Argued April 30, 1884
Decided June 3, 1884
James L. Bishop for appellant. Henry G. Atwater for respondents.
If one proposition of the respondents is sound it settles in their favor every serious question raised on this appeal. That proposition is, that under the existing provisions of the Code of Civil Procedure, a promissory note is made property capable of manual delivery, which may be levied upon so as to effect a lien upon the debt which it represents by taking it into the officer's actual custody, and that he may protect and defend that levy and lien by assailing as fraudulent a previous assignment or transfer to a third party. Under the earlier provisions of the Code, a levy upon property capable of manual delivery, executed by taking it into the actual possession of the officer, invested him with the right in defense of his levy to assail as fraudulent and void against creditors a previous assignment or transfer which threatened by its priority the security of the lien obtained. ( Rinchey v. Stryker, 28 N.Y. 45.) But this court also held, as to the levy permitted to be made upon choses in action, that the attachment reached and became a lien upon only such debts as at the time belonged to the debtor by a legal title, and for the recovery of which he could maintain an action at law, and as a consequence, where, before levy of the attachment, he had parted with the legal title, even if with intent to defraud his creditors, there remained in him for their benefit only an equity which the attachment could not reach, and so the sheriff could not assail the transfer as fraudulent. The doctrine of Thurber v. Blanck ( 50 N.Y. 80) went to that extent, and has been since approved. ( Castle v. Lewis, 78 N.Y. 137; Wait on Fraudulent Conveyances, § 86.) These authorities establish that the sheriff in the case before us could not assail as fraudulent the transfer of the note and its collateral made prior to his asserted levy, unless their doctrine is made inapplicable by the change in the provisions of the Code (§ 649). Where the property sought to be attached is "capable of manual delivery, including a bond, promissory note or other instrument for the payment of money," the levy is now to be made "by taking the same into the sheriff's actual custody." This provision changed merely the mode of making the levy, but in no respect altered the inherent character of the property sought to be attached. If the note or bond has been transferred, however fraudulently, no lien by attachment is possible, and it is of no consequence that the mode of executing the process has been changed. The note is not turned into a chattel by the new provision. It remains a chose in action, and when the legal title is in the attachment debtor the debt may be seized by taking the note or bond which is its evidence; but where the legal title has been transferred to a third party, and is not in the debtor to be attached, the possession of the note by the officer under his warrant accomplishes nothing. On the assumption, therefore, that no levy was made until after the transfer of the note, the attachment gave the officer no right to assail or contest it.
But it is claimed that the levy made by taking the note into the officer's custody relates back to the demand made by him upon Clark Brooks, who had the possession of the paper, and which occurred before the note was transferred. The warrant was issued May 28, 1881. On June 2 the officer called upon Clark Brooks, who was the agent and attorney of the defendant, and had the note in his custody locked up in a friend's safe, served upon him a certified copy of the warrant, together with a copy of the affidavits, and demanded the note and bond and mortgage, and a certificate that he held them for the benefit of the defendant. Brooks refused. Thereupon he was ordered to submit to an examination which took place on June 7. The assignment of the note and mortgage was dated the day before, but recorded on the same day. In July a motion to compel Brooks to deliver up the note was denied at Special Term, but the order reversed by the General Term, which directed him to deliver up the securities to the sheriff. This he did under protest. It was said in Bills v. Nat. Park Bank ( 89 N.Y. 351) to have been the law that a debt evidenced by a negotiable security could be attached while in the hands of the attachment debtor by serving the attachment upon the maker of the security; but the effect of sections 648 and 649 of the Code of Civil Procedure was not considered. Section 649 prescribes how the levy shall be made. It must be "by taking the same into the sheriff's actual custody," who must " thereupon, without delay, deliver to the person from whose possession the property is taken, if any, a copy of the warrant and of the affidavits upon which it was granted." No other mode is prescribed. Nothing else will constitute the levy. Until the officer has obtained the actual custody he has made no levy, and can make none. He is armed with power to get such custody. He may proceed by action or special proceeding to reach that result, but until he has reached it he has made no levy, and can make none. We have nothing to do with the wisdom of the rule. We can only enforce it as it is plainly written.
It follows that neither before nor after the assignment did the sheriff acquire any title to or lien upon the note or bond and mortgage; that he had no interest in the foreclosure or right to intervene, and that the judgment and interlocutory order appealed from should each be reversed, and judgment of foreclosure ordered in favor of the plaintiff, with costs.
All concur except RUGER, Ch. J., not voting.