Mandeville v. Avery

3 N.Y.S. 745, 20 N.Y. St. Rep. 801, 51 Hun 636, 1889 N.Y. Misc. LEXIS 72
New York Supreme Court·Decided January 11, 1889·Published·Cited by 3 cases

Opinion

Bradley, J.

The plaintiff was appointed receiver in proceedings supplementary to execution upon a judgment recovered by Lewis P Ross against ’the defendant Henry J. Beck, and brought this action to require the defend.ant Avery to account for the proceeds of the sale of a quantity of personal property of Beck, upon which it is alleged Avery had two chattel mortgages, pursuant to which such property was sold. And the alleged ground in support of such relief is that the mortgages were made and taken with the intent to hinder, delay, and defraud the creditors of the mortgagor. The relief demanded by the complaint is that the mortgages be so adjudged, and that Avery be required to account for and pay to the plaintiff the proceeds of such sale, or sufficient to satisfy the judgment of Ross, and that the plaintiff have such • other or further relief as he may be entitled to. The action was first moved for trial at special term, and the court there, by order, sent it to the circuit for trial. It is said this was done because it was treated as an action at law, •and triable by jury only. This is one of the orders which the plaintiff seeks to have reviewed on this appeal. The cause of action alleged in the complaint :is equitable in character, and therefore triable by the court without a jury. The right to require the defendant to account for and pay over the proceeds •of the sale of the mortgaged property to satisfy the j udgment represented by the plaintiff rested upon the ground that, as to the judgment creditor, the defendant Avery, by reason of the fraud, might be treated as trustee in respect to .such proceeds; and the remedy dependent upon such relation, to be determined by the judgment of the court, is necessarily equitable in character. Lawrence v. Bank, 85 N. Y. 320; Campbell v. Railway Co., 46 Barb. 540; Anthony v. [746] Wood, 96 N. Y. 180. In support of his contention that the case presented by the complaint was not one for equitable relief, but was the subject of an action at law, the defendant's counsel cites Southard v. Benner, 72 N. Y. 424, affirming 7 Daly, 40, which seems to have been tried by jury. But that action was brought by an assignee in bankruptcy to recover the proceeds of property transferred by the chattel mortgage of the bankrupt in fraud of his creditors, and it may be observed that by the statute of the United States under which he was appointed it was provided that “ all the property conveyed by the bankrupt in fraud of his creditors” should, “in virtue of the adjudication. of bankruptcy and the appointment of his assignee, be at once vested in such assignee.” Bankrupt Act, § 14 f Rev. St. U. S. § 5046. In Southard v. Benner the party making such transfer was adjudged a bankrupt in December, 1873, and the property was taken and sold upon the chattel mortgage in February, 1874. The title to the property became vested in the assignee in bankruptcy, assuming that the mortgage was in fraud of the creditors of the mortgagor, which afforded to the plaintiff in that action the right of action for the proceeds of the sale upon the theory as for money liad and received to his use, or as for conversion of the property, at his election. Schroeppel v. Corning, 6 N. Y. 112. In the present case the mortgages were, foreclosed. by sale of' the property, not only before the plaintiff was appointed receiver, but before■ the recovery of the judgment upon which the proceedings supplementary to-the execution, in which he was appointed receiver, were taken. The plaintiff did not, by force of any statute or otherwise, become vested with the legal title to the mortgaged property. Code Civil Proe. § 2468. But he represented, the judgment creditor so far as to enable him to maintain an action in equity to reach hot only property transferred by the debtor in fraud of creditors, but. to obtain the application of its proceeds in the hands of the party chargeable with male/ides in respect to such transfer, to the satisfaction of the judgment. Bostwick v. Menck, 40 N. Y. 383; Wright v. Nostrand, 94 N. Y. 31. The action is in the nature of a creditors’ bill, and for the purposes of the relief in view the receiver has the same right of action which the judgment creditor, after return of the execution, may have had, if the receiver had not been appointed. A creditor for such purpose in the meaning of the statute is one having a judgment upon which execution has been issued. Jones v. Graham, 77 N. Y. 628. The plaintiff represents such a creditor, and his right of action is not dependent upon the provisions of chapter 314, Laws 1858. Porter v. Williams, 9 N Y 142, and cases before cited.

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Mandeville v. Avery, 3 N.Y.S. 745, 20 N.Y. St. Rep. 801, 51 Hun 636, 1889 N.Y. Misc. LEXIS 72 (N.Y. Super. Ct. 1889).

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