Court Opinion

ID: 6136033
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:42:07.767111+00
Date Added: 2024-06-11T08:54:30.713947
License: Public Domain

Robertson, J.
The objection that the defendants cannot move to discharge the attachment in this case, founded on the cases of Furman a. Walter (13 How. Pr., 348) and Matter of Griswold (13 Barb., 412), is overruled by the provisions of section 241 of the Code, that the defendant may in all cases move to discharge an attachment, as in case of other provisional remedies. Whether the plaintiff can use supplemental affidavits, not only to disprove matters in the defendants’ affidavits, on which the motion is made, but also to justify the issuing of the attachment, is a question which has been differently decided by different tribunals. A distinction undoubtedly exists between attachments, which are separate special proceedings and not in any action, where the affidavits on which they are issued must show jurisdictional facts, and those, which are mere provisional remedies. That distinction is ably discussed and laid down in Furman a. Walter (supra), upon the strength of which distinction the court held, in the case of St. Amand a. De Beixcedon (3 Sandf., 703), that an attachment might be sustained by affidavits supplying defects in the original affidavits.
The Supreme Court of this district has, it is true, held, in the case of Wilson a. Britton (6 Abbotts' Pr., 33), followed by that of Dickinson a. Benham (10 Ib., 390 ; 11 Ib., 158), that no supplemental affidavits were admissible on the part of the plaintiff, except such as contradicted the statements contained in the defendant’s; but I consider the authority in St. Amand a. De Beixcedon as paramount in this court, even if it were not sustained by the reasoning in Furman a. Walter.
Although, therefore, it seems to be disproved, by the affidavits on behalf of the defendant, that he used the expressions contained in one of the affidavits on which the attachment was issued on the occasion therein mentioned, the new affidavit of the same witness, which is uncontradicted, shows that he used it on another occasion. This, therefore, renders necessary the examination of the question, whether such declaration is evidence of any fact which authorizes the issuing of an attachment.
The declaration in question resembles very much that discussed in Wilson a. Britton (26 Barb., 562; 6 Abbotts’ Pr., 97), and that in Dickinson a. Benham (supra). In both these cases the declarations were held not to be evidence of a fraudulent intent, because the threat contained in them was only to do what *68might be legal; but the effect of the condition accompanying it seems to have been overlooked in both cases, as affecting the question, to wit, in case of an action by the party threatened. Row it was conceded, in the case of Griffin a. Marquardt (21 N. Y., 121), that a declaration by an assignor, that he had made an assignment for the purpose of gaining time to pay his creditors, was admissible, although held not to be conclusive; the question arises, whether a debtor can use the power he has of ássigning his property preferentially, to intimidate creditors into abstaining from pursuing the remedies allowed by law to collect debts, without being chargeable with an intent to defraud them.
The common law held that a debtor was bound to apply his property to paying his debts, as they became due; .and a creditor was entitled to pursue his legal remedies unobstructed, for the purpose of enforcing that obligation; every obstacle interposed by the debtor to bar or delay such pursuit, was void. (Sands a. Hildreth, 14 Johns., 493.)
The Statute of Frauds and Statutes of Bankruptcy were passed to carry out this principle, the latter both expediting the creditor’s pursuit, converting the failing debtor’s estate into a trust-fund, and releasing the honest debtor on surrender of his estate.' The law allows a debtor to assign his property to pay his debts, and even to make preferences, but compels him to make his selection without any conditions for personal gain to himself; thus he cannot, by an assignment, hold out a hope of an .extra share of his assets, or a fear of loss of any participation therein, as a means to induce a creditor to abandon all, or any part of his claim, or to forbear pursuing his legal remedies therefor.
The cases in our courts, beginning with Hyslop a. Clarke (14 Johns., 458) and Searing a. Brinkerkoff (5 Johns. Ch., 329), continuing with Austin a. Bell (20 Johns., 442), and ending with' Grover a. Wakeman (11 Wend., 187), sustain the doctrine as to coercion into abandoning part of a claim, as Berry a. Riley (2 Barb., 307) does in reference to compulsory abstinence from suing.
I am aware that a threat by a debtor, to assign his property if sued, is not only frequently practised, but is considered an innocent mode of coercing creditors into extending the time of paying their claim; but I am at a loss to understand any legal *69principle of distinction, as proof of a fraudulent intent, between an admission that the object of an assignment executed was to gain time, as in Griffin a. Marquardt (supra), and a declaration that an assignment would be executed to defeat a remedy by action, in order to deter a creditor from bringing it.
In equity, an insolvent debtor is trustee for his creditors; and he is bound to distribute his property among them, or allow them to collect their claims out of it; a change of the title to the property to a trustee may operate to obstruct legal remedies against that property by any creditor, and therefore can only be employed for a legal purpose; the imposition upon that change of title of a trust or condition, by which the share of each creditor in the assigned assets is made to depend on his leniency to the assignor, virtually retains power in the assignor’s hands over the property for his own benefit, and therefore makes the assignment altogether void. Whatever purpose, which, if declared in writing and inserted in the assignment renders it void as legally fraudulent, ought, when declared by the debtor verbally to be the object of an intended assignment while holding possession of the property, to be considered as of an equally fraudulent character. • The mere change of title, or reduction of the intent to writing, as a condition, could not impart any new fraud to the intent.
A threat, therefore, by a debtor to a creditor, to make an assignment so as to deprive the latter of all share of his estate if he commenced an action, appears, to me to be as much evidence of a fraudulent intent in fact, as the actual making of an assignment, with a like provision in it, is of a fraudulent intent in law.
Besides this, however, if the defendant’s account of his assets is to be taken as correct, he could not legally assign his property so as to exclude the plaintiffs from any participation in it, as they exceed the amount of other claims against him ; in fact, he states that he only wanted time to pay all his debts. In order, therefore, to prevent the plaintiffs from getting any thing, the intended assignment must have been fraudulent or an instrument of fraud; besides, the additional threat was made, of carrying on business in some one else’s name, which can be only understood as intending to conceal the defendant’s property or earnings from the plaintiffs’ claim or pursuit.
*70The defendant may have honestly intended to have satisfied, when more convenient, the plaintiffs’ claim, but he mistook his legal power over his own property, and his right to assign it to pay creditors, when he undertook to abuse that power of assigning it, by coercing a creditor into giving credit on a claim from fear of an assignment which should cut them off.
The motion to dissolve the attachment must therefore be denied, but without costs, as it is sustained only on the new affidavit.