author: Pierrepont, J. Hoffman, J.

text:
    Erastus D. Thayer v. James C. Willet, Sheriff.
    1. In an action against a Sheriff to recover the possession of personal property which the latter has seized under an attachment issued in an action on contract, pursuant to the Code, against the plaintiff’s vendor; the Sheriff may allege in his answer and show by way of defense that the transfer to the plaintiff was made with intent to defraud the creditors of his said vendor, having first shown the existence of a debt by such vendor to the plaintiff in such attachment, and that the attachment was duly and regularly issued and executed.
    (Before Hoffman, Pierrepont and Moncrief, J. J.)
    Heard, October 28;
    decided, November 12, 1859.
    This action comes before the Court on a question of law arising at the trial, and there ordered to be first heard at General Term. It was tried before Mr. Justice Slossoh and a jury on the 21st of May, 1859.
    The action is brought to recover the possession of goods and chattels which the complaint describes, and alleges the defendant wrongfully took and wrongfully detains, and are of the value of $2,000.
    The answer of the defendant puts at issue these allegations, and then states as a separate defense that on the 26th of June, 1857, one Mason A. Perkins owed Joseph and William Rosenthal $818.62 on contract; that they on that day sued Perkins in the Supreme Court to obtain a judgment therefor; issued to defendant then being Sheriff, &c., a summons in that action to be served, and obtained duly from a Judge of the Supreme Court a warrant of attachment against the property of Mason and delivered it to the defendant to execute; that such warrant specified as the grounds for issuing it “ that said Mason kept himself concealed within the State of New York with intent to defraud his creditors and to avoid the service of a summons;” that defendant as such Sheriff seized the goods in question under and by virtue of said attachment; and avers that when so seized they were “ the property of the said Mason A. Perkins, or that he had a leviable interest therein, or that said goods and chattels were liable to be levied upon and taken under and by virtue of said attachment.” That the plaintiff, on the goods being so attached and taken, claimed an immediate delivery thereof to himself and obtained it, as provided by chapter 2, of title 7, of part 2, of the Code, and it prayed a return and redelivery of the goods to the defendant, and damages for the detention thereof.
    At the trial, the plaintiff read in evidence a bill of sale of the goods from Mason A. Perkins to himself, dated June 12, 1857; and gave'evidence tending to. show that the sale and transfer were made in payment of a preexisting debt; that possession was taken on the execution of the bill of sale; that the defendant took them from plaintiff’s possession on the 26th of June, 1857, and detained them until they were redelivered to the plaintiff by the Coroner, by virtue of proceedings had in this action under the Code, and that they were worth $1,000, and rested.
    The defendant then offered to prove the facts stated in his answer, in respect to Perkins’ owing the Rosenthals, and the commencing of a suit by them against Perkins therefor, the issuing of the attachment and the regularity of the proceedings in respect thereto, that the defendant took the goods by virtue of said attachment, and further that said bill of sale was fraudulent and void as against Perkins’ creditors, and especially the Rosenthals, as being made with intent to hinder, delay and defraud them of their lawful suits, damages, debts and demands, and that the plaintiff in this action had notice of such alleged intent.

      The plaintiff objected to this evidence on the ground that the Rosenthals were not judgment creditors of Perkins, but were only simple contract creditors, and as such could not attack the validity of the bill of sale; and that the defendant was not in a position, by reason of his holding said attachment and havingtalcen the goods under it, to attack the bill of sale or question the plaintiff’s title under it.
    The Judge sustained the objection and excluded the evidence, and the defendant excepted.
    The jury thereupon found a verdict for the plaintiff, and assessed the value of the property at $1,000; damages for its detention being waived.
    The Court then ordered the exception so taken to be first heard at the General Term, and the entry of judgment in the meantime to be suspended.

      Wm. Curtis Noyes and A. J. Vanderpool, for defendant.
    I. The decision in Hall v. Stryker, (2 Dist., G. T., opinion by Justice Brown,) was cited and acted upon at the trial, and is a direct authority against the right to attach.

    We submit that this case ought not to be followed, nor in any wise sanctioned. It is opposed to all prior decisions upon the point, and overlooks the principles and policy of the attachment statutes. It renders the remedy by attachment of comparatively little benefit to the creditor.
    II. By section 227 of the Code, an attachment may be issued:
    1. Against a foreign corporation.
    2. Against a non-resident.
    3. Against an absconding or concealed debtor.
    4. Against a defendant, who is about to remove his property from the State.
    5. When he has assigned, or disposed of, or secreted, or
    6. When about to assign, or dispose of, or secrete his property with intent to defraud his creditors.
    It issues against the two classes, one who have a facility (by reason of their non-residence), the other, who have shown the disposition to evade the payment of their debts, and against whom the ordinary legal remedies, with the delays incident thereto, would probably be unavailing. The ground of the writ has no effect upon its form, or the proceedings and duties and rights of the officer under it. Its object is to give the creditor a lien, or, as it is by the same section declared to be, “a security for the satisfaction of such judgment as the plaintiff may recover.” The creditor cannot avail himself of this lien by having the property sold and applied in payment of his debt, until he has pursued his action to judgment and execution. His lien enables him to and protects him in retaining his debtor’s property within the jurisdiction of the Court. .(Storm v. Waddell, 2 Sand. Ch. R., 494; Peck v. Jenness, 7 How. U. S. R., 612.)
    III. The effect of sections 231 and 232 is to give the officer the same authority to take the defendant’s property, and hold it as a security pendente lite, as he has under an execution, to take and sell. It may be levied upon any property which the law will allow the creditor to reach by levy under execution, or proceedings supplemental thereto. (McKay v. Harrower, 27 Barb., 463, 469.)
    The statute gives the creditor, by virtue of the levy under the attachment, a provisional lien upon the specific property of his debtor, to the extent of the judgment he may subsequently recover. It is authorized to be fastened upon the property in invitum, before the demand is established by judgment. When sold under execution, the title relates to the time of the levy under the attachment (Coffin v. Ray, 1 Metc., 212.) There is no difference between the lien acquired on a levy under an attachment and under an execution. (Van Loan v. Kline, 10 Johns., 129-131; American Exchange Bank v. Morris Canal Banking Co., 6 Hill, 362-366; Grosvenor v. Gold, 9 Mass., 209, 210; Drake on Attachment, §§ 221, 226, 233; Martin v. Dryden, 1 Gilm., 188.)
    IV. It is said, however, that “ the attachment only directs a levy upon the property of the debtor.” Is not the command of the attachment to the Sheriff the same in substance in an attachment as in an execution? But property transferred in fraud of the rights of creditors, although valid as to the debtor, remains, so far as the creditor defrauded is concerned, the property of the debtor, as to him the transfer is void, and as if the possession had remained unchanged. The command of the two kinds of

      process being the same, the authority to take is also the same, except where the statute has provided otherwise. (Pratt v. Wheeler, 6 Gray, 520; Handy v. Dobbin, 12 Johns. R., 220.)
    This is a remedial statute, and is to be construed liberally. (Roberts on Fraud. Conv., 542.)
    V. There are occasionally general expressions used by the judges, to the effect that in order to enable the creditor to attack the fraudulent conveyance, he must have first established his debt by a judgment and execution. But in none of these cases has the creditor claimed under an attachment, or any process by which the property of the debtor is made immediately or ultimately liable to be appropriated in satisfaction of the debt. They claimed, not as creditors who had pursued their legal remedies, and had the property placed in custodia legis, acquiring a lien, but merely as creditors at large, as in Andrews v. Durant, (18 N. Y. R., 496,) and Reubens v. Joel, (3 Kern., 488,) or were like the cases of- Frisbey v. Thayer, (25 Wend., 396,) and Hastings v. Belknap, (1 Denio, 190,) in which a landlord proceeded, not as a creditor, but with a distress warrant under a special statute. His rights as a creditor are entirely distinct. (See Mr. Nash’s points, submitted herewith.)
    VI. The Courts of this State have uniformly held, that the officer could, under an attachment issued, pursuant to the statute relative to absconding and fraudulent debtors, attach and seize property in the hands of a fraudulent vendee, and maintain his lien upon it until judgment and execution. (Noble v. Holmes, 5 Hill, 194; Van Ftten v. Hurst, 6 id., 311; Halsey v. Christie, 21 Wend., 9; Cross v. Phelps, 16 Barb., 502; Miller v. Brinkerhoff, 4 Denio, 118; Van Kirk v. Wilds, 11 Barb., 520; Clute v. Fitch, 25 id., 428; Batchellor v. Schuyler, 3 Hill, 386; Falconer v. Freeman, 4 Sand. Ch. R., 565; Handy v. Dobbin, 12 Johns. R., 220; Wilson v. Forsyth, 24 Barb., 119.)
    There is no difference between the rights of the officer, whether acting under an attachment issued pursuant to the Code, or under the statutes previously in force. The provisions of the different statutes are substantially alike in this respect.
    VII. The decisions of the Courts of sister States, where the attachment is resorted to as one of the modes of legal proceeding to enforce the payment of debts, distinctly declare the right of the officer to seize the property in the possession of the fraudulent vendee. (Damon v. Bryant, 2 Pick., 411; Pratt v. Wheeler, 6 Gray, 520; Owen v. Dixon, 17 Conn., 492; Angier v. Ash, 6 Foster, 99; Halsey v. Whitney, 4 Mason, 206, 211; Warner v. Norton, 20 How. U. S. R., 448; Tappan v. Evans, 11 N. H. R., 811.)
    VTTT- Upon principle, as well as upon authority, an attaching creditor can compel an officer to levy upon property in the possession of a party other than the debtor, where such party claims under a transfer from the debtor which is fraudulent and void as against his creditors. The statute relative to fraudulent conveyances does not say that the transfer shall be void only against judgment creditors; on the contrary, the transfers are void as to all creditors who signify their election to treat them as void, by adopting the process which the law provides, to enable him to avail himself of the property thus fraudulently transferred, so as to have it immediately or ultimately applied to the satisfaction of his debt. This is the class of persons referred to in the statute as creditors. Our law, beside the judgment and final execution, has provided the attachment process, whereby the creditor does not avoid the transfer immediately, but he can acquire the right, in certain cases provided by law, to have the property placed in custodia legis pending the action. (Jackson v. Myers, 18 John. R., 425; Owen v. Dixon, 17 Conn., 492; Halsey v. Whitney, 4 Mason, 206-211; 2 R. S., 136; Clapp v. Leatherbee, 18 Pick., 181.)
    1. The statute which requires the Sheriff to retain the property seized under an attachment where a claim is interposed, and an indemnity given against the claim, is an affirmance of this view. The Sheriff can retain the property, notwithstanding the claim, even where no indemnity is given. (Chamberlain v. Beller, Ct. App., notes of decisions; Bachellor v. Schuyler, 3 Hill, 386; People v. Schuyler, 4 Comst., 173.)
    2. We are further sustained by the fact, that one ground for granting the attachment is, that the debtor has fraudulently transferred his property.
    3. If the right to attach does not exist where the debtor has made a fraudulent transfer, then the debtor has only to vest the 'legdl title to his property in another by the most fraudulent contrivance known, and betake himself beyond the jurisdiction of the Court, and the property will be fully protected.
    4. Where the summons is not personally served on the debtor, the" judgment recovered by publication only allows the property attached to be applied on the judgment. (Thomas v. Merchants' Bank, 9 Paige, 216, 218; Corey v. Cornelius, 1 Barb. Ch. R., 571; Cochran v. Fitch, 1 Sand. Ch. R., 142; Martin v. Dryden, 1 Gilm., 188.)
    IX. It is true that a Court of Chancery will not ordinarily lend its aid to a creditor, to obtain satisfaction of his debts out of property not liable to be levied on by execution, unless he show an execution on his judgment returned unsatisfied. This has been the rule in England, where the remedy by attachment has not until very recently existed. The only attachment process which has existed there,'has been that issued under the custom of London, the object of which was to procure the defendant’s appearance, and when he did appear, and put in special bail, the attachment had served its purpose, and was of no further use. Here, however, we are acting under a power conferred upon a creditor by statute, who is pursuing his rights in a Court of law. We seek the benefit of a specific lien. But the Court of Chancery, on a bill filed to remove a fraudulent obstruction, always, where the attachment process has existed, recognized the lien acquired by an attaching creditor on the property fraudulently transferred, and the lien of the judgment, when recovered, related back to the time of levying the attachment. Wherever the law gives a lien, the party can go into chancery whenever necessary to obtain the benefit of it. (Wilson v. Forsyth, 24 Barb., 119; Falconer v. Freeman, 4 Sand. Ch. R., 565; Scott v. McMillen, 1 Littell, 302; McElwain v. Willis, 9 Wend., 548; Tappan v. Evans, 11 N. H. R., 311; Kittridge v. Warren, 14 id., 509; Hunt v. Field, 1 Stock., 36; Stone v. Anderson, 6 Foster, 506; Drake on Attachment, 225, 2d ed.)
    X. The necessity which is referred to by the Court, in the opinion in Hall v. Stryker, of producing the judgment, where the officer justifies a levy under execution, against the claim of a third person, is to show, first, that he is a creditor, and, second, that he has valid process. This necessity of establishing both of these grounds in the case of an attachment is conceded, and were offered to be proven on the trial in the only mode in which it can be done.
    XI. The argument drawn from the inconvenience of having two issues upon the record, 1st, as to whether the party is a creditor ; and, 2d, as to the fraud, is not entitled to any weight. It is not unusual to have a double issue, so to speak. Suppose goods which have been fraudulently purchased are afterwards found in the possession of a third person who claims as a bona fide purchaser. Two questions must be tried, 1st, original fraud, and yet the original vendee is not before the Court; and, 2d, as to bona fides and want of notice in the second purchaser. If hardships, they must be endured, in order to promote the administration of justice. (Hunt v. Field, 1 Stock., 36, 39.)
    The exception should be sustained, and a new trial granted.

      E. & E. F. Brown, for plaintiff.
    I. No foundation was laid for proving the attachment and preliminary proceedings.
    The plaintiff had shown a bill of sale to him of the property, prior to the attachment, payment of the consideration of the sale, and actual possession taken, leaving no ddubt that the transaction was valid betw die parties; that plaintiff’s title was good as against Perkins.
    II. The plaintiffs in the attachment suit have not recovered judgment against Perkins, and never may; and if the doctrine, as contended for by the defendant’s counsel, be the law, the Sheriff (should the Rosenthals fail eventually to obtain judgment) might keep the property of the plaintiff, which he has attached, without accountability to any one.
    In the first place, Perkins could not recover either of him or the Rosenthals, for the plain reason that long before the Sheriff attached the property, he had sold the same to Thayer, and received the full purchase price, and delivered possession thereof.
    Again, the Rosenthals could not recover of the Sheriff after failing in their suit against P'erkins; because, first, they would have no debt or judgment to be satisfied, or on which it could apply, and would not be accountable over either to Perkins or Thayer. And, lastly, if Thayer should sue the Sheriff for the property a second time, after failing to recover in this action, the Sheriff might successfully plead the determination of this action for the same property in bar of any recovery on a second suit. (Embury v. Conner, 3 Comst., 511.)
    In such case the Sheriff would hold the property as a kind of godsend, illustrating very clearly the unsoundness of the doctrine contended for by the defendant’s counsel and claimed to be law.
    ■ -HI. In point of fact, no evidence was excluded that could by any possibility have varied the plaintiff’s case, or his right to recover, unless the defendant had also controverted some of the facts established by the plaintiff.
    No evidence being' given, or offered to be given, to disprove " the case so made by the plaintiff, the evidence offered was wholly immaterial.
    IV. But the main ground relied upon, is, that the defendant, without first showing a judgment, was not in a situation to attack the sale of Perkins to plaintiff, after he had shown a title good as against Perkins. (See the following authorities: Jackson v. Cadwell, 1 Cow. R., 622; Parker v. Walrod, 16 Wend., 514; High v. Wilson, 2 John. R., 46; Frisbey v. Thayer, 25 Wend. R., 396; Cow. Tr., vol. 2, p. 287, and cases there cited; Crippin v. Hudson, 3 Kern., 161; McElwain v. Willis, 9 Wend., 548; Cow. & Hill’s Notes, 739, 1079-1082.)
    The cases above cited all hold that the defendant, to justify, must have a judgment before he will be allowed to attack a sale, good as against the vendor, but claimed to be fraudulent as to creditors.
    The rule in equity has been uniform, that before a conveyance, good as between the parties, can be assailed by creditors, the party assailing must be a judgment creditor. (Crippin v. Hudson, supra.)

    There is not a case to be found under our attachment laws, where the question involved in this case has been distinctly presented and decided.
    The case of Van Etten v. Hurst, (6 Hill, 311,) arose on demurrer to a plea of justification of the talcing of property under an attachment from a Justices’ Court. The pica was held to be bad on two grounds: First, because it did not allege that the defend ant in the attachment was a non-resident of the county.; and, secondly, because it did not allege that the plaintiff in the attachment was a creditor of the defendant.
    Justice Bronson, who delivered the opinion of the Court, says, that “to attack the sale on the ground that, although it may be good as between the parties to it, it was fraudulent and void as against creditors, the party must show a judgment as well as an execution.”
    The decision of that point was all that was necessary to be decided in that action to show that the plaintiff was entitled to judgment on the demurrer.
    It is true that Judge Bronson adds, {obiter,) that when-the proceeding is by attachment, “they must show that the Justice had jurisdiction, and that the process was regularly issued;” but as the remark was unnecessary to the decision of the question, it is not an authority to show that a simple contract creditor, without a judgment, could attack the title of the vendee of property, having a title good as against the vendor, but claimed to be fraudulent as against creditors.
    The rule at most is a rule of protection in behalf of officers in making their defense; but when they bring suit for the recovery of property attached, they are bound to show a valid judgment and valid process. (Earl v. Camp, 16 Wend., 562.)
    The case of Noble & Eastman v. Holmes, (5 Hill, 194,) does not decide that a simple contract creditor, or one claiming to be such, can attack the sale of property by his debtor, good as against him, but is an authority for the plaintiff.
    If a creditor wishes to impeach the sale of his .debtor’s real estate, on the ground of its being fraudulent as against creditors, he may sell the land on execution, and after obtaining a deed, bring ejectment for the land, and thus raise the question of fraud; or he may file a bill against the debtor and his fraudulent grantee, and try the question of fraud in that way; but in either case he must first obtain a judgment. Gases of the latter kind have been of frequent occurrence; but it is believed that no case can be found where a plaintiff in an attachment suit was ever allowed to sustain a bill to set aside a conveyance good as against the grantor or vendor, before he had obtained a judgment.
    If .the Sheriff can .try the question of fraud against creditors in this suit, without first showing a judgment, such a bill might have been filed by the attaching creditors before judgment, and the fact that no other than an alternative decree could be made in such suit, proves the soundness of the rule established by the Courts, that judgment creditors only can attack a sale alleged to be fraudulent as against creditors.
    The fact that such a contingency might arise, shows the necessity of the rule adopted by the Court in this case. (23 Wend., 480; Brinkerhoff v. Brown, 4 John. Ch. R., 671; Clarkson v. Depeyster, 3 Paige, 320; Cuyler v. Moreland, 6 id., 273 ; Beck v. Burder, 1 id., 305.)
    The last four cases cited above were creditors’ bills filed after judgment.
    It is held, however, in McElwain v. Willis, (9 Wend., 548,) that where the bill is filed to remove a fraudulent obstruction, it must show that the property is leviable at law on execution.
    There must always be a judgment as the foundation of such a suit but even a judgment and execution, returned unsatisfied, rendered in another State, or in the United States’ Court, will not authorize the filing of a bill. (Tarball v. Griggs, 3 Paige, 207.)
    Where proceeding is by attachment to obtain judgment, a creditor’s bill will not lie even after judgment obtained. (Thomas v. The Merchants' Bank, 9 Paige, 216; Corey v. Cornelius, 1 Barb. Ch. R., 571.)
    We submit to the Court that the exceptions of the defendant should be overruled,, andi a new trial denied.

       Since reported, 89 Barb., 105.

   Pierrepont, J.

This case presents the single question whether a Sheriff, acting under a warrant of attachment, regularly issued in an action,, pursuant to- the provisions of the Code, and who has attached property in the possession of a vendee, claiming title under a bill of sale from the debtor,, can show in defense of a suit against him by such vendee,, to recover the property, that the alleged sale was fraudulent as against creditors..

By section 227 of the Code, an attachment may be issued :■

1. Against a foreign corporation..

2.. Against a non-resident..

3. Against an absconding or concealed debtor.

4- Against a defendant who is about to remove his property from the States

5. When he has assigned, or disposed of, or secreted, or,

6. When about to assign, or dispose of, or secrete his property, with intent to defraud his creditors.

The warrant may issue when, by affidavit, it shall appear that a cause of action exists against the defendant, and the grounds and amount of the claim are specified, &c. (Code, § 229.)

Before issuing the warrant, an undertaking with sufficient surety is required. (§ 230.) And the warrant shall be directed to the Sheriff, and shall require him to attach and safely keep such property of the defendant as may be sufficient to satisfy the plaintiff’s demand, including costs and expenses. (§ 231.) And the Sheriff is required “ to keep the property seized by him to answer any judgment which may be obtained in such action.” (§ 232.)

If the writ under which the Sheriff took this property had been an execution instead of a warrant of attachment, he could have given evidence that the sale to the vendee, Thayer, was fraudulent and void as against the creditors of Perkins. This proposition is too familiar - to require any reference to authorities.

An execution is directed againt the property of the defendant. The same is true of the warrant of attachment. But it is urged that an execution is founded upon a judgment, by which the relation of debtor and creditor is established, while the warrant of attachment rests upon an alleged claim, supported only by ex parte affidavits sufficient to obtain the warrant, and to make a prima facie case which a trial may disprove.

Now, what did-the Legislature intend by these provisions of the Code?

When this statute was passed, the law relating to sales and transfers of property, with intent to defraud creditors, had long been in force, and all such sales were void. The Sheriff who had seized property under a fi.fa., might, in an action against him by the vendee of the defendant, show that the title of such vendee was fraudulent as against creditors.

This being the well settled and long established law, the Legislature enacts, that when a defendant “ has assigned or disposed of his property with intent to defraud his creditors,” an attachment (on proper application) may issxie, and the defendant’s property be held by the Sheriff to answer any judgment which may be obtained in the action. Did the Legislature intend to say that a fraudulent assignment of a man’s property should be a ground for an attachment, and yet that the fraudulent assignee could forthwith take such property from the Sheriff or sue him in trespass, and the Sheriff have no right to set up the fraud in defense o'f his lien and his right to hold the goods ?

A owns a store of goods of great value; just before 3 o’clock he- goes to B and borrows $20,000, and gives his check payable the next day. . On the following morning A transfers his entire stock of goods to his son by bill of sale, duly executed, .for the consideration of one dollar ‘and love and 'affection. The son ■takes possession, and the father retires, and refuses to pay his check. B obtains a warrant of attachment on the ground that A has disposed of his property with intent to defraud his creditors. The Sheriff seizes the goods in possession of -the son, who thereupon sues the Sheriff for the value of the goods; proves the bill of sale and possession. The Sheriff offers to show the sale fraudulent, but "is met with the objection that the transfer as between the father and son is good, and that B is not a “ judgment creditor,” and hence no evidence of fraud in the sale can be admitted. In my judgment, the intention of this statute is clear. Its plain meaning is that a creditor, whether by judgment or otherwise, upon giving the requisite bond and making the requisite affidavit, shall have the right to cause the Sheriff to attach the property of the defendant, and keep it to answer any judgment which may be recovered in the action. A transfer of property with intent to defraud creditors, is void; not void as to judgment creditors alone, but as to all creditors; the statute makes no distinction. A transfer which is void conveys no title. The moment the attachment issues, the plaintiff in the attachment is, prima facie, a creditor, and has, so far as the attachment is concerned, all the rights of a judgment creditor, until his prima facie claim is defeated.

If the plaintiff in the attachment does not prove his claim, he fails in the action, and the Sheriff holds the property ready to be returned to the vendee from whom it was taken, or he responds in such damages as the law awards. ' But if the plaintiff in the attachment succeeds, and the title of the vendee is adjudged fraudulent, then the property is applied to .the payment of the judgment which the attaching creditor has recovered, and no injustice is done, and the intention of the law is-satisfied.

Under the statute relating to absconding and fraudulent debtors, attachments have repeatedly been issued, and our Courts seem to have recognized the right of the Sheriff to maintain his lien upon property attached in the hands of a fraudulent vendee until a determination of the action.

In the case of Falconer v. Freeman, (4 Sand. Ch. R., 567,) the Court say: “ The complainants, although creditors at large, have acquired a lien upon Freeman’s property by this attachment; it is as valid and effective a lien in favor of all creditors as is made in favor of a plaintiff at law by the issuing of an execution, which he is prevented by some fraud of his debtor from levying on movable property.”

In Noble v. Holmes, (5 Hill, 194,) Judge Bronson says: “ The sale could not be impeached by a creditor at large. It must be a creditor having a judgment and execution or some other process which authorizes a seizure of the goods.

“Asa general rule, process regular upon its face is sufficient for the protection of the officer, although it may have been issued without authority. But when the officer attempts to overthrow a sale by the debtor on the ground of fraud, he must go back of his process and show authority for issuing it. If he act under an execution he must show a judgment, and if he seizes under an attachment he must show the attachment regularly issued.”

The same principle was recognized in Van Etten v. Hurst, (6 Hill, 311,) and also very directly by Judge Harris in Van Kirk v. Wilds. (11 Barb., 520.)

The case of Warner v. Norton et al., came up by writ of error from the Circuit Court of the United States for the Northern District of Hlinois, and the Court held, that

“Where a Sheriff was sued for taking goods under an attachment, which goods had been previously assigned under circumstances which were alleged to be fraud nlent, it was proper for the Court to charge the jury, that if they believed from the evidence that the sale was made for the purpose of hindering, delaying or defrauding creditors, it was invalid as against the defendant; and that whether the sale was or was not fraudulent was a question of fact to be determined by the jury under all the circumstances of the case. (20 How. U. S. R., 448.)

• An execution directs the Sheriff to take the property of the defendant. The warrant of attachment does the same. The command in each writ, in this respect, is identical, and the authority to take is the same. Under the present statute, the warrant has even a greater power than an execution. It reaches all things which an execution might take, and debts, equities, things intangible besides.

In Handy v. Dobbin, (12 Johns. R., 220,) Spehcer, Ch. J., says: “There can be no doubt that the constable under the attachment could take any goods and chattels which could be levied on by execution. The authority in both cases is the same.”

Mr. Justice Welles, in McKay v. Harrower, (27 Barb., 463, 469,) says: “ An attachment issued under the Code, is more in the nature of the former writ of fieri facias, as to its object and effect, than of any other common law writ.” “ It is in effect an initiatory execution against the defendant’s property before judgment, and issued in anticipation thereof.”

The case of Pratt v. Wheeler, (6 Gray Mass., 520,) was recently decided by the Supreme Court of Massachusetts. In that case it appeared that a tenant in possession of real estate claimed title under a levy upon the premises as the property of Taft & Gleason, made the 6th of July, 1855; that the action against Taft & Gleason was commenced by “general attachment,” dated April 3d, 1855. •

Prior to the attachment, and so early as October, 1854, Taft & Gleason had conveyed this property to one Bancroft, by deed, which was duly recorded. Bancroft conveyed the premises to Edward Lamb, by deed, dated March 24th, 1855, which was also duly recorded prior to the attachment.

Upon the trial, the tenant offered to prove that the deed from Taft & Gleason to Bancroft, was made without consideration and to protect the property of Taft & Gleason from attachment, and contended that it was therefore void as against their creditors. The Judge, before whom the action was tried, admitted the evidence, and submitted the question of fraud to the jury, who found in favor of the tenant. Exception was taken, and on the hearing above, Chief Justice Shaw, delivering the opinion of the Court, says:

“ The Court are of opinion that the attachment on mesne process, though in general terms, was sufficient to bind the estate if afterwards levied on.” * * * “ It is stated in the argument that this rule ought not to apply, when the estate attached does not stand in the name of the debtor. No authority is cited for this distinction. Perhaps it is founded on the supposed misdescription in the return, as 1 of all the interest of Taft & Gleason, ’ the defendants, while they had conveyed it away and had no interest. But it seems to us that this distinction cannot be sustained. The theory of the law is, that such a deed, by a debtor to defraud creditors, passes nothing; for all purposes of attachment, the estate is the property of the debtor; it is attached as his, levied upon as his; the title, by force of the levy, passes directly from the debtor to the execution creditors. The intermediate deed is void; and therefore the estate is not misdescribed as the estate of the debtor, though such deed be on record.” The fact that in this case a judgment was obtained after the attachment, can make no difference in the principles upon which the Court based their decision.

In Lyon v. Sandford, (5 Conn. R., 548,) the Court held that “ the lien by attachment was as sacred as a lien by mortgage.”

In Owen v. Dixon, (17 Conn. R, 498,) the Court held that a creditor at large, without process, could not impeach a fraudulent conveyance; but that a creditor, having some process on which the property might be lawfully seized, and by which it is made liable, either immediately or ultimately, to be appropriated in satisfaction of the debt, could impeach such fraudulent conveyance : and that whether the process was attachment or execution made no difference. The case of Peck v. Whiting, (21 Conn. R., 206,) seems also directly in point. The statutes of Massachusetts and Connecticut, relating to attachments and fraudulent conveyances, are so like our own that their decisions bear directly upon the question before us.

In the late Court of Chancery, a bill to set aside a fraudulent conveyance would not lie in favor of one who claimed to be a creditor before judgment and execution; and such creditor could obtain no lien by filing his bill or Us pendens. And the same is now true of proceedings which are in the nature of the old creditor’s bill in equity; and hence it is asked why a creditor, before judgment, can obtain that indirectly by attachment which he could not obtain directly by bill in equity or its substitute ? The. answer is, that the statute gives him the right in the one case, and not in the other. Under the statute, the attaching creditor pursues his legal remedies, and acquires such rights or liens as that statute gives him. If his case does not come within the statute, he cannot avail himself of its provisions. There are many cases where a bill may properly be filed to set aside fraudulent conveyances in which no attachment could issue. But in a proper case for an attachment, where the creditor seeks Ms remedy under the law, and in conformity therewith obtains a warrant, and the Sheriff,'under such process, seizes goods as of the defendant, he acquires a lien upon those goods, if they are in fact the defendant’s. They are his if the sale was void. It was void, if made with intent to defraud creditors, and the Sheriff’s apparent lien and special property, with right of possession, will remain until that question of fraud can be tried, or until the plaintiff is defeated in his action. We think one of' the very objects of the statute was to reach in a summary way the debtor’s property fraudulently transferred, and to hold it safe in the custody of the law until the creditor-might have an opportunity to pro.ve his demand out of which the debtor was, by the sale, endeavoring to defraud him.

I have found no case reported in which it has ever been held that the sheriff’s special property or lien, acquired by seizure under a regular attachment, has ever been defeated by a vendee of the defendant in the action where the sale to such vendee was fraudulent as against creditors, and no case in which evidence of such fraud was excluded when offered by the sheriff in his defense.

The case of Andrews v. Durant, (18 N. Y. R., 500,) and the other cases where like remarks have been made in the course of the decisions, are not in conflict with this view. In none of those cases did the question of the Sheriff.’s lien or special property, by virtue of an attachment, arise; and the Court did not pass upon or in any manner seem to -have had their attention called to such a case.

I am aware that in the Second District, a General Term of the Supreme Court, held by three eminent Judges in this State, have held a contrary opinion in a case like this. (Hall v. Stryker, Sheriff.) Entertaining as we do, for the judgment of a Court so constituted, the highest respect, we are, nevertheless, compelled to differ in our construction of the statute.

A new trial should be granted, costs to abide the event.

Hoffman, J.

The case has been treated by the learned counsel on both sides as one of great importance, not only in relation to numerous actions, involving large amounts, dependent upon its determination, but as to the principles which it embraces, and the consequences which it entails. A decision of the learned Court of the second district, expressly to the point, has also been brought before us; and, as our conclusion is adverse to that decision, it is proper to state our course of reasoning with fullness and with care.

The defendant—the Sheriff of the county of New York—has seized certain goods upon an attachment, under the Code, issued to him in an action in this Court still pending. The plaintiff in the present action claims such goods under an assignment made prior to the attachment. The question is, can the Sheriff, the defendant in the present action, set up fraud in the assignment as a defense ?

The objection is urged, with great apparent strength, that none but a judgment and execution creditor is allowed to impeach an assignment or transfer of property as fraudulent; that the demand of a creditor must be first judicially determined; that the whole inquiry, trial, and expense of testing the question of fraud may turn out utterly useless, as the plaintiff in the -action may be defeated; and that thus principle, authority and expediency are repugnant to the allowance of the proposed defense.

These objections, with some others, are urged in the opinion of Mr. Justice Brown, in the case of Hall v. Stryker, (29 Barb., 105,) in which the General Term of the second district expressly decided the question before us, adversely to the claim of the defendant here.

The learned Judge presented the question thus: “I shall examine whether a person, claiming to.be a creditor, with a warrant of attachment under the Code, but with no judgment or execution for his debt, has a standing in Court which will enable him to impeach and litigate the Iona fides of a sale of goods by his alleged debtor to a third person, which has been consummated by transfer and delivery of the possession before the lien of the warrant attached ?” The case is then examined, and various propositions stated and argued, upon which the conclusion was arrived at denying the right of such a creditor. These are adverted to in the following opinion.

The Code has expressly authorized an attachment to issue when a person has assigned, disposed of, or secreted any of his property, with an intent to defraud creditors. The property is to be attached as security for a judgment which may be recovered by the plaintiff. (§ 227.) The affidavit under section 229 makes a case for the attachment when it appears that a cause of action exists, and that the party has assigned, disposed of, or secreted his property with intent to defraud his creditors. The warrant directs the Sheriff to attach and safely keep the property of the defendant within his county. (§ 231.) By section 232, he is to collect and receive into his possession all debts, credits and effects of the defendant, and may take such legal proceedings as may be necessary for that purpose, either in his own name or in that of the plaintiff.

In thus explicitly sanctioning an attachment when property has been fraudulently assigned, the Code appears to warrant, necessarily, "an inquiry into the fraud, and a contest with the aEeged fraudulent assignee; and it seems to warrant this upon the attachment merely.

Again, the case of an attachment differs from that of a simple contract creditor bringing an action to impeach an assignment, (Neustadt v. Joel, 2 Duer, 530; 3 Kern., 488,) in two important particulars. First, by the 229th section of the Code, a Judge is to issue the warrant “ when it shall appear by affidavit that a cause of action exists against the defendant, specifying the amount of the claim and the grounds thereof, and showing a case for an attachment.” Here is something of a judicial declaration that the plaintiff appears entitled to recover money, (§ 228;) in other words, that he is a creditor. Next, it cannot be questioned that the attachment constitutes a lien upon property levied upon in any mode, by actual seizure or otherwise, which is allowed by law.

The language of the 227th section is clear and comprehensive. The property which may be attached, (not actually seized,) is to be attached as security for the judgment which may be recovered.

In Peck v. Jenness, (7 How. U. S. R., 612,) the disputed question, whether an attachment was a lien within the 2d section of the Bankrupt Act, was determined. The Court say: “ An attachment on mesne process creates a charge on the property attached in favor of the plaintiff which is, in the language of the Courts and the statutes of New Hampshire, called a security and a lien.” Cases are cited to show its similar designation in Massachusetts and Connecticut. (See, also, the elaborate opinion of Vice-Chancellor Sandford in Storm v. Waddell, 2 Sandf. Ch. R., 494.)

And in McKay v. Harrower, (27 Barb., 463,) the writ is thus spoken of: “An attachment, under the Code, is more in the nature of the former writ of fieri facias, as to its object and effect, than of any other common law writ. It is, in effect, an initiatory execution against the defendant’s property before judgment, and is issued in anticipation thereof.”

It has been very justly observed that the statute as to fraudulent conveyances (2 R. S., 137, § 1,) does not prescribe that a creditor must have a judgment to entitle him to impeach "an assignment. Its language is that every conveyance, assignment, &c., made with intent to delay and defraud creditors of their lawful suits, damages, debts or demands, shall be void, as against the persons so hindered, delayed or defrauded.

And the statute of 13 Elizabeth, cap. 5, was similar in its language.

It has become a settled rule of law that a general creditor cannot avail himself of the statute until he has obtained a judgment and execution, (2 John. Ch. R, 144,) and the Revised Statutes (2 R. S., p. 173, § 41,) embodied this rule inferentially at any rate in express enactments.

Yet it seems clear that there is no statutory provision which prevents a creditor before judgment, who has obtained a statutory lien, from pursuing this course of redress.

I proceed to notice some important authority upon this point:

In Giddings v. Coleman, (12 N. H. R, 153,) such a course was sanctioned. “ It was a controversy in effect between a creditor seeking to recover a past debt by process of law and one claiming to be a creditor and bona fide assignee of the debt which was the subject of dispute. The latter must show that his assignment was bona fide and upon sufficient consideration.” Angier v. Ash, (6 Foster, 99,) is to the same effect. In Hare v. Anderson, (6 Foster, 506,) the point was decided, after a full consideration, that an attachment was such a lien upon property as enabled the creditor to file a bill to set aside a fraudulent obstruction. Kittredge v. Warren is cited as to the same effect. (14 N. H. R., 509.)

The case of Pratt v. Wheeler, (6 Gray R., 520,) is open to the criticism that a judgment had been obtained, but the language of the Chief Justice is very pertinent. “ The theory of the law is, that such a deed by a debtor to defraud creditors passes nothing; for all purposes of attachment, the estate is the property of the debtor; it is attached as his; levied upon as his; the title passes directly from the debtor to the execution creditor. The intermediate deed is void; and, therefore, the estate is not misdescribed as the estate of the debtor, although such deed be on record.”

The attachment law of New Jersey exists only, I believe, in cases of absconding and absent debtors. The provisions are similar to those upon the same subject under our own statute. (Revision of Laws of 1847, p. 49.)

The writ shall bind the property and estate of the defendant so as aforesaid attached from the time of executing the same.” There are provisions for trying a claim of property by ajury. _

_ By section 28, the proceeding cannot be discontinued without the consent of all the creditors who have'applied to the Court or Auditors. Proceedings are taken before Auditors to call in the creditors, and the fund is distributed among them.

The case of Hunt v. Field, (1 Stock., 36,) so much relied upon by the defendants, and the two cases cited by the learned Chancellor of New Jersey, are open to the remark that the process was to operate like a bankrupt act, and any creditor coming in could continue it in force. Yet with every qualification which may be suggested, the cases prove that the lien by an attaching creditor is enough to enable him (suing on behalf of himself and all others, &c.,) to obtain the aid of the Court of Chancery to interfere with the acts of an alleged fraudulent assignee; to protect the property, and by bringing in the debtor and assignee to settle the question of fraud and of indebtedness in one suit.

Dixon v. Hill et al, (5 Mich. R., 404,) was as follows: On the 2d of August, 1856, a general assignment was made by Lewis, which was conceded to be fraudulent on its face, as authorizing a sale on credit. The assignee sold goods to the plaintiffs,below upon a credit in notes of twelve, eighteen, twenty-four and thirty months. The sale was on the 24th of September, 1856. On the 3d of October, the goods were attached by the defendant as Sheriff as the property of Lewis. The plaintiffs below, the purchaser, had taken possession of the goods, but had not given the notes. An inventory was being made. The Court held, that no one but a creditor or purchaser for value could claim title to property, which had been fraudulently assigned, against the action of an attaching creditor, and the plaintiffs were not such purchasers before payment.

There is nothing in the statute of Michigan which renders the principle of this decision dependent upon any special provision. (Laws of Mich., 1846, p. 114, ch. 140 of Compiled Laws.)

In Peay v. Morrison's Executors, (10 Gratt., 149,) Austin Peay ■had executed a deed to his son William. The executors of Morrison commenced a suit by attachment in equity, to set aside the deed and for payment of their demand, which was of an equitable nature, and by a creditor at large. The Court say: “ The defendant below being a citizen ■ of a foreign State, sufficient ground was shown to authorize the plaintiffs to assail the deed, notwithstanding they had not recovered a judgment for their ■demand.

That demand was of a clearly equitable nature; and the provision of the statute of Virginia is, that equitable claims for money or property may be enforced by suit and attachment in Chancery, upon affidavit being made as in actions at law. (R. S., Va., 1849, p. 605.) The provisions and object of the Virginia statute are similar to those of the Code, an auxiliary remedy to an action for the benefit of the particular creditor.

Eaton v. Cooper & Smith, (29 Vt., 444,) was this case: The action was trespass for talcing goods. The plea of the general issue was accompanied with a notice, that the defendant Smith, .as Deputy Sheriff, had attached the property as belonging to Kimball, by direction of the defendant Cooper, attorney of creditors of Kimball, - and that the property belonged to Kimball. The plaintiff claimed under an execution.against Kimball, and a purchase.upon the same. The attachment was made on the 18th of February, 1852.. Testimony was given tending to show fraud in the purqhase by the plaintiff; that it was a cover for Kimball’s use,, and to defeat creditors. The Judge left this question to the jury, instructing them - that if they found this to be .the case, the plaintiff could not recover. This ruling- was not disputed in the Court above, but a new trial was granted on a .point connected with the misuse of the process by the defendants themselves, evidence as to which had been excluded.

. The statute law of Connecticut recognizes two kinds of attachment. The first .is. the process for commencing an action. “Attachments may.be granted against the goods and chattels of a defendant, and for want thereof against his lands, or against •his person when not exempt from imprisonment on execution in the suit.” (Compilation of 1854, p. 51.) Provisions are made for security, and for -the mode of attaching real and personal estate. Ho estate attached, is tobe held unless execution is taken out within, sixty days after .judgment. These enactments regulate the law in the cases-in which an attachment is the process for commencing a suit, and for the benefit of the particular creditor. There are .other distinct provisions termed Foreign Attachments. (Laws:of 1854, p. .130.) Under these, effects in the hands of a Trustee -are to be attached to answer the judgment if recovered.

The following cases, .out of many upon the subject in the Courts of Connecticut, may be referred to1 as very pertinent. In Potter v. Mather, (24 Conn. R., 551,) the action was trespass against the Sheriff and certain attaching creditors of one Potter. Evidence was given to show that the sale to the-plaintiff by the debtor Potter, was in fraud of creditors. The Judge at the trial left the question of fraud to the jury. The Court above supported his charge. “ The question was, whether there was a change of possession, and whether the sale was fraudulent and void as against the defendants, who were attaching creditors.”

Peck v. Whiting, (21 Conn. R., 206,) was trover by assignees of a debtor under an assignment for the benefit of creditors, The defendant, a Deputy Sheriff, claimed that the assignment was void against the attaching creditors, and various facts were relied upon at the trial to prove this. The whole case turned upon the point of fraud in the transfer. “ The question was, whether the goods could be held by the attaching creditors against the plaintiffs who claim under a previous assignment.”

Beers v. Lyon, (21 Conn. R, 609,) is a case of a similar character. It arose in trover against a Deputy Sheriff to recover goods taken by him under an attachment, and he defended on the ground of the fraudulent nature of the assignment to the debtor.

I do not know of any distinction between this part of the law of attachment in Connecticut and that under our own Code, except that in the former an attachment commences an action. Under the Code it is a remedy auxiliary to an action. I do not see any reason why the cases cited are not applicable on this account.

■ The case referred to, before Vice-Chancellor Saitdford, (Falconer v. Freeman, (4 Sandf. Ch. R, 565,) is an express authority that a creditor taking out an attachment under the act relative to absent and concealed debtors obtained such a lien upon the property as enabled him to file a bill in Chancery to enforce and. protect his lien, against fraudulent obstructing transfers, by means of an injunction or otherwise. The bill was by the attaching creditors, before trustees were appointed. The case is open to the remark that it was under the general act, operating as an insolvent or bankrupt act. It does not appear to me that this makes a valid and sufficient distinction.

The learned counsel of the defendant has referred us to an ancient record of the usages and customs of the Burgh of Yarmouth. (Bloomfield’s History of Norfolk, vol. II, pp. 337, 341.) The custom of attachment is recognized as having prevailed there as early as the reign of Edward I. The course of proceeding is stated with marked precision; and among the provisions is one, in substance, (article 13,) that, “ whereas divers times goods and chattels attached are supposed to be the goods of others, not of the parties defendants, in such cases the parties claiming to have property to those goods, to defeat the attachment made, and the actions and recoveries had by force thereof, are to be sworn in open Court, that the property which he or they claim, in such attached goods is only upon good cause and consideration, without fraud, covin, or deceit.” The claimant was to enter his plea in Court to that effect. If contested, issues were to be joined upon the plea, and a jury impanneled to try them. If the property was found in the claimants, according to the plea, the goods were to be released from the attachment and restored. Another clause provides for security being given by the claimants, whose property is supposed to be without fraud or covin, in special cases of injury from the property being withheld, that they will proceed to try the question of property within a certain limited time.

I think, also, that the case of Barber v. Devans et al., cited by Mr. Locke, (On Attachment, p. 41, note 5,) contains a principle to sustain this defense. On a plea of nihil habent, by garnishees, a question of fraud in the debtor in obtaining money which came to the garnishees’ hands was tried.

The numerous authorities cited by the defendants’ counsel as to attachments under the non-imprisonment act and other statutes, contain some strong expressions of the Judges in support of their position. I have examined"most of them. That of Van Etten v. Hurst, (6 Hill, 311,) states the proposition distinctly, and that of Van Kirk v. Wilds, (11 Barb., 520,) rñay be considered as exactly in point. The necessity of proving a debt, independently of the plaintiff’s affidavit, noticed in some of them, (25 Barb., 29,) is obviated in the present instance by the admission that the plaintiffs were simple contract creditors.

The legal rule established in Frisbey v. Thayer, (25 Wend., 396,) that a landlord with á distress warrant does not stand in the situation of a judgment and execution creditor, seems to me to furnish but a slight analogy to the present question, and to be very far from determining it.

A new trial must be had

Moncrief, J., concurred in the result.

Hew trial ordered, costs to abide the event.


source: Caselaw Access Project

author: By the Court—Moncrief, J.

license: Public Domain

text:
    Crosby et al, Plaintiffs and Respondents, v. The New York Mutual Insurance Company, Defendant and Appellant.
    1. In an action upon a marine policy upon a ship, to recover for a total loss, the ship having sunk at sea, it is not a defense that the insured sold and transferred his interest in her before she sunk, where it is shown that, prior to such transfer, she received an injury from the perils insured against, which rendered it impossible to keep her afloat, and made her subsequent actual loss inevitable.
    2. Where a vessel is so injured by the perils insured against that the assured has no means of saving her, and she subsequently sinks solely in consequence of such injury, the loss of the assured, from the time such injury is inflicted, is, practically and in substance, total, notwithstanding he may, in ignorance of the facts, have sold and transferred his interest in her after sho received such injury, and before she was actually sunk.
    (Before Bosworth, Oh. J., and Woodruff 'and Monorief, J. J.)
    Heard, June 15;
    decided, November 26, 1859.
    This is an appeal by the New York Mutual Insurance Company, the defendant, from .a judgment in favor of Seth Crosby, Ferdinand Crocker, and George Lovell, composing the firm of Crosby, Crocker & Co., the plaintiffs, entered on a verdict rendered on a trial had before Mr. Justice Pierrepont and a jury, on the 21st of May, 1858.
    The action was commenced on the 5th of November, 1856, on a Policy of insurance on the ship Adriana, for a voyage at and from New York to San Francisco and Benicia, and at and thence, &c. The Policy is dated March 21, 1856, and in it the vessel is valued at $10,000, the sum insured. The insurance is, in terms, “ on account of whom it may concern,” and the loss, if any, is payable to the plaintiffs. The action was brought to recover for a total loss. The complaint states that the insurance was made for the account of the plaintiffs, who, then and since, were interested in, and had a lien on, the vessel, her tackle, &c., to the amount of $10,000, together with all prior insurance thereon, “ which interest was and is, by reason and by means of advances and supplies and outfits furnished by said plaintiffs to said vessel for said voyage,” and also as trustees for 0. 0. Duncan, mortgagee in possession, and also as trustees for David Croolcer, William D. Orooker, Thomas D. Wilder, Augustus Palmer, Howard P. Wig-gin, Samuel Swanton 2d, Horace Parlin, Silas W. Parlin, William H. Parlin, Theodore Ripley, and Isaac Preble, part owners of said ship, and also as trustees of W.-S. Lindsay, Edgar P. Stringer, George Gladstone, and Edward Pembroke, mortgagees and bottomry holders in possession of said ship.
    The answer denied all the allegations óf the complaint, and. alleged that the ship was unseaworthy.
    At the trial, the defendants, when the cause was opened, stated “ that they now admitted their liability for three-fourths of the loss, and only. offered. defense as to one-fourth, and that they defended as to this one-fourth solely on the ground of change of interest as to this one-fourth, after the inception of the Policy and before the loss.” The Policy, the protest of the master and mariners belonging to the ship, and the ship’s register, were read in evidence, and proof was given of service of the protest as proof of loss, and of a certified copy of the register as proof of interest. Depositions as to the fact of a loss and its cause were read. It was proved that the vessel encountered a storm on the 16th-of April, and sunk on the 6th of. May, 1856. It was also proved that William D. Orooker, a registered part owner, by a bill of sale, dated April 18, 1858, conveyed one-eighth of the ship to George W; Kendall and John G. Richardson; and that David Orooker, a registered part owner, by a bill of sale, dated April 21, 1856, conveyed one-sixteenth to the same parties; and that Theodore. Ripley, a registered part owner, by a bill of sale, dated April 17, 1856, conveyed one-sixteenth of the ship to said Kendall and Richardson ; and that these three bills of sale were delivered on the 24th of April, 1856. The plaintiffs’ claim, by reason of the stores'and ship-chandlery furnished the ship for the voyage, and their lien on- the ship therefor was proved to be $4,161.50, with interest from Miarch 19, 1856. The other facts material to be known are sufficiently stated in the.charge of the Judge.
    The defendants requested the Judge to charge,
    “That the defendants under this policy are liable only for- the proportions of' the interests existing at the- time the insurance was made, subsisting at the time of the loss, and that the plaintiffs must prove the interests as alleged in their complaint, -and can recover only for such; interests- existing at the time of the insurance, and averred in the complaint, as subsisted at the time of the loss.
    “ That the change of interest by the conveyances to Kendall and Richardson, by the bills of sale of April, completed by the 24th of April, precludes any recovery but for three-fourths of the amount insured.

      “ That the existence of the mortgages on the vessel is immaterial, the Company being bound only for the shares of the ship in which the owners’ interest, covered originally by the policy, subsisted at the time of the loss.”
    The Judge refused to charge the jury otherwise than as hereinafter stated, to which refusal defendants’ counsel then and there excepted.
    The Judge in charging the jury spoke as follows:
    “ You will be very much limited in your inquiry in this case, as the questions are few indeed upon which you are' to pass at all. There is no dispute about the loss of the vessel, about the insurance, and the question of seaworthiness is not made.
    "The defense is, that on the 24th of April, there was a change or sale of a quarter interest of the ship, and that in consequence of that change (the Insurance Company never having given assent to it one way or the other) this policy does not cover the interest of parties who acquired it on the 24th day of April. They claim that the loss happened on the 6th of May following, and consequently that the parties who got one-fourth on the 24th of April were not insured under this policy. The plaintiffs on the other side contend, 1st, that this change of interest does not affect the recovery, and 2d, that this loss did occur on the 18th of April, prior to this transfer of the one-fourth interest. It is very clear that the ship went down on the 6th of May, and if you believe the testimony, it is very certain that she encountered a severe thunder storm on the 16th of April, as she was bound around Cape Horn, going south, and sprang a leak. On the 18th of April there was another storm, which increased the leak, and on the 21st or 22d of April, after a consultation of the officers of this vessel, they came to the conclusion to put in to the nearest port for safety, and they made for Bermuda. But the wind changed, and they were not able, as they supposed, to make that port with safety, and they turned about for another port, and sailed for Halifax. The rest of the testimony is all before you. The mere fact that the vessel sank on the 6th of May, does not prove that she was not destroyed so far as to be covered by this Policy at an earlier date; the vessel might have been injured days before she went down, and though she did not sink until sometime after the injury, yet the ruin might have been done at the time she received the injury as effectually as though the vessel had gone down on the same day, if she did sink solely in consequence of that injury.
    “ If the hands had all left the vessel on the 18th when they encountered this storm, and the vessel had tossed about for some time, and then gone down; yet if the injury which caused her to go down was such as to excuse the desertion and to cause the destruction, this loss did occur in contemplation of' law before the 24th of April; so that, if you come to the conclusion that the storm which she encountered on the 16th or 18th of April, or at any time prior to the 24th of April, produced the fatal injury to this vessel, which caused her to sink, then the plaintiff is entitled to your full verdict in any view of the law which has been presented. But if you should come to the conclusion that she was lost in consequence of the storm that occurred after the 24th of April, after the transfer of the one-fourth interest, then your verdict will be for three-fourths; otherwise for the whole amount claimed. I do not see that I need to comment at all upon this evidence; it has been clearly presented; it has been nearly all in writing, and distinctly read; you will observe that the storm commenced on the 16th, and that on the 22d of April they put about for a port of necessity; on the 6th of May the vessel went down; yojr have heard that described; if you come to the conclusion that she received her fatal injury (as heretofore explained) prior to the 24th of April, your verdict will be for the plaintiffs,, for the whole amount; but if you come to the conclusion that the fatal injury was received after that date, your verdict will be for three-fourths, and the calculations can be made by the counsel without detaining you."
    The defendants’ counsel then and there excepted to so much of the charge of his honor the Judge:
    1. As instructed the jury, that “ the mere fact that the vessel sank on the-6th of May, does not prove that she was not des-

      troyed so far as to be covered by this Policy, at an earlier date; the vessel might have been injured days before she went down; and though she did not sink until sometime after the injury, yet the ruin and damage might have been done at the time she received the injury as effectually as though the vessel had gone down on the same day, if the vessel did sink solely in consequence of this injury.”
    2. As instructed the jury, that “ if you come to the conclusion that the storm which she encountered on the 16 th or 18th of April, or at any time prior to the 24th of April, produced the fatal injury to this vessel, which caused her to sink, then the plaintiffs are entitled to your full verdict in any view of the law which has been presented. But if you should come to the conclusion that she was lost in consequence of the storm that occurred after the 24th of April, after the transfer of the one-fourth interest, then your verdict will be for three-fourths, otherwise for the whole amount claimed.”
    3. As instructed the jury, that “ if you come to the conclusion that she received her fatal injury as heretofore explained, prior to the 24th of April, your verdict will be for the plaintiffs for the whole amount; but if you come to the conclusion that the fatal injury was received after that date, your verdict will be for three-fourths.”
    The jury rendered a verdict in favor of the plaintiffs for the full amount claimed, ten thousand two hundred and twenty-seven dollars and sixty-six cents ($10,227.66.)
    A stipulation was entered into between the parties, by which the defendants paid three-fourths of the verdict, and the plaintiffs were permitted to enter judgment, in form, fos the other fourth and costs, and the defendants appealed from the judgment so entered, in order to test the question of their liability for the remaining one-fourth. The stipulation provided that if the defendants succeeded on the appeal, the plaintiffs should not be entitled to costs previous to the appeal, and that the costs of the appeal should abide the event.

      Wm. M. Evarts, for defendants, (appellants.)
    I. The insurance having been effected upon the interest of the owners, and the owners of one-fourth part having by the bills of sale, made respectively on the 17th, 18th and 21st of April, and delivered and recorded on the 24th, conveyed away all interest in that portion, the plaintiffs can recover under the Policy for three-fourths only, unless the Adriana became a total loss prior to such conveyance.
    1. The interest, in respect of which the insurance was effected, must, in order to entitle the insured to recover on the Policy, be a subsisting interest during the risk, and until and at the time of the loss. (1 Arn. Ins., 281; Phil. Ins., §§ 87 and 185, and cases cited; Powles v. Innes, 11 Mees. & Welsb., 10; Carroll v. Boston Marine Ins. Co., 8 Mass., 515 ; Gordon v. Mass. F. & M. Ins. Co., 2 Pick., 258.)
    2. The complaint avers interest in the plaintiffs as trustees of the parties who conveyed the fourth part in question to Kendall & Richardson.
    II. The vessel insured had not become a total loss when the change of interest in the one-quarter was effected.
    1. The complaint alleges the loss to have taken place on the 6th of May, and not before.
    2. When the transfer was made she was still a ship, waterborne, pursuing her voyage, and transporting her cargo; and, as to the one-quarter, she was sold as such.
    3. At no time between the discovery of the leak and the transfer was the condition of the ship such as to justify an abandonment to the underwriters, for prior to May 1st she could be kept free from water.
    4. The case is to be considered as if the policy upon the one-fourth had expired at the time when the sale was effected; the insured could not, under such a policy, recover for a total loss on a vessel which continued on her course in the condition of the Adriana a full week after the termination of the risk. (Meretony v. Dunlop, 1 T. R., 260; Arn. Ins., 451, 452; Phil. Ins., §1148.)
    III. If it were true that she was fatally damaged or received her death blow on the 16th of April, or at any time before the transfer, still the fact that the quarter was sold and the price received, would preclude the possibility of a recovery under the policy by the vendors for a total loss. They sustained no loss, and there is nothing for which they could ask indemnity. The plaintiffs representing the vendors, as trustees, can recover no more than the vendors could.
    1. The owners of the portion sold have received their own price for it, as acknowledged by the bills of sale, and on their behalf) the plaintiffs are struggling to make the insurers pay for it again.
    2. The purchasers of the quarter in question might have insured that portion, and would have been entitled to recover for a total loss. There cannot be two parties with an insurable interest as owners of the same subject, and so entitled to exact double indemnity for its loss.
    3. The plaintiff’s fallacy consists in confounding the fatal damage to the structure of the ship with actual loss to its owners of their property in it.
    IV. The Court below erred in directing the jury to find for the plaintiffs for the full amount claimed, if they came to the conclusion that the Adriana received her fatal injury prior to the 24th of April. There is no evidence in the case to justify such a finding, or to warrant the submission of the question to the jury.
    1. No leak was discovered prior to the morning of the 19th of April, and up to that time the ship had encountered no unusual perils, except upon the 16th, “heavy rain and lightning,” which, however, could not have caused the leak.
    2. After the discovery of the leak, and before the storm of May. 1st, the ship met with no disaster or storm or bad weather or extraordinary peril, and was all the while kept free from water.
    3. During this whole interval she was daily within reach of assistance, but her officers spoke no vessel and sought for no assistance, and made no efforts to lighten or relieve their ship until after the storm of May 1st.
    4. The proximate cause of the loss, the real death blow, was the hard gale from the eastward of May 1st, which continued until the 3d. This caused the ship to labor very heavily, and first made the leak dangerous. It was followed by the bursting of the pump on the 4th of May, and not till then did the ship become unmanageable.
    V. If the vessel can in any sense be said to have become a total loss at any time before the transfer of the quarter in dispute, the price received by the owners of that portion as ascertained by the bills of sale, was in the nature of salvage, and went as such by abandonment to the underwriters, and this amount should have been accounted for to the defendants, and their proportion deducted from the verdict. (2 Phil. Ins., § 1714; 2 Arn., p, 1178, and cases cited.)
    The judgment should be reversed; and under the stipulation the complaint dismissed, with costs of the appeal.

      Dexter A. Hawkins, for plaintiffs, (respondents.)
    Insisted that a change of interest as to the one-quarter, after the inception of the risk, and before the loss, does not terminate the Policy pro tanto, but that it continued in force for the benefit of the purchasers, and that the plaintiffs may sué on it for the benefit of such purchasers. (Sparks v. Marshall, 3 Scott, 174; 2 Bing. N. C., 774; Perchard v. Whitmore, 2 Bos. & Pul., 155.)
    That even if such transfer terminated the Policy, pro tanto, as to such owners, still it continued in force to cover the merchant’s lien for outfits supplied on the credit of the vessel for this voyage ; and that those having such lien were parties concerned at the date of the Policy, and up to and' at the time of the loss. (1 Arn., 219, 252; Irving v. Richardson, 1 M. & Rob., 153; S. C., 2 B. & Ad., 193; 4 Dall., 424 ; 3 Burr., 1394; 1 Bos. & Pul., 316.)
    That the verdict is conclusive that the fatal wounds on account of which the vessel was lost, were received by her in the storm of the 16th and 18th of April, and before the 24th. She was, for any beneficial purpose, as completely out of existence then as though at the bottom of the sea, where she soon sunk. The subsequent transfer (and which was made under a mistake of facts) could not in any way affect the defendant’s liability for the loss or damage previously sustained, and that loss was in substance total. (Barr v. Gibson, 5 Mees. & Wels., 390; 2 Duer on Ins., 5, 6; id., 570; Coit v. Smith, 3 Johns. Cas., 16 ; Howell v. Protection Ins. Co., 7 Ohio R., 284; 4 Kern., 143; 2 Arn., 1000-1004; Roux v. Salvador, 3 Bing. N. C., 266; Mellish v. Andrews, 15 East, 15; Hare v. Travis, 7 B. & C., 14; 1 Phil. on Ins., 706, 707.)
   By the Court—Moncrief, J.

The words in the Policy, for whom it may concern,” must be applied to the interest of the parties, and only the parties for whom it was intended by the person who effects or orders the insurance. (7 Har. & Johns., 417; 2 Caines, 203 ; 4 Wend., 75; 8 id., 144; 24 id., 276.)

Those terms are always controlled by proof of the parties for whose benefit the insurance was in fact intended. (Sharp v. Whipple, 1 Bosw., 567.) Proof was given showing that William D. Crooker, David Crooker and Theodore Ripley were the owners of the one-fourth interest in said vessel up to the 24th of April, 1856, on which day bills of sale therefor (of previous dates) were delivered to Kendall & Richardson, the purchasers.

On the opening of the case on behalf of the plaintiffs, thé defendants stated that they defended as to this one-fourth solely, on the ground of change of interest as to this one-fourth, after the inception of the Policy and before loss.

The jury, upon the evidence in the case, found, as a matter of fact, that the vessel, “ before the 24th of April, received the fatal injury which caused her subsequent loss by sinking, on the 5th or 6 th of-May following.”

The vessel having received a death wound before she was sold, then it is true that by the perils insured against she was damaged while owned by the insured, and they should recover to the extent of that damage, though they sell her subsequently and before the destruction is visibly complete.

The question then arises, what, on such a state of facts, was the extent of the damage or the loss ? Wherever it appears that neither the assured nor the underwriters could exercise any control over the vessel, and that in the course of the voyage the vessel had been placed in such a position that it was totally put of the power of the assured or the underwriters to procure her arrival, the voyage being arrested and the vessel receiving a damage which, considering its nature, rendered it certain that she could not reach her original destination, the loss is absolutely and of Itself total, independently of the election of the assured to treat it as such.

The loss is in its nature total to him who has no means of recovering his property, whether his inability arises from its annihilation or from any other insuperable obstacle. (It is only in case of a constructive, not of an absolute total loss, that an abandonment is necessary.) (1 Curtis, 152; 9 Barn. & Cress., 411; 2 Maule & Selw., 240; Park., 169; 3 Bing. N. C., 266; 14 Conn., 50.)

If the damage was such that the vessel could not get into port, but sunk at sea, the loss was practically total, and in substance .and good sense amounted to the sum insured, and the defendants are bound by the very terms of their contract to pay the whole sum insured. (3 Johns. Cas., 16; 3 Bing. N. C., 266;. 6 Mass. R., 465; 7 Ohio R., 283.)

No cases say that the bare existence of the hulk, “ the mere congeries of plank and iron ” of the ship, prevents the loss from being total.

The exceptions, therefore, not being well taken, the judgment will be affirmed in conformity to the stipulation between the parties.

Judgment was ordered accordingly.

       The case of Duncan et al. v. The Great Western Insurance Company, was argued at the same term as the above, involved substantially the same questions, and was similarly decided.