
    (67 Hun, 145.)
    LINDSLEY v. VAN CORTLANDT et al.
    (Supreme Court, General Term, Second Department.
    February 13, 1893.)
    1. Judgment—Offer by Defendant—Service.
    Under Code Civil Proc. § 738, providing that on an offer oí judgment by defendant plaintiff may file the summons, complaint, and offer, with proof of acceptance, and thereupon the clerk must enter judgment accordingly, proof of service of the summons need not be filed.
    3. Same—Fraud—Preferences.
    The judgment having been entered on an honest debt, wholly due', the fact that defendant was the son of the plaintiff in that action, and that the purpose of the parties may have been to obtain a preference, will not avoid judgment.
    3. Same—Evidence.
    The fact that within 10 days after execution was issued op the judgment it was returned; that immediately an order was obtained against defendant in supplemental proceedings, under which he was examined the same day, and on the same day, at the close of the examination, a receiver was appointed,—shows that the judgment debtor was facilitating the proceedings, yet there was nothing illegal in that, unless there was fraudulent intent, and evidence that the son declared his intention to beat plaintiff is insufficient to show such intent, it appearing that the father knew nothing of the statement, and there being nothing to justify a finding of fraud against him.
    Appeal from special term, Westchester county.
    Action by Augustus N. Lindsley against Henry W. Van Cortlandt and others to set aside a bill of sale and certain judicial proceedings on the ground of fraud against creditors. From a judgment in favor of plaintiff, defendants appeal.
    Reversed.
    Argued before BARNARD, P. J., and PRATT, J.
    Reeve & Scrugham, for appellant Augustus Van Cortlandt.
    John H. Ferguson, for appellants Henry W. Van Cortlandt and Hall B. Waring.
    Rudd, Hunter & Wilder, for respondent.
   PRATT, J.

I am unable to concur in the conclusions reached by the learned trial judge in this cause. The action was brought to set aside a bill of sale and certain judicial proceedings on the theory that they were fraudulent as against creditors. The controlling facts have been found or appear by evidence substantially undisputed. Young Van Cortlandt owed his father $7,988.50 on July 20, 1891. He also owed the plaintiff quite a sum, the precise amount not being important, in my view of the questions here involved. He on that day sold certain property to his father by a bill of sale apparently regular on its face, in consideration, therein expressed, of $728.35, -which sum was immediately credited by the father in reduction of this debt, thus leaving the debt $7,260.15. The father immediately entered into possession of these goods, and there is no evidence that he did not maintain it. The sum mentioned as a consideration in the bill of sale was a fair price for the goods covered thereby. So much appears by the findings. The defendants each requested the court to find that on the same day the father commenced an action in this court against the sonto recover $7,060.15. The court refused so to find on the request of the father, and omitted to pass on a like request by the other defendant. The request was undoubtedly material, as will presently appear. There can be no question but that the action was commenced on that day. The son swore that the summons was served, but did not state the date. But the findings show that on the 20th day of July, 1891, the son appeared in person in the action, and offered judgment for $7,260.15, with costs, and that this offer was accepted on the same day. These facts appeared without contradiction by the affidavit of the father’s attorney, and also by due acknowledgment of both the offer and acceptance, all attached to the judgment roll. Judgment was entered July 21, 1891, on these papers and upon the summons and complaint, which was verified on the 20th. But no proof of service of the summons was originally filed with the judgment roll. The letter of the Code did not require such proof of service. It provides that plaintiff may file the summons, complaint, and offer with proof of acceptance; and thereupon the clerk must “enter judgment accordingly.” It is thus plain that the judgment roll included everything required by the statute, and showed that the action was actually commenced on July 20, 1891.

It is suggested that the practice required that the summons must have been actually served before the offer could have been properly made, on the authority of Trier v. Herman, 115 N. Y. 163, 21 N. E. Rep. 1034. The -answer is threefold: (1) This case decides no such point. That precise question was not involved in that case. The learned court simply and incidentally remarked obiter that the plaintiff “must pursue the practice prescribed.” (2) The Code (section 738) does not require filing of the proof of service of the summons; hence this judgment was regular on its face without that proof. (3) At most the plaintiff in such a judgment must prove the service, if required, but not necessarily by the judgment roll; and he did prove it by the son’s oath as a witness on this trial. Of course, his statement raised the question of his credibility, but the circumstances satisfy my mind that the statement was true. And again, pending the trial of this action, the court, on special motion in the father’s action, allowed him to file the affidavit of service of that summons, and directed the clerk to attach it to the judgment roll nunc pro tune. See White v. Bogart, 73 N. Y. 256. I think this supposed irregularity had some influence upon the decision. Its twenty-eighth paragraph states without limitation or qualification that this judgment was irregular, illegal, and void. The defendants excepted to this finding. What the irregularity was, in what respect it was illegal, and how it was void, are matters which are difficult to understand. Here was an honest debt, cor'ered by what seems to me a perfectly regular judgment. Possibly the purpose of the parties may have been to obtain a preference, but that was not a wrong per se. Beards v. Wheeler, 76 N. Y. 213. Bo, too, circumstances might exist] xx'hich would satisfy the court that it xvas entered in pursuance of a scheme to defraud- creditors, but such an inference would require most convincing proof of fraudulent intent on the part of both parties in a case where the judgment was entered upon an honest debt, justly and wholly due.

An execution was issued on this judgment July 21, 1891, to the sheriff of the county where the judgment debtor resided, which was returned on or before August 1, 1891, and on that day an-order was obtained against him in supplemental proceedings granted by the-county judge of that county, under which he was examined before that, judge on the same day, and on the same day, at the close of the examination, an order was made by the same county judge appointing Mr. Hall a receiver of "the judgment debtor’s property, and the receiver duly-qualified August 8, 1891. These dates unquestionably show that the-judgment debtor was facilitating these proceedings, but there was nothing-illegal or fraudulent in that, unless there was a fraudulent intent. The-county judge had jurisdiction to make this order for this examination, (Code, § 2434;) and because the application was made “at the close of the examination” he unquestionably had jurisdiction to make the-order appointing the receiver, (section 2464.) The case does not affirmatively show that this order was filed, but we cannot presume such an omission in view of the receiver’s subsequent qualification and pro-ceedings. The title of the judgment debtor’s property, therefore, vested in the receiver. Section 2468. Subsequently (August 15, 1891) the-receiver applied to the county court of that county by petition, and that court assumed to make an order instructing him to sell the property in, his hands. This may have been wrong, (section 2471,) but this action did not hinge upon that point, as will presently appear. In the mean time the plaintiff sued on his debt, and on August 31, 1891, obtained an attachment, which was delivered, based on allegations that the son, had fraudulent!)' disposed of his property. That attachment, was delivered to the sheriff of the same county, and was served on the receiver,, who was then in possession of the property formerly' owned by the son. The plaintiff then commenced this action, the object of which-was to attack the bona fides of the bill of sale to the father, and these judicial proceedings in his favor, and to have them adjudged .irregular, illegal, and void; and the court has, in substance, held them not only fraudulent, but irregular and illegal. For reasons already stated, they were-not irregular, and it was error, as it seems to me, that they should have been thus' adjudged. Nor were they void, except on the theory that, they were fraudulent as against the plaintiff. This remark, of course, does not apply to the order of the county clerk instructing the receiver,, who was doubtless subject to the direction of this court. Code, §- 2471. But no harm has been done in that regard, because the plaintiff applied to this court in this action for and obtained an injunction, and the court has, on hearing the parties, permitted the receiver-to collect the assets, and directed that, when he realized $1,890, that sum should be paid into this court, and the injunction' was dissolved on the subsequent payment of that sum. Now, I fail to detect any evidence upon which to adjudge any bad faith on the part of the receiver, and, since the judgment holds all these proceedings void, there was an error committed against him which calls for reversal and a new trial. Perhaps the direction by the county court was invalid, but his appointment was undoubtedly valid; and, since he-has acted in good faith, he was entitled to the protection of the court. There was, therefore, no reason why he should have been ignored, or for the appointment of a new receiver.

In the next place, I think the decision proceeds upon the theory of the illegality and irregularity of the bill of sale to and proceedings in favor of the father. The findings, in that particular, are erroneous, and there should be a reversal and new trial in favor of all parties, on that ground.

In the next place, the finding of fraud seems so interwoven with this theory of irregularity and illegality that I am satisfied that a new trial should be ordered on that ground.

In the next place, when we consider the evidence of fraud itself, it seems limited to the son. There was evidence that he declared to one witness that he intended to “beatGus,”—evidently referring to plaintiff; but the father was not present, and, for aught that appears, knew nothing about that statement. Nor can I see any evidence which, in my judgment, justifies the finding of fraud against the father. Here was a perfectly valid claim by the lather against the son, which was paid to the extent of $728.35 by this bill of sale,—a transaction which both of them had a right to make. So, too, the judgment and subsequent proceedings were based upon indebtedness actually found. If these proceedings had not been thus supported by truth, equity, and justice, there might be ground for imputation of fraud against the father as well as the son. But the fact is the other way, and the utmost that can be said is that the son intended to prefer the father, and the father wanted to be preferred, and they were co-operating to that end. Of course, I do not mean to say that there may not be fraud in such a case, but I simply hold that there must be some other evidence of it,—something more than here appears to connect the father with a fraudulent intent on the part of the son, if even that exist. True enough, their relations require us carefully to scrutinize their dealings, and perhaps to treat them with suspicion; but suspicion is not proof of fraud. It must be proved, not by surmise, but by evidence which rises above the realm of mere suspicion, and to the dignity of proof; otherwise it would be next to impossible to sustain transactions between near relations upon any other theory. The mere relationship would justify an inference of fraud, and that is going much too far. It is in this view that I am unable to approve the disposition of some of the requests for findings. The refusal to find that the action was commenced July 20, 1891, in face of this proof, was certainly a technical error, and, in view of the other findings, seems to have affected the decision. So, too, the finding in the decision that this bill of sale “was without adequate consideration” seems to me entirely at variance with the finding on the joint request of the son and the receiver “that the sum mentioned as a consideration in said bill of sale was a fair price for the goods.”

Finally, I am afraid that the weight of authority is against the maintenance of this action in any view. The plaintiff is a mere attaching creditor, and had recovered no judgment in his attachment suit when this action was commenced. He may, therefore, wisely consider the question whether or not he will gain any advantage by a retrial of the action. See Galle v. Tode, (Sup.) 14 N. Y. Supp. 531. In any view, I think the present decision proceeds on erroneous theories, and therefore conclude that there should be a new trial, with costs of this appeal in favor of the father to abide the event of the action.

BARNARD, P. J.

The finding that the judgment obtained by Augustus Van Cortlandt against Henry Van Cortlandt on the 21st of July, 18(11, was irregular, illegal, and void is not supported by the evidence. The debt upon which it was founded was good, and it is so found by the trial court. The claim was put into the hands of Reeve & Schrugham for the purpose of obtaining a judgment upon it. William N. Schrugham served a summons personally upon the defendant, and he made an offer of judgment, which was accepted. In filing the papers for judgment no proof of the service of the summons was annexed, but the summons and complaint and offer and acceptance, both acknowledged by the respective parties. The omission was subsequently corrected, and the plaintiff, Augustus Lindsley, was permitted to file proof of service. The judgment lacks nothing in form. Was it given to defraud creditors? There is nothing to prove such an intent, assuming the judgment to be valid. The plaintiff immediately issued execution upon it, and obtained a receiver. The bill of sale of the personal property given by Henry Van Cortlandt was valid. The debt to his father was reduced by this sale $728. Augustus Van Cortlandt took immediate possession, and has ever since retained it. The receiver took possession of the remaining personal assets as receiver, and under the order of the county judge proceeded to advertise the same at public auction, when he was arrested by the injunction herein. Augustus Van Cortlandt was diligent, and did not suffer his execution to become dormant, and, if he had a good debt, he had the same rights as a stranger. Upon the merits the defendants are entitled to have a reversal of this judgment. It seems to be established by a long line of authorities that the plaintiff in this action, not being a judgment creditor, cannot maintain it. Sullivan v. Miller, 106 N. Y. 635, 13 N. E. Rep. 772; Briggs v. Austin, 129 N. Y. 208, 29 N. E. Rep. 4; Frothingham v. Hodenpyl, (N. Y. App.) 32 N. E. Rep. 240. The granting of the order to file the proof of the service of the summons and complaint was clearly within the power of the court, if it was necessary. The service was made and the order merely permitted the filing of the proof as if it had been filed in due time. I think the judgment was good without it. The granting of the motion made by plaintiff to insert allegations in the complaint that the bill of sale was fraudulent was also proper. It could have been proven without the insertion of section 4 of the complaint under the general allegations of fraud. An act done in fraud of creditors at about the same time will be received to show fraudulent intent. The order should be affirmed, without costs.

The judgment should be reversed, and the complaint dismissed, with costs.  