Court Opinion

ID: 5461331
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:37:20.398051+00
Date Added: 2024-06-11T08:32:53.908248
License: Public Domain

By the Court, Welles, J.
The judgment in the action -by the receiver, the plaintiff in this action, against John Hughes and Onney Hughes, his wife, established the fact, at least prima facie, that the three notes given by Donellan & Oo, to John Hughes were transferred by the latter to his wife Onney Hughes, with the intent to hinder, delay and defraud the creditors of the said J ohn Hughes, of whom Bonesteel, the plaintiff in the action in which the receiver was appointed, was one. And that therefore the title and ownership of those notes, as between Hughes and his creditors, was in Hughes, and had been from the time they were given by Donellan & Co. The defendant's title to the note, as against Hughes and his wife, was unquestionably good ; but whether it was good as against the creditors of J ohn Hughes must necessarily depend upon whether he had notice, or is chargeable with notice, of the fraudulent transfer by Hughes to his wife. The action by the receiver against them was commenced in *561" June, 1862, and the note in controversy was purchased hy the present defendant in September following. By the commencement of that action the plaintiff acquired a lien upon it, which was good against all persons who had knowledge, or are chargeable with knowledge, of such lien. The defendant, . Mr. Cochrane, defended the action, as attorney for Hughes and his wife, and put in separate, answers for them. He therefore must have had knowledge of what the plaintiff in that action alleged in his complaint, and purchased the note in question with the risk of the plaintiff being able to establish the fraud in its transfer by Hughes to his wife. If the plaintiff had failed to establish such fraud, the defendant’s title would have been perfect. If he succeeded, as he after-wards did, the lien created by the commencement of the action would relate back to the time when the action was commenced, and overreach the title of the present defendant. The plaintiff has exhausted his remedy under the judgment in the action brought against Hughes and wife, and has failed in recovering any thing. The judgment directed the defendants therein to pay the plaintiff’s demand, with interest and costs, or, in default of such payment, to deliver the three notes against Donellan & Co. to the plaintiff; or if the notes had been put out of the hands of the defendants, that the proceeds or avails of the notes be delivered to the plaintiff. Hone of these requirements have been complied with by the defendants. And I can perceive no legal obstacle in the way of the plaintiff’s recovering of the present defendant the amount of the note purchased by him, with interest.
[Monroe General Term,
March 4, 1867.
I think the judgment of the special term should be affirmed, with the costs of this appeal.
Welles, E. D. Smith, and Johnson, Justices.]