Forbes v. Logan

The first question is, whether the plaintiff is in a position to sustain this action in consequence of the direction of his attorney to return the execution within seven days, and its actual return within that time. ,

There are certain facts in the case, besides those noticed by the Judge, of no little consequence.

On the 2d day of June, 1856, the judgment was entered and docketed. On the same day the execution was tested and delivered to the Sheriff. This was returned on the 9th day of June unsatisfied, in pursuance of the written direction of the attorney, dated the 5th, (and before stated at length.)

The counsel for the Receiver produced this testimony.

The original action was commenced to set aside the assignment in question, by service of a summons with the complaint, on the 1st day of August, 1856. The complaint was sworn to on the *47925th day of July, and on the 26th day of July, a preliminary order for an injunction was allowed with an order to show cause on the 4th day of August.

The original and supplemental complaint stated the issuing and due return of the execution, so that no objection appeared on their face; and the answers of the assignor and assignee by not denying, admitted all the allegations of the complaint on this subject. The Receiver, in his answer to the supplemental complaint, stated a want of knowledge or information, and controverted these among other allegations. The Receiver, it should be noticed, was appointed in a suit brought by one Dickinson, as a creditor under the assignment, to remove the assignee and distribute the fund. .That suit was commenced in May, 1856, and an injunction allowed on the 9th of that month, restraining the assignee and assignor from any interference with the property, and on the 18th day.of October, 1856, an order of reference to appoint a Receiver was made, and on the 28th day of November, 1856, the Receiver was duly appointed. Liberty to bring him into this suit by supplemental complaint was granted by an order made on the 20th day of March, 1857. •

The assignment purported to transfer the whole property, real and personal, of the assignor.

An action, like the present, to set aside an alleged fraudulent transfer of property, may be brought by the judgment creditor, notwithstanding the provisions as to supplementary proceedings, and the method of redress thus given. The old rules and principles of the Court of Chancery must afford the guide, although the Code may be resorted to for aid and explanation. If there is anything hostile to the former course of proceedings, the Code would control.

It may be useful, first, to advert to the rules which at different periods prevailed as to the issuing and return of an execution. It will aid our examination,- and in some respects it becomes important.

By the common law, the Sheriff was not obliged to return a writ of execution until he was ruled'so to do. (Watson on Sheriffs, 63; id., 198; Cheasely v. Barnes, 10 East’s R., 72.) There was an exception in case of an elegit. (See, also, 6 East’s R., 550.)

By our statute, (1 R. S., 1813, 318,) two common days of return were established.

*480Process issued in term might be tested any day in that term, and be made returnable any day in that term, or the next term. If issued in vacation, it might be tested in any previous term, and be made returnable on any day in the next term.

The Revised Statutes of 1830 adopted the same provision, with some others, as to the duration of the terms, and as respects the issuing test and return of process, not necessary to be noticed. (2 R. S., 197, §§ 4, 5, 6.)

It was the law under these provisions, that the Sheriff was bound to return the writ on the return day without being ruled, and he might be sued in trespass on the case, or be liable to an attachment or amerciament for neglect.

By the general rule of law, also, the Sheriff could not execute a writ after the return day, though he might perfect proceedings commenced before. (Vail v. Lewis, 4 Johns. R., 450.) A return and a new writ, or perhaps a continuance on the roll merely, was necessary. (Devoe v. Elliott, 2 Caines’ R., 243; see The Mayor, &c., v. Evertson, 1 Cow. R., 36.)

This system continued until the statute of May the 14th, 1840. By that, a fi. fa. might “ be tested and issued at any time after the expiration of thirty days from the entry of the judgment; and such writ shall be made returnable sixty days after the receipt thereof by the Sheriff or other officer.” (Sess. L., 1840, p. 334, § 24.)

This appears to bear the construction that the writ could not be returned before the end of the sixty days. I do not know whether this point has been decided. -

By the Code, (§ 290,) the execution “ shall be returnable within sixty days after its receipt by the officer,- to the clerk with whom the judgment is filed.”

It is well settled under this provision,- that the execution may be returned at any time within the sixty days, so as to warrant proceedings under section 292' of the Code. Collusion or fraud may be shown, and will defeat the proceeding. (Engle v. Bonneau, 2 Sandf. S. C. R., 679, and cases; 1 Code R., 107; Morange v. Edwards, 1 E. D. Smith R., 414; Livingston v. Cleaveland, 5 How. R., 396; Jones v. Porter, 6 id., 286.)

In Livingston v. Gleaveland,' (supra,) the subject was fully examined ; Mr. Justice Mason delivering the opinion of the Court. Cassidy v. Meacham, (3 Paige R., 311,) and Williams v. Hoge*481boom, (8 Paige R., 469,) were admitted to have settled the rule in Chancery before the Code, that a bill could not be filed until after the return day, although the execution had been returned before. The statute and law, before the act of 1840, and the rule under that act were examined, and the distinction taken upon the language of sections 289 and 290 of the Code, that now the Sheriff may legally return the execution within the sixty days whenever he has made diligent search for property, and become satisfied that the defendant has not property to satisfy the same or any part thereof. It is to be presumed that the Sheriff has done his duty in searching for property, when he has made his return nulla bona.

The case of Jones v. Porter, (supra,) was before Mr. Justice Parker, at Special Term. It is very strong upon this point.

Judge Rowley, the County Judge, in Messenger v. Fish, (1 Code R., 106,) stated the reasons for such a construction of the Code with much force.

It is to be .deduced from these cases, that when nothing appears but the fact of a return directed to be made by the plaintiff or his attorney, the inference is that the Sheriff was not left to his proper efforts to collect the amount, but that the intervention with his duty was from some improper or vexatious motive. But, under these decisions, jurisdiction would appear tobe acquired, whether the execution is returned before or after the end of the sixty days. The defendant has no longer the absolute right to say that this extraordinary remedy may not be resorted to until the full period given by the law for him to pay the debt under an execution has elapsed, or until efforts to collect it by the legal process have proved ineffectual for that period. The time is no longer absolutely given him, when the Sheriff is authorized by law, on his own responsibility, to abridge it.

Thus, it seems to me, that an official, voluntary return by the Sheriff, before the end of the sixty days, may be treated as a compliance with what the statute deems it essential to establish— that the legal remedy has been exhausted. He subjects himself to a liability for a false return, in case property could be shown which might have been reached, and acts at his peril.

This course of reasoning may justly be regarded as of little weight when the plaintiff, or his attorney, has directed the return *482of the execution, and promptly, upon its being issued. The theory upon which an action like the present proceeds, must always be regarded.

While an execution is in the hands of a Sheriff, all leviable personal property is affected by its lien, under and by force of the statute. While it was in life, a bill to set aside a fraudulent transfer, which interferes with the levy, might be sustained, because the lien existed. But if the execution is returned the lien was lost, and the right to sustain the action, apart from statutory provision, was also lost. (McElwain v. Willis, 9 Wend. R., 548; Weed v. Pierce, 9 Cow. R., 728; Watrous v. Lathrop, 4 Sandf. S. C. R., 700; Cuyler v. Moreland, 6 Paige R., 273; Crippen v. Hudson, 3 Kern. R., 161; Bishop v. Halsey, 3 Abbott R., 400.)

But it was equally clear, that a bill in equity, to reach equitable interests and choses. in action, could not be filed until after execution returned unsatisfied; and then the authorities before referred to, settled that the creditor must wait until the return day, which the law had prescribed, had passed,

. The anomaly might then apparently exist, that, if the execution was returned, leviable property could not be touched; and, if it was not returned, equitable interests could not be reached. The relief, where a fraudulent transfer comprised both,, would seem imperfect.

The Revised Statutes met this difficulty by providing that after execution returned unsatisfied, property of every description, whether it could have been taken on execution or not, might be applied to the demand. (2 R. S., 174, § 42.)

Thus, then, the relief which was to be given to a creditor failing- to realize his demand, at law by the usual process, was given, with these restrictions, and upon the condition of these rules being observed by him.

There is one view in which the case presents a very close point. This action was not commenced until the 1st day of August. The filing of the bill under the old Chancery system was not the commencement of an action, but only the service of a subpoena, or a hona fide attempt to serve it. (1 Paige R., 564; 10 id., 1.) Sections 99 and 127 appear to be decisive of the same rule under the Code. The fact that an injunction order *483Was obtained on the 26th day of July, which was served with the summons and complaint, does not appear to me to affect this view of the case. It is true that by section 139 of the Code, the Court is deemed to have jurisdiction of a case, and to have control of the subsequent proceedings, from the allowance of a provisional remedy, as well as from service of a summons. But as to the parties, an injunction would be inoperative until served, and an attachment until levied.

By the 290th section, the writ is to be returnable within sixty days after its receipt by the Sheriff.

Whatever might be the rule upon the exclusion or inclusion of the day of the delivery of the writ; under the Revised Statutes, and cases upon the subject generally, (1 R. S., 605; 8 Barb. R., 384,) the Code has prescribed a definite rule which must govern the present case.

By section 407, the time within which an act is to be done, as herein provided, shall be computed by excluding the first day, and including the last. . If the last day be Sunday it shall be excluded.

Then the sixty days allowed for the return of this writ ended on the 1st day of August, and the suit was commenced on the 1st day of August.

Had the action been commenced on the 2d day of the month, I apprehend that by the strictest rule it would have been sustained, and I do not think the fact of the attorney’s procuring or directing a premature return would have varied the case.

It appears to have been admitted, that a Sheriff might have returned an execution on the morning of the return day, and would not be liable, although he might subsequently have executed the writ, provided he had used due diligence before. (Henmann v. Borden, 10 Wend. R., 367.) We are warranted in presuming that the action was commenced after the actual return on the last day.

The proposition upon which I think the present action can be maintained is this, that although an execution has been returned at the direct instigation of the plaintiff or his attorney, yet if the action be to set aside- a fraudulent assignment, and is not commenced until after, or on the actual return day, it can be sustained; and further, that in the present instance, this conclusion is greatly *484strengthened by the fact, that at the time of the delivery of the execution, and through the whole period of the sixty days, the assignor, (the debtor,) and the assignee were under an injunction prohibiting their application of any property-to the payment of the creditors’ demands.

I forbear to enter upon the consideration of other cases in which the right to sustain such an action may exist, without these circumstances, even where the attorney has interfered. Without at all saying, nothing will suffice but what is found in the present case, I think there is sufficient here.

2. The learned Judge has found as matter of fact that the assignment was not accompanied by an immediate delivery, or followed by any actual or continued change of possession of the assigned property, but was made with intent to hinder, delay, and defraud the creditors of the said Eobert Waller.

We are not able to say that this result is wrong upon the evidence. On the contrary the circumstances of possession, control, contracts, and negotiations of the assignor which have been proved, appear to us to warrant it.

8. There are some exceptions to the ruling of the Judge during the trial which require observation.

As to the objection by the Eeceiver to the question, whether the object of the assignor was not to prevent sacrifices in making the assignment? He could have been asked by the defendant in support of the assignment, whether he intended to defraud creditors. (4 Kern. R., 568.) Much more may he be asked as to his intentions and objects, by the adverse party.

The other question which the defendant asked, and the Court rejected, was, whether there was any agreement between the assignor and the assignee, that he (the assignor) was to continue in possession of the property ? (To the decision excluding an answer to this question, the appellant excepted.)

It may be that this ought to have been allowed. But when the fact of an actual continuance in possession is made out by competent evidence, the fact whether there was or was not a prior agreement for it, seems immaterial.

I think the judgment should be affirmed.

Moncrief, J., concurred

It was settled law, prior to the Code, that a creditor’s bill, to reach the choses in action of the judgment debtor, could not be filed, until an execution had been issued and returned unsatisfied. And although an execution had been so issued and in fact returned, such a bill could not be filed until after the return day of the execution was passed. (McElwain v. Willis, 9 Wend., 548; Crippen v. Hudson, 3 Kern., 161.)

That such a bill could hot be filed until after the return day of the execution, was decided in Cassidy v. Meacham, (3 Paige, 311,) and the rule was re-asserted in Williams v. Hogeboom, (8 id., 469.)

In Crippen v. Hudson, (supra,) it was declared that the rule since the'Code, is the same as it was before the Code was enacted. The preexisting practice not. inconsistent with the Code, is by the Code continued in force. (Code, § 469.) •

In the present case, the execution was issued on the 2d of June, 1856, and returned on the 9th of the same month, and this action was so far commenced on the 25th of July, 1856, the fifty-third day after the execution was issued, that the complaint was verified on that day. An injunction was granted on the 26th, and these papers and the summons were served on the 1st of August, 1856, the sixtieth day after the execution was received by the Sheriff.

By the Code, an execution is “ returnable within sixty days after its receipt by the officer ” to whom it is directed. (Code, § 290.)

This action, as a creditor’s suit to reach property not liable to be levied upon by an execution, cannot be maintained. It was commenced before the return day of the execution; • and the execution was actually returned within seven days after it was issued, at the written request of the attorney of the plaintiff in such execution.

Can it be sustained, as a suit by a judgment creditor, who, at the time it was commenced, had a specific lien upon the property which he seeks to reach; to remove, through the aid of a court of equity, a fraudulent obstruction interposed by the debtor to the executionof process by which, but for such fraudulent obstruction, the property might be levied upon and sold ? Whether the property which the creditor seeks to reach be real or personal, .if the latter be property leviable by execution, it is essential to his right to *486institute a suit to remove a fraudulent transfer of it, that he has “ obtained a lien on such property.”

If it be real, he must have a judgment docketed, which would be a legal lien, if the fraudulent transfer had not been made. If it be personal, he must have issued an execution and have had a levy made on the property; either an actual levy, or a constructive one, by having placed the execution in the Sheriff’s hands to be executed. (McElwain v. Willis, supra; Greenwood v. Brodhead, 8 Barb., 593-597; approved by the Court of Appeals, in Crippen v. Hudson, 3 Kern, 161.)

If it be settled that an execution must be issued to the Sheriff to be levied, to create a right to institute such a suit, it would seem to be illogical to hold that the creditor may procure his execution to be immediately returned, and then commence such a suit.

The moment the execution is so returned, the creditor ceases to have any lien, either actual or constructive, on such personal property. And if the existence of the 'lien is essential to the right of action, it would seem to follow, that the plaintiff had no right of action in respect to such property, when this suit was commenced. It is quite clear, that any other creditor, by levying on the property in question, {i. e., on such of it as could be taken upon execution,) between the actual return of the plaintiff’s execution and the appointment of a Receiver, would hold the property in preference to this plaintiff.

If another creditor, by levying an execution before the appointment of a Receiver, can wholly defeat the action, that fact would furnish a strong argument against assuming jurisdiction over it.

In McElwain v. Willis, (9 Wend., 561,) Mr. Justice Kelson said, that “ the property out of which the judgment creditor is seeking to satisfy his debt, must be subject to the judgment if real, and to execution if personal property. The jurisdiction of the Court rests upon the right or title to the- property in question, acquired by the proceeding at law upon the judgment or execution, and. consequently the return of the latter by the officer is not only not essential, but would be fatal to the relief sought.”

In the same case, Senator Tracy said, “ the plaintiff must show that he ■ has issued an execution into the county where the property is situated, and obtained a specific lien thereon, by the *487actual or constructive levy of the Sheriff.” As the aid of the Court is sought to enforce a legal lien, “ it is indispensable it should appear from, the bill that this legal' lien then exists.” (Id., 568, 569.)

This rule is stated in terms as explicit, in Greenwood v. Brodhead, (8 Barb., 597,) and in Crippen v. Hudson. (3 Kern., 167.)

For these reasons, I think the action cannot be maintained to reach personal property, in its nature liable to be taken upon an execution, or the choses in action of the judgment debtor.

The assignment in question includes only these two kinds of property, viz., leviable personal property and choses in action. The judgment appealed from, does not profess to affect any other property.

It is true, that the Code allows proceedings supplementary to execution to be instituted, when the execution has been actually returned unsatisfied, although the return day has not elapsed. (§ 292.)

And there would seem to be no reason for not allowing an action to be commenced, when the right to institute such proceedings is perfect.

But in all cases in which they have been instituted in this Court before the return day of the execution, this Court has discharged them on its being made to appear that the execution had been prematurely returned at the request of the plaintiff's attorney. The Court requires a return by the Sheriff, made in the discharge of his duty, upon his own responsibility, and will not grant an order under section 292 of the Code, before the return day of the execution, when the return has been procured by the attorney.

If that practice, (which is supposed to be in harmony with the rule which requires a creditor to exhaust his remedy at law before going into a court of equity,) be correct, then the Code has not, (even by implication,) so changed the preexisting practice, as to authorize a creditor’s suit to reach choses in action, to be instituted before the return- day of the execution, when its earlier return has been procured by the interference of the attorney.

If the rule, as uniformly stated and applied, that to reach leviable personal property it is essential to give jurisdiction that the plaintiff has obtained a lien upon it, existing when the action is commenced, is to be adhered to; then the present action cannot *488_ be maintained, in so far as it respects such property, as the plaintiff lJhad ho such hen when it was commenced.

I think, that the “return day ” of an execution issued under the Code is as certain, in fact and in law, as one issued under chapter 386 of the Laws of 1840. By section 24 of the latter act, (Laws of 1840, p. 334,) “ writs of fieri facias ” * * “ shall be made returnable sixty days from the receipt thereof by the Sheriff or other officer to whom the same shall be directed.”

By section 290 of the Code, “ the execution shall be returnable within sixty days after its receipt by the officer, to the clerk with whom the record of judgment is filed.”

Under the act of 1840, the execution, in the body of it, declared that it was returnable sixty days from its receipt by the Sheriff, lender the Code, an execution, by section 289, need not declare in the body of it when it is returnable. The return day is declared by a general statute, viz., Code, section 290. •

The return day of a writ, is that on which, by law, it is declared to be “ returnable.”

If not returned on or before the sixtieth day after its receipt, the officer may be sued in case. (2 R. S., 440, § 77; 4 Sand., 67; 3 Seld., 550.)

He cannot be sued or attached for not returning it at an earlier day. (Rule 6 of the Rules 1854, and Rule 8 of the Rules of 1858.)

The execution in this case, is made by law “ returnable ” within sixty days after it was received by the Sheriff. He is required by statute to indorse on it the date of its receipt by him. The Sheriff, if he returns it before the sixtieth day after its receipt by him, returns it at his peril. He cannot be compelled to return it, nor be sued for not returning it sooner. It continues in force during the sixty days after its receipt, and may be levied as well on the sixtieth day after, as on the day of its receipt.

. Its return day is as fixed and certain under, as before the Code.

“Returnable” “sixty days from” its receipt, and “within sixty days after its receipt,” mean the same thing.

The Code does not say, that the Sheriff may return it at any time within sixty days after its receipt; but, on the contrary, fixes its return day, by declaring when it shall be “returnable.”

*489A writ can have but one return day, and that is the day on which, by its terms or by general law, it is made “ returnable."

I think, therefore, that under the act of 1840, and under the Code, the return day of an execution is as certain in intendment of law, as of on"e issued prior to the act of 1840.

And that a return of an execution (issued under the Code) within seven days after its receipt by the Sheriff, on the request of the plaintiff’s attorney, no more exhausts a creditor’s remedies at law, than an equally prompt return, by the like interference, of an execution issued under the act of 1840, or before that act was passed.

If the practice, which is understood to be observed by the Courts generally, that proceedings supplementary to execution cannot be upheld, if instituted before the return day of the execution, when such earlier return has been procured by the interference of the attorney, be in harmony with a correct interpretation of section 292 of the Code, then it would seem to follow that this action was commenced before it could have been commenced under the law as it was prior to the Code, and before there was any right to commence it under the Code, even conceding the former practice to be so far modified by the Code that the right to bring a suit is perfect, whenever the right to institute proceedings under section 292 is absolute.

For all practical purposes, this action was commenced as early as the 26th of July, 1856.

The plaintiff then appeared in Court with his verified complaint, and upon that alone applied for and obtained an injunction. Without the presentation of a complaint on the application for an injunction, none could have been granted. (Code, § 219.)

From the granting of that, the Court acquired jurisdiction of the action and of the proceedings therein, (§ 139,) for certain purposes, though not an effectual jurisdiction (for all purposes) of the persons of the defendants, until the summons had been served, or they had voluntarily appeared.

If, on the 27th of June, the defendants, with knowledge that the injunction had been granted and of its contents, had disposed of the property in question with intent to evade it, and expecting immunity from the fact that the summons had not then been *490served, it is by no means clear that they could not have been punished for a contempt. (The People v. Sturtevant, 5 Seld., 277, 278; The People v. Compton et al., 1 Duer, 553, and cases cited at the foot of that page.)

The right to maintain this action is opposed, therefore, by the facts: 1st. That the execution was returned in seven days after it was issued, and “ was so returned by the request óf the'plaintiff, by his attorney, in writing.” Ho attempt was made to execute it.

2d. On the 26th of July, 1856, the plaintiff applied to a Judge of the Court for and obtained an. injunction in this action, that being the fifty-fourth day after execution issued, and six days before its return day. The injunction was granted on a complaint in this action which was verified on the previous day.

3d. The summons, complaint and injunction were served on the 1st of August, the return day of the execution. That being done, it cannot be denied that certain proceedings were taken in the action before the return day of the writ, and that the whole proceedings are based upon a return made by the Sheriff, not in the responsible discharge óf and according to his convictions of his official duty, but upon the written request of the plaintiff, which would be an answer to an action brought by the-latter for a false return.

Under such circumstances, I think the action cannot be maintained without overruling adjudged cases; either as an action to reach leviable property on which the plaintiff had a legal lien, when it was commenced, or as a creditor’s suit to reach choses in action, after the issuing and due return of an execution unsatisfied,

Entertaining these views, and not feeling at liberty to disregard established practice which section 469 of the Code continues in force, I think the judgment should be reversed and a new trial granted.

■Judgment affirmed.