N. Y. Life Insurance v. Mayer

19 Abb. N. Cas. 92
CourtNew York Court of Common Pleas
DecidedApril 15, 1887
StatusPublished
Cited by2 cases

This text of 19 Abb. N. Cas. 92 (N. Y. Life Insurance v. Mayer) is published on Counsel Stack Legal Research, covering New York Court of Common Pleas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
N. Y. Life Insurance v. Mayer, 19 Abb. N. Cas. 92 (N.Y. Super. Ct. 1887).

Opinion

Bookstaver, J.

On September 24, 1883, Ferdinand Mayer owned individually the equity of redemption in the property sold under foreclosure. At that time he was a member of the firm of F. Mayer & Co., composed of himself and Benjamin Mayer, doing business in the city of Few York.

On that day he and Benjamin Mayer made a general assignment of all their copartnership and individual property, including real and personal estate, for the benefit of creditors.

The original assignee was removed, and finally, Thomas L. James was substituted as assignee, and as such makes claim to these surplus moneys.

In November, 1883, and thereafter, a large number of judgments were recovered, some against Ferdinand Mayer [94]*94individually, and others against him and Benjamin Mayer, for firm debts.

The plaintiffs in these actions make claims to this surplus, according to their supposed, interest in the same. Some of them insist that it should be applied to the satisfaction of money judgments against Mayer, and against his firm, in the order of their docketing.

Others insist that the application of this surplus should be determined by the order of the commencement of actions in equity based on money judgments, and which have resulted in decrees setting aside as fraudulent and void the assign-, merit made by Mayer and his firm prior to the recovery of the judgments.

Holders of individual judgments against Ferdinand Mayer claim that as the fund arises from his separate property, they should be paid before the judgments of copartnership creditors.

The first of the money judgments recovered were docketed on November 19, 1883, by the Lincoln National Bank against Ferdinand Mayer, individually, for the sum of. $59,627.33, and by Van Valkenburgli & Leavitt against the firm of F. Mayer & Co., for the sums aggregating $54,771.80, the latter being the second judgment in point of time.

Thereafter four judgment creditors’ actions were instituted to have the general assignment before mentioned set aside as fraudulent, and a receiver appointed, viz.: Minzescheimer et al. v. Mayer et al., begun December 19, 1883 ; Swift et al. v. Mayer et al., begun February 26, 1884 ; Dexter et al. v. Mayer et al., begun March 11, 1884, and Bank of North America v. Mayer et al., begun November 20, 1884. All of these actions were based upon judgments obtained after the judgment of the Lincoln National Bank had been docketed. In each, decrees have been entered declaring the assignment fraudulent and void, and in each, Ohanncey Truax, Esq., has been appointed receiver, and has qualified.

The receiver and those whom he represents claim the [95]*95surplus-moneys, on the ground that a lien was acquired on the real estate in question by the judgment creditors’ actions, and that the lien so obtained is superior to that of all the prior docketed judgments. The Lincoln National Bank claims that its judgment constituted a legal lien upon the • property fraudulently conveyed by Ferdinand Mayer, and should first be paid out of the surplus.

In determining this question, it is well to bear in mind the distinction between real and personal property; when and how the lien of a judgment attaches to each ; and what is the nature of the lien.

As to the lien, it is not in strictness either a jus in rs, nor a jusadremj that is, it is not a property in the thing itself, nor does it create a right of action for the thing ; but constitutes a charge upon the thing.

As between creditors, this charge or lien attaches to personal property at the time an execution on the judgment is issued to the sheriff for service; so that, if the junior judgment creditor issues the first execution, he takes priority, as to personal property, over all senior judgment creditors, and when the sheriff makes an actual levy on the debtor’s goods and chattels, the lien becomes complete against all the world, including a subsequent purchaser in good faith. The issuing of the execution to the sheriff fixes the order of priority, as between creditors, as far as personal property is concerned.

Not so as to the real estate of the debtor. In that case the order of priority is determined by the docketing of the judgment, and the lien attaches at the time of the docketing.

These are fundamental principles, and fix the liens of judgments and executions with mathematical exactness in all cases wdiere the debtor has not made a fraudulent disposition of his property.

But the receiver claims that the assignment in question was voidable only, and not absolutely void, and that it conveyed such a title to the assignee that no judgment lien did or could attach to the property.

[96]*96On the argument it was practically conceded that if the assignment was void on its face, the lien of the judgments would have attached, but that, being voidable only by reason of fictitious debts, inserted in the schedules, the lien of the judgment could not attach. Is this so? A fraudulent assignment is on the same footing as any other fraudulent conveyance. The statute of frauds declares a conveyance1 made to hinder, delay or defraud creditors, absolutely void as against the creditors defrauded.

Bump on Fraudulent Conveyances (p. 465, 2 ed. p. 474), says : “ The theory of the law is, that a fraudulent transfer passes nothing as against creditors. For all purposes of appropriating the property to the satisfaction of their demand, the property is to be deemed still vested in the debtor. The legal, as well as the equitable title, still remains in him, and creditors who obtain judgment against him afterwards acquire liens upon his property wherever such are given by the law, according to the dates of their respective judgments, in the same "manner, precisely, as if no such transfer had been made.”

White’s Bank v. Farthing (101 N. Y. 344), holds: The several judgments became liens on lands fraudulently conveyed by Matilda Farthing, the judgment debtor, in the order of their docketing, and they could have been sold on execution issued on their judgments.”

Underwood v. Sutcliffe (77 N. Y. 58, 62), also holds : “ Property of a debtor transferred by him in fraud of creditors still remains as to them the property of the judgment debtor. If real estate, the lien of the judgment against the debtor attaches to it, and if chattels, they may be seized and sold on the execution ” (See also Chautauque County Bank v. Risley, 19 N. Y. 369 ; Walker v. White, 36 Barb. 592 ; O’Brien v. Browning, 49 How. Pr. 109, 113 ; Erickson v. Quinn, 15 Abb. Pr. N. S. 166 ; Bergen v. Carman, 79 N. Y. 146 ; Becker v. Torrance, 31 Id. 631).

Not onl)r has this doctrine been repeatedly announced in [97]*97the court of appeals, but it is constantly acted on in the case of fraudulent conveyances.

A judgment creditor issues his execution to the sheriff, who levies upon and sells both real and personal property, covered by such conveyances. If the assignee or vendee commences an action against him or the sheriff for malting such levy and sale, either may defend by attacking the conveyance, and if he succeeds in establishing its fraudulent character, he is justified in making the levy.

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Bluebook (online)
19 Abb. N. Cas. 92, Counsel Stack Legal Research, https://law.counselstack.com/opinion/n-y-life-insurance-v-mayer-nyctcompl-1887.