Opinion
Argued October 18, 1889
Decided November 26, 1889
Otto Horwitz for appellants.
W.J. Townsend for respondent.
The action is brought by the plaintiff as assignee of the firm of J.M. Hirschhorn Co., under a general assignment for the benefit of creditors dated May 16, 1887, to recover for the alleged conversion by the sheriff of the city and county of New York, of certain goods and merchandise, part of the assigned property taken by him from the possession of the plaintiff after the assignment. The present defendants are indemnitors of the sheriff, who, after the commencement of the action, were substituted as defendants in place of the sheriff under section 1421 of the Code of Civil Procedure.
The defendants in their answer justified the taking of the property by the sheriff, under an attachment in an action commenced by Isaac Goldschmidt and others against J.M. Hirschhorn Co., the assignors, to recover a debt owing by the defendants to the plaintiffs therein at the time of the assignment. The answer set forth the proceedings taken to procure the attachment, showing a compliance with the statutory conditions preliminary to the issuing of that process, and further averred that the assignment of Hirschhorn Co. was made with intent to hinder, delay and defraud their creditors. At an early stage of the trial, and before the defendants had entered upon their defense, the court ruled, in substance, that the defendants would not be permitted to raise any question as to the validity of the assignment, and at the conclusion of the case instructed the jury that the only question which they could consider was the question of damages.
We think the ruling was erroneous. Goods and chattels fraudulently assigned by a debtor, to hinder, delay and defraud creditors, are attachable in the hands of his voluntary assignee at the suit of a creditor defrauded by the assignment. ( Rinchey v. Stryker, 28 N.Y. 45; Frost v. Mott, 34 id. 253.) The rule which prevents the levy of an execution, under similar circumstances, upon equitable assets or choses in action, proceeds upon peculiar grounds, not applicable to chattels, of which there can be a manual tradition. ( Thurber v. Blanck, 50 N.Y. 80; Anthony v. Wood, 96 id. 180.) If, therefore, the present action had been continued against the sheriff, there can be no doubt that he could have defended the original taking by showing that he took the goods under a valid attachment against Hirschhorn Co., and that the assignment to the plaintiff was fraudulent as to the plaintiff in the attachment suit. The defendants, as his indemnitors, stand in his shoes. We need not consider whether they would be protected to the same extent as the sheriff, if the process, though regular on its face, was affected by some latent vice, as, for example, if issued without jurisdiction.
It is evident from an inspection of the record that the ruling of the court, excluding inquiry as to the validity of the assignment, was based on an admission of the defendants in their answer, that subsequent to the seizure of the goods by the sheriff the attachment was vacated. This admission was made in connection with a separate matter, set up in the answer, relating to the conduct of the sheriff after the vacation of the attachment, for which the defendants alleged they were not responsible, the acts not being, as claimed, within the terms of the indemnity. It is clear that the defendants were entitled to litigate the validity of the assignment unless the vacation of the attachment precluded them from justifying under it. If the attachment was void, it would afford no protection to the party suing it out, whether vacated or not, and it is probable that indemnitors who came in in aid of the party would stand in the same position. But if valid, the process would protect both the officer and party for what was done under it before it was vacated, the liability of the property to seizure being shown. The case of Day v. Bach ( 87 N.Y. 56) is a decisive authority that trespass will not lie for the seizure of goods under a valid attachment subsequently vacated for error. The process is a protection to the officer or party for whatever is done under it while in force. The vacation of the process for error does not convert into a trespass that which was legal until it was set aside. The subsequent conduct of the officer or party in dealing with the attached property may create a cause of action, but if the original taking was justified, this would afford no ground for a recovery against indemnitors. The ruling of the court is sought to be supported on the ground that the existence of the debt and the papers on which the attachment issued were not proved, and that, therefore, the attachment may have been void for want of jurisdiction to issue it. But this answer is insufficient. The ruling of the court was made in limine before the defendants had any opportunity to prove the attachment proceedings. It was assumed by all parties that there was a valid attachment, and the ruling proceeded, as is clearly to be inferred, upon the ground that, nevertheless, the vacation of the process deprived the defendants of their justification.
We think the court erred and that the judgment should be reversed and a new trial granted.
All concur.
Judgment reversed.