Ward v. Van Bokkelen

| New York Court of Chancery | Jul 6, 1830

The Chancellor.

If the transactions to which the pleadings and proofs in1 this case relate were of recent occurrence, the weight of testimony would certainly be against the validity of the conveyances of November, 1807. There is certainly much reason to suspect that the property was conveyed to Mrs. Morris for the purpose of defrauding Beebe of his- debt. But considering the staleness of the transaction, • the fact that an investigation took place before the recorder a few months after the conveyance of the property, and the extraordinary circumstances, under which this claim is now brought forward, if the decision of the cause turned upon the question of fraud alone, I should not think myself warranted in setting aside the conveyances without giving the defendants an opportunity to exatnine the witness openly in the presence of a jury. Before a feigned issue can be directed to try the question of fraud, it becomes nececessary to examine some of the other points raised by the pleadings and proofs in this cause, for the purpose of ascertaining whether the establishment of the fraud will entitle the complainant to the relief asked for here.

It is objected, among other things, that the assignment of the decree to the complainant was void, on the ground of champerty; and that the assignor should have been a party to the suit. By the ancient practice of the English court of chancery there is no doubt that the assignor of a chose in action was a necessary party to a bill to recover the amount. And as late as 1792, in the case of Cathcart v. Lewis, (1 Ves. jun. 463,) Lord Thurlow allowed a demurrer to a bill filed by the assignee of a judgment, because the assignor was not made a party. Though some years previous to that time Lord Hardwick had declared it was not necessary in every case to make the assignor a party, where all the equitable interest had been assigned. (Brace v. Harrington, 2 Atk. 234.) In 1802, in the court of errors of this state, there was a difference of opinion among some of the judges as to the necessity of making the assignor of a mortgage a party to a bill of foreclosure brought by the assignee. (Johnson v. Hart, 3 John. Ca. 322.) But at this day the rule is well settled that where there has been an absolute assignment of all the'interest of the mortgagee in the debt secured by the mortgage, he is not a necessary party to a bill to redeem, or to a bill of foreclosure. (Chambers v. Goldwin, 9 Ves. 269. Newman v. Chapman, 2 Rand. Rep. 93. Whitney v. M’Kinney, 7 John. Ch. R. 144.) The reason why it was formerly considered necessary to make the assignor of a chose in action a party to a bill in equity brought by the assignee, I apprehend, must have been that courts of law did not sanction and protect such assignments; considering them a species of maintenance. And the assignor having the legal title or interest in the thing assigned, he might sustain an action at law thereon, notwithstanding a decree in equity to which he was not a party. This reason has long since ceased, as it is now well settled, at least in this state, that after an absolute assignment of a chose in action, the assignee, at law' as well as in equity, is considered the real party to the suit; and the defendant may plead and give in evidence any matter of defence which! exists in his favor against the assignee.- A decree in equity between the defendant and the assignee would now have the same effect in court of law as if the assignor was a party to such a decree;- the fact of the assignment being first established. In Cobb v. Thompson, (1 Marsh. Kent. R. 508,) the assignee of a judgment was permitted to file a bill in chancery, in his own name, without making the personal representative of the assignor a party. If there was any controversy between the assignor and the assignee in relation to the fact of the assignment, or as to the right of the latter to the chose in action, this court, in the exercise of a sound discretion, might require the assignor to be made a party, so that both might be bound by the decree. But in a case like the present, where there is an absolute assignment in writing, and when there is nothing in the pleadings or proofs to induce a belief that the assignor' has not parted with all his-interest in the subject matter of the suit, it would be an unnecessary and useless expense to make him a party.

The question as to the legality of the assignment in this case is not so clear. There can be no doubt of the fact that the assignment was obtained for the express purpose of commencing a suit, to endeavour to set aside the conveyances to Mrs. Morris on the ground of the alleged fraud. There was no longer any hope of obtaining any thing on account of that decree except by a litigated suit. Post was discharged under the insolvent act, and had died insolvent many years before. The purchase of this antiquated claim was undoubtedly made for the benefit of Mary Post, one of the defendants; and there was not- the least possibility of recovering any thing unless she' could show that her mother had committed a fraud, and that her husband had been guilty of perjury. Neither the complainant nor herself had any claim against Beebe or his representatives, and neither could' have had any other possible motive for the purchase except to harrass the defendants, or to make money by the purchase of a lawsuit. The statute declares that no officer or other person shall take upon him any business that is or maybe in suit in any court to have a part of the thing in plea or demand ; and no person upon any such agreement shall give up his right to another, and every such conveyance and agreement shall be void. (1 R. L. 172.) I am aware that this statute has been construed strictly ; and that it does not extend to the fair and bona fide purchase of a chose in action in the ordinary course of trade or. business, or for the, purpose of securing or recovering payment of an antecedent debt. (2 Sim. & Stu. 244. 2 Freeman’s Rep. 145. 6 Dane’s Abr. 741, ch. 202, art. 9, § 3.) But if any state of facts can bring the purchase of a chose in action within the prohibition of the statute, this is a case of that description. The decree was no longer a personal claim against Post, or his property at large ; but if it had any validity it was as against the lands then owned by the devisees of Mrs. Morris. It was strictly a purchase of the profits of a litigation ; as to which the purchaser is not entitled to the aid of this court.

1 Independent of this objection, to the complainant’s right of recovery, there is another which is equally fatal in this case. It appears by the answer of the defendants, and by the proofs in the cause, that shortly after the conveyances to Mrs. Morris, Post was discharged under the insolvent act and assigned all his property to A. L. Degrove for the benefit of his creditors. If the conveyances to Mrs. Morris were fraudulent, the whole of this property of the insolvent passed by that assignment to the assignee under the act, whether inventoried or not; and the assignee is a necessary party to the suit.

I am satisfied the complainant is not entitled to any relief in this case, and the bill must be dismissed with costs.