1 N.Y.S. 83 | N.Y. Sup. Ct. | 1888
Lead Opinion
The appellant admits that, if McDonnell were living still, an action could not be maintained except by a judgment creditor; but he urges that both before and since the statute of 1858, c. 314, that the administrators might have brought this action; hence that, on their refusal so to do, he, as one of the eestuis que trustent, may bring it, making the administrators parties. We do not think it important to examine the rights of administrators in this respect prior to the act of 1858; and we may notice, in passing, that that act speaks of “estate or property so held in trust;” and, again, of “property held by or of right belonging to any such trustee.” Whether an administrator, in any such sense, holds the real estate of the deceased that he can disaffirm conveyances thereof under this act, we need not inquire at this time. It seems to be assumed in Lichtenberg v. Herdifelder, 103 N. Y. 302, 8 N. E. Rep. 526, that the administrators may disaffirm conveyances of real estate. In regard to the real estate conveyed by Morris to Lucy, and for which the consideration was paid by McDonnell, the plaintiff relies on section 52, 1 Rev. St. 728, creating a trust in such property for creditors; but it has been decided that a receiver in supplementary proceedings cannot enforce that trust. Underwood v. Sutcliffe, 77 N. Y. 58. The opinion refers to the statute of 1858; and while it admits that a receiver may set aside fraudulent transfers, it holds that he cannot enforce this statutory trust. By analogy an administrator cannot. The creditor must enforce it directly by an action, (Garfield v.Hatmaker, 15 N. Y. 475;) but only after exhausting his legal remedies, (Bank v. Olcott, 46 N. Y. 12.) Therefore, in respect to this part of the complaint, it is plain that the plaintiff cannot maintain the action, both because the administrators could not have enforced the statutory trust created by section 52, ut supra, as it is not derived through the debtor, and also because the plaintiff has not exhausted his legal remedies, as was decided in Estes v. Wilcox, 67 N. Y. 264.
Another claim of the complaint is that Lucy McDonnell, one of the defendants, has received, from life policies payable at the death of her husband, more than she might lawfully. Laws 1870, c. 277. Yow, this money must-have been paid .after the death of the intestate. We do not see why any liability to account for such money could not have been heard by the surrogate, in the accounting of the administrators. Code, § 2739; Shakespeare v. Markham, 72 N. Y. 400; Boughton v. Flint, 74 N. Y. 476. That accounting seems to be the proper place to determine the question as to the insurance money; whether it belongs to Lucy McDonnell individually, or to her as administratrix.
Then, as to the real estate of which McDonnell executed a deed to O’Brien, and O’Brien to Lucy. According to the averrment of the complaint, these deeds were not delivered in McDonnell’s life-time. If so, it would seem to follow that they never took effect, and the land descended according to law.
In the case of Bate v. Graham,, 11 H. Y. 237, the plaintiff was a judgment creditor. He sued to recover for the estate certain personal property fraudulently transferred by the deceased. How, before the statute, 2 Rev. St. 449, .§ 17, it had,been held that where a fraudulent vendee had taken possession of goods prior to the death of the vendor, and remained in possession, he might be charged as an executor de son tort, though there was a rightful executor. Hence it had been held that, after that statute, the executor might sue the fraudulent vendee for the goods thus taken, (Babnock v. Booth, 2 Hill, 181;) and the plaintiff’s action was sustained. He was, as above observed, not a .simple contract creditor. The eases of Dewey v. Moyer, 72 N. Y. 70; Bank v. Leggett, 51 N. Y. 554; Crouse v. Frothingham, 97 N. Y. 105; and Sands v. Codwise, 4 Johns. 536,—were also cases of judgment creditors. The case cf Bates v. Bradley, 24 Hun, 84, was one of simple contract creditors. The debtors had filed a petition in bankruptcy, and therefore the creditors could not put their claims into judgment. Rev. St. U. S. § 5106. The case of Overton v. Olean, 37 Hun, 48, was an action for an injunction to restrain the village from permitting a railroad company to erect a permanent structure in the street. Of course, there could be no prior judgment. It was not a case of contract, but of tort. It is no exception, then, to the doctrine we have stated. It may be asked, why should a judgment first be obtained? Because .a court of equity is not a place in which to recover or to establish debts. The ■existence and the amount of the debt should be established in a court of law, and legal remedies to collect should be taken before resort is had to equity to remove fraudulent obstructions. So it was said, Estes v. Wilcox, ut supra, 266, that the reason of the rule “does not fail by the death of the debtor before judgment recovered for the debt.” The judgment “ would conclude the creditor as to the amount of the debt. ”
The plaintiff’s argument is that the administrators are trustees for the ■creditors; and, if the administrators will not act, the creditors may. It is rather a new doctrine that an administrator is a trustee of the real estate of the deceased. Even over the real estate of which the deceased was seized at his death the administrator has no power. He can institute proceedings to .subject it to the payment of debts; so can creditors. It seems somewhat strange that an administrator, who is not trustee of the real estate of which the deceased died seized, should be called trustee of that of which the deceased did not die seized; and a careful examination of the section of 1858 will show that the right of the administrator, as of other trustees, is limited to such property as is held by, or of right belonging to, such trustee or estate. So it was held in Underwood v. Sutcliffe, ut supra, that the statutory trust did not belong to a receiver, and could not be enforced by him, although it might be enforced by a judgment creditor. So, in the present case, if there had been no conveyance of McDonnell to O’Brien, and of O’Brien to Lucy, would the land belong to the administrators? They could not even allow the claims of creditors against heirs and devisees. In re Haxtun, 102 N. Y. 157, 5 N. E. Rep. 111. If not, how can the execution of those deeds make the land belong to the administrators? Or how can the setting aside the deeds as fraudulent give the administrators any title thereto which they would not have had if the deeds had never existed? It seems inconsistent
Ingalls, J., concurs.
Dissenting Opinion
(dissenting.) The complaint alleges that the plaintiff was a general creditor of John McDonnell, who died intestate, and of whose estate-the defendants are administrators; that a portion of plaintiff’s debt has been paid by the administrators, in part from the personal property, and in part from the sale by the surrogate of the real estate of the intestate; that the intestate in his life-time transferred to the defendant Lucy McDonnell certain property in fraud of his creditors, and that all of his assets have now been applied towards the payment of his debts, except the property thus fraudulently transferred to the defendant Lucy McDonnell; that she claims to own such property, and refuses, though requested, to apply the same, or to pay the balance of the debt due the plaintiff; that the plaintiff has requested defendants to bring an action to set aside such conveyances, which they decline to do; that the only property applicable to plaintiff’s debt is that thus transferred by the intestate to the defendant Lucy McDonnell. The complaint does not allege that plaintiff recovered any judgment against the intestate or the administrators. The prayer for relief is the usual one in a creditors’ bill, except that the amount realized be distributed among all the creditors who-come in, etc. Upon the trial the plaintiff offered to prove the facts set forth in his complaint, and to prove the decree of the surrogate’s court directing the sale of the intestate’s real estate, not including that described in the complaint, to pay his debts, the sale, the application of the proceeds, and the-balance unpaid upon the plaintiff’s claim, and that a large amount of other debts of the intestate were not fully paid. The court, upon the objection of' defendants’ counsel to the evidence as insufficient to establish1 a cause of action against the defendants, and upon their motion that the complaint and facts offered to be proved did not constitute a cause of action against them,, dismissed the complaint; the court holding that the plaintiff, as a general creditor, without judgment and execution, could not maintain the action.
The judgment should be reversed, new trial granted; costs to abide the event.