Lane v. Wheelwright — 53 N.Y. St. Rep. 368

Majority

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Jonas H. Lane et al., Resp’ts, v. John W. Wheelwright et al., App’lts.

(Supreme Court, General Term, First Department,

Filed May 12, 1893.)

Headnote

1. Attachment—Levy upon pledged property.

Where, in levying an attachment upon the pledgors’ interest in pledged property, the sheriff did not take possession of the property, but left with the pledgee certified copies of the attachment, and notices showing the property attached, Meld, a sufficient levy upon the property.

3. Pleading—Separate causes of action—Waiver.

The objection that an action cannot be maintained because two or more causes of action are set forth in the complaint, and the statement of facts constituting each cause of action is not separate and numbered, as required by § 483 of the Code, is waived if not taken by answer or demurrer.

3. Corporations—Preferences.

The laws of New York prohibiting the transfer by a corporation of any portion of its assets to give preference to a creditor in anticipation of insolvency, do not apply to a foreign corporation.

4.. Conflict of laws.

There is no presumption that the statutory law of one state is the same as another, the only presumption being, where the foreign law is not proven, that the common law still exists in those countries where it obtained.

Appeal from a judgment obtained in an action brought under §§ 655 and 677 of the Code by the sheriff, and attaching creditors of the Norton Manufacturing Company, a corporation of the state of Massachusetts, to reach certain assets of said company claimed to be in the possession of the firm of AYheelwright, Eldredge & Company, the appellants herein.

The following is the opinion at special term:

Truax, J. As between the plaintiffs in this action and the assignees of the Norton Manufacturing Company, I am unable to distinguish the facts of this case from the facts in the case of Warner v. Fourth Nat. Bank, 115 N. Y., 251 ; 26 St. Rep., 213 . In that case, as in this, certain property bad been pledged. There, as here, the sheriff did not take possession of the pledged property, but left with the pledgee certified copies of the warrants of attachment, and notices showing the property attached. There, as here, the pledgor made an assignment of the property after the levies had been made upon the property under the attachments. And it was held by the court of appeals that the attachment operated to secure to the attaching creditor a lien upon the pledged property to the extent of the interest of the pledgor, and that interest was the right to the pledged property, or so much of it. or of the proceeds from any collection, as remained after the satisfaction of the pledgee’s claim for advances. It is to be noticed that the court says that the lien of the attachment is upon the “ pledged property, and not upon any indebtedness of the pledgee to the pledgor.” It, therefore, must be held in this case that the attachments were levied upon property, and not upon a debt due from the pledgee to the pledgor; and, therefore, the cases of ForeignHeld Bonds, 15 Wall., 316 ; Smith v. Union Bank of Georgetown,

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5 Pet, 518 ; Green v. Van Buskirk, 7 Wall., 139 ; and Henry v. Rhode Island Locomotive Works, 93 U. S., 664 , are not pertinent.

The defendants also contend that this action cannot be maintained because two or more causes of action are set forth in the complaint, and the statement of facts constituting each cause of action is not separate, and numbered, as required by § 483 of the Code of Civil Procedure. This provision of the Code relates to practice.; is a formal, and not a substantial, right. Goldberg v. Utley, 60 N. Y., 427 , and is waived if not taken either by demurrer or answer. If the objection appears upon the face of the complaint, it must be taken by demurrer; if it does not so appear, it must be taken by answer; or it will be waived. Sections 488, 498, 499, Code Civil Proc.; Blossom v. Barrett, 37 N. Y., 434 ; Bebinger v. Sweet, 1 Abb. N. C., 266 . See also Willis v. Sharp, 113 N. Y., 588 ; 23 St. Rep., 670 ; Perkins v. Stimmel, 114 N. Y., 368 ; 23 St. Rep., 657 .

Section 677 of the Code of Civil Procedure provides that the ■attaching creditor may bring and maintain in the name of himself and the sheriff, jointly, any action which, by the provisions of title 3, chap. 7, Code Civ. Proc., maybe brought by the sheriff, to recover property attached, or the value thereof; and the attaching creditor may, as stated above, maintain any action that the sheriff might maintain under subdivision 2, § 655, Code Civ. Pro. This section, 677, gives an attaching creditor the right to bring any of the actions mentioned in the section, and also the right to bring any of the actions mentioned in § 655. This action is, in effect, an action to recover property attached, see Warner v. Fourth Nat. Bank, 115 N. Y., 258 ; 26 St. Rep., 213 , or the value thereof, and, therefore, may be maintained by the sheriff, or by the attaching creditor jointly with the sheriff.

The last question to be determined is, was the property, at the time the levy was made, the property of the debtor in the attachment suit ? It is conceded that it once was the property of the •debtor, but it is claimed that the debtor, before the levying of the .attachment, sold the property. The debtor was the Norton Manufacturing Company, of Massachusetts. Charles F. Eddy was the treasurer of said company, and was also a member of the firm of Eddy & Street, which firm was a creditor of the said Norton Manufacturing Company. The sale, if there was any, was made by said Eddy’s “ transferring the account to Eddy & Street” At the time of this transfer the property was in the state of New York, and all that was in fact done was that said Eddy, as treasurer, wrote to the persons Who had possession of the goods in this state a letter directing them to transfer to Eddy & Street, and sell for their account, all goods invoiced to them by the Norton Manufacturing Company. By the laws of this state such a transfer is prohibited, and in the absence of proof to the contrary the laws of Massachusetts are presumed to be the same as the laws of this state. Hynes v. McDermott, 82 N. Y., 41 . Judgment is ordered for the plaintiffs, with costs.

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H. Wallis, for app’lts; W. R. Barriklo and G. A. Clement for resp’ts.

This action was brought by the sheriff and attaching and judgment creditors in aid of the attachments-set forth in the complaint, and the judgments and execution issued thereon, to enforce liens claimed to have been created by said attachments, and to remove obstructions to the collection of the judgments out of the attached property. We think, for the reasons stated in the opinion of the learned judge who tried the case in the court below, that the attachments were properly levied, and that the objections to the form of the complaint were waived by not being taken by demurrer or answer. And the only question in respect to which a satisfactory conclusion was not reached was the question as to whether, at the time of the levying of the attachments, the property in question was the property of the debtor in the attachment suits. The learned judge held that the attempted transfer of the property was void because prohibited by the laws of this state, and that in the absence of proof to the contrary the laws of Massachusetts are presumed to be the same as the laws of this state; the prohibition contained in the laws of this state being against the transfer by a corporation of any portion of its property to give a preference to any of its creditors in contemplation of insolvency. Therefore, the only questions necessary for us to discuss are: Was there a transfer by the Nor-

ton Manufacturing Company, the defendant in the attachment suits, to Eddy & Street, of this property subsequently attached ? And was such transfer void because contrary to the statutes of this state ?

It appears from the evidence in this case that Mr. Eddy, of Eddy & Street, was the president and treasurer of the Norton Manufacturing Company, the defendant in the attachment suits, a Massachusetts corporation, and that the property which formed the subject-matter of the attachment was situated within this state, having been consigned to the firm of Wheelwright, Eldridge & Co., defendants herein, for sale, upon which said firm had made advances; the amount of goods being more than sufficient to pay such advances. And it further appears that the Norton Manufacturing Company being largely indebted to Eddy & Street, in July, 1888, a resolution was passed by the directors of said company, authorizing Mr. Eddy to protect Eddy & Street against any goods that were sold them in the future, and that subsequent thereto, and prior to the 19th of September, 1888, Eddy & Street had sold the Norton Manufacturing Company goods "amounting to somewhere near $5,000, and that the Norton Manufacturing Company had consigned the goods in question, as above stated, to Wheelwright, Eldridge & Co., upon which day Mr. Eddy, under the power given him, in contemplation of the insolvency of the Norton Manufacturing Company, transferred all the goods in the hands of Wheelwright, Eldridge & Co. to Eddy & Street, and Wheelwright, Eldridge & Co. were notified thereof. Such transfer took place on the 19th of September, 1888, and Eldridge was present with Mr.

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Eddy. Ho money passed at the time, nor was there any change in the possession of the goods. The transfer was effected by such goods being charged on the books of the Horton Manufacturing Company to Eddy & Street, and credited on Eddy & Street’s books to the Horton Manufacturing Company, and the charge to Wheelwright, Eldridge & Co. of these goods by the Horton Manufacturing Company was canceled. These entries were made by Mr. Eddy personally, no one having any authority to act but himself. It would seem that the result of those transactions was to change the title in these goods from the Horton Manufacturing Company to Eddy & Street, and that all was done which could be done to effect such transfer. The goods in question were in the possession of Wheelwright, Eldridge & Co. Heither the Horton Manufacturing Company nor Eddy & Street were entitled to the possession of the same, they being the subject of a pledge for advances made by Wheelwright, Eldridge & Co. Such being the case, unless the laws of Hew York prohibiting the transfer by a corporation of any portion of its assets to give preference to a creditor in anticipation of insolvency applied to this transfer, the title to the goods in question were in Eddy & Street. It seems to us clear that such laws do not apply to a foreign corporation. These prohibitions being statutory, and not existing under the common law, there is no presumption that the law of Massachusetts was the same as the law of Hew York; the only presumption being, where the foreign law is not proven, that the common law still exists in those countries where the common law obtained. Applying this rule to the case at bar, there was no prohibition against the Horton Manufacturing Company transfering these goods to Eddy & Street; and, in the absence of fraud, such transfer was effectual to vest the title in Eddy & Street. The judgment appealed from should be reversed, and a new trial ordered, with costs to appellants to abide event.

O’Brien and Ingraham, JJ., concur.