Siy v. McMicking
| Decision Date | 09 July 1986 |
| Citation | 510 N.Y.S.2d 407,134 Misc.2d 164 |
| Parties | , 1 UCC Rep.Serv.2d 889 Ramon L. SIY and Philip Ang, Plaintiffs, v. Joseph R. McMICKING; BPI International Finance Ltd., Ayala Investment and Development Corp., Bertola, A.G., Ayala Corporation; Does 1-10, inclusive, Defendants. |
| Court | New York Supreme Court |
Christy & Viener, New York City, for plaintiffs.
Baker & McKenzie, New York City, for BPI International.
This application for equitable intervention in aid of attachment raises a question of first impression in New York as to the applicability of Article 8 of the Uniform Commercial Code.
Plaintiffs are citizens and residents of the Philippines and, having invested in a corporation engaged in the development of residential and resort properties on the Spanish Mediterranean Coast now contend that there was fraud, misrepresentation and breach of fiduciary duty in connection with the investment. Defendant BPI International Finance Ltd. has counterclaimed for over $6,500,000 on promissory notes issued to guarantee payment for the stock purchased. BPI now moves for an order of attachment under CPLR 6201 et seq. However, it appears that Siy and Ang have no attachable assets in New York. The only attachable assets of which BPI claims to be aware are the holdings of Siy and Ang in Empire Holdings Ltd., which owns the Redwood Bank of California. Their stock assets outside this state are said to be worth tens of millions of dollars.
Since securities can only be attached when actually seized by the Sheriff and put under his dominion and control, BPI seeks to invoke the aid of this court by asking it to issue a preliminary mandatory injunction to direct Siy and Ang to transfer their shares of stock outside this jurisdiction to the State of New York so that such shares can be attached by the Sheriff.
In asking for such relief, BPI relies on Uniform Commercial Code Sec. 8-317(6), which section provides:
"A creditor whose debtor is the owner of a security shall be entitled to such aid from courts of appropriate jurisdiction, by injunction or otherwise, in reaching such security or in satisfying the claim by means thereof as is allowed at law or in equity in regard to property which cannot readily be reached by ordinary legal process."
While that section authorizes the court to employ its injunctive powers in reaching securities not readily amenable to ordinary legal process, that must be done in such manner "as is allowed at law or in equity." Thus, it does not appear that the quoted provision of the Uniform Commercial Code effectively changes the well-grooved requirements under New York law for injunctive relief. Those requirements include likelihood of ultimate success, irreparable injury, no adequate remedy at law and a balancing of the equities. Such requirements are not eliminated by the permissive language of Section 8-317(6) so as to permit the issuance of injunctions to bring assets subject to attachment within the jurisdiction of the court, at the mere behest of any creditor.
It is to be noted that the shares of stock which BPI hopes to attach are not the subject matter of the action and it is not demonstrated that anything is threatened with respect to those assets which might tend to render the judgment ineffectual.
There is no generalized doctrine that plaintiffs or counterclaiming defendants are entitled to have assets subjected to the jurisdiction of this State in order to secure a possible money judgment in the future.
BPI in its pleadings is seeking a money judgment pure and simple. Nevertheless, by way of motion, it asks for sweeping injunctive and equitable relief. There appears to be no persuasive reason why this court should intervene to exercise its equitable powers in so unusual a fashion merely to provide security for a money judgment. There is not even a hint of irreparable injury. Irreparable injury means injury for which an award of monetary damages is inadequate. Matter of Nelson, 110 A.D.2d 535, 536, 487 N.Y.S.2d 777. If Siy and Ang are as wealthy as represented...
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... ... 8-317(6) of the Uniform Commercial Code, N.Y.U.C.C.Law Sec. 8-317(6) (Consol.1993), only where the creditor meets the requirements for the issuance of injunctive relief. See Siy v. McMicking, 134 Misc.2d 164, 165-67, 510 N.Y.S.2d 407, 407- ... 09 (N.Y.Sup.Ct.1986). Thus, both of Chemical's claims on appeal must properly be assessed under the familiar standards for when an injunction should issue ... On a motion for a preliminary injunction, the established test ... ...
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