Court Opinion

ID: 3610809
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:55:01.054248+00
Date Added: 2024-06-11T12:48:20.904039
License: Public Domain

A transfer of real or personal property which is fraudulent as to creditors, nevertheless divests the transferer of his title to the subject of the transfer, and he can never recover it by action, nor thereafter vest by contract or by will a third person with any right to or interest in it; and upon his death no title or right of action in respect to it passes from him to his heirs or next of kin, nor does his administrator acquire any title to the property or right to recover it by virtue of any succession in interest. The fraudulent transferee holds the legal title as a trustee ex maleficio for the benefit of defrauded creditors, and they only, or some person representing them, can reach the property and subject it to the payment of the debts of the fraudulent transferer. When an insolvent of this state makes a voluntary or fraudulent conveyance of land, and thereafter makes within this state a general assignment for the benefit of creditors to an assignee within this state, the latter acquires no right to avoid the previous voluntary or fraudulent conveyance by virtue of any title, interest or right of action derived through the assignment from the assignor, but his right to maintain an action to set aside the previous fraudulent transfer is conferred solely by chapter 314 of the Laws of 1858. (Southard v. Benner, 72 N.Y. 424.) From the passage of this act, and *Page 255 
until its amendment by chapter 487 of the Laws of 1889, the right to subject property fraudulently transferred to the payment of debts was, in case the transferer had made a general assignment, in his assignee; and in case he had died it was in his personal representative. (Spring v. Short, 90 N.Y. 538; Childs v.Kendall, 30 Hun, 227; aff'd 101 N.Y. 625; Lichtenberg v.Herdtfelder, 103 id. 302; Harvey v. McDonnell, 113 id. 526;Lore v. Dierkes, 19 J.  S. 144; S.C. 16 Abb. [N.C.] 47;Swift v. Hart, 35 Hun, 128.)
It is insisted in behalf of the plaintiff that this Connecticut assignee did not acquire a right under the statute to set aside the conveyances and recover the avails of the land, because it is urged that the Connecticut assignment could not transfer to the assignee the title to land in this state. It has been shown, we think, that an assignee does not acquire his cause of action by virtue of the assignment, and the statute does not vest him with title to the property fraudulently conveyed, but with a chose in action, or with a right by an action to subject it through a judicial sale to the payment of the defrauded creditors. The statute does not limit the right of action to an assignee under an assignment executed in this state, nor to an assignee residing within this state, and it was not the intent of the legislature to create a remedy for fraudulent conveyances by its citizens, and not a remedy for like practices by citizens of other states. The right of foreign assignees for the benefit of creditors to prosecute actions in this state has been frequently recognized by our courts. (Slatter v. Carroll, 2 Sandf. Ch. 573; Ackerman
v. Cross, 40 Barb. 465; Matter of Accounting of Waite,99 N.Y. 433; Phelps v. Borland, 103 id. 409.) The assignee of Abner C. Wetmore acquired the right under the statute to set aside the conveyance, and the plaintiff has neither alleged nor proved facts authorizing him to bring this action. It is not alleged that the assignee has been requested or has refused to bring an action; he is not made a party defendant, and this action is not brought to recover in the right of the assignee for the benefit of all of the defrauded creditors, and it cannot be maintained. (Harvey *Page 256 
v. McDonnell, supra.) It is not now material to determine whether, under the laws of Connecticut, the administrator has succeeded to the rights of the assignee.
The judgment should be affirmed, with costs.
All concur with BRADLEY, J., except FOLLETT, Ch. J.. dissenting, and POTTER, J., not voting.
Judgment modified so as to grant a new trial