Pietro Gavazzi, Respondent, v. Mortimer H. Dryfoos and Others, Defendants, Impleaded with Engelbert Hardt and Others, Appellants

Pietro Gavazzi, Respondent, v. Mortimer H. Dryfoos and Others, Defendants, Impleaded with Engelbert Hardt and Others, Appellants. First Department, December 30, 1905. Pleading — complaint 'failing to state facts warranting equitable relief in aid of execution — demurrer. A complaint does not state a cause Of action when it sets out a levy under attachment in a prior action, the recovery of .judgment and the issue of execution against certain-property, and that the defendants, holding the property as security for a debt of the defendant in the prior action, claim á superior lien thereon, which lien is alleged to be invalid as against the plaintiff, and that their claim of such lien is null and void. The allegations that the lien, as claimed by defendants, is invalid, null and void, is a mere conclusion of law, not admitted by the demurrer. • It seems, that had facts been stated showing that the lien was fraudulent or void, or inequitably interposed, equity would lend its aid to remove the obstruction to execution, even though such execution is not yet returned unsatisfied. Patterson and Houghton, JJ., dissented. Appeal by the defendants, Engelbert Hardt and others, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 28th day of April, 1905, upon the decision of the court, rendered after a trial at the New York Special Term, over- , ruling the said defendants’ demurrer to the amended complaint. Herbert H. Maass, for the appellants. Henry Gennert, for the respondent. [MAJORITY — O’Brien, P. J.:] O’Brien, P. J.: I am of the opinion that the demurrer should have' been sustained on the ground that the complaint fails to state a cause of action. . n The plaintiff in his brief upon this appeal admits that the “ action is not brought in aid of an attachment or as a judgment creditor’s action under the Code,” and he claims that, “ irrespective of any statutory provision,” he “ seeks to invoke the inherent power of the court of equity to aid in the enforcement of a lien to which there exists an obstacle which must be removed.” • I am unable to find in the complaint sufficient facts to authorize a court of equity to entertain the action. In considering the demurrer the plaintiff must be given the benefit of all the facts alleged in the complaint, as well as of the reasonable and fair inferences which may be drawn from them. Considering the complaint in this light, it alleges that in another action between the present plaintiff and the defendant Rogers a warrant of attachment against the property of said Rogers was duly issued, under which the sheriff duly attached certain property, consisting of silks, belonging to Rogers, but in the possession of Dryfoos, Kahn & Co.; that pursuant to the demand of the sheriff, the said firm delivered to him a certificate to the effect that they were carrying the goods for and on account of the firm of Hardt, Von Bernuth & Co. under an agreement with the defendant Bogers that the. property should be held as security for -an indebtedness of about • $18,235.11 owing from Bogers to Hardt, Von Bernuth &. Co. The complaint- further alleges that after giving this certificate the property had been sold by DryfooS) Kahn & Co. and $5',000 realized therefor, which pro- . coeds were still in their hands'; that" in'the action in which the attachment had been issued, a judgment was duly recovered in favor of plaintiff for $3,445.45, and that execution was duly issued thereon against the property so attached and demand was made on Dryfoos, Kahn & Co. for the application of so much of the proceeds of the property attached as.would bé.sufficient to pay the judgment;- that the defendants refused to comply with this demand on the ground that Hardt, Von Bernuth & Co. were entitled to such proceeds by reason of their prior lien, and that the latter firm, at the time of the levy, had, and still have, a lien upon such property and proceeds superior to the attachment and execution of the plaintiff. The plaintiff then alleges that by reason' of such claim the sheriff is prevented from enforcing said execution. It is also set up as a fact that the firm of Hardt, Von Bernuth & Co. at the time of said attachment claimed, and still claim, a lien upon such property and proceeds superior to the attachment and .execution by reason of the advances made by them to the defendant Bogers above.mentioned. This latter allegation is followed by the further allegation (^[- 9), upon information and belief, that Hardt, Von Bernuth & Co.-, did not, at the time-qf the levy under the attachment, have any lien whatsoever which was valid' as against the plaintiff, and that they did mot then have,, and-have not since had,jmy valid claim or lien upon-the property or the proceeds thereof a§ against plaintiff,-and that their claim-of such lien is null and void as against the plaintiff.. . ■ . ‘ These allegations were properly held by the court at Special Tevih to be mere, conclusions of law, and as such were not admitted by the demurrer: This being "so, we have in substance a complaint which alleges the levy under an attachment,, the. recovery of a judgment and the issuance of an execution in behalf of.the plaintiff against certain property, and the claim oii behalf of defendants of a superior lien upon that property, which lien the court is asked td declare null and void as against the' plain tiff. These facts, however, do not show any ground for invoking the act of equity. The rule is still in force which was laid down in Beck v. Burdett (1 Paige, 305) and quoted with approval in Stewart v. Beale (7 Hun, 411), which latter case was affirmed by the Court of Appeals (68 N. Y. 629). It was said: “There are two classes of cases where a plaintiff is permitted to come into this court for relief, after he has proceeded to judgment and execution at law without obtaining satisfaction of his debt. In one case the issuing of the execution gives to the plaintiff a lien upon the property, but he is compelled to come here for the purpose of removing some obstruction, fraudulently or-inequitably interposed to prevent a sale on the execution. In the other, the plaintiff comes here to obtain satisfaction of his debt out of property of the defendant, which cannot be reached by execution at law. In the látter case his right to relief here depends upon-the fact of his having exhausted his legal remedies without being able to obtain satisfaction of his judgment. In the first case the plaintiff may come into this court for relief immediately after he has obtained a lien upon the property by the issuing of an execution to the sheriff of the county where the same is situated, and, the obstruction being removed, he may proceed to enforce the execution by a sale of the property, although an actual levy is probably necessary to enable him to hold the property against other execution creditors or bona, fide purchasers.” It may be admitted that under this rule a plaintiff may invoke the aid of a court of equity after the issuance of execution and before it is returned unsatisfied, but in order to do this his complaint must show the existence of some obstruction to legal process either fraudulently or inequitably interposed. (Macauley v. Smith, 132 N. Y. 524; People ex rel. Cauffman v. Van Buren, 136 id. 252; Whitney v. Davis, 148 id. 256.) This the present complaint fails to do. It contains no allegation that the alleged prior lien of Yon Benmth. & Co. is fraudulent, nor does it state any facts from which the inference can be drawn that such lien is void as against the plaintiff or that it was inequitably interposed; on the contrary, there is nothing to negative the assumption that the claim made by the defendants that the property of Rogers was held by Dryfoos, Kahn & Co. as collateral security for advances which Hard t, Yon Bern nth & Co. had made to Rogers, and which advances gave the latter firm a prior lien upon the property. . A plaintiff in the situation of ' this one cannot invoke the inherent equity jurisdiction off the court without alleging some fact at least which shows the necessity for the exercise of that power. (People ex rel. Cauffman v. Van Buren, supra; Whitney v. Davis, supra Geery v. Geery, 63 N. Y. 256.) For these ,reasons-I am of .the opinion that the. complaint fails to state a cause of action and that the demurrer should have been sustained. The judgment should be reversed, with costs, and the demurrer sustained, with costs, with leave to the plaintiff to amend on payment of. costs in this court and in the court below. Ingraham and McLaughlin, JJ., concurred; Patterson and Houghton, JJ., dissented, on the opinion’ of the court below. ■ (Reported in 47 Misc. Rep. 15.) [CONCURRENCE — Ingraham, J. (concurring):] Ingraham, J. (concurring): I concur, with the presiding justice, as I do not see that there is > . any 'cause of action alleged against either of the defendants. The plaintiff apparently seeks to enforce a lien claimed to have b'een acquired by a: levy under an attachment -upon property of the defendant in the action in which the attachment was granted. To obtain a lien under an attachment upon personal property capable of manual delivery it was necessary that the sheriff should take the actual custody of such property: (Code Civ. Proc. § 649, subd. 2.) A'lien can be, acquired, under subdivision 3 of section 649 of the ' Code of Civil Procedure, upon personal property belonging to the defendant in the attachment action where such property is in the possession of - a third party, but is. subject to a lien,, so that actual ' custody of the property cannot be taken by the sheriff. (Warner v. Fourth National Bank, 115 N. Y. 251.) The sheriff adopting this course levied upon property held by Dryfoos,. Kahn & Co., by the service of the attachment upon them and obtained from them á certificate that they held certain property which was subject to á lien. To-enforce the lieu of an attachment upon property thus levied' upon it is necessary that.the plaintiff should allege that the property was held by Dryfoos,. Kalm & Co: subject to a lieu, that a levy had been acquired upon such property by.the service of an. attachment, as. required by subdivision 3 of section 649 of the Code of Civil Procedure and that the lien to which the property was subject had been in some way satisfied and discharged,, or that the property was of a greater value than the lien, whereby the attachment creditor would be entitled to the surplus. The complaint does not contain the necessary allegations to sustain an action to enforce such a levy. The action cannot be maintained as a judgment creditor’s action under section 1871 of the Code of Civil Procedure for that section applies-only, to a case where execution has been returned wholly or partly unsatisfied, hi or can the action be sustained as an action to enforce' an outstanding execution, as there is no allegation that this defendant holds property of the judgment debtor which should be applied to the satisfaction'of the judgment but which the sheriff is prevented from taking by reason of a fraudulent transfer, or other invalid instrument which it is necessary that the court should set aside to enable the sheriff to levy. The demurrer should, therefore, be sustained upon the ground that no cause of action is alleged against the demurring defendants. O’Brien, P. J., and McLaughlin, J., concurred. Judgment reversed, with" costs, and demurrer sustained, with costs,-with'leave to plaintiff to amend on payment of costs in this court and in the court below.