Hadlock v. Eric
Decision Date | 28 February 1938 |
Citation | 23 F. Supp. 692 |
Parties | HADLOCK v. ERIC. |
Court | U.S. District Court — Southern District of New York |
Krause, Hirsch & Levin, of New York City (George J. Hirsch, of New York City, of counsel), for plaintiff.
Kleeberg & Greenwald, of New York City (Jacob Greenwald, of New York City, of counsel), for defendant.
Motion for summary judgment under Rules 113 and 114 of the Rules of the Civil Practice of New York.
The plaintiff, Albert E. Hadlock, Jr., as Trustee in Bankruptcy of Seward W. Eric, commenced this suit by service of a summons and complaint on August 27, 1937, for the recovery of alleged fraudulent transfers of stock and notes of the Daphne Realty Corporation by the bankrupt to the defendant, his wife.
Counsel for the plaintiff take the position that the Debtor and Creditor Law is merely a codification of the common law, and that an action to set aside or recover for a fraudulent transfer is not "an action to recover upon a liability created by statute."
The first two causes of action allege that in October, 1930, the defendant received from the bankrupt without fair consideration stock and notes of the Daphne Realty Corporation having a value of at least $41,000, at which time the bankrupt was insolvent or rendered insolvent by said transfer. They follow generally the wording of section 273 of the Debtor and Creditor Law.
In my judgment section 273 of the Debtor and Creditor Law does not itself create new liabilities but was a codification of and the embodiment of existing presumptions established by a long line of decisions of the courts of the State of New York, those cases holding that a voluntary conveyance made while the one transferring was in debt or insolvent, was presumably fraudulent. Feist v. Druckerman, 2 Cir., 70 F.2d 333; Cole v. Tyler, 65 N.Y. 73; Smith v. Reid, 134 N.Y. 568, 31 N.E. 1082; Kerker v. Levy, 206 N.Y. 109, 99 N.E. 181; cf. Ga Nun v. Palmer, 216 N. Y. 603, 111 N.E. 223; Report of National Conference of Commissioners on Uniform State Laws, Annual Meetings, Vol. 27-28, August, 1918.
Therefore, it seems to me that neither the "First" nor "Second" cause of action is "an action to recover upon a liability created by statute", and that section 48, subdivision 2 of the Civil Practice Act does not apply. Whether the action is governed by the ten year provision of section 53 dealing with constructive fraud, or by section 48, subdivision 5, relating to actual fraud within a six year limitation, is immaterial for if it be the shorter period plaintiff may be able to establish that the discovery of the fraud did not occur until some years after 1930.
The allegations in the "Third" cause of action, though following the usual allegations under ...
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...creditor during the pendency of another creditor's action. Twyne's Case, 76 Eng.Rep. 809 (Star Chamber 1601); see also Hadlock v. Eric, 23 F.Supp. 692, 693 (S.D.N.Y.1938) ("section 273 of the Debtor and Creditor Law does not itself create new liabilities but was a codification of and the em......
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...court does not decide, there is an issue of fact which necessitates a denial of the motion as to this cause of action. See Hadlock v. Eric, D.C., 23 F.Supp. 692. The Fifth cause of action is based upon what is alleged to be Section 71 of the General Corporation Law of New York. This section......
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...indeed, the right to recovery for fraudulent conveyances is a common law right which exists independent of statute. Hadlock v. Eric, 23 F.Supp. 692, 693 (S.D.N.Y.1938). 3. A transfer made by a debtor is fraudulent if the debtor made the transfer with actual intent to hinder, delay, or defra......
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