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In re the Assignment of Foley & Co.

10 Daly (N.Y.) 4 Court N.Y.C.P. English

Delivered by J. F. Daly, J.

Contents

Majority

p. 4
In the Matter of the Assignment of Foley & Co. to Edward True for the Benefit of Creditors.
[Special Teem.]
(Decided January, 1878.)

Headnote

Where, after an assignment for the benefit of creditors, a warrant of attachment against the property of the assignor is obtained by a creditor on the ground that the assignment is a fraudulent disposition of property, moneys in the hands of the attorney for the assignee, collected by him before the issue of the attachment, upon claims forming part of the assigned estate, are not subject to levy under such attachment.
p. 5
Application by an assignee under a general assignment for the benefit of ci editors for payment to him of moneys of the assigned estate in the hands of his attorney.
Foley & Co. made an assignment for the benefit of their creditors to Edward True. Part of the assets assigned were claims against debtors of Foley & Co., which the assignee employed his attorney, David Leventritt, Esq., to collect. After some of these claims had been collected, but before the proceeds had been paid over to the assignee, Thomas Hanley, one of the creditors of Foley & Co., procured from the Marine Court an attachment against their property on the ground that the assignment was fraudulent, and the attachment was levied on the moneys collected and the uncollected claims remaining in the hands of Mr. Leventritt. The assignee applied to have the moneys paid over to himself.
M. M. Budlong, for Edward True, assignee.
David Leventritt, in person.
Peter Cook, for Thomas Hanley, attaching creditor.

The attachment of Thomas Hanley, a creditor of the assignors, Foley & Co., which was issued by the Marine Court on the ground that Foley & Co. had fraudulently disposed of their property, can be levied only upon the property claimed to have been fraudulently assigned, and not upon its proceeds (Lawrence v. Bank of the Republic, 35 N. Y. 320 ; Lanning v. Streeter, 57 Barb. 33 ; Campbell v. Erie R. Co., 46 Barb. 540 ; Greenleaf v. Mumford, 50 Barb. 543 ; McElwain v. Willis, 9 Wend. 548 ).

In this case the attachment was levied on two classes of property in the possession of David Leventritt, attorney of the assignee, viz: (1) moneys collected from debtors of the assignors upon claims placed in Mr. Leventritt’s hands by the assignee for collection; and, (2) claims against other debtors of the assignors uncollected.

The proceeds of collected claims are to be regarded in the

p. 6
same light as proceeds of sales of property. When the claim is uncollected the debt maybe levied on under the attachment, but when the debt has been paid before the attachment is issued nothing remains which is the subject of levy, and the creditors of the assignors can only reach the proceeds by action in equity against his assignee after exhausting their legal remedies.

It follows, therefore, that whatever moneys had been collected by the attorney for the assignee before the attachment was issued are not the subject of attachment, and must be paid over by Mr. Leventritt to the assignee.

Application granted.

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