Jasper v. Rozinski
| Decision Date | 13 April 1920 |
| Citation | 127 N.E. 189,228 N.Y. 349 |
| Parties | JASPER v. ROZINSKI et al. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Action by Morris Jasper against Jacob Rozinski and others. From a judgment of the Appellate Division, First Department (182 App. Div. 365,169 N. Y. Supp. 769) reversing a judgment against the defendant named and dismissing the complaint, plaintiff appeals.
Reversed, and judgment of the Special Term affirmed.
Appeal from Supreme Court, Appellate Division, First department.
Samuel J. Rawak, of New York City, for appellant.
Abraham I. Spiro, of New York City, for respondent.
This is an action by a judgment creditor to set aside for fraud, several conveyances, including a mortgage for $5,000 and an assignment of that mortgage. The demand for judgment is not only that said conveyances be set aside, but that plaintiff have leave to issue execution against the property included in the deeds as provided by chapter 13 of the Code of Civil Procedure, and also that the plaintiff have judgment against the defendants for the amount of his judgment and interest.
On September 19, 1914, the plaintiff obtained a judgment against the defendant Sam A. Krulewitch for $1,055.65. It was docketed September 19, 1914, and execution was issued thereon which was returned wholly unsatisfied. In the months of August and September, 1914, prior to plaintiff obtaining his said judgment, the defendant Sam A. Krulewitch transferred to others three pieces of real property theretofore owned by him. Among the pieces of real property so transferred was the piece at No. 21 East 112th street. The conveyance thereof was made on August 12, 1914, to the defendant Berkowitz expressly subject to a mortgage for $13,000. At the time of the delivery of said deed to the defendantBerkowitz, he gave back to the defendant Sam A. Krulewitch a mortgage on the property of $5,000 dated the same day as the deed and it was duly recorded.
Said defendant Krulewitch on the 17th day of September, 1914, assigned the mortgage so given by Berkowitz to the defendant Rozinski and the assignment was duly recorded.
After the return of said execution against Krulewitch, the plaintiff commenced a proceeding supplementary to said execution, and thereafter and in November, 1914, this action, and more than four months after September [228 N.Y. 353]19, 1914, and the commencement of this action, bankruptcy proceedings were commenced against Krulewitch and he was declared a bankrupt and a trustee in bankruptcy was duly appointed. It does not appear that the plaintiff filed a notice of the pendency of this action.
On the 24th day of March, 1916, more than a year after the alleged fraudulent transfers and the commencement of this action, the defendant Rozinski commenced an action to foreclose the said $5,000 mortgage.
So far as appeared of record, when the foreclosure action was commenced, the plaintiff in this action had no interest in the property covered by the mortgage, neither was he a necessary party to the action.
There are no special allegations in the complaint to show why the plaintiff was made a party thereto. The complaint contains the usual allegation that the defendants ‘and each of them have or claim to have some interest in or lien upon said mortgaged premises or on some part thereof, which interest or lien, if any, has accrued subsequently to the lien of the said mortgage or is subject or subordinate thereto.’ The demand is the ordinary demand for foreclosure and sale.
The trustee in bankruptcy, who was served with the summons and complaint, answered the complaint setting up as a defense that the transfer of the mortgage by Krulewitch to the defendant Rozinski (the plaintiff in that action) was fraudulent and without consideration, and demanded affirmative relief adjudging the fraud, and the dismissal of the complaint.
The plaintiff in this action, as a defendant in that action, was served with the summons and a notice of the object of the action, and it was therein stated that ‘No personal claim is made against you.’ He did not appear therein.
The issues as between the plaintiff in that action and the trustee in bankruptcy came on for trial, and a stipulationwas thereupon entered into between them without the knowledge of the plaintiff herein, which recites that the parties thereto are willing to compromise the differences between them, and it was therein agreed that the plaintiff therein had an interest in the mortgage to the extent of $1,000 and interest, and that the mortgage and all rights thereunder, except to the extent of said $1,000 and interest, belong to and were thereby assigned to the trustee in bankruptcy. Judgment was thereupon entered as by default and upon the consent of the trustee in bankruptcy for the foreclosure of the mortgage, and payment was therein directed from the proceeds of sale according to said stipulation and assignment. The report of sale shows that the plaintiff therein (Rozinski) was paid the amount stipulated as due to him, and that the trustee in bankruptcy was paid the sum of $3,233.33, the net balance of the proceeds of sale.
Thereafter a supplemental answer was interposed in the action now before us setting up the foreclosure action and the judgment therein as res adjudicata in this action. When the issues in the action now before us came on for trial, the judge at Special Term said in substance that it was his impression that plaintiff could not set aside the title of the purchaser to the property sold under the judgment in the foreclosure action, to which counsel for the plaintiff replied, ‘We make no claim now against the property.’ The case then proceeded to trial, and testimony was taken relating to the alleged fraudulent transfer of the property No. 21 East 112th street by Krulewitch to Berkowitz, and the mortgage of $5,000 given to Krulewitch and its assignment to Rozinski, and the court found without qualification or reservation that the transfer of the property itself, the giving of the mortgage, and the assignment thereof, were with intent to hinder, delay, and defraud the creditors of Krulewitch, and also that the deed, mortgage, and assignment were without consideration, and that Krulewitch was at the time insolvent. The court found the facts in regard to the foreclosure action and judgment, and judgment was entered in this action for an accounting by Rozinski, and a recovery by the plaintiff herein, against Rozinski, of the amount of his judgment against Krulewitch.
An appeal was taken therefrom to the Appellate Division, where the judgment of the Special Term was reversed, and the complaint dismissed ‘upon the merits, with costs, this court (the Appellate Division) holding as a matter of law that the judgment specified in the ‘Twelfth’ finding of fact (the foreclosure judgment) is a complete bar to this action.' Jasper v. Rozinski, 182 App. Div. 365,169 N. Y. Supp. 769. None of the findings of fact made at the Special Term were reversed or modified.
The plaintiff herein did not seek to have determined in this action whether the conveyance including the mortgage and the assignment thereof were valid as between the parties thereto. So far as appears, they were unassailable as between them. He sought to show that they were fraudulent and void as against him and his judgment and to have the court so adjudge. His only purpose was to remove hindrances to the collection of his judgment.
A conveyance or assignment in writing or otherwise of an interest in real property with intent to hinder, delay, and defraud creditors is void as against every person so hindered, delayed, or defrauded. Real Property Law (Cons. Laws, c. 50) § 263. And every such transfer of an interest in personal property is void as against persons so hindered, delayed or defrauded. Personal Property Law (Cons. Laws, c. 41) § 35.
[1] A general assignment made after the lien of a creditor has attached by the filing of a bill, only conveys the property to the assignee subject to such lien. Corning v. White, 2 Paige, 567, 22 Am. Dec. 659;First Nat. Bank of Amsterdam v. Shuler, 153 N. Y. 163, 171,47 N. E. 262,60 Am. St. Rep. 601.
An equitable lien acquired by a creditor's bill is not affected by subsequent proceedings in bankruptcy, where, as in this case, the creditor obtained his judgment against the bankrupt and commenced his action as a judgment creditor more than four...
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