Coddington v. Gilbert — 12 N.Y. Super. Ct. 72

Majority

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Thomas Coddington v. William W. Gilbert, George S. Coe, Heyron D. Johnson, and William A. Nichols.

Headnote

Bonds executed by a railroad company, and in the hands of its agents, to be negotiated for its use, cannot be seized on an attachment against the company, so as to give the attaching creditor a right to enforce the bonds against the company, or any claims against parties who had guaranteed such bonds, for the better enabling the company to negotiate them.

Property which may be attached under the 227th section of the Code, is property as defined in the 463d and 464th sections. “ Persona] property includes money, goods, chattels, things in action, and evidences of debt.” Such bonds could not be regarded as of either class. The fact that the agents had an interest in the bonds, with a power to sell them for reimbursement of advances, does not make a difference as to the right to attach.

(Before Dube, Bosworth and Slosson, J.,T.)

October —, 1855.

At the trial of this action, a verdict was taken for the plaintiff for $3,359.77, subject to the opinion of the court at General Term, on the questions of law arising in the case, the entry of judgment to be suspended, and judgment to be applied for'in the first instance at the General Term, with power to the court there to dismiss the complaint, if of opinion that the plaintiff was not entitled to recover.

On the 17th of Fovember, 1853, the Maysville and Lexington Railroad Company, a foreign corporation, created under the laws of Kentucky, were indebted to the defendants, Gilbert, Coe & Johnson, in about $60,000 upon an unsettled account for moneys advanced. As a collateral security for the payment of this debt,

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the defendants held 292 second «.mortgage six per cent, bonds of the Maysville and Lexington Railroad Company, of $1,000 each, (guaranteed in part by the city of Maysville, and in part by the Louisville and Frankfort Railroad Company,) with authority to sell the same, to an amount sufficient to reimburse and protect them for the advances made by them for said company.

About the 26th of January, 1854, the plaintiff, Coddington, having a demand against the Maysville and Lexington Railroad Company for $3,027.68, commenced an action in the Supreme Court, and issued an attachment under the Code to the sheriff of the city and county of New York.

About the 2d of February, 1854, the sheriff delivered a certified copy of the attachment to the defendants, who, at the same time, gave the sheriff a statement in writing, admitting that they had received notice of the attachment, and stating that all the property in their possession of the Maysville and Lexington Railroad Company, consisted of the bonds above described, and that they held them as collateral security for advances as already mentioned.

The sheriff did nothing further in the matter until after judgment and execution in the action.

May 19th, 1854, the plaintiffs recovered judgment for $3,174.58, against the Maysville and Lexington Railroad Company, and issued execution thereon to the sheriff.

The sheriff called on the defendants, and informed them he had the execution, with instructions to sell the bonds. The defendants requested the sale adjourned, and said to the sheriff, they would write to the Maysville and Lexington Railroad Company in Kentucky. The sheriff adjourned the sale a week. In the interval the Maysville and Lexington Railroad Company paid the demand of Gilbert, Coe & Johnson, the defendants, and took the bonds.

The sheriff realized nothing on the execution. The plaintiff, therefore, commenced this action, claiming (under the Code, § 237, subd. 3; Laws of 1842, ch. 197, § 4, subd. 3) to recover from Gilbert, Coe & Johnson, double damages for having wilfully withheld from the sheriff property attached.

The action was tried before Justice Bosworth and a jury, on the 19th of March, 1855.

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The court charged the jury that for the purposes of the action, they should consider the bonds in question as property of the Maysville and Lexington Bailroad Company, and liable to levy on an attachment.

To this thp defendants’ counsel excepted.

The verdict was therefore taken as before stated.

S. P. Nash, for the plaintiff.

A. Matthews, for defendants.

The bonds in question, not having been issued by the Maysville and Lexington Bailroad Company, were not property in their hands, or in the hands of their agents, in such sense that any creditor of the company by attaching them could enforce the obligation which their terms import, either by action on the bonds, or by a foreclosure of the mortgage by which they purported to be secured, or by action against the city of Maysville, or the Louisville and Frankfort Bailroad Company, on their respective guaranties.

As well might a creditor, on attachment against his debtor, seize a note made by the debtor, and left with an agent to be negotiated, but which had not been negotiated at the time of such seizure.,

The attachment requires the sheriff to attach and safely keep all the property of the Maysville and Lexington Bailroad Company within his county, &c.

The word “property,” as used in the Code, includes property real and personal. (§ 464.)

The words “personal property,” as used in the Code, include “money, goods, chattels, things in action, and evidences of debt.” (§ 463.)

The bonds were not things in action, on which the company issuing them could maintain an action, nor were they evidence of debt owing to the company. As obligations, they had no validity, and were valueless.

For the purpose of raising the questions of law, to be passed upon at the General Term, they were treated as valid obligations, precisely as they would have been, if they had been issued and

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negotiated by some other company, and at the time belonged to the defendants in the attachment. One question, which it was considered would arise for the consideration of the court, was, whether bonds executed by a railroad company, and in the hands of its agents to be negotiated for it, could be seized, on an attachment against the company, and by such seizure give to the creditor any right to enforce the bonds against the company, or to enforcé any claims against those who had guaranteed the bonds, for the purpose of enabling the company tó negotiate them on better terms. We are clearly of the opinion, that no such rights could be acquired by such an attachment.

The fact, that Gilbert, Coe & Johnson, were authorized to sell enough of the bonds to reimburse them the amount the company owed them, does not strengthen the plaintiff’s case. The only property in the bonds, as obligations, which this authority could create, was the property of Gilbert, Coe & Johnson. When they were paid, the bonds, so far as relates to the capacity of the plaintiff .to proceed against and attach them, were in precisely the same condition as they would have been if Gilbert, Coe & Johnson had never been creditors of the company, but had at all times held them merely as agents of the company, with power to negotiate them for the company. ■

The decision of this point being sufficient to dispose of the case, we deem it unnecessary to pass upon any other of the numerous questions discussed at the hearing, and which it was insisted were fatal to the plaintiff’s right to recover.

The verdict must be set aside, and the complaint be dismissed.