Crosby v. DeGraffenreid

By the Court.

Benning, J.

delivering the opinion.

[1.] Was the administrator, Green, entitled to have from DeGraffenreid an account of the notes and money conveyed to ■the latter by the intestate of the former ?

The notes and money had been delivered to DeGraffenreid by the intestate, before his death. It does not appear that they were ever in the possession of the administrator.

The transfer of the notes and money was good, not only against the intestate, who made the transfer, but also against his administrator. The Statute of the 13iA Elizabeth, makes ¡such a transfer void, as against creditors, their heirs, executors, &c. and them “ only.” (Bob. on Fraud. Con. 2 note .(a.) Such a transfer, therefore, is good against him who makes it, and his executors and administrators. Such is the necessary inference from the words of the Statute.

Accordingly, it was decided, soon after the enactment of the Statute, that the administrator of a fraudulent transferer •of goods, was bound to deliver them to the transferee; and ;this, although the administrator insisted that the transfer was fraudulent, and that the transferrer had not goods, besides ■those, sufficient to pay the creditors intended to be defrauded. (Hawes vs. Leader, Cro. James, 270, and see 1 Amer. Lead. Cas. 58.)

It is true that this case may, perhaps, be somewhat in conflict with the earlier case of Bethel vs. Stanhope. Rut I do mot know that it is. It is not clear, from the facts of that -case, whether the gift had ever been completed in the lifetime of the fraudulent transferee. He died “possessed” of the goods, and the transfer, itself, was to be void on the payment of twenty shillings. After his death, the transferee took possession of the goods. It was held that this was a trespass against his administrator ; that the goods were assets in the administrator’s hands. (Bethel vs. Stanhope, Croke Eliz. 810.)

.It seemed, however, to be admitted by the Counsel for the plaintiff in this case, that a fraudulent transfer by a testator, is good, at Law, against his executor. But it was insisted, that as the executor is a “ trustee” for creditors, such a transfer would not be good in Equity, against him.

But why should there be a difference in Equity ? The executor is as much trustee for the creditors at Law, as he is in Equity.

And what is it that the executor is trustee of, whether in Equity or at Law ? The property which the testator had at the time of his death. But property which a testator has transferred before his death, even although he may have transferred it to defraud his creditors, is not, at the time of his death, Ms property. The transfer takes the title out of him, and vests it in the transferee, indefeasibly as to all the world except those creditors. And those creditors have no title to the property. They have the right to subject the property in the hands of the transferee to the payment of their debts, and that is all the right they have.

If this be so, the executor cannot be a trustee for the creditors of this property. He can no more be such trustee, than could his testator have bpen had he lived. Can the fraudulent donor, himself, in Equity, recover back the property from the fraudulent donee, on an allegation that he wants it for use in the payment of the defrauded creditors ? If he cannot, how can his executor? Can an executor have more rights than his testator had ?

Besides, there would be no use in allowing this executor te recover back this property. The creditors do not need the ,aid of the executor, in order to bring the property within their reach. They can reach it themselves. Let them get their judgments against the executor, establishing the existence of their debts. If these judgments shall be even judgments of assets in futuro, yet, they will be such judgments as may be enforced by the creditors themselves, against the property ; certainly with, and perhaps without, the aid of a Court of Equity. (Allen vs. Matthews, 7 Ga. R. 149; Trippe & Slade and others vs. Lowe’s Adm’r, and others, 2 Kelly, 304.)

It is no more incongruous that such a judgment should bind such property, of which the executor himself has neither the possession nor the right of possession, than that a judgment against the fradulent donor himself should bind the property which he has transferred; for by the transfer the property has ceased to be his.

In both cases, the judgment ascertains the existence of the debt. The rest the Statute may do, as well in the one case •as in the other; i. e. make the property subject to the payment of the debt which the judgment has ascertained.

Not only is there no use for the interposition of this executor, but such interposition would, of necessity, do more harm than good. It would diminish the property by an amount equal to the cost of administering the property; it would bo attended by increased delay, increased expense and increased risk in the accomplishment of the object; it would force out of the hands of the transferee the whole of the property, when, perhaps, the debts to be paid out of it would require but a part.

We think, therefore, that the Court below, in sustaining the demurrer to the bill, did right.

We may remark, in conclusion, that we see no insuperable ■objection to DeGraffenreid’s being treated by the creditors •of Green, as executor de son tort of Green.