Harvey v. McDonnell

1 N.Y.S. 83, 55 N.Y. Sup. Ct. 409, 16 N.Y. St. Rep. 513, 48 Hun 409, 1888 N.Y. Misc. LEXIS 1196
New York Supreme Court·Decided May 17, 1888·Published·Cited by 2 cases

Opinions

Learned, P. J.

The appellant admits that, if McDonnell were living still, an action could not be maintained except by a judgment creditor; but he urges that both before and since the statute of 1858, c. 314, that the administrators might have brought this action; hence that, on their refusal so to do, he, as one of the eestuis que trustent, may bring it, making the administrators parties. We do not think it important to examine the rights of administrators in this respect prior to the act of 1858; and we may notice, in passing, that that act speaks of “estate or property so held in trust;” and, again, of “property held by or of right belonging to any such trustee.” Whether an administrator, in any such sense, holds the real estate of the deceased that he can disaffirm conveyances thereof under this act, we need not inquire at this time. It seems to be assumed in Lichtenberg v. Herdifelder, 103 N. Y. 302, 8 N. E. Rep. 526, that the administrators may disaffirm conveyances of real estate. In regard to the real estate conveyed by Morris to Lucy, and for which the consideration was paid by McDonnell, the plaintiff relies on section 52, 1 Rev. St. 728, creating a trust in such property for creditors; but it has been decided that a receiver in supplementary proceedings cannot enforce that trust. Underwood v. Sutcliffe, 77 N. Y. 58. The opinion refers to the statute of 1858; and while it admits that a receiver may set aside fraudulent transfers, it holds that he cannot enforce this statutory trust. By analogy an administrator cannot. The creditor must enforce it directly by an action, (Garfield v.Hatmaker, 15 N. Y. 475;) but only after exhausting his legal remedies, (Bank v. Olcott, 46 N. Y. 12.) Therefore, in respect to this part of the complaint, it is plain that the plaintiff cannot maintain the action, both because the administrators could not have enforced the statutory trust created by section 52, ut supra, as it is not derived through the debtor, and also because the plaintiff has not exhausted his legal remedies, as was decided in Estes v. Wilcox, 67 N. Y. 264.

Another claim of the complaint is that Lucy McDonnell, one of the defendants, has received, from life policies payable at the death of her husband, more than she might lawfully. Laws 1870, c. 277. Yow, this money must-have been paid .after the death of the intestate. We do not see why any liability to account for such money could not have been heard by the surrogate, in the accounting of the administrators. Code, § 2739; Shakespeare v. Markham, 72 N. Y. 400; Boughton v. Flint, 74 N. Y. 476. That accounting seems to be the proper place to determine the question as to the insurance money; whether it belongs to Lucy McDonnell individually, or to her as administratrix.

Then, as to the real estate of which McDonnell executed a deed to O’Brien, and O’Brien to Lucy. According to the averrment of the complaint, these deeds were not delivered in McDonnell’s life-time. If so, it would seem to follow that they never took effect, and the land descended according to law. [85] Then the plaintiff should reach it as he would reach any land of a deceased person. But that is not the course he has taken in this action. If, according to another allegation, the deeds were delivered, but with intent to defraud ■creditors, then it is a settled rule that the creditor must first exhaust his legal remedies by judgment and execution, or, at least, must have acquired, by judgment or execution, a lien on the property said to be fraudulently assigned. Adsit v. Butler, 87 N. Y. 585; Estes v. Wilcox, ut supra; Bank, v. Mead, 18 Hun, 303; Reubens v. Joel, 13 N. Y. 488; Gardner v. Lansing, 28 Hun, 415; Bank v. Wetmore, 42 Hun, 359.

In the case of Bate v. Graham,, 11 H. Y. 237, the plaintiff was a judgment creditor. He sued to recover for the estate certain personal property fraudulently transferred by the deceased. How, before the statute, 2 Rev. St. 449, .§ 17, it had,been held that where a fraudulent vendee had taken possession of goods prior to the death of the vendor, and remained in possession, he might be charged as an executor de son tort, though there was a rightful executor. Hence it had been held that, after that statute, the executor might sue the fraudulent vendee for the goods thus taken, (Babnock v. Booth, 2 Hill, 181;) and the plaintiff’s action was sustained. He was, as above observed, not a .simple contract creditor. The eases of Dewey v. Moyer, 72 N. Y. 70; Bank v. Leggett, 51 N. Y. 554; Crouse v. Frothingham, 97 N. Y. 105; and Sands v. Codwise, 4 Johns. 536,—were also cases of judgment creditors. The case cf Bates v. Bradley, 24 Hun, 84, was one of simple contract creditors. The debtors had filed a petition in bankruptcy, and therefore the creditors could not put their claims into judgment. Rev. St. U. S. § 5106. The case of Overton v. Olean, 37 Hun, 48, was an action for an injunction to restrain the village from permitting a railroad company to erect a permanent structure in the street. Of course, there could be no prior judgment. It was not a case of contract, but of tort. It is no exception, then, to the doctrine we have stated. It may be asked, why should a judgment first be obtained? Because .a court of equity is not a place in which to recover or to establish debts. The ■existence and the amount of the debt should be established in a court of law, and legal remedies to collect should be taken before resort is had to equity to remove fraudulent obstructions. So it was said, Estes v. Wilcox, ut supra, 266, that the reason of the rule “does not fail by the death of the debtor before judgment recovered for the debt.” The judgment “ would conclude the creditor as to the amount of the debt. ”

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Harvey v. McDonnell, 1 N.Y.S. 83, 55 N.Y. Sup. Ct. 409, 16 N.Y. St. Rep. 513, 48 Hun 409, 1888 N.Y. Misc. LEXIS 1196 (N.Y. Super. Ct. 1888).

1 N.Y.S. 83 (Harvey v. McDonnell) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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