3 Keyes 13 | NY | 1866
On the 1st day of September, 1856, Wm. Sherman made a general assignment, for the benefit of creditors, to John Sherman, James A, Sherman and Erasmus Bowen. On the 13th of October, 1856, James Horton commenced an action to set aside this assignment, on the ground that it was fraudulent and void against creditors, and on the 13th of October, 1857, entered" a decree adjudging the same to be fraudulent and void, directing the payment of his debt of $6,000 from the assigned property, and appointing the plaintiff, in this action, receiver. On the 1st of January, 1857; which was intermediate the commencement of Horton’s suit and the obtaining his decree, and after the execution of the original assignment, the defendant made and delivered to the assignees of Wm. Sherman, as such assignees; his two promissory notes, bearing date of that day, payable at once, and which notes, at the time of the trial, amounted to $272.62. These notes passed to the plaintiff as such receiver, and the present action was brought to recover the amount of them.
It also appeared that on the 6th day of December, 1856, which was after the assignment and after the commencement of Horton’s proceedings in hostility to the same, the defend
The defendant, in his suit against the present plaintiff, as receiver, and others, recovered a judgment, directing the receiver to pay the amount of the notes held by him, $345.48, with the costs, and he claims that judgment to be decisive of the present suit. In this I think he errs. His judgment is a legal determination of the validity of his claim, but. it does not determine when it shall be paid, or what, if any, shall be its preference over other debts. By obtaining an offset against the notes in suit, the defendant would at once obtain payment of his claim to that amount, and this without regard to the amount of debts or assets applicable to the general settlement of Wm. Sherman’s affairs. He might thus obtain a large proportion or the whole of his debt, while others, equally entitled, might be compelled to accept a much smaller proportion. This the law does not allow. Equality in the payment of debts by a receiver is the rule of law, unless by diligence, or for some, special reason, a preference is declared of one creditor, or of one class, over creditors generally. Ho such circumstance exists in this
The defendant also claims that the title to the' notes in suit became vested in the plaintiff, as receiver only, from the time of his appointment as such; that he obtains his title by the act of the law, and not by or through the assignees. It • is further claimed that the receiver took title to the notes subject to all liens and equities then existing against them; that the defendant’s right to a set-off against Sherman was perfect; and, as the receiver derives his title by the act of the law, through Sherman, the right to the set-off remains perfect against the present plaintiff, the receiver.
It is true that the present action is not brought by the assignees, nor by one acquiring title from them.- It is true that the plaintiff does not hold under the assignees, but directly from the assignor, under an order directing an assignment by him to the plaintiff as receiver. It is also true that, as to some classes of property, his title commences from the filing of the order directing the appointment of a receiver; that it relates back to the date' of that order only, overreaching all intermediate liens. To this effect are the following cases, viź.: Chautauqua County Bank v. Risley (19 N. Y. 374); Porter v. Williams (5 Seld. 149); Van Alstyne v. Cook (25 N. Y. 489); Becker v. Torrance (31 N. Y. 631); Code 1862, § 298.
A distinction, however, is established by the cases, as to the kind of property to which this principle is applied. It is conceded that, as to real estate, and as .td tangible personal estate,- the law is as claimed by the appellant. In other words, if the appellant had issued an execution upon his judgment and levied upon the real estate or upon the horses and cattle, held under the assignment, the subsequent appointment of a receiver would not have diverted his lien. This circumstance, however, did not exist in the case before us. On the contrary, the fund which the appellant seeks to
It is to be observed, further, that the notes in suit were never the property of William Sherman. They were given to his assignees. For what precise purpose, or upon what consideration, is not disclosed in the case. ISfor is it material. When the assignment was vacated, it was vacated as to-creditors only. The title-to the notes did not thereupon vest in William Sherman. As to • him, every thing in which he was interested passed perfectly under the assignment, and did not so vest in him when the assignment was set aside. The law transferred the title of the notes from the assignees to the receiver, no gap intervening. If he had ever had title to the notes, it would not have returned to him on the setting aside of the assignment. But he never had title at any time.
The judgment should be affirmed.
All the judges concurring,
Judgment affirmed.