Ginsberg v. Automobile Coaching Co. — 151 A.D. 627

Majority

p. 627

Louis Ginsberg, as Administrator, etc., of David Ginsberg, Deceased, Respondent, v. Automobile Coaching Company, Defendant, Impleaded with Charles Burkelman, Individually and as Executor, etc., of Patrick J. Ryder, Deceased, Appellant.

First Department,

June 28, 1912.

Headnote

Corporation — action by judgment creditor to compel stockholder to account — complaint — demurrer.

Where the complaint in an action under section 66 of the Stock Corporation Law to compel a stockholder of a corporation to account for certain personal property of the corporation, alleges that the defendant was á stockholder and that on July 18, 1907, the said corporation being insolvent, executed chattel mortgages to the defendant upon its sole assets; that prior to the 1st day of May, 1908, the plaintiff commenced an action against the corporation for the death of his intestate and recovered judgment on said date, and that execution has been returned unsatisfied, but fails to allege that the chattel mortgages were given for an inadequate consideration, or in payment of an antecedent debt, or that the plaintiff was a creditor of the corporation on July 18, 1907, it is demurrable.

Although the death of plaintiff’s intestate was caused before the transfer and judgment was not entered thereon until afterwards, the plaintiff could have maintained the action if he had made such an allegation.

p. 628

Appeal by the defendant, Charles Burkelman, individually and as executor, etc., from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the comity of New York on the 18th day of March, 1912, granting the plaintiff’s motion for judgment on the pleadings.

John J. Halpin, for the appellants.

Gustavus A. Rogers, for the respondent. .

This is an action by a judgment creditor of the defendant corporation to require the mdividual defendant to account for certain personal property of the corporation conveyed to said defendant through the execution of chattel mortgages.

The pleadings consist of a complaint and a demurrer.

The action is brought under the provisions of section 66 of the Stock Corporation Law (Consol. Laws, chap. 59; Laws of 1909, chap. 61). The complaint alleges the recovery by plaintiff on May 1, 1908, of a judgment for damages for the death of his decedent, and that said judgment was duly docketed, execution issued thereon and returned unsatisfied, and that said judgment remains unpaid. It is-alleged that the individual defendant was a “ shareholder and was otherwise interested in ” the company, and that on July 18, 1907, the said company being insolvent and in contemplation of insolvency, and with the intent of giving a preference to the individual defendant, executed and delivered to said defendant chattel mortgages upon automobile sight-seeing touring-cars, which were then the property of the company. It is not alleged' that these chattel mortgages were given without consideration, or upon inadequate consideration, or in payment of an antecedent debt due to said defendant. It is alleged that at the time of the execution of the mortgages the automobiles mortgaged constituted the sole assets of the company, and that its liabilities exceeded its assets. The plaintiff treated the demurrer as frivolous, and moved for judgment upon that ground, but, so far is it from being frivolous, it is clearly good. The transfers of which plaintiff complains are alleged to have been made on July 18, 1907, and there is no allegation that on

p. 629

that date plaintiff was a creditor of the corporation or held any claim against it. All that is said on that score is that “ prior to the first day of May, 1908,” the plaintiff commenced an action, but when the death of plaintiff’s decedent occurred which gave rise to the actipn does not appear. It is probably true that plaintiff became a creditor as soon as he was appointed administrator, because the' liability of the defendant corporation accrued when the death occurred. If the death had been caused before the transfer, although judgment was not entered thereon until afterwards, the plaintiff could maintain the action (Kain v. Larkin, 4 App. Div. 209 ), but there is no such allegation. We are also of the opinion that no cause of action is stated against Charles Burkelman in his representative capacity. Even if he held shares hi the defendant corporation as executor, and the chattel mortgage was in form made to him as executor, the cause of action the plaintiff has attempted to set out is one against him personally, and not against the estate of which he is executor.

It follows that the order appealed from must be reversed, with ten dollars costs and disbursements, and the motion for judgment denied, with ten dollars costs.

Ingraham, P. J., McLaughlin, Miller and Dowling, JJ., concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.