Wood v. Sidney Sash, Blind & Furniture Co. , 92 Hun 22 ( 1895 )

PARKER, J.

The complaint in this action avers that the plaintiffs are judgment creditors of the defendant the Sidney Sash, Blind & Furniture Company; that the defendants the First National Bank of Earlville, the Sidney National Bank of Sidney, N. Y., and Charles G. Brooks conspired together with the defendant the Sidney Sash, Blind & Furniture Company, an insolvent corporation, to obtain for the said banks, which were large creditors of such corporation, an unlawful preference in the payment of their debts. It then proceeds to state the manner in which that preference was secured, substantially as follows: Judgments in favor of the banks were suffered by the insolvent corporation to be taken against it, and, through executions issued thereon, all the personal property of the corporation that could be sold on execution was sold, and the price realized on such sale was applied upon the judgments. It is also averred that such property was bid off by the banks at a much less sum than it was fairly worth. Such judgments also became and still stand as prior liens to those of the plaintiffs’ judgments upon the real estate of such corporation. In order to reach the book accounts and choses in action of such corporation, a pretended sale was made to the defendant Brooks of about $15,000 worth thereof for the pretended sum of $7,000, and Brooks took an assignment of the same for the benefit of such banks. It does not appear that Brooks was a creditor ot the insolvent corporation, or had any interest in its property, or in any of the transactions above stated, save as an assistant to the banks. He took and holds the property so assigned to him solely for their benefit, and to enable them to gain an unlawful preference thereto. The relief sought is that the judgments so obtained be declared void and of no' effect as liens prior to those of the plaintiffs’ judgments, that the defendant banks account for and pay over to a receiver of the corporation all that they have received or taken under and by reason of such judgments, and'that •said Brooks and the defendant banks account to such receiver for the value of the accounts so transferred to Brooks.

• It is argued by the appellants’ counsel that such complaint improperly joins two causes of action,—the one against the corporation and the banks to set aside the judgments so unlawfully suffered to be taken, and the transfer of property obtained through them, in which the defendant Brooks has no interest whatever, and the determination of which cause of action would in no way affect Brooks; the other a cause of action to set aside the transfer of the accounts and dioses in action to Brooks, which he holds for the benefit of the banks, and in which it would seem that all the defendants are interested. It is true that the facts set forth in the complaint may be so grouped and arranged as to present the two distinct causes of action above stated, but it is also evident that the pleader had no such plan in his mind when he drew such complaint. He based his right of action upon the fact that the defendant the Sidney Sash, Blind & Furniture Company, being indebted to the plaintiffs in a large amount, and being utterly insolvent, had, under an arrangement with the other defendants, unlawfully appropriated, all of its property to securing and preferring the debts of the two banks, and that in the transaction by which it was done Brooks had received, and still holds, some of the property so unlawfully applied. The unlawful transfer, both through the sales under the judgments and the sale to Brooks, is treated as an act done in pursuance of one scheme, and the complaint is framed upon the theory that in equity a right existed on behalf of the plaintiffs to have anything that was done in pursuance of that scheme adjudged fraudulent and void, and to require all those who had received any property through it to account for the amount so received. All persons are therefore made parties who did in any manner participate in such transaction, and received anything through it. The following cases are a plain authority that such an action may be brought and such a complaint sustained: Brinkerhoff v. Brown, 6 Johns. Ch. 139; Fellows v. Fellows, 4 Cow. 682; Boyd v. Hoyt, 5 Paige, 65. True, these cases were decided before the Code of Civil Procedure, but the ground upon which the decisions are put is that in such cases there is but one cause of action averred; and, if that be so, then such a complaint is not demurrable on the ground that two causes of action are improperly joined. See, also, the following cases, decided since the Code of Civil Procedure: Holmes v. Abbott, 53 Hun, 617, 6 N. Y. Supp. 943; Oakley v. Tugwell, 33 Hun, 357; Morton v. Weil, 33 Barb. 30; Newbould v. Warrin, 14 Abb. Prac. 80. But, even if the analysis of the complaint which the appellants’ counsel has made is the correct and only one of which it is susceptible, and "the action must be deemed an attempt by judgment creditors to reach in a single action property unlawfully transferred to different persons by separate and distinct transfers, and in pursuance of separate and distinct agreements, yet the case of Reed v. Stryker, 12 Abb. Prac. 47, is a direct authority that such a complaint must be sustained. That decision was made by the court of appeals deliberately overruling a judgment of this court to the contrary. It was made while a section of the Code of Procedure substantially like section 488 of the Code of Civil Procedure was in operation, and it has never been modified or criticised by any decision to which our attention has been directed. On the contrary, it is accepted by Justice Mason as having settled the rule in this state. See Newbould v. Warrin, 14 Abb. Prac. 86. An examination of the report of the case in Reed v. Stryker, 6 Abb. Prac. 109, shows that the precise question was in that case which the appellants’ counsel raises in this, and, notwithstanding his very able argument to the contrary, we must consider that case as decisive against him. As to the claim that there is a misjoinder of parties plaintiff, the cases above cited seem to be decisive against it. Also, see Bank v. Farthing, 101 N. Y. 344, 347, 4 N. E. 734. The judgment on the demurrers should be affirmed, with one bill of costs to the plaintiffs only, and the defendants should have leave to answer within 20 days after a certified copy of the order herein is served upon them, and upon payment of the cost of the demurrers and of this appeal.

Interlocutory judgments affirmed, with one bill of costs only to the plaintiffs, and leave granted to the defendants to withdraw their demurrers and answer within 20 days, upon payment of costs of the demurrers and of this appeal. All concur.