Scoville v. Shed

Follett, J.: "When a debtor transfers to a fraudulent transferee the legal title-to property subject to sale on execution, a judgment creditor may disregard the conveyance, sell the property while in the hands of the fraudulent transferee under an execution, and if possession is-withheld from the purchaser, he may establish the fraudulent transfer and recover the property in ejectment or replevin. This is-the common-law remedy which has existed since the statute of IE [167] Elizabeth, chapter 5. Instead of resorting to this legal remedy, a judgment creditor may maintain an action to set aside the fraudulent conveyance in aid of his execution, but if by lapse of time, or for any cause a sale cannot be had under the execution, such an action cannot be maintained. The early English cases and some of the-early cases in this State, held that a bill in equity could not be > maintained for the recovery of property, unless it was such as was-subject to sale under execution,-that equity followed the law, and that money, stocks, etc., were not enumerated in the statute above cited. This doctrine was exploded in Spader v. Davis (5 Johns. Ch., 280; affirmed Hadden v. Spader, 20 Johns. 554). Subsequently the doctrine of the case last cited was somewhat limited in Donovan v. Finn (Hopk., 59), which led to the enactment of the section of the Revised Statutes, which provided that a judgment creditor might file a bill in chancery against the judgment debtor and any other person, to compel the discovery of any property or thing in action belonging to the judgment debtor, or of any property, money or thing in action due or held in trust for him, whether the same might or might not have been originally taken in execution. (2 R. S., 173,174, §§ 38 and 39.) This provision of the Revised Statutes is continued by sections 1871 and 1873 of the Code of Civil Procedure, and when property is discovered it may be recovered. (2 R. S., 135, § 1; Id-, 137,, § 1.) The case at bar is not to set aside a conveyance in aid of the judgment. The judgment debtor never held the legal title to the farm, and, setting aside the deed to the wife, would not vest the title in the husband, or in any way aid the collection of the judgment by an execution. (Garfield v. Hatmaker, 15 N. Y., 475.) This action is brought under the sections of the Code above cited, to recover property paid for by the husband and held by the wife. Should it be established on the trial that this property was paid for by-the husband, in whole or in part, it, or his interest therein, could be applied in payment of the .plaintifi’s claim notwithstanding th& judgment never was a legal lien on the farm and notwithstanding the fact that more than ten years have elapsed since it was recovered. The court erred in refusing to determine the question of fact and in dismissing the complaint on the ground that the action cannot, be maintained because the judgment is not a lien on real estate. [168] The judgment should be reversed, and a new trial ordered, costs to abide the event. Hardin, P. J., and Boardman, J., concurred. Judgment reversed and new trial ordered, costs to abide the event.