Hart v. A.L. Clarke & Co.

• Decision Date: 02 March 1909
• Citation: 194 N.Y. 403,87 N.E. 808
• Parties: HART v. A. L. CLARKE & CO., Limited, et al.
• Court: New York Court of Appeals Court of Appeals

194 N.Y. 403

87 N.E. 808

HART

v.A. L. CLARKE & CO., Limited, et al.

Court of Appeals of New York.

March 2, 1909.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Henry Hart against A. L. Clarke & Co., Limited, and others. From an order of the Appellate Division in the First Judicial Department (127 App. Div. 679,111 N. Y. Supp. 886), reversing an order of the New York Special Term, granting plaintiff an injunction pendente lite, plaintiff appeals. Affirmed.

The question of law certified to this court by the Appellate Division is: ‘Upon the facts stated in the complaint, is the plaintiff entitled to an injunction?’ It appears from the complaint that the defendant A. L. Clarke & Co., Limited, is a foreign corporation, and that on April 6, 1908, the plaintiff in this action brought an action against said ‘A. L. Clarke & Co., Limited,’ on contract, which action is now pending undetermined. The summons in said action was personally served in this state on said April 6, 1908. On that day the plaintiff duly obtained a warrant of attachment in said action against the defendant, and the sheriff to whom the attachment was delivered ‘did forthwith attach property belonging to the defendant * * * consisting of certain 100 cases of Scotch whisky,’ and by virtue of such attachment said sheriff ‘became and since has been in control of the said attached property.’ The complaint further alleges that after the said attachment had been served the defendant A. L. Clarke & Co., Limited, and the defendant Fluegelman conspired ‘to fraudulently dispose of the attached property, and to hinder, delay, and defraud the plaintiff and the said sheriff from enforcing the claim or lien under and pursuant to the said warrant of attachment, and did pretend to convey, or to have conveyed, the right, title, and interest of the said A. L. Clarke & Co., Limited, to the property attached, to the defendant Isidore Fluegelman; but that the pretended conveyance, if any there were, to the said defendant Isidore Fluegelman, was with knowledge on the part of the said Fluegelman, as well as of the said A. L. Clarke & Co., Limited, of the existence of plaintiff's claim, and was without consideration, and was with intent to defraud, and for the purpose of hindering, delaying, and defrauding, this plaintiff and the other creditors of the defendant A. L. Clarke & Co., Limited, in the collection of their just debts, and the sheriff of the county of New York from enforcing his claim or lien against the property attached, as aforesaid, under the warrant of attachment aforesaid, and was with the fraudulent purpose and intent to interfere with the possession and control of the property attached by the said sheriff under said warrant of attachment, and in order that the said sheriff under the said warrant of attachment might not be able to obtain any property, and in order that there might be no property in this country of the said A. L. Clarke & Co., Limited, which could be seized and held under the said warrant of attachment, or levied upon and sold under any execution issued upon any judgment which the plaintiff might obtain in said action.’ This action is brought to set aside and make null and void the alleged transfer of said attached property, and to enjoin said defendants from removing, selling, pledging, or in any wise disposing of or incumbering said attached property, and to restrain the sheriff from parting with said property or surrendering the same to the defendant Fluegelman. An injunction was granted pendente lite.

Don R. Almy, for appellant.

Henry W. Pollock, for respondents.

CHASE, J. (after stating the facts as above).

The general rule is well settled that until after the recovery of a judgment and the issuing of an execution thereon no equitable action can be maintained by an attaching creditor to set aside a fraudulent transfer. Whitney v. Davis, 148 N. Y. 256, 42 N. E. 661. Where the summons in an action is served without the state, or by publication pursuant to an order obtained for that purpose, and the defendant has not appeared in the action, it is provided by statute that the sheriff may, in aid of an attachment, maintain an action for the discovery of property belonging to the attachment debtor, or he may maintain any other action that may be maintained by a judgment creditor. Code Civ. Proc., § 655. The plaintiff in an action may, by leave of the court or a judge thereof, procured as described by statute, bring in the name of himself and the sheriff jointly any action that can be brought by the sheriff to recover property attached, or the value thereof, or for the purposes stated in said section 655. Code Civ. Proc. § 677. This action is not brought pursuant to such statutory authority. The plaintiff seeks to maintain this action upon the facts stated in the complaint as one within the general equitable powers of the court. There are some exceptions to the general rule that an action will not lie by an attachment creditor until the recovery of a judgment and the return of an execution thereon unsatisfied. The authorities relied upon by the plaintiff are instances of such exceptions to the general rule.

The Special Term granted the...