Agne v. Schwab

Gaynor, J.: This is a suit by the residuary devisee and legatee under a will to set aside a sale by the administratrix with the will annexed of the business assets and personal property of the,deceased as fraudulent . [747] against the plaintiff and the creditors of the deceased and make the defendants, viz., the said administratrix and her fraudulent vendee, account for the property thus fraudulently diverted by them. An executor or administrator is trustee for the creditors, legatees and distributees of the deceased, and that a suit to annul a fraudulent disposition of the trust property, and to follow the property or its proceeds may be maintained against a trustee of any kind, executor, guardian or trustee of an express trust, and his fraudulent grantee or vendee, by a cestui que trust, is a thing not to be disputed (2 Perry on Trusts [5th ed.], secs. 810 et seq.; 1 Story’s Eq. Jur. [13th ed.] sec. 424; 2 Wms. on Ex’rs. [7th Am. ed.] p. 124; Hill v. Simpson, 7 Ves. 152; McLeod v. Drummond, 17 id. 152; Wilson v. Moore, 1 M. & K. 337; Field v. Schieffelin, 7 Johns. Ch. 155 et seq.; Haddow v. Lundy, 59 N. Y. 320; Wetmore v. Porter, 92 id. 76; Zimmerman v. Kinkle, 108 id. 282). That the cestui que trust may require the executor to account on his accounting for the full value of the property notwithstanding the fraudulent sale was never a reason for refusing to entertain the suit. If it were, the fraudulent grantee or vendee could not be held to responsibility for his wrong at all, for he cannot be brought into the Surrogate’s Court and rnadé to account. And the Haddow. Case {supra) shows that such a suit is maintainable against the executor or trustee alone. The case has been confused by counsel discussing in their briefs and oral arguments chapter 314 of the Laws of 1858 as amended by chapter 487 of the Laws of 1889 and chapter 740 of the Laws of 1894 (now codified as section 7 of the Personal Property Law and section 232 of the Eeal Property Law), as though the right to maintain this action depends thereon. These are enabling statutes, viz., the first simply' enables (1) “ any executor, administrator, receiver, assignee or other trustee”, and the amending ones (2) a simple creditor of a deceased person whose claim exceeds $100, to maintain an action for the benefit of creditors to set aside a fraudulent disposition of property, personal or real, by the deceased in his lifetime, or by the assignor, or person from whom title has devolved. As a person has no right of action to set aside his own fraudulent conveyances, no such right can pass from him to his executor, assignee, etc., and hence a statute was necessary to give [748] the latter the right .to bring such an action (Ordronaux v. Helie, 3 Sand. Ch. 512; Osborne v. Moss, 7 Johns. 161); and as it was made doubtful or denied in this State by the decision in Lichtenberg v. Herdtfelder (103 N. Y. 302) that a creditor of a deceased who had not obtained a judgment on his claim and a lien and priority thereunder during the lifetime of the deceased could bring an action after the death of the deceased to set aside the latter’s fraudulent sales or conveyances, the said act of 1889 was passed to enable him to do so. In the same year it was decided in a case to which the new act was not in time to apply that such a creditor could maintain such an action' if the executor refused to bring it (Harvey v. McDonnell, 113 N. Y. 526). These statutes have nothing, to do with the present case, which is a case of fraudulent disposition of property of an estate by the administratrix, not by the deceased in his lifetime. No statute was ever needed to enable a, cest/ai que trust to sue Ins trustee to set aside his fraudulent transfer of trust property and make him and his fraudulent grantee or vendee account therefor. The case of Magoun v. Quigley (115 App. Div. 226) has not been overlooked. There the point that such a suit cannot be maintained was not raised at the bar, but the court seems to say of its own motion that it is not maintainable for the reason that the said statutes do not enable it to be brought. It is to be deplored that any member of our honorable profession could so far forget himself as to make the scandalous attack on the plaintiff, a woman, which is contained in the brief for the appellant. The judgment should be affirmed. It is also ordered that the brief of appellant’s counsel be taken from the archives of this court. ' Woodwaeb, Hookeb and High, JJ., concurred. Interlocutory judgment affirmed, with costs.