Parmelee v. Egan

7 Paige Ch. 610 | New York Court of Chancery | 1839

The Chancellor.

The former decree in this cause settled the rights of the complainant to the payment of his debt out of the fund in the hands of the sheriff The only question therefore in which he is interested, is the question of costs. As the three Egans were all concerned in the fraudulent transfer of the property, for the purpose of delaying and hindering the complainant in the payment of his debt, it follows of course that he is entitled to costs against them ; and if those costs cannot be collected of them, he is entitled to the amount thereof to be paid out of the fund in the hands of the sheriff.

The other questions in the cause, and which were reserved in the decree of the vice chancellor, relate to the residue of the fund after paying the complainant’s debt and costs. These are questions between Purcell, the assignee of the judgment against K. Egan, and the two creditors who came in before the master, to prove their claims against M. .& A. Egan, under the decree. And if those creditors stand in the same situation, in regard to this fund, as the complainant does, they are unquestionably entitled to be paid out of the same rateably with him ; or rather to be paid, out of the fund, according to the priorities of their respective executions, as a lien upon the property, of the debtors, which was sold for the purpose of defrauding them. But to entitle creditors to come in under a decree, upon a bill filed by a complainant in behalf of himself and other creditors, standing in the same situation in reference to the fund to be created by the decree, they must be so circumstanced that they could have filed a similar bill themselves. Thus if the complainant’s right to set aside a sale, of persona] estate, as fraudulent against him, as a creditor, depends upon the fact that he has issued an execution which could not be levied in consequence of the pretended sale, another creditor, who claims to come in under the decree, must show that he also has taken out an execution, which could not be levied upon the property for a similar reason. Here Leeds, and Wells & Nichols, who have come in to prove their debts under this decree, although they have recovered judgments against the defendants M. & A. Egan, do not show that they had taken out executions on those judgments, previous to the assignment of the judgment against K, Egan to Purcell, to pay other creditors who had equal equity with themselves to be paid out of the proceeds of the property. Whether any execution was ever issued upon either of those judgments is very doubtful; but it is certain none was issued previous to the assignment to Purcell, for the benefit of the creditors of M. & A. Egan, as neither of the judgments had been obtained at that time. The holders of those judgments are not therefore authorized to come in under the decree in this suit to claim the fund to the exclusion of other creditors.

The injunction must be dissolved so far as to permit the sheriff to pay over the surplus in his hands to the assignee, after satisfying the complainant’s debt and costs, for the benefit of whoever may be entitled to the same ; but without prejudice to the rights of those who have sought to come in under the decree, or the rights of any other creditors of M. & A. Egan in any future litigation respecting such surplus.

Decree accordingly.