Webster v. Lawrence — 15 N.Y. St. Rep. 140

Majority

p. 140

Horace Webster, App’lt, v. Charles W. Lawrence et al. in re. National Park Bank, Resp’t.

(Supreme Court, General Term, First Department,

Filed March 2, 1888.)

Headnote

1. Practice—Assignment—Sheriff mat set tip fraud in transfer of property seized as a defense in action of trespass.

Where a creditor at large, by attachment, causes property to be taken by the sheriff thereunder, such sheriff may defend an action of trespass upon the ground that the property had been transferred by the defendants in the attachment suit in fraud of their creditors.

2. Same—Assignment—Creditor at darge cannot maintain action to. SET ASIDE.

A creditor at large cannot maintain an action for the purpose of setting aside an assignment as fraudulent as against creditors.

Appeal from order denying leave to levy an attachment, upon property in the possession of the receiver.

F. 6. Barlow, for app’lt; A._ B. Boardman, for resp’ts.

It is undoubtedly true that a creditor at large cannot maintain an action for the purpose of setting aside an assignment as fraudulent as against creditors. But it is also quite well settled that where a creditor at large, by

p. 141

attachment, causes property to be taken by the sheriff thereunder, such sheriff may defend an action of trespass upon the ground that the property had been transferred by the defendants in the attachment suit, in fraud of their creditors. This right is all that the appellants seek to avail themselves of by this proceeding. Their attachment has been issued against the property of the defendants, H. Webster & Co., upon the ground that they have disposed of their property with intent to hinder, delay and defraud creditors, and the sheriff cannot levy upon their property because it is in the hands of the court, such property having been placed in the hands of the court in an action between these co-partners relating to the instrument of transfer, which is claimed to have been a fraudulent transfer of their property by H. Webster & Co. The receiver, therefore, is the mere liquidator of the parties, and there is no reason why, under .such circumstances, the plaintiffs in the attachment should not be at liberty to pursue their rights, notwithstanding the fact that such property has been placed in the custody of the court.

Without passing upon any of the questions involved as to the illegality of the judgment which has been referred to upon this appeal, or as to the effect of the assignment mentioned in the proceedings which culminated in such judgment, it seems that the plaintiffs in the attachment should have the right to test the title to this property in the manner provided by law, and that they should be permitted to levy their attachment thereunder, and the sheriff to take the same into his possession, leaving the parties to their action for the trespass which will have been committed, provided the title to the property cannot be maintained.

The order should be reversed, without costs, and the appellants have leave to cause their attachment to be levied -on the property in the hands of the receiver.

Macomber and Bartlett, JJ., concur.