California Packing Corp. v. Kelly Storage & Distributing Co.

188 A.D. 475, 177 N.Y.S. 37, 1919 N.Y. App. Div. LEXIS 7751
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 13, 1919
StatusPublished
Cited by3 cases

This text of 188 A.D. 475 (California Packing Corp. v. Kelly Storage & Distributing Co.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
California Packing Corp. v. Kelly Storage & Distributing Co., 188 A.D. 475, 177 N.Y.S. 37, 1919 N.Y. App. Div. LEXIS 7751 (N.Y. Ct. App. 1919).

Opinion

Smith, J.:

On July 13, 1917, the Phoenix Bank of Lexington, Ky., made a loan of $6,500 to the defendant, the Kelly Storage and Distributing Company. As security for this loan the Kelly Company transferred to the bank a non-negotiable receipt of a warehouseman in the city of New York, covering [477]*477the merchandise in question. The bank gave no notice of the transfer of this warehouse receipt to the warehouse before August 10, 1918, at which time the plaintiff, claiming to have a cause of action against the defendant for some $2,000, obtained and levied a warrant of attachment upon the same goods.

Under section 115 of the Personal Property Law (Consol. Laws, chap. 41 [Laws of 1909, chap. 45], as added by Laws of 1911, chap. 571), as well as under section 126 of the General Business Law (Consol. Laws, chap, 20; Laws of 1909, chap. 25), it is provided that a person to whom such a document has been transferred may notify the warehouseman of its ownership of such receipt and acquire the direct obligation of the warehouseman to hold possession of the goods for the transferee, and it is further provided: Prior to the notification of such bailee by the transferror or transferee of a non-negotiable document of title, the title of the transferee to the goods and the right to acquire the obligation of such bailee may be defeated by the levy of an attachment or execution upon the goods by a creditor of the transferror.” The same provision, with varying phraseology, occurs in both sections of the statutes noted. Subsequent to the levy of the attachment the bank gave notice to the warehouse of its assignment.

This motion was made by the Phoenix Bank to vacate that attachment upon the ground that the papers were insufficient to authorize the granting of the same. The motion was opposed at Special Term upon two grounds: First, that the Phoenix Bank was not a subsequent lienor within section 682 of the Code of Civil Procedure and, therefore, could not properly make the motion. That section provides: “ The defendant, or a person who has acquired a lien upon, or interest in, his property, after it was attached, may * * * apply to vacate or modify the warrant.” But the Phoenix Bank did not acquire a hen upon the property until notice of the transfer was given to the warehouse, which was subsequent to the granting and levy of the attachment. I am of opinion, therefore, that the Phoenix Bank has a standing in court to question the sufficiency of the papers upon which the attachment was granted.

Upon the question whether those papers were sufficient [478]*478the Code provision is that the papers upon which the warrant was granted must show that the plaintiff has one of the causes of action specified in the statute. (See Code Civ. Proc. §§ 635, 636, 683.) The allegations of the complaint claimed to show the consideration of such a cause of action are contained in the 3d and 4th paragraphs which read as follows:

Third. That on or about the 27th day of November, 1917, plaintiff drew a draft upon the defendant for the sum of Two thousand and 83 /100 ($2000.83) dollars, payable May 23rd, 1918.
Fourth. That thereafter and for a valuable consideration defendant duly accepted said draft and agreed to pay the same.”

Before discussing these provisions of the complaint, it is well to note, in the first place, that this is not a case where the defect can be cured by amendment. The motion is made upon the papers upon which the attachment was granted. An additional affidavit cannot be allowed to be furnished in support of the attachment. (Hilborn v. Pennsylvania Cement Co., Nos. 1 & 2, 145 App. Div. 442; Ladenburg v. Commercial Bank, 87 Hun, 269; affd., 146 N. Y. 406; Lewisohn v. Kent & Stanley Co., 87 Hun, 257, 262; Trow’s Printing, etc., Co. v. Hart, 85 N. Y. 500; Steuben County Bank v. Alberger, 75 id.' 179.) Moreover, section 768 of the Code, as amended by chapter 763 of the Laws of 1911, provides that whenever a motion is made to set aside an order, judgment or decree, for defects in papers or proceedings upon which it was made and such defects can, “ without prejudice to intervening rights, be cured or supplied,” those defects may be cured by affidavit nunc pro tunc. After the granting of this attachment the Phoenix Bank served upon the warehouse its assignment of the interest of the Kelly Company, so that this attachment must stand, if at all, upon the original papers. The respondent makes no other claim in this case and does not attempt to fortify its position in any way by an amendment of the papers upon which the attachment was granted.

Again, this is not a case in which the court will consider the sufficiency of the papers with less care than it would upon the trial of the action, because the issue here is not between the plaintiff and the defendant in the case, between [479]*479whom amendment of the pleadings may, with the court’s permission, be made, but between plaintiff and a third party, whose rights have been cut off, if the plaintiff’s attachment be held good.

As to the allegation in the 4th paragraph, that, for a valuable consideration, the defendant duly accepted said draft and agreed to pay the same, this Department has held in Neukirch v. McHugh (165 App. Div. 406) that this statement of consideration is simply a conclusion of law and is not a sufficient statement of a consideration in a pleading. This case follows other cases in this Department. (See Fulton v. Varney, 117 App. Div. 572; Browning, King & Co. v. Terwilliger, 144 id. 516; Czerney v. Haas, Id. 430.)

In St. Lawrence County National Bank v. Watkins (153 App. Div. 551) the Third Department held that such a statement of consideration was sufficient, refusing to follow the rule as laid down in this Department. Thereafter this Department in the Neukirch Case (supra) with that decision in mind has deliberately concluded to adhere to its former rulings until the Court of Appeals should hold otherwise. For the sake of uniformity of decision, while sitting in this Department, we should follow the determination thus announced and hold that the 4th paragraph of the complaint does not sufficiently state a consideration for the acceptance of the draft to make a binding contract upon which liability can be predicated. The plaintiff is then compelled to rely upon the allegations in the 3d paragraph, to wit, that the plaintiff drew a draft upon the defendant for the sum of $2,000.83, payable May 23, 1918. The argument of the plaintiff is that a draft is, in fact, a bill of exchange and that a bill of exchange is defined in the Negotiable Instruments Law, by section 210, as “ An unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to hearer.” (See Gen. Laws, chap. 50 [Laws of 1897, chap. 612], § 210, as amd. by Laws of 1898, chap. 336; Consol. Laws, chap. 38 [Laws of 1909, chap. 43], § 210.) And it is further declared that a negotiable instrument is presumed to have been given upon [480]*480sufficient consideration.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Montgomery Ward & Co. v. Newman
157 A. 824 (Supreme Court of Vermont, 1932)
Grassi v. La Sociedad Bancaria Del Chimborazo
213 A.D. 629 (Appellate Division of the Supreme Court of New York, 1925)
Dahl v. Scandinavian Trust Co.
108 Misc. 135 (New York Supreme Court, 1919)

Cite This Page — Counsel Stack

Bluebook (online)
188 A.D. 475, 177 N.Y.S. 37, 1919 N.Y. App. Div. LEXIS 7751, Counsel Stack Legal Research, https://law.counselstack.com/opinion/california-packing-corp-v-kelly-storage-distributing-co-nyappdiv-1919.