Rousseau v. Bleau — 29 N.Y. St. Rep. 334

Majority

p. 334

John Rousseau, as Administrator, App’lt, v. Jennie Bleau et al., Resp’ts.

(Supreme Court, General Term, Third Department,

Filed February 4, 1890.)

Headnote

1. Executors and administrators—May maintain action to set aside FRAUDULENT TRANSFERS.

Under chapter 314 Laws of 1858 an administrator can maintain an action, alleging in his complaint the validity of claims of creditors against the estate of his intestate, the inadequacy of the assets to pay said claims, a fraudulent transfer by the intestate and demanding judgment that such transfer be set aside for the benefit of creditors.

3. Trial—Practice in equity cases.

The practice in equity cases adopted in the third department is approved. Equity cases are placed upon the calendar, no issues having been previously settled. The case is tried before the court; a jury is empanelled with the understanding that if the court so desires it will frame issues in the form of questions, and submit them to the jury after argument of counsel and with proper instructions; if satisfied with the jury’s verdict, it will approve it; if not, it will find those facts according to its ow-n judgment, and other facts as well, and thereupon decide the whole case, and. make a decision in writing covering all material issues.

3. Same—Direction for judgment—Code Crv. Pro., § 1023.

And where in such case the court at the conclusion of the plaintiff’s case granted a motion for a nonsuit, and a judgment was entered dismissing the complaint upon the merits with costs, and judgment was afterwards entered having been signed by the clerk, this was a sufficient compliance with § 1033, Code Civ. Pro.

Appeal from a judgment of nonsuit, dismissing the complaint, upon the merits with costs at the close of the plaintiff’s testimony upon the trial before the court at the Rensselaer circuit with a jury empanelled to pass upon such issues as the court might deem it proper to submit to them.

The action was brought under chap. 314 of the Laws of 1858 by the plaintiff, as administrator of, etc., of Mary Rousseau, deceased, the complaint alleging that the deceased, at the time of her death, was indebted to Elizabeth Rousseau in the sum of $528, which is due and unpaid to said Elizabeth, and that at the time of her death she was indebted to other persons in amounts which are due and unpaid to them; that as administrator the plaintiff has taken possession of the personal property of which the intestate died possessed, and that it does not exceed fifty dollars in value; that the deceased was prior and up to March 6,1888, the owner of a house and lot in the city of Troy of the value of $4,000, over and above incumbrances; that she was sick with a cancer and apprehending death therefrom; that with the intent to cheat and defraud her creditors then existing, and intending then to contract further indebtedness and to cheat and defraud all creditors which she might have at the time of her death, she executed a conveyance, without any actual consideration, of the said house and lot to the defendant, Jennie Bleau, which deed was afterwards delivered to said defendant, but the said deceased retained possession of said house and lot until her death, which occurred October 28,1888 ; that the said deed was recorded October 30, 1888.

Judgment is demanded that the said deed be set aside as fraud

p. 335

ulent against the creditors of Mary Rousseau and this plaintiff, as her administrator, and that the real estate may be sold by the order of this court, or by proceedings in the surrogate’s court, and the proceeds applied in due course of administration to the payment of the debts of the deceased.

The defendant, Jennie Bleau, answered, denying fraud, alleging validity of the deed to her and denying the validity of the claim of Elizabeth Rousseau. The case came on for trial at the Rensselaer circuit. 3STo issues had been settled; a jury was empannelled to decide such issues of fact as the presiding judge should deem proper to submit to them.

Testimony was given tending to establish all the material allegations of the complaint.

It appeared that the deed was delivered to the defendant, after the death of Mary Rousseau, by the attorney with whom she had left it for that purpose; that an inventory had been filed showing assets to the amount of sixty-one dollars, that no advertisement had been had for claims against the estate and no accounting before the surrogate.

Upon the close of the plaintiff’s testimony the court nonsuited the plaintiff and judgment was thereupon entered dismissing the complaint on the merits, with costs. The plaintiff appeals.

II. D. Bailey, for app’lt; John T. Norton, for resp’ts.

The practice in this case has long prevailed in the third department, and it ought to be upheld unless we are required by MacNaughton v. Osgood, 114 N. Y., 574 ; 24 N. Y. State Rep., 531, to declare it improper.

The practice in brief is this: Equity cases are placed upon the circuit calendar. Uo issues are previously settled. The caséis brought to trial before the court; a jury is empanelled with the understanding that if the court, after the testimony is given, desires to submit any issues to them the court will frame them then and there in the form of questions and submit them to the jury for decision; the jury having heard the arguments of counsel and the charge of the court render a verdict by answering the questions submitted; the court then approves or disapproves of them: if the court disapprove it finds the fact in accordance with its own judgment and finds upon the other issues in the case, and thereupon decides the whole case, mating the decision in writing covering the material issues.

In the case before us the record recites that at the close of the plaintiff’s testimony the defendant’s counsel moved for a nonsuit, taking the usual ground, that assuming all the inferences of fact in the plaintiff’s favor he had made out no case. The court concurred and directed that the complaint be dismissed upon the merits, with costs, and judgment, signed bv the clerk, was after-wards entered.

In the case cited the practice differed from that here pursued, in that the trial court dismissed the complaint upon the close of the testimony and then directed that the exceptions be heard in the first instance at the general term.

p. 336

The court of appeals, second division, held that such a direction as to the exceptions could only be made in cases triable by a jury. The direction that the exceptions be heard in the first instance at the general term prevented the entry of judgment until the decision of the general term was made, and of course prevented a. decision directing judgment by the trial term. When the case came to the court of appeals it had no decision of the trial court directing judgment, and no judgment of that court.

The practice pursued in the present case was substantially in accord with that approved in Acker v. Leland, 109 N. Y., 5 ; 14 N. Y. State Rep., 23; except that no findings of fact or of law are signed by the court, unless the judgment signed by the clerk be considered such. The signature of the clerk is the signature of the court. The judgment is equivalent to a finding of fact by the court, that the testimony adduced by the plaintiff did not, taken in the aspect most favorable to him, establish the case alleged in his complaint. It is also a finding that the court did elect not to submit any question to the jury. The direction for judgment finds that on the merits the plaintiff is not entitled to-recover. If the court had awarded affirmative relief, it would have been proper to have made a decision setting forth the facts, from which the directoin of judgment would follow as the necessary legal conclusion. But the necessity for setting forth findings-of inconsequent facts, and then formally finding as a conclusion of law that they are inconsequent, is not obvious.

We think the judgment signed by the clerk, in a case in which the result is a dismissal of the complaint upon the merits, a sufficient compliance with § 1022. The case of MacNaughton v. Osgood does not hold otherwise. There is no difficulty in reviewing upon appeal such a case.

The court dismissed the complaint upon the supposed authority of Harvey v. McDonnell, 48 Hun, 409 ; 16 N. Y. State Rep., 513. That case has since been reversed. 113 N. Y., 526 ; 23 N. Y. State Rep., 501. It is held in that case that a general creditor of an intestate may, under chapter 314, Laws 1858, where the administrator refuses to disaffirm a transfer made by the intestate to-defraud creditors, and where the assets in the hands of the administrator are insufficient to pay the debts of the intestate, himself bring an action for his own benefit and that of the other creditors, to reclaim the property, making the administrator a party. The supposed difficulty in that case was, that the general creditor, in the absence of judgment and execution, had no equity because he had not shown that he had exhausted his legal remedies.

The court of appeals held that the act of 1858 dispensed with a. resort to judgment and execution in the cases embraced in it. Here the administrator, not the creditor, proceeds. He recognizes the validity of the claims set forth in the complaint, alleges the inadequacy of assets, the fraudulent transfer by his intestate, and asks to set it aside for the benefit of the creditors. The statute confers upon him the power, and if the facts are as he

p. 337

alleges, it is his duty to proceed. We think the evidence was sufficient to put the defendant upon her defense.

The defendant’s title to the real estate in question is in any event valid against the administrator except to the extent necessary to satisfy the creditors of the intestate. If upon a new trial the plaintiff should recover, this court could take to itself the administration of the fund realized from the real estate, but we incline to the opinion that it would be wiser to adjudge that the plaintiff’s title is invalid against the claims of the creditors of the intestate including such costs as may be awarded the plaintiff and against such proceedings as may be taken in the due course of administration in the surrogate’s court for the sale or mortgage of the property and against the title thus granted. The judgment should provide that the defendant be allowed full opportunity to contest all claims not determined in this action.

Judgment reversed, new trial granted, costs to abide the event.

Fish, J., concurs.

Section 1, chap. 314, Laws 1858, gave the. right to executors, etc., “or other trustee of an estate, for the benefit of creditors interested in the estate or property so held in trust, to set aside a transfer in fraud of the rights of any creditor interested in any estate, or property,” held by or by right belonging to any such trustee. I am unable to see that executors or administrators hold the real estate of the deceased in trust, or that such real estate by right belongs to such executors or administrators. I have supposed that the real estate of the deceased passed to heirs or devisees. And since the authority given by that statute is limited to the persons who hold the property in trust, and to the property which is so held, I do not understand where the authority of an administrator to set aside a fraudulent conveyance of land is to be found.

If a debtor had assigned certain personal property, or all his personal property, to an assignee in trust for creditors, I cannot see how, under this statute, such an assignee could maintain an action to set aside a previous fraudulent conveyance of land by the debtor. The condition of an administrator is analogous.

This view is strengthened by the amendment of chap. 487, Laws of 1889, which, leaving the language of the former statute untouched, authorizes the creditor of a deceased insolvent debtor, without having recovered a judgment, to maintain an action to set aside all transfers, etc., made in fraud of the right of any creditor.

This additional clause is not limited to the property or estate “ held in trust ” by the administrator, but is genei’al in its terms.

Still there are words used in Lichtenberg v. Herdtfelder, 103 N. Y., 302 ; 3 N. Y. State Rep., 91, and in Harvey v. McDonnell, 113 N. Y., 526 ; 23 N. Y. State Rep., 501, which indicate that the court, without referring to the language of the statute, has assumed that the administrator might maintain an action to set aside a conveyance of land. Such a construction seems unnecessary, since the rights of simple contract creditors have been secured by the

p. 338

amendment of 1889. But I feel bound by the dicta in those opinions. And I, therefore, concur in the opinion of Judge Landon.

Judgment reversed and new trial granted, costs to abide event.