Opinion
11-04-1898
WALSH v. ROSSO et al.
Leon Abbett, for complainant. John H. Meeker, for defendants.
Bill by John B. Walsh, receiver, against Marietta Rosso and others, to subject to the satisfaction of a judgment recovered by Angela Franchl, against defendant Carlo Rosso, certain moneys advanced by said judgment debtor in payment of an incumbrance on certain lands acquired by his wife, defendant Marietta Rosso. On demurrer to bill. Overruled.
Leon Abbett, for complainant.
John H. Meeker, for defendants.
PITNEY, V. C. The facts admitted by the demurrer are as follows: On December 4, 1897, Angela Franchl recovered a judgment in the supreme court of this state against the defendant Carlo Rosso. A fi. fa. was issued thereon, and duly returned unsatisfied. On the 11th of February, 1898, an order was made by one of the judges of the supreme court that Carlo Rosso appear and be examined upon supplemental proceedings upon the execution, and that such proceedings were had on that order that the complainant, on the 3d of March, 1898, was duly appointed by a Judge of the court receiver of the property and things in action of Carlo which belonged to him or were held in trust for him. Five years previously, viz. on the 25th of October, 1893, the defendant Marietta Rosso, the wife of Carlo, acquired title by conveyance to certain lands in Essex county for the expressed consideration of $6,000. She paid only $700 on account thereof, and took title subject to a building loan mortgage for $3,800, payable in installments of $40 per month, which sum of $40 per month the defendant Carlo has each and every month since that date, and up to the time of the filing of the bill, paid to the holder of the mortgage. The relief sought by the complainant is that he should be declared to have a lien upon the lands to the extent of the amount so paid by Carlo, by way of subrogation to the rights of the mortgagee.
Two causes of demurrer are assigned. The first, as set out in the demurrer, is that the complainant is without power to ask the aid of the court as to real estate, and that such is the nature of his claim set out in the bill. The second—stated orally at the argument— Is that no interest in the real estate is shown by the bill which is available to creditors by any proceeding.
With regard to the second cause of demurrer, the presumption undoubtedly is that the payments made by Carlo upon the mortgage upon his wife's property were gifts by him to her, and as such, unless made with a settled design to defraud creditors in futuro, are valid against all persons except those who were creditors at the time of the payment. The bill does not state when the cause of action underlying the judgment of Franchi arose. It must have arisen some little time before the judgment was recovered. But the bill does allege that payments were made between the time of the entry of the judgment and the filing of the bill, July 12, 1898; so that several payments of $40 each were made after the entry of the judgment. The facts set out in the bill warrant the inference that those payments, at least, cannot be held as gifts as against the judgment creditor.
As to the first cause of demurrer, which is the one principally relied upon, I think it also fails. It was undoubtedly held by Vice Chancellor Van Fleet, in Higgins v. Gillesheiner, 26 N. J. Eq. 308, that a receiver, such as is now before the court, has no power to impeach a grant and conveyance of land by a debtor in fraud of his creditors; that the remedy is by the judgment creditor directly against the land. And subsequently, in Miller v. Mackenzie, the same learned vice chancellor held that such a receiver could not attack a conveyance of, or mortgage upon, chattels. No opinion was prepared or reported, but the decision was based upon the decision in Higgins v. Gillesheiner. The decree in Miller v. Mackenzie was reversed, as reported in 29 N. J. Eq. 291; and it was held that as to personal property such a receiver was entitled to the remedy in question. In Skinner v. Terhune, 45 N. J. Eq. 565, 19 Atl. 377, it was held by me that the rule laid down in Higgins v. Gillesheiner was not disturbed by that announced in Miller v. Mackenzie, except so far as related to personalty, and that as to realty such a receiver had no right to intervene. And in Boid v. Dean, 48 N. J. Eq. 193, 21 Atl. 618, I followed the ruling just mentioned, and refused relief to a receiver as against real estate, but granted it as to personal property, to wit, a bond and mortgage. The question, then, is whether or notthe interest here sought to be reached is, in substance and effect, personalty or realty; and I conclude that it is personalty. It is, in effect, an equitable right to a lien which the judgment debtor has upon land for money advanced by him to pay an incumbrance thereon, and which payment so made cannot be held as a gift as against his creditors. I will advise a decree that the demurrer be overruled, with costs, and leave to the defendants to answer within 20 days.