Columbus Watch Co. v. Hodenpyl

• Decision Date: 11 October 1892
• Citation: 135 N.Y. 430,32 N.E. 239
• Parties: COLUMBUS WATCH CO. et al. v. HODENPYL et al.
• Court: New York Court of Appeals Court of Appeals

135 N.Y. 430

32 N.E. 239

COLUMBUS WATCH CO. et al.

v.HODENPYL et al.

Court of Appeals of New York.

Oct. 11, 1892.

Appeal from supreme court, general term, first department.

Action by the Columbus Watch Company and others, attaching creditors of Stern & Stern, against A. J. G. Hodenpyl and others, to set aside certain judgments recovered by defendants against said firm of Stern & Stern, and the executions issued thereon, and to restrain the collection of such executions, on the ground that such judgments and executions were fraudulent and void. From a judgment and order of the general term (16 N. Y. Supp. 337) affirming a judgment of the special term in favor of defendants, plaintiffs appeal. Affirmed.

Franklin Bien, for appellants.

Hays & Greenbaum, for respondents.

GRAY, J.

The plaintiffs were creditors of the firm of Stern & Stern in New York city, and had procured attachments to be issued upon their claims, as set forth in their several actions. They then brought this action for equitable relief, seeking to set aside certain judgments recovered against Stern & Stern, and the executions issued thereon against the property attached, and to restrain the sheriff from paying the executions until they, these plaintiffs, could perfect judgments in their other actions. The grounds upon which plaintiffs base their right to such equitable relief are a fraudulent collusion in obtaining the judgments and the nullity of the executions, for being issued against executors in contravention of the requirements of the provisions of the Code of Civil Procedure. In 1886 Joseph Stern, a member of the firm of Stern & Stern, died, leaving a will, whereby he constitutes his widow, the defendant Dinah Stern, and his partner, the defendant Simon Stern, the executors of his estate, and therein authorized them ‘to conduct his interest in the business then carried on by him under the firm name of Stern & Stern, in conjunction with his brother, in such manner as they should deem proper, and for such time as they should deem for the interest of his estate.’ Thereafter the business of the testator's firm was carried on by the surviving partner and Joseph Stern's executors until November 29, 1889. On that date the judgments complained of were recovered against the firm of Stern & Stern, and executions thereon issued to the sheriff. The trial judge found that each of the judgments was for a debt justly owing by the firm to the party or parties in whose favor the judgment was entered, and nothing which is pointed out by the appellants' counsel would warrant us in saying that the findings were not justified. Indeed, their counsel bases his attacks upon the judgments upon inferences from the methods in which the judgments were recovered, rather than upon anything which amounts to evidence affecting the bona fides of the claims of the judgment creditors. They were entered upon offers made by the defendant firm to allow judgment to be taken for the amount claimed, and of course, in such a sense, they might be called collusive; but, if made to secure the payment of a just indebtedness, the offer to allow judgment to be entered is not a collusion which violates any rule of law, or gives the right to another and less fortunate creditor to interfere. The existence of some other purpose must be shown, whch involves the commission of a fraud or a legal injustice upon creditors, to render fraudulently collusive the preference permitted to a creditor in allowing an immediate entry of judgment in his suit. The judgments were all for goods sold and delivered to the firm, with the exception of three, which were for moneys loaned to the firm. These latter judgments were recovered by relatives, and they are particularly the subject of attack.

I see no good reason, nor is any advanced, for disturbing the conclusions reached by the learned justices at the special and general terms. There was some evidence to support the finding as to the bona fides of the indedtedness, and there was no proof affirmatively establishing, or even tending to establish, on the plaintiff's part, that the judgments were for fraudulent or nonexistent demands. The courts below have drawn their inferences from the testimony given by defen...