Buckley Petroleum Products, Inc. v. Goldman

• Decision Date: 18 May 1967
• Citation: 28 A.D.2d 640,280 N.Y.S.2d 876
• Parties: BUCKLEY PETROLEUM PRODUCTS, INC., et al. and Glenn D. Bartle, Trustee of Markson Bros., Inc. (now known as MBH, Inc.), Debtor, Appellant-Respondent, v. Abe GOLDMAN, Respondent-Appellant, Joseph Schwartz et al., Defendants. O. W. SEIBERT CO., Inc., et al. and Glenn D. Bartle, Trustee, Appellant-Respondent, v. Asher S. MARKSON, Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 876

280 N.Y.S.2d 876

28 A.D.2d 640

BUCKLEY PETROLEUM PRODUCTS, INC., et al. and Glenn D.

Bartle, Trustee of Markson Bros., Inc. (now known

as MBH, Inc.), Debtor, Appellant-Respondent, v. Abe GOLDMAN, Respondent-Appellant, Joseph Schwartz et al.,

Defendants.

O. W. SEIBERT CO., Inc., et al. and Glenn D. Bartle, Trustee, Appellant-Respondent, v. Asher S. MARKSON, Respondent-Appellant.

Supreme Court, Appellate Division, Fourth Department.

May 18, 1967.

Smith, Sovik, Terry, Kendrick, McAuliffe & Schwarzer, Syracuse, for appellant-respondent Bartle (Laurence Sovik, Syracuse, of counsel).

Mackay Caswell, Syracuse, for respondent-appellant Markson (Wm. J. Mackay, Syracuse, of counsel).

Costello, Cooney & Fearon, Syracuse, for respondents-appellants Schwartz, Goldman and Markson Bros. (Angela E. Struglia, Syracuse, of counsel).

Before BASTOW, J.P., and GOLDMAN, HENRY and MARSH, JJ.

MEMORANDUM:

Ordering paragraphs 4, 5 and 6 should be modified to provide in paragraph 4 that the motion to strike defendant Markson's first affirmative defense be granted without costs; in paragraph 6 that the motion to strike said defendant's third affirmative defense be denied without costs and in paragraph 5 the added qualification be stated that said defendant be also credited with the payments of 47 1/2% On unsecured general creditor's claims in accordance with the arrangement approved by Bankruptcy Court.

Ordering paragraph 4 which denied the motion to strike the defense pertaining to the statute of limitation is modified by granting said motion because the action was timely commenced. The six year statute of limitations (Civil Practice Act, § 48(2) applied when CPLR became effective on September 1, 1963 and the causes of action were not then barred. The provisions of the Civil Practice Act continued to be applicable and the causes of action were not barred when the action was commenced in September 1963. (CPLR 218(b))

The modifications in paragraphs 5 and 6 are required because in this action the creditors have causes of action only to the extent to which they have been damaged. Debtor and Creditor Law, § 278(1)(a) allows a creditor whose claim has matured the right to set aside a conveyance only to the extent needed to satisfy his claim. Stock Corporation Law, § 58 allows recovery by creditors of the 'full amount of any loss' only. Stock Corporation Law, § 59 creates no right in the corporation but only in the creditors, and American Broadcasting-Paramount Theatres, Inc. v. Frye, 8 N.Y.2d 232, 237, 203 N.Y.S.2d 850, 853, 168 N.E.2d 669, 671, must be read to restrict the action to reimbursement of losses only (see also Wyle v. Gould, 22 Misc.2d 935, 110 N.Y.S.2d 113.). Although Stock Corporation Law, § 15 reads so as to make any payments prohibited by the section void, the concluding sentence makes the personal liability of officers and directors limited to 'the full extent of any loss' to creditors insofar as an action by creditors is concerned (see Shaw v. Jewel...