Case ID: ny_37/html/0765-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Grover, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Gates v. Andrews et al.
    
    
      limitation,—Joint-tenants.
    
    In case of fraud, the statute of limitations does not begin to run, until a discovery, though the right of action were previously perfect; yet, nevertheless, the statute does not run against a cause of action, until there is a perfect right to sue, though the fraud be previously discovered.
    'Where joint-debtors have made an assignment, fraudulent in law as to existing creditors, one of them, without the concurrence of his co-owner, cannot make a subsequent assignment, for the purpose of curing the defect, so as to pass the title to the joint property.
    Appeal from the general term of the Supreme Court, where a judgment rendered in favor of the plaintiff, in a case tried before the court, without a jury, had been reversed, and a new trial awarded; the plaintiff giving the usual stipulation.
    This was an action by T. B. Gates, receiver of the effects of the firm of Bridger & Bishop, against G. V. N. Andrews and others, their assignees for the benefit, of creditors, to recover the assets of the firm in the hands of the defendants. The facts are sufficiently stated in the opinion.
    The case was tried before the court without a jury, and the judge directed a judgment in favor of the plaintiff, which, however, was reversed at general term, and a new trial awarded, whereupon, this appeal was taken.
    
      Reynolds, for the appellant.
    
      Parker, for the respondents.
   Grover, J.

But a few months elapsed after the recovery of the judgment against Bridger & Bishop, and the return of the execution issued thereon, before the commencement of this action. It is clear, that an action like the present cannot be maintained, until after the 'return of an execution, in whole or part, unsatisfied. It is insisted, by the counsel for the plaintiff, that the cause of action, within the meaning of the statute of limitations, does not accrue, until the right to maintain the action is perfect. Upon the part of the defendant, it is claimed, that the cause of action accrues, and the statute commences running against an existing creditor, upon his discovery of the fraud by the debtor, against which redress is sought, although no judgment had been recovered against the debtor. If the latter be the correct construction of the statute, this action is barred by the statute, as more than six years elapsed, after the discovery, by the creditors, of the fraud in the assignment of Bridger & Bishop, before the commencement of the action. Section 74 of the Code provides, that civil actions can only be commenced within the periods prescribed after the cause of action shall have accrued, except a different limitation is- prescribed by statute. The sixth subdivision of § 90 provides, that an action for which, upon the ground of fraud, in cases which were heretofore solely cognisable by the court of chancery, the cause of action in such case is not to he deemed to have accrued, until the discovery, by the aggrieved party, of the facts constituting the fraud. It is argued, by the counsel for the respondents, that *the construction of the above clause is, that the action shall be deemed as accruing, upon the discovery of the fraud by the party aggrieved thereby, whether his right of action-is then perfect or not. I think this construction erroneous. The provision is, not that the cause shall be deemed to accrue upon such discovery, but, to prevent the running of the statute, it shall not be deemed to have accrued, before such discovery ; thereby providing for a class of cases, where the right of action was perfect, but became barred by the statute, before the discovery of the facts upon which such right depended. Th'e statute had not, therefore, become a bar to the action in this case.

It is further insisted by the respondents, that the plaintiff was not duly appointed a receiver, for the reason that the process in the action in which the judgment was recovered was not served upon Bishop. It is a sufficient answer to this position, that no such question was made upon the trial of the action at special term. No ruling was then made, nor any exception taken to a refusal to make a ruling, upon this point.

The provision, authorizing the assignees to sell real estate assigned upon credit, found in the assignment of Bridger & Bishop, of the 4th August 1849, rendered the assignment fraudulent, as against their existing creditors. (Nicholson v. Leavitt, 6 N. Y. 591.) The leasehold interest was real estate, within the meaning of the assignment. The inquiry then arises, whether this assignment, being void as to creditors, is made valid by the subsequent assignment, made November 15th, 1855, to the two surviving assignees named in the former. The authority to sell upon credit is not found in the last assignment, nor is it claimed by the plaintiff, that that has been, in any way, shown to be fraudulent as to creditors.

, But it is claimed, that the first assignment, although fraudulent as to creditors, was valid between the parties, and, as to them, transferred all tne title of the assignors to the assignees therein named; and, consequently, the latter must rely upon the title thus acquired, as nothing passed to them under the last assignment, there being no interest in the property ^remaining in the assignors, except their right to the surplus remaining after the satisfaction of all the debts. As an original question, I should regard this position correct. In Porter v. Williams (9 N. Y. 142), the judge, in giving the opinion of the court, says: “ It is believed, that the assignor had divested himself of all control over the property, by the assignment of the 5th of January, and that he could neither revoke nor alter it.” This reasoning appears to me to be sound. But the point was not necessarily involved in the case, as the title of the plaintiff had attached at the time of the second assignment. The point was decided in favor of the right of the assignee to make valid the first by a second assignment, in Merrill v. Englesby (28 Vt. 150) and Ingraham v. Wheeler (6 Conn. 277).

It is not necessary to pass upon this point in the present case, as the judgment must be reversed upon the point next considered; that is, whether,-from the finding of facts by the judge at special term, the last assignment was made by Bridger & Bishop, or by Bridger only; and, in the latter event, whether he had power to make it. The finding of the judge upon this ppint is, that, on the 15th of November 1855, another assignment was made by Bridger & Bishop to said assignee, a copy of which forms a part of this roll, from which it appears to have been executed by Bridger for both. There is no finding as to whether Bridger had any authority from Bishop to execute this assignment for him. No fact can be presumed for the purpose of reversing a judgment; hut every fact, as to which there is no finding, will be presumed, which is necessary to sustain it. From the finding, as a whole, all that is found is, that Bridger executed the assignment for both; and it must be presumed, in support of the judgment, that he did this without authority from Bishop. In Wells v. Marsh (30 N. Y. 344), it was held by this court, that one partner was not ■ authorized to execute an assignment of the property of the firm, in the firm name, for the benefit of creditors, without consent of his copartner, and that such an assignment was void as to the creditors of the firm. If a partner cannot execute an assignment of the assets of the *firm, clearly, a joint-debtor cannot of the joint property. It would follow, that the assignment executed by Bridger, in 1855, was not valid, and, therefore, could, not give validity to that executed by both in 1849.

The order, reversing the judgment, and directing a new trial, should be reversed, and the judgment rendered at special term affirmed.

Order reversed, and judgment of the special term affirmed,,