Keller v. Payne — 16 N.Y. St. Rep. 245

Majority

p. 245

Frank Keller et al., Resp’ts, v. May L. Payne et al., Appl’ts.

(Supreme Court, General Term, First Department,

Filed May 18, 1888.)

Headnote

Injunction — When granted — Deposit of money to abide event of SUIT.

The firm of P. S. & Co., in November and December, made unusually large purchases on credit, and on the 28th day of December in the same year the members thereof confessed judgments aggregating over $30,000 to the wife and mother-in-law and other relatives of one of said firm. Subsequently the partners made a general assignment for the benefit of their creditors, which was recorded on the following day. Executions were issued upon the confessed judgments before the plaintiffs obtained their attachment, and the sheriff took, possession of the goods in the store under these executions. This attachment was obtained, the plaintiffs alleging the judgments were fraudulently confessed for the purpose of hindering, delaying and defrauding the honest creditors. In the suit to declare said judgment void, etc., a preliminary injunction was granted, and the sheriff was directed to deposit the amount of the plaintiffs’ claim-out of the proceeds of the sale in a trust company to the credit of this action. Held, that the order should be sustained. Following Bates n. Blonsky, 28 Hun, 112 .

Appeal from order continuing injunction pendente liter

L. Laflin Kellogg, for app’lts; Charles Miehling, for resp’ts.

The plaintiffs are attachment creditors of. the firm of Payne, Steck & Co., consisting of the defendants William H. Payne and Frederick D. Steck, dealers in diamonds and gold jewelry in the city of New York. In November and December, 1887, according to the affidavit of one of the plaintiffs, the defendant’s firm made unusually large purchases on credit, and on the 28th day of December in the same year the members thereof confessed judgments aggregating over $30,000 in favor of four of the defendants ■ herein, May L. Payne, Augusta L. Bamber, William Bamber and Louise Nellis. May L. Payne is the wife of the defendant William H. Payne, and Augusta Bamber is his mother-in-law.

Subsequently the partners made a general assignment for the benefit of their creditors, which was recorded on the following day. Executions were issued upon the confessed judgments, before the plaintiffs obtained their attachment, and the sheriff took possession of the goods in the store of Payne, Steck & Co. under these executions. The plaintiffs nevertheless claim a lien upon these goods, by virtue of their attachment, superior to that of the execution creditors, alleging that the judgments were fraudulently confessed for the purpose of hindering, delaying and defrauding the hon

p. 246

est creditors of the firm of Payne, Steck & Co. They have brought this suit to have the confessed judgments and the assignment declared void; to enforce the priority of their own claims; to compel the sheriff to retain out of the proceeds of the sale of the goods of defendants’ firm an amount sufficient to pay their demand: and to enjoin him from paying over, or the execution creditors from receiving, this amount. A preliminary injunction was granted, and was continued by the special term. The order also fixed the amount of the plaintiffs’ claim at $3,200, and directed the sheriff to deposit that sum, out of the proceeds of the sale, with the United States Trust Company to the credit of this action. The defendants now appeal.

I think the order appealed from may be sustained upon the authority of Bates v. Plonsky ( 28 Hun, 112 ), even as limited by the subsequent case of Bowe v. Arnold ( 31 Hun, 256 ). There, upon facts very similar to those presented here, although hardly bearing as strongly against the defendants, it was held “that the plaintiffs were entitled to enjoin the disposition of the proceeds until the action could be tried, for the purpose of determining the rights of the different parties to such proceeds.” See 31 Hun, 257 . If it was right to continue the injunction in Bates v Plonsky, it was right to continue the injunction in this suit.

As to the alleged invalidity of the attachment, I think there was enough in the papers to give jurisdiction to the officer who granted the warrant. Hence it cannot be deemed invalid, and so long as the attachment remains in force, it suffices to give the plaintiffs the standing of attachment creditors in the present action.

The,order appealed from should be affirmed with costs.

Van Brunt, P. J., and Macomber, J., concur.