Lanning v. Streeter , 1869 N.Y. App. Div. LEXIS 129 ( 1869 )

By the Court, Johnson, J.

This action was brought by the plaintiff, as sheriff of Yates county, against Jasper Traver, now deceased, and the present defendant has been duly substituted as his executor. The foundation of the action is a debt, alleged to have been due from said Traver, on the 9th of February, 1858, to John Shoemaker, Jr. This alleged debt, the plaintiff, as such sheriff, attached in the hands of Traver, by virtue of an attachment, issued and placed in his hands, in a certain action in this court, brought by Smith Shoemaker against the said John Shoemaker, Jr. The attachment in that action was issued upon the ground that said John Shoemaker, Jr., had departed from the State with intent to defraud his creditors. The notice, served by the plaintiff on the said Traver, with the copy of the attachment, was that the property levied on by virtue of such attachment was “ a debt of about $550, owing by you to the said defendant for the avails of property belonging to him and sold by you, and for money belonging to him and now in your possession or under your control, and you are hereby forbidden paying the said debt to any person other than the said plaintiff or his attorneys.” Judgment was recovered in that action, in favor of the plaintiff therein, against the defendant, for $410.79, damages and costs, in May, 1858. The attachment and notice in that action were served upon Traver, the defendant’s testator, on the 9th of February, 1858.

This action was afterwards, though at what time does not appear, brought by the plaintiff, as sheriff, to recover the amount of the debt attached, or so much' thereof as would be sufficient to satisfy the judgment in that action. The sole cause of action alleged in the complaint is that at the time of the service of the attachment in that action the" said Traver was indebted to the said John Shoemaker, Jr., for property received and converted into money, and for money had and received of said John Shoemaker, Jr., in - the sum of more than $500, and that said Traver had refused to pay the same to the plaintiff although often requested so to do. The answer of Traver denied his indebtedness to said Shoemaker. It is objected on behalf of the defendant that the sheriff cannot maintain such an action. But I see no difficulty in the way of the sheriff bringing and maintaining such an action if there was in fact an indebtedness existing from Traver to Shoemaker, at the time the attachment and notice were served on the former. The debt, if it existed, was incapable of manual delivery, and the attachment was executed upon it in the manner prescribed by section 235 of the Code, by serving the copy of the warrant and a notice therewith showing the property levied on. By this means the sheriff acquired a specific lien upon the debt, if there was one, and that is a sufficient interest to enable him to maintain an action for its recovery, or enough thereof to satisfy the judgment recovered in the attachment suit. The sheriff is expressly authorized to bring such an action by the Code, section 232; also section 237, subdivision 4. (Rinchey v. Stryker, 28 N. Y. Rep. 45.) But in order to enable the sheriff" to bring the action in any such case, he- must have actually levied upon such debt or property and subjected it to the attachment in his hands. If he has not done this he can have no right of action to recover such debt or property against any one. Of course, if there was no debt in this case from Traver to Shoemaker, the action must fail. The debt was the only thing levied upon by the plaintiff, in the hands of Traver, or attempted to be, and is the only cause of action set out in the complaint.

The referee, it will be seen, has not found, upon the evidence before him, either as matter of fact, or as a conclusion of law, that Traver was indebted to Shoemaker at the time the attachment and notice were served on him. All that he has found upon that subject is that at that time “the said Jasper Traver had in his hands the sum of $551.74, the property of and belonging to the said John Shoemaker, Jr. This clearly shows no cause of action. If Traver held Shoemaker’s money in his hands at that time, the legal inference is that he held it as agent or bailee, and this would create no debt. As the fact of indebtedness was the only issue, and the referee has failed to find that he held it under circumstances which would make him the debtor of Shoemaker, or that he was in fact such debtor, no ground for a recovery is made to appear. Shoemaker’s money in Traver’s hands was not attached, but only a debt from the latter to the former. All that Traver was forbidden to pay over to Shoemaker, was the debt he was owing him. Anything else in his hands he might lawfully deliver over, unless it had been levied upon by the attachment. If he had Shoemaker’s money in his hands, the idea is wholly excluded that he was indebted to Shoemaker for it, and there is no presumption that he had not paid it over long before this action was brought. It would he manifestly unjust to allow a recovery against Traver, or his estate, now, for money or property belonging to Shoemaker, which he then held, and which he had no right to keep, and which the law must presume, in the absence of all evidence to the contrary, he did not keep from the lawful owner. But it is enough for this case, to say that the conclusion of law arrived at by the referee, that the plaintiff was entitled to recover, because the defendant’s testator had in his hands the money of Shoemaker, at the time of the service of the attachment and notice, is erroneous, and cannot be upheld. The plaintiff acquired no right to it if he did not levy upon it, and no cause of action accrued to him, against any one, to recover it. Where property or money has been fraudulently transferred by a debtor, to a third person, for the purpose of hindering, delaying or defrauding the creditors of such debtor, the sheriff having an attachment against such debtor, may levy such attachment upon the property, or money, so assigned or transferred, and bring his action and contest the right of the person in possession, and prove the fraudulent transfer. This was held in the case of Rinchey v. Stryker, (supra.) But in such case the identical thing fraudulently assigned must be attached, and a specific lien acquired by virtue of the levy of the attachment. The creditor, in such a case, does not become the creditor at large of his debtor, by virtue of his action and attachment, but both himself, and the sheriff as his bailee, are confined to the property actually levied upon. But when the property so fraudulently assigned has been converted into money by the assignee, or the money has been converted into other property which is claimed by the assignee to belong to him, before the attachment in the action by the creditor is issued, the attachment cannot be levied upon the money or property so held as the proceeds of that assigned, and the sheriff can maintain no action against such assignee,, by virtue of the attachment in his hands, to recover such proceeds. In such a case the avails are held by the fraudulent assignee as trustee for the creditors of the assignor, and can be reached only by an action in the nature of a creditor’s bill, which a sheriff cannot maintain. This is well settled. (Lawrence v. Bank of the Republic, 35 N. Y. Rep. 320. Campbell v. Erie Railway Co., 46 Bark 540. Greenleaf v. Mumford, 35 How. Pr. 148.) It is quite apparent, upon examining the evidence and the report of the referee, that this distinction, which lies at the very foundation of the right of action by a sheriff, derived from his attachment, was wholly lost sight of or disregarded, by the referee. The whole case shows that the action was tried and determined as though it had been an action in the nature of a creditor’s bill, and without any regard to the question of a specific lien by a levy under the attachment. As nothing but the debt was attached in this case, the plaintiff, as sheriff, could only maintain his action by proving the existence of a debt from Traver to John Shoemaker, Jr., which the latter could enforce by action. If he can make out such a claim only as the creditors of Shoemaker can enforce in equity, but which Shoemaker himself cannot enforce against Traver or his estate, the action can never be sustained. In the latter case the action must be brought by the plaintiff in the judgment, and be in the nature of a creditor’s bill.

[Monroe General Term, December 6, 1869.

The judgment must therefore be reversed, and a new trial granted, with costs to abide the event.

Sew trial granted.

E. Darwin Smith, J. C. Smith and Johnson, Justices.]