Court Opinion

ID: 5498443
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:55:53.498906+00
Date Added: 2024-06-11T08:33:52.326279
License: Public Domain

Merwin, J.
It is claimed by the defendants that the judgment upon which this action is based is void, on the ground that the justice before whom the judgment was recovered acquired no jurisdiction to render it. The summons and verified complaint were personally served on the defendant by delivering to her copies thereof. The return of the constable did not show that the copies were left with her. The defendant did not appear, and thereupon the justice entered judgment for the amount demanded in the complaint. Ho proof was made before the justice of the cause of action. By chapter 414 of the Laws of 1881 it is provided that, in certain actions in justices’ courts, the plaintiff may prepare in writing and verify his complaint, attach it to the summons, and have them “served upon the defendant by delivering to and leaving with him personally true copies thereof,” in which case, upon default of the defendant, he shall be deemed to have admitted the allegations of the complaint, and judgment may be entered for the amount demanded without further proof. Assuming that the complaint was not sufficiently served to authorize the justice to enter judgment without further proof, that did not-prevent the justice from taking proof and entering judgment accordingly. The summons was in the ordinary form, and it was served as required by section 2878 of the Code. By such service the justice acquired jurisdiction of the-person, and he had jurisdiction of the subject-matter. He had then power to-proceed in the action to j udgment. Whether he proceeded properly, or entered judgment without proper proof, was a matter for consideration in a direct proceeding to review the judgment. In Blair v. Bartlett, 75 N. Y. 150, it was held, with reference to a judgment by default in justice’s court, that whatever was requisite to be proved and established as facts by plaintiff in order to obtain judgment is, so long as the judgment remains unreversed, res adgndicata between the parties, and conclusive upon them. Within this principle, the point raised by counsel is not available here.
It is further claimed by the defendants that, by reason of the general assignment before the recovery by plaintiffs of their judgment, the plaintiffs could not maintain this action. The general proposition, as to the right of an as*763signee to maintain actions of this kind, is not disputed by the plaintiffs; but they say the rule is not applicable to this case for several reasons: First, the answers do not set up non-joinder of the assignees as defendants; second, the assignees have been discharged, and the estate closed up; third, the assignment is void on its face; fourth, the assignment is void as made to defraud creditors, and the assignees were in collusion with these defendants.
1. The answers, in substance, alleged the execution, recording, and existence of the assignment, and that the plaintiffs were not the proper parties to bring the suit. There was no occasion to allege the non-joinder of the assignees. The action was not in aid of the assignment. Assuming the assignment valid as alleged, the plaintiffs, under their complaint, had no standing in court. The case is different from Bank v. Leggett, 51 N. Y. 552; for there the objection that under the statute the assignee was vested with the cause of action was not taken upon the pleadings or on the trial. In that case it is said that, if the assignees were in complicity with the fraudulent parties, or refused on request to be plaintiffs, then the creditor might, as plaintiff, assert the right; citing Bate v. Graham, 11 N. Y. 237. Such assertion, however, is for the benefit of the estate represented by the assignee. It was so held in the Bate Case, and is now the established rule. Crouse v. Frothingham, 97 N. Y. 113, 114, and cases cited. The plaintiffs in the present case sought and obtained a judgment for their own benefit solely.
2. After the commencement of this action, the assignees had an accounting in the county court, and an order was made discharging them. For this reason, and upon the additional suggestion that there had been shown to be no other creditors, it was held at special term that the making of the assignment was not a bar to this action. The same evidence that showed the discharge showed the existence of a large amount of unpaid debts. There was no evidence to the contrary. There was no finding either way, as matter of fact. If this fact was important to give the plaintiffs a standing, it was for them to show.
Aside from this, the query is, how can what occurred after the commencement of this action give the plaintiffs a standing, if they had no cause of action when the suit was commenced? If, as held in Spring v. Short, 90 N. Y. 538, and the kindred subsequent cases, the assignee, or some one through him, is the only one, as between him and subsequent judgment creditors, who can maintain an action to set aside a prior conveyance as fraudulent against creditors, then plaintiffs, when they commenced this suit, had no cause of action in their own right, such as they set out in their complaint. The rights of the parties must be determined at the commencement of the action. Wisner v. Ocumpaugh, 71 N. Y. 117. Belief may be given sometimes in view of the situation at the trial, but the substantial cause of action must exist when the suit is commenced. Hare v. Van Deusen, 32 Barb. 92. Whether the discharge would operate to clothe the plaintiffs with a right, it is not necessary to here determine. Under the statute, (chapter 466 of 1877, § 20, subd. 5,) as amended by chapter 318 of 1878, the discharge only operated to discharge the assignees “from all further liability upon matters included in the accounting.” If other assets were afterwards discovered, it may be argued with some force that the assignee is still the only one to receive and administer, and that the discharge does not prevent this. In Clarkson v. Dunning, 4 N. Y. Supp. 430, the discharge was in bankruptcy, under a statute that authorized an absolute discharge. Rev. St. U. S. § 5096. The action was brought long after the discharge.
3. But it is said that the assignment was void on its face by reason of its failure to state the kind of business carried on by the assignor, and the place at which it was then conducted. The statement in the assignment is, “Emily Laraway, of the town of Croghan, Lewis county, N. Y.” In Taggart v. Sisson, ante 758, (decided by this court at this term,) it is held that an assign*764ment having a similar defect is not void on its face; that the statute in that regard is directory.
4. Whether the assignment was voidable for fraud cannot be tried in this action in its present form. The complaint is not on that basis. The assignees are necessary parties to that issue. Russell v. Lasher, 4 Barb. 237. Assuming the assignment is valid on its face, the plaintiffs are not in a position to assail the deed in question, without also effectually assailing the assignment. Loos v. Wilkinson, 110 N. Y. 209, 18 N. E. Rep. 99. That is essential to their showing a cause of action.
If, after the assignment, there was collusion between the assignees and these defendants, the creditors interested in the assignment had a remedy. In re Cornell, 110 N. Y. 351, 18 N. E. Rep. 142. It would not operate to give the plaintiffs a cause of action in hostility to the assignment. It follows that, as the ease stood, the plaintiffs were not entitled to recover. Judgment reversed on the exceptions, and new trial ordered, costs to abide the event. All concur.