In re Freel — 55 How. Pr. 386

Majority

p. 386

N. Y. COMMON PLEAS.

Matter of Application of Edward Freel, assignee of Foley & Co.

Headnote

Attachment—Moneys arising from, assigned claims cannot he attached.

Property assigned cannot be reached on attachment based on the charge that the assignment was made to defraud creditors, if the property has changed its form. That is moneys arising from assigned claims cannot be attached, though the claims could have been reached, had the attachment been levied before they were changed into money.

Special Term, January, 1878.

Motion by assignee of Foley & Co. to compel Mr. David Leventrit, an attorney, to pay over moneys collected by him for said assignee.

M. M. Bucllong, for assignee.

JDamid I&oenbrit, in person.

Peter Cook, for creditor, Hanley.

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 agt. Bk. Republic, 35 N. Y., 320 ; Lanning agt. Streeter, 57 Barb., 33 ; Campbell agt.

p. 387

Erie R. R. Co., 46 id., 540; Greenleaf agt. Mumford, 50 id., 543; McElwain agt. Willis, 9 Wend., 569 ).

In this case the attachment was levied on two classes of property in the possession of David Leventrit, attorney of the assignee, viz.: Honeys collected from debtors of the assignors, upon claims placed in Hr. Leventrit’s hands by the assignee for collection, and, second claims against other debtors of the assignors uncollected.

The proceeds of collected claims are to be regarded in the same light as proceeds of sales of property. Where the claim is uncollected the debt may be 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 the 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 Hr. Leventrit to the assignee.