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Butterworth, Receiver, &c., v. Peck et al.
The case of Chapman v. White, (2 Seld., 412,) seems to me to cover the present question entirely. It involves the position that the Island City Bank became the owner of the fund deposited by Mooney, and the latter had only a right of action against that Bank, and was in truth its creditor. The check was not an appropriation of a specific fund. It gave no right of action, as against the Bank, without acceptance; and if it gave no right of action, it cannot constitute a right of set-off, or counterclaim.
It may be that, when the Receiver shall wind up the affairs of the Bank, the holder of Mooney's check may claim a pro rata dividend of what the Bank owed Mooney, and the proportion of the assets coming to him. It is impossible, in the present action, to liquidate accounts so as to ascertain what this sum would be, and thus allow an offset to that sum.
The case of Dykers v. The Leather Manufacturing Bank, referred to by Justice GARDINER, was first before Assistant ViceChancellor HOFFMAN, in December, 1841. He held that the drawing of a check upon a bank was not a specific appropriation of the funds of the borrower to the payment of that particular debt, in preference to holders of checks subsequently drawn. The drawer, therefore, might countermand the order at any time before his draft was actually paid or accepted by the bank. This proposition was recognized by the Chancellor. (11 Paige, 617.) Without acceptance, or some act, such as certifying the check to be good, no liability is created between the Bank and the holder of the check.
The line of reasoning which the case of Chapman v. White appears to warrant, might seem to extend to the cases of the other checks given by Terpenny, which were allowed to be deducted by the learned Judge below. But the distinction is this: The Bank had, in discounting the note, expressly appropriated its avails to the demand of the party on whose account it was discounted. It was a fund specially set apart. Terpenny had not withdrawn the whole of this sum by the amount of the check for $280. He gave Peck this particular sum by his check.
So as to the dividend of $70, the Bank had declared the right of Terpenny to this specific amount, as a specific fund. Terpenny, therefore, had a right to say that the Bank held so much money on these two accounts particularly belonging to him, and
Thayer v. Willet, Sheriff.
applicable to the reduction of the note for which he was principally liable.
Had Terpenny drawn out these two funds and then redeposited them in one sum, the case would have been different. The judgment must be affirmed, with costs.
Judgment affirmed. 1
ERASTUS D. THAYER v. JAMES C. WILLET, Sheriff.
1. In an action against a Sheriff to recover the possession of personal property which the latter has seized under an attachment issued in an action on contract, pursuant to the Code, against the plaintiff's vendor; the Sheriff may allege in his answer and show by way of defense that the transfer to the plaintiff was made with intent to defraud the creditors of his said vendor, having first shown the existence of a debt by such vendor to the plaintiff in such attachment, and that the attachment was duly and regularly issued and executed.
(Before HOFFMAN, PIERREPONT and MONCRIEF, J. J.)
THIS action comes before the Court on a question of law arising at the trial, and there ordered to be first heard at General Term. It was tried before Mr. Justice SLOSSON and a jury on the 21st of May, 1859.
The action is brought to recover the possession of goods and chattels which the complaint describes, and alleges the defendant wrongfully took and wrongfully detains, and are of the value of $2,000.
The answer of the defendant puts at issue these allegations, and then states as a separate defense that on the 26th of June,
1 As to the main point discussed, see 6 Duer, 463, 483, 484, and 19 N. Y. R., 499. As to the charge in respect to the two checks of $280 and $70; it may be suggested that the plaintiff did not appeal; and therefore the appeal taken did not involve the question of its accuracy. But if the Receiver stood in no better situation in this respect than the insolvent Bank would if plaintiff (2 R. S., 464, [§ 42] 469. [§§ 68-74,] id., 41, [§ 7] 47, [§ 36] 6 Paige 220, 2 id., 581, 9 Cow., 409, 21 N. Y. R., 159,) it is difficult to see why Terpenny, whose moneys the Bank held and to whom the moneys were due at the time the Bank became insolvent to the extent of the $280 and $70, had not a clear right of set-off, and if he availed himself of that right as he did on the trial, it would necessarily avail to the same extent in favor of the other defendant, an accommodation maker of the note in suit. REPORTER.
Thayer v. Willet, Sheriff.
1857, one Mason A. Perkins owed Joseph and William Rosenthal $813.62 on contract; that they on that day sued Perkins in the Supreme Court to obtain a judgment therefor; issued to defendant then being Sheriff, &c., a summons in that action to be served, and obtained duly from a Judge of the Supreme Court a warrant of attachment against the property of Mason and delivered it to the defendant to execute; that such warrant specified as the grounds for issuing it "that said Mason kept himself concealed within the State of New York with intent to defraud his creditors and to avoid the service of a summons;" that defendant as such Sheriff seized the goods in question under and by virtue of said attachment; and avers that when so seized they were "the property of the said Mason A. Perkins, or that he had a leviable interest therein, or that said goods and chattels were liable to be levied upon and taken under and by virtue of said attachment." That the plaintiff, on the goods being so attached and taken, claimed an immediate delivery thereof to himself and obtained it, as provided by chapter 2, of title 7, of part 2, of the Code, and it prayed a return and redelivery of the goods to the defendant, and damages for the detention thereof.
At the trial, the plaintiff read in evidence a bill of sale of the goods from Mason A. Perkins to himself, dated June 12, 1857; and gave evidence tending to show that the sale and transfer were made in payment of a preëxisting debt; that possession was taken on the execution of the bill of sale; that the defendant took them from plaintiff's possession on the 26th of June, 1857, and detained them until they were redelivered to the plaintiff by the Coroner, by virtue of proceedings had in this action under the Code, and that they were worth $1,000, and rested.
The defendant then offered to prove the facts stated in his answer, in respect to Perkins' owing the Rosenthals, and the commencing of a suit by them against Perkins therefor, the issuing of the attachment and the regularity of the proceedings in respect thereto, that the defendant took the goods by virtue of said attachment, and further that said bill of sale was fraudulent and void as against Perkins' creditors, and especially the Rosenthals, as being made with intent to hinder, delay and defraud them of their lawful suits, damages, debts and demands, and that the plaintiff in this action had notice of such alleged intent. Bosw.-VOL. V.
Thayer v. Willet, Sheriff.
The plaintiff objected to this evidence on the ground that the Rosenthals were not judgment creditors of Perkins, but were only simple contract creditors, and as such could not attack the validity of the bill of sale; and that the defendant was not in a position, by reason of his holding said attachment and having taken the goods under it, to attack the bill of sale or question the plaintiff's title under it.
The Judge sustained the objection and excluded the evidence, and the defendant excepted.
The jury thereupon found a verdict for the plaintiff, and assessed the value of the property at $1,000; damages for its detention being waived.
The Court then ordered the exception so taken to be first heard at the General Term, and the entry of judgment in the meantime to be suspended.
Wm. Curtis Noyes and A. J. Vanderpool, for defendant.
I. The decision in Hall v. Stryker, (2 Dist., G. T., opinion by Justice BROWN,) was cited and acted upon at the trial, and is a direct authority against the right to attach.'
We submit that this case ought not to be followed, nor in any wise sanctioned. It is opposed to all prior decisions upon the point, and overlooks the principles and policy of the attachment statutes. It renders the remedy by attachment of comparatively little benefit to the creditor.
II. By section 227 of the Code, an attachment may be issued: 1. Against a foreign corporation.
2. Against a non-resident.
3. Against an absconding or concealed debtor.
4. Against a defendant, who is about to remove his property from the State.
5. When he has assigned, or disposed of, or secreted, or
6. When about to assign, or dispose of, or secrete his property with intent to defraud his creditors.
It issues against the two classes, one who have a facility (by reason of their non-residence), the other, who have shown the disposition to evade the payment of their debts, and against
1 Since reported, 29 Barb., 105.
Thayer v. Willet, Sheriff.
whom the ordinary legal remedies, with the delays incident thereto, would probably be unavailing. The ground of the writ has no effect upon its form, or the proceedings and duties and rights of the officer under it. Its object is to give the creditor a lien, or, as it is by the same section declared to be, "a security for the satisfaction of such judgment as the plaintiff may recover." The creditor cannot avail himself of this lien by having the property sold and applied in payment of his debt, until he has pursued his action to judgment and execution. His lien enables him to and protects him in retaining his debtor's property within the jurisdiction of the Court. (Storm v. Waddell, 2 Sand. Ch. R., 494; Peck v. Jenness, 7 How. U. S. R., 612.)
III. The effect of sections 231 and 232 is to give the officer the same authority to take the defendant's property, and hold it as a security pendente lite, as he has under an execution, to take and sell. It may be levied upon any property which the law will allow the creditor to reach by levy under execution, or proceedings supplemental thereto. (McKay v. Harrower, 27 Barb., 463, 469.)
The statute gives the creditor, by virtue of the levy under the attachment, a provisional lien upon the specific property of his debtor, to the extent of the judgment he may subsequently recover. It is authorized to be fastened upon the property in invitum, before the demand is established by judgment. When sold under execution, the title relates to the time of the levy under the attachment (Coffin v. Ray, 1 Metc., 212.) There is no difference between the lien acquired on a levy under an attachment and under an execution. (Van Loan v. Kline, 10 Johns., 129131; American Exchange Bank v. Morris Canal Banking Co., 6 Hill, 362-366; Grosvenor v. Gold, 9 Mass., 209, 210; Drake on Attachment, §§ 221, 226, 233; Martin v. Dryden, 1 Gilm., 188.)
IV. It is said, however, that "the attachment only directs a levy upon the property of the debtor." Is not the command of the attachment to the Sheriff the same in substance in an attachment as in an execution? But property transferred in fraud of the rights of creditors, although valid as to the debtor, remains, so far as the creditor defrauded is concerned, the property of the debtor, as to him the transfer is void, and as if the possession had remained unchanged. The command of the two kinds of