Tichonchuk v. Orloff

• Decision Date: 13 September 1962
• Parties: Mary TICHONCHUK, Plaintiff, v. Anna ORLOFF, individually and as Executrix under the Last Will and Testament of Jacob Tichonchuk, deceased, and Commercial Bank of North America, the Bowery Savings Bank, Amalgamated Bank of New York, Queens County Savings Bank and College Point Savings Bank, Defendants.
• Court: New York Supreme Court

Page 321

233 N.Y.S.2d 321

36 Misc.2d 623

Mary TICHONCHUK, Plaintiff, v. Anna ORLOFF, individually and as Executrix under the Last Will and Testament of Jacob Tichonchuk, deceased, and Commercial Bank of North America, the Bowery Savings Bank Amalgamated Bank of New York, Queens County Savings Bank and College Point Savings Bank, Defendants.

Supreme Court, Special Term, Queens County, Part I.

Sept. 13, 1962.

Benjamin Adler, New York City, for plaintiff Tichonchuk.

Alexander J. Lekus, New York City, for defendant Orloff.

GEORGE P. STIER, Justice.

In an action to impress a constructive trust upon certain real property and bank accounts, the plaintiff moves (1) to strike the first and second affirmative defenses and the counterclaim as sham or, in the alternative, pursuant to rules 113 and 114, of Rules of Civil Practice, granting partial summary judgment and (2) to strike the fifth defense as insufficient in law.

The individual defendant cross-moves for summary judgment dismissing the complaint and granting a judgment in ejectment upon the counterclaim.

The plaintiff is the stepmother of the individual defendant herein and seeks an undivided one-half interest in certain realty and in the proceeds of certain bank accounts. The complaint, in substance, alleges that the plaintiff, in reliance on certain oral promises and representations made by Jacob Tichonchuk, the plaintiff's husband and father of the individual defendant, to convey to the plaintiff a one-half interest in the real property and bank accounts involved herein, was induced to and did part with money from her own resources.

The first and second affirmative defenses allege, in substance, that Jacob Tichonchuk in November 1924 executed a deed to the real property involved herein to his first wife, said deed being recorded in June 1925; that thereafter the first wife died intestate in March 1927 seized in fee simple in the abovementioned realty; that under the then existing law the individual defendant was her sole heir and distributee and that Jacob Tichonchuk, her surviving husband, obtained a life estate in the realty by right of curtesy; that, therefore, upon the death of Jacob Tichonchuk the individual defendant was vested in fee simple in the realty; that in 1926 various creditors of Jacob Tichonchuk commenced an action against him and his first wife to set aside the above-mentioned conveyance as being in fraud of creditors; that thereafter a judgment was entered in said action declaring the conveyance null and void as to those creditors and that by reason of such adjudication Jacob Tichonchuk and the plaintiff claiming an interest through him are estopped. The plaintiff, in support of the first branch of the main motion, argues that these defenses are sham and without merit inasmuch as a decree of this court nullified the purported conveyance by Jacob Tichonchuk to his first wife for all purposes and the title to the real property reverted to him. Furthermore, the plaintiff argues that the counterclaim, which incorporates by reference the allegations concerning the conveyance by Jacob Tichonchuk to his first wife which was declared a nullity by this court, seeking to eject the plaintiff from the real property in her possession on the ground that title in fee simple has vested in the individual defendant is for the reasons mentioned above also sham and without merit.

In support of the second branch of the main motion, the plaintiff contends that the fifth affirmative defense, pleading the statute of frauds is insufficient since the statute of frauds is not a bar to an action seeking to impress a constructive trust or equitable lien.

The individual defendant, in opposition, contends that the first and second affirmative defenses are valid and proper inasmuch as the decree in the action brought by the creditors of Jacob Tichonchuk did not reinvest him with title to the real property since the effect of the decree was to set aside the conveyance only to the extent necessary to satisfy the claims of such creditors. Furthermore, the individual defendant argues that the defense of the statute of frauds is sufficient under the circumstances in the case at bar since the plaintiff is seeking to establish a claim upon an oral agreement.

The individual defendant, in support of the cross-motion, contends that the plaintiff has failed to establish a cause of action for a constructive trust since the plaintiff has not alleged or proved that she supplied the original consideration for the property or that at any time did she convey such property. Furthermore, argues the individual defendant, section 347 of the Civil Practice Act bars the plaintiff's testimony with respect to any personal transactions or communications with Jacob Tichonchuk, now deceased. The individual defendant argues that the statute of limitations is a bar to the present action since, even assuming upon any possible legal theory that the plaintiff is entitled to a constructive trust, more than ten years have elapsed since Jacob Tichonchuk failed to convey a one-half interest in the real property following the marriage of the plaintiff and Jacob Tichonchuk in 1927 as plaintiff alleges Jacob Tichonchuk promised he would do.

The individual defendant contends that the bank accounts involved herein were Totten trusts naming her as beneficiary and thus became her property upon the death of Jacob Tichonchuk since no evidence has been introduced indicating that the Totten trusts had been revoked and thus a constructive trust may not be impressed upon the funds. Finally, the individual defendant argues that since Jacob Tichonchuk's first wife died intestate and was owner of the real property herein and that under the then existing law she was the sole heir and distributee of the intestate, she became vested with title in fee simple upon the death of Jacob Tichonchuk, who merely had a life estate in the realty by right of curtesy. Therefore, she is entitled to summary judgment upon her counterclaim for ejectment.

The court is of the opinion that the decree in the action by the creditors did not set aside the conveyance by Jacob Tichonchuk to his first wife completely but only to the extent necessary to satisfy the judgment creditors' claims. (See Society Milion Athena v. National Bank of Greece, 281 N.Y. 282, 293, 22 N.E.2d 374, 377; see also Glassman v. Glassman, 309 N.Y. 436, 439, 131 N.E.2d 721, 723; Gruenbaum v. Lissauer, 185 Misc. 718, 57 N.Y.S.2d 137, affd. 270 App.Div. 836, 61 N.Y.S.2d 372.) The legal and equitable rights of a creditor are only to set aside fraudulent transfers by debtors in so far as necessary to satisfy the debt--when the debt is paid, the transfer is valid as to the debtor as well as other persons. (Bostwick v. Menck, 40 N.Y. 383, 386.) In the case at bar Jacob Tichonchuk paid his debts to his creditors and the decree obtained by them was not acted upon. Therefore, the transfer to his first wife remained valid. Under these circumstances, the first and second affirmative defenses and the counterclaim embodied in the defendant's answer are valid and must not be stricken.

Accordingly, the first branch of the plaintiff's motion is denied .

Inasmuch as the theory upon which the plaintiff's complaint is based is to impress a constructive trust, the defense of the statute of frauds is legally insufficient. (See Williams v. Williams, 4 A.D.2d 793, 165...