Grady v. Bowe

Van Brunt, J.

[After stating the facts as above.]— The first point raised by the appellant is that neither the attaching creditors nor the sheriff have any standing in court to impeach the j^cZes of the transfer to the plaintiff; that the attaching creditors, not being judgment and execution creditors and simply creditors at large, have no standing in court to impeach the bona fides of the transfer ; and cites in support of this proposition a large number of cases in which it is held that a creditor at large has no status in equity, and the right of a judgment creditor to relief depends upon the fact of his having exhausted his legal remedies without avail.

Undoubtedly it is true that neither the sheriff nor the attaching creditors could have maintained a bill in equity for the purpose of adjudicating the assignment above mentioned fraudulent, but it has been repeatedly held by the Court of Appeals that under an attachment the sheriff may seize any property which the defendants have disposed of with intent to defraud their creditors, and that in respect to such property he is not to be deemed a mere creditor at large but pne having a specific lien upon the property attached (Hall v. Stryker, 27 N. Y. 596 ; Rinchey v. Stryker, 31 N. Y. 140 ; and numerous other cases).

In the case of Castle v. Lewis (78 N. Y. 131), which is claimed by the appellant’s counsel to sustain a different view, the thing attached was a chose in action, and it was found by the court that the point urged, that the transfer of said chose in action was fraudulent and void as against creditors and no title passed, was not well taken.

The main question involved in this case is as to whether the instrument called an assignment is to be construed according to the laws of Virginia or the laws of the State of New York.

It is urged upon the part of the appellant, that personal property has no situs but follows its owner, and that the voluntary transfer, if valid by the law of the owner’s domicile, is valid everywhere except where the transfer conflicts with the policy of The state where the property is situated (Story on Conflict of Laws, §§ 379-884).

Numerous adjudged cases are cited in the plaintiff’s points to sustain this proposition, and it must be conceded to be the law as established by the courts of this state. In all those cases the domicile and the place of the execution of the will or other instrument of transfer coincided. In the case at bar the assignment was executed in New York. Execution implies signing, sealing and delivering. All must concur before there is a complete execution of any sealed instrument. Execution of a deed or sealed instrument is defined to he the signing, sealing and delivery of the same (Bouvier’s Law Dictionary, title, Execution).

The assignment in question was signed and sealed by Oliver & Robinson in Virginia, but the execution of the instrument was not completed until it was actually delivered to and accepted by Grady, which took place in New York. Up to that time they undoubtedly had a right to recall and revoke the instrument, because until such delivery the instrument was not executed by them and consequently no transfer of property could take place. The execution of the deed of assignment and its acceptance by the assignee was not only a transfer of the property therein named, but it was a contract entered into by the assignee to perform his part of the trust therein reposed in him. It is a principie of elementary law that the lex loci contractus governs the question as to the validity of the contract (Story on Conflict of Laws, §§ 242 et seq.').

No case has been called to the attention of the court where a transfer valid by the law of the domicile, but which was void by the law of the place where it was executed and where the property was situated and where such transfer went into effect, has been sustained.

It is urged upon the part of the appellant that it was not necessary in order that this transfer should be valid that Grady should accept it at all, because it is a principle of equity that a trust shall never fail for want of a trustee. This principle is undoubtedly correct, but has no application to the case at bar, because no trust whatever was created until this assignment was executed, and it was not executed, as has before been said, until it was delivered to Grady; therefore, it would appear that the lex loci contractus must govern, and that the law of the domicile cannot override the law of the place of the execution of the instrument, the situation of the subject matter, and the place of performance.

It is not necessary to decide in this case whether an assignment of personal property made, signed, sealed and delivered in Virginia, valid by the laws of Virginia and invalid by the statute law of the State of New York, would pass the title to personal property in the State of New York, because no such question is presented by the evidence in this case.

The General Assignment Act of 1877 evidently contemplates the making of assignments by non-residents of the State of New York, who are carrying on business within said state. It provides that every conveyance or assignment by a debtor of his estate, real or personal, or both, to an assignee for the benefit of creditors of such debtor, shall be in writing, etc., and shall be recorded in the County Clerk’s office of the county where such debtor resided or carried on Ms business at the date thereof; and it further provides that an assignment by copartners shall be recorded in. the county where the principal place of said business is situated. This language evidently contemplates those cases where the assignor lives out of the state, and is intended to apply to every transfer of property situated in the State of New York made for the benefit of creditors, when the assignor had carried on his business within this state. The evidence in this case shows that Oliver & Robinson, although residents of the State of Virginia, carried on their business in the State of New York, and an assignment of the property used in said business and situated in ■ the City of New York must, therefore, be governed by the assignment law of the State of New York, especially where, as has already been seen, such assignment was executed within said state.

It is conceded upon the part of the appellant that if this assignment is to be construed by the laws of the State of New York that it is not valid; and, therefore, it is not necessary upon this appeal to discuss that question.

It is urged that as the attaching creditors were residents of the State of Virginia, as well as the assignors Oliver & Robinson, that some different rule should prevail on that question, because they were both subject to the laws of Virginia. That this rule, however, does not apply to the case at bar is evident from the fact that no matter where parties are domiciled, the lex loci contractus must govern.

It is urged upon this appeal that the attachments, the execution and the judgment roll were inadmissible in evidence.

It is undoubtedly true that the admission of the attachments, without the affidavits upon which they were issued, was error, but it appears from the record that those affidavits were subsequently offered in evidence, and it appears that they upon their face conferred jurisdiction upon the court to issue the attachments, and this objection, therefore, cannot- now prevail. Whether the judgment was-regularly entered or not is entirely immaterial in this case, because the sheriff, if he was authorized to make this seizure under the attachment, must he protected by this attachment, and the subsequent failure to recover a proper judgment cannot make the sheriff liable for an action of trespass, certainly if the same is commenced as the one at bar was before any judgment could possibly be obtained —this action being comménced within seven days after the commencement of the action in which the attachments were issued: and it was held in the case of Hinckey v. Stryker (supra), that the sheriff, in an action for wrongfully taking the property, has a right to show that the title of the purchaser from the debtors was fraudulent and void as against attaching creditors, even before judgment in the attachment suit. In other words, the question as to whether the sheriff is a trespasser or not must be determined by the condition of affairs at the time that he seizes the property. Any other rule would make the sheriff liable for the mis'conduct or negligence of the attorneys in subsequent proceedings taken after a levy, over which he would have ho control.

For these reasons we are of the opinion that the question as to whether proceedings subsequent to the issuing of the attachment by which the 'plaintiff in the attachment suit obtained judgment were regular or not is entirely immaterial.

' We are of the opinion, therefore, that the judgment appealed from must be affirmed, with costs.

J.' F. Daly and Yah Hoeseh, JJ., concurred.

Judgment and order affirmed, with costs.