Leach v. Kelsey

Sy the Court, Gridley, J. This is an action in the nature of a bill in equity, brought by the assignee of a judgment creditor of Kelsey, against him and the two other defendants, Eaton & Spicer, alledging a sale by Kelsey to Eaton & Spicer of his whole property, in fraud of the judgment. A referee has reported in favor of the plaintiff; and a judgment has been entered on the report, from which judgment the defendants Eaton & Spicer have appealed. The only grounds relied on by the appellants’ counsel are 1st. That the plaintiff can not maintain this action inasmuch as it appears that after the sale and before the commencement of the suit, Kelsey had made a general assignment in favor of all his creditors. It is supposed that this claim passed by the assignment, and can only be asserted by the assignee. This is a mistake. The general assignee takes no claim which the assignor could not enforce. His title is derivative merely; and the assignor would be estopped from asserting his own fraud in a suit against his fraudulent vendee. The case of Brownell v. Curtiss, (10 Paige, 210,) is decisive upon this point. 2dly. That Kelsey was an incompetent witness for the plaintiff, to prove the sale fraudulent. (1.) It is said that the witness was interested within the decision in Red v. Smith, (19 Wend. 293.) It would be sufficient to say that the objection was not put on this ground, or on any particular ground, before the referee. Not only must the interest be stated, as the ground of objection, but the nature of the interest must be stated, so that the party may, if in his power, remove it. Where the nature of the interest was not stated, in the record, though the witness was the vendor of the party, the court would not notice it. (Cowen & Hill’s Notes, 256. 10 Martin’s Rep. 633, 8.) (2.) Again; it is insisted, that by sections 343 and 344 of the code, in connection with the cases of Pillow and Wife v. Bushnell, (4 Howard’s Sp. T. Rep. 9,) and M. & F. Bank v. Wil [471] bur et al. (2 Code Rep. 33,) Kelsey could not be sworn as a witness. It has not been held that a more stringent rule prevails under the code than existed under the former practice. Kelsey was not examined as a party against himself, but he was offered as a witness against his co-defendants, and as such he might have been examined under the 63d chancery rule of the rules of 1847. The only possible objection—that of interest—not having been taken before the referee, was waived. (1 Cowen & Hill’s Notes, 256, 266.) Kelsey had put in no answer; and there was no issue between him and the plaintiff. The relief to be granted was not necessarily against any party, except Eaton & Spicer. But if it were otherwise, Kelsey was inevitably liable on his judgment, and allowed the complaint to be taken against him without interposing any defence. (See 2 John. Ch. Rep. 625; 5 Paige, 632.) 3dly. It is urged that the report is against evidence. If Kelsey is to be believed, the report was fully warranted, and the credibility of this witness was a question solely for the referee, whose decision we can not supervise. I have said that there is no objection raised to the report and judgment except those which we have already discussed. It is true that the report is against all three defendants, and the judgment is joint against them. It would have been more in accordance with the old practice to have ordered the two defendants Eaton & Spicer to apply so much of the proceeds of the property fraudulently purchased by them as would be sufficient to pay the plaintiff’s judgment and the costs of the suit. But the joining of Kelsey in the report, in the manner the referee has chosen to adopt, is not an error prejudicial to the other defendants, and of which they can justly complain. We therefore are of opinion that the judgment must be affirmed. Judgment affirmed.