Hart v. A. L. Clarke & Co.

127 A.D. 679, 111 N.Y.S. 886, 1908 N.Y. App. Div. LEXIS 4078
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 8, 1908
StatusPublished
Cited by1 cases

This text of 127 A.D. 679 (Hart v. A. L. Clarke & 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
Hart v. A. L. Clarke & Co., 127 A.D. 679, 111 N.Y.S. 886, 1908 N.Y. App. Div. LEXIS 4078 (N.Y. Ct. App. 1908).

Opinions

McLaughlin, J. :

This action is brought to set aside a transfer of personal property. The complaint charges, in substance, that on or about the 6th of April, 1908, the plaintiff, as assignee of one Eaphael, commenced an action against the defendant A. L. Clarke & Company, Limited, a foreign corporation, to recover the sum of $2,700 for services rendered by-plaintiff’s assignor, the summons being personally served upon- an officer of defendant within the State; that on the same day a. warrant of attachment was issued against the property of Clarke & Company; that the defendant Foley, as sheriff, did forthwith attach in pursuance thereof,, property belonging to said defendant, consisting of 100 cases of Scotch whisky, held by Charles & Company,, a New York corporation, which had a claim or lien thereon for money advanced to pay duty, cartage and storage, amounting to $604; that thereafter the defendant A. L. • Clarke <&■ Company [681]*681conspired with the defendant Fluegelman to fraudulently dispose of the attached property and to hinder and defraud the sheriff from enforcing the lien of the-attachment, and did pretend to convey or to ' have conveyed the right, title and- interest of Clarke & Company in such property to Fluegelman; that such pretended conveyance, if any .there were, was without consideration and for such fraudulent purpose ; that Clarke & Company lias no other property within the State subject to levy and plaintiff has no adequate remedy at law. The judgment demanded is that such alleged conveyance be declared void, and the property declared, as to plaintiff, to belong to Clarke & Company and subject to the lien of the attachment; and that during the pendency of the first action the defendants be enjoined from removing or disposing of said property. Upon proof by affidavits of the facts alleged in the complaint the plaintiff obtained an order enjoining the defendants, during the pendency of this action, and until the further order of the court, from removing, disposing of, or incumbering the attached property, the sheriff being directed to hold the same under the warrant of attachment. From this order the defendant Fluegelman appeals.

No answering affidavits were submitted and the sole question presented is whether, upon the facts stated, the plaintiff has a right to the relief demanded. If he has not, then the order must be reversed.

An injunction pendente lite cannot be granted unless the complaint states facts sufficient to constitute a cause of action (McHenry v. Jewett, 90 N. Y. 58; Werbelovsky v. Michael, 106 App. Div. 138), and, therefore, the order appealed from must be reversed, unless facts are set out in the complaint which entitle the plaintiff to some relief.

It seems to be conceded, and if not it might well be, that the action -cannot be maintained under section 655, subdivision 2, or section 677 of the Code of Civil Procedure, because the complaint shows that the summons in the attachment .action has been personally served, within the State, upon the defendant, but it is suggested that the facts stated are sufficient to justify a court of equity independent of the statute in exercising its equitable powers on behalf of the plaintiff. I am unable to reach this conclusion. A court of equity will not tak¿ jurisdiction of a case where the sole claim is [682]*682that the property which is attached has been transferred by the defendant to a third party with intent to hinder, delay and defraud the attaching creditor. To do so, there being no statutory provision authorizing it, would be in direct hostility to the rule that a creditor has no standing in court to reach equitable assets until his remedy at law has been exhausted, nor to attack a fraudulent trans-, f er of property of his debtor until after judgment. (Bowe v. Arnold, 31 Hun, 256; affd. on opinion below, 101 N. Y. 652; Whitney v. Davis, 148 id. 256; Butcher v. Pearson, 43 App. Div. 468; affd., 161 N. Y. 625.) Indeed, one of the grounds for an attachment is a fraudulent transfer of property, and if an action of this character could be maintained, then a creditor at large could always maintain an action in equity by first procuring and levying an attachment upon such property. (Thurber v. Blanck, 50 N. Y. 80.)

That this action cannot be maintained upon the facts set out. in the complaint is settled by Bowe v. Arnold (supra). There, an attachment was issued and a levy made upon personal property which was claimed, as here, by a third party under an assignment. An action was then commenced to set aside the assignment as fraudulent and it was held that it could not be maintained.- Mr. Justice Daniels, who delivered the opinion, said “ As this action cannot be maintained under the sections of the Code which' have been mentioned, there seems to be no legal ground upon which it can be allowed to stand. To authorize the creditors in maintaining an action of this' description, it is necessary that they shall first recover judgment in their favor * * During the course of the opinion, referring to what the court decided in Bates v. Plonsky (28 Hun, 112), cited, here and relied upon by the -respondent—and the same learned justice delivered the opinion in that case — he said that that action was in effect-brought to prevent the distribution of the proceeds of the property until the conflicting rights of different claimants to them could be settled by the court and a lawful distribution made under its authority. “ It was not intended to be held,” he said, “ and was not in that .case, that creditors seizing property claimed to be that of the debtors, could by force of their seizure alone maintain an action to set aside an álleged fraudulent disposition previously made of- it by the debtors. ..But all that was held was that the plaintiffs were entitled to enjoin the dispo[683]*683sition of the proceeds until the action could be tried for the purpose of determining the conflicting rights of the different parties to such proceeds, and whether the action could be maintained was not a point before the court at'that time for determination. All that was then presented and decided was that there was sufficient to enjoin the distribution of the proceeds until a final hearing and determination could be had.”

But it is urged that People ex rel. Cauffman v. Van Buren (136 N. Y. 252) is an authority to the effect that the action can be maintained. I do not so read the opinion in that case. There, an attaching creditor brought an independent action to set aside certain judgments upon which executions had been issued' and levies made on the property attached, on the ground that such' judgments were fraudulent, having been rendered with intent to hinder and delay the attaching creditor. It was held, by a bare majority of the court, that under the peculiar facts- set forth the action could be maintained. The sheriff, as indicated, had, by virtue of executions issued upon the alleged fraudulent judgments, levied upon and was about to sell the property, and the basic principle underlying the decision, as justifying the maintenance of the action, is substantially the same as the one referred to by Mr. Justice Daniels as justifying the maintenance of the action in Bates v. Plonsky (supra), which was

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248 A.D. 221 (Appellate Division of the Supreme Court of New York, 1936)

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Bluebook (online)
127 A.D. 679, 111 N.Y.S. 886, 1908 N.Y. App. Div. LEXIS 4078, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hart-v-a-l-clarke-co-nyappdiv-1908.