People ex rel. Cauffman v. Van Buren

The defendants were properly adjudged guilty of contempt in disobeying the preliminary injunction order granted by the county judge of Monroe county, unless the order ivas void upon its face for an utter lack of jurisdiction on the part of the judge who granted it. (People v. Sturtevant, 9 N. Y. 263 .)

JSTo matter how erroneous the action of the court may have been in taking cognizance of the suit and awarding a mandatory process, unless there was an entire absence of judicial .authority to act in the premises, it was the duty of the defendants to obey its commands, until they had been revoked by an order made in the action in which they fiad been issued either

For the purpose of determining this question, all the averments contained in the complaint and in the plaintiffs’ moving papers upon the application for the injunction order must be taken as unqualifiedly true. The plaintiffs were creditors at large of the defendants, Klock and Tiffany, who a few days before the commencement of this action, it is alleged, fraudulently confessed judgments to three of the defendants to the amount of $17,000, and about the same time fraudulently mortgaged or conveyed their real property to two of the other defendants. The defendant debtors were insolvent when these transactions occurred and, as It must be assumed, upon this appeal, they were entered into by the various parties to them, with the intent and for the purpose of defrauding the other creditors of Klock and Tiffany and in order to secure preferences to themselves; not obtainable under the general assignment laws of the state. Immediately upon the confession of these judgments executions were issued to the sheriff of Oswego county, where the debtors resided, and a levy was made by him upon all their tangible property, and, it is to be inferred, upon all the property which they then owned, which was subject to seizure, and the sheriff had advertised the property to be sold to satisfy the executions. Upon the discovery of these facts the plaintiffs at once began suit against their debtors to recover the amount of their debt and obtained and issued a warrant of attachment upon the ground that their debtors had assigned or disposed of, or were about to assign, or dispose of, their property with intent to defraud creditors,

It does not appear whether the attachment was delivered to the sheriff or the coroner, and it is perhaps immaterial, but it is claimed it was levied on the same property upon which the sheriff had levied under the executions issued upon the fraudulent judgments. But such levy would, prima, facie, be

The question whether the facts alleged constitute a cause of action and afford sufficient grounds for the equitable interference of the Supreme Court, is one which has’ never been authoritatively determined by this court, and the decisions in the courts below have been far from harmonious upon the subject. There has also been a great diversity of judicial opinion upon this point in other states and it is stated in the American and English Encyclopedia of Law (vol. 4, p. 575) that “ whether an equitable suit analagous to the creditor’s suit will be allowed in aid of the lien created by an attachment, before the recovery of judgment, is a question to which the American courts have given directly different answers.” In the cases of Hall v. Stryker ( 27 N. Y. 596 ) and Rinchey v. Stryker ( 28 N. Y. 45 ), it was held that under a warrant of attachment any property of the debtor, transferred in fraud of his creditors, could be seized and that after service of the warrant the party procuring it is no longer to be deemed a creditor at large, but a creditor having a specific lien upon the 'goods attached, and that for the purpose of upholding the attachment and the lien acquired under it the decision of the judge granting the warrant is to be deemed an adjudication of the existence of the debt which is conclusive upon the fraudulent transferee of the debtor’s property. In both cases suit was brought against the attaching creditor by a party

Still the cases may be regarded as decisive of the general question that an attaching creditor ceases to occupy the defenseless position of a creditor at large, and becomes, in a certain sense, invested with the privileges of a creditor whose debt has been adjudged valid and who finds himself embarrassed in its collection by the fraudulent conduct of the debtor. In Hall v. Stryker, Chief Judge Denio, at p. 601, says, “ When the creditor has procured legal process, such as the law allows a creditor to have against the property of his debtor, he has acquired the standing of a creditor in respect to all the property of his debtor, and that which he has conveyed with the intent forbidden by the law (the conveyance being void) is as much his in the judgment of the law and as fully subject to the process, as if the conveyance had'not been made.

“ Under certain circumstances, the law has, upon motives of policy, allowed an ex parte .determination as to the existence of the debt, and permitted process to issue against the debtor’s property upon such determination, providing however, for sufficient security to the debtor, if upon a regular trial the alleged creditor shall fail to establish the existence of the demand.”

These cases were followed in Frost v. Mott ( 34 N. Y. 253 ), where Postee, J., states the doctrine without qualification, that “ A creditor, by attaching property in the possession of his debtor, acquires a specific lien upon his interest, and is entitled, like a judgment' creditor, to impeach the colorable

In Thurber v. Blanck ( 50 N. Y. 80 ), it was held that an attaching creditor had no standing in court to reach equitable assests until his remedy at law was exhausted nor to attack a fraudulent transfer of the property of his debtor until after judgment; and in the Mechanics and Traders’ Bank v. Dakin ( 51 N. Y. 519 ), the commission of appeals held that an attaching creditor after the recovery of judgment and the issuing of execution may maintain an equitable action in his own name to set aside a fraudulent transfer of the property which had been seized under the attachment. The impression seems to have prevailed that there was an irreconcilable conflict between these two cases and the reporter in a foot note in the 51 N. Y., says: “ This case, it will be perceived, was argued prior to the decision of the case of Thurber v. Blanck ( 50 N. Y. 80 ), with which it is in conflict. That case had not been brought to the attention of the commission at the time of the decision herein.” But we fail to discover any real ground of antagonism between them. In Thurber v. Blanck the court was dealing with an attempt on the part of an attaching creditor to reach equitable assets, which it has been uniformly held cannot be done until judgment has been recovered, execution issued and returned unsatisfied, and an action or proceeding in the nature of a creditor’s bill instituted. The provisions of the Bevised Statutes (now §§ 1871-9 of the Code) which authorized a judgment creditor’s action imperatively required the recovery of a judgment and the issue and return of an execution unsatisfied as an indispensable condition of the creditor’s right to bring the action.

In Bank v. Dakin, the attaching creditor had, by the recovery of judgment and the issue of execution, acquired the right to have the attached property applied to the satisfaction

In the case of Falconer v. Freemam, ( 4 Sand. Ch. 565 ), the precise point here involved was decided in favor of the plain, tiff’s contention and the vice-chancellor held that a court of chancery will aid an attaching creditor to enforce the lien of the attachment by injunction and otherwise, on the same principle that it aids an execution creditor similarly obstructed. There are some cases in the Supreme Court to the same effect. (Bates v. Plonsky, 28 Hun, 112 ; Keller v. Payne, 22 Abb. N. C. 352 ; Tannenbaum v. Rosswog, Id. 346, 354.) The objection is urged that the creditor may be unsuccessful in establishing his debt in the attachment suit, and it thus may be found that there was no basis for the equitable action. But such a risk attends all litigation, and provision for full indemnity is made in the requirements of the statute for security both upon the issue of the attachment and the granting of the preliminary injunction. Both actions are pending in the same tribunal Which can control the order in which they shall be tried, and if issue is joined in the action at law, the determination of the equitable action may be postponed until the former has been finally disposed of.

The measure of relief to be granted in the equitable action is also discretionary with the court and might be limited to a decree enjoining interference with the attached property until the plaintiff’s right to follow the attachment with an execution has been adjudged.

The court, therefore, had jurisdiction of the action in which the injunction order was granted and the violation of its provisions by the defendants was inexcusable.

It is insisted that the attachment had not been levied when the injunction was obtained and that it was, therefore, prematurely issued. That may be so. There is some ambiguity in the moving papers and some expressions which may support such a finding, while the opposing affidavits upon this motion positively affirm that it was not served until the next

It is urged that the county judge had no jurisdiction, because the summons had not been served when the order was signed. Section 608 expressly provides that the order may be granted to accompany the summons. This section cannot be construed to refer solely to an injunction granted under section 603. It is not limited in terms. It is a substitute for that part of section 220 of the old Code, which provided that the injunction might be granted at the time of commencing the action, which was also held to apply to all kinds of preliminary injunction orders. This language was much more restrictive than in the present Code, and yet it was held that the order might be granted before the commencement of the action; but would not become operative until the service of the summons, which might be made at the same time with the order. (Leffingwell v. Chave, 10 Abb. Div. 412.) In this case Woodkuff, J., says: “ It imports that the injunction may be obtained, so that it shall operate at the time when, and as soon as, the action is commenced, and not alone after it is commenced. This accords with good sense. It meets a very large class of cases, in which it is of vital importance to the plaintiff to enjoin the defendant at the very instant he is apprised that an action is commenced, and in which the defendant would, but for such injunction, defeat the very object of the suit. The section which declares that the court is deemed to have acquired jurisdiction in a civil action from the time of the allowance of a provisional remedy, is in harmony with this construction and sustains it.”

It is not seen how any different meaning can be attached .to the phrase “ during the pendency of the action ” when it occurs, in section 604 than when used in section 603. In both cases it

The amount of the fine was correctly fixed. When the order was made the plaintiff’s debt in the attachment suit had become merged in a judgment, as appears from the record here. He had a valid lien by attachment upon property sufficient to secure its payment. That lien was destroyed by a sale which the injunction order prohibited. Presumably, the plaintiff’s loss was the amount of their claim, as it is conceded the judgment debtors are insolvent.

The defendants made no proof' in reduction of damages and under the mandatory provision of section 2284 we do not think the Special Term had any discretion; but was required to fix the amount at the sum named.

The order must be affirmed, with costs.

(dissenting). In the latter part of December, 1890, Hiram Block and Edgar A. Tiffany confessed three judgments; one to the First National Bank of Oswego for $2,525, another to the same bank for $131.56 and one to Jacob M. Hertens and Alexander Dissell for $14,296.33. The judgments were entered and docketed in Oswego county, and executions thereon were issued to the sheriff of that county and by him immediately levied upon the property of the defendr ants in that county. The sheriff advertised the property for sale on the 2d day of January, 1891, at 10 o’clock a. m. On the first day of January, 1891, the above-named respondents,

If the county judge had jurisdiction upon the facts presented to him to grant the injunction, the defendants in the action were bound to obey it, although the exercise of the jurisdiction was plainly erroneous. (Erie Railway Co. v. Ramsey, 45 N. Y. 637 .)

If, however, it was granted without jurisdiction it was a nullity and bound no one. I propose now to confine my attention to the question of jurisdiction.

There is no general power in the equity courts of this state to grant injunctions. They have only such powers in that

This injunction was not granted, and could not have been granted under this section, because at the time it was granted there was no complaint in the action, and none came into existence until February 11, 1892, more than two weeks after this proceeding was instituted. And further, if we look at the complaint we find that it contains no demand for relief by injunction, and no mention whatever of an injunction or any restraint.

The only other section of the Code under which the respond

Here, as I have stated, this injunction was granted under section 604, when no action was pending. There was not, therefore, a case in which an injunction could be granted, and the county judge was absolutely without jurisdiction to grant it. There was no evidence before him of any kind that the action was pending, or tending in any degree to show that it was pending, and thus there was nothing to call for the exercise of his jurisdiction. It is of no importance that the action was subsequently commenced by the service of the summons, and that the injunction was served at the same time. The validity of the injunction must be tested by the facts existing when it was granted and properly placed before the county judge.

I have not overlooked section 608 of the Code, which provides that the injunction order “ may be granted to accompany the summons, or at any time after the commencement of the action and before final judgment.” All these sections must be construed together and harmonized. Clearly every injunction order cannot accompany the summons into the hands of the person who is to serve them. An injunction order which cannot be granted until after the action has been commenced cannot accompany the summons. Manifestly the provision means that every injunction order which has been validly granted may accompany the summons, not that an injunction order granted without jurisdiction, which is a nullity, may accompany the summons. Any injunction order granted under section 603 may accompany the summons, and never one granted under section 604, which can have no existence until after the action has been commenced.

If these respondents, not being judgment creditors, could, upon any theory, maintain their equitable action to set aside the judgments and executions as fraudulent and void, they could do so only by showing that they had, by the levy of their attachment, obtained a lien upon the property of Klock & Tiffany at the time they applied for the injunction. Such an action, if maintainable, would be in aid of the attachment to remove the fraudulent obstacles and obstructions placed in its way. But here, at the time the injunction was applied for and granted, the attachment had not been levied, and the respondents had no lien upon the property of Klock & Tiffany. 'fhere was, therefore, at that time absolutely no ground for the maintenance of the equitable action, or for the granting of the injunction, even if it be assumed that the action had been commenced. The respondents had no right whatever to the injunction, and it was manifestly erroneous to grant it. Although erroneous, we may assume that the injunction was not granted without jurisdiction on the ground here stated, and that the court, to maintain its dignity and

The orders of the General and Special Terms should he reversed and the petition of the respondents dismissed, with costs in all the courts.

Andrews, Gray and O’Brien, JJ., concur with Maynard, J.; Finch and Peokham, JJ., concur with Earl, Ch. J., dissenting.

Order affirmed.