Neustadt v. Joel — 9 N.Y. Super. Ct. 530

Majority

p. 530

Neustadt and another v. Flora Joel, impleaded with others.

(Before Duer, Campbell, and Bosworth, J.J.)

December 10, 1853.

Headnote

A general creditor cannot maintain an action to get aside an assignment ag fraudulent and void ag against creditors, The rule that such an action can only be brought by a judgment creditor, has not been filtered by the Code,

Appeal from a judgment at special term sustaining demurrer to the complaint,

The complaint stated that Alfred and Louis Joel were ' copartners and dealers in jewelry, under the name of A, Joel & Co.; that at various times previous to the 1st January, 1853, the plaintiffs (doing business under the name of Heustadt & Barnett) sold the said A- Joel & Co. merchandise to the amount of $2,1-91 t=ul, and that the credit had expired on the sales, and the amount was due and unpaid; that the said A, Joel & Co. had recently come to the United States, and established themselves in business on an extensive scale, and had contracted large debts by making purchases of the plaintiffs and others; that they, said A. Joel & Co., had recently made an assignment of their stock in trade as copartners (and whether other property, the plaintiffs had no knowledge or information to form a belief) to the defendant Flora Joel; that Flora Joel was the sister of the said Alfred and Louis, and a young woman without any means, and obtained a livelihood by the manual labor of embroidering shoes, &c.; that the assignment had been made ostensibly to secure a pretended indebtedness of Alfred and Louis of $5,000 or $6,000 to one Mrs, Levy, resident in Eng

p. 531

land; that the debt was fictitious, and set up by the assignors in collusion with the assignee, and that the assignment was color* able only, and made to defraud creditors, and that the assignee was a party to the fraud; that the said Alfred, Louis, and Flora, had commenced to sell at auction the property pretended to be assigned; that the auctioneer, H. H. Leeds, had received and held a portion of the proceeds of such property as had been Bold; that great and irreparable injury would be done to the plaintiffs if the Joels should dispose of said property, and the pretended assignment should be allowed to stand and be carried Into execution, or the auctioneer be allowed to pay over the funds received by him, and unless an injunction issue. The complaint then prayed for judgment for the debt, with interest, against A. & L. Joel, and costs of the suit, an injunction against all the defendants, and that the assignment should be declared fraudulent, null .and void, and that a receiver be appointed.

1 ' The defendant, Flora Joel, demurred to this complaint; and showed, among other causes, that the plaintiffs were creditors at large, and had no lien by judgment, or execution, or otherwise, on the property assigned; that they had not exhausted their remedies at law in execution) and did not show that they had any judgment and execution issued and returned unsatisfied, and were in no position to impeach or disturb any disposition that A- Joel & Co. might have made pf thph’ property,"

John Graham, for plaintiffs,

J. B. Herbert Judah, for defendant, Flora Joel,

The plaintiff is a general creditor, Who peeks to set aside an assignment made to the defendant, Flora Joel, as fraudulent and void, as against creditors, and, it is plain, that, as against her, he is not entitled to the relief, or any part of the relief, which he demands, unless his right as a creditor to impeach the assignment is apparent upon the face of the complaint, It is needless to cite authorities to prove that before the Code no such action could be maintained by a creditor, without averring that he had obtained a judgment

p. 532

against the debtor making the assignment, and that upon this judgment an execution had been issued, and returned unsatisfied ; nor do we understand it to be denied that such was the settled law. The whole argument, upon the part of the plaintiff, rests upon the assertion, that the law in this respect has been altered by the Code, and that by force of the alteration every creditor has now the same right to have a fraudulent assignment set aside for his benefit, as was formerly possessed by judgment creditors alone.

This very important alteration of the law, as hitherto administered, is alleged to have been effected by § 219 of the Code 5 but upon examining the provisions of that section, it seems to us manifest, that they have no bearing whatever upon the question of the right of a general creditor to maintain' an action like the present.

The sole object of the section is to enumerate and define the cases in which a temporary injunction may be granted, but all of these are cases in which it appears by the complaint, that the. plaintiff is entitled to the relief demanded, against the defendant, to restrain whose acts or proceedings the injunction is sought. The section, doubtless, enlarges the powers of the court to grant injunctions, but does not enlarge the rights of the plaintiff, in any case, to maintain his action, but leaves the question, whether he is or is not entitled to the relief demanded by his complaint, to be determined by the existing law; the law as previously understood and established. Governed by this law, the judge at special term has decided the issue raised by this demurrer in favor of the defendant, and governed by the same law, we cannot do otherwise than affirm his decision.

It would, perhaps, be a salutary change in the law to allow a remedy to creditors in cases like the present, even before their debts have passed into judgment; but such a change, however desirable, can only be made by the exercise of legislative power, and is wholly beyond that of the judiciary. •

The judgment appealed from is affirmed, with costs.