Hart v. Albright

HART v. ALBRIGHT. N. Y. Superior Court, Special Term; March, 1892. 1. Creditor’s bill for discovery not superseded by supplementary proceedings^ Notwithstanding the relief afforded by the Code to a judgment creditor by supplementary proceedings, his right to an action upon grounds which formerly would have sustained a creditor’s bill to obtain discovery of property concealed, withheld and transferred in fraud of creditors is still preserved. 2. Forms,~\ Form of complaint in an action by a judgment creditor to obtain a discovery of the property of his judgment debtor. Demurrer on the ground that the complaint did not state facts sufficient to constitute a cause of action. The action was brought by William Hart, jr., against Charles H. Albright and Joseph Steindler. After setting forth the recovery of a judgment by plaintiff against defendants, and the issuing and return of an execution unsatisfied, the complaint alleged as follows: (1.) That a short time before the commencement of the action in which the judgment was obtained, and after the indebtedness upon which the said judgment was obtained had accrued, the said defendants were, and for several years previous thereto, had been engaged in mercantile business at No. 515 Broadway, in the city and county of New York, and as plaintiff is informed and believes, various persons became indebted to them to a large amount and that-these said defendants had at the commencement of this action debts due them to a large amount, to wit, to an amount not less, as plaintiff is informed and believes, than the sum of $1,000, a considerable portion of which are evidenced by charges on their books of account which plaintiff is unable to see and examine, and therefore unable to specify, and cannot learn and does not know the particular items or amounts of said indebtedness or the names of the several persons from whom the same are due, but is informed and believes that several of them owing defendants, in the aggregate, a sum of not less than $1,000, reside in the city and county of New York and are solvent and able to pay the respective demands against them. (2). Upon information and belief that at or before the commencement of the action in which said judgment was obtained, the said defendants conveyed and assigned to persons to the plaintiff unknown and whose names the plaintiff is unable to learn, certain property debts and choses in action belonging to said defendants to a certain amount, to wit, to'an amount not less than $5,000, in fraud of their creditors and of the plaintiff; and that after satisfying all lawful claims of these assignees against the defendants there still remains over and above said claims and due and payable to said defendants a certain large amount, to wit, an amount not less than $1,000. WHEREFORE the plaintiff demands : (1). That the said defendants be adjudged to apply to the amount of said judgment and interest thereon together with the costs of this action, said property debts, things in action and equitable interests belonging to them or held in trust for them or in which they are in any way or manner beneficially interested. (2) . That they be enjoined from selling, transferring or interfering with said property debts, things in action and equitable interests. (3) . That a receiver may be appointed of all said property, equitable interests, things in action and effects of the said defendants, and said defendants directed to execute to him an assignment thereof, and said receiver sell or otherwise dispose of the same and convert the same into money as soon as may be, and that said receiver apply so much of the proceeds thereof as may be necessary for that purpose to the payment of the plaintiff’s said debt with interest and the costs of this a'ction. (4). And for such other and further relief as may be just. Betts, Atterbury, Hyde & Betts, for plaintiff Franklin Bien, for defendants. [MAJORITY — McAdam, J.] McAdam, J. This is a creditor’s bill, filed to obtain discovery from the defendants of certain book accounts concealed, withheld and transferred in fraud of creditors. The result' sought might have been obtained by supplementary proceedings, and Taylor v. Persse (15 How. Pr. 417), holds the latter to be the appropriate remedy, while Abbott, in his Digest of Cases Criticised (p. 756), says this case must be regarded as overruled. Throop, in his preliminary note to section 1871 of-the Code, says that the ancient equitable jurisdiction of the courts in regard to creditors’ bills has been preserved, and this seems to be the consensus of opinion on the subject. As the complaint states a sufficient cause of action for equitable relief under the old practice, it is not open to demurrer under the present mode of procedure. There must be interlocutory judgment in favor of the plaintiff, with a reference to examine the defendants as to the discovery claimed, with liberty to apply for final judgment on the conclusion of such examination. Settle order on notice.