1 Barb. Ch. 309 | New York Court of Chancery | 1845
The order of reference in this case did not authorize the complainants to examine the defendant for the mere purpose of ascertaining whether he had made a fraudulent assignment of his property previous to the commencement of
It.is, at least, doubful, whether the -receiver himself had the power, under any clause of this order, to examine the defendant, or any other person, as a witness, for the mere purpose of ascertaining whether the defendant had not made a fraudulent sale of his .property previous to the filing, of the complainants’ bill. There is no statutory provision authorizing such a receiver to set aside, or avoid such'a sale; where the defendant himself, at the time he was directed to assign to the receiver, would not have had the right to do so. The statute only makes the fraudulent sale or transfer void as to the creditors who are intended to be defrauded. And where .the property is not in the possession of the defendant, so as to make it his duty to deliver it up to the receiver, leaving the fraudulent assignee, or grantee, to come in and be.heard pro interesse suo, the proper course, for
The order of reference, therefore, in cases not provided for by the 191st rule, should authorize the master to appoint a receiver of all the property, equitable interests, things in action and effects, which belonged to, or were held in trust for the defendant, or in which he had any beneficial interest, at the time of the commencement of the suit, except such articles of personal property as are exempt by law from sale on execution against such defendant; and- direct him to take from such receiver the requisite security for the faithful performance of his trust. It should then require the defendant to assign to such receiver, under the direction of the master, all such property, equitable interests, things in action and effects, or such parts or portions of the same as are in his possession, or under his power and control. And such order should also direct that the complainant have leave to examine the defendant or any other person on oath, before the master, for any of the purposes of the reference; and also to compel the produc
The order, in the present case, does not in terms authorize the examination of third persons as witnesses, before the master, upon the application of the complainants, as to the property which the defendant is directed to assign and deliver over to the receiver. Yet it is undoubtedly sufficient to authorize a full examination of the defendant himself on that subject. The defendant, therefore, was not only bound to answer the direct question, what property, equitable interests, and things in action, and effects, he owned or had a beneficial interest in, at the time specified in the order of reference, but every other question which might indirectly aid .in the ascertainment of the fact as to what property was owned by him at the time of the commencement of the suit, or what property was then held by others, in which he had any beneficial interest. And he was also bound to answer and disclose whether such property was in his possession, or under his control, at the time of such examination, so as to be the proper subject of an order or direction of the master that he should deliver the same to the receiver. It is not sufficient, then, that the defendant should answer generally that he had no property, or no property other than that specified by him in his answer to the general question. For, upon a more minute and particular examination of the facts, it may turn out, as it did in the present case, that the defendant’s genera] answer was erroneous; that he was under a mistake in supposing that he had no property at the time of the commence
In the present case, many of the questions propounded to the' defendant, and overruled by the master, were proper; for the purpose of ascertaining what property, if any, the defendant held' such an interest in, or control over, as to "make it the legitimate subject of assignment and delivery to the receiver, under the order of the court. Particularly, the defendant should have been required to answer "what property he had shortly previous'to the filing of the bill; and "if he had any, what had become of it; and if he had sold it, how it had been paid for, or whether the purchase money was still due to him ; and if paid for, what had become of the proceeds' of the" sale,. <fec. He should also have been required to answer whether he had disposed of airy prop-'
The order appealed from must, therefore, be reversed; and the application for a further examination of the defendant, upon the principles above stated, must be granted. And the complainant’s costs upon this appeal, as well as upon the application to the vice chancellor, must abide the event of the suit."