Bank of Montreal v. Gleason — 16 N.Y. St. Rep. 768

Majority

p. 768

The Bank of Montreal, Resp’t, v. Patrick J. Gleason and John J. Kiernan, Impleaded, etc., App’lts.

(Supreme Court, General Term, First Department,

Filed June 19, 1888.)

Headnote

Injunction—In aid of judgment-creditor’s action—Sufficiency of FACTS TO ENTITLE PARTY TO.

In a judgment-creditor’s action against the defendant Kiernan to reach and appropriate equitable assets for the payment of its judgment, the fact of the recovery of the judgment, the issuing and return unsatisfied of an execution upon it against the property of the judgment-debtor to the sheriff of the county in which he resided, were proved ; and also the facts that he was a partner in two partnerships, and before the recovery of the judgment, assigned his interest in the profits of the business to the other defendant Gleason. It was further made to appear by the authenticated statements of the appealing defendants that the business of the two firms was profitable, and that the judgment-debtor had been paid, from time to time, upon his share of the profits of the business, after the making and delivering of the assignment, and without any information to his co-partner of the fact of that, assignment. Held, that these facts, so far as they de

p. 769

pended upon information received from defendants, could be legally and properly proved in that manner, and were sufficient to entitle the plaintiff to an injunction restraining the assignee from transferring or disposing of the interest of the judgment-debtor held by him in this manner until the determination of the action.

Appeal from an order continuing an injunction order, with liberty to the defendants to be relieved from its effect upon giving and filing an undertaking.

Clarence F. Birdseye, for app’lts; Thomas G. Sherman, for resp’t.

The action has been brought by the plaintiff as the judgment-creditor of the defendant John J. Kiefnan to reach and appropriate equitable assets for the payment of its judgment. The fact of the recovery of the judgment, the issuing and return unsatisfied of an execution upon it against the property of the judgment-debtor to the sheriff of the county in which he resided, are clearly and plainly proved. So are the facts that he was interested as a partner in two different partnerships, and before the recovery of the judgment, assigned his interest in the profits of the business to the other defendant Patrick J. Gleason.

And it was further made to appear by the authenticated statements of the appealing defendants that the business of the two firms was profitable, and that the judgment debtor had been paid from time to time upon his share of the profits of the business, after the making and delivering of the assignment, and without any information to his copartner, cf the fact of that assignment.

These facts so far as they depended upon information received from the defendants could be legally and properly proved in that manner, and they together with the other facts of which no dispute can exist in the case, were sufficient to ■entitle the plaintiff to an injunction restraining the assignee from transferring or disposing of the interest of the judgment debtor held by him in this manner until the determination of the action. The plaintiff had placed itself by the proofs in the situation where it had the right to insist that the financial relations of the parties should not be changed until a trial of the case could be had. For the fact that the assignor was permitted to receive the profits of the business the same as though no assignment was made, after it had been executed and delivered, was a circumstance having a decided tendency to indicate that it was made to hinder, delay, or defraud creditors.

The statement of the consideration for which the assignment was made, also tends to throw doubt upon its good faith.

It may turn out upou the trial to be .substantially sufficient, but it does not now so appear as to justify the refusal

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of an injunction, and the plaintiff is entitled at least to an opportunity to test its validity by such proof as may be accessible, although not stated in any extended manner in the affidavits.

The assertion that the debtor has real and personal property out of which the judgment could be collected, is not a. defense to the action. For that has been permitted by the present, as well as the preceding statute, to be commenced and prosecuted to secure payment of the judgment, after an execution against property issued to the sheriff of the county where the judgment debtor resided, has been returned, as it was in this case, wholly unsatisfied.

The law upon this subject is contained in section 1871 of the Code of Civil Procedure, and is subject to no such qualification as the defendant has claimed should be attached, to it in this case. A point somewhat similar was considered by the chancellor in Stoors v. Kelsey, 2 Paige, 418,, where it was held that the debtor himself had his remedy against the sheriff, if the execution was improperly returned, and cannot avail himself of the fact as a defence to the creditors’ action.

Without considering the objection that certain portions of the affidavits are made upon information not obtained from either defendant it is sufficient for the present purposes of this case that the facts upon which the right to the injunction rests were made out in a manner not liable to this objection. The case contained all that can be usually required for this purpose under the settled rules of practice, without placing any reliance whatever upon such matters of fact as had been upon information derived from any other person or persons than the defendants in the action. The rights of the defendants were all protected by the order allowing the injunction to be vacated in case they should give a bond with two sufficient sureties in the sum of $6,000 conditioned to pay the judgment in case the plaintiff should prove to be successful in the action. This was as small a sum as .the defendants could insist upon according to the amount of the judgment, and the order was as favorable to them in this and all other respects as they had any reason fairly to expect, and it should be affirmed together with $10 costs and also the disbursements.

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