Court Opinion

ID: 3611235
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:55:21.055756+00
Date Added: 2024-06-11T14:07:31.929902
License: Public Domain

The statute declares, that every conveyance of an interest in lands, c., or in goods, c., made with intent to hinder, delay or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts or demands, c., with like intent, as against the persons so hindered, delayed or defrauded, shall be void. (2 R.S., 137.)
It is well settled, in cases where the sheriff is sued for taking goods, by one not a party to the judgment, that he cannot defend under the execution alone. This directs him to take the property of the person against whom the execution is issued, *Page 606 
and of course, if he takes the goods of another person, the execution will be no defence.
If the plaintiff in such action shows a prima facie title, the sheriff cannot attack such title, without producing the judgment upon which the execution was issued. There must have been a judgment or there could have been no execution, and the judgment is the best evidence of the relation of creditor and debtor, and no other evidence, in such a case, will be received. Upon the production of such evidence, the sheriff as defendant, or any one having a right to avail himself of the judgment and execution, may raise and litigate the question of fraudulent sale by the judgment debtor to the plaintiff. The judgment establishes conclusively the relation of creditor and debtor, and all are bound by it. It cannot be impeached or questioned collaterally, in the action by a third person for taking the goods as the goods of the judgment debtor. (Candee v. Lord et al., 3 Comst., 269.)
The Court of Chancery would not entertain jurisdiction upon a creditor's bill, until the creditor had proceeded to judgment. As to the statute relating to the remedy in Chancery, it clearly requires that the creditor should have exhausted his remedy by judgment and execution. (2 R.S., 173.)
Does it follow, in all cases, that the relation of creditor and debtor must be established by judgment, before a sale made by the debtor can be questioned, on the ground of fraud as to the creditors of the vendor?
In certain actions and under certain circumstances specified, among which are those against a defendant who has absconded or concealed himself, or is about to remove any of his property from this State, or has assigned, disposed of or secreted, or is about to assign, dispose of or secrete, any of his property, with intent to defraud creditors, as mentioned in the act, the plaintiff may have the property of such defendant attached, as a security for the satisfaction of such judgment as the plaintiff may recover. The warrant of attachment may be obtained from a judge of the court in which the action is brought, or a county judge. It must be made to appear, by affidavit, that a cause *Page 607 
of action exists against the defendant, specifying the amount of the claim and the grounds thereof, and certain other facts specified. (Code, §§ 227-229.)
The warrant of attachment requires the sheriff to attach and safely keep the property of the defendant; and he is required to proceed in all respects in the manner required of him by law in cases of attachment against absent debtors. (§ 231.)
The plaintiff commences his action against the defendant, and the sheriff is required to attach and safely keep the property of the defendant. He is not authorized to take the property of any one other than the defendant, and if he does he is a trespasser. But if he takes property claimed by a person other than the defendant, how is such claim to be tried? and what will be the issues? The claimant sues the sheriff, and gives evidence of a purchase, by him, of the defendant in the action in which the attachment has been issued. If the purchase was in good faith, he has a good title, but if made with intent to delay, hinder or defraud the creditors of the vendor or other persons of their lawful suits, damages, c., it was, as to such creditors or other persons, void, and as to them, the title of the property remained in the vendor, and the sheriff had not only the right, but was required, to attach and safely keep the property so sold. The sale is only void as to creditors or other persons specified in the statute, and no other persons have a right to question it. The question, however, constantly is, what shall be the evidence that the party who or in whose right the sale is attacked, is in fact a creditor, c. And, as we have seen, in cases where the property has been taken on execution, the most numerous class of cases, the best and only evidence is, the judgment upon which the execution was issued, and that is conclusive. It is said, that in case evidence not conclusive is received, the trial will involve an issue between persons not parties to the action, and that any decision upon such issue will not bind such parties; and this is undoubtedly so. But it will not follow that the legislature could not dispense with the evidence by judgment, to establish the relation of creditor and debtor, and it seems to me that it has done so, *Page 608 
in a class of provisional remedies, in short, in this case. It has provided when and under what circumstances a plaintiff may have an attachment against the property of the defendant in the action. The statute carefully specifies what "shall appear by affidavit," and when such facts are made to appear, and an undertaking, as required by the statute, has been given, the warrant of attachment may be issued, requiring the sheriff to "attach and safely keep the property of the defendant, as a security for the satisfaction of such judgment as the plaintiff may recover." In my opinion, the warrant of attachment, when properly issued, is a complete protection to the sheriff or the plaintiff, in any action brought against him, provided he can show that the sale of the goods by the defendant in the action in which the attachment is issued to the plaintiff suing the sheriff, was fraudulent as to the creditors of such vendor and defendant, and that the affidavits, assuming them sufficient, upon which the warrant of attachment has been issued, must be regarded as establishing the character of the plaintiff as a creditor, in such action against him or the sheriff, by a third person, to recover the goods attached or their value.
It must be kept in mind, that the goods attached, or the proceeds of such as may be sold, are to be kept by the sheriff, "as a security for the satisfaction of such judgment as the plaintiff may recover." It is very clear, that the defendant in the attachment action cannot maintain any action for the taking of his property, and thus precipitate the trial of the issue whether he was the debtor of the plaintiff. That issue must be tried in the action against him, and, if he prevails on the trial, his property will be restored to him. And, in my opinion, one claiming title to the property attached, by purchase from the defendant in the attachment action, cannot raise the question that such defendant, his vendor, was not a debtor of the plaintiff suing out the attachment, or call upon such plaintiff or the sheriff in an action against him, to establish the relation of creditor and debtor between his vendor and the party suing out the attachment. And, unless he can maintain his title upon the ground that it is valid as against the creditors of his vendor, *Page 609 
he must await the trial of the issue between the plaintiff attaching the property, and the defendant, his vendor.
I think Candee v. Lord (2 Comst., 269), in principle, quite instructive in this case. The principle established is, that a judgment obtained without fraud or collusion, is conclusive evidence in suits between creditors in relation to the property of the debtor, of the indebtedness of the latter, and of the amount of such indebtedness. Though such creditors were not parties to the record, Judge GARDINER says that the judgment rendered upon default, confession, or after contestation, without fraud or collusion, is, upon all questions affecting the title to his property, conclusive evidence against his creditors to establish, first, the relation of creditor and debtor between the parties to the record, and, second, the amount of the indebtedness. Other cases show that such judgment is conclusive evidence of the relation of creditor and debtor, in cases arising between the creditor and the vendee of such debtor. Now it seems to me that whenever one purchases property, with intent to defraud the creditors of the vendor, he takes it subject to the statute authorizing the property of his vendor to be seized, upon an attachment issued in an action against his vendor, and if the property he purchased shall be taken upon such attachment, he cannot, in an action against the sheriff, dispute the facts proved by the affidavits upon which the attachment was issued, but that such facts are as conclusive against him in the action brought by him as they would be in an action brought by the defendant (his vendor) against the sheriff: that such facts are as conclusive, in the action against the sheriff, to establish the relations between the plaintiff and defendant in the action in which the attachment is issued, as a judgment is in establishing the relation of creditor and debtor between the parties to the record. One who purchases property, with intent to defraud the creditors of his vendor, cannot complain that it is taken on attachment, under a special statute requiring certain facts to be proved, and held until his vendor, if he sees fit, makes defence against the claim and defeats the action. The vendee has no right to appear in such action and make *Page 610 
defence, nor can he compel his vendor to do so; and in the absence of collusion or fraud, he will, as to the question of creditor and debtor, be bound by their acts and the judgment rendered between them. If he is an honest purchaser, then he will recover, whatever may have been the relations between his vendor and the party suing him, and the question of bona fides in the purchase may be tried in his action against the sheriff.
All the cases cited by the learned judge delivering the opinion of the court below, were cases of the taking of the property on execution, except Frisbey v. Thayer (25 Wend., 396), which has no application to the present case. The question in that case arose under the statute authorizing a landlord to pursue and distrain goods removed from the demised premises, except where the goods had been sold before seizure, in good faith, c. The tenant had mortgaged the goods, and the mortgagee had removed them before they were seized by the distress warrant. It was held that the goods could not be distrained: that the mortgage was valid between the parties as to the landlord, unless fraudulent in fact: that the property was not the property of the tenant, and that the statute making mortgages void as to creditors and subsequent purchasers, was not applicable; the learned judge adding, quite unnecessarily, "as the question there can only arise between judgment creditors and the mortgagee." Belknap v.Hastings (1 Den., 190,) was a case of distress for rent. Numerous questions were involved and litigated, some of them touching the validity of an assignment; and it was held that persons justifying under a distress warrant are not in a condition to impeach a conveyance made by the tenant on the ground of fraud against creditors. To enable a landlord to take such objection, he must, like any other creditor, obtain judgment and issue execution. The landlord in these cases had proceeded under the statute relating to a distress warrant for rent, and the cases were not embraced by the statute. He could no more distrain as a creditor than any other creditor could issue execution without a judgment. His special remedy, by distress, *Page 611 
was as landlord. If he sought to recover the rent by action, he must, of course, resort to the same remedies given to other creditors, and it was not necessary to specify and limit such remedies. It is undoubtedly true that a simple creditor pursuing the ordinary remedy by action, without an attachment, cannot attack a sale made by his debtor as fraudulent, until he has obtained judgment. But no such question as we are now considering was present to the minds of the learned judges delivering opinions in the cases just cited.
For the reasons already stated, I think the judgment should be reversed, and there should be a new trial, costs to abide event.
DAVIES and WRIGHT, Js., concurred; SELDEN, ROSEKRANS and BALCOM, Js., thought that the question whether the plaintiff in the attachment was a creditor in point of fact is open to inquiry until he has obtained a judgment; and ROSEKRANS, J., thought that the party defending under the attachment was bound to give evidence of the debt on which it professed to be founded. EMOTT, J., expressed no opinion on that question. All the judges were for reversal on the principal question.
Judgment reversed, and new trial ordered.