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Berliner v. Kuttner

147 N.Y.S. 308 Court N.Y. App. Term Decision date 1914-05-01 English

Delivered by BLACKMAR, J.

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p. 308
BERLINER v. KUTTNER.
(Supreme Court, Appellate Term, Second Department.
May 1, 1914.)

Headnote

Execution (§ 494[2] )—Supplementary Proceedings—Receivers.
A receiver in supplementary proceedings may not sue, either under Code Civ. Proc. § 2468, defining the title of such receiver, or under Personal ■ Property Law (Consol. Laws, c. 41) § 19, defining the powers of receivers, for the conversion of chattels mortgaged by the judgment debtor to de
p. 309
fendant with intent to defraud creditors’; but the remedy" is by .execution or by appeal to equity to remove the fraudulent conveyance.
[Ed. Note.—For other cases, see Execution, Gent. Dig. §§ 1160-1191; Dec. Dig. § 404.[2] ]
Appeal from Municipal Court, Borough of Brooklyn, Second District.
Action by Edward Berliner, as receiver of the property of Barney Hecht, for the benefit of Michael Garlick and Adolph Danziger, against Marcus Kuttner. From a judgment for plaintiff, defendant appeals.
Reversed, and complaint dismissed on the merits.
Argued before MADDOX, BEACKMAR, and KEEBY, JJ.
Miller & Stein, of Brooklyn (Isaac Miller, of Brooklyn, of counsel), for appellant.
Max H. Newman, of Brooklyn, for respondent.

We gather from the meager record that this action was brought by plaintiff, as receiver in supplementary proceedings, to recover from the defendant damages for the conversion of chattels taken by the defendant from the judgment debtor under a chattel mortgage which was fraudulent and void as to creditors. The judgment was for plaintiff, and, from the judgment and an order denying a motion fi> set aside the verdict and for a new trial, defendant appeals.

Such an action cannot be maintained. A receiver in supplementary proceedings takes title to the personal property of the judgment debtor as of the time of filing the order appointing him. Section 2468 of the Code of Civil Procedure. By virtue of plaintiff’s appointment, he obtained no greater or other title thañ the judgment debtor then had. But the chattel mortgage was valid as against the mortgagor and void only as to creditors. It follows that no title to the chattels passed to the receiver from the judgment debtor, who was the mortgagor, for as against him the mortgage was good. As the defendant took the chattels under a mortgage valid as to the mortgagor, the mortgagor could not maintain an action for conversion, nor could a receiver derive a right to maintain such action from a judgment debtor who did not possess it.

A fraudulent chattel mortgage is void as against creditors of the mortgagor (section 35, Personal Property Law), and a receiver in supplementary proceedings, in addition to the property of the judgment debtor, takes such rights as the creditor at whose suit he was appointed has. As to such creditor, chattels fraudulently conveyed still remain the property of the judgment debtor; but a judgment creditor has no title to the property of the judgment debtor. He has a right only to the satisfaction of his judgment from such property, which he may secure by execution. If therefore the mortgage is void as to the creditor, his only remedy is in his execution, or he may appeal to a court of equity to clear away the obstruction of fraudulent conveyances. A judgment creditor cannot sue for conversion of the property of a judgment debtor, neither can he confer that right on a receiver in supplementary proceedings.

p. 310
As the receiver does not obtain the right to maintain such action from either the judgment creditor or judgment debtor, no more is it conferred on him by chapter 314 of the Laws of 1858, now section 19 of the Personal Property Law. The word “receiver” in that law does not include a receiver in supplementary proceedings. Under the doctrine noscitur a sociis, the “receivers” mentioned in that act are those who represent not only the judgment debtor, but all creditors sharing equally; but a receiver in supplementary proceedings represents only the judgment debtor and the creditor at whose suit he is appointed. He does not represent other creditors.

Tire conclusion is that a receiver in supplementary proceedings cannot maintain an action for the conversion of chattels conveyed by the judgment debtor to the defendant with intent to defraud his creditors. Stephens v. Meriden Britannia Co., 160 N. Y. 178 , 54 N. E. 781 , 73 Am. St. Rep. 678 .

The judgment is reversed, and the complaint dismissed on the merits, with appropriate costs in the court below and costs of the appeal to the appellant. All concur.

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