Seymour v. Wilson

Headnote

An assignor who is called as a witness to prove facts tending to show his act fraudulent as against creditors, on the cross-examination, may be asked, whether in making that assignment he had any intent to defraud his creditors.

A receiver appointed in proceedings supplementary to execution, may contest the validity of any transfers of the judgment debtor, with the same effect as if the suit was brought in the name of the creditor. (Overrules this same case, 16 Barbour, 294. This last question was decided in the same way in the court of appeals in Porter^ agt. Ciarle, 12 Sow. 10Y.)

This action was referred to the Hon. George G. Scott, as sole referee, to hear and determine the same.

The facts are taken from the report of the case in 16 Barb. 294 ,,and are as follows: “ Conrad Cramer, on the 15th of March, 1850, recovered a judgment in this court against Ansel C. Durkee, for $67.12, damages and costs, upon a debt contracted the 1st of April, 1849. The summons was served on the 22d day of February, 1850, in the afternoon. An execution was issued upon this judgment to the sheriff of Washington county, where Durkee resided, and was returned wholly unsatisfied. Cramer thereupon instituted proceedings against Durkee under title nine, chapter two of the Code, and the plaintiff was appointed receiver' of his effects. In the forenoon of the 22d of February, 1850, Durkee assigned to the defendants the three first instalments of $200 each, and the interest thereon to grow due on a mortgage bearing date October 15th, 1849, made by his brother Calvin Durkee and

his wife to him, upon a lot of' thirteen acres in the town of Fort Edward, and given to secure the payment of $1,000 and interest. There was then a prior outstanding mortgage of $400, upon the undivided half of the premises, executed by Calvin Durkee. The whole premises, according to the testimony, were worth not less than $800 and not to exceed $1,000. Calvin was insolvent at the time of this transfer, and had been so ever since; and after assigning the instalments upon his mortgage, owned no other property, and was considerably in debt. Calvin, at this time, owed the defendants $300, and Sheldons & Wood upwards of $300. The defendants agreed to appropriate the avails of the mortgage equally to the payment of their debt, and the debt of Sheldons & Wood. The defendants had previously caused to be sold on a judgment given to secure their debt, the aforesaid lot of land. They purchased it on the 7th of February, 1850, and obtained the sheriff’s certificate of sale. This certificate was assigned by them to Ansel, when he assigned to them the instalments upon his mortgage. There was no other consideration for that assignment moving between Ansel and the defendants. There was no consideration but brotherly affection moving between Ansel and Calvin for the assignment of the mortgage. And there was no consideration whatever moving as between Ansel and Sheldons & Wood. Before this suit was commenced, the plaintiff applied to the defendants to be allowed the amount of his debt out of the mortgage. They refused to allow it. In his complaint, the plaintiff asked that the assignment of the instalments on the mortgage be declared void as against him, and that the mortgage and bond be assigned to him, or that the defendants be directed to pay the amount of the judgment, and the costs of the supplementary proceedings, with the costs of this suit. The answer denied all knowledge of the judgment, the supplementary proceedings, and of the appointment of the plaintiff as receiver; but admitted the assignment of the bond and mortgage, with the allegation that it was executed to the defendants for a valuable consideration, and by them received

in good faith, and without any intent on their part, or as they believed, on the part of Durkee, to defraud his creditors, and without any knowledge on their part that he had any creditors, and denying certain averments of the complaint, as to the value of the mortgaged premises, &c. The reply denied the averments of the answer.”

Judges Willard and Allen were for affirming that judgment. Judge Cady concurred with Willard and Allen, Justices, upon the merits, that the assignment was fraudulent and void as against the creditors of Ansel C. Durkee, but he concurred with Justice Hand, that the receiver could not question the assignment. The judges being equally divided upon that point, the case could not be decided in the fourth district until Judge Willard went into the court of appeals.

Thereupon the first judgment was reversed, and a new trial ordered before the same referee. (See 16 Barb. 294 .)

Before the second trial, the court of appeals unanimously decided, in the case of Porter agt. Olaric, ( 12 How. 107 ,) that a receiver could contest such assignments.

Upon the second trial before the referee, the plaintiff called Ansel C. Durkee, the judgment debtor, and proved by him certain facts tending to show the said assignment fraudulent.

Upon the cross-examination the defendants’ counsel put the following question: “ In making that assignment to Wilson & Grimwood, did you intend to defraud Conrad Cramer or any other creditor of yours ?” To this question, the plaintiff’s counsel objected, on the ground that the witness had no right to swear to his intentions; that he must state only facts, leaving the referee to pass upon the question of intention. The referee sustained the objection, the question was excluded, and the counsel for the defendants excepted to the decision.

The referee again reported in favor of the plaintiff, but found, as a fact, “ that there was no actual knowledge by the defendants of Ansel C. Durkee’s fraudulent intent,” and from that judgment the defendants appealed to the general term.

At the general term Justices James, Allen and Cady affirmed the judgment, and Justice Hand dissented.

The defendants appealed to the court of appeals, where the case was argued in September, 1856, by

1856, December 25, judgment reversed, and a new trial granted, on the ground that the referee erred in excluding the question to the witness Ansel C. Durkee. All the judges concurred in this except Mitchell and Comstock, who thought the ruling of the referee upon that point was right.