Hillyer v. Le Roy

CHASE, J.

It is conceded that the evidence given on behalf of the plaintiffs established that the. transfers of reaj estate and personal property declared fraudulent and void by the judgment were made and received for the purpose of hindering and defrauding creditors. If such transfers had not been made, plaintiffs’ judgment would have become a direct lien upon the real property mentioned, and, as the judgment was obtained more than four months prior to the filing of the petition in bankruptcy, the discharge of the judgment debtors would not have affected the lien of the judgment as against such real property. The transfers having been made fraudulently, and the transferees as well as the transferrors being concerned in the fraud, the transferees became trustees ex maleficio for the plaintiffs. Dewey v. Moyer, 72 N. Y. 70. The transferees have not transferred the real property, and they should account therefor to the plaintiffs. If the appellants had desired to raise the question that the action should have been prosecuted in the name of the trustee in bankruptcy, they should have so stated in their answer. Dewey v. Moyer, 72 N. Y. 70. The foundation of the plaintiffs’ claim, so far as the real property is concerned, is the judgment obtained and docketed by them more than four months prior to the filing of the petition in bankruptcy. Plaintiffs had no lien on the personal property even in equity, prior to a date four months before the filing of such petition; consequently, under the provisions of section 67 of the national bankruptcy law (Act July 1, 1898, 30 Stat. 564, c. 541 [U. S. Comp. St. 1901, p. 3449]), the equitable title passed to the trustee as a part of the estate of the bankrupt.

The judgment should be modified by striking therefrom that part thereof relating ro the personal property, and, as so modified, affirmed, without costs to either party. All concur, except CHESTER, J., not voting.