Yates v. Lyon

By the Court, Johnson, J. The action is brought to set aside a general assignment for the benefit of creditors, made by David Welch and William Welch to the defendant Lyon, and for the appointment of a receiver of the assigned property. The plaintiffs are judgment creditors of the two Welches. One defense set up by the appellant, and which he now insists upon, is that the action is barred by a former action and judgment between him and the plaintiffs, in which the validity of the assignment was in question and-determined. That case is reported in 52 Barb. 237. It is apparent from that case, as reported, that it can form no bar to this action. The plaintiffs, who were defendants in that action, set up in their answer, and offered, upon the trial, to prove and establish the invalidity of the assignment on the same ground, substantially, on which they now attack it.- But their defense was ruled out, on the ground that they had no such standing in relation to the assigned property which they had taken, as would en [209] able them to litigate that question. They had seized it by virtue of an attachment, which had been set aside for irregularity, and they were thus left without justification, and were held to be mere tort-feasors, having no right to dispute the title of the defendant, who was plaintiff in that action; he having lawful possession and the apparent title. The‘question involved in this action was not then litigated and determined, as it was held not to arise, and the judgment in that action is no bar to the action here. It was proved upon the trial, and the referee has found as matter of fact, that at the time the assignment in question was made, one of the assignors was an infant of the age of nineteen years, only. If the decision in the case of Fox v. Heath, (21 How. Pr. 384,) in the Hew York common pleas, is sound., law, that fact alone renders the assignment void, as matter of law, as against creditors. One general principle applied to assignments of this character is, that they must be absolute and irrevocable in terms, and not subject to revocation, or defeasance, by the party assigning. They must be absolute and unconditional, and without reservation or stipulation for the advantage of the assignor. (Grover v. Wakeman, 11 Wend. 187. Leitch v. Hollister, 4 N. Y. 211. Curtis v. Leavitt, 15 id. 9.) Many other cases might be cited to the same effect. In the case last cited, Comstock, J., in his opinion, at page 32, says: “The principle indeed which runs through thiswhole branch of our law, is, that when á trader or dealer fails, and professes to put his estate in trust, he must devote the. whole of it, immediately and unconditionally, to the payment of his debts. It is only on these terms that he is allowed to withdraw it from the ordinary process of the law.” It cannot be doubted, I think, that should a general assignment for the benefit of creditors, upon its face and by its terms, reserve the same right to the assignor, or to one of several assignors, of disaffirmance and revocation which [210] the law gives to the infant assignor in this case, it could not be upheld, for a moment. (Burrill on Assignments, 234.) Indeed, it is impossible to see how an infant, upon general principles, can, of his own act and volition, create a trust and appoint a trustee to administer it. Upon this ground, alone, that the assignment did not, and could not, as matter of law, devote the property assigned absolutely and unconditionally to the payment of the debts °of the assignors, I am of the opinion it was fraudulent and void as against their creditors, in law. The general principle that a sale or assignment by an infant is voidable only, and not void until he elects to avoid it, and remains valid until such election, does not apply to this branch of the law, which allows property to be withdrawn from ordinary legal process in a certain way, and upon certain terms, only. Uor is it of the least consequence that the infant assignor did not elect to disaffirm or revoke, but by his silence afterwards, consented and ratified. The vice lies in the power he had, by law, to disaffirm and avoid. The assignment did not, when executed and delivered, operate to devote the property unqualifiedly, and consequently did not withdraw it from the reach of legal process. The fact that one of the assignors was an infant at the time the assignment was executed and delivered, was properly proved, and the exception to the ruling admitting evidence is not well taken. As this fact alone is decisive against the validity of the assignment, all the other questions raised in regard to the admissibility of evidence, upon other matters and questions in the case, are immaterial. The decision of the issue could not possibly have been different, had the rulings excepted to been all the other way. The motion for a dismissal of the complaint, or for a nonsuit, on the ground that William Welch, though named as a party in the summons and in the action, had not been' served with process, nor appeared in the action, was prop [211] erly denied. It was no ground for a dismissal of the complaint or for nonsuit. William Welch was properly named as a party to the action, in the summons and proceedings,- and might properly have been served with the summons and brought in to answer. But it was not indispensable that he should he served or brought in. The action was to reach the joint property of himself and David Welch, and could properly proceed, and judgment be rendered so as to bind the joint property, without such service or appearance as respects him. This is regulated by the Code, § 136. [Fourth Department, General Term, at Syracuse, November 13,1871. The action was referred by stipulation, and it was too late on the trial to take the objection by a motion of that character, even if tenable otherwise. The judgment must he affirmed, with costs. Mullin, P. J., and Johnson and Talcott, Justices.]