Braem v. Merchants' National Bank

Martin, J. The plaintiffs claim that, as the Syracuse Iron-Works was insolvent at the time of the offer by that company to allow judgment to be taken against it in favor of the defendant, the judgment was void, as being in contravention of the statute which declares: “It shall not be lawful to make any transfer or assignment in contemplation of the insolvency of such company, to any person or persons whatever; and every such transfer and assignment to such officer, stockholder, or other person, or in trust for them or their benefit, shall be utterly void.” 1 Rev. St. pt. 1, c. 18, tit. 4, § 4; 8th Ed. p. 1729, § 4. If the offer of judgment was made in contemplation of insolvency, or with the view to giving the defendant a fraudulent preference, then it would fall within the prohibition of the statute, and would be void as to the creditors of such corporation. Kingsley v. Bank, 31 Hun, 329. If, however, as the evidence tends to show, there was an existing agreement between the defendant and such company that the company should give the defendant security for the debt which was owing by it to the defendant whenever the defendant should demand it, and this judgment was given in pursuance and execution of such agreement, then the fact that the corporation was insolvent at the time would not furnish controlling evidence that such offer of judgment was made in contemplation of insolvency. Paulding v. Steel Co., 94 N. Y. 334. The question whether the offer of judgment was made in contemplation of .insolvency was a question of fact for the jury, and should have been submitted to them unless there were other reasons why this action could not be maintained. Therefore, for the purpose of examining the other questions in this case, it must be assumed that the question would have been determined in the plaintiffs’ favor. The plaintiffs also claim that, as the judgment recovered by the defendant was void, they can maintain an action at law for the damages they claim to have sustained by the alleged wrongful act of the defendant in issuing an execution against the property of such corporation upon a void judgment. The iron-works was actually indebted to the defendant to the amount claimed, and an action was commenced to collect such debt. The company admitted that the sum claimed was due, and offered judgment therefor. The defendant accepted such offer, and entered judgment thereon for the amount offered. Execution was then issued thereon, and delivered to the sheriff of Onondaga county. The sheriff levied upon the property of the ironworks, sold it, and paid the amount of an execution under which a previous levy had been made, and the remainder of the proceeds of such sale was applied upon the execution issued upon the defendant’s judgment. When the defendant’s judgment was entered, the execution issued thereon, and a levy made under it, the plaintiffs had acquired no lien or interest in the property sold. Ho transcript of their judgment had then been filed or docketed in Onondaga county. The defendant performed no act after the plaintiff’s judg [848] ment was docketed in Onondaga county which in any way interfered with the rights of the plaintiffs. It is true it received certain moneys from the sheriff to apply on its judgment, but in so doing it in no way interfered with or impaired any right which the plaintiffs had acquired. The act of which the plaintiffs complain, and for which this action was brought, was performed on the day previous to the docketing of their judgment in that county. The weakness of the plaintiff’s claim seems to rest in the fact that at the time of the issuing of defendant’s execution and the levy by the sheriff the plaintiffs had obtained no lien upon or interest in the property in question. The plaintiff’s had acquired no legal right which was invaded by the act complained of. A right of action to enforce a merely moral or imperfect obligation does not exist. Ashley v. Dixon, 48 N. Y. 430, 432. An act which does not amount- to a legal injury cannot be actionable, even if done with a bad intent. Stevenson v. Newnham, 13 C. B. 285. It is essential to an action of tort that the action complained of should be legally wrongful as regarding the party complaining, i. e., it must prejudicially affect him in some legal right. The fact that it will, however directly, do him harm in his interests, is not enough. Rogers v. Rajendro Dutt, 13 Moore, P. C. 209, 8 Moore, Ind. App. 103, 9 Wkly. Rep. 149. A plaintiff who has procured an execution to be levied upon personal property of a defendant cannot sustain an action against a wrong-doer for taking such property out of the possession of the officer. Barker v. Mathews, 1 Denio, 335; Copper Co. v. Pratt, 10 Hun, 443; Skinner v. Stuart, 39 Barb. 206; Steffin v. Lockwood, 17 Wkly. Dig. 418. In Adler v. Fenton, 24 How. 407, where a creditor, whose debt was not yet due at the time of bringing the action, brought a suit against his debtors and two other persons, for a conspiracy to enable the debtors to dispose of their property fraudulently, so as to hinder and defeat the creditors in the collection of their lawful demands, it was held that the action would not lie. In Moran v. Dawes, Hopk. Ch. 365, it was held that the court had no jurisdiction to restrain a defendant in a suit at law, after verdict against him and before judgment, from alienating his property. In delivering the opinion in that case the chancellor says: “It suffices for the determination of this question that by our law the complainant has no lien or right in the lands of the defendant; that the defendant may, notwithstanding the pendency of the suit against him, sell his lands; and that equity does not vary these legal rights.” In Hutchins v. Hutchins, 7 Hill, 104, where the defendants, after a will had been made and executed devising certain real estate to A., conspired with each other to induce the testator to revoke it, and effected their object by means of false and fraudulent representations, it was held that A. could not maintain an action, as the revocation of the will merely deprived him of an expected gratuity, without interfering with any of his rights. In Murtha v. Curley, 47 N. Y. Super. Ct. 393, it was held that an action for damages only cannot be maintained upon proof that defendant conspired with plaintiff’s judgment debtor to defraud plaintiff of his debt by taking and foreclosing a fraudulent chattel mortgage upon the debtor’s property, and selling the property covered thereby, before the issue of execution on such judgment. It mustappear that plaintiff had, at the time of the alleged wrongful acts, some interest in or lien upon the property which could be the subject of damage. It seems that the proper action in such cases is in the nature of a creditors’ bill to set aside the mortgage, and that the judgment therein should direct that defendant account for the property mortgaged or its proceeds. In Wellington v. Small, 3 Cush. 145, in an action on the case, brought against two defendants, it was alleged that one of them was indebted to the plaintiff; that the two confederated and conspired together to prevent the plaintiff from obtaining security for or payment of his debt; that in pursuance of such purpose and intention, and in order to enable the plaintiff’s debtor to take the poor debtor’s oath, the defendants caused the property of the latter to be removed from his own custody [849] and possession into the possession of the other defendant, by whom the same, or the proceeds thereof, were kept secreted and concealed from attachment; that the plaintiff sued out a writ against his debtor to recover the debt aforesaid, and caused his body to be arrested thereon; that the defendant in tile said suit took the poor debtor’s oath, and was discharged from arrest; and that the plaintiff entered tile same, and recovered a judgment therein, which remained wholly unpaid. The plaintiff at the trial gave evidence of everything alleged in the declaration, except the fact of conspiracy, of which there was no direct proof. It was held that the action could not be maintained. In Randall v. Hazelton, 12 Allen, 412, where a mortgagee of land voluntarily promised the mortgagor not to act under a power of sale contained in the mortgage without notice to him, but was afterwards induced by falsehood to assign the mortgage to persons who thereupon proceeded to sell the land under the power of sale, without notice to the mortgagor, and clandestinely, whereby the latter was deprived of his equity of redemption, it was held that he could maintain no action at law against the parties guilty of the fraud. In Lamb v. Stone, 11 Pick. 526, which was an action on the case for the fraud of the defendant in purchasing personal property of the plaintiff’s debtor, and aiding the debtor to abscond, in order to prevent the plaintiff from enforcing payment of his debt by attaching the property or arresting the body of the debtor, it was held that the action could not be sustained, but that the proper-remedy was either to attach specifically the property fraudulently transferred, or to attach it in the defendant’s hands by the trustee process. In Bradley v. Fuller, 118 Mass. 239, it was held that if a person who has a claim against a corporation, which he intends to enforce by an attachment of its property, is induced by the false and fraudulent representations of its treasurer to refrain from making the attachment, and all the property of the corporation is subsequently attached for the debt of another person, and is sold on execution, an action- of tort for such fraudulent representations will not lie against the treasurer. In Browne v. London, Twisden, J., said: “I remember an action upon the case was brought, for that the defendant had taken away his goods, and hidden them in such secret places, that the plaintiff could not come at them to take them in execution, and it was adjudged it would not lie.” 1 Mod. 286. In Platt v. Potts. 13 Ired. 455, where a creditor had placed a note in the hands of an officer for collection, and another by persuasion induced the officer not to collect, and the debtor not to pay, the debt, it was held that the creditor had no ground for an action on the case against the other parties. In Matthews v. Pass, 19 Ga. 141, where a person aided a debtor to remove himself and his property out of the state, it was held that an action on the case would not lie against such person, at the suit of the creditor. In Kelly v. McCaw, 29 Ala. 227, it was held that an action would not lie to recover damages for the defendant’s fraudulent and wrongful act in inducing the sheriff to release and discharge from his possession certain property on which an execution had been levied in favor of the plaintiff against a third person, and whicli defendant removed so that it could not afterwards be found, the defendant in the execution being insolvent, and having no other property out of which said execution could be satisfied. The cases cited by the plaintiffs are distinguishable from the case at bar, and fall far short of sustaining the doctrine contended for by them. In Yates v. Joyce, 11 Johns. 136, the plaintiff had a judgment which was a lien on the property removed. In Brown v. Feeter, 7 Wend. 301, the plaintiff owned the property taken by the direction of the defendant. In Van Pelt v. McGraw, 4 N. Y. 110, the plaintiff’s mortgage was a lien on the property removed, and the waste committed was a direct injury to such lien. In Kerr v. Mount, 28 N. Y. 659, the defendant’s testator caused the property of the plaintiff to be taken on an irregular attachment. The case of Quinby v. Strauss, 90 N. Y. 664, is so meagerly reported that it is impossible to determine what was de [850] cid'ed in that case. There are expressions in the portion of the opinion quoted which might perhaps be construed as being somewhat in conflict with some of the cases above cited, but we are unable to discover that any principle is established by that case which would uphold a recovery in the case at bar. While it may be that the plaintiffs might have maintained a suit in equity to set aside the defendant’s judgment, and in aid of their execution while in the hands of the sheriff, or might by motion have compelled the sheriff to apply the money in his hands, so far as necessary, to the payment of their judgment, still, following the principle of the authorities cited, we are of the opinion that they could not maintain an action at law against the defendant for damages for issuing an execution upon its judgment before they had any interest in the property sold, nor for afterwards receiving from the sheriff the amount of its judgment, although it should be conceded that the defendant’s judgment would have been held invalid and set aside as against them in a proper action or proceeding for that purpose. We think the learned trial justice properly nonsuited the plaintiffs, and that the judgment appealed from should be affirmed. Judgment affirmed, with costs. Hardin, P. J., and Merwin, J., concur.