Case ID: ny-sup-ct_37/html/0227-01.html
Source: Caselaw Access Project
Author: {"author": "Haight, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

J. MORRIS CHILDS and ORLANDO J. CHILDS, Respondents, v. HORACE F. KENDALL, as Assignee of LORING BOYDEN and GEORGE J. WELLS, Appellant, Impleaded with THOMAS N. JARVIS, and MILTON B. JARVIS.
    
      Judgment creditor — right of, to Tyring an action (after the making ef a general assignment Tyg Ms judgment debtor), to vacate a fraudulent mortgage given before the execution of such general assignment; the judgment having been recovered after the execu-. tion of the assignment. ,
    A judgment creditor cannot maintain an action to have a chattel mortgage executed by his debtor declared fraudulent and void, where the latter has executed, after the execution of the mortgage and before the recovery of the judgment, a general assignment for the benefit of his creditors.
    
      Spring v. Short (90 N. Y., 538) followed; Leonard v. Clinton (26 Hun, 288) overruled.
    
      Appeal from a judgment, entei’ed in Oneida county upon tbe decision of tbe Special Term, in favor of tbe plaintiffs, and from an order refusing to open tbe case and admit further evidence.
    
      Waters, McLennan á¡ Dillaye, for tbe appellant.
    
      Adams <& Swan, for tbe respondents.
   Haight, J.:

Tbe plaintiffs are. judgment creditors of tbe defendants Boyden and Wells. Tbe decree adjudges two chattel mortgages executed by tbe defendants Boyden and Wells, to be fraudulent and void as against tbe plaintiffs, and directs tbat tbe assignee pay to tbe plaintiffs tbe amount of tbeir judgment. Prior to tbe plaintiffs obtaining tbeir judgment tbe defendants Boyden and Wells executed to tbe defendant Horace P. Kendall a general assignment of all tbeir property for tbe benefit of creditors. No question is raised in .reference to tbe validity of tbe assignment. Tbe question presented is: Can a judgment creditor maintain an action to have an instrument declared fraudulent and void when a general assignment lias been made for tbe benefit of creditors previous to tbe procuring of tbe judgment.

In tbe case of Leonard v. Clinton (reported 26 Hun, 288) it was held in tbe Third Department tbat tbe judgment creditor could maintain tbe action notwithstanding tbe fact tbat tbe debtor had made a general assignment. A different conclusion, however, was reached in this department ib tbe case of Spring v. Short (12 Weekly Dig., 360). This latter case has recently been affirmed in tbe Court of Appeals (90 N. Y., 538, 544). The opinion upon this question says: “ Tbe opinion of tbe G-eneral Term, in this case, bolds that tbe appellants are not in a position to attack the validity of the mortgage which is tbe subject of this action, for tbe reason tbat tbe mortgagor had, subsequently to tbe execution of the mortgage, and before the appellants bad docketed tbeir judgments, being insolvent, executed a general assignment of all bis property including the mortgaged premises in trust for tbe benefit of all bis creditors; tbat tbe good faith of tbe assignment not being questioned by tbe appellants, as to them or between tbe parties thereto it must be regarded as a valid conveyance of tbe premises, so far as tbis action is concerned, and that tbe assignee or tbe creditors he represents are tbe only persons who have any right to question tbe validity of tbe mortgage. Upon tbis ground tbe judgment of tbe trial court was affirmed.

“We are unable to perceive bow tbis position can be overcome. The appellants bad no ben upon tbe premises. Tbe assignment stands in them way and presents an insuperable difficulty to maintaining the defense sought to be interposed. They occupy tbe position of parties who have commenced an action in tbe nature of a creditor’s bill to set aside a fraudulent conveyance, and whose action is founded and prosecuted upon tbe ground that if they sue- ’ ceed, and tbe fraudulent conveyance is set aside; they have bens under tbe judgments upon tbe property which, if enforced, will enable them to collect their demands. In tbis case if tbe mortgage is declared to be invalid, tbe assignment still remains an obstacle which prevents tbe appropriation of tbe property directly to tbe payment of their judgments. Tbe assignment constitutes a prior and a better title which is entitled to a preference, and as it is not alleged to be fraudulent or invalid, tbe mortgage cannot be assailed in this action.”

Tbis authority appears to be in point and must dispose of tbe question presented.

Judgment reversed, and a new trial ordered, with costs to abide the event.

Appeal from order dismissed, without costs.

Smith, P. J., and Haedht, J., concurred.

So ordered.