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Kingston v. Koch

10 N.Y.S. 363 Court N.Y. Gen. Term Decision date 1890-06-20 English

Delivered by Macomber, J.

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p. 363
Kingston v. Koch.
(Supreme Court, General Term, Fifth Department.
June 20, 1890.)

Headnote

Assignment for Benefit of Creditors—Validity.
A debtor prepared and placed in the hands of his attorney, who was defending a suit against him, an assignment for the benefit of creditors. On the day of the trial the debtor instructed the attorney that he should not deliver the instrument that morning. No subsequent directions were given, and there was no evidence of any directions having been given to deliver the instrument at any particular time. After judgment was entered in the suit against the debtor, the attorney, without consultation with the client, delivered the assignment to the assignee. Held, that the assignment never became effective as against creditors.
Appeal from judgment on report of referee.
Action by George L. Kingston, assignee, etc., against Harriet N. Koch, administratrix, etc. Judgment was given dismissing the complaint upon the merits, and plaintiff appeals.
Argued before Dwight, P. J., and Macomber and Corlett, JJ.
Edmond J. Plumly, for appellant. Seward A. Simons, for respondent.

The plaintiff, as assignee for the benefit of the creditors of one George Southwick, brought this action to recover the value of certain property which he claimed under such assignment, and which had been seized by the defendant’s intestate, as sheriff of Brie county, under a judgment and execution issued against the assignor in behalf of one Houghtaling. The action of Houghtaling was begun in the municipal court of Buffalo, November 28, 1884, and the summons therein was made returnable at 10 o’clock a. m. on the 5tli day of December of that year. An unverified answer was attempted to be filed by the defendant in that action, but the same was finally rejected, but such effort resulted in a delay in the proceedings of a few hours. Early in the afternoon, however, a judgment was taken, a transcript was immediately issued and filed with the clerk of Brie county, and at 10 minutes past 3 o’clock of that day an execution was delivered to the sheriff. A levy was actually made upon the property in question on the 8th day of December, 1884. The debtor, Southwick, had prepared and had signed and placed in the hands of his attorney, prior to the entry of such judgment against him, the general assignment for the benefit of creditors under which the plaintiff claims. This instrument was put into the safe of the attorney, and there remained until the judgment above mentioned was procured, when the attorney, who had been defending the case in the municipal court, went hurriedly to his office, and, without any further communication with the assignor, took

p. 364
the assignment from the safe, and gave it to the plaintiff, the assignee therein named. We are of the opinion tbat.this assignment never became effective as against creditors. ' When the assignor executed the same he had no in-, tention of having it delivered as an effective instrument, but intended the same to be used only as a shield, in case of necessity. .The last positive instructions which the case shows that the assignor made to his attorney were to the effect that he should not deliver that instrument in the morning of the day above mentioned. There is no evidence of any instruction that he should deliver it at a particular time, or in any particular event, though it is a fair inference that the same was designed to be delivered or withheld from delivery according to the course pursued in the action in the municipal court. There is no evidence of any subsequent direction of the assignor to the attorney to deliver the instrument to the assignee. The assignor kept within his own control, save as above-mentioned, the entire matter. Southwick pursued his business as theretofore, without any change, and as though the instrument that he had executed was not outstanding. It was, in fact, a provisional execution of a general assignment, not to become operative until further orders had been given to the attorney. There was therefore reserved to the assignor the right to withhold the delivery of the assignment, and the right to revoke it and render it void. Until delivery, an assignment is a nullity, and unless the assignor has, by his acts, authorized a delivery, the instrument is inoperative. Reichenbach v. Winkhaus, 67 How. Pr. 512 ; McIlhargy v. Chambers, 23 N. E. Rep. 1144 ; Chapin v. Thompson, 89 N. Y. 270 . The referee has found as a fact that the assignment was made for the purpose of defrauding creditors, and particularly creditor Houghtaling, and is therefore void. This conclusion is abundantly sustained by the evidence, and is fortified by the following authorities, which show that it is not the intent of the assignee, but rather the intent of the assignor, before the delivery of the assignment, which is to govern: Cuyler v. McCartney, 40 N. Y. 221 ; Talcott v. Hess, 31 Hun, 282 . The judgment should be affirmed, with costs. All concur.

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