| New York Court of Chancery | Apr 17, 1838

The Chancellor.

Upon a careful examination of the answers of the defendants and the evidence in this case, I think the conclusion of the vice chancellor, that the assignment of Stoddard’s property was not fraudulent, was erroneous. Independent of the legal presumption of fraud arising from his continuance in possession after the execution ef the absolute bill of sale, I think the amount of property assigned was, at its fair value, much more than sufficient to pay the debt due to the purchasers. The case would have been somewhat different if Thurber & Townsend had taken the property in absolute satisfaction of their debt and at their own risk; or if they had taken an assignment of the property in trust for the other creditors, after securing,to themselves a preference in payment out of the same. But, as I understand the transaction, the bill of sale to them was absolute, so as to give them the full benefit of all the property and debts assigned if the amount realized therefrom should be more than the amount of their debt, but to be applied to the extinguishment of their debt pro tanto only if the proceeds of the' assignment should for any reason turn out to be less. As the nominal amount of the goods and debts assigned was more than doubtle what was actually due to Thurber & Townsend, I can see no reason for the making of an absolute sale and assignment of all this property to them, without any risk of loss on their part, unless it was upon some secret or implied understanding, between the parties to that transaction, to keep the surplus from otheiLCreditors, and for the benefit of Stoddard himself.

¡^Besides ; there never was in fact any change of the possession of the assigned property until after the issuing of the complainants’ execution; as the nominal appointment of the *166seller as the agent of the buyers, to retain the possession and retail the goods and collect in the debts for them, without any visible change in the mode of doing business at the st0re, was not a change of possession within the intent and meaning of the statute on this subject. The sale must be accompanied by an actual and continued change of possession as well as a nominal and constructive change, or the transaction will be deemed fraudulent as against creditors; and a construction which would allow the vendor or assignor of a store of goods to continue in possession thereof, and to sell them out as the agent of the purchaser or assignee, would render this statutory provision for the prevention and detection of frauds a mere nullity. (Hart v. Acker & Gedney, In Chan. April 3, 1838, S. P.) For these reasons, the decree of the vice chancellor must be reversed with costs; and a decree must be entered declaring the assignment from Stoddard to Thurber & Townsend fraudulent and void as against the complainants. But as the complainants had no lien upon the goods, as against other creditors, until the issuing of the execution, or upon the debts and choses in action of Stoddard until the filing of the bill in this cause, the monies received by Thurber & Townsend before the filing of the bill, for debts collected previous to that time, or for goods sold before the complainants obtained a lien thereon by the issuing of their execution, the defendants Thurber & Townsend have a right to retain such monies in part payment of their debt. But they must account to the complainants for the value of the goods on hand at the time of issuing the execution; as the complainants by reason of this fraudulent assignment were prevented from reaching those goods by their execution. The complainants are also entitled to all the debts and choses in action which had not been collected and actually paid over to Thurber & Townsend at the time of the commencement of this suit. The defendants must therefore account for any monies received by them, either from Stoddard or any other person since that time, on account of such debts, or which may have been received by Stoddard as their agent. It must therefore be referred to a master tq take an account accordingly; al*167lowing interest as shall be just. The master is also to appoint a receiver, to whom the defendants are to assign and deliver over on oath, under the direction of the master, the notes, book accounts and other demands remaining uncollected ; with the usual powers to such receiver. The master is also to take an account of what is due to the complainants for principal and interest on their judgment. And the question of costs, and all other questions and directions, are reserved until the coming in and confirmation of the report, (a)

Affirmed, on appeal to the court for the correction of errors, Jan. 1839.

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