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Kaphan v. Rogers Bros. Grocery Co.

154 N.Y.S. 753 Court N.Y. App. Div. Decision date 1915-07-30 English

Delivered by RICH, J.

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p. 753
KAPHAN v. ROGERS BROS. GROCERY CO., Inc., et al.
(Supreme Court, Appellate Division, Second Department.
July 30, 1915.)

Headnote

Feat dulent Conveyances <@=>305—Sates in Bulk—Remedy of Judgment Creditor—Appointment of Receiver.
Personal Property Daw (Consol. Laws 1909, c. 41) § 44, as amended by Laws 1914, c. 507, making the transfer of goods in bulk void as against the creditors of the seller under certain circumstances, provides that any purchaser who shall not conform to the section shall, upon application of any of the creditors of the seller, become a receiver and be held accountable to such creditors for all the'goods that have come into his possession by such sale. Code Civ. Proc. tit. 12, relating to proceedings supplementary to execution against property, in section 2432 provides for three distinct remedies, one an order made or warrant issued against a judgment debtor after return of execution, another an order made or warrant issued against a judgment debtor after the issuing and before return of execution, and, third, an order made after execution, issued either before or after return against a person who has property of or is indebted to the judgment debtor, while section 2433 provides that each such remedy is a special proceeding. In a special proceeding supplementary to execution, by a judgment creditor against a transferee of the judgment debtor, to declare such transferee a receiver for the benefit of creditors, the trial court received testimony of officers of the judgment debtor taken in a separate supplementary proceeding against it. Held, that the court had not power to appoint the transferee a receiver, acting on the testimony, since the transferee had not been a party to the first proceeding, which was distinct from the one in which it was defendant.
[Ed. Note.—For other eases, see Fraudulent Conveyances, Cent. Dig. §§ 917-919; Dec. Dig. <@=>305.]
@s»For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
Appeal from Kings County Court.
Proceeding supplementary to execution by Leo Kaphan against Francis H. Leggett & Co. and another. From an order declaring the named defendant a receiver for the benefit of creditors of a judgment debtor, it appeals. Reversed without prejudice.
Argued before JENKS, P. J., and THOMAS, CARR, RICH, and PUTNAM, JJ.
Samuel D. Jones, of New York City, for appellant.
Israel H. Perskin, of Brooklyn, for respondent.

The order from which the appeal is taken declares the appellant to be a receiver for the benefit of creditors of the judgment debtor, under the provisions of section 44 of chapter 41 of the Consolidated Laws, as amended by chapter 507 of the Laws of 1914, which makes the transfer of goods in bulk void as against the creditors of the seller, transferror, or assignor, under certain circumstances. The act provides, among other things:

“3. Any purchaser, transferee or assignee who shall not conform to the provisions of this section, shall upon application of any of the creditors of the seller, transferror or assignor become a receiver and be held accountable to such creditors for all the goods, wares, merchandise and fixtures that have come into his possession by virtue of such sale, transfer or assignment”

The appellant contends that the County Court erred in acting upon evidence taken in a proceeding to which it was not a party. This con

p. 754
tention- is based upon the fact that, in a supplementary proceeding instituted against the judgment debtor, the testimony given by its secretary and treasurer relating to the transfer of property to the appellant is" recited in the order from which this appeal is taken as having been considered in granting such order. Section 2432 of the Code of Civil Procedure provides for three distinct remedies—one an order made or warrant issuéd against a judgment debtor after the return of execution, one’ an order made or warrant issued against a judgment debtor after the issuing and before the return of execution, and one an order made after execution issued, and either before or after its return against a person who has property of, or is indebted to-, the judgment debtor; and it is provided by section 2433 that each of such remedies is a special proceeding. The appellant was not a party to the special proceeding; it was not sworn as a witness therein, but a distinct and separate special proceeding was instituted against it as a third party, having property in its possession of the judgment debtor, and this "may not be done. The court is without power to make the order in a proceeding supplementary to execution.

Order of the County Court of Kings County reversed, with $10 costs and disbursements, without prejudice to the institution of such proceedings as appellant may be advised. All concur.