42 N.J. Eq. 563 | New York Court of Chancery | 1887
The following statement presents all the material facts on which the complainant rests his right to relief in this case: The ■complainant is a judgment creditor of Abraham T. Wood. The debt on which his judgment is founded was contracted prior to the 18th of September, 1877. He has exhausted his remedy at law, the execution issued on his judgment having been returned tmsatisfied, no property having been found on which a levy could be made. Wood, on the date last named, executed a chattel
The important question raised by the demurrer is whether the bill states sufficient facts, if undenied or undisputed, to entitle the complainant to a decree nullifying the assignment. If the assignment is valid, there can be no doubt that all the property in controversy, as well that to which the assignor held the title at the time he made the assignment, as that which he had previously conveyed and transferred in fraud of his creditors, passed, by the assignment, to his assignee, and that his assignee is liable to answer for its value to such of his creditors as have made a proper exhibition of their claims. It is now authoritatively settled in this state that an assignee, under our statute regulating assignments for the benefit of creditors, may, in virtue of the power conferred upon him by the assignment, avoid conveyances and transfers made by his assignor in fraud of his creditors, if the property so alienated is required for the payment of debts exhibited to the assignee. As to such debts the principle is established that the assignee stands in the place of the creditors, with all their rights and equities. Pillsbury v. Kingon, 6 Stew. Eq. 287. The possession of this power imposes a duty. The as-signee is bound to exercise it for the benefit of the creditors, or answer for any loss which they may sustain by his neglect of duty. Mr. Justice Potts, in Garretson v. Brown, 2 Dutch. 425, 440, said that any fraudulent disposition which the assignor may have made of his property is liable to be avoided by his assignee. His assignee is but the trustee of creditors, who may compel him
But the complainant in this case does not seek to establish a right to relief through the assignment; on the contrary, he denounces the assignment as a fraud, and asks that it may be set aside, and that relief be administered to him as though it had never been made. The fraud charged against the assignment is expressed as follows:
“ And your orator is informed and believes, and expressly charges the truth to be, that said assignment by said Abraham T. Wood to Ira D. Hoffman, so-far from being for the benefit of the creditors of said Wood, was made with the intent and purpose, on the part of said Wood, of hindering, delaying and defeating his creditors in the collection of their debts, and of protecting and preserving his property to his own use.”
This, it is obvious, is entirely too general. No rule of equity pleading is better settled than that which declares that every material fact which it is necessary for a complainant to prove to . establish his right to the relief he asks must be alleged in the premises of his' bill, with reasonable fullness and particularity.
The bill also charges that the sale made by the assignee of the lands of the assignor was fraudulent, but the charge is made in language so meagre and vague as to give no indication whatever what facts will be put i'n evidence to establish the truth of the charge. The bill simply says that if a sale of the lands has been made, it was not made in good faith, nor for an adequate or valuable consideration, but as a step in the execution of a scheme
The bill unquestionably avers sufficient facts, with the requisite degree of particularity, to show that the mortgage executed to Mrs. Wood was fraudulent as to creditors. But, as already remarked, if the mortgage is fraudulent as to creditors, the assignee has a paramount right to the chattels pledged by it. The complainant can, in no event, and under no circumstances, legally claim any part of their proceeds until such of the crédito-< as have exhibited claims to the assignee are fully paid. The aggregate of the claims which are undisputed, excluding those which are impugned as false, exceeds, according to the bill, $3,000. The bill does not state the value of the chattels which were mortgaged; it says, however, that in. September, 1877, they consisted of the stock, crops and poultry on a farm of about one hundred and seven acres, and the implements and utensils used in its cultivation. This was over nine years ago. The probabilities are that very few of them are now in existence, and that those which still remain are of insignificant value, so that a decree invalidating the mortgage would give the complainant nothing. Courts of equity sit to administer justice in matters of substantial interest, -not to foster a spirit of vexatious litigation..
But there is another reason why the complainant cannot maintain an action to invalidate this mortgage. His right of action is barred. The mortgage was executed on the 18th of September, 1877, and the bill in this case was not filed until the 28th of January, 1886, so that a period of more than eight years elapsed between the time when the alleged fraud was perpetrated, and the date of the institution of this suit. There is no claim that the fraud was concealed, or that its existence has recently been discovered. The bill does not aver that the person whom the complainant represents in this action did not have full knowledge that a fraud had been committed against him immediately after it was committed. Courts of law and courts of equity have concurrent jurisdiction over alienations and pledges of chattels made in fraud of creditors. Mulford v. Peterson, 6 Vr. 127, 133,
The demurrer must be sustained, with costs.