46 Barb. 540 | N.Y. Sup. Ct. | 1866
Lead Opinion
• The action was brought by the plaintiff to recover the price and value of a quantity of timber and lumber sold and delivered by him to the defendant. The only question in the case is whether the matters offered in evidence on the part of the defendant were material, and constituted any valid defense to the. action. The offer was, in substance, to prove that the defendant had paid the amount to the sheriff to apply in satisfaction of an execution in his hands, issued upon a judgment in favor of Field & Havens, against Stevens & White, upon being indemnified by Field & Havens against the claims of the plaintiff. There is no pretense that the defendant did not purchase the property of the plaintiff, nor that it did not acquire a perfect undisputed title thereto as against all the world; nor that the pjlaintiff did not sell in his own right, upon the defendant’s
It must be admitted, for the purpose of determining this question, that the purchase by the plaintiff was in fact fraudulent and void as respects the creditors of Stevens & White. But the defendant was not their creditor; nor did it become, in' any sense, by its purchase of the plaintiff, the debtor of Field & Havens, legally or equitably. It comes here as a simple volunteer, to litigate a question in which it has, and can have no possible interest, having first taken security against the consequences of its free encounter. The defendant has no assignment, .even, of Field & Haven’s judgment, and nothing to base their claim to a defense upon, other than the mere voluntary payment of the debt to the sheriff, which Stevens & White owed to Field & Havens.
' The reason of this is that the statute only makes the sale void, in such a case, as to the creditors of the vendor, leaving it perfectly valid and effectual as between the parties. The sale being void as to creditors, the property may be seized by process of attachment or execution in a legal action in the hands of the fraudulent purchasers) at the suit of such creditors, the same as though no sale had ever been made. The rule is different in regard to' real estate, especially where the purchase money is furnished by the debtor and the title taken in the name of another. There a creditor can only proceed in an equitable action after having exhausted his remedy at law. 'He can not, as in the case of a fraudulent transfer of personal property, seize and sell the land upon execution, or attach it in a legal action. (McCartney v. Bostwick, 31 Barb. 390. Garfield v. Hatmaker, 15 N. Y. Rep. 475. Wood v. Robinson, 22 id. 564.) The case of Wait v. Day,
In the case before us, though the plaintiff's purchase was void as to the creditors of his vendors, and the property might have been seized and sold upon execution in their favor while in that condition, the sale by the plaintiff to the defendant was perfectly valid, and gave the defendant a clear title to the p>rop>erty.- 'There was no offer to show, nor any pretense, that the defendant had any notice of the fraud which rendered void the title of the plaintiff in respect to the creditors of his vendee. Their title was therefore unimpeachable. (2 B. 8. 137, § 5.) Stevens & White had then no interest in the property transferred, and no interest whatever in the transaction, or in the demand created by the transfer and sale, legal or equitable, and there was nothing in such demand to which, in an action at law, the claims of the creditors of Stevens & White, or any process or judgment in such action, could possibly attach. Here had been a valid sale by a fraudulent purchaser, and there was no right, legal or equitable, remaining in the original owner and debtor, which his creditors could attach. Because, if it be granted that an attachment, as a provisional remedy in an action at law, may take and attach to things which, could not be seized and sold by virtue of an execution, still it must be something which belongs to the defendant in the action. It must be “the property of such defendant.” If the thing attempted to be attached and held be something in which the - debtor
If Field & Havens, as creditors of Stevens & White, had any claim against any one, other than their debtors, it was against the plaintiff as their trustee of a resulting trust. The statute does not create this trust, as it does in the case of real estate, where the consideration is paid by the debtor and the conveyance taken by another, (1 B. S. 747, § 57;) but it is the mere creature of equity, which will be raised in favor of creditors of the debtor, merely, to prevent them from being defrauded of their just claims upon their debtor’s property. This equity will do in all cases where the conveyance is not absolutely void, so as to vest no title in the purchaser. Where the fraudulent purchaser takes a title good as against the grantor, equity will fasten a trust upon it, in favor of the grantor’s creditors, in his hands, and make him trustee for them, to the extent and value of such property. (Law of Trusts and Trustees, 96.) This is not a trust in favor of the vendor of the property, and debtor, in any respect, but merely in favor of his creditors, who are alone the beneficiaries. But a bona fide purchaser, either from the fraud-lent vendor or the fraudulent vendee, is in no sense such trustee. The sale being legal, and in all respects valid as
I am of opinion, therefore, that the defense offered Was properly excluded, and that a new trial should be denied,
Wblles, J. concurred.
Dissenting Opinion
(dissenting.) The defense, as presented in the defendant’s answer and in the proof offered in support of it at the circuit, having been 'overruled by the circuit judge, the question presented is, whether if the defendant had fully proved what he proposed and, offered to do, it would have constituted any defense in the action. It must therefore be assumed that Stevens & Go. were the original owners of the timber in question; that they sold it to the plaintiff; and that such sale was fraudulent as against
The money owing by the defendant for this timber would be clearly considered in equity as a substitute for the timber, and as a debt due to Stevens & Go. and would be held upon a creditor’s bill against them and the plaintiff as equitable property, or applied in payment of their debts. And I can see no reason why a lien was not created upon it, and why it was not bound by the attachment, upon the service thereof in the suits of Havens & Field v. Stevens & Go. Upon an attachment under the Code the sheriff is required to attach and safely keép all the property of the defendant, in his county. He is to receive and take into his possession all debts, credits and effects of the defendant. The attachment reaches all kinds of property, whether legal or equitable, and I can not see why it does not reach all equitable property as • such, as a creditor’s bill or other proceeding to reach the equitable property of & judgment debtor upon supplemental proceedings after executioti returned unsatisfied. Treating the plaintiff as a mere agent of Stevens & Go. to sell their property, and he is nothing more, if the sale to him was fraudulent, the debt created on the sale by the plaintiff to
The only question which remains is, whether the defendant, having purchased the timber of the plaintiff and contracted to pay him therefor, can voluntarily pass by him and pay the price to the creditors of Stevens & Co. upon the assumption that the plaintiff’s title was fraudulent, and that such creditors were legally entitled to the proceeds or price of such timber. The relation between the plaintiff and the defendant is that of debtor and creditor. It is like the relation between bailor and bailee.
The defendant is primarily bound to pay the plaintiff for the property which it has purchased of and received from him. The attachment served upon it did not change this relation, or its rights or duties. It was, as between them, like a notice, or at most like an injunction, forbidding it to pay the debt to the plaintiff. It could not, after service of the attachment, have paid the plaintiff, except at the peril of having to pay the debt a second time to the creditors, pending the attachment suit. The service of the attachment, while—if the sale from Stevens & Co. to the plaintiff was" fraudulent—it created a lien upon this debt, yet did not confer upon the defendant the right to assume that such was its legal effect, or that the plaintiff was not at the time of the sale the legal owner of the timber and had the power to give, and had conveyed to it, a valid legal title to said property. But although this is, primarily prima facie so, it is not conclusive upon the rights of the defendant. If it was satisfied that the plaintiff had no valid title to the timber in question; that he obtained possession of it by fraud ; that he was the mere agent or tool of Stevens & Co. to help them conceal and cover up the property, and keep it from their creditors, and that the attaching creditors had the valid legal title to such property, I think it might at its own risk and
This rule, I think, is established by the following oases : King v. Richards, (1 Wheat. 418;) Hardman v. Willoch, (9 Bing. 378;) Bates v. Stanton, (1 Duer, 45.)
In principle, I think the rule precisely the same as between bailor and bailee. In King v. Richards, (supra,) Judge Kennedy says: “It would be repugnant to every principle of honesty to say that, after the right owner had demanded the goods of the bailee, the latter shall not be permitted, in an action by the bailor against him, to defend against his claim by showing clearly and conclusively that the plaintiff acquired the possession of the goods either fraudulently, tortiously or feloniously, without having obtained any right thereto.” The same view is taken, in substance, by Judge Buer, in Bates v. Stanton, (supra.) In all cases, I think, where a man finds himself in possession of personal property to which there are several claimants, he may. determine at his peril which is the true and rightful owner of such property, and may deliver the same to him, or he may pay the price of such property to the claimant, as the defendant did in this case. The peril he runs in such case is that he takes the burden upon himself, if sued by any other claimants of such property, of establishing the fact that he delivered the same, or, paid the purchase money therefor, to the lawful owner thereof; and proof of such fact will constitute a complete .defense to any such action • against him. In accordance with this view, I
Hew trial denied.
Welles, JE. D. Smith and Johnson, Justices.]