Hyperlawhypertext legal database Small v. Muller 67 A.D. 143

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Small v. Muller

67 A.D. 143 Court N.Y. App. Div. English

Delivered by Willard Bartlett, J.:

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p. 143
Fenwick B. Small, as Trustee in Bankruptcy of the Estate of William M. Dean & Company, a Corporation, Respondent, v. Conrad Muller, Appellant, Impleaded with Others.

Headnote

Action to set aside a chattel mortgage—jurisdiction of the Supreme Court over such an action brought by a trustee in bankruptcy — sale of the chattels not ordered, before final judgment.
A State court is not debarred by the provisions of the Bankruptcy Act of 1898 from taking jurisdiction of an action brought by a trustee in bankruptcy to set aside a chattel mortgage and bill of sale as fraudulent and void, and to enjoin the defendant from interfering with the property described in said instruments, or claiming any title thereto at a sale thereof by the plaintiff.
An order appointing a receiver of non-perishable property pendente lite should not contain a provision authorizing him to sell the property before final judgment.
Appeal by the defendant, Conrad Muller, from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings' on the 27th day of June, 1901, enjoining said defendant and others from interfering with the sale by the plaintiff of the chattels and machinery situated in the plant of William M. Dean & Company and of the lease upon which such plant is operated.
Also from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the 1st day of October, 1901, denying the said defendant’s motion for a modification of the above-mentioned injunction order.
Also from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the 1st day of October, 1901, appointing the
p. 144
plaintiff receiver .of the property mentioned ffi the injunction order and authorizing him to sell such property and to deliver a good title thereto to the purchaser thereof, free and clear of all claims of the appellant.
Lawrence E. Brown, for the appellant.
Saul S. Myers [Ira Leo Bamberger with him on the brief], for the respondent.

This is a suit by a trustee in bankruptcy to set aside a chattel mortgage and bill of sale as fraudulent and void, and to enjoin the defendant from interfering with the property described in said instruments or claiming any title thereto, at a sale thereof, by the plaintiff.

, A State court is not debarred from jurisdiction in such an action by the provisions of the Bankruptcy Act of 1898. (30 U. S. Stat. at Large, 544; Bardes v. Hawarden Bank, 178 U. S. 524 .)

The objection to the orders under review is that they practically dispose of the litigation in favor of the plaintiff, before trial.

Theré is no answer in the appeal book, but-there is an affidavit of the defendant, Oonrad Muller, which puts at issue the allegations ■of the complaint which the plaintiff must establish to entitle him to the judgment which he asks.

The moving papers make out. a proper case for the appointment of a receiver pendente life to take and preserve the property until final judgment.

There was no necessity or occasion, however, for ordering a sale prior to the determination of the controversy, inasmuch as the prop, erty was not of a perishable character, (See Brush v. Jay, 113 N. Y. 482 .)

It is not a justification for taking away and selling a man’s possessions under such circumstances to tell him that he may assert his claim against the proceeds just as well as against the property.

The order appointing the receiver should be modified by striking out the provision authorizing a sale and by restricting the powers of the receiver to the preservation of the property pending the action; as thus modified, it should be affirmed, without costs.

p. 145
As the injunction relates solely to the proposed sale, and we think there should be no sale before judgment, the injunction ■should be dissolved, with costs to the appellant.

The appeal from the order refusing to modify the injunction should be dismissed, without costs.

Goodrich, P. J., Woodward, Hirschberg and Jenks, JJ., concurred.

Order appointing receiver modified, and as modified affirmed, without costs. Injunction dissolved, with ten dollars costs and disbursements to the appellant. Appeal from order refusing to modify injunction dismissed, without costs.

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