Princeton Bank & Trust Co. v. Berley

57 A.D.2d 348, 394 N.Y.S.2d 714, 1977 N.Y. App. Div. LEXIS 10967
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMay 23, 1977
StatusPublished
Cited by8 cases

This text of 57 A.D.2d 348 (Princeton Bank & Trust Co. v. Berley) 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
Princeton Bank & Trust Co. v. Berley, 57 A.D.2d 348, 394 N.Y.S.2d 714, 1977 N.Y. App. Div. LEXIS 10967 (N.Y. Ct. App. 1977).

Opinion

Hopkins, J. P.

This appeal essentially involves the priority of the liens of two judgment creditors of one Samuel M. Berley in attaching the latter’s interest in partnerships whose assets include the fee in certain lands improved by shopping centers in Queens County. Two of the three deeds conveying the lands named Berley and one Morton Pickman as grantees, without stating the nature of their interests. On July 28, 1975 the intervenor, the Tengran Company (Tengran), entered a judg[350]*350ment for $1,003,521.28 against Berley in Nassau County, based upon his confession of judgment, and docketed it in Queens County two days later. Thereafter, on August 15, 1975, the appellant, Princeton Bank and Trust Company (Princeton), entered a judgment for $101,346 in Nassau County against Berley, based upon the latter’s nonpayment of a promissory note.

Princeton claims priority over Tengran’s judgment. By this proceeding, commenced November 14, 1975, pursuant to section 54 of the Partnership Law, it seeks a charging order on Berley’s partnership interests in the shopping centers and the appointment of a receiver. On August 13, 1975, prior to the institution of Princeton’s proceeding, Tengran (under the mistaken impression that Berley’s interest in the lands improved by the shopping centers was that of a tenant in common) delivered an execution with “notice to garnishee” to the Sheriff. In fact, the execution commanded the Sheriff to satisfy the judgment “out of the real and personal property of the * * * judgment debtor.” The “notice to garnishee” portion was addressed to Berley himself, stating that “you are indebted to the judgment debtor * * * or in possession or custody of property not capable of delivery in which the judgment debtor has an interest, including * * * the following specified debt and property: The real property located in the County of Queens which is described in the metes and bounds descriptions attached to this execution” (the properties so described were apparently the lands on which the shopping centers were located). The Sheriff took no action on Tengran’s execution, other than to advertise a sale of the properties, scheduled for December 10, 1975, by notice dated September 18, 1975.

In its proceeding, which was returnable December 1, 1975, Princeton alleged that its judgment remained unsatisfied and that Berley had specified interests in six named partnerships, including the shopping centers in Queens County located on the lands specified in Tengran’s execution. Tengran was not named as a party.

Pickman, a party to the Princeton proceeding, submitted an affidavit in which he stated that he was a general partner, together with Berley, in the named partnerships, and he attached a copy of the notice of Sheriff’s sale to be held as a result of the execution under Tengran’s judgment.

Princeton thereupon moved (within its pending proceeding [351]*351under the Partnership Law) to vacate Tengran’s execution and to set aside any sale; it claimed that the execution was void on the ground that a judgment creditor "may not execute against partnership property where it has a judgment against one of the partners individually” and that "the only procedure which can be followed is under Section 54 of the Partnership Law, as Petitioner has done here.”

Tengran responded by asserting that it had priority because "Berley appears to have title to the real property in issue as tenant-in-common. The property, therefore, is not owned by partnerships”. Further, it asserted that (assuming the real properties were assets of partnerships) "CPLR 5234 (b) grants a priority on execution against personal property (such as a partnership interest) to the judgment creditor who first delivers an execution to the sheriff of the county in which the personal property is located”, and that the execution delivered to the Sheriffs office on August 13, 1975 was "an execution against all of the property of Berley in that county, including, but not limited to, real property” (emphasis in original).

Princeton’s reply requested the court to temporarily enjoin the Sheriffs sale and conduct a hearing to determine, inter alia, whether the real properties were owned by Berley and Pickman individually, or as partners. This request was granted by Special Term by an order dated December 9, 1975, and a hearing was directed to be held on December 22, 1975.

On December 10, 1975 Tengran delivered a new "execution with notice to garnishee” to the Sheriff; this time the named garnishee was Morton Pickman. On the following day a deputy sheriff served the execution on Pickman at his stated office address by handing it to Pickman’s attorney.

On December 12, 1975 Tengran moved for leave to intervene in the pending proceeding under section 54 of the Partnership Law. On December 17, 1975 Princeton (still in the context of the section 54 proceeding) moved to set aside Tengran’s judgment on the ground that the underlying affidavit in support of the confession of judgment, because of incompleteness and mathematical inaccuracies, failed to comply with CPLR 3218. The motion for leave to intervene was orally granted on March 2, 1976, the day of the hearing, and the sufficiency of the confession of judgment was accepted as an issue at the hearing.

By a decision dated July 13, 1976, Special Term held that (1) the affidavit of confession underlying the Tengran judgment [352]*352did not violate CPLR 3218; (2) on the facts presented to it, including admissions made by Berley, his interest in the properties was that of a partner and not of a tenant in common; (3) the charging order procedure set forth in section 54 of the Partnership Law was not the exclusive remedy for placing a lien on a judgment debtor’s interest in a partnership; (4) an interest in a partnership is subject to garnishment pursuant to paragraph 3 of subdivision (c) of CPLR 5201; and (5) CPLR 5234 (subd [c]) gives priority to a judgment creditor who has not issued execution (such as Princeton) where "a receiver * * * has been appointed by order * * * and the order is filed before the property or debt is levied upon”, and such was not the case herein.

Princeton, in addition to contesting the conclusions of Special Term (except, of course, for the finding that Berley’s interest in the real property was that of a partner), contends that Tengran had never validly levied in that (a) the August 13, 1975 execution was of no effect, since it did not name any partner of the judgment debtor as the garnishee (as required by CPLR 5201), nor was any such partner served by the Sheriff, and (b) since the December 11, 1975 levy was made after the original return date of the motion to charge the debtor’s interest under section 54 of the Partnership Law, it should be deemed junior to the section 54 proceeding.

We affirm. Tengran’s rights are superior to the claim of Princeton.

I

THE THRESHOLD ISSUE OF THE SUFFICIENCY OF THE AFFIDAVIT OF CONFESSION

The affidavit of confession states: "3.

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Cite This Page — Counsel Stack

Bluebook (online)
57 A.D.2d 348, 394 N.Y.S.2d 714, 1977 N.Y. App. Div. LEXIS 10967, Counsel Stack Legal Research, https://law.counselstack.com/opinion/princeton-bank-trust-co-v-berley-nyappdiv-1977.