Cramer v. Blood , 1867 N.Y. App. Div. LEXIS 268 ( 1867 )

By the Court, Bosekrans, J.

The facts found by the referee do not sustain his conclusions of law, or the judgment rendered in the action. If the defendant intended to defraud the creditors of Lowd by taking and converting the property of Lowd into cash, such intent was rendered harmless by his delivering the proceeds of the sale to Lowd or his wife, who was his authorized agent; and if he subsequently received a portion of such proceeds, with like intent, from the agent of Lowd, for the use of Lowd and his wife, and to be handed over to them, or for their use as they might want, such intent was rendered harmless by his paying over the money to Lowd’s creditors or to Lowd or his wife by Lowd’s direction. ' The creditors of Lowd could not be injured by the defendant’s possession of the property of Lowd, or his sale of such property, or his possession of the proceeds of such sale. Either could be reached in the hands of the defendant by any creditor who was in a condition to seize the property under execution against Lowd, or its proceeds under proceedings supplementary to- execution or creditor’s suit. Besides, it appears from the proceedings of the referee, that while any of Lowd’s property, or the proceeds of its sale, were in the possession of the defendant, the creditor upon whose judgment the plaintiff was appointed receiver, was only a creditor at large of Lowd, and was not in a situation to question the bona fides of the transfer of the prop- ' erty of Lowd, nor the right of the defendant to take his property, nor his right to retain the proceeds of its sale. And whatever wrongs may have been committed by the defendant in relation to Lowd’s property or its proceeds, it appears, from the findings of the referee, that they were fully settled between Lowd and the defendant before the judgment of Smith was obtained. This settlement and payment of the amount due to Lowd discharged the defendant from any liability to the creditors of Lowd, who subsequently obtained j udgment against him. The statute in relation to conveyances of a debtor’s property, with the intent to delay, hinder or defraud his creditors, has no application to a fraudulent transfer of such property by any one except the debtor, and no one can avail himself of the statute except a creditor who is hindered, delayed or defrauded thereby. A creditor at large cannot be hindered by such transfer, within the purview of the statute referred to. The referee should have granted a nonsuit, as asked for by the defendant, for the reason that the evidence did not show any money or property of Lowd in the possession of the defendant at the time the judgment of Smith was obtained, and for the reason that it appeared that the defendant had previously fully accounted with Lowd for all property or money received from him or his wife. The cause of action set out in the complaint was, that the defendant had in his possession either the property of Lowd or its proceeds, for which he had never accounted ; and this was the only cause of action for which the plaintiff could recover. And after the referee had found that before judgment was rendered against Lowd the defendant had fully accounted with Lowd for all the property and proceeds of property of Lowd in the defendant’s possession, there remained no cause of action against the defendant, the settlement not having been found to have been unfair or fraudulent.

[Clinton General Term, May 7, 1867.

The judgment should be reversed and a new trial or-, dered, with costs to abide the event.

Xcnnes, Potter and PoseJcrms, Justices.]