft of the said Pitkin County Bank to the Bank of Leadville to the amount of $7,005.60 and interest to date. George W. Trimble, Receiver and Assignee." The evidence shows that at the time of negotiating and concluding the settlement as above stated Langhorne expressly denied his liability. He testified that he would not have made the payment but for the fact that it was accepted in full settlement. The evidence was sufficient to show a bona fide controversy in respect to this alleged liability, so that the settlement and payment would undoubtedly have been a complete discharge and satisfaction of the debt, were it not that the appointment of the receiver has since been declared void. See Jones v. Bank, 10 Colo. 464, 17 Pac. 272 Conceding that Trimble acted without due authority, it is nevertheless admitted that the $5,000 was received by the Leadville Bank, and went to swell its assets; conceding that the order of the district court was void, nevertheless it appears that the bank not only received, but has thence hitherto retained, the fruits of such order. It must there fore be held estopped to question the validity of the proceedings by which it obtained the money. See Water Co. v. Middaugh, 12 Colo. 434, 21 Pac. 565; also, Arthur v. Israel, 15 Colo. 152, 25 Pac. 81, and cases there cited. Since the bank cannot maintain an action against Langhorne, how, then, can Jones hold him liable as garnishee of the bank? In garnishment proceedings under our statute, the judgment creditor has the same remedy against the garnishee as the judgment debtor would have in an action on the same demand,

and none other. See foregoing opinion by Chief Justice HAYT, and authorities there cited.

The judgment of the district court discharging the garnishee may also be sustained on another ground. The garnishee, by an amendment to his answer, pleaded the sixyears statute of limitations in bar of plaintiff's demand. To this plea there was no formal reply of a new promise, nor was evidence introduced upon the trial sufficient to have sustained a replication of a new promise, if the same had been duly pleaded. The evidence clearly shows that the indebtedness of the Bank of Pitkin County to the Bank of Leadville accrued prior to November 12, 1882. On that day the Pitkin County Bank closed its doors, and immediately transferred all its assets, including cash, accounts, books, and papers, to the Bank of Leadville, and never afterwards engaged in business as a banking institution; nor did it afterwards contract any indebtedness to the Leadville Bank. Not until January 4, 1889, was the writ of garnishment in this proceeding served upon Langhorne. This was more than six years after the indebtedness accrued. There was no evidence of any express promise by Langhorne to pay such indebtedness; nor was any circumstance shown in evidence from which a promise on his part to pay might be inferred. It is true that certain money realized from the assets of the Pitkin Bank was applied by the Leadville Bank as a credit upon the indebtedness due it from the Pitkin Bank. But the authority to make such application had its inception at the time the Pitkin Bank transferred its property to the Leadville Bank; so that, if the crediting of such money be regarded as an act of payment by the Pitkin Bank, or of the members thereof, it was their act at the date of the transfer, as above stated, and not afterwards. It is true, also, that Langhorne made the $5,000 payment, as above stated. But the circumstances under which the payment was made clearly rebut any inference of a new promise on his part to pay the residue. In the absence of special legislation, the accepted doctrine is that, to overcome the plea of the statute of limitations in actions on simple contracts by an implied promise to be inferred from an acknowledgment, or from part payment, "the acknowledgment or part payment must be shown to have been voluntary, unconditional, by the proper person, to the proper person, and under circumstances consistent with an intention and promise on the part of the debtor to pay the particular debt so acknowledged, or the residue thereof." See Toothaker v. City of Boulder, 13 Colo. 227, 22 Pac. 468, and authorities there cited. The circumstances under which Langhorne paid the $5,000 certainly were not consistent with an intention or promise on his part to pay the residue of the

indebtedness now claimed by the Bank of Leadville. The evidence clearly shows a contrary intention. In my opinion, the finding of the district court in favor of the garnishee was fully justified, and the judgment discharging him from liability must be affirmed.

Mr. Justice GODDARD, having tried this cause in the district court, did not participate in the decision upon this review.

(19 Colo. 149)

E. F. HALLACK LUMBER & MANUF'G
CO. v. GRAY et al.1
(Supreme Court of Colorado. Nov. 22, 1893.)
PLEDGE-CONVERSION BY PLEDGEE-ACTION-

DAMAGES.

1. Plaintiff gave his note to defendant, and transferred to him a note of a corporation as collateral. After the secured note had become due, it being still unpaid, defendant, without notice to plaintiff, transferred both notes to the president of the corporation, knowing his connection with the corporation. Held a conversion of the collateral note by defendant.

2. In an action by the pledgor of a note as collateral, against the pledgee, for conversion thereof, plaintiff need not tender the debt for which the collateral was pledged, where the full amount thereof has been realized by defendant.

3. In an action by the pledgor of a note as collateral to another note, against the pledgee, for conversion, where such conversion consisted in the transfer of both notes after the secured note bad become due, the measure of plaintiff's recovery is the difference between the collateral note and his indebtedness to defendant at the time of the conversion, and not the full value of the collateral note, as the se cured note, having been transferred after maturity, is subject to equities.

4. Defendant is not cut off from this right by the fact that he denied the conversion, as the right to have the secured note deducted from the amount of the collateral note is not a matter of defense, since, whatever the action, plaintiff is only entitled to adequate indemnity.

Appeal from district court, Arapahoe county.

Action by Henry N. Gray and another against the E. F. Hallack Lumber & Manufacturing Company. From a judgment for plaintiffs, defendant appeals. Reversed.

The other facts fully appear in the following statement by GODDARD, J.:

On the 30th day of March, 1889, Gray Bros. & Co. instituted this action in the district court of Arapahoe county to recover from the E. F. Hallack Lumber & Manufacturing Company, a duly-organized corporation, damages for the conversion of certain collateral security. The conceded facts are that on the 1st day of January, 1885, Gray Bros. & Co. executed to the defendant company their certain promissory note for the sum of $2.214.25, payable, with interest at the rate of 12 per cent. per annum, on the 1st day of May, 1885. On the 27th day of 1 Rehearing denied.