Cohen v. Levy

• Decision Date: 24 May 1915
• Citation: 221 Mass. 336,108 N.E. 1074
• Parties: COHEN v. LEVY et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

221 Mass. 336

108 N.E. 1074

COHEN v. LEVY et al.

Supreme Judicial Court of Massachusetts, Suffolk.

May 24, 1915

COUNSEL

M. H. Steuer, of Boston, for appellants.

Wm Charak and Julius Robbins, both of Boston, for appellee.

OPINION

RUGG C.J.

This is a bill to reach and apply property of the defendant Levy in the hands of the other defendant, Harry L. Lurie. At the trial it developed that title to the property in question had been transferred to Yetta Lurie and motion by the plaintiff to join her as a party defendant was allowed. Of course this without more did not make her a party. There is nothing in the record to show that service was made upon her, that she ever appeared, or filed an answer. Further, it being recited in the final decree that the goods sought to be reached and applied have been sold at auction by one Guttentag, a constable of the city of Boston, the decree proceeds, that in the event of failure by the debtor defendant to pay the plaintiff's debt, 'then the said Joseph Guttentag constable, is directed and ordered to deliver unto the plaintiff from the proceeds of such sale, and it is ordered that the proceeds of such sale shall be applied by said Joseph Guttentag' toward the payment of the plaintiff's claim.

All this was irregular. The motion to join Yetta Lurie as a party having been alllowed on the ground that she had a real interest in the goods, the plaintiff ought then, if she did not appear voluntarily, to have caused her to be summoned to appear in court and thereto have moved to have had the bill taken for confessed if she failed to appear. If the property of its proceeds which the plaintiff wanted to reach was in the hands of Guttentag, he also should have been joined as a party. There is nothing in the record to show his relation to the goods. For aught that appears, he may have attached the goods on a writ in favor of an innocent creditor of Harry Lurie or Yetta Lurie. No decree in a case like the present can run against a stranger until he has been made a party to the suit and subjected to the jurisdiction of the court.

The order for final decree in conventional form simply states the conclusion of law that the conveyance was made to hinder delay and defraud creditors, and, in order to understand and interpret it, resort must be had to the finding of facts later made under R. L. c. 159, § 23. That finding, so far as material, is printed in a footnote. ^[1] It is not plain. A debtor at common law has a right to exhaust his property in the payment of one or more of his creditors in full, in preference to and to the exclusion of others. Giddings v. Sears, 115 Mass. 505. It is not necessary to determine whether a debtor may sell lawfully his property to a third person for a fair price, with a genuine purpose to apply the proceeds to the payment of some creditors in preference to others. Clements v. Moore, 6 Wall. 299, 18 L.Ed. 786; Gregory v. Harrington, 33 Vt. 241; Priest v. Brown, 100 Cal. 626, 35 P. 323. The finding is not explicit upon the point whether Kate Levy had an intent to do more than pay the debt due to her son in preference to her other creditors. The inadequacy of the consideration paid by Lurie, together with other circumstances, was evidence sufficient to warrant a finding of fraudulent purpose on her part. Nor does the finding go to the extent of saying that Lurie knew of or participated in an intent of Kate Levy to hinder, delay or defraud her creditors. It a transaction is 'honest enought,' it is somewhat difficult to regard it as a...